Brunel International NV

AEX:BRNL

Q2-2025 Earnings Call

[Operator]

Good morning, and welcome to the Brunel International Results Call for Second Quarter and First Half 2025. My name is Brika, and I will be coordinating your call today. [Operator Instructions] On this side of the line, we have Peter de Laat, CEO; and Toine van Doremalen, CFO.

I will now hand over to Peter. Peter, please go ahead.

[Peter de Laat, executive]

Thank you very much. Good morning, everybody. Welcome to our call on the results for the second quarter and the first half year of 2025. I want to start by welcoming Toine because it's the first time he joined the call after joining us 1st of April and his appointment in quarter to CFO on the AGM. Thanks for joining me.

[Toine van Doremalen, executive]

Thank you. Good morning, everyone.

[Peter de Laat, executive]

And as you can see on this slide, we also just celebrated our 50-year anniversary on the 1st of July. And that's 50-year anniversary with full of ups and downs in a cyclical market. So it's also good to keep that in mind that we've been here before.

Then moving on to the operational highlights. The second quarter quite kind of developed in line with our expectations with a similar trend organically as we've seen in the first quarter. That means at a lower level than we were last year, but it's pretty much stable run rate at the moment. And that means low revenue and lower GP, but we were -- we saw the benefit of the cost program we executed last year with a saving that's been around EUR 13 million in the second quarter -- first half year, so more than EUR 20 million that we were aiming for last year.

But still, based on our current run rate, we also decided that we need to do more in costs. So we'll do an additional saving measure. And the biggest one of that is closing our card test center in Dortmund in Germany. We closed that in June, yes, and it's the only activity where we have some assets or actually quite some assets on the balance sheet. As a result, the balance between the one-off cost and the cost saving is different than we've seen last year.

We saw a little bit of positive in our perm activities in the second quarter, still at a lower level than last year, but higher than the first quarter. So there's a slight recovery there. And we've seen a lot more progress on our technology and AI implementations because our perm system almost live everywhere in the world, or I would say, everywhere in the world, except for 1 location. And the addition of AI to it is going faster than I had expected 6 months ago. So very happy with that.

And with that, I want to hand over to Toine to share the details of our results.

[Toine van Doremalen, executive]

Thank you, Peter. And again, nice to meet you all. Let me get into some more details of the financial results. Revenue ended in quarter 2 with around EUR 303 million, which is down 12% on a reported basis, but mind you that there's quite some currency and working day impact to get organic growth, which ended at 7%. And again, the currency impact has given all the turmoil in the world and specifically the U.S. dollar, which has reduced compared to the euro.

Then the gross profits declined with 20% compared to last year. And organically, that was 14%, again, given the working day and the currency impacts. The decrease in gross margin was also impacted by the fact that perm revenue still is lower and that comes at a very high margin, as you know, as well as some ongoing margin pressure in some of our markets, more specifically in Germany.

Then Peter mentioned that from a cost perspective, we initiated last year cost reduction, where we're basically overshooting the EUR 20 million in the first half -- EUR 20 million was a full year run rate, and we achieved EUR 13 million in the first half. So that's overshoot. And in addition, given the challenges, we've initiated indeed an additional cost saving program with specifically then the test center in Germany, as Peter already mentioned.

The cost savings will show in the results during Q3. And again, those are full year run rate savings and they come with a one-off cost of close to EUR 8 million, which is about half related to assets and lease impairments as those represent a relatively high asset base and the other half is people related. Then underlying EBIT is at EUR 6.3 million. That's a 46% decline. Organically, it was 27%. And again, here, the currency and working day impact was pretty high.

Then from a regional perspective, we'll go in the regions in a minute. But high level, we see most pressure currently in DACH and the Netherlands, but we also have some positive developments in Australasia, Middle East and India, Americas and Asia. Specifically from a profit perspective, we have seen in Q2 an increase organically as well as reported and the same for the first half of the year.

And with that, let me continue to the next slide. This shows the split in revenue and gross profit across the regions we have seen over the last few years and also in Q1 and Q2 that the rest of the world has increased its share in revenue as well as in gross profits.

Zooming a bit more into the regions. DACH was hard hit by the reduction in headcount. That, of course, also then impacted the revenue for working day, which was close to 25% reduction. And also the margins were impacted not only by the reduction in activity level, but also with some price pressure in specific segments as well as lower permanent headcount and some productivity. Underlying EBIT was at negative 0.6%.

I think I've highlighted most of the topics on this slide. What you can see here is that the trends between Q1 and Q2 were pretty similar from a top line and gross profit perspective. We see some increase in the operating expense reduction, which again will further increase over the course of Q2.

Moving on to the Netherlands. There, we did see a decline in revenue per working day of around 9%, which is also in line with the headcount decline that we've seen year-on-year. Gross margin adjusted for working days was down 23% in quarter 2 of this year compared to 25% last year. And that reduction is primarily impacted by still a slightly higher banks, which is reducing, but it takes time to get that to the right level. Underlying EBIT was 4.5%.

Then the specifics of the Netherlands. I've highlighted most of the topics here. What you can see also is that in Q2, the revenue was down 11%, operating expenses were down 13% and profits still at 7% underlying.

Australasia had a good performance, even though revenue was down where we have reduced some of our low-margin businesses. And as a result, we have seen conversion ratio increasing to 33% and also the cost organization has reduced year-on-year, leading to a very high EBIT increase of 40% organically.

Most of the topics I've discussed here, so I will skip this one with the good performance.

Middle East and India, also here, we have seen solid improvement year-on-year in EBIT, even though activities have reduced a little, margin has improved and EBIT has improved year-on-year amongst others driven by some cost measures in the region.

Then going to the Americas. We have seen here a positive development in Brazil in terms of revenue, which was partly offset by lower revenue in the U.S. and Canada, also impacted there by perm revenue, which, as Peter already mentioned, we've seen across the board. Gross margin declined slightly, but then combined with good cost control, we have seen the EBIT staying flat year-on-year in Q2 and even improving a bit for the first half of the year.

Asia did see a rebound in quarter 2 compared to quarter 1. That was partly driven by working days given the fact that the Chinese New Year took place in Q1. And we've also seen some more activity level on existing projects in the region with that driving revenue, driving margin and driving profitability. And also the cost control in the region was very well during Q2 and the first half of the year.

Then the rest of world. There, we did see a decline in profitability that was partly related to Taylor Hopkinson, where, again, perm revenue, even though a bit better than in Q1, it's declined year-on-year. And we have also seen a slight slowdown in the business in Europe and Africa, specifically in conventional energy and hydrogen and that was the main impact in Q2 for the rest of the world.

I think I've highlighted most topics here. Also here, you can see that operating expenses were well controlled during. Yes, thank you.

Now international. Yes. So here, you can see the negative 12% OpEx was well controlled and more coming. And again, underlying EBIT shows negative 46% here. But on a like-for-like basis, it was negative 27%.

Then moving on to the verticals. Obviously, the vertical show more or less across the board, we have highlighted for the regions, specifically in mobility, which is specifically the car industry, we did see a higher decline, not surprisingly, primarily driven in Germany.

Then the net profit, which includes the one-offs that we highlighted before, ended up with EUR 0.3 million and on the back of a EUR 6.3 million then underlying profit and then the one-off.

The tax rate was relatively high in Q2 and usually high that came through a couple of topics, which was primarily some payments of withholding taxes as well as some nondeductible losses related to the one-off costs, specifically the write-offs that I spoke about in Germany and where we could not book a corresponding deferred tax asset.

Then we move on to the next page. I think we already mentioned most of this in terms of the incremental cost savings and the corresponding one-offs.

The balance sheet. Free cash flow was negative EUR 24 million in the first half of the year that compares to more or less a flat cash flow in the first half of last year. The main impacts are the lower earnings, as we mentioned, also a delay in collections as well as some higher corporate income tax payments, which were primarily impacted in Q1.

Then the net debt balance per end of the quarter was negative EUR 2 million. That compares to about a EUR 65 million cash balance last year. And the main difference there is, one, the dividend payment of EUR 26 million, which took place recently as well as the seasonality in the cash flows, which we've also seen in prior years. That is, I think, most on the balance sheet for now.

And then if we go to the outlook, that is where we see that the trends -- we expect the trend in Q3 to continue in line with the trend in Q2. And obviously, with the movement in currency that will impact the results as well moving forward.

With that, I hand it back to you, Peter.

[Peter de Laat, executive]

Yes. And of course, there are some -- there's a lot of positive news in our markets. So we're starting with Bazooka that's been announced in Germany, but also progressed on conventional energy projects like Rovuma in Mozambique, Penang in PNG, the Wittu FPSO for Guyana and GranMorgu FPSO for Suriname, The Phoenix Project in Namibia. So there's more activity than we've seen in the last 12 months. But some of those projects will only start in the course of second half of the year. So there's not too much impact yet in the first quarter. And the same for the Bazooka in Germany that has been announced, but they're still working on the funding, and it definitely has not resulted in projects being started. So we need a bit more time to see that the positive impact of those new activities in our results.

And of course, these macroeconomic conditions, but also the impact of technology and especially AI that, of course, ask for an updated strategy. And we're currently working on that to see what our plan going forward will look like, updating it again on other developments. And we will share that with you latest in the first quarter of next year.

And looking at AI, AI is a big opportunity for us, but also a threat. Let's start with the threat. We are currently providing certain roles to our clients that are likely to disappear on the short or medium term from our clients. The positive part is that they will need new skills, and we can also help them there. We need to find the balance there to make sure that balance is positive. And the best impact on short term will be in making our own organization more efficient by using AI and streamlining our processes and especially increasing our speed of everything we do. And again, we are making nice progress there. So really optimistic on what that will bring for us.

And that's a brief summary of our second quarter results, and now I want to ask you to ask me any of the questions you might have.

[Operator]

[Operator Instructions] The first question we have from the phone lines comes from Konrad Zomer with ABN AMRO.

[Konrad Zomer, analyst]

A few. Firstly, can you be a bit more specific on how you're going to spend the EUR 10 million -- or sorry, how you're going to save the EUR 10 million of costs, the geographical direction they should come from, what you implement to do?

Secondly, can you share with us what the specific delay in your collection of bills contains? Any specific clients or geographies that you can share with us?

And lastly, Peter, you mentioned a few new contract or potential opportunities. But at the same time, your guidance for Q3 is broadly in line with Q2. So do we understand it correctly, if we say that the benefits of these additional contracts are going to take a while to filter through your excellent results?

[Peter de Laat, executive]

Do you want to start with first?

[Toine van Doremalen, executive]

Yes. So thank you, Konrad. In terms of the EUR 10 million savings, we have emphasized here the test center in Germany as one of the savings. And other than that, we have identified savings and those have been implemented across all regions and activities. So that is the majority of the EUR 10 million.

Then the delay in collection. I think that requires a bit of explanation. If you look at our DTO, which -- of TDO, which is our metric to see how long we take to one bill our invoices, but also collect the monies. Then we finished with 80 days by the end of Q2 this year compared to 87 days last year same time period. So overall, we are collecting faster. However, what we see in terms of seasonality that we ended the year 2024 very low at 73 days. So we always see in the beginning of the year with new service orders being originated, that it takes a bit of time to get that process, again, fully working our clients. So that is why you see in the comparison that collections have -- are good compared to last year, same time period, but a little bit less compared to the end of the year. So we have hoped for a little bit more unwind in our receivables, but that will then happen in the second half of the year.

[Peter de Laat, executive]

And to add to that, so it's not client-specific or region-specific. And then your last question -- I'm sorry. Then the last question, yes, you're right, the new opportunities, the pipeline is increasing, but it will take a while before we will start to see the real benefits. Also keeping in mind that most of the projects starting, especially in the energy space, only start with a low headcount for us and then ramp up in the course of the project.

[Konrad Zomer, analyst]

Right. And then maybe one follow-up on the back of that last answer. We've seen quite a lot of news flow recently on some of the oil majors scaling back activities in renewables, hydrogen, the specific areas that Brunel would like to grow at. Have you noticed any scale back in your negotiations yet or your contacts with these companies? Particularly BP in Australia comes to mind. Has that any impact on your business?

[Peter de Laat, executive]

Let me address the first part first. So what we see is that all the increased activity is all in conventional energy. So not in renewables. So that matches what you're seeing. BP specifically, it's slightly different for us because until now, we have never worked with them. So it's not impacting us yet, although we did just sign a contract with them for the first time. So that could be promising. But yes, we haven't seen a change with Shell and BP, again, because we didn't do too much renewable work with them so far. And the renewable market has been weak for 2 years already and it's definitely not getting weaker.

[Operator]

Your next question comes from Simon Van Oppen with Kepler Cheuvreux.

[Simon Van Oppen, analyst]

I have 2. First of all, the DACH region continues to be a drag on performance, which seems to be a broader trend among staffing companies in the sector. What is your view on the outlook for the region in the second half and into 2026? In particular, how are your clients hiring attentions evolving in the light of the EU-U.S. tariff agreement and the German federal budget vote expected in September?

And then secondly, you reported strong growth in renewables in Asia during the first half of the year. Could you elaborate on what is driving that performance? And how do you see the growth trend evolving in the current quarters?

[Peter de Laat, executive]

Yes. Thanks, Simon. Let's start with renewable Asia. That's one specific project, is Inscape project, where we do construction on fabrication yard and that has started in December last year. So that's contributing in the first half of the year. So a very nice project.

On the DACH region, I want to answer it in a couple of ways. First of all, you noticed that we only provide an outlook for 1 quarter ahead. That's because of a lack of visibility on, yes, how the market will behave. Based on what we've seen now [Audio Gap]. Does that answer your question, Simon?

[Simon Van Oppen, analyst]

My line was breaking up. I'm not sure the issue was on my end or on your end, because I couldn't hear you for a moment.

[Peter de Laat, executive]

Okay. Did you get the part on renewables for Asia?

[Simon Van Oppen, analyst]

Yes, I got that.

[Peter de Laat, executive]

Yes. So the DACH region, it's hard to predict when exactly the investments will result in additional work for us. I don't expect any significant this year, but I'm optimistic that we will see the first pieces next year. But once again, the sentiment is that Germany is changing so many times and so drastically that it will be hard to give a detailed prediction on that.

[Operator]

We now have Marc Zwartsenburg with ING.

[Marc Zwartsenburg, analyst]

I just want to follow up on the cost savings question from Konrad on the EUR 10 million. So part is in the automotive test center in Germany. But the other, let's say, EUR 8 million, is that purely reducing staff in Germany, in the Netherlands and across the globe a bit to address the organization to the top line? Or are there any specific other cost savings in there, like closure of branches in Germany or something like that?

[Peter de Laat, executive]

Yes, that's exactly where I was going to. Yes, we are also reviewing our office infrastructure. So we're reducing the office space we're using and also reducing the number of locations we're in. And that's not just Germany, but also other parts of the world where we see that we can do with a smaller office. So also definitely office cost is less. And then staff cost is the biggest part of our cost. So obviously, there's -- the biggest part is in staff cost. And a part of that is that we have -- yes, we are earning less gross margin or gross profit. So we're also paying less commission to our sales people. So that's a connection that we have with the business. And we -- you've seen that our internal headcount is still going down, and that will also result in lower staff costs.

[Marc Zwartsenburg, analyst]

And by reducing the network across the globe, you mean smaller offices? Or are you also retreating from some areas in the global businesses?

[Peter de Laat, executive]

For now, it's mainly smaller offices. But as part of the strategy update, we are obviously also reviewing our global footprint.

[Marc Zwartsenburg, analyst]

And is it in specific industries like maybe in the renewal areas where you believe that maybe the market might be structurally lower like in the U.S., for example, where Trump is, of course, very much opposed to wind energy and what have you? Anything about that or automotive in the U.S. or somewhere else?

[Peter de Laat, executive]

The reduction in office space is twofold. It's firstly due to the lower activity level in Germany. So just small organization. But in other parts of the world, we see that we are becoming more efficient and the headcount is lower, so we need smaller offices. So it's not vertical-related, it's much more how we are organized internally.

[Marc Zwartsenburg, analyst]

Okay. Okay. And then you also made a few statements on AI. So on the one hand, short term, it will be a benefit from making your own organization more efficient. I assume that's not in the cost savings yet, so that's on top of at some point. Is that correct?

[Peter de Laat, executive]

A little bit of both. We -- also, last year, we announced that part of the triggers driving our cost savings that we achieved last year was on the back of the technology implementations, but there is more to come with the use of AI. That's clear.

[Marc Zwartsenburg, analyst]

Okay. Yes. And then you also mentioned there's a threat that some services that are currently delivered to clients will disappear. Is that a statement you make based on an assessment you've currently made on the service you're providing to your clients that you already have some feedback from clients like, hey, these kinds of businesses will disappear. So keep that in mind because you will get some people back. Isn't that concrete? And can you maybe give a bit more color?

[Peter de Laat, executive]

That not -- we don't. No, we didn't have too many conversations with clients yet, but it's based on the client behavior that we've seen and our own review of the most common roles we're providing. And the biggest part of that will be in the Netherlands with exposure to supporting banks and governments for work that probably can be also done by AI. In energy space, we don't expect too much impact.

[Marc Zwartsenburg, analyst]

You say in the Netherlands, it's where you support the government and bank.

[Peter de Laat, executive]

Yes.

[Marc Zwartsenburg, analyst]

What that the other?

[Peter de Laat, executive]

Yes.

[Marc Zwartsenburg, analyst]

And you say, based on customer behavior, I mean, they are already not extending contracts. Is that how I should see it?

[Peter de Laat, executive]

You can see that in our vertical report, our activity in the financial sector in the Netherlands is also reducing. And that's partly because of the cost-saving programs in that industry, but they're able to achieve those cost savings also because they're implementing AI.

[Marc Zwartsenburg, analyst]

Okay. And on the Netherlands, now we're talking about the Netherlands anyway. Do you see -- do you also see some positive impact from the freelance law? Because initially, it had a small negative because you had small group of people that needed to leave. But do you also see people more coming in on the back of that because they end up somewhere. So I would expect that at some point, it has a bit of a positive impact on your business, but I can't see that, to be honest.

[Peter de Laat, executive]

That's also what we had expected, but we're not seeing it yet, and that's for a couple of reasons. The current legislation around freelancers still has some room for interpretation. We see that there are still competitors that have a slightly more aggressive interpretation of it. So freelancers are still able to find companies like us to continue being a freelancer.

And in general, clients do not want to work -- or want to work less and less with freelancers. So this will help us going forward. We do see the first signs of freelancers being open to have an employment contract instead of a freelance arrangement, but that's only really recently changes. The first couple of months of this year, we saw that freelancers will desperately try to find a solution to continue as a freelancer.

[Marc Zwartsenburg, analyst]

I'm writing this all down pretty quickly. And then maybe lastly on the tax rate. You guide for a higher tax rate. How should we look at the tax rates maybe beyond this year, so '26, '27? Should we then assume the normal 30%, 35% again? Or what should we expect there?

[Peter de Laat, executive]

Yes, based on our current activities, it should go back to anywhere between 30% and 35%.

[Marc Zwartsenburg, analyst]

And then lastly, you mentioned some projects. Can you maybe share us a bit of more color on what projects are new and which ones will start in the second half of this year, which ones are delayed maybe to next year? Can you give a bit more color maybe on the project business?

[Peter de Laat, executive]

So the 2 that will definitely start this year are the FPSOs for Guyana and Suriname, so that's Wittu and GranMorgu. PNG is now...

[Marc Zwartsenburg, analyst]

What's the other one?

[Peter de Laat, executive]

Guyana. And the Mozambique and Namibia projects will only start in the first half of next year based on what we know now. Those are the 4 biggest ones.

[Marc Zwartsenburg, analyst]

How big are these contracts? Are they EUR 10 million to EUR 20 million on an annual basis? Or how big are they in revenue terms or in people?

[Peter de Laat, executive]

Yes. The FPSO projects are in that ballpark of EUR 10 million, EUR 20 million, but Mozambique and PNG are potentially bigger than that, but also for a longer course.

[Operator]

Your next question comes from Maarten Verbeek with The Idea.

[Maarten Verbeek, analyst]

It's Maarten Verbeek from The Idea. Firstly, linked to the previous question more or less, when we look at conventional energy, there's also the backdrop this year. Was that due to delayed projects? Or was it simply due to lower activities?

[Peter de Laat, executive]

Sorry, what do you mean by backdrop?

[Maarten Verbeek, analyst]

Much lower revenue.

[Peter de Laat, executive]

Yes. So what we've seen in conventional energy this year is that a couple of projects have been completed already in Q4 last year or in the first half of this year, and that's driving lower revenue with the new projects only starting in the second half of the year.

[Maarten Verbeek, analyst]

Okay. Then secondly, looking at your cash flow statement, it was also negatively impacted by higher income tax payment. That income tax payment was related to profit of last year?

[Peter de Laat, executive]

That's twofold. It's partly due to the previous years and also the advanced payments for this year that are a bit too high. So we also need to work on that on adjusting and that collecting the money again. But the largest part relates to previous year.

[Maarten Verbeek, analyst]

Okay. So second half, we should expect none to maybe even a bit of refunds?

[Peter de Laat, executive]

Yes.

[Maarten Verbeek, analyst]

Okay. And then maybe the technical question. When I look at your net profit and you divide it to your noncontrolling and attributable to the Brunel shareholders. This is a very different -- old split this year. Could you give some color to that?

[Peter de Laat, executive]

That's linked to the mix in our business because the noncontrolling interest is mainly in the Middle East. And the Middle East has a, yes, bigger share of the result than the mix was last year.

[Maarten Verbeek, analyst]

What company don't you have -- to what company does it refer this noncontrolling interest?

[Peter de Laat, executive]

That's -- there are activities in the Middle East, where we are the controlling partner. And this is the share of our minority shareholders in that region.

[Maarten Verbeek, analyst]

Okay. Let me see -- yes, just one remark, because in the first quarter of '26, you will organize in your Investor Day, Capital Markets Day. Just as a recommendation, please -- because that will be a period whereby a lot of companies will report their full year results, a lot of conference calls, meetings or whatever. Just to advise to do it maybe at a day that it's not going to be as many companies reporting because otherwise, you won't have the -- maybe analysts and shareholders' interest for your Capital Markets Day, that will be a waste of time.

[Peter de Laat, executive]

Yes, absolutely. So it will definitely be somewhere in March, not before that. I will -- when there's more clarity on the result releases, we'll pick a date.

[Operator]

We have a follow-up question from Konrad Zomer with ABN AMRO.

[Konrad Zomer, analyst]

Yes, I've got a few more, please. Firstly, referring to Maarten's comment on the CMD. The fact that you do not give an update on your midterm targets today, can we assume that whatever you're going to tell us at the CMD is going to be referring to different KPIs or the same sort of layout because it sounds like you are unlikely to achieve those targets. And obviously, with new management and new world, are you going to give us new KPIs? Or are you going to refer to the ones that you have set out a few years ago?

[Peter de Laat, executive]

That's a good question, but it's a little bit too early to answer that. But what I can say is, but what also shared last time that we need better macroeconomic conditions to achieve our targets for '27. And those improved economic conditions are not here today. And it's hard to predict when they will return. And that will also keep in mind when we share, as I said, our new targets. So unfortunately, not a clear answer, but more -- not more than I can give now, Konrad.

[Konrad Zomer, analyst]

Yes. And then on your dividend, because it's like a percentage of net profit. It looks like in 2025, your net profit is -- will be hampered by the additional one-off charges. The benefits of this new EUR 10 million cost saving might not come in before the end of the year. There's a higher tax rate. So your net-net number is actually subdued versus your, let's say, underlying net number. Is that going to have an impact on the dividend? Or are you likely to adjust for that?

[Peter de Laat, executive]

Yes, Konrad, that's probably a bit too early to say, but we will take these effects into account once we get to the dividend decision.

[Konrad Zomer, analyst]

Maybe my last...

[Peter de Laat, executive]

Sorry, go ahead.

[Konrad Zomer, analyst]

And then maybe my last question. It's about the timing. If you -- in your press release, you do give a few specific comments that suggest that the worst might be behind. you. You've made some positive comments about things that are slightly picking up. Perm in Q2 was not as bad as in Q1, et cetera. So you do try to give us the impression that here and there, cautiously, things might improve somewhat. Are you not concerned that if in addition to the EUR 20 million of cost savings last year, you put through an additional EUR 10 million for this year that you're going to reduce capacity just at a time when things might pick up?

[Peter de Laat, executive]

Yes. First of all, on the suggestions, the slight positive items that you picked up from our press release were a reflection of what we've seen in Q2. And with the current lack of visibility, it's hard to predict that it's really adjacent trend or that it's a temporary -- a slightly better improvement. But the other part is correct. We also want to be ready for when the markets really start improving. So we are -- the cost savings we are achieving, we're doing in areas where we don't expect growth in the foreseeable future and that will give us room to invest in areas where we do see growth because, for example, we do our -- we are increasing our sales force in the Americas and Australasia.

So yes, it's a balancing act, and we want to be ready for when the market picks up, but that's definitely part of our decision process.

[Operator]

I will now hand it back to Peter for some web questions.

[Peter de Laat, executive]

Thank you very much. And we have a question from William Burgers asking for the extent of the strategy update. And if it could include that Brunel is considering to leave certain markets because of a lack of sufficient future profit potential?

It's so early to actually answer that question. But obviously, we are looking into all our markets and outlook for those markets. And our strategy will be aligned to the outlook of those markets and that potentially could also mean that we will exit certain markets.

In the second part -- second question from William Burgers is if we could add some color on our medium-term prospects for the U.S.A. and Canada and Asia.

So the medium-term outlook for U.S.A and Canada and Asia are actually connected. We see now the LNG markets improving in the U.S.A., especially with some projects are getting really close to FID with a couple expected this quarter. That will support results in Americas, but also in Asia because those projects will involve construction of modules in Asia. So that's one part. And Canada specific just announced the second phase of LNG Canada, and we're also working on that, that will support activities in Canada. But even more so, the construction for that project in Asia. Those were the questions we received via the chat.

[Operator]

I can confirm that does conclude the Q&A session today, and I would like to hand it back to the management team for some final closing comments.

[Peter de Laat, executive]

Thank you very much. Thank you, everybody, for attending. Yes, again, the second quarter developed more or less as expected. We see some project activity or promising project activity for the future ahead of us. And until that, we are working very hard to make sure that we have the right strategy and a very strong strategy to return to a strong growth and good profitability. And I hope to share more with you pretty soon. Thank you very much.

[Toine van Doremalen, executive]

Thank you.

[Operator]

Thank you all for joining. I can confirm that does conclude today's conference call. Thank you all for your participation. You may now disconnect, and please enjoy the rest of your day.