Hello, everyone. Thank you for joining us, and welcome to Brunel International Third Quarter 2026 Quarterly Results. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Peter de Laat, CEO. Please go ahead.
Thank you. Good morning, everybody, to our results call for the third quarter of 2026. To dive right into it, we saw the trend, as expected, continuing with the year-on-year margin development, profit development improving. We still saw a decline in Q1 and Q2. We are now at the same level as where we were last year. The underlying businesses were slightly different than we expected. DACH performed better, and Asia slightly below our expectations because we saw projects ending as expected, but the new projects will take a little bit longer to start. That also brings me to exciting developments in our industry that we experienced in the last couple of months, what we already highlighted in Capital Markets Day.
The outlook for our markets, especially conventional energy and mining, is still very strong, and we saw that confirmed in the last quarter with major projects nearing FID. Some nice examples, Papua New Guinea, that we have been expecting for seven years now, is expected to get FID in December this year. Similar for Mozambique LNG project, and slightly later, we will see a huge LNG project in Indonesia getting FID. Next step, we saw the FPSO market strengthening, as we have also shared with a very busy pipeline. They will have their busiest year next year, and we are pretty strong in the FPSO market. So, a lot of projects that are expected to start in the course of the first half of next year, probably mostly around just after Chinese New Year.
We also continue to invest in our organization, in our sales, in our business development, in recruitment, and technology. We will have our AI solution to support our core process live in all regions by the end of this year. With that, I want to hand it over to Toine for the more details.
Yep. Thank you, Peter. Good morning, everyone. Diving into the financials, we had another EUR 300 million revenue quarter, indeed as expected, whereby the organic growth was slightly down. Gross profit, as already mentioned, stable, with gross margin improving to 18.8% from 18.6%. Operating costs increased. Last year, Q3, we already did see a big part of the cost savings coming in, so the comparable became more difficult, and we also have continued to invest in growth and operational excellence projects during this year and also in Q3. Underlying EBIT then came in at around EUR 11 million, which is down organically 4%. Year-to-date, more or less the same trends, almost EUR 900 million for the first nine months. The gross profit slightly down compared to last year, but again, good to see that for Q3, we did see the increase.
OpEx for the year still down, but then slightly up for the quarter. If you then dive into the regions on this slide, DACH, as already mentioned, continued a strong performance with a 10% organic revenue growth and significant EBIT improvements. The Netherlands and Belgium, although still shrinking, the trend is improving compared to prior quarters. So we are bottoming out slowly but surely. If you look at the global regions, we see Australasia, Americas continuing to perform very well, both in terms of top line as well as bottom line. Middle East continues to be resilient despite the ongoing crisis in the Middle East. Even though revenue and profit are slightly down, it is still a good performance, and it sets us up for success in future when things start to ease up there.
Asia, as already mentioned, is a bit in between project stops and project starts, and Peter already mentioned on the FIDs that are in progress. We are optimistic there for the future, and the rest of world is slightly down in terms of revenue and also in terms of profits. If you look at the first nine months also for the regions, it are more or less the same trends, so I will skip this one, but you can see there that Asia for the year-to-date is still up compared to last year. Then the gross margin, 18.8%. Good to mention here that there is a bit of a difference, as expected, between Europe and global. Europe, we have seen the challenges over the last few quarters, specifically in the Netherlands, but if you look at total Europe, Q3 is improving compared to last year.
The global business continues to be strong over the last few quarters, with both gross profit margin up compared to last year, with more or less flat revenue. Now we go in a bit more detail into the regions. DACH again had a strong quarter despite softness in the automotive market. That market, as expected, all the announcements over the last few months in the automotive industry, that remains challenging, and it has become tougher in Q3 and probably also tougher moving forward. OpEx well under control and combined with better margins and lower costs, a strong EBIT performance in Q3. The Netherlands and Belgium, as mentioned, we have combined the two countries as one region as beginning of this year. Revenue has declined with 15%. That was as expected.
The trends are improving, and you can also see in the headcount line in the right top that headcount has been pretty stable in the Netherlands and Belgium. We are bottoming it out, and we see more improvement for the quarters to come. Moving on to Australasia. A very strong quarter, which fits in the trend. Organic revenue growth of about 4%. Strong gross profit increase year-on-year. That is not only driven by the top line, but also the margins have been improving steadily in Australasia on the back of higher value-add services that we deliver there. With that also, EBIT has been improving strongly year-on-year. The Americas also a good trend with double-digit organic revenue growth. Gross margins are also improving, and also EBIT is increasing with about 18%.
We continue to invest also in that region, as there is lots of potential for the future. Middle East and India, already mentioned there that we have seen decline year-on-year, but things have been remarkably stable over the last few quarters despite the geopolitical uncertainties there with underlying EBIT still at EUR 2.7 million. We expect that we are ready to support our customers whenever they need us when things start to ease up. Asia, we already mentioned in prior quarters that the mix has been changing to more secondment work, meaning we get the margin but not the revenue. That is why the top line has been a bit softer than the margin development. In Q3, we have also seen that some projects have stopped and new projects have not yet started.
The pipeline, as already mentioned by Peter, is promising for the quarters to come, specifically 2027. Underlying EBIT still at EUR 1.6 million for the quarter. The rest of world, which is a combination of our Europe and Africa and Taylor Hopkinson businesses. There we have seen revenue more or less stable year-on-year with a 2% organic reduction. Gross margin was more or less flat compared to last year, and EBIT reduced slightly in the quarter. If we then add it up for total Brunel on a global level, good to see here that at the right top that the headcount trend has been stabilizing. Maybe good to mention also here that compared to last year, a big part of the decline was due to the closure of our Kazakhstan business, which was about 350 FTE.
We see that we are bottoming out and ready for growth. One-off cost in the quarter amounted to EUR 2.4 million, and that was mainly restructuring charges related to capability building as well as further implementation of our strategy. The gross profit by vertical, more or less the same trends as before. We see more or less stabilization in the conventional energy, slight improvement in renewables on a global basis. Mining still growing. Future mobility and DACH more or less flat compared to last year. I mentioned already that is in a still a challenging environment, and that we have seen also the challenges in the Dutch market, specifically in the financial and public services in line with prior quarters. Moving on to cash flow. Free cash flow of about EUR 8 million a quarter, which was slightly down compared to last year.
Maybe good to mention here that Q4 historically is our best quarter in terms of cash collection. So we expect also the net cash position to improve for the remainder of the year. Also good to mention here that in Q3, we had a cash outflow of a bit over EUR 7 million related to a settlement of a put/call option related to a prior acquisition. So that is included in that cash position. Restricted cash is slightly up compared to last year. Then moving on to the outlook. Peter, you will take that one.
Thank you. Overall, we expect the trend that we saw in the first three quarters to continue. So a slight year-on-year improvement, especially on the margin. Also, resulting in profitability, of course. By region, we see some differences. In the Netherlands and Belgium, you will see more impact of the turnaround that our new MD has been working on, including more impact on the cost level that we are currently at. The DACH might be a touch weaker due to the challenges in the automotive sector. Global business will continue the trend that we are currently on. Overall, this year developed in line with our expectations. That is the end of our presentation, so I now want to open the floor for the Q&A.
We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Konrad Zomer with ABN AMRO - ODDO. Your line is now open. Please go ahead.
Hi, good morning. I have a few questions. The first one is on your pipeline in conventional energy projects. You sound very optimistic about some of these projects coming in in the first half next year. Can you maybe share with us what the combined revenue contribution could be of the projects that you think might come in in the first half? My second question is on the Netherlands. You reported a 15% decline in revenues in Q3 versus a 14% decline in Q2. Why are you saying that things have bottomed out? Because it is hard from the outside to really see that bottoming out in the results. My last question, on Asia, you mentioned some of the projects have started or have not yet started, while others have ended. What happens to the people that you employ in Asia?
Do you keep them on your payroll for the time being, or do you let them go? How does that work in those markets? Thank you.
Well, thank you. Nice questions. Let's start with Asia. Typically, people don't stay on our payroll, but we keep them engaged for the next project to bridge the period. With some clients, we find a solution to also keep them on our payroll. But overall, we don't need to have any risk for the idle time. But we are making sure that they will be available when the new projects start. That links to the pipeline for conventional energy. It's very hard to put a revenue number to it, especially year by year, because some projects will run for two years, some for seven. It also depends on how big of a share of the work we will get. But to put it a bit more in perspective, especially the projects in PNG and Mozambique, both have a project value of over $20 billion.
It's been a long time since we've seen such significant projects. That also includes a significant portion of labor costs. So, it is much more than we've seen in the past. How it will impact our next year's numbers, it's too early to tell because it depends on the actual start dates. So we need to get back to you at a later stage on that, probably early next year. But overall, the total volume is much higher than we saw at the beginning of this year.
In terms of the Netherlands, Konrad, we see that the headcount numbers, the direct headcount numbers in the Netherlands are stabilizing over the last month and two quarters, and also revenue. You see that it is more stable compared to prior quarter. Obviously, still a reduction compared to last year, but if you look at quarter-on-quarter within the year, then things start to bottom out.
Yeah, because, Konrad, you mentioned the number of - 14, I think, in Q2, but the actual number was - 21.
Yeah, the decrease is getting smaller.
Okay. Okay. I may have got that number wrong. But just to press you a little bit more on the size of the potential contracts next year. I mean, if we happen to see one of these EUR 20 billion contracts being awarded, it doesn't necessarily mean, first of all, you're going to get involved. It doesn't mean you're going to generate a lot of revenues in the first half next year. But you do mention it as one of the reasons why you're optimistic on your outlook, and you sound very pleased with what you see, and it's getting nearer, and it could have happened this year, and it's going to happen next year. It looks great, but it doesn't mean that you're going to get any revenue contribution in the first half. But you do state it as one of the reasons why you're optimistic.
I'm sure you can understand that it's a bit hard for us to put any of that in our models, because of the uncertainty of everything involved. I'm just asking again, can you maybe, not saying plus 10 or plus 20, but just in general, are these contracts likely to have a significant impact on your revenues next year? Are they similar to some of the projects that we've seen awarded in the last few years? How does that relate to each other?
Yeah. Let's start with the FPSO pipeline. That will definitely have a significant contribution to our revenue next year and result in growth, especially for Asia. Those are confirmed, and start dates will be shortly after Chinese New Year. Those are clear. Then the bigger ones, that will be really once they start, you will really see that in the numbers, and even bigger numbers. Because it is all with live clients, and we are already onboarding the first people on the project, but really small numbers, we are convinced that you also see those in the numbers. So, depending when this will start, and again, the FPSO business will start after Chinese New Year, but it will definitely have a revenue contribution for Asia of around 20%.
Right. Okay. Thank you.
As a reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your next question is from the line of Marc Zwartsenburg with ING. Your line is now open. Please go ahead.
Yes, thank you. Good morning. Can you maybe give me a bit of help with the revenue trend? Because you basically mentioned for the Netherlands and also for Germany, that is rather stable. How is that through the quarter? Is it September, October still looking stable, and then on easier comps, we should see a further moderation of the declines in the Netherlands? In Germany, is it stable, growing still double digits? The second question is, on the OpEx side, there is still some one-offs in the quarter. Should we expect some further cost savings kicking in Q4 onwards that we should model in, that we see a further decline in OpEx starting in Q4? That is it.
Yeah. Thanks. The revenue trend for Netherlands and Belgium, if you look at the headcount development in Netherlands and Belgium, that is included on the slide, you see that the headcount for this year is pretty much flat, where we saw a decrease, especially in the second half of last year. That will lead to better trends, but mainly due to weaker comparatives. We do not see yet month-on-month growth. For the DACH, it is slightly similar, where after a strong start of the year, the headcount has remained flat, and we are not growing week on week anymore there. But yeah, with the decline we still had in Q4 last year in Germany, also the trend will continue overall. OpEx, we did have one-off costs, and that will result in lower costs for Netherlands and Belgium in Q4.
One-off. Let us say the charge, we should take that as a full year saving.
No, the charge, the one-off costs are not entirely related to the Netherlands. But yeah, we will be able to make up for the one-off costing with cost saving in Q4. But that is only for the Dutch component.
It is in one quarter you will make up for it already. On an annualized basis, it will be bigger.
Yeah.
Okay. All right. Thank you.
But please, not all one-off costs relate to the Netherlands.
No, no. No, no. Clear.
Your next question is from Konrad AMRO - ODDO. Your line is now open. Please go ahead.
Thank you. I have two more questions. The first one on Germany. Both in your remarks at the start, but also in the press release, you talk about slightly more challenging market conditions going forward because of automotives. I think you did an excellent job in the first three quarters of the year in Germany. Are you suggesting that your own performance in terms of conversion rate, for example, is also likely to weaken in Q4? My other question is on the Netherlands again. Revenues were down 15%. Your costs were down 8%. Quite a big diversion between your cost performance in Germany and in the Netherlands. The 8% decline in the Netherlands, is that a number that you are happy with?
Is that a deliberate 8% versus your much weaker revenue trends, or would you have liked to have seen that higher, as in - 10 or - 12? Your EBIT obviously was completely gone in Q3. Thank you.
To start for Netherlands, the cost decline in Q3 was as expected and as we planned, because we were doing a much bigger turnaround in the Netherlands, and we take our time to do it thoroughly and in the right way, and to continue with the right people. Overall, of course, if your revenue and GP is declining this much, then also costs should go down more, and that is also what we expect to see in Q4. On DACH, year-on-year, the trend and improvement in conversion will still be there in Q4, but it will be interesting to see how we will start the year there next year.
Okay. Thank you.
Your next question is from the line of Maarten Verbeek with The Idea. Your line is now open. Please go ahead.
Good morning. It is Maarten Verbeek of The Idea. Couple of questions. Sorry to bother you again on the Netherlands. You mentioned month-on-month you do not expect any growth for the short term. Does that imply that for next year you expect the Netherlands to be clearly below this year's revenue level as well?
No, not at all. If you look at our current headcount development, our development, the headcount is pretty flat this year. If that continues into next year, what we do not expect, but if that would continue, then we would already have revenue growth just because of rate increases. We also expect to see the impacts of our turnaround activities next year, and that is also supported if trends at the generalist staffers in Europe, they are getting stronger, and we are typically six to nine months behind the generalist staffers.
What I was pleased about Netherlands was that I saw that the gross margin was edging up a bit. Are you also focusing much more on added value services offering in the Netherlands, that also your gross margin will continue to improve in the course of 2027?
There are two elements to the gross margin developments. It was significantly impacted by the changes in legislation we saw in the last two years, the new CLA, the new definition of equal pay. We were not completely able to pass those additional costs onto our clients. For new business, we are able to pass those on. We should recover a bit of the margin we lost in the last two years. In that, we are also focusing more on statement of work activities in Netherlands, which should also generate a higher margin, but it is still a very small portion of what we do in the Netherlands today.
Okay, thanks. Lately, your performance in Americas has been pretty strong. Now we have had the blue wave. Will this impact your business there?
Not for the next two years, and they will continue to invest for conventional energy, and there will be one project there that are starting that are contributing to the growth. I can only see it supporting our business when they might consider to do renewable energy projects again. That probably will not be in next two years yet.
Okay. Thanks.
Your next question is from the line of Simon van Oppen with Kepler Cheuvreux. Your line is now open. Please go ahead.
Hi. Good morning. Good morning, gentlemen. I have a question on your cash flow. It was down versus last year, whereas your reported EBIT was up relatively strongly. I was wondering if you could talk about the working capital components in your cash flow, as well as what do you expect in terms of net debt position or net cash position to end up on the full year, also in relationship to your dividend. Very curious there. Thank you.
Mm-hmm. Simon, thank you. Again, maybe good to repeat that Q4 is, generally speaking, our biggest cash contribution quarter, so that is still to come. You are right that we are a little bit down in free cash flow compared to last year, despite some of the one-offs last year. That indeed has to do also with seasonality in our receivables and cash collection, so we expect to catch that up in Q4. What is also in there is what I mentioned, the EUR 7 million settlement of the put/call option, which impacted our net debt position. In terms of expectation for year-end, we have shared before that we think that getting to the level of last year of about EUR 30 million positive cash is at the upper side of the bandwidth. More realistically, it would be around the EUR 20 million, as we see it now.
In terms of dividend, that is a bit too early to say at this moment. We defer that till the full year results.
Okay. Thanks for the clarification.
Thank you.
Your next question is from the line of Maarten Verbeek with The Idea. Your line is now open. Please go ahead.
Yeah, it's Maarten again. I forgot to ask you one question, and you also just mentioned it again. You had a cash out of EUR 7 million on a put/call option of acquisition. Could you inform me what acquisition this concerns? Because if I look at the past couple of acquisitions you made, they were pretty small. Could you clarify that for us, please?
Yeah, of course. This relates to the acquisition of ICE, our commissioning activities in Singapore. They performed really well since we acquired them, especially with a huge project in Sweden with the Stegra, hydrogen-powered steel plant. So they had a huge GP contribution and hence a high earn-out.
But if I look at that deal, when you mentioned it, you had an upfront payment of EUR 0.8 million and a conditional future payment of EUR 1.2 million, and now you talk about EUR 7 million.
Yeah, but the amounts you mentioned relate to the initial acquisition of the 51% of the shares, and this one relates to the remaining 49% that we acquired this year.
Okay, thanks.
As a reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw a question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your next question is from the line of Marc Zwartsenburg with ING. Your line is now open. Please go ahead.
Yeah, just a quick follow-up on that settlement thing for the acquisition in Singapore. Why didn't you mention this before, to be honest? That was a bit of a surprise, and that's why the cash guidance for the full year is a bit lower. Why wasn't this flagged before? Did it come up as an opportunity? What's the reason behind it?
No, it was disclosed before. It's even included in our 2025 financial statements, and it was included in the P&L as well for 2023, 2024, 2025. Yeah, based on your question, I think that we should have flagged it clearer.
Yeah, well, if you talk about that cash at the end of the year, it was always like EUR 30 million, EUR 35 million, and now you miss it because of the EUR 7 million. Apparently not, because it was in your EUR 30 million, EUR 35 million guidance, as I now assume. In the line, there must be something else explaining why it's now EUR 20 million. It must be the net working capital.
No, but if you remember last time, Toine mentioned that EUR 30 million would be the maximum. Then we already took into account this cash out. You are right, our total spending went up a little bit in the last couple of months, and that explains the difference.
That relates to what exactly? Is that a specific region? Is it specific clients?
It depends. It is a bit across regions. It is in a couple of days here and there. Sometimes you see with customers that they have, for example, ERP migrations where payment takes longer. Sometimes it is also the payment terms with specific customers, so it is not always a completely straight line, Marc, and there are differences between customers and between regions.
Is there then in the end a penalty for that customer that they pay a higher gross margin? Because in the end, you are refinancing their issues like implementations.
Well, TDO or
That is the penalty, if I would
Payment term differences are taken into account indeed in margin. Obviously, if someone pays a little bit slower or later from quarter to quarter, that is not fully visible in the margin, but on average, indeed, payment term differences are taken into account.
Okay. Should we also expect any impact from FX changes with the dollar being so strong? Is that something else on the cash flow that we should keep in mind?
Not something material we have seen in Q3. Not expected at this. With the current exchange rate, it's something we expect at this moment, but of course, we don't know what's going to happen in Q4. Based on what we see now, the answer is very limited.
Okay. Lastly, on the Middle East, it's quite stable, but the projects are still running. Should we expect any already a bit of a recovery there in Q4 or into early 2027? Is there anything you can say about the Middle East?
No, we only expect a recovery.
Is it what it is at the moment?
It is what it is, and the business we are doing today is, yeah, supporting their ongoing operations. We expect that to continue, but we will only see a recovery once the conflict is resolved.
Yeah. All right. Perfect. Was the EUR 20 million including or excluding the restricted cash?
That is including. That is total cash, all in.
Including restricted, then the number is stable, or could you give us the number a bit?
The restricted has been pretty stable. It went up a little bit, but it's always in the EUR 10 million-EUR 12 million, EUR 13 million range.
Yeah, so the real net cash is then, let's say, EUR 6 million, EUR 7 million or so.
Yeah, if you look at it from that perspective, if you want to split it, that is correct. Yeah.
Yeah. Okay. All right. Thank you very much.
You are welcome.
There are no further questions at this time. I will now turn the call back to Peter de Laat, CEO, for closing remarks.
Thank you very much for joining this call today. Our business is developing as expected, as shared in our Capital Markets Day, and the pipeline is building. We continue to go full force ahead and to go to the growth that we also shared during the Capital Markets Day, and I look forward to share more about that in the next quarters update. Thank you very much.
Thank you. Have a good day.
This concludes today's call. Thank you for attending. You may now disconnect.