ANNUAL REPORT 2019/20 INFRASTRUCTURE and BUILDINGS for MODERN SOCIETIES Contents
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Cover ANNUAL REPORT 2019/20 INFRASTRUCTURE AND BUILDINGS FOR MODERN SOCIETIES Contents CONTENTS We want to contribute to the green transition Aarsleff and how we work 3 The year at a glance 34 The Aarsleff Group is taking The highest tower in responsibility and leading the Carlsberg City 35 the way when it comes to Management’s review 4 future-proofing the building The year in figures 5 Track renewal in Northern Jutland 36 and construction industry. Letter from the CEO 6 Tubular steel piles for railway bridge 37 Financial highlights and ratios Museum for the Icelandic sagas 38 for the Group 8 First, second and third phase 39 The year in brief 9 New museum 40 The future financial year 12 Contruction Corporate governance 41 Our business 14 Corporate governance 42 M The year in figures 252 Strategic focus areas 15 Internal control and risk An unusual but strong finan- Focus areas for the three segments 17 management in financial reporting 44 cial year with a record-high Pipe Technologies EBIT bottom line, a strong order Executive Management and Corporate social responsibility 19 intake and a high order M Board of Directors 46 162M 553 Commercial risk assessment 22 backlog. Shareholder information 50 Financial targets, capital structure Ground Engineering and dividend policy 24 Management’s statement 139M and auditor’s report 52 Business areas 26 Management’s statement 53 Construction 27 Independent auditor’s report 54 Pipe Technologies 30 Ground Engineering 32 The year at a glance Financial statements 58 In the middle of Copenhagen, Financial review 59 we are constructing the new Natural History Museum Consolidated financial statements 61 of Denmark in the existing Parent company financial statements 97 buildings and in a new under- ground exhibition hall. Companies in the Aarsleff Group 107 Aarsleff | Annual report 2019/20 2 Begin – Aarsleff and how we work AARSLEFF AND HOW WE WORK The Aarsleff Group constructs and maintains the infrastructure and building structures of society. We lay the foundations for a financial and sustainable development and create value for the society and our shareholders. We take responsibility, lead the way and contribute to the green transition which will future-proof the building and construction industry. Market leader improve the efficiency of the direct Partnerships and sustainability The Aarsleff Group is a building con- production costs. We build long-term partnerships with One Company Clear profitability focus struction and civil engineering group customers and business partners to Focused portfolio management with an international scope and a One Company improve the efficiency of our services, Development of collaboration. market leading position in Denmark. The Group’s diverse range of business and we add value to our customers’ units are either independent compa- projects by early contractor involve- The Group comprises a portfolio of nies or departments. Each business ment. EXTERNAL PARTNERS independent, competitive compa- unit has different specialist skills, Efficient and well-structured nies, each with their own specialist and therefore they mainly sell their The Aarsleff Group assumes corpo- expertise, organised under Per services directly to our customers. rate social responsibility, leads the collaboration Aarsleff Holding A/S. As the largest Our specialist expertise includes har- way and contributes to the green THE CUSTOMER of these companies, Per Aarsleff A/S bour and marine construction, railway transition which will future-proof the Attractive price and has a significant role in coordinating work, tunnel work, ground engineer- building and construction industry. In reliability of delivery and managing the Group, since our ing work, district heating work, pipe a close working relationship with our ONE top management and the Group staff rehabilitation and the execution of customers and collaboration partners, Focus on the challenges ofCOMPANY the project functions are based in this company, technical contracts with subsequent we are working actively to find inno- THE OC TEAM together with the management of all operation and service. vative and sustainable solutions that Team spirit and performance Efficient project execution three segments: Construction, Pipe ensure value-creating processes and Technologies and Ground Engineer- Where synergies can be achieved, we products within building construction ing. focus on integrating the specialist and infrastructure. expertise of our business units across of agreements AAR SLEFFUncomplicated COMPANIES concepts Our ground engineering and trenchless the Group into turnkey solutions with pipe renewal activities are market- a high degree of in-house produc- leading and strongly internationalised tion. We optimise and improve the with a number of companies in Den- efficiency of our collaboration across mark and abroad. The activities have the Group by working according to a high degree of industrialisation, and specific principles expressed in our it is our goal to constantly reduce and One Company model. Aarsleff | Annual report 2019/20 3 ManRev – Frontpage In spite of the insecurity caused by the coronavirus pandemic, we have had a strong financial year with a record-high bottom line, a strong order intake and a high order backlog. MANAGEMENT ’S REVIEW The year in figures 5 Letter from the CEO 6 Financial highlights and ratios for the Group 8 The year in brief 9 The future financial year 12 Aarsleff | Annual report 2019/20 4 ManRev – The year in figures THE YEAR IN FIGURES Revenue Investments EBIT EBIT margin See The year in brief for more information about the financial performance 13,295M 469M 553M 4.2 % of the year and the order backlog. Revenue decreased by 1.2%. Organ- During the financial year, the usual EBIT was DKK 625 million before EBIT margin before goodwill impair- ic revenue decreased by 2.2%. In investments were made in the re- goodwill impairment. Construction ment was 4.7% and is above expec- Construction, revenue decreased placement of equipment. Investments delivered results in line with expecta- tations. The EBIT margin of the three primarily due to a slowdown in the of the year primarily took place in tions. Ground Engineering delivered segments was 2.8% for Construction, Icelandic market. In Pipe Technolo- Ground Engineering with the acquisi- results above expectations due to a 7.5% for Pipe Technologies and 6.3% gies, the level of activity was high tion of Sør-Norsk Boring AS in July. high level of activity on most markets, for Ground Engineering. with major projects in Germany and resulting in high capacity utilisation. Sweden. In Ground Engineering, rev- Pipe Technologies achieved results enue increased due to a higher level above expectations driven by a high of activity in Germany and Poland as level of activity. well as the acquisition in Norway. 13,453 13,295 195 553 12,108 503 4.0% 4.2% 11,188 475 3.9% 3.7% 10,420 416 3.4% 46 63 380 20 62 572 442 388 378 406 2015/16 2016/17 2017/18 2018/19 2019/20 2015/16 2016/17 2017/18 2018/19 2019/20 2015/16 2016/17 2017/18 2018/19 2019/20 2015/16 2016/17 2017/18 2018/19 2019/20 Acquisition of companies Property, plant and equipment Aarsleff | Annual report 2019/20 5 ManRev – CEO letter WE ARE IN A GOOD POSITION In spite of the insecurity caused by the coronavirus pandemic, we have had a strong financial year with a record-high bottom line, a strong order intake and a high order backlog. The Aarsleff Group’s recent financial We began the financial year by in- year was characterised by a very high creasing our focus on the green tran- level of activity in all three segments, sition. Unfortunately, this was put on resulting in a record-high bottom line. hold when the coronavirus pandemic In recent years, harbour expansions struck in the spring. But we did not have taken up a great share of the forget the green transition, and we are order book, but now we see a high continuing our efforts with the recent level of activity on the large building launch of our ECO Center which is projects in Aarhus and Copenhagen the Aarsleff Group’s sustainability as well as on infrastructure projects initiative. in Sweden and Norway. Moreover, we are about to kick off the Fehmarnbelt Link project of which Aarsleff’s share Jesper Kristian Jacobsen amounts to DKK 3.7 billion in 2015 CEO prices. Aarsleff | Annual report 2019/20 6 An unusual year sustainability. For this reason, the We are in a strong position It has truly been an unusual year. The Aarsleff Group is taking responsibility It is difficult to forecast the future, lockdown of Europe in mid-March and leading the way when it comes especially now, and even though we changed the entire world, and the to future-proofing the building and have not experienced it so far, the world in which we are operating. The construction industry. We must suc- derived effects of the coronavirus building and construction industry ceed with the green transition, and it pandemic may affect the Aarsleff has been relatively spared until now, requires that the entire value chain Group financially. But one thing is and at Aarsleff we have succeeded participates. certain: Thanks to our current and fu- in maintaining a relatively normal ture large, multi-annual projects; our production on the majority of our In line with our ambitions to strength- high and long-term order backlog as projects. Of course, this has resulted en our focus on sustainability, we well as our current financial situation, in some challenges along the way, but have recently established Aarsleff we are in a strong position. And we it has been important for us to retain ECO Center which is a centrally are looking forward to entering a new all our skilled employees, because we organised knowledge and compe- year.