Thank you. I would now like to pass the conference over to your host, Jilko Andringa, Chief Executive Officer of Brunel, to begin. Jilko, please go ahead.
Thank you very much. Good morning, good afternoon, everybody. Thanks for joining our update call. Yeah, the world is a difficult place once in a while. If you see what is happening in our markets, in some of our industries, then navigating, and you know Brunel always was a nautical company. Navigating through difficult times is very important. Sitting here, I'm very proud that we navigated these challenges pretty well in Q1. When you look at the results and especially the organic results, you see that we are continuing to grow both on the top line and on the bottom line. Yeah, many of you also watch what's happening in our industry with some of our competitors.
And then I must say, I'm proud of what all the Brunellers around the world were able to deliver in this quarter. We have a healthy book of business, we have a strong pipeline, and we are still winning a good business in markets that are not always easy. And we have to recognize that we have to work hard to get to these type of results. The markets that we're in are somewhere, somewhere under pressure because of inflation rates. Sometimes it's harder to make capital investments on our client side. But as we said last year, sometimes it's also short term.
We had to give a warning in October of last year for the renewable permanent placement business, and we're happy in this update to show that we're actually for the perm side, back at the levels of last year and on the contracting side, see very, very healthy growth there. So the bump on the road, as we announced it then, actually was a bump on the road and, yeah, we are back at our strength there and expect that growth to... One of our four markets, as you can see in our press release, and we also called out that the four chosen industry segments, the four chosen verticals that we are focused at, conventional energy, renewable energy, life science, and mining, all four grow fast.
For all four, we also expect that our clients will continue to need specialized talent at many, many places in the world. A confirmation that the strategic choices that we made a couple of years ago are continuing to help us, and yeah, will give us support for our medium and longer term results to reach the next level performance for Brunel. With that introduction, I would like to give it over to our CFO, Peter de Laat.
Thank you, Jilko. Let me move on to the summary of our results then. We are very proud that all our regions are able to achieve revenue growth and profit growth. There's a big impact of the working days. That has a huge impact on the business in Q1. It was a negative impact, one day in most of the world, and two days, even in DACH. The overall EBIT impact is EUR 3.4 million, so pretty significant. But if you take that into account, we still achieved a 14% increase in EBIT. And nice to see that all our regions have been able to increase their EBITs. And also, some support in the rest of the year because the remainder, all the other quarters this year will have an additional working day.
So some support there. And moving on to the first region, the DACH region. Of course, we are closely monitoring the general development of the German economy. Germany is the biggest contributor to this region. And I'm very proud that our team is still outperforming the general market. And how do they do that? They manage to find the markets that are successful, where still growth is achievable, and with slightly less attention on more challenging markets. And markets that are doing well at the moment is anything renewable, offshore wind related and the related grid investments, but obviously also the defense industry, and even the automotive industry is still pretty resilient. So it's all other components of the German economy that are slightly weaker for us.
Despite these circumstances, I'm happy to see that it seems to getting better economically in Germany, so we should get some support there. But already we still achieve revenue growth and EBIT improvement, and that's also the result of restructuring we executed in Q4 last year, that we were able to manage our cost level to appropriate level. One, looking forward, we have a bit tougher comparison, comparatives in Q2. Q2 last year, we did achieve some growth. We expect slightly less this year, but after that, it will reverse with easier comps and hopefully an improved market. So overall, the outlook for Germany is still pretty okay.
As you can also see in the results, they are in the press release, so they managed to achieve, adjusted for working days, a slightly better EBIT, and a revenue growth. On to the Netherlands. Netherlands, on average, it was pretty flat year-on-year, but we still managed to increase our revenue, of course, due to the higher rates, and that's a continuing trend. So higher rates with slightly lower headcount in Q1 and slightly lower productivity, in the end, still results in an in revenue growth. Also there, you can see that the year-on-year comparison will be a bit tougher in Q2. And in the Netherlands, we typically mainly grow in the second half of the year, and at the moment, we still think that will be the same this year.
But there's some catch-up to do headcount-wise compared to last year. Positive thing is that the gross margin is developing slightly positive, even though it's still lower than last year, but the gap is decreasing, where until Q4 last year, the gap pricing-wise was 1.5%. It's now under 1%, so we see some catch up with all the cost increases now being able to pass it on to our clients. Summary of the results also there revenue growth and EBIT growth adjusted for the working day, one less. Then also Asia, it's a really unique performance. Both our big countries, Australia, Australia and Papua New Guinea, are growing really fast across various industries, especially conventional energy and mining.
But we now see also strong developments in offshore wind, with the first auction on concessions being done last week or this week. So that also provides more opportunities. The margin was a bit impacted, but that's mainly due to the client change in the client mix. And that should, yeah, reverse in the second half of the year. That on Australia, we include, of course, the acquisition, the small acquisition of Advance Careers, the boutique firm, that joined us first of January, and their EBIT contribution in Q1 was breakeven. So, looking forward to see them contribute going forward. Then we look the results together. The Middle East and India been an interesting quarter. First of all, because we completed a rather big construction project in, on yards in Dubai.
That was all finalized in March, but we also see a ramp-up of the contract that we discussed many times in previous quarters that started in February, as expected. In Q2, the balance of the project stopping and the ramp-up of the new one will still be negative, so revenue in Q2 will be slightly lower than in Q1. But after that, we see pretty much a lot of potential to continue to grow. And we also need to be mindful of the Ramadan period, where new projects, new starts, is always slow, so projects are only starting around now, and then we only see that in our revenue in the second half of the year.
Overall, again, continued strong performance, I would almost say, as always in this region, resulting in a very strong EBIT contribution, as you can see here. Then Americas. You see the headcount graph, the yellow line, on this slide, is more or less in line with last year, but the mix is different. And so the US is now making up a larger part of that, than, and Brazil, a smaller part, and that has, of course, a favorable impact on the average day rates. Yeah, our markets in the US are doing really well at the moment, so there's much more to come in the medium term there.
I'm happy to see that probably this year is, will be the last year that we see a 0 in the quarterly EBIT for this region after many tougher years. Then Asia, a really strong performance in China on the yard construction work, and Indonesia, especially in the mining industry. In both countries, we have a pretty unique position in offering compliant solutions and the capability to mobilize experts to those locations. And projects are going really well, and the pipeline remains healthy, but we are waiting for bigger projects, bigger construction projects to really accelerate the growth there. The summary of the results, also still nice EBIT growth and revenue growth, and again, a very promising pipeline, but we are waiting for bigger projects to start.
Then the rest of the world, maybe even to our surprise, the perm market in the renewable industry recovered faster than we expected, and the fees are almost at the same level as last year. And it's not just the market that's recovering, but it's especially our teams focusing on other parts of the markets. It's no longer just offshore wind, but also onshore wind, solar, all type of other renewable markets where we managed to win perm contracts. Team is doing great there, and they've also adjusted the cost base so that they are back to financial performance, revenue growth. That was last year, and yeah, very promising outlook.
On this market, worthwhile to mention that we completed the settlement with the CEO of Taylor Hopkinson, Tom Hopkinson, to buy his remaining shares, and as a result, he's moved on to a new role within Brunel, and two of his senior managers took over responsibility for managing the company and doing a great job so far. So exciting company to be in. And I also want to highlight our Europe and Africa energy operations that continue to do very strong, with all the energy-related projects and opening the doors for our regions somewhere else in the world. Many of the projects being started in Europe and then ending up somewhere else in the world. They are great business developers for the rest of our organization.
And to summarize, yeah, there's still a zero here, so some work to do, but, we're working on that, and of course, it also includes the cost for the earn-out, the remaining cost, and this will be the final year that we see those earn-out costs in our P&L, with the full final settlement, Q1 next year. That brings us to our overall results. Nice revenue growth, 10%, especially considering the circumstances, driven by our strong position in our key markets, and still managing... Being able to manage the EBIT growth and managing the cost. Then go to our outlook, and as stated, we expect the current trend to continue.
We see a very healthy pipeline of running projects, a lot of potential new projects that will, I hope, probably start showing in our headcounts in the second half of this year. There are also other dynamics going on. Like Jilko said, it's an uncertain economy. Some of our competitors are really struggling, and as a result, they are less disciplined in their pricing. At the moment, it's not impacting us significantly, but it's something to be mindful of. We feel that we are offering additional quality, and that should make up for higher margins, but, yeah, just, we are monitoring that very closely. So as an end result, we expect the Q1 trend to continue in the Q2. Our cash position decreased a little bit to EUR 6 million.
Once again, we have sufficient overdraft facilities in place to finance future growth and potential acquisitions, if there are any. And at the moment, there are no activities or M&A targets in approach progressed phase, but we're still looking at it and be eager to do acquisitions. But we have plenty of cash available to support that, and the settlement with Tom Hopkinson obviously has resulted in the cash out. That has an impact on our cash position. And finally, our fees per vertical, where you can see that all our key verticals are growing and renewables and mining even very strong. Automotive or future mobility is still pretty resilient, and with some other markets a bit more challenging.
A brief summary of our Q1 performance and results and some outlook for the remainder of the year, and now I want to leave it to you to answer any questions you might have.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind at any time, please press star then two to remove your request to speak. We will pause here for a moment while questions are registered. We have a question from Konrad Zomer of ABN AMRO. Your line is open.
Hi, good morning. Thanks for taking my questions. I'd like to ask two questions, please. Firstly, on the cost base in the Middle East and India, I think it was great to see flat operating costs while your organic revenues grew 28%. It highlights the operating leverage of the business, but at the same time, I'd like to wonder why costs didn't go up a lot more in order to capture more growth. What are the plans in the next few quarters? And my second question is, it's encouraging to see a rapid recovery of your perm business in offshore wind. But could you give us a bit more details on the scale of that business and how much did that business recover?
I don't know off the top of my head what the revenue contribution was in Q1 last year, so I'm struggling to estimate the impact on revenues in Q1 this year. Thank you.
Yeah. I would like to give some feedback on the Middle East and India region. You called out the nice revenue growth, and you know, we are steering our business on the gross profit development.
With the high revenue growth, our gross profit growth is actually limited. It has something to do with the mix, and as Peter said, in some occasions, competitive pricing is a little bit lower than in the past. And that means that with the high double-digit growth that we have on the top line, we see a low single-digit growth on the GP. And yeah, being aware of that, we have to be very conscious on our cost management, and we are very proud of the Middle East and India region, that they're able to do that, that they can handle this growth, at a little bit of gross margin with very, very strong cost control.
So in not only in this region, in all the regions, as you know, we are managing the company with a conversion ratio and a fall-through philosophy, where we say, "When you grow, you can only spend 50% of the added GP on cost." And we promised also during the Capital Markets Day last year that we would manage very strictly to that. Yeah, and this is one of the regions that shows that it is possible when you are well-organized, and you have a strong management team to do that.
I would like to add to that also the continued investments in our technology to support efficiency, to support and help improve, and in case of Middle East, protect our conversion rates. Then moving on to the perm on Taylor Hopkinson. Taylor Hopkinson average, on average, has EUR 2.5 million on perm fees each quarter. And they were around that level, just below that, in Q1 as well. And the mix is slightly changing once again, where it used to be mainly offshore wind. Now, it's slightly broader with the markets I already mentioned. Does that answer your question, Konrad?
Yeah, absolutely. Absolutely. Thanks.
Thank you. As a reminder, to ask any further questions, to please press star, followed by one on your telephone keypad. We now have Maarten Verbeek of The Idea .
I guess they mean me, but it's Maarten Verbeek of The Idea .
Yeah. Hi, Maarten.
Morning. Couple of questions from my end, please. Firstly, could you say anything about the sickness rates in Germany? How is that developing? Secondly, you have purchased an initial 20% of Taylor Hopkinson, and final closing will be next quarter, but should we still expect the EUR 0.7 million for the next coming three quarters in your P&L account? And then lastly, a very daft question: you mentioned you expect Q1 trends to develop in Q2, and I presume you talk about the organic one, corrected for working capital... Sorry, for working days effect. Thank you.
Yeah, thanks, Maarten. So we're very happy to see the sickness rates in Germany return to a normal level in Q1, where we had much higher level in the second half of last year. So that doesn't seem to be an issue anymore, at least at the moment. Then the earn-out for Taylor Hopkinson, we had a very specific arrangements where basically, if somebody decides to leave earlier than the initial earn-out period, then any discount we agree with the leaver would flow to the people that stay. And that was a deliberate action from us because the people that take over get a bigger responsibility, and we wanna also wanna reward that for to them.
As a result, that means that the total earn-out sum does not change, and you will continue to see the 0.7 dependent on their performance in each quarter this year. Finally, with the trends, with our comment that the trends will continue, we indeed refer to the organic trends on revenue and profitability.
Thanks very much.
Thank you. We have a follow-up question from Konrad Zomer of ABN AMRO.
Yeah, hi. It's me again. I'm very interested to hear a bit more about the MyBrunel platform. In particular, the scale of that platform, is it the intention to roll it out worldwide? And could you give us some specific, tangible benefits in terms of efficiency once rolled out? Thank you.
I'm so happy that you asked this question, and we're so proud of this, technology development. MyBrunel is a sort of logical entrance, a logical connection to all our specialists. So, one of your questions is, are you planning to roll it out globally? Absolutely. But we also have to make sure that we, when we roll out, that we inform our specialists what the feasibilities are to get the maximum return on investment. Before we talk about efficiencies, the most important driver of a platform like MyBrunel is the intimacy with our specialists. We wanna improve our relationship and our retention with our specialists by using tools that they expect from us, that help them understand where they are in their career....
What their compensation is, what their training opportunities are, what their potential next job is. All these elements are offered to them under this MyBrunel platform. And of course, with the elements I mentioned, a discussion around my next training or my next job is now in many situations a longer physical or Teams meeting that can partly be replaced by the platform. We don't wanna have it 100% replaced. It's a supporting tool of our personal interaction with our specialists, but it's definitely one of the ways that we can drive our conversion to the 32%, longer term, as we discussed last year during Capital Markets Day. And absolutely creating a better ratio, indirect to direct ratio, in the countries where we roll it out.
We started to roll out in the Netherlands, and I think we are about 60% or 70% of the specialists in the Netherlands that are actively using it. The second country where we're rolling it out now is in Germany, which is also going very fast, because we know now what to do around training and informing our specialists, and then we will do a region by region rollout of this MyBrunel platform. Asia, I just heard from our CIO-
And, uh-
Asia is the next platform, next, region.
Yeah. And just as a follow-up, what would be the benefit for, let's say, specialists in the Netherlands or in Germany to have this on a global scale? I can see people in the conventional energy business that move around globally, that it might benefit them to have a global database, but what would be the benefit for specialists in... or contractors in any of the countries that are less mobile?
Yeah, it's not just the mobility, and like Jilko Andringa said in his start of his reply, it's also focused on the intimacy with the specialist. So it provides us a personalized channel to all the contractors or the specialists to get access to all the relevant information, and that's just the straightforward things like timesheet portals, pay information, but also our vacancies, the and the, it offers vacancies that can be relevant for them of after their current project. So yeah, a very personalized tool to communicate and interact with them. And it's not really. It also supports the mobility part, obviously, but yeah, that's just one of the features.
Yeah. One of the features is that we,
Yeah
apply through artificial intelligence jobs that fit an individual because of the skills, the experience, but also because of timing, because one of their own current projects runs out, and then we offer jobs within Brunel. And even when we do not have a job within Brunel, we can offer jobs outside of Brunel to make sure that they can continue their career. And that can also be jobs that are in another country. So especially in the conventional energy, where we know the skills are sometimes needed at a very different place, we can make that very visible for the specialists in through this MyBrunel platform.
Yeah. I think it's potentially very interesting. And then finally, what's the total investment that you have made or are going to make? And also, when do you think the full rollout will be completed?
We look at Peter for the full investment.
Yeah, so the nice thing is, it is mainly a communication channel, but it provides access to all other tools that we already have. It's combining it. That also means that the investment is, I would say not that significant, probably EUR 1 million per year, to set it up and also to, yeah, keep on improving it. And we started doing that last year, obviously will continue this year, and I have to check with our CIO when we expect the rollout to be completed.
May.
May next year, we plan to have the entire world connected to it.
Cool. Thank you.
Thank you. As a reminder, if you would like to ask any further questions, please press star followed by one on your telephone keypad now. We have another follow-up question from Maarten Verbeek. So your line is now open.
Ah, it's Maarten again, and this time my name was more properly spelled. One question concerning the renewable business, particularly your perm fees. Did you see some regional differences in the catch up again of those perm business? And have you also made an entrance into Australia where they have decided to start the first offshore wind park?
Yeah, absolutely. We do see some regional differences, and part of it is slightly linked to the slowdown in perm we had in second half of last year. That means that in some areas, we also have a slowdown in new projects at the moment, but that's only temporary. Most regions continue pretty strong, but Taiwan specifically, where we used to have a lot of projects, does see a lot of projects ending in the course of this year and not a lot of new activity.
So overall, across the globe, a lot of activity, slightly lower in Taiwan. In Australia, Advance Careers is also specialized in renewable and ESG-related matters, and we also hired a Taylor Hopkinson team in Australia, to yeah focus on the renewable projects or the offshore wind projects that will be started there.
Thank you. Thank you. If you would like to ask any further questions, please press star followed by one on your telephone keypads now. I can confirm we currently have no more questions, so I would like to hand it back to Jilko Andringa and Peter de Laat for any final remarks.
Thank you very much. Just check here. No online questions? No. All right. Yeah, thanks for joining us in this call. As we started, proud of where we are, we're very much aware that the outside circumstances are not perfect everywhere, but the navigation of the group, the navigation of Brunel, seems to work pretty well in Q1. And as we said in our outlook, we plan to continue on this route. And with the strict management of conversion, we believe that we are still on track to reach our medium and long-term goals, and we're happy to give you a progress update during next quarter. Thank you very much for your attention, and see you next time.
Thank you all for joining today's conference call with Brunel. I can confirm we have now concluded today's call. You may now disconnect your lines, and please enjoy the rest of your day.