Annual Report 2011 FUGRO N.V. 50 Years FUGRO
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ANNUAL REPORT 2011 FUGRO N.V. ANNUAL REPORT 2011 FUGRO 50 YEARS FUGRO From small Dutch engineering company to global player! FUGRO N . V. Annual Report 2011 GEOTECHNIEK MILIEU ONDERZOEK MARINER Fugro N.V. Colophon Veurse Achterweg 10 2264 SG Leidschendam Fugro N.V. P.O. Box 41 Veurse Achterweg 10 2260 AA Leidschendam 2264 SG Leidschendam The Netherlands The Netherlands T +31 (0)70 3111422 T +31 (0)70 3111422 F +31 (0)70 3202703 F +31 (0)70 3202703 E [email protected] E [email protected] www.fugro.com Commercial Register The Hague Realisation: Trade Registry no 27120091 C&F Report Amsterdam B.V. VAT no 00 56 21 409 B01 Photography and images: Fugro N.V. Fugro has endeavoured to fulfil all legal requirements related to copyright. Anyone who, despite this, is of the opinion that other copyright regulations could be applicable should contact Fugro. A Dutch translation of this annual report is available. In matters of any misinterpretation the official English annual report will prevail. This annual report is also available on www.fugro.com. Cautionary statement regarding forward-looking statements This annual report may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including (but not limited to) statements expressing or implying Fugro’s beliefs, expectations, intentions, forecasts, estimates or predictions (and the assumptions underlying them). Forward-looking statements necessarily involve risks and uncertainties. The actual future results and situations may therefore differ materially from those expressed or implied in any forward-looking statements. Such differences may be caused by various factors (including, but not limited to, developments in the oil and gas industry and related markets, currency risks and unexpected operational setbacks). Any forward-looking statements contained in this annual report are based on information currently available to Fugro’s management. Fugro assumes no obligation to make a public announcement in each case where there are changes in information related to, or if there are otherwise changes or developments in respect of, the forward-looking statements in this annual report. Contents ■ Preface 2 ■ Financial statements 2011 89 1 Consolidated statement of comprehensive ■ Fugro at a glance 3 income 90 Major developments in 2011 3 Key figures 4 2 Consolidated statement of financial position 92 Mission and profile 6 Fugro’s activities 7 3 Consolidated statement of changes in equity 93 Financial targets and strategy 8 Information for shareholders 10 4 Consolidated statement of cash flows 96 ■ Report of the Supervisory Board 15 5 Notes to the consolidated financial statements 98 ■ Report of the Board of Management 23 6 Subsidiaries and investments of Fugro N.V. General 23 accounted for using the equity method 170 Acquisitions 24 Employees 25 7 Company balance sheet 173 Capacity planning 25 Financial 26 8 Company income statement 174 Dividend proposal 32 Market developments and trends 32 9 Notes to the company financial statements 175 Backlog 34 Post balance sheet date events 34 10 Other information 180 Outlook 35 Important and interesting contracts 37 Report of Stichting Administratiekantoor Fugro Geotechnical division 40 (‘Trust Office’) 184 Survey division 42 Geoscience division 44 Historic review 186 ■ Theme: 50 years Fugro 46 Glossary 188 ■ Corporate Social Responsibility 60 ■ Risk Management 73 ■ Corporate Governance 79 Annual Report 2011 ■ Preface Dear shareholders and other stakeholders, The aftermath of the global financial crisis that started I am pleased to have received the confidence to shape the in 2008 has also affected the course of business of Fugro. next phase of Fugro’s development as Chairman of the This was particularly noticeable in Europe and in the Board of Management. I look forward to accomplishing United States, where even still now, large government this, working with colleagues and employees. deficits are slowing down economic recovery. On the other hand, growth continues in emerging countries like Effectively 1 January 2012, Fugro is managed by a Board China, Brazil and India. of Management supported by a group of managers with a regional or service oriented responsibility. This will In the past year our strategy, which aims to provide a strengthen mutual cooperation and customer focus in wide range of services based on a large geographic the regions and create more consistency in the services spread, has proven useful. The result is that, despite Fugro provides. It will also allow us to be even more challenging circumstances, the year 2011 can be decisive and further improve our competitive position. concluded with new highlights: a net profit of EUR 288 million and revenue of EUR 2.6 billion. As a result of the increasing demand for oil and gas as well as the depletion rate in existing oil fields, we expect Prior to the financial crisis, Fugro had several years with our workload from the oil and gas market to strengthen strong growth in revenue and net profit. In 2009 the towards the second half of 2012. The recovery of the impact of the crisis was limited to a profit decrease of marine seismic data acquisition market is progressing 7% and 5% lower revenue. In the following years, the with further price recovery. Considering the strong upward trend was quickly resumed and thanks to our position that Fugro has in the markets it operates in, strong financial position we were able to keep investing the current improving backlog and a strong in future growth. Last year this was specifically reflected management team, we enter 2012 with confidence, in an active acquisition policy. despite the current uncertainties. It is a privilege to have the opportunity to write my last On behalf of the Board of Management, the management preface on the basis that we completed last year team and employees I would like to thank Klaas Wester successfully and that Fugro’s outlook is positive. for his significant contribution to the development of I would like to take this opportunity to thank all Fugro during his term as President and CEO. His astute stakeholders and interested people for the confidence ability to analyse opportunities, pragmatic view on they placed in me. The pleasure and enjoyment I have things and ‘down to earth’ mentality has brought Fugro experienced leading thousands of employees with dozens to where it is today. We will do whatever is necessary to of nationalities is particularly due to their tireless efforts continue the success of Fugro in the years to come. that form the basis of Fugro’s success. K.S. Wester A. Steenbakker President and CEO of the Board of Management Chairman of the Board of Management until 31 December 2011 as of 1 January 2012 2 ■ Fugro at a glance ■ MAJOR DEVELOPMENTS IN 2011 • In 2011 Fugro’s revenue increased by 13.0% to • It is proposed to maintain the dividend for 2011 EUR 2,577.8 million (2010: EUR 2,280.4 million). at EUR 1.50 per (certificate of a) share (2010: Revenue increased organically by 7.6% and by EUR 1.50), to be paid at the option of the 8.8% as a result of acquisitions. The foreign shareholder in cash or in (certificates of) shares. currency effect was 3.2% negative. The effect of In case no choice is made, the dividend will be paid disposals was 0.2% negative. in (certificates of) shares. • Net result went up with 5.7% to EUR 287.6 million • Investments for capacity expansion continued (2010: EUR 272.2 million). according to plan and amounted to EUR 208.9 million in 2011. • Net profit margin was 11.2% (2010: 11.9%). • Annual revenue of the companies acquired in • Earnings before interest, tax, depreciation 2011 amounts to EUR 215 million. and amortisation (EBITDA) increased by 3.5% to EUR 581.0 million (2010: EUR 561.1 million). • Backlog at the beginning of 2012 amounted to EUR 1,692.6 million. This is 9.0% higher than at • Results from operating activities (EBIT) were 0.6% the beginning of 2011 (EUR 1,553.2 million). lower at EUR 349.3 million (2010: EUR 351.5 million). • In the second half of 2011 Fugro was refinanced. Fugro reached agreement with 27 US and UK based • In particular the Survey and Geoscience divisions investors with respect to so called US Private showed growth in revenue and all three divisions Placement loans (USPP) with a value expressed in were profitable. US dollars of 909 million. Fugro also reached agreement with a number • Earnings per share increased by 4.6% to EUR 3.63 of individual banks for committed facilities up (2010: EUR 3.47). Cash flow per share was 6.4% to a total value of EUR 775 million for 5 years. higher at EUR 6.65 (2010: 6.25). These facilities were made available by eight internationally operating banks. The term ‘shares’ as used in this Annual Report should, with respect to ordinary shares issued by Fugro N.V., be construed to include certificates of shares (also referred to as ‘share certificates’ or ‘depositary receipts’ for shares) issued by Stichting Administratiekantoor Fugro (also referred to as ‘Fugro Trust Office’ or ‘Trust Office’), unless the context otherwise requires or unless it is clear from the context that this is not the case. For further information please refer to page 83. In this Annual Report, Fugro N.V. is also referred to as ‘the Company’ or ‘Fugro’. Fugro N.V. and its subsidiary companies are together referred to as ‘the Group’. Fugro at a glance 3 Change ■ KEY FIGURES 2011 in % 2010 2009 2008 2007 Result (x EUR million) Revenue 2,577.8 13.0 2,280.4 2,053.0 2,154.5 1,802.7 Gross profit (net