Continuing growth in sales and profits for KEMA in 2009

Strategy effective in challenging global market conditions

Arnhem, 15 March 2010 – KEMA again achieved further growth in sales and results in 2009. Under challenging market conditions, the company has continued to pursue and develop its strategy. The firm expanded its gas services during the year and divested its KEMA Quality business division . By focusing on worldwide developments in energy, such as energy efficiency and energy transition, KEMA’s sales rose to EUR 256.2 million [1] (2008: EUR 226.7 million). The operating result (EBIT) amounted to EUR 17.2 million [1] compared to EUR 15.9 million in 2008. On a comparable annual basis, sales grew in 2009 by about 20%, 10% of which was the result of acquisitions. On this basis, the operating result increased by 15%. Net profits, including the book profit on the sale of KEMA Quality, also rose to EUR 65.8 million (2008: EUR 16.6 million).

Major developments in 2009
Through its acquisitions of Gasunie Engineering & Technology, the German-Swiss technology company for electrical rail systems Elbas and the Czech short-circuiting laboratory Zku, KEMA has further strengthened its global position even further in the energy value chain. KEMA also sold, in line with its strategy, its KEMA Quality division to DEKRA, a safety expertise company.

Thanks to organic growth and the further professionalization of the organization, the operating result rose to EUR 17.2 million (2008: EUR 15.9 million). Operating margins fell slightly due to price pressure caused by market conditions, increased competition and, as expected, the limited contribution from the acquisitions. The contribution of the division sold, KEMA Quality, is shown for 10 months.

In the current economic climate, with the exception of the Middle East the markets in which KEMA operates showed no significant deterioration. Sales continued to grow steadily² by 23%, 11% of which was through acquisitions. Virtually all regions, particularly activities in North America, showed strong organic growth. The total number of employees at the end of 2009 was more than 1.600 – 650 of whom are based in the Netherlands.

The energy consulting activities successfully gained advantage from the worldwide emphasis on transitioning to renewable power and energy efficiency, on setting and operating within evolving environmental objectives and regulations, and on investing in new technologies such as electric transport and intelligent networks, as well as biogas and energy storage. In addition to capacity expansion, there was a strong global demand for services to optimize and extend the lifetime of power plants and transmission and distribution infrastructure.

In terms of the firm’s testing and certification of components for the medium-, high- and ultra-high voltage networks, KEMA continues to maintain its leading global position. The demand for testing and certification services in Asia, particularly China, Korea and India, is growing strongly, as is the market for calibrating meters and testing smart grid related components such as smart meters and protection equipment. Following the acquisition of the Czech short-circuiting laboratory Zku, KEMA is well positioned to benefit from growth in Central and Eastern Europe.

Innovation
Innovation is extremely important to KEMA. Having initiated the ‘Window on the World’ innovation project in 2009, the company is placing even greater emphasis on examining developments among customers and government programs in the US and the EU. Internal innovation processes have been further optimized and embedded within the organization. Concrete results include projects and services in the fields of capture and storage of CO2, biogas, distributed power generation, smart grids, energy savings, electric transport, wind and solar power, and new simulation models for the changing energy markets. In 2009, KEMA assisted many power utilities with their energy transition process, such as by developing new concepts for electricity transport and distribution. KEMA is a global leader in the development of intelligent electricity and gas networks (smart grids) with activities on all continents.

Investments
During the past year KEMA has continued to invest in growth and internationalization. In adition to the three previously mentioned acquisitions, the company opened new business locations in Beijing, Shanghai and Rotterdam. Elsewhere in the world, existing locations were expanded. KEMA also officially put into operation its new High-Voltage laboratory – the largest commercially operating laboratory of its kind in the world. The firm also made ongoing investments to improve the internal processes, such as project and account management, leadership and other training courses.

Response from Pier Nabuurs, CEO of KEMA:
‘The past year has been an important year in the history of KEMA. Not only have we strengthened our position in the energy value chain, particularly in the area of gas, but at the same time we sold the KEM Quality division. Despite the continuing poor macro-economic situation, we have succeeded in further improving our sales and profits. KEMA is well positioned to benefit, both in the short- and long- term, from global developments in the energy sector. Our strategy will therefore continue to focus on international growth, both organic and through acquisitions, strengthening our portfolio and providing a higher added value to our customers.’

Key figures (in millions of euros)

20092008
Sales256227
Operating result (EBIT)17,215,9
Net profit65,816,6
FTEs (Average)1.8221.648
Solvency59,3%49,7%
Net Liquidity position86,127,2

Sales and EBIT 2009:incl. 10 months KEMA Quality.

Sales and EBIT 2008:incl. 12 months KEMA Quality.


Outlook
The fundamental developments in the energy markets are generally favorable for KEMA’s activities. Despite initial signs of recovery, the macro-economic situation is likely to continue to affect the results in 2010, particularly through ongoing pressure on prices. Even so, KEMA expects to continue pursuing its strategic objectives with success.

These expectations are subject to accounting policies remaining the same, constant currency exchange rates and excluding extraordinary items and unforeseen circumstances.

About KEMA
KEMA, set up in 1927, is an independent knowledge provider that is active around the world in the energy value chain. It specializes in high-value services in the area of business & technical consultancy, operational support, measurements & inspections, and testing & certification. As an independent company, KEMA advises and supports government organizations as well as producers, suppliers and end users of energy, and manufacturers of electricity transmission and distribution equipment. More than 1,600 professionals work at KEMA, which has offices and representations in more than 20 countries around the world.

Notes:

[1] The results of the division KEMA Quality were consolidated in the financial statements for 10 months.

[2] KEMA results adjusted for the effects of the activities of KEMA Quality that were sold.