Ballast Nedam Annual Figures for 2013: Poor year, Sharper Strategic Focus and Solid Refinancing
07 Mar, 2014, 06:30 GMT
NIEUWEGEIN, The Netherlands, March 7, 2014 /PRNewswire/ --
Number 2014.003 E
Ballast Nedam Annual Figures for 2013: Poor year, Sharper strategic focus and solid refinancing
- Results in line with the press release of 5 February 2014
- Operating loss of € 30 million, including € 18 million of restructuring costs and impairment (2012:€ 31 million loss)
- The loss for the period was € 41 million (2012€ 41 million loss)
- Revenue € 1.3 billion (2012:€ 1.3 billion)
- Well-filled order book of € 1.5 billion (2012€ 1.8 billion)
- Financing position of € 59 million debt (2012€ 20 million debt)
- No dividend for 2013
Strategic, operational and financial measures in 2014
- Sharper strategic focus on major integrated complex projects:further restructuring, disposals and strengthening of the balance sheet through a proposed € 30 million rights issue
- Refinancing of € 80 million completed, maturing in 2017
Prospects
- 2014 will be a transitional year
Key figures
x EUR 1 million 2013 2012
Revenue 1 268 1 296
EBIT ( 30) ( 31)
Margin (2.4%) (2.4%)
Profit before income tax ( 37) ( 38)
Profit for the period ( 41) ( 41)
Dividend in EUR 0.00 0.47
Order book 1 460 1 761
Shareholders' equity 90 131
Solvency 13% 17%
Financing position ( 59) ( 20)
Theo Bruijninckx, Ballast Nedam's CEO, comments
We have a difficult year behind us, with a disappointing operating loss of 30 million euros, which includes 18 million euros of restructuring costs and impairment. The operating losses are attributable to the A15 Maasvlakte-Vaanplein highway project, several old regional infrastructure projects, two specialized companies, and undercoverage in the regional construction companies. Capacity in the two specialized companies has been reduced, and several loss-making products discontinued. The old regional infrastructure projects predate the 2012 restructuring operation, and are nearing completion.
The persistently poor market conditions, the disappointing results, and revenues from disposals that materialized later than foreseen, necessitated a further accelerated intervention on strategic, operational and financial levels alike. The strategic focus has been sharpened further. We are aiming for major integrated complex projects and related activities in the niche markets of offshore wind turbines and industrial construction. Modular building is a fitting response to clients' life-cycle management approach. Some supply and specialized companies that no longer contribute to this strategic proposition will be disposed of.
We are restructuring the regional construction companies to form a construction company with integrated operations and a renovation company, Bouwborg, with national scope. Having made the transition to an infrastructure company with nationwide operations, and the related departure from the loss-making traditional markets, we are now focusing our organization more sharply on the strategic route that we have embarked upon. The long-term financial position has also been strengthened with support from all 5%-plus shareholders and banks. The refinancing comprises a proposed 30 million euro rights issue and new loans of 80 million euros that mature in 2017. The rights issue strengthens the balance sheet, and together with the new loans it gives the company sufficient financial scope to concentrate fully on the accelerated implementation of its strategy. Ballast Nedam is now better positioned for the future. 2014 will be a transitional year.
The key activities that are oriented to the major, integrated projects have remained profitable throughout the cycle. The results achieved on the ongoing major projects in the offshore wind turbines and industrial construction niche markets were good. The major complex construction projects also made a fine contribution. In 2013 Ballast Nedam again added several projects to its track record on the growth market of integrated projects, including the Zaanstad Penitentiary project, the Butendiek offshore wind turbine project in Germany for the design, delivery and installation of 80 foundations, and the design and construction of the Nobo Otrabanda Hospital in Curaçao. Our track record and our well-filled order book of 1 460 million euros with major integrated complex projects endorse Ballast Nedam's strategy and underline its position in this market segment.
Financial results
Infrastructure
x EUR 1 million 2013 2012
Revenue 546 496
EBIT 4 10
Margin 0.8% 2.1%
Order book 596 900
Assets 247 214
The infrastructure markets were under pressure in 2013. Competition also intensified for major projects and industrial construction. The offshore wind turbines niche market continued to be favourable.
Infrastructure achieved a profit of 4 million euros. Good results on several major projects exceeded the losses incurred on the major A15 Maasvlakte-Vaanplein highway project and several old regional projects that predate the 2012 restructuring operation. The results achieved on the ongoing major projects in the offshore wind turbines and industrial construction niche markets were good. Disregarding the restructuring costs, the operating profit went down by 13 million euros to 4 million euros.
2013 saw the transformation to an infrastructure company with national operations, which has reduced our exposure to loss-making traditional markets. Total employee numbers have been reduced from more than 800 to approximately 475 in the past two years. This adjustment is larger than the fall in volume in the market. The issues on the old regional projects are nearing resolution.
The order book contracted from 900 million euros at year-end 2012 to 596 million euros because of good progress on several major multiyear projects and the absence of new large project acquisitions on the domestic market in the past year. In the offshore wind turbines niche market, work has now started on the Butendiek project, which reached financial close in early 2013. The project is for the design, delivery and installation of eighty foundations for the Butendiek offshore wind turbine project in Germany. In the second half of 2013 Ballast Nedam installed thirty-nine monopiles and transition pieces in the EnBW Baltic 2 offshore wind farm. To date Ballast Nedam has used the heavy lift vessel Svanen to install more than 400 offshore wind farm foundations.
In 2013 the Port of Rotterdam awarded Ballast Nedam the Infrastructure Asset Management integrated performance contract. For five years from 2014 Ballast Nedam will have responsibility for the operational management and maintenance of all Port of Rotterdam dry infrastructure. Work has now started on the Katwijk Coastal Work engineering & construct (E&C) contract, which was acquired in July 2013. This integrated project combines the necessary seaward coastline reinforcement at Katwijk with additional underground parking, dunes, and a recreation area. A start was also made on the design & construct (D&C) contract for the renovation of approximately 23 kms of sheet piling in the Amsterdam-Rhine Canal, which was acquired in 2013.
The Surinam Ministry of Public Works has awarded Ballast Nedam a new contract for the design and construction of the Carolina Bridge over the Surinam river.
Infrastructure's total assets declined from 214 million euros to 247 million euros because of increased work in progress.
Building & Development
x EUR 1 million 2013 2012
Revenue 531 573
EBIT ( 11) ( 26)
Margin (2.2%) (4.6%)
Order book 691 731
Assets 289 314
The markets were poor in the past year, resulting in substantial price pressure. The door to the housing market remained closed. Funding was limited, and the borrowing capacity of many households declined considerably. Another unhelpful factor was the scrapping and postponement of numerous housing association projects. Exceptions to the rule were homes for first-time buyers, student accommodation and recreational dwellings, which performed relatively well. The housing market definitely has good prospects on the horizon. The long-term shortage is increasing, in terms of both quantity and quality, because of the current low rate of production and the sustained demographic trend. The first tentative signs of housing market appear to present themselves. Recovery of the office market will follow later, with the pace being tempered by the combined effect of a declining space requirement per employee, protracted high vacancy levels, and general economic performance. We see reason for optimism in the more stable renovation and maintenance market, as well as in opportunities for transforming vacant property to new functions.
The revenue of Building & Development went down by 7 per cent to 531 million euros because of the decline in the regional construction companies.
Building & Development incurred an operating loss of 11 million euros because of impairment losses and restructuring costs. Disregarding the write-downs and restructuring costs, the result was break-even. The contribution from major projects was excellent. The regional companies and property development made a loss because of low revenue, undercoverage and high costs. The rigorous restructuring of the regional construction companies will accordingly continue in the first half of 2014, to produce a company with integrated operations, and a focus on relatively large, integrated complex projects, together with a renovation company, Bouwborg, with national scope. The property and area development activities will be integrated into the Concessions business unit, which also manages the PPP and concession project portfolio. Laudy Bouw & Ontwikkeling will continue to operate as a regional company in the south of the Netherlands. The previously announced restructuring of the regional construction companies is estimated to involve the loss of 150 jobs.
The order book of Building & Development declined by 40 million euros to 691 million euros, because of the completion of several major projects and fewer contracts in the regional construction companies.
In 2013 the Pi2 consortium, a joint undertaking of Ballast Nedam (65%) and Royal Imtech (35%), reached financial close for the Zaanstad Penitentiary PPP project. Pi2 is responsible under the DBFMO contract with the Government Buildings Agency for the design, new construction, financing, maintenance and technical facilities management for a 25-year period following availability. Ballast Nedam is the sole shareholder of Pi2. Financial close was also reached for the work for Amsterdam Airport Schiphol's transition to central security. Ballast Nedam is constructing an overlay on the E and F piers and a terminal extension between them. Ballast Nedam has also received the provisional award for the Thialf stadium renovation in Heerenveen.
Winning the bid for the Hart van Zuid development area is an extraordinary achievement after a tendering procedure of over one and a half years. Ballast Nedam's plan is for the area around the Zuidplein retail centre and Ahoy event centre to grow in the coming twenty years into a focal point for shopping, business and entertainment.
Ballast Nedam has successfully used the expertise gained with major integrated, complex projects on the hospitals market in the Netherlands in the acquisition of the Design, Build & Maintain contract for the new hospital in Curaçao.
Ballast Nedam also won the contract from student accommodation organization DUWO for the redevelopment and new building of the Uilenstede campus in Amstelveen. Ursem Modular Building systems is applying modular construction techniques on this project. The building, which has 233 new accommodation units, will be identical in style to the other new campus buildings. Ursem Modular Building Systems is a pioneer in modular building to a height of eleven floors.
On behalf of the Ymere housing association, Ballast Nedam is replacing two of the five apartment buildings on Tugelaweg in Amsterdam-Oost with mixed new building. The 157 newly built homes are a combination of 85 for social rent, 33 for market rent, and 39 for owner-occupation. Bouwborg, Ballast Nedam's national renovation company, started a large-scale renovation project for BrabantWonen in early 2013. This is a three-year project for the renovation of 324 homes in the Graafsewijk Barten-Zuid district of 's-Hertogenbosch.
The assets of Building & Development decreased by 25 million euros to 289 million euros because of lower unsold stock and lower land positions.
Exposure property development
x EUR 1 million 2013 2012
Land positions 142 # 152
Unsold stock under construction 5 # 6
Unsold stock delivered 10 # 18
Total on balance 157 # 176
Liabilities to complete projects under construction 3 1
Liabilities to acquire land positions 44 # 39
Total liabilities off-balance 47 # 40
Exposure property development 204 # 216
The number of completed homes increased in the past year with 9 per cent to 1 041, whereby the number of homes under construction went down by 172 to 929. The number of in-house developed homes under construction rose strongly from 23 at year-end 2012 to 424, in particular because of the start of the projects (Y)ours Leiden, the most sustainable student campus in Europe, with a total of 1,900 student dwellings, 205 homes for first-time buyers and associated facilities, and the 74 energy-neutral iQwoning® homes in Berckelbosch in Eindhoven.
The total property development exposure, which consists of investments in land positions, investments in unsold stock and the related unconditional purchase commitments and subsequent payment obligations, decreased in 2013 by 12 million euros to 204 million euros. In addition, the conditional purchase commitments increased by 12 million euros from 143 million euros at year-end 2012 to 155 million euros.
The total investment in unsold stock, both delivered and under construction, went down in 2013 by 9 million euros to 15 million euros. The number of unsold homes rose from 67 at year-end 2012 to 96 because of the start of new projects that are selling well. The number of unsold homes went down from 56 at year-end 2012 to 27 at year-end 2013, spread over ten projects.
The net unsold completed property declined by 8 million euros to 10 million euros through the sale of homes in the Nieuwvlietbad Beach Resort and Entrada Meuse Cuijck projects.
Land positions
x EUR 1 million 2013 2012
1 January 152 154
Net investment ( 9) 19
Write-down ( 1) ( 21)
31 December 142 152
Cumulative write-down 40 39
The land positions decreased by 10 million euros to 142 million euros, consisting of sales of 9 million euros and a write-down of 1 million euros. The still outstanding unconditional obligations to acquire land positions increased by 5 million euros to 44 million euros, of which 4 million euros will fall in 2014.
The estimated development potential of the land bank fell by 15 per cent from 10 000 homes at year-end 2012 to approximately 8 500, mainly because of lower estimates of the numbers of homes to be built and the sale of land.
Specialized Companies
x EUR 1 million 2013 2012
Revenue 260 262
EBIT ( 19) ( 10)
Margin (7.5%) (3.8%)
Order book 113 90
Assets 115 131
The volume on the specialized companies' market, being a derivative of the construction and infrastructure markets, declined. Nonetheless a stable revenue was achieved of 260 million euros because of supplies to in-house projects such as the A15 Maasvlakte-Vaanplein (MaVa), A2 Maastricht and the overlay of the E and F piers at Amsterdam Airport Schiphol.Specialized Companies achieved a most disappointing loss of 19 million euros. The successes achieved in the companies that performed well were overshadowed by substantial losses in two specialized companies, of which the capacities have been reduced considerably and several loss-making products discontinued. Disregarding the restructuring costs the loss rose by 7 million euros to 14 million euros.
CNG Net succeeded in increasing revenue by adding eleven CNG (natural gas and green gas) filling stations in the Netherlands. With CNG Net, Ballast Nedam now operates 68 CNG filling stations supplying natural gas and green gas, making it the market leader. In addition some ten more filling stations are being built for private investors. LNG24 operates the first public LNG-filling station in the Netherlands, in Zwolle. A start was made in 2013 on preparations for a second station in Delfgauw.
The order book grew by 26% to 113 million euros. The lower investments resulted in a decrease in total assets by 16 million euros to 115 million euros.
Supplies
x EUR 1 million 2013 2012
Revenue 212 216
EBIT 8 2
Margin 3.8% 0.9%
Order book 55 56
Assets 187 205
In general the volumes in the supply companies' markets declined. The markets for Bestone in offshore, asphalt and rail construction, and for the reprocessed raw materials, remained reasonable. Conversely, pressure on the volume of raw materials for the concrete industry and the prefabricated concrete market was undiminished.
The revenue of Supplies went down by 4 million euros to 212 million euros because of the sale of the raw material company Yvoir.
Operating profit rose by 6 million euros to 8 million euros. Disregarding the impairments and restructuring costs, operating profit remained unchanged at 9 million euros. There was also an impairment loss in 2012. Improved results in the prefabricated concrete companies and the sale of Yvoir and an associated asphalt plant supported the profit.
Price and volume pressure caused by the poor market conditions led to a modest loss for the prefabricated concrete companies. The raw material companies remained in profit but achieved a lower result because of the lower revenue. Feniks Recycling made a fine contribution on the secondary raw materials niche market. Preparations started in 2013 on for the construction of new plants in Cleveland and Ipswich, which entered operation in 2014. Work is also in progress on the capacity enlargement of plants in Sheffield and Castle Bromwich, which will be operational in 2015.
The order book of 55 million euros remained largely unchanged.
Work on the project 'New Life in the Lus van Linne' started in the autumn of 2013. Ballast Nedam will work closely with the stakeholders on the phased redevelopment of the area in the coming fifteen years into 200 hectares of river nature that is home to a wide range of species, various recreational facilities, and flood protection measures. This redevelopment will be combined with estimated resource extraction of 10 million tonnes of sand and gravel.
The assets of Supplies decreased by 18 million euros to 187 million euros mainly because of the sale of Yvoir and a stake in an asphalt plant.
Financial results
Revenue
x EUR 1 million 2013 2012
Infrastructure 546 496
Building & Development 531 573
Specialized Companies 260 262
Supplies 212 216
1 549 1 547
Other ( 281) ( 251)
1 268 1 296
Revenue decreased by 2 per cent from 1 296 million euros to 1 268 million euros, in particular because of the decline in regional activities in Building & Development.
EBIT
x EUR 1 million 2013 2012 2013 2012
Infrastructure 4 10 4 17
Building & Development ( 11) ( 26) - 2
Specialized Companies ( 19) ( 10) ( 14) ( 7)
Supplies 8 2 9 9
Other ( 12) ( 7) ( 11) ( 3)
( 30) ( 31) ( 12) 18
Write-down ( 6) ( 31)
Restructuring costs ( 12) ( 18)
(30) ( 31)
The operating loss was 30 million euros. Disregarding the impairment losses on land positions, property, plant and equipment and goodwill, and the restructuring costs, the operating profit deteriorated from 18 million euros in 2012 to a loss of 12 million euros. The 'Other' result consisted mainly of holding company costs. .
Margin
2013 2012
Infrastructure 0.8% 2.1%
Building & Development (2.2%) (4.6%)
Specialized Companies (7.5%) (3.8%)
Supplies 3.8% 0.9%
(2.4%) (2.4%)
The overall margin was 2.4 per cent negative. Disregarding the impairment losses and restructuring costs, the margin changed from 1.4 per cent positive for 2012 to 0.1 per cent negative.
Profit for the period
x EUR 1 million 2013 2012
EBIT ( 30) ( 31)
Net finance income and expense ( 7) ( 7)
Profit before income tax ( 37) ( 38)
Income tax expense ( 4) ( 3)
Profit for the period ( 41) ( 41)
The financing item was unchanged relative to 2012 at 7 million euros. The income tax expense for the year was 4 million euros because of profits outside the fiscal unity. The loss for the period was unchanged at 41 million euros.
Order book
x EUR 1 million 2013 2012
Infrastructure 596 900
Building & Development 691 731
Specialized Companies 113 90
Supplies 55 56
1 455 1 777
Other 5 ( 16)
1 460 1 761
The order book contracted declined by 301 million euros to 1 460 million euros, attributable mainly to the absence of major project acquisitions by Infrastructure in the past year, and the substantial capacity reduction in the regional operations. The main reason for the reduction in the order book for Building & Development was the decrease in the regional companies. The size, quality and composition of the order book make disciplined bidding still feasible.
Equity and cash flows
Ballast Nedam's shareholders' equity decreased to 90 million euros because of the loss for the period of 41 million euros.
The loss led to a fall in solvency from 17 per cent at year-end 2012 to 13 per cent. The above solvency is as calculated using the method that accounts for joint ventures by recognizing the share in the assets. 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 15 per cent at year-end 2012 to 11 per cent.
Total assets decreased by 37 million euros to 849 million euros because of lower investments and the sale of the raw material company Yvoir. Current assets minus current liabilities also went down from 7 million euros to 1 million euros negative. Capital employed decreased by 42 million euros to 210 million euros.
The cash outflow for 2013 was 44 million euros, compared with a cash outflow for 2012 of 11 million euros.
The operating cash flow deteriorated from € 1 million positive for 2012 to a cash outflow of € 24 million for 2013, attributable to increased work in progress through lower prepayments.
The cash outflow from investing activities was 16 million euros compared with an outflow of 60 million euros for 2012, consisting of 35 million euros of investment and 18 million euros of disposals. Investments included 19 million euros of property, plant and equipment, 6 million euros of intangible assets 2 million euros for associates and 7 million euros of financial assets. The financial assets consisted largely of the PPP receivables for the Zaanstad Penitentiary Pi2. The 12 million euros net investment in property, plant and equipment was lower than the 21 million euros of depreciation.
Most of the cash outflow from financing activities of 4 million euros consisted of the net 4 million euros repayment of long-term loans and financial lease instalments paid.
Financing position
x EUR 1 million 2013 2012
Cash and cash equivalents 54 84
Bank overdrafts ( 22) ( 8)
Net cash 32 76
Recourse loans ( 91) ( 96)
Financing position ( 59) ( 20)
Non-recourse loans ( 24) ( 29)
Financing position including non-recourse ( 83) ( 49)
Ballast Nedam's financing position declined by 39 million euros from 20 million euros debt at year-end 2012 to a debt position of 59 million euros. The financing position including the non-recourse loans declined by 34 million euros from a debt position of 49 million euros at year-end 2012 to 83 million euros.
Net cash decreased by 44 million euros to 32 million euros. The prepayments on projects went down by 26 million euros to 42 million euros. We expect these prepayments to continue to reduce in the next few years, and more use to be made of the working capital facilities in 2014 than in 2013. At year-end 17 million euros of these facilities had been drawn. The normal pattern is for a larger capital requirement to arise in mid year.
Loans
x EUR 1 million 2013 2012
PPP loans 8 6
Land bank financing 40 44
Business loans 51 51
Finance leases 4 7
Other loans 12 17
115 125
Recourse 91 96
Non recourse 24 29
115 125
Current loans 9 17
Long-term loans 106 108
115 125
The large business loan of 50 million euros expires in April 2017. The fixed interest rate is 5.4 per cent, 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 euros 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.
The other long-term loans of 32 million euros consist of 8 million euros of PPP loans, for which the interest rate is fixed by means of derivatives. There is no opportunity of recourse on Ballast Nedam for 24 million euros of the 115 million euros of long-term loans.
Improved solvency in 2014 through a rights issue of 30 million euros and the sale of Feniks Recycling
Ballast Nedam is strengthening its balance sheet through the rights issue of 30 million euros of depositary receipts for shares with tradable rights. Solvency is expected to rise to 17% following the 30 million euro rights issue. Solvency will rise by a couple more percentage points in 2014 when the sale of Feniks Recycling materializes. Ballast Nedam is aiming for a solvency greater than 20% and a leverage ratio of less than 2.0 in the medium term.
The 5%-plus shareholders, Hurks Groep B.V., Navitas B.V., Delta Lloyd Levensverzekering N.V., Delta Lloyd Deelnemingen Fonds N.V., Bibiana Beheer B.V., Via Finis Invest B.V. en Menor Investments B.V., have committed unconditionally to a participation of approximately 69% in the rights issue. The remainder of the rights issue will be guaranteed through a volume underwriting commitment under the normal conditions by ING and Rabobank, acting as Joint Global Coordinators and Joint Bookrunners.
The rights issue will be submitted to the shareholders at the General Meeting of Shareholders to be held on 25 April 2014. The net proceeds of the rights issue will be used to reduce the company's debt burden, strengthen its financial position, and enhance its financial flexibility. The rights issue must be accompanied by an AFM-approved prospectus. Ballast Nedam's aim is to complete the emission in the third quarter.
Controlled disposal of supply and specialized companies in the medium term
In the medium term the portfolio of supply and specialized companies will be brought further in line with the strategic focus through the controlled disposal of companies that do not contribute to major integrated complex projects. This measure will also strengthen Ballast Nedam's financial position. The sale of raw material company Yvoir and of Gebr. Van Leeuwen Boringen was completed In 2013. The sales processes of the stake in the raw material company Beheermaatschappij Bontrup and of Feniks Recycling are ongoing.
Refinancing complete in February 2014
In February 2014 the refinancing was completed with the banking syndicate of ING Bank, Rabobank and Royal Bank of Scotland.
The committed loan facilities of 110 million euros comprise a loan of 80 million euros that matures in 2017, and a bridging loan of 30 million euros that will be repaid in 2014 from the proceeds of the proposed rights issue. The loans under the current non-committed facility of 60 million euros will be repaid with these funds. The normal banking covenants will be determined in the coming weeks. The interest rate for the loan of 80 million euros is a function of the amount outstanding under the loans and the leverage ratio, and is initially Euribor +4%. The normal securities have been provided in connection with the committed loans.
The committed loans provide sufficient financial scope to allow Ballast Nedam to concentrate on the execution of its strategy.
Ballast Nedam's shares
There were 9 667 500 shares in issue at year-end 2013 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 were 4.22 euros negative.
The Ballast Nedam share price quoted at the end of 2012 on NYSE Euronext was 9.82 euros. The year 2013 ended with a 7 per cent higher price at 10.50 euros. The Amsterdam Small Cap Index (AScX), which includes the Ballast Nedam shares, rose by 26 per cent in 2013. The highest closing price of 13.60 euros was reached on 23 October 2013. The lowest closing price of 9.56 euros was quoted on 19 December 2013.
No dividend
The dividend policy is to place 50 per cent of the profit for the period at the disposal of shareholders for distribution as dividend. The agreement with the banks stipulates that dividend will be paid on shares only if the leverage ratio is less than 2.
A substantial loss was incurred and solvency deteriorated in 2013. The leverage ratio is above 2, 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 2013.
CO2 reduction
In 2013 Ballast Nedam achieved the target of a 16 per cent CO2 reduction relative to 2008 and related to the revenue of the Dutch activities, which leaves us well on schedule to achieve the 30 per cent CO2 emission reduction target in 2020, relative to 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 and CNG-fuelled vehicles in Ballast Nedam increased by 10% to 751, which now accounts for 45% of the entire vehicle fleet. This represents a significant lowering of CO2, nitrogen oxide and particulate matter emissions.
Safety
The injury frequency (IF) for 2013 was 7.45, which is slightly less than for 2012, when it was 8.3. Many Ballast Nedam companies had no accidents leading to absence in 2013. We are upholding our objective to have an IF less than 6.5 for 2014, culminating in an injury-free Ballast Nedam. The injury frequency is the number of lost-time accidents per million hours worked. There were no fatal accidents in the past year.
Compliance and integrity
Ballast Nedam effected its sharpened compliance policy in 2013. The response to any abuse or infringement of laws and regulations is stringent. We have also felt the consequences of the negative publicity surrounding past compliance violations, which has strengthened us to continue our zero tolerance policy in 2014.
Corporate governance
The recently announced departure on 1 July 2014 of the CEO Theo Bruijninckx has led the Supervisory Board to start the search for a successor. The ongoing selection procedure for a new position of Chief Operating Officer (COO) in the Board of Management, which had been proposed earlier, will be suspended accordingly until further notice. The Board of Management has appointed Mr Herman Hovestad to support the Board of Management on an interim basis, in particular in the restructuring of Building & Development and the disposals.
With the sharper strategic focus, the operational control based on six clusters will be further integrated in 2014 into the three clusters Infrastructure, Building & Development and Specialized Companies & Supplies. The number of cluster Managing Directors had already been reduced to three in 2013. The Board of Management and the three cluster Managing Directors jointly form the Ballast Nedam Concern Council.
Prospects
The market conditions for 2014 continue to be challenging and uncertain, despite the first signs of an eventual construction industry revival. At the start of the year we announced several strategic, operational and financial measures that will be carried out in the course of the year. With the sharper strategic focus on integrated projects and the completed refinancing, the company is well positioned for the future. The coming year will be a transitional year.
Nieuwegein, 7 March 2014
Board of Management,
T.A.C.M. Bruijninckx
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 2013. 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 25 April 2014. The auditors have issued an unqualified opinion on the financial statements, which were signed by the Board of Management on 6 March 2014.
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 modular products and 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
Note for the editorial staff:
Further details can be obtained from Ballast Nedam N.V., Adrie van Kessel, telephone +31 30 285 41 61 or +31 6 22 45 71 85
Consolidated income statement
x EUR 1 million 2013 2012
Revenue 1 268 1 296
Other operating income - 4
Costs of raw materials and subcontractors ( 949) ( 956)
Employee benefits ( 268) ( 285)
Other operating expenses ( 57) ( 57)
(1 274) (1 298)
Share in profits of associates - -
Earnings before interest, taxes,
depreciation and amortization (EBITDA) ( 6) 2
Depreciation and amortization of
property, plant and equipment and
intangible assets ( 21) ( 23)
Impairment of tangible and intangible
assets ( 3) ( 10)
Earnings before interest and taxes (EBIT) ( 30) ( 31)
Finance income - 3
Finance expense ( 7) ( 10)
Net finance income and expense ( 7) ( 7)
Profit before income tax ( 37) ( 38)
Income tax expense ( 4) ( 3)
Profit for the period ( 41) ( 41)
Attributable to owners of the company:
Basic earnings per share (EUR) (4.22) (4.24)
Diluted earnings per share (EUR) (4.22) (4.24)
Consolidated statement of comprehensive income
x EUR 1 million 2013 2012
Profit for the period ( 41) ( 41)
Other comprehensive income:
Foreign currency translation differences - -
Net changes in hedging reserve 1 5
Total comprehensive income for the period ( 40) ( 36)
Attributable to:
Owners of the company ( 40) ( 36)
Non-controlling interests - -
Total comprehensive income for the period ( 40) ( 36)
Consolidated statement of financial position
x EUR 1 million 2013 2012
Non-current assets
Intangible assets 21 31
Property, plant and equipment 137 169
Financial assets 17 11
Disposals of associates 4 2
Deferred tax assets 32 32
211 245
Current assets
Inventories 175 202
Work in progress 135 112
Receivables 226 239
Cash and cash equivalents 54 84
Assets held for sale 48 4
638 641
Current liabilities
Bank overdrafts ( 22) ( 8)
Current portion of long-term loans ( 9) ( 17)
Prepayments on inventories ( 2) ( 1)
Work in progress ( 106) ( 124)
Trade payables ( 237) ( 253)
Income tax expense ( 1) ( 3)
Other liabilities ( 207) ( 187)
Provisions ( 28) ( 39)
Liabilities held for sale ( 27) ( 2)
( 639) ( 634)
Current assets minus current liabilities ( 1) 7
210 252
Non-current liabilities
Loans 106 108
Derivatives 1 1
Deferred tax liability 1 4
Personnel expenses 5 4
Provisions 7 4
120 121
Total equity
Equity attributable to owners of the company 90 131
Non-controlling interest - -
90 131
210 252
Summary consolidated statement of changes in equity
x EUR 1 million 2013 2012
Share capital 60 60
Share premium 52 52
Reserves 19 59
Opening 131 171
Foreign currency translation differences - -
Net change in hedging reserve 1 5
Other comprehensive income 1 5
Profit for the period ( 41) ( 41)
Dividend paid - ( 5)
Other ( 1) 1
Closing 90 131
Consolidated statement of cash flows
x EUR 1 million 31 december 2013 31 december 2012
Net cash - opening balance 76 87
Profit for the period ( 41) ( 41)
Adjustments:
Depreciation 21 23
Amortization - -
Impairment (in)tangible assets 3 10
Finance expense 7 10
Finance income - ( 3)
Share-based payments - 1
Gain from disposal of fixed assets and subsidiaries - -
Income tax expense 1 3
Share in profits of associates - -
Movements:
Movement in inventories 27 6
Movement in work in progress ( 41) ( 46)
Movement in fair value investments - 1
Movement in other receivables 5 24
Movement in provisions and employee benefits ( 7) ( 2)
Change in other current liabilities 10 28
Interest paid ( 7) ( 7)
Interest paid on hedging instruments - ( 3)
Interest received - -
Income taxes paid ( 2) ( 3)
Net cash from operating activities ( 24) 1
Intangible assets
investments ( 6) ( 2)
income from disposals 2 1
Property, plant and equipment
investments ( 19) ( 23)
income from disposals 7 8
Financial assets
investments ( 7) ( 41)
income from disposals 1 -
dividends received - 1
income from other receivables - -
Disposals of associates ( 2) -
Disposal of subsidiaries after deduction of
disposed cash and cash equivalents - ( 4)
Sale of subsidiaries after deduction of disposed
cash and cash equivalents 8 -
Net cash used in investing activities ( 16) ( 60)
Income from long-term loans drawn 14 62
Repayment of long-term loans ( 15) ( 7)
Handling charges paid on new loans - -
Finance lease instalments paid ( 3) ( 2)
Acquisition of non-controlling interest - -
Dividend paid - ( 5)
Proceeds from repurchase of own shares - -
Net cash
x EUR 1 million 31 december 2013 31 december 2012
Cash and cash equivalents 54 84
Bank overdrafts ( 22) ( 8)
Net cash 32 76
Fully consolidated ( 3) 63
Proportionately consolidated 35 13
Net cash 32 76
Net financing position
x EUR 1 million 31 december 2013 31 december 2012
Net cash 32 76
Current portion of long-term loans ( 9) ( 17)
Long-term loans ( 106) ( 108)
( 83) ( 49)
Consolidated statement of financial position
Proportionately consolidated Not proportionately consolidated
x EUR 1 million
31 december 2013 31 december 2013 31 december 2012
Non-current assets
Intangible assets 21 15 25
Property, plant and
equipment 137 123 141
Financial assets 21 52 41
Deferred tax assets 32 32 32
211 222 239
Current assets
Inventories 175 133 165
Work in progress 135 118 96
Receivables 226 179 188
Cash and cash equivalents 54 21 68
Assets held for sale 48 24 4
638 475 521
Current liabilities
Bank overdrafts ( 22) ( 17) -
Current portion of long-
term loans ( 9) ( 5) ( 9)
Prepayments on inventories ( 2) ( 2) -
Work in progress ( 106) ( 60) ( 63)
Trade payables ( 237) ( 154) ( 180)
Income tax expense ( 1) - ( 2)
Other liabilities (207) ( 222) ( 204)
Provisions ( 28) ( 28) ( 67)
Liabilities held for sale ( 27) ( 10) ( 2)
( 639) ( 498) ( 527)
Current assets minus
current liabilities ( 1) ( 23) ( 6)
210 199 233
Non-current liabilities
Loans 106 97 93
Derivatives 1 - -
Deferred tax liability 1 2 2
Employee benefits 5 4 4
Provisions 7 6 3
120 109 102
Total equity
Equity attributable to
owners of the company 90 90 131
Non-controlling interest - - -
90 90 131
210 199 233
Solvency 11% 13% 17%
PRN NLD
SOURCE Ballast Nedam
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