Annual Report 2015
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HomeHome AtAt a glance a glance StrategicStrategic objectives objectives RiskRisk management management FinancialFinancial results results ReportReport by sector by sector AbridgedAbridged financial financial statements statements OverviewOverview of Groupof Group companies companies Annual report 2015 VolkerWessels is the trading name of Koninklijke Volker Wessels Stevin nv Begin hier HomeHome AtAt a glance a glance StrategicStrategic objectives objectives RiskRisk management management FinancialFinancial results results ReportReport by sector by sector AbridgedAbridged financial financial statements statements OverviewOverview of Groupof Group companies companies Through smart phasing and standardisation, the shell of the land tunnel in the Delft-Schiedam section of the A4 was ready just over one year after the start. The tunnel, which is more than 2 kilometres long, consists of 50 tunnel sections with a length of 40 metres each, to which 10,580 tons of concreet was applied. More information on this project is provided on page 42. HomeHome AtAt a glance a glance StrategicStrategic objectives objectives RiskRisk management management FinancialFinancial results results ReportReport by sector by sector AbridgedAbridged financial financial statements statements OverviewOverview of Groupof Group companies companies Table of contents Report of the Board of Management Risk management 22 Abridged financial statements 52 Contents 3 Risk management philosophy 23 Profile, activities and markets 4 Risk appetite 23 Overview of group companies 85 Foreword 5 Strategic and market risks 24 Operational risks 27 Definitions 88 VolkerWessels at a glance 6 Financial risks 29 Important developments in 2015 7 Internal risk management and Colophon 89 control systems 31 Five-year summary 8 Key figures 10 Financial results 32 Composition of the Supervisory Board and Board of Management 11 Report by sector 34 Strategic objectives and results 12 Construction & Real Estate in the Netherlands 35 General 13 Infrastructure in the Netherlands 39 VolkerWessels’ strategy 13 Energy & Telecoms 43 VolkerWessels’ results for 2015 14 International markets 48 Core values 17 Outlook 20 Report of the Supervisory Board 51 VolkerWessels 3 Annual report 2015 HomeHome AtAt a glance a glance StrategicStrategic objectives objectives RiskRisk management management FinancialFinancial results results ReportReport by sector by sector AbridgedAbridged financial financial statements statements OverviewOverview of Groupof Group companies companies PROFIlE, ACTIVITIES AND MARKETS Profile, activities and markets Employing some 15,000 people in more than VolkerWessels is active in three sectors and focuses on three geographical areas. 100 operating companies, VolkerWessels builds projects for the residential, commercial, mobility, energy and telecoms sectors. We handle development, design, construction, financing, management and operation for all our stakeholders: our clients, employees, shareholders, suppliers and society in the broadest sense. SECTORS CONSTRUCTION & REAL ESTATE INFRASTRUCTURE ENERGY & TELECOMS We operate in three market sectors: Construction & Real Estate, Infrastructure, – Property development – Civil engineering – Energy networks* and Energy & Telecoms, and aim to achieve – Industrial construction – Road construction – Telecoms connections* solid returns in each of these sectors. We do The Netherlands – Non-residential – Railway construction (Onshore & Offshore) this through enterprising use of opportunities, construction – Traffic and rail technology – Maritime services introducing sustainable innovations and giving – Residential construction – Traffic and parking good people ample scope for personal – Mechanical/electrical management installations development. VolkerWessels’ ambition is to create value for all its stakeholders by operating in a sustainable, safe and sound – Industrial construction – Civil engineering manner. – Non-residential – Road construction United Kingdom construction – Railway construction – Area development – Civil engineering – Road construction Canada/United States * These companies also have offices For a list of individual companies by sector, please see the list of Group companies in Belgium. starting on page 57. VolkerWessels 4 Annual report 2015 HomeHome AtAt a glance a glance StrategicStrategic objectives objectives RiskRisk management management FinancialFinancial results results ReportReport by sector by sector AbridgedAbridged financial financial statements statements OverviewOverview of Groupof Group companies companies FOREWORD Foreword The results for 2015 once again give cause for loss-making years, the results of our traffic growth in economic activities. In Alberta wholly-owned group companies, following the satisfaction. All sectors made a positive and mobility discipline are ‘neutralising’. (Canada), market entrants, capacity pressure acquisition of the remaining half of the shares. contribution to good and healthy operating and falling prices for property and land We also increased our interest in G&S results. Although the growth of net profit In the Construction & Real Estate sector, with positions are creating pressure in a volatile Vastgoed from 30% to 70%. Where we see (by €4 million to €125 million) and the EBITDA the exception of utilities construction, we are market. Whilst the regional economy is not opportunities, we are in no way reluctant to (by €7 million to €235 million) was modest in seeing (cautious) recovery. This market unhealthy, there is a strong correlation with take (healthy entrepreneurial) risks. 2015, there was a stronger improvement in the recovery is, however, making demands on our the price of oil and other commodities. VolkerWessels therefore continues to make underlying result (after extraordinary profits (working) capital. In an addition to a number of substantial, targeted investments in people, and losses). The order book grew further, to a bright spots, the sector also faces a fair In this playing field, VolkerWessels is adhering equipment and sustainable and innovative record level, totalling more than €7 billion at number of challenges. For example, the revival firmly to its proven strategy, the principal concepts, projects and technologies. year-end 2015. amongst suppliers is leading to pressure on pillars of which are operational excellence, For example, our innovative MorgenWonen prices. With higher procurement prices, market leadership, diversification and a (Future living) concept, involving far-reaching Market conditions vary from one sector to projects and contracts with prices fixed for broadly-based position in the value chain. industrialisation of housing construction, has another. Overcapacity and price pressure are long periods without indexation are struggling Whilst failure costs are almost inevitable in a proved to be a driver for innovative proving to be persistent challenges. Whilst with shrinking margins. Our own supply project organisation, sound risk management developments that we can also apply different markets are showing tentative to companies also benefited from the market and methods such as the Building Information elsewhere in our group. With that innovative strong recovery, the late-cycle infrastructure recovery. Model (BIM) and our group-wide Building strength and entrepreneurial spirit, a healthy sector in the Netherlands remains a cause for Smarter Together programme (Samen Slimmer order book, a sound financial position and our concern. Particularly in this sector, market The positive results in the Energy & Telecoms Bouwen), which is based on the LEAn technical expertise, we have confidence in our parties have absorbed too many unacceptable sector trailed those of 2014. In offshore philosophy, unmistakeably contribute towards own strengths and our people. Our company risks which are not always within their control. markets, we felt the effects of lower oil prices. positive operating results in all sectors. has proved often enough in the past that it is These unhealthy market conditions are taking The offshore wind market presented a dual At least as important are financial and able to distinguish itself even in difficult their toll. Various (near) company failures picture. On the one hand, the maintenance operational discipline, through realistic markets. For whatever the market conditions, affected the market picture in the entire market is growing. At the same time, 2015 was budgeting and calculation. Margins take there are always opportunities for innovative construction sector in 2015. These events a transitional year for the construction of new precedence over volumes. We wish to businesses. That leads us to take an optimistic show that a single large project loss can place wind parks. In the telecoms market, there is participate in projects only if we regard the view of the future of VolkerWessels. the entire financial management of a company strong consumer demand and exponential price levels and risks as acceptable. This leads under pressure. For the first time, there was growth in data use. But fierce competition to a high quality order book which was VolkerWessels Board of Management also widespread attention to counterparty amongst providers is reflected in the price enhanced during the year under review with D. Boers risks, which VolkerWessels also faces. Market levels and investments in telecoms projects including the new IJmuiden Sea sluice, H.J. van der Kamp parties and major clients are currently infrastructure. the court house