Royal HaskoningDHV CFO Jasper de Wit introduces our 2020 financial results.
Given COVID-19, we are pleased with our financial performance. The operating margin increased to 4.8% (2019: 4.2%), while the financial results of 2020 show an organic revenue decline of -5.9% (2019: +1.3%). In the end a net result of €13.0 million (2019: €9.2 million) was reported. The order portfolio of €303 million is more or less at the same level as last year (2019: €314 million).
Our operational result (EBITA recurring) ended at €28.3 million (2019: €26.9 million). The operating income loss was compensated by substantial cost savings on travel and accommodation and staff expenses. In spite of the COVID-19 crisis we continued our strategic Strong22 programme in 2020 and related operating expenditure. This contains transformation costs and the launch of our Digital Business Line and connected developments. The results in 2020 were strongly driven by the Business Lines Industry & Buildings and Transport & Planning and our strong market position in the Netherlands. In spite of the COVID-19 crisis, we performed very well in these markets. Due to challenging market situations, the Aviation and Southern African Business Lines showed a top-line decline in operating income. Both were still able to operate profitably and, although limited, this is a sound result.
Excluding contractors, organic added value decline was -3.8% (2019: +2.3%). Although Sales Added Value was relatively good, the utilisation rate slightly declined compared to last year, partially caused by a firm focus on innovation and development but also due to more than expected proposal hours.
To achieve our Strong22 ambitions, we undertook two investments. In the Netherlands we acquired Novius Adviesgroep voor Informatie & Organisatie B.V., while in the United Kingdom we joined forces with Integrated Transport Planning Ltd. Furthermore, the year 2020 continued to be another year of investing in building the digital business, both in terms of consulting capabilities and digital software.
The results yielded a positive free cash flow in 2020 of €38.3 million (2019: €2.0 million). The free cash flow is higher than last year due to better working capital management. The COVID-19 crisis hardly impacted trade working capital (work in progress, trade debtors and trade payables), which showed a normal seasonal pattern throughout the year and was below last year’s level for almost the entire year. The days sales outstanding (DSO) decreased to 70 days at the end of 2020 (2019: 79 days). Our financial position remains healthy, with an equity ratio of 48% (2019: 48%) and a net cash position at the end of the year. We operate well within our bank covenants.
Besides the effect of the COVID-19 crisis as described above on our financial performance, there are no special events that should be taken into account for the financial statements.