Annual Report 2019
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ANNUAL REPORT 2019 RIGSHOSPITALET MANAGEMENT’S REVIEW STATEMENTS ON THE ANNUAL REPORT 8 COWI's business model 03 10 COWI’s services 56 56 Statement by the Board of 12 Financial ratios Directors and Executive Board 14 Financial review 57 Independent auditor’s report 18 Outlook for 2020 COWI HOLDING A/S COWI HOLDING A/S CONSOLIDATED FINANCIAL COMPANY INFORMATION STATEMENTS 2019 20 60 61 COWI’s organisation 21 Profit and loss account 63 COWI’s Board of Directors 22 Balance sheet 24 Statement of changes in equity 25 Cash flow statement 26 Notes COWI HOLDING A/S (PARENT COMPANY) 47 FINANCIAL STATEMENTS 48 Accounting policies 49 Profit and loss account 50 Balance sheet 51 Statement of changes in equity 52 Notes PUBLISHED BY EDITORIAL INPUT ENDED COWI Holding A/S February 2020 Parallelvej 2 2800 Kongens Lyngby REPRODUCTION Denmark Permitted with appropriate Tel 56 40 00 00 source references. Fax 56 40 99 99 www.cowi.com ISSN 1904 8734 www.cowiholding.com MANAGEMENT’S REVIEW 3 MANAGEMENT’S REVIEW 2019 was the first year with Arkitema sustainable solutions, which calls for im- to customers as well as our internal as part of the COWI Group. Including mense behavioural changes in terms of, operation benefit from digital solutions an architectural firm in the Group dem- e.g., new energy-efficient homes and and tools. One focal point is developing onstrated its clear value as customers infrastructure. With our broad experi- common processes and tools for pro- are increasingly looking for partners that ence and solid expertise within sustain- ject management. Working according provide integrated design solutions. ability, COWI is well positioned to be the to the same methodology and using the During 2019, COWI and Arkitema jointly partner of choice when governments, same digital tools throughout the Group won projects worth approximately DKK municipalities and private companies will improve our organisational agility 500 million. However, this could not have to find sustainable solutions to significantly as project team members mitigate the negative impact of delayed solve the climate challenges. can work across borders with fewer investment decisions and projects practical obstacles. Looking ahead, our being put on hold, following uncertainty In line with the growing drive for sus- platform will enable us to share advan- in world economy and trade tensions. tainability, COWI decided to become tages in data science, AI and robotics All in all, COWI had a challenging year, carbon neutral in 2020, and within the across units. which led to an unsatisfactory financial next ten years, we will reduce our actual result, but we concluded the year with CO2 footprint by 70 per cent, compared We see how new digital solutions are a solid order book and strong operating to our 2008 level. The end goal is zero changing our existing business model cash flow. emissions by 2050. In order to reach and offerings. For instance, we now carbon neutrality, it was decided to off- provide real-time data from more than The poor financial result was heavily set COWI's carbon emissions through 100,000 cars, which will be used by the affected by project disputes, as well the funding of an equivalent carbon di- Danish Road Directorate to provide the as project descoping and delays. In oxide reduction elsewhere in the world. public with better online traffic informa- addition, we were negatively affected by The selected project is the Sidrap Wind tion. Similarly, we now provide several the slow-down in the buildings markets Energy Project Phase 1, located in the web-based self-service solutions to in Denmark and Sweden, which saw South Sulawesi Province, Indonesia. It customers for a variety of applications both fewer project tenders and projects replaces traditional electricity production such as retail-store location and traffic put on hold, mainly in the private sector. based on fossil fuels and is estimated accident analysis. All examples of Finally, our business in North America to shave off 1,412,480 tonnes of CO2 service deliveries that have evolved from is yet to obtain critical mass, rendering from 2018 to 2028. The project is a so- traditional consultancy into it sensitive to individual wins and losses called Gold Standard project, which is digital solutions. or projects put on hold. the highest possible classification. The measured and calculated CO reduc- 2 UNSATISFACTORY OPERATIONAL As a consequence of the reduced tions are verified by an independent RESULT FOR 2019 business activity and unpredictable UNFCCC-accredited verification and In 2019, COWI's turnover grew markets, we adjusted our capacity and validation company. In 2019, we also compared to 2018 by 6.8 per cent to reduced our exposure to risks in certain set up a strategic framework to further DKK 6,623 million, due to Arkitema markets. This included withdrawing or increase sustainability impact through becoming part of the COWI Group. reducing our presence in geographical our services to customers. These efforts There was no organic growth (0.3 per areas where we consider business risks will continue into 2020 and are cent). Our EBITDA margin decreased to to be too high. As a consequence, we particularly linked to the UN’s sustain- 6.4 per cent compared to 7.8 per cent divested our business in Zambia, closed able development goals (SDGs) in 2018, while operating profit for the our office in Tanzania and reduced our nos. 6, 7, 9, 11 and 13. year was DKK 213 million, correspond- exposure in the Middle East. ing to an EBIT margin of 3.2 per cent, DIGITAL TRANSFORMATION ON down 1.6 percentage points from 2018. SUSTAINABILITY MOVING UP TRACK AND ACCELERATING Operating cash flow was a satisfactory THE BUSINESS AGENDA Our digitalisation journey progressed as DKK 384 million and in line with the Furthermore, the green transition gained planned. We now have a digital trans- target set. momentum and focus with our custom- formation team, which enables us to ers. The intensified political attention orchestrate our digital innovation across to climate change influenced custom- the Group. Our focus is on transforming ers’ prioritisation of and demand for how we work so our project delivery The result was negatively affected by projects mainly within the transportation utilise spare capacity with Bridges. We DKK 44 million related to the ongoing sector, and the number of employees consolidated COWI Group capabilities arbitration case in Oman. The figures from other business lines allocated to related to the wind market within BTM, above are exclusive of these costs. Norwegian projects continued to grow and the new Wind and Marine business during the year. Noteworthy wins in unit had a strong backlog with the Result for the year is positively affected 2019 included the expansion of the ever-increasing need for sustainable by a reversal of earn-out regarding Nygårdstangen-Bergen-Fløen railway waterfront and energy solutions – in acquisitions. line and the expansion of highway E6 particular offshore wind. In September, from Kvål to Melhus, as well as the new we relocated and expanded our office The performance of our five business emergency hospital in Hjelset. in Hamburg, Germany, which is the lines varied significantly, from robust centre for our work on the Arcadis Ost to unsatisfactory. 1 offshore windfarm. TURNAROUND IN SWEDEN TAKES TIME ROBUST PERFORMANCE Business Line Sweden continued its ARKITEMA HIT BY A VOLATILE IN DENMARK solid efforts to turn around the busi- BUILDING MARKET Business Line Denmark delivered a ness, and the new leadership team Business Line Arkitema had a trouble- robust performance in a market where headed by the new Executive Vice some first year in the COWI Group the investment level in public infrastruc- President, Anders Wiktorson, was put as our architecture business was hit ture is low. The Water and Environment in place early in the year. The business severely by a cool-down in the residen- business unit demonstrated solid performance is not yet in line with tial building market, both in Denmark results and we expect this trend to ambitions. The results were in particular and Sweden. As a result, customers continue with sustainability at the negatively affected by low profitability in delayed projects or put them on hold, top of both the political and business legacy infrastructure projects, and low which heavily affected Arkitema's result, agendas. The Infrastructure business billability affected by a slow-down in which was disappointing. Arkitema was, managed to maintain a stable business the residential building market. On the however, quick to adapt its capacity to volume in spite of a low investment positive side, the overall performance the new situation without compromising level. After the summer, our Buildings of the project portfolio is improving, and its quality or competitiveness. This was business unit saw a growing number of cashflow was robust. AEC, Projektbyrån reflected in some significant wins, and projects being either delayed or put on and the Industry business unit per- in the last part of the year, we were able hold, but managed to catch up at the formed well, and we had some notable to boost the backlog significantly. For end of the year and delivered a solid wins in the past year: the creation of instance, by adding the turnkey consul- performance, including significant wins the man-made peninsula being built at tancy contract for the Posthusgrunden together with Arkitema. Throughout the Masthuggskajen in Gothenburg, a new project in Copenhagen and the new year, Business Line Denmark landed a LNG Terminal at the port of Oxelösund, railway station in Trondheim, Norway. At number of significant projects, includ- as well as a substantial addition to the the end of the year, Thomas Kveiborg ing Odense Tramway, and framework OLP high-speed rail project.