Annual Report • Apr 27, 2017
Annual Report
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| Letter from the CEO | 4 |
|---|---|
| Directors' report | 6 |
| Declaration by the board and CEO | 12 |
| Financial statements - Group | 14 |
| Financial statements - Parent company | 41 |
| Shareholder information | 56 |
| Corporate governance | 58 |
| Auditor's report | 64 |
| Key figures Group | 68 |
| Definitions | 69 |
We are a Scandinavian consultancy which works for players who are important for society in the public and private sectors. We provide services in information technology, digital communication and enterprise management. At 31 December 2016, we had 1 090 employees at 14 offices in Norway and Sweden.
We are committed to maintaining long-term client relationships and are a strategic partner for a number of enterprises through innovation, development and implementation of solutions of critical significance for society. In that way, we help to design digital solutions which create new business opportunities. Clients value our good understanding of their activities, and the fact that our broad range of services makes us a turnkey supplier. This is how we win the trust of our clients.
Our regional model with local offices provides clear advantages in marketing work and competitiveness. Many enterprises consider it important that their provider of business-critical systems has local entrenchment and expertise. It is also easier to establish long-term relationships in this way, and thereby to get to know the client's business and systems.
Thanks to our clear focus on the principles for managing the business, we are perceived as a solid, well-run and reputable company. Our standards for delivering good solutions are supplemented by strict requirements for ethics, avoiding conflicts of interest, openness and trustworthiness.
We are able to maintain close relationships with clients because our business and our employees conduct our assignments with a high level of integrity.
| 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| 1 232.5 | 1 132.6 | 1 112.8 | 1 030.3 | |
| 106.3 | 99.4 | 79.2 | 95.1 | 78.2 |
| 79.9 | 74.7 | 57.0 | 69.8 | 56.6 |
| 8.0 % | 8.1 % | 7.0 % | 8.5 % | 7.6 % |
| 32.9 % | 35.9 % | 34.3 % | 35.9 % | 34.7 % |
| 1 090 | 1 036 | 1 008 | 931 | 881 |
| 1 330.8 |
Turnover from customer 100 % public owned: 52.4 % Turnover from customer
wholly or partially private owned: 47.6 %
%
| Public admin | 26.6 % |
|---|---|
| Oil & gas | 19.3 % |
| Transportation | 10.7 % |
| Power supply | 10.0 % |
| Retail | 6.6 % |
| Service industry | 6.3 % |
| Info and communication | 4.4 % |
| Bank & finance | 4.3 % |
| Industry | 4.1 % |
| Other | 3.9 % |
| Health | 3.7 % |
The year 2016 was exciting not only for our company but for all of us. New technology is changing our society at record speed. The question of how to initiate digital processes in the organisation has been discussed in virtually all management teams and boardrooms over the past 12 months. All our clients faced up to this challenge. Through important and highly interesting digitalisation projects, we were able to participate during 2016 in modernisations, efficiency enhancements and changes in the public and private sectors. These projects have helped to alter and develop the society we inhabit.
We worked in 2016 to develop our corporate culture, pursued continuous expertise development and worked closely with our clients. That led to satisfied employees and positioned us as one of the largest and leading centres of expertise in Scandinavia – and not least one of the most profitable. We also acquired new and able colleagues both through recruitment and by taking over the Swedish business of US consultancy Ciber.
Only one option is available to us for the way forward – to develop. Both because this generates energy and internal dynamism, and because we work in an industry and inhabit a society where new things are constantly happening. In 2016, these trends meant that we won assignments which were challenging, educational, entertaining and profitable, and where we saw that client needs were met in a way which equipped them to face the future with new digital solutions.
During the year, we became a very important partner for even more clients in their digitalisation process. We accomplished that because our attention has been concentrated on keeping abreast of new technology and developing new service areas. We experienced a marked change during 2016 with regard to interest in and need for expertise with machine learning and artificial intelligence (AI). We know a great deal about AI, and increased our commitment to this area in 2016.
Our employees have done a fantastic job in winning new clients. In Rogaland county, where demand from our clients in the oil sector was once again lower in 2016 than a couple of years ago, we secured a number of new clients in the public and private sectors. Despite the downturn in the petroleum business, we
increased market share over the year and Statoil remained our largest client. Among other assignments, we were chosen as the company's partner for its Go Digital programme.
We were shown increased confidence by our big clients throughout the year. The armed forces, the Oslo, Sandnes, Bergen and Trondheim local authorities, the Directorate for
Civil Protection and Emergency Planning, the State Agency for the Recovery of Fines, Damages and Costs, the Norwegian Directorate for Children, Youth and Family Affairs, the Norwegian Labour Inspection Authority, the Norwegian Courts Administration, BarensWatch, the Norwegian Directorate for Education and Training, the Norwegian University of Science and Technology (NTNU), the Swedish Legal, Financial and Administrative Services Agency, Ica, Rema, Statnett, Statkraft, Hafslund, Lyse, Agder Energi, Engie, Eni Norge, Hydro, Nortura, Skandiabanken and Handelsbanken were among our biggest clients in 2016.
Our delivery of software robots to the City of Bergen attracted great attention nationally. In addition, we won a number of awards for solutions developed with our clients.
We got even better during the year at combining our regional model with a focus on local expertise and intelligence by exploiting all the energy concentrated in our overall organisation and corporate community. This is a matter of helping each other, sharing knowledge with each other and our clients, and being the bearers of a shared culture. We have given a number of presentations nationally and internationally, as well as sharing our expertise through many breakfast seminars.
As in earlier years, turnover among our staff was low during 2016. This creates continuity both in our internal development and in our client relations. Surveys show that both employees and clients are very satisfied to be working at and with us.
Digitalisation will continue to mean changes in consumer behaviour, productivity and business models, and will saturate all public and private activity in the future. The development and use of new technology is accelerating, which means that neither we nor our clients can "consolidate". We and they must go forward, dare to do new things and seek new opportunities together. We will continue to develop as the leading Norwegianowned consultancy. We are building new expertise and aim to be strategic advisers, business developers and our clients' partner in implementing tomorrow's digital solutions. And we have the three most important requirements for success in place – the culture, the knowledge and the best clients.
Sverre Hurum CEO
Bouvet had a good year in 2016. The group is delivering growth in both turnover and profit. Demand has increased steadily. Existing clients have sought services across the breadth of the group's range. At the same time, a number of large new clients have been secured. Entering into important and long-term frame agreements was a new feature of the year. During the fourth quarter, the group acquired the Ciber Sweden AB business and thereby doubled its capacity in Stockholm. This acquisition is in line with Bouvet's strategy of a strong local presence.
Bouvet participated in many very important digitalisation projects during 2016. Continuous development of the group's services is based on opportunities and requirements in the market, and is pursued in close collaboration with clients. This led in 2016 to new services and delivery models which enhance client adaptability.
The company's cross-disciplinary collaboration has resulted in unique and prize-winning solutions of great commercial value to its clients.
Bouvet devoted attention during 2016 to recruiting new employees, and the group's workforce increased by 54 people.
Digital change, innovation and enhanced efficiency are extremely relevant and central to Bouvet's daily work. The group is an important partner for many enterprises, and supports digital renewal by companies. Together with its clients, Bouvet develops services which optimise customer experience and adopts technology in order to secure benefits. Clients appreciate Bouvet's ability to grasp and
collaboratively overcome their challenges through leadingedge expertise and delivery models tailored to their individual requirements.
The group thereby reinforced its position as a leading turnkey supplier of consultancy and development services during 2016.
The regional model with local offices and closeness to assignments and clients provides clear advantages for both marketing work and competitiveness. A number of enterprises give priority to suppliers who combine good technological knowledge with cultural understanding, knowledge of the client's industry and a local presence. Bouvet's closeness and culture of sharing enhance the client's expertise about the opportunities provided by the technology in digitalising its own business. The model facilitates a positive and efficient approach to the client's challenges and provides the basis for long-term cooperation.
Close collaboration ensures continuous development of services with immediate relevance to the client's needs. Bouvet can thereby quickly take advantage of technology trends to create value. The company participated during 2016 in a number of important strategic projects and developed services in such areas as the EU's new general data protection regulation, software robots and Big Data.
Bouvet receives positive feedback for its technical and social expertise, business comprehension, proposals for solutions and ability to deliver. The company is present in many arenas for expertise development and knowledge-sharing. That equips it to meet tomorrow's challenges.
Clients set great store by the company's willingness to share important knowledge and ability to apply its expertise to
developing appropriate and creative solutions. Combined with the close relationship maintained with the group's clients, this makes it possible to implement assignments with a high degree of integrity.
Having a strategy to ensure a long-term and stable client base is important for Bouvet. This approach means that a steadily growing number of clients return to obtain expanded support from the company. No less than 93 per cent of its turnover in 2016 came from clients who were also using Bouvet the year before. A client satisfaction survey conducted by Markedsføringshuset in the autumn of 2016 showed that Bouvet has an overall client satisfaction rating of 80 per cent.
Long-term client relations mean that the group is less exposed to cyclical fluctuations and reduce its sales costs. In addition, Bouvet continued to win new assignments during 2016. Turnover rose substantially over the year in all sectors other than the oil and gas industry.
Revenue from the group's 20 largest clients accounted for 48 per cent of its overall revenues in 2016. Satisfied clients will always be the best ambassadors, and good references are valuable in sales work.
Bouvet has increased its market share in recent years. Results show that the company has an appropriate business model and a range of services which is well adapted to client needs. Thanks to a clear focus on the principles for managing its business, Bouvet is perceived as a solid, well-run and reputable company.
The market in the areas served by Bouvet is good in both Norway and Sweden. Its biggest areas are the public sector, energy, oil and gas, and transport. In addition, demand has increased markedly in the health sector and banking/finance. The rapid pace of digitalisation on the way towards a more data-driven society provides a high level of demand for all Bouvet's services. During 2016, the company was closely integrated in digitalisation work at its clients and contributed expertise on digitalisation and technology.
Technology developments and a changing cost picture affect business models and existing industry chains. Bouvet is experiencing increased demand from large and established players in the market who are responding to these changes with digital renewal. The company is involved in strategic and operative processes to lay the basis for and deliver forwardlooking solutions.
These changes create increased demand for services in digital business development, user understanding, design and system development. Bouvet possesses this expertise and is therefore well positioned in this development.
The Age of the Customer means that enterprises need to convey a unified image and deliver good user experiences across channels. The customer becomes the agenda-setter, and knowledge about people's patterns of behaviour and emotional reactions becomes a success criterion. Bouvet combines this knowledge with the requirements of its clients for system solutions.
Service design, knowledge about developing business-critical user interfaces, testing, architecture, system development, web analysis and Big Data are among the important areas where Bouvet supports its clients.
Digital solutions are making big inroads in business processes at the clients. Production of goods and services is moving from fully manual to digital processes. A number of traditional product manufacturing companies are undergoing a digital transformation to make new business models and services possible. These trends call for knowledge about what others are doing, business understanding and user insight. That creates increased demand for cross-disciplinary services and expertise on such trends as artificial intelligence (AI), software robots, the Fourth Industrial Revolution and service design. With its broad range of services, Bouvet is therefore well positioned for this development.
Bouvet continuously pursues innovation and service development in order to support clients with development and the choice of technology when they are uncertain of the direction to take in markets experiencing rapid and unpredictable changes. The combination of such technology trends as AI, software robots, cloud technology and the internet of things (IoT) offer enterprises undreamed-of opportunities. The company's ambitions and values provide the freedom of action to share experience and knowledge of new trends. Its regional model and strategy make provision for continuous service developments which are either market or technology driven. The group initiated a commitment to AI and machine learning in 2016 which has already led to a number of new enquiries.
Today's broad range of service means that Bouvet is well positioned to be a partner in the client's digitalisation work from strategy to administration.
Bouvet had operating revenues of NOK 1 330.8 million in 2016, up by 8 per cent from the year before. A 3.3 per cent increase in the average number of employees compared with 2015 contributed to the growth in operating revenues. These
Consolidated cash flow from operations was NOK 113.5 million, compared with NOK 123.7 million in 2015. Liquid assets of NOK 165.9 million take the form of bank deposits.
earnings were also affected by an 0.6 per cent rise in prices for the group's hourly based services from the year before. The billing ratio for the group's consultants was unchanged
Bouvet uses the services of external consultants in cases where it lacks the capacity to meet demand with its own personnel or where the client requires leading-edge expertise outside the company's own priority areas. The sub-consultant share of total revenues was 12.6 per cent,
Overall expenses in Bouvet grew by 8.1 per cent in 2016 to
Bouvet experienced a general rise of 1.9 per cent in employee pay during 2016, compared with 1.8 per cent the year before.
Bouvet achieved an operating profit (EBIT) of NOK 106.3 million in 2016, compared with NOK 99.4 million the year before. That represents an increase of seven per cent from 2015. The EBIT margin was eight per cent, compared with 8.1 per cent in 2015. Bouvet's long-term goal is an EBIT margin of
Net profit was NOK 79.9 million, up from NOK 74.7 million in 2015. Earnings per issued share came to NOK 7.76, compared
Bouvet had a total balance sheet of NOK 535.9 million at 31 December 2016, compared with NOK 486.2 million a year earlier. Higher turnover led to an increase in accounts receivable in 2016. The group has good control with and overview of its receivables, and regards them as sound.
Consolidated equity at 31 December came to NOK 176.2 million, compared with NOK 174.6 million in 2015. Bouvet paid a total of NOK 66.6 million in dividend to shareholders during the year. The group's capital adequacy measured by the carried equity ratio was 32.9 per cent at 31 December 2016, compared with 35.9 per cent a year earlier. Bouvet's aim is to
Balance sheet and financial aspects
The growth in operating expenses related primarily to increased payroll costs because the average number of employees rose during the period. These costs grew by NOK 49.2 million or 5.8 per cent from 2015 to 897.4 million, while the average number of employees grew by 3.3 per cent. The cost of sales rose by NOK 34.8 million or 23.5 per cent to NOK 183 million. This increase reflected increased use of sub-consultants. Other operating costs rose by 5.2 per cent from 2015
from 2015.
up from 9.8 per cent in 2015.
Operating expenses
reach NOK 1 224.5 million.
to NOK 129.6 million.
Profit
10 per cent.
with NOK 7.21 in 2015.
Consolidated investment totalled NOK 38.2 million in 2016. Purchases of new operating equipment accounted for NOK 21.7 million of this total, investment in intangible assets for NOK 9.2 million and acquisition of businesses for NOK 7.3 million. The group disposed of business assets totalling NOK 0.4 million during the year, so that net investment for 2016 came to NOK 37.8 million compared with NOK 12.8 million the year before.
The board takes the view that Bouvet has sufficient capital to finance the group's liabilities, investment needs and operations from internal funds.
Net profit for parent company Bouvet ASA came to NOK 81.1 million, compared with NOK 68.3 million in 2015. The bulk of the company's profit comprises recognised dividend and group contribution from the Bouvet Norge AS subsidiary, and the rise for the year primarily reflected increased income from Bouvet Norge. The investment in Bouvet Norge is the parent company's principal asset. Liabilities for the parent company consist almost entirely of provision for dividend and debt to subsidiaries. Cash flow from operations was negative at NOK 2 million, compared with a negative NOK 2 million in 2015.
Pursuant to section 3, sub-section 3a of the Norwegian Accounting Act, the board confirms that the going concern assumption is realistic, and the accounts for 2016 have been prepared on that basis. This is based on the group's longterm forecasts as well as its equity and liquidity positions.
Bouvet is exposed to various risk and uncertainty factors, which are operational, market-related and financial in character. Managing and dealing with uncertainty factors form an integrated part of business operations in order to help attain the company's strategic and financial goals.
The board of Bouvet ensures that the company's executive management identifies all relevant risk factors and that the necessary risk management systems and tools are available to reduce the scope of undesirable incidents of a strategic, operational or financial character.
The most important operational risk factors to which the group is exposed relate to the implementation of projects for clients and the availability of employees with relevant expertise.
Estimate risk is the risk of errors in estimates which form the basis for entering into contracts with clients where fixed-price elements are included.
Reputational risk could primarily arise because the quality of a delivery is inadequate.
The group is dependent on the availability of relevant expertise to be able to deliver quality and to meet client demand. Increased staff turnover and a generally tight labour market are important elements related to such risk.
The most important financial risks to which the group is exposed relate to liquidity and credit. The board makes continuous assessments and specifies guidelines for the way these risks should be handled by the executive management.
Bouvet's client portfolio consists mainly of large and financially sound enterprises and organisations with high credit ratings, and the group has no significant credit risk related to a single counterparty or several counterparties which can be regarded as a group because of similarities in the credit risk.
The group reduces its exposure by subjecting new clients to a credit assessment before possible significant credit is approved.
Liquidity risk is the risk that the group will be unable to meet its financial obligations as and when they fall due.
The group manages this type of risk by maintaining sufficient liquid assets at all times to be able to meet its financial obligations when they fall due, under both normal and extraordinary conditions.
A continuous overview is maintained of the maturity structure of the group's financial obligations, which in general takes account of all possibilities that early redemption might be required.
At 31 December, the group had no interest-bearing debt and bank deposits of NOK 165.9 million. It also possessed undrawn credit facilities totalling NOK 51.3 million.
Market risk relates primarily to external factors which could affect fair value and/or future cash flows.
Changes in interest rates affect both financial income and expenses and the income statement. Bouvet had no interestbearing debt at 31 December 2016. The company's interest rate risk is accordingly limited to a possible reduction in financial income, and can accordingly be characterised as limited.
The bulk of the group's business is conducted in Norwegian kroner, and risk related to foreign exchange fluctuations can accordingly be characterised as limited.
Financial developments in Bouvet depend primarily on market and price trends in the Scandinavian market for services related to technology, communication and enterprise management in general.
With a high proportion of fixed costs, the company is exposed to fluctuations in the level of activity. Bouvet's strategy is to utilise services from external consultants when it does not have sufficient capacity to meet demand with its own workforce. This provides increased flexibility in adapting to the market conditions prevailing at any given time.
The sub-consultant share of total revenues in 2016 was 12.6 per cent, compared with 9.8 per cent in 2015.
Although Bouvet seeks to reduce the consequences of undesirable incidents through risk management systems, risk factors will always remain which cannot be adequately addressed by preventive measures. The company accordingly seeks to cover this type of risk as far as possible through the purchase of insurance policies.
The company had 1 412 shareholders at 31 December. Its 20 largest shareholders owned 7 123 290 shares, which corresponded to 69.5 per cent of total issued shares.
The Bouvet share was priced at NOK 138.00 at 31 December, compared with NOK 98.00 a year earlier. This price varied over the year between a low of NOK 94.50 at 5 January and a peak of NOK 138.50 at 28 December. The share price rose by 40.8 per cent over the year. Including a dividend of NOK 6.50 per share paid for fiscal 2015, the return in 2016 was 47.4 per cent. A total of 1.73 million Bouvet shares were traded in 1 434 transactions during the year, compared with 2.52 million in 797 transactions for 2015.
The share capital of the company at 31 December was NOK 10 250 000, divided between 10 250 000 issued shares with a nominal value of NOK 1.00. This was unchanged from the year before. The company held 98 682 of its own shares at 31 December, compared with 31 317 a year earlier.
The board was mandated by the AGM on 12 May 2016 to increase the share capital of the company by up to NOK 1 million to finance other companies and businesses. In addition, the board was mandated to increase the share capital by up to NOK 200 000 in connection with the share saving programme for company employees. The board was also mandated to acquire the company's own shares up to a total nominal value of NOK 1 025 000 for use as full or partial settlement in the acquisition of businesses and to have a holding of shares in hand for that purpose, and for implementing the share saving programme for company employees.
These mandates run until 30 June 2017.
The group aims to give its shareholders a return in the form of dividend and rising share value which is at least on a par with alternative investments offering a comparable level of risk. A dividend is proposed to the extent that the board feels this would not have a negative effect on the group's growth ambitions and capital structure.
A dividend of NOK 6.50 per share proposed by the board was approved by the AGM on 12 May 2016, and the share was traded ex-dividend from 13 May.
Bouvet has adopted incentive schemes for its employees in the form of profit sharing and a share saving programme.
Bouvet's goal is to be a company which creates positive spin-offs in society. It does this by creating value as a company, by contributing to development and efficiency improvements at its clients, and by being a good employer. Many of Bouvet's deliveries make a positive contribution to society by creating new services for the population and the business community, enhanced security and more efficient utilisation of society's resources. Increased expertise with digital solutions is a political objective in Norway, and Bouvet also plays its part in this area through the contributions made by its employees to national and local fora.
The employees are Bouvet's most important resources. Great emphasis is accordingly given to job satisfaction and professional development. The latter is secured by making provision for seminars, certification and knowledge sharing, and by making learning an integrated part of doing the job. As well as offering challenging assignments, Bouvet works actively to retain and strengthen a good social environment. It has succeeded in these efforts, and its workforce turnover is below the industry average. The high level of commitment among its personnel helps to manifest the group's expertise in the market and to establish Bouvet as an attractive place to work.
An employee survey was conducted in 2016 by Great Place to Work. One of its findings was that 90 per cent of personnel agreed with the statement "All things considered, I believe this is a great place to work". The results of the survey place Bouvet among the 5 best companies in its class in Great Place to Work's rankings.
Total sickness absence for 2016 was 86 409 hours or 4.3 per cent, up from 4.1 per cent the year before. No serious working accidents occurred during 2016. Bouvet has contracts with local medical centres to provide an occupational health service.
Health, safety and the environment are a priority area in Bouvet. It has established documented routines and divisions of responsibility which are observed in this area. These include local safety delegates and working environment committees.
Bouvet is working long-term to increase the percentage of women among its employees. The female proportion is 27 per cent, unchanged from 2015. The proportion in management is 25 per cent. Women and men in comparable jobs receive the same pay.
All Bouvet employees are duty-bound to contribute to a positive and professional working environment. This means that they will treat each other with respect, and that all forms of discrimination are unacceptable. That includes discrimination on the basis of religion, skin colour, gender, sexual orientation, age, nationality, race or disability.
Bouvet's goal is to be as environment-friendly as possible. Action in this area is described in a separate report concerning CSR on the group's website. Bouvet continued the process of certifying the whole company as an Eco-Lighthouse.
Bouvet regards all forms of corruption as unacceptable. Guidelines and routines in this area are described in the report on CSR posted to the group's website.
Bouvet appreciates the importance of clear ethical guidelines for its employees. As a consultancy, compliance with these is particularly important. These guidelines include always giving the client the advice which is best for it, observing applicable legislation and statutory regulations, and requiring employees to show respect for others in their work.
All managers in Bouvet take the programme entitled Cornerstones for Bouvet's Management. Behaving in a trustworthy manner towards clients and employees is an important element in this programme.
Bouvet works on the basis of a regional model where closeness to the clients is important. The group has 11 offices in Norway and three in Sweden, located in Arendal, Bergen, Forus, Haugesund, Kristiansand, Malmö, Oslo, Sandvika, Skien, central Stavanger, Stockholm, Trondheim, Sandefjord and Örebro. Employees increased from 1 036 in 2015 to 1 090.
Bouvet will continue to build on its regional strategy, and aims to occupy a leading position in the regions where it operates.
Consolidated net profit for 2016 was NOK 79.9 million, compared with NOK 74.7 million the year before. Parent company equity before provision for dividend at 31 December 2016 amounted to NOK 95.7 million.
The board proposes that a dividend of NOK 71.8 million be paid, corresponding to NOK 7.00 per share. The remaining net profit after the payment of dividend is proposed to be transferred to other equity.
Bouvet operates in a market where clients meet changed competitive conditions and tougher government requirements. Digitalisation is high on society's agenda in order to increase the productivity of the individual enterprise. In light of the present speed of change, a further acceleration is expected along with the realisation of expressed technology changes such as AI and Big Data.
The group is exposed to sectors with varying technological maturity and commercial requirements, but a common denominator is the necessity of technology for the enterprise to be able to think along new lines. An integrated approach combined with leading-edge expertise in digital business development, system development and administration is
therefore the very foundation for realising strategies and dealing with new and unknown industrial chains and business models. Bouvet's long experience, broad range of services and delivery models are well adapted to these requirements. Good demand for its services is accordingly expected in both public and private sectors.
Thanks to the regional model which forms the basis for Bouvet's organisation, the company is adaptable and flexible. It has demonstrated an ability to adjust to economic fluctuations and to launch new concepts and services at the right time. Bouvet's ambitions and values continuously facilitate further development of expertise at company and personal level, and the formation of new client relationships as demand in the market changes.
Everything is in place for Bouvet to continue developing an organisation which is already competent and motivated, in order to ensure satisfied clients, a high level of repeat orders and further progress for the group.
Encouraging growth was a stated commitment during 2016. The group's strategy is to grow organically through the recruitment of competent personnel and through the acquisition of businesses which provide the group with new expertise and clients.
The board regards the group's prospects as good.
Oslo, 6 April 2017 The board of directors of Bouvet ASA
Åge Danielsen
Chair
Ingebrigt Steen Jensen
Director
Tove Raanes Deputy Chair
Egil Christen Dahl Director
Grethe Høiland Director
Sverre Hurum President and CEO
The board of directors and the chief executive officer have today reviewed and approved the directors' report and the annual consolidated and parent company financial statements for Bouvet ASA at 31 December 2016.
We hereby confirm that, to the best of our knowledge:
Oslo, 6 April 2017 The board of directors of Bouvet ASA
Åge Danielsen
Chair
Ingebrigt Steen Jensen Director
Tove Raanes Deputy Chair
Egil Christen Dahl Director
Grethe Høiland Director
Sverre Hurum President and CEO
1 January - 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| Revenue | 5 | 1 330 811 | 1 232 486 |
| Operating expenses | |||
| Cost of sales | 6 | 183 002 | 148 200 |
| Personnel expenses | 7 | 897 355 | 848 200 |
| Depreciation fixed assets | 11 | 10 001 | 10 032 |
| Amortisation intangible assets | 13 | 4 588 | 3 505 |
| Other operating expenses | 8, 21 | 129 567 | 123 195 |
| Total operating expenses | 1 224 513 | 1 133 132 | |
| Operating profit | 106 298 | 99 354 | |
| Financial items | |||
| Other interest income | 1 315 | 2 074 | |
| Other financial income | 553 | 1 166 | |
| Other interest expense | -265 | -272 | |
| Other finance expense | -1 852 | -552 | |
| Net financial items | -249 | 2 416 | |
| Ordinary profit before tax | 106 049 | 101 770 | |
| Income tax expense | |||
| Tax expense on ordinary profit | 9 | 26 164 | 27 032 |
| Total tax expense | 26 164 | 27 032 | |
| Profit for the year | 79 885 | 74 738 | |
| Assigned to: | |||
| Shareholders in parent company | 78 887 | 73 639 | |
| Non-controlling interests | 998 | 1 099 | |
| Diluted earnings per share | 10 | 7.66 | 7.12 |
| Earnings per share | 10 | 7.76 | 7.21 |
1 January - 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| Profit for the year | 79 885 | 74 738 | |
| Items that may be reclassified through profit or loss in subsequent periods | |||
| Currency translation differences | -346 | 41 | |
| Sum other income and costs | -346 | 41 | |
| Total comprehensive income | 79 539 | 74 779 | |
| Assigned to: | |||
| Shareholders in parent company | 78 542 | 73 679 | |
| Non-controlling interests | 998 | 1 099 |
At 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | |||
| Deferred tax asset | 4,9 | 0 | 368 |
| Goodwill | 4,13,14 | 32 782 | 27 909 |
| Other intangible assets | 4,13 | 25 032 | 17 414 |
| Total intangible assets | 57 814 | 45 691 | |
| Fixed assets | |||
| Office equipment | 11 | 13 430 | 8 685 |
| Office machines and vehicles | 11 | 3 283 | 2 417 |
| IT equipment | 11 | 14 949 | 10 526 |
| Total fixed assets | 31 662 | 21 628 | |
| Financial non-current assets | |||
| Other financial assets | 11 | 11 | |
| Other long-term receivables | 859 | 4 162 | |
| Total financial non-current assets | 870 | 4 173 | |
| Total non-current assets | 90 346 | 71 492 | |
| CURRENT ASSETS | |||
| Work in progress | 4,12 | 97 728 | 80 193 |
| Trade accounts receivable | 15 | 159 133 | 144 463 |
| Other short-term receivables | 16 | 26 990 | 19 928 |
| Cash and cash equivalents | 17 | 161 719 | 170 138 |
| Total current assets | 445 570 | 414 722 | |
| TOTAL ASSETS | 535 916 | 486 214 |
At 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Paid-in capital | |||
| Share capital | 18 | 10 250 | 10 250 |
| Own shares - nominal value | -99 | -31 | |
| Share premium | 10 000 | 10 000 | |
| Total paid-in capital | 20 151 | 20 219 | |
| Earned equity | |||
| Other equity | 152 378 | 150 998 | |
| Total earned equity | 152 378 | 150 998 | |
| Non-controlling interests | 3 629 | 3 401 | |
| Total equity | 176 158 | 174 618 | |
| DEBT Long-term debt |
|||
| Deferred tax | 4, 9 | 1 521 | 0 |
| Other provisions for obligations | 57 | 285 | |
| Total long-term debt | 1 578 | 285 | |
| Short-term debt | |||
| Trade accounts payable | 61 128 | 34 643 | |
| Income tax payable | 9 | 21 944 | 27 109 |
| Public duties payable | 126 258 | 118 539 | |
| Other short-term debt | 22 | 148 850 | 131 020 |
| Total short-term debt | 358 180 | 311 311 | |
| Total liabilities | 359 758 | 311 596 | |
| TOTAL EQUITY AND LIABILITIES | 535 916 | 486 214 |
1 January - 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Ordinary profit before tax | 106 049 | 101 770 | |
| Taxes paid | 9 | -27 016 | -23 247 |
| (Gain)/loss on sale of fixed assets | 1 257 | -106 | |
| Ordinary depreciation | 11 | 10 001 | 10 032 |
| Amortisation intangible assets | 13 | 4 588 | 3 505 |
| Share based payments | 5 826 | 5 430 | |
| Changes in work in progress, accounts receivable and accounts payable | -5 720 | 11 008 | |
| Changes in other accruals | 18 476 | 15 321 | |
| Net cash flow from operating activities | 113 462 | 123 712 | |
| Cash flows from investing activities | |||
| Sale of fixed assets | 405 | 175 | |
| Purchase of fixed assets | 11 | -21 696 | -7 383 |
| Purchase of intangible assets | 13 | -9 191 | -5 635 |
| Purchase of business | -7 343 | 0 | |
| Net cash flow from investing activities | -37 826 | -12 842 | |
| Cash flows from financing activities | |||
| Purchase of own shares | -25 095 | -14 880 | |
| Sales of own shares | 8 436 | 7 702 | |
| Dividend payments | -67 395 | -52 122 | |
| Net cash flow from financing activities | -84 054 | -59 300 | |
| Net changes in cash and cash equivalents | -8 419 | 51 570 | |
| Cash and cash equivalents at the beginning of the period | 170 138 | 118 568 | |
| Cash and cash equivalents at the end of the period | 161 719 | 170 138 | |
| Unused credit facilities | 51 332 | 51 467 |
1 January - 31 December
| NOTE | NOK 1 000 | SHARE CAPITAL |
OWN SHARES |
SHARE PREMIUM |
TOTAL PAID-IN EQUITY |
OTHER EQUITY |
TRANSLA TION DIF FERENCES |
TOTAL OTHER EQUITY |
NON-CON TROLLING INTERESTS |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity at 01.01.2015 | 10 250 | -20 | 10 000 | 20 230 | 130 466 | -338 | 130 128 | 3 174 | 153 532 | |
| Profit for the year | 0 | 73 639 | 73 639 | 1 099 | 74 738 | |||||
| Other income and costs | 0 | 41 | 41 | 41 | ||||||
| 18 | Purchase/sale of own shares (net) | -11 | -11 | -7 099 | -7 099 | -7 111 | ||||
| Employee share scheme | 0 | 5 541 | 5 541 | 5 541 | ||||||
| 18 | Dividend | 0 | -51 250 | -51 250 | -872 | -52 122 | ||||
| Equity at 31.12.2015 | 10 250 | -31 | 10 000 | 20 219 | 151 297 | -297 | 151 000 | 3 401 | 174 618 | |
| Equity at 01.01.2016 | 10 250 | -31 | 10 000 | 20 219 | 151 297 | -297 | 151 000 | 3 401 | 174 618 | |
| Profit for the year | 0 | 78 887 | 78 887 | 998 | 79 885 | |||||
| Other income and costs | 0 | -346 | -346 | -346 | ||||||
| 18 | Purchase/sale of own shares (net) | -68 | -68 | -16 592 | -16 592 | -16 660 | ||||
| Employee share scheme | 0 | 6 055 | 6 055 | 6 055 | ||||||
| 18 | Dividend | 0 | -66 625 | -66 625 | -770 | -67 395 | ||||
| Equity at 31.12.2016 | 10 250 | -99 | 10 000 | 20 151 | 153 021 | -643 | 152 378 | 3 629 | 176 158 |
The Group financial statements of Bouvet ASA for the period ending on 31 December 2016 were approved in a board meeting on 6 April 2017.
Bouvet ASA is a public limited company incorporated in Norway and listed on Oslo Børs. The Group's main office is located in Sørkedalsveien 8, 0369 Oslo, Norway. The Group delivers consultancy services and training within information technology. The Group's business concept is to create opportunities and increase the efficiency of their customers' processes by means of new ideas and new technology in close cooperation with the customer.
The Group's financial statements of Bouvet for the accounting year 2016 have been prepared in accordance with international accounting standards and interpretations accepted by the EU, mandatory for the accounting year 2016.
The financial statements are based on the principles of historic cost, with exception of obligations related to conditional compensation in acquisitions measured at fair value.
The Group financial statements have been prepared on the basis of uniform accounting principles for uniform transactions and events under otherwise equal circumstances.
The Group's presentation currency is Norwegian Kroner (NOK) and the parent company's functional currency is NOK. Balance sheet items in subsidiaries with a functional currency other than NOK are converted to Norwegian kroner by applying the currency rate applicable on the balance sheet date. Currency conversion differences are booked against other comprehensive income. Income statement items are converted by applying the average currency rate for the period.
The Group financial statements include Bouvet ASA and companies under the controlling interest of Bouvet ASA. An entity is considered to be controlled by the Group where the Group is exposed, or has the rights, to variable returns from its involvement with the entity in question, and has the ability to affect those returns through its power over the entity. Controlling interest is normally achieved when the Group owns more than 50 per cent of the shares in the company, and the Group is able to exercise actual control over the company.
The purchase method is applied when accounting for mergers. Companies that are sold or purchased during the year are included in the Group accounts from the date when a controlling interest is achieved and until the control ends. Ref. paragraph Business Combinations.
Inter-company transactions and balances, including internal profit and unrealized profit and loss have been eliminated.
Management has used estimates and assumptions that have affected assets, liabilities, revenue, expenses and information on potential liabilities. The most significant accounting estimations concerns the revenue recognition of customer projects with elements of fixed price, write-down of goodwill and other intangible assets, and the calculation of fair value of assets and liabilities at acquisitions. Future events may imply that the estimates change. Estimates and the underlying assumptions are considered on a continuous basis. Changes in accounting estimates are recognised in the period the changes arise. In the event that the changes also apply for future periods, the effect is distributed over current and future periods. Ref. note 4.
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in foreign currency are translated at de end of every period to the rate applicable on the balance sheet date. Non-monetary items valued at historic costs are translated at the transaction date. Non-monetary items assessed at real value denominated in foreign currency are translated at the rate applicable on the balance sheet date. Exchange rate changes are recognized in the income statement as they occur during the accounting period.
Asset and liabilities in foreign enterprises, with another functional currency than Norwegian kroner, are converted to Norwegian kroner by applying the rate applicable on the balance sheet date. Revenue and expenses are converted based on average rate for the reporting period.
Currency translation differences are reported in the statement of other income and costs. When a foreign enterprise is disposed in a way where Bouvet ASA no longer is in control, currency translation differences are expensed and simultaneously reversed in the statement of other income and costs.
Bouvet mainly sells services. Revenue is recognised when it is probable that transactions will generate future financial benefits for the Group and the size of the amount can be reliably estimated. Sales revenue is presented net of value added tax and potential discounts.
Revenue from the sale of products is recognised when the significant risks and rewards of ownership of the products have passed to the buyer.
Revenue from the sale of services is recognised in line with the deliveries. Customer projects with elements of fixed price are recognised in line with the project's degree of completion, when the outcome of the transaction can be reliably estimated. Progress is measured as accrued hours in relation to totally estimated hours. When the transaction's result cannot be reliably estimated only revenue equaling accrued project costs are taken to income, provided that it is likely that the revenue will be greater than accrued project costs. Any estimated loss on a project will be fully recognised in the income statement in the period when it is identified that the contract will result in a loss.
The Group is not reporting internally on separated business areas. The Group's business is uniform and within the Scandinavian market for IT-consultancy services. Risks and earnings are followed up by the business united with the same markets, on a project basis and per consultant. Based on this the Group has one reportable business segment.
Financial information regarding geographical allocation of revenue is presented in note 5.
The tax expense consists of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all temporary differences between book and tax value on assets and liabilities, with the exception of
Deferred tax assets are recognised when it is probable that the tax jurisdiction will make sufficient profit in future periods to utilise the tax asset.
The companies recognise previous not recorded deferred tax assets to the extent that it is probable that the Group can utilise the deferred tax asset. Likewise, the Group will reduce the deferred tax assets when it is considered unlikely that the deferred tax asset can be utilised.
Deferred tax and deferred tax assets are measured on the basis of the adopted future tax rates of the Group companies where temporary differences have arisen.
Deferred tax and deferred tax assets are disclosed at a nominal value and classified as long-term debt/assets in the balance sheet.
Tax payable and deferred tax assets are set-off directly against equity to the extent that the underlying items are booked against equity.
Fixed assets are valued at cost less accumulated depreciation and impairment losses. When assets are sold or disposed of, the gross carrying amount and depreciation are reversed, and any gain or loss on the sale or disposal is recognised in the income statement.
The gross carrying amount of fixed assets is the purchase price, including duties/taxes and direct acquisition costs related to making the fixed asset ready for use. Subsequent costs, such as repair and maintenance costs, are normally expensed when incurred, whereas other expenses expected to increase future economic benefits are balance sheet recorded.
Depreciation is calculated using the straight-line method over the following periods.
| Office equipment | 5-10 years |
|---|---|
| Office machines and vehicles | 5 years |
| IT equipment | 3 years |
The depreciation periods and methods are assessed each year. The residual value is estimated every year-end and changes in the estimate for residual value is accounted for as an estimation change.
Leases where most of the risk lies with the other contracting party are classified as operating leases. Lease payments are classified as operating costs and recognised in the income statement during the contract period.
Intangible assets acquired separately are recorded at cost. Costs related to intangible assets at acquisitions are disclosed at real value in the Group's opening balance. Balance sheet recorded intangible assets are carried at cost less any accumulated amortisation and impairment losses.
The cost of intangible assets includes the purchase price and any duties/taxes.
Internally generated intangible assets, with the exception of capitalised development costs, are not capitalised, and expenditure is charged to profit and loss in the year in which the expenditure is incurred.
The useful lives are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Goodwill is not depreciated, but tested annually for impairment.The amortisation period and method are assessed at least once a year. Changes in amortisation method and/or period are treated as a change in estimate.
Expenses relating to research are recognised in the income statement when incurred.
Expenses related to development are balance sheet recorded to the extent that the product or the process is technically and commercially viable, and:
Expenses recorded in the balance sheet include materials, direct salary costs and a portion of directly attributable joint expenses.
Development costs are recorded in the balance sheet at cost less accumulated depreciation and impairment losses.
Balance sheet recorded development costs are depreciated on a straight-line basis and over the asset's estimated useful life.
The difference between cost at acquisition and the Group's share fair value of net measureable assets at the time of acquisition is classified as goodwill. Concerning investments in associated companies, goodwill is included in the investment's balance sheet recorded value.
In the balance sheet, goodwill is recognised at cost less any accumulated amortisation.
Assets and liabilities taken over in mergers are recognised at fair value in the Group's opening balance.
The allocation of compensation at mergers is changed if any new information on fair value at the date of the take-over of control arises and 12 months after the acquisition.
Goodwill is allocated to cash flow generating units or groups of cash generating units expected to have synergy effects of the merger, and is tested at least annually for impairment.
Equity at real value in excess of acquisition cost Equity at real value in excess of acquisition cost at mergers is immediately recognised as income at the time of the acquisition.
In accordance with IAS 39 Financial Instruments: Recognition and Measurement, financial instruments are classified within the scope of IAS 39 in the following categories: at fair value with changes in value through profit or loss, held to maturity, loans and receivables, available for sale and other liabilities.
The Group has financial instruments in the form of trade accounts receivable and payable, recognised at amortised cost.
Trade accounts receivables are initially recognised at fair value plus any transaction costs. Trade accounts receivables are subsequently carried at amortised cost using the effective interest method, if the amortisation effect is material. The carrying amount is subsequently reduced by any impairment losses. Provisions for impairment are made when there are objective indicators that the group will not receive their contractual payments.
The carrying amount of trade accounts receivable and payable is approximately equal to fair value, as they are agreed at "normal" conditions and normally have a short period to maturity.
Cash includes cash in hand and bank deposits. Cash equivalents are short-term liquid investments that can be converted to cash within three months and at a known amount.
Liabilities and equity
Financial instruments are classified as liabilities or equity in accordance with the underlying financial reality.
Interest, dividend, profit and loss related to a financial instrument classified as debt will be presented as expense or income. Distributions to owners of financial instruments classified as equity will be set off directly against equity.
On repurchase of own shares, costs including directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement.
Transaction costs directly relating to an equity transaction are set off directly against equity after deducting tax expenses.
The Group has a defined contribution plan by which it is committed to contribute to each employee's pension plan with a fixed amount. The future pension depends on the size of the contributions and the yield on the pension savings. The Group's obligation is fully met when paid. The pension costs are charged as an expense when accrued.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The fair value of the scheme is measured at the grant date and expensed over the vesting period of 2 years. The scheme is an arrangement with settlement in shares, where the cost is recognised as a payroll expense with equity as the contra entry. Employer's National Insurance contribution on the award is recognised in profit and loss over the expected vesting period.
A provision is recognised when the Group has an obligation as a result of a previous event and it is probable that a financial settlement will take place as a result of this obligation and the size of the amount can be measured reliably. If the effect is considerable, the provision is calculated by discounting estimated future cash flows using a discount rate before tax that reflects the market's pricing of the time value of money and, if relevant, risks specifically linked to the obligation.
Potential restructuring provisions are recognised when the Group has approved a detailed, formal restructuring plan and the restructuring has either started or been publicly announced within the company.
Provisions for loss-making contracts are recognised when the Group's estimated revenues from a contract are lower than unavoidable costs which were incurred to meet the obligations pursuant to the contract.
Contingent liabilities are not recognised in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are very unlikely to be incurred.
Contingent assets are not recognised in the annual accounts but are disclosed if there is a certain probability that a benefit will be added to the Group.
New information on the Group's position at the balance sheet date is taken into account in the financial statements. Events after the balance sheet date that do not affect the Group's position at the balance sheet date, but will affect the Group's position in the future, are stated if significant.
IASB have issued new standards, which will be adopted with effect for future reporting periods when they become effective. The most relevant is IFRS 9 Financial instruments, IFRS 15 Revenue from contracts with customers and IFRS 16 Leases.
IFRS 9 includes revised guidance on classification and measurement, impairment and hedge accounting. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. The parts of IAS 39 that have not been amended as part of this project has been transferred and included in IFRS 9.
IFRS 9 is effective for annual periods beginning on or after 1 January 2018. The adoption of IFRS 9 is not expected to have significant impact on the Group financial statement, however expanded disclosure requirements may change the nature and extent of the group's disclosures about its financial instruments.
IFRS 15 Revenue from Contracts with Customers The IASB and FASB has published a new converged standard for revenue recognition; IFRS 15 Revenue from Contracts with Customers. The standard replaces all existing standards and interpretations relating to revenue recognition. The core principle of IFRS 15 is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. With some few exceptions, the standard is applicable for all remunerative contracts and includes a model for recognition and measurement of sale of individual non-financial assets (e.g. sale of property, plant and equipment).
The Standard is mandatory for annual periods beginning 1 January 2018 or later. Preliminary analysis of the consequences of IFRS 15 have not identified any material impacts. The group will perform more detailed analysis of the impact during 2017. The group expect to adopt the standard 1 January 2018.
IFRS 16 Leases replaces existing IFRS leases requirements, IAS 17 Leases. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, ie the customer ('lessee') and the supplier ('lessor'). The new leases standard requires lessees to recognize assets and liabilities for most leases, which is a significant change from current requirements.
IFRS 16 is effective for annual periods beginning on or after 1 January 2019. The group have not yet assessed to what extent it's operating lease commitments will result in the recognition of an asset and a liability for future payments, and how this will affect the group's profit or classification of cash flows. See note 21 for information on the group's lease commitments. At this stage, the group does not intend to early adapt the standard.
1 October 2016, Bouvet Stockholm AB (tier-subsidiary of Bouvet ASA) acquired 100 per cent of the business Ciber in Stockholm. This implies taking over the employees , customer relations and customer contracts together with existing lease obligations. The takeover was financed by NOK 7.3 million in cash. The Group applied external advisors at the acquisition.
Ciber's office in Stockholm was owned by the consultancy company Ciber Sweden AB, whose head office is in Denver USA. The strategy of Ciber is to focus on larger markets than the Scandinavian market. The office in Stockholm serves smaller and local customers, which fits with Bouvet's regional strategy. The purchase resulted in a goodwill of NOK 5.2
million and an added value of NOK 2.9 million related to customer relations. The goodwill is subject to an annual impairment test, while intangible assets are subject to impairment test at any indication on a fall in value. It is expected that the acquisition will have a positive influence on future earnings and have synergy effects on existing business.
1 October 2016, Ciber's office in Stockholm, including employees, was incorporated with Bouvet Stockholm AB's office in Stockholm.
The acquisition of Ciber Stockholm had the following effect on Bouvet ASA's group account per acquisitions date:
| NOK 1 000 | ADDED VALUE | ACQUISITION 2016 |
|---|---|---|
| Fixed assets/customer relations | 2 854 | 2 854 |
| Current assets | 0 | 0 |
| Deferred tax | -685 | -685 |
| Short-term debt | 0 | 0 |
| Net identifiable assets and liabilities | 2 169 | 2 169 |
| Goodwill at acquisition | 5 174 | 5 174 |
| Purchase amount | 7 343 | 7 343 |
| Cash | 7 343 | |
| Purchase amount | 7 343 | |
| Paid in cash | 7 343 | |
| Cash received | 0 | |
| Net cash out | 7 343 |
The acquired company has an estimated contribution with NOK 6 074 thousand to the Group turnover and NOK -52 thousand to the Group's profit before tax in the period between the purchase and the balance sheet date.
Included in the value of goodwill are employees and expected synergies with Bouvet Stockholm AB's existing business.
Had the acquisition been carried out on 1 January 2016, the Group's estimated total turnover for the entire period would have been NOK 1 350 305 thousand and the Group's estimated profit before tax would have been NOK 107 985 thousand.
The following subsidiaries are included in the consolidated accounts:
| COMPANY | COUNTRY | MAIN BUSINESS LINE | RESULTS 2016 |
EQUITY 31.12.2016 |
RESULTS 2015 |
EQUITY 31.12.2015 |
OWNER SHIP |
VOTING SHARE |
|---|---|---|---|---|---|---|---|---|
| Ontopia AS 1) | Norway | IT consultancy company | 23 | 3 545 | 20 | 3 522 | 100 % | 100 % |
| Nordic Integrator Management AS 2) | Norway | IT consultancy company | -2 | 1 142 | -5 | 1 144 | 100 % | 100 % |
| Olavstoppen AS 3) | Norway | IT consultancy company | 2 494 | 9 072 | 2 749 | 8 503 | 60 % | 60 % |
| Bouvet Sverige AB (former Zekundera AB) 4) | Sweden | IT consultancy company | -2 754 | 1 532 | -6 775 | 1 831 | 100 % | 100 % |
| Bouvet Norge AS | Norway | IT consultancy company | 83 923 | 185 120 | 80 256 | 183 707 | 100 % | 100 % |
1) Consolidated from 1 April 2007
2) Consolidated from 1 July 2007
3) Established in March 2010
4) Consolidated from 1 October 2008. Bouvet Sverige AB has to subsidiaries; Bouvet Stockholm AB and Bouvet Syd AB.
Interests held by non-controlling interests in the Group's activities and cash flows:
| COMPANY | LOCATION | MAIN BUSINESS LINE | OWNERSHIP | VOTING SHARE |
|---|---|---|---|---|
| Olavstoppen AS | Stavanger | IT consultancy company | 40 % | 40 % |
Summary of financial information regarding non-controlling interests (40 %):
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Revenue | 10 635 | 11 472 |
| Profit for the year | 998 | 1 099 |
| Total comprehensive income | 998 | 1 099 |
| Non-current assets | 85 | 68 |
| Current assets | 6 363 | 6 527 |
| Total assets | 6 448 | 6 595 |
| Equity | 3 629 | 3 401 |
| Long-term debt | 0 | 0 |
| Short-term debt | 2 820 | 3 194 |
| Total equity and liabilities | 6 448 | 6 595 |
| Dividend | 770 | 872 |
In preparing the financial statements in accordance with IFRS, the Group's management has applied estimations based on their best judgement and on assumptions considered to be realistic. Unexpected situations or changes in market conditions can result in changed estimations and thereby have an effect on the company's assets, liabilities, equity and result.
The Group's most significant accounting estimations concern the following items:
The Group is primarily delivering its services based on time and material used. The Group has some income from fixed price or target price projects where the Group shall deliver a predefined result at a price that is either fixed or has elements causing income per hour not to be known before the projects are finalised. For these projects the income is recorded in correlation with the degree of completion. Progress is measured as incurred hours in relation to totally estimated hours. For the accounting year 2016, NOK 46.51 million or 3.5 per cent of the Group's income was generated by projects with such an element of uncertainty and the income is recorded based on the degree of completion. (Ref. note 12.) For the
accounting year 2015 corresponding figures was NOK 39.16 million or 3.2 per cent.
The Group's balance recorded goodwill and other intangible assets are annually assessed for impairment and any reversal of previous write-downs (ref. note 14). The impairment test is based on expectations from the time of acquisition and when substantial changes in these expectations a write-down must be considered. The expectations are attached to moderate growth in number of employees, market and customers.
Bouvet distributes costs for acquired businesses on acquired assets and liabilities based on an estimated fair value at acquisition. The Group has performed the necessary analysis to decide the fair value of acquired assets and liabilities. The management has to perform substantial judgement in deciding on methods, estimates and assumptions for these valuations. Significant purchased intangible assets recognised comprise customer contracts and customer relations. Assumptions used for assessing intangible assets include, but are not limited to, the expected economic life of customer contracts and the customer relationship based on lapse of customers. Assumptions used for assessing assets include, but are not limited to, the replacement costs for fixed assets. Management's calculations of fair value are based on assumptions considered to be fair, but with an inherent uncertainty. As a consequence, the actual result may deviate from the calculations.
a) Information about geographical allocation of revenue Revenue from external customers attributable to:
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Norway | 1 205 298 | 1 178 669 |
| Sweden | 107 606 | 50 041 |
| Other countries | 17 907 | 3 776 |
| Total income | 1 330 811 | 1 232 486 |
See note 11 for geographical allocation of fixed assets.
Included in revenue in 2016 is NOK 162.8 million (2015: NOK 166.6 million) from the groups largest customer.
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Hired consultants | 147 412 | 105 123 |
| Hired training instructors | 9 044 | 10 026 |
| Purchase of training documentation | 4 183 | 1 487 |
| Out-of-pocket expenses and travels invoiced customers | 6 853 | 12 197 |
| Purchase of software and hardware for resale | 15 510 | 19 367 |
| Total cost of sales | 183 002 | 148 200 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Salary | 722 236 | 685 289 |
| Bonus/profit sharing | 24 995 | 23 951 |
| Social security tax | 117 827 | 108 741 |
| Pension costs (see note 20) | 31 998 | 24 970 |
| Personnel insurance | 4 124 | 4 904 |
| Other expenses | 8 481 | 7 876 |
| Government grant related to R&D | -1 420 | -1 896 |
| Capitalised development expenses | -10 886 | -5 635 |
| Total salary expenses | 897 355 | 848 200 |
| Average number of man-labour years: | ||
| Administration, sales and management | 126 | 121 |
| Other employees | 908 | 880 |
| Total | 1 034 | 1 002 |
| Average number of employees: | ||
| Administration, sales and management | 128 | 123 |
| Other employees | 921 | 893 |
| Total | 1 050 | 1 016 |
See note 23 for transactions with related parties.
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Office premises | 31 596 | 28 479 |
| Travel and transport | 11 990 | 11 876 |
| Social costs and welfare initiatives | 21 195 | 22 618 |
| Office supplies, EDP etc. | 24 377 | 22 537 |
| Competence development | 7 839 | 7 508 |
| Recruitment costs | 7 315 | 6 983 |
| Marketing expenditure | 4 397 | 4 426 |
| External services | 9 102 | 7 756 |
| Other expenses | 11 756 | 11 012 |
| Total other operating expenses | 129 567 | 123 195 |
Income tax expense:
| NOK 1 000 | 2015 | |
|---|---|---|
| Tax payable | 24 984 | 28 852 |
| Adjustment of previous years current income tax | 625 | -1 554 |
| Changes in deferred tax | 556 | -265 |
| Tax expense | 26 164 | 27 032 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Calculated tax payable | 24 984 | 28 852 |
| Government grant related to R&D | -3 115 | -1 896 |
| Payable tax (receivable) subsidiary in Sweden | 75 | 153 |
| Total income tax payable | 21 944 | 27 109 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Ordinary profit before tax | 106 049 | 101 770 |
| Calculated tax 25 % | 26 512 | 27 478 |
| Adjustment current income tax of previous years | 625 | -1 554 |
| Not tax deductible costs | 269 | 315 |
| Tax losses carry forward not recognised | 638 | 1 786 |
| Other permanent differences | -1 768 | -993 |
| Effect change in tax rate | -112 | 0 |
| Tax expense | 26 164 | 27 032 |
| Effective tax rate | 25 % | 27 % |
Specification of basis for deferred tax:
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Basis for deferred tax asset | ||
| Other differences | -4 431 | -4 282 |
| Tax losses carry forward | -26 329 | -23 755 |
| Of this tax losses carry forward Sweden, not recorded in the balance sheet | 26 159 | 21 108 |
| Basis deferred tax asset - gross | -4 600 | -6 928 |
| Basis deferred tax liability | ||
| Intangible assets | 2 973 | 1 131 |
| Fixed assets | 2 882 | 2 217 |
| Other differences | 5 084 | 2 106 |
| Basis deferred tax liability - gross | 10 939 | 5 455 |
| Basis deferred tax - net | 6 339 | -1 473 |
| Net recognised deferred tax/ deferred tax asset (-) | 1 521 | -368 |
The basic earnings per share are calculated as the ratio between the profit for the year that is attributable to the shareholders in the parent company of NOK 78.90 million (NOK 73.64 million in 2015) divided by the weighted average number of ordinary shares throughout the year of 10.17 millions (10.21 millions in 2015). EBIT per share is calculated as the ratio between this year's operating profit attributable to the
shareholders in the parent company NOK 105.00 million (NOK 97.89 million in 2015) divided by the weighted average number of ordinary shares throughout the accounting year.
When calculating diluted earnings per share, the weighted average basic shares outstanding is adjusted for dilutive effects from the employee share scheme (see note 19).
| 2016 | ||||
|---|---|---|---|---|
| EBIT (NOK 1000) | 105 002 | 97 894 | ||
| Profit for the year (NOK 1000) | 78 887 | 73 639 | ||
| Weighted average shares issued | 10 250 000 | 10 250 000 | ||
| Weighted average basic shares outstanding | 10 171 365 | 10 208 354 | ||
| Weighted average diluted shares outstanding | 10 304 044 | 10 340 661 | ||
| EBIT per share (NOK) | 10.32 | 9.59 | ||
| Diluted EBIT per share (NOK) | 10.19 | 9.47 | ||
| Earnings per share (NOK) | 7.76 | 7.21 | ||
| Diluted earnings per share (NOK) | 7.66 | 7.12 | ||
| Weighted average shares | ||||
| Weighted average shares issued | 10 250 000 | 10 250 000 | ||
| Weighted average own-shares | -78 635 | -41 646 | ||
| Weighted average basic shares outstanding | 10 171 365 | 10 208 354 | ||
| Dilutive effects from employee share scheme | 132 679 | 132 307 | ||
| Weighted average diluted shares outstanding | 10 304 044 | 10 340 661 |
| NOK 1 000 | EDP EQUIPMENT |
OFFICE MACHINES AND VEHICLES |
FIXTURES AND FITTINGS |
TOTAL 2016 | EDP EQUIPMENT |
OFFICE MACHINES AND VEHICLES |
FIXTURES AND FITTINGS |
TOTAL 2015 |
|---|---|---|---|---|---|---|---|---|
| Acquisition cost | ||||||||
| Accumulated 1 January | 28 407 | 5 317 | 18 960 | 52 685 | 25 657 | 5 281 | 18 184 | 49 123 |
| Exchange rate variances | -171 | 0 | -55 | -226 | 154 | 0 | 46 | 200 |
| Additions of the year | 11 554 | 1 832 | 8 362 | 21 748 | 6 010 | 626 | 747 | 7 383 |
| Disposals of the year | -7 567 | -747 | -7 219 | -15 532 | -3 414 | -590 | -17 | -4 021 |
| Accumulated 31 December | 32 224 | 6 403 | 20 048 | 58 675 | 28 407 | 5 317 | 18 960 | 52 685 |
| Depreciation | ||||||||
| Accumulated 1 January | 17 881 | 2 901 | 10 275 | 31 057 | 14 082 | 2 599 | 8 096 | 24 777 |
| Exchange rate variances | -138 | 0 | -36 | -175 | 139 | 0 | 33 | 172 |
| Disposals of ordinary depreciation | -7 431 | -675 | -5 764 | -13 870 | -3 357 | -559 | -8 | -3 924 |
| This year's ordinary depreciation | 6 962 | 894 | 2 144 | 10 001 | 7 018 | 860 | 2 154 | 10 032 |
| Accumulated 31 December | 17 275 | 3 119 | 6 619 | 27 013 | 17 881 | 2 901 | 10 275 | 31 057 |
| Book value | ||||||||
| Book value at 1 January | 10 526 | 2 417 | 8 685 | 21 628 | 11 576 | 2 682 | 10 088 | 24 346 |
| Book value at 31 December | 14 949 | 3 283 | 13 429 | 31 662 | 10 526 | 2 417 | 8 685 | 21 628 |
| Depreciation rate | 20-33 % | 20 % | 10-20 % | 20-33 % | 20 % | 10-20 % | ||
| Economic life | 3-5 years | 5 years | 5-10 years | 3-5 years | 5 years | 5-10 years | ||
| Depreciation method | linear | linear | linear | linear | linear | linear |
Booked value of total fixed assets, except for deferred tax assets and financial assets, located in Norway is NOK 78 million (2015: NOK 63 million), and the remaining fixed assets is located in Sweden NOK 11 million (2015: NOK 4 million).
The Group recognises as income, sales of services in line with the deliveries. Customer projects with elements of fixed price are recognised as income in accordance with the project's degree of completion, provided that the outcome of the transaction can be reliably estimated. Progress is measured as incurred hours in relation to total estimated hours. In the event that the outcome of the transaction cannot be reliably estimated, only income corresponding to incurred project costs are taken to income, given that it is likely that the income will be greater than the incurred project costs. Any estimated loss on a project will be fully recognised in the income statement in the period when it is identified that the project will result in a loss. Included in other short-term debt are provisions for losses on fixed price contracts with NOK 0.44 million (2015: NOK 0.60 million). The provision for loss covers remaining work on the contracts.
At the balance sheet date, processed but not billed services amounted to NOK 97.73 million (2015: NOK 80.19 million).
NOK 88.88 million (2015: NOK 77.91 million) of these was services delivered on running account, and NOK 8.85 million (2015: NOK 2.28 million) was related to customer projects with elements of fixed price. Services delivered on running accounts at the end of accounting year 2016 was invoiced to customers at the beginning of January 2017. Net received prepayments from customer projects with elements of fixed price amounted to NOK 1.18 million (2015: NOK 3.74 million) at balance sheet date. At the balance sheet date in total NOK 47.16 million (2015: NOK 39.64 million) was recognised as income and NOK 32.84 million (2015: NOK 36.67 million) was recognised as costs on still running customer projects with elements of fixed price. At the balance sheet date a total of 28 730 hours (2015: 14 506 hours) is estimated as remaining work for these projects. Accrued income related to customer projects with elements of fixed price is settled based on degrees of completion as described above and in notes 1 and 4.
Intangible assets and goodwill are related to added value from the acquisitions of the subsidiaries Blinc AS, Nordic Integrator Management AS, Ontopia AS and Bouvet Sverige AB, and also the business Capgemini Trondheim, cost related to development of software and internally developed internet homepage.
| CUS TOMER RELA |
SOFT | INTER | TOTAL | CUS TOMER RELA |
SOFT | INTER | TOTAL | |||
|---|---|---|---|---|---|---|---|---|---|---|
| NOK 1 000 | TIONS | WARE | NET | GOODWILL | 2016 | TIONS | WARE | NET | GOODWILL | 2015 |
| Acquisition cost | ||||||||||
| Accumulated 1 January | 13 036 | 11 479 | 4 341 | 27 909 | 56 765 | 12 907 | 5 844 | 4 341 | 31 230 | 54 322 |
| Exchange rate variances | -142 | 0 | 0 | -301 | -443 | 129 | 0 | 0 | 275 | 404 |
| Addition purchase of subsidiary | 2 854 | 0 | 0 | 5 175 | 8 028 | 0 | 0 | 0 | 0 | 0 |
| Self-developed intangible assets | 0 | 8 395 | 796 | 0 | 9 191 | 0 | 5 635 | 0 | 0 | 5 635 |
| Disposals of the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -3 596 | -3 596 |
| Accumulated 31 December | 15 747 | 19 875 | 5 137 | 32 782 | 73 541 | 13 036 | 11 479 | 4 341 | 27 909 | 56 765 |
| Depreciation | ||||||||||
| Accumulated 1 January | 6 705 | 2 248 | 2 489 | 0 | 11 442 | 4 932 | 1 414 | 1 621 | 0 | 7 967 |
| Exchange rate variances | -303 | 0 | 0 | 0 | -303 | -30 | 0 | 0 | 0 | -30 |
| Disposals of ordinary depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| This year's ordinary depreciation | 1 811 | 1 909 | 868 | 0 | 4 588 | 1 803 | 834 | 868 | 0 | 3 505 |
| Accumulated 31 December | 8 213 | 4 157 | 3 357 | 0 | 15 728 | 6 705 | 2 248 | 2 489 | 0 | 11 442 |
| Book value | ||||||||||
| Book value 1 January | 6 330 | 9 232 | 1 852 | 27 909 | 45 323 | 7 975 | 4 430 | 2 720 | 31 230 | 46 355 |
| Book value 31 December | 7 534 | 15 718 | 1 780 | 32 782 | 57 814 | 6 330 | 9 232 | 1 852 | 27 909 | 45 323 |
| Depreciation rate | 10 % | 20 % | 20 % | N/A | 10 % | 20 % | 20 % | N/A | ||
| Economic life | 10 years | 5 years | 5 years not decided | 10 years | 5 years | 5 years not decided | ||||
| Depreciation method | linear | linear | linear | N/A | linear | linear | linear | N/A |
Depreciation relates to customer relations, software and internally developed internet homepage. The value of customer relations is based on expected future cash flows before tax, discounted with a relevant discount rate taking into consideration expected term to maturity and risk at the time of group formation. The value of software is based on expected future maintenance income. Internet homepage are depreciated based on estimated useful life.
The group is developing a software that works as a search engine for enterprise data.The search engine can collect all type of information, tie it together and make use of the compound information in a range of valuable services. In conjuction with development of this system the group has been assigned a Government grant related to R&D of NOK 3 115 thousand.
Goodwill is not depreciated, but an impairment test is carried out at least once a year. Impairment testing of goodwill is discussed in note 14.
Recognised goodwill in the Group at 31.12.2016 constitutes NOK 32.8 million. This is mainly related to the acquisitions of Nordic Integrator Management AS (NOK 15.3 million) that took place in 2007 and Bouvet Sverige AB (NOK 3.0 million) that took place in 2008, and the acquisition in 2014 of the business Capgemini Trondheim (NOK 8.9 million) and in 2016 the aqusition of Ciber's business in Stockholm (NOK 5.2 million). Capgemini's business in Trondheim has been integrated with Bouvet's business in Trondheim and Ciber's business has been integrated with Bouvet Stockholm AB's business.
After the acquisition of Nordic Integrator Management AS and Capgemini Trondheim the businesses has been integrated into Bouvet's business respectively in Bergen and Trondheim, in such a way that they do not represent separate cash generating units. They will be measured together with cash flows from remaining business in respectively in Bergen and Trondheim. Bouvet Sverige is considered to be a separate cash generating unit within the Group. All goodwill from these acquisitions are allocated to the respective cash generating units.
The recoverable amount is based on an assessment of the enterprise's value in use. The value in use is calculated based on a discount of expected future cash flows before tax, discounted with a relevant discount rate before tax considering term to maturity and risk. Future cash flow is based on budgeted values and an expectation of moderate growth. It is assumed an annual growth of 2 per cent for hourly rates and operating expenses. The interest rate applied for discounting cash flows is 8 per cent before tax. This is based on a risk free interest rate of 1 per cent, with an additional risk premium of 7 per cent. The discount rate is based on a calculated WACC derived from CAPM methodology. The WACC applied in discounting the future cash flows is based on a risk free interest rate, market risk premium, asset beta, gearing and corporate tax rate.
The projection of cash flows is based on budget for the first five years. The cash flows are based on historic figures for the division, and an expectation of moderate growth in the total market and prices on services is considered. In the management's opinion, it is a reasonable assumption, that it will continue to be a demand for such IT services. After the five year period, a prudent estimate of 2 per cent nominal growth in net cash flows is included.
Ciber's business in Stockholm was acquired in 2016. In the management's view, this was a reasonably favorable purchase. The value, however, based on some key assumptions. In the vent that these assumptions develop considerably different from expectations, this may imply a necessity to write down the goodwill of total NOK 5.2 million. If employees leave and
there is no growth and development in Stockholm, but rather stagnation the business could be subject to write down if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
Capgemini Trondheim / part of the business in the North Capgemini's business in Trondheim was acquired in 2014. In the management's view, this was a reasonably favorable purchase. The value is, however, based on some key assumptions. In the event that these assumptions develop considerably differently from expectations, this may imply a necessity to write down the goodwill a total of NOK 8.9 million. If employees leave and there is no growth and development in Trondheim, but rather stagnation the business could be subject to write downs if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
Bouvet Sverige AB was acquired in 2008. In the management's view, this was a reasonably favorable purchase. The value is, however, based on some key assumptions. In the event that these assumptions develop differently from expectations, this may imply a necessity to write down the goodwill that has a total value of NOK 3.0 million. If employees leave as a consequence of the acquisition, if there is no growth or development in the Swedish market, but on the contrary the unit experiences stagnation, the business area could be subject to write downs if other assumptions are constant. The Group believes that no reasonably possible change in any of the key assumptions used for impairment testing would cause the amount of any of the cash generating units to exceed its recoverable amount.
Nordic Integrator Management AS was acquired in 2007. In the management's view, this was a reasonably favorable purchase, and the value of the company at least exceeds the compensation of NOK 21.3 million. The value is, however, based on some key assumptions. In the event that these assumptions develop considerably differently from expectations, this may imply a necessity to write down the goodwill. If employees leave as a consequence of the acquisition, if there is no growth in services delivered to the bank and finance sector or if Bergen as a geographic area experiences stagnation, the business area could be subject to write downs if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
NOK 1 000 2016 2015 Gross trade accounts receivable 159 175 144 681 Provisions for losses -42 -218 Trade accounts receivable 159 133 144 463
Losses on trade accounts receivable are classified as other operating expenses in the income statement. See note 24 for assessment of credit risk.
Movements in the provision for loss are as follows:
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Opening balance | 218 | 25 |
| Provision of the year | 0 | 218 |
| Realised loss this year | -176 | 0 |
| Reversal of previous provision | 0 | -25 |
| Closing balance | 42 | 218 |
At 31.12., the Group had the following trade accounts receivable due, but not paid or written off:
| NOK 1 000 | TOTAL | NOT DUE | <30 D | 30-60D | 60-90D | >90D |
|---|---|---|---|---|---|---|
| 2016 | 159 133 | 133 602 | 18 138 | 2 220 | 231 | 4 942 |
| 2015 | 144 463 | 113 108 | 26 057 | 2 363 | 1 629 | 1 305 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Advances to employees | 9 082 | 8 858 |
| Prepaid rent | 1 242 | 1 413 |
| Prepaid software | 9 428 | 4 372 |
| Prepaid other expenses | 3 157 | 4 759 |
| Deposit account - guarantee rent obligations | 3 306 | 0 |
| Other receivables | 775 | 526 |
| Total other short-term receivables | 26 990 | 19 928 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Cash in hand and at bank - unrestricted funds | 127 190 | 137 635 |
| Employee withheld taxes - restricted funds | 34 529 | 32 503 |
| Cash and cash equivalents in the balance sheet | 161 719 | 170 138 |
The group has unused credit facilities of NOK 51 332 thousand per 31.12.2016 (NOK 51 467 thousand in 2015). There are no restrictions on the use of these funds.
| SHARES IN THOUSANDS | 2016 | 2015 |
|---|---|---|
| Ordinary shares, nominal value NOK 1 | 10 250 | 10 250 |
| Total number of shares | 10 250 | 10 250 |
Changes in share capital and premium:
| NO. OF SHARES | SHARE CAPITAL | |||
|---|---|---|---|---|
| NOK 1 000 | 2016 | 2015 | 2016 | 2015 |
| Ordinary shares issued and fully paid at 31.12. | 10 250 | 10 250 | 10 250 | 10 250 |
| Own shares at nominal value | -99 | -31 | -99 | -31 |
Throughout the year, Bouvet ASA has sold 142 635 own shares to employees within the group at a total amount of NOK 13 899 thousand, giving an average sales price of NOK 97.45 per share (which includes the element of remuneration). The cash consideration for these shares was NOK 7 172 thousand. The Company owns 98 682 own shares per 31 December 2016.
The nominal value of the share is NOK 1. All shares in the company have equal voting rights and are equally entitled to dividend. The computation of earnings per share is shown in note 10.
The 20 main shareholders at 31.12.2016 are:
| AKSJONÆR | NUMBER OF SHARES | OWNERSHIP INTERES |
|---|---|---|
| VARNER KAPITAL AS | 1 070 000 | 10.44 % |
| STENSHAGEN INVEST AS | 925 402 | 9.03 % |
| VPF NORDEA AVKASTNING | 776 120 | 7.57 % |
| PROTECTOR FORSIKRING ASA | 700 000 | 6.83 % |
| MP PENSJON PK | 569 904 | 5.56 % |
| HURUM SVERRE FINN | 507 873 | 4.95 % |
| VEVLEN GÅRD AS | 420 000 | 4.10 % |
| SIX SIS AG | 400 000 | 3.90 % |
| STOREBRAND VEKST VERDIPAPIRFOND | 259 669 | 2.53 % |
| STUBØ ERIK | 237 373 | 2.32 % |
| STOREBRAND NORGE I VERDIPAPIRFOND | 211 289 | 2.06 % |
| DYVI INVEST AS | 200 000 | 1.95 % |
| TELENOR PENSJONSKASSE | 186 800 | 1.82 % |
| VERDIPAPIRFONDET STOREBRAND OPTIMA | 122 841 | 1.20 % |
| VOLLE ANDERS | 121 697 | 1.19 % |
| BOUVET ASA | 98 682 | 0.96 % |
| J.P. MORGAN CHASE BANK N.A. LONDON | 90 645 | 0.88 % |
| RADIG NILS-HÅKAN | 79 754 | 0.78 % |
| SVENDSEN PAUL HALLAN | 74 368 | 0.73 % |
| TALLAKSRUD OLE-JØRGEN | 70 873 | 0.69 % |
| Remaining shareholders | 3 126 710 | 30.50 % |
| Total | 10 250 000 | 100.00 % |
The company has paid the following dividends:
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Ordinary dividend for 2015: NOK 6.50 per share | 66 625 | |
| Ordinary dividend for 2014: NOK 5.00 per share | 51 250 | |
| Total | 66 625 | 51 250 |
Proposed dividend to be approved at the annual general meeting amounts to NOK 7.00 per share.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The offer does not include employees paid by the hour. The scheme consists of annual offers where each employee can subscribe for shares once per calendar year. The share scheme is approved for one year at a time.
The share scheme gives the employee the opportunity to subscribe for shares at a value of NOK 7 500 per year against a deduction in salary of NOK 6 000, of which Bouvet is subsidising the employee with NOK 1 500. Bouvet will give a corresponding number of shares free of charge if the employee keeps the shares for two years and is still employed.
In 2016 a total of 49 206 shares were sold at a rate of NOK 126.00 minus a 20 per cent discount. 834 employees have joined the scheme, and 59 shares per employee were distributed. The previous year 60 909 shares were sold at a rate of NOK 94.75 minus a 20 per cent discount.
The Group also has established an additional share scheme for the management. The share scheme consist of annual offers where each member can subscribe for shares once per calendar year. The share scheme is approved for one year at a time.
The share scheme gives members of the management the opportunity to subscribe for shares at a value of NOK 22 500 per year at market value without any subsidising from Bouvet. Bouvet will give a corresponding number of shares free of charge if the manager keeps the shares for two years and is still employed.
In 2016 a total of 17 145 shares were sold at a rate of NOK 126.00. A total of 101 employees have joined the scheme. The previous year 20 382 shares were sold at a rate of NOK 94.75.
In 2016 a total of 76 284 shares was provided free of charge in relation to the 2014 share scheme. (In 2015: 66 968 shares related to the 2013 share scheme).
The share scheme is treated in accordance with IFRS 2. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. The calculated fair value are recognised as an expense with an corresponding amount directly in equity over the vesting period. NOK 5 903 thousand in compensation costs have been charged in 2016 (in 2015 NOK 5 429 thousand). Remaining estimated compensation costs at 31 December 2016 for the years 2017 and 2018 are NOK 8 666 thousand.
The Group is required to have an occupational pension scheme in accordance with the Norwegian law on required occupational pension ("lov om obligatorisk tjenestepensjon"). The Group's pension schemes satisfy the requirements of this law, and represents a defined contribution plan. At the end of the year there were 1 090 participants in this defined contribution plan.
The Group has a defined contribution plan for all employees. 1 May 2016 the Group's obligation changed in Norway to give contribution of 4 per cent between 1G and 7.1G and 8 per cent between 7.1G and 12G, to each employee's pension savings. The previous obligation was to give contribution of 3 per cent between 1G and 6G and 5 per cent between 6G and 12G. The future pension depends on the size of the contributions and the return on the pension savings. The Group's commitment is fully met when paid. At the end of the accounting year, 1 090 employees were part of this scheme. The expensed contribution in Norway amounted to NOK 27 680 thousand and NOK 22 146 thousand in 2016 and 2015 respectively. In Sweden the expensed contribution amounted to NOK 3 569 thousand in 2016 and NOK 2 824 thousand in 2015, thus for the group the total expensed contribution amounted to NOK 31 249 thousand for 2016 and NOK 24 970 thousand for 2015.
Reconciliation of this year's total pension expense:
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Contribution plan - paid contribution for the year | 31 998 | 24 970 |
| This year's recognised pension costs (note 7) | 31 998 | 24 970 |
The group has entered into several operating leases for vehicles and office machines. The agreements related to office machines contain an option to extend.
| The lease costs included: | ||
|---|---|---|
| NOK 1 000 | 2016 | 2015 |
| Ordinary lease payments | 1 254 | 1 356 |
Future payments related to non-cancellable leases fall due for payment as follows:
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Within 1 year | 649 | 1 054 |
| 1 to 5 years | 1 371 | 411 |
| Future lease commitment | 2 020 | 1 465 |
The group has the following lease commitments connected with office premises. End of period is the same as termination of contract.
| CITY | END OF PERIOD | ANNUAL LEASE |
|---|---|---|
| Arendal | 2027 | 204 |
| Bergen | 2018 | 1 566 |
| Haugesund | 2017 | 805 |
| Kristiansand | 2019 | 292 |
| Malmø | 2018 | 663 |
| Oslo | 2026 | 16 457 |
| Sandefjord | 2020 | 362 |
| Sandvika | 2019 | 512 |
| Skien | 2020 | 330 |
| Stavanger - Forus | 2021 | 4 657 |
| Stavanger - Vågen | 2018 | 2 102 |
| Stockholm - Drottinggatan | 2017 | 713 |
| Stockholm - Östermalmsgatan | 2020 | 1 682 |
| Trondheim - Kjøpmannsgaten | 2020 | 912 |
| Trondheim - Skipsbygget | 2018 | 683 |
| Örebro | 2018 | 369 |
| Total | 32 309 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Prepayments from customers | 19 509 | 14 925 |
| Accrued salary, holiday pay and bonus | 105 270 | 97 912 |
| Employees' holiday and time-off balance | 12 334 | 11 850 |
| Other short-term debt | 11 737 | 6 333 |
| Total | 148 850 | 131 020 |
NOK 1 000
| NAME | ROLE | FEES PAID IN 2016 | FEES PAID IN 2015 |
|---|---|---|---|
| Åge Danielsen | Chairman of the Board | 300 | 250 |
| Tove Raanes | Vice-chairman of the Board | 175 | 150 |
| Grethe Høiland | Board member | 150 | 125 |
| Ingebrigt Steen Jensen | Board member | 150 | 125 |
| Egil Christen Dahl | Board member | 150 | 125 |
| Total | 925 | 775 |
| NAME | SALARY | BONUS | PENSION CONTRIBUTION |
OTHER REMUNERATION |
TOTAL 2016 |
|---|---|---|---|---|---|
| Sverre F. Hurum , CEO | 2 651 | 512 | 55 | 215 | 3 433 |
| Erik Stubø, CFO | 2 286 | 518 | 56 | 65 | 2 925 |
| Total | 4 937 | 1 030 | 111 | 280 | 6 358 |
| NAME | SALARY | BONUS | PENSION CONTRIBUTION |
OTHER REMUNERATION |
TOTAL 2015 |
|---|---|---|---|---|---|
| Sverre F. Hurum , CEO | 2 477 | 433 | 44 | 251 | 3 205 |
| Erik Stubø, CFO | 2 211 | 433 | 44 | 53 | 2 741 |
| Total | 4 688 | 866 | 88 | 304 | 5 946 |
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Åge Danielsen | Chairman of the Board | 8 400 |
| Tove Raanes | Vice-chairman of the Board | 895 |
| Grethe Høiland | Board member | 0 |
| Ingebrigt Steen Jensen | Board member | 0 |
| Egil Christen Dahl | Board member | 420 000 |
| Total | 429 295 |
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Sverre F. Hurum | CEO | 507 873 |
| Erik Stubø | CFO | 237 373 |
| Total | 745 246 |
| TYPE | 2016 | 2015 |
|---|---|---|
| Ordinary audit 1) | 775 | 752 |
| Tax advice | 101 | 95 |
| Other services | 27 | 82 |
| Total | 903 | 929 |
1) In addition there are fees to auditors, other than the group auditor, that amounts to NOK 46 thousand in 2016 and NOK 99 thousand in 2015.
The CEO has an agreement of 12 months' pay after termination of employment. No other key management personnel has any agreement of pay after termination of employment.
The Group has only financial instruments related to trade and other receivables and trade accounts payable, involving both credit risk and liquidity risk.
The Group is mainly exposed to credit risk connected with trade accounts receivable, deposits with banks and other short-term receivables. The Group is reducing its exposure against credit risk by requiring that all third parties, like customers, shall be approved and subject to an assessment of credit verification procedures.
The Group has no significant credit risk connected with one single contracting party or several that can be considered a group due to similarities in credit risk.
The Group has guidelines ensuring that sales are made only to customers without previous payment problems and that outstanding balances do not exceed set credit limits.
In the Group's view, the maximum risk exposure is the carrying value of trade accounts receivable (note 15), deposits with banks (note 17) and other short-term receivables (note 16).
The liquidity risk is the risk that the Group will not be able to service its financial obligations when due. The Group's strategy to manage liquidity risk is to have adequate liquid funds at all times to be able to meet the financial obligations when due, under normal as well as extraordinary circumstances, without risking unacceptable losses or bad reputation. Unused credit facilities are described in note 17.
The following table illustrates the maturity structure of the Group's financial commitments, based on non discounted contractual payments. In instances where the counterpart can require an earlier redemption, the amount is stated in the earliest period payment can be demanded. In the event that commitments can be required redeemed at request, these are included in the first column (less than 1 month).
| REMAINING PERIOD | ||||||
|---|---|---|---|---|---|---|
| NOK 1 000 | LESS THAN 1 MONTH |
1-3 MONTHS | 3-12 MONTHS | 1-5 YEARS | MORE THAN 5 YEARS |
TOTAL |
| 31.12.2016 | ||||||
| Trade accounts payable | 53 674 | 7 454 | 0 | 0 | 0 | 61 128 |
| Other financial commitments 1) | 8 133 | 112 | 24 444 | 96 147 | 66 162 | 194 999 |
| NOK 1 000 | LESS THAN 1 MONTH |
1-3 MONTHS | 3-12 MONTHS | 1-5 YEARS | MORE THAN 5 YEARS |
TOTAL |
|---|---|---|---|---|---|---|
| 31.12.2015 | ||||||
| Trade accounts payable | 32 907 | 1 736 | 0 | 0 | 0 | 34 643 |
| Other financial commitments 1) | 5 425 | 176 | 16 656 | 74 951 | 65 593 | 162 801 |
1) Maturity not-accounted commitments related to lease agreements.
The main objective of the Group's management of the capital structure is to ensure a solid equity to secure further operations and also to have the ability to pursue opportunities for further profitable growth.
By producing satisfactory ratios connected with equity and debt, the Group will be able to support operations and thereby maximise the value of the shares.
The Group controls its capital structure and carries out required changes based on a continuous assessment of the present financial conditions and the possible prospects and opportunities in the short and mid-long term.
The capital structure is managed by adjusting dividend distributions, repurchasing own shares, reducing the share capital or by issuing new shares. There have been no changes in guidelines in this area in 2015 or 2016.
The Group is following up its capital structure by reviewing the equity share, defined as equity in per cent of total capital. Group policy is to have an equity share in excess of 30 per cent. The equity share was 33 per cent per 31.12.2016.
There have been no events after the balance sheet date significantly affecting the Group's financial position.
1 January - 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| Revenue | 0 | 0 | |
| Operating costs | |||
| Salary costs | 2, 13 | 1 101 | 930 |
| Depreciation fixed assets | 6 | 10 | 0 |
| Other operating costs | 3, 13 | 1 183 | 1 654 |
| Total operating costs | 2 294 | 2 584 | |
| Operating profit | -2 294 | -2 584 | |
| Financial items | |||
| Other interest income | 11 | 6 | |
| Received dividend and group contribution | 84 512 | 71 535 | |
| Other financial income | 1 | 242 | |
| Other interest expense | -794 | -720 | |
| Other finance expense | -316 | -208 | |
| Net financial items | 83 414 | 70 855 | |
| Ordinary profit before tax | 81 120 | 68 271 | |
| Income tax expense | |||
| Tax expense on ordinary profit | 4 | 0 | 0 |
| Total tax expense | 0 | 0 | |
| Profit for the year | 81 120 | 68 271 | |
| Attributable to: | |||
| Other equity | 81 120 | 68 271 |
At 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Financial non-current assets | |||
| Shares in subsidiaries | 7 | 138 883 | 136 416 |
| Total financial non-current assets | 138 883 | 136 416 | |
| Fixed assets | |||
| IT equipment | 6 | 29 | 0 |
| Total fixed assets | 29 | ||
| Total non-current assets | 138 912 | 136 416 | |
| CURRENT ASSETS | |||
| Trade accounts receivable group company | 7 | 83 557 | 70 790 |
| Other short-term receivables | 8 | 0 | 7 |
| Cash and cash equivalents | 9 | 2 609 | 987 |
| Total current assets | 86 166 | 71 784 | |
| TOTAL ASSETS | 225 078 | 208 200 |
At 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Paid-in capital | |||
| Share capital | 10 | 10 250 | 10 250 |
| Own shares - nominal value | 10 | -99 | -31 |
| Share premium | 10 | 10 000 | 10 000 |
| Total paid-in capital | 20 151 | 20 219 | |
| Earned equity | |||
| Other equity | 3 841 | 5 031 | |
| Total earned equity | 3 841 | 5 031 | |
| Total equity | 23 992 | 25 250 | |
| LIABILITIES | |||
| Long-term debt | |||
| Loan from group company | 7 | 40 000 | 40 000 |
| Total long-term debt | 40 000 | 40 000 | |
| Short-term debt | |||
| Short term debt to group company | 7 | 88 814 | 75 844 |
| Public duties payable | 522 | 477 | |
| Other short-term debt | 10,12 | 71 750 | 66 629 |
| Total short-term debt | 161 086 | 142 950 | |
| Total liabilities | 201 086 | 182 950 | |
| TOTAL EQUITY AND LIABILITIES | 225 078 | 208 200 |
1 January - 31 December
| NOK 1 000 | NOTE | 2016 | 2015 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Ordinary profit before tax | 81 120 | 68 271 | |
| Group contribution and dividend | -84 512 | -71 535 | |
| Ordinary depreciation | 10 | 0 | |
| Changes in other accruals | 1 409 | 1 240 | |
| Net cash flows from operating activities | -1 974 | -2 024 | |
| Cash flows from investing activities | |||
| Purchase and investment in subsidiary | 6 | -39 | 0 |
| Net from financing to group companies | 7 | 16 769 | 7 495 |
| Net cash flows from investing activities | 16 730 | 7 495 | |
| Cash flows from financing activities | |||
| Purchase of own shares | 10 | -25 095 | -14 880 |
| Sale of own shares | 10 | 8 359 | 7 702 |
| Group contribution payments | 70 227 | 53 051 | |
| Dividend payments | 10 | -66 625 | -51 250 |
| Net cash flows from financing activities | -13 134 | -5 377 | |
| Net changes in cash and cash equivalents | 1 622 | 94 | |
| Cash and cash equivalents at the beginning of the year | 987 | 893 | |
| Cash and cash equivalents at the end of the year | 2 609 | 987 |
1 January - 31 December
| NOTE | NOK 1 000 | SHARE CAPITAL |
OWN SHARES |
SHARE PREMIUM |
TOTAL PAID-IN EQUITY |
OTHER EQUITY |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|
| Equity at 01.01.2015 | 10 250 | -20 | 10 000 | 20 230 | 5 025 | 25 255 | |
| Income for the year | 68 271 | 68 271 | |||||
| 10 | Purchase/sale of own shares (net) | -11 | -11 | -7 099 | -7 110 | ||
| Employee share scheme | 5 459 | 5 459 | |||||
| 10 | Proposed dividend | -66 625 | -66 625 | ||||
| Equity at 31.12.2015 | 10 250 | -31 | 10 000 | 20 219 | 5 031 | 25 250 | |
| Equity at 01.01.2016 | 10 250 | -31 | 10 000 | 20 219 | 5 031 | 25 250 | |
| Income for the year | 81 120 | 81 120 | |||||
| 10 | Purchase/sale of own shares (net) | -68 | -68 | -16 592 | -16 660 | ||
| Employee share scheme | 6 032 | 6 032 | |||||
| 10 | Proposed dividend | -71 750 | -71 750 | ||||
| Equity at 31.12.2016 | 10 250 | -99 | 10 000 | 20 151 | 3 841 | 23 992 | |
The financial statements of Bouvet ASA for the period ending on 31 December 2016 were approved in a board meeting on 6 April 2017.
Bouvet ASA is a public limited company incorporated in Norway and listed on Oslo Børs. The company's main office is located in Sørkedalsveien 8, 0369 Oslo, Norway.
The financial statements of Bouvet ASA for the accounting year 2016 have been prepared in accordance with the Norwegian Accounting act and general accepted accounting principles in Norway (NGAAP).The financial statements are based on the principles of historic cost.
The company's functional currency and presentation currency is Norwegian Kroner (NOK).
Management has used estimates and assumptions that have affected the income statement and the valuation of assets and liabilities, together with potential assets and liabilities at balance sheet date under preparation of the financial statements in accordance with general accepted accounting principles in Norway (NGAAP).
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in foreign currency are translated at the end of every period to the rate applicable on the balance sheet date. Non-monetary items valued at historic cost are translated at the transaction date. Non-monetary items assessed at real value denominated in foreign currency are translated at the rate applicable on the balance sheet date. Exchange rate changes are recognised in the income statement as they occur during the accounting period.
Shares in subsidiaries are initially recognized at cost in the parent company financial statement. Subsequently the investments are recognized at cost unless there is a need for impairment. An impairment to fair value will be recognized if the decrease in value is not assessed to be temporarily and it is in accordance with good accounting practice. Any impairment will be reversed if the basis for impairment is not longer applicable.
Dividend, group contribution and other distributions from subsidiaries are recognized as income in the year the distribution has been recognized as a liability in the subsidiary. If the distribution from the subsidiary exceeds the Company's share of profit after the subsidiary was acquired, the excess amount will be treated as repayment of invested capital, and thus recognized as a reduction of the investment.
The tax expense consists of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all temporary differences between book and tax value on assets and liabilities, with the exception of
Deferred tax assets are recognised when it is probable that the company will make sufficient profit in future periods to utilise the tax asset. The company recognises previous not recorded deferred tax assets to the extent that it is probable that the company can utilise the deferred tax asset. Likewise, the company will reduce the deferred tax assets when it is considered unlikely that the deferred tax asset can be utilised.
Deferred tax and deferred tax assets are measured on the basis of the adopted future tax rate.
Deferred tax is disclosed at a nominal value and classified as long-term debt in the balance sheet.
Tax payable and deferred tax assets are set-off directly against equity to the extent that the underlying items are booked against equity.
Fixed assets are valued at cost less accumulated depreciation and impairment losses. When assets are sold or disposed of, the gross carrying amount and depreciation are reversed, and any gain or loss on the sale or disposal is recognised in the income statement.
The gross carrying amount of fixed assets is the purchase price, including duties/taxes and direct acquisition costs related to making the fixed asset ready for use. Subsequent costs, such as repair and maintenance costs, are normally expensed when incurred, whereas other expenses expected to increase future economic benefits are balance sheet recorded.
Depreciation is calculated using the straight-line method over the following periods.
| Office equipment | 5-10 years |
|---|---|
| Office machines and vehicles | 5 years |
| IT equipment | 3 years |
The depreciation periods and methods are assessed each year. The residual value is estimated every year-end and changes in the estimate for residual value is accounted for as an estimation change.
Cash includes cash in hand and bank deposits. Cash equivalents are short-term liquid investments that can be converted to cash within three months and at a known amount.
The cash flow statement is prepared in accordance with the indirect method. Cash and cash equivalents comprise cash in hand bank deposits and other liquid short term assets.
Trade and other short term receivables are recognized at nominal amount less of any impairment. Provision for doubtful debt is based on individual assessments for each of the receivables. If relevant, there may be unspecified provision for doubtful debt for covering expected loss on trade receivables.
On repurchase of own shares, costs including directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement.
Transaction costs directly relating to an equity transaction are set off directly against equity after deducting tax expenses.
The company has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The fair value of the scheme is measured at the grant date and expensed over the vesting period of 2 years. The scheme is an arrangement with settlement in shares, where the cost is recognised as a payroll expense with equity as the contra entry. Employer's National Insurance contribution on the award is recognised in profit and loss over the expected vesting period.
New information on the company's position at the balance sheet date is taken into account in the financial statements. Events after the balance sheet date that do not affect the company's position at the balance sheet date, but will affect the company's position in the future, are stated if significant.
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Board remuneration | 925 | 775 |
| Social security tax | 136 | 115 |
| Other remunerations | 40 | 40 |
| Total salary expenses | 1 101 | 930 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Office premises | 13 | 55 |
| Travel and transport | 35 | 26 |
| Office supplies, EDP etc. | 0 | 53 |
| External services | 629 | 901 |
| Other expenses | 506 | 619 |
| Total other operating expenses | 1 183 | 1 654 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Tax payable | 0 | 0 |
| Changes in deferred taxes | 0 | 0 |
| Tax expense | 0 | 0 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Ordinary profit before tax | 81 120 | 68 271 |
| Permanent differences | -1 120 | -1 271 |
| Group contribution | -80 000 | -67 000 |
| Basis for tax payable | 0 | 0 |
| Tax 25 % being tax payable on this year's profit | 0 | 0 |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Calculated tax payable | 0 | 0 |
| Tax payable recognised directly in equity | 0 | 0 |
| Total income tax payable | 0 | 0 |
Reconciliation of effective tax rate:
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Profit before tax | 81 120 | 68 271 |
| Tax calculated based on 25 % | 20 280 | 18 433 |
| Non taxable income | -20 280 | -18 433 |
| Tax expense | 0 | 0 |
| Effective tax rate | 0 % | 0 % |
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Basis deferred tax - net | 0 | 0 |
| Net recognised deferred tax/ deferred tax asset (-) | 0 | 0 |
The basic earnings per share are calculated as the ratio between the profit for the year that is attributable to the shareholders of NOK 81.12 million (NOK 68.27 million in 2015) divided by the weighted average number of ordinary shares throughout the year of 10.17 millions (10.21 millions in 2015). EBIT per share is calculated as the ratio between this year's operating profit of NOK -2.29 million (NOK -2.58 million in
2015) divided by the weighted average number of ordinary shares throughout the accounting year.
When calculating diluted earnings per share, the weighted average basic shares outstanding is adjusted for dilutive effects from the employee share scheme (see note 11).
| 2016 | 2015 | |
|---|---|---|
| EBIT (NOK 1000) | -2 294 | -2 584 |
| Profit for the year (NOK 1000) | 81 120 | 68 271 |
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average basic shares outstanding | 10 171 365 | 10 208 354 |
| Weighted average diluted shares outstanding | 10 304 044 | 10 340 661 |
| EBIT per share (NOK) | -0.23 | -0.25 |
| Diluted EBIT per share (NOK) 1) | -0.23 | -0.25 |
| Earnings per share (NOK) | 7.98 | 6.69 |
| Diluted earnings per share (NOK) 1) | 7.87 | 6.60 |
| Weighted average shares | ||
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average own-shares | -78 635 | -41 646 |
| Weighted average basic shares outstanding | 10 171 365 | 10 208 354 |
| Dilutive effects from employee share scheme | 132 679 | 132 307 |
| Weighted average diluted shares outstanding | 10 304 044 | 10 340 661 |
1) Potential diluted options are not included in the calculations because they do not have dilutive effect.
| NOK 1 000 | EDP EQUIPMENT | TOTAL 2016 |
|---|---|---|
| Acquisition cost | ||
| Accumulated 1 January | 0 | 0 |
| Additions of the year | 39 | 39 |
| Disposals of the year | 0 | 0 |
| Accumulated 31 December | 39 | 39 |
| Depreciation | ||
| Accumulated 1 January | 0 | 0 |
| Disposals of ordinary depreciation | 0 | 0 |
| This year's ordinary depreciation | 10 | 10 |
| Accumulated 31 December | 10 | 10 |
| Book value | ||
| Book value at 1 January | 0 | 0 |
| Book value at 31 December | 29 | 29 |
| Depreciation rate | 20-33 % | |
| Economic life | 3-5 years | |
| Depreciation method | linear |
The following subsidiaries are included in the consolidated accounts:
| NOK 1 000 | |||||
|---|---|---|---|---|---|
| COMPANY | COUNTRY | MAIN BUSINESS LINE | BOOK VALUE | OWNERSHIP | VOTING SHARE |
| Ontopia AS 1) | Norway | IT consultancy company | 4 529 | 100 % | 100 % |
| Nordic Integrator Management AS 2) | Norway | IT consultancy company | 3 375 | 100 % | 100 % |
| Olavstoppen AS 3) | Norway | IT consultancy company | 1 200 | 60 % | 60 % |
| Bouvet Sverige AB (former Zekundera AB) 4) | Sweden | IT consultancy company | 23 173 | 100 % | 100 % |
| Bouvet Norge AS | Norway | IT consultancy company | 106 606 | 100 % | 100 % |
| Total subsidiaries | 138 883 |
1) Consolidated from 1 April 2007
2) Consolidated from 1 July 2007.
3) Established in March 2010
4) Consolidated from 1 October 2008. Bouvet Sverige AB has to subsidiaries; Bouvet Stockholm AB and Bouvet Syd AB.
Loans, receivables and liabilities between Bouvet ASA and its subsidiaries:
| NOK 1 000 COMPANY |
LOANS TO SUBSIDIARIES |
CURRENT RECEIVABLES DUE FROM SUBSIDIARIES |
LOANS FROM SUBSIDIARIES |
CURRENT LIABILITIES TO SUBSIDIARIES |
|---|---|---|---|---|
| Bouvet Norge AS | 0 | 83 357 | 40 000 | 88 814 |
| Olavstoppen AS | 0 | 200 | 0 | 0 |
| Bouvet Sverige AB including subsidiaries | 0 | 0 | 0 | 0 |
| Total | 0 | 83 557 | 40 000 | 88 814 |
See note 3 in Group accounts for specification of results and equity in subsidiaries, and information about non-controlling interests.
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Advances to board members | 0 | 7 |
| Total other short-term receivables | 0 | 7 |
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Cash in hand and at bank - unrestricted funds | 2 205 | 584 |
| Employee withheld taxes - restricted funds | 404 | 403 |
| Cash and cash equivalents in the balance sheet | 2 609 | 987 |
| SHARES IN THOUSANDS | 2016 | 2015 |
|---|---|---|
| Ordinary shares, nominal value NOK 1 | 10 250 | 10 250 |
| Total number of shares | 10 250 | 10 250 |
Changes in share capital and premium:
| NO. OF SHARES | SHARE CAPITAL | |||
|---|---|---|---|---|
| NOK 1 000 | 2016 | 2015 | 2016 | 2015 |
| Ordinary shares issued and fully paid at 31.12. | 10 250 | 10 250 | 10 250 | 10 250 |
| Own shares at nominal value | -99 | -31 | -99 | -31 |
Throughout the year, Bouvet ASA has sold 142 635 own shares to employees within the group at a total amount of NOK 13 899 thousand, giving an average sales price of NOK 97.45 per share (which includes the element of remuneration). The cash consideration for these shares was NOK 7 172 thousand. The Company owns 98 682 own shares per 31 December 2016.
The nominal value of the shares is NOK 1. All shares in the company have equal voting rights and are equally entitled to dividend. Calculation of earnings per share are disclosed in note 5.
The 20 main shareholders at 31.12.2016 are:
| SHAREHOLDER | NUMBER OF SHARES |
OWNERSHIP INTEREST |
|---|---|---|
| VARNER KAPITAL AS | 1 070 000 | 10.44 % |
| STENSHAGEN INVEST AS | 925 402 | 9.03 % |
| VPF NORDEA AVKASTNING | 776 120 | 7.57 % |
| PROTECTOR FORSIKRING ASA | 700 000 | 6.83 % |
| MP PENSJON PK | 569 904 | 5.56 % |
| HURUM SVERRE FINN | 507 873 | 4.95 % |
| VEVLEN GÅRD AS | 420 000 | 4.10 % |
| SIX SIS AG | 400 000 | 3.90 % |
| STOREBRAND VEKST VERDIPAPIRFOND | 259 669 | 2.53 % |
| STUBØ ERIK | 237 373 | 2.32 % |
| STOREBRAND NORGE I VERDIPAPIRFOND | 211 289 | 2.06 % |
| DYVI INVEST AS | 200 000 | 1.95 % |
| TELENOR PENSJONSKASSE | 186 800 | 1.82 % |
| VERDIPAPIRFONDET STOREBRAND OPTIMA | 122 841 | 1.20 % |
| VOLLE ANDERS | 121 697 | 1.19 % |
| BOUVET ASA | 98 682 | 0.96 % |
| J.P. MORGAN CHASE BANK N.A. LONDON | 90 645 | 0.88 % |
| RADIG NILS-HÅKAN | 79 754 | 0.78 % |
| SVENDSEN PAUL HALLAN | 74 368 | 0.73 % |
| TALLAKSRUD OLE-JØRGEN | 70 873 | 0.69 % |
| Remaining shareholders | 3 126 710 | 30.50 % |
| Total | 10 250 000 | 100.00 % |
Dividend The company has paid the following dividends:
| NOK 1 000 2016 |
2015 | |
|---|---|---|
| Ordinary dividend for 2015: NOK 6.50 per share | 66 625 | |
| Ordinary dividend for 2014: NOK 5.00 per share | 51 250 | |
| Total | 66 625 | 51 250 |
Proposed dividend to be approved at the annual general meeting amounts to NOK 7.00 per share.
The Company did not have any employees in 2016 or 2015. All of the Group's costs related to the share scheme are expensed in the respective subsidiaries.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The offer does not include employees paid by the hour. The scheme consists of annual offers where each employee can subscribe for shares once per calendar year. The share scheme is approved for one year at a time.
The share scheme gives the employee the opportunity to subscribe for shares at a value of NOK 7 500 per year against a deduction in salary of NOK 6 000, of which Bouvet is subsidising the employee with NOK 1 500. Bouvet will give a corresponding number of shares free of charge if the employee keeps the shares for two years and is still employed.
In 2016 a total of 49 206 shares were sold at a rate of NOK 126.00 minus a 20 per cent discount. 834 employees have joined the scheme, and 59 shares per employee were distributed. In 2015 60 909 shares were sold at a rate of NOK 94.75 minus a 20 per cent discount.
The Group also has established an additional share scheme for the management. The share scheme consist of annual
offers where each member can subscribe for shares one time each calendar year. The share scheme is approved for one year at a time.
The share scheme gives members of the management the opportunity to subscribe for shares at a value of NOK 22 500 per year at market value without any subsidising from Bouvet. Bouvet will give a corresponding number of shares free of charge if the manager keeps the shares for two years and is still employed.
In 2016 a total of 17 145 shares were sold at a rate of NOK 126.00. A total of 101employees have joined the scheme. The previous year 20 382 shares were sold at a rate of NOK 94.75.
In 2016 a total of 76 284 shares was provided free of charge in relation to the 2014 share issue program. (In 2015: 66 968 related to the 2013 programme).
The share scheme is treated in accordance with Norwegian Accounting Standard 15A. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. NOK 5 903 thousand in share based payment costs have been charged the subsidiaries in 2016 in addition to the bonus shares described above. In 2015 NOK 5 429 thousand was charged. Remaining estimated compensation costs at 31 December 2016 for the years 2017 and 2018 are NOK 8 666 thousand.
| NOK 1 000 | 2016 | 2015 |
|---|---|---|
| Other short-term debt | 0 | 4 |
| Accrued dividend payment | 71 750 | 66 625 |
| Total | 71 750 | 66 629 |
NOK 1 000
| NAME | ROLE | FEES PAID IN 2016 |
FEES PAID IN 2015 |
|---|---|---|---|
| Åge Danielsen | Chairman of the Board | 300 | 250 |
| Tove Raanes | Vice-chairman of the Board | 175 | 150 |
| Grethe Høiland | Board member | 150 | 125 |
| Ingebrigt Steen Jensen | Board member | 150 | 125 |
| Egil Christen Dahl | Board member | 150 | 125 |
| Total | 925 | 775 |
Key management has received its remuneration from Bouvet Norge AS. For information about the remuneration to the management see note 23 to the consolidated financial statements.
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Åge Danielsen | Chairman of the Board | 8 400 |
| Tove Raanes | Vice-chairman of the Board | 895 |
| Grethe Høiland | Board member | 0 |
| Ingebrigt Steen Jensen | Board member | 0 |
| Egil Christen Dahl | Board member | 420 000 |
| Total | 429 295 |
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Sverre F. Hurum | CEO | 507 873 |
| Erik Stubø | CFO | 237 373 |
| Total | 745 246 |
| TYPE | 2016 | 2015 |
|---|---|---|
| Ordinary audit | 195 | 185 |
| Tax advice | 31 | 30 |
| Other services | 15 | 58 |
| Total | 241 | 273 |
The CEO has an agreement of 12 months' pay after termination of employment. No other key management personnel has any agreement of pay after termination of employment.
The Company is currently a holding company, and does have a limited amount of financial instruments except for its investment in subsidiaries and group receivables and group payables. For information about the Company's treatment of financial risks such as liquidity risk and capital management, see note 24 to the consolidated financial statements.
There have been no events after the balance sheet date significantly affecting the Company's financial position.
| NOK | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|
| Market value at 31 Dec | 1414.5 mill. | 1004.5 mill. | 779.0 mill. | 912.3 mill. |
| Share price at 31 Dec | 138.00 | 98.00 | 76.00 | 89.00 |
| Share price/ total equity per share | 8.03 | 5.75 | 5.07 | 5.71 |
| Dividend paid | 6.50 | 5.00 | 6.00 | 5.00 |
The Bouvet share is listed on the Oslo Stock Exchange under the ticker code BOUVET.
Its price increased by 40.82 per cent during 2016. The company's market value was NOK 1 004.5 million at 1 January 2015 and had increased to NOK 1 414.5 million at 31 December.
The Bouvet share will be a profitable investment for its owners through the increase in its value and payment of dividend. In accordance with the company's dividend policy, a significant part of the previous year's net profit will be distributed to the owners.
The annual general meeting held in 2016 resolved to pay a dividend of NOK 6.50 per share.
Bouvet communicates openly about conditions relevant to its financial position and future development so that market players can form the best possible picture of the company. All shareholders will be treated equally, and information will be provided at the right time, in a precise form and sufficiently comprehensive.
Price-sensitive information is made available to the whole market simultaneously through the Oslo Stock Exchange announcement system. The company's website is an important tool for ensuring that available information is comprehensive and updated. All information is also made available on the company's website at www.bouvet.no. Bouvet will work continuously on improving the site, so that its pages are updated with relevant data at all times.
Bouvet does not publish forecasts for key figures in coming periods, but bases its comments on expected general market trends.
In connection with the presentation of interim results, the company's management holds a presentation where investors, analysts, the media and other stakeholders can meet senior executives. Four such presentations were given in 2016.
One Norwegian stockbroker provide analyses of the company:
The Bouvet share traded between NOK 94.50 per share and NOK 138.50 per share in 2016. A total of 1 734 000 shares were traded on the Oslo Stock Exchange through 1 434 transactions. The company's share price at 31 December 2016 was NOK 138.00 per share.
Issued shares at 31 December 2016 totaled 10 250 000, with a nominal price of NOK 1.00 per share.
The company had 1 412 shareholders at 31 December, including 1 316 Norwegian and 79 foreign.
The 20 largest shareholders owned 69.50 per cent of the shares. Bouvet owned 98 682 of its own shares at 31 December 2016, compared with 31 317 the year before.
| EVENT | DATE |
|---|---|
| Annual General Meeting | 23 May 2017 |
| First quarter 2017 | 19 May 2017 |
| Second quarter 2017 | 24 August 2017 |
| Third quarter 2017 | 9 November 2017 |
| Fourth quarter 2017 | 16 February 2018 |
In connection with the presentation of interim results, the company's management holds a presentation where investors, analysts, the media and other stakeholders can meet senior executives. The presentations are held in Oslo.
Nordea Bank Norge ASA Registrar service P O Box 1166 Sentrum NO - 0107 Oslo
| SPREAD | NO OF SHAREHOLDERS | TOTAL NO OF SHARES | PERCENTAGE |
|---|---|---|---|
| 1 - 100 | 238 | 14 013 | 0.14 % |
| 101 - 1 000 | 772 | 340 722 | 3.32 % |
| 1 001 - 10 000 | 321 | 936 790 | 9.14 % |
| 10 001 - 100 000 | 66 | 2 249 507 | 21.95 % |
| 100 001 - 1 000 000 | 14 | 5 638 968 | 55.01 % |
| 1 000 001 - | 1 | 1 070 000 | 10.44 % |
| Total | 1 412 | 10 250 000 | 100.00 % |
The chief financial officer is the company's primary spokesperson for financial information, such as interim and annual reports. The chief executive will be the primary contact on other issues, such as important contracts and other price sensitive information.
Other members of Bouvet's executive management may serve as spokespersons in special cases where appropriate.
Bouvet ASA (Bouvet) is concerned to practise good corporate governance in order to strengthen confidence in the company and thereby contribute to the best possible long-term value creation with the lowest possible risk to the benefit of shareholders, employees and other stakeholders. Good corporate governance is intended to regulate the division of roles between shareholders, the board and the executive management more comprehensively than is required by legislation.
Bouvet is subject to formal requirements for reporting on its corporate governance. Pursuant to section 3, sub-section 3b of the Norwegian Accounting Act, the company is obliged to report on its principles for and practice of corporate governance. In addition, the Oslo Stock Exchange requires an annual report on the company's principles in compliance with the applicable Norwegian code of practice for corporate governance (the code) issued by the Norwegian Corporate Governance Board (NCGB).
This report applies for fiscal 2016, and is based on the disposition specified in the legislation as well as the main points in the code.
The board of directors of Bouvet complies with the applicable code from the NCGB, published on 23 October 2012 with amendments of 21 December 2012, as well as with the revised code published on 20 October 2014. The board is responsible for implementing sound principles for corporate governance in the company. Bouvet provides an annual overall report of its principles for corporate governance and compliance with these in its annual report, and this information is also made available on the company's website at www.bouvet.no.
An annual review of the report on corporate governance is conducted by the board and the executive management, and the report for 2016 was adopted on 6 April 2017.
Confidence in the company's management and business is crucial for Bouvet's present and future competitiveness. The company practises open management, and thereby builds trust both in-house and externally.
Relations between owners and the company will be characterised by respect for the owners, good and timely information and equal treatment of shareholders.
A general principle for Bouvet is that the company will behave in a trustworthy manner towards its employees, clients, government agencies and other stakeholders. Guidelines for Bouvet's CSR are available on the company's website.
Bouvet delivers services related to communication, information technology and advisory. The company is a strategic
partner for a number of enterprises, and helps these to design, develop and administer digital solutions which create new business opportunities. Bouvet has a regional model where closeness to the clients is the key element. Long-term client relationships are forged through local expertise and entrenchment.
A detailed presentation of Bouvet's business is available on its website at www.bouvet.no.
Bouvet has experienced growth in turnover, and still has opportunities for further profitable expansion. To benefit from these opportunities, the group will maintain a solid equity and good liquidity.
Consolidated equity at 31 December 2016 was NOK 176.2 million, corresponding to an equity ratio of 32.9 per cent. Bouvet's goal is an equity ratio of just over 30 per cent. The board accordingly regards the group's capital structure as satisfactory.
The Bouvet share will be a profitable investment for its owners through the increase in its value and the payment of dividend. As a contribution to ensuring good corporate governance, the board has resolved that the group's dividend policy will be to distribute a significant proportion of the previous year's net profit to the owners. When considering proposals for a dividend, the executive management and the board will take account of the following considerations:
Major investments will normally be funded through new financing in the form of debt, equity or a combination of these. However, the dividend payout ratio can be reduced if substantial investments are planned. Dividend can be lower than the goal if the retained profit can be profitably invested for the owners.
The board must explain the reasons for its proposed dividend payout to the general meeting.
In the board's view, mandates from the general meeting to increase the share capital should be limited to defined purposes and remain valid for up to a year. The general meeting should therefore consider board mandates to increase the share capital separately for each purpose, rather than awarding an umbrella mandate.
Bouvet held its annual general meeting on 12 May 2016. This awarded the board a mandate to increase the share capital of the company by up to NOK 1 million for financing the acquisition of other companies and businesses. In addition, the board has a mandate to increase the share capital by a maximum of NOK 200 000 in order to implement the share saving programme for group employees.
Both mandates run until 30 June 2017.
As a general rule, existing shareholders will have a preemptive right to the allocation of and subscription to significant share issues. Should the general rule be waived, the reason for doing so will be published in the stock exchange announcement issued in connection with the capital increase.
The board believes that mandates to purchase the company's own shares must remain valid for a period no longer than to the next annual general meeting.
A mandate was held by the board at 31 December 2016 to acquire up to 1 025 000 of the company's own shares to serve as full or partial settlement for the acquisition of businesses, to provide a holding of shares in hand for that purpose, and to implement the company's share saving programme for group employees. These transactions will be conducted through the stock exchange or in others ways at prevailing stock exchange prices, and such a way that the principle of the equal treatment of shareholders is observed. The mandate runs until 30 June 2017.
Bouvet has a single share class, and each share carries one vote. Shareholders will be treated equally unless qualified grounds exist for an alternative approach. Efforts will be made to conduct possible transactions by the company in its own shares through the stock exchange or in others ways at prevailing stock exchange prices.
Bouvet's routines specify that, in general, no transactions should be conducted between the group and its shareholders, directors, senior executives or their close associates. Should any of these have an interest in a transaction involving the group, the board must be informed and take up the matter for consideration if necessary. Unless the transaction is insignificant, the board will secure third-party assessments of the transaction and otherwise assure itself that no form of unfair treatment of shareholders, elected officers, employees or others is involved.
Bouvet's shares are freely negotiable, and the company's articles of association place no restrictions on transferability.
The general meeting is the company's highest authority.
Bouvet will facilitate the participation of as many shareholders as possible at the general meeting, and ensure that it functions as an effective meeting place for the shareholders and the board so that the owners can exercise their rights.
Notice of the meeting and supporting documents will be issued in good time before the meeting is to take place, and posted to the company's website no later than 21 days in advance. All shareholders with a known address in the Norwegian Central Securities Depository (VPS) will receive the documents in the post at least 21 days before the general meeting takes place. Pursuant to article 6 of the articles of association, it is sufficient that related documents are made available on the company website. A shareholder may however demand to be sent supporting documents concerning matters that are to be considered at the General Meeting. Supporting documents shall include all necessary documentation so that the shareholders can decide on all matters to be discussed. The deadline for attendance registration is five working days prior to the meeting.
Shareholders unable to attend in person will be given an opportunity to vote by proxy. The company will provide information on the procedure for appointing a proxy or appoint a person who can act as proxy for the shareholder. A proxy form will also be prepared which makes it possible for the shareholder to specify how their proxy should vote on each item to be considered and over each candidate for election.
The board, the nomination committee and the auditor will attend the annual general meeting, together with representatives of the executive management. In addition, at least one director will attend all extraordinary general meetings.
The board determines the agenda for the general meeting. The main items on the agenda comply with the requirements of the Public Limited Companies Act as well as article 6 of the company's articles of association. As recommended by the code, each general meeting appoints a person to act as its independent chair. Minutes of general meetings are published on the company and Oslo Stock Exchange websites.
Article 7 of the company's articles of association specifies that Bouvet will have a nomination committee. Instructions for the committee's work have been drawn up and adopted by the general meeting.
Pursuant to the articles of association, the committee will comprise three members elected for a two-year term.
The committee's job is to recommend candidates for election to the board and to make a recommendation on directors' fees. These recommendations should be justified, and include relevant information on the candidates and their independence. An overview of the nomination committee's members is available on the company's website.
Article 5 of the articles of association specifies that the board will consist of five to eight directors.
Bouvet's board of directors consisted at 31 December 2016 of five shareholder-elected directors, including two women and three men. The chief executive is not a director.
The shareholder-elected directors have long and varied experience from the energy, banking/ finance and public administration sectors, and have expertise in the fields of organisation, marketing, management and finance. An overview of the directors can be found on the company's website.
The composition of the board ensures that it can operate independently of special interests. All the shareholderelected directors are regarded as independent of the executive management, substantial business contacts and the company's principal shareholders.
An overview of each director's shareholding in Bouvet is provided in note 23 to the annual financial statements for 2016.
Deviation from the code: Directors can be elected by law for up to four years, but the code recommends that their term of office does not last longer than two. Bouvet's articles of association do not regulate the process of electing and replacing directors.
The board has overall responsibility for planning and execution of the group's strategy and activities, including its organisation, remuneration policy and risk management. The board also has overall responsibility for control and supervision. The duties and responsibilities of the board are dictated by applicable legislation, the parent company's articles of association, and mandates and instructions adopted by the general meeting.
These duties and responsibilities can be divided into two principal categories:
An annual plan has been approved by the board for its work. This focuses on the board's duties: to develop the group's strategy and monitor its implementation. In addition, the board will exercise supervision to ensure that the group meets its business goals and manages risk in a wise and satisfactory manner.
The board discusses all matters relating to the group's activities which are of significant importance or of a special character. A total of 10 board meetings were held in 2016.
Pursuant to the Public Limited Companies Act, the division of the board's roles and duties is enshrined in a formal mandate which includes specific rules and guidelines for the board's work and decisions.
The chair is responsible for ensuring that the work of the board is conducted in an efficient and proper manner and in compliance with applicable legislation.
In addition to the chair, the board has an independent chair to lead the discussion on issues where the chair has a conflict of interest or is unable to attend.
The board is responsible for appointing the chief executive. The board also adopts instructions, authorities and terms for the chief executive.
Periodic reports which comment on the group's financial status are received by the board. Where interim reporting is concerned, the company observes the deadlines set by the Oslo Stock Exchange.
The board has established two sub-committees, for audit and compensation respectively. Instructions have been adopted by the board for the work of these bodies.
The audit committee is elected by and from among the directors for a period of two years or until its members cease to sit on the board. The committee has three members, including one shareholder-elected director and two worker directors, who possess the expertise required to exercise their duties. At least one of its members must be independent of the business and have accounting or auditing qualifications.
A list of committee members is available on the company website.
The committee's primary function is to conduct an independent check of the company's financial reporting, auditing, internal control and overall risk management.
The committee can initiate the investigations it finds necessary for discharging its duties, which includes obtaining external advice and support. The committee will not take decisions on behalf of the board, but will present its assessments and recommendations to the board.
The committee will meet as frequently as it finds necessary, but not less than four times a year. The committee determines for itself who is to attend meetings. Apart from the committee's members, the chief financial officer and a representative of the external auditor will normally attend.
The committee will have separate meetings at least once a year with a representative of the external auditor and the chief executive respectively.
Bouvet has established a compensation committee which comprises three directors and which is independent of the company's executive management. Members of the committee are appointed by the board for a period of two years or until they cease to be directors. A list of the committee's members is available on the company website.
This sub-committee is charged with assessing the content and principles of the group's pay and bonus system, and for preparatory work ahead of a discussion of these issues by the full board in cooperation with the chief executive. The sub-committee compares remuneration in Bouvet in part with other companies, and presents proposals to the full board on possible changes.
The board evaluates its work and competence annually.
The board and executive management of Bouvet place great emphasis on establishing and maintaining routines for risk management and internal control. An annual review of the most important risks affecting the business is conducted by the board, with special attention paid to the following aspects.
Training and motivating employees is a key factor in Bouvet's business. It regards a high quality of work, openness and honesty in relations between individuals and the group as important principles. Systematic efforts are made to ensure that the workforce is professionally up-to-date and developing well. The group is committed to maintaining a good social environment. Another goal is that the working day will not last longer than is necessary for employees to have good leisure time. Bouvet conducts annual working environment (climate) surveys as part of its internal control.
In addition to the instructions enshrined in its contracts of employment, Bouvet has established in-house rules for employees and pays attention to training in and understanding of these regulations.
The Bouvet group has prepared internal guidelines for monthly, quarterly and annual financial reporting, including routines for internal control. The audit committee monitors the internal control systems, and the group's CFO attends audit committee meetings. Consolidated financial statements are presented in accordance with the applicable IAS/IFRS.
Financial results and key figures are presented to the board on a monthly basis together with the executive management's presentation of the group's position. The group does not use budgets, but prepares a business plan for the year as a whole. Deviations from the business plan, with the focus on central key figures, are reported to and considered by the board on a monthly basis. Forecasts for the development of profits and liquidity over the coming 12 months are prepared on a monthly basis and presented to the board.
All projects where the group has a delivery responsibility are reviewed and the remaining work re-estimated on a monthly basis in order to ensure correct accrual of the projects in the financial reporting.
Regular surveys are conducted to secure information on client satisfaction.
Bouvet invoices most of its projects on an on-going basis. But the group also delivers projects where a predefined result is to be supplied at a price which is fixed or contains elements
of fixed pricing. Variances may arise in such cases between the final income per hour and the calculated income per hour at start-up and during execution of the projects. A continuous assessment is made of risk associated with projects.
Bouvet conducts an annual review of both clients and suppliers to identify counterparty risk. New clients are also subject to a thorough assessment to identify any risk they may present.
The general meeting determines directors' fees on the basis of proposals from the nomination committee.
Fees are fixed and independent of the results achieved. Information on all remuneration paid to directors is presented in note 23 to the annual financial statements. No options are awarded to directors.
The board determines the chief executive's terms of employment and sets guidelines for the remuneration of other senior executives.
The main principle applied by Bouvet for determining the pay and other remuneration of the chief executive and other senior executives is that these persons will be offered competitive terms.
In addition, Bouvet will offer terms which encourage a commitment to and value creation for the group and its shareholders, and which strengthen the loyalty of senior employees to the business.
All Bouvet's incentive schemes are collective, and no programmes of this kind are reserved exclusively for the chief executive and other senior executives.
Bouvet's profit-sharing model comprises two components:
Performance-based remuneration cannot exceed 50 per cent of ordinary annual pay.
The chief executive and other senior executives have three months notice, calculated from the end of the calendar month in which they resign/are dismissed. The chief executive has a 12-month pay guarantee in addition to the agreed
period of notice, subject to the reporting of all other income in the period to Bouvet for deduction from payments by the group. The right to this pay guarantee will be lost if the chief executive is dismissed on legitimate grounds pursuant to the regulations of the Working Environment Act.
Information on all benefits paid to the executive management is provided in note 23 to the annual accounts.
Bouvet takes the view that objective, detailed and frequent information to the market is essential for a correct valuation of the Bouvet share, and accordingly pursues a continuous dialogue with analysts and investors.
Information about important events in Bouvet as well as its periodic reporting of results are published in accordance with the guidelines to which the group is subject through its listing on the Oslo Stock Exchange.
Bouvet seeks continuously to publish all relevant information to the market in a timely, efficient and non-discriminatory manner. All stock exchange announcements are made available on the company and Oslo Stock Exchange websites.
The group will provide the same information to all shareholders at the same time. To the extent that analysts or shareholders contact it for further details, Bouvet and the board will ensure that only information which has already been made public is provided.
Bouvet's website is an important tool in its communication policy. All published information will be posted to this site, which will also be used to receive proposals to the nomination committee and other communications from shareholders.
The group holds quarterly open presentations. These provide an overview of operational and financial developments in the previous quarter as well as an overview of market prospects and the outlook for the business. These presentations are given by the chief executive. Interim reports and presentation materials are made available on the group's website.
The board determines the group's financial calendar, which specifies the dates for the publication of interim reports and the annual general meeting. This calendar is published by the end of December via the Oslo Stock Exchange's information system and on the Bouvet website.
In the event of a bid for the parent company's shares, the board and the executive management will ensure that all shareholders are treated equally and have access to sufficient information to be able to reach a decision on the offer. Unless otherwise instructed by the general meeting, the board will not deploy defensive mechanisms to prevent the implementation of the bid.
The board will provide shareholders with its view of the offer and, providing they have reached a decision on this, directors are duty-bound to inform shareholders whether they personally intend to accept the bid.
Should the board find that it is unable to recommend whether the shareholders should accept the bid, it will explain the reasons why such a recommendation cannot be given. An explanation must be provided if the board's decision is not unanimous.
The board will consider whether an assessment should be obtained from an independent expert.
Bouvet is audited by Ernst & Young AS.
The group does not use the auditor as a consultant unless this has been approved in advance by the board or its chair. A plan for their work is submitted annually by the external auditor to the board, and this plan will specify planned services other than auditing.
The auditor attends the board meeting which deals with the annual accounts. During this meeting, the auditor will review the audits performed, possible changes to the company's auditing principles, assessments of significant accounting estimates, assessment of the company's internal controls and all cases where disagreement has arisen between the auditor and the executive management.
At least once a year, the auditor will conduct a review with the audit committee of the company's internal control system and possible weaknesses, with suggestions of improvement. In addition, the board and the auditor will hold at least one meeting a year without the chief executive or other executive personnel being present.
The auditor's fee will be presented to the chair of the audit committee, who evaluates it and makes a recommendation to the general meeting. Information on the auditor's fee is provided in note 23 to the annual financial statements.
Statsautoriserte revisorer Ernst & Young AS
Dronning Eufemias gate 6, NO-0191 Oslo Oslo Atrium, P.O.Box 20, NO-0051 Oslo
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 Fax: +47 24 00 29 01 www.ey.no Medlemmer av Den norske revisorforening
To the Annual Shareholders' Meeting of Bouvet ASA
We have audited the financial statements of Bouvet ASA comprising the financial statements of the parent company and the Group. The financial statements of the parent company comprise the balance sheet as at 31 December 2016, the income statement, the statements of changes in equity and cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies. The consolidated financial statements comprise the balance sheet as at 31 December 2016, the income statement, statements of comprehensive income, cash flows and changes in equity for the year then ended and notes to the financial statements, including a summary of significant accounting policies.
In our opinion,
We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Norway, and we have fulfilled our ethical responsibilities as required by law and regulations. We have also complied with our other ethical obligations in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements.
The Group's revenues from customer projects where the revenue is based on fixed price or the hourly rate varies with the time incurred of the projects, amounted to NOK 46.5 million in 2016. The estimation of earned revenue and profit is affected by the estimated time to complete each project. The recognition of revenue from customer projects is a key audit matter due to the significant degree of judgment involved in estimating the percentage of completion.
We considered the Group's accounting principles related to revenue recognition, routines for monitoring customer projects and estimates for selected projects. The audit procedures included testing total project revenue against agreements, incurred costs and hours against underlying invoices and time sheets, assessment of estimated total project costs and hours with comparable projects as well as assessment of the historical accuracy of for estimated percentage of completion.
Refer to note 4 has information on estimation uncertainty and note 5 on income.
Konsernet hadde i 2016 inntekter på 46,5 MNOK fra kundeprosjekter hvor inntekt fra det enkelte prosjektet er basert på fastpris eller hvor timeprisen varierer med tidsforbruket på prosjektet. Estimering av opptjent inntekt og fortjeneste er påvirket av estimert tidsforbruk for å fullføre det enkelte prosjektet. Inntektsføring av kundeprosjekter er et sentralt forhold ved revisjonen som følge av at det er stor grad av skjønn knyttet til estimering av fullføringsgrad.
Vi vurderte konsernets regnskapsprinsipper knyttet til inntektsføring, rutiner for oppfølging av kundeprosjekter samt estimater på utvalgte prosjekter. Revisjonshandlingene omfattet kontroll av totale prosjektinntekter mot inngåtte avtaler, kontroll av påløpte kostnader og timer mot underliggende fakturaer og timelister, vurdering av estimerte totale prosjektkostnader og timer mot sammenlignbare prosjekter, samt vurdering av historisk treffsikkerhet for estimert fullføringsgrad,
The Group is primarily delivering its services based on time and material used. The Group has some income from fixed price or target price projects where the Group shall deliver a predefined result at a price that is either fixed or has elements causing income per hour not to be known before the projects are finalised. For these projects the income is recorded in correlation with the degree of completion. Progress is measured as incurred hours in relation to totally estimated hours. For the accounting year 2016, NOK 46.51 million or 3.5 percent of the Group's income was generated by projects with such an element of uncertainty and the income is recorded based on the degree of completion. (Ref. note 12.) For the accounting year 2015 corresponding figures was NOK 39.16 million or 3.2 percent.
Other information consists of the information included in the Company's annual report other than the financial statements and our auditor's report thereon. The Board of Directors and Chief Executive Officer (management) are responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Independent auditor's report - Bouvet ASA
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway for the financial statements of the parent company and International Financial Reporting Standards as adopted by the EU for the financial statements of the Group, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with law, regulations and generally accepted auditing principles in Norway, including ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other
Independent auditor's report - Bouvet ASA
matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors' report and in the statements on corporate governance and corporate social responsibility concerning the financial statements, the going concern assumption and proposal for the allocation of the result is consistent with the financial statements and complies with the law and regulations.
Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, «Assurance Engagements Other than Audits or Reviews of Historical Financial Information», it is our opinion that management has fulfilled its duty to ensure that the Company's accounting information is properly recorded and documented as required by law and bookkeeping standards and practices accepted in Norway.
Oslo, 6 April 2017 ERNST & YOUNG AS
Petter Larsen State Authorised Public Accountant (Norway)
(This translation from Norwegian has been made for information purposes only.)
Independent auditor's report - Bouvet ASA
| NOK 1 000 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|
| INCOME STATEMENT | |||||
| Operating revenue | 1 330 811 | 1 232 486 | 1 132 598 | 1 112 774 | 1 030 349 |
| EBITDA | 120 887 | 112 891 | 92 501 | 105 800 | 88 327 |
| Operating profit (EBIT) | 106 298 | 99 354 | 79 162 | 95 093 | 78 236 |
| Ordinary profit before tax | 106 049 | 101 770 | 81 577 | 97 138 | 80 179 |
| Profit for the year | 79 885 | 74 738 | 56 981 | 69 841 | 56 557 |
| EBITDA-margin | 9.1 % | 9.2 % | 8.2 % | 9.5 % | 8.6 % |
| EBIT-margin | 8.0 % | 8.1 % | 7.0 % | 8.5 % | 7.6 % |
| BALANCE SHEET | |||||
| Non-current assets | 90 346 | 71 492 | 70 712 | 47 630 | 46 639 |
| Current assets | 445 570 | 414 722 | 376 349 | 397 807 | 363 656 |
| Total assets | 535 916 | 486 214 | 447 061 | 445 437 | 410 295 |
| Equity | 176 158 | 174 618 | 153 532 | 159 829 | 142 341 |
| Long-term debt | 1 578 | 285 | 669 | 0 | 1 723 |
| Short-term debt | 358 180 | 311 311 | 292 860 | 285 608 | 266 231 |
| Equity ratio | 32.9 % | 35.9 % | 34.3 % | 35.9 % | 34.7 % |
| Liquidity ratio | 1.24 | 1.33 | 1.29 | 1.39 | 1.37 |
| CASH FLOW | |||||
| Net cash flow operations | 113 465 | 127 874 | 48 762 | 99 381 | 97 384 |
| Net free cash flow | 75 638 | 115 032 | 18 921 | 88 267 | 80 165 |
| Net cash flow | -8 416 | 55 732 | -49 111 | 31 377 | 23 490 |
| Cash flow margin | 8.5 % | 10.4 % | 4.3 % | 8.9 % | 9.5 % |
| SHARE INFORMATION | |||||
| Number of shares | 10 250 000 | 10 250 000 | 10 250 000 | 10 250 000 | 10 250 000 |
| Weighted average basic shares outstanding | 10 171 365 | 10 208 354 | 10 220 261 | 10 174 317 | 10 249 900 |
| Weighted average diluted shares outstanding | 10 304 044 | 10 340 661 | 10 346 049 | 10 292 902 | 10 369 686 |
| EBIT per share | 10.32 | 9.59 | 7.59 | 9.20 | 7.49 |
| Diluted EBIT per share | 10.19 | 9.47 | 7.49 | 9.09 | 7.41 |
| Earnings per share | 7.76 | 7.21 | 5.45 | 6.75 | 5.41 |
| Diluted earnings per share | 7.66 | 7.12 | 5.39 | 6.67 | 5.35 |
| Equity per share | 17.19 | 17.04 | 14.98 | 15.59 | 13.89 |
| Dividend per share | 6.50 | 5.00 | 6.00 | 5.00 | 5.00 |
| EMPLOYEES | |||||
| Number of employees (year end) | 1 090 | 1 036 | 1 008 | 931 | 881 |
| Average number of employees | 1 050 | 1 016 | 958 | 908 | 848 |
| Operating revenue per employee | 1 267 | 1 213 | 1 182 | 1 226 | 1 215 |
| Operating cost per employee | 1 166 | 1 115 | 1 100 | 1 121 | 1 123 |
| EBIT per employee | 101 | 98 | 83 | 105 | 92 |
| Cash flow margin | Net cash flow operations / Operating revenue |
|---|---|
| Diluted earnings per share | Profit after tax / weighted average diluted shares outstanding |
| Diluted EBIT per share | EBIT / weighted average diluted shares outstanding |
| Dividend per share | Paid dividend per share througout the year |
| Earnings per share | Profit after tax / weighted average basic shares outstanding |
| EBIT | Operating profit |
| EBIT per employee | EBIT / average number of employees |
| EBIT per share | EBIT / weighted average basic shares outstanding |
| EBITDA | Operating profit + depreciation fixed assets and intangible assets |
| EBITDA-margin | EBITDA / operating revenue |
| EBIT-margin | EBIT / operating revenue |
| Equity per share | Equity / number of shares |
| Equity ratio | Equity / total assets |
| Liquidity ratio | Current assets / Short-term debt |
| Net free cash flow | Net cash flow operations + Net cash flow investments |
| Number of shares | Number of issued shares at the end of the year |
| Operating cost per employee | Operating cost / average number of employees |
| Operating revenue per employee | Operating revenue / average number of employees |
| Weighted average basic shares outstanding | Issued shares adjusted for own shares on average for the year |
| Weighted average diluted shares outstanding | Issued shares adjusted for own shares and share scheme on average for the year |
The Group has offices in Oslo, Trondheim, Bergen, Haugesund, Stavanger, Kristiansand, Arendal, Skien, Sandvika, Sandefjord, Malmö, Örebro and Stockholm. Our philosophy is that competence should be utilized across the company, while projects are attached locally. This means that our customers will have a local account manager and project manager, but access to competence independent of its location.
Sørkedalsveien 8 0369 Oslo Postboks 5327 Majorstuen, 0304 Oslo
Frolandsveien 6 4847 Arendal Tel: (+47) 23 40 60 00
Solheimsgaten 15 5058 Bergen Tel: (+47) 55 20 09 17
Uniongata 18 Klosterøya 3732 Skien Tel: (+47) 23 40 60 00 KRISTIANSAND Kjøita 25 4630 Kristiansand Tel: (+47) 23 40 60 00
4033 Stavanger Tel: (+47) 51 20 00 20
Strandkaien 36 4005 Stavanger Tel: (+47) 52 82 10 17
TRONDHEIM Kjøpmannsgata 35 7011 Trondheim Tel: (+47) 23 40 60 00
SANDEFJORD Klinestadmoen 9 3241 Sandefjord Tel: (+47) 23 40 60 00 STOCKHOLM Drottninggatan 25 111 51 Stockholm Tel: (+46) 8 578 771 00
Södergatan 3 211 34 Malmö Tel: (+46) 40 636 60 00
Storgatan 3 70361 Örebro Tel: (+46) 0 709 431 411
Bouvet South 55
* Number of employees per region.
and staff 20
WWW.BOUVET.NET
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