ANNUAL REPORT 2018/19 Indhold
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ANNUAL REPORT 2018/19 Indhold CONTENTS Aarsleff and how we work 3 34 MANAGEMENT’S 43 FINANCIAL STATEMENT AND STATEMENTS 4 MANAGEMENT’S AUDITOR’S REPORT Financial review 44 Consolidated financial statements 45 REVIEW Management’s statement 34 Parent company financial statements 84 The year in figures 5 Independent auditor’s report 35 Letter from the CEO 6 Financial highlights and ratios for the Group 8 38 THE YEAR 93 COMPANIES IN The year in brief 9 The future financial year 10 AT A GLANCE THE AARSLEFF GROUP Strategic focus areas 12 Marine construction in extreme conditions 38 Focus areas for the three segments 14 Copenhagen’s largest Financial targets, capital structure construction site 39 and distribution policy 16 Significant Aarsleff footprint Construction 18 at Aarhus Ø 40 Pipe Technologies 20 Expansion of Port of Rønne 41 Ground Engineering 22 Building construction in Shareholder information 24 the centre of Reykjavik 42 Corporate governance 26 Commercial risk assessment 27 Internal control and risk management in financial reporting 28 Corporate social responsibility 29 Executive Management and This Annual Report has been prepared in Danish and English. Board of Directors 31 In case of discrepancy, the Danish version shall prevail. Aarsleff Annual report 2018/19 2 Aarsleff how we work AARSLEFF AND HOW WE WORK MARKET LEADER ONE COMPANY PARTNERSHIPS The Aarsleff Group is a building construction and civil engi- The Group’s diverse range of business units are either independ- AND EFFICIENCY neering group with an international scope and a market leading ent companies or departments. Each business unit has different position in Denmark. The Group comprises a number of inde- specialist skills, and therefore they mainly sell their services directly IMPROVEMENTS pendent, competitive companies, each with their own specialist to our customers. Our specialist expertise includes harbour and expertise, organised under Per Aarsleff Holding A/S. As the marine construction, railway work, tunnel work, ground engi- largest of these companies, Per Aarsleff A/S has a significant role neering work, district heating work, pipe rehabilitation and the We build long-term partnerships with customers and business in coordinating and managing the Group, since our top manage- execution of technical contracts with subsequent operation and partners to improve the efficiency of our services, and we add ment and the Group staff functions are based in this company, service. Where synergies can be achieved, we focus on integrating value to our customers’ projects by early contractor involvement. together with the management of all three segments: Construc- the specialist expertise of our business units across the Group into Our ground engineering and trenchless pipe renewal activities tion, Pipe Technologies and Ground Engineering. turnkey solutions with a high degree of in-house production. We are strongly internationalised with a number of companies in optimise and improve the efficiency of our collaboration across the Denmark and abroad. The activities have a high degree of indus- Group by working according to specific principles expressed in our trialisation, and it is our goal to constantly reduce and improve One Company model. the efficiency of the direct production costs. Aarsleff Annual report 2018/19 3 management review MANAGEMENT’S REVIEW The year in figures 5 Letter from the CEO 6 Highlights for the Group 8 The year in brief 9 The future financial year 10 Strategic focus areas 12 Focus areas for the three segments 14 Financial targets, capital structure and distribution policy 16 Construction 18 Pipe Technologies 20 Ground Engineering 22 Shareholder information 24 Corporate governance 26 Commercial risk assessment 27 Internal control and risk management in financial reporting 28 Corporate social responsibility 29 Executive Management and Board of Directors 31 Aarsleff Annual report 2018/19 Management's review 4 manrev year in figs THE YEAR IN FIGURES REVENUE INVESTMENTS EBIT EBIT MARGIN 13,453M 440M 503M 3.7% Revenue increased by 11.1%, of which 10.1% was During the financial year, the usual investments Construction performed in line with The EBIT margin, adjusted for the organic growth. Revenue increased in all three were made in the replacement of equipment expectations. Ground Engineering performed arbitration loss, was 4.3% as expected. segments and was attributable to a high level and a few new investments in e.g. drilling rigs above expectations driven by the high level The EBIT margin of the three segments of activity within harbour expansions, building and a tamping machine. Acquisitions during of activity in Denmark. Pipe Technologies was 3.2% for Construction, 4.9% for activities in Greater Copenhagen, construction the year primarily consisted of the German also performed above expectations driven by Pipe Technologies and 4.9% for Ground pits in Denmark, acquisitions in Germany and companies in Ground Engineering. a high level of activity and improved profit Engineering. a high level of activity in the German market for margins in Germany. pipe renewal. 13,453 12,108 195 11,188 4.7% 10,254 10,420 484 503 4.0% 475 3.9% 3.7% 416 3.4% 46 380 55 20 62 572 377 442 388 378 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 Acquisition of companies Property, plant and equipment Aarsleff Annual report 2018/19 Management's review 5 manrev ceo letter ON A STEADY COURSE Aarsleff Annual report 2018/19 Management's review 6 The past year was characterised by a very high level of activity HEALTHY CULTURE AND JOB SATISFACTION The experience and and growth in all three segments – and we achieved record-high At Aarsleff, we have generally succeeded in retaining our skilled the qualifications of our top and bottom lines. Especially within large harbour expan- employees, and for that we are grateful. The experience and the employees are essential to sustain sions, building construction and railway activities, our project qualifications of our employees are essential to sustain our mar- activities experienced a very positive development. During the ket position. We have a good and healthy culture, and this was our market position. We have a year, we have developed as a team and as an organisation, thereby also reflected in our most recent employee survey which showed good and healthy culture, and this strengthening our One Company qualifications. high employee satisfaction scores. was also reflected in our most recent employee survey which showed high Our activities in Denmark were characterised by the harbour Over the year, the number of trainees and apprentices in the expansions in Rønne, Hanstholm, Frederikshavn and Skagen. largest Danish contracting companies has been debated. In the employee satisfaction scores. Large, exciting and, not least, challenging projects requiring theo- future, there will be an increasing competition to find skilled retical know-how, practical experience and entrepreneurial spirit workers, and we are aware of our shared responsibility to train for a successful completion. Skills that the Aarsleff Group clearly the employees of the future generations. That is why we will demonstrated when we produced and installed the 7,000-tons continue having apprentices and trainees on our projects if it is pier head for Port of Hanstholm – the largest so far in Denmark. possible and if it provides value to society. Read more about our work concerning apprentices and trainees in our CSR report. PROJECT- AND SOLUTION-BASED BUSINESS APPROACH This report also describes our measures to reduce the number of We must continue meeting our customers and their consultants accidents. with a project- and solution-based approach, and we prefer to begin our collaboration already in the design phase. Although WE PURSUE MARKET OPPORTUNITIES it may be a long process, it allows us to use our specialist skills There is an increased focus on digitalisation in the building and We are measured against parameters such as earnings, revenue when we optimise the project, ensure buildability and minimise construction industry. Aarsleff is among the first to implement and growth. However, growth has never been an isolated target to the risks during the execution phase together with the client and and use digital tools that e.g. optimise the design phase and us. And it will not be so in the future, either. Growth goes hand the consulting engineers. improve the efficiency in the execution phase. in hand with development and earning capacity. And we will continue developing – because it is in our DNA to pursue market Using early contractor involvement, we secured the contracts Currently, the Aarsleff Group is experiencing a record-high order opportunities. for the construction of Danske Bank’s new headquarters in backlog, and we expect that the relatively high level of activity Copenhagen, the new Natural History Museum of Denmark in will continue in the coming years as some of our large projects JESPER KRISTIAN JACOBSEN Copenhagen as well as Lighthouse in Aarhus which will become will keep us busy during the next three to four years. CEO Denmark’s tallest residential building. Aarsleff Annual report 2018/19 Management's review 7 manrev financial highlights FINANCIAL HIGHLIGHTS FOR THE GROUP (DKK’000) 2018/19 2017/18 2016/17 2015/16 2014/15 2018/19 2017/18 2016/17 2015/16 2014/15 Income statement Financial ratios1 Revenue 13,453,011 12,108,257 11,188,255