Ballast Nedam Annual Figures for 2012: Tough Year, Firm Intervention, Accelerated Profile Change
NIEUWEGEIN, The Netherlands, March 8, 2013 /PRNewswire/ --
- Operating loss of € 31 million following € 49 million of reorganization expenses and impairment (2011: € 19 million profit)
- The loss for the period was € 41 million (2011: € 9 million profit)
- Revenue lower at € 1.3 billion (2011: € 1.4 billion)
- Well-filled book of € 1.8 billion (2011: € 1.9 billion)
- No dividend for 2012 (2011: € 0.47 per share)
- Financing position of € 20 million debt (2011: € 11 million debt)
- Forecast for 2013: operating profit of approximately € 15 million
- Nomination to the Supervisory Board of Ms C.M. Insinger MBA
Key figures x EUR 1 million 2012 2011 Revenue 1 296 1 382 EBIT ( 31) 19 Margin (2.4%) 1.4% Profit before income tax ( 38) 12 Profit for the period ( 41) 9 Dividend in EUR 0.00 0.47 Order book 1 761 1 950 Shareholders' equity 131 171 Solvency 17% 21% Financing position ( 20) ( 11)
Tough year, firm intervention, accelerated profile change
Ballast Nedam incurred an operating loss of € 31 million following € 49 million of reorganization expenses and impairment losses on land positions, and property, plant and equipment. This result is in line with the trading update for the third quarter of 2012. In 2011 the operating profit was € 19 million. The excellent results achieved on several large multiyear projects and in the niche markets endorse Ballast Nedam's strategy. The regional companies and some specialized companies that operate mainly in the strongly capacity-driven markets incurred losses.
In 2012 we duly increased the pace of implementing the strategy that is oriented to the well-performing markets of integrated projects and several niche markets. This acceleration was prompted by the persistently poor prospects for several companies that operate in the strongly capacity-driven markets. The resultant radical restructuring of these regional companies and several specialized companies will reduce the exposure to these loss-making traditional markets. In the process, more than 500 of the 3,900 jobs have been lost, which will have substantial personal consequences for the employees involved.
With the changes, Ballast Nedam's profile is changing faster from a major player on the bleak traditional markets to a prominent player on the integrated projects market and several niche markets that have growth prospects, such as offshore wind turbines, industrial construction, secondary raw materials and alternative fuels.
Theo Bruijninckx, Ballast Nedam's CEO, comments: 'Our strategic choice in 2012 was to move where possible from the persistently poor, and strongly capacity-driven, markets. We are continuing to focus on the markets in which Ballast Nedam is able to add value in a distinctive way. These are integrated projects, the niche markets with growth prospects, such as offshore wind turbines, and the promising modular building concept. We are accelerating the change in the company's profile accordingly. With this strategic focus, less exposure to loss-making markets and the well-filled order book, we are looking forward to an operating profit for 2013 of approximately € 15 million'.
Infrastructure x EUR 1 million 2012 2011 Revenue 496 523 EBIT 10 14 Margin 2.1% 2.7% Order book 900 1 152 Assets 214 228
Volume declined in the infrastructure market, leading to cut-throat competition and greater price pressure in several strongly capacity-driven market segments. The price level in the regional public procurement market for traditional contracts collapsed to below cost. Competition also increased for the major multiyear projects and in the industrial construction niche market. The offshore wind turbines niche market remained favourable.
Infrastructure achieved a € 4 million lower profit of € 10 million, in particular because of the increased reorganization expenses. However, in general terms Infrastructure displayed a fine performance in view of last year's further deteriorated markets. Indeed, disregarding the reorganization expenses in both years, Infrastructure's profit was unchanged relative to 2011 at € 17 million. Excellent results on the major projects exceeded the regional companies' losses.
Excellent results were also achieved on the ongoing major projects in the offshore wind turbines and industrial construction niche markets. For instance, the heavy lift vessel Svanen was extremely well utilized in 2012 on three offshore wind turbine projects in Denmark and the United Kingdom, and the Nuon Magnum multifuel power plant project will be completed in the first half of 2013.
The regional companies incurred losses in 2012. A previous capacity reduction of 20% in late 2011 was followed in 2012 by a further 50% adjustment. This means that in the space of one-and-a-half years the workforce has contracted from over 500 to around 200. This adjustment is many times larger than the fall in volume in the market. It is therefore a strategic choice to abandon the regional procurement market for smaller traditional contracts, and to focus instead on the larger, more integrated projects. Accordingly there will be less exposure to this loss-making market.
Infrastructure was awarded no PPP projects in 2012. We came second in the tender for the A1-A6 link PPP project, and after the parties had submitted their final bids for the complete two-line tram system in the city of Groningen, the client abandoned this PPP project.
Ballast Nedam operates on the alternative fuels niche market through investment in fuel filling stations and their implementation, management, commercial operation and maintenance. CNG Net and LNG24 invest in green gas public filling station networks for the private market, and LNG (liquefied natural gas) filling stations for the transport market. CNG Net produced a splendid, higher profit, and in December opened its fiftieth public filling station. CNG Net also manages seven custom filling sites for green gas customers, such as for the Connexxion public transport operator in the Arnhem Nijmegen metropolitan region. LNG24 has opened its first public LNG filling station in Zwolle, which serves many transport operators, whose vehicles now run cleaner and quieter on LNG.
Infrastructure's total assets declined from € 228 million to € 214 million.
The order book contracted from € 1152 million at year-end 2011 to € 900 million because of good progress on several major multiyear projects, and the absence of new large project acquisitions in the past year. In the next few years there will be substantial production from attractive projects, such as the A2 in Maastricht, which was acquired in a new contract form, and the large multiyear PPP project for the Maasvlakte - Vaanplein section of the A15. Among the good news was the completion early this year of the financing for the major Butendiek offshore wind turbine project in Germany. The contract for the design, delivery and installation of eighty foundations for approximately € 250 million was already in the order book at year-end 2011. Also in early 2013, Ballast Nedam acquired a contract for a wind farm in the Northeast Polder. Ballast Nedam is designing, delivering and installing the foundations for 48 water-based wind turbines along the dikes of the polder. Financial close must be reached in the spring of 2014, and the project has yet to be added to the order book.
Building & Development x EUR 1 million 2012 2011 Revenue 573 642 EBIT ( 26) 8 Margin (4.6%) 1.2% Order book 731 693 Assets 314 346
The markets continued to deteriorate in the past year, and we expect a further decline in volume in the coming year, for which reason competition for new projects is stiff, leading to lower prices. The housing market has stalled completely because of low consumer confidence, which is attributable to the now implemented constraints on acquiring home loans, falling prices, and the constantly changing tax treatment of mortgage interest. The housing associations' more limited scope for investment has increased pressure on the volume in the housing market. We are more optimistic about the housing market in the longer term. The sustained population growth, the smaller numbers of occupants in each home, and several years of low housing production are increasing the shortage, in terms of both quantity and quality. The office market will take longer to recover, in view of the current number of vacant properties and the trend towards using ever less office space for each employee. The renovation and maintenance market, and the transformation of vacant property to serve different functions, present good opportunities.
Building & Development incurred an operating loss van of € 26 million because of impairment losses on land, and reorganization expenses. However, even disregarding the write-downs and reorganization in both years, profit declined from € 17 million in 2011 to € 2 million. The major projects made an excellent contribution. The regional companies and property development produced a loss. The seven regional construction companies have been restructured in the past year, and have been transformed into three upscaled regional companies with a uniform structure, in order to raise efficiency and market orientation, and provide a better match for the new market volumes. In the reorganization more than 200 of the approximately 1,100 jobs were shed.
The revenue of Building & Development decreased by 11% to € 573 million. The underlying revenue of all operations was lower, with the exception of the management activities. Ballast Nedam Beheer, which has operations in housing, mobility and energy, achieved a higher revenue through multiyear management for the PPP projects.
Despite the difficult market conditions and the substantial regional company restructuring, the order book has expanded by € 38 million to € 731 million. Major projects that have been acquired, such as the public transport terminal in Breda, the new Hilton hotel at Schiphol Airport Amsterdam and the renovation and expansion of the ASR head office in Utrecht contributed to this increase.
Building & Development's assets decreased by € 32 million to € 314 million.
The residential construction operations declined from 1,147 homes under construction at year-end 2011 to 1,101, of which only 23 homes are from internal development. In 2012, 954 homes were completed.
Exposure property development x EUR 1 million 2012 2011 Land positions 152 154 Unsold stock under construction 6 13 Unsold stock delivered 18 12 Total on balance 176 179 Liabilities to complete projects under construction 1 7 Liabilities to acquire land positions 39 24 Total liabilities off-balance 40 31 Exposure property development 216 210
The total property development exposure, which consists of investments in land positions, investments in unsold stock and the related unconditional future liabilities, increased in 2012 by € 6 million to € 216 million. In addition, the conditional liabilities to acquire went down by € 16 million from € 159 million at year-end 2011 to € 143 million. Despite the ambition to lower the capital invested in property in the next few years, we expect little progress in the near future because of the sustained stagnation on the market.
The total investment in unsold stock, both delivered and under construction, remained approximately unchanged in 2012 at € 24 million.
The number of unsold homes went down from 110 at year-end 2011 to 67. The number of unsold delivered homes increased by 20 to 56, spread over 13 projects.
There was a net increase of € 6 million in delivered unsold stock to € 18 million, because of the completion of the leased hotel in Sittard - part of the Kloosterkwartier major integrated redevelopment project - and of the 20 unsold homes. In 2012 the 1,350 m² leased store in Arena Poort in Amsterdam was sold. Besides the 56 homes, there was also delivered unsold stock from 4,112 m² leased and 1,000 m² unleased commercial property.
Land positions x EUR 1 million 2012 2011 1 January 154 160 Net investment 19 2 Write-down ( 21) ( 8) 31 December 152 154 Cumulative write-down 39 18
Each year, or earlier if the need arises, a plan assessment based on scenario analyses is performed for each land position. The present value of all future cash flows is estimated using a weighted average cost of capital of 9%. These cash flows at the current price level are not indexed. A 3% margin for sale risk is also factored in, and no account is taken of the result on the building. The carrying amount of the land bank comprises almost no interest and preparatory expenses.
The land positions decreased by € 2 million to € 152 million, consisting of a net investment of € 19 million and a write-down of € 21 million.
The € 19 million net investment largely comprised the investment in the second phase of the Nieuwvlietbad beach resort area development, and delivery of the land in Langendijk. The still outstanding unconditional liabilities to acquire land positions increased by € 15 million to € 39 million, of which € 22 million will fall in the 2014 to 2018 period, and € 17 million in 2019 and later. This increase was attributable mainly to a housing site in Hazerswoude for which a designation for residential purposes was obtained. Sales for the first phase will open later this year.
The write-down of € 21 million related to 23 positions spread throughout the land bank of approximately 100 positions. About one half of this write-down is attributable to construction of the homes later than previously planned. The other half of the write-down is attributable to lower sales prices and a lower expected number of homes per position. In 2011 the € 8 million write-down was mainly on six land positions for residential construction in the northeast of the Netherlands. The cumulative write-down on land positions therefore increased by € 18 million at year-end 2011 to € 39 million, which is 20% on the entire land bank since 2008.
The estimated development potential of the land bank fell by 17% from 12,000 homes at year-end 2011 to approximately 10,000 through the dissolution of several partnership agreements for which no land had yet been purchased, and through lower estimates of the numbers of homes to be built on a number of positions.
Any significant further deterioration in the housing market could lead to more land position write-downs. Analyses have shown this write-down risk to be more sensitive to the time phasing of implementation than to the trend in prices.
Specialized Companies x EUR 1 million 2012 2011 Revenue 262 252 EBIT ( 10) - Margin (3.8%) 0.0% Order book 90 89 Assets 131 139
The volume in the markets for the specialized companies also declined, since they are largely derivative markets of infrastructure and construction.
On the other hand, revenue rose by € 10 million to € 262 million, because of the execution of the ongoing major projects such as the A2 in Maastricht, the Maasvlakte - Vaanplein PPP, the Erasmus Medical Centre in Rotterdam and the Amstel campus in Amsterdam.
Alongside contracts for design, construction and maintenance of fuel filling stations for CNG, LNG and hydrogen on the alternative fuels niche market, 2012 also saw the acquisition of the contract for the delivery, commercial operation, management and maintenance of 270 new electric vehicle charging points in the municipality of Utrecht. Ballast Nedam also won the Green Power tender for installing solar panels for various government buildings and residents in the Arnhem-Nijmegen region.
The specialized companies made a disappointing loss of € 10 million. There were large losses in prestressing, asphalt and foundation operations. In the subsequent restructuring some 30% of the jobs in the three companies concerned were lost. Disregarding the reorganization expenses, the result went from break-even in 2011 to a loss of € 7 million.
The order book remained unchanged at € 90 million and the total assets went down by € 8 million to € 131 million.
Supplies x EUR 1 million 2012 2011 Revenue 216 232 EBIT 2 4 Margin 0.9% 1.7% Order book 56 54 Assets 205 221
The markets for the high-grade hard stones and reprocessed raw materials were still reasonable. There was great pressure on the deliveries of raw materials to the concrete industry and the prefabricated concrete market.
The revenue of Supplies decreased by € 16 million to € 216 million as a result of the poorer market conditions in the Netherlands. Last year additional revenue was still being obtained from deliveries from the Norwegian quarry to Maasvlakte.
Operating profit declined by € 2 million to € 2 million, mainly because of an asset write-down at Rademakers Gieterij and a prefabricated concrete company. Disregarding write-downs and reorganization expenses, the operating profit improved from € 7 million for 2011 to € 9 million, which is mainly attributable to a reduction in the losses of prefabricated concrete companies and the favourable administration of a claim.
The raw material companies achieved a lower but positive profit because of the lower revenue. On the secondary raw materials niche market, Feniks Recycling also made a fine contribution, as it also did in 2011, thanks to high metal prices, as the shrinking infrastructure market put pressure on the sales of the remaining waste processing ash. The prefabricated concrete companies incurred a modest loss because of the price pressure resulting from the poor market conditions and the start-up of the iQwoning® plant. The new associates Ursem Modulaire Bouwsystemen and Concrete Valley made a positive contribution.
The order book of € 56 million remained largely unchanged. There was an underlying increase in the order book at Feniks Recycling and a decrease in that of the prefabricated concrete companies.
The assets of Supplies declined by € 16 million to € 205 million, mainly because of asset write-downs of € 7 million.
Ballast Nedam is focusing on modular building, which is an innovative industrial building method performed under controlled conditions. Modular building offers an optimum price-quality ratio, speed, flexibility and sustainability. Supplies strengthened its position in the past year with the stake in Ursem, whose modular building systems are used to construct utility buildings and building sections, such as student accommodation, care centres, schools, detention centres, hotels and prefabricated bathrooms. Ballast Nedam, with the iQwoning®, Ursem modular building systems and ModuPark® (the modular car parking product), now provides modular concepts for the new building and renovation market for residential and nonresidential construction. Ballast Nedam has presented the Plug and Play Core for the 2022 FIFA World Cup in Qatar. This modular sports stadium concept is designed for ease of assembly, transport, returnability and reuse, in a wide variety of forms.
The creation of Concrete Valley together with Microbeton has strengthened our position on the market for technologically and architecturally advanced lightweight, extremely strong concrete solutions.
Ballast Nedam has an excellent position in the secondary raw materials niche market.
In the United Kingdom Feniks Recycling has seven installations in operation for recovering secondary raw materials from the ash from waste incineration plants. In the past year Feniks Recycling strengthened its leading position in the United Kingdom by acquiring the construction contract for an installation in Norfolk, which is expected to be operational at the end of 2015. We foresee continued growth in this niche market in the next few years.
Revenue x EUR 1 million 2012 2011 Infrastructure 496 523 Building & Development 573 642 Specialized Companies 262 252 Supplies 216 232 1 547 1 649 Other ( 251) ( 267) 1 296 1 382
Revenue declined by 6% from € 1,382 million to € 1,296 million, mainly because of the decline in property operations at Building & Development.
EBIT x EUR 1 million 2012 2011 2012 2011 Infrastructure 10 14 17 17 Building & Development ( 26) 8 2 17 Specialized Companies ( 10) - ( 7) - Supplies 2 4 9 7 Other ( 7) ( 7) ( 3) ( 5) ( 31) 19 18 36 Write-down ( 31) ( 10) Restructuring costs ( 18) ( 7) (31) 19
The operating profit decreased by € 50 million from € 19 million in 2011 to a loss of € 31 million, the main reasons for which are the reorganization expenses and impairment losses on land positions, property, plant and equipment, and goodwill. Disregarding these items, the operating profit fell by € 18 million to € 18 million. The greatest decline resides in Building & Development and the specialized companies. The operating profit for 2011 was helped by the sales result on the PPP projects. The 'Other' result consisted mainly of holding company costs.
Margin 2012 2011 Infrastructure 2.1% 2.7% Building & Development (4.6%) 1.2% Specialized Companies (3.8%) 0.0% Supplies 0.9% 1.7% (2.4%) 1.4%
The overall margin decreased from 1.4% to minus 2.4%. Disregarding the write-downs and reorganization expenses, the margin declined from 2.5% in 2011 to 1.4%.
Profit for the period x EUR 1 million 2012 2011 EBIT ( 31) 19 Net finance income and expense ( 7) ( 7) Profit before income tax ( 38) 12 Income tax expense ( 3) ( 3) Profit for the period ( 41) 9
The financing item was unchanged relative to 2011 at € 7 million. Both the capitalized interest on PPP receivables and the interest expenses of the PPP loans decreased through the sale of the PPP projects. Despite incurring a loss before income tax, taxation remained unchanged because of positive results outside the fiscal unity. The profit for the period decreased by € 50 million to a loss of € 41 million. There was a net decrease in the deferred tax asset of € 3 million to € 32 million because of the sale of the A15 Maasvlakte - Vaanplein PPP project. There was otherwise no net change in the deferred tax asset, because the derecognition of € 13 million that was agreed with the Dutch tax authorities and the use of € 2 million were balanced by the unused tax losses that were recognized.
Order book x EUR 1 million 2012 2011 Infrastructure 900 1 152 Building & Development 731 693 Specialized Companies 90 89 Supplies 56 54 1 777 1 988 Other ( 16) ( 38) 1 761 1 950
The order book contracted by € 189 million to € 1,761 million. Infrastructure acquired no major projects in the past year. Building & Development did succeed in acquiring larger projects, but margins on the projects that were acquired in the past two years were lower than previous levels. The size, quality and composition of the order book, together with the past radical capacity adjustment, make disciplined bidding still feasible.
Equity and cash flows
Ballast Nedam's shareholders' equity decreased by € 40 million to € 131 million. This decrease comprised the loss for the period of € 41 million, the dividend distribution of € 5 million, an increase of € 5 million in the hedging reserve for interest rate derivatives for the PPP projects, and a positive difference of € 1 million in the option scheme.
The loss led to a fall in solvency from 21% at year-end 2011 to 17%. The above solvency is as calculated using the method that accounts for joint ventures by recognizing the share in the assets (i.e. the equity method). The solvency as calculated in accordance with the proportionate consolidation method that is currently allowed under IFRS and is applied for the joint ventures, such as the PPP projects, decreased from 18% at year-end 2011 to 15%.
Total assets declined by € 55 million to € 886 million, which was attributable in particular to the sale of a PPP project, and lower property, plant and equipment because of write-downs and disposals. The necessary current assets minus current liabilities also went down by € 23 million to € 7 million. Capital employed therefore decreased by € 53 million to € 176 million.
The outstanding liabilities to contribute supplementary capital in the PPPs decreased from € 13 million at year-end 2011 to € 3 million through the sale of 80% of our stake in a PPP project.
The cash flow for 2012 was € 11 million negative, compared with a positive cash flow for 2011 of € 26 million.
The operating cash flow deteriorated from € 72 million positive for 2011 to € 1 million positive for 2012, attributable mainly to a deterioration in the work in progress position because of lower prepayments.
The cash flow from investing activities was € 60 million negative compared with € 52 million negative for 2011, consisting of € 66 million investments, € 9 million disposals, € 4 million acquisition of operations, and € 1 million dividend received. Investments included € 23 million of property, plant and equipment, € 2 million of intangible assets and € 41 million of financial assets. Most of the financial assets were concerned with the PPP receivables for the A15 Maasvlakte - Vaanplein highway project. The € 15 million net investment in property, plant and equipment was lower than the € 23 million of depreciation.
Most of the positive cash flow from financing activities of € 48 million consisted of the net € 55 million drawings of long-term loans and a dividend payout of € 5 million.
Financing position x EUR 1 million 2012 2011 Cash and cash equivalents 84 98 Bank overdrafts ( 8) ( 11) Net cash 76 87 Recourse loans ( 96) ( 98) Financing position ( 20) ( 11) Non-recourse loans ( 29) ( 34) Financing position including non-recourse ( 49) ( 45)
Ballast Nedam's financing position declined by € 9 million from € 11 million debt at year-end 2011 to a debt position of € 20 million. The financing position including the non-recourse loans declined by € 4 million from a debt position of € 45 million at year-end 2011 to € 49 million. Net cash decreased by € 11 million to € 76 million. The prepayments on projects went down by € 24 million to € 68 million. Because of a further decrease of these prepayments and the payments concerning the reorganisation, more use will be made in the coming year than in earlier years of the uncommitted working capital facilities. At year-end no use was made of these facilities. The normal pattern is for a larger capital requirement to arise in mid year.
Loans x EUR 1 million 2012 2011 PPP loans 6 25 Land bank financing 44 43 Business loans 51 50 Finance leases 7 10 Other loans 17 4 125 132 Recourse 96 98 Non recourse 29 34 125 132 Current loans 17 11 Long-term loans 108 121 125 132
There will be no need to refinance the long-term loans in the coming years. The large business loan of € 50 million expires in April 2017. The fixed interest rate is 5.4%, and mortgages have been taken out on a number of properties in use by Ballast Nedam as security for the loan. The other large loan of € 33 million is mainly for financing several land positions in a separate company. This loan matures in October 2015 and the interest rate is Euribor plus a margin. The land positions concerned were mortgaged as security for the loan. There are no financial covenants in the conditions of the recourse long-term loans.
The other long-term loans of € 42 million consist of € 6 million of PPP loans, for which the interest rate is fixed by means of derivatives. There is no opportunity of recourse on Ballast Nedam for € 29 million of the € 125 million of long-term loans.
In summary, the strategic objectives for 2013 are:
- to acquire more integrated projects and apply the life-cycle management approach more by expanding management, maintenance and renovation;
- to strengthen the position in the industrial construction, offshore wind turbines, secondary raw materials and alternative fuels niche markets;
- to strengthen the position in, and to develop, the modular building concept;
- to achieve the CSR objectives;
- to improve the financial position.
In the coming year the financial position will be improved by achieving result, the accelerated administration of claims and the sale of property and other assets.
Ballast Nedam's shares
There were 9,667,500 shares in issue at year-end 2012 out of the 10 million issued shares. At year-end Ballast Nedam held 332,500 shares in portfolio to hedge the obligations arising from the current management option scheme. The average basic earnings per share declined from € 0.93 in 2011 to € 4.24 negative.
The Ballast Nedam share price quoted at the end of 2011 on NYSE Euronext was 13.39 euros. The year 2012 ended with a 27% lower price of € 9.82. The highest closing price of € 14.24 was reached on 16 March 2012. The lowest closing price of € 9.30 was quoted on 27 November 2012. The Amsterdam Small Cap Index (AScX), where the Ballast Nedam shares are included, rose by 7% in 2012. The average equity per share in issue was € 13.55. At year-end the market capitalization was 72% of shareholders' equity. The corresponding figure at year-end 2011 was 75%.
According to shareholdings reported, Hurks group with 20.0%, and Navitas with 15.4%, were the largest shareholders at year-end 2012. Other parties holding 5% or more of the shares or depository receipts for shares in Ballast Nedam at year-end were Delta Lloyd Holdings Fund, Delta Lloyd Levensverzekeringen, Menor Investments, Via Finis Invest and Bibiana Beheer.
The current dividend policy is to place 50 per cent of the profit for the period at the disposal of shareholders for distribution as dividend. A substantial loss was made in 2012, solvency deteriorated, and the difficult market conditions are expected to continue. For these reasons, the Board of Management, with the approval of the Supervisory Board, has decided in line with the dividend policy to refrain from paying a dividend for 2012. The dividend for 2011 was € 0.47. In view of the loss incurred and the loss of more than 500 jobs, no bonuses will be paid in Ballast Nedam for 2012.
Ballast Nedam achieved the envisaged 14% CO2 reduction, which leaves us well on schedule to achieve the 30% reduction target relative to the CO2 emission in 2008. Ballast Nedam aims to reduce energy consumption, and is engaged within its markets on sustainable energy, including the application of green gas, heat/cold storage and wind energy. The number of green gas-fuelled vehicles in Ballast Nedam increased by 47% to 677, which now accounts for 35% of the entire vehicle fleet. This represents a significant lowering of CO2, nitrogen oxide and particulate matter the emissions.
Safety is one of Ballast Nedam's core values. Despite our great efforts on workplace safety in the past year the number of lost-time accidents increased from 48 in 2011 to 64 in the course of 7.7 million worked hours, which translates into a decline in the injury frequency from 6.5 in 2011 to 8.3. In 2010 the injury frequency was 10.7. This figure must be brought down in 2013. The injury frequency is the number of lost-time accidents per million hours worked. There were no fatal accidents in the past year.
It has been an eventful year in terms of compliance, with much negative media-attention for integrity issues in the past, which is attributable to the strictly enforced zero-tolerance policy for infringements of the Code of Conduct. The compliance policy has been tightened further and is being given high priority throughout the organization. A Chief Compliance & Risk Officer who was appointed at the start of this year reports to both the Board of Management and the Supervisory Board, and implements the tightened compliance guidelines and monitors their observance.
In ongoing appeal proceedings, the Netherlands Competition Authority reduced a 7.9 million euro fine imposed on Ballast Nedam in 2003 to 1.5 million euros. Furthermore, a settlement was reached with the Public Prosecutor's Office in the investigation of payments made to foreign agents in the 1996 - 2003 period. The settlement requires a payment of 5 million euros to the Public Prosecutor's Office and the irrevocable withdrawal of a 12.5 million euro claim against the tax authorities.
Nomination of a candidate for the Supervisory Board
The Supervisory Board has resolved to fill the vacancy that arose on the departure of Mr Boelen as a member of the Supervisory Board. At the General Meeting of Shareholders to be held in May 2013 the Supervisory Board proposes to nominate Ms C.M. Insinger MBA to fill this vacancy. Ms Insinger was born in 1965 and is a Dutch national. She is an independent consultant and interim manager, is a partner in De Nieuwe Commissaris Consult B.V., and holds several supervisory positions. For some years she was CFO, and is a member of various audit committees. The Supervisory Board is of the opinion that Ms Insinger's specific knowledge and experience would be a valuable complement to the know-how and experience already present within the Supervisory Board.
Nieuwegein, 8 March 2013
Board of Management,
P. van Zwieten
The consolidated income statement, statement of financial position and cash flow statement included in this press release are based on sections of the financial statements for 2012. In accordance with statutory provisions, the financial statements will be disclosed at least 42 days prior to the Annual General Meeting of Shareholders to be held on 16 May 2013. The auditors have issued an unqualified opinion on the financial statements, which were signed by the Board of Management on 7 March 2013.
This press release is for information purposes only. The forecasts and outlook presented in this press release are given with no form of guarantee whatsoever of their future achievement. This press release contains forward-looking statements, including with respect to intentions and outlook, which are based on current views and assumptions and are subject to known and unknown risks, uncertainties and other factors that are largely outside Ballast Nedam N.V.'s control, and which could cause the actual results or achievements to differ materially from the future results or achievements expressed or implied by the forward-looking statements. Ballast Nedam N.V. disclaims any obligation to update or amend the forward-looking statements in the light of new information, future events, or for any other reason whatsoever, except as required by applicable laws and regulations, or on the authority of a competent regulatory body.
Ballast Nedam engages in integrated projects in The Netherlands in four areas of work: housing, mobility, energy and nature. Within this area we focus on the niche markets: industrial construction, offshore wind turbines, secondary raw materials and alternative fuels. In a number of areas of expertise, we also operate internationally. The Ballast Nedam share is included in the Amsterdam Small Cap Index (AScX) of NYSE Euronext.
Ballast Nedam's approach is based on life cycle thinking and acting: we develop, construct, manage and recycle. We are involved in long-term management, maintenance and operation of projects and organize financial feasibility. Our supply and specialized companies deliver competitive edge through innovation, cost leadership and purchasing strength. Ballast Nedam's range of services is shifting towards specific product-market combinations with greater added value.
Ballast Nedam creates enduring quality combined with lower life cycle costs for its customers and society. http://www.ballast-nedam.com
Consolidated income statement x EUR 1 million 2012 2011 Revenue 1 296 1 382 Other operating income 4 6 Costs of raw materials and subcontractors ( 956) (1 019) Employee benefits ( 285) ( 278) Other operating expenses ( 57) ( 44) (1 298) (1 341) Share in profits of associates - - Earnings before interest, taxes, depreciation and amortization (EBITDA) 2 47 Depreciation and amortization of property, plant and equipment and intangible assets ( 23) ( 26) Impairment of tangible and intangible assets ( 10) ( 2) Earnings before interest and taxes (EBIT) ( 31) 19 Finance income 3 6 Finance expense ( 10) ( 13) Net finance income and expense ( 7) ( 7) Profit before income tax ( 38) 12 Income tax expense ( 3) ( 3) Profit for the period ( 41) 9 Attributable to owners of the company: Basic earnings per share (EUR) (4.24) 0.93 Diluted earnings per share (EUR) (4.24) 0.93 Consolidated statement of comprehensive income x EUR 1 million 2012 2011 Profit for the period ( 41) 9 Other comprehensive income: Foreign currency translation differences - 1 Net changes in hedging reserve 5 4 Total comprehensive income for the period ( 36) 14 Attributable to: Owners of the company ( 36) 14 Non-controlling interests - - Total comprehensive income for the period ( 36) 14
Consolidated statement of financial position x EUR 1 million 2012 2011 Non-current assets Intangible assets 31 31 Property, plant and equipment 169 183 Financial assets 11 33 Disposals of associates 2 4 Deferred tax assets 32 35 245 286 Current assets Inventories 202 215 Work in progress 112 78 Receivables 239 264 Cash and cash equivalents 84 98 Assets held for sale 4 - 641 655 Current liabilities Bank overdrafts ( 8) ( 11) Current portion of long-term loans ( 17) ( 11) Prepayments on inventories ( 1) ( 6) Work in progress ( 124) ( 136) Trade payables ( 253) ( 243) Income tax expense ( 3) ( 3) Other liabilities ( 187) ( 176) Provisions ( 39) ( 39) Liabilities held for sale ( 2) - ( 634) ( 625) Current assets minus current liabilities 7 30 252 316 Non-current liabilities Loans 108 121 Derivatives 1 10 Deferred tax liability 4 4 Personnel expenses 4 5 Provisions 4 5 121 145 Total equity Equity attributable to owners of the company 131 171 Non-controlling interest - - 131 171 252 316
Summary consolidated statement of changes in equity x EUR 1 million 2012 2011 Share capital 60 60 Share premium 52 52 Reserves 59 49 Opening 171 161 Foreign currency translation differences - 1 Net change in hedging reserve 5 4 Other comprehensive income 5 5 Profit for the period ( 41) 9 Dividend paid ( 5) ( 4) Other 1 - Closing 131 171
Consolidated statement of cash flows x EUR 1 million 2012 2011 Net cash - opening balance 87 61 Profit for the period ( 41) 9 Adjustments: Depreciation 23 25 Amortization - 1 Impairment (in)tangible assets 10 2 Finance expense 10 13 Finance income ( 3) ( 6) Share-based payments 1 - Gain from disposal of fixed assets and subsidiaries - ( 6) Income tax expense 3 3 Share in profits of associates - - Movements: Movement in inventories 6 39 Movement in work in progress ( 46) 25 Movement in fair value investments 1 - Movement in other receivables 24 ( 37) Movement in provisions and employee benefits ( 2) ( 15) Change in other current liabilities 28 33 Interest paid ( 7) ( 9) Interest paid on hedging instruments ( 3) ( 4) Interest received - - Income taxes paid ( 3) ( 1) Net cash from operating activities 1 72 Intangible assets investments ( 2) ( 6) income from disposals 1 1 Property, plant and equipment investments ( 23) ( 42) income from disposals 8 5 Financial assets investments ( 41) ( 27) income from disposals - - dividends received 1 2 income from other receivables - - Disposals of associates - ( 3) Disposal of subsidiaries after deduction of disposed cash and cash equivalents ( 4) ( 5) Sale of subsidiaries after deduction of disposed cash and cash equivalents - 23 Net cash used in investing activities ( 60) ( 52) Income from long-term loans drawn 62 59 Repayment of long-term loans ( 7) ( 50) Handling charges paid on new loans - - Finance lease instalments paid ( 2) - Acquisition of non-controlling interest - - Dividend paid ( 5) ( 4) Proceeds from repurchase of own shares - - Net cash from financing activities 48 5 Effect of exchange rate fluctuations on cash held - 1 Net cash - closing balance 76 87
Net cash x EUR 1 million 2012 2011 Cash and cash equivalents 84 98 Bank overdrafts ( 8) ( 11) Net cash 76 87 Fully consolidated 63 78 Proportionately consolidated 13 9 Net cash 76 87 Net financing position x EUR 1 million 2012 2011 Net cash 76 87 Current portion of long-term loans ( 17) ( 11) Long-term loans ( 108) ( 121) ( 49) ( 45)
Consolidated statement of financial position Proportionately consolidated Not proportionately consolidated x EUR 1 million 2012 2012 2011 Non-current assets Intangible assets 31 25 29 Property, plant and equipment 169 141 160 Financial assets 13 41 39 Deferred tax assets 32 32 32 245 239 260 Current assets Inventories 202 165 180 Work in progress 112 96 73 Receivables 239 188 211 Cash and cash equivalents 84 68 82 Assets held for sale 4 4 - 641 521 546 Current liabilities Bank overdrafts ( 8) - ( 3) Current portion of long-term loans ( 17) ( 9) ( 6) Prepayments on inventories ( 1) - ( 5) Work in progress ( 124) ( 63) ( 68) Trade payables ( 253) ( 180) ( 178) Income tax expense ( 3) ( 2) ( 2) Other liabilities ( 187) ( 204) ( 207) Provisions ( 39) ( 67) ( 62) Liabilities held for sale ( 2) ( 2) - ( 634) ( 527) ( 531) Current assets minus current liabilities 7 ( 6) 15 252 233 275 Non-current liabilities Loans 108 93 92 Derivatives 1 - - Deferred tax liability 4 2 3 Employee benefits 4 4 5 Provisions 4 3 4 121 102 104 Total equity Equity attributable to owners of the company 131 131 171 Non-controlling interest - - - 131 131 171 252 233 275 Solvency 15% 17% 21%
SOURCE Ballast Nedam
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