(OET) Fugro is planning to expand into the carbon capture utilization and storage (CCUS) segment as part of its strategy towards 2027.
Fugro has updated its strategic agenda with three priorities, including growing and transforming current business, expanding into developing segments, and increasing recurring revenue with Geo-data as a service.
The plan is to target profitable growth in the company’s core markets by further expanding resources, including people, and solutions; transforming capabilities, including ongoing digitalization of operations and further roll-out of uncrewed vessels and remote operations; and optimizing business performance by focusing on execution excellence, commercially, operationally and financially.
Fugro revealed it was targeting a further expansion into developing segments with a large requirement for Geo-data, including CCUS, as well as ocean health and coastal resilience, and to expand on its existing solutions through scalable technology, i.e. its data platform VirGeo, and hardware with data subscription, such as Lidar buoys.
The Dutch company expects revenue growth from an annual level of €2.1 billion today to €3-3.5 billion in 2027. The main drivers for the projected margin expansion are volume growth, value-based pricing, operational leverage, strict cost management, and improvement in business mix towards higher margin and recurring revenue.
To achieve its strategic priorities, Fugro plans to continue investing in a gradual shift of its asset base towards asset-lighter and low-carbon solutions, while at the same time ensuring capacity to cater for future demand, with this resulting in capital expenditure of an average of €200-250 million per year till 2027.
This comprises €100-125 million to sustain the business (mainly maintenance) and €100-150 million discretionary capex to grow with the market, transform capabilities, optimize business performance and drive carbon reduction.
“Over the past years, we have successfully transitioned into a resilient, highly diversified company with significantly improved results. We have created a solid foundation for future growth and we are ready to capture the exciting opportunities in our markets,” Fugro’s CEO Mark Heine said.
“Fugro’s updated strategy builds on our highly skilled people, market-agnostic assets and innovative scalable technology. Whilst capturing the growth in our markets, we will continue to implement more efficient and safer ways of working, with lower emissions, and a faster and better delivery of our valueadding solutions.”
To remind, Fugro reported revenue of €608.9 million for the third quarter of 2023, an increase from €480.2 million reported in the same quarter of 2022 – a result said to be due to better contracting conditions, high activity levels and good project execution.