Profile and mission VolkerWessels is a closely-knit group of companies at home in the Netherlands and abroad. We work in partnership with our stakeholders to shaping society in the field of construction, mobility, energy and communications provision and development, design, realisation, management and operations. The focal point of the activities of VolkerWessels is in the Netherlands. There are also offices in the United Kingdom, Belgium, Germany, Poland, Estonia, the United States and Canada. We operate in a decentralised organisational structure with 125 operating companies and with an average of 16,600 employees. 2009 Annual Report VolkerWessels Oostmaaslaan 71, 3063 an Rotterdam P.O. Box 2630, 3000 cp Rotterdam The Netherlands t +31 (0)10 42 44 244 f +31 (0)10 42 44 282 e [email protected] i www.volkerwessels.com De Groot Vroomshoop maakte voor de In 2009, Wessels Rijssen realised the new construction nieuwbouw van Reggefiber (gebouwd for Reggefiber in Rijssen. De Groot Vroomshoop was door Wessels Rijssen) de spanten. responsible for the exceptional wood construction work. 2009 table of contents table of contents 6 Key figures 7 Introduction 8 Mission, vision, financial targets and strategy 12 Members of the Management Board and management structure 13 Report of the Management Board 13 Core issues 13 General 17 General risks 20 Market risks 21 Operating risks 22 Financial risks 24 Building and Property Development the Netherlands 29 Civil engineering, Roads and Rail 37 Civil engineering, Roads and Building United Kingdom 38 Civil engineering, Roads and Building United States/Canada 39 Infrastructure technology and Telecommunications 43 Supplies and Service Delivery 44 Human Resources Management 46 Corporate Responsibility 50 Corporate Governance 52 Remuneration policy 54 Composition of the Supervisory Board 55 Report of the Supervisory Board 58 Five years of VolkerWessels 59 Consolidated income statement 60 Consolidated balance sheet 62 Consolidated cash flow statement 64 Operational structure 70 Publication Van Hattum en Blankevoort and KWS Infra, among others, working on the reconstruction of the A2 motorway, here in the vicinity of Utrecht. The work includes a new viaduct with noise barriers. VolkerWessels Annual report 2009 / 5 general general Key figures In millions of euros unless stated otherwise introduction Solid results in difficult market conditions thanks to the diversity of our activities Consolidated information* 2009 was a hectic year with the economy in continuous movement. In most cases, the news 2009 2008 was quite bleak. The financial sector and banks had difficulties, and that also reflected on the Revenue 4,419 4,874 construction industry and our business. VolkerWessels, too, had a difficult year in more than one Order book 4,499 4,966 area in 2009. EBITDA 198 262 Thanks to a healthy financial position, a full order book and excellent diversification in our activities, Result for the financial year 91 145 we came through the year relatively unscathed. We closed 2009 with revenue of € 4.4 billion and result for the financial year at € 91 million, which is in line with earlier expectations. Income tax 30 40 Effective tax rate 25% 21% The markets in which we are active developed very differently, reflecting the diversity of our Operating working capital 713 887 business. In some market segments, such as building and civils, utility construction and the rail Net debt 114 305 sector, we saw increased competition and pressure on prices. Other markets, often specialist markets, were more stable despite economic pressures. Depreciation and impairment of property, plant and equipment 71 69 Working capital management was a focal point for our business in 2009, resulting in a strengthening Amortisation and impairment of of the financial position and improved stability in the business. Apart from the focus on working intangible assets 10 9 capital management, the improvement of project management and risk management remained high Investments in property, plant and on the agenda. equipment 94 109 Investments in intangible assets 8 25 In 2009, we provided a strong stimulus for our sustainability policy. Clients (public and private) increasingly request visibility in this field and, partly in response to this, we have decided to publish Share capital 84 84 a special sustainability report this year. Total equity 935 910 In addition to a brief explanation in this annual report, you can find detailed information in the sustainability report on how far we have progressed this year. Now and in the future, we will Average number of employees 16,599 17,279 continue to embrace our responsibility in the field of sustainability and report on it. Ratios Safety is and will continue to be a top priority for our company. We see it as a primary duty to ensure Current ratio 1.24 1.24 a safe working environment for our staff. Furthermore, we have a strong focus on the safety of our Solvency 30% 28% stakeholders, such as road users and local residents. Profitability The construction sector as a whole will face a challenging year in 2010. The latest forecasts are Return on equity 10.0% 16.8% unanimously subdued. Market conditions will continue to be difficult, with increasing competition EBITDA 4.5% 5.4% and pressure on prices. Net margin 2.1% 3.0% The sectors in which we are active have a delayed cyclical character. Order books will come under further pressure, projects will be more frequently postponed, and a number of market segments, such as the housing and office market, are not yet showing signs of recovery. It is expected that * The 2009 financial statements are private clients will remain reticent, and municipal councils and housing corporations will face an prepared in accordance with EU-IFRS. uphill struggle. However, we assume that the Dutch central government will continue to invest, as a The comparative figures for 2008 have result of which the infrastructure market will show a steady improvement. been adjusted. In the coming year, as with last year, we will continue to pursue our strategy of strengthening and The financial information contained on pages 58 to 63 was derived from the audited 2009 financial statements of Royal Volker Wessels improving our business, with a focus on operational excellence, giving extra attention to project Stevin NV (‘financial statements’). An unqualified auditor’s report was issued on the financial statements. The accounts should be read in management and risk management. We are in a good position to face the challenges ahead. conjunction with the financial statements, from which they were derived, as well as with the unqualified auditor’s report. VolkerWessels is a group with a healthy financial position, strong shareholders, motivated and A digital version of the financial statements is available on the VolkerWessels website (www.volkerwessels.com). passionate staff, a good order book and last, but not least , a broad spectrum of activities. We are therefore realistic and confident about the years ahead. Financial diary Gerard van de Aast The interim figures of VolkerWessels are published on 16 September 2010. Chairman of the Management Board VolkerWessels Annual report 2009 / 6 VolkerWessels Annual report 2009 / 7 mission, vision, financial targets and strategy mission, vision, financial targets and strategy mission, vision, financial targets and strategy Most of our operations are focused on the Netherlands. In addition, we have operations in: the United Kingdom, Belgium, Germany, Poland, Estonia, the United States and Canada. Our operating VolkerWessels is a closely-knit group of companies at home in the Netherlands and abroad. companies’ projects are implemented on a global scale. An average of 16,600 people are involved We work in partnership with our stakeholders to shaping society in the field of construction, on a daily basis giving substance to our motto ‘Building together on home, work and mobility.’ mobility, energy and communications provision and development, design, realisation, management and operations. Our stakeholders include: the central government, government ministries and departments, provinces, municipalities, the Directorate General for Public Works and Water Management We operate in a decentralised organisational structure with 125 operating companies and are (Rijkswaterstaat), ProRail, water boards, institutional investors, housing corporations, the active in the following areas: housing and utility construction, industrial construction, property corporate sector, institutional clients, consumers in the housing market, consortium partners, development, civil engineering, road construction, network infrastructure (cables and pipelines), subcontractors, sector associates, waste disposal companies, energy suppliers, our staff, employer telecommunications infrastructure, railway construction and maintenance, technical installations, and employee organisations, environmental organisations, educational and research institutions, traffic technology, plant and machinery management, parking management, building supplies and local communities and residents and financial institutions. advice and service delivery. Strategic vision Amongst others, our strengths lie, in extensive knowledge and know-how in all construction Our strategy is aimed at further strengthening our current business in harmony with our Over four weekends, VolkerRail disciplines, cooperation in multidisciplinary and integrated projects, a good geographic coverage, environment: to be safe,