· 1Reported revenues up 84 per cent to US$816.1 million (2006/07: US$444.2 million)

· 2Normalised EBITDA up 73 per cent to US$33.8 million (2006/07: US$19.5 million)

· 2Normalised profit before tax up 20 per cent to US$25.0 million (2006/07: US$20.9 million)

· Exceptional charges of US$88.2 million (2006/07: nil) of which:

- US$53.5 million relates to operating charges

- US$15.3 million relates to future contingency

- US$19.4 million relates to impairment charges

· 1Reported loss before tax US$63.2 million (2006/07: profit of US$20.9 million)

· 2Normalised EPS (diluted) down 23 per cent to 16.7 US cents (2006/07: 21.8 US cents)

· Total cash at 30 June 2008 of US$160.1 million (30 June 2007: US$147.5 million)

· Free cash, net of bonding collateral, at 30 June 2008 of US$69.8 million (30 June 2007: US$118.2 million)

· No final dividend proposed (2006/07: 3.7 US cents per share). Total dividend for the year of 3.5 US cents per share (2006/07:

6.0 US cents per share)

· Backlog at 30 June 2008 of US$1.3 billion up 44 per cent from 30 June 2007 (US$954 million)

1 Reported figures are calculated after exceptional items

2 Normalised figures are calculated before exceptional items

1 Chiffres calculés en tenant compte des éléments exceptionnels

2 Chiffres normalisés sont calculés avant les éléments exceptionnels    

 

 

Background to Exceptional Charges and Capital Requirements

· On 1 June 2008 David Lamont was appointed Chief Executive Officer of the Group and on 26 August 2008 Davis Larssen joined the Group as Chief Financial Officer

· Following a thorough review of all major projects, operating centres and the Group’s goodwill and other intangible assets, it became evident that impairment charges and other exceptional costs were necessary in order to provide a solid platform for future profit growth· The exceptional charges relate to legacy corporate acquisitions and business practice, in particular to goodwill impairment on the Delta-T acquisition, to the Group’s business in the Former Soviet Union (“FSU”), to provisions for increased costs to complete five legacy projects and to a doubtful debt· Approximately 50 per cent of the exceptional costs represent future cash costs. Taking these into account, together with increased bonding requirements, the Group’s free cash, net of bonding collateral, as of 30 September 2008, was US$33.9

million· BSG Resources, the major shareholder, has reiterated its commitment to the Company and its confidence in the new management team, pledging financial backing and support. It has provided a subordinated US$10 million loan (“the Loan”) and guaranteed credit lines of a further US$10 million on commercial terms· The Independent Directors of the Company consider that, having consulted with Credit Suisse, its nominated adviser, the terms of the Loan are fair and reasonable so far as the shareholders of the Company are concerned. In advising the Independent Directors of the Company, Credit Suisse has taken into account the Independent Directors’ commercial assessment of the Loan.

With the full support of both the Board and the major shareholder, the new management team has conducted a detailed business review. This has lead to a clear understanding and recognition of the current state of the Company’s backlog and of the Group’s relative strengths and areas for improvement. A strategic review followed which is setting the direction for the Company going forward.Fundamentally, greater emphasis will be placed on operational competence and bottom line growth versus the revenue led growth of the past. In recognition of the core values and strengths of the Company, engineering and technology will be at the core of our market offering, with less recognition of engineering, procurement construction (“EPC”) packages being a “product” in their own right.

While the market segments which the Company serves are going through change, our US$1.3 billion backlog provides significant underlying value to the Group. The backlog’s diversification, as to geographic and market segment, coupled with a large number of projects underway and with the Group’s renewed execution rigor, provide the Board with good reason to look to the future with confidence.

Commenting on the results, David Lamont, Chief Executive Officer of Bateman Litwin said:

“I was attracted to Bateman Litwin because of its significant engineering capability, strong technology focus, global presence and culture based on diversity, improvement and growth. These fundamentals prevail and most definitely remain at the heart of the Group. We have had an intense period of review and while the adjustments deemed necessary are tough in the short-term, we have now established a solid foundation for the future. We are delighted that BSG Resources has pledged its financial backing and continued support for the Group. ”

A meeting for investors and analysts will be held today at 9.00 am at Oriel Securities, 125 Wood Street, London EC2V 7AN.

Bateman Litwin N.V. is a supplier of technology, engineering and project management services to global energy and resource industries. Its services cover the full life-cycle of projects including design, supply, construction, installation and commissioning.

Bateman Litwin N.V. operates throughout the world and employs over 2,000 people with annual sales of approximately US$820 million.

To find out more, visit Bateman Litwin at: www.bateman-litwin.com

Enquiries:

Bateman Litwin Tel: + 44 (0)20 7799 8307

David Lamont, Chief Executive Officer

Davis Larssen, Chief Financial Officer

Ingrid Boon, Investor Relations Manager

Credit Suisse Securities (Europe) Limited Tel: +44 (0)20 7888 8888

Jon Grussing

Will MacLaren

 

Oriel Securities Limited Tel: +44 (0)20 7710 7600

Richard Crawley

Michael Shaw

Pelham Public Relations Tel: +44 (0)20 7743 6679

Archie Berens

 

The financial year ended 30 June 2008 witnessed a changing of the guard at Bateman Litwin as well as a thorough review and evolution of its strategy. Shuki Raz stepped down as Chief Executive Officer and David Lamont was appointed as his successor. After the year end Davis Larssen joined the Group as Chief Financial Officer.

The Group has come through a period of rapid expansion due to both acquisitive and organic growth. For the year ended 30 June 2008, Group revenue increased by 84 per cent to US$816 million (2006/07: US$444 million) of which US$278 million related to the Delta-T acquisition. The Group has grown rapidly over the past four years. For the year ended June 2005, Bateman Litwin employed 590 people and reported revenue of US$116 million. Today the Group employs over 2,000 people and has increased reported revenue by more than seven times that of 2005.

Financial Performance It became apparent, however, during the course of the year, that the Group’s expansion had not been underpinned by the appropriate development of its cost controls and management structures. Furthermore, a review of the business led by the incoming CEO and CFO revealed legacy project cost over runs and a need for goodwill impairment charges. This has resulted in a pre tax exceptional charge of US$88.2 million of which US$43.9 million represents future cash costs to the Group. A loss after tax of US$65.6 million was reported.

Regarding the exceptional charges, US$19.4 million represents a goodwill impairment charge, of which, US$14.4 million is due to the Delta-T acquisition in North America and the remaining US$5 million to a goodwill write down in the FSU.

US$66.9 million represents a provision for increased costs and contingency to complete five legacy projects. These projects are an oil and gas project in the FSU (US$36.6 million), a waste-to-energy project in Europe (US$14.6 million), a solvent extraction project in South America (US$5.9 million), an ethanol project in North America (US$5 million) and an oil and gas project in Europe (US$4.8 million). Finally, there is a charge of US$1.9 million for a doubtful debt.

The Board of Bateman Litwin is extremely disappointed over the magnitude of the charges, however, the they have been necessary in order to provide a sound footing for future performance. Going forward the highest priority will be given to financial accountability and transparency.

Strategic Review

Since his arrival, effective as of 1 June 2008, the new Chief Executive has been strengthening the operating team and determining the Group strategy with the support of the senior management team. The conclusion of this review is that Bateman Litwin requires an essential strategic adjustment from focusing on low margin turnover growth to establishing itself as a business whose technology and engineering know-how are at its core. This will not only reduce operational risk but will also allow Bateman Litwin to expand its service offering and to become a valued technical and operational authority to our customers. Whilst this will result in slower top line growth and a change in the Group’s backlog profile over time, it will improve profit margins and, most importantly, reduce execution risk, thus securing a more robust predictable business performance. We are committed to improving financial responsibility and operational excellence.

The Group intends to properly align its portfolio of projects and cost base and is targeting an EBITDA margin of between 5 and 7 per cent within the next three years.

 

The litigation against Delta-T’s former owners, the Swains, is ongoing. Both parties are still completing the discovery stage due to the sheer volume of documents involved. A trial date is due at the beginning of 2009. Based on the Delta-T financial results for the 2007 calendar year and the price adjustment formula in the acquisition agreement, the Board of Bateman Litwin continues to anticipate the return and cancellation of the 11.8 million Bateman Litwin shares which initially formed part of the purchase price.

Funding It is anticipated that upon completion of the audited financial results the Company will be in technical breach of certain banking covenants. Bateman Litwin is, however, engaged in a constructive dialogue with the banks and is confident of a mutually acceptable outcome.

The Group’s major shareholder has pledged financial backing and support and has provided a subordinated US$10 million loan as well as guaranteed credit lines of a further US$10 million. This will enable the Group to satisfy its ongoing funding requirements. The loan is for two years at LIBOR plus 4 per cent. It is repayable at the end of the loan period unless Bateman Litwin chooses to repay it early.

This year has seen many challenges for the Group and I am encouraged by the positive response from our workforce. I would like to thank everybody for their hard work and enthusiasm.

There have been a number of internal management changes and external appointments. After the year end, we were pleased to announce the appointment of Davis Larssen, previously Regional Vice President Finance at Vetco Gray, as the Group Chief Financial Officer. Thomas (Mac) McDaniel was appointed as the Managing Director of Delta-T and the Americas while Paul Grogan joined the Company as the Group Human Resources Director. Both Thomas and Paul are long serving ex employees of Schlumberger and BHP Billiton respectively. Furthermore, Etienne Cabanes, previously Senior Vice President of Middle East and South West Asia at Technip, joined the Group as the EMEA Bateman Litwin Chief Operating Officer.

In addition to David Lamont joining the Board, David Granot joined as a non-executive director in June 2008. David Granot has over 35 years of international finance experience. He is employed by the BSG Group, and as such represents the Bateman Litwin controlling shareholder. Prior to joining the BSG Group, Mr. Granot was, amongst others, Chief Executive Officer of The First International Bank of Israel, Israel Discount Bank and Union Bank of Israel.

Davis Larssen is expected to join the Board at the Company’s AGM, following his appointment as the Chief Financial Officer. Max Abitbol, formally the CEO of Litwin retired as an executive director of the Company during the year. [He has remained, however, as a non-executive director and has continued to work for the Group in a part-time consulting capacity.]

The Board is committed to seeking a move to the Main List of the London Stock Exchange in the first half of 2009.

Dividends An interim dividend of 3.5 US cents, equating to 1.75 pence, has been declared and paid to shareholders (2006/07: 2.3 US cents). The Board is not recommending a final dividend (2006/07: 3.7 US cents).

I believe the new management team has re-defined Bateman Litwin’s objectives and focus on its core strengths. Difficult decisions have been taken to address the operational and financial performance of certain legacy contracts. Looking forward, the Group’s performance will be underpinned by the geographic and market diversification of the Company. This coupled with a large number of projects underway, and the Company’s renewed execution rigor, provide the Board with good reason to look to the future with confidence.

 

CEO’s review

Introduction

Bateman Litwin is a company rich with engineering and technology know-how, capability and resource. With over one thousand engineers and technologists located in most of the key energy and resource markets worldwide, we are well placed to address the diverse and growing technical challenges of our customers. My priority for the foreseeable future, along with the whole management team, is to align and focus the Group to improve operational execution and risk management, to restore technology and engineering know-how as our core capability and to move away from a sales growth mentality.

Since becoming Bateman Litwin’s CEO as of 1 June 2008, I have led a thorough review of all major projects and operating centres. It became evident that a goodwill impairment charge was necessary as well as a review of costs to complete certain legacy projects within the Group. It was essential to thoroughly address these legacy issues within the Group in order to provide a solid foundation for future growth.

This has resulted in a pre tax exceptional charge of US$88.2 million of which US$43.9 million represents future cash costs to the Group. US$19.4 million of the exceptional cost represents a goodwill impairment charge, of which, US$14.4 million is due to the Delta-T acquisition in North America and the remaining US$5 million to a goodwill write down in the FSU. US$66.9 million represents a provision for increased costs and contingency to complete five legacy projects within the Group and US$1.9 million represents a doubtful debt, all of which are described above in the Chairman’s statement.

Bateman Litwin requires a change in strategic direction. Our business model will concentrate on our core capabilities of technology and engineering know-how and will move away from being a high turnover, low margin EPC operator with an auxiliary technology unit. Our core capabilities will be underpinned by disciplined best in class project management skills. This will allow Bateman Litwin to expand its service offering encompassing the life of a client’s asset rather than a narrow focus on the front-end, low margin, high risk, design and build aspect of a process orientated plant. In essence, we are aiming to leverage our knowledge to become a highly regarded technical and operational authority to our customers. This will reduce our risk profile and ensure we are involved in more value added activities based on our core strengths.

Delta-T provides a good example of the change required. With a 21 per cent market share of the US bio-ethanol market, its licensed plants provide significant opportunities to offer technical services as well as upgrades to existing plant owners.

We are implementing strict risk review procedures with a view to quantifying risk in an objective and thorough manner. More stringent execution discipline is essential for our focus on operational excellence, which when coupled with a more discerning selection of business, will improve the quality and most importantly the predictability of our earnings going forward. Earlier recognition of issues, for example, allows for less costly solutions. Most important, however, is a management team capable of and dedicated to delivering the changes in a consistent, rigorous and disciplined manner.

To this end, I have introduced a number of changes to the team. I expect to continue developing a team capable of delivering best in class performance.

 

- Davis Larssen joined the Company as Chief Financial Officer. Davis was previously Regional Vice President of Vetco Gray. Davis is playing a vital role in establishing robust Group accounting and reporting systems, including accurate cash and profit and loss forecasting and proactive management.

- Thomas (Mac) McDaniel joined as the Managing Director of Delta-T and Bateman Litwin North and South America. Mac is a Schlumberger veteran with over 25 years’ industry experience. He has a proven track record in operations management and business development.

- Paul Grogan joined as the Group Human Resources Director having previously worked for BHP Billiton for 20 years. Paul’s wealth of experience will help shape the Group structure in terms of optimising the value of our workforce.

- Etienne Cabanes joined from Technip as the Chief Operating Officer of Bateman Litwin EMEA. Given the strength of Bateman Litwin’s EMEA backlog, Etienne will play a crucial role in ensuring disciplined project execution.

Furthermore, the Group will minimise its risk in EPC activities, specifically in the non-core elements of execution and support. This will be achieved through strategic joint ventures with local operators and will result in less dependence on lump sum turnkey type contracts.

Accordingly, the Group’s structure is being refocused. The technology and engineering know-how divisions will focus on a global offering while the regional units, underpinned by our low cost engineering centres, will ensure thorough operational discipline inprojects.

1. Global Procurement

The Group has adopted a global procurement strategy. A global procurement manager has been appointed to co-ordinate the Company wide purchasing of more than US$500 million of equipment. Previously these transactions occurred on a local basis ignoring the cost benefits that scale can bring.

2. Engineering Utilisation

The Group is focusing on improving engineering untilisation through more efficient use of the Group’s resources. Bateman Litwin has an exceptionally strong engineering population of over one thousand engineers. This, together with our diverse geographic footprint of low cost engineering centres particularly in Israel, Romania, Slovakia and the United Arab Emirates, provides the Group with a valuable competitive advantage.

3. Consolidation of Sales and Marketing

Bateman Litwin’s regional sales and marketing departments were previously operating as independent units foregoing any meaningful levels of cross selling of the Group’s services. Jean Yves Martin, the Managing Director of Bateman Litwin EMEA, has been appointed as Global Head of Sales and Marketing. He is facilitating the transfer of our technology and know-how throughout all territories in which we operate.

4. Operations Risk Management

In terms of bidding for new contracts a revised internal bid procedure has been implemented in order to properly assess

potential project risk. A key factor in the decision-making process, given that the focus of our business is technology and

know-how, is to ensure the correct mix of projects.

 

5. Centralise the Treasury Function

This is being implemented to improve cash management, to consolidate and enhance our relationships with our Banks and to ensure crucial forward planning.

6. Reduce selling, general and administrative expenses

The Group’s cost base is being re-aligned to a more appropriate size to better represent the Company’s aims.

In the 2008/09 financial year, Bateman Litwin will look to decrease overheads and increase efficiencies while working through the problem legacy projects. These projects will still require significant resources while not contributing to EBITDA. Consequently, we are aiming to achieve a 2008/09 EBITDA similar to that achieved on a normalised basis in the 2007/08 financial year. The Group is targeting an EBITDA margin over the next three years of between 5 per cent and 7 per cent.