Ballast Nedam Annual Results 2011: Higher Profit and Good Starting Position
NIEUWEGEIN, The Netherlands, March 9, 2012 /PRNewswire/ --
- Operating profit rises to € 19 million (2010: € 18 million)
- Profit for the period up: € 9 million (2010: € 7 million)
- Revenue stable at € 1.4 billion (2010: € 1.4 billion)
- Better-filled order book of € 1.9 billion (2010: € 1.8 billion)
- Higher proposed dividend for 2011 of € 0.47 per share (for 2010: € 0.36 per share)
- Downward value adjustment of land positions and goodwill of € 10 million (2010: € 4 million)
- Financing position improved to € 11 million debt (2010: € 56 million debt)
- Considerably lower non-recourse loans of € 34 million (2010: € 175 million)
- Loan facilities extended to 2017
- Restructuring operations in 2011 on schedule
- Forecast for 2012 of approximately equal results in deteriorating markets
- Relative CO2 reduction of 12%
- Injury frequency improved from 10.7 for 2010 to 6.5
- Proposed new Supervisory Board member, Mr L.W.A.M. van Doorne
Key figures
x EUR 1 million 2011 2010
Revenue 1 382 1 359
EBIT 19 18
Margin 1.4% 1.4%
Profit before income tax 12 11
Profit for the period 9 7
Proposed dividend in EUR 0.47 0.36
Order book 1 950 1 841
Shareholders' equity 171 161
Solvability 21% 20%
Financing position ( 11) ( 56)
Higher profit and good starting position
Ballast Nedam has performed well, certainly considering the bleak market conditions, increasing competition and price pressure. This situation will persist in the coming years. The operating profit achieved of € 19 million was in line with the forecast issued in March last year of between € 15 million and € 20 million. The profit for the period improved by € 2 million to € 9 million on a revenue of € 1.4 billion. Excellent results were achieved on several large multiyear projects and in the niche markets. The results endorse Ballast Nedam's strategy of focusing on integrated projects and the niche markets of industrial construction, hospitals, offshore wind turbines, secondary raw materials and alternative fuels. The poor market conditions pushed property development, the infrastructure regional companies and the prefabricated concrete companies in particular into loss. Restructuring operations were duly undertaken in all three of these areas in 2011. The restructuring followed on from the change to the new cluster structure that was introduced last year. The cluster structure puts us in a better position to operate as 'One Ballast Nedam' in proposing integrated projects and achieving efficiency gains.
Among the favourable developments were a stronger order book of € 1.9 billion and a strengthening of the balance sheet through the sale of three PPP projects, the sale of the Canadian resort, a lower property exposure and the extension of loan facilities to 2017.
Theo Bruijninckx, Ballast Nedam CEO, comments, 'Our strategic focus has allowed us to continue to deliver respectable results in 2011. The strengthening of our balance sheet together with the quality and the larger size of the order book give Ballast Nedam a favourable starting position to withstand the current recession and to continue to gain from the opportunities for integrated projects and the niche markets. For 2012 we forecast approximately equal results on a revenue of € 1.4 billion in further deteriorating market conditions.'
Strategy
Ballast Nedam's strategy focuses on integrated projects and the niche markets of industrial construction, hospitals, offshore wind turbines, secondary raw materials and alternative fuels. Ballast Nedam develops, constructs, manages and recycles, which we refer to as life-cycle management of the living environment. Ballast Nedam aspires to a more prominent role in project development, and longer-term involvement in management, maintenance and operation. Ballast Nedam also arranges for financial feasibility. The supply and specialized companies add competitive advantage to the total solutions through innovation, cost leadership and purchasing strength. The strategic focus is causing a shift in Ballast Nedam's range of products and services towards specific product-market combinations that provide greater added value. Ballast Nedam's four areas of work in the living environment are housing, mobility, energy and nature. With our sustainable total solutions we create enduring quality. Taken together these activities improve the living environment and lower life-cycle costs.
Financial results
Infrastructure
x EUR 1 million 2011 2010
Revenue 523 534
EBIT 14 10
Margin 2.7% 1.8%
Order book 1 152 986
Assets 228 309
The volume in the infrastructure market remained reasonable in the first half of last year. The picture changed half-way through the year as competition intensified. The downward pressure on prices in the public procurement market for traditional contracts consequently increased substantially. The regional companies were still heavily dependent on this type of tender. Although competition also increased for the major projects, the niche markets of industrial construction and offshore wind turbines held up well.
Generally speaking, infrastructure performed well. Profit increased from € 10 million for 2010 to € 14 million because of the excellent major project results and the contribution from PPP project sales. The regional companies made a disappointing loss in the second half of the year.
The results were excellent on the ongoing major projects in the niche segments of industrial construction and offshore wind turbines. For instance, in industrial construction, building has started on a bio-energy plant in Delfzijl, and the Nuon Magnum multifuel power plant was nearing completion. It was also a good year for offshore wind turbines. In the first half-year the heavy lift vessel Svanen installed 51 foundations for the Walney II Offshore Wind Farm in England, before moving on to the London Array offshore wind farm. At the end of the year installation started of the foundations for the Anholt offshore wind farm in Denmark, which comprises 111 turbines.
Poor prices and declining volume in the market prevented the regional companies from keeping pace with the cost level of competitors in the regions. In addition, their scale was insufficient to realize the ambition to strengthen their position on the growth market of more integrated projects. A restructuring of the regional companies was therefore put into action at the end of last year. The reorganization costs came on top of the regional companies' losses. The first action was to adjust capacity downward, thereby eliminating 115 of the 519 jobs. The operations will later become a centrally managed company, with attendant efficiency gains, while putting the company in a stronger position to tackle the more integrated design & construct projects.
We are strengthening our position on the Dutch market for public-private partnership projects through the Benelux Secondary PPP Fund I, in which Ballast Nedam has a 20% stake and responsibility for management. The fund acquired the equity stakes of three operational PPP projects from Ballast Nedam. Two of these PPPs were Komfort in Utrecht, which is the headquarters of the Dutch Army, and DUO2 in Groningen, which provides new offices for the Education Executive Agency and the Tax Administration. This transaction has released capital for investment in new PPP projects, and also demonstrates that the business model is successful. We create value through design, building, multiyear management and investment in these projects. Infrastructure was a member of a consortium that prequalified in 2012 for the PPP tender for the A1 - A6 highway link from Diemen to Almere. Infrastructure had already prequalified last year for the current PPP tender of the entire two-line tram system in the city of Groningen.
The balance sheet was also strengthened by the sale at the end of 2011 of the 4-season Kicking Horse Mountain Resort in Canada. Ballast Nedam created the infrastructure, developed the village centre and managed the 1,131 hectare skiing area that attracts 160,000 visitors a year.
In early 2012 CNG Net's position as the major road vehicle green gas supplier was strengthened by the award to Connexxion of the largest green gas public transport concession in the Netherlands. For a ten-year period from the end of 2012 CNG Net will supply green gas for all 225 Connexxion city buses in the Arnhem-Nijmegen metropolitan region, which represents an expansion of approximately 6 million kilograms of green gas a year. In 2011 CNG Net also continued to expand its nationwide green gas filling station network. With the current 52 stations, five of which are under construction, the volume has risen by 30% to approximately 13 million kilograms. Green gas is a less expensive vehicle fuel than the alternatives and is almost CO2 neutral. The vehicles are quieter and almost free of harmful emissions, such as nitrogen dioxide and particulate matter.
In 2011 Ballast Nedam also started the company LNG24 for the construction of a public LNG filling station network. LNG stands for liquefied natural gas. It has the same advantages as natural gas, but with a much larger radius of action, making it an attractive fuel for the heavier road vehicles and shipping. LNG24 will open the first LNG filling station in Zwolle in the spring of 2012.
Infrastructure's total assets declined from € 309 million to € 228 million, in particular through the sale of the PPP projects and the Canadian resort.
Infrastructure succeeded in the second half of 2011 in acquiring orders with a value as high as € 566 million. The contract worth approximately € 250 million for the design, delivery and installation in 2013 of 80 foundations for the Butendiek offshore wind farm in Germany was the largest of these. The order book of € 1 152 million was consequently € 166 million higher than at the end of 2011. In the next few years there will be substantial contributions from attractive major projects, such as the A2 in Maastricht, which was acquired in a new contract form in 2009, and the large multiyear PPP project for the Maasvlakte - Vaanplein section of the A15.
Outlook for 2012
The volume in the infrastructure market will be lower in 2012 than in 2011. Based on the well-filled order book we nonetheless expect Infrastructure to gain from the opportunities we see in the niche markets and the effects of the restructuring of the regional companies, and to achieve a higher profit in 2012 on a likewise higher revenue.
Building & Development
x EUR 1 million 2011 2010
Revenue 642 641
EBIT 8 4
Margin 1.2% 0.7%
Order book 693 735
Assets 346 447
Building & Development performed well considering the difficult market, with operating profit improving by € 4 million to € 8 million because of higher profits on the major projects and the contribution from the sale of the PPP projects. While the regional companies contributed somewhat less than last year, they were nonetheless profitable. Property development made a loss because of a low trading volume and the downward valuation of the land positions.
Building & Development's revenue was almost unchanged at € 642 million. The underlying revenue from the major projects was lower in particular because of the extremely high rate of production achieved in the first half of 2010. This decline was largely compensated by a rise in the regional companies' revenues, also following the acquisition of the Heddes operations in the first quarter of last year. Property development revenue decreased. Ballast Nedam Beheer, which has operations in housing, mobility and energy, achieved a higher revenue. The multiyear management of three PPP projects started in 2011.
Markets deteriorated further in the fourth quarter, and for 2012 we expect the volume to continue to fall. The competition for new projects is therefore increasing, and is accompanied by great price pressure. The housing market has stalled completely, in particular because of low consumer confidence. Difficulties in obtaining loans, falling prices and uncertainty surrounding the tax-deductibility of mortgage interest in the Netherlands are not helping the situation. However, the housing market does have promise in due course, as the low rate of production of new build homes exacerbates the structural shortage, in both quantitative and qualitative terms. The office market will take more time to recover in view of the 7 million m² that are vacant nationally and the structurally lower demand for office space. However, we see promise in the somewhat more stable renovation and maintenance market.
The order book went down by € 42 million to € 693 million. Good progress on some major projects, such as the building for the Ministry of Security and Justice and the Ministry of the Interior in The Hague, and the Erasmus MC university medical centre in Rotterdam, has resulted in a smaller order book for major projects by approximately € 75 million. This decline was partially compensated by the regional companies, with support from the Heddes acquisition at the start of 2011. Ballast Nedam's share in the proposed awards in 2011 of the public transport terminals in Breda (€ 130 million) and Arnhem (€ 37 million) had yet to be included in the order book.
Building & Development's assets decreased by € 101 million to € 346 million through the sale of the PPP projects and the lower inventories of land positions and unsold projects.
Building & Development's residential construction operations increased above the market rate, partly because of the Heddes acquisition. From internal property development, 413 homes were started in 2011. Compared with the lowest point in 2010, when only 28 homes were started, and given the poor market conditions, this was a creditable performance. The total number of homes under construction thereby increased from 669 at year-end 2010 to 1 147. For 2012 we expect a further increase in this number. In 2011 607 homes were completed, which is 946 fewer than in 2010.
Exposure property development
x EUR 1 million 2011 2010
Land positions 154 160
Unsold stock under construction 13 12
Unsold stock delivered 12 27
Total on balance 179 199
Liabilities to complete projects under construction 7 3
Liabilities to acquire land positions 24 30
Total liabilities off-balance 31 33
Exposure property development 210 232
Good progress was made in the second half of 2011 on reducing the risks of property development. The total property development exposure, which consists of investments in land positions, investments in unsold stock and the related future liabilities, was reduced by 9% from € 232 million at year-end 2010 to € 210 million. This is a favourable development in view of the substantial deterioration in the property market in the second half of 2011. Despite our ambition to lower the capital invested in real estate over the next few years, our expectations for the near future are tempered by the poor market outlook.
The total investment in unsold stock, both delivered and under construction, decreased in 2011 by € 14 million to € 25 million. There are liabilities to complete on 9 real estate projects, which increased by € 4 million to € 7 million. The number of unsold homes went down from 124 at year-end 2010 to 110. The number of these homes that are completed also went down from 102 to 36, spread over 10 projects. The completed unsold stock was unchanged compared with year-end 2010 at 1 609 m2 of leased and 1 000 m2 of unleased commercial space.
Land positions
x EUR 1 million 2011 2010
1 January 160 157
Net investment 2 7
Write-down ( 8) ( 4)
31 December 154 160
Cumulative write-down 18 10
The estimated development potential of the land bank fell by 20% from 14 900 homes at year-end 2010 to approximately 12 000 because of the termination of several partnership agreements for which no land had yet been purchased, refraining from exercising a number of land-purchase options, and lower estimates of the numbers of homes to be built on a number of positions. The land positions decreased by € 6 million to € 154 million, consisting of a net investment of € 2 million and a write-down of € 8 million. The net investment of € 2 million included the acquisition of several real estate positions from Heddes and the take-up of land from pre-existing purchase obligations. The take-up of land caused a further decrease in the outstanding unconditional purchase obligations for land at year-end of € 6 million to € 24 million, of which € 6 million will fall in 2012. The conditional purchase obligations also fell sharply from € 205 million at year-end 2010 to € 159 million. The disposals were concerned with various positions now in development, such as the Nieuwvliet-Bad Beach Resort area development on which construction has started. The write-down of € 8 million was mainly concerned with six land positions for residential construction in the northeast of the Netherlands and a hotel development. The cumulative write-down on land positions therefore increased by € 10 million at year-end 2010 to € 18 million. The net write-down in 2010 was € 4 million, consisting of a write-down of € 7 million and reversal of a previous write-down of € 3 million.
Outlook for 2012
The market volume for 2012 in the construction and real estate sector will decline by about two per cent. The projects started in 2011 have a lower margin than those now nearing completion. We therefore expect a lower operating profit for Building & Development in 2012 of between break-even and a modest profit on a lower revenue.
Specialized companies
x EUR 1 million 2011 2010
Revenue 252 214
EBIT - 2
Margin 0.0% 0.9%
Order book 89 80
Assets 139 121
Specialized Companies' revenue increased by € 38 million to € 252 million. The main reason for the revenue increase was the redevelopment and reconstruction of several filling stations in Belgium by Ballast Nedam IPM and increased delivery of the specialized companies to major projects such as the A2 in Maastricht, the A15 Maasvlakte - Vaanplein PPP project and the Magnum multifuel power station in Eemshaven.
Specialized Companies thereby achieved a higher profit. The poorer market conditions in 2011 pushed down the profit to break even.
Ballast Nedam IPM is the innovative specialized company in installation engineering for energy and mobility. For instance, a lead was taken in 2011 with the construction of the first public LNG filling station in the Netherlands that complies with all future European legislation and regulations. Furthermore, Ballast Nedam IPM won the contract for building the first transportable production and filling station for sustainable hydrogen in the Netherlands. These are important developments in the transition to sustainable and clean fuels.
The specialized companies perform the site assembly of the modular building systems produced by Supplies. For example, 14 iQwoningen® were built in Laarbeek In 2011.
The order book grew by € 9 million to € 89 million through a larger volume of orders at Ballast Nedam Milieutechniek. Specialized Companies' contribution to the large multiyear projects ensured a reasonable quality of the order book, in view of the general fall in volume in the market.
Outlook for 2012
For the coming year we expect markets for the specialized companies to remain under pressure. Specialized Companies will achieve an approximately unchanged profit on a somewhat lower revenue than for 2011.
Supplies
x EUR 1 million 2011 2010
Revenue 232 202
EBIT 4 10
Margin 1.7% 5.0%
Order book 54 67
Assets 221 188
The revenue of Supplies increased by € 30 million to € 232 million because of the increased raw materials revenue. This rise was attributable to supplies from our Norwegian quarry to Maasvlakte and the offshore projects, and higher sales of secondary raw materials by Feniks Recycling.
The raw material companies achieved a sound profit on a higher revenue. Underutilization and price pressure because of the low market volume caused some prefabricated concrete companies to make a loss. Production capacity was accordingly adjusted, with the loss of 100 jobs at Waco Lingen, which amounts to approximately 25% of the total number of jobs at the four prefabricated concrete companies. The reorganization expenses involved depressed the profit further.
Partly because of the production capacity adjustment at Waco Lingen, the order book went down by € 13 million to € 54 million. The other supply companies succeeded in maintaining approximately unchanged levels of their order books.
Supplies' assets increased by € 33 million to € 221 million, mainly as a result of the investments in the new iQwoning® plant in Weert, Feniks Recycling's new installations in England and Amsterdam for recovering secondary raw materials from incinerator bottom ash, and the rebuilding of the vessel Yeoman Bontrup for transport from the Norwegian quarry.
Supplies strengthened its position in modular construction, which is an innovative industrial building method under controlled conditions. Alongside the iQwoning® and ModuPark® (the modular parking product) plants that started operation in 2011, Ballast Nedam acquired a stake in Ursem modular building systems in 2012. These modular building systems are used for utility buildings such as student apartments, schools, detention centres and hotels. Ballast Nedam is thereby in a position to serve a variety of markets in residential and nonresidential construction, and new building and renovation, with modular concepts.
In Great Britain, Feniks Recycling reinforced its lead on the market for recovering secondary raw materials from waste incinerator bottom ash, as its seventh installation started operation. We certainly see growth opportunities for this niche market in the next few years.
Outlook for 2012
For 2012 we expect Supplies to achieve a higher profit on a lower revenue. The operating profit will improve because of last year's capacity adjustment in the prefabricated concrete companies. Revenue will decline somewhat because deliveries to Maasvlakte ended last year and the prefabricated concrete capacity has been adjusted downward.
Revenue
x EUR 1 million 2011 2010
Infrastructure 523 534
Building & Development 642 641
Specialized companies 252 214
Supplies 232 202
1 649 1 591
Other ( 267) ( 232)
1 382 1 359
Revenue increased by 2% from € 1 359 million to € 1 382 million. The specialized companies and the supply companies deliver competitive advantage to the total solutions through innovation, cost leadership and purchasing strength. The 15% rise in internal revenue in 2011 is a favourable development. It confirms our steadily growing capability in implementing integrated projects, and demonstrates the fruits of our organizational restructuring. Of the revenue, 91% was generated in the Netherlands.
EBIT
x EUR 1 million 2011 2010
Infrastructure 14 10
Building & Development 8 4
Specialized companies - 2
Supplies 4 10
26 26
Other ( 7) ( 8)
19 18
The operating profit rose from € 18 million in 2010 to € 19 million. The total operating profit of the segments was equal to that in 2010 on a fractionally higher revenue. The 'Other' result consisted mainly of holding company costs, where the release of a provision formed in 2002 in connection with a competition case, compensated for the additional costs concerned with introducing the cluster structure and a € 2 million downward valuation of goodwill. Goodwill at year-end 2011 was € 11 million.
Margin
2011 2010
Infrastructure 2.7% 1.8%
Building & Development 1.2% 0.7%
Specialized companies 0.0% 0.9%
Supplies 1.7% 5.0%
1.4% 1.4%
The overall margin was unchanged at 1.4%. Both Infrastructure and Building & Development succeeded in improving their margins. Supplies' margin went down because of losses in the prefabricated concrete companies.
Profit for the period
x EUR 1 million 2011 2010
EBIT 19 18
Net finance income and expense ( 7) ( 7)
Profit before income tax 12 11
Income tax expense ( 3) ( 4)
Profit for the period 9 7
The financing item was unchanged relative to 2010 at € 7 million. The capitalized interest on PPP receivables decreased by € 4 million to € 6 million because of the sale of the PPP projects. The interest charges on the loans decreased accordingly by € 11 million in 2010 to € 9 million. Profit before income tax was € 12 million, which was up by € 1 million. With the help of a lower tax burden, the profit for the period rose by € 2 million to € 9 million. Last year's higher tax burden arose because a smaller portion of the results could be settled within the fiscal unity. The deferred tax asset decreased by € 3 million to € 35 million.
Order book
x EUR 1 million 2011 2010
Infrastructure 1 152 986
Building & Development 693 735
Specialized companies 89 80
Supplies 54 67
1 988 1 868
Other ( 38) ( 27)
1 950 1 841
The order book grew in the second half of 2011 by € 234 million to € 1 950 million, which was € 109 million higher than at year-end 2010. Of these orders, approximately € 1 billion will be executed in 2012. The quality, composition and larger size of the total order book puts Ballast Nedam in a relatively strong starting position in a market that continues to deteriorate. It is therefore possible for us to continue to tender in a disciplined manner, and if necessary to adjust capacity progressively in line with market conditions, as occurred in 2011 with property development, the prefabricated concrete companies and the regional companies.
Equity and cash flows
The capital ratio improved from 20% at year-end 2010 to 21%. This is the capital ratio as calculated in accordance with the method that accounts for joint ventures as an interest at the share in the assets (i.e. the equity method). The capital ratio as calculated in accordance with the proportionate consolidation method that is currently allowed under IFRS and applied for the joint ventures, such as the PPP projects, improved strongly from 15% at year-end 2010 to 18%. This increase is predominantly attributable to the sale of the PPP projects, which are largely financed by loans that provide no opportunity of recourse on Ballast Nedam.
Ballast Nedam's shareholders' equity increased by € 10 million to € 171 million. This rise comprised the profit for the period of € 9 million, the dividend distribution of € 4 million, an increase of € 4 million in the hedging reserve for interest rate derivatives for the PPP projects, and foreign currency translation gains of € 1 million.
Total assets went down by € 143 million to € 941 million, in particular because of the sale of three PPP projects and the sale of Kicking Horse Mountain Resort. Another favourable development was the lower working capital requirement because of the decrease in inventories. Capital employed therefore decreased by € 196 million to € 229 million.
The outstanding obligations for additional capital contributions in the PPP companies went down from € 18 million at year-end 2010 to € 13 million. The accumulated capital contributions of € 9 million at year-end 2010 declined to nil.
Cash flow for 2011 improved considerably and was € 26 million positive compared with a negative cash flow for 2010 of € 50 million.
The operating cash flow of € 72 million was positive, compared with a negative operating cash flow of € 39 million for 2010, because of a better work in progress position and lower inventories of unsold stock.
The cash flow from investing activities was € 52 million negative compared with € 92 million negative for 2010. This consisted of € 75 million of investments, € 6 million of disposals, € 5 million for acquisition of operations, € 2 million for a participation and € 23 million for the sale of the PPP projects and the Canadian resort. Investments included € 42 million of property, plant and equipment, € 6 million of intangible assets and € 27 million of financial assets. Most of the financial assets were concerned with the PPP receivables for the A15 Maasvlakte - Vaanplein project. The € 37 million net investment in property, plant and equipment exceeded the € 25 million of depreciation.
The positive cash flow from financing activities of € 5 million consisted of the net € 9 million proceeds from long-term loans and a dividend payout of € 4 million.
Financing position
x EUR 1 million 2011 2010
Cash and cash equivalents 98 81
Bank overdrafts ( 11) ( 20)
Net cash 87 61
Recourse loans ( 98) ( 117)
Financing position ( 11) ( 56)
Non-recourse loans ( 34) ( 175)
Financing position including non-recourse ( 45) ( 231)
The financing position improved by € 45 million from € 56 million debt at year-end 2010 to a debt position of € 11 million. The sales of the PPP interests and the Canadian resort contributed to this improvement. The financing position including the non-recourse loans (which include the PPP loans) improved even more strongly, by € 186 million from a debt position of € 231 million at year-end 2010 to € 45 million. Net cash rose by € 26 million to € 87 million. The prepayments on projects remained approximately unchanged at € 92 million. The financing requirement is always higher in the course of the year than at year-end.
Loans
x EUR 1 million 2011 2010
PPP loans 25 169
Land bank financing 43 33
Business loans 50 50
Finance leases 10 9
Other loans 4 31
132 292
Recourse 132 117
Non recourse 34 175
132 292
Current loans 11 7
Long-term loans 121 285
132 292
There will be no need to refinance the long-term loans in the coming years, since in March 2012 the general loan of € 50 million was extended by 3 years to April 2017. The interest rate of 5.4% is unchanged and mortgages were 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 these loans.
The other long-term loans of € 49 million consist of € 25 million of PPP loans, for which the interest rate is fixed by means of derivatives. Based on the current PPP project portfolio, these PPP loans will rise to approximately € 70 million at year-end 2012. There is no opportunity of recourse on Ballast Nedam for € 34 million of the € 132 million of long-term loans.
The Ballast Nedam shares
There were 9 667 500 shares in issue at year-end 2011 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 management option scheme. The basic earnings per average ordinary share in issue rose from € 0.73 in 2010 to € 0.93.
The Ballast Nedam share price quoted at the end of 2010 on NYSE Euronext was € 14.40. The share price at the end of 2011 was 7% lower at € 13.39. The Amsterdam Small Cap Index, which includes Ballast Nedam shares, went down by 24% in 2011. Shareholders' equity per average outstanding share was € 17.66. The highest price of € 17.55 was on 30 March 2011. The lowest price of € 9.78 was quoted on 22 November 2011. The liquidity of Ballast Nedam shares went down from 8 697 per trading day in 2010 to 5 770.
According to shareholdings reported, Hurks Groep and Navitas, with 20.0% and 15.4%, respectively, were the largest shareholders at year-end 2011. Other parties holding 5% or more of the shares or depository receipts for shares in Ballast Nedam at year-end were Delta Deelnemingen Fonds, Delta Lloyd, Menor Investments, Finis Invest and Bibiana Beheer.
Higher proposed dividend
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. The Board of Management, with the approval of the Supervisory Board, proposes to distribute a dividend in line with the dividend policy of € 0.47 per share in issue for 2011. The dividend for 2010 was € 0.36. Distribution will take place on 29 May 2012. The date of the ex-dividend listing will be 18 May 2012.
CO2 reduction
Ballast Nedam's sustainable energy operations in its markets include the application of green gas, heat-cold storage and wind energy. The company actively pursues a reduction of energy consumption. For instance, in the past year the number of CNG-fuelled vehicles in Ballast Nedam increased by 269 to 458, which is 23% of the entire vehicle fleet. The target for our internal operations is to achieve 30% less CO2 emission in 2020 relative to 2008. The envisaged 12% reduction in 2011 was achieved .
Safety
Safety is one of Ballast Nedam's core values. Our employees and chain partners must perform their work safely and be in a position to do so. Much attention was again given to safety in the past year. In total there were 48 lost-time accidents in 7.4 million hours worked, which represents an improvement in the injury frequency from 10.7 in 2010 to 6.5. The injury frequency is the number of lost-time accidents per million hours worked.
Nomination of Supervisory Board members
The Supervisory Board has resolved to increase the number of Supervisory Board members to five. In accordance with the retirement schedule, Mr A.N.A.M. Smits will step down in May 2012. At the General Meeting of Shareholders to be held in May 2012 the Supervisory Board intends to nominate Mr Smits and Mr L.W.A.M. van Doorne to fill the vacancies. Mr Van Doorne was born in 1959 born and he is a Dutch national. He is CEO and major shareholder of Optics Innovation Group B.V. and delegated executive director of Pallieter RENEFF B.V. Mr Van Doorne also holds various executive and supervisory directorships with diverse companies. The Supervisory Board is of the opinion that his specific knowledge and experience make Mr Van Doorne an excellent candidate, and will furthermore complement the knowledge and experience already present in the Supervisory Board.
Nieuwegein, 9 March 2012
Board of Management,
T.A.C.M. Bruijninckx
R. Malizia
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 2011. 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 2012. The auditors have issued an unqualified opinion on the financial statements, which were signed by the Board of Management on 8 March 2012.
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 has a leading position in construction and infrastructure. The company operates mainly in the Netherlands on integrated and other projects for companies, public authorities and housing consumers, in the fields of mobility, housing, employment, leisure and energy. Ballast Nedam operates internationally in various areas of expertise. Ballast Nedam supplies project, process and contract management in the development, implementation and management phases. The company also provides specialized know-how and skills, and semi-finished and finished products. Ballast Nedam is listed on NYSE Euronext in Amsterdam. The share is included in the Amsterdam Small Cap Index.
Consolidated income statement
x EUR 1 million 2011 2010
Revenue 1 382 1 359
Other operating income 6 6
Costs of raw materials and subcontractors (1 019) (1 005)
Personnel expenses ( 278) ( 278)
Other operating expenses ( 44) ( 37)
(1 341) (1 320)
Share in profits of associates - -
Earnings before interest, taxes, depreciation
and amortization (EBITDA) 47 45
Depreciation and amortization of property,
plant and equipment and intangible assets ( 26) ( 26)
Impairment of tangible and intangible assets ( 2) ( 1)
Earnings before interest and taxes (EBIT) 19 18
Finance income 6 10
Finance expense ( 13) ( 17)
Net finance income and expense ( 7) ( 7)
Profit before income tax 12 11
Income tax expense ( 3) ( 4)
Profit for the period 9 7
Attributable to owners of the company:
Basic earnings per share (EUR) 0.93 0.73
Diluted earnings per share (EUR) 0.93 0.73
Consolidated statement of comprehensive income
x EUR 1 million 2011 2010
Profit for the period 9 7
Other comprehensive income:
Foreign currency translation differences 1 1
Net changes in hedging reserve 4 ( 3)
Total comprehensive income for the period 14 5
Attributable to:
Owners of the company 14 5
Non-controlling interests - -
Total comprehensive income for the period 14 5
Consolidated statement of financial position
x EUR 1 million 2011 2010
Non-current assets
Intangible assets 31 29
Property, plant and equipment 183 184
Financial assets 33 167
Investments in associates 4 2
Deferred tax assets 35 38
286 420
Current assets
Inventories 215 252
Work in progress 78 101
Receivables 264 230
Cash and cash equivalents 98 81
655 664
Current liabilities
Bank overdrafts ( 11) ( 20)
Current portion of long-term loans ( 11) ( 7)
Prepaid on inventories ( 6) ( 1)
Work in progress ( 136) ( 128)
Trade payables ( 243) ( 217)
Income tax payable ( 3) ( 1)
Other liabilities ( 176) ( 178)
Provisions ( 39) ( 46)
( 625) ( 598)
Current assets minus current liabilities 30 66
316 486
Non-current liabilities
Loans 121 285
Derivatives 10 18
Deferred tax liability 4 4
Employee benefits 5 5
Provisions 5 13
145 325
Total shareholders' equity
Equity attributable to owners of the company 171 161
Non-controlling interest
171 161
316 486
Summary consolidated statement of changes in equity
x EUR 1 million 2011 2010
Share capital 60 60
Share premium 52 52
Reserves 49 50
Opening 161 162
Foreign currency translation differences 1 1
Net change in hedging reserve 4 ( 3)
Other comprehensive income 5 ( 2)
Profit for the period 9 7
Dividend paid ( 4) ( 3)
Other - ( 3)
Closing 171 161
Consolidated statement of cash flows
x EUR 1 million 2011 2010
Net cash - opening balance 61 111
Profit for the period 9 7
Adjustments:
Depreciation 25 25
Amortization 1 1
Impairment (in)tangible assets 2 1
Finance expense 13 17
Finance income ( 6) ( 10)
Share-based payments - -
Gain from disposal of fixed assets and subsidiaries ( 6) -
Income tax expense 3 4
Share in profits of associates - -
Movements:
Movement in inventories 39 ( 33)
Movement in work in progress 25 ( 59)
Movement in other receivables ( 37) ( 4)
Movement in provisions and employee benefits ( 15) 19
Interest paid ( 9) ( 11)
Paid on hedging instruments ( 4) ( 5)
Interest received - -
Income taxes paid ( 1) ( 3)
Change in other current liabilities 33 12
Net cash from operating activities 72 ( 39)
Intangible assets
investments ( 6) ( 2)
disposals 1 -
Property, plant and equipment
investments ( 42) ( 32)
disposals 5 8
Financial fixed assets
investments ( 27) ( 70)
disposals - 4
dividends received 2 2
net change other receivables - -
Investments in associates ( 3) ( 2)
Acquisitions of subsidiaries ( 5) -
Disposal of subsidiaries after deduction of
disposed cash and cashequivalents 23 -
Net cash used in investing activities ( 52) ( 92)
Drawings of long-term loans 59 107
Repayment of long-term loans ( 50) ( 19)
Disposal of long-term loans - -
Acquisition of non-controlling interest - ( 3)
Dividend paid ( 4) ( 3)
Proceeds from repurchase of own shares - -
Net cash from financing activities 5 82
Effect of exchange rate fluctuations on cash held 1 ( 1)
Net cash - closing balance 87 61
Net cash
x EUR 1 million 2011 2010
Cash and cashequivalents 98 81
Bank overdrafts ( 11) ( 20)
Net cash 87 61
Unrestricted cash balances 78 47
Proportionately consolidated 9 14
Net cash 87 61
Net financing position
x EUR 1 million 2011 2010
Net cash 87 61
Current portion of long-term loans ( 11) ( 7)
Long-term loans ( 121) ( 285)
( 45) ( 231)
Consolidated statement of financial position
Proportionately consolidated Not proportionately consolidated
x EUR 1 million
2011 2011 2010
Non-current assets
Intangible assets 31 29 27
Property, plant and equipment 183 160 166
Financial assets 37 39 53
Deferred tax assets 35 32 33
286 260 279
Current assets
Inventories 215 180 216
Work in progress 78 73 99
Receivables 264 211 169
Cash and cash equivalents 98 82 60
655 546 544
Current liabilities
Bank overdrafts ( 11) ( 3) ( 8)
Current portion of long-term loans ( 11) ( 6) ( 1)
Prepayments on inventories ( 6) ( 5) -
Work in progress ( 136) ( 68) ( 55)
Trade payables ( 243) ( 178) ( 160)
Income tax payable ( 3) ( 2) -
Other liabilities ( 176) ( 207) ( 255)
Provisions ( 39) ( 62) ( 47)
( 625) ( 531) ( 526)
Current assets minus current
liabilities 30 15 18
316 275 297
Non-current liabilities
Loans 121 92 107
Derivatives 10 - -
Deferred tax liabilities 4 3 3
Employee benefits 5 5 5
Provisions 5 4 19
145 104 134
Total equity
Equity attributable to owners of
the company 171 171 163
Non-controlling interest
171 171 163
316 275 297
Solvability 18% 21% 20%
PRN NLD
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