Fugro N.V. — Earnings Release 2007

Mar 7, 2008

Leidschendam, the Netherlands, 7 March 2008

Strong 2007 for Fugro: continuing growth

• Revenue increased by 26% to EUR 1,803 million
• Net result increased by 53% to EUR 216 million
• Result from operating activities (EBIT) 54% higher at EUR 325 million
• All divisions showed strong growth
• Order backlog at the beginning of 2008 EUR 1,459 million (beginning of 2007: EUR 1,146 million)
• Dividend proposal 2007: EUR 1.25 (2006: EUR 0.83) per (certificate of an) ordinary share

Key figures (in EUR million)	31 December 2007	Change	31 December 2006
Revenue	1,802.7	25.7%	1,434.3
Net result	216.2	53.3%	141.0
Cash flow	337.1	49.1%	226.1
Result from operating activities (EBIT)	324.8	53.5%	211.6
Investments (including acquisitions and assets under construction)	341.1	38.7%	245.9
Net margin (%)	12.0		9.8
Earnings per share (EUR)	3.11	51.7%	2.05
Number of employees at year-end	11,472	16.6%	9,837

Business Development

The financial year 2007 was exceptionally good for Fugro with substantial increases in revenue, net result and net margin and the records set in 2006 were well and truly broken. The market conditions were very good for every business line which resulted in a high utilisation of capacity at good rates. Organic growth was strong and was positively influenced by the investments made in 2006-2007 combined with successful acquisitions. All divisions showed a strong improvement.

The full benefits of the considerable expansion of the seismic fleet capacity carried out during 2006-2007, as well as the extra investments scheduled for 2008, will not be seen in full until 2009 and subsequent years. Orders have also been placed for the construction of several new vessels, which will be delivered in 2010. By taking these steps Fugro is responding proactively to the anticipated structural growth in demand for our services.

Fugro's size and (technical) expertise facilitate an increasing role in complex and multidisciplinary projects – a trend that continued in the year under review. These projects involved different combinations of business units working together to provide integrated service solutions. To be able to deliver such solutions in the offshore industry more effectively, a number of geotechnical services and survey services were combined into the Fugro Geoconsultancy group, with service centres in the United States and the United Kingdom. A service centre in South East Asia will be set-up in 2008.

Fugro collects, processes and interprets data related to the earth's surface and soil composition and provides advice based on the results. As an extension to these activities, Fugro provides services such as precise positioning, construction materials testing, reservoir engineering and data management. Fugro's operations have been organized into three divisions: Geotechnical, Survey and Geoscience. Fugro is listed on Euronext Amsterdam and is included in the Amsterdam Midkap Index (AMX). Fugro has about 12,000 employees in more than fifty countries.

Fugro collects, processes and interprets data related to the earth's surface and sea bed and the deeper soils and rocks beneath. Around 74% of Fugro's activities are related to the oil and gas industry. In accordance with Fugro's policy these activities cover many phases in the life-cycle of oil and gas fields. The substantial increases in long-term investments made by oil and gas companies in recent years have had a positive effect on Fugro. Thanks to its balanced portfolio and market positions, Fugro supplies services to a large group of clients in the oil and gas industry. Our policy of continuously investing in new equipment and in people, as well as our constant focus on innovative research have had a structurally positive effect on business development.

Fugro is also active in the infrastructure (14% of revenue) and mining sectors (6% of revenue). The remaining 6% comes from other market segments. 'Onshore Geotechnical services' puts considerable effort into obtaining contracts related to large, integrated projects. This approach creates a sound basis for the further growth and development of these activities. The demand for our services from the mining industry has remained high. Here too Fugro is continuing to strengthen its position through technological advancement.

Of the revenue growth 22.9% was achieved through organic growth and 6.4% as a result of acquisitions. Against this the foreign currency effect was 3.5% negative and some minor activities were discontinued (0.1% negative).

All Fugro's activities showed organic growth. To a large extent this was due to continuing high global demand for oil and gas related offshore services. Relatively speaking the seismic survey activities increased the most. The expansion and modernisation of the seismic capacity reflects the growing demand for these services and Fugro's goal of building a strong position in this sector throughout the world.

Acquisitions

One of the important developments of 2007 was combining Fugro's onshore survey and positioning activities to form the Geospatial services business line. Fugro's objective is to build up a global geospatial information service business focused on providing solutions for the professional user. To this end, EarthData (United States) was acquired. The company supplies innovative aerial mapping, remote sensing and geospatial information services. Furthermore Fugro completed the acquisition of MAPS Geosystems (United Arab Emirates). MAPS' specialisms include aerial mapping; an expertise acquired in the course of more than thirty years operational experience in the Middle East and Africa.

A further acquisition involved ImpROV Ltd. in the United Kingdom. ImpROV supplies specialised integrated underwater equipment and engineering services to the offshore oil and gas industry. The company has been added to 'Offshore Survey services'.

In 2007 two geotechnical companies were acquired and added to 'Onshore Geotechnical services': GECO Umwelttechnik GmbH (Austria) and LGU GmbH (Germany). The acquisition of Sobesol (France), which specialises in geotechnical and laboratory activities, was also completed.

At the end of the year the geological consultancy bureau William Lettis & Associates Inc. (United States) was acquired. This company specialises in geological consultancy, particularly earthquake hazard assessment and offers geotechnical advice to the energy industry, government agencies, the oil and gas industry and for water and infrastructure projects. William Lettis & Associates will contribute towards the further growth of Fugro's involvement in complex projects, such as the construction of nuclear power plants and dams onshore, as well as offshore structures.

Another acquisition was HGN Hydrogeologie GmbH (Germany), which specialises in providing consultancy services for water management, flood control systems, dyke surveys and hydraulic modelling for federal and state authorities.

William Lettis & Associates and HGN Hydrogeologie were announced at the end of December 2007 and consolidated as of 1 January 2008.

At the beginning of 2008 Fugro acquired Pavement Management Services Pty Ltd and associated companies (PMS), Sydney, Australia. The acquisition was announced in February 2008. PMS provides pavement engineering consultancy services, including assessment of current pavement condition, design studies for new pavements and definition of maintenance programmes for existing highway networks.

Roadware Group Inc. Paris, Ontario, Canada was also added to Fugro at the beginning of 2008. Roadware is a provider of technology and services for the assessment and mapping of highway and other pavement structures and the supply of asset management database systems.

In 2007 ProFocus Systems (Norway) was acquired and now forms part of 'Development & Production' services. The company develops seismic information capture and storage systems. Another company added to the Group was 4th Wave Imaging (United States). The company offers services in the field of seismic reservoir monitoring. In this business line Fugro also completed the purchase of assets of the Canadian company Kestrel which

specialises in data storage for the oil and gas industry. With this acquisition Fugro has further expanded its services in this field in North America.

At the beginning of 2008 Fugro has reached agreement with Electro Magnetic Marine Exploration Technologies (EMMET), Russian Federation, to acquire 60% of EMMET's shares. EMMET is a technology developer and provider of marine electromagnetic services for hydrocarbon exploration. The company is also part of 'Development & Production'.

Advantages of acquisitions are the obtaining of state-of-the-art technology and increasing our market share. The annual revenue of the acquired companies in 2007 amounts to approximately EUR 76.2 million. The total cost of the acquisitions completed in 2007 was EUR 68.4 million.

The annual revenue of the above mentioned acquired companies at the beginning of 2008 amounts to approximately 35 million. The total cost of these acquisitions in 2008 was EUR 47 million.

Capacity expansion

As a follow-on to the 2006-2007 investment programme Fugro will continue to invest in extra staff and equipment to increase its capacity. This will not only involve additional vessels but also ROVs (Remotely Operated Vehicles) and seismic equipment (including streamers). In addition to the offshore-related investments there will also be investments in extra equipment for other activities, including aircraft and drilling equipment.

In 2007 three seismic vessels: 'Geo Barents', 'Seisquest' and 'Geo Celtic', were added to the fleet. Five other vessels were brought into service for other offshore activities. At the end of 2007 the fleet comprised a total of 50 vessels of which 28 are Fugro owned. Already under construction are the new vessels 'Fugro Saltire' (an ROV construction-support vessel), scheduled for delivery in May 2008, 'Geo Caribbean' (a seismic vessel), to be delivered in November 2008 and 'Fugro Synergy' (a multi-purpose vessel), due to be delivered early 2009. During 2008 a number of other vessels will be chartered on a short or medium term basis. By the end of 2008 the fleet is expected to have increased to around 55 vessels. Orders have also been placed for the construction of a number of new vessels: one for seismic surveys (delivery in the second half of 2010), one ROV construction support vessel (delivery end of 2010) and one geophysical survey vessel (delivery at the end of 2009). These vessels will make a major contribution towards the expansion of capacity and the fleet renewal programme already underway.

The total investments in the above mentioned owned vessels (fully equipped) will amount to approximately EUR 450 million in the period 2008-2010.

Number of employees

As a result of the acquisitions, and based on good market conditions and prospects, the number of employees increased during 2007 by 1,635 to 11,472 at the end of the year (2006: 9,837). The acquisitions have added 700 employees to Fugro's workforce in 2007. At the beginning of 2008 the number of employees increased to 11,900, as a result of the fact that another 400 employees were added due to the acquisition of William Lettis & Associates, HGN Hydrogeologie, Pavement Management Services, Roadware and EMMET.

This has provided Fugro with some additional well-trained and experienced professionals it is constantly seeking. The average number of employees during the financial year was 10,824 (2006: 9,261) an increase of 16.9%. Fugro also works with a large team of experienced and trustworthy freelance staff who are regularly deployed on a project basis.

Despite the global shortage of specialists, Fugro continues to be successful when it comes to recruiting experienced and professional employees. Increasingly this is coordinated on a global basis with best practices being implemented at a local level. Fugro's success when it comes to recruiting employees is largely based on the global spread of the activities and Fugro's innovative and enterprising culture.

Results 2007

Revenue and costs development

In 2007 revenue increased by 25.7% to EUR 1,802.7 million, compared with EUR 1,434.3 million in 2006. Most of the revenue increase (22.9%) was achieved through organic growth.

The increase in revenue was accompanied by increased costs. Third party costs increased in line with the revenue by 20.2% to EUR 604.9 million (2006: EUR 503.1 million).

Personnel expenses increased by 21.4% to EUR 518.1 million (2006: 426.6 million). The average costs per employee increased by 3.9% (2006: 3.6%). Personnel costs as a percentage of revenue decreased slightly to 28.7% (2006: 29.7%).

Depreciation of tangible fixed assets increased by 37.7% to EUR 107.7 million (2006: 78.2 million). Depreciation as a percentage of revenue increased to 6.0% (2006: 5.5%).

Other operating expenses increased by 14.8% to EUR 254.6 million (2006: 221.7 million) and, as a percentage of revenue, decreased to 14.1% (2006: 15.5%).

Net result

Net result increased by 53.3% to EUR 216.2 million (2006: EUR 141.0 million), after deducting third party interests in the profits of subsidiary companies. This amounts to EUR 3.11 per share (2006: EUR 2.05), an increase of 51.7%.

There were no significant impairments of tangible and intangible assets in 2007. The net profit margin increased for the fourth consecutive year and amounted to 12.0% (2006: 9.8%).

Result from operating activities (EBIT)

At EUR 324.8 million the result from operating activities (EBIT) was 53.5% higher than in 2006 (EUR 211.6 million), which is in line with the net result increase.

Exchange rates

During 2007 the average US dollar exchange rate was EUR 0.73 (2006: EUR 0.79). A declining dollar rate during the financial year was one of the causes of the negative exchange rate result of approximately EUR 7 million (2006: approximately EUR 7 million negative).

The balance sheet was also influenced by the US dollar, British pound and Norwegian kroner. At the end of 2007 the dollar rate was EUR 0.68 (2006: EUR 0.76),

the rate of the British pound EUR 1.36 (2006: EUR 1.49) and Norwegian kroner EUR 0.126 (2006: EUR 0.121). Exchange variances had an 8.7% negative impact on the equity.

Cash flow

As a result of the increased net result in 2007 the total cash flow from operations amounted to EUR 337.1 million (2006: EUR 226.1 million). This equates to EUR 4.84 per share (2006: EUR 3.29), an increase of 47.1%.

Investments

The 2007 investments can be specified as follows (x EUR million):
Maintenance capex	93.1
Capacity expansion	197.9
Assets under construction
(primarily vessels, streamers and ROVs)	41.4
Assets from acquisitions	8.7
	-------
Total investments in tangible fixed assets	341.1

Each year Fugro invests to maintain the existing capacity. In 2007 these investments amounted to EUR 93.1 million (2006: EUR 82.8 million). As a continuation of the 2006 investment programme, additional investments were made in 2007, to permit organic growth to continue in the future. These investments amounted to EUR 197.9 million (2006: EUR 100.1 million). Investments in assets under construction amounted to EUR 41.4 million (2006: 42.0 million). The assets from acquisitions amounted to EUR 8.7 million (2006: EUR 21.0 million). This makes the total of investments in 2007 EUR 341.1 million (2006: EUR 245.9 million).

Net finance costs and taxes

Due to the sizeable investment programme the net finance costs increased and amounted to EUR 31.0 million (2006: 26.4 million). In 2007 exchange rate differences are included as a loss of EUR 7 million in the net finance costs (2006: loss EUR 7 million). The tax charge on the profit before taxes increased slightly to 24.3% (2006: 23.4%). The company strives for a relatively low tax rate through an efficient tax and company financing structure. The tax charge depends in part on the geographical spread of the projects that are carried out.

Dividend proposal

It is proposed that the dividend for 2007 be increased to EUR 1.25 per ordinary share (2006: EUR 0.83), paid according to the preference of the shareholder in cash, or in (certificates of) ordinary shares. As in previous years, the proposed dividend equates to a pay-out percentage of 40% of the net result.

Post balance sheet date events

Post balance sheet date Fugro announced the following:

• William Lettis & Associates, Inc., a geological consultancy with headquarters in Walnut Creek, California, United States. The acquisition costs are EUR 12 million. William Lettis & Associates has 75 employees and an annual revenue of EUR 10 million;
• HGN Hydrogeologie GmbH, a hydro geological and hydrological consultancy, Nordhausen, Germany. The acquisition sum is EUR 3.7 million. The annual revenue of HGN amounts to EUR 7.5 million and the company has 120 employees;
• Pavement Management Services Pty Ltd and associated companies (PMS), Sydney, Australia. The costs involved are EUR 7.4 million. PMS provides pavement engineering consultancy services, including assessment of current pavement condition, design studies for new pavements and definition of maintenance programmes for existing highway networks. The annual revenue of PMS amounts to EUR 3.8 million. The company employs 40 staff;
• Roadware Group Inc, Paris, Ontario, Canada. Roadware is a provider of technology and services for the assessment and mapping of highway, other pavement structures and supplies asset management database systems. The acquisition sum is around EUR 14 million. The company has an annual revenue of EUR 9 million and 130 employees.
• Electro Magnetic Marine Exploration Technologies (EMMET), Russian Federation. Fugro has reached agreement to acquire 60% of EMMET's shares for an amount of EUR 10 million. Fugro will also have the exclusive option to purchase the remaining shares. EMMET has offices in St. Petersburg and Moscow and is a technology developer and provider of marine electromagnetic services for hydrocarbon exploration. The company has 35 employees.

In January 2008 Fugro was awarded a contract for the inspection of almost 2,000 kilometres of 'non-urban' dykes in Central Valley, California. Fugro's share in this five-year project amounts to EUR 35 million.

Order backlog

At the beginning of 2008 the backlog of work to be carried out during the coming year amounted to EUR 1,459 million – a considerable increase of EUR 313 million compared with the previous year (beginning of 2007: EUR 1,146 million). The proportion of definite orders remained the same at 65% (beginning of 2007: 65%). The order backlog calculation is based on end-of-year exchange rates in EUR and, despite the US dollar exchange rate dropping from EUR 0.76 to EUR 0.68, the order backlog in EUR is 27% higher than at the beginning of 2007. Had the exchange rate remained the same the order backlog would have increased by 31% compared to the beginning of 2007. The growth of the order backlog is partly due to orders being placed at an earlier stage and the increased size of projects.

Financial targets and strategy

Given the current market conditions, Fugro's objective in the coming period will be to at least maintain the net profit margin of around 12%.Over the coming year Fugro anticipates a revenue growth that is above the average of approximately 15% achieved over the past five years. The assumption is that, as in previous years, around 5% of this growth can be achieved by expanding the activities through acquisitions.

Prospects

The prospects for suppliers to the oil and gas industry, the most important sector for Fugro, are positive for 2008. According to some external reports, the oil and gas companies' worldwide investments that are important for Fugro will again substantially increase during 2008, thus creating opportunities for further growth. Our preparation is reflected in additional investments and fleet expansion.

Although these investments will generate positive effects in 2008 they will not bear fruit fully until 2009 and the years thereafter.

During 2008 good developments are expected for deepwater projects in the Gulf of Mexico, West Africa and Brazil. Good capacity utilisation is, once again, expected in the Middle East, the North Sea and Asia. Fugro will also profit from its expertise and experience in improving the services for productivity of (existing) oil and gas resources.

Fugro is well equipped to respond to the global increase in demand in the oil and gas sector. Fugro is also well placed to expand its activities in large-scale infrastructure projects onshore and in coastal waters. The same applies for the mining sector due to continuing demand for diamonds, gold and uranium in particular.

Market conditions in the segments that are important to us appear to offer ample opportunities for growth during the current year. At the beginning of 2008 our order backlog was very good. We remain focused on strong organic growth supplemented by strategic acquisitions and on maintaining and, where possible, improving the profit margin.

As Fugro operates worldwide, the general development of the global economy does have an effect on its activities. There are uncertainties about the US dollar exchange rate compared to the euro. International political unrest may result in project stagnation and there is a challenge to recruit and retain sufficient qualified staff.

We remain confident in Fugro's future. Under the current market conditions we anticipate achieving further growth in revenue and in net result in 2008.

Due to the short-term nature of part of our projects, as in previous years, we will not be able to give a quantitative forecast for the entire year until August, when the 2008 half-yearly report is published.

Market developments and trends

The oil and gas market

Investments by the oil and gas industry once again increased by a substantial 15 – 19% during the year under review. The entire market sector, including Fugro, profited from this increase. 74% of Fugro's revenue is related to oil and gas.

According to recent external market research, US dollar investments by oil and gas companies will again rise by about 10% worldwide in 2008. An increase of 12 to 16% is anticipated in the international market segment that is important to Fugro, which excludes the United States. This segment represents approximately 70% of the global investments. Investments in the United States are expected to increase by 4 to 5% in 2008 and in Canada they are expected to fall slightly, as they did in 2007. Regarding these predictions, it should be noted that in recent years the actual increase in annual global investment was more than double the initial market forecast.

Increasingly, as a consequence of its broad package of related solution-oriented services Fugro is involved throughout almost the entire life-cycle of oil and gas fields. This cycle can last for several decades. It starts with the search for fields and continues from surveys related to the design and construction of the structures required to bring new fields into production, to improving production from existing fields and finally decommissioning. Fugro will, therefore, be able to continue profiting from the further increase in the investments (which were already substantial in recent years), now being made by the oil and gas companies. For a number of years these investments were relatively limited while, at the same time, the demand for energy increased throughout the world. To close the gap between demand and supply it is anticipated that oil and gas operators may make additional investments in the coming years. Fugro's response to this development includes the expansion of capacity already underway.

Many of the exploration and development activities, especially those related to deepwater projects, take place in the Gulf of Mexico, West Africa and Brazil. Other regions that continue to be very active are the Middle East, the Caspian Sea, the North Sea and parts of Asia, India and Australia. There is also increasing interest in detailed reservoir information from existing fields to enable production levels to be maintained for as long as possible, and to permit the maximum possible percentage of available oil and gas to be extracted.

Demand for gas is also creating a strong global growth market. Some of the demand is met by production of liquefied natural gas (LNG), which can be transported over the sea. Fugro is carrying out surveys for a number of LNG terminals now under development in various parts of the world. High energy prices are making the development of gas fields located at some distance from the user markets more attractive. This is especially applicable in the Middle East where there are considerable gas reserves within transportation distance of India, China and Japan. Large scale developments are also taking place in countries that have been exporting gas for some time, such as Australia, Nigeria and Indonesia. This will reinforce the trend towards the creation of a global gas market and could result in gas remaining more attractive than alternative energy sources.

Oil prices remained high throughout the year. In 2007 the average price of a barrel of Brent crude was USD 72.44 (2006: USD 65.51). The rise was caused by the global economic growth (demand side) combined with the relatively limited production and distribution capacity that cannot be increased quickly (supply side). External publications indicate that oil companies are basing their economic viability calculations for larger projects on an oil price of USD 30-40; well below the current price level. Considering the long duration from start to finish of these kind of projects, Fugro anticipates that its services will continue to be in high demand in 2008 and the following years.

The market for infrastructure projects

Infrastructure related activities accounted for approximately 14% of Fugro's activities in 2007. These projects are very regional in character and their scale increases thanks to strong economies in a large number of regions and a trend to consider larger, integrated developments.

Fugro performs large contracts associated with airports, land reclamation, (LNG) harbour expansions, dykes, tunnels, and major building and construction works all over the world. Fugro has strengthened its market position in this segment, steadily and continuously. One reason for this is the fact that Fugro has increasingly positioned itself as a supplier of integrated solutions in order to fulfil the customer's preference for handing over the responsibilities for various data acquisition and consultancy activities across a broader front to a single service supplier. Fugro can benefit from this market trend, thanks to the Group's unique combination of activities, specialists, equipment and technologies, combined with its scale of operation and leading market position.

Mining

Mining-related activities accounted for around 6% of revenue in 2007. The current price of minerals has led to a substantial increase in investment in exploration by mining companies. The search for new mining prospects has generated a high demand for this kind of survey. Government agencies are commissioning geophysical information mapping programmes on a more frequent basis to stimulate exploration activities. Exploration initiatives are also on the rise in the developing countries in Africa where the World Bank, the European Union and the African Development Bank have financed regional surveys.

Other market segments

Fugro not only supplies services to the markets mentioned above but also to a number of other niche markets. These services include precise positioning for machine guidance in agriculture, route surveys for offshore telecommunications cables and airborne mapping using laser technology for governmental authorities. Combining several activities into 'Geospatial Services' is Fugro's primary response to the globalisation of these markets that has been brought about by, for example, technical developments such as the use of satellites and increasingly precise measuring techniques. Approximately 6% of annual revenue is generated by these segments.

Divisions

Geotechnical services (x EUR million)	2007	2006
Revenue	443	371
Result from operating activities (EBIT)	78	58
Invested capital	246	240
Depreciation of tangible fixed assets	19	14
Result from operating activities (EBIT) as % of revenue	18	16
Result from operating activities (EBIT) as % of invested capital	32	24

Onshore geotechnical services

The strategy started in previous years proved successful in 2007. The main elements of this strategy are business growth in regional markets worldwide; further development of a strong market position for soil investigations in coastal waters; and involvement in larger, long-term projects. Fugro's size, favourable market conditions and the possibility to exchange knowledge and support offered by Fugro offices worldwide, combined to make 2007 a success. During the year under review new technological initiatives for further growth were developed.

In Western Europe the results were good against the background of a slightly improving market. Projects carried out in the former Eastern Europe have encouraged us to strengthen our position in that region. The acquisition of HGN Hydrogeologie GmbH in Germany enhanced our position in the market for hydrogeological services worldwide. The company specialises in providing advice about management of surface water, – considered a growth market in the context of rising sea levels.

In the United States excellent growth was achieved through the continuation of activities related to levee investigation in New Orleans and California and the provision of specialised investigations and advice for largescale projects such as tunnels, water discharge schemes and power plants. The acquisition of William Lettis & Associates, Inc., a company specialised in the field of earthquake hazard analysis, will contribute towards the further growth of our involvement in complex projects, such as the construction of dams and nuclear power plants, and the widening of the Panama Canal.

In the Middle East the volume of work remained high as a result of continuing activities related to infrastructure projects and the construction of artificial islands. Oil and gas projects continued to be important, particularly in Saudi Arabia. The new office in New Delhi will support further business growth in India aimed at profiting from substantial national investment in roads and harbours.

In the Far East the market in Hong Kong strengthened in anticipation of large-scale investments in 2008 and 2009. The results from the geotechnical and instrumentation activities in China were positive.

Offshore geotechnical services

Offshore geotechnical services continue to position Fugro more and more as an integrated supplier for multidisciplinary, complex, deepwater projects. To this end, several of the existing Offshore geotechnical and offshore Survey services have been combined into the Geoconsultancy Group. Service centres bringing together various areas of Fugro expertise are being established in the United Kingdom, the United States and Southeast Asia in order to respond to one client base. Fugro is expanding its leading market position based on its worldwide presence and specialist equipment. This strong position and extensive technical expertise play a decisive role when competing for deepwater site investigation projects and multi-discipline projects.

The results for 2007 were clearly better than for 2006. Fleet capacity was optimised due to good logistical planning of personnel and marine equipment. The work portfolio included deepwater projects in the Mediterranean Sea, the Gulf of Mexico and offshore West Africa, India and Brazil. The high oil prices generated an increasing interest in (new smaller-scale) field development projects in shallow water, in South East Asia, Australia, the North Sea and the Gulf of Mexico. Fugro's services in those regional markets are more focused on independent oil and gas companies. There was also an increase in the activities of national oil and gas companies. Encouraging market prospects have led Fugro to make new investments in training employees and expansion of equipment in this sector as well.

In 2007 Fugro carried out further surveys for several clients including China and South Korea and in an earlier stage for private oil and gas companies, to determine the presence of gas hydrates in deepwater. This information will be used for several purposes, including advising on the effects on safety when drilling for, or extracting of hydrates, as a new source of energy.

Survey services (x EUR million)	2007	2006
Revenue	852	709
Result from operating activities (EBIT)	205	146
Invested capital	371	278
Depreciation of tangible fixed assets	37	29
Result from operating activities (EBIT) as % of revenue	24	21
Result from operating activities (EBIT) as % of invested capital	55	52

Offshore survey services

Offshore survey provides a range of specialised services such as positioning, construction support, geophysical surveying, metocean and oceanographic studies. Survey vessels, ROVs (Remotely Operated Vehicles) and AUVs (Autonomous Underwater Vehicles) are deployed worldwide in support of these activities.

Once again Fugro had an excellent year with these activities. Across a broad front there was a sharp upswing in the markets. The results were also positively influenced by the acquisition of Rovtech at the end of 2006. In 2007 there was high demand for survey related to the development of new fields for the oil and gas companies and also for services related to installation work by service contractors. Investment by the oil and gas industry was substantial while the telecommunications market also recovered somewhat. Capacity utilisation was excellent and prices were good. Throughout 2007 Fugro also profited from the demand for survey support services in connection with work to repair damage to offshore infrastructure caused by the hurricanes in the Gulf of Mexico at the end of 2005.

During the financial year considerable investments were made in both employee training and equipment. New vessels were added to the fleet and the number of ROVs increased significantly. These investments are Fugro's response to the continuous growth in demand for our services. The increased development of deepwater oil fields means a high demand for precise and detailed measurements of the sea bed and underlying layers. Fugro's AUV technology is used all over the world for such surveys. In the year under review Fugro continued to pursue a policy of diversifying outside the oil and gas market. The telecommunications cable market and the hydrographic charting market (for the government) generated high demand for sea bed mapping worldwide, using both conventional vessel borne technology and airborne laser mapping systems.

Geospatial services

As of the 2007 Fugro's onshore survey and positioning activities have been combined into Geospatial services. The strategy is aimed at building-up a global geospatial services capability that delivers solutions for the professional user.

Two 2007 acquisitions – EarthData and MAPS – have also been incorporated in Geospatial services. This has added new data acquisition techniques, extended the geographical coverage and considerably strengthened the client base ready for the further expansion of these activities on a global scale. Fugro's market position and the possibilities for synergy with other Fugro business units are expected to contribute towards maximising opportunities to achieve further business growth.

During the year under review the revenue and net result generated from existing activities developed well. Almost all the market segments and regions made excellent progress with the exception of the gas related survey activities in Western Canada. In the Middle East infrastructure related activities generated strong growth and in the United States (Louisiana) oil and gas activities developed extremely well. In Africa business development was good across a broad front.

The acquisitions also had a positive influence on Fugro's results and broadened the range of services. The acquired new companies have given Fugro a strong position in the field of airborne mapping in the United States and in more inaccessible regions. The client base includes government organizations and many local and regional authorities and the focus is also on activities outside the oil and gas sector. Furthermore, with these acquisitions Fugro has also acquired technologically advanced cameras, laser measuring systems and a unique airborne radar technology (GeoSar). In 2007 Fugro also invested in further new equipment including instrumentation for mapping from helicopters. Three new systems of this type were launched onto the European and North American markets.

Geoscience services (x EUR million)	2007	2006
Revenue	508	354
Result from operating activities (EBIT)	115	66
Invested capital	402	286
Depreciation of tangible fixed assets	23	17
Result from operating activities (EBIT) as % of revenue	23	19
Result from operating activities (EBIT) as % of invested capital	29	23

Development & Production

Development & Production supplies the oil and gas industry worldwide with a broad spectrum of interrelated services and occupies a strong position in the offshore seismic survey market and as a supplier of nonexclusive multi-client data. It also provides high-value geophysical, geological and reservoir data processing and interpretation services aimed at improving knowledge about (potential) oil and gas reservoirs.

In 2007 the activities of all the business units continued to develop extremely well. Once again the oil and gas industry showed an increase in investments in exploration activities. This resulted in a strong increase in the demand for seismic surveys and good sales of geological and seismic multi-client data. Sales of this type of data in the Gulf of Mexico were lower than expected but this was amply compensated by good sales elsewhere. In 2007 total revenue in seismic services amounted to approximately EUR 325 million. The demand for data related to the discovery of new oil and gas prospects is expected to continue to grow as production from existing oil fields continues to decline (depletion effect) in response to growing demand for oil and gas and as a result of consistently high oil and gas prices.

Fugro is responding to this trend. The excellent development of business in 2007 was due not only to favourable market conditions but also to Fugro's investments in capital-intensive projects during the preceding year. Fugro is pushing ahead with building-up a modern fleet for offshore seismic surveys so that it can operate efficiently all over the world. More capacity will be added in the coming years. Fugro has developed into a global player with this modern fleet and is on the tender short list of almost all the large oil and gas companies. This emphasises the importance of a modern fleet of sufficient size equipped with the latest technology and complying with the most stringent safety regulations. The current organisation is able to leverage the cooperation and synergy

between various Fugro business units. Fugro's flexibility and market position improved still further in a market that was characterised by continuing consolidation in 2007.

In 2007 Fugro improved geographical exposure for its data processing and interpretation activities through expansion in South America. Two acquisitions, ProFocus Systems and 4th Wave, have also strengthened the position in seismic data capture and storage systems, and in processing seismic data for reservoir analysis. The global expansion of the data management and storage business was further enhanced in 2007 by the acquisition of the oil and gas assets of Kestrel in Canada.

Airborne survey services

Airborne survey concentrates primarily on the search for (new) mining prospects. At the same time, the oil and gas industry is also making increasing use of Airborne survey methods and techniques to search out and map new fields. Due to the strategic economic importance of mineral and fossil fuel extraction, business generated by (semi) governmental agencies is also a significant market component.

The results of the Airborne survey activities also increased in 2007. Fugro stands out from the competition by being able to deliver a full service package and to deliver its services and technologies globally. The intended purchase of the Falcon precise gravitational measurement technology will broaden service capability still further. The improved results reflect the continuing high level of activities related to the search for natural resources with the search for water being paid increasing attention. The expansion of the global economy means the demand for base metals, precious minerals and oil and gas remains as great as ever.

As in the previous year, one of the strongest growth areas in 2007 was the search for alternative energy sources. Once again this led to a substantial increase in exploration for uranium in Canada and Australia.

In 2007 Fugro made further investments in technological developments. A new type of cost-efficient aircraft was added to the fleet and second generation equipment was developed allowing a deep-penetration electromagnetic geological survey system to be carried from a helicopter. These systems are particularly useful for surveys in remote areas where airfields are scarce or non-existent.

Explanation annual results 2007

At 10.30 hours, Fugro will host a press conference (in Dutch) to explain the annual results of 2007. This press conference will be webcast (www.fugro.com). At 13.00 hours the analysts' meeting (in English) will start. This meeting will also be webcast on www.fugro.com. A digital version of the Annual Report 2007 is available on this website.

For further information: Fugro N.V. K.S. Wester, President and CEO Telephone + 31 70 311 11 12

Cautionary Statement regarding Forward-Looking Statements

This announcement may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including (but not limited to) statements expressing or implying Fugro N.V.'s beliefs, expectations, intentions, forecasts, estimates or predictions (and the assumptions underlying them).

Forward-looking statements necessarily involve risks and uncertainties. The actual future results and situations may therefore differ materially from those expressed or implied in any forward-looking statements. Such differences may be caused by various factors (including, but not limited to, developments in the oil and gas industry and related markets, currency risks and unexpected operational setbacks).

Any forward-looking statements contained in this announcement are based on information currently available to Fugro N.V.'s management. Fugro N.V. assumes no obligation to in each case make a public announcement if there are changes in that information or if there are otherwise changes or developments in respect of the forward-looking statements in this announcement.

Consolidated income statement

For the year ended 31 December (EUR x 1,000)

	2007	2006
Revenue Third party costs (cost of sales)	1,802,730 (604,855)	1,434,319 (503,096)
Net revenue own services Other income	1,197,875 14,448	931,223 13,052
Personnel expenses Depreciation Amortisation of intangible assets Other expenses	(518,146) (107,684) (7,093) (254,587)	(426,636) (78,169) (6,212) (221,691)
Result from operating activities (EBIT) Finance income Finance expenses	324,813 3,837 (34,818)	211,567 2,393 (28,839)
Net finance costs	(30,981)	(26,446)
Share of profit of equity accounted investees	(226)	1
Profit before income tax Income tax expense	293,606 (71,277)	185,122 (43,373)
Profit for the period	222,329	141,749
Attributable to: Equity holders of the Company Minority interest	216,213 6,116	141,011 738
Profit for the period	222,329	141,749
Basic earnings per share (EUR)	3.11	2.05
Diluted earnings per share (EUR)	2.86	1.91

Consolidated balance sheet

As at 31 December (EUR x 1,000)

	2007	2006
Assets
Property, plant and equipment	599,298	412,232
Intangible assets	407,587	368,881
Investments in equity accounted investees	1,542	1,853
Other investments	6,265	3,498
Deferred tax assets	18,037	23,531
Total non-current assets	1,032,729	809,995
Inventories	44,320	47,403
Trade and other receivables	549,732	472,605
Income tax receivables	1,375	4,647
Cash and cash equivalents	71,974	71,048
Total current assets	667,401	595,703
Total assets	1,700,130	1,405,698
Equity
Share capital	3,521	3,479
Share premium	301,550	301,539
Reserves	178,705	116,388
Unappropriated result	216,213	141,011
Total equity attributable to equity holders of the Company	699,989	562,417
Minority interest	7,033	3,364
Total equity	707,022	565,781
Liabilities Loans and borrowings	449,957	341,997
Employee benefits	30,333	38,745
Provisions	16,278	13,888
Deferred tax liabilities	486	357
Total non-current liabilities	497,054	394,987
Bank overdraft	78,443	42,879
Loans and borrowings	6,460	57,010
Trade and other payables	321,715	285,758
Other taxes and social security charges	29,407	23,782
Income tax payable	60,029	35,501
Total current liabilities	496,054	444,930
Total liabilities	993,108	839,917
Total equity and liabilities	1,700,130	1,405,698

Geotechnical services
(EUR x million)	2007	2006	2005
Revenue onshore geotechnical services	254	223	172
Revenue offshore geotechnical services	189	148	132
Total	443	371	304
Result from operating activities (EBIT)	78	58	46
In % of revenue	18	16	15
In % of invested capital	32	24	26
Depreciation of tangible fixed assets	19	14	10
Invested capital	246	240	175
Average US dollar rate	€ 0.73	€ 0.79	€ 0.81
Order backlog	Jan 08	Jan 07	Jan 06
Onshore geotechnical services	153	147	97
Offshore geotechnical services	142	98	69
Total backlog	295	245	166
US dollar rate per 1 January	€ 0.68	€ 0.76	€ 0.85

Survey services
(EUR x million)	2007	2006	2005
Revenue Offshore survey services	731	624	490
Revenue Geospatial services	121	85	75
Total	852	709	565
Result from operating activities (EBIT)	205	146	97
In % of revenue	24	21	17
In % of invested capital	55	52	44
Depreciation of tangible fixed assets	37	29	25
Invested capital	371	278	222
Average US dollar rate	€ 0.73	€ 0.79	€ 0.81
Order backlog	Jan 08	Jan 07	Jan 06
Offshore survey services	539	482	372
Geospatial services	109	62	57
Total backlog	648	544	429
US dollar rate per 1 January	€ 0.68	€ 0.76	€ 0.85

Geoscience services
(EUR x million)	2007	2006	2005
Revenue Development & Production	406	268	216
Revenue Airborne survey	102	86	76
Total	508	354	292
Result from operating activities (EBIT)	115	66	44
In % of revenue	23	19	15
In % of invested capital	29	23	24
Depreciation of tangible fixed assets	23	17	18
Invested capital	402	286	180
Average US dollar rate	€ 0.73	€ 0.79	€ 0.81
Order backlog	Jan 08	Jan 07	Jan 06
Development & Production	453	294	171
Airborne survey	62	63	48
Total backlog	515	357	219
US dollar rate per 1 January	€ 0.68	€ 0.76	€ 0.85