Annual Report • Mar 17, 2016
Annual Report
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The Wilhelmsen group is the largest maritime network in the world. We make the maritime industry spin. Our 48 000 hands ensure it happens, every day, all year.
WILH. WILHELMSEN HOLDING ASA
Although many still think of Wilhelmsen as a shipping company, more than 50% of our underlying operating profit came from maritime services and our logistics offering in 2015. Wilhelmsen is much more than a shipping company.
In 2015, a continued slowdown in world economy and trade contributed to a 10% decline in our top line. Our response to the markets has been focus on cost cutting and efficiency initiatives, which lifted our underlying operating profit by 21%.
Although 2015 was characterised by headwind and challenges, our activity level was high. We handled more than 75 000 port calls, 220 000 product deliveries and transported 74 million cubic metres of cargo.
Buzz words like disruptive technology and innovation are more popular than ever. Like them or not, we understand that a company fostering innovationwill shape the industry and staying ahead. We therefore continuously ask ourselves questions starting with "what if …".
Are unmanned vessels the future? Or unmanned terminals? Will customers require self-service and less traditional customer centres? Will 3D printing
reduce the need for ocean transportation? What if vessels only run on renewable energy?
We might not have the answers to these and other questions, but we think about how these and other changes might challenge our current business models and equally important create new opportunities for us.
Core elements in our long-term strategy are firm. We will achieve the right results, the right way. High ethical standards are not something we turn on and off at will, they are permanent and just how we do business.
Our commitment when investing in new business and developing our existing portfolio is long-term and industrial. We have delivered underlying positive results and earnings for more than 20 years. Despite challenging market, our average return on capital employed has been 9% the past five years.
In addition, our diversified portfolio make us less vulnerable than many in our industry. We will continue to develop our portfolio to ensure we have a solid platform for profitable growth in the years to come.
We have 48 000 hands on deck. We would be nothing without our
"What if? We are preparing for future change, tomorrow's challenges and opportunities"
dedicated employees. Their knowledge of the industry, how our products and services can improve and make our customers' operations more efficient combined with sound knowledge of regulatory requirements, give us a unique position to deliver high quality services.
A bet on Wilhelmsen is a bet on the development of the world economy, commodity prices and world trade. There are clouds on the horizon for 2016. The markets in which we operate continue to be challenging. However, there is currently nothing indicating that world trade and the need for seaborne transportation will be less in the near future.
Our last acquisition before the turn of the year, of the rope provider Timm, reinforced our position as a global player within marine products. We started 2016 by investing more in logistics in both South Africa and the US. In February, we announced a restructuring leading to the listing of a new entity hopefully by the end of the second quarter.
I believe we will see major restructuring and consolidation within the maritime industry in the years to come given the challenges our industry have been faced with the past years. We are positioned to grow organically and through mergers and acquisitions. We are looking for new opportunities. We have a strong balance sheet. Our liquid funds combined with listed entities give us the financial flexibility to act on opportunities. It all boils down to finding the perfect match, building on our core competencies and global network, to continue to create long-term value.
010 — Key figures consolidated accounts
032 — Wilh. Wilhelmsen Holding ASA group
104 — Corporate governance report
118 — Sustainability reporting by group CEO
Despite a staggering presence in 125 countries around the world, with over 125 nationalities employed, our company embraces one culture. We revolve everything around our Code of Conduct and five core values: empowerment, teaming and collaboration, stewardship, learning and innovation, and customer centred.
Quick port calls require speed and efficiency from a partner in port. Since we handle over 75 000 port calls per year, we know how to be a good partner in port. Be it out on anchorage, or in to port, our customers want it to be smooth so the vessel can quickly get back out to sea.
| 2015 | 2014 | 2013 | 2012 | 2011 | ||
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Total income * | USD mill | 3 321 | 3 693 | 3 533 | 3 896 | 3 450 |
| Operating profit before amortisation and impairment (EBITDA)* | USD mill | 398 | 566 | 542 | 777 | 581 |
| Operating profit * | USD mill | 165 | 381 | 363 | 601 | 407 |
| Profit before tax * | USD mill | 48 | 273 | 374 | 496 | 247 |
| Net profit * | USD mill | 56 | 292 | 340 | 446 | 232 |
| Net profit after minorities * | USD mill | 54 | 241 | 260 | 329 | 188 |
| Balance sheet | ||||||
| Non current assets | USD mill | 3 566 | 3 687 | 3 728 | 3 699 | 3 286 |
| Current assets | USD mill | 1 120 | 1 152 | 1 218 | 1 282 | 1 132 |
| Equity | USD mill | 2 206 | 2 329 | 2 286 | 2 077 | 1 673 |
| Interest-bearing debt | USD mill | 1 660 | 1 693 | 1 851 | 2 008 | 1 901 |
| Total assets | USD mill | 4 686 | 4 839 | 4 946 | 4 981 | 4 418 |
| Key financial figures | ||||||
| Cash flow from operation (1) | USD mill | 258 | 241 | 243 | 310 | 214 |
| Liquid funds at 31 December (2) | USD mill | 638 | 688 | 734 | 790 | 717 |
| Liquidy ratio (3) | 1.7 | 2.1 | 1.7 | 2.1 | 1.5 | |
| Equity ratio (4) | % | 47% | 48% | 46% | 42% | 38% |
| Yield | ||||||
| Return on capital employed (5) | % | 3% | 8% | 11% | 15% | 10% |
| Return on equity (6) | % | 2% | 13% | 16% | 24% | 14% |
| Key figures per share | ||||||
| Earnings per share (7) | USD | 1.16 | 5.20 | 5.59 | 7.06 | 4.05 |
| Operating profit before amortisation and impairment (EBITDA) per share (8)* | USD | 8.55 | 12.18 | 11.66 | 16.72 | 12.49 |
| Average number of shares outstanding | Thousand | 46 404 | 46 404 | 46 404 | 46 404 | 46 454 |
| Dividend per share | NOK | 5.00 | 5.00 | 5.50 | 8.00 | 5.50 |
(1) Net cash flow from operating activities
(2) Cash, bank deposits and short term financial investments
(3) Current assets divided by current liabilities
(4) Equity in percent of total assets
(5) Profit for the period before tax plus interest expenses and realised interest derivatives, in per cent of average equity and interest-bearing debt
(6) Profit after tax divided by average equity
(7) Profit for the period after minority interests, divided by average number of shares
Earnings per share taking into consideration the number of shares reduced for own shares
(8) Operating profit for the period adjusted for depreciation and impairments of assets, divided by average number of shares outstanding
* Figures according to the proportionate method for joint ventures, which reflect the group's underlying operations in more detail than the financial statements based on equity method.
Reported operating profit impacted by material non-recurring items
Improved operating profit adjusted for non-recurring items
Book equity ratio of 47%
Negative development in WWH share price
Paid dividend of NOK 5.00 per share
The Wilh. Wilhelmsen Holding group (WWH or group) is a global provider of maritime related services, transportation and logistics solutions. The group activities are carried out through fully and partly owned entities, most of which are among the market leaders within their segments.
WWH is exposed to development in the world economy and to merchandised trade in particular. While global growth remained positive, the transformation taking place in China, fall in commodity prices and high debt in many countries had an impact on the group's activity level in 2015.
While the reported operating profit of WWH was down in 2015 due to material non-recurring items, the board is pleased to note that the underlying operating profit improved. The improvement shows the group's ability to manage its cost base and adjust to a continuously changing business environment.
Wilh. Wilhelmsen ASA (WWASA) shipping volumes were down for the year, driven by reduced high and heavy cargo. In spite of this, the underlying operating profit improved supported by reduced bunker and other cost. The anti-trust investigations continues, and in 2015 WWASA decided to make a USD 200 million provision to cover its share of future charges within its joint ventures.
Wilhelmsen Maritime Services (WMS) continued to deliver sound operating profit, supported by a strong USD. The market environment, however, remained challenging. Following a review of the business portfolio, a goodwill impairment charge
of USD 50 million was made in 2015 related to a previous acquisition within the technical solution business area.
Return from financial investments was down compared with the previous year, but remained positive. Currency effect however reduced the net value of most financial assets when converting into USD. NorSea Group delivered slightly improved results for the year in spite of a general reduction in the offshore activities.
The group equity and capital base remained strong. At the end of 2015 the group equity ratio was 47% and the group had liquid assets of USD 638 million, increasing to USD 760 million if including available-for-sale financial assets. The debt repayment profile of the group is of a long-term nature.
The WWH share price was down for the year, underperforming the general equity market for the second year in a row. In 2015, total return (including dividends reinvested on ex-dates) was negative with 19.1% for the WWI share and negative with 18.6% for the WWIB share. This compared with a 19.3% increase in the Oslo Stock Exchange Industrial index (source Oslo Stock Exchange Annual statistics).
A dividend of NOK 3.00 per share was paid during the second quarter of 2015, followed by a second dividend of NOK 2.00 in the fourth quarter. This represented a dividend yield of 3.0 per cent based on the average WWI/WWIB share price by the end of 2014.
The board believes sound corporate governance is the foundation for profitable growth and a healthy company culture. Good governance contributes towards reduced risk and value creation over time for shareholders and other stakeholders. By the end of 2015, 95% of land based employees and 80% of active seafarers had conducted the "I comply" campaign. The zero tolerance policy in relation to facilitation payments will receive further attention in 2016.
Investment in a more fuel efficient fleet and energy management tools continued in 2015, resulting in further reduction in CO2 and NOx emission.
WWH's vision is to take an active role in shaping the maritime industry.
In the Wilh. Wilhelmsen Holding's financial report the equity method is applied for consolidation of joint ventures. This method provides a fair presentation of the group's financial position.
The WWH group's financial accounts for 2015 prepared according to the equity method showed a total income of USD 1 281 million, compared with USD 1 538 million in 2014. This corresponds to a reduction of 17%. Income was negatively impacted by a slowdown in world economy and trade, lower commodity prices and a stronger USD.
WWASA's total income was down 39% for the year, mainly due to the USD 200 million accrual related to ongoing anti-trust investigations in certain WWASA joint ventures. While the accrual was made by WWASA, it is reported as a reduction in share of profit/(loss) in joint ventures. Less bunker compensation in shipping and reduced net result in Hyundai Glovis also had an impact on total income.
WMS experienced an 8% reduction in total income compared with the previous year. The strong USD continued to have a negative impact on income, but had a positive contribution on margins. The reduced activity level in the offshore industry also had a negative impact.
The WWH group operating profit was USD 122 million in 2015 compared with USD 339 million in the previous year, a reduction of 64%. The operating profit for the year was impacted by in a USD 200 million accrual related to ongoing anti-trust investigations, a USD 50 million impairment charge related to a WMS acquisition as well as a USD 26 million sales gain related to WWASA investment in Hyundai Glovis. When adjusting for these main non-recurring items as well as pension gains which impacted both 2014 and to less degree 2015 results, the operating profit was up 24%.
Net financials was an expense of USD 86 million in the year compared with an expense of USD 85 million in the previous year. Contribution from investment management was a gain of USD 5 million compared with a gain of USD 17 million in 2014. Interest expenses for the year was USD 47 million, while interest rate derivatives was a net expense of USD 8 million. Net income/expense on interest rate derivatives mainly reflected net value impact from changes in long term interest rates. Net financial currency was a loss of USD 25 million. The currency loss mainly reflects unrealised losses from hedging of non-USD operating expenses and bond debt.
Tax was included with an income of USD 19 million, reflecting deferred tax income related to currency translation losses.
Minority interests' share of profit was USD 1 million, of which a loss of USD 1 million related to minority shareholders in WWASA.
Net profit after tax and minority interests was USD 54 million in 2015 compared with USD 241 million in 2014, a reduction of 78%.
Other comprehensive income for the year was a loss of USD 134 million compared with a loss of USD 187 million in the previous year, mainly reflecting currency translation differences on non-USD assets and liabilities when converting into USD.
Total comprehensive income, including profit for the year 2015 was a loss of USD 80 million compared with a profit of USD 103 million in 2014. Of this net loss USD 77 million was attributable to owners of the parent compared with a profit of USD 62 million in the previous year.
The WWH group had a net decrease in cash and cash equivalents of USD 53 million for the year, compared with a decrease of USD 21 million in in the previous year. Cash flow from operating activities was USD 258 million, up from USD 241 million in 2014. This increase was due to higher operating cash flow in own operation compensating for reduced upstream from joint ventures and associates. Cash flow from investing activities was negative with USD 187 million, compared with negative USD 66 million in 2014. Main items were USD 212 million related to investments in vessel newbuildings and other fixed assets and USD 39 million in net proceeds from sale of shares in Hyundai Glovis. Cash flow from financing activities was negative with USD 123 million, including dividend to shareholders and ordinary interest payments for group companies. The corresponding figure for 2014 was negative with USD 197 million.
Cash and cash equivalents amounted to USD 311 million by end of the year, down from USD 364 million one year earlier.
The WWH group carries out active financial asset management of part of the group's liquidity, with investments in various asset classes including Nordic shares and investment grade bonds. The value of the group's investment portfolio amounted to USD 327 million at the end of the year, up from USD 324 million one year earlier. Of this, USD 85 million were in the parent company compared with USD 89 million by end of 2014.
Cash and cash equivalents and current financial investments totalled USD 638 million by the end of 2015, compared with USD 688 million one year earlier.
Available-for-sale financial assets totalled USD 122 million by the end of the year, down from USD 131 million one year earlier. The largest investment was in Qube Holdings Logistics.
The main group companies also have undrawn committed drawing rights to cover any short term cash flow needs, including where relevant back stop for outstanding certificates and bonds with a remaining term of less than 12 months to maturity.
The group funds its investments and operations from several capital sources, including the commercial bank loan market, financial leases, export financing and the Norwegian bond market. Business activities are primarily financed over the balance sheet of the relevant subsidiary or joint venture.
As of 31 December 2015, the group's total interest-bearing debt was USD 1 660 million, compared with USD 1 693 million by end 2014. Of this, USD 1 319 million related to the WWASA group, USD 307 million related to the WMS group and USD 34 million related to Holding and Investments.
Pursuant to section 4, sub-section 5, confer section 3, subsection 3a of the Norwegian Accounting Act, it is confirmed that the annual accounts have been prepared under the assumption that the enterprise is a going concern and that the conditions are present.
The group's internal financial segment reporting is based on the proportionate method. The major contributors in the WWASA group segment are joint ventures and hence the proportionate method gives management a higher level of information and a fuller picture of the group's operations. For the WMS group segment and Holding and Investments segment the financial reporting will be the same for both the equity and the proportionate methods.
The same accounting principles are applied in both
the management reports and the financial accounts, and comply with the International Financial Reporting Standards (IFRS).
The WWH group's accounts for 2015 prepared according to the proportionate method for joint ventures showed a total income of USD 3 321 million. This was a reduction of 10% when compared with the previous when total income was income USD 3 693 million.
Operating profit was USD 165 million for the year compared with USD 381 million in 2014. Excluding these main non-recurring items as well as the pension gain which impacted both 2014 and 2015 results, the operating profit was up 21% for the year.
Net profit after tax and minority interests was USD 54 million in 2015 compared with USD 241 million in the previous year.
The Wilh. Wilhelmsen ASA group (WWASA or group) is a global provider of shipping and logistics services towards car and ro-ro customers. WWH owns 72.7% of WWASA. In line with accounting standards, all revenue and expenses in WWASA are reported in full with minority interest included after net profit/(loss)
In 2015, WWASA delivered a total income of USD 2 308 million compared with USD 2 592 million in the previous year, a reduction of 11%. Operating profit was USD 103 million for the year, compared with USD 253 million in 2014.
WWASA recorded several non-recurring items during the year, including a provision related to the ongoing antitrust investigation, gain on the share reduction in Hyundai Glovis, and impairment of vessels sold for recycling.
Net profit after tax and minority interest came to a loss of USD 3 million for the year, compared with a profit of USD 121 million in the previous year.
Global light vehicle car sales increased 2% in 2015 and totalled 89 million units sold. In key markets (North America, Europe, Oceania and the BRIC countries), sales were up 2% to 69 million units. A stronger USD and US
economy continued to contribute to healthy sales in North America. Sales in Western Europe continued the positive trend and were up a strong 9% from last year. Chinese car sales continued to grow albeit at a lower level than previously seen and sales in Brazil and Russia continued to decline from the weak levels seen last year.
Japanese export increased by 2% from 2014 and totalled approximately 4.0 million cars in 2015. Korean vehicle export continued the slightly negative trend from the previous year and ended 2015 at 2.8 million units, down 4% from the year before. Chinese vehicle export declined and was down 20% to 728 000 units in 2015 from 910 000 units in 2014. Exports were hurt by lower demand in Eastern Europe and Africa.
Estimated global construction spending grew by 2.6% in 2015. North America saw the strongest growth, while construction spending in Europe improved less than expected, while the Asia-Pacific region overall recorded 3.3% The Chinese market continued to be under pressure due to slower economic growth and a challenging housing market.
Given the general negative development in commodity prices from mid-2012, most mining companies continued to cut capital expenditure and refrained from initiating new investment projects also in 2015.
The business sentiment for agricultural equipment saw a weak demand cycle in most parts of the world, with only a few areas seeing a positive development.
WWASA's shipping segment includes shipping activities within Wallenius Wilhelmsen Logistics (WWL, owned 50%), EUKOR Car Carriers (EUKOR, owned 40%), American Roll-on-Roll-off Carrier (ARC, owned 50%) and Hyundai Glovis (owned 12.0%), as well as certain shipowning activities outside the operating companies.
In 2015, WWASA's shipping segment delivered a total income of USD 1 800 million compared with USD 2 051 million in the previous year.
The fleet transported 74 million cubic metres (CMB) of cargo, a decrease of 4.5% compared with the 77.5 million cubic metres transported in 2014. Both auto volumes and high and heavy cargo volumes declined. In addition, a
WWASA's shipping activities are organised in three operating companies:
Wallenius Wilhelmsen Logistics (WWL – owned 50%)
EUKOR Car Carriers (EUKOR – owned 40%)
American Roll-on Roll-off Carrier (ARC – owned 50%)
The logistics activities in WWASA are mainly carried out through:
Wallenius Wilhelmsen Logistics (WWL – owned 50%)
Hyunday Glovis (owned 12%)
continued unfavourable cargo and trade mix combined with lower bunker compensations and a general rate pressure had a further negative effect on profitability and fleet utilisation.
While ARC saw a positive development in volumes transported in 2015, both WWL and EUKOR saw declines. For WWL, auto volumes were stable, while the company recorded a substantial decline in high and heavy cargo negatively impacting the cargo mix. EUKOR saw a decline in volumes transported in their European trade, while volumes to Americas improved.
By the end of 2015, WWASA group companies controlled a total of 137 vessels with a total capacity of 886 000 car equivalent units (CEUs), down from 147 vessels and 935 000 CEUs one year earlier. The group's total fleet represented a 22% share of the global car carrying market, down from 24% in 2014. Twenty-nine of the vessels were owned or controlled by WWASA. WWL operated a total fleet of 52 vessels at the end of 2015, with a total capacity of 359 000 CEUs. EUKOR operated a total of 80 vessels with a total capacity of 499 000 CEUs, in addition to a large number of spot charter vessels. ARC operated a total of five vessels by the end of 2015, with a total capacity of 29 000 CEUs.
WWASA group companies took delivery of two new vessels in 2015. Both vessels, the pure car and truck carriers Thermopylae and Thalatta were for WWASA's account and commenced service for WWL.Two vessels were ordered for EUKOR's account during 2015.
The group companies' newbuilding programme totalled eight Post-Panamax vessels by the turn of the year, equalling 11% of the world car carrier orderbook measured in CEUs. The vessels will be delivered in 2016-2017. Two of the vessels are for WWASA's account and will be delivered in the first half of 2016.
The authorities in Japan (2013), South Africa (2015) and China (2015) have finalised their investigations of the car carrying industry and fined WWL for non-competitive behaviour. EUKOR has been fined in China (2015).
The companies continue to be part of anti-trust investigations in several jurisdictions, of which the EU and US are among the bigger jurisdictions. As some of the processes are confidential, WWASA is not in a position to comment on the ongoing investigations within the respective jurisdictions. The processes are expected to continue to take time, but further clarifications within some jurisdictions are expected during 2016 and 2017.
In the third quarter 2015, WWASA made a provision of USD 200 million representing the estimated WW share of exposure in WWL and EUKOR. At year-end the remaining amount of the provision was USD 179 million after fines in China amounted to USD 21 million.
WWASA's logistics segment includes logistics activities within Wallenius Wilhelmsen Logistics (WWL, owned 50%) and Hyundai Glovis (owned 12.0%).
In 2015, WWASA's logistics segment delivered a total income of USD 537 million compared with USD 560 million in the previous year.
Increased activity level for WWL lifted total income compared with 2014, while the operating profit came in on par with the previous year. WWL handled a total of 5 million units at its terminals, while 6.3 million units were handled at the company's some 40 technical services facilities. The corresponding figures for the previous year was 2 million units and 6 million units respectively. Inland distribution services grew by almost 8% and totalled 2.8 million units in 2015, up from 2.6 million units in 2014.
The share of profit from Hyundai Glovis in WWASA's accounts for the 2015 was USD 36 million, down from USD 66 million in 2014. Of this, USD 5 million was reported under shipping and USD 31 million under logistics. In addition, WWASA had a gain on sale of shares in Hyundai Glovis of USD 26 million in 2015.
The Hyundai Glovis share price was down during the year, and the market value of WWASA's shares in Hyundai Glovis was valued at USD 741 million as of 31 December 2015.
The WWASA share price was down in 2015, reducing the market value of WWH's shares in WWASA to NOK 5 648 million as of 31 December 2015. The market value of WWH's shareholding in WWASA represented NOK 122 per outstanding share in WWH (WWI/WWIB) by the end of the year, down from NOK 159 per share one year earlier. WWASA paid a total dividend of NOK 1.50 per share during 2015, with WWH receiving NOK 240 million.
Acquiring strategically important logistics infrastructure is a key goal for WWASA in order to further strengthen its position in the car and high and heavy market and increase the logistics footprint.
Following up on the ambition, WWL entered into an agreement with Two Continents Logistics to acquire full ownership of WWL Vehicle Services Americas (VSA), currently a joint venture (50/50) between the two companies based in USA in February 2016. The company employs 3 400 employees and handles some 4.7 million units annually. With full ownership, WWL strengthens its position as a leading provider of vehicle processing for automotive manufacturers in North America.
Simultaneous, WWL entered into an agreement with partner company Groupe CAT to acquire its 50% shares in CAT-WWL, a joint venture network of ten vehicleprocessing facilities based in South Africa. With full ownership in CAT-WWL, WWL becomes one of the top independent providers of vehicle processing services to support automotive manufacturers in South Africa. The business employs more than 900 workers and handles some 680 000 units.
WWL also sold Vehicle Services Europe (VSE) to Groupe CAT. The company employs some 400 employees with truck based inland distribution in Europe and three vehicle processing centres in Germany.
The new investments are expected to contribute with approximately net USD 10 million in 2016 to WWASA's operating profit.
In February 2016, the board of WWASA proposed to carry out a restructuring of the company. In the new suggested structure, Den Norske Amerikalinje AS (owning the 12% shareholding in Hyundai Glovis) will be demerged from WWASA and carried forward in a separately listed entity to be named Treasure ASA. The proposed demerger will improve transparency and create a simpler structure visualising values for shareholders in WWASA. In addition,
WWASA will be more correct capitalised following the restructuring.
The restructuring enables WWASA to focus on its core activities, creating value through its joint ventures by offering global car and ro-ro customers' high quality sea transportation and integrated logistics/land-based solutions from factory to dealer.
Shareholders will receive the same amount of shares they hold in WWASA in Treasure ASA and hence keep their prorate share.
Treasure ASA will be jointly and severally responsible for the obligations incurred by WWASA parent company prior to the demerger becoming effective.
The proposed changes are subject to approval at an extraordinary general meeting in WWASA to be held 20 April 2016.
The Wilhelmsen Maritime Services group (WMS) is a global provider of ships service, ship management and technical solutions towards the maritime industry. WMS is a whollyowned subsidiary of WWH.
Total income for WMS was USD 1 010 million in 2015, down 8% compared with the previous year. The reduction was mainly due to currency impact of non-USD revenue when converting into USD and reduced income from certain technical solutions business activities.
Operating profit for the year was USD 65 million compared with USD 122 million in 2014. The operating profit for 2015 included a USD 50 million impairment charge related to the technical solutions business area and a USD 4 million pension gain in ships services, while the operating profit for 2014 including a sales gain and a pension gain. When adjusting for the mentioned non-recurring items, operating profit was up 34% from the previous year. The adjusted operating margin was 11.0%, well above the historic average. While the maritime service market in general remained challenging, the strong operating margin reflected a strong USD to a large degree. WMS had approximately 60% of its total income in USD and approximately 25% of the expenses were in USD.
Financial items for WMS amounted to an income of USD 3 million compared with an income of USD 7 million in the previous year. The results were positively impacted by a USD 11 million net currency gain, while a USD 80 million currency
WMS was in 2015 organised in four business areas:
Wilhelmsen Ships Service (WSS)
Wilhelmsen Ship Management (WSM)
Technical Solutions, including:
Corporate/other activities, including:
• Wilhelmsen Insurance Services
translation loss was charged directly to comprehensive income. The corresponding figures for 2014 was a gain of USD 19 million and a loss of USD 111 million respectively. The currency losses charged against comprehensive income reflected currency revaluation of net assets and change of functional currency for WMS AS.
Net profit after tax and minority for 2015 was USD 50 million compared with USD 100 million in the previous year.
The global merchant fleet increased with approximately 2.0% in 2015, measured in number of vessels > 1000gt. The dry bulk market continued to deteriorate on the back of flat volume development and a steady growth in global feet. The tanker market on the other hand saw a second year in a row with positive development, supported by increased volumes, longer sailing distances and use of vessels for storage. The global container market continued to grow, but with fleet growth even larger most freight market indexes were significantly down in 2015. Other shipping markets were mixed. LPG was volatile at a fairly high level, the chemical market was relatively stable while strong increase in new tonnage was driving down LNG rates.
The continued fall in oil prices and oil majors aggressively cutting cost took its toll on the offshore industry in 2015. Rates fell throughout the sector and an increasing number of offshore vessels and rigs were idle or went into layup towards the end of the year.
While orders for tanker and container vessels increased in 2015, the overall picture for the newbuild market was bleak. The total number of newbuild contracts was down by 40% when compared with the previous year. The offshore and bulk carrier segments were most affected, dropping by close to 70%.
WMS' total income is distributed with approximately 70-75% towards the operating fleet and 20-25% towards yards. Development in shipping markets impact owners' purchasing capabilities and as such demand for certain WMS products and services. WMS is also impacted by newbuilding activities, including LNG/LPG.
Wilhelmsen Ships Service (WSS) is a global provider of standardised product brands and service solutions to
the maritime industry, focussing on marine products, marine chemicals, safety products and services, maritime logistics and ships agency. WSS is a wholly owned subsidiary of WMS.
WSS recorded a 6% reduction in total income for 2015, impacted by currency effect from converting local revenue into USD. Income from ships agency and to a less degree marine products was down, while income from safety products and services was stable. On a regional basis, delivery income down less in Asia Pacific than in other markets. When measured against the total global merchant fleet, WSS generated income of USD 34 per vessel/day in 2015, a decrease compared with the previous year.
The operating profit saw a significant improvement from previous year, supported by a strong USD.
In October, WSS acquired Timm AS, a leading provider of high performance ropes worldwide.
Wilhelmsen Ship Management (WSM) provides full technical management, crewing and related services for all major vessel types with exception of oil tankers. WSM is a wholly owned subsidiary of WMS.
Total income for WSM was down 6% for the year, influenced by the strong USD. Total activity level remained stable, with new ships on management broadly matched by a similar outflow, mainly due to sale or recycling of vessels. By the end of the year, WSM served 402 ships worldwide, out of which approximately 40% were on full technical management and 6% were on layup management. The remaining contracts were related to manning services.
Operating profit improved, supported by the strong USD.
The technical solutions business area includes entities providing fully engineered solutions, equipment and services towards the maritime and offshore industries, focusing on safety systems, electrical energy management, HVAC-R and insulation for newbuilds and retrofits. These entities operate in the market as Wilhelmsen Technical Solutions and Callenberg Technology Group.
Total income for the technical solutions business area was down 13% compared with the previous year, partly due to
currency and a challenging offshore market . Income was down for all business streams except for insulation, which recorded revenue on par with 2014.
New order intake was below level from previous year, which was positively impacted by newbuilding orders related to LNG insulation and safety systems. The total order reserve was USD 334 million at the end of the year compared with USD 394 million one year earlier.
The operating profit for 2015 followed development in total income, ending some below level from the previous year.
A process has been ongoing related to a restructuring of the technical solutions business area, including a potential sale of Callenberg. Following a review of the sales process and business area, a USD 50 million impairment was made in the third quarter covering all remaining goodwill originating from the acquisition in 2008 of Callenberg.
This includes Wilhelmsen Insurance Services (WIS) and Wilhelmsen IT Services (WIT).
WIS delivered insurance services to approximately 170 vessels in 2015, in addition to arranging non-marine insurance programs for the WWH group. WIS delivered a positive result for 2015, supported by a favourable exchange rate.
Holding and Investments includes activities performed by the holding company and investments outside WWASA and WMS.
Total income for the Holding and investments segment was USD 28 million for the year compared with USD 32 million in 2014. The reduction was due to less operating revenue in holding, mainly related to shared service activities for the group.
Operating loss in 2015 was USD 4 million compared with a profit of 6 million in the previous year. The reduction was due to previous year accounts impacted by a USD 11 million accounting gain related to pension cost.
Net financials was a net income of USD 9 million for the year compared with a net income of USD 16 million in 2014. Net profit/(loss) after tax and minorities was a net profit of
USD 7 million compared with a profit of USD 21 million in the previous year.
This includes cash and cash equivalents, current financial investments and available for sale financial assets held by the parent company and Wilh. Wilhelmsen Holding Invest (WWHI).
Current financial investments include investment in equities, bonds and other financial assets available for sale and managed as part of an investment portfolio. The financial investment portfolio in Holding and Investments was USD 85 million by the end of the year compared with USD 89 million one year earlier. The portfolio primarily included Nordic equities and investment-grade bonds. Net income from investment management was an income of USD 4 million in 2015, down from USD 12 million in 2014.
Available for sale financial assets included shares in Qube Holdings Limited (Qube) and Kaplan Equity Limited (KEL). Both investments are owned through WWHI. Changes in market value of these shareholdings are reported under comprehensive income and dividend income is reported as financial income.
Qube is Australia's largest integrated provider of import and export logistics services, and listed on the Australian Securities Exchange. By the end of the year, WWHI held Qube 66 million shares in Qube, the same as one year earlier. The value of the investment was USD 116 million by the end of the year, a reduction from USD 131 million one year earlier mainly due to currency. In 2015, Qube paid dividend of AUD 0.055 per share. Total proceeds to WWHI of USD 3 million were reported as financial income.
In the third quarter of 2015, WWHI bought 6.9 million shares in KEL, an Australian investment fund. The total investment was USD 6 million.
NSG is a leading provider of supply bases and integrated logistics solution to the Norwegian and Danish offshore industry. Through WWHI, WWH owns 40% of NSG. NSG is reported in WWH's accounts as "associated investment", with share of net result reported as income from associated investments.
Total income for NSG including share of profits from associates and joint ventures and sales gains was
The Holding and Investment segment included in 2015 the following main investments:
NorSea Group (NSG – owned 40%)
Qube Holdings Limited (Qube – owned ~6%)
Financial investment portfolio
NOK 2.9 billion in 2015. This was a 5% reduction from previous year. The reduction was due to reduced income from vessel chartering activities, while income from supply base activities was up.
Operating profit declined, mainly due to lower share of profit from associates and JVs, but also due to lower margins. Financial expenses was slightly down due to reduced currency loss and lower interest rates.
WWHI's share of net profit in NSG for 2015 was USD 7 million, up from USD 6 million in 2014.
In 2015, WilNor Governmental Services (WGS) entered into a seven-year strategic support agreement with the Norwegian Armed Forces. The agreement includes logistic services to the Norwegian Home Guard and support to allied forces in Norway during peace, crisis and war. WGS is owned by WWH and NSG.
The WWH group consist of operating companies and investments exposed to the global economy and world merchandised trade.
From an income and investment perspective, the WWASA shipping operation remained the largest operating activity for the group. Through its capital intensity and cyclical nature, shipping has historically represented a relatively high degree of volatility and financial risk. While logistics and maritime services are exposed to some of the same market forces as shipping, these activities are less capital intensive and have historically been less cyclical. Outside own operating companies and joint ventures, WWASA's shareholding in Hyundai Glovis remains the largest financial exposure of the group.
The group is committed to manage risks in a sound manner related to its businesses and operations. To accomplish this, the governing concept of conscious strategy and controllable procedures for risk mitigation ultimately provides a positive impact to profitability. The responsibility of governing boards, management and all employees is to be aware of the current environment in which they operate, implement measures to mitigate risks, prepare to act upon unusual observations, threats or incidents and respond to risks to mitigate consequences.
The group has put in place a risk monitor process based on identification of risks for each business unit, with a consolidated report presented to the board on a quarterly basis for review and necessary actions.
WWASA's joint venture companies continue to be part of anti-trust investigations in several jurisdictions of which the EU and US are among the bigger jurisdictions. The company made a provision in the third quarter covering its expected share of exposure (for details see page 18 and note 21 on page 79).
Demand for WWH group's service offerings are, to various degree, correlated with the general global economic activity and with trade in commodities and manufactured goods. Projections for 2016/17 indicates continued modest global growth, impacted by high debt in many countries, a slowdown in China, reduced commodity prices and uncertainties related to future interest levels in the US.
WWASA is primarily exposed to the automotive and high and heavy logistics markets. While global automotive sales continues to grow broadly in line with global GDP, ocean trade is projected to grow less. Renewal of EUKOR's contracts with Hyundai and Kia for four years until December 2019, though with reduced overall share, has reduced the risk. High and heavy markets continue to be a challenge, impacted by low commodity prices and reduced construction activities in some markets.
WMS's exposure is to the general shipping market and, to a less extent, parts of the newbuilding market. The general shipping market remained weak in 2015, but with strong differences between different segments. The further fall in oil prices has taken its toll on the offshore market, while tanker markets have remained strong. The bulk market remains weak. Newbuilding activity has remained subdued, with little signs of a material uplift. Expectation is for individual markets to remain volatile.
Of main investments, NorSea Group remains highly exposed to activity level on the Norwegian shelf. Qube Holdings have a similar exposure to the Australian economy, but with a mix between export of primarily commodities and merchandised imports.
The various operating entities of the group are exposed
to and manage risk specific to the markets in which they operate. The general risk picture broadly remains unchanged from previous years.
In the WWASA group (car/ro-ro shipping and logistics) operational responsibility mainly rests with the various operating companies. While certain events such as closure of certain trading routes will have impact throughout the industry, most operational risk factors will be limited to specific carriers or markets.
Through its global reach and broad product spectre, WMS is exposed to a wide range of operational risk factors, though mainly related to local markets and specific product offerings. While any such incident will normally have limited global consequences, a major accident, turbulence within a key geographical market, product quality issues, disruption of IT systems or loss of main customers may affect the wider financial and operational performance.
The group has established a range of measure in order to avoid and, potentially, mitigate the consequences of any such incidents.
The WWH group remains exposed to a wide range of financial risk, either on a general basis or related to specific group companies. Also 2015 had its fair share of changes in key financial markets. Underlying forces included a slowdown in Chinese growth and investments, falling commodity prices, fragile emerging economies and a US interest rate hike. The USD continued to appreciated against most currencies in 2015, finishing up another 10% versus EUR and up nearly twice as much versus NOK. The downward slide in commodity prices continued, with the oil price falling some 35% during the year. Equity markets also experienced its fair share of volatility. Interest rates, however, remained at historic low levels in most markets, but risk margins increased. The group's exposure to and management of financial risk are further described in Note 15 of the 2015 accounts. This includes foreign exchange rate risk, interest rate risk, investment portfolio risk, bunker price risk, credit risk and liquidity risk.
The WWH group companies have a number of covenants related to its loans. WWASA has obtained waivers related to temporary effect of anti-trust fines on certain financial ratios. All group companies were in compliance with covenant requirements in 2015.
The group has substantial investments exposed to external market pricing, including shares in WWASA, vessels and shares in Hyundai Glovis (both through WWASA), real estate (through among other NorSea Group) and shares in Qube and other financial investments. While majority of investments are of a long-term industrial nature, any fluctuations in values will have impact on the net asset value and solidity of the group and may affect profitability. During 2015, share price was down for WWASA while other investments had a mixed development. Value in USD was also impacted by the depreciation of NOK and, to a less degree, AUD and KRW.
Working environment and occupational health By living the company values (empowerment, stewardship, customer centred, teaming and collaboration, learning and innovation), WWH focuses on developing a good and inspiring working environment at sea and on land. The company conducts its business with respect for human rights and labour standards, including conventions and guidelines related to the prevention of child or forced labour, minimum wage and salary, working conditions and freedom of association. Employees are encouraged to report on non-compliant behaviour through the group's global whistleblowing system.
A healthy working environment leads to more efficient, sustainable and profitable business. The overall guidelines are described in the company's principles for human resources, quality, and health and safety, as well as in the group's leadership expectations. Several KPIs related to working environment are measured on a quarterly basis, including sickness leave, turnover and lost time injury frequency.
In 2015, there were around 42 million exposure hours (work hours) in the group. Vessel based operations account for 75% of total exposure hours and onshore operations accounts for 25%.
The sickness absence rate for onshore operations was 1.67%. 2015 was the first year for all onshore operations to be included in the metric and will be the base year for reporting. Vessel based operations will be added from 2016.
WWH has implemented a variety of initiatives to reduce absence, for example focusing on the monitoring and
reporting of cases by all of the locations, health road shows, company health service, adapted working hours, activity club, serving of healthy food, employee engagement and opportunities for personal development.
The turnover rate for employees in the parent company and subsidiaries was 8.45% in 2015, decreasing from 9.6% in 2014. The turnover rate varies from segment to segment. As an example, the turnover rate is higher in the warehouse environment than in office environment.
In 2015, there were zero work related fatalities on vessel operations and onshore.
For vessel based operations, a number of safety campaigns aimed at creating safer and healthier working conditions on board the vessels were conducted during the year.
and Total Recordable Case Frequency Rate VESSEL Sites
and Total Recordable Case Frequency Rate ONSHORE Sites
There was a reduction in overall injuries on vessels, resulting in a positive improvement in lost-time injuries and total recordable cases.
For vessel based operations, the lost-time injury frequency rate (LTIFR) ended at 0.56 in 2015, down from 0.73 the previous year and in line with the target not to exceed 0.65. The LTIFR target for 2016 is 0.6. The total recordable case frequency rate (TRCFR) for vessel based operations result was 2.01, with a target of 2.8.
For onshore operations, there was also a reduction in overall injuries. This is mainly due to increased management attention and improved reporting.
The LTIFR for onshore operations ended at 0.59 in 2015 and TCRFR 1.32. LTIFR and TRCFR targets for onshore operations will be determined during 2016.
All incidents were investigated to avoid similar episodes in the future and to improve necessary training and awareness measures.
For vessel based and onshore operations, there is a potential to improve near miss incident and safety observation reporting.
All reported near misses are investigated to avoid similar incidents in the future, improve necessary training and awareness measures, and improve control measures.
Safety observation reporting on vessel operations has improved over time with 9 388 cases reported in 2015, a 5% increase from the base year 2013.
Safety observation reporting onshore improved in 2015, mainly resulting from audit outcomes.
The low number of hazard observation cases for on shore operations requires improvement in reporting and will be a focus area for 2016.
The management cooperates closely with employees through several bodies, including the Joint Working Committee and the Executive Committee for Industrial Democracy in Foreign Trade Shipping. The bodies give valuable input to solve company related issues in a constructive way.
The Joint Working Committee discusses issues related to health, work environment and safety. The Executive Committee for Industrial Democracy in Foreign Trade Shipping consider drafts of the accounts and budget, as well as matters of major financial significance for the company or of special importance for the workforce. In 2015, both committees held official meetings according to plan.
The board acknowledges the environmental challenges faced by the maritime industry, and the need for sustainable solutions. As a major participant in the maritime industry, WWH actively works to reduce the use of energy and decrease the environmental impact of its activities through its shareholding in WWASA and ownership of WMS. Efforts and initiatives are directed towards high impact areas like reduced bunker consumption and thereby reduced emissions. As a supplier of products and services to the merchant fleet in general, the group is also engaged in finding and sourcing green products.
The company implements its environmental ambition by setting objectives and goals for operating companies, technical managers and other stakeholders. Some of the main achievements in 2015 were:
In 2016, the company will continue to seek excellence in optimising vessel performance and operations by:
Total Safety Observations ONSHORE and VESSEL sites
An environmental account for 2015 and update on specific issues are included in the group's sustainability report on pages 118-122 and available on www.wilhelmsen.com.
No serious incidents harming the environment were reported in 2015, neither from WWASA vessels nor WSM managed vessels. However, one oil spill incident was reported among the WWASA owned and controlled vessels. 300 litres of hydraulic oil from the stern ramp system escaped to the harbour basin. P&I attended at our request, and the port agent arranged a clean up team locally. The local water police fined the vessel EUR 55.
In case of incidents and near misses, investigations are conducted to improve necessary processes and implement appropriate training awareness to avoid similar accidents in the future.
WWASA's joint venture WWL reports on emissions according to the standard developed by the Green House Gas Protocol. Please refer to www.2wglobal.com for their online reports.
The group employs around 23 800 people when wholly or partly owned subsidiaries, joint ventures and seafarers are included. Of this, seafarers accounted for 10 100 and employees in wholly and partly owned subsidiaries for 6 400. The group's head office is located in Norway, and the group has around 300 offices in 71 countries within its controlled structure.
Gender mix in the WW group 2014 (wholly owned subsidiaries)
71%
Men Woman
WWH has a clear policy stating that men and women have the right to equal opportunities. Harassment and discrimination based on race, gender or similar grounds, or other behaviour that may be perceived as threatening or degrading, is not acceptable. The industry's unequal recruitment base makes it difficult to achieve an equal mix of gender in the company.
Women accounts for 29% of the around 6 400 people employed in wholly owned subsidiaries and joint ventures, up from 28% one year earlier.
Two of the five directors on the board of directors of WWH are female, and one of the six members of the company's group management team.
The group conducts annual performance appraisals with employees on a global basis. The completion rate for 2015 ended at 77%. The appraisals are conducted to align how each employee can contribute to reach the group's overall strategic and financial ambitions.
The group is implementing a new digital platform for the 2016 performance appraisals in order to improve and develop the performance management. New KPI's are part of the project scope, and will be tracked accordingly.
The WWH group seeks to provide a positive and stimulating work environment in which all employees are motivated to work and achieve their full potential. To support this, WWH conducts an annual engagement survey to give all land based employees in wholly or partly owned subsidiaries the possibility to have their say towards WWH as an employer.
The 2015 survey shows stable results at a good level. Our employees show a high sense of loyalty to the company, and are proud to work for the group. This is a strong motivational factor for our employees. The impact of WW's compliance campaign in 2014 and 2015 is shown to have been successful based on the survey. Going forward, we aim to compete with the best-in-class companies. In order to achieve this, results from the engagement survey will be followed up closely in 2016, with special emphasis on leadership capabilities for strategic success.
The purpose of WWH's compensation and benefit policy is to drive performance and to attract and retain the right employees. These are considered to be people with the right experience and knowledge deemed necessary to achieve the company's strategic ambitions. The policy takes local regulations and competition into account, as well as the responsibility and complexity of the position.
The bonus scheme is one of several instruments focusing attention on driving performance. Bonus is paid if set bonus targets are reached. Compensation to executives is described in the corporate governance report (see page 104) and in the notes 4 and 2 to the group and parent accounts respectively (see pages 49-51 and 84-85). The company also issues a declaration on the determination of employee benefits for senior executives, note 16 to the parent company accounts on page 97.
"Learning and innovation" is one of the company's core values. The WWH group pays particular attention to competence and knowledge development. A learning organisation with motivated employees contributes to efficient operations and has a positive impact on the group's revenue and earnings. Training related to each employee's working situation receives most attention. In addition, the company has an internal academy offering employees a variation of courses and training opportunities. WW Academy also provides programmes for leadership development, in addition to a broad range of specific training programmes. WW Academy is an important contributor in order to develop common attitudes, expectations, ways of working, and common business standards.
In 2015, 246 employees took classroom programmes arranged by WW Academy, and 319 eLearning programmes are available. 79 598 eLearning course were completed in 2015, representing a 300% increase from 2014. The reason for the large growth in the number of courses available and completed courses is the implementation of a new enterprise resource planning system in WSS. This was a major application change that required several thousand people to be trained.
The board believes sound corporate governance is a foundation for profitable growth and that it provides a healthy company culture. A good governance contributes to reducing risk and creating value over time for shareholders and other stakeholders.
WWH observes the Norwegian Code of Practice for corporate governance, in addition to requirements as specified in the Norwegian Public Companies Act and the Norwegian Accounting Act. The board's corporate governance report for 2015 can be found on pages 104-115 or on wilhelmsen.com. It is the board's view that the company has an appropriate governance structure and that it is managed in a satisfactory way. The corporate governance report is to be reviewed by the annual shareholder meeting (AGM) on 3 May.
WWH assesses environmental, social and corporate governance issues in its investment analysis, business decisions, ownership practises and financial reporting. The company has a social responsibility guideline that includes human rights, labour standards and a commitment to promote greater environmental responsibility. A summary of the guideline can be reviewed at www.wilhelmsen.com.
The board acknowledges that sustainability and corporate social responsibility are important prerequisites for creating long-term profitability and value for the company's shareholders. With an aim to increase transparency, the board therefore issues a sustainability report following the guidelines set forward in the Global Reporting Initiative. The report describes how WWH combines long-term profitability with emphasis on ethical business conduct and with respect for human being, the environment and society.
To ensure the group focuses on the material aspects of its business and key issues for external stakeholders, an extensive materiality assessment was conducted by DNV GL in 2013. The assessment concluded that the following topics where of most importance:
The company believes the list holds true also for 2015. However, a re-evaluation will be conducted in 2016 to ensure continued focus on the most critical aspects.
The summary of the status on each aspect is available on pages 121-122. The full report, which will be reviewed by the annual general meeting on 3 May 2016, is available on www.wilhelmsen.com.
One of WWASA's operating companies, WWL, reports on its commitment to the ten principles of the UN Global Compact. For their online reports, please refer to www.2wglobal.com.
In 2015, the WWH group had a particular attention at the following topics:
For further details on the progress on the focus areas, please view the full sustainability report online.
The focus areas for 2015 will continue into 2016. Through clearly expressed expectations to employees as well as companies in which the WWH group is a shareholder, the group will contribute to promote human rights, sound working standards, reduce its environmental impact, and work towards eliminating corruption in own operations, as well as the operations of suppliers and business partners. In 2016, the company will continue to improve guidelines and standards.
With an ambition to improve transparency, the company will also continue to improve data quality and reporting routines to follow up on issues defined as material for the group's sustainability ambitions.
In 2016, we will continue to emphasise our zero tolerance
policy on facilitation payments. The Wilhelmsen group practises zero tolerance against corruption.
In 2015, WWH were engaged in dialogues with governments, investors, non-governmental organisations and other stakeholders discussing topics related to the company or industry at large. The main questions were related to financial and environmental issues, but there were also forums specifically addressing sustainability at large. The company were engaged in, amongst others, the Trident Alliance, the International Maritime Organisation, KOMpakt, BIMCO and the Norwegian Shipowners' Association, and indirectly in organisations such as Maritime Anti-Corruption Network.
The board's proposal for allocation of the net profit for the year is as follows:
| Parent company accounts (NOK thousand) | ||
|---|---|---|
| Profit for the year | NOK | 728 405 |
| To equity | NOK | 496 386 |
| Proposed dividend | NOK | 139 211 |
| Interim dividend paid | NOK | 92 808 |
| Total allocation | NOK | 728 405 |
WWH has a tradition of paying dividend twice every year. The board is proposing a NOK 3.00 dividend per share payable during the second quarter of 2016, representing a total payment of NOK 139.2 million. The board of directors also propose that the General Meeting gives the board of directors authority to approve further dividend of up to NOK 3.00 per share for a period limited in time up to the next General Meeting.
The WWH ASA board of directors is granted an authorization to, on behalf of the company, acquire up to 10% of the company's own issued shares. The authorisation is valid until the Annual General Meeting in 2016.
WWH is a global provider of maritime related services, transportation and logistics solutions. The prospects for the group and its business segments are, to various degree, correlated with general development in world economy and trade.
Projections for 2016 indicates continued growth in the global economy, but at a modest rate.
WWASA expects the market situation to remain challenging with continued pressure on profitability.
In 2016, modest growth is expected for global car sales. Demand for transportation of high and heavy units are also expected to be modest, with lower global construction spending and relatively low commodity and crop prices limiting the need for lifting construction, agricultural and mining equipment around the world.
The new investments in Vehicle Service Americas and South Africa will have a positive effect on operating profit from the logistics segments. However, the proposed restructuring of WWASA, will take down the contributions from the logistics segment as the Hyundai Glovis shareholding will be demerger from the company. With limited growth in world economy and world trade, the company has initiatives to further improve operational efficiency and reduce unit costs are put in motion.
WWASA entered 2016 with a healthy balance sheet. With a strong financial position, the company is positioned to further grow the business and prepared to act upon market opportunities.
While some shipping segments continue to perform well, the general market has deteriorated further over the last 12 months. The negative factors of flat bulk volumes, reduced offshore activities and fleet overcapacity in many segments will continue to weight on ship-owners. The long-term underlying trend, however, remains positive, supported by a gradual though modest increase in world trade and operating fleet. Ordering of newbuilds fell in 2015, but the WMS order reserve remains at a fairly healthy level.
Operating profit for WMS remains sensitive to development in the general shipping market and currency fluctuations. While the shipping market is expected to remain challenging for some time, a continued strong USD will support the operating margin.
A process has been initiated in order to restructure the WMS product portfolio, including potential sale of part of the WTS business streams. This process will continue in 2016.
A de-merger of WWASA and separation of the 12% shareholding in Hyundai Glovis into a new listed entity is planned to take place in the second quarter of 2016. WWH will retain a 72.7% shareholding in the new listed company, to be named Treasure ASA. The market outlook of Hyundai Glovis is highly correlated with the development of Hyundai and Kia Motors, as well as ability to secure third party business. Hyundai Glovis is guiding on a modest growth for 2016.
The outlook for the oil and gas industry is in general uncertain, and the overall activity level is expected to decrease in 2016. This will have a negative impact on income and operating profit in NorSea Group. Long term contracts and income from real estate and base rental will mitigate part of the downfall.
The Australian economy is projected to grow at a modest pace on the back of a general fall in commodity prices. Development in Qube is sensitive to development of the Australian economy and trade, as well as the outcome of the targeted acquisition of the leading Australian container terminal operator.
In 2015, the group made provision for anti-trust charges and an impairment of goodwill. The equity ratio though remains strong and the group has good liquidity. The de-merger of WWASA group in two stand-alone, focused entities will create a more balanced WWH group.
All main companies have positive operating cash flows. While the market environment remains challenging, the board expects main business segments to deliver underlying operating profit close to the level seen in 2015.
Lysaker, 17 March 2016 The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler chair
Helen Juell
Odd Rune Austgulen
Bettina Banoun
Carl Erik Steen
Thomas Wilhelmsen group CEO
Modest growth in demand for seaborne transportation
Continued unfavourable cargo mix
Logistics investments to contribute positivity
Treasure ASA will be listed on the Oslo stock exchange
The general maritime services market remains soft, in particular offshore related activities
Strong equity and sound liquidity
Continued focus on issues related to anti-corruption, competition law, theft, fraud and whileblowing
Good luck sailing around the world without bumping into some form of Wilhelmsen along the way. With our products and services, our peopleand our vessels, we have an unique global footprint with deliveries every three minutes of every day, all year.
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| Operating revenue | 1 | 1 307 | 1 369 |
| Other income | |||
| Share of profit/(loss) from joint ventures and associates | 2 | (60) | 165 |
| Gain on sale of assets | 34 | 5 | |
| Total income | 1 281 | 1 538 | |
| Operating expenses | |||
| Vessel expenses | 1 | (42) | (47) |
| Charter expenses | (22) | (23) | |
| Inventory cost | (460) | (520) | |
| Employee benefits | 4 | (331) | (337) |
| Other expenses | 1 | (151) | (167) |
| Depreciation and impairments | 5 | (154) | (105) |
| Total operating expenses | (1 159) | (1 199) | |
| Operating profit | 122 | 339 | |
| Financial income | 1 | 1 | 17 |
| Financial expenses | 1 | (86) | (101) |
| Financial income/(expenses) | (86) | (85) | |
| Profit before tax | 36 | 255 | |
| Tax income/(expense) | 6 | 19 | 36 |
| Profit for the year | 55 | 290 | |
| Of which: | |||
| Profit attributable to minority interests | 1 | 49 | |
| Profit attributable to owners of the parent | 54 | 241 | |
| Basic / diluted earnings per share (USD) | 7 | 1.16 | 5.20 |
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| Profit for the year | 55 | 290 | |
| Items that may be reclassified to the income statement | |||
| Net investment hedge/cash flow hedges (net after tax) | (8) | 7 | |
| Revaluation mark to market value | 10 | (1) | 24 |
| Currency translation differences | (131) | (168) | |
| Items that will not be reclassified to the income statement | |||
| Remeasurement postemployment benefits, net of tax | 8 | 5 | (51) |
| Other comprehensive income, net of tax | (134) | (187) | |
| Total comprehensive income for the year | (80) | 103 | |
| Total comprehensive income attributable to: | |||
| Owners of the parent | (77) | 62 | |
| Minority interests | (3) | 42 | |
| Total comprehensive income for the year | (80) | 103 |
Notes 1 to 22 on the next pages are an integral part of these consolidated financial statements.
| USD mill | Note | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| ASSETS | |||
| Non current assets | |||
| Deferred tax asset | 6 | 92 | 43 |
| Goodwill and other intangible assets | 5 | 205 | 276 |
| Vessel, property and other tangible assets | 5 | 2 011 | 1 950 |
| Investments in joint ventures and associates | 2 | 1 116 | 1 264 |
| Other non current assets | 8/9/10 | 141 | 154 |
| Total non current assets | 3 566 | 3 687 | |
| Current assets | |||
| Inventories | 11 | 107 | 110 |
| Current financial investments | 12 | 327 | 324 |
| Other current assets | 9/13 | 375 | 354 |
| Cash and cash equivalents | 311 | 364 | |
| Total current assets | 1 120 | 1 152 | |
| Total assets | 4 686 | 4 839 | |
| EQUITY AND LIABILITIES Equity |
|||
| Paid-in capital | 122 | 122 | |
| Retained earnings and other reserves | 1 632 | 1 738 | |
| Attributable to equity holders of the parent | 1 754 | 1 860 | |
| Minority interests | 452 | 469 | |
| Total equity | 2 206 | 2 329 | |
| Non current liabilities | |||
| Pension liabilities | 8 | 67 | 92 |
| Deferred tax | 6 | 20 | 8 |
| Non current interest-bearing debt | 14/15 | 1 461 | 1 590 |
| Other non current liabilities | 9 | 291 | 297 |
| Total non current liabilities | 1 839 | 1 987 | |
| Current liabilities | |||
| Current income tax | 6 | 8 | 11 |
| Public duties payable | 9 | 9 | |
| Current interest-bearing debt | 14/15 | 199 | 103 |
| Other current liabilities | 9/14 | 425 | 399 |
| Total current liabilities | 640 | 522 | |
| Total equity and liabilities | 4 686 | 4 839 | |
Lysaker, 17 March 2016 The board of directors of Wilh. Wilhelmsen Holding ASA
Helen Juell
Odd Rune Austgulen
Thomas Wilhelmsen group CEO
Diderik Schnitler chair
Bettina Banoun
Carl Erik Steen
Notes 1 to 22 on the next pages are an integral part of these consolidated financial statements.
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Profit before tax | 36 | 254 | |
| Financial (income)/expenses | 1 | 58 | (49) |
| Financial derivatives unrealised | 1 | 24 | 118 |
| Depreciation/impairment | 5/6 | 154 | 105 |
| Loss/(gain) on sale of fixed assets | 1 | (6) | (2) |
| Gain from sale of joint ventures and associates | 2 | (28) | (4) |
| Change in net pension asset/liability | (22) | (61) | |
| Change in inventory | 2 | 2 | |
| Change in working capital | (48) | (50) | |
| Share of (profit)/loss from joint ventures and associates | 2 | 60 | (165) |
| Dividend received from joint ventures and associates | 2 | 47 | 103 |
| Tax paid (company income tax, withholding tax) | (19) | (11) | |
| Net cash provided by operating activities | 258 | 241 | |
| Cash flow from investing activities | |||
| Proceeds from sale of fixed assets | 16 | 26 | |
| Investments in fixed assets | 5 | (212) | (91) |
| Net proceeds from sale of subsidiaries | 2 | 9 | |
| Net proceeds from sale of joint ventures and associates | 41 | 1 | |
| Investments in joint ventures and associates | (17) | ||
| Loan repayments received from joint ventures and associates | 1 | ||
| Proceeds from sale of financial investments | 139 | 90 | |
| Current financial investments | (174) | (92) | |
| Interest received | 1 | 4 | 6 |
| Changes in other investments | (3) | ||
| Net cash flow from investing activities | (187) | (66) | |
| Cash flow from financing activities | |||
| Net proceeds from issue of debt after debt expenses | 14 | 227 | 696 |
| Repayment of debt | 14 | (207) | (753) |
| Interest paid including interest derivatives | 1 | (87) | (91) |
| Cash from financial derivatives | (13) | 12 | |
| Dividend to shareholders | (43) | (60) | |
| Net cash flow from financing activities | (123) | (197) | |
| Net increase in cash and cash equivalents | (53) | (22) | |
| Cash and cash equivalents at the beginning of the period | 364 | 386 | |
| Cash and cash equivalents at 31.12 | 311 | 364 |
The group is located and operating world wide and every entity has several bank accounts in different currencies. The cash flow effect from revaluation of cash and cash equivalents is included in net cash flow provided by operating activities.
Notes 1 to 22 on the next pages are an integral part of these consolidated financial statements.
| USD mill | Share capital |
Own shares |
Retained earnings |
Total | Minority interests |
Total equity |
|---|---|---|---|---|---|---|
| Balance at 31.12.2014 | 122 | 0 | 1 738 | 1 861 | 469 | 2 329 |
| Comprehensive income for the period: | ||||||
| Profit for the period | 54 | 54 | 1 | 55 | ||
| Comprehensive income | (131) | (131) | (3) | (135) | ||
| Total comprehensive income for the period | 0 | 0 | (78) | (78) | (2) | (80) |
| Transactions with owners: | ||||||
| Dividends | (29) | (29) | (15) | (44) | ||
| Balance 31.12.2015 | 122 | 0 | 1 632 | 1 754 | 452 | 2 206 |
| USD mill | Share capital |
Own shares |
Retained earnings |
Total | Minority interests |
Total equity |
| Balance at 31.12.2013 | 122 | 0 | 1 713 | 1 836 | 450 | 2 286 |
| Comprehensive income for the period: | ||||||
| Profit for the period | 241 | 241 | 49 | 290 | ||
| Comprehensive income | (180) | (180) | (7) | (187) | ||
| Total comprehensive income for the period | 0 | 0 | 62 | 62 | 42 | 103 |
| Transactions with owners: | ||||||
| Dividends | (37) | (37) | (23) | (60) | ||
| Balance 31.12.2014 | 122 | 0 | 1 738 | 1 861 | 469 | 2 329 |
Own shares represented 0.22% of the share capital in nominal value at 31 December 2015 (analogous for 31 December 2014).
Dividend for fiscal year 2014 was NOK 5.00 per share, where NOK 3.00 per share was paid in May 2015 and NOK 2.00 per share was paid in November 2015.
Dividend for fiscal year 2013 was NOK 5.00 per share, where NOK 3.00 per share was paid in May 2014 and NOK 2.00 per share was paid in November 2014.
The proposed dividend for fiscal year 2015 in 2016 is NOK 3.00 per share, payable in the second quarter of 2016.
A decision on this proposal will be taken by the annual general meeting on 3 May 2016. The proposed dividend is not accrued in the year-end balance sheet.
The dividend will have effect on retained earnings in second quarter of 2016.
Wilh. Wilhelmsen Holding ASA (referred to as the parent company) is domiciled in Norway. The parent company's consolidated accounts for fiscal year 2015 include the parent company and its subsidiaries (referred to collectively as the group) and the group's share of joint ventures and associated companies.
The annual accounts for the group and the parent company were adopted by the board of directors on 17 March 2016.
The parent company is a public limited company which is listed on the Oslo Stock Exchange.
The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS), as endorsed by the European Union. The financial statements for the parent company have been prepared and presented in accordance with simplified IFRS approved by Ministry of Finance 3 November 2014. In the parent company, the company has elected to apply the exception from IFRS for dividends and group contributions. Otherwise, the explanations of the accounting policy for the group also apply to the parent company, and the notes to the consolidated financial statements will in some cases cover the parent company.
The accounts for the group and the parent company are referred to collectively as the accounts.
The group accounts are presented in US dollars (USD), rounded off to the nearest whole million.
Most of the entities in WWASA group have USD as functional currency while entities in WMS group and Holding & Investments are measured using currency of primary economic location in which the entity operates. The exception from this is the investments activity in Malta, where AUD is the functional currency and the parent company for Wilhelmsen Maritime Services (WMS AS) has USD.
The parent company is presented in its functional currency NOK.
The income statements and balance sheets for group companies with a functional currency which differs from the presentation currency (USD) are translated as follows:
Goodwill and the fair value of assets and liabilities related to the acquisition of entities which have a functional currency other than USD are attributed in the acquired entity's functional currency and translated at the exchange rate prevailing on the balance sheet date.
The accounts have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities (including financial derivatives) at fair value through the income statement.
Preparing financial statements in conformity with IFRS and simplified IFRS requires the management to make use of estimates and assumptions which affect the application of the accounting policies and the reported amounts of assets and liabilities, revenues and expenses.
Estimates and associated assumptions are based on historical experience and other factors regarded as reasonable in the circumstances. The actual result can vary from these estimates.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are described in more detail below in the section on critical accounting estimates and assumptions.
The accounting policies outlined below have been applied consistently for all the periods presented in the accounts.
There are no new or amended standards adopted by the group or parent company from 1 January 2015 or later.
New standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the group;
• IFRS 9, The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the 'hedged ratio' to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The group is yet to assess IFRS 9's full impact.
The group is in the early phase of evaluating the impact of IFRS 16. The currently material lease contracts are related to vessels, properties and life rafts.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group and the parent company.
When items are reclassified in the segment reporting, the comparative figures are included from the beginning of the earliest comparative period.
Shares in subsidiaries, joint ventures and associates are presented according to the cost method. Group relief received are included in dividends from subsidiaries. Group contributions and dividends from subsidiaries is recognised in the year for which it is proposed by the subsidiary to the extent the parent company can control the decision of the subsidiary through its share holdings. Shares in subsidiaries, joint ventures and associates are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may exceed the fair value of the investment. An impairment loss is reversed if the impairment situation is deemed to no longer exist.
Subsidiaries are all entities over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. When relevant the consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the group recognises any minority interests in the acquirer either at fair value or at the minority interest's proportionate share of the acquirer's net assets.
The excess of the consideration transferred the amount of any minority interests in the acquiree and the acquisition-date fair value of any previous equity interests in the acquiree over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. If this is less than fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive income.
Intercompany transactions, balances and unrealised gains and losses on transactions between group companies are eliminated.
Joint arrangements and associates are entities over which the group or parent company has joint control or significant influence respectively but does not control alone.
The group applies IFRS 11 to all joint arrangements. Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations to each investor. The group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.
Significant influence generally accompanies investments where the group or the parent company has 20-50% of the voting rights. The group's investments in joint ventures and associates are accounted for by the equity method. Such investments are recognised at the date of acquisition at their acquisition cost, including excess values and possible goodwill.
The group's share of profit after tax from joint ventures and associates, are recognised in the income statement as an operating income. The investments in joint ventures and associates are related to the group's operating activities and therefore classified as part of the operating activity. The share of profit after tax from joint ventures and associates is added to the capitalised value of the investments together with its share of equity movements not recognised in the income statement. Sale and dilution of the share of associate companies is recognised in the income statement when the transactions occur for the group. Unrealised gains on transactions are eliminated.
When an investment ceases to be an associate, the difference between (1) the fair value of any retained investment and proceeds from disposing of the part interest in the associate and (2) the carrying amount of the investment at the date when significant influence is lost, is recognised in the income statement.
If the ownership interest in a joint venture or an associate is reduced, but the investment continues to be a joint venture or an associate, a gain or loss is recognised in the income statement corresponding to the difference between the proportionate book value of the investment sold and the proceeds from disposing of the part interest in the joint venture or associate.
The group treats transactions with minority interests as transactions with equity owners of the group.
For purchases from minority interests, the difference between any consideration paid and relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity.
Gains or losses on disposals to minority interests are also recorded in equity.
The operating segments are reported in a manner consistent with the internal financial reporting provided to the chief operating decision-maker.
Comparative figures have been reclassified in the segments figures from the beginning of earliest comparative period.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board and Group Management Team consist of the group chief executive officer (group CEO) and five executive managers who makes the strategic decisions.
The WWASA group segment covers shipping and logistics activities in the group. The shipping activity is engaged in ocean transport of cars, roll-on roll-off (ro-ro) cargo and project cargo. Its main customers are global car manufacturers and manufacturers of agriculture and other high and heavy equipment. The customer's cargo is carried in a worldwide transport network. This is the group's most capital intensive activity.
The logistics activity has much the same customer groups as shipping. Customers operating globally are offered sophisticated logistics services. The activity's primary assets are human capital (expertise and systems) and customer contacts reflected in long-term relationships.
The WMS group segment offers marine products, technical service, ship agency services and logistics to the merchant fleet, safety and environmental systems to the newbuilding and retrofit sectors of the marine and offshore markets, supplies electrical, automation and heating ventilation and air conditioning (HVAC) systems to the marine and offshore markets, ship management including manning for all major vessel types, through a worldwide network of more than 310 offices in some 71 countries.
The Holding & Investments segment includes the parent company, Wilh. Wilhelmsen Holding ASA, Wilh. Wilhelmsen Holding Invest AS group, Wilnor Governmental Services AS and other minor activities (WilService AS, Wilhelmsen Accounting Services AS, Wilh Wilhelmsen HK and corporate group activities like operational management, tax, legal, finance, portfolio management, communication and human relations) which fail to meet the definition for other core activities.
Eliminations are between the group's three segments mentioned above.
The group and the parent company have transactions with joint ventures and associated companies. These contracts are based on commercial market terms. They relate to the chartering of vessels on long term charters.
See note 9, 19 and 20 to the group accounts for transactions with joint ventures and associates, and note 6 and 14 to the parent company accounts.
See note 4 to the group accounts concerning remuneration of senior executives in the group, and note 2 to the parent company accounts for information concerning loans and guarantees for employees in the parent company.
Transactions In individual companies' transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange as of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of the exchange at the balance sheet date. The realised and unrealised currency gains or losses are included in financial income or expense. Change in the currency position related to qualified cash flow hedging derivatives, qualifying net investment hedges, gains and losses are recognised in comprehensive
income.
In the consolidated financial statements, the assets and liabilities of non USD functional currency subsidiaries, joint ventures and associates, including the related goodwill, are translated into USD using the rate of exchange as of the balance sheet date. The results and cash flow of non USD functional currency subsidiaries, joint ventures and associates are translated into USD using average exchange rate for the period reported (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions).
Exchange adjustments arising when the opening net assets and the net income for the year retained by non USD operation are translated into USD are recognised in other comprehensive income. On disposals of a non USD functional currency subsidiary, joint ventures or associates, the deferred cumulative amount recognised in equity relating to that particular entity is recognised in the income statement.
Revenue is recognised when it is probable that a transaction will generate a future economic benefit that will accrue to the entity and the size of the amount can be reliably estimated.
Revenues are recognised at fair value and presented net of value added tax and discounts.
Revenue is recognised when it is probable that a transaction will generate a future economic benefit that will accrue to the entity and the size of the amount can be reliably estimated. Revenues are recognised at fair value and presented net of value added tax and discounts.
The group's revenue in ship owning companies derives from chartering (renting) out its vessels to operating companies. The charter hire per vessel is generated from either variable time charter hire (operating companies' net results) or fixed time charter, i.e. predetermined for the entire charter period. The charter agreements are on time charter basis, implying chartering a complete vessel including crew.
Revenues from time charters are accounted for as operating leases under IAS 17. Revenues from predetermined time charters are recognised on a straight-line basis over the duration of the period of each charter and adjusted for off-hire days, as service is performed. Revenues from variable time charters are recognised in accordance with recognition in the operating company (charterer).
Total revenues and voyage related expenses in a period are accounted for as the percentage of completed voyages. Voyage accounting consists of actual figures for completed voyages and estimates for voyages in progress. Voyages are normally discharge-to-discharge. Except for any period a ship is declared off-hire due to technical or other owner's matters, a ship is always allocated to a voyage.
Sales of logistics services are recognised in the accounting period in which the services have been rendered and completed.
Revenue from the sale of goods and services is recognised at fair value, net of VAT, returns and discounts. Revenue from the sale of goods is recognised when ownership passes to the customers. Generally, this is when products are delivered. Rebates and incentive allowance are deferred and recognised in income upon the realisation or the closing of the rebate period. Services are recognised as they are rendered.
Sales of goods and services are recognised in the accounting period in which the services are rendered or goods sold.
Construction contract related to fixed-price contracts with a long production period is accounted for in accordance with the percentage of completion method. The degree of completion is calculated as costs incurred as a percentage of the expected total cost. The total cost is reviewed continuously.
Inventories of purchased goods and work in progress, including bunkers, are valued at cost in accordance with the standard cost method. Impairment losses are recognised if the net realisable value is lower than the cost price. Sales costs include all remaining sales, administrative and storage costs.
Luboil is valued at the lower of cost and net realisable value. Luboil represents the lubrication oil held on board the vessels.
When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue is recognised over the period of the contract by reference to the stage of completion. Contract costs are recognised as expenses by reference to the stage of completion of the contract activity at the end of the reporting period. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable.
Variations in contract work, claims and incentive payments are included in contract revenue to the extent that may have been agreed with the customer and are capable of being reliably measured.
The group uses the 'percentage-of-completion method 'to determine the appropriate amount to recognise in a given period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion.
For cash-settled payments, a liability equal to the portion services received is recognised at the current fair value determined at each balance sheet date.
The group operates a cash settled share based payment incentive scheme for employees at senior executive management level. A liability equal to the portion of services received is recognised at the current fair value of the options determined at each balance sheet date. The total expense is recognised over the vesting period that is 12 months from grant date. The social security contributions payable in connection with the grant of the options is considered an integral part of the grant itself and the charge will be treated as cash-settled transaction
See note 4 to the group accounts and note 2 and 16 to the parent accounts concerning remuneration of senior executives
Vessel, property and other tangible assets acquired by group companies are stated at historical cost. Depreciation is calculated on a straight-line basis. A residual value, which reduces the deprecation base, is estimated for vessels. The estimate is based on a 10 years average rolling demolition prices, for general cargo. In addition, a charge for environmental friendly recycling is deducted. The calculation is done on an annual basis.
The carrying value of tangible assets equals the historical cost less accumulated depreciation and any impairment charges.
The group's borrowing costs are recognised in the income statement when they arise. Borrowing costs are capitalised to the extent that they are directly related to the acquisition of the vessel. Shipbuilding instalments, other direct vessel costs and the group's direct interest costs related to financing the acquisition cost of vessels are capitalised as they are paid.
Land is not depreciated. Other tangible assets are depreciated over the following expected useful lives:
| Property | 10-50 years |
|---|---|
| Other tangible assets | 3-10 years |
| Vessels | 30 years |
Each component of a tangible asset which is significant for the total cost of the item will be depreciated separately. Components with similar useful lives will be included in a single component.
An analysis of the group's fleet concluded that vessels based on a pure car truck carrier/ro-ro design do not need to be separated into different components since there is no significant difference in the expected useful life for the various components of these vessels over and above docking costs. Costs related to docking and periodic maintenance will normally be depreciated over the period until the next docking.
The estimated residual value and expected useful life of long-lived assets are reviewed at each balance sheet date, and where they differ significantly from previous estimates, depreciation charges will be changed accordingly.
Amortisation of intangible fixed assets is based on the following expected useful lives:
| Goodwill | Indefinite life |
|---|---|
| Software and licenses | 3-5 years |
| Other intangible assets | 5-10 years |
Goodwill represents the excess of the consideration transferred, the amount of any minority interests in the acquiree and the acquisition date fair value of any previous equity interests in the acquiree over the fair value of the group's share of the identifiable net assets of the acquired subsidiary, joint venture or associate. Goodwill arising from the acquisition of subsidiaries is classified as an intangible asset. Goodwill arising from the acquisition of an interest in an associated company is included under investment in associated companies, and tested for impairment as part of the carried amount of the investment annually.
Goodwill from acquisition of subsidiaries is tested annually for impairment and carried at cost less impairment losses. Impairment losses on goodwill are not reversed. Gain or loss on the sale of a business includes the carried amount of goodwill related to the sold business.
Goodwill is allocated to relevant cash-generating units ("CGU"). The allocation is made to those CGU or groups of CGU which are expected to benefit from the acquisition.
Details concerning the accounting treatment of goodwill are provided in the section on consolidation policies above.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met:
Trademark, technology/licenses and customer relationship have a finite life and are recognised at historical cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licenses over their estimated useful life.
Capitalised expenses related to other intangible assets are amortised over the expected useful lives in accordance with the straight-line method.
At each reporting date the accounts are assessed whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, estimates of the asset's recoverable amount are done. The recoverable amount is the highest of the fair market value of the asset, less cost to sell, and the net present value (NPV) of future estimated cash flow from the employment of the asset ("value in use"). The NPV is based on a discount rate according to a weighted average cost of capital ("WACC") reflecting the company's required rate of return. The WACC is calculated based on the company's long-term borrowing rate and a risk free rate plus a risk premium for the equity. If the recoverable amount is lower than the book value, impairment has occurred and the asset shall be revalued. Impairment losses are recognised in the profit and loss statement. Assets are grouped at the lowest level where there are separately identifiable independent cash flows.
Future cash flow is based on an assessment of what is the group's expected time charter earnings and estimated level of operating expenses for each type of vessel over the remaining useful life of the vessel. Vessels are organised and operated as a fleet and evaluated for impairment on the basis that the whole fleet is the lowest CGU. The vessels are trading in global network as part of a fleet, where the income of a specific vessel is dependent upon the total fleet's earnings and not the individual vessel's earnings. Further the group's vessels are interchangeable among the operating companies which are seen through the ongoing operational co-operation (long-term chartering activities, vessel swaps, space chartering, combined schedules etc.). As a consequence, vessels will only be impaired if the total value of the fleet based on future estimated cash flows is lower than the total book value.
Goodwill acquired through business combinations has been allocated to the relevant CGU. An assessment is made as to whether the carrying amount of the goodwill can be justified by future earnings from the CGU to which the goodwill relates. Future earnings are based on next year's expectations with a 1% growth rate.
If the "value in use" of the CGU is less than the carrying amount of the CGU, including goodwill, goodwill will be written down first. Thereafter the carrying amount of the CGU will be written down. Impairment losses related to goodwill cannot be reversed.
Leases for property, equipment and vessels where the group carries substantially all the risks and rewards of ownership are classified as financial leases.
Financial leases are capitalised at the inception of the lease at the lower of fair value of the leased item or the present value of agreed lease payments. Each lease payment is allocated between liability and finance charges. The corresponding rental obligations are included in other non current liabilities. The associated interest element is charged to the income statement over the lease period so as to produce a periodic rate of interest on the remaining balance of the liability for each period.
Financial leases are depreciated over the shorter of the useful life of the asset or the lease term.
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, net of any financial incentives from the lessor, are charged to the income statement on a straight-line basis over the period of the lease.
The group and the parent company classify financial assets in the following categories: trading financial assets at fair value through the income statement, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose of the asset.
Management determines the classification of financial assets at their initial recognition.
Financial assets carried at fair value through the income statement are initially recognised at fair value, and transaction costs are expensed in the income statement.
This category consists of financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of profit from short term price gains. Short term investments are valued at fair value. The resulting unrealised gains and losses are included in financial income and expense. Derivatives are also placed in this category unless designated as hedges. Assets in this category are classified as current.
Loans and receivables are non derivative financial assets with fixed or determinable payments, which are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non current assets. Loans and receivable are classified as other current assets or other non current assets in the balance sheet.
Loans and receivables are recognised initially at their fair value plus transaction costs. Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or are transferred, and the group has transferred by and large all risk and return from the financial asset.
Realised gains and losses are recognised in the income statement in the period they arise.
Available-for-sale financial assets are non derivatives that are either designated in this category or not classified in any of the other categories. After initial recognition, available-for-sale financial assets are measured at fair value with gains or losses recognised as a separate component in other comprehensive income until the investments is derecognised, at which time the cumulative gain or loss previously reported in equity is included in the income statement.
The fair value of the investments that are actively traded in organised financial markets is determined by reference to quoted market bid price at the close of business on the balance sheet date. For investments where there is no active market fair value are determined applying commonly used valuation techniques.
Available-for-sale financial assets are included in non current assets unless the investment matures of management intends to dispose of it within 12 months of the end of the reporting period.
Derivatives are included in current assets or current liabilities, except for maturities greater than 12 months after the balance sheet date. These are classified as non current assets or other non current liabilities as they form part of the group's long term economic hedging strategy and are not classified as held for trading.
Derivatives are recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured on a continuous basis at their fair value.
Most derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instruments which do not qualify for hedge accounting are recognised in the income statement stated in financial income/expense.
The group designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges).
At the date of the hedging transaction, the group documents the relationship between hedging instruments and hedged items, as well as the object of its risk management and the strategy underlying the various hedge transactions. The group also documents the extent to which the derivatives used are effective in smoothing the changes in fair value or cash flow associated with the hedge items. Such assessments are documented both initially and on an ongoing basis.
The fair value of derivatives used for hedging is shown in note 15 to the group accounts. Changes in the valuation of qualified hedges are recognised directly in other comprehensive income until the hedged transactions are realised.
The fair value of financial derivatives traded in active markets is based on quoted market prices at the balance sheet date. The fair value of financial derivatives not traded in an active market is determined using valuation techniques, such as the discounted value of future cash flows. Independent experts verify the value determination for instruments which are considered material.
The effective portion of changes in the fair value of derivatives designated as cash flow hedges are recognised in comprehensive income together with the deferred tax effect. Gain and loss on the ineffective portion is recognised in the income statement. Amounts recognised in comprehensive income are recognised as income or expense in the income statement in the period when the hedged liability or planned transaction will affect the income statement.
Gains and losses arising from the hedging instruments relating to the effective portions of the net investments hedges are recognised in comprehensive income. These translation reserves are reclassified to the income statement upon disposal of the hedged net investments, offsetting the translation differences from these net investments. Any ineffective portion is recognised immediately in the income statement within net financial income/(expenses).
Gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of, sold or change of functional currency.
Deferred tax is calculated using the liability method on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates and laws which have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available, and that the temporary differences can be deducted from this profit.
Deferred income tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the group.
For group companies subject to tonnage tax regimes, the tonnage tax is recognised as an operating cost.
Group companies have various pension schemes, and the employees are covered by pension plans which comply with local laws and regulations. These schemes are generally funded through payments to insurance companies or pension funds on the basis of periodic actuarial calculations. The group and the parent company have both defined contribution and defined benefit plans up to 31 December 2015.
The group decided November 2014 to terminate the group defined benefit plans for the Norwegian employees and change to defined contribution plan from 1 January 2015. After the termination, all affected employees received a paid-up policy as of 31 December 2014. The termination also included the risk plan, related to the group's defined contribution pension schemes, that was covered by a defined benefit plan.
From 1 January 2014, the group established "Ekstrapensjon", a new contribution plan for all Norwegian employees with salaries exceeding 12 times the Norwegian National Insurance base amount (G). The new contribution plan replaced the group obligations mainly financed from operation. However, the group still has obligations for some employees' related to salaries exceeding 12 times the Norwegian National Insurance base amount (G) mainly financed from operations
A defined contribution plan is one under which the group and the parent company pay fixed contributions to a separate legal entity. The group and the parent company have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
For defined contribution plans, the group and the parent company pay contributions till publicly or privately administered pension insurance plans on an obligatory, contractual or voluntary basis. The group and the parent company have no further payment obligations once the contributions have been paid. The contributions are recognised as a payroll expense when they fall due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
A defined benefit plan is one which is not a defined contribution plan. This type of plan typically defines an amount of pension benefit an employee will receive on retirement, normally dependent on one or more factors such as age, years of service and pay.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation
The pension obligation is calculated annually by independent actuaries using a straightline earnings method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
Past-service costs are recognised immediately in income
Trade receivables and other receivables, that have fixed or determinable payments that are not quoted in an active market are classified as receivables.
Receivables are recognised at face value less any impairment. Provision for impairment is made to specified receivable items when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the receivable, the estimated future cash flows of the investments have been affected.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other current highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown under borrowings in current liabilities on the balance sheet.
When the parent company purchases its own shares (treasury shares), the consideration paid, including any attributable transaction costs net of income tax, is deducted from the equity attributable to the parent company's shareholders until the shares are cancelled or sold. Should such shares subsequently be sold or reissued, any consideration received is included in share capital.
Dividend payments to the parent company's shareholders are recognised as a liability in the group's financial statements from the date when the dividend is approved by the general meeting.
Proposed dividend for the parent company's shareholders is shown in the parent company account as a liability at 31 December current year. Group contribution to the parent company is recognised as a financial income and current asset in the financial statement at 31 December current year.
Loans are recognised at fair value when the proceeds are received, net of transaction costs. In subsequent periods, loans are stated at amortised cost using the effective yield method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the term of the loan. Loans are classified as current liabilities unless the group or the parent company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
The group and the parent company make provisions for legal claims when a legal or constructive obligation exists as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be estimated with a sufficient degree of reliability. Provisions are not made for future operating losses.
When preparing the financial statements, the group and the parent company must make assumptions and estimates. These estimates are based on the actual underlying business, its present and forecast profitability over time, and expectations about external factors such as interest rates, foreign exchange rates and oil prices which are outside the group's and parent company's control. This presents a substantial risk that actual conditions will vary from the estimates.
The group tests at each reporting date whether vessels have suffered any impairment, in accordance with the accounting policies for "Impairment of goodwill and other non financial assets". The recoverable amounts of cash generating unit (CGU) have been determined based on value in use calculations. These calculations require the use of estimates.
See note 5 in the group accounts for additional information.
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
If available estimated fair value of an asset is obtained externally. In addition, the group has financial models which calculate and determine the value in use through a combination of actual and expected cash flow generation discounted to present value. The expected future cash flow generation and models are based on assumptions and estimate.
See note 5 in the group accounts for additional information.
| USD mill | 2015 | 2014 |
|---|---|---|
| OPERATING REVENUE | ||
| Freight revenue | 313 | 285 |
| Ships service revenue | 636 | 677 |
| Technical solutions revenue | 306 | 351 |
| Ship management and crewing revenue | 48 | 50 |
| Other revenue | 5 | 6 |
| Total operating revenue | 1 307 | 1 369 |
| VESSEL EXPENSES | ||
| Luboil | (6) | (6) |
| Stores (water, safety, chemicals, ropes etc) | (3) | (4) |
| Maintenance of vessels | (18) | (19) |
| Insurance | (5) | (7) |
| Other vessel expenses | (10) | (12) |
| Total vessel expenses | (42) | (47) |
| OTHER EXPENSES | ||
| Loss on sale of assets | (1) | (3) |
| Office expenses | (41) | (45) |
| Communication and IT expenses | (30) | (31) |
| External services | (20) | (23) |
| Travel and meeting expenses | (14) | (16) |
| Marketing expenses | (7) | (8) |
| Other administration expenses | (38) | (41) |
| Total other expenses | (151) | (167) |
| FINANCIAL INCOME AND EXPENSES | ||
| Financial items | ||
| Investment management | 5 | 17 |
| Interest income | 4 | 6 |
| Other financial items | (9) | (10) |
| Net financial items | 1 | 14 |
| Financial interest expenses | ||
| Interest expenses | (47) | (59) |
| Interest rate derivatives – realised | (32) | (26) |
| Net financial – interest expenses | (79) | (85) |
| Interest rate derivatives – unrealised | 24 | (16) |
| Financial currency | ||
| Net currency gain/(loss) | 36 | 92 |
| Derivatives for hedging of cash flow risk – realised | (2) | 8 |
| Derivatives for hedging of cash flow risk – unrealised | (26) | (38) |
| Derivatives for hedging of translation risk – realised | (12) | 4 |
| Derivatives for hedging of translation risk – unrealised | (21) | (63) |
| Net financial currency | (25) | 2 |
| Valuation of bunker hedges | (6) | |
| Financial income/(expenses) | (86) | (85) |
| Spesification of financial income and expenses income statement: | ||
| Net financial items | 1 | 14 |
| Net financial currency | 2 | |
| Financial income | 1 | 17 |
| Net financial – interest expenses | (79) | (85) |
| Net financial currency | (25) | |
| Interest rate derivatives – unrealised | 24 | (16) |
| Valuation of bunker hedges | (6) |
See note 15 on financial risk and the section of the accounting policies concerning financial derivatives.
Financial expenses (86) (101)
| 2015 | 2014 | ||
|---|---|---|---|
| Business office, country | Voting share/ownership | ||
| WWASA group (shipping) | |||
| Mark I Shipping Pte Ltd (liquidated) | Singapore | 50.0% | |
| Tellus Shipping AS | Lysaker, Norway | 50.0% | 50.0% |
| American Roll-on Roll-off Carrier Holding Inc | New Jersey, USA | 50.0% | 50.0% |
| Fidelio Inc | New Jersey, USA | 50.0% | 50.0% |
| Fidelio Limited Partnership | New Jersey, USA | 50.0% | 50.0% |
| EUKOR Car Carriers Inc | Seoul, Republic of Korea | 40.0% | 40.0% |
| EUKOR Car Carriers Singapore Pte Ltd (liquidated) | Singapore | 40.0% | |
| EUKOR Shipowning Singapore Pte Ltd (liquidated) | Singapore | 40.0% | |
| WWASA group (shipping/logistics) | |||
| Wallenius Wilhelmsen Logistics AS | Lysaker, Norway | 50.0% | 50.0% |
| WWASA group (logistics) | |||
| American Roll-On Roll-Off Carrier Group Inc | New Jersey, USA | 50.0% | 50.0% |
| American Logistics Network LLC | New Jersey, USA | 50.0% | 50.0% |
Wallenius Wilhelmsen Logistics (WWL) is a joint venture between Wilh. Wilhelmsen ASA (WWASA) and Wallenius Lines AB (Wallenius) and was established in 1999. It is an operating company within both the shipping segment and the logistics segment. It operates most of the WWASA's and Wallenius' owned vessels. The company provides global transportation services for the automotive, agricultural, mining and construction equipment industries and its services consist of supply chain management, ocean transportation, terminal services, inland distribution and technical services. WWL is the contracting party in customer contracts with industrial manufacturers for cars, agricultural machinery etc.
EUKOR Car Carriers (EUKOR) is a joint venture between WWASA, Wallenius, Hyundai Motor Company and Kia Motors Corporation. EUKOR is one of the world's largest shipping companies specialised in transporting cars and other rolling cargo. EUKOR is party to contracts for ocean transportation of Hyundai and Kia cars out of Korea, as well as a global provider of quality car carrying services for a diversified customer base.
American Shipping & Logistics Group manages several US based companies, all of which are established on a joint venture basis between WWASA and Wallenius. These companies include a liner service operating company, a ship owning company, and a logistics services provider.
American Roll-on Roll-off Carrier (ARC), a vessel-operating company, is the largest U.S. flag ro-ro carrier and the third largest U.S. flag carrier overall in international trade and provides ro-ro liner services in the US – international trades.
Fidelio Limited Partnership (FLP) owns 6 ro-ro ships, of which 6 are US-flag vessels under contract in the US government's Maritime Security Program (MSP). FLP charters vessels to ARC. The logistics companies were the contract service provider to the US government under the global privately owned vehicle (POV) contract but lost the contract in May 2014.
All companies are private companies and there are no quoted market price available for the shares.
WWL and EUKOR are subject to anti-trust investigations of the car carrying industry in several jurisdictions. See note 21 for contingencies.
There are no other contingent liabilities relating to the group's interest in the joint ventures.
| USD mill | 2015 | 2014 |
|---|---|---|
| Summarised financial information – according to the group's ownership | ||
| Share of total income | 1 933 | 2 241 |
| Share of operating expenses | (1 921) | (2 038) |
| Share of depreciation | (77) | (75) |
| Share of net financial items | (31) | (23) |
| Share of tax expense | (11) | (16) |
| Share of profit/(loss) for the year | (108) | 86 |
| Share of equity (equity method) | ||
| Book value | 673 | 825 |
| Excess value (goodwill) | 16 | 16 |
| USD mill | 2015 | 2014 |
| Joint ventures' assets, equity and liabilities (group's share of investments) | ||
| Share of non current assets | 1 301 | 1 275 |
| Share of cash and cash equivalents | 262 | 223 |
| Share of current assets | 240 | 292 |
| Total share of assets | 1 803 | 1 790 |
| Share of equity 01.01 | 841 | 856 |
| Share of profit/(loss) for the period | (108) | 86 |
| Dividend received/repayments of share capital | (33) | (89) |
| Charged directly to equity | (6) | (8) |
| Currency translation differences | (5) | (5) |
| Share of equity 31.12 | 689 | 841 |
| Share of non current financial liabilities | 640 | 620 |
| Share of other non current liabilities | 197 | 21 |
| Share of current financial liabilities | 67 | 85 |
| Share of other current liabilities | 209 | 222 |
| Total share of liabilities | 1 114 | 949 |
| Total share of equity and liabilities | 1 803 | 1 790 |
Set out below are the summarised financial information, based on 100%, for EUKOR Car Carriers Inc, which, in the opinion of the directors, is a material joint venture to the group.
Joint venture not considered to be material, is defined under "other" (based on 100%).
| USD mill | EUKOR Car Carriers Inc | Other | |||
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | ||
| SUMMARISED STATEMENT OF COMPREHENSIVE INCOME | |||||
| Total income | 1 918 | 2 249 | 2 633 | 2 944 | |
| Operating expenses | (1 757) | (1 931) | (2 734) | (2 777) | |
| Depreciation / amortisation | (139) | (118) | (47) | (69) | |
| Net operating profit/(loss) | 23 | 201 | (149) | 99 | |
| Financial income/(expenses) | (48) | (37) | (23) | (18) | |
| Profit/(loss) before tax | (25) | 164 | (172) | 81 | |
| Tax income/(expense) | (2) | (3) | (20) | (30) | |
| Profit/(loss) after minority interest | (27) | 162 | (195) | 46 | |
| Other comprehensive income | (19) | (8) | (7) | (18) | |
| Total comprehensive income | (46) | 154 | (202) | 28 | |
| WWH share of dividend from joint ventures | 24 | 24 | 9 | 65 |
| USD mill | EUKOR Car Carriers Inc | Other | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| SUMMARISED BALANCE SHEET | ||||
| Non current assets | 2 746 | 2 627 | 373 | 423 |
| Other current assets | 154 | 207 | 362 | 422 |
| Cash and cash equivalents | 265 | 270 | 313 | 232 |
| Total assets | 3 165 | 3 104 | 1 048 | 1 076 |
| Non current financial liabilities | 1 376 | 1 341 | 179 | 177 |
| Other non current liabilities | 161 | 7 | 266 | 37 |
| Current financial liabilities | 178 | 169 | 13 | 43 |
| Other current liabilities | 114 | 139 | 302 | 316 |
| Total liabilities | 1 829 | 1 656 | 760 | 573 |
| Net assets | 1 336 | 1 448 | 289 | 504 |
The information above reflects the 100% amount presented in the financial statements of the joint ventures, adjusted for differences in accounting policies between the group and the joint ventures.
| USD mill | EUKOR Car Carriers Inc | Other | ||
|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | |
| RECONCILIATION OF SUMMARISED FINANCIAL INFORMATION | ||||
| Opening net asset 01.01 | 1 448 | 1 356 | 504 | 629 |
| Profit/(loss) for the period | (27) | 162 | (195) | 46 |
| Other comprehensive income | ||||
| - Cash flow hedges, net of tax | (19) | (8) | ||
| - Currency translation differences | (11) | (10) | ||
| - Remeasurement postemployment benefits, net of tax | (1) | 4 | (9) | |
| - Dividend to shareholder | (60) | (60) | (19) | (153) |
| - Reclassification | (6) | 6 | ||
| Closing net assets 31.12 | 1 336 | 1 448 | 289 | 504 |
| WWH share | 534 | 579 | 138 | 245 |
| Goodwill | 11 | 11 | 6 | 6 |
| Carrying value 31.12 | 545 | 590 | 144 | 251 |
| 2015 | 2014 | ||
|---|---|---|---|
| Business office/country | Voting/control share | ||
| WWASA group | |||
| Hyundai Glovis Co Ltd | Seoul, Republic of Korea | 12.0% | 12.5% |
| Shippersys AB | Stockholm, Sweden | 25.0% | 25.0% |
| Holding & Investments | |||
| NorSea Group AS* | Stavanger, Norway | 40.0% | 40.0% |
| Profit sharing agreements ** | |||
| WMS group – companies with significant shares of profits | |||
| Almoayed Wilhelmsen Ltd | Bahrain | 50.0% | 50.0% |
| Wilhelmsen Huayang Ships Services (Shanghai) Co Ltd | China | 50.0% | 50.0% |
| Wilhelmsen Huayang Ships Services (Beijing) Co Ltd | China | 50.0% | 50.0% |
| Diana Wilhelmsen Management Limited | Cyprus | 50.0% | 50.0% |
| Wilhelmsen Ships Service Georgia Ltd | Georgia | 50.0% | 50.0% |
| Barklav (Hong Kong) Ltd | Hong Kong | 50.0% | 50.0% |
| Alghanim Barwil Shipping Co-Kutayba Yusuf Ahmed & Partner WLL | Kuwait | 49.0% | 49.0% |
| Barwil-Andersson Agencies Ltd | Latvia | 49.0% | 49.0% |
| Wilhelmsen Ships Service Lebanon S.A.L. | Lebanon | 49.0% | 49.0% |
| Wilhelmsen-Smith Bell Shipping Inc | Philippines | 49.0% | 49.0% |
| Wilhelmsen Hyopwoon Ships Services Ltd | Republic of Korea | 50.0% | 50.0% |
| Haeyoung Maritime Services Co Ltd | Republic of Korea | 20.0% | 20.0% |
| Barwil Star Agencies SRL | Romania | 50.0% | 50.0% |
| Binzagr Barwil Maritime Transport Co Ltd | Saudi Arabia | 50.0% | 50.0% |
| Nagliyat Al-Saudia Co Ltd | Saudi Arabia | 49.6% | 49.6% |
| Wilhelmsen Meridian Navigation Ltd, Sri Lanka | Sri Lanka | 40.0% | 40.0% |
| Baasher Barwil Agencies Ltd | Sudan | 50.0% | 50.0% |
| Wilhelmsen Ships Service LLC | United Arab Emirates | 50.0% | 50.0% |
| Barwil Abu Dhabi Ruwais LLC | United Arab Emirates | 50.0% | 50.0% |
| Barwil Dubai LLC | United Arab Emirates | 50.0% | 50.0% |
| Wilhelmsen Ships Service (UAE) LLC | United Arab Emirates | 42.5% | 42.5% |
| Triangle Shipping Agencies Co LLC | United Arab Emirates | 50.0% | 50.0% |
| Denholm Wilhelmsen Ltd | United Kingdom | 40.0% | 40.0% |
| Knight Transport LLC | USA | 33,3% | 33,3% |
| Barwil de Venezuela C.A. | Venezuela | 50.0% | 50.0% |
| Barwil – Sunnytrans Co. Ltd | Vietnam | 50.0% | 50.0% |
* The investment in NorSea Group AS is collateral. See note 14.
** Takes account of agreements on profit sharing which are additional to the equity share.
An overview of actual equity holdings can be found in the presentation of company structure on page 126.
Hyundai Glovis' principal activity is logistics and distribution services. The company provides overseas logistics services, including vehicle export logistics, air freight forwarding, ocean freight forwarding and international express service. Hyundai Glovis also has a growing shipping segment with its own fleet of car carriers and bulk carriers.
Even if the share interest in Hyundai Glovis is 12.0%, the investment is treated as an associate in accordance with IFRS. The reason is that the group has entered into a shareholders' agreement regarding their shareholding in Hyundai Glovis, including two representatives on the board of directors (22%). The agreement, which has an indefinite term, contains provisions, inter alia, restrictions on transfer of shares, corporate governance, composition of and procedures for the board of directors, matters which
require a qualified majority at the general meeting of shareholders, and mechanisms in case a resolution cannot be reached by the partners. In addition the business relationship between the group's joint venture EUKOR Car Carriers Inc and Hyundai Glovis is strong as Hyundai Glovis is a global logistics service provider for EUKOR's main customers Hyundai Motor Company and Kia Motors Corporation.
Hyundai Glovis Co Ltd was listed on 23 December 2005, and the group's equity interest had a stock market value USD 741 million at 31 December 2015 (2014: USD 1 257 million).
NorSea group is a leading provider of supply bases and integrated logistics solution to the Norwegian offshore industry. Through its fully and partly owned entities the group operates ten strategically located supply bases along the coast of Norway, including NorSea (two supply bases both in the Stavanger area), Stordbase (Stord), Coast Center Base (Bergen), Vestbase (Kristiansund), Helgelandsbase (Sandnessjøen) and Polarbase (Hammerfest). In 2014 NorSea acquired Danborg from A.P.Møller Maersk. Danbor is the largest service provider of oil and gas logistics in the Danish part of the North Sea with an estimated market share of 80%. Through the acquisition, NorSea will improve its offering to UK and Scotland based customers and not least be part of new explorations related to offshore opportunities at Greenland.
| USD mill | 2015 | 2014 |
|---|---|---|
| Share of profit from associates | ||
| Hyundai Glovis Co Ltd | 36 | 66 |
| NorSea Group AS | 7 | 6 |
| Other associates WMS group | 5 | 6 |
| Share of profit from associates | 48 | 79 |
| Hyundai Glovis Co Ltd | 337 | 322 |
|---|---|---|
| NorSea Group AS | 76 | 83 |
| Share of equity 31.12 | 428 | 423 |
|---|---|---|
| Other comprehensive income | (15) | (19) |
| Dividend | (15) | (14) |
| Disposal WMS group | (1) | (1) |
| Disposal WWASA group | (13) | |
| Addition in Holding & Investments | 1 | 17 |
| Share of profit for the year | 48 | 79 |
| Share of equity 01.01 | 423 | 361 |
There are no contingent liabilities relating to the group's interest in the associates.
In April 2014, WWH group increased its stake in NorSea group AS from 35.4% to 40.0%. Total investment including new equity and shareholder loan amounted to USD 19 mill.
In the first quarter of 2015, WWASA sold 187 500 shares in Hyundai Glovis with net proceeds of approximately USD 39 million. The net gain recorded in the 2015 group's accounts amounted to USD 26 million.
Set out below are the summarised financial information for, based on 100%, for Hyundai Glovis and NorSea group, which, in the opinion of the directors, is the material associates to the group.
Associates not considered to be material is defined under "other" (based on 100%). Hyundai Glovis is accounted for one quarter in arrears and figures presented correspond to the periods included in WWH Group.
| USD mill | Hyundai Glovis | NorSea group | Other | ||||
|---|---|---|---|---|---|---|---|
| 2015* | 2014* | 2015 | 2014 | 2015 | 2014 | ||
| SUMMARISED STATEMENT OF COMPREHENSIVE INCOME | |||||||
| Total income | 12 836 | 12 922 | 364 | 508 | 85 | 123 | |
| Operating expenses | (12 237) | (12 327) | (327) | (454) | (73) | (112) | |
| Net operating profit | 598 | 596 | 37 | 54 | 12 | 11 | |
| Finance income & expenses | (21) | (7) | |||||
| Other financial expenses | (109) | 118 | (17) | (33) | 2 | 1 | |
| Profit before tax | 469 | 708 | 20 | 22 | 14 | 13 | |
| Tax | (177) | (186) | (2) | (6) | (3) | (1) | |
| Profit/(loss) after minority interest | 292 | 522 | 18 | 16 | 11 | 11 | |
| Other comprehensive expenses | 20 | (20) | (1) | ||||
| Total comprehensive (expense)/income | 312 | 502 | 18 | 16 | 11 | 11 | |
| WWH share of dividend from associates | 9 | 7 | 2 | 2 | 4 | 6 |
*Corresponding to Hyundai Glovis' accounting period respectively 01.10.2014 through 30.09.2015 and 01.10.2013 through 30.09.2014.
| USD mill | Hyundai Glovis | NorSea group | Other | |||
|---|---|---|---|---|---|---|
| 31.12.2015** | 31.12.2014** | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| SUMMARISED BALANCE SHEET | ||||||
| Non current assets | 3 149 | 2 587 | 547 | 614 | 16 | 17 |
| Other current assets | 2 745 | 2 475 | 77 | 100 | 55 | 59 |
| Cash and cash equivalents | 695 | 705 | 21 | 18 | 42 | 41 |
| Total assets | 6 589 | 5 767 | 645 | 733 | 114 | 117 |
| Non current financial liabilities | 660 | 578 | 360 | 400 | ||
| Other non current liabilities | 911 | 416 | 14 | 1 | 5 | 4 |
| Current financial liabilities | 972 | 923 | 23 | 24 | ||
| Other current liabilities | 1 393 | 1 272 | 58 | 99 | 77 | 76 |
| Total liabilities | 3 936 | 3 189 | 456 | 524 | 82 | 80 |
| Net assets | 2 654 | 2 578 | 189 | 209 | 32 | 37 |
**Corresponding to Hyundai Glovis' accounting period ending respectively 30.09.2015 and 30.09.2014.
| USD mill | Hyundai Glovis | NorSea group | Other | |||
|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| RECONCILIATION OF SUMMARISED FINANCIAL INFORMATION |
||||||
| Net asset 01.01 | 2 578 | 2 049 | 209 | 225 | 37 | 39 |
| Increased capital | 14 | |||||
| Profit for the period | 292 | 522 | 18 | 16 | 12 | 11 |
| Other comprehensive income*** | (158) | |||||
| Currency translation differences | (66) | 60 | (34) | (46) | (6) | (13) |
| Dividend /disposal entities | 8 | (53) | (4) | (11) | (1) | |
| Net assets 31.12 | 2 654 | 2 578 | 189 | 209 | 32 | 37 |
| WWH share | 318 | 322 | 76 | 83 | 15 | 17 |
| Sale of shares in Hyundai Glovis | (13) | |||||
| Goodwill | 18 | 19 | ||||
| Currency | 13 | (18) | ||||
| Carrying value 31.12 | 337 | 322 | 76 | 83 | 15 | 17 |
***Including currency translation differences on net assets 01.01.
| USD mill | 2015 | 2014 |
|---|---|---|
| Share of profit/(loss) from joint ventures | (108) | 86 |
| Share of profit from associates | 48 | 79 |
| Share of profit/(loss) from joint ventures and associates | (60) | 165 |
| Share of equity from joint ventures | 689 | 841 |
| Share of equity from associates | 428 | 423 |
| Share of equity from joint ventures and associates | 1 116 | 1 264 |
The group's share of profit/(loss), after tax from joint ventures and associates is recognised in the income statement as an operating income. The investments in joint ventures and associates are related to the group's operating activities and therefore classified as part of the operating activity. All joint ventures and associates are equity consolidated.
| Business office/country | Nature of business | Proportion of ordinary shares directly held by parent (%) |
Proportion of ordinary shares held by the group (%) |
|
|---|---|---|---|---|
| WWASA group | ||||
| Wilh Wilhelmsen ASA | Lysaker, Norway | Shipping & logistics | 72.73% | 72.73% |
| WMS group | ||||
| Wilhelmsen Maritime Services AS | Lysaker, Norway | Maritime products and services | 100% | 100% |
| Wilhelmsen Ships Service AS | Lysaker, Norway | Maritime products and services | 100% | |
| Wilhelmsen Technical Solutions AS | Lysaker, Norway | Technical solution | 100% | |
| Callenberg group AB | Gotenburgh, Sweden | Technical solution | 100% | |
| Wilhelmsen Ship Management Ltd | Hong Kong | Ship management | 100% | |
| Holding & Investments | ||||
| Wilh. Wilhelmsen Holding Invest AS | Lysaker, Norway | Investment | 100% | 100% |
| Wilh. Wilhelmsen Holding Invest Malta Ltd | Valletta, Malta | Investment | 100% |
The group's principal subsidiaries at 31 December 2015 are set out above. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership interests held equals the
voting rights held by the group. The country of incorporation or registration is also their principal place of business.
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| Pay | 200 | 223 | |
| Payroll tax | 39 | 44 | |
| Pension cost | 8 | 18 | 24 |
| Termination gain defined benefit plan | 8 | (4) | (57) |
| Employee benefits seagoing personnel | 43 | 54 | |
| Other remuneration | 34 | 42 | |
| Provision downsizing Scandinavian officers | 6 | ||
| Total employee benefits | 331 | 337 | |
| Number of employees: | |||
| Group companies in Norway | 620 | 628 | |
| Group companies abroad | 5 720 | 5 782 | |
| Seagoing personnel Wilhelmsen Ship Management | 10 133 | 11 151 |
| Total employees | 16 473 | 17 561 |
|---|---|---|
| Average number of employees | 17 017 | 17 432 |
| USD thousand | Pay | Bonus | Pension premium |
* Other remuneration |
Total | Total in NOK thousand |
|---|---|---|---|---|---|---|
| 2015 | ||||||
| Group CEO | 563 | 279 | 197 | 190 | 1 229 | 9 908 |
| Group CFO | 443 | 113 | 144 | 145 | 844 | 6 805 |
| President and CEO Wilh. Wilhelmsen ASA | 454 | 188 | 554 | 512 | 1 707 | 13 766 |
| President and CEO Wilhelmsen Maritime Services AS | 397 | 113 | 413 | 399 | 1 323 | 10 663 |
| 2014 | ||||||
| Group CEO | 694 | 496 | 187 | 201 | 1 578 | 9 943 |
| Group CFO | 517 | 186 | 357 | 394 | 1 453 | 9 158 |
| President and CEO Wilh. Wilhelmsen ASA | 574 | 188 | 427 | 426 | 1 615 | 10 174 |
| President and CEO Wilhelmsen Maritime Services AS | 498 | 165 | 466 | 542 | 1 672 | 10 536 |
Remuneration is paid in NOK, which means that the USD amounts are not comparable from year to year. Rates of remuneration can be compared by taking account of changes in the USD exchange rate.
* Mainly related to gross up pension expenses and company car.
| Remuneration of the board of directors | ||
|---|---|---|
| USD thousand | 2015 | 2014 |
| Diderik Schnitler (chair) * | 111 | 143 |
| Bettina Banoun | 47 | 56 |
| Helen Juell | 47 | 56 |
| Odd Rune Austgulen | 47 | 56 |
| Carl E. Steen | 47 | 56 |
* Included board of directors fee from WWASA USD 43 thousand (2014: USD 48 thousand)
The chair has an additional consulting agreement with the WWASA group where he got paid USD 27 thousand in 2015 (2014: USD 34 thousand). The board's remuneration for fiscal year 2015 will be approved by the general meeting 3 May 2016. Remuneration of the nomination committee, for both Wilh. Wilhelmsen Holding ASA and Wilh. Wilhelmsen ASA, totalled USD 21 thousand for 2015 (2014: USD 22 thousand).
Thomas Wilhelmsen – group CEO Nils Petter Dyvik – group CFO Jan Eyvin Wang – president and CEO Wilh. Wilhelmsen ASA Dag Schjerven – president and CEO Wilhelmsen Maritime Serivces AS
See note 2 Employee benefits in the parent company accounts, and note 19 Related party transaction.
As of 1 January 2015, the synthetic option programme was replaced with a new long term incentive scheme (LTI). Participants are the group management team and the presidents for Wilhelmsen Ships Service and Wilhelmsen Ship Management. For the group CEO, maximum annual payment is 100% of base salary and for the president and CEO of WWASA it is 75%. For the remaining six participants of the programme, the annual payment is 50% of base salary.
The LTI is focusing on long term shareholder value creation and is based on positive development of the WW group's value adjusted equity. The ambitions set for the programme are to increase alignment with shareholders' interest, attract, retain and motivate participants and drive long-term group performance.
Settlement is based on return on value adjusted equity the last four years leading up to the settlement. The value adjusted equity is determined by using a "sum-of-the-parts" principle. For listed companies, value adjusted equity is based on market price, while earnings multiples are used for non-listed entities.
The board sets value adjusted equity targets at the beginning of each four year measurement period. Without consultation or agreement with the individual, the board has the right to change or terminate incentive programme after each year.
The extraordinary general meeting of Wilh. Wilhelmsen Holding ASA (WWH) held at 6 December 2011 resolved to renew the share-price-based incentive program for employees at management level in the company, and in its associated subsidiaries.
The program has a duration of three years, running from 1 January 2011 until 31 December 2013, extended to 2014, and entitles the participants to a cash reward based on the annual total return of the underlying shares and dividends during the period. Maximum annual payment is set to 50% of annual basic salary.
The board of directors for WWH and the board of directors for Wilh. Wilhelmsen ASA (WWASA) were authorised to decide the beneficiaries under the program. The two boards initially allocated annually 16 500 share equivalents in WWH (reference A shares) and annually 130 000 share equivalents in WWASA.
| Thomas Wilhelmsen – group CEO | 6 500 | 30 000 |
|---|---|---|
| Nils Petter Dyvik – group CFO | 4 500 | 20 000 |
| Jan Eyvin Wang – president and CEO Wilh. Wilhelmsen ASA | 50 000 | |
| Benedicte B. Agerup – CFO Wilh. Wilhelmsen ASA | 30 000 | |
| Dag Schjerven – president and CEO Wilhelmsen Maritime Services AS | 5 500 |
Per 31 December the options were out of money for 2014.
| USD mill | 2015 | 2014 |
|---|---|---|
| EXPENSED AUDIT FEE | ||
| Statutory audit | 2.3 | 3.0 |
| Other assurance services | 0.3 | 0.5 |
| Tax advisory fee | 1.6 | 1.3 |
| Other assistance | 0.2 | 0.8 |
| Total expensed audit fee | 4.3 | 5.7 |
The fees above cover the group expenses to all external auditors and tax advisors.
| USD mill | Property | Vessels* | Newbuilding contracts |
Other tangible assets |
Total tangible assets |
|---|---|---|---|---|---|
| TANGIBLE ASSETS | |||||
| 2015 | |||||
| Cost price 1.1 | 93 | 2 338 | 61 | 213 | 2 706 |
| Acquisition | 6 | 10 | 144 | 34 | 193 |
| Reclass/disposal | 5 | 90 | (172) | (12) | (88) |
| Currency translation differences | (11) | (20) | (32) | ||
| Cost price 31.12 | 92 | 2 439 | 33 | 215 | 2 779 |
| Accumulated depreciation and impairment losses 1.1 | (29) | (640) | (87) | (757) | |
| Depreciation/amortisation | (3) | (80) | (11) | (94) | |
| Reclass/disposal | (6) | 75 | 4 | 72 | |
| Impairment | (2) | (2) | |||
| Currency translation differences | 4 | 9 | 13 | ||
| Accumulated depreciation and impairment losses 31.12 | (37) | (646) | (86) | (768) | |
| Carrying amounts 31.12 | 56 | 1 793 | 33 | 129 | 2 011 |
| 2014 | |||||
| Cost price 1.1 | 109 | 2 436 | 31 | 227 | 2 803 |
| Acquisition | 2 | 5 | 30 | 20 | 58 |
| Reclass/disposal | (4) | (103) | (14) | (122) | |
| Currency translation differences | (13) | (20) | (33) | ||
| Cost price 31.12 | 93 | 2 338 | 61 | 213 | 2 706 |
| Accumulated depreciation and impairment losses 1.1 | (33) | (647) | (93) | (773) | |
| Depreciation/amortisation | (3) | (76) | (13) | (91) | |
| Disposals | 2 | 86 | 8 | 96 | |
| Impairment | (4) | (4) | |||
| Currency translation differences | 4 | 11 | 15 | ||
| Accumulated depreciation and impairment losses 31.12 | (29) | (640) | 0 | (87) | (757) |
| Carrying amounts 31.12 | 64 | 1 698 | 61 | 126 | 1 950 |
| Economic lifetime | 10-50 years | 30 years | 3-10 years | ||
| Depreciation schedule | Straight-line | Straight-line | Straight-line |
* Vessels include dry-docking and carrying amounts at year end was USD 15 million (2014: USD 14 million)
During 2015, two new vessel were delivered. WWASA has, on own accounts, two new vessels due for delivery in 2016. See note 17 for commitments related to the newbuilding program.
The group has evaluated the need for potential impairment losses on its fleet in accordance with the accounting policies.
Vessels are organised and operated as a fleet and evaluated for impairment on the basis that the whole fleet is the lowest cash generating unit CGU. The recoverable amount is the higher of estimated market value (third party quotations) and value in use calculations. As a consequence, vessels will only be impaired if the recoverable value of the fleet is lower than the total book value.
Value in use is the net present value of future cash flows arising from continuing use of the asset or CGU, including any disposal proceeds.
Future cash flow is based on an assessment of what is the group's expected time charter earnings and estimated level of operating expenses for each type of vessel over the remaining useful life of the vessel. Key assumptions are future estimated cash flows, time charter income reduced by estimated vessel operating expenses, based on group management's latest long term forecast. The estimated future cash flows reflect both past experience as well as external sources of information concerning expected future market development.
Management has estimated a moderate improvement in cash flows over the five year
forecasting period 2016-2020. Cash flows remain stable until vessels exceeds 20 years, then time charter earnings are reduced by 5% over the remaining useful lives of vessels (0% growth rate).
The net present value of future cash flows was based on weighted average cost of capital (WACC) of 6.14% in 2015. The WACC can be estimated as follows:
Borrowing rate: Debt ratio*(implied 22 year US swap rate + loan margin)
Based on the value in use estimates, management has concluded that no impairment is required as per 31 December 2015.
Had the WACC been one percentage point higher, the estimated value in use would be reduced by USD 191 million which would not have resulted in an impairment loss. Had the WACC been one percentage point lower, the estimated value in use would be increased by USD 221 million.
Had the estimated time charter income been five percentage points lower, the estimated value in use would be reduced by USD 167 million which would not have resulted in an impairment loss. Had the estimated time charter income been five percentage points higher, the estimated value in use would be increased by USD 167 million.
| USD mill | Goodwill | Other intangible assets |
Software and licences |
Total intangible assets |
|---|---|---|---|---|
| INTANGIBLE ASSETS | ||||
| 2015 | ||||
| Cost price 01.01 | 216 | 28 | 109 | 353 |
| Acquisition | 2 | 1 | 18 | 21 |
| Reclass/disposal | (2) | (4) | (6) | |
| Currency translation differences | (24) | (4) | (14) | (42) |
| Cost price 31.12 | 194 | 23 | 109 | 327 |
| Accumulated amortisation and impairment losses 01.01 | (1) | (5) | (71) | (76) |
| Amortisation/impairment | (50) | (2) | (5) | (57) |
| Reclass/disposal | 0 | 0 | 3 | 3 |
| Currency translation differences | 0 | 1 | 8 | 9 |
| Accumulated amortisation and impairment losses 31.12 | (52) | (6) | (64) | (122) |
| Carrying amounts 31.12 | 142 | 17 | 45 | 205 |
| 2014 | ||||
| Cost price 01.01 | 249 | 23 | 121 | 393 |
| Acquisition | 12 | 12 | 9 | 33 |
| Reclass/disposal | (4) | (1) | 1 | (5) |
| Currency translation differences | (40) | (6) | (22) | (68) |
| Cost price 31.12 | 216 | 28 | 109 | 353 |
| Accumulated amortisation and impairment losses 01.01 | (4) | (5) | (76) | (84) |
| Amortisation/impairment | (0) | (1) | (9) | (10) |
| Disposals | 3 | 0 | 0 | 3 |
| Currency translation differences | 0 | 1 | 14 | 15 |
| Accumulated amortisation and impairment losses 31.12 | (1) | (5) | (71) | (76) |
| Carrying amounts 31.12 | 215 | 23 | 38 | 276 |
| Segment-level summary of the goodwill allocation: | 2015 | 2014 | ||
| WMS group | 137 | 209 | ||
| WWASA group | 6 | 6 | ||
| Total goodwill allocation | 142 | 215 |
In 2015 WMS group (CGU Ships Service) acquired Timm AS for USD 9 million. The excess value (nominated in NOK) was split into intangible assets and goodwill of USD 4 million.
In 2014 WMS group (CGU Technical Solution) acquired Integrated Engineering Services (Aberdeen) Limited for USD 24 million. The excess value (nominated in GBP) was split into intangible assets and goodwill of USD 12 million.
In the WMS group segment, USD 125 million relate to business area Ships Service mainly to the acquisition of Unitor ASA, USD 10 million relate to business area Technical Solution mainly to the acquisition of IES Callenberg LtD (Abeerdeen) and the rest of the goodwill relate to WWASA group USD 6 mill. The goodwill figures are originally calculated in NOK, GBP and USD. (2014: NOK, SEK, USD and GBP).
For the purpose of impairment testing, goodwill is allocated to the respective cash generating units which are Ships Service and Technical Solutions. In 2015 an
impairment was made with USD 50 million related to the goodwill in technical services from acquistion of Callenberg Sweden. The impairment charge impacted the operating profit in WMS group.
Value in use was determined by discounting the future cash flows generated from the continuing operation of the units. Cash flows were projected based on actual operating results and next year's forecast. Cash flows is based on a 5-year strategy plan period with terminal value (terminal growth rate 1%) were extrapolated using the following key assumptions:
| USD/NOK 8.30 |
6.39 |
|---|---|
| USD/SEK 8.42 |
7.10 |
| Discount rate 9.0% |
9.0% |
| Growth rate 3-9% |
6-9% |
| Increase in material cost 6-9% |
6-9% |
| Increase in pay and other remuneration 3-4% |
3-4% |
| Increase in other expenses 4-7% |
3-7% |
The values assigned to the key assumptions represent management's assessment of future trends in the maritime industry and are based on both external sources and internal sources.
No reasonably possible change in any of the key assumptions on which management has based its determination of the recoverable amount would cause the carrying amount to exceed its recoverable amount.
Had the WACC been 0.5 percentage point higher, the estimated value would be reduced by USD 12 million for WSS net value. Had the WACC been 0.5 percentage point lower, the estimated value would be increased by USD 12 million for WSS.
Had the multiple, enterprise value / EBITDA been 1 point lower, the estimated value would be reduced by USD 91 million for WSS net value. Had the multiple, enterprise value / EBITDA been 1 point higher, the estimated value would be increased by USD 91 million for WSS.
The full amount of the goodwill arising from acquisition of Callenberg was written off in the third quarter of 2015 with USD 50 million. No impairment was necessary at 31 December 2014.
Companies subject to tonnage tax regimes are exempt from ordinary tax on their shipping income. In lieu of ordinary taxation, tonnage taxed companies are taxed on a notional basis based on the net tonnage of the companies' vessels. Income not derived from the operation of vessels in international waters, such as financial income, is usually taxed according the ordinary taxation rules applicable in the resident country of each respective company. The WWASA group had two wholly owned companies resident in UK and Malta which was taxed under a tonnage tax regime in 2015. Further, the WWASA group had one tonnage taxed joint venture company resident in the Republic of Korea, one tonnage taxed joint venture company resident in Norway, and two tonnage taxed joint venture companies in Singapore in 2015.
The tonnage tax is considered as operating expense in the accounts.
The ordinary rate of corporation tax in Norway is 27% of net profit for 2015. Norwegian limited liability companies are encompassed by the participation exemption method for share income. Thus, share dividends and gains are tax free for the receiving company. Corresponding losses on shares are not deductible. The participation exemption method does not apply to share income from companies considered low taxed and that are located outside the European Economic Area (EEA), and on share income from companies owned by less than 10% resident outside the EEA.
For group companies located in the same country and within the same tax regime, taxable profits in one company can be offset against tax losses and tax loss carry forwards in other group companies. Deferred tax/deferred tax asset has been calculated on temporary differences to the extent that it is likely that these can be utilised in each country and for Norwegian entities the group has applied a rate of 25%.
Wilhelmsen Lines Shipowning (WLS) commenced legal proceedings before the Oslo City Court based on the tax appeal board's decision to turn down the application for tonnage tax. The basis for the proceedings was that the transition rule valid for companies that exited the old tonnage tax regime (abolished in 2007) into ordinary taxation was in breach with The Constitution of Norway, article 97. The litigation process was scheduled for 2-4 May 2016, but the group have now concluded to withdrawn the case. Such withdraw will have no impact on the income statement or balance sheet for the group.
The effective tax rate for the group will, from period to period, change dependent on the group gains and losses from investments inside the exemption method and tax exempt revenues from tonnage tax regimes.
Companies domiciled outside Norway will be subject to local taxation, either on ordinary terms or under special tonnage tax rules. When dividends are paid, local withholding taxes may be applicable. This generally applies to dividends paid by companies domiciled outside the EEA.
Payable tax foreign is impacted by a notice from Korea Tax Authorities whereas they disregard Wilhelmsen Ships Holding Malta Ltd as the beneficial owner of dividends from EUKOR. The notice is for the period 2010-2014 with an increased withholding tax from 5% to 15%. Korea Tax Authorities claim Wilh. Wilhelmsen ASA being the beneficial owner of the dividend with the consequence of 15% withholding tax according to tax treaty Norway-Korea. EUKOR has withheld 5% on dividends paid according to the Malta-Korea tax treaty. Total increased withholding tax and penalty (10%) for the period 2010-2015 amounts to approximately USD 15 million. The company has made an administrative appeal to the Board of Audit and Inspection (BAI). A decision here is normally made within 6-9 months.
| Total tax income/(expense) | 19 | 36 |
|---|---|---|
| Change in deferred tax | 47 | 57 |
| Payable tax foreign | (26) | (16) |
| Payable tax in Norway | (2) | (5) |
| Allocation of tax income/(expense) for the year | ||
| USD mill | 2015 | 2014 |
The tax income for 2015 is driven by the tax effect of unrealised currency losses related to non current interest-bearing debt in USD in the Norwegian entities.
| Profit before tax | 36 | 255 |
|---|---|---|
| 27% tax | 10 | 69 |
| Tax effect from: | ||
| Permanent differences | 3 | (8) |
| Non-taxable income | (78) | (54) |
| Share of profits from joint ventures and associates | 17 | (44) |
| Change in difference tax rate, deferred tax assets allowance | 2 | |
| Currency transition from USD to NOK for Norwegian tax purpose | 11 | (6) |
| Witholding tax and payable tax previous year | 19 | 6 |
| Calculated tax (income)/expense for the group | (19) | (36) |
| Effective tax rate for the group | (52.2%) | 4.1% |
The effective tax rate for the group will, from period to period, change dependent on the group gains and losses from investments inside the exemption method and tax exempt revenues from tonnage tax regimes.
| USD mill | 2015 | 2014 |
|---|---|---|
| Deferred tax assets to be recovered after more than 12 months | 16 | 15 |
| Deferred tax assets to be recovered within 12 months | 148 | 133 |
| Deferred tax liabilities to be recovered after more than 12 months | (37) | (45) |
| Deferred tax liabilities to be recovered within 12 months | (56) | (68) |
| Net deferred tax assets | 72 | 35 |
| Net deferred tax assets/(liabilities) at 01.01 | 35 | (40) |
| Currency translation differences | (10) | 6 |
| Tax charged to equity / acquisition | 1 | 13 |
| Income statement charge | 47 | 57 |
| Net deferred tax assets at 31.12 | 72 | 35 |
| Deferred tax assets in balance sheet | 92 | 43 |
| Deferred tax liabilities in balance sheet | (20) | (8) |
| Net deferred tax assets at 31.12 | 72 | 35 |
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:
| Tonnage | ||||
|---|---|---|---|---|
| USD mill | Fixed assets | tax regime | Other | Total |
| Deferred tax liabilities | ||||
| At 31.12.2014 | (54) | (35) | (22) | (113) |
| Through income statement | (4) | 12 | (3) | 6 |
| Charged directly to equity | ||||
| Currency translations | 4 | 4 | 7 | 14 |
| Deferred tax liabilities at 31.12.2015 | (54) | (19) | (19) | (93) |
| At 31.12.2013 | (62) | (54) | (3) | (121) |
| Through income statement | 8 | 16 | (34) | (9) |
| Charged directly to equity | 13 | 13 | ||
| Currency translations | 2 | 2 | 4 | |
| Deferred tax liabilities at 31.12.2014 | (54) | (35) | (22) | (113) |
| USD mill Deferred tax assets |
Non current assets and liabilities |
Current assets and liabilities |
Tax losses carried forward |
Total |
| At 31.12.2014 | 87 | (3) | 62 | 148 |
| Through income statement | 16 | 4 | 21 | 40 |
| Charged directly to equity | (1) | 4 | (2) | 1 |
| Currency translations | (12) | (10) | (3) | (25) |
| Deferred tax assets at 31.12.2015 | 90 | (7) | 79 | 165 |
| At 31.12.2013 | 60 | (3) | 23 | 80 |
| Through income statement | 23 | 43 | 66 | |
| Charged directly to equity | 3 | 2 | (5) | |
| Currency translations | 1 | (1) | 1 | 1 |
Deferred tax assets at 31.12.2014 87 (3) 62 148
Temporary differences related to joint ventures and associates are USD 0 for the group, since all the units are regarded as located within the area in which the exemption method applies, and no plans exist to sell any of these companies.
The temporary differences in WWASA group related to exit tonnage tax, fixed assets, current assets and liabilities and most of the tax losses carry forward are nominated in NOK and translated to balance date rate. The net currency gain and losses are
recognised on entities level through income statement due to different functional currency than local currency.
The WMS group segment will have shares in subsidiaries not subject to the exemption method which could give rise to a tax charge in the event of a sale, where no provision has been made for deferred tax associated with a possible sale or dividend. No plans exist at present to dispose of such companies.
Earnings per share taking into consideration the number of outstanding shares in the period. The group acquired 100 000 own A shares during August 2011.
Basic / diluted earnings per share is calculated by dividing profit for the period after minority interests, by average number of total outstanding shares.
Earnings per share is calculated based on 46 403 824 shares for 2014 and 2015.
In order to reduce the group's exposure to certain risks associated with defined benefit plans, such as longevity, inflation, effects of compensation increases, the group regularly reviews and continuously improves the design of its post-employment defined benefit plans. Until 31 December 2014, the group provides both defined benefit pension plans and defined contribution pension plans.
For many years the group had a defined benefit plan for employees in Norway through Storebrand. The defined benefit plan was closed for new employees 1 May 2005.
The group decided November 2014 to terminate the group defined benefit plans for the Norwegian employees and change to defined contribution plan from 1 January 2015. After the termination all affected employees received a paid-up policy as of 31 December 2014. The termination also included the risk plan, related to the group's defined contribution pension schemes, that was covered by a defined benefit plan.
Subsidiaries outside Norway have separate schemes for their employees in accordance with local rules, and the pension schemes are for the material part defined contribution plans.
The group's defined contribution pension schemes for Norwegian employees are with Storebrand, similar solutions with different investment funds. Maximum contribution levels according to regulations have been followed up to 31 December 2014. From 1 January 2015 the contributions from the group are changed to be in accordance with new requirements.
The group pension liabilities have been calculated based on updated actuarial and financial assumptions as of 31 December 2014 and booked against other comprehensive income (directly to equity) before the termination has been reversed as an accounting gain through profit and loss and included in employees benefits to be a part of the group's operating profit. The effect of termination of defined benefit plan for one subsidiary in 2015 was USD 4 million.
The change in the group pension plans decreased the net equity with approximately USD 6 million at the end of 2014.
Through income statement 2014 a gain of USD 63 million and a loss before tax through other comprehensive income (directly to equity) of USD 69 million. Through income statement 2015 a gain of USD 4 million has been booked as a part of pension cost.
From 1 January 2014 the group established "Ekstrapensjon", a new contribution plan for all Norwegian employees with salaries exceeding 12 times the Norwegian National Insurance base amount (G). The new contribution plan replaced the group obligations mainly financed from operation. However, the group still has obligations for some employees' related to salaries exceeding 12 times the Norwegian National Insurance base amount (G) mainly financed from operations.
In addition the group has agreements on early retirement. This obligations are mainly financed from operations.
The group has obligations towards some employees in the group's senior executive management. These obligations are mainly covered via group annuity policies in Storebrand.
Pension costs and obligations includes payroll taxes. No provision has been made for payroll tax in pension plans where the plan assets exceed the plan obligations.
The liability recognised in the balance sheet in respect of the remaining defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligations are calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
In a few countries where there is no deep market in such bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
| Funded | Unfunded | |||
|---|---|---|---|---|
| Number of people covered by pension schemes at 31.12 | 2015 | 2014 | 2015 | 2014 |
| In employment | 35 | 125 | 26 | 49 |
| On retirement (inclusive disability pensions) | 19 | 148 | 710 | 718 |
| Total number of people covered by pension schemes | 54 | 273 | 736 | 767 |
| Expenses | Commitments | |||
|---|---|---|---|---|
| Financial assumptions for the pension calculations: | 2015 | 2014 | 31.12.2015 | 31.12.2014 |
| Discount rate | 2.30% | 4.00% | 2.50% | 2.30% |
| Anticipated pay regulation | 3.00% | 3.50% | 2.25% | 3.00% |
| Anticipated increase in National Insurance base amount (G) | 3.00% | 3.50% | 2.25% | 3.00% |
| Anticipated regulation of pensions | 0.60% | 0.60% | 0.60% | 0.60% |
Anticipated pay regulation are business sector specific, influenced by composition of employees under the plans. Anticipated increase in G is tied up to the anticipated pay regulations. Anticipated regulation of pensions is determined by the difference between return on assets and the hurdle rate.
Actuarial assumptions: all calculations are calculated on the basis of the K2013 mortality tariff. The disability tariff is based on the KU table.
| Pension assets investments (in %) | 31.12.2015 | 31.12.2014 |
|---|---|---|
| Current bonds | 7.5% | 10.6% |
| Bonds held to maturity | 45.3% | 45.9% |
| Money market | 2.3% | (0.8)% |
| Equities | 5.7% | 6.7% |
| Other (property, credit bonds) | 39.4% | 37.8% |
| Total pension assets investments | 100.0% | 100.0% |
The table shows how pension funds including derivatives administered by Storebrand Kapitalforvaltning AS were invested at 31 December 2015. The recorded return on assets administered by Storebrand Kapitalforvaltning was 3.9% at 31 December 2015 (2014: 6.6%).
| Funded Unfunded Total Funded Unfunded Total Pension expenses Service cost 2 2 7 1 7 Termination gain defined benefit plan (4) (4) (56) (1) (57) Net interest cost 2 2 3 3 Cost of defined contribution plan 15 15 14 14 Net pension expenses 13 2 15 (36) 3 (33) USD mill 2015 2014 Remeasurements – Other comprehensive income Effect of changes in demographic assumptions 1 Effect of changes in financial assumptions 4 Effect of experience adjustments (58) Return on plan assets (excluding interest income) 1 (6) Total remeasurements included in OCI 6 (63) The group comprehensive income pension 5 (51) The tax effect of comprehensive income pension 2 (19) Gross remeasurements included in OCI pension 7 (69) Remeasurements included in OCI (parent and subsidaries) 6 (63) Remeasurements included in OCI (joint ventures and associates) 1 (6) USD mill 2015 2014 Pension obligations Defined benefit obligation at end of prior year 109 213 Effect of changes in foreign exchange rates (19) (40) Service cost 2 8 Termination gain defined benefit plan (2) (57) Interest expense 2 8 Benefit payments from plan (5) Benefit payments from employer (4) (6) Settlement payments from plan assets (9) (75) |
USD mill | 2015 | 2014 | ||
|---|---|---|---|---|---|
| Fair value of plan assets at end of prior year | 17 | 105 |
|---|---|---|
| Effect of changes in foreign exchange rates | (4) | (18) |
| Interest income | 4 | |
| Employer contributions | 2 | 8 |
| Benefit payments from plan | (0) | (5) |
| Settlement payments from plan assets | (9) | (75) |
| Return on plan assets (excluding interest income) | (1) | (2) |
| Gross pension assets 31.12 | 6 | 17 |
Remeasurements – change in assumptions (6) 62
| Net liability (asset) | 11 | 56 | 67 | 17 | 74 | 92 |
|---|---|---|---|---|---|---|
| Fair value of plan assets | 6 | 6 | 17 | 17 | ||
| Total pension obligation | 17 | 56 | 73 | 35 | 74 | 109 |
| Service cost | 2 | 1 | 2 | 8 | 1 | 8 |
| Defined benefit obligation | 15 | 56 | 71 | 27 | 73 | 100 |
| Total pension obligations | Funded | Unfunded | Total | Funded | Unfunded | Total |
| USD mill | 2015 | 2014 |
Premium payments in 2016 are expected to be USD 5.0 million (2015: USD 6.6 million). Payments from operations are estimated at USD 4.1 million (2015: USD 5.4 million).
| USD mill Historical developments |
31.12.2015 | 31.12.2014 | 31.12.2013 | 31.12.2012 | 31.12.2011 | 31.12.2010 |
|---|---|---|---|---|---|---|
| Gross pension obligations, including payroll tax | (73) | (109) | (213) | (206) | (227) | (204) |
| Gross pension assets | 6 | 17 | 105 | 107 | 99 | 103 |
| Net recorded pension obligations | (67) | (92) | (108) | (99) | (128) | (101) |
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| OTHER NON CURRENT ASSETS * | |||
| Available-for-sale financial assets | 10 | 122 | 131 |
| Non current share investments | 15 | 2 | 2 |
| Pension assets | 8 | 1 | 1 |
| Related party non current assets | 15/19 | 9 | 11 |
| Other non current assets | 15 | 8 | 9 |
| Total other non current assets | 141 | 154 | |
| OTHER CURRENT ASSETS * | |||
| Account receivables | 19 | 233 | 219 |
| Financial derivatives | 15 | 2 | 10 |
| Restricted cash | 13 | 1 | 7 |
| Other current assets | 15 | 139 | 117 |
| Total other current assets | 375 | 354 | |
| OTHER NON CURRENT LIABILITIES * | |||
| Financial derivatives | 15 | 182 | 205 |
| Other non current liabilities ** | 109 | 91 | |
| Total other non current liabilities | 291 | 297 | |
| OTHER CURRENT LIABILITIES * | |||
| Account payables | 19 | 169 | 175 |
| Financial derivatives | 15 | 68 | 22 |
| Other current liabilities | 188 | 202 | |
| Total other current liabilities | 425 | 399 |
* Current assets and current liabilities are due within 12 months. Non current assets and non current liabilities are due in more than 12 months.
customers vessels. Most customers have paid a deposit for the cylinders they have onboard their vessels. The total deposit liability booked is USD 101 million (2014: USD 89 million).
** WMS group has 569 000 (2014: 542 000) cylinders booked as a other tangible asset in the balance sheet, see note 5. The cylinders are valued at USD 95 million (2014: USD 93 million). These cylinders are partly in the group's own possession and partly on board If cylinders are not returned within 48 months statistics show that the cylinders will not be returned and the net between deposit value and booked value is booked to the income statement.
At 31 December 2015, USD 33 million (2014: USD 38 million) in trade receivables had fallen due but not been subject to impairment. These receivables related to a number of separate customers. Historically, the percentage of bad debts has been low and the group expects the customers to settle outstanding receivables. Receivables fallen due but not subject to impairment have the following age composition:
| USD mill | 2015 | 2014 |
|---|---|---|
| Aging of trade receivables past due but not impaired | ||
| Up to 90 days | 13 | 14 |
| 90-180 days | 20 | 24 |
| Over 180 days | ||
| Movements in group provision for impairment of trade receivables are as follows | ||
| Balance at 01.01 | 6 | 7 |
| Net provision for receivables impairment | (1) | |
| Balance 31.12 | 6 | 6 |
| Account receivables per segment | ||
| WMS group (shipowners and yards) | 224 | 214 |
| WWASA group (shipowners) | 8 | 5 |
| Holding & Investments | ||
| Total Account receivables | 233 | 219 |
See note 15 on credit risk.
| USD mill | 2015 | 2014 |
|---|---|---|
| Available-for-sale financial assets | ||
| At 01.01 | 131 | 126 |
| Sale of available-for-sale financial assets | (5) | |
| Acquisition of KEL | 6 | |
| Change in value of available-for sale assets | (1) | 21 |
| Currency translation adjustment | (14) | (11) |
| Total available-for-sale financial assets | 122 | 131 |
| Available-for-sale financial assets | ||
| Qube Holdings Limited | 116 | 131 |
Kaplan Equity Limited (KEL) 6
Qube Holdings is a diversified Australian logistics and infrastructure company with operating divisions providing logistics services for clients in both import and export cargo supply chains. The company is listed on the Australian Securities Exchange and included in the S&P/ASX100 index. WWH holds 66 million shares in Qube, representing a 6.2% ownership. 35 million shares are mortgaged. See note 14.
Available-for-sale financial assets are denominated in Australian Dollar at 31.12.2015 and at 31.12.2014. The investment in Norwegian Car Carriers ASA was sold in first quarter 2014.
| USD mill | 2015 | 2014 |
|---|---|---|
| Inventories | ||
| Raw materials | 6 | 7 |
| Goods/projects in process | 2 | 0 |
| Finished goods/products for onward sale | 95 | 100 |
| Luboil | 4 | 3 |
| Total inventories | 107 | 110 |
| Obsolescence allowance, deducted above | 4 | 5 |
| Construction contracts The gross amount of Wilhelmsen Technical Solution projects are as follow: |
2015 | 2014 |
| Prepaid expenses & accrued income (other current assets) | 16 | 24 |
| Accrued operating expenses (other current liabilities) | 24 | 44 |
If a contract cost incurred plus recognised profit (less recognised loss) exceed progress billings, the contract value represent an asset and if the case is the opposite the contract represent a liability.
| USD mill | 2015 | 2014 |
|---|---|---|
| Market value current financial investments | ||
| Nordic equities | 116 | 122 |
| Bonds | 210 | 202 |
| Total current financial investments | 327 | 324 |
The fair value of all equity securities, bonds and other financial assets is based on their closing prices in an active market.
| The net unrealised gain/(loss) at 31.12 (4) |
7 |
|---|---|
| ------------------------------------------------ | --- |
The parent company's equity portion of the portfolio of financial investments USD 44 million is held as collateral within a securities' finance facility. See note 14.
| USD mill | 2015 | 2014 |
|---|---|---|
| Payroll tax withholding account | 1 | 1 |
| Other restricted bankaccount / deposits | 2 |
Wilhelmsen Maritime Services AS, Wilhelmsen Chemicals AS, Wilhelmsen Ships Service AS, Wilhelmsen Technical Solutions AS, Wilhelmsen Technical Solutions Norway AS, Wilhelmsen Insurance Services AS, Maritime Protection AS, Wilhelmsen Ship Management (Norway) AS and Wilhelmsen IT Services AS do not have a payroll tax withholding account, but bank guarantees for USD 3.4 million (2014: USD 3.5 million).
| Undrawn committed drawing rights | 50 | 50 |
|---|---|---|
| Including backstop for outstanding certificates and bonds with a remaining term of less than 12 months to maturity | 50 | |
| Undrawn committed loans | 182 | 295 |
| Total interest-bearing debt | 15 | 1 660 | 1 693 |
|---|---|---|---|
| Bank loan | 341 | 368 | |
| Bonds | 270 | 319 | |
| Leasing commitments | 82 | ||
| Mortgages | 1 049 | 924 | |
| Interest-bearing debt | |||
| USD mill | Note | 2015 | 2014 |
| Vessels | 1 730 | 1 627 |
|---|---|---|
| Available-for-sale-financial assets, current financial investments | 166 | 178 |
| Investment in associate and shareholder loan (NorSea Group AS) | 85 | 94 |
| Total book value of collateral, mortgaged and leased assets | 1 981 | 1 900 |
| Due in year 1 | 199 | 103 | |
|---|---|---|---|
| Due in year 2 | 106 | 185 | |
| Due in year 3 | 302 | 118 | |
| Due in year 4 | 641 | 280 | |
| Due in year 5 and later | 411 | 1 008 | |
| Total interest-bearing debt | 15 | 1 660 | 1 693 |
Loan agreements entered into by group companies contain financial covenants related to equity ratio, liquidity, current ratio and net interest-bearing debt / EBITDA measured in respect of the relevant borrowing company or group of companies. In addition one loan facility contains financial covenants relating to value-adjusted equity. The group has had a dialogue with its lenders and received covenant waivers related to the provision made in the third quarter 2015, an extraordinary item impacting only the debt-earnings ratio. Hence the group was in compliance with all loan agreements at 31 December 2015. (The group was in compliance with its covenants at 31 December 2014).
| USD mill | 2015 | 2014 |
|---|---|---|
| The group net interest-bearing debt (joint ventures based on equity method) | ||
| Non current interest-bearing debt | 1 461 | 1 590 |
| Current interest-bearing debt | 199 | 103 |
| Total interest-bearing debt | 1 660 | 1 693 |
| Cash and cash equivalents | 311 | 364 |
| Current financial investments | 327 | 324 |
| Net interest-bearing debt | 1 022 | 1 005 |
| Net interest-bearing debt in joint ventures | ||
| Non current interest-bearing debt | 640 | 620 |
| Current interest-bearing debt | 67 | 85 |
| Total interest-bearing debt in joint ventures | 707 | 705 |
| Cash and cash equivalents | 262 | 223 |
Net interest-bearing debt in joint ventures 445 482
A key part of the liquidity reserve takes the form of undrawn committed drawing rights and loans, which amounted to USD 232 million at 31 December 2015 (2014: USD 345 million).
The group's leasing commitments relating to a financial lease agreement for 3 car carriers was terminated in July 2015 (leasing commitments at 31 December 2014 was USD 82 million). The leasing commitments were related to a financial lease agreement for 3 car carriers. The charter had a floating interest rate (varying annual nominal charter rate). These car carriers had a book value at 31 December 2014 of USD 106 million, and depreciation for the year came to USD 4 million.
The overview above shows the actual maturity structure, with the amount due in year one as the first year's instalment classified under other current liabilities.
The bank debt which partly finances the investment in NorSea Group AS utilizes financial assets available-for-sale as collateral. The parent company's equity portion of the portfolio of financial investments is held as collateral within a securities' finance facility.
| 2015 | 2014 | |
|---|---|---|
| Guarantee commitments | ||
| Guarantees for group companies | 1 142 | 1 069 |
| The carrying amounts of the group's borrowings are denominated in the following currencies | ||
| USD | 1 354 | 1 252 |
| NOK | 306 | 359 |
| GBP | 82 | |
| Total | 1 660 | 1 693 |
| The exposure of the group's borrowings to interest rate changes and the contractual repricing | ||
| dates at the balance sheet date are as follows |
12 months or less 1 112 1 381
See otherwise note 15 for information on financial derivatives (interest rate and currency hedges) relating to interest-bearing debt.
The group has exposure to the following financial risks from its ordinary operations:
Hedging strategies have been established in order to mitigate risks originating from movements in currencies and interest rates. This is compliant with the financial strategy approved by the board of directors. Changes in the market value of financial derivatives are recognised through the income statement (Fair Value Accounting).
Joint venture and associate entities in which the group has joint arrangement or significant influence respectively, hedge their own exposures. These are recorded in the accounts in accordance with the equity method, so that the effects of realised and unrealised changes in financial derivatives in these companies are included in the line "share of profit from joint ventures and associates" in the group accounts.
The group is exposed to currency risk on revenues and costs in non functional
currencies, mostly USD (transaction risk) and balance sheet items denominated in currencies other than non functional currencies, mostly USD (translation risk). The group's largest individual foreign exchange exposure is NOK against USD. The group is also exposed to a number of other currencies, including EUR, SGD, SEK, KRW, DKK, GBP and JPY.
The group's operating segments are responsible for hedging their own material transaction risk. Within the WWASA group segment, approximately 65% at the end of 2015 (2014: 60%) of the USD/NOK exposure is hedged using a four year rolling portfolio of currency forwards and currency options. Exposures in remaining segments and in other currencies are hedged on an ad hoc basis.
The group's policy for mitigating translation risk is to match the denomination currency of assets and liabilities to as a large extent as possible. Material residual translation risk is hedged using basis swaps. NOK 1.6 billion of the group's net NOK debt have been hedged against USD with basis swaps.
On 31 December 2015, material foreign currency balance sheet exposure subject to translation risk was in NOK, EUR, DKK and SEK. Income statement sensitivities (post tax) for the net exposure booked are as follows:
| Income statement effect (post tax) | 5 | 4 | 0 | (3) | (3) |
|---|---|---|---|---|---|
| USD/DKK | 5.49 | 6.17 | 6.86 | 7.54 | 8.23 |
| Income statement effect (post tax) | 12 | 10 | 0 | (8) | (7) |
| USD/SEK | 6.74 | 7.58 | 8.42 | 9.27 | 10.11 |
| Income statement effect (post tax) | 1 | 1 | 0 | (1) | (1) |
| EUR/USD | 0.87 | 0.98 | 1.09 | 1.20 | 1.31 |
| Income statement effect (post tax) | 20 | 16 | 0 | (13) | (11) |
| USD/NOK | 7.06 | 7.94 | 8.82 | 9.71 | 10.59 |
| Translation risk | |||||
| Sensitivity | (20%) | (10%) | 0% | 10% | 20% |
(Tax rate used is 27% that equals the Norwegian tax rate)
| Note | 2015 | 2014 |
|---|---|---|
| Through income statement | ||
| Financial currency | ||
| Net currency gain/(loss) – Operating currency | 28 | 55 |
| Net currency gain/(loss) – Financial currency | 8 | 38 |
| Currency derivatives – realised | (2) | 8 |
| Currency derivatives – unrealised | (26) | (38) |
| Cross currency derivatives – realised | (12) | 4 |
| Cross currency derivatives – unrealised | (21) | (63) |
| 1 Net financial currency |
(25) | 2 |
| Currency translation differences through other comprehensive income | (131) | (168) |
|---|---|---|
| Total net currency effect | (156) | (166) |
The translation risk of material balances items (other currencies than the entities functional currency) is related to WWASA group, since the segment is denominated in USD. The translation currencies for this segment is booked through Income statement and included in "Net financial currency".
For WMS group and Holding & Investments, the material translation risk for these segments are booked to other comprehensive income due to the functional currency for most of the entities is different from the reporting currency USD.
The group's segments perform sensitivity analyses with respect to the unhedged part of the transaction risk on a regular basis.
The portfolio of derivatives used to hedge the group's transaction risk (described above), exhibit the following income statement sensitivity:
| Income statement effect (post tax) | 42 | 23 | 0 | (11) | (23) |
|---|---|---|---|---|---|
| USD/NOK spot rate | 7.06 | 7.94 | 8.82 | 9.71 | 10.59 |
| Transaction risk | |||||
| Income statement sensitivities of economic hedge program | |||||
| Sensitivity | (20%) | (10%) | 0% | 10% | 20% |
| USD mill |
(Tax rate used is 27% that equals the Norwegian tax rate)
The group's strategy is to hedge a significant part of the interest-bearing debt against rising interest rates. As the capital intensity varies across the group's business segments and subsidiaries, which have their own policies on hedging of interest rate risk, targeted and actual hedge ratios vary.
Overall, interest rate derivatives held by the group corresponded to about 57% (2014: 60%) of its interest-bearing debt exposure at 31 December 2015.
| USD mill | 2015 | 2014 |
|---|---|---|
| Due in year 1 | 190 | |
|---|---|---|
| Due in year 2 | 100 | 40 |
| Due in year 3 | 152 | 242 |
| Due in year 4 | 230 | 100 |
| Due in year 5 and later * | 280 | 570 |
| Total interest rate hedges | 952 | 952 |
| *of which forward starting | 150 | 200 |
To replace maturing interest rate hedge derivatives and new debt uptake, the group has entered into forward starting swaps and swaptions with a notional value of USD 150 million. These derivatives commence in 2016 (2014: USD 50 in 2015 and USD 150 in 2016).
The group has outstanding swaption contracts with a notional value of USD 110 million expiring at the end of 2017. Depending on interest rate levels on the expiry date, exercising the swaptions by the counterparties will extend the maturity of normally expiring swaps until 2021.
The average remaining term of the existing loan portfolio is approximately 3.7 years, while the average remaining term of the running hedges and fixed interest loans is approximately 4 years.
The group's interest rate risk originates from differences in duration between assets and liabilities. On the asset side, bank deposits and investments in interest-bearing instruments (corporate bonds) are subject to risk from changes in the general level of interest rates, primarily in USD. On the liability side, the mix of debt and issued bonds with attached fixed or floating interest rates – in combination with financial derivatives on interest rates (plain vanilla interest rates swaps and swaptions) – will be exposed to changes in the level and curvature of interest rates. The group uses the weighted
average duration of interest-bearing assets, liabilities and financial interest rate derivatives to compute the group's sensitivity towards changes in interest rates. This methodology differs from the accounting principles, as only the changes in the market value of interest rate derivatives are recognised over the income statement (as "unrealised gain or loss on interest rate instruments"), whereas outstanding debt is booked at the respective outstanding notional value.
| Fair value sensitivities of interest rate risk | |||||
|---|---|---|---|---|---|
| Change in interest rates' level | (2%) | (1%) | 0% | 1% | 2% |
| Estimated change in fair value | (22) | (11) | 0 | 11 | 22 |
All financial derivatives are booked against the income statement in accordance with the fair value accounting principle.
Apart from the fair value sensitivity calculation based on the group's net duration, the group is exposed to cash flow risk stemming from the risk of increased future interest payments on the unhedged part of the group's debt.
| USD mill | 2015 | 2014 | ||
|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | |
| Interest rate derivatives | ||||
| WWASA group | 77 | 101 | ||
| WMS group | 2 | |||
| Holding & Investments | ||||
| Total interest rate derivatives | 0 | 77 | 0 | 103 |
| Currency derivatives | ||||
| WWASA group | 2 | 69 | 8 | 50 |
| WMS group | 2 | 2 | ||
| Holding & Investments | 2 | 3 | ||
| Total currency derivatives | 2 | 74 | 10 | 53 |
| Cross currency derivatives | ||||
| WWASA group | 93 | 71 | ||
| WMS group | ||||
| Holding & Investments | ||||
| Total cross currency derivatives | 0 | 93 | 0 | 71 |
| Total market value of financial derivatives | 2 | 244 | 10 | 227 |
Book value equals market value
The group actively manages a defined portfolio of liquid financial assets for a proportion of the group's liquidity. In both WWH and WWASA group, the board of directors
determines a strategic asset allocation by setting weights for main asset classes, bonds, equities and cash. Management has certain intervals for each asset class, within which the asset allocation may fluctuate.
Within the investment portfolio, held equities are exposed to movements in equity markets. Listed equity derivatives (futures and options) are applied to manage this
equity risk to reduce the volatility of the investment portfolio's market value. Below table summarizes the equity market sensitivity towards the market value of held equities and equity derivatives:
| Income statement effect | (15) | (8) | (0) | 7 | 14 |
|---|---|---|---|---|---|
| Change in portfolio market value | (20%) | (10%) | 0% | 10% | 20% |
| Change in equity prices | |||||
| USD mill |
Within the investment portfolio, corporate bonds are exposed to interest rate risk, typically measured by the duration. The duration has been low throughout the year (< 3 year). Below table summarizes the interest rate sensitivity towards the fair value of held bonds:
| Fair value sensitivities of interest rate risk | |||||
|---|---|---|---|---|---|
| Change in interest rates' level | (2%) | (1%) | 0% | 1% | 2% |
| Income statement effect | 2 | 1 | 0 | (1) | (2) |
Within the investment portfolio, corporate bonds are exposed to movements in credit spreads – measured as the difference between the bonds' yield to maturity and the level of interest rate swaps with matching maturity – and typically more linked to equity markets' performance. The portfolio's average credit spread at year end 2015 was approximately 210 basis points. The movements in credit spreads will have the same effect on the fair value of held bonds as changes in interest rate levels, see table interest rate risk above.
The group's strategy for bunker is to secure bunker adjustment clauses (BAF) in contracts of affreightment. Various forms of BAF's are included in most of the contracts of affreightment held by the operating joint ventures.
The profitability and cash flow of the group will depend upon the market price of bunker fuel which is affected by numerous factors beyond the control of the group. Rotterdam FOB 380 ended at USD 139 per tonne at end of 2015, which is significantly lower than previous year (2014: USD 285).
The group is exposed to bunker price fluctuations through its investments in Wallenius Wilhelmsen Logistics (WWL) (50%), American Shipping and Logistics Group (50%) and EUKOR Car Carriers (40%), and through adjustment in vessel charter hire from WWL.
EUKOR have entered into derivative contracts to hedge part of the remaining bunker price exposure. The group's share of these contracts corresponds to its share of earnings in EUKOR. The group's share of the market value relating to bunker contracts held by EUKOR were negative USD 10.6 million at 31 December 2015 (2014: negative USD 3.2 million).
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial derivative fails to meet its contractual obligations, and originates primarily from the group's customer receivables, financial derivatives used to hedge interest rate risk or foreign exchange risk, as well as investments, including bank deposits.
The group's exposure to credit risk on its receivables varies across segments and subsidiaries.
The credit risk in the WWASA group segment is determined by the mix and characteristics of each individual customer of the segment specific joint ventures.
However, the WWASA group segment has historically been considered to have low credit risk, as the business is long term in nature and primarily with large and solid customers. In addition, cargo can be held back.
Within the WMS group segment, the global customer base provides a certain level of diversification with respect to credit risk on receivables. The segment monitors and manages its credit risk on a regular basis. Reference is made to note 9.
Given the negative market sentiment in several shipping segments, some customers are currently facing increased financial difficulties relative to previous years, implying that the group's credit risk has increased somewhat, but is still regarded as moderate.
The group's exposure to credit risk on cash and bank deposits is considered to be very limited as the group maintain banking relationships with a selection of financially solid banks (as determined by their official credit ratings) and where the group – in most instances – has a net debt position towards these banks.
The group's exposure to credit risk on its financial derivatives is considered limited as the counterparties are financially.
The group's exposure to credit risk on loans to joint ventures is limited as the group – together with is respective joint venture partners – control the entities to which loans have been provided.
No material loans or receivables were past due or impaired at 31 December 2015 (analogous for 2014).
The group's policy is that no financial guarantees are provided by the parent company. However, financial guarantees are provided within the WWASA group segment and the WMS group segment. See note 14 for further details.
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| Exposure to credit risk | |||
| Financial derivatives | 9 | 2 | 10 |
| Accounts receivables | 9 | 233 | 219 |
| Current financial investments | 12 | 210 | 202 |
| Other non current assets | 9 | 19 | 22 |
| Other current assets | 9 | 139 | 117 |
| Cash and bank deposits | 311 | 364 | |
| Total exposure to credit risk | 914 | 934 |
The group's approach to managing liquidity is to secure sufficient liquidity to meet its liabilities, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's reputation.
The group's liquidity risk is low in that it holds significant liquid assets in addition to credit facilities with the banks.
At 31 December 2015, the group had in excess of USD 638 million (2014: USD 688 million) in liquid assets which can be realised over a three day period in addition to USD 232 million (2014: USD 217 million) in undrawn capacity under its bank facilities.
| USD mill | Less than 1 year |
Between 1 and 2 years |
Between 2 and 5 years |
Later than 5 years |
|---|---|---|---|---|
| Undiscounted cash flows financial liabilities 2015 | ||||
| Mortgages | 125 | 136 | 561 | 374 |
| Bonds | 90 | 6 | 185 | 13 |
| Bank loan | 14 | 327 | ||
| Financial derivatives | 129 | 26 | 102 | 4 |
| Total undiscounted cash flow financial liabilities | 358 | 168 | 1 174 | 391 |
| Current liabilities (excluding next year's instalment on interest-bearing debt) | 373 | |||
| Total gross undiscounted cash flows financial liabilities 31.12.2015 | 731 | 168 | 1 174 | 391 |
| Total gross undiscounted cash flows financial liabilities 31.12.2014 | 670 | 289 | 1 246 | 448 |
|---|---|---|---|---|
| Current liabilities (excluding next year's instalment on interest-bearing debt) | 419 | |||
| Total undiscounted cash flow financial liabilities | 251 | 289 | 1 246 | 448 |
| Financial derivatives | 81 | 55 | 102 | 6 |
| Bank loan | 40 | 330 | ||
| Bonds | 14 | 109 | 217 | 26 |
| Leasing commitments | 8 | 8 | 23 | 82 |
| Mortgages | 108 | 117 | 573 | 334 |
Interest expenses on interest-bearing debt included above have been computed using interest rate curves as of year-end.
The group's bank and lease financing as well as the outstanding bonds is subject to financial or non-financial covenant clauses related to one or several of the following:
As of the balance date, the group is not in breach of any financial or non-financial covenants.
The group's policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future business development. The board of directors monitors return on capital employed, which the group defines as operating profit divided by capital employed (shareholders equity and interest-bearing debt). For the time being, the long-term objective is a ROCE > 10%, however the level is assessed by the BoD annually. The long-term objective is a ROCE > 10%. The board of directors also monitors the level of dividends to shareholders.
The group seeks to maintain a balance between the higher returns that might be possible with higher levels of financial gearing and the advantages of a strong balance sheet. The groups target is to achieve a return on capital employed over time that exceeds the risk adjusted long term weighted average cost of capital. In 2015, the return on capital employed was 3% (2014: 8%).
| USD mill | 2015 | 2014 |
|---|---|---|
| Average equity | 2 284 | 2 308 |
| Average interest-bearing debt | 1 699 | 1 772 |
| Profit after tax | 55 | 290 |
| Net profit before tax * | 36 | 255 |
| Interest expenses and realised interest derivatives | (79) | (85) |
| Return on equity | 2% | 13% |
| Return on capital employed | 3% | 8% |
* Profit before taxes plus interest expenses and realised interest derivatives, in percent of average equity and interest-bearing debt.
The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. The fair value of financial instruments not traded in an active market (over-the-counter contracts) is based on third party quotes. These quotes use the maximum number of observable market rates for price discovery. Specific valuation techniques used by financial counterparties (banks) to value financial derivatives include:
The carrying value less impairment provision of receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial derivatives.
| USD mill | Note | Fair value | Book value |
|---|---|---|---|
| Interest-bearing debt | |||
| Mortgages | 1 047 | 1 049 | |
| Bonds | 268 | 270 | |
| Bank loan | 341 | 341 | |
| Total interest-bearing debt 31.12.2015 | 14 | 1 656 | 1 660 |
| Mortgages | 932 | 924 | |
| Leasing commitments | 85 | 82 | |
| Bonds | 323 | 319 | |
| Bank loan | 368 | 368 | |
| Total interest-bearing debt 31.12.2014 | 14 | 1 708 | 1 693 |
The fair values, except for bond debt, are based on cash flows discounted using a rate based on market rates including margins and are within level 2 of the fair value hierarchy. The fair values of the bond debt are based on quoted prices and are also classified within level 2 of the fair value hierarchy due to limited trading in an active market.
| USD mill | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value | ||||
| Nordic equities | 116 | 116 | ||
| Bonds | 210 | 210 | ||
| Financial derivatives | 2 | 2 | ||
| Available-for-sale financial assets | 116 | 6 | 122 | |
| Total financial assets 31.12.2015 | 442 | 8 | 0 | 450 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 248 | 248 | ||
| Total financial liabilities 31.12.2015 | 248 | 0 | 248 | |
| Financial assets at fair value | ||||
| Nordic equities | 122 | 122 | ||
| Bonds | 184 | 17 | 201 | |
| Financial derivatives | 10 | 10 | ||
| Available-for-sale financial assets | 131 | 131 | ||
| Total financial assets 31.12.2014 | 437 | 27 | 0 | 465 |
| Financial liabilities at fair value | ||||
| Financial derivatives | 227 | 227 | ||
| Total financial liabilities 31.12.2014 | 0 | 227 | 0 | 227 |
The group has not held any level 3 derivatives in the past years.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
The fair value of financial instruments that are not traded in an active market (over-thecounter contracts) are based on third party quotes (Mark-to-Market). These quotes use the maximum number of observable market rates for price discovery. The different techniques typically applied by financial counterparties (banks) were described above. These instruments – FX and IR derivatives – are included in level 2.
The quoted market price used for financial assets held by the group is the current close price. These instruments are included in level 1. Instruments included in level 1 at the end of 2015 are liquid investment grade bonds (analogous for 2014).
If one or more of the significant inputs is not based on observable market data, the derivatives is in level 3.
| Assets at 31.12.2015 | 693 | 330 | 122 | 9 | 1 154 | |
|---|---|---|---|---|---|---|
| Cash and cash equivalent | 311 | 311 | ||||
| Other current assets | 9 | 372 | 2 | 1 | 375 | |
| Current financial investments | 12 | 327 | 327 | |||
| Other non current assets | 9 | 9 | 2 | 122 | 8 | 141 |
| Assets | ||||||
| USD mill | Note | Loans and receivables |
Assets at fair value through the income statement |
Available for-sale financial assets |
Other | Total |
| Note | Liabilities at fair value through the income statement |
Other financial liabilities at amortised cost |
Total | |
|---|---|---|---|---|
| Liabilities | ||||
| Non current interest-bearing debt | 14 | 1 660 | 1 660 | |
| Other non current liabilities | 9 | 182 | 109 | 291 |
| Other current liabilities | 9 | 68 | 357 | 425 |
| Liabilities 31.12.2015 | 250 | 2 126 | 2 376 |
| Assets at fair | ||||||
|---|---|---|---|---|---|---|
| Note | Loans and receivables |
value through the income statement |
Available-for sale financial asset |
Other | Total | |
| Assets | ||||||
| Other non current assets | 9 | 11 | 2 | 131 | 9 | 154 |
| Current financial investments | 12 | 324 | 324 | |||
| Other current assets | 9 | 336 | 10 | 7 | 354 | |
| Cash and cash equivalent | 364 | 364 | ||||
| Assets at 31.12.2014 | 712 | 336 | 131 | 17 | 1 195 |
| Note | Liabilities at fair value through the income statement |
Other financial liabilities at amortised cost |
Total | |
|---|---|---|---|---|
| Liabilities | ||||
| Non current interest-bearing debt | 14 | 1 693 | 1 693 | |
| Other non current liabilities | 9 | 205 | 91 | 297 |
| Other current liabilities | 9 | 22 | 377 | 399 |
| Liabilities 31.12.2014 | 227 | 2 162 | 2 389 |
The chief operating decision-maker monitores the business by combining operatings having similar operational characteristics such as product services, market and underlying asset base, into operating segments. The WWASA group segment offers a global service covering major global trade routes which makes it difficult to allocate to geographical segments.
The equity method for joint ventures provides a fair presentation of the group's financial position but the group's internal financial reporting is based on the proportionate method for joint ventures. The major contributors in the WWASA group segment are joint
ventures and hence the proportionate method gives the chief operating decision-maker a higher level of information and a fuller picture of the group's operations.
For the WMS group segment and Holding & Investment segment the financial reporting will be the same for both equity and proportionate methods.
The segment information provided to the chief operating decision-maker for the reportable segments for the year ended 31 December 2015 is as follows:
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| WWASA group | WMS group | Investments | Eliminations | Total | ||||||
| USD mill | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| INCOME STATEMENT | ||||||||||
| Operating revenue | 2 243 | 2 525 | 998 | 1 090 | 21 | 26 | (25) | (31) | 3 237 | 3 610 |
| Share of profit from associates | 36 | 66 | 5 | 6 | 7 | 6 | 49 | 79 | ||
| Gain on disposals of assets | 29 | 7 | 5 | 35 | 5 | |||||
| Total income | 2 308 | 2 592 | 1 010 | 1 101 | 28 | 32 | (25) | (31) | 3 321 | 3 693 |
| Voyage expenses | (818) | (1 061) | (818) | (1 061) | ||||||
| Vessel expenses | (85) | (82) | (85) | (82) | ||||||
| Charter expenses | (316) | (329) | (316) | (329) | ||||||
| Inventory cost | (458) | (518) | (1) | (1) | (460) | (520) | ||||
| Employee benefits | (168) | (197) | (263) | (267) | (16) | (7) | 1 | 1 | (446) | (470) |
| Other expenses | (658) | (510) | (150) | (169) | (14) | (16) | 24 | 31 | (799) | (664) |
| Depreciation and impairments | (160) | (160) | (73) | (24) | (1) | (1) | (233) | (185) | ||
| Total operating expenses | (2 205) | (2 339) | (944) | (979) | (32) | (26) | 25 | 31 | (3 157) | (3 312) |
| Operating profit/(loss) | 103 | 253 | 65 | 122 | (4) | 6 | (0) | 0 | 165 | 381 |
| Net financial items | 12 | (18) | 2 | (1) | 7 | 15 | 22 | (3) | ||
| Net financial – interest expenses | (91) | (91) | (10) | (12) | (1) | (2) | (103) | (105) | ||
| Net financial currency | (49) | (22) | 11 | 19 | 3 | 3 | (35) | |||
| Financial income/(expenses) | (128) | (131) | 3 | 7 | 9 | 16 | 0 | 0 | (117) | (108) |
| Profit/(loss) before tax | (25) | 122 | 69 | 129 | 5 | 22 | (0) | 0 | 48 | 273 |
| Tax income/(expense) | 23 | 46 | (16) | (25) | 2 | (1) | 8 | 20 | ||
| Profit/(loss) for the year before minorities | (3) | 168 | 52 | 104 | 7 | 21 | (0) | 0 | 56 | 292 |
| Minority interests | 47 | 2 | 4 | 2 | 51 | |||||
| Profit/(loss) for the year after minorities | (3) | 121 | 50 | 100 | 7 | 21 | (0) | 0 | 54 | 241 |
| Reconciliations between the operational segments and the group's income statement | Note | 2015 | 2014 |
|---|---|---|---|
| Total segment income | 16 | 3 321 | 3 693 |
| Share of total income from joint ventures | 2 | (1 933) | (2 241) |
| Share of profit/(loss) from joint ventures | 2 | (108) | 86 |
| Total income | 1 281 | 1 538 | |
| Share of (profit)/loss from joint ventures and associates | 2 | 60 | (165) |
| Gain on sale of assets | 1 | (34) | (5) |
| Operating revenue | 1 307 | 1 369 | |
| Total profit for the year | 16 | 54 | 241 |
| Profit for the year attribute to the owners | 54 | 241 |
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| WWASA group | WMS group | Investments | Eliminations | Total | ||||||
| USD mill | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| FINANCIAL INCOME/(EXPENSES) | ||||||||||
| Investment management 1 | 2 | 6 | 4 | 12 | 6 | 18 | ||||
| Interest income | 4 | 4 | 2 | 3 | 1 | 1 | 7 | 8 | ||
| Other financial items | (12) | (10) | (2) | 2 | 3 | (10) | (10) | |||
| Net financial items | (6) | (1) | 2 | 1 | 7 | 15 | 0 | 0 | 4 | 16 |
| Financial – interest expenses | ||||||||||
| Interest expenses | (57) | (63) | (9) | (11) | (1) | (2) | (69) | (76) | ||
| Interest rate derivatives – realis. | (34) | (29) | (1) | (1) | 0 | (34) | (29) | |||
| Net financial – interest expenses | (91) | (91) | (10) | (12) | (1) | (2) | 0 | 0 | (103) | (105) |
| Interest rate derivatives – unrealised | 24 | (17) | 0 | (2) | 0 | 0 | 0 | 0 | 24 | (19) |
| Financial currency | ||||||||||
| Currency gain/(loss) – operation | (5) | 11 | 24 | 39 | 19 | 51 | ||||
| Currency gain/(loss) – financial | 16 | 53 | (15) | (24) | 5 | 6 | 7 | |||
| Curr. derivatives – realis. | (2) | 10 | (2) | 10 | ||||||
| Curr. derivatives – unrealis. | (26) | (36) | 2 | 3 | (3) | (4) | (26) | (36) | ||
| Cross curr.derivatives – realis. | (12) | 4 | (12) | 4 | ||||||
| Cross curr.derivatives – unrealis. | (21) | (63) | (21) | (63) | ||||||
| Net financial currency | (49) | (22) | 11 | 19 | 3 | 3 | 0 | 0 | (35) | (36) |
| Financial derivatives bunkers | ||||||||||
| Valuation of bunker hedges | (6) | (6) | ||||||||
| Net financial derivatives bunkers | (6) | (0) | 0 | 0 | 0 | (6) | (0) | |||
| Financial income/(expenses) | (128) | (131) | 3 | 7 | 9 | 16 | 0 | 0 | (117) | (143) |
The amounts provided to the chief operating decision-maker with respect to total assets, liabilities and equity are measured in a manner consistent with that of the balance sheet.
The balance sheet is based on equity consolidation for joint ventures and is therefore not directly consistent with the segment reporting for the income statement.
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| WWASA group | WMS group | Investments | Eliminations | Total | ||||||
| USD mill | 31.12.15 | 31.12.14 | 31.12.15 | 31.12.14 | 31.12.15 | 31.12.14 | 31.12.15 | 31.12.14 | 31.12.15 | 31.12.14 |
| BALANCE SHEET | ||||||||||
| Assets | ||||||||||
| Deferred tax asset | 67 | 25 | 22 | 16 | 3 | 2 | 92 | 43 | ||
| Intangible assets | 6 | 6 | 199 | 270 | 0 | 0 | 205 | 276 | ||
| Tangible assets | 1 827 | 1 760 | 182 | 187 | 2 | 3 | 2 011 | 1 950 | ||
| Investments in joint ventures and associates | 1 025 | 1 164 | 15 | 17 | 76 | 83 | 1 116 | 1 264 | ||
| Other non current assets | 1 | 1 | 9 | 11 | 131 | 142 | 141 | 154 | ||
| Current financial investments | 242 | 235 | 85 | 89 | 327 | 324 | ||||
| Other current assets | 24 | 23 | 455 | 439 | 6 | 4 | (3) | (2) | 482 | 464 |
| Cash and cash equivalents | 108 | 140 | 181 | 179 | 22 | 46 | 311 | 364 | ||
| Total assets | 3 299 | 3 353 | 1 063 | 1 118 | 326 | 370 | (3) | (2) | 4 686 | 4 839 |
| Equity and liabilities | ||||||||||
| Equity majority | 1 204 | 1 242 | 273 | 307 | 278 | 312 | 1 754 | 1 860 | ||
| Equity minorties | 451 | 465 | 4 | 452 | 469 | |||||
| Deferred tax | 1 | 20 | 8 | 20 | 8 | |||||
| Interest-bearing debt | 1 319 | 1 325 | 307 | 328 | 34 | 40 | 1 660 | 1 693 | ||
| Other non current liabilities | 225 | 264 | 126 | 115 | 7 | 9 | 358 | 389 | ||
| Other current liabilities | 100 | 55 | 336 | 357 | 7 | 9 | (3) | (2) | 441 | 419 |
| Total equity and liabilities | 3 299 | 3 353 | 1 063 | 1 118 | 326 | 370 | (3) | (2) | 4 686 | 4 839 |
| Investments in tangible assets | 154 | 35 | 39 | 22 | 1 | 193 | 58 |
The amounts provided to the chief operating decision-maker with respect to cash flows are measured in a manner consistent with that of the balance sheet. The cash flows are
based on equity consolidation for joint ventures and is therefore not directly consistent with the segment reporting for the income statement.
| Holding and | ||||||
|---|---|---|---|---|---|---|
| WWASA group | WMS group | Investments | ||||
| USD mill | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| CASH FLOW | ||||||
| Profit/(loss) before tax | (38) | 104 | 69 | 129 | 5 | 22 |
| Net financial (income)/expenses | 98 | 108 | (5) | (19) | (15) | (23) |
| Depreciation/impairment | 80 | 80 | 73 | 25 | 1 | 1 |
| Change in working capital | (34) | (19) | (53) | (93) | (7) | (6) |
| Share of (profit)/loss from joint ventures and associates | 72 | (152) | (5) | (6) | (7) | (6) |
| Net gain from sale of associate | (26) | |||||
| Dividend received from joint ventures and associates | 41 | 95 | 4 | 6 | 2 | 2 |
| Net cash provided by operating activities | 194 | 216 | 83 | 41 | (23) | (11) |
| Net sale/(investments) in fixed assets | (147) | (20) | (33) | (46) | (1) | |
| Net sale/(investments) in entities and segments | 39 | (7) | 8 | (34) | (18) | |
| Net investments in financial investments | (33) | 4 | 2 | 3 | (4) | 1 |
| Net changes in other investments | 4 | 1 | ||||
| Net cash flow from investing activities | (137) | (16) | (38) | (34) | (38) | (18) |
| Net change of debt | 43 | (88) | (22) | 30 | ||
| Net change in other financial items | (91) | (59) | (12) | (18) | (1) | (2) |
| Net dividend from other segments/ to shareholders | (41) | (69) | (8) | (34) | 38 | 41 |
| Net cash flow from financing activities | (89) | (216) | (42) | (21) | 37 | 39 |
| Net increase in cash and cash equivalents | (32) | (17) | 3 | (15) | (23) | 11 |
| Cash and cash equivalents at the beg.of the period | 140 | 157 | 179 | 193 | 46 | 36 |
| Cash and cash equivalents at the end of period | 108 | 140 | 181 | 179 | 22 | 46 |
| Europe | Americas | Asia & Africa | Oceania | Other | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| USD mill | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| GEOGRAPHICAL AREAS | ||||||||||||
| Total income | 393 | 538 | 107 | 116 | 441 | 560 | 33 | 39 | 307 | 285 | 1 281 | 1 538 |
| Total assets | 1 313 | 1 536 | 75 | 87 | 689 | 665 | 32 | 34 | 2 576 | 2 516 | 4 686 | 4 839 |
| Investment in tangible assets | 20 | 9 | 1 | 1 | 17 | 12 | 1 | 1 | 154 | 35 | 193 | 58 |
Assets and investments in shipping-related activities are not allocated to geographical areas, since these assets constantly move between the geographical areas and a breakdown would not provide a sensible picture. This is consequently allocated under the "other" geographical area.
Area assets are based on the geographical location of the assets.
Area capital expenditure is based on the geographical location of the assets.
The share of profits from joint ventures and associates is allocated in accordance with the location of the relevant company's head office. This does not necessarily reflect the geographical distribution of the underlying operations, but it would be difficult to give a correct picture when consolidating in accordance with the equity method.
Area income is based on the geographical location of the company and includes sales gains and share of profit from joint ventures and associates.
Charter hire income received by shipowning companies cannot be allocated to any geographical area. This is consequently allocated under the "other" geographical area.
The equity method is used in communicating externally, in accordance with IFRS.
The amounts provided with respect to the segment split are in a manner consistent with that of the income statement.
| Holding and | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| WWASA group | WMS group | Investments | Eliminations | Total | ||||||
| USD mill | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| INCOME STATEMENT | ||||||||||
| Operating revenue | 313 | 285 | 998 | 1 090 | 21 | 26 | (25) | (31) | 1 307 | 1 369 |
| Other income | ||||||||||
| Share of profit/(loss) from joint ventures and associates * |
(72) | 152 | 5 | 6 | 7 | 6 | (60) | 165 | ||
| Gain on sales of assets | 27 | 7 | 5 | 34 | 5 | |||||
| Total income | 267 | 437 | 1 010 | 1 101 | 28 | 32 | (25) | (31) | 1 281 | 1 538 |
| Operating profit/(loss) before depreciation and impairment (EBITDA) |
140 | 291 | 138 | 146 | (3) | 7 | 0 | 0 | 275 | 444 |
| Depreciation and impairment | (80) | (80) | (73) | (24) | (1) | (1) | (154) | (105) | ||
| Operating profit/(loss) | 60 | 211 | 65 | 122 | (4) | 6 | 0 | 0 | 122 | 339 |
| Financial income/(expense) | (98) | (108) | 3 | 7 | 9 | 16 | (86) | (85) | ||
| Profit/(loss) before tax | (38) | 104 | 69 | 129 | 5 | 22 | 0 | 0 | 36 | 255 |
| Tax income/(expense) | 33 | 62 | (16) | (25) | 2 | (1) | 19 | 36 | ||
| Profit/(loss) for the year before minorities | (4) | 166 | 52 | 104 | 7 | 21 | 0 | 0 | 55 | 290 |
| Minorities | (1) | 45 | 2 | 4 | 1 | 49 | ||||
| Profit/(loss) for the year after minorities | (3) | 121 | 50 | 100 | 7 | 21 | 0 | 0 | 54 | 241 |
* Cash settled portion of bunker hedge swaps is included in net operating profit by reduction/(increase) of voyage related expenses.
The group has lease agreements for 3 vessels on operating leases. The 3 vessels are chartered on a 15 year time charter from 2006 (2 vessels) and 2007 (1 vessel) with an option to extend for additional 5 + 5 years.
Sale/leaseback agreement for the office building, Strandveien 20 for 15 years from 1 October 2009, with an option to extend for additional 5 years + 5 years.
Lease agreement for the office building (including storage and parking) Strandveien 12. The lease run over 10 years from 1 June 2006, with an option to extend for additional 5 years. The option to extend is agreed from 2016, with new 5 years the lease agreement runs until 2021.
Liferafts, as a part of the WMS group products and services, are on operating lease for 5 years. The first lease agreement was established in 2008.
| Nominal amount of operating lease commitments | 192 | 239 |
|---|---|---|
| Due in year 5 and later | 71 | 106 |
| Due in year 4 | 29 | 31 |
| Due in year 3 | 29 | 32 |
| Due in year 2 | 30 | 34 |
| Due in year 1 | 32 | 36 |
| USD mill | 2015 | 2014 |
In connection to the daily operation the group has additional lease agreements for office rental and office equipment.
The group has, on own accounts, two new vessels due for delivery in 2016.
| USD mill | 2015 | 2014 |
|---|---|---|
| Due in year 1 | 130 | 145 |
| Due in year 2 | 130 | |
| Nominal amount of newbuilding commitments | 130 | 275 |
Financial leases
Sale/leaseback agreements have been entered into for the two vessels due for delivery in 2016. The 2 leases run over 14 years and 9 month from delivery with an option to extend for an additional 5 + 5 years or a purchase option after the end of each period, and will be accounted for according to financial leases.
| USD mill | 2015 | 2014 |
|---|---|---|
| Due in year 1 | 20 | |
| Due in year 2 | 20 | |
| Due in year 3 | 20 | |
| Due in year 4 | 20 | |
| Due in year 5 and later | 215 | |
| Nominal amount of financial lease commitments | 295 |
There were no material acquisitions in the group in 2015 or 2014.
The ultimate owner of the group Wilh.Wilhelmsen Holding ASA is Tallyman AS, which control about 60% of voting shares of the group. The ulimate owners of Tallyman AS are the Wilhelmsen family and Mr Wilhelm Wilhelmsen controls Tallyman AS.
Remuneration to Mr Wilhelm Wilhelmsen for 2015 totalled USD 320 thousand (2014: USD 409 thousand) whereof USD 93 thousand (2014: USD 119 thousand) was consulting fee, USD 9 thousand (2014: USD 10 thousand) in nomination committee for Wilh. Wilhelmsen Holding ASA and Wilh. Wilhelmsen ASA and USD 219 thousand (2014: USD 280 thousand) in ordinary paid pension and other remuneration.
See note 4 regarding fees to board of directors, and note 2 and note 9 in the parent company regarding ownership.
The group has undertaken several agreements and transactions with related parties – joint ventures in the segments WWASA group, WMS group and Holding & Investments in 2015 and 2014. All transactions are entered into in the market terms.
The services are:
Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually.
Most of the above expenses will be a part of time charter income from joint ventures. Net income from joint ventures include the expenses to the related parties as a part of the share of profit from joint ventures and associates.
| NorSea Group AS | Stavanger, Norway | 40.0% | |
|---|---|---|---|
| Hyundai Glovis Co Ltd | Seoul, Republic of Korea | 12.0% | |
| ASL group * | New Jersey, USA | 50.0% | |
| Tellus Shipping AS | Lysaker, Norway | 50.0% | |
| EUKOR Car Carriers Inc | Seoul, Republic of Korea | 40.0% | |
| Wallenius Wilhelmsen Logistics AS | Lysaker, Norway | 50.0% | |
| Material related parties in WWH group are: Business office, country |
Ownership |
* American Roll-on Roll-off Carrier Holdings Inc., Fidelio Inc, Fidelio Limited Partnership, American Logistics Network LLC, American Shipping & Logistics Group Inc.
Wallenius Wilhelmsen Logistics (WWL) is a joint venture between WWASA and Wallenius Lines AB (Wallenius). It is an operating company within both the shipping and the logistics activities. It operates most of the WWASA groups and Wallenius' owned vessels. The distribution of income from WWL to WWASA group and Wallenius is based on the total net revenue earned by WWL from the operating of the combined fleets of WWASA group and Wallenius, rather than the net revenue earned by each party's vessels.
EUKOR Car Carriers Inc is also chartering vessel from WWASA group. The contracts governing such transactions are based on commercial market terms and mainly related to the chartering of vessels on short and long term charters.
In addition, JV's and associate (Hyundai Glovis Co Ltd) have several transactions with each other. The contracts governing such transactions are based on commercial market terms and mainly related to the chartering of vessels on short and long term charters.
| USD mill | Note | 2015 | 2014 |
|---|---|---|---|
| OPERATING REVENUE FROM RELATED PARTY | |||
| Sale of goods and services to joint ventures and associates from: | |||
| WWASA group | 312 | 270 | |
| WMS group | 13 | 8 | |
| Holding & Investments | 2 | 2 | |
| Operating revenue from related party | 327 | 280 | |
| OPERATING EXPENSES TO RELATED PARTY | |||
| Purchase of goods and services from joint ventures and associates to: | |||
| WMS group | 4 | 2 | |
| Operating expenses from related party | 4 | 2 | |
| ACCOUNT RECEIVABLES FROM RELATED PARTY | |||
| WWASA group | 6 | 3 | |
| WMS group | 3 | 4 | |
| Account receivables from related party | 10 | 7 | |
| ACCOUNT PAYABLES TO RELATED PARTY | |||
| WWASA group | 1 | 1 | |
| Account payables to related party | 1 | 1 | |
| NON CURRENT ASSETS TO RELATED PARTY | |||
| Holding & Investments | 9 | 11 | |
| Non current assets to related party | 9 | 11 |
Of the groups total controlled fleet as per 31 December 2015 26 (2014: 26) vessels are chartered out on operating lease with variable time charter rates and 6 (2014: 6) vessels are chartered out on operating lease with fixed time charter rates.
| USD mill | 2015 | 2014 |
|---|---|---|
| Variable Time Charter | 268 | 226 |
| Fixed Time Charter | 44 | 44 |
| Other operating revenues | 1 | 15 |
| Total operating revenues | 313 | 285 |
Future minimum lease payments under non-cancellable fixed operating leases agreements:
| USD mill | 2015 | 2014 |
|---|---|---|
| Duration less than one year | 44 | 44 |
| Duration between one and five years | 111 | 129 |
| Duration over five years | 23 | 49 |
| Total future minimum lease payments | 178 | 222 |
The size and global activities of the group dictate that companies in the group will be involved from time to time in disputes and legal actions.
The authorities in Japan (2013), South Africa (2015) and China (2015) have fined WWL for anti-trust behaviour. EUKOR has been fined in China (2015).
The companies continue to be part of anti-trust investigations in several jurisdictions, of which the EU and US are among the bigger jurisdictions. As some of the processes are confidential, WWASA is not in a position to comment on the ongoing investigations within the respective jurisdictions. The processes are expected to continue to take time, but further clarifications within some jurisdictions are expected during 2016 and 2017.
In the third quarter 2015, WWASA made a provision of USD 200 million representing the estimated WW share of exposure in WWL and EUKOR. The provision is allocated to JVs in the shipping segment. As of 31 December 2015 USD 179 million is remaining.
The group is not aware of any further financial risk associated with disputes and legal actions which are not largely covered through insurance arrangements. Any such disputes/actions which might exist are of such a nature that they will not significantly affect the group's financial position.
The board of directors of WWASA proposes to carry out a restructuring of the company. In the new suggested structure, Den Norske Amerikalinje AS (owning the 12.0% shareholding in Hyundai Glovis) is demerged from WWASA and carried forward in a separately listed entity to be named Treasure ASA.
The proposed demerger will improve transparency and create a simpler structure visualising values for shareholders in WWASA. In addition, WWASA will be more correct capitalised following the restructuring.
The restructuring enables WWASA to focus on their core activities, creating value through its joint ventures by offering global car and ro-ro customers' high quality sea transportation and integrated logistics/land-based solutions from factory to dealer.
Shareholders in WWASA will receive the same amount of shares they hold in WWASA in Treasure ASA and hence keep their prorate share.
Treasure ASA will be jointly and severally responsible for the obligations incurred by WWASA parent company prior to the demerger becoming effective.
The proposed changes are subject to approval at an extraordinary general meeting in WWASA to be held in April 2016 (to be confirmed).
WWL has entered into an agreement with Two Continents Logistics to acquire full ownership of WWL Vehicle Services Americas (VSA), currently a joint venture (50/50) between the two companies based in USA. The company employs 3 400 employees and handles some 4.7 million units annually.
With full ownership, WWL strengthens its position as a leading provider of vehicle processing for automotive manufacturers in North America.
WWL has also entered into an agreement with partner company Groupe CAT to acquire its 50.0% shares in CAT-WWL, a joint venture network of ten vehicle-processing facilities based in South Africa.
With full ownership in CAT-WWL, WWL becomes one of the top independent providers of vehicle processing services to support automotive manufacturers in South Africa.
The business employs more than 900 workers and handles some 680 000 units.
In addition, WWL has sold Vehicle Services Europe (VSE) to Groupe CAT. The company employs some 400 employees with truck based inland distribution in Europe and three vehicle processing centres in Germany.
No other material events occurred between the balance sheet date and the date when the accounts were presented which provide new information about conditions prevailing on the balance sheet date.
| NOK thousand | Note | 2015 | 2014 |
|---|---|---|---|
| Operating income | 1 | 87 213 | 87 317 |
| Operating expenses | |||
| Employee benefits | 2 | (104 167) | (36 301) |
| Operating expenses | 1 | (62 943) | (51 455) |
| Depreciation | 3/5 | (2 406) | (2 627) |
| Total operating expenses | (169 517) | (90 383) | |
| Operating profit/(loss) | (82 304) | (3 066) | |
| Financial income/(expenses) | |||
| Net financial income | 1 | 795 062 | 761 531 |
| Net financial expenses | 1 | (6 088) | (6 903) |
| Financial income/(expenses) | 788 974 | 754 628 | |
| Profit before tax | 706 670 | 751 562 | |
| Tax income/(expense) | 4 | 21 735 | (15 478) |
| Profit for the year | 728 405 | 736 084 | |
| Transfers and allocations | |||
| To equity | 9 | 496 386 | 504 064 |
| Proposed dividend | 9 | 139 211 | 139 211 |
| Interim dividend paid | 9 | 92 808 | 92 808 |
| Total transfers and allocations | 728 405 | 736 084 |
| NOK thousand | Note | 2015 | 2014 |
|---|---|---|---|
| Profit for the year | 728 405 | 736 084 | |
| Items that will not be reclassified to the income statement | |||
| Remeasurement postemployment benefits, net of tax | 9/10 | 11 695 | (46 137) |
| Total comprehensive income | 740 100 | 689 947 | |
| Attributable to | |||
| Owners of the parent | 740 100 | 689 947 | |
| Total comprehensive income for the year | 740 100 | 689 947 |
Notes 1 to 16 on the next pages are an integral part of these financial statements.
| NOK thousand | Note | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| ASSETS | |||
| Non current assets | |||
| Deferred tax asset | 4 | 16 163 | |
| Intangible assets | 3 | 1 529 | 1 198 |
| Tangible assets | 3 | 14 208 | 15 239 |
| Investments in subsidiaries | 5 | 4 338 477 | 4 031 038 |
| Other non current assets | 6 | 4 563 | 3 063 |
| Total non current assets | 4 374 940 | 4 050 537 | |
| Current assets | |||
| Current financial investments | 7/8 | 752 528 | 664 931 |
| Other current assets | 6/8 | 544 472 | 323 811 |
| Cash and cash equivalents | 152 896 | 291 323 | |
| Total current assets | 1 449 896 | 1 280 065 | |
| Total assets | 5 824 837 | 5 330 603 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Paid-in capital | 9 | 930 076 | 930 076 |
| Own shares | 9 | (2 000) | (2 000) |
| Retained earnings | 9 | 4 510 551 | 4 002 471 |
| Total equity | 5 438 628 | 4 930 547 | |
| Non current liabilities Pension liabilities |
10 | 48 102 | 66 692 |
| Deferred tax | 4 | 3 132 | |
| Other non current liabilities | 6 | 43 853 | 37 274 |
| Total non current liabilities | 91 955 | 107 098 | |
| Current liabilities | |||
| Public duties payable | 7 412 | 5 241 | |
| Other current liabilities | 6/11 | 286 842 | 287 716 |
| Total current liabilities | 294 253 | 292 957 | |
| Total equity and liabilities | 5 824 837 | 5 330 603 |
Lysaker, 17 March 2016 The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler chair
Odd Rune Austgulen
Thomas Wilhelmsen group CEO
Helen Juell
Bettina Banoun
Carl Erik Steen
Notes 1 to 16 on the next pages are an integral part of these financial statements.
| NOK thousand Note |
2015 | 2014 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit before tax | 706 670 | 751 562 |
| Financial (income)/expenses | (782 532) | (768 725) |
| Depreciation 3 |
2 406 | 2 627 |
| Gain of fixed asset 3 |
(3) | |
| Change in net pension liability | (26 225) | (63 880) |
| Change in other current assets | (6 495) | (2 076) |
| Change in working capital | (7 291) | 19 465 |
| Net cash provided by operating activities | (113 470) | (61 026) |
| Cash flow from investing activities | ||
| Proceeds from sale of fixed assets | 313 | |
| Investments in fixed assets 3 |
(2 016) | (4 321) |
| Investments in subsidaries | (306 439) | (99 840) |
| Loan repayments received from subsidiaries | 7 874 | |
| Loans granted to subsidiaries | (1 500) | (1 000) |
| Proceeds from sale of financial investments | 341 634 | 168 941 |
| Investments in financial investments | (377 017) | (170 561) |
| Dividend received | 10 474 | 8 943 |
| Interest received 1 |
3 498 | 2 313 |
| Net cash flow from investing activities | (331 052) | (87 652) |
| Cash flow from financing activities | ||
| Interest paid | (1 886) | (1 558) |
| Group contribution/dividends from subsidaries 1/4 |
540 000 | 500 000 |
| Dividend to shareholders 9 |
(232 019) | (232 019) |
| Net cash flow from financing activities | 306 095 | 266 423 |
| Net increase in cash and cash equivalents | (138 427) | 117 745 |
| Cash and cash equivalents, at the beginning of the period | 291 323 | 173 578 |
| Cash and cash equivalents at 31.12 | 152 896 | 291 323 |
The company has several bank accounts in different currencies. Unrealised currency effects are included in net cash provided by operating activities.
Notes 1 to 16 on the next pages are an integral part of these financial statements.
| NOK thousand | 2015 | 2014 | |
|---|---|---|---|
| OPERATING INCOME | |||
| Other income | 2 650 | 112 | |
| Income from group companies | 14 | 84 560 | 87 205 |
| Gain on sale of assets | 3 | ||
| Total operating income | 87 213 | 87 317 | |
| OTHER OPERATING EXPENSES | |||
| Expenses to group companies | 14 | (22 291) | (21 450) |
| Communication and IT expenses | (3 651) | (2 085) | |
| External services | 2 | (8 876) | (12 586) |
| Travel and meeting expenses | (6 036) | (2 569) | |
| Marketing expenses | (1 570) | (3 969) | |
| Other administration expenses | (20 518) | (8 796) | |
| Total other operating expenses | (62 943) | (51 455) | |
| FINANCIAL INCOME/(EXPENSES) | |||
| Financial income | |||
| Investment management | 8 540 | 47 777 | |
| Interest income | 14 | 3 498 | 2 313 |
| Dividend/group contribution from subsidiaries | 14 | 740 000 | 670 000 |
| Net currency gain | 43 024 | 41 441 | |
| Net financial income | 795 062 | 761 531 | |
| Financial expenses | |||
| Interest expenses | (4 363) | (4 901) | |
| Other financial items | 7 | (1 725) | (2 001) |
| Net financial expenses | (6 088) | (6 903) | |
| Net financial income | 788 974 | 754 628 |
| Average number of employees | 51 | 52 |
|---|---|---|
| Total employee benefits | 104 167 | 36 301 |
| Other remuneration | 8 890 | 3 001 |
| Termination gain defined benefit plan | (56 798) | |
| Pension cost | 11 540 | 14 094 |
| Payroll tax | 12 863 | 13 448 |
| Pay | 70 874 | 62 555 |
| NOK thousand | 2015 | 2014 |
| Group CFO | 3 256 | 1 170 | 2 247 | 2 484 | 9 158 |
|---|---|---|---|---|---|
| Group CEO | 4 372 | 3 128 | 1 176 | 1 267 | 9 943 |
| 2014 | |||||
| Group CFO | 3 570 | 912 | 1 157 | 1 166 | 6 805 |
| Group CEO | 4 539 | 2 246 | 1 588 | 1 534 | 9 908 |
| 2015 | |||||
| NOK thousand | Pay | Bonus | Pension premium |
* Other remuneration |
Total |
* Mainly related to gross up pension expenses and company car.
Remuneration of the five directors totalled NOK 2 150 for 2015 (2014: NOK 2 000). The board's remuneration for the fiscal year 2015 will be approved by the general assembly 3 May 2016.
In addition the chair had remuneration as a board member in WWASA with NOK 325 in 2015 (2014: NOK 300). The chair also has an consulting agreement with the WWASA group, where he got paid NOK 200 in 2015 (2014: NOK 200).
Remuneration of the nomination committee totalled NOK 85 for 2015 (2014: NOK 70).
Senior executives
Thomas Wilhelmsen – group CEO Nils Petter Dyvik – group CFO
The group CEO – agreed retirement age is 62, provided not agreed to be postponed. The pension should basically be 66% at age 67.
The group CEO has a severance pay guarantee under which he has the right to receive up to 100% of his annual salary for 24 months after leaving the company as a result of mergers, substantial changes in ownership, or a decision by the board of directors. Possible income during the period is deducted up to 50%, which comes into force after six months notice period.
There were no loan or guarantees to employees per 31.12.2015.
| Name | A shares | B shares | Total | Part of total shares |
Part of voting stock |
|---|---|---|---|---|---|
| Board of directors | |||||
| Diderik Schnitler (chair) | 2 000 | 25 000 | 27 000 | 0.06% | 0.01% |
| Bettina Banoun | 2 200 | 2 200 | 0.00% | 0.01% | |
| Helen Juell | 20 188 | 20 188 | 0.04% | 0.06% | |
| Odd Rune Austgulen | 136 | 40 000 | 40 136 | 0.09% | 0.00% |
| Carl E. Steen | 8 000 | 8 000 | 0.02% | 0.02% | |
| Senior executives | |||||
| Thomas Wilhelmsen – group CEO | 22 100 | 750 | 22 850 | 0.05% | 0.06% |
| Nils Petter Dyvik – group CFO | 4 492 | 5 000 | 9 492 | 0.02% | 0.01% |
| Nomination committee | |||||
| Wilhelm Wilhelmsen | 20 882 114 | 2 302 444 | 23 184 558 | 49.86% | 60.29% |
| Gunnar Fredrik Selvaag | 0.00% | 0.00% | |||
| Jan Gunnar Hartvig | 0.00% | 0.00% |
As of 1 January 2015, the synthetic option programme was replaced with a new long term incentive (LTI) scheme. Participants are the group management team and the presidents for Wilhelmsen Ships Service and Wilhelmsen Ship Management. For the group CEO, maximum annual payment is 100% of base salary and for the president and CEO of WWASA it is 75%. For the remaining six participants of the programme, the annual payment is 50% of base salary.
The LTI is focusing on long term shareholder value creation and is based on positive development of the WW group's value adjusted equity. The ambitions set for the programme are to increase alignment with shareholders' interest, attract, retain and motivate participants and drive long-term group performance.
Settlement is based on return on value adjusted equity the last four years leading up to the settlement. The value adjusted equity is determined by using a "sum-of-the-parts" principle. For listed companies, value adjusted equity is based on market price, while earnings multiples are used for non-listed entities.
The board sets value adjusted equity targets at the beginning of each four year measurement period. Without consultation or agreement with the individual, the board has the right to change or terminate incentive programme after each year.
The extraordinary general meeting of Wilh. Wilhelmsen Holding ASA (WWH) held at 6 December 2011 resolved to renew the share-price-based incentive program for employees at management level in the company, and in its associated subsidiaries.
The program has a duration of three years, running from 1 January 2011 until 31 December 2013, extended to 2014, and entitles the participants to a cash reward based on the annual total return of the underlying shares and dividends during the period. Maximum annual payment is set to 50% of annual basic salary.
The board of directors for WWH and the board of directors for Wilh. Wilhelmsen ASA (WWASA) was authorised to decide the beneficiaries under the program. The two boards initially allocated annually 16 500 share equivalents in WWH (A shares) and annually 130 000 share equivalents in WWASA.
Share equivalent in WWI shares Share equivalent in WW ASA shares
| Thomas Wilhelmsen – group CEO | 6 500 | 30 000 |
|---|---|---|
| Nils Petter Dyvik – group CFO | 4 500 | 20 000 |
| EXPENSED AUDIT FEE (excluding VAT) | ||||
|---|---|---|---|---|
| ------------------------------------ | -- | -- | -- | -- |
| Total expensed audit fee | 573 | 469 |
|---|---|---|
| Other service fees | 32 | 8 |
| Statutory audit | 541 | 461 |
| NOK thousand | 2015 | 2014 |
| Intangible | Other tangible | |||
|---|---|---|---|---|
| NOK thousand | assets | Buildings | assets | Total |
| 2015 | ||||
| Cost price 01.01 | 1 530 | 10 582 | 11 740 | 23 852 |
| Additions | 625 | 1 390 | 2 016 | |
| Disposals | (442) | (442) | ||
| Cost price 31.12 | 2 156 | 10 582 | 12 688 | 25 426 |
| Accumulated ordinary depreciation 01.01 | (332) | (1 327) | (5 755) | (7 415) |
| Depreciation/amortisation | (294) | (423) | (1 688) | (2 406) |
| Disposals | 132 | 132 | ||
| Accumulated ordinary depreciation 31.12 | (626) | (1 751) | (7 311) | (9 688) |
| Carrying amounts 31.12 | 1 529 | 8 831 | 5 377 | 15 738 |
| 2014 | ||||
| Cost price 01.01 | 43 | 6 663 | 12 825 | 19 531 |
| Additions | 3 919 | 402 | 4 321 | |
| Disposals | 1 488 | (1 488) | ||
| Cost price 31.12 | 1 530 | 10 582 | 11 740 | 23 852 |
| Accumulated ordinary depreciation 01.01 | (43) | (1 022) | (3 723) | (4 787) |
| Depreciation/amortisation | (289) | (306) | (2 032) | (2 627) |
| Accumulated ordinary depreciation 31.12 | (332) | (1 327) | (5 755) | (7 415) |
| Carrying amounts 31.12 | 1 198 | 9 255 | 5 984 | 16 437 |
| Economic lifetime | Up to 3 years | Up to 25 years | 3-10 years | |
| Amortisation/depreciation schedule | Straight-line | Straight-line | Straight-line |
| NOK thousand | 2015 | 2014 |
|---|---|---|
| Allocation of tax income/(expenses) | ||
| Payable tax/withholding tax | (1 620) | (1 767) |
| Change in deferred tax | 23 355 | (13 711) |
| Total tax income/(expense) | 21 735 | (15 478) |
| Basis for tax computation | ||
| Profit before tax | 706 670 | 751 562 |
| 25% tax (in 2014 27% tax) | (176 668) | (202 922) |
| Tax effect from | ||
| Permanent differences | (257) | (944) |
| Withholding tax | (1 620) | (1 767) |
| Non taxable income and loss | 192 908 | 206 817 |
| Tax credit allowance | 7 370 | (16 663) |
| Current year calculated tax | 21 735 | (15 478) |
| Effective tax rate | (11.4%) | 2.1% |
| Deferred tax asset/(liability) Tax effect of temporary differences |
||
| Fixtures | 742 | 579 |
| Current assets and liabilities | (2 011) | (7 981) |
| Non current liabilities and provisions for liabilities | 3 045 | 3 655 |
| Tax losses carried forward | 14 387 | 614 |
| Deferred tax asset/(liability) | 16 163 | (3 132) |
| Deferred tax asset/(liability) 01.01 | (3 132) | (6 485) |
| Charge to equity (tax of OCI) | (4 059) | 17 064 |
| Change of deferred tax through income statement | 23 355 | (13 711) |
| Deferred tax asset/(liability) 31.12 | 16 163 | (3 132) |
Investments in subsidiaries are recorded at cost. Where a reduction in the value of shares in subsidiaries is considered to be permanent and significant, a impairment to net realisable value is recorded.
| NOK thousand | Business office country |
Voting share/ ownership share |
2015 Book value |
2014 Book value |
|---|---|---|---|---|
| Wilh. Wilhelmsen ASA | Lysaker, Norway | 73% | 2 174 931 | 2 174 931 |
| Wilhelmsen Maritime Services AS | Lysaker, Norway | 100% | 1 264 440 | 964 440 |
| Wilh. Wilhelmsen (Hong Kong) Ltd | Hong Kong | 100% | 900 | 900 |
| WilService AS | Lysaker, Norway | 100% | 14 550 | 14 550 |
| Wilh. Wilhelmsen Holding Invest AS | Lysaker, Norway | 100% | 875 595 | 875 595 |
| Wilhelmsen Accounting Services AS | Lysaker, Norway | 100% | 1 622 | 622 |
| WilNor Governmental Services AS | Lysaker, Norway | 51% | 6 439 | |
| Total investments in subsidiaries | 4 338 477 | 4 031 038 |
Wilhelmsen Maritime Services AS, increased capital of NOK 300 000 000.
Wilhelmsen Accounting Services AS, increased investment through group contribution of NOK 1 000 000.
WilNor Governmental Services AS is a company established in 2015, and owned 51% by Wilh. Wilhelmsen Holding ASA.
| NOK thousand Note |
2015 | 2014 |
|---|---|---|
| OTHER NON CURRENT ASSETS | ||
| Non current loan group companies (subsidiary and associates) 14 |
4 563 | 3 063 |
| Total other non current assets | 4 563 | 3 063 |
| Of which non current debitors falling due for payment later than one year: | ||
| Loans to subsidiary and associates 14 |
4 563 | 3 063 |
| Total other non current assets due after one year | 4 563 | 3 063 |
| OTHER CURRENT ASSETS | ||
| Intercompany receivables 14 |
524 764 | 312 135 |
| Other current receivables | 19 708 | 11 676 |
| Total other current assets | 544 472 | 323 811 |
| OTHER NON CURRENT LIABILITIES | ||
| Allocation of commitment | 43 853 | 37 274 |
| Total other non current liabilities | 43 853 | 37 274 |
| OTHER CURRENT LIABILITIES | ||
| Accounts payables | 5 828 | 3 022 |
| Intercompany payables 14 |
1 517 | 2 067 |
| Next year's instalment on interest-bearing debt 11 |
100 000 | 100 000 |
| Proposed dividend 9 |
139 211 | 139 211 |
| Other current liabilities | 40 286 | 43 415 |
| Total other current liabilities | 286 842 | 287 716 |
The fair value of current receivables and payables is virtually the same as the carried amount, since the effect of discounting is insignificant.
Lending is at floating rates of interest. Fair value is virtually identical with the carried amount. See note 14.
| NOK thousand | 2015 | 2014 |
|---|---|---|
| Market value asset management portfolio | ||
| Nordic equities | 390 083 | 352 810 |
| Bonds | 362 361 | 312 475 |
| Other financial derivatives | 85 | (353) |
| Total current financial investments | 752 528 | 664 931 |
| The fair value of all equity securities, bonds and other financial assets is based on their closing prices in an active market. | ||
| The net unrealised gain at 31.12 | 138 488 | 140 597 |
The equity portion of the portfolio of financial investments is held as collateral within a securities' finance facility. See note 12.
| NOK thousand | 2015 | 2014 |
|---|---|---|
| Restricted bank deposits | ||
| Payroll tax withholding account | 4 697 | 3 071 |
| Undrawn committed drawing rights | ||
| Undrawn committed drawing rights for 31 December | 400 000 | 400 000 |
| NOK thousand | Share capital | Own shares | Retained earnings | Total |
|---|---|---|---|---|
| Current year's change in equity | ||||
| Equity 31.12.2014 | 930 076 | (2 000) | 4 002 471 | 4 930 547 |
| Interim dividend paid | (92 808) | (92 808) | ||
| Proposed dividend | (139 211) | (139 211) | ||
| Profit for the year | 728 405 | 728 405 | ||
| Comprehensive income for the year | 11 695 | 11 695 | ||
| Equity 31.12.2015 | 930 076 | (2 000) | 4 510 551 | 5 438 628 |
| NOK thousand | Share capital | Own shares | Retained earnings | Total |
|---|---|---|---|---|
| 2014 change in equity | ||||
| Equity 31.12.2013 | 930 076 | (2 000) | 3 541 018 | 4 469 095 |
| Interim dividend paid | (92 808) | (92 808) | ||
| Proposed dividend | (139 211) | (139 211) | ||
| Group contibution prior year | 3 525 | 3 525 | ||
| Profit for the year | 736 084 | 736 084 | ||
| Comprehensive income for the year | (46 137) | (46 137) | ||
| Equity 31.12.2014 | 930 076 | (2 000) | 4 002 471 | 4 930 547 |
At 31 December 2015 the company's share capital comprises 34 637 092 Class A shares and 11 866 732 Class B shares, totalling 46 503 824 shares with a nominal value of NOK 20 each. Class B shares do not carry a vote at the general meeting. Otherwise, each share confers the same rights in the company.
At 31 December 2015 Wilh. Wilhelmsen Holding ASA had own shares of 100 000 Class A shares. The total purchase price of these shares was NOK 12.7 million.
The proposed dividend for fiscal year 2015 is NOK 3.00 per share, payable in the second quarter 2016. A decision on this proposal will be taken by the annual general meeting on 3 May 2016.
Dividend for fiscal year 2014 was NOK 5.00 per share, where NOK 3.00 per share was paid in May 2015 and NOK 2.00 per share was paid in November 2015.
Dividend for fiscal year 2013 was NOK 5.00 per share, where NOK 3.00 per share was paid in May 2014 and NOK 2.00 per share was paid in November 2014.
| Total number | % of | % of | |||
|---|---|---|---|---|---|
| Shareholders | A shares | B shares | of shares | total shares | voting stock |
| Tallyman AS | 20 784 730 | 2 281 044 | 23 065 774 | 49.60% | 60.01% |
| Pareto Aksje Norge | 1 146 220 | 651 085 | 1 797 305 | 3.86% | 3.31% |
| VPF Nordea Norge Verdi | 208 226 | 1 494 820 | 1 703 046 | 3.66% | 0.60% |
| Folketrygdfondet | 942 450 | 675 915 | 1 618 365 | 3.48% | 2.72% |
| UBS Switzerland AG | 677 037 | 80 999 | 758 036 | 1.63% | 1.95% |
| Skagen Vekst | 744 081 | 744 081 | 1.60% | 2.15% | |
| J. P. Morgan Luxembourg S.A. | 648 762 | 11 850 | 660 612 | 1.42% | 1.87% |
| Stiftelsen Tom Wilhelmsen | 370 400 | 236 000 | 606 400 | 1.30% | 1.07% |
| Nordea Nordic Small Cap Fund | 121 875 | 415 630 | 537 505 | 1.16% | 0.35% |
| MP Pensjon PK | 176 743 | 277 444 | 454 187 | 0.98% | 0.51% |
| UBS AS, London Branch | 423 154 | 423 154 | 0.91% | 1.22% | |
| Nordnet Bank AB | 72 466 | 338 053 | 410 519 | 0.88% | 0.21% |
| Oslo Pensjonsforsikring AS PM | 400 000 | 400 000 | 0.86% | 0.00% | |
| Skandinaviska Enskilda Banken AB | 103 944 | 292 395 | 396 339 | 0.85% | 0.30% |
| Bras Kapital AS | 30 000 | 361 826 | 391 826 | 0.84% | 0.09% |
| Verdipapirfondet DNB Norge (IV) | 139 313 | 252 248 | 391 561 | 0.84% | 0.40% |
| VPF Nordea Kapital | 142 230 | 233 703 | 375 933 | 0.81% | 0.41% |
| Citibank, NA | 369 783 | 6 000 | 375 783 | 0.81% | 1.07% |
| Pareto AS | 270 000 | 101 000 | 371 000 | 0.80% | 0.78% |
| Forsvarets Personellservice | 303 500 | 303 500 | 0.65% | 0.88% | |
| Other | 6 962 178 | 3 756 720 | 10 718 898 | 23.05% | 20.10% |
| Total number of shares | 34 637 092 | 11 866 732 | 46 503 824 | 100.00% | 100.00% |
Shares on foreigners hands
At 31. December 2015 – 3 827 518 (11.05%) A shares and 1 668 560 (14.06%) B shares.
Corresponding figures at 31. December 2014 – 2 268 912 (6.55%) A shares and 1 154 146 (7.36%) B shares.
In order to reduce the company's exposure to certain risks associated with defined benefit plans, such as longevity, inflation, effects of compensation increases, the company regularly reviews and continuously improves the design of its postemployment defined benefit plans. Until 31 December 2014, the company provides both defined benefit pension plans and defined contribution pension plans. From 2015 the defined benefit plan relate to senior management see note 2.
For many years the company had a defined benefit plan for employees in Norway through Storebrand. The defined benefit plan was closed for new employees 1 May 2005.
The company decided November 2014 to terminate the company defined benefit plans for Norwegian employees and change to defined contribution plan from 1 January 2015. After the termination all affected employees received a paid-up policy as of 31 December 2014. The termination also included the risk plan, related to the group's defined contribution pension schemes, that was covered by a defined benefit plan.
The company's defined contribution pension schemes for Norwegian employees are with Storebrand, similar solutions with different investment funds. Maximum contribution levels according to regulations have been followed up to 31 December 2014. From 1 January 2015 the contributions from the company are changed to be in accordance with new requirements.
The company pension liabilities have been calculated based on updated actuarial and financial assumptions as of 31 December 2014 and booked against other comprehensive income (directly to equity) before the termination has been reversed as an accounting gain through profit and loss and included in employees benefits to be a part of the group's operating profit.
The change in the group pension plans decreased the net equity with approximately NOK 6 million at the end of 2014.
The net effect of equity is as follow:
Through income statement 2014 a gain of NOK 57 million and a loss before tax through other comprehensive income (directly to equity) of NOK 63 million.
From 1 January 2014 the company established "Ekstrapensjon", a new contribution plan for all Norwegian employees with salaries exceeding12 times the Norwegian National Insurance base amount (G). The new contribution plan replaced the company obligations mainly financed from operation.
In addition the company has agreements on early retirement. This obligations are mainly financed from operations. The company has obligations towards some employees in the company's senior
executive management. These obligations are mainly covered via group annuity policies in Storebrand.
Pension costs and obligations includes payroll taxes. No provision has been made for payroll tax in pension plans where the plan assets exceed the plan obligations.
The liability recognised in the balance sheet in respect of the remaining defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligations are calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
| Funded | Unfunded | |||
|---|---|---|---|---|
| Number of people covered by pension schemes at 31.12 | 2015 | 2014 | 2015 | 2014 |
| In employment | 2 | 3 | 1 | 2 |
| On retirement (inclusive disability pensions) | 1 | 4 | 6 | |
| Total number of people covered by pension schemes | 3 | 3 | 5 | 8 |
| Expenses | Commitments | |||
|---|---|---|---|---|
| Financial assumptions for the pension calculations: | 2015 | 2014 | 31.12.2015 | 31.12.2014 |
| Discount rate | 2.30% | 4.00% | 2.50% | 2.30% |
| Anticipated pay regulation | 2.80% | 3.50% | 2.25% | 3.00% |
| Anticipated increase in National Insurance base amount (G) | 3.00% | 3.50% | 2.25% | 3.00% |
| Anticipated regulation of pensions | 0.60% | 0.60% | 0.60% | 0.60% |
The expected return on assets reflects the weighted average expected returns on pension plan assets. The assumption shall reflect the weighted average expected returns for each asset class, e.g. equities, and bonds, given the actual asset allocation.
Anticipated pay regulation are business sector specific, influenced by composition of employees under the plans. Anticipated increase in G is tied up to the anticipated pay regulations. Anticipated regulation of pensions is determined by the difference between return on assets and the hurdle rate.
Actuarial assumptions: all calculations are calculated on the basis of the K2013 mortality tariff. The disability tariff is based on the KU table.
| NOK thousand | 31.12.2015 | 31.12.2014 |
|---|---|---|
| Pension assets investments (in %) | ||
| Current bonds | 7.5% | 10.6% |
| Bonds held to maturity | 45.3% | 45.9% |
| Money market | 2.3% | (0.8)% |
| Equities | 5.7% | 6.7% |
| Other (property, credit bonds) | 39.4% | 37.8% |
| Total pension assets investments | 100.0% | 100.0% |
The table shows how pension funds including derivatives administered by Storebrand Kapitalforvaltning AS were invested at 31 December. The recorded return on assets administered by Storebrand Kapitalforvaltning was 3.9% at 31 December 2015 (2014: 6.6%).
| 2015 | 2014 | |||||
|---|---|---|---|---|---|---|
| NOK thousand | Funded | Unfunded | Total | Funded | Unfunded | Total |
| Pension expenses | ||||||
| Service cost | 4 658 | 61 | 4 719 | 4 309 | 1 000 | 5 309 |
| Termination gain defined benefit plan | (55 262) | (1 536) | (56 798) | |||
| Net interest cost | 448 | 900 | 1 348 | 3 645 | 1 677 | 5 322 |
| Cost of defined contribution plan | 5 473 | 5 473 | 3 463 | 3 463 | ||
| Net pension expenses | 10 579 | 961 | 11 540 | (43 845) | 1 141 | (42 704) |
| Remeasurements – Other comprehensive income | 2015 | 2014 |
|---|---|---|
| Effect of changes in demographic assumptions | ||
| Effect of changes in financial assumptions | (9 607) | |
| Effect of experience adjustments | (5 755) | 54 459 |
| (Return) on plan assets (excluding interest income) | (392) | 8 742 |
| Total remeasurements included in OCI | (15 754) | 63 201 |
| The company comprehensive income pension | (11 695) | 46 137 |
| The tax effect of comprehensive income pension | (4 059) | 17 064 |
| Gross remeasurements included in OCI pension | (15 754) | 63 201 |
| NOK thousand Pension obligations |
2015 | 2014 |
| Defined benefit obligation at end of prior year | 97 653 | 140 826 |
| Service cost | 4 719 | 8 941 |
| Interest expense | 2 129 | 5 322 |
| Termination gain defined benefit plan | (56 798) | |
| Benefit payments from plan | (3 567) | (1 301) |
| Benefit payments from employer | (8 289) | |
| Settlement payments from plan assets | (45 507) | |
| Remeasurements – change in assumptions | (15 362) | 54 459 |
Fair value of plan assets
| Gross pension assets 31.12 | 37 470 | 30 961 |
|---|---|---|
| Return on plan assets (excluding interest income) | 820 | (8 742) |
| Administrative expenses paid from plan assets | (428) | |
| Settlement payments from plan assets | (45 507) | |
| Benefit payments from plan | (1 024) | (1 301) |
| Employer contributions | 6 360 | 9 939 |
| Interest income | 781 | 3 117 |
| Fair value of plan assets at end of prior year | 30 961 | 73 455 |
| NOK thousand | 2015 | 2014 | |||||
|---|---|---|---|---|---|---|---|
| Funded | Unfunded | Total | Funded | Unfunded | Total | ||
| Total pension obligations | |||||||
| Defined benefit obligation | 44 318 | 36 535 | 80 853 | 45 495 | 43 217 | 88 712 | |
| Service cost | 4 658 | 61 | 4 719 | 7 941 | 1 000 | 8 941 | |
| Total pension obligation | 48 976 | 36 596 | 85 572 | 53 436 | 44 217 | 97 653 | |
| Fair value of plan assets | 37 470 | 37 470 | 30 961 | 30 961 | |||
| Net liability (asset) | 11 506 | 36 596 | 48 102 | 22 475 | 44 217 | 66 692 |
Premium payments in 2016 are expected to be NOK 9.4 million (2015: NOK 10.8 million). Payments from operations are estimated at NOK 2.5 million (2015: NOK 2.7 million).
| NOK thousand | 31.12.2015 | 31.12.2014 |
|---|---|---|
| Historical developments | ||
| Gross pension obligations, including payroll tax | 85 572 | 97 653 |
| Gross pension assets | 37 470 | 30 961 |
| Net recorded pension obligations | 48 102 | 66 692 |
| NOK thousand | 2015 | 2014 |
|---|---|---|
| Interest-bearing debt | ||
| Bank loan | 100 000 | 100 000 |
| Total interest-bearing debt | 100 000 | 100 000 |
| Repayment schedule for interest-bearing debt | ||
| Due in year 1 | 100 000 | 100 000 |
| Due in year 2 and later | ||
| Total interest-bearing debt | 100 000 | 100 000 |
| Held as collateral within a securities' finance facility | ||
| The equity portion of the portfolio of financial investments | 390 083 | 352 810 |
The parent company's financing arrangement provides for customary financial covenants related to minimum liquidity, and minimum value adjusted equity ratio. The company was in compliance with these covenants at 31 December 2015 (analougue for 31 December 2014).
See note 14 to the parent accounts and note 15 to the group accounts for further information on financial risk, and note 14 to the group accounts concerning the fair value of interest-bearing debt.
The company has a sale/leaseback agreement for the office building, Strandveien 20. The lease run over 15 years from 1 October 2009, with an option to extend for additional 5 years + 5 years.
The company also has a lease agreement for the office building (including storage and parking) Strandveien 12. The lease run over 10 years from 1 June 2006, with an option to extend for additional 5 years. The option to extend is agreed from 2016, with new 5 years the lease agreement runs until 2021.
| NOK thousand | 2015 | 2014 |
|---|---|---|
| Due in year 1 | 48 541 | 45 981 |
| Due in year 2 | 48 881 | 49 084 |
| Due in year 3 | 49 223 | 50 066 |
| Due in year 4 | 49 568 | 51 067 |
| Due in year 5 and later | 226 001 | 298 941 |
| Total expense related to operating leasing commitments | 422 214 | 495 139 |
Guarantees
The group and parent policy's is that no financial guarantees are provided by the parent company.
The parent's exposure to credit risk on cash and bank deposits is considered to be very limited as the parent maintain banking relationships with a selection of well-known and good quality banks.
The parent's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to at all times meet its liabilities, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the parent and group's reputation.
The parent's liquidity risk is considered to be low in the sense that it holds significant liquid assets in addition to undrawn credit facilities with solid banks.
The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. The fair value of financial instruments that are not traded in an active market (over-the-counter contracts) are based on third party quotes. These quotes use the maximum number of observable market rates for price discovery. Specific valuation techniques used to value financial instruments include:
Quoted market prices or dealer quotes for similar instruments.
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.
The fair value of interest rate swap option (swaption) contracts is determined using observable volatility, yield curve and time-to-maturity parameters at the balance sheet date, resulting in a swaption premium.
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value.
The fair value of foreign exchange option contracts is determined using observable forward exchange rates, volatility, yield curves and time-to-maturity parameters at the balance sheet date, resulting in an option premium.
The carrying value less impairment provision of receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments.
| NOK thousand | Fair value | Carrying amount |
|---|---|---|
| 2015 | ||
| Interest-bearing debt | ||
| Bank loan | 100 000 | 100 000 |
| Total interest-bearing debt 31.12 | 100 000 | 100 000 |
| 2014 | ||
| Interest-bearing debt |
| Bank loan | 100 000 | 100 000 |
|---|---|---|
| Total interest-bearing debt 31.12 | 100 000 | 100 000 |
The fair value of financial instruments traded in active markets is based on closing prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
The price used for valuation of financial assets held by the group is the closing price. These instruments are included in level 1. Instruments included in level 1 at the end of 2015 and 2014 are investment grade bonds, equities and listed financial derivatives.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. These instruments are included in level 2. Instruments included in level 2 are FX and IR derivatives.
If one or more of the significant inputs is not based on observable market data, the derivatives is in level 3. The group has not held any level 3 derivatives in the past years.
| NOK thousand | Level 1 | Level 2 | Level 3 | Total balance |
|---|---|---|---|---|
| Financial assets at fair value through income statement 2015 | ||||
| - Bonds | 362 361 | 362 361 | ||
| - Equities | 390 083 | 390 083 | ||
| - Financial derivatives | 408 | 408 | ||
| Total assets 31.12 | 752 443 | 408 | 0 | 752 852 |
| Financial liabilities fair value through income statement 2015 | ||||
| - Financial derivatives | (270) | (19 703) | (19 974) | |
| Total liabilities 31.12 | (270) | (19 703) | 0 | (19 974) |
| NOK thousand | Level 1 | Level 2 | Level 3 | Total balance |
| Financial assets at fair value through income statement 2014 | ||||
| - Bonds | 312 475 | 312 475 | ||
| - Equities | 352 810 | 352 810 | ||
| Total assets 31.12 | 665 285 | 0 | 0 | 665 285 |
| Financial liabilities fair value through income statement 2014 | ||||
| - Financial derivatives | (149) | (21 571) | (21 720) | |
| Total liabilities 31.12 | (149) | (21 571) | 0 | (21 720) |
| Assets at fair | ||||
| Financial instruments by category | Note | Loans and receivables |
value through the income statement |
Total |
| Assets | ||||
| Other non current assets | 6 | 4 563 | 4 563 | |
| Current financial investments | 7 | 752 528 | 752 528 | |
| Other current assets | 6 | 544 472 | 544 472 | |
| Cash and cash equivalent | 152 896 | 152 896 | ||
| Assets at 31.12.2015 | 701 930 | 752 528 | 1 454 459 | |
| Other financial | ||||
| liabilities at | ||||
| Note | at amortised cost | Total | ||
| Liabilities Financial derivatives |
6 | 19 703 | 19 703 | |
| Current interest-bearing debt | 6 | 100 000 | 100 000 | |
| Other current liabilities | 6 | 27 927 | 27 927 | |
| Liabilities 31.12.2015 | 147 630 | 147 630 | ||
| Assets at fair | ||||
| Loans and | value through the | |||
| Note | receivables | income statement | Total | |
| Assets | ||||
| Other non current assets | 6 | 3 063 | 3 063 | |
| Current financial investments | 7 | 664 931 | 664 931 | |
| Other current assets | 6 | 323 811 | 323 811 | |
| Cash and cash equivalent | 291 323 | 291 323 | ||
| Assets at 31.12.2014 | 618 197 | 664 931 | 1 283 128 | |
| Other financial | ||||
| liabilities at | ||||
| Note | amortised cost | Total | ||
| Liabilities | ||||
| Financial derivatives | 6 | 21 367 | 21 367 | |
| Current interest-bearing debt | 6 | 100 000 | 100 000 | |
| Other current liabilities | 6 | 27 137 | 27 137 | |
| Liabilities 31.12.2014 | 0 | 148 504 | 148 504 |
See note 15 to the group financial statement for further information about the group risk factors.
The ultimate owner of the group Wilh.Wilhelmsen Holding ASA is Tallyman AS, which control about 60% of voting shares of the group.
| Name | A shares | B shares | Total | Part of total shares |
Part of voting stock |
|---|---|---|---|---|---|
| Wilhelm Wilhelmsen | 20 882 114 | 2 302 444 | 23 184 558 | 49.86% | 60.29% |
Wilhelm Wilhelmsen has in 2015 received remuneration of NOK 750 thousand (2014: NOK 750 thousand) in consulting fee, NOK 70 thousand (2014: NOK 60 thousand) in nomination committee for Wilh. Wilhelmsen Holding ASA and Wilh. Wilhelmsen ASA and NOK 1 762 thousand (2014: NOK 1 765 thousand) in ordinary paid pension and other remunerations.
WWH ASA delivers services to other group companies in Holding & Investment, WWASA group and WMS group, these include primarily human resources, tax, communication, treasury and legal services ("Shared Services").
In accordance with service level agreements, WilService AS delivers in-house services such as canteen, post, switchboard and rent of office facilities, Wilhelmsen Accounting Services delivers accounting services and WMS group delivers IT services and group consolidation services to WWH. Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually.
| NOK thousand | Note | 2015 | 2014 |
|---|---|---|---|
| WWASA group | 16 703 | 16 805 |
|---|---|---|
| WMS group | 63 445 | 67 777 |
| Holding & Investments | 4 412 | 2 623 |
| 1 Operating revenue from group companies |
84 560 | 87 205 |
| Operating expenses to group companies 1 |
(22 291) | (21 450) |
|---|---|---|
| Holding & Investments | (14 166) | (13 720) |
| WMS group | (8 126) | (7 730) |
| WWASA group |
| 1 Financial income from group companies |
740 172 | 670 159 |
|---|---|---|
| Holding & Investments | 172 | 159 |
| WMS group | 500 000 | 350 000 |
| WWASA group | 240 000 | 320 000 |
Account receivables
| Account receivables from group companies | 6 | 524 764 | 312 135 |
|---|---|---|---|
| Holding & Investments | 481 | 152 | |
| WMS group | 523 890 | 311 565 | |
| WWASA group | 393 | 418 |
| WWASA group | (6) | |
|---|---|---|
| WMS group | ||
| Holding & Investments | (1 517) | (605) |
| 6 Account payables to group companies |
(1 517) | (611) |
No material events occurred between the balance sheet date and the date when the accounts were presented which provide new information about conditions prevailing on the balance sheet date.
The Statement on senior executives' remuneration has been prepared in accordance with the Norwegian Public Limited Companies Act, the Norwegian Accounting Act and the Norwegian Code of Practice and is adopted by the board of directors.
For the purposes of this statement, company employees referred to as senior executives are: Thomas Wilhelmsen (group CEO), Nils Petter Dyvik (group CFO), Jan Eyvin Wang (President and CEO of Wilh. Wilhelmsen ASA) Dag Schjerven (President and CEO of Wilhelmsen Maritime Services AS), Jørn Even Hanssen (Group Vice President HR and OD), Benedicte Teigen Gude (Group Vice President Corporate Communication), Bjørge Grimholt (President WSS) and Carl Schou (President WSM)
The following guidelines are applied for 2016.
The remuneration of the group CEO is determined by the board of directors, whereas remuneration of other senior executives is determined administratively on the basis of frameworks specified by the board of directors.
The remuneration level shall reflect the complexity and responsibilities of each role and shall take into account the group's breadth of international operations. Being headquartered in Norway, the board of directors will primarily look to other Norwegian companies operating in an international environment for comparison.
Remuneration of the senior executives shall be at a competitive level in the relevant labour market(s). It should be a tool for the board of directors to attract and retain the required leadership and motivational for the individual executive. The total remuneration package shall therefore consist of fixed remuneration (basic salary and benefits in kind) and variable, performance based remuneration (short- and long term incentives). The remuneration system should be flexible and understandable.
Market comparisons are conducted on a regular basis to ensure that remuneration levels are competitive.
The main element of the remuneration package shall be the annual base salary. This is normally evaluated once a year according to individual performance, market competitiveness and local labour market trends.
The senior executives receive benefits in kind that are common for comparable positions. These include newspapers, telecommunication, broadband, insurance and company car/car salary
As a key component of the total remuneration package, the annual variable pay scheme, emphasizes the link between performance and pay and aims to be motivational.
It aligns the senior executives with relevant, clear targets derived from the group's strategic goals. The variable pay scheme takes into consideration both key financial targets and individual targets (derived from the annual operating plan). Maximum opportunities for annual payments are capped at four to six months' salary, depending on role.
The senior executives also participate in a LTI scheme, based on positive development of the WW Group's Value adjusted Equity which aims to increase alignment with shareholders' interests.
Annual payment is 50% of base salary. For Group CEO, maximum annual payment is 100% of base salary and for the president and CEO of WW ASA it is 75%. The LTI arrangement, has replaced the old synthetic option programme.
Pension benefits for senior executives include coverage for old age, disability, spouse and children, and supplement payments by the Norwegian National Insurance system. The senior executives also have rights related to salaries in excess of 12G at a level of approximately 66% of gross salary and the option to take early retirement from the age of 62- 67. Pension obligations related to salaries in excess of 12G and the option to take early retirement are insured in the case of GCEO, GCFO, President and CEO WMS and President and CEO WW ASA. The President for WSS has a defined benefit plan for salary exceeding 12G financed through operations. The remaining executives has a defined contribution plan for salary above 12G. For salary below 12G, they are all a part of the collective agreement.
The GCEO has a severance pay guarantee under which he has the right to receive up to 100% of his annual salary for 24 months after leaving the company as a result of mergers, substantial changes in ownership, or a decision by the board of directors. Possible income during the period is deducted up to 50%, which comes into force after six months notice period. The group CFO, President and CEO WW ASA, GCFO, President and CEO WMS and President WSS, also have arrangements for severance payment beyond redundancy period following departure from the group.
Remuneration policy and development for the senior executives in the previous fiscal year built upon the same policies as those described above. For further details regarding the individual remuneration elements, see note 2 concerning pay and other remuneration for senior executives of the parent company and note 4 of the group accounts concerning senior executives of the group.
To the Annual Shareholders' Meeting of Wilh. Wilhelmsen Holding ASA
We have audited the accompanying financial statements of Wilh. Wilhelmsen Holding ASA, which comprise the financial statements of the parent company and the financial statements of the group. The financial statements of the parent company comprise the balance sheet as at 31 December 2015, income statement, comprehensive income and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. The financial statements of the group comprise the balance sheet as at 31 December 2015, income statement, comprehensive income, statement of changes in equity, and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of the financial statements of the parent company in accordance with simplified application of international accounting standards according to § 3-9 of the Norwegian Accounting Act and for the preparation and fair presentation of the financial statements of the group in accordance with International Financial Reporting Standards as adopted by EU and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
| Independent auditor's report - 2015 - Wilh. Wilhelmsen Holding ASA, page 2 |
|---|
| Opinion on the financial statements of the parent company |
| In our opinion, the financial statements of the parent company are prepared in accordance with the law and regulations and present fairly, in all material respects, the financial position of Wilh. Wilhelmsen Holding ASA as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with simplified application of international accounting standards according to § 3-9 of the Norwegian Accounting Act. |
| Opinion on the financial statements of the group |
| In our opinion, the financial statements of the group are prepared in accordance with the law and regulations and present fairly, in all material respects, the financial position of the group Wilh. Wilhelmsen Holding ASA as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by EU. |
| Report on Other Legal and Regulatory Requirements |
| Opinion on the Board of Directors' report and the reports on Corporate Governance and Sustainability |
| 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 reports on Corporate Governance and Sustainability concerning the financial statements, the going concern assumption and the proposal for the allocation of the profit is consistent with the financial statements and complies with the law and regulations. |
| Opinion on Registration and Documentation |
| 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 produce a proper and clearly set out registration and documentation of the company's accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway. |
| Oslo, 17 March 2016 PricewaterhouseCoopers AS Fredrik Melle State Authorised Public Accountant (Norway) |
| (2) |
We confirm, to the best of our knowledge, that the financial statements for the period 1 January to 31 December 2015 have been prepared in accordance with current applicable accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit for the entity and the group taken as a whole.
We also confirm that the Board of Directors' Report includes a true and fair review of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.
Lysaker, 17 March 2016 The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler chair
Helen Juell
Odd Rune Austgulen
Bettina Banoun
Carl Erik Steen
Thomas Wilhelmsen group CEO
That many and no less. The Wilhelmsen group has people on the ground practically anywhere you have ships, or maritime related industries. If we are not exactly where our customers or partners are, we come to them. Our network capability is limitless.
Corporate governance comply or explain overview
| Principle | Deviations | Reference in this report | |
|---|---|---|---|
| 1. | Implementation and reporting on corporate governance |
None | On page 106 |
| 2. | The business | None | On page 106 |
| 3. | Equity and dividends | None | On page 107 |
| 4. | Equal treatment of shareholders and transactions with close associates |
The company has two share classes. The B shares do not carry voting rights at the general meeting. Apart from this, each B share carries the same rights in the company and holders of the respective classes are treated equally. Converting to a single share class is not regarded as appropriate in the present circumstances. |
On page 108 |
| 5. | Freely negotiable shares | None | On page 108 |
| 6. | General meetings | The chair of the board also acts as chair of the general meeting as stated in the company's Articles of Association. |
On page 109 |
| 7. | Nomination committee | The nomination committee is not described in the Articles of Association and the company has not developed a formal way for shareholders to submit proposals for candidates to the committee. |
On page 109 |
| 8. | Corporate assembly and board of directors: composition and independence |
Executive committee for industrial democracy in foreign trade shipping instead of corporate assembly. General meeting elects the board. |
On page 109 |
| 9. | The work of the board of directors | The whole board acts as remuneration and audit committee. Without a corporate assembly, the board elects its own chair. |
On page 110 |
| 10. | Risk management and internal control | None | On page 112 |
| 11. | Remuneration of the board of directors | None | On page 113 |
| 12. | Remuneration of the executive personnel | None | On page 113 |
| 13. | Information and communications | None | On page 114 |
| 14. | Take-overs | No policy developed. However, intention is described in the report. |
On page 114 |
| 15. | Auditor | None | On page 114 |
The board is responsible for ensuring the company is directed and controlled in an appropriate and satisfactory manner according to existing laws and regulations. This report is, amongst others, based on the requirements covered in the Norwegian Code of Practice for Corporate Governance. The code is intended to strengthen confidence in listed companies among shareholders, the capital market and other interested parties.
For the board, a sound corporate governance model is important, because it:
The board's assesses the company's corporate governance performance to be of high standard, and discussed and approved this report 17 March 2016. All the directors were present at the meeting.
On behalf of the board
Diderik Schnitler, chair Lysaker, 17 March 2016
WWH is a public limited company organised under Norwegian law. Listed on the Oslo Stock Exchange, the company is subject to Norwegian securities legislation and stock exchange regulations.
This report is based on the requirements covered in the Norwegian Code of Practice for Corporate Governance ("the code", dated 30 October 2014), the Public Limited Companies Act and the Norwegian Accounting Act, approved by the board and published as part of the company's annual report. The report is also available on the company's webpage.
In addition to provisions and guidance that in part elaborate on company, accounting, stock exchange and securities legislations, as well as the Stock Exchange Rules (dated 1 October 2014), the code also covers areas not addressed by legislation. Build on a "comply or explain" principle, the code requires the company to justify deviations from its 15 provisions and to describe alternative solutions where and if applicable. A summary of WWH's adherence to the code can be found on page 104 in this report.
A responsible business model is necessary to be sustainable. Acknowledging that the company's activities affect its surroundings, the company issues a report based on the requirements stated by the Global Reporting Initiative. The report describes how WWH combines long-term profitability with emphasis on ethical business conduct including respect for human rights, the natural environment and the societies in which the company operates. The report includes how the company addresses employee rights and working environment, human rights, health and safety issues, the environment, prevention of corruption and last but not least how the company works to the best of the communities in which it operates.
Employees and others working for and on behalf of the group should carry out their business in a sustainable,
ethical and responsible manner and in accordance with current legislation and the company's standards.
To ensure the right results are achieved the right way, the company has a set of governing elements including its vision "shaping the maritime industry", values, basic philosophy, leadership expectations, code of conduct and company principles. A corporate social responsibility statement is part of the group's principles. Making up the core of the company's governance framework, the governing elements guide the employees in making the right decisions and navigating safely in a rapidly changing environment.
A summary of the governing elements are available electronically on the group's intranet, as written documentation, as e-learning and on the company's webpages.
In 2015, anti-corruption, competition law, fraud and theft as well as whistleblowing received particular attention. The company continued its "I comply" campaign and 95% of land based employees have conducted mandatory training. The focus on anti-corruption, competition law etc will continue in 2016. More information on the "I comply" campaign can be found on the company's webpages.
Deviations from the code: None
The company's business activities and the scope of the board' authority are restricted to the business specified in its Articles of Association. In brief, the company's objective is to engage in shipping, maritime services, aviation, industry, commerce, finance business, brokerage, agencies and forwarding, to own or manage real estate, and to run business related thereto or associated therewith. The full articles of association is presented on the company's webpages.
The company's main strategy is to create value by developing a diversified business portfolio. The company will leverage its market positions, global network and
collective competence to continue to grow a sustainable and profitable business. The portfolio currently consists of three main business segments:
For a further presentation of the business segments, see the company's webpages.
Deviations from the code: None
The parent company has a sound level of equity tailored to its objectives, strategy and risk profile. As of 31 December 2015, the total equity amounted to NOK 5 439 million, corresponding to 93% of the total capital (parent account). In 2014, the total equity amounted to NOK 4 931 million equal to 92% of the total capital.
A dividend policy approved by the board states that the company's goal is to provide shareholders with a high return over time through a combination of value creation for the company's shares and payment of dividend. The objective is to have consistent yearly dividend paid twice annually.
In 2015, the company paid NOK 5.00 in dividend per share, totalling USD 28 million. The payable dividend was in line
with the company's dividend policy and based on approved annual accounts.
The board has proposed that the annual general meeting (AGM), to be held 3 May 2016, approves an ordinary dividend for the fiscal year 2015 amounting to NOK 3.00 per share.
With reference to The Norwegian Companies Act, the board proposes that the AGM gives the board authority to approve further dividend of up to NOK 3.00 per share for a period limited in time up to the next AGM, although not later than 20 June 2017.
The proposal is in line with the company's dividend policy and depends on AGM's approval of the annual accounts for 2015.
As of 31 December 2015, the company held 100 000 own shares. On behalf of WWH, the board is authorised by the AGM to acquire shares in the company. The company can own up to 10% of the current share capital. The minutes from the AGM held 23 April 2015 describes the authorisation, expiring 30 June 2016, in more detail. The
Number of shareholders
% of shares owned by Norwegian and foreign shareholders
board cannot increase the company's share capital without a specific mandate from the AGM.
Deviations from the code: None
Shareholders
As of 31 December 2015, the company had 3 259 (3 181) shareholders, of which 250 (241) were foreign and the remaining were Norwegian. This implicated a total increase of 2% shareholders at the turn of the year, of which nine were none-Norwegians. The Norwegian shareholders count for 88% of the company's shareholderbase or 93% of the total number of shares, as shown in the graphs below.
The company has two share classes, comprising 34 637 092 A shares and 11 866 732 B shares. According to the company's Articles of Association, the B shares do not carry voting rights at general meetings. Apart from this, each B share carries the same rights in the company and holders of the respective classes are treated equally. Converting to a single share class is not regarded as appropriate in the present circumstances.
Where the board resolves to carry out an increase in share capital and waive the pre-emption rights of existing shareholders on the basis of a mandate granted to the board, the justification should be publicly disclosed in a stock exchange announcement issued in connection with the increase in share capital.
Any transactions the company carries out in its own shares are carried out through the stock exchange and at prevailing stock exchange prices.
Any transactions taking place between a principal shareholder or close associates and the company will be conducted on arm's length terms. A similar principle will be used for certain transactions between companies with in the group.
In the event of material transactions, the company will seek independent valuation. Relevant transactions will be publicly disclosed to seek transparency.
Pursuant to the instructions issued by and for the board, directors are required to inform the board if they have interests and/or relations, directly or indirectly, with the WWH group (WWH including subsidiaries).
A list of insiders can be found on the Oslo Stock Exchange under the company's ticker.
Deviations from the code: The code recommends only one share class. The company has two share classes. The B shares do not carry voting rights at general meetings. Apart from this, each B share carries the same rights in the company and holders of the respective classes are treated equally. Converting to a single share class is not regarded as appropriate in the present circumstances.
Listed on the Oslo Stock Exchange with the tickers "WWI" and "WWIB" for the A and B share respectively, both shares are freely negotiable. There are no restrictions on negotiability in the company's Articles of Associations.
Deviations from the code: None
The company's governing bodies consist of the general meeting, the executive committee for industrial democracy, the board of directors, the group chief executive and the group management team.
The general meetings deals with and decides on the following matters:
The general meeting is held late April or early May. Shareholders with known address are notified by mail no later than 21 days prior to the meeting and all relevant documents are published on WWH's website no later than 21 days prior to the meeting. Shareholders may, upon request, received hard copies of the material.
Shareholders wishing to attend the general meeting must notify the company at least two working days before the meeting takes place. Shareholders may participate at the meeting without being present in person, and can vote in advance through electronic communication. Guidelines for voting are included in the notice to the meeting Last, but not least, the shareholders can appoint a proxy to vote for their shares. Shareholders with known address receives a proxy appointment form. The form is downloadable from the company's web pages.
The chair, auditor and representatives from the company are present at the general meeting, which is organised in a way that facilitates dialogue between shareholders and representatives from the company.
The chair of the board opens and directs the general meeting, as described in the Articles of Association.
The minutes from the AGM are available on the company's website immediately after the meeting and may be inspected by shareholders at the company's office.
The general meeting appoints the nomination committee and has approved guidelines for the committee's work. The committee nominates candidates to the board and proposes board members' remuneration. As part of its
nomination process, the committee will have contact with major shareholders, the board and the company's executives to ensure the process takes the board's and company's needs into consideration. A justification for a candidate will include information on each candidate's competence, capacity and independence.
The nomination committee currently consists of Wilhelm Wilhelmsen (chair), Gunnar Frederik Selvaag and Jan Gunnar Hartvig. Elected at the general meeting in April 2014 for a period of two years, the committee members are up for election in 2016.
The majority of the committee is independent of the board and executives in the company. Mr Wilhelmsen meets in the executive committee and acts as an advisor for the board. None of the committee members are executives in the company.
In 2015, the nomination committee held three meetings.
The company does not have a corporate assembly (see executive committee), and therefore the general meeting elects the board. The board comprises five directors, of which minimum two are women, elected for minimum two years at a time. Four of the directors are independent of the majority owner and the executive management. The board does not include executive personnel. However, the group CEO and group CFO are always present at the board meetings as is other executives depending on agenda and issues to be discussed.
| Board member | Elected | Up for election |
|---|---|---|
| Diderik Schnitler, chair | April 2015 | April 2018 |
| Helen Juell | April 2015 | April 2018 |
| Odd Rune Austgulen | April 2014 | April 2016 |
| Bettina Banoun | April 2015 | April 2016 |
| Carl Erik Steen | April 2014 | April 2016 |
Information on the background and experience of the directors is available on the company's web pages, which also lists the number of shares in the company held by each director.
All the board members have attended a seminar hosted by the Oslo Stock Exchange. The objective of the course was
From left:
Nils P. Dyvik (group CFO)*
Jan Eyvin Wang (president and CEO of WWASA)
Thomas Wilhelmsen (group CEO)
Jørn Even Hanssen (group vp HR and OD)
Benedicte Teigen Gude (group VP corp comm)
Dag Schjerven (president and CEO of maritime services)
* As of April 2016, Christian Berg will replace Nils P. Dyvik as group CFO.
to provide information on legislation, rules, regulations and best practice that are relevant for board members of listed companies.
The instruction for the board includes rules on the work of the board and its administrative procedures determining what matters should be considered by the board. The board has the ultimate responsibility for the management of the company and that the business is run in a sustainable and responsible way.
The board head the company's strategic planning and makes decisions that form the basis for the administrations execution of the agreed strategy.
The chair of the board has an extended duty to ensure the board operates well and carries out its duties.
The board establishes an annual plan for its work. In 2015, the company hosted eight board meetings, including two full day strategy meeting. All the board members were present at the meetings, although two board member attend per phone at one meeting each.
In addition to the board meetings, the board visits business related locations to ensure they have a solid understanding of the business, market and outlook for the maritime industry.
The company keeps the board regularly updated on development in the group through a variety of communication channels, including a board portal containing timely and relevant information.
The extraordinary general meeting in December 2011 decided that the whole board serves as the company's audit committee, as the board only comprises five members. In addition, WWASA, representing a material part of the WWH group, has its own audit committee. The audit committee in WWASA assists the WWH board/audit committee on issues related to the integrity of WWASA's financial statements, financial reporting processes, internal control and risk assessments and risk management policies.
The audit committee maintains a pre-approval policy governing the engagement of WWASA's primary and other external auditors to ensure auditor independence.
In 2015, the audit committee have had a particular attention at anti-corruption, theft and fraud, whistleblowing and competition law and the roll-out of an awareness programmes related to these topics. The focus will
continue in 2016 with a follow-up session of the awareness programme.
The board has not deemed it as relevant to have a separate remuneration committee, and therefore acts collectively as the remuneration committee. The board sets guidelines for remuneration for the executive personnel, including longand short-term bonus schemes and pension plans. The also decide the general remuneration principles for other employees in the company.
An executive committee for industrial democracy in foreign trade shipping, chaired by the group CEO Thomas Wilhelmsen, ensures the interest of the employees. The committee comprises six members, four appointed from the management and two elected by the workforce. It meets regularly through the year. Issues submitted for consideration by the committee include a draft of the accounts and budget as well as matters of major financial significance for the company or of special importance for the workforce. The executive committee members were elected in 2014 for a three-year period.
The group management team (GMT) in WWH consists of the group chief executive officer (group CEO) and five executive managers:
GMT discusses and coordinates all main business and management issues relevant for the group of companies. It also makes benefit of the group's total expertise and knowledge when executing strategies and goals set by the board. An overview of the background and expertise of the GMT member is available on the company's website.
The board's instruction to the group CEO includes a statement of duties, responsibilities and delegated authorities. The group CEO has the overall responsibility for the company's results and for conducting the businesses and affairs of the company and its subsidiaries in a proper and efficient manner, in the company's and its shareholders best interest.
The group CEO has a particular responsibility to ensure that the board receives accurate, relevant and timely information that is sufficient to allow it to carry out its duties. Group's operations, financial results, projections, financial status or other topics specified by the board, is regularly shared with the board between board meetings.
The group CEO has delegated the responsibility of the different professions and subsidiaries to other members of the GMT.
The group CFO heads finance and strategy for WWH ASA and the consolidated WWH group. The group CFO is responsible for providing group CEO and the board with reliable, relevant and sufficient financial information related to the WWH group's business activities, and assuring that such information is based on requirements for listed companies.
The WWH group consists of several legal entities (for a full overview, please see pages 126-132). Each entity has its own board responsible for issues related to the specific entity.
WWH's ambition is to be a demanding and reliable owner, taking the long-term interests of the companies and the total group into consideration when developing its future strategy, including how ownership will be exercised, financial prospects as well as expectation towards code of conduct, environmental and sustainable standards and aspirations.
Control and management of all entities are based on the same governance principles applicable to WWH.
In the case of partly owned subsidiary, the same principle applies concerning control and management of the business. WWH is represented on the board of partly owned subsidiaries. WWH's ownership in the subsidiaries is formally exercised through the respective companies' general meetings.
Deviations from the code: The chair of the board also acts as chair of the general meeting as stated in the company's Articles of Association. Further, the company has an executive committee for industrial democracy in foreign trade shipping instead of a corporate assembly. Without a corporate assembly, the board elects its own chair. Given
the size of the board and the fact that the board jointly is responsible for its decisions, separate committees is not valued as necessary. The whole board therefore acts as remuneration and audit committee. Last, the Articles of Association does not include a reference to the nomination committee and the company has not developed a formal way for shareholders to submit proposals for candidates to the committee.
The board is responsible for the company's internal control and risk management, and believes that the company's systems are sound and appropriate given the extent and nature of the company's activities. The system contributes to sound control characterised by integrity and ethical attitudes throughout the organisation. It is based on the company's governing elements including the guidelines for business standard and corporate social responsibility.
The board reviews the company's risk matrix at least four times a year and the internal control arrangements at least once a year, preferably together with the company's auditor.
Governing documents, code of conduct, company principles (including corporate social responsibility), policies, guidelines and process descriptions are documented and electronically available to the company's employees through the company's global integrated management system. Various internal control activities give management assurance that the internal control of financial systems is working adequately and according to segment management's expectations.
The company's internal control is a process designed to provide reasonable assurance of:
Internal control includes:
• Activities established to evaluate and confirm the quality of internal control regarding financial reporting (per segment)
The group's finance and strategy division has the responsibility for updating internal control procedures on a group level, including:
The group financial strategy is approved by the board and covers all main elements related to financial management of the group, including:
WWASA and WMS have implemented similar governing documents approved by the respective boards and in line with the group financial strategy.
Confirmation from external auditors and internal procedures i.e. business reviews (financial, operational and quality) give the management and board confidence that the group complies with external and internal rules and regulations.
The company's auditors conduct audit in accordance with the laws, regulations and auditing standards
and practices generally accepted in Norway and give reasonable assurance as to whether the consolidated financial statements are free from material misstatements and whether internal control over financial reporting were appropriate in the circumstances relevant to the audit. The audit includes examining on test basis evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting policies used and the reasonableness of accounting estimates made by management as well as evaluation of the overall financial statement presentation including the disclosures.
The company has a global whistle blowing system including procedures and channels for giving notice to the company about potential non-compliance, e.g. corruption, theft, fraud, sexual harassment or other breaches to the company's business standards. Strengthening transparency and safeguarding that the business standards are applied the way they are intended, the procedures also ensure that the group has a professional way of handling potential breaches to laws and regulations, self-imposed business standards or other serious irregularities. The procedures also includes guidelines to safeguard the whistle-blower.
Deviations from the code: None
Remuneration of directors is determined by the annual general meeting and is not dependent upon the company's results. The fee reflects the responsibilities of the board, its expertise, the amount of time devoted to its work and the complexity of the company's businesses. No director holds share options in the company.
None of the directors performs assignments for the company other than serving on the board of the company or one or more of its subsidiaries, except for board member Diderik Schnitler's company, Løkta AS, which performs certain consultancy work for WWASA. Amongst others, Mr Schnitler represents WWASA on the joint WWASA/ Wallenius steering committee governing the joint ventures Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Shipping and Logistics. The board has approved the assignment including remuneration.
An overview of the directors' remuneration is specified in note 4 to WWH group accounts and note 2 to the parent company accounts, of which the latter includes an overview of shares in company held by the individual director.
Deviations from the code: None
WWH's remuneration policy covers all employees and is developed to ensure the company attracts and retains competent employees. The remuneration principles are communicated to all employees to ensure a common understanding of expectations and rewards, both linked to the company's strategic ambitions, financial targets and business standards.
The board determines the group CEO's remuneration and establishes the framework for adjustments for other employees. Salary adjustment for each employee is settled administratively within the limits set. For these purposes the board carries out a comparison with salary conditions in other Norwegian shipping companies and also looks to the general level of pay adjustments in Norway.
An overview of employee benefits, including salary and other components of the chief executive's and CFO's remuneration packages, is detailed in note 4 to the group accounts and note 2 and 17 to the parent company accounts. The board's statement of executive personnel is also a separate appendix to the agenda for the annual general meeting, which approves the remuneration as part of the annual report.
The board determines the annual norm for the bonus scheme developed for employees in WWH and its main subsidiaries. Intended to reinforce the focus on performance and results, the bonus scheme is based on the group's return on capital employed and other selected predefined key performance indicators (KPIs). As a principle, a minimum of 50% of the KPIs are linked to financial targets, while the remaining are linked to group and/or individual KPIs. One discretionary KPI is linked to the employee's overall performance.
As of 1 January 2015, the synthetic option programme was replaced with a new long term incentive scheme (LTI). Participants are the group management team and the presidents for Wilhelmsen Ship Services and Ship
10 February Q4 2015 presentation
3 May Annual general meeting
12 May Q1 2016 presentation
4 August Q2 2016 presentation
15 September Capital Markets Day
10 November Q3 2016 presentation
The company reserves the right to revise the dates, and will in case of changes inform the market in due time. The listed dates indicate when the report is released to the Oslo Stock Exchange (after close of trading). The quarterly presentation will take place at the company's premises on the following day.
Management. For the group CEO, maximum annual payment is 100% of base salary and for the president and CEO of WWASA it is 75%. For the remaining six participants of the programme, the annual payment is 50% of base salary.
The LTI is focusing on long term shareholder value creation and is based on positive development of the WW group's value adjusted equity. The ambitions set for the programme are to increase alignment with shareholders' interest, attract, retain and motivate participants and drive long-term group performance.
Settlement is based on return on value adjusted equity the last four years leading up to the settlement. The value adjusted equity is determined by using a "sum-of-the-parts" principle. For listed companies, value adjusted equity is based on market price, while earnings multiples are used for non-listed entities.
The board sets value adjusted equity targets at the beginning of each four year measurement period. Without consultation or agreement with the individual, the board has the right to change or terminate incentive programme after each year.
Deviations from the code: None
Transparency, accountability and timeliness guides the group's communication activities. The company follow the guidelines set out by the Oslo Stock Exchange and The Norwegian Investor Relations Association and their opinion of best practice related to financial reporting and Investor Relations information.
The interim and annual results are presented to the financial markets and business journalists. At least two of these presentations are transmitted directly by webcast. Results are also posted on the group's investor relations pages. Further, the company strives to host an annual capital markets day , to give the stakeholders more in-depth knowledge about the group's activities and strategies. The market is regularly informed about the group's activities and results through stock exchange notices, annual and interim reports, press releases and updates on the group's web site.
Extensive information about the activities of the group is provided on the group's web pages. A separate section named "Investors relations" includes relevant information to shareholders, including reports and presentations, financial calendar, analysts, share information, corporate governance, IR contact and news and media. The company has a dedicated Investor relations team, and main point of contact is Mr Åge S Holm and Ms Hiva Ghiri.
The group is present on social media, but have strict rules on who can utilise social media for company purposes and has clear guidelines stating that stock sensitive information must be published through the stock exchange before it is made available on social media.
Two weeks before the planned release of quarterly financial reports – the silent period – the company will not comment on matters related to the general financial results or expectations, and contact with external analysts, investors and journalists will be minimised. This is done to reduce the risk of information leakages and that the market has access to different information.
Deviations from the code: None
The board has not established a policy for its response to possible takeover bids. The board and management will seek to treat any take-over bids for the company's activities or shares in a professional way and in the best interest of the company's shareholders. If such circumstances arise, the board and the company's management will seek to treat all shareholders equally and take action to secure that shareholders receive sufficient and timely information to consider the offer.
Deviations from the code: No policy developed, but intention described above.
The company's auditor – PricewaterhouseCoopers AS (PwC) – attends board meetings as required and is always present when the annual accounts are approved.
To ensure the board has solid understanding of the accounts and any changes in the accounting principles, the auditor discuss changes in IFRS relevant for the group's accounting principles or other law requirements relevant for the company with the board. The auditor also runs through the main features of the audits carried out.
There were no disagreements between the management and PwC during 2015.
It is of importance to the board that the auditor is independent of management. The board therefore has at least one meeting with PwC without senior management being present. If used for other services than accounting, the parties will follow guidelines as described in the Auditing and Auditors' Act. The auditor provides the board with a confirmation of independence in relation to nonaudit services provided.
In 2015, PwC has audited accounts, notes, the director's report and read through and commented on the board's report on corporate governance and the company's sustainability report.
The auditor's fee, broken down by audit work, audited related services, tax services and other consultancy services, is specified in note 4 to the WWH group accounts and note 3 to the parent company accounts.
For the financial year 2015, Fredrik Melle had been the company's main auditor at PwC.
Deviations from the code: None
Åge S. Holm Vice President Finance & Investor Relations
[email protected] + 47 900 87 670
Hiva Ghiri Investor Relations Officer
[email protected] +47 958 66 790
We do business the right way, and we understand the importance of compliance. We train our employees to safely navigate in a challenging world where non-compliance unfortunately exists.
The Wilhelmsen group has been doing business all around the world since 1861. If we want to survive the next 155 years and beyond, we need to deliver profitable and sustainable results.
To deliver the right results the right way, we need healthy, motivated and competent employees, a healthy and ethical business world without corruption, healthy local communities, and we need a healthy global environment. That is why we strive to contribute to the best of our efforts on all these areas.
This report is our way of showing our sustainability impact during 2015, and how we wish to progress in 2016. In addition to wanting to improve the way we do business, we also want to be more transparent and open in our reporting. We aim to get better, and we truly believe we are on the right path.
I am particularly happy to see that 95% of our land based employees and more than 50% of our seafarer pool have completed our compliance training. I am also proud to say that 94% of our sailings through the Suez Canal were conducted without any form of facilitation payments in 2015. Our lost time injury frequency rate improved in 2015 to 0.56 following focused initiatives, and we will continue to work for a safe and healthy working environment for all employees.
Green shipping has been a top priority for the Wilhelmsen group for many years. Two of several interesting initiatives to reduce fuel consumption last year were the change of the bulbous bows on four vessels and the increased number of hull cleanings performed together with the young talents behind EcoSubsea.
We care for the communities in which we operate. An impressive list including more than 80 charitable contributions was recorded in 2015.
Being the fifth generation heading up the group of companies, I have a strong personal commitment to our long-term goals and ambitions. With a thorough anti-trust investigation of the car carrying industry, we have seen how misconduct can affect our reputation and bottom line. At the other end of the scale, we have also seen how our firm stand against facilitation payments has shown remarkable results in Suez. This is encouraging and strengthens our belief in our long term ambition which is a corruption free industry.
Being a shaper of the industry means being at the forefront of sustainability. Being a shaper is not something we can turn on and off at will. It is a true commitment. It is just how we do business.
Total recordable case frequency rate not to exceed 2.8
2.8
Install Shippersys system on all EUKOR
Zero fatalities No oil spills 100% completion rate on anti-corruption training for land based employees
100%
Lost time injury frequency rate not to
exceed 0.6
0.6
For us, doing business is about maximising profit and making sure we do business the right way.
Our sustainability report is based on the fourth generation of sustainability reporting guidelines developed by the Global Reporting Initiative (GRI G4). We report in accordance with the "core" option, which comprises the essential elements of sustainability in the group's work. More information about the guidelines can be found on GRI's webpage globalreporting.org.
One key element of the GRI guidelines is to find the aspects of business we consider to be of most importance to our impact on the environment and the societies in which we operate. These aspects are identified through a materiality assessment, where the importance of different topics are ranked by us and our stakeholders, such as our board, group management team, employees, customers, suppliers, competitors, industry players and shareholders. The process steps are shown on the opposite page.
We performed a materiality assessment in 2013. The outcome was a priority list, displayed on the opposite page. This has guided our work and reporting in 2014 and 2015. We recognise that this list should be evaluated on a regular basis to ensure that we always are reporting on the most critical issues, and our intention is to conduct a new materiality assessment in 2016.
Based on the assessment, we have divided the high priority aspects into five groups, which form the basis of this report:
These topics are relevant for all entities, throughout the whole value chain, and in all geographical areas.
We aim to build a transparent reporting system. In time, we expect to have external assurance for the information provided. In the meantime, we use DNV GL, our accounting auditor PricewaterhouseCoopers AS and stakeholder engagement for advice and to identify ways to improve.
In addition to specifying relevant targets for 2016, we work continuously to improve our sustainability processes. We review and update guidelines and standards for managers, employees, customers, suppliers, subsidiaries, joint ventures and business partners, clearly expressing the group's expectations regarding material aspects of sustainability.
The subsidiaries handle business relevant issues on a central or local level, depending on the nature of the issue.
For our full sustainability report and annual report, please visit www.wilhelmsen.com.
| PRIORITY | ||
|---|---|---|
| C Lobbying |
B Diversity and inclusion Society and community Supply chain management Tax Piracy Controversial/illegal cargo Biodiversity Ballast water |
A Labour relations and standards Innovation Waste Human rights Business ethics Anti-corruption Climate change and emissions Stakeholder engagement Working conditions and health and safety Sustainability governance |
We are regularly in dialogue with key stakeholders who engage with issues relating to the maritime industry and the corporate activities of the Wilhelmsen group. The dialogue contributes to understanding the expectations of the community and transferring them to the group. It also enables us to communicate corporate decisions to stakeholders and provide them with explanations for our underlying motives. The table below provides examples of how we involve stakeholders in important topics.
Engagement survey Performance appraisal Industrial democracy
Code of conduct
122 WILH. WILHELMSEN HOLDING ASA ANNUAL REPORT 2015
Annual and quarter reports and presentations, capital markets day
Press releases
Investor meetings
Customer meetings, regular dialogue
Customer surveys
Road-shows and fairs
Supply chain code of conduct
Procurement policies Supplier audits
Meetings and discussions with NGOs
Ship owners associations
Sponsorships
Presentations and guest lectures
Our most important asset. Our people make our group function, and our people create the advances we make in the maritime industry. Every location, every service delivered, every vessel, every decision – our people are what makes the Wilhelmsen group.
WWASA group Legal entity
Unless otherwise stated, the company is wholly-owned Activities in
| COMPANY NAME | COUNTRY | OWNER SHIP % |
|---|---|---|
| WILHELMSEN LINES AS (SHIPPING ACTIVITIES) | ||
| Wilhelmsen Ships Holding Malta Ltd | Malta | 100% |
| — Wallenius Wilhelmsen Logistics AS | Norway | 50% |
| — EUKOR Car Carriers Inc | Republic of Korea | 40% |
| Tellus Shipping AS | Norway | 50% |
| Wilhelmsen Lines Shipowning AS | Norway | 100% |
| Wilhelmsen Lines Malta Ltd | Malta | 100% |
| Wilhelmsen Lines Shipowning Malta Ltd | Malta | 100% |
| Wilhelmsen Lines Car Carriers Ltd | United Kingdom | 100% |
WILH. WILHELMSEN HOLDING ASA ANNUAL REPORT 2015 127
| CONT. WWASA GROUP SEGMENT | |||
|---|---|---|---|
| COMPANY NAME | COUNTRY | OWNER SHIP % | |
| WILHELMSEN LINES AS (SHIPPING ACTIVITIES) | |||
| American Roll-on Roll-off Carrier Holdings Inc | USA | 50% | |
| — American Roll-on Roll-off Carrier LLC | USA | 100% | |
| Fidelio Inc. | USA | 50% | |
| — Fidelio Limited Partnership | USA | 2% | |
| Wilhelmsen Ships Holding AS* | Norway | 100% | |
| — Fidelio Limited Partnership* | USA | 49% |
| American Logistics Network LLC | USA | 50% |
|---|---|---|
| — AP Logistics LLC | USA | 50% |
| American Shipping & Logistics Group Inc | USA | 50% |
| — American Insurance Providers Inc | USA | 100% |
| — American Auto Logistics LP | USA | 99% |
| — American Auto Logistics LP | USA | 1% |
| — Transcar GmbH | Germany | 100% |
* The company is allocated both to WWASA group's shipping and logistics activities
Business area Legal entity Unless otherwise stated, the company is wholly-owned
| CONT. WMS GROUP SEGMENT | ||
|---|---|---|
| COMPANY NAME | COUNTRY | OWNER SHIP % |
| Wilhelmsen IT Services Sdn Bhd | Malaysia | 100.00% |
| Wilhelmsen IT Services AS | Norway | 100.00% |
| Wilhelmsen Insurance Services AS | Norway | 100.00% |
| WILHELMSEN SHIPS SERVICE | ||
| Wilhelmsen Ships Service Algeria SPA | Algeria | 49.00% * |
| Wilhelmsen Ships Service Argentina SA | Argentina | 100.00% |
| New Wave Maritime Services Pty Ltd | Australia | 100.00% |
| Wilh. Wilhelmsen Oceania Pty Ltd | Australia | 50.00% * |
| Wilhelmsen Ships Service Pty Limited | Australia | 100.00% |
| Wiltrading (Darwin) Pty Ltd | Australia | 50.00% * |
| WLB Shipping Pty Ltd | Australia | 100.00% |
| WWHI Property Australia Pty Ltd | Australia | 100.00% |
| Almoayed Wilhelmsen Ltd | Bahrain | 40.00% * |
| Wilhelmsen Ships Service Limited | Bangladesh | 50.00% |
| Wilhelmsen Ships Service NV | Belgium | 100.00% |
| Barwil Brasil Agencias Maritimas Ltda | Brazil | 100.00% |
| Wilhelmsen Ships Service do Brasil Ltda | Brazil | 100.00% |
| Wilhelmsen Ships Service Ltd | Bulgaria | 100.00% |
| Wilhelmsen Ships Service Inc | Canada | 100.00% |
| Wilhelmsen Ships Service Agencia Maritima SA | Chile | 100.00% |
| Wilhelmsen Ships Service (Chile) S.A. | Chile | 100,00% |
| Wilhelmsen Huayang Ships Service (Beijing) Co Ltd | China | 50.00% |
| Wilhelmsen Huayang Ships Service (Shanghai) Co Ltd | China | 49.00% * |
| Wilhelmsen Ships Service Co Ltd | China | 100.00% |
| Wilhelmsen Ships Service Colombia SAS | Colombia | 100.00% |
| Wilhelmsen Ships Service Cote d'Ivoire SARL | Cote d'Ivoire | 100,00% |
| Wilhelmsen Ships Service Cyprus Ltd | Cyprus | 100.00% |
| Wilhelmsen Ships Service A/S | Denmark | 100.00% |
| Wilhelmsen Ships Service Ecuador SA | Ecuador | 100.00% |
| Barwil Arabia Shipping Agencies SAE | Egypt | 24.50% |
| Barwil Egytrans Shipping Agencies SAE | Egypt | 49.00% * |
| Scan Arabia Shipping Agencies SAE | Egypt | 49.00% * |
| Wilhelmsen Ships Service Oy Ab | Finland | 100.00% |
| Auxiliaire Maritime SAS | France | 100.00% |
| Wilhelmsen Ships Service France SAS | France | 100.00% |
| Barwil Georgia Ltd | Georgia | 50.00% |
| Wilhelmsen Ships Service Georgia Ltd | Georgia | 50.00% |
| Barwil Agencies GmbH | Germany | 100.00% |
| Wilhelmsen Ships Service GmbH | Germany | 100.00% |
| Barwil Black Sea Shipping Ltd | Gibraltar | 50.00% |
| Wilhelmsen Ships Service (Gibraltar) Limited | Gibraltar | 100.00% |
| Wiltrans (Gilbraltar) Limited | Gibraltar | 100.00% |
| Barwil Hellas Ltd | Greece | 60.00% |
| Uniref SA | Greece | 100.00% |
| Wilhelmsen Ships Service Hellas SA | Greece | 100.00% |
| Wilhelmsen Ships Service Limited | Hong Kong | 100.00% |
| Wilhelmsen Maritime Services Private Limited | India | 100.00% |
| Wilhelmsen Ships Service Private Limited | India | 100.00% |
| Wiltrans Logistics & Shipping Company Private Limited | India | 100.00% |
| WSS Business Services India Private Limited | India | 100.00% |
| CONT. WMS GROUP SEGMENT | |||
|---|---|---|---|
| COMPANY NAME | COUNTRY | OWNER SHIP % | |
| P.T. Tirta Samudera Caraka | Indonesia | 0.00% * | |
| P.T. Tirta Sarana Banjar | Indonesia | 0.00% * | |
| P.T. Tirta Sarana Borneo | Indonesia | 0.00% * | |
| P.T. Tirta Sarana Dermaga | Indonesia | 0.00% * | |
| P.T. Tirta Sarana Jasatama | Indonesia | 0.00% * | |
| P.T. Tirta Wahana Transportama | Indonesia | 0.00% * | |
| Barwil For Maritime Services Co Ltd | Iraq | 100,00% | |
| Wilhelmsen Ships Service SpA | Italy | 100.00% | |
| Wilhelmsen Ships Service (Japan) Pte Ltd – Legal Branch | Japan | 100.00% | |
| Wilhelmsen Ships Service Co Ltd | Japan | 100.00% | |
| Wilhelmsen Ships Service Ltd | Kenya | 100.00% | |
| Alghanim Barwil Shipping Co-Kutayba Yusuf Ahmed & Partners WLL | Kuwait | 49.00% | |
| Barwil-Andersson Agencies Ltd | Latvia | 49.00% | |
| Wilhelmsen Ships Service Lebanon SAL | Lebanon | 49.00% | |
| Barwil Westext Sdn Bhd | Malaysia | 25.00% * | |
| Wilhelmsen Agencies Sdn Bhd | Malaysia | 100.00% | |
| Wilhelmsen Freight & Logistics Sdn Bhd | Malaysia | 100.00% | |
| Wilhelmsen Ships Service Holdings Sdn Bhd | Malaysia | 100.00% | |
| Wilhelmsen Ships Service Malaysia Sdn Bhd | Malaysia | 30.00% * | |
| Wilhelmsen Ships Service Trading Sdn Bhd | Malaysia | 100.00% | |
| WSS Global Business Services Sdn Bhd | Malaysia | 100.00% | |
| Wilhelmsen Ships Service Malta Limited | Malta | 100.00% | |
| Unitor de Mexico, SA de CV | Mexico | 100.00% | |
| Wilhelmsen Ships Service (Mozambique), Limitada | Mozambique | 100.00% | |
| Wilhelmsen Ships Service BV | Netherlands | 100.00% | |
| Unitor Ships Service NV Netherlands Antilles | Netherlands Antilles | 100.00% | |
| Wilh. Wilhelmsen (New Zealand) Limited | New Zealand | 100.00% | |
| Wilhelmsen Ships Service Limited | New Zealand | 100.00% | |
| Barwil Agencies AS | Norway | 100.00% | |
| Wilhelmsen Chemicals AS | Norway | 100.00% | |
| Wilhelmsen Ships Service AS | Norway | 100.00% | |
| Wilhelmsen Towell Co LLC (formerly known as Towell Barwil Co LLC) | Oman | 60,00% | |
| Wilhelmsen Ships Service (Private) Limited | Pakistan | 49,00% * | |
| Barwil Agencies SA | Panama | 100.00% | |
| Intertransport Air Logistics SA | Panama | 100.00% | |
| Lonemar SA | Panama | 100.00% | |
| Lowill SA | Panama | 100.00% | |
| Scan Cargo Services SA | Panama | 100.00% | |
| Transcanal Agency SA | Panama | 100.00% | |
| Wilhelmsen Ships Service SA | Panama | 100.00% | |
| Wilhelmsen Ships Service Peru SA | Peru | 100.00% | |
| Wilhelmsen-Smith Bell (Subic) Inc | Philippines | 50.00% | |
| Wilhelmsen-Smith Bell Shipping Inc | Philippines | 40.00% * | |
| Wilhelmsen Ships Service Philippines Inc | Philippines | 100.00% | |
| Wilhelmsen Ships Service Polska Sp z.o.o. | Poland | 100.00% | |
| Argomar-Navegcao e Transportes SA | Portugal | 100.00% | |
| Barwil-Knudsen, Agente de Navagacao Lda | Portugal | 100.00% | |
| Wilhelmsen Ships Service Portugal, SA | Portugal | 100.00% | |
| Wilhelmsen Ship Services Qatar Ltd | Qatar | 0.00% * | |
| Wilhelmsen Hyopwoon Ships Service Ltd | Republic of Korea | 50.00% | |
| Wilhelmsen Ship Services Co Ltd | Republic of Korea | 100.00% |
| CONT. WMS GROUP SEGMENT | ||
|---|---|---|
| COMPANY NAME | COUNTRY | OWNER SHIP % |
| Barwil Star Agencies SRL | Romania | 100.00% |
| Barwil Novorossiysk Ltd | Russia | 100.00% |
| Wilhelmsen Ships Service OOO | Russia | 100.00% |
| Barwil Agencies Ltd For Shipping | Saudi Arabia | 70.00% |
| Binzagr Barwil Maritime Transport Co Ltd | Saudi Arabia | 50.00% |
| Nagliyat Al-Saudia Co Ltd | Saudi Arabia | 0.00% * |
| Wilhelmsen Ships Service Senegal SUARL | Senegal | 100.00% |
| Unitor Cylinder Pte Ltd | Singapore | 100.00% |
| Wilhelmsen Ships Service (Japan) Pte Ltd | Singapore | 100.00% |
| Wilhelmsen Ships Service (S) Pte Ltd | Singapore | 100.00% |
| Barwil (South Africa) Pty Ltd | South Africa | 100.00% |
| Krew-Barwil (Pty) Ltd | South Africa | 49.00% |
| Wilhelmsen Ships Services (Pty) Ltd | South Africa | 100.00% |
| Wilhelmsen Ships Services South Africa (Pty) Ltd | South Africa | 70.00% |
| Wilhelmsen Ships Service Canarias SA | Spain | 100.00% |
| Wilhelmsen Ships Service Spain SAU | Spain | 100.00% |
| Wilhelmsen Meridian Navigation Ltd | Sri Lanka | 40.00% |
| Baasher Barwil Agencies Ltd | Sudan | 50.00% |
| Alarbab For Shipping Co. Ltd | Sudan | 0.00% * |
| Wilhelmsen Ships Service AB | Sweden | 100.00% |
| Wilhelmsen Ships Service Inc | Taiwan | 100.00% |
| Wilhelmsen Ship Services Ltd | Tanzania | 100.00% |
| Wilhelmsen Ships Service (Thailand) Ltd | Thailand | 49.00% * |
| Wilhelmsen Denizcilik Hizmetleri Ltd Sirketi | Turkey | 100.00% |
| Wilhelmsen Lojistick Hizmetleri Ltd Sirketi | Turkey | 100.00% |
| Crewing Agency "Barber Manning" | Ukraine | 100.00% |
| Wilhelmsen Ships Service Ukraine Ltd | Ukraine | 100.00% |
| Barwil Abu Dhabi Ruwais LLC | United Arab Emirates | 0.00% * |
| Barwil Dubai LLC | United Arab Emirates | 49.00% * |
| Wilhelmsen Ship Services LLC | United Arab Emirates | 42.50% |
| Triangle Shipping Agencies LLC | United Arab Emirates | 49.00% * |
| Wilhelmsen Ships Service AS (Dubai Branch) | United Arab Emirates | 100.00% |
| Wilhelmsen Maritime Services JAFZA | United Arab Emirates | 100.00% |
| Wilhelmsen Ships Service (LLC) | United Arab Emirates | 49.00% * |
| Denholm Wilhelmsen Ltd. (formerly known as Denholm Barwil Ltd.) | United Kingdom | 40.00% |
| Wilhelmsen Ships Service Limited | United Kingdom | 100.00% |
| Knight Transport Ltd | United States | 33,34% |
| Wilhelmsen Ships Service Inc | United States | 100.00% |
| Barwil de Venezuela CA | Venezuela | 50.00% |
| Barwil-Sunnytrans Ltd | Vietnam | 49.00% * |
| International Shipping Co Ltd | Yemen | 0.00% * |
| Unicorn Shipping Services Ltd | Bangladesh | 51.00% |
|---|---|---|
| Wilhelmsen Ship Management Serviços Marítimos do Brasil Ltda | Brazil | 100.00% |
| Wilhelmsen Ship Management d.o.o. | Croatia | 100.00% |
| Barklav (Hong Kong) Limited | Hong Kong | 50.00% |
| Wilhelmsen Marine Personnel (Hong Kong) Ltd | Hong Kong | 100.00% |
| Wilhelmsen Ship Management Holding Limited | Hong Kong | 100.00% |
| Wilhelmsen Ship Management Limited | Hong Kong | 100.00% |
| WSM Global Services Limited | Hong Kong | 100.00% |
| CONT. WMS GROUP SEGMENT | ||
|---|---|---|
| COMPANY NAME | COUNTRY | OWNER SHIP % |
| Wilhelmsen Ship Management (India) Private Limited | India | 100.00% |
| Global Vessel Management Ltd | Liberia | 33.33% |
| Wilhelmsen Ship Management Sdn Bhd | Malaysia | 100.00% |
| Wilhelmsen Ship Management Services Sdn Bhd | Malaysia | 100.00% |
| WSM Offshore Services Sdn Bhd | Malaysia | 100.00% |
| Diana Wilhelmsen Management Inc | Marshall Islands | 50,00% |
| Unicorn Shipping Services Limited | Mauritius | 51.00% |
| Wilhelmsen Marine Personnel (Myanmar) Company Limited | Myanmar | 100.00% |
| Barber Moss Ship Management AS | Norway | 50.00% |
| Golar Wilhelmsen Management AS | Norway | 40.00% |
| Wilhelmsen Marine Personnel (Norway) AS | Norway | 100.00% |
| Wilhelmsen Ship Management (Norway) AS | Norway | 100.00% |
| OOPS (Panama) SA | Panama | 100.00% |
| Wilhelmsen-Smith Bell Manning Inc | Philippines | 25.00% * |
| Wilhelmsen Marine Personnel Sp z.o.o. | Poland | 100.00% |
| Haeyoung Maritime Services Co Ltd | Republic of Korea | 20.00% |
| Wilhelmsen Ship Management Korea Ltd | Republic of Korea | 100.00% |
| Barklav SRL | Romania | 50.00% |
| Wilhelmsen Marine Personnel Novorossiysk Ltd | Russia | 100.00% |
| Wilhelmsen Ship Management Singapore Pte Ltd | Singapore | 100.00% |
| Wilhelmsen Marine Personnel (Ukraine) Ltd | Ukraine | 100.00% |
| Wilhelmsen Ship Management (USA) Inc | United States | 100.00% |
| WILHELMSEN TECHNICAL SOLUTIONS (SAFETY) | ||
|---|---|---|
| Wilhelmsen Technical Solutions do Brasil Ltda | Brazil | 100.00% |
| Wilhelmsen Technical Solutions Production Co Ltd | China | 100.00% |
| Wilhelmsen Technical Solutions China Co Ltd | China | 100.00% |
| Novenco Fire Fighting A/S | Denmark | 100.00% |
| Maritime Protection AS | Norway | 100.00% |
| Wilhelmsen Technical Solutions AS | Norway | 100.00% |
| Wilhelmsen Technical Solutions Co Ltd | Japan | 100.00% |
| Wilhelmsen Technical Solutions Sp z.o.o. | Poland | 100.00% |
| Wilhelmsen Technical Solutions Korea Co Ltd | Republic of Korea | 100.00% |
| Wilhelmsen Technical Solutions Pte Ltd | Singapore | 100.00% |
| Ti Callenberg China Co Ltd (formerly known as Ti China Co Ltd) | China | 100.00% |
|---|---|---|
| Callenberg A/S (formerly known as Wilhelmsen Technical Solutions A/S) | Denmark | 100.00% |
| Callenberg A/S (formerly known as Wilhelmsen Technical Solutions A/S) | Denmark | 100.00% |
| Ti Callenberg Japan Co Ltd (formerly known as TI Marine Contracting Japan Co Ltd) | Japan | 100.00% |
| TI Marine Contracting AS | Norway | 100.00% |
| Callenberg AS (formerly known as Wilhelmsen Technical Solutions Norway AS) | Norway | 100.00% |
| Ti Callenberg Korea Co Ltd (formerly known as TI Korea Co Ltd) | Republic of Korea | 100.00% |
| Callenberg Technology AB (formerly known as Wilhelmsen Technical Solutions Sweden AB) | Sweden | 100.00% |
| Callenberg Group AB (formerly known as Wilhelmsen Technical Solutions AB) | Sweden | 100.00% |
| European Manning Services Ltd | United Kingdom | 100.00% |
| IES Callenberg Ltd (formely know as Integrated Engineering Services (Aberdeen) Limited) | United Kingdom | 100.00% |
| Ti Callenberg UK Limited (formerly known as Ticon Insulation Limited) | United Kingdom | 100.00% |
| Callenberg Inc (Formerly known as Wilhelmsen Technical Solutions, Inc) | United States | 100.00% |
* Additional profit share agreement
PCTC: Pure car and truckcarrier
| NAME | IMO | BUILT | TYPE | FLAG | CEU | WW SHARE |
|---|---|---|---|---|---|---|
| MHI TYPE | ||||||
| TORONTO | 9302205 | 2005/8 | PCTC | GBR | 6 500 | 100% |
| TOLEDO | 9293624 | 2005/2 | PCTC | GBR | 6 500 | 100% |
| TORRENS | 9293612 | 2004/10 | PCTC | GBR | 6 500 | 100% |
| TUGELA TOPEKA VALLETTA |
9310109 | 2006/06 | PCTC | GBR | 6 500 | TUGELA 100% |
| TOMBARRA | 9319753 | 2006/09 | PCTC | GBR | 6 500 | 100% |
| TORTUGAS | 9319765 | 2006/12 | PCTC | GBR | 6 500 | 100% |
| TOMAR | 9375264 | 2008/10 | PCTC | GBR | 6 500 | 100% |
| TOREADOR | 9375288 | 2008/12 | PCTC | GBR | 6 500 | 100% |
| TORINO | LCTC 9398321 |
2009/03 | PCTC | GBR | 6 500 | 100% |
| TOSCANA | Tugela: 230 m 9398333 |
2009/06 | PCTC | GBR | 6 500 | 100% |
| TONGALA | 9605786 | 2012/09 | PCTC | MLT | 6 400 | 100% |
| OTHER | ||||||
| TANCRED* | 8605167 | 1987/04 | PCTC | NIS | 4 600 | 100% |
| TRINIDAD* | 8602579 | 1987/09 | PCTC | NIS | 5 800 | 100% |
| TRIANON* | 8520680 | 1987/04 | PCTC | NIS | 5 800 | 100% |
| MORNING CONCERT | 9312822 | 2006/04 | PCTC | GBR | 6 600 | 100% |
PCTC: Pure car and truckcarrier
| NAME | Thalatta: 200 m IMO |
BUILT | TYPE | FLAG | CEU | WW SHARE |
|---|---|---|---|---|---|---|
| POST PANAMAX (HERO TYPE) | ||||||
| THERMOPYLÆ | 9702443 | 2015/01 | PCTC | MLT | 8 000 | 100% |
| THALATTA | 9702455 | 2015/04 | PCTC | MLT | 8 000 | 100% |
*The three PCTC vessels Tancred, Trianon and Trinidad – were sold for recycling at green facilities in China in the first quarter of 2016.
LCTC
| TUGELA VALLETTA |
TUGELA | |
|---|---|---|
| NAME | IMO | BUILT | TYPE | FLAG | CEU | WW SHARE |
|---|---|---|---|---|---|---|
| LCTC1 | ||||||
| TIJUCA | 9377511 | 2008/12 | LCTC | NIS | 7 600 | 100% |
| TIRRANNA | 9377523 | 2009/6 | LCTC | NIS | 7 600 | 100% |
| LCTC2 | ||||||
| TUGELA | 9505065 | 2011/07 | LCTC | MLT | 8 050 | 100% |
| TUGELA TULANE VALLETTA |
9505089 | 2012/06 | LCTC | MLT | TUGELA 8 050 |
100% |
| TIGER | 9505039 | 2011/06 | LCTC | MLT | 8 050 | 100% |
| TITANIA | 9505053 | 2011/12 | LCTC | MLT | 8 050 | 100% |
| Tønsberg 265.00 m | ||||||
|---|---|---|---|---|---|---|
| NAME | IMO | BUILT | TYPE | FLAG | CEU | WW SHARE |
| MARK V | ||||||
| TØNSBERG | 9515383 | 2011/03 | RO-RO | MLT | 8 500 | 100% |
| TYSLA | 9515400 | 2012/01 | RO-RO | MLT | 8 500 | 100% |
| MARK IV | ||||||
| TAMESIS | 9191307 | 2000/04 | RO-RO | NIS | 7 700 | 100% |
| TALISMAN | 9191319 | 2000/06 | RO-RO | NIS | 7 700 | 100% |
| TARAGO | 9191321 | 2000/09 | RO-RO | NIS | 7 700 | 100% |
| TAMERLANE | 9218648 | 2001/02 | RO-RO | NIS | 7 700 | 100% |
Capacity in terms of Car Equivalent Units (CEU) equals RT43 and is based on stowage plans for PCTC and LCTC. For RO-RO vessels, the CEU capacity is estimated from the bale cubic and is greater than the RT43-capacity. Wilh. Wilhelmsen Holding ASA P O Box 33
NO-1324 Lysaker, NORWAY Tel: +47 67 58 40 00 www.wilhelmsen.com Follow us on Twitter | Facebook | LinkedIn | YouTube | Instagram
Org no 995 277 905 MVA
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