Gruppo De Eccher 2011 Rizzani De Eccher S.P.A
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GRUPPO DE ECCHER 2011 RIZZANI DE ECCHER S.P.A. Via Buttrio, 36 33050 Cargnacco (UD) Italy Tel. +39 0432 6071 Fax +39 0432 522336 [email protected] Joint Stock Company incorporated in Italy Share Capital Euro 20,000,000.00 fully paid up Member, Udine Chamber of Commerce Registration no.115684 Department of Foreign Trade UD 002577 Companies Register of Udine Tax ID & VAT Number IT00167700301 rizzanideeccher.com Annual Report and Consolidated Financial Table of Contents Statements for the Financial Year 2011 (1st January – 31st December) 3 Letter from the Chairman During the Financial Year under review no material changes have occurred 4 2011 at a glance that require corrections or adjustments to the Annual Reports of preceding years. 10 History The 2011 Annual Report was approved by the Shareholders’ Annual General Meeting 13 Strategies held in Udine, Italy on 14th June 2012. 15 Organisation 18 Quality is Innovation 20 Sustainable Development 23 Areas of business activity 24 General Building This Annual Report was printed in 2500 copies in July 28 Infrastructures and circulated to shareholders and the public, including the financial community, 31 Engineering and Special Equipment employees of the company, for Bridges and Viaducts main customers and suppliers. 32 Real Estate Development For further information: 33 Focus [email protected] 45 Management Report 50 Notes to the 2011 Annual Report 51 Contents of the Consolidated Financial Statements 56 Balance Sheet Analysis 68 Income Statement Analysis 71 Independent auditors’ report 73 Consolidated Financial Statements 81 Appendices 89 Statutory Financial Statements of the Parent Company 1 LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS Dear Shareholders, Notwithstanding an increase in order backlog, the continuing economic and financial crisis that erupted globally in 2008 and the political upheavals of the spring of 2011 in the Mediterranean basin have caused a temporary reduction in Group turnover. At € 359 million, the revenues marks a decrease of 26% as opposed to 2010, which is mostly due to the cancellation or delays of important overseas projects owing to the unfavourable global economic situation. Conversely, operating income (EBIT) of € 21,7 million and net profit of € 14.7 million emphasise an excellent performance. The order backlog, notwithstanding the cancellation of contracts in Libya and (partially) in Kuwait, increased from € 1,641 million to € 1,979 million, of which roughly 1/3 in Italy and 2/3 abroad. This should be enough to ensure the comeback in the next years to the levels of production of 2010 at least. This Annual Report and the enclosed Financial Statements have been drawn according to principles of transparency, independence, accuracy, complete- ness and reliability. These principles will provide any reader (whether mem- bers of the public, the financial community, customers, suppliers or Group employees) with a fair and accurate picture of results achieved. In closing, I would like to convey my sincere thanks to our employees for their commitment and hard work towards the attainment of our corporate objectives. I would also like to thank all our business and financial partners for their continued support and contributions towards the Group’s success. The Chairman Marco de Eccher Preceding page: Office building Santa Monica, Udine (Italy) 3 2011 AT A GLANCE economic and financial indicators [Euro thousand] 2007 2008 2009 2010 2011 Total revenues* 488,618 492,628 408,668 483,724 358,930 Total costs of production* (444,089) (463,386) (377,270) (447,761) (326,249) Gross operating income (EBITDA) ** 44,529 29,243 31,398 35,963 32,681 % EBIDTA 9.1% 5.9% 7.7% 7.4% 9.1% Depreciation and amortization (7,653) (6,773) (5,460) (10,201) (11,022) Operating income (EBIT) 36,876 22,470 25,938 25,762 21,659 % EBIT 7.5% 4.6% 6.3% 5.3% 6.0% Financial income/(expenses) and valuation adjustment of investments 95 (4,738) (2,355) (947) 2,762 Profit or (loss) before income taxes (EBT) 36,971 17,732 23,583 24,814 24,421 Income tax (13,268) (5,286) (7,387) (8,419) (6,271) Profit or (loss) for the financial period 23,703 12,446 16,196 16,396 18,150 Minority share of profit for the financial period 531 981 699 2,873 3,453 Consolidated Group profit or (loss) for the financial period 23,172 11,465 15,497 13,523 14,697 Share value of production from overseas 70% 74% 74% 80% 67% Cash flow *** 30,825 18,238 20,957 23,724 25,719 * extraordinary income/charges included ** EBITDA is conventionally calculated as the earning before depreciation and amortization, net financial income/(expenses), valuation adjustment of investment and income tax. Since the composition of EBITDA is not defined by the reference accounting standards, the criterion for its determination applied by the Group might not be consistent with that used by others and therefore not be comparable. *** consolidated Group profit + depreciation and amortization Total non current assets 38,772 31,595 70,860 82,436 92,276 Inventory 52,084 76,652 61,332 70,056 91,209 Accounts receivable 239,188 194,949 156,276 193,859 163,396 Total current assets 291,272 271,601 217,608 263,915 254,605 Debts and other payables 201,720 178,031 160,956 187,475 199,132 Advances from customers 84,032 122,559 106,207 122,395 113,601 Total current liabilities 285,752 300,591 267,163 309,870 312,733 Net current assets (NCA) 5,520 (28,990) (49,555) (45,955) (58,128) Employees' severance indemnity 5,695 5,504 4,979 4,599 4,988 Provision for contingencies and other liabilities 16,537 2,168 3,330 3,979 1,243 Total non current liabilities 22,232 7,672 8,309 8,578 6,231 Net capital invested 22,060 (5,067) 12,996 27,903 27,917 Shareholders' equity 53,454 58,762 76,031 89,381 108,497 Net medium and long term financial position 7,500 9,100 9,034 11,228 23,357 Net short term financial position (NFP) **** (38,894) (72,929) (72,069) (72,706) (103,937) Total shareholders' equity and net financial position 22,060 (5,067) 12,996 27,903 27,917 NCA + NFP 44,414 43,939 22,514 26,751 45,809 Current ratio 1.16 1.15 1.08 1.09 1.15 **** negative number = positive net short term financial position / positive number = negative short term financial position As evidenced by the foregoing data, the economic and financial € 61.5 million in 2010). The sum of net current assets (NCA) position of the Group remains excellent from a structural and net short term financial position (NFP) is € 45.8 million standpoint, with EBITDA and EBIT marking yet a slight (as opposed to € 26.8 million in 2010) and the corresponding reduction in absolute terms but a significant increase relative ratio is 1.15. The constant improvement of such financial to revenues, and – more importantly – with a significant indicators over the preceding years bears testimony to the improvement of the Group net financial position (inclusive of Group’s ability to negotiate construction contracts that allow short term and long-term debt relating to an ongoing leasing for operational and financing needs to be funded directly by contract), which is a positive € 80.6 million (as opposed to payments from clients (advances and progress payments). 4 36.9 488.6 492.6 483.7 408.7 358.9 25.9 25.8 80% 74% 23.2 22.5 70% 21.7 74% 15.5 14.7 67% 13.5 11.5 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Revenues = revenues Income from operations = net profit (millions of Euros) = percentage generated abroad (millions of Euros) = EBIT 48.3 43.4 30.8 29.4 25.0 20.4 19.5 16.4 15.1 13.5 0.3 0.1 0.1 0.02 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Profitability [%] = ROI Financial charges as a % of revenues = ROE 1979 1641 2160 1169 66% 1081 1072 1583 68% 82% 92% 1142 1151 1185 77% 746 1219 793 801 1783 439 377 364 349 350 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Order book = order book Number of employees = employees abroad (millions of Euros) = percentage abroad = employees in Italy 5 As anticipated, profitability ratios have improved as opposed decrease in the revenues, the Group in 2011 has yet again to the preceding year. Ratios such as ROI (expressed by the demonstrated its solidity and competitiveness, consolidating ratio between EBIT and gross invested capital inclusive of the market share gained over the past few years. cash and cash equivalent) at 16,4 and ROE (net earnings The backlog of orders at year end has posted a significant on shareholders’ equity inclusive of profit for the year) at increase reaching € 1,979 million (it was € 1,641 million in 13,5 have remained high. In addition, the ratio of financial 2010); it is expected that the execution of the order backlog charges and interest expenses on revenue has remained in the following years will lead to a split between overseas next to zero. and domestic turnover substantially in line with that of the Thus, in general terms and notwithstanding a 26% year under review. PARENT COMPANY AND ITS MAIN OPERATING UNITS: 2011 AT A GLANCE The following tables show the main economic and financial indicators of the parent company and its most representative consolidated subsidiaries on a stand-alone basis. (Euro thousand) Rizzani de Eccher 2007 2008 2009 2010 2011 Revenues 285,020 322,469 269,945 291,875 168,928 Shareholders’ equity 37,594 48,382 63,485 67,853 67,963 Operating income (EBIT) 30,036 15,187 11,666 738 (6,016) Net profit (loss) 14,523 15,788 15,103 8,266 737 Cash flow (*) 16,850 18,113 18,176 12,147 4,347 Codest International 2007 2008 2009 2010 2011 Revenues 70,952 93,299 65,850 79,298 48,463 Shareholders’ equity 1,919