KEMA records best-ever turnover and operating earnings in 2007
All business units contribute to continuing strong profitability and earnings growth
KEMA’s turnover and operating profit in 2007 were higher than ever before. Net turnover was up by 10.9% to EUR 200.1 million (autonomous: 13.4%), while operating profits (EBIT) grew by 51% to EUR 9.5 million. Net profits were 49% higher, at EUR 11.2 million and a net margin of 5.6% was achieved (2006: 4.0%). All business units contributed to the growth, which was based on improved performance both on the Dutch and on the international markets.
Developments
The improved results were the outcome of various developments. Greater emphasis on high-added-value services and on internationalization were particularly important, yielding larger and more complex orders and higher margins worldwide. Double-digit autonomous turnover growth was seen both in established markets, such as the Netherlands and the USA, and in growth markets, such as the UK and Asia.
KEMA’s performance was also aided by growing market interest in environmental management, sustainability and energy transition, and by the social trend towards risk avoidance. These developments have fuelled demand for KEMA’s core energy chain activities: high-level commercial and technical consultancy, innovation, technical and operational support, measurement and inspection, testing and certification services.
Comment by Pier Nabuurs, KEMA CEO:
‘Last year was a special one for KEMA. Not only because we achieved our best results ever, but also because we celebrated our eightieth anniversary. And the expertise that we have built up over eight decades is clearly in great demand from major global players on the energy market and the testing and certification market, whose service requirements are increasingly complex. KEMA’s support is frequently being sought not only by international energy companies, grid operators and manufacturers of electrical and other high-risk equipment, but also by governmental bodies. We are confident that this trend will continue, and that our new growth-oriented strategy, with its focus on internationalization, is very much in tune with developments.’
Innovation
During 2007, KEMA continued to invest in innovation. The tangible results of this policy included successful projects and services in fields such as energy storage, the certification of care sector processes, smart grids, the combustion of secondary fuels at coal-fired power plants and CO2 capture. In addition, the Chinese authorities granted official accreditation to KEMA’s testing and certification activities: a development that helped KEMA secure the Cathay Pacific China Trader Award for 2007. Further recognition for KEMA’s commitment to pioneering technology came in the form of an award from the innovation platform established by Spanish energy company Endesa.
Investments
Over the course of the year, KEMA continued to invest in growth and internationalization. Offices were opened in South Limburg and Spain, which have since been expanding steadily. A substantial increase was also made in the staff complement at the Dubai office. Work began on construction of a new high-voltage laboratory, while realization of the globally unique electromagnetic power technology laboratory (EMVT Laboratory) was virtually concluded. The year also saw the takeover of TNO’s medical device certification activities and the establishment of a new emission report verification company, KEMA Verification Services. The new firm immediately acquired a solid expertise basis by taking on the auditors of the VER cooperative. Other important developments included the construction and commissioning of facilities for the testing of 800 / 1,100 kV equipment, and refitting of the low-voltage test laboratory.
Financial summary (figures in millions of euros)
Profit and loss account 2007 2006 Movement (%)
Net turnover 200.1 180.5 10.9%
Operating result (EBIT) 9.5 6.3 51%
Net result 11.2 7.5 48.9%
Balance sheet 2007 2006 Movement (%)
Total 112.4 98.9 13.5%
Shareholders’ equity 49.6 41.3 20.1%
Net liquidities 27.8 18.6 49.0%
Ratios 2007 2006 Movement
Net margin 5.6% 4.0% –
Return on shareholders’ equity 22.6% 18.2% –
Return on capital invested 49.6% 31.7% –
Solvency 44.9% 42.8% –
Workforce (FTEs at year end) 1,544 1,392 11%
Prospects
KEMA’s order portfolio is healthy in all key countries and market trends are favorable. The management is therefore positive about the prospects for further turnover and profit growth in 2008. The forecast of continued progress assumes unchanged accounting principles and stable exchange rates, and excludes special items and unforeseen developments.
About KEMA
KEMA (www.kema.com) specializes in the provision of high-level services in the fields of business and technical consultancy, operational support, inspection, testing and certification. KEMA’s clients include energy companies, investors, government bodies and major industrial consumers of electricity, as well as electricity-sector suppliers, electrical component and end product manufacturers, and retail and wholesale traders. KEMA employs more than 1,500 professionals in twenty countries around the world.
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