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Fugro: Surveying Sustainable Value Creation At An Attractive Price

Executive Summary

  • Fugro's sale of Geoscience division, related transactions and focus on stronger positioned Survey and Geotechnical divisions will lead to revenue growth and higher returns
  • Fugro continues to be under negative market sentiment since CEO change in November and whistleblower letter on the company's accounting, yet maintains market position and reputation
  • Investigation into accounting led to no material adverse findings
  • Fugro has achieved economic returns above cost of capital and continues to be a company with high barriers to entry
  • Near-term catalysts could push Fugro ADRs to an intrinsic value of $75 (55 Euros for ordinary shares) and 13% annual capital compounding could raise shares to $108 (79 Euros for ordinary shares) by 2016

The market's ascent has left...

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