Posted on March 27, 2024
Van Oord concluded 2023 with strong results: revenue reached record high and profits more than doubled. Compared to last year, we saw revenue growth across both our Dredging & Infra and Offshore Energy business units, which resulted in a significantly revenue increase of 42% to EUR 2.9 billion from EUR 2.0 billion in 2022. Net profit doubled to EUR 127 million from EUR 60 million in 2022. High fleet utilisation and the continued sharp focus on risk and contract management contributed to the improved results. Solvency was stable at 32.5% and the net debt position improved to EUR 152 million as of 31 December 2023, despite an extremely high investment level. The order book increased by 3% to EUR 4,429 million from EUR 4,300 million in 2022. From an operational and financial perspective, 2023 proved to be an extremely busy year for Van Oord and one of substantial growth and recovery.
The year in numbers:
- Revenue: EUR 2.9 billion (2022: 2.0 billion)
- EBITDA: EUR 379 million (2022: EUR 243 million)
- Net profit: EUR 127 million (2022: EUR 60 million)
- Operational cash flow: EUR 381 million (2022: EUR 62 million)
- Order book: EUR 4.4 billion (2022: 4.3 billion)
- Net debt EUR 152 million (2022: EUR 178 million)
- Solvency ratio: 32.5% (2022: 32.4%)
- Investment in equipment: EUR 298 million (2022: EUR 227 million)
- Number of employees (FTEs): 5,766 (2022: 5,243)
- Number of nationalities: 84 (2022: 89)
- Scope 1 greenhouse gas emissions (x 1,000 tonnes of CO2e): 602.6 (2022: 475.3)
- Relative scope 1 emissions per euro revenue (tCO2e/ million EUR revenue): 210.3 (2022: 235.2)
Executive summary
Compared to 2022, revenue increased by 42%, to a new record level for Van Oord, while profitability more than doubled. Following the challenges in the 2 last years, our markets are steadily stabilising. Global inflation returned to more normal levels, alleviating some of the cost pressures experienced in 2021 and 2022 as a result of severe supply chain disruptions. Moreover, we no longer suffered from COVID-19-related travel restrictions or quarantine requirements.
In 2023, we carried out a significant repositioning, which involved the consolidation of 4 separate business units – Dredging, Netherlands, Offshore Wind and Offshore – into the 2 robust business units Dredging & Infra and Offshore Energy. This strategic repositioning allows us to sharpen our focus on our core markets. Both business units provide tailor-made services to our clients on a global scale, leveraging our extensive scale, expertise and assets across multiple markets. The synergy between the 2 business units is also clearly visible. Both business units deliver true Marine ingenuity supported by specialist knowledge and a large fleet of vessels developed in-house.
After facing challenging market conditions for over 5 years, we witnessed a clear market recovery in 2022 which continued in 2023. Climate adaptation, the energy transition and corresponding need for marine infrastructure are the drivers of this recovery. Increasing demand is clearly reflected in our revenue growth across both our business units. In 2023, our total revenue significantly increased to EUR 2.9 billion from EUR 2.0 billion in 2022, marking a record year for our company. Our net profit doubled to EUR 127 million from EUR 60 million in 2022. A strong operating cash flow enabled us to improve our net debt to EUR 152 million (2022: EUR 178 million), despite a high investment level.
Our organisation grew rapidly in 2023 as a result of the recovery of our markets. By the end of the year, Van Oord employed 5,766 FTEs. Over the past 3 years, our workforce has expanded by nearly 1,400 FTEs. Our successful recruitment efforts are proof that we are perceived as an attractive employer. Our investments in digitalisation are supporting the growth of our organisation and the further professionalisation of our processes. We achieved an important milestone in our Founding the Future programme with the selection of an ERP system to enable standardisation and streamline our global operations.
‘In April 2024, after more than 15 years as CEO, I am pleased to hand over this company to a new generation and entrust my cousin Govert van Oord with the leadership of Van Oord. The transition from the fourth to the fifth generation of the Van Oord family marks an important milestone in our company’s history. I would like to thank our colleagues around the world for their commitment and contribution to this successful year, and for the last 30 years in helping me to make Van Oord a successful company. After a difficult period, we have proven that with resilience and hard work, we are able to meet our clients’ expectations and return to healthy margins.’
— Pieter van Oord, CEO
Key financial performance
Van Oord increased its revenue to EUR 2,866 million in 2023 (2022: EUR 2,021 million) and realised a net profit of EUR 127 million (2022: EUR 60 million). The award volume was balanced between the 2 business units. The business unit Dredging & Infra achieved strong results, while Offshore Energy saw a recovery of the offshore wind market. The conventional offshore activities were more negatively affected by a loss-making project in 2023. In 2023, we took on new projects totalling a net amount of EUR 3.0 billion, signalling a clear and strong recovery of our markets. Our order book increased slightly to EUR 4.4 billion, accompanied by improving margins. Our operating cash flow rose substantially to EUR 381 million, significantly higher than the previous year’s EUR 62 million. This strong operating cash flow enabled us to reduce net debt from EUR 178 million in 2022 to EUR 152 million in 2023. This net debt improvement was achieved despite a high investment level of EUR 316 million (compared to EUR 187 million in 2022). Our leverage ratio was 0.5. We ended the year with a robust balance sheet. Our return on capital employed (ROCE) of 11.4% indicates a positive trajectory towards acceptable return levels.
The Dredging & Infra business unit grew its revenue to EUR 1,442 million (2022: EUR 1,214 million) including amongst others the Fehmarnbelt Fixed Link project and Afsluitdijk. Compared to 2022, the Offshore Energy business unit had a busy year with EUR 1,424 million in revenue (2022: EUR 807 million) due to the Saint-Brieuc, Hollandse Kust Noord and Sofia offshore wind projects. The financial position of our company at year-end 2023 improved compared to last year and remained solid. Equity amounted to EUR 1,075 million (2022: EUR 985 million) and solvency was 32.5% (2022: 32.4%). The operational cash flow of EUR 381 million (2022: EUR 62 million) was higher than our investment cash flow of EUR 317 million (2022: EUR 187 million) and consequently net debt decreased to EUR 152 million, which is well within the terms and conditions of our credit facilities. The financing cash flow amounted to EUR -84 million (2022: EUR 143 million). The total order book of EUR 4,429 million at year-end 2023 increased compared to 2022 (EUR 4,300 million) as revenue was slightly below the award volume including variations.
Strategy and outlook
Over the last few years, we have been implementing our strategy Building the Future Together. As part of this strategy, we continue to build and expand our synergistic portfolio of maritime activities. That requires profitable growth, and we are confident that our business will continue to grow over the coming years. After facing challenging market conditions for over 5 years, we witnessed a clear market recovery in 2022 and 2023. Climate adaptation, the energy transition and corresponding need for marine infrastructure are the drivers of this recovery. Looking ahead, we remain optimistic about our markets. We expect our order book to increase further this year. Our margins will continue to improve barring any unforeseen events. The year 2023 was exceptionally busy for Van Oord and we are grateful to our colleagues around the world for their commitment and contribution to this successful year.
