With our continued diversification
we are well placed to support the energy transition, climate change adaptation
and sustainable infrastructure development.

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Mark Heine

Chief Executive Officer

Mark Heine

Chief Executive Officer

Download the message from the CEO

Message from the CEO

In 2020, the Covid-19 virus took hold around the world and affected all of us. Fugro’s results reflect our resilient operating model, which enabled a quick response to the impact of the pandemic, and a very strong growth in offshore wind. In a rapidly changing world, there are many opportunities for Fugro to contribute to the safe, sustainable and efficient development and operation of our clients’ assets. We are well placed to support the energy transition, climate change adaptation and sustainable infrastructure development. Our recent refinancing provides us with the flexibility to deliver on our Path to Profitable Growth strategy.

QUICK RESPONSE TO PANDEMIC

During 2018 and 2019, we made significant progress with the implementation of our strategy. After four challenging years in the offshore oil and gas market, we grew again in 2018 and 2019 and, through a strong increase in our offshore wind revenue, we managed to rapidly diversify. While we were anticipating further growth in 2020, the sudden and unprecedented deterioration in market circumstances across the world due to the pandemic created a new reality.

Our resilient operating model provides the flexibility to quickly adapt to the turbulent market conditions. In many countries people are mostly working from home, and our marine crews were at times confronted with longer rotation periods and mitigation measures such as pre-boarding quarantines. Fugro’s project teams have been pro-active, flexible and resourceful in meeting the quickly changing and locally varying circumstances. Despite the huge operational complexities, in close cooperation with clients we have been able to continue working on most of our projects, while maintaining health and safety as a priority.

Fugro’s revenue was impacted by both the pandemic and the declining oil price, leading to clients’ reduced activity levels and spending, only partly offset by a very strong growth of our offshore wind business. To protect profitability and liquidity, we acted decisively by immediately implementing a comprehensive cost reduction programme. As a result, we are able to report a modest year-on-year decline in margins, despite the significant revenue decline.

SUPPORTING GLOBAL TRENDS

The Earth is a complex and dynamic sphere. We have a deep understanding of Geo-data: information related to the Earth’s surface, subsurface and structures built on it. Through integrated data acquisition, analysis and advice, we help our clients design, build and operate their assets in a safe, sustainable and efficient manner.

The Covid-19 pandemic has clearly been the overarching theme throughout the year. In its wake, it has accelerated and intensified the attention on other global issues, most notably climate change. As a result, our purpose to create a safe and liveable world is becoming ever more relevant as we enter the new decade.

Fugro’s Path to Profitable Growth strategy is built on our transition towards becoming the world’s leading Geo-data specialist in the areas of sustainable energy, infrastructure and water. Population growth and urbanisation combined with the need for decarbonisation are driving increased spending on renewable energy, electricity networks, infrastructure, subsea cables, coastal defence, hydrography and freshwater projects. Our leading market positions, global footprint, versatile asset base, specialist workforce, innovative digital solutions and resilient operating model position us well to benefit from these opportunities, and thus further diversify. In 2020, we already generated 55% of our revenue in the offshore wind, infrastructure, nautical and other non-oil and gas related markets.

ENERGY TRANSITION

Even in this challenging year, our offshore wind revenue grew by 28%. This demonstrates our leading position in this market and flexibility to deploy our assets and capabilities across multiple markets. Fugro is playing an important role in the energy transition, most notably through its innovative services for the development of offshore wind resources.

Initially a mostly European market, offshore wind farms are now being developed all over the world. In 2020, we both completed and won numerous prestigious site characterisation projects in the North Sea, the US, Taiwan, Korea, Japan and Australia. In addition, we provided positioning and construction support services; for example for the world’s first semi-submersible floating wind farm, WindFloat Atlantic in Portugal. At the same time, transmission and distribution networks are increasingly loaded due to ongoing electrification. Fugro’s Roames digital asset management solutions drive grid modernisation and resilience. In 2020, we successfully completed projects for utilities in the US, Australia and the UK.

Although the energy transition is clearly gathering pace, there is a large discrepancy between governments’ carbon reduction targets and current reality: fossil fuels will remain an important part of the energy mix for years to come. Market watchers expect an increase in oil and gas demand from the current depressed levels, even though peak demand might be lower and may be reached earlier than assumed before the pandemic. Our solutions enable clients to develop vital fossil resources in a safe and responsible way; for example, through our remote operations centres and lightly crewed vessels, resulting in fewer people offshore, increasing safety and reducing CO2 footprint.

With our continued diversification
we are well placed to support the energy transition, climate change adaptation
and sustainable infrastructure development.

CLIMATE CHANGE ADAPTATION AND SUSTAINABLE INFRASTRUCTURE

Over the coming decades, climate change is expected to lead to sea level rise, extreme weather, flooding and water scarcity. Governments around the world are investing in coastal zone management and flood protection, and Fugro is supporting these efforts with mapping solutions, such as in Australia and the Caribbean. Also, our reputation as a company committed to ocean sustainability is evidenced by our tangible support of the Seabed 2030 project and the UN Decade of Ocean Science for Sustainable Development.

Infrastructure is the back bone of our society, and Fugro is assisting its clients in the sustainable development and maintenance of their assets, such as by providing route surveys for sub-sea cable installations. Fugro was recently engaged by Alcatel Submarine Networks to support its 37,000 km ‘2Africa’ fibre-optic project, which will connect 23 countries in Africa, the Middle East and Europe. Also onshore, we provide clients with guidance on the prioritisation of maintenance and lower cost of ownership. This year, with our state-of-the-art acquisition technology and AI-driven data analytics, we assisted organisations including Banedanmark, Network Rail and Caltrans California.

HOW WE DO IT

We are a recognised leader in remote operations, robotics and data analytics and the events of this year have demonstrated the value of our advanced remote and automated solutions. In 2020, we started with the deployment of our new uncrewed surface vessels (USVs) on nautical charting projects in the US and Australia. At the beginning of 2021, the first of our next generation USVs, from which we can deploy remotely operated vehicles and autonomous underwater vehicles for asset inspections was delivered. In our land based operations, we offer digital asset management solutions for railroads, roads, bridges and overhead electricity networks. We opened a new remote operations centre (ROC) in Abu Dhabi; the latest addition to Fugro’s network of ROCs which now totals eight across our regions.

Environmental, social and governance (ESG) related topics feature more prominently in discussions with clients, investors and other stakeholders, including our own employees. We recognise the increasing importance of non-financial reporting. This year we engaged with various ESG rating and benchmark organisations, leading amongst others to full disclosure of the company’s corporate climate change data through the CDP platform. In 2020, we began implementing the recommendations of the Task Force on Climate-related Financial Disclosures, with a qualitative assessment of the impact of climate change on our business opportunities and risk profile.

Fugro’s sustainability roadmap is specifically aimed at reducing the environmental impact of our own operations (CO2 emissions, energy consumption, waste and recycling). Our target is to be carbon neutral by 2035. Stimulating diversity and inclusion throughout the organisation is also a key area of attention. In 2020, the company was successful in attracting women for a couple of key management positions, both at corporate and regional level. In 2020, 20% of management positions were held by women, and we target an increase to 25% by 2025.

FOSTERING OUR FUGRO CULTURE

In 2018, we launched our Path to Profitable Growth strategy and in 2019 we adjusted our organisation to facilitate its implementation. An additional and crucial element is our company culture. Ultimately it is not our technology or equipment that determines our long-term success: it the quality and engagement of our people.

To guide us in fulfilling our purpose, in 2020 we formulated our new company values: we are determined to deliver, we do what’s right, we prepare for tomorrow, we build trust. This set of values was based on hundreds of conversations and workshops with colleagues throughout the organisation. A groupwide activation campaign will start in 2021, after a kick-off in our May senior management meeting.

SAFETY FIRST

Irrespective of the changes around us, health and safety remain our highest priority, for ourselves and for the people and environment around us. In 2020, this translated to a practical risk-based approach to managing Covid-19 and our operational response, which also ensured the best outcome for business continuity. While a number of programmes and initiatives were hampered by the extraordinary circumstances, we were able to maintain our high levels of health and safety performance.

REFINANCING COMPLETED

Towards the end of the year, we completed a comprehensive refinancing of our balance sheet. In light of this year’s challenging market environment, we decided to strengthen our balance sheet by issuing new equity. This was supported by a substantial cornerstone commitment by top tier investors, mostly existing shareholders, which was instrumental in the successful completion of this transaction. In addition, the EUR 575 million revolving credit facility was replaced with a new EUR 250 million facility and a EUR 200 million term loan, both maturing in December 2023. The refinancing provides us with the financial flexibility to deliver on our strategy.

OUTLOOK AND PRIORITIES FOR 2021

At the start of 2021, we are looking forward to what will hopefully be a return to more normal market conditions in the second half of the year. Our management agenda is: to manage our cost base and cash flow; to complete the turnaround of the land business; to further strengthen operational and commercial excellence; to enhance our service delivery with new market leading digital solutions; to divest Seabed Geosolutions and to accelerate our ESG roadmap.

I am very proud of the way in which everyone within Fugro stepped up to the challenges of 2020. Throughout the year we have been able to maintain high a quality of work and service delivery while dealing with mobilisation challenges, local and regional lockdowns, and the organisational changes we had to make in response to market developments. This has not been easy and I want to thank all my colleagues for a job well done.

Mark Heine
Chief Executive Officer

A couple of impressions of the solutions that we offer

Fugro’s purpose -to create a safe and liveable world- is becoming ever more relevant. You can find relevant examples of Fugro’s solutions in the areas of energy transition, climate change adaptation and sustainable infrastructure here...

Renewables

Offshore wind farm development solutions

UXO

Detection of unexploded ammunition

Efficient routing

Delivering insights for safer rail networks

Remote operations

Fugro's offshore remote and autonomous operations

A selection of Fugro projects

Fugro fulfils an important role in the ongoing energy transition, mostly through its wide range of site characterisation and asset integrity services for the safe, efficient and sustainable development of offshore wind parks. Fugro’s Geo-data enhance the client’s understanding of the ground risks associated with the project, de-risking the decision-making process. At the same time, Fugro’s dedicated assets and purpose-built equipment ensure safe installation and cost-effective operation.

In August 2020, the CrossWind consortium, a joint venture between Shell and Eneco, was awarded the Hollandse Kust Noord development concession from the Dutch Government. The park will be located 18.5 km off the coast near Egmond aan Zee. The consortium plans to have it operational by 2023, enabling the supply of green energy to 1 million households.

Fugro supported the project with a comprehensive geotechnical site investigation, which started with an unexploded ordnance clearance survey. This was followed by a cone penetration test to determine the soil composition in order to gain insights for foundation design, using Fugro’s SEACALF® MkV. This system is more cost-effective and penetrates deeper than conventional systems, shortening the fieldwork.

In 2020, Fugro generated 21% of its revenues from renewables, mostly through its site characterisation and asset integrity services for the development and construction of offshore wind parks. Initially a mostly European market, these are by now being developed all over the world, among others in North America and Asia.

On the back of two earlier data acquisition campaigns, in September 2020 Fugro IOVTEC, a recently established local joint venture, completed the data acquisition phase for the third geotechnical site investigation project for Hai Long 2 and Hai Long 3 developments in Taiwan.

The work scope consisted of Geo-data acquisition at 14 wind turbine locations or 27 boreholes. The project was successfully completed by the Fugro Voyager, with the largest seismic cone penetration test scope completed to-date for single project in Asia Pacific followed by a comprehensive laboratory testing programme.

Over the coming decades, population growth, economic development and urbanisation will result in increasing demand for energy, water, food, minerals, metals, housing, industrial plants and infrastructure. Fugro contributes to building and maintaining modern infrastructure such as the safe and efficient routing of telecoms cables.

Since the first quarter of 2020, Fugro is supporting Alcatel Submarine Networks with a number of geophysical and geotechnical surveys for the 2Africa subsea fibre-optic cable project. Once installed, this system will connect 23 countries in Africa, the Middle East and Europe and deliver more than the total combined capacity of all subsea data cables serving Africa today. Working towards a completion date in

2023/early 2024, the system will be over 37,000 km long, supporting the growth of 4G, 5G and fixed broadband access for hundreds of millions of people and businesses and will be a major driver for further economic development.

Fugro is supporting the project with offshore and onshore survey expertise and consultancy. Activities comprise a geophysical route survey and geotechnical testing in order to optimise the engineering, manufacturing and routing of the cable. The work was complicated by the Covid-19 pandemic and the associated protocols and travel restrictions, but Fugro’s rigorous project management and the strategic partnership with ASN allowed for execution of the project as planned.

Over the coming decades, climate change is expected to lead to significant challenges for the environment as a result of extreme weather, flooding and water scarcity. Therefore, the sustainable development and operation of infrastructure, industrial plants, buildings and natural resources are becoming prominent concerns.

In cooperation with Friesland Water Authority (Wetterskip Fryslân) and Dutch institute for applied research Deltares, Fugro investigated the internal erosion (piping) of tidal sand in protective sea-dikes along the Wadden Sea coast. Water seeping below the dike has the potential to develop channels (piping) that wash

sand away and could cause the dike to fail. This research aims to identify conditions that influence this mode of dike failure, particularly during periods of high water, contributing significantly to the Dutch Flood Protection Programme.

The initial results are very positive and the resulting knowledge will allow the Dutch Water Authorities to reduce flood risk by strengthening 1,300 km of dikes before 2050 and by maintaining these safely while benefitting from costs savings and a lower environmental impact.

Governments around the world are investing in coastal zone management, taking into account the potential impacts of climate change and rising sea-levels.

As part of its multi-year contract with the US National Oceanic and Atmospheric Administration (NOAA), Fugro executed its third hydrography project in Florida. The 2020 project included surveys in the heavily trafficked port area of Apalachicola. NOAA uses the data to update their nautical charts, define US territorial limits, support coastal management activities and perform inundation modelling.

Four vessels were used in the data collection effort, including the new uncrewed surface vessel Fugro Blue Shadow, completing the work during operating constraints in relation to the Covid-19 pandemic. All field operations, completed to date, have been without incident or any safety issue. Fugro has recognised great success with this multi-vessel approach, enabling mapping of the seabed ahead of schedule and under budget.

Climate change will have a major impact on the availability of water resources and is expected to lead to an increase in frequency and magnitude of extreme events, like floods but also droughts. Romania is one of the European countries most at risk of floods, with an estimated cost of EUR 140 million per year to its economy.

Fugro has been awarded a Geo-data acquisition contract from the World Bank in their efforts to support the Government of Romania in preparing flood hazard and risk maps, and related management plans. Fugro will provide digital terrain models,

surface models and ortho-imagery and will survey around 13,300 cross sections plus 3,500 bridges and hydrotechnical infrastructures.

Between September 2020 to March 2021, Fugro will carry out the acquisition, processing and interpretation of various geospatial data in order to create a digital terrain model. The preparation and implementation of these plans and improved methodologies will increase Romania’s capacity for flood risk management and support the country in taking a secure development path for its people, economy and environment.

Increasing power generation from renewables is placing new requirements on power distribution networks.

Germany has set itself a very ambitious objective: at least 80% of the power supply should come from renewable energies by 2050. Since industrial consumers in Southern Germany have no direct access to the wind energy generated in the North Sea, the power grids have to be upgraded in order to guarantee safe and competitive power supplies in the future. Approximately 700 km long and due to be completed by 2028, the new Suedlink powerline is the country’s largest energy infrastructure project and will effectively transport electricity generated by offshore wind in the

north of Germany to meet demand in the south. This is a key project for the ‘Energiewende’ and one of the largest energy infrastructure projects in Europe.

Vössing Engineers have awarded Fugro a geotechnical and water consulting contract to support the route planning, permitting and installation of 106 km of underground power cables on Section 2 of powerline. Fugro’s multidisciplinary consultancy services include site investigation supervision, hydrogeological expertise and environmental support. Vössing Engineers will use Fugro’s comprehensive Geo-data acquisition, and ground and environmental risk mitigation advice, to optimise the cable route layout. Fugro has furthermore been appointed as safety coordinator for the entire planning and construction phase.

Governments around the world are investing in coastal zone management, taking into account the potential impacts of climate change and rising sea-levels. Fugro supports these efforts with comprehensive mapping solutions, supporting the sustainable development of coastal and marine areas.

In 2020, Fugro was awarded two projects in Gulf St. Vincent and in Torres Strait under the Australian Hydrographic Office Hydroscheme Industry Partnership Program to improve understanding of the gulf’s oceanography and support the development of an accurate tide model for future vessel traffic. Fugro’s approach to these projects was to introduce new technologies to the Australian Government, including the Fugro Blue Shadow unmanned surface vessel and the most recent version of the Fugro designed airborne lidar bathymetric sensor, LADS HD+.

Both sensors acquire data that meets the requirement, while greatly reducing the impact to the environment through the reduction of carbon emissions. The USV utilises approximately 90% less fuel than a traditional survey vessel. At the same time, an area of 540 square kilometres of airborne data was acquired in 25 hours, which would traditionally take 45 days of vessel time.

Governments around the world are investing in coastal zone management, taking into account the potential impacts of climate change and rising sea-levels. Fugro contributes to these efforts with comprehensive coastal zone mapping solutions.

Sea level rise is expected to significantly damage to the Caribbean island of Sint Maarten by coastal erosion, inundations and storm floods. As part of its Emergency Recovery project objectives for understanding disaster risk and improving climate resilience, the Government of Sint Maarten commissioned Fugro to deliver terrain and bathymetric models to enhance understanding of the hydrological processes and complex coastal risks throughout of the island.

Fugro has deployed its cutting-edge airborne mapping capabilities, with the lowest industry carbon emissions, to collect high resolution topographic and bathymetric data. Local communities will be informed on risks and spatial vulnerability of their territory thanks for instance to improved floodplain maps, used to determine how far water will go inland. As a result, Sint Maarten will be equipped with tools and knowledge to develop disaster recovery strategies, strengthen adaptation capacities and help preserve people’s health and quality of life.

Fugro fulfils an important role in the ongoing energy transition. This includes solutions for floating wind, opening up previously inaccessible deep sea areas where the wind is more powerful than shallow coastal waters. As these turbines require solid anchoring to the seabed, Fugro’s services are crucial for these developments.

Recently, Fugro provided positioning support services to Bourbon Subsea Services on the installation of the world’s first semi-submersible floating wind farm, WindFloat Atlantic. Located 20 km from Viana do Castelo on the west coast of Portugal, this cutting-edge development comprises three 8.4 MW floating turbines with a total installed capacity of 25 MW, generating enough energy to supply the equivalent of 60,000 users per year, saving almost 1.1 million tons of CO2.

With its extensive experience with rig moves, and its expertise in precise satellite positioning, Fugro assisted Bourbon’s towing and exact positioning of the turbines. Fugro’s customised remote positioning system was powered by a combination of solar and wind, with a real-time connection to the remotely operated vehicle and support vessel. Also, Fugro supported Bourbon’s installation of the inter-array cables by performing touchdown monitoring and by consulting on video and positioning data acquired via Bourbon’s ROV and vessel spread.

Fugro contributes to maintaining future proof infrastructure. Hundreds of bridges and kilometres of quay walls in Amsterdam, for example, have reached the end of their structural lifespan and are often in a poor state of repair. The City of Amsterdam launched their ‘Bridges and Quay Walls’ programme to investigate, monitor and repair 829 bridges and 205 km of quay walls.

Fugro has been involved from the outset, using traditional survey measurement techniques based on tachymetry and levelling. However, the size of the programme requires more efficient monitoring techniques. Mid-December 2020, Fugro began testing its innovative TotaLite and mobile laser scanning solutions. TotaLite analyses

images taken from permanently fixed compact cameras to measure deformation and the mobile lasers scan bridges and quays from the water. Any deformations are accurately determined and the resulting Geo-data is immediately available for analysis via Fugro’s online platform, enabling optimal repair and maintenance planning of the bridges and quay walls.

Fugro’s new technologies will make an important contribution to the programme and achieve faster, more accurate and more cost-effective monitoring to improve the safety of the city’s inhabitants.

Although the energy transition is clearly gathering pace, there is a large discrepancy between governments’ ambitious carbon reduction targets and current reality: fossil fuels will remain an important part of the energy mix for years to come. Fugro’s sustainable and innovative solutions enable clients to develop vital fossil resources in a safe and responsible way, resulting in less people offshore, benefiting safety and significantly reducing CO2 footprint.

If anything, the year 2020 has demonstrated the value of advanced remote and automated solutions, assisting clients in their critical operations. A case in point is

an inspection programme on Repsol’s Auk A platform, based 155 miles south east of Aberdeen. When one of the offshore crew members was tested positive for Covid-19. Fugro quickly solved the problem by executing parts of the work remotely from its remote operations centre in Aberdeen. This way, Fugro was able to carry out the operation with one inspection engineer offshore on nightshift, and an onshore based engineer on dayshift. Fugro’s response highlighted its leading position in digital solutions, and the project was carried out successfully with no issues and minimal latency ensuring the project came in on time and budget.

In a community investment initiative, Fugro provides support to the largest waste recycler in Nepal. Globally, Nepal is ranked fourth in terms of vulnerability to climate change, causing excessive rainfall in the monsoon and long periods of droughts in the summer. Most of the agricultural lands are on the slopes of the hills and mountains and are therefore prone to erosion and landslides. This vulnerability is further increased by the excessive use of chemical fertilisers, affecting the structure of the soil and reducing its capacity to hold water.

Biocomp helps Nepal to improve agricultural practices and reduce the risk of erosion and landslides. To this end, Biocomp collects organic waste from local fruit and vegetable markets and composts this in anaerobic process to reduce greenhouse gas emissions. Alternatively, this waste would be dumped and rot away, polluting the direct environment and producing large amounts of methane, a greenhouse gas much more potent than CO2. The compost is used for sustainable farming practices, reducing the risk of erosion and landslides. Going forward, Biocomp plans to expand into the collection and recycling of plastics.

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Unlocking insights from Geo-data, for a safe and liveable world

Performance highlights

A couple of impressions of the solutions that we offer

Fugro’s purpose -to create a safe and liveable world- is becoming ever more relevant. You can find relevant examples of Fugro’s solutions in the areas of energy transition, climate change adaptation and sustainable infrastructure here...

Renewables

UXO

Efficient routing

Remote operations

Global player with local presence

Americas

Asia

Europe

Middle-east

Fugro’s offshore and onshore activities

Unlocking insights from Geo-data, for a safe and liveable world

Performance highlights

A couple of impressions of the solutions that we offer

Fugro’s purpose -to create a safe and liveable world- is becoming ever more relevant. You can find relevant examples of Fugro’s solutions in the areas of energy transition, climate change adaptation and sustainable infrastructure here...

Renewables

UXO

Efficient routing

Remote operations

Global player with local presence

Americas

Asia

Europe

Middle-east

Fugro’s offshore and onshore activities

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