Dutch construction group Hollandsche Beton Groep (HBG)
aims to raise its profitability rapidly over the next three years. At
a meeting for investment analysts in Amsterdam, the group's president
CJA Reigersman said HBG would "more than double" its earnings
before interest and taxes (EBIT), to at least €200m in 2003.
HBG announces its 2000 results next month but has already made provisions
which will result in a net loss of around €68m.
At the end of September last year the group embarked on a 'strategic
reorientation' beginning with an analysis of its business against international
competitors. It concluded that the group needed to improve results in
the construction and real estate and civil engineering sectors (together
accounting for over 85% of turnover) before considering acquisitions
or disposals. Within a group profit margin target of 4%, construction
and property is expected to achieve 3.6%, while consultancy and engineering
should deliver 7%.
A programme of efficiency improvements and cost-cutting is expected
to produce €135m worth of savings, comprising €70 m from improved
operating results, €40m from savings on purchasing costs and €25m
from reduced overheads and "general savings" at all business
units.
The Group said it will seek to expand its activities with greater added
value, such as project development and PFI projects. HBG Construction
in the UK launched a facilities management arm last year (see
News story).
In the medium term, HBG will "withdraw from any markets in which
its operating companies are not either market leaders or have the ability
of swiftly gaining a leading market position through acquisitions or
organic growth."
www.hbg.nl
Richard Byatt
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