Strategy update (scope: 2012)

August 24 2007

During its presentation of its half-year figures 2007, Imtech has given an explanation of its growth strategy with the objective to reach 5 billion euro revenue in 2012, whilst maintaining an operational EBITA margin of 6%.

Strategy update (scope: 2012)

Starting position
In the past years Imtech has expanded into a European technical services provider of substance with an operating revenue approaching three billion euro per annum and more than 19,000 employees. In addition to strong positions in the field of multidisciplinary technical services provision in a number of European countries, Imtech’s position has also been strengthened in several technological markets. Imtech is, for example, now one of the global leaders in the maritime market and obtains a strong position in the market of ICT. The objective in the strategic blue print of 2003 was to reach 3 billion euro revenue in 2008. In 2006 Imtech already reached revenue of more than 2.8 billion euro. The order portfolio at 30 June 2007 has reached a record of over 3.5 billion euro. Our strategy is paying off. Imtech wants to continue this growth in the future, which is why we have updated our growth strategy.

Strategic base
Imtech provides a cohesive package of technical services with a concentration on a number of European countries (the Benelux, Germany, Eastern Europe, the UK and Spain) and the, to an extent, international ICT & Marine market (ICT, Technology, Marine and Mobility). The combination of the technological core competencies electrical engineering, ICT (information and communication technology) and mechanical engineering is offered throughout the full depth (consultancy, design, engineering, implementation, maintenance management and maintenance services) in four markets (Buildings, Industry, Marine and Infrastructure/Mobility). This combination, together with the size of the company, distinguishes Imtech from the competition and gives it a unique profile.

Continued growth since 1993
Since 1993 Imtech’s strategy has been focussed on achieving increasing revenue with a higher EBITA margin and, therefore, improved profitability through:

  • robust organic growth in existing geographical and technological home markets;
  • strengthening its position through geographical acquisitions in the ‘home’ countries selected by Imtech in order to achieve at least a top-3 position in every Imtech country;
  • the acquisition of high-tech services in the, to some extent, international ICT & Marine market.

This strategy has been successful: Imtech’s revenue and EBITA have increased substantially every year since 1993. The CAGR (Compound Annual Growth Rate) in the period 1993 – 2006 was as follows:

  • revenue: 13.7%
  • EBITA: 20.8%

This track record makes Imtech one of the fastest-growing technology companies in Europe.

Scope for further growth
Imtech has updated this successful strategy for the period until 2012. The most important conclusion is that Imtech’s strategy offers sufficient scope for further growth until 2012. The geographical and technological markets in which Imtech operates offer sufficient possibilities for further organic growth and acquisitions.

Trends and Imtech’s strategic response
The demand for technological services, and especially technical total solutions, is increasing across a broad front and is characterised by several trends. Imtech’s strategy is aimed at responding actively to these trends both organically from within existing competencies and expertise and by intensifying internal co-operation and through the acquisition of new companies.

Market trends
The following communal market trends, the consequence of which is a rapid rise in investment in technology, are relevant for Imtech:

  • an increased demand for energy saving, alternative resources and solutions that contribute towards a better environment;
  • an increased demand for security from the authorities and in both the business and domestic environment;
  • an increased demand for care, health and welfare coupled with changes in the way the care is organised;
  • increased congestion and, as a result, an urgent demand for mobility solutions.

In the energy and environment market Imtech has proven itself capable of developing innovative concepts, for example for energy contracting and the use of alternative energy sources. In the security market Imtech focusses on integrated, certified solutions with a guaranteed continuity and operational reliability. The challenge facing the care sector is to reduce costs, improve the care process and professionalise the maintenance of buildings and technology. Here too Imtech’s answer is the integration of all the technological solutions. The same integration offers good solutions for improving safe traffic throughput, for example in the field of traffic management and intelligent traffic systems.

The positions already achieved in the energy & environment, security, care & cure and mobility markets will be strengthened substantially in the coming years.

Changing customer attitude
More often customers are specifying their desired output (generally in the form of financial indices) and asking technical services providers how and with which concepts, services and technologies they can best achieve this output. Imtech is taking over more and more responsibility from customers who are concentrating on their own core-business. The trend towards the increasing outsourcing of the responsibility for technology in customers’ primary and secondary processes is accelerating, generally combined with an up-scaling of projects or trajectories. This is partly the result of the increasing consolidation of the market through co-operation, mergers and acquisitions.

In this context Imtech wants to increase its added-value. In concrete terms this means Imtech wants to make services like project management, asset management, project financing, risk management and energy contracting an integral component of the total services package.

ICT as dominant factor
The importance of software services in the technical services provision market is growing fast. More and more frequently ICT is forming the core of technological total solutions. From a strategic point of view Imtech wants to operate at the heart of primary and secondary processes in the buildings, industry, marine and infrastructure/mobility markets where Imtech’s solutions are increasingly dominated by ERP, Business Intelligence and ICT applications. Which is why partnerships with global market leaders like IBM and Microsoft are gaining in importance. Imtech’s strategic portfolio contains two ‘types’ of ICT:

  • ‘hardcore’ ICT: the spearhead of Imtech with ICT as a core business and which acts as an innovation and knowledge centre;
  • ‘embedded’ ICT: the integration of more or less standard ICT solutions into Imtech’s technology services.

Continuous transfer of knowledge and co-operation between both ‘types’ will result in Imtech achieving a dominant ICT position in the market. ICT is becoming a driver for increasing success in both the technological and geographical Imtech markets.

Imtech will focus on:

  • creating internal co-operation and intensifying the interaction between existing ICT activities;
  • acquiring high-value ICT companies that fit within the Imtech profile;
  • strengthening existing partnerships with the global market leaders IBM and Microsoft so as to develop into a leading European partner.

The labour market
The shortage of technically qualified staff is a critical success factor. Not only are the education centres delivering fewer young qualified people, but slowly and surely a generation of older but also extremely experienced technicians are reaching retirement age. The technical know-how of people entering the labour market is insufficient to answer the market’s demands, which means supplementary training is needed. Increasingly the available capacity of trained and qualified staff is a determining factor when it comes to awarding projects. Without human expertise, technological innovation is almost impossible.

Imtech aspires to be the best employer in the technical services provision market. Imtech will fight the ‘war for talent’ that exists at every level of the scarce technical staff market. Additional attention will be paid to reputation management, branding, recruitment and training programmes and contacts with education establishments.

Expansion of the geographical and technological scope
In addition to the strategic strengthening of its position in existing ‘home’ countries, especially the UK, Spain and Eastern Europe, in the future Imtech wants to build-up a geographical position that, in terms of both market volume and expectations regarding the investment climate, business culture and availability of good acquisition candidates, meets Imtech’s stringent criteria in several other countries:

  • Ireland;
  • Austria;
  • Scandinavia: Norway, Sweden and Denmark.

Imtech also wants to further strengthen its technological position in the ICT, Technology, Marine and Mobility markets both organically and through acquisitions.

Strategic action points
Concrete action points for implementing this strategy are:

  • A focus on energy, environment, security, care and mobility;
  • Strengthening the industrial activities in the Netherlands;
  • Acquisitions in the field of ICT, especially in Belgium, the UK and Spain;
  • Strengthening the partnerships with IBM and Microsoft;
  • Strengthening the position in the UK, both geographically in the buildings and industry markets and in the water and waste water treatment market;
  • Strengthening the position in Spain, both technologically and geographically;
  • Building-up the desired positions in Ireland, Austria and Scandinavia through acquisitions;
  • Strengthening the position in a number of Eastern European countries;
  • Further strengthening of the position of the international marine activities through both organic growth and acquisitions;
  • Increasing the added-value by strengthening existing activities in the field of project management, asset management, project financing, risk management and energy contracting;
  • The development of a preferred position in the technical labour market.

Objective
On the basis of this strategic update Imtech has formulated the following objective: revenue to reach 5 billion euro in 2012, whilst maintaining an operational EBITA margin of 6%.