Annual Report • Apr 4, 2017
Annual Report
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Dredging, marine engineering and environment / Contracting / Real Estate
Development 81
After a career of thirty years, first as CFO, then as CEO and director at Ackermans & van Haaren (CFE's principal shareholder), I took on a new challenge by assuming the chairmanship of CFE's Board of Directors. It is a group I am familiar with, as I have been a board member of DEME since 1986.
CFE has seen an interesting development and has become a solid and diversified group around three divisions. In marine engineering, we are the world leader in the construction of offshore wind farms. In the Contracting division, we distinguish ourselves by our ingenious and efficient processes. Also in real estate development, we have built up a solid and profitable position over the years. Moreover, all three divisions strengthen each other, which is a valuable asset.
In 2016, all three divisions reported a positive result, which shows that we are on the right track. We must carry on in that vein, since we have tremendous growth potential ahead of us. Since I have been at the helm of the group, I have met many members of CFE's workforce in all activities. I am convinced that their skills, their motivation and their expertise are a factor of progress and that the highly relevant efforts being made in that respect in the area of operational excellence are going in the right direction.
Thanks to everyone's commitment, CFE has now, more than ever, the necessary determination and know-how to carry on developing successfully.
Luc Bertrand Chairman of the Board of Directors
CFE ended the year with a net result after tax of €168.4 million, which is close to the exceptional result achieved in 2015. As a percentage of revenue (6% after tax), this economic performance is among the best ever realized by the CFE group. This is the result of the success of all the divisions of the CFE group, starting with DEME.
With a revenue that is substantially lower than in 2015, DEME maintains a very high result as well as a low level of debt. This achievement is all the more remarkable as DEME continues to pave the way for the future. Substantial investment programmes were implemented in 2016 and will continue over the next two years. Thanks to the investments that have been made since 2005, DEME now has a new fleet that is definitely the most advanced in the field of dredging and related services. The company also has a sizeable order book that is well up (+19.3%) on the previous year, promising an excellent 2017. For DEME, 2015 was marked by the exceptional Suez Canal project, which involved a very substantial part of the company's resources. The drop in activity observed in 2016 could have been reflected in a significant fall in profit, but the high quality of the work on projects in progress easily made up for the impact of that decrease in revenue.
CFE's success is also that of the Contracting division, which we had finished reorganizing by the end of 2015. CFE Contracting, which accommodates the construction activities in Belgium, Luxembourg, Poland and Tunisia, as well as the activities of the Multitechnics and Rail infra
Piet Dejonghe Managing Director
& Utility Networks segments, has clearly shown its ability to return to profit under the leadership of its new CEO. The pursuit of operational excellence was put into practice in workshops bringing together the various management members of the group, along with other players in the construction industry as part of wider partnerships architects, engineering firms, customers, delegate project managers, subcontractors, etc; this procedure serves to improve the organization of the sites and thereby get better results. The quality of the order book at year-end 2016 augurs well for 2017.
The third success story is that of real estate development. BPI continued its operations in residential property in Belgium, Luxembourg and Poland, and has acquired strong positions in several projects. Like every year since it was incorporated in the CFE group in 2004, BPI reported a profit and ended the year with a particularly low stock of unsold apartments, which proves the appropriateness of the choice of sites for its real estate development operations. 2017 in particular looks to be a great year in view of the results expected on the projects in the process of completion.
The holding and non-transferred activities - which remain in CFE SA - have undergone thoroughgoing reorganizations, particularly the international and civil engineering activities. Those reorganizations have permitted, and will permit in 2017, the completion of the contracts that were concluded several years ago and of which the results could have constituted a risk factor for the company. Rent-A-Port's contribution to the results of the CFE group in 2016 was largely positive.
CFE reported an excellent economic performance in 2016 and, in view of the order books in the various activities, 2017 augurs very well for all the divisions of the group.
Renaud Bentégeat Managing Director
Rapport annuel 2016 5 Annual report 2016 5
DEME initiated the construction of its multipurpose vessel 'Living Stone' to consolidate its position on the market of offshore renewable energy production and transportation.
Engineering, software development, signalling and installation of those systems were done by VMA.
MBG won, in joint venture, the contract for the construction of the new ZNA Cadix hospital in Antwerp.
Start of the first phase of the works on Erasmus Gardens in Anderlecht for the developer BPI.
The consortium Femern Link Contractors, which includes CFE and DEME, signed conditional contracts with the Danish government for a major European infrastructure project: the world's longest immersed road/rail tunnel and its entrances, the Fehmarnbelt Link.
The tunnel will run 18 kilometres under the sea between Germany and Denmark, with a four-lane motorway (and hard shoulder) and a twin-track railway. The Ambition 2020 project was launched!
DEME and Siemens signed an EPCI contract for the foundations of the Hohe See offshore wind farm in the German North Sea.
The EPCI contract encompasses the design, engineering, procurement, construction and installation of 71 foundations consisting of a monopile and a transition piece.
DEME began the first phase of the Tuas Terminal project in Singapore with the installation of the first caisson for the quay wall, in the presence of the Singaporean Minister for Infrastructure
This quay wall will be made up of 222 caissons.
Tideway won the cable-laying contract for the 'Hornsea Project One' project, the world's biggest offshore wind farm off the Yorkshire coast (United Kingdom). The new cable-laying vessel 'Living Stone' will be used for this.
In just 17 working days, Lamcol completed a six-storey building with 10 apartments. The secret of this miracle: Cross Laminated Timber (CLT). CLT is an environmentally-friendly material with a positive carbon footprint, good insulating properties, resistant, and fast and efficient to work with.
Louis Stevens & Co started electrical works on the runway lighting at Brussels Airport. The works involved the lighting of the approach and take-off runways
Atro finished the new O Building on the university campus '3 Eiken' in Wilrijk. The O Building, with its gold-coloured façade made up of 2,856 panels, contains eight auditoriums, four laboratories, and an impressive atrium that can seat 3,000 students.
DEME won its first dredging contract for Port Louis in Mauritius.
BPI will redevelop, in joint venture, the current head office of Allianz on Place de Brouckère in Brussels. The project will for the most part comprise residential units (classic, prestige or for students), offices or a hotel. The ground floors will accommodate retail outlets to help revitalize the pedestrian precinct and city centre of Brussels.
CFE Polska began construction work on the new Mayaland Indoor Kownaty. This theme park is part of the new Holiday Park Kownaty, which within a few years will accommodate two theme parks, hotels, a holiday village, a shopping precinct, and restaurants.
DEME signed the financial close of the Merkur project and immediately began installing the offshore foundations. Merkur is an offshore wind farm in the North Sea that will guarantee the continuity of energy supply while making a significant contribution to the share of renewable energy.
Opening of Les Grands Prés in Mons, Wallonia's biggest shopping centre. This double extension was realized by BPC Hainaut.
Opening of the Docks Bruxsel shopping centre in Brussels: a multipurpose centre built by BPC and accommodating shops, cafés and restaurants, offices, eight cinemas, concert hall, indoor adventure park, and an industrial archaeology museum.
RENTEL NV reached the financial close on the project for a new 309 MW offshore wind farm off the Belgian coast. This project, located 40 km north of Ostend, will be the fifth offshore wind farm project in the Belgian North Sea. Dredging International will be in charge of the design, construction, transport and installation of the foundations and the intra-field cables.
BPC initiated the 'Quartier durable Tivoli' project in Laken (Brussels), involving the building of a model sustainable district. The project comprises roads and a park, around 400 housing units, two crèches, shops, etc. The site is situated in the vicinity of Tour & Taxis.
Decrease of the net financial debt
Increase of the revenue of the Multitechnics segment
+13.3%
apartments sold 90% of the first building of the Erasmus Gardens project in Anderlecht
cargo capacity 12,500 tonnes crane 600 tonnes crew 100
persons
wind turbines with a total capacity of
309
MW
The wind farm Rentel will comprise 42
+22.8%
the 'Living Stone' is a green multipurpose vessel.
EBITDA margin of DEME :
The order book reached a record level of
The regrouping of CFE's activities in three large independent divisions in no way precludes fruitful synergies, quite the opposite: the greater autonomy of the different entities goes hand in hand with a perfect strengthening of synergies at all levels. This strategy, which is of course highly advantageous for our customers, also proves extremely beneficial for the group and each of its entities.
More and more opportunities for synergies within the CFE group arise between subsidiaries of the same division as well as between the different divisions, notably between DEME with its dredging and marine and environmental civil engineering activities, BPI with all its Real estate development activities, and CFE Contracting with its Construction, Multitechnics and Rail infra & Utility Networks activities in the Benelux area, Poland and Tunisia. Those synergies take shape in different ways, such as by sharing experiences, working together on large-scale projects or on complex projects involving different sets of skills, sharing opportunities according to the geographical location, or by transferring activities between entities.
The transfer within DEME of the marine engineering activities and the establishment of the marine infrastructure company DIMCO at the end of 2015 more effectively guaranteed the continuity of those activities while meeting DEME's needs in that area.
First of all, the transfer saved the jobs of many workers whose high level of skill is acknowledged in the industry in Belgium and internationally. There were virtually no more infrastructure projects in Belgium and, consequently, the very small number of contracts led to cut-throat competition. As a result, those workers were at risk of becoming underemployed. Thanks to the partnership with DEME and the creation of DIMCO, the staff of CFE's engineering department and the engineers of the CFE group could be integrated in DEME and so keep their jobs.
Furthermore, and equally importantly, this partnership made it possible to preserve and perpetuate a solid expertise within the CFE group as a source of present and future successes on international and Benelux projects. We won the contract for the Fehmarnbelt tunnel - an 18 km undersea road and rail tunnel between Germany and Denmark; we landed a €500 million (share of the CFE group) deal on the RijnlandRoute project in the Netherlands, while other projects involving DIMCO are currently under consideration. All this means that more staff will be hired, particularly young people, which will further strengthen our capacities and the general benefit of the partnership with DEME.
Another form of synergy is being investigated between the real estate development activities and those carried
out by DEC-Ecoterres within DEME. A more extensive collaboration is being examined between the teams of the two entities, more particularly the utilization of the expertise offered by DEC-Ecoterres in soil remediation on the sites acquired by BPI.
Synergies must naturally also exist between the real estate division and the construction activity. Of course it is important that each division has its own management and that it is responsible for its results, but that does not rule out the possibility of working together. The best example is what is now happening in Poland. The partnership between real estate development and construction materializes in the very early stages of projects where the smartest technological solutions are sought for the benefit of the developer, who in that way can benefit from lower building costs. This interaction clearly shows the complementarity of the activities.
and a well-filled order book at the year-end.
In the Contracting division, the Multitechnics segment made substantial progress in 2016, reporting an increase in revenue and a well-filled order book at the year-end. The progress of this division owes much to the successful grouping, under the auspices of VMA, of all electrical activities in one single cluster. This clustering offers the advantage of a far wider range of human resources, making it possible always to put the right man in the right place on projects, which may be difficult to accomplish for each company individually when several projects require the same skills at the same time. The overall view of the technical and human
resources needed for each assignment of the electrotechnics cluster currently rests with one single person, Guy Wynendaele. A similar procedure is currently being established for the HVAC cluster.
The Rail infra & Utility Networks segment is also experiencing the benefit of a cluster organization with the search for synergies and complementarity between entities that work mainly for Infrabel.
The results and order book to date speak for themselves: CFE's strategy of allying greater autonomy with more synergies not only bore fruit in 2016, but also gives the group the greatest potential for the coming years.
Director Luc Bertrand Chairman of the Board of Directors Member of the Appointments and Remuneration Committee
Christian Labeyrie Director - Member of the Audit Committee
Jan Suykens
Leen Geirnaerdt
Pas de Mots SPRL, represented by Leen Geirnaerdt - Independent Director Member of the Audit Committee
Ciska Servais
Ciska Servais SPRL, represented by Ciska Servais - Independent Director Chair of the Appointments and Remuneration Committee Member of the Audit Committee
Piet Dejonghe Managing Director
Annual report 2016 13
Safety has always been a priority throughout the CFE group and has naturally remained so after the reorganization: 2016 saw efforts being stepped up in the area of safety through a multiplicity of targeted training and awareness campaigns conducted by the different entities and subsidiaries. At the beginning of 2017, a big Safety Day was organized simultaneously in all the entities of CFE Contracting.
All the subsidiaries organized specific technical training sessions on how to operate machinery and to work on site more safely. This was the case at CFE Bouw Vlaanderen, which in 2016 also initiated a safety assessment system, and at CFE Bâtiment Brabant Wallonie (CFE BBW), which specifically emphasized the prevention of risks associated with
operating a tower crane. Apart from the mandatory training sessions in that area for internal staff and for subcontractors, each crane must now be fitted with a camera to allow the crane operator to see the load being handled in all configurations.
These specific training sessions took place at all the subsidiaries, naturally with variations according to the type of activity. The themes that were discussed included the use of harnesses, sling operations, electrical works, working at heights and on aerial platforms, scaffolding, elevators, or, at ENGEMA, training in projects for Infrabel, which are often carried out in very difficult conditions, in particular when night work is involved.
Training programmes, awareness campaigns, toolbox meetings, poster campaigns and safety days were also held in the different clusters and subsidiaries of the Contracting division, in Belgium and internationally, for instance to
Annual report 2016 14
On 17 November 2016, CFE Polska, which in October had devoted a whole week to health and safety, was awarded first prize for 'Safest Building Site' in the Gdansk area by the National Labour Inspectorate. This prize is an acknowledgement for the constant efforts by CFE Polska to apply CFE's 'safety first' values day by day.
reiterate the basic principles of safety management, the response required in case of accidents and fire, or to raise awareness of the importance of risk analysis before embarking on an activity, road safety, the consequences of a work accident, etc. Current events also led VMA to realize the need to offer support and counselling to individuals who witnessed serious accidents or some other dramatic situation in the workplace: at the time of the terrorist attacks in March 2016, its teams were in Zaventem and gave support to the victims.
In addition to those various initiatives, there were unannounced on-site safety visits, improvements to personal protective equipment (harness, fall protection, etc.), and, as in Tunisia, commitment to an integrated management system (IMS) that prioritizes personnel health and safety.
Every year, DEME organizes a 'Safety Moment Day' in all operational units, which in 2016 centred on the potential risks of working with ladders. The 'Best Performed Safety Moment' award is given to the department, office or project with the best safety initiative. Moreover, DEME was accoladed for the second time by the International Association of Dredging Companies (IADC) for the most innovative idea in the area of safety that can be applied to the whole industry.
Well-being, safety and environment have always been DEME's primary concerns, and are the guiding principles in the company's commitments in terms of international best practices and compliance with local laws and regulations. DEME's safety objectives are ambitious and involve every employee. Aiming for the 'zero accident' target has thus become part of the company's DNA.
awareness
CHILD, DEME's safety awareness programme, was set up in 2010, but 2016 saw the launch of a new programme, called CHILD 5, which aims to ensure that attention to safety becomes second nature to every staff member. Two seminars have already been held. Intended for managers, the new programme explains how as individuals they can change their safety behaviour and thus make the difference. Twelve more sessions are planned.
The safety strategy rests on four pillars: commitment, cooperation, communication and leadership. Those four pillars are the foundations for better performance in safety, quality and efficiency. They are also essential elements of working with respect for the environment. Therefore DEME focused its attention on a number of initiatives which, in view of the positive results, have clearly shown the relevance of its extensive safety programme.
28.4
22.6
Dredging and environment
1.3
2.8
1.6
1.1
43.2
37.8
33.2
Within the CFE group, the paramount importance of the role, competence and motivation of its employees is widely acknowledged, and gets the utmost attention at every level.
Gabriel Marijsse CFE
Our priority is not only to attract and hire talented people with complementary skills, but also to win their loyalty by offering them a dynamic and fulfilling work environment in which they feel good and can develop all their competencies.
In that perspective, DEME wants to give its employees the opportunity to switch from one discipline, subsidiary or activity to another. Thus an employee may start his career in dredging, then move on to green energy, and eventually find fulfilment in a wind energy project.
The CFE group boasts values, a corporate culture and reputation that represent trump cards when it comes to recruitment, as does the multidisciplinary and multicultural character of its staff. It is no accident, then, that in recent years the CFE group has on several occasions been proclaimed 'Top Employer' and received the diversity label of the Brussels-Capital Region.
CFE is a strong brand which the group's companies can successfully rely on when they participate in events that introduce employers to young people (meetings with schools, universities, colleges, internships for students, etc.).
Naturally the subsidiaries have their own valuable assets to attract candidates, such as induction and coaching for new employees and a wide range of training programmes. Nevertheless, finding new employees remains a difficult proposition for certain niche jobs, since there is a shortage of young people with the necessary skills.
Diversity is a reality at CFE: competence is the only criterion in the recruitment process. Men and women have the same opportunities, as more and more women are found in management positions, or as engineers, site supervisors, project leaders, etc., which were previously the reserve of men. Similarly, cultural background plays no part in the selection process.
| Holding & non transferred activities |
DEME | Contracting | Real estate |
Total | ||
|---|---|---|---|---|---|---|
| 2014 | 884 | 4,264 | 2,828 | 45 | 8,021 | |
| 2015 | 426 | 4,421 | 3,265 | 48 | 8,160 | |
| 2016 | 204 | 4,476 | 3,023 | 49 | 7,752 | |
| Staff by category | ||||||
| 2016 | Labourers | Employees | Total | |||
| Holding & activities |
non-transferred | 113 | 105 | 218 | ||
| DEME | 1,990 | 2,486 | 4,476 | |||
| Contracting | 1,861 | 1,148 | 3,009 | |||
| Real estate | 0 | 49 | 49 | |||
| Total CFE | 3,964 | 3,788 | 7,752 |
| Number of hours by type of training |
Total 2015 |
Total 2016 |
Men | Women |
|---|---|---|---|---|
| Technical | 57,265 | 50,248 | 48,304 | 1,944 |
| Health and Safety |
68,918 | 82,068 | 78,478 | 3,590 |
| Environment | 1,970 | 1,851 | 1,782 | 69 |
| Management | 22,800 | 29,207 | 26,048 | 3,159 |
| IT | 12,634 | 10,858 | 8,298 | 2,560 |
| Admin./Account/ Management/ Legal |
5,827 | 9,553 | 7,969 | 1,584 |
| Languages | 4,931 | 5,635 | 3,246 | 2,389 |
| Diversity | 0 | 36 | 36 | 0 |
| Other | 6,366 | 12,511 | 11,196 | 1,315 |
| Total | 180,711 | 201,967 | 185,357 | 16,610 |
Ambition 2020 is a project that was initiated in 2016 by the Contracting division to pool energies in a forwardlooking common project. This project will bring together the diversity of talents that make up CFE Contracting and will foster the accountability and motivation of every employee, which are essential in the construction activities, while at the same time developing a corporate culture.
The project began with a strategic reflection round involving some forty directors and managers of the different entities of CFE Contracting. Several intersubsidiary working groups were then set up, involving more staff members, with the aim of accelerating the growth towards excellence by promoting the exchange of good practices. The creation of the Digital Platform, currently under development, is already a big step forward in terms of participation in a common project and exchanging good practices. It has already met with great success among many staff members.
Finally, the different entities of CFE know that they will be better equipped for the future if, according to their needs, they hire experienced people over 50 as well as young people who represent valuable new blood and are called upon to take over from the older generation.
Besides training of young people under the supervision of a coach or of more experienced colleagues, a wide range of collective or individual training programmes is offered to employees who wish to hone their competencies. In addition to safety training and technical training specific to the group's different activities, the companies offer training programmes, organized internally or in collaboration with external organizations, in such topics as finance, leadership, coaching, communication, negotiation, languages, project management, vendor management, etc.
Apart from training programmes, various initiatives are taken to foster synergies and exchanges of experience and good practices. Advances in digitalization naturally also play an important part here. Those initiatives were backed up by the Ambition 2020 project at CFE Contracting, while BPI sought in particular to intensify the synergies between the different countries and to improve and renew the skills of its teams, more specifically in the area of communication and in its sales teams.
DEME also offers a very wide range of internal and external, general or specific, training programmes of a technical nature or intended for the management. A worldwide training programme was initiated in 2015 to ensure the fleet's compliance with the latest requirements of the Convention on Standards of Training, Certification & Watchkeeping (STCW). Around 750 members of the seagoing crews will have completed this training programme between 2015 and 2017.
The 'People@DEME' platform enables every employee to access the 'fact file' on his job, listing his duties and responsibilities and presenting the various training opportunities, as well as suggestions for career development courses.
'Time To' is a new tool to help employees assess their skills and their development needs. 'Time to' also provides DEME with a database of skills available in the company to ensure that the right team is assigned to the right project each time.
Finally, the new 'corporate app' allows DEME to communicate information directly to an employee's laptop or smartphone and give him direct access to the work tools when he is out of the office. A superb tool for internal communication and collaboration!
Training has become all the more primordial as innovation is currently very much part of the construction activities. This certainly applies to techniques, machines, tools and materials, but also at a more general level to improve the processes and to realize projects in a more qualitative and efficient way.
The companies of the CFE group are very much aware of the fact that CFE BBW invests in extensive training programmes in BIM and Lean Management, and that CLE also invests in BIM. At CFE Bouw Vlaanderen, the BIM approach was tested in the field and has evolved into a highly positive original formula, called BlueBeam. But what do BIM and Lean mean?
The purpose of the Lean Management approach in construction is to eliminate everything that does not contribute to the customer's satisfaction - in other words, to avoid waste of resources - and to realize the project in a more efficient way by a proper organization of the construction site. For example, the lean approach makes it possible, by the use of various digital tools, to clearly indicate the places where various materials are stocked and
the size of those stocks, or to identify pointless and time-consuming processes.
Lean planning is an essential element of lean management. Its objective is optimal planning and uses 'smart planning' tools to achieve faster progress in the project as a whole. Above all, it requires the cooperation of everyone involved in the project. Planning is based on the customer's wishes, as well as on the actual information supplied by those who carry out the various works: on-site workers, subcontractors, suppliers, architects, engineering firms, etc. This calls for the participation and collaboration of all the parties right from the outset, so that they become closely involved in the project. Each party can set a deadline for its task (as part of the planning agreed with the customer), and can also specify what it needs from the other parties. This collaborative approach makes it possible to cope with unavoidable changes in a project or problems encountered by a given party in the best possible way and without giving rise to conflicts. In this way, lean management ensures the ideal orchestration of the contributions from each party to avoid loss of time and cut costs.
After AZ Sint-Maarten hospital in Mechelen, MBG worked in Antwerp on the construction of a second digitized project, this time using an original formula, called BlueBeam. This project is the Antwerp Management School, in which MBG has been involved according to the 'Bouwteam' formula since the design stage and works together with all the partners.
Like BIM, BlueBeam allows the team to work digitally and in real time. However, rather than work in 3D, MBG uses the PDF format to transmit all the information contained in the BIM model. This choice is motivated by the present reality of working on a building site: everyone can use PDF (on their iPad for instance), while the large majority of subcontractors have neither the staff nor the means to use 3D software. Furthermore, BlueBeam helps to simplify various processes. With BlueBeam, which is currently being tested on the Antwerp project, the digitization of the construction works is set to function in a way that is easy to understand and use for everybody.
BIM or 'Building Information Modelling' is a digitized model of a building project in a cloud which every party involved in the project - architects, engineers in charge of stability or special techniques, general contractors, etc. - can access and collaborate on. The result is that information is communicated more easily, which helps to avoid many problems and improves work efficiency.
The project is no longer drawn, but 'modelled'. Every element (beam, window, etc.) is represented in 3D and accompanied by numerous details: the material used, finish, colour, etc. That information will be further supplemented with new data about the execution of the works and may be used and modified during the whole lifecycle of the building, for instance for maintenance purposes or in case an element is changed later on. BIM is 3D, and also a database that can be accessed by all the partners in the project.
3D BIM is currently used in several countries, such as the Netherlands, Austria, Germany, and England. Further developments in BIM are already on the horizon, such as 4D BIM, which includes the time dimension to optimize on-site work planning and progress.
DEME
Innovation has always been of primordial importance to DEME, and is put at the service of the environment and the pursuit of the company's general objectives.
DEME's Research & Development approach is multidisciplinary and involves close collaboration not only between the sites, vessels and head office, but also between the design office, the project teams, and the technical and engineering departments. The innovation process involves a methodical, systematic and structured approach that is rewarded with success.
DEME's approach to innovation has generated many results.
For example, EverSea has developed the concept of a standard platform adapted to every gas field in the Dutch North Sea, which can be installed by small and less expensive vessels, and reused for another gas field. Another example is an impressive 'pile gripper', developed to install the foundations of wind turbines in the seabed, which offers many advantages, such as lower cost, faster implementation, and lower susceptibility to weather conditions. The LOTO App ('Lock Out Tag Out'), designed on board the sea dredger Ambiorix, is a visual application to facilitate and accelerate the LOTO process while avoiding the risk of human error. In another area, a tool was developed in Singapore, the ME2WE, to help stimulate the team spirit, facilitate internal relations, and improve workforce productivity.
Many other innovations have emerged in various areas, such as rock cutters, specialized vessels for laying pipes, soil remediation, etc.
Not only has considerable know-how in sustainable construction been developed over the years at the different entities, the CFE group also contributes to environmental protection in many other ways, such as the production of renewable energy.
Year by year, the CFE group sets higher targets in sustainable development in order to offer solutions that are well adapted to present and future demand, with increasing attention to energy and environmental aspects, well ahead of the regulations in force in Belgium and internationally.
The different entities, which are well aware of the sustainability aspect, launch numerous initiatives on a daily basis to limit and process waste, reduce travelling, and cut energy consumption in their offices and on site. Above all, the subsidiaries have over the years built up valuable environmental expertise which they turn to advantage in the preparation and realization of projects. Many building projects testify to this:
Examples of passive buildings include the De Vonck school in Knokke (MBG), a crèche with wooden framework in Laeken, and the 'Les Trèfles' school in Anderlecht (CFE Brabant), the 'Laiterie', a cafeteria situated in a listed park in Schaerbeek (Leloup Entreprise Générale), and the Green Wall building for IFAPME in Gembloux (Druart). Numerous projects have also won, or will win, the BREEAM Very Good or BREEAM Excellent certification. Examples include the large Docks Bruxsel complex (BPC), the Promenada project in Warsaw (CFE Polska) and the Kons and Glesener buildings in Luxembourg (CLE). Several other projects developed by BPI Luxembourg (Edengreen, Greenhill, G4S, Differdange, Kiem, Route d'Esch) also received (or will receive) sustainability certificates.
Certain activities of the group are sustainable by their very nature. This is the case with the activities that improve the performance of the railway network and therefore the use of a less polluting means of transport, or activities of wastewater treatment or the collection and processing of waste to generate energy. Other examples are heating and air-conditioning systems with heat recovery, and the installation and maintenance of solar panels. There is also be.Maintenance, which maintains buildings, involving fine-tuning of settings to limit energy consumption, and recommends energy-saving solutions to customers. Finally, CFE also acquired stakes in several offshore wind farm projects, such as Rentel, off the Ostend coast, which will supply renewable energy to some 285,000 households.
In its concern to save the future of the planet, DEME decided to invest in dual fuel vessels, a technology that allows engines to run on diesel or on LNG while reducing carbon emissions and virtually eliminating all NOx, SOx and particulate emissions.
Once this investment programme has been completed, DEME will be one of the very few fleet owners to use this technology on such a large scale. Those investments amply surpass the legal requirements, and all the vessels of DEME (Minerva, Scheldt River, Apollo, Blanew, Gulliver, etc.) will be awarded a Green Passport and a Clean Design certificate.
Let's take a closer look at some of those vessels, starting with the 'Living Stone', which will be deployed on its first assignment shortly.
The 'Living Stone' is DEME's first green multipurpose vessel. Built near Bilbao in Spain, it left the shipyard in September 2016 to join Tideway's fleet of fallpipe vessels in order to be deployed on the construction of offshore wind farms. This dual fuel vessel has a heat recovery system, and its spent oil is biodegradable. Not only is the 'Living Stone' a green vessel: its cargo capacity - 12,500 tonnes - and 3,000 m² deck area are equally impressive. It holds two cable reels of 5,000 tonnes each, or the equivalent of 200 kilometres of cable, and a crane of 600 tonnes. Capable of laying cables extremely fast, this vessel of the future can accommodate a crew of up to 100. The 'Living Stone' will be deployed on its first assignment in the second quarter of 2017, on the Hornsea Project One wind farm off the Yorkshire coast.
Together with 'Scheldt River', the 'Minerva' is the first dredger in the world to be completely fitted with dual fuel engines and capable of running only on LNG. This 3,500 m² trailing suction hopper dredger was launched by the shipbuilder Royal IHC in December 2016 and will join the fleet of DEME in early summer 2017.
Bonny River is the name of a river in Nigeria, but also that of the new trailing suction hopper dredger that will join the fleet of DEME in 2017. This dual fuel vessel has a very long and heavy suction pipe with a massive pump head to extract sea sand down to a depth of 102 metres. The special design of the hull gives the 'Bonny River' an impressive carrying capacity with a shallow draught. This makes it ideally suited for coastal protection works. Furthermore, its ecological closed pipe is a first in DEME's fleet. This ecological pipe has the major advantage of minimizing water turbidity and therefore of allowing dredging in ecologically sensitive areas. Finally, the hydrodynamic shape of the hull and the dual fuel engines help to further optimize fuel consumption and reduce the carbon footprint.
The operations that remain in the holding include the concession activities, certain international construction activities, and the civil engineering activities that were not transferred to DIMCO. 2016 saw the completion of several international projects, the continuation or completion of large-scale civil engineering projects in Belgium, and the realization of the Offshore Rentel wind project in the North Sea. Rent-A-Port consolidated its position in Vietnam and the Middle East.
The concession activities were marked by the transaction during the year of CFE's stake in its two infrastructure projects, the Liefkenshoek rail tunnel in Antwerp and the Coentunnel in Amsterdam. For the Liefkenshoek project, the operating company is Locorail, in which CFE held 25%. For the Coentunnel project, the operating company is the Coentunnel Company, in which CFE held 23% (of which 5% for DEME).
The main activity of the concessions now lies essentially in the group's participation in the activities of Rent-A-Port and Green Offshore.
Rent-A-Port studies and develops greenfield port projects and industrial port zones. Its subsidiary, Rent-A-Port Green Energy specializes in renewable energy generation.
During project development, Rent-A-Port seeks in particular to ensure the overall management of everything to do with electricity and water distribution along with services such as waste collection and processing or wastewater treatment. In the area of water and electricity, Rent-A-Port can finance renewable energy and drinking water supply projects that are
implemented by its subsidiary Rent-A-Port Green Energy.
In 2016, the Rent-A-Port Group witnessed a substantial improvement in its financial situation, also due to the transfer of its offshore wind operations to CFE and Ackermans & van Haaren. The group also reinforced its teams to meet the needs of its subsidiary's activities in Oman, Vietnam and Qatar.
Considerable progress was made in Vietnam and Oman in strengthening the ownership and control of electricity grids. The local and central authorities in Vietnam and Oman would like to see more green energy production. This reorientation in favour of wind energy, solar panels and waste-to-energy conversion has reached a decisive stage, allowing Rent-A-Port Green Energy to hire specialist staff.
In Vietnam, the province of Quang Ninh lies in the immediate vicinity of the province of Hai Phong, and the western area of Quang Ninh is part of the hinterland of the new sea port of Lach Huyen that is currently under construction. Rent-A-Port leads the operations of two major concessions in those provinces: Tien
Work on the Rentel wind farm, situated off the Belgian coast at 40 km from Ostend, is currently in the start-up phase following the financial close of the project in the fourth quarter of 2016.
Phong South (360 hectares), without an external partner, and Tien Phong North (1,200 hectares), in joint venture with a partner.
Meanwhile, the water engineering works of Tien Phong South started in 2016, and the administrative organization was put in place to start up a first industrial park (with jetty and quay wall). The Investment Certificate for this new industrial park was obtained on 28 December 2016. This project launched in Quang Ninh province is similar to the one realized by Rent-A-Port when it won the concession of Dinh Vu in Hao Phong in the early 2000s.
In order to firmly establish its presence in the countries where its projects are realized, Rent-A-Port took various initiatives in 2016 to strengthen the position of its subsidiary Rent-A-Port Green Energy.
In Vietnam, several actions were undertaken in the north and south of the country at the incentive of and in close collaboration with the national government in Hanoi. In the province of Hai Phong, the electricity grid of Dinh Vu became autonomous and was formed into an independent entity with very clear 'green' ambitions. In 2016, Rent-A-Port Green Energy also prepared a study for Quang Ninh province to assess the methods and impact of the large-scale disposal of all floating waste in the bay of Halong for conversion into energy. Finally, in the Mekong Delta, a study was carried out and cooperation agreements were concluded with the Ministry of Agriculture for the production of fresh water for the irrigation of rice fields and other crops (in collaboration with a Qatari partner for water desalination).
In Oman, a consortium was set up with Rent-A-Port Green Energy, Access, Artelia and Seven Seas Holding to develop a project for renewable energy generation and electricity storage, just north of the port of Duqm. This project will supply the future industrial zone
Due to the transfer of its offshore wind operations to CFE and Ackermans & van Haaren and its developments in Vietnam, the Rent-A-Port Group witnessed a substantial improvement in its financial situation in 2016.
planned in the concession approved by the Sultan of Oman in 2015 with green and competitively priced energy.
In view of all those achievements, 2016 was clearly a year of consolidation and preparation of growth for Rent-A-Port. The future therefore looks promising.
As of July 2016, the offshore wind farm activities, grouped together in the entity Green Offshore, are equally owned by Ackermans & van Haaren and CFE. Green Offshore is involved in the Rentel, Seastar and Mermaid wind farms. Work on the Rentel wind farm, situated off the Belgian coast at 40 km from Ostend, is currently in the start-up phase following the financial close of the project in the fourth quarter of 2016. Those works, which have been entrusted to DEME, will last two years. The wind farm will comprise 42 wind turbines with a total capacity of 309 MW, enough to supply renewable energy to 285,000 households. The wind power plant is expected to be fully operational by the end of 2018.
Of the civil engineering activities that were not transferred to DIMCO, several major projects continued in 2016: the refurbishment works on the Kennedy tunnel in Antwerp, carried out during the weekends; the construction of the immense car park and bypass of Mechelen railway station, which will be completed sometime in the first half of 2017; the major project for the refurbishment and construction of the new Brussels-South wastewater treatment plant (STEP).
On the last project, the civil engineering teams of CFE work together with the teams of Nizet Entreprise, in partnership with those of VINCI Environment. The complexity of the works and the extent
of the changes to the project, as well as the customer's wish to have the works partly finished (end of phase B) by the end of 2018, resulted in a settlement regarding the definition of the new scope in October 2016. The works for the two main phases will be finished by the end of 2018. An optional third phase may be carried out later.
BAGECI continued work on its civil engineering contracts in Wallonia. The firm completed several wastewater treatment plants in 2016 and continued work on the water pumping station in Jemeppe (Liège), which will be completed by the end of the first half of 2017. Work on the dam of Kain on the river Scheldt will continue according to the agreed schedule and will be completed in June 2018.
The ambitious Eko Tower II project in Lagos, a 120-metre-high building, was completed to the customer's satisfaction.
Under the direction of Patrick Bonnetain, the reorganization of the international team and the execution of very large projects meant positive results on numerous sites
In Algeria, where the head office of BNP in Algiers was completed in 2015, an important four-year maintenance contract was signed in 2016 with BNP; this contract is currently being performed to the customer's satisfaction.
Another operation was finished at the end of 2016 in Nigeria: the ambitious Eko Tower II project in Lagos, a 120-metrehigh building, was completed to the customer's satisfaction. The warranty period is underway.
In Sri Lanka, the drinking water supply systems for Kolonna and Balangoda, designed and realized by CFE, were completed in September 2015, also to the satisfaction of the customer, the National Water Supply & Drainage Board. Virtually all payments were received in 2016, and the final administrative procedures for the settlement of this assignment are currently being negotiated with the customer and the subcontractors.
In Chad, the situation remains difficult. he work itself is not at issue: final acceptance of the Grand Hotel in N'Djamena was declared and CFE will maintain the hotel pending its opening by the Radisson group. However, the company's outstanding receivables on that operation remain high, and negotiations are in progress with international financial organizations to enable the Chadian authorities to settle the amounts still due to CFE. It is the same story for the project of the Ministry of Finance, carried out in a 50/50 joint venture with VINCI in Africa: work was suspended in 2015 and
will remain so pending the payment of arrears to the joint venture. In this case, too, negotiations are in progress with financial organizations to try and find a solution to settle those outstanding amounts. The risk on Chad for the whole group as at 31 December 2016 amounts to 60 million euros.
In Hungary, Bayer-CFE should be able to start work on the construction of an office building being let to Hyundai.
Finally, new international projects are currently in advanced stages of investigation, more particularly in Senegal, where the international teams of CFE work together with the teams of CFE Contracting and those of DEME.
For the first time in DEME's history, dredging-plus activities, including marine and offshore solutions, environmental solutions, infra marine solutions and fluvial & marine resources, reached the same level of turnover as dredging activities. The offshore wind market in particular held important opportunity for DEME.
In the dredging market, activities were dominated by the Tuas Terminal 1 mega port project in Singapore. In La Réunion works continued for another major project, the construction of the "Nouvelle Route du Littoral" with dredging and backfilling works for the gravity foundations of the viaduct for the new coastal road. Several new contracts were secured in Africa, including port expansion projects in Sierra Leone and Mauritius. DEME had a good level
of activity in many countries in Latin America, and returned to the historic Panama Canal project to complete the widening and deepening of the Pacific Access Channel. Several projects carried on in Egypt and India, while in Europe DEME continued maintenance dredging campaigns in Belgium, France and Germany.
The offshore renewables market has seen a particular growth for DEME in 2016. Contracts were secured by GeoSea in Germany, Belgium, Denmark and the UK, including an installation contract for Hornsea Project One, the world's largest offshore wind farm. GeoSea was also involved in the groundbreaking MeyGen tidal energy project in Scotland, the world's first multi-turbine, tidal stream power station to be connected to the electricity grid. With DEME Concessions and investments in projects like Merkur, Rentel and MeyGen, the company
continues to be at the forefront of offshore renewables developments.
DEME's environmental specialist companies carried out remediation projects in the UK, Norway and Belgium and saw increasing activity in their soil and sediments recycling centres in Belgium and France.
DIMCO, DEME's infra marine specialist, further reinforced its position in the Benelux with several new projects and aims to develop international activities in close synergy with other DEME activities.
With a record order book and a strong project pipeline for the year ahead, DEME is strongly positioned for a sustained high performance. DEME's long-term strategy and objectives remain firmly in place.
The company will continue to invest in people and fleet, with the goal to deploy the most modern and environmental friendly fleet to serve both the dredging and offshore market. DEME will further reinforce its world-leading position in offshore renewables, offering customers every service connected to offshore wind, whether this means cable laying, foundation works, turbine installation or a full EPC contract. The group's specialist companies, like DEC and DEME Building Materials, will continue to seize on market opportunities to remain or become market leaders in their sector. DEME will also continue the strong tradition of partnerships either at local, geographic or specialist level. Strategic partnerships have proven successful in many projects and markets and enable DEME to offer customers complete solutions for even the most complex projects.
2017 will undoubtedly come with its own challenges, but DEME has a proven strategy for growth, and most importantly, a team of employees worldwide with the expertise and innovative spirit to drive further success going forward.
Alain Bernard DEME SA
Annual report 2016 32
Dredging, marine engineering and environment
At the outer edge of the port of Rotterdam DIMCO completed the construction of a quay from where the giant piles intended for wind farms can be loaded ready to be transported by sea. Works Manager Guy helped to bring about the successful conclusion of the project and is now overseeing the final dredging operations required for the structure.
The 460 m long quay wall was erected at the very limit of the port of Rotterdam in an area that has only been reclaimed from the North Sea a few years ago.
"Almost England", people working on the Offshore Terminal Rotterdam (OTR) jokingly describe the location where they have recently erected a 460 m long quay wall. The project is situated on land at the very edge of the port of Rotterdam that has only been reclaimed from the North Sea a few years ago. And this comes with its own specific risks as there is still a bank of clay located in front of the wall that needs to be dredged and replaced with a thick layer of sand to ensure that the project has stable foundations.
Even though the construction phase is complete, the project still needs to be
monitored until these operations have been finalised. There is, for example, still a minimal risk of underwater erosion, i.e. loose sand could undermine the structure endangering the stability of the entire quay wall. That is why, to be on the safe side, a team of engineers is on site 24/7 – although this is an additional measure. Several automated precautionary measures were put in place, including a fibre optic cable installed below the quay wall that registers even the slightest sand movement to ensure that appropriate measures are taken if something threatens to go wrong.
You cannot afford to take any risks with these types of projects," stated Works Manager Guy, who helps to oversee the project on behalf of DIMCO. "That is also the main reason why we were awarded the contract by the port of Rotterdam, the client for this project. We developed a comprehensive redundancy system in order to constantly monitor the stability of the construction."
Following the delivery of the project on 1 June 2017, the quay wall will be used to load mono piles, the huge supports for wind turbines, onto jack-up ships ready to be installed in wind farms at sea. The Roermond based company SIF, which builds foundations for these wind farms, partially commissioned the site on 24 December 2016, so the quay wall had to be built quickly. And that represented quite a challenge, Guy added. "For example, the construction of the concrete quay wall had to be sequenced with the even sections first followed by the uneven
sections. It enabled us to install the formwork and reinforcement for the second one, whilst the concrete was being poured for the first one. This saved a huge amount of time, which was necessary because the project was under such enormous time pressure. Now that the project is almost complete I consider it a great 'business card' for DIMCO. It was a huge challenge to deliver a high quality product to a very demanding client safely and on time."
Obviously a project of this nature required a highly experienced team. Guy, for example, who graduated in the nineties as an industrial engineer at the Industrial University College in Ghent, immediately gained his spurs in major civil construction projects and has now been working for the CFE group for about sixteen years. "What fascinates me in particular in projects such as the OTR is that no day is the same," he commented. "You constantly have to overcome minor obstacles, discuss issues, make the necessary adjustments and keep an eye on safety. It definitely isn't an office job. You have to be out in the field, on site, talking to people and ensuring that all parties are singing from the same hymn sheet. On a site of this magnitude there is no such thing as personal glory – everyone in the team, throughout the hierarchy, has a significant part to play."Aperibusandia sum esenis dis esequi dolorumqui de et
Christel Goetschalckx Secretary to the Management Team
Eric Tancré Area Director North Europe Steven Poppe Area Director Africa
Els Verbraecken Chief Financial Officer Alain Bernard Director Chief Executive Officer
2016 was a remarkable year for DEME, a year of both transition and opportunity
Tuas Terminal Phase 1 (Singapore) on full speed
DEME started in april 2016 the first phase of the Tuas Terminal in Singapore with the installation of the first caisson for the quay wall. The quay wall will be made up of 222 caissons.
In Turkey, DEME finished widening and deepening the navigation channel, turning basin, port basin and access channel in the port of Mersin.
On 3 December, Royal IHC launched the new dredger 'Minerva'. The 3,500 m³ capacity suction dredger was commissioned by DEME. It is the first dredger fully equipped with dual fuel engines and capable of operating only in LNG mode.
In concrete terms, it can be powered by diesel as well as gas: the diesel engine is equipped with a gas train, which allows for either fuel to be used. LNG is a natural gas that can be cooled down to -162° Celsius, at which point it becomes liquid, taking up 600 times less volume. The "Minerva" holds the "Green Passport" and "Clean Design" ratings and will be officially named in Blankenberge in spring 2017.
Despite difficult conditions in the oil and gas industry, Tideway managed to maintain a high level of activity in 2016, partly thanks to projects in the offshore wind sector.
Major contracts for GeoSea
GeoSea won a major contract for Hornsea Project One in the United Kingdom, the world's biggest offshore wind project.
FLUVIAL AND MARINE RESOURCES
50000 tonnes of sand for the offshore terminal of Rotterdam
In the Netherlands, DEME Building Materials supplied approximately 50,000 tonnes of sand and gravel for the new offshore terminal of Rotterdam, built by DIMCO.
MARINE AND OFFSHORE SOLUTIONS MARINE AND OFFSHORE SOLUTIONS
GeoSea Maintenance will provide logistic and maintenance services for Rentel using its fast crew vessels and jack-up vessels.
Annual report 2016 40
At Wissant, beach replenishment and dune reinforcement works were carried out on the coast which is susceptible to strong erosion.
An ambitious investment programme to expand the fleet is currently underway at DEME. A number of vessels are being built in order to substantially improve performance in terms of productivity and from an environmental point of view. September 2016 saw the launch of the 'Living Stone', the most state-of-the-art vessel in the world for laying subsea cables and for other offshore works.
The trailing suction hopper dredgers 'Minerva', 'Scheldt River' and 'Bonny River' will be the first dredgers in the world to be equipped with engines powered by two types of fuel and capable of running entirely on LNG. Those vessels carry a Green Passport and a Clean Design Notation, certifying that they meet the strictest international emission standards.
The new jack-up vessel 'Apollo' will join DEME's present fleet of self-propelled crane vessels in order to respond to the expanding offshore energy market.
Scaldis will add the crane ship 'Gulliver' to the fleet, an extremely powerful vessel with a lifting capacity of 4,000 tonnes.
The vessels 'Living Stone', 'Minerva', 'Scheldt River', 'Apollo' and 'Gulliver' will be brought into service in 2017.
Maintenance dredging works, carried out by Dredging International and Baggerwerken Decloedt, continued in 2016 at the ports of Zeebrugge, Ostend and Blankenbergen, and in the North Sea access channels. DEME continued the maintenance dredging works on the river Scheldt as part of a five-year contract signed in 2015. DEME was also involved in the renovation of the quay wall of the PSA container terminal in the port of Antwerp. On the Belgian coast, a series of breakwaters were demolished to make room for the landfall point for the power cables from the offshore wind farms.
In the Netherlands, DIMCO (DEME Infra Marine Contractors – see below) carried out deepening and soil improvement works for the construction of the new quay of the Offshore Terminal in Rotterdam. In June, DEME finished the coastal protection works for the 290 ha
Waterdunen project in Breskens in the Netherlands. Also in the Netherlands, DEME finished the final phase of the beach replenishment works at Dishoek, Zoutelande and Goeree-Westhoofd.
In 2017, de Vries & van de Wiel will carry on widening the Juliana Canal. Together with a Dutch partner, de Vries & van de Wiel realized the Kooyhaven site, an approximately 21 ha industrial zone connected with the waterways. The port with public quay became operational in mid-December 2016. The dredging works on the Waddenzee were completed.
In Germany, Nordsee Nasbagger- und Tiefbau carried out maintenance works on the Weser under a two-year contract. Water injection maintenance works on the Elbe and the Kiel Canal continued in 2016. As part of a consortium that
includes Bilfinger, Nordsee Nasbaggerund Tiefbau landed a contract to extend the Europakai in Cuxhaven. DEME was also involved in emergency works on the Elbe to refloat the giant container carrier 'Indian Ocean' that had run aground.
In France, SDI (Société de Dragage International) carried out maintenance dredging works at Bayonne and deepening works on the Seine between Le Havre and Rouen. At Wissant, beach replenishment and dune reinforcement works were carried out on the coast, which is susceptible to strong erosion. On La Réunion, DEME continued the construction of the spectacular 'Nouvelle Route du Littoral', a 13 km coastal road built offshore. DEME handles the dredging of the foundation pits for the viaduct of the new road.
With the deployment of state-of-the-art equipment and techniques, work on the Tuas Terminal Phase 1 mega project in Singapore has reached full speed. In a joint venture with Daelim Industrial of South Korea, DEME will build 21 deepwater quays. Those quays will have a total annual container capacity of 20 million TEUs. The first important stage in the project was initiated in April 2016 with the successful installation of the first caissons (of a total of 222) that will form the structure of the terminal quay.
The Jurong Island Westward Extension project continued according to plan and will be completed in 2018. This project involves the reclamation of approximately 38 million m³ of new land on Jurong Island, Singapore's petrochemical hub.
In Papua New Guinea, works to remove potentially contaminated mine-derived sediments from the Lower Ok Tedi River were resumed in March 2016 after a period of slack activity due to very low water levels caused by El Niño. In
2017, DEME will carry out remediation dredging of the Ok Tedi basin for the 20th consecutive year. The present contract runs at least until 2020.
The La Mer Jumeirah Open Beach project in Dubai, which presented a major challenge in geotechnical terms, was successfully completed in 2016. This project involved the reclamation of 2.9 million m³ of new mixed-use land for residential, commercial and leisure purposes.
The New Port project in Doha was fully completed at the beginning of 2016. The project involved dredging the navigation channel and reclamation of land for the industrial zone and the new naval base. Before the work was finally completed, the first vessels were already able to use the access channel to the new port.
In 2016, DEME forged ahead with its activities in Egypt. After successfully completing the works on the new Suez Canal, the same consortium composed of Dredging International and the US company GLDD was awarded a second contract by the Suez Canal Authority to dredge the eastern access channel to Port Said. These works were completed well ahead of schedule.
DEME carried out dredging works in the port of Alexandria for the Egyptian navy. In December, DEME embarked on dredging and land reclamation works to enlarge the Ras Al Teen naval base. Also in Egypt, DEME and Tideway together carried out dredging works and the installation of pipelines for the Burullus Combined Cycle Power project.
In Turkey, DEME finished widening and deepening the navigation channel, turning basin, port basin and access channel in the port of Mersin.
In Italy, maintenance dredging works were carried out in the port of Livorno. On Yard Belleli di Taranto, SIDRA (Societa Italiana Dragaggi) built a sheet pile wall and a wastewater treatment plant. DEME is currently finishing the construction of a quay wall in the port of Trapani in Sicily.
In Dubai, on the exclusive coastal stretch of Jumeirah, DEME has reclaimed three prestigious peninsulas from the sea. Offering a unique panoramic view of the Persian Gulf which stretches as far as the eye can see, and the emblematic skyline of Dubai's tower blocks, this new land is the ideal place to dream away. DEME used the trailing suction hopper dredgers (TSHD) Antigoon and Pearl River to reclaim land from the sea and to compact the banked-up soil
As much as 7 million cubic metres of sand was pumped up and 450,000 square metres of new land created. The peninsulas will soon accommodate 688 apartments, shops, bars, restaurants, villas and 160 hotel rooms of the highest quality. There will be no lack of leisure and entertainment facilities: beach sports, skateboard ramps and tracks, outdoor gym, etc. Two marinas and a park complete this idyllic picture. The Sea: the most magnificent jewel in DEME's crown.
IndicaTOr
A hundred years after the opening of the Panama Canal, the DEME Group has spent more than eight years participating in major work to widen, deepen and expand the famous sea passage. During the latest assignment, a record was set: we took not 540 but 366 days to widen and deepen the access to the canal on the Pacific side. The project was completed 173 days ahead of schedule!
The secret behind this success lies in the fact that DEME relies on innovation and technology, an approach that gives it an undeniable competitive advantage and enables it to complete its work in record time. Specifically, we have developed new milling units for the cutters. This enabled the d'Artagnan to dredge the volcanic outcrops efficiently.
The result: since July 2016 big container ships can negotiate the renovated canal of Panama.
In 2016, Dredging International returned to Panama to continue widening and deepening the Pacific Access Channel; these works were finished sooner than planned. DEME will still be engaged on the Panama Canal in 2017 with dredging works near the Cocoli Locks. Also in Panama, DEME widened and deepened the turning basin and access channel of Manzanillo International Terminal.
In Cuba, the access channel and turning basin of Mariel Port were deepened. Maintenance dredging works were carried out at two Compas port terminals in Colombia. DEME completed, in joint venture, the extension of a quay wall and accompanying dredging works in the port of Montevideo in Uruguay.
At the end of 2016, DEME started maintenance dredging works on the access channel to the port of Santos, the largest seaport of Brazil. DEME also carried out maintenance dredging works on the Rio Grande in joint venture. These works will continue in 2017.
Through its subsidiary International Seaport Dredging (ISD), DEME remains a prominent player in India with, among other projects, the expansion of the port of Kamarajar and dredging works at the ports of Dhamra, Salaya and Kakinada.
At the end of 2016, DEME started a land reclamation project in Emboodhoo Lagoon, in the Maldives. Three paradisiac islands will be developed there for tourism.
DEME, which has been active in Africa for over 50 years, retains a solid presence across that continent. In 2016, DEME was still working on the largescale EKO Atlantic City project in Nigeria. Maintenance dredging works continued on the Bonny River as part of a concession agreement with the Nigerian National Ports Authority. Also in Nigeria, DEME was involved in the extension of the port of Onne and in a land reclamation project on Ilubirin Island. A contract was also awarded for dredging works on the access channel to the Lagos Deep Offshore Logistics (LADOL) base.
Outside Nigeria, DEME won contracts for port extensions in Sierra Leone, Mauritius and Guinea, as well as a
maintenance contract in Ivory Coast; maintenance dredging works were executed in Angola. In Congo, the PPP with the dredging company La Congolaise des Voies Maritimes continued for maintenance works on the Congo River.
Annual report 2016 46
Did you know that in 2020 several nuclear and coal-fired power stations in Germany will be decommissioned? Merkur, an offshore wind farm in the North Sea (approximately 45 kilometres north of the German island of Borkum), will guarantee continuity of power supply while making a significant contribution to the share of renewable energy.
When the project is finished, 66 wind turbines will generate 1,750 GWh green power each year, supplying electricity to 500,000 households. The installation of the offshore foundations will begin in August 2017. The whole project is expected to be completed in March 2019. The construction of Merkur Offshore will be in the hands of GeoSea, DEME's subsidiary specializing in complex offshore marine engineering projects.
Work on the German Nordsee One offshore wind farm was completed at the beginning of 2016. GeoSea also installed 91 foundations for the Race Bank wind farm in the United Kingdom. Under an EPCI contract with RWE Innogy UK, GeoSea installed the first foundation in December for the Galloper wind farm in the United Kingdom. Tideway, another subsidiary of DEME, will protect the foundations against erosion.
GeoSea won a major contract for Hornsea Project One in the United Kingdom, the world's biggest offshore wind project, and was awarded a contract for Borkum Riffgrund 2 in Germany. GeoSea also won EPCI contracts for Merkur (Germany) and Rentel (Belgium), work which is due to begin in 2017. In Denmark, GeoSea landed a contract for the 400 MW Horns Rev 3 wind farm.
In October, a unique partnership agreement was signed between DEME and the Chinese company COSCO Shipping for the joint development of offshore wind power in China. This partnership is in keeping with China's climate goals and the development of renewable energy, as set down recently in the thirteenth fiveyear plan (2016-2020) on economic and social development.
In the fourth quarter, GeoSea was involved in the construction of the unique MeyGen tidal energy plant in the far north of Scotland. GeoSea installed the foundations for a first series of four underwater turbines.
GeoSea also won the EPCI contract for Hohe See in Germany, of which the financial close is expected in the first quarter of 2017.
Under a maintenance contract, GeoSea Maintenance carried out maintenance works for C-Power on the Belgian coast. Maintenance works were carried out using the jack-up vessels 'Neptune' and 'Thor' for various customers in the Irish Sea and the North Sea. GeoSea Maintenance will provide logistic and maintenance services for Rentel using its fast crew vessels and jack-up vessels.
EverSea, DEME's subsidiary specializing in complex offshore marine engineering projects, successfully carried out the installation of the unmanned gas platform P11-E for the Dutch company Oranje-Nassau Energie.
For the dismantling of the Thames gas platform in the North Sea, EverSea took part in the removal and transportation of a ventilation tower and a crane boom.
The National Award Business Success institute has named Tideway the Best Employer 2016 in the hydraulic engineering sector. The jury was impressed with its approach and expertise, which saw the DEME subsidiary receive high marks in terms of staff satisfaction. The jury noted in its report that "The board of Tideway is aware of the importance of human capital to the company and is therefore very alert to the well-being and motivation of its workers".
Despite difficult conditions in the oil and gas industry, Tideway managed to maintain a high level of activity in 2016, partly thanks to projects in the offshore wind sector.
In Germany, Tideway arranged the post-lay cable crossings for the DolWin 3 and Veja Mate offshore wind farms. Tideway also protected the foundations of the Nordsee One and Galloper wind farms against erosion, and replaced the infield cable of the C-Power wind farm off the Belgian coast.
Rock placement works were carried out for the Godewind I and II offshore wind farms in Germany, as well as for the Lower Churchill project in Canada.
The joint venture company Combined Marine Terminal Operations Worldwide (CTOW) continued in 2016 the contract
for the provision of harbour towage services in the port of Onne in Nigeria. Two new tugs, 'CTOW Bieke' and 'CTOW Lala', joined the fleet.
Scaldis salvaged the 'Flinterstar', which had sunk off the Belgian coast in 2015.
In Vlissingen, the heavy lift crane vessel 'Rambiz' was used to lift a 'stinger transition frame' to be mounted on the 'Pioneering Spirit', the world's largest pipeline laying vessel. The 'Rambiz' was used to lift a tilting system for laying pipelines from the Huisman construction site in Rotterdam and transported to the pipeline laying vessel 'Skandi Buzios'.
Scaldis transported and installed the substations for the Nordsee One and Rampion offshore wind farms and the transformer station for Nobelwind.
Scaldis performed hoisting operations as part of the decommissioning of the Viking Bravo gas platform in the North Sea. Preparatory work was carried out on several platforms that will be dismantled between 2017 and 2020.
DEC (DEME Environmental Contractors), DEME's environmental division, worked on different remediation projects in Belgium: Carcoke in Zeebrugge, Rhodia in Ghent, Bayer in Rieme, Electrabel in Evergem, and Eandis in Kortrijk and Veurne. For Blue Gate in Antwerp, soil surveys were completed as part of the remediation works that will begin in 2017.
DEC also continued the operation of AMORAS, where dredged material from the port of Antwerp is processed.
DEC carried out remediation works in the United Kingdom on an area of 100 ha as part of the Avenue Coking Works project in Chesterfield, and finished a project at Staveley Goyts for the removal and treatment of contaminated sediments.
In 2016, DEC, in partnership with the Norwegian company Veidekke Entreprenør, started the remediation of a former Norwegian refinery site for ExxonMobil.
In the autumn, de Vries & van de Wiel started soil remediation works on the former site of NAF in Alphen aan den Rijn.
Ecoterres, DEME's environmental subsidiary in Wallonia, treated more than 450,000 tonnes of contaminated soil and sediments at its specialized recycling
plants Sedisol, Petit Try and Cetraval in Belgium and Bruyère-sur-Oise in France. Remediation works were carried out on part of the Haut Fourneau site in Seraing and on the Codami site near La Louvière. Environmental dredging works were also performed on the Brussels-Charleroi Canal and on the river Scheldt in the north of France.
Purazur, a subsidiary of DEME specializing in wastewater treatment, started building a new wastewater treatment plant in 2016 for the waste processing firm Indaver in Antwerp. Purazur is responsible for the design, construction and commissioning of the new plant.
Vallø is a small town in Norway, two hours' drive away from the capital Oslo. It is called the 'Norwegian Riviera'. The site of the refinery was badly in need of remediation. ExxonMobil, the biggest stock market listed player on the oil and gas market, awarded this contract to DEC and a partner. The project was named 'VEIDEC'.
The 27 ha site will be cleared, the excavated soil will be cleaned up, and part of the waste will be exported. In the final phase, the site will be filled up with clean soil. DEC is currently in the first phase of the project. The remediation process should be finished by mid-2019.
The main challenge is to meet the administrative demands of the customer: each batch of 100 to 300 tonnes of polluted soil or acid tar has to be analysed to allow appropriate processing. There is a total volume of 220,000 m³ to be processed. That means 700 basic tests over 250 working days. There are also supplementary tests, since every batch of soil must be traceable throughout the process. Furthermore, all plans and method statements must be drawn up and validated beforehand. Nevertheless, those strict requirements also work in favour of DEME: not every firm is up to the task.
At the beginning of 2016, DIMCO, in joint venture with a Dutch partner, won the contract for the construction of a 460-metre quay wall for the new offshore terminal in the port of Rotterdam. The first 150 metres of the quay became operational in December 2016.
In January, DIMCO also won the contract for the installation of six dolphins and 27 mooring buoys in the port of Rotterdam. The work took place between May and October 2016. Also in the Netherlands, contracts were landed for the construction of a new wharf at the Maasvlakte oil terminal and the extension of the Caland wharf.
DIMCO is working on phase 2 of the 'Spoorzone Delft' project, where the company is involved in the design and construction of the 2.3 km 'Willem van Oranje' rail tunnel.
Together with two partners, DIMCO is engaged on the extensive renovation of the dam complex on the river Lek.
Despite the slowdown seen in recent years in the European construction industry, DEME Building Materials reported a marked growth in business in 2016, particularly in the first six months, with full occupancy of the gravel suction hopper dredgers 'Charlemagne' and 'Victor Horta'. This is due in large measure to the growing demand in the United Kingdom.
In the Netherlands, DEME Building Materials supplied approximately 50,000 tonnes of sand and gravel for the new offshore terminal of Rotterdam, built by DIMCO.
DEME
DEME has taken another step forward in its commitment to being at the forefront of tidal energy by acquiring shares in MeyGen, the world's first deep water (35 m) tidal energy project being developed off the rocky coast of Pentland Firth, Scotland. MeyGen will be the first multi-turbine tidal energy plant in the world to be connected to an electric grid.
In April 2016, DEME Concessions acquired a share in Tidal Power Scotland Limited (TPSL), the company overseeing the MeyGen project. GeoSea, the company which won the tender for the first phase of the project, has developed an incredibly stable self-lifting platform - the Neptune which is capable of positioning extremely heavy loads with a high level of precision, hoisting and installing the base components for the turbines (each unit weighs 400 tonnes). The first phase of installation, which took place in September 2016, saw the successful activation of the first turbine with production starting in November. Two additional turbines were installed
in December 2016 with the last being installed in February 2017. This first phrase represents a capacity of 6 MW.
This new project has effectively been a game changer for GeoSea within the tidal energy sector. Owing to the various research projects carried out on how a deep water platform lift could be used - of particular note being the successful September 2015 testing at the major tidal energy site in Raz Blanchard in France - GeoSea has been able to position itself at the forefront of this branch of technology, which is still in its initial stages. GeoSea is currently gearing up for the second phase of the MeyGen project (an additional 6 MW's worth of energy), which is scheduled to commence in 2018.
Aside from its holdings in TPSL, DEME also holds shares in two other tidal energy projects - the West Islay Tidal Farm in Scotland (30 MW) and Fair Head in Northern Ireland (100 MW) - both of which are currently under development alongside local partners.
In 2016, financial close was reached for the Merkur (Germany) and Rentel (Belgium) offshore wind farms, in which DEME Concessions has a stake of 12.5% and 18.9% respectively. Works on Merkur and Rentel will start in the course of 2017. Together with the other shareholders of Otary, DEME Concessions Wind holds, besides Rentel, concessions for the Belgian offshore wind farms Seastar and Mermaid.
The stake in the Coentunnel in Amsterdam and half of the stake in the offshore wind farm C-Power have been sold.
DEME Concessions acquired a minority interest in Tidal Power Scotland Limited (TPSL) which, together with Scottish Enterprise, owns MeyGen, the world's biggest tidal energy plant. As in offshore wind, DEME wants to be a pioneer in this promising and sustainable technology. Besides its stake in TPSL, DEME is also, through DEME Blue Energy (70% DEME Concessions - 30% ParticipatieMaatschappij Vlaanderen) and in association with Nuhma, a partner (50%-50%) in BluePower, another development company in the field of tidal energy. DEME develops, in association with the Irish company DP Marine Energy (DPME), the West Islay Tidal Energy Park (30 MW - Scotland) and Fair Head (100 MW - Northern Ireland) projects.
Global Sea Mineral Resources is a subsidiary of DEME active in deep-sea mining. As raw materials are becoming scarce on land and demand keeps increasing, there is a growing interest in seabed minerals. In partnership with the Belgian engineering firm De Meyer, a state-of-the-art pre-prototype vessel, the 'Patania', has been developed and will be tested in 2017 on an expedition in the Pacific down to a depth of 4 to 5 km or more.
Contracting
Rapport annuel Interview CEO CFE Contracting was set up in 2015 following the reorganization of the group and accommodates the Construction activities in Belgium, Luxembourg, Poland and Tunisia, as well as the operations of the Multitechnics and Rail infra & Utility Networks segments. This reorganization allows us to achieve a more effective combination of the strength of an international diversified group with entrepreneurship and proximity to our customers. Being able to couple flexibility, responsiveness and understanding the needs of the customer at subsidiary level with the financial resources, human competencies and recognition of the CFE group is a major advantage. We focused our efforts on that aspect in 2016 and we will continue to accelerate them in 2017.
The 'Ambition 2020' project, which was successfully launched in the Contracting division in 2016, follows on from that reorganization and can be described as a collective inter-subsidiary reflection platform on a common captivating project, setting targets and forming working groups to achieve those targets. One of the first outcomes is the 'digital CFE platform' which is being developed to allow collaboration and to improve the evolution of our business.
The construction business is in constant development, and it is by operational excellence, innovation and forming new partnerships that we can meet the challenge.
* Building Information Modelling: digital model of a building project in a cloud, which all players can access and collaborate on.
Annual report 2016 54
The prestigious O Building of the University of Antwerp.
Having said that, people are of course still the key element in this change process, which means a good management of the teams and a dynamic environment where people can grow and work together, inspired by a real sense of belonging to the group.
2016 saw the finalization of numerous projects and the continuing international development. The year ended on a highly positive note. The clusters formed in the different business segments continued to develop well, and this integration will be further strengthened in the coming years.
2017 will be marked in the Construction segment by stability in Belgium and a
slight growth internationally. In Rail infra & Utility Networks, the level of activity will be very high in 2017, while another year of growth is expected for Multitechnics, which can already look back on a very successful 2016.en 2016.
Raymund Trost CFE Contracting SA
Annual report 2016 56
Gaining the respect of your team is paramount'
The Leiekouter site in the centre of Ghent is a project involving 50% new construction as well as the restoration of a listed monument. Project Manager Siska managing, and keeping this complex project on the right track.
By the time a major residential construction project such as Leiekouter reaches completion the person in charge of the project has faced and managed quite a few challenges. For example, the rear of the development, which is being constructed on the site of a late eighteenth century mansion in Louis XVI style and was the Hotel Legrand until a few years ago, is immediately adjacent to the river Leie. This meant that an iron dam had to be erected following
Contracting
the demolition of the office building on the site, to prevent water from the river seeping into the cellars. The mansion itself comprises several salons with listed ceilings and wall paintings, which obviously require an extremely careful approach. Because the construction of the four on-site residences, comprising 51 luxury apartments, required more material storage space than the relatively limited surface area of the project itself provided, a plot of land was rented on the other side of the river Leie from where a tower crane will in due course transfer materials to the site
« There have never been any tensions over the fact that as a woman I usually have to lead a team of men."»
Workers often encounter many unexpected obstacles during the groundwork phase.
And that is only the preliminary phase of the project, involving the excavation work and initial restoration of the building at the front, alongside the Nederkouter quarter. It presents quite a few challenges to the person in charge of the project, who must deploy meticulous planning skills and a superior problem solving ability to ensure that all these knots are quickly disentangled. But that is all part of the daily routine for Project Manager Siska. "There are many question marks, particularly during this phase
When, as a recently graduated engineer, Siska started her first projects 13 years ago, she soon progressed from assistant project leader to project leader. Now, as a project manager, she oversees several sites simultaneously on behalf of the company. The fact that she is a woman in the construction sector, which is
generally considered a man's world, has never bothered her. "At the start of my career my appearance on site may well have raised a few eyebrows, but I think that was more to do with the fact that I was still wet behind the ears," Siska continued. "There was never any real friction about the fact that as a woman I had to supervise a team of mostly men. I am also of the opinion that with each project you have to gain every team member's respect first, irrespective of whether they are men or women."
when we are still involved in the excavation work," she stated. "For example, we came across an archaeological find and the soil was slightly polluted. Aspects such as these are not part of the planning and you need quickly come up with a solution. That is why I need to maintain a regular presence on site, not just to verify whether everything fits in with the planning, but also to check that safety instructions are complied with and the team is founded on the right dynamics. Usually we set up new teams for this type of project, which means that we have to start from scratch for each project."
Contracting
Managing Director CFE Bouw Vlaanderen SA and General Manager of the Multitechnics segment and Rail infra & Utility Networks
Frédéric Claes Managing Director CFE Bâtiment Brabant Wallonie SA
Fabien De Jonge Chief Financial Officer of the CFE group
Raymund Trost CEO CFE Contracting SA
Group Terryn, which became a whollyowned subsidiary of CFE Contracting at year-end 2016, went through a year of transition under the leadership of a new management team.
'De Krook' is an ambitious urban renewal project in the heart of Ghent. It comprises three parts: a new building, the renovation of the Winter Circus, and the redevelopment of the public spaces. Each part has its own project owner. VMA worked on the installations for the new building of the Municipal Library and the high-tech multimedia centre. VMA transported most of the equipment by waterway, which is a first for the company.
Since opening its doors Docks Bruxsel has welcomed many visitors and even more on Saturdays! A runaway success for this innovative new shopping centre. It's like walking around town, along streets on several levels, between nine different buildings, the whole thing covered with a huge glass roof.
A multifunctional centre with shops (110 brands), places to eat and drink, offices, 8 cinemas, an auditorium in a huge zinc "bubble", an indoor adventure park and, finally, a museum of industrial archaeology. No less!
Several school building projects were finalized as part of the 'Schools of Tomorrow' programme
Annual report 2016 62
MBG continued to work on the AZ Sint-Maarten project in Mechelen: the structural work has been completed and the finishing works have begun.
2016 was a positive year for CFE Contracting, with a general increase in results in several markets in Belgium and internationally (Poland, Luxembourg and Tunisia). The satisfactory order book level means that we can look forward to 2017 with confidence.
BENELMAT provides technical assistance to the operational teams in the choice, study, supply and selection of the equipment needed on the group's construction projects. The new warehouse in Gembloux will allow a better streamlining of BENELMAT's hardware resources.
With more than €110 million in revenue, MBG maintains an excellent volume of business in industrial buildings as well as in construction for the public and private sectors. MBG continued to work on the AZ Sint-Maarten project in Mechelen: the structural work has been completed and the finishing works have begun. Several school building projects were finalized as part of the 'Schools of Tomorrow' programme for AG Real Estate, as well as the new passive school building 'De Vonk' in Knokke-Heist.
MBG also finished the last of the six residential tower blocks at the Kattendijkdok in Antwerp.
Atro, which completed the prestigious O Building of the University of Antwerp, with its gold-coloured façades, reported a strong revenue growth in 2016, reaching an all-time high at €46.3 million. The past year includes also the completion of the construction of serviced residences for Triamant in Geluwe and the residential project in Neerland Park in Wilrijk for Vlaamse Poort and DELA. The further integration of the two entities started at the beginning of 2017. In commercial terms the entities will continue to operate under one single name, MBG with 3 hubs : Brugge, Brasschaat and Wilrijk.
BPC Brabant completed several prestigious projects, such as the large mixed-use centre Docks Bruxsel with its highly innovative design at Pont Van Praet, the Eastman Museum of European History in Brussels, and new phases of the major Brussels projects Chambon and Solvay. The company also continues to work on several other projects, such as the construction of Agora in Louvain-la-Neuve. BPC Brabant reported a positive result in 2016 with €78 million revenue, realized for the most part in Brussels and Walloon Brabant. The year also saw the consolidation of the existing teams in view of the merger with CFE Brabant. As at 1 January 2017, the order book had shrunk slightly, but several known avenues ushered in a return to growth at the beginning of the year.
CFE Brabant, which returned to profit after several difficult years, merged with BPC Brabant as of 1 January 2017, and the two entities now operate under one single name, BPC. In 2016, CFE Brabant worked on public and private projects of different sizes in Brussels for an overall revenue figure of €58 million. The firm completed the Chirec hospital at Delta (structural work), the school 'Les Trèfles' in Anderlecht, of which all the buildings are passive and classed as 'exemplary', and the Eastman building for the European Parliament. Several projects are still in progress: the Chirec and Bordet (Erasmus) hospitals, and several schools, offices and residential buildings. Given the growth in the order book, 2017 looks to be a promising year, a year that will also be marked by the merger between CFE Brabant and BPC Brabant.
Leloup Entreprise Générale reported a 50% revenue growth in 2016, and has landed some interesting contracts that allow it to look forward to 2017 with confidence. The completion of the GSK project in Wavre is planned for the end of March with the delivery of the two new buildings. Leloup Entreprise Générale also delivered several projects in Brussels, such as a residential building in Rue Stroobant. In 2017, the firm will continue the construction of the Ste-Anne sports club and the conversion of a building into an Art Gallery for BD (Senne project).
Leloup Entreprise Générale reported a 50% revenue growth in 2016, and has landed some interesting contracts that allow it to look forward to 2017 with confidence. The completion of the GSK project in Wavre is planned for the end of March with the delivery of the two new buildings. Leloup Entreprise Générale also delivered several projects in Brussels, such as a residential building in Rue
Stroobant. In 2017, the firm will continue the construction of the Ste-Anne sports club and the conversion of a building into an Art Gallery for BD (Senne project).
After a solid growth, BPC Hainaut-Liège-Namur reported a slight temporary downturn due to the postponement of public projects; nevertheless, the year saw the completion of several major projects, such as the 'Les Grand Prés' shopping centre in Mons, the extensive renovation of a luxurious historic building for Delen Bank in Liège, and the renovation of the 'Ol Fosse d'Outh' holiday resort for CSC. Several large-scale public and private-sector construction or renovation projects are still in progress: the CHC Montlégia hospital in Liège, the head office of CBC Bank in Namur, Shape, the day hospital in Gosselies, and the MediaSambre building, which will accommodate the RTBF in Charleroi. 2017 should see a larger proportion of business from the public sector, and an overall stabilization or even increase of revenue.
At year-end 2016 Groep Terryn became a wholly-owned subsidiary of CFE Contracting. In the course of the year a new management team took over the leadership. The group concentrated on its core business: industrial construction and laminated timber. The improved performance in terms of in-house production of laminated timber and several fine projects in industrial construction and in glued laminated timber (riding school in Herve) and cross-laminated timber (school in Uccle) prove that there is still a lot of potential. Groep Terryn looks to the future with great optimism due to its integration within CFE that opens up new opportunities.
CLE experienced a sustained vigorous growth due to an increase in real estate investments associated with urban infrastructural developments. The company, which substantially
expanded its technical teams, started, continued or completed numerous projects, such as Galerie Kons in Luxembourg City, the Arboria shopping centre, the French Lyceum, the Trianon building, or the civil engineering project of Pulvermühle Viaduct and facilities for the Luxembourg Railways (CFL) in Schifflange. CLE reported a 60% revenue growth compared with the previous year, and has started 2017 with the prospect of a fresh growth in business.
Despite a slowing market and increased competition, CFE Polska ended the year with a 40% growth in revenue, highly satisfactory margins, and an equally positive outlook for 2017. In 2016, CFE Polska finished the extension of the 'Galeria Promenada' shopping centre in Warsaw for Atrium Real Estate and the construction of a hotel in Lodz for 'B&B Hotels'. Several other projects are in progress, such as the first phase (Majaland) of the 'Holiday Park Kowtany' leisure park and the 'Marina Royale' residential complex in Darlowo. Three residential projects for BPI Polska are also underway: 'Four Oceans' in Gdansk, 'Bulwary Ksiazece' in Wroclaw, and 'Wola Libre' in Warsaw. These projects bear witness to the profitable synergies that have developed between the Contracting and Real Estate divisions
CTE successfully completed several projects in 2016, such as the extension of the American School in Tunis, the construction of residential and office buildings in Korba and Nabeul, and the refurbishment of the Courthouse in Gabes, which in 2017 will be followed by the refurbishment of Gabes Prison. The other projects in progress include the construction of a mixed-use residential and retail complex in Berges du Lac, and the development of the 50 ha industrial zone ENFIDHA. At year-end 2016, CTE's order book was filled up to 80%, and the firm is confident that it will win other contracts for 2017 despite market conditions that remain extremely difficult.
Annual report 2016 66
The Gateway project in Zaventem.
2017 will see the formation of an 'Electrotechnics Cluster' comprising VMA, VMA West, Vanderhoydonks and Nizet Entreprise as one group specializing in electrotechnical installations for the construction, infrastructure and manufacturing industries.
VMA carried out major automation and industrial installation projects in the motor industry for Scania in Sweden, for Jaguar in England, for Volvo in Ghent, and for Audi in Mexico and Brussels. The Business Unit Electrotechnics Buildings has handled numerous installations in the healthcare sector, such as for Groeninge General Hospital in Kortrijk, Jan Palfijn hospital in Ghent and several retirement homes, and in the service industries, more particularly the Gateway project in Zaventem, the head office of AXA in Brussels, and the De Krook Media Centre in Ghent. All in all, 2016 was a good year for VMA, marked by
a growth in revenue and continuing satisfactory results.
The same picture emerges for VMA West, which performed numerous electrical installations, and for Vanderhoydoncks, which installed facilities in the Nike building in Ham. The Tertiary department of Nizet Entreprise, which experienced a difficult year marked by increased competition, completed or continued various electrotechnical installations for the car park of UCL, the CPAS (Welfare Office) in Tournai, and the CHU–UCL in Namur. Business was thriving for the medium-voltage activity. Nizet completed the water pumping station in Hanoi and won a new contract. In 2016, Nizet opened a branch in Luxembourg.
Consequently, and in view of the order book, 2017 looks promising for the various activities of the VMA cluster.
Druart carried out numerous assignments on the 'Schools of Tomorrow' project in 2016 for MBG in Herentals and 's Gravenwezel. The firm also continued work on the urban complex 'Regatta' in Antwerp and the 'Rive Gauche' shopping centre in Charleroi, and in January 2017 completed the HVAC & sanitation installation at the logistics centre of Lidl in Marche en Famenne. Several
other projects were completed in 2016, which nevertheless was a difficult year for Druart. The new management team is tasked with improving the company's profitability in 2017.
Business was very brisk for Procool in industrial cold storage on several sites, such as those of GSK and CHWAPI in Tournai. In air-conditioning, activity was more buoyant during the second half of the year, with the Hôtel des Douanes in Brussels as one of the projects. Procool reported a 25% increase in revenue and an exceptionally well-filled order book.
be.Maintenance further strengthened its position as a major player on the technical maintenance and services market, as is borne out by several important assignments, such as for Aspria and for the British Embassy. The synergies within CFE Contracting allowed it to consolidate its position on long-term contracts, such as for Charleroi police station (25 years) and 'Schools of Tomorrow' (30 years). Emphasis will be on the development of new long-term contracts.
be.Maintenance have been awarded a fiveyear contract to manage renowned coachbuilder D'Ieteren's new sites, with the newest - Audi in Drogenbos - requiring prompt action. We meet up with the team as they get ready to dive into unknown waters.
Standing outside of the building, the only things of note are the huge bay window, the 1,388 m² showroom and the telltale four hoops. This is the new Audi Center Brussels located in Drogenbos and Pierre, Head of Operations for be.Maintenance, is waiting for us beside the somewhat tucked away door which leads to D'Ieteren's factory floor. "As this is a new site we've firstly got to sign in before we get acquainted with the technical installations and see how things run here." Pierre has business in his blood, managing four response teams covering the entire Belgian territory - two in Brussels, one in Wallonia and one in
entrance lies the factory floor where the bodies used for cars are assembled. Next is a tight, winding stairwell and then a huge technical room where - amongst the hydraulic lines, ventilation units and extraction towers - one's gaze comes to focus on the HVAC dashboard. An LED blinks on and off; there is something out of order. "The first thing we're going to do is look into this alarm, prior to shutting everything down and starting the maintenance phase," states Jonathan.
Pierre takes in the various work areas and, technical plans in hand, inspects the status of the equipment alongside the technicians. "All in all the contract is for 80 boilers with a combined wattage of around 25 MW, 15 refrigeration machines with a combined wattage of 2.7 MW, 76 air con/heating units and four heat pumps with a combined wattage of
around 400 kW," he explains. "That's a lot. What we're here to focus on is one of the 77 forced air units, I'm certain it's got clogged up. We'll have to clean it out from the inside."
The covering to the unit is eventually removed, revealing a set of dirty filters. "All we've got to do here is replace the filters, clean things up as much as possible and then monitor all safety aspects," says Jonathan, and just like that the malfunction has been remedied. "However, some installations are more dilapidated than the ones here... And that makes things more difficult," he explains. The contract concluded with D'Ieteren goes beyond just simple maintenance tasks: it also includes a number of other services such as corrective maintenance, minor repairs and equipment renovation in addition to technical management, monitoring and reporting duties. In Pierre's own words, "buildings are more and more technical these days and things move very quickly in this sector. You simply can't do without a high performance building."
Flanders - on a daily basis. That comes to 35 experienced technicians specialising in managing and maintaining technical installations.
This morning, however, Pierre is flanked by two of his most trusted men in what will be the first maintenance campaign for the building. "Even a fully functional building, with demands being made on it on all sides, may have the odd small flaw in it," says Jonathan, one of the two technicians. "This is why speaking with the people working in the building is absolutely vital: we can very quickly form an idea about the history of the building and its level of performance." Past the
Besides heat pumps and roof ventilators more than 80 boilers and 76 air conditioners are put under surveillance.
Annual report 2016 70
Despite a difficult start to the year due to the postponement of expenditure decisions by Infrabel, ENGEMA reported a stable level of business in signalling and replacement of overhead contact lines, and an increase in activity for electrification works. The firm is more confident about 2017. ENGEMA Signalisation continued work on the concentration of signal boxes in the Dendermonde zone, and carried out several projects involving the TBL 1+ system. ENGEMA Caténaire started or continued various electrification projects and replacements of cables or overhead contact lines in the zones of Bruges (Dudzele), Ghent, Brussels and Namur. ENGEMA Lignes laid underground cables and worked on overhead systems in Walloon Brabant and the province of Namur. ENGEMA Montage, which worked on the high-voltage power lines at Stevin-Gezelle (Bruges) and Monceau-Fontaine L'Evêque (Hainaut), reported a vigorous growth which is expected to continue in 2017 with the upturn in investment activity at ELIA.
ENGEMA Montage, which worked on the high-voltage power lines at Stevin-Gezelle (Bruges) and Monceau-Fontaine L'Evêque (Hainaut), reported a vigorous growth which is expected to continue in 2017.
After a thoroughgoing reorganization, ETEC reported a profit in 2016. The firm carried out various aboveground and underground works for Ores and RESA. Its projects include the lighting of the Belfry in Thuin and the R9 in Charleroi, as well as installations on housing developments in Walloon Brabant. At the beginning of 2017 this entity modified its name in ENGETEC.
Louis Stevens & Co ended 2016 with a stable volume of business. The firm worked on the runway lighting system and on low and high-voltage cables and connections at Brussels Airport and Liège Airport, as well as on the electrical connection of wind farms and the wiring of cell phone masts for Infrabel. It also carried out signalling works at the Petite-Ile station in Brussels and was involved in the Dendermonde zone project. The Telecom & Security department of Louis Stevens & Co carried out several contracts for Infrabel, Infrabel ICT, the Belgian railway company (SNCB) and the Brussels public transport company (STIB), such as the installation of fibre optic cables and video surveillance systems, fire detection systems, ticket dispensers, etc.
Remacom continued the various activities developed in 2015. The teams worked in West Flanders, Brussels and Antwerp on numerous projects involving railway equipment, renovation of railway lines, renovation of railway points, and laying a railway level crossing. Although the year was off to a difficult start due to delays at Infrabel, Remacom looks to the future with confidence because of the potential synergies within the Rail infra & Utility Networks cluster.
Louis Stevens & Co, which is based in Halen in the province of Limburg, manages approximately sixty electrical projects each year in the underground stations of the Brussels based MIVB public transport company. The installation of a fibre optic infrastructure has become an increasingly important part of their activities in recent years. Site Manager Geert is keeping the project on track.
Teams don't just happen by themselves'
Fibre optic cables that interconnect via network panels and sleeves installed and maintained by Louis Stevens & Co in the stations make up the physical electronic highway that facilitates the operators' telecommunications services, the electronic transmissions of emergency services and the stations' own communications. A separate, dedicated fibre optic network is currently being installed specifically for the latter. The same company, a specialist in electrical and signalling operations, has also been working on this for several years.
"Because we were there from the outset two decades ago, we have already built up considerable expertise in fibre optic technology," Senior Site Manager Geert commented. "It also enables us to deploy the expertise of young people quite quickly, as their training and education tends to be focused on this area nowadays. I have an eye for people's specific skills and strengths, and we deploy our workforce with those in mind. That's why it is important for a site manager to be around all the time. Teams don't
just happen; you have to manage the dynamics between people."
« Fibreglass is a technology of which we have acquired considerable knowledge early on in the roll-out phase," says Geert Velkeniers.
Geert constantly commutes between the capital's sixty underground stations, where Louis Stevens & Co manages an average of five sites at any one time. On his trips between sites he uses the underground, just like everyone else. "Working on underground stations is quite different from working on the national rail infrastructure," Geert added. "Spending the day with just your colleagues and
a few rabbits in the field obviously has its attractions. But working in areas with a constant flow of people is equally fascinating, although it presents quite a few challenges in terms of planning. For example, working on platforms between 06.00 and 09.00 hrs in the morning, or at the close of business later in the day, is not an option."
Real estate development today is confronted with a market that is very buoyant, but at the same time highly competitive and highly demanding. A market of specific niches, with better informed buyers who analyse and consider every aspect of each project: price, quality, energy efficiency, location, facilities in the neighbourhood (shops, schools, leisure, mobility, etc).
To cater to this market demanding more and more advanced projects, BPI is starting in 2017 with a process to optimize the development, quality and efficiency of projects, with the aim of offering more within the same budgets. This requires a better design and definition of the product, as well as a lean approach to allow much closer monitoring of the development process. In 2017 we will also implement a process of analysing residential projects with a view to offering products that will satisfy the demand in three or four years' time. Those products will offer greater connectivity, flexibility and modularity in housing design.
BPI is without doubt engaged in a dynamic of high-quality projects in buoyant markets, with good visibility in terms of products and turnaround times. Moreover, the outlook for development is favourable in 2017 and 2018: in Belgium, Poland and Luxembourg, BPI has a portfolio of mature projects that are ready for sale in the next two years. Examples in Belgium include the 'La Joyeuse Entrée' project in the City of Brussels, the Kuborn project in Anderlecht, and, in the wake of the Solvay project in Ixelles, the Allianz site to be developed on Place de Brouckère. Another highly significant example: in Luxembourg, BPI won the Kiem project on the Kirchberg plateau
Annual report 2016 The mixed-use Kons project opposite Luxembourg station.
at the beginning of 2016, and having obtained planning permission at the beginning of 2017, sales have already begun and are meeting with great success.
In 2017, BPI will focus on the search for new projects. In Belgium, priority will go to Flanders where the company still has a low profile. In Luxembourg, the completion of Galerie Kons allows BPI's teams to concentrate on the search for new projects in a highly competitive market. Given the highly successful sales of projects in Poland, BPI's priority will clearly be, apart from the synergies with Belgium and Luxembourg, to find new
sites that can quickly be developed and sold.
This urgent need to find new projects in 2017 confirms the quality and relevance of BPI's current project portfolio!
Jacques Lefèvre BPI SA
Annual report 2016 75
Erasmus Gardens is situated on the outskirts of Brussels, surrounded by both the meadows of the Pajottenland region and golf facilities, the Erasmus Hospital and various business parks.
Project Manager Leen manages Erasmus Gardens, an ambitious Real Estate project that will create an entirely new residential quarter in Brussels over the coming years, on behalf of BPI.
The slogan 'In the middle of everywhere' is quite correct in many ways. The 13
It is fascinating to bring experts such as architects and lawyers together around the table
hectare construction project, which is located at the interface between the city and the green belt around Brussels, will eventually be a home to three thousand new residents.
The estate has been developed around a central Plaza, with restaurants and terraces surrounded by promenades and a park. Student flats, a care home, service flats, apartments, a school and a nursery will be located alongside the traffic free promenades. This will introduce a diverse range of residents, in which the main target group for the BPI apartments will be young families looking for a compact, affordable, ready to move into home in and around Brussels.
Annual report 2016 77
Real Estate Development
From the outset Leen was involved in the strategic approach and staging of the overall project, taking into account urban development, legal and financial aspects as well as constantly changing market demands.
The project represents an interesting challenge: 'The site was a blank canvas, which enabled us to combine the existing synergy of the area with the required diversity in functions and buildings, resulting in a site that can operate completely autonomously,' stated Leen.
The threshold for the end user has been kept as low as possible, with a specific focus on Brand Identity, something which young double-income couples in particular can identify with.
Erasmus Gardens will be an entirely new urban residential district focused on full
autonomy.
Having developed various projects in Berlin, Brussels and Hasselt, Leen considers Erasmus Gardens a dream project. 'I find it extremely fascinating to bring together, and develop the project with, specialists from every field, architects, engineers, lawyers and commercial operators,' she commented. Obviously
The first two phases, consisting of 7 buildings, are currently being erected in parallel. The estate presently under construction will become a living entity at the beginning of next year.
The first phase consists of the buildings alongside the Boulevard, where a 160 room care home, 300 student and 35 service flats are under construction.
The second phase around the central Plaza will accommodate 240 families and will also include a school for 500 pupils and a nursery for 50 children.
This critical mass of residents will immediately turn it into a lively estate with local facilities and services on and around the Plaza, which will be similar to the central market squares in historic cities that also developed as a result of rising demand and population growth.
BPI runs its own, on site sales team and office, which means that future residents can immediately identify with the site and anyone interested has access to
information on the benefits offered by the project via one of the sales representatives. This personal approach, focused on the involvement of future residents, is quite unique.
It also gives BPI the opportunity to gain a better understanding of its target audience, which means that, in order to accommodate current and future developments, products are always optimised and tailored to the needs of a new generation of residents at Erasmus Gardens.
Further information: www.erasmusgardens.be
a project of this magnitude presents the necessary challenges, which she has to help find solutions for throughout the course of the entire project, from the concept to the approval phase, commercialisation and obviously its implementation.
Annual report 2016 79
BPI Luxembourg continues its search for building lots to consolidate its position, and has thus won the Kiem project on the Kirchberg plateau.
BPI, which encompasses all the group's real estate activities in Belgium, Luxembourg and Poland, has successfully boosted its development and sales of various major projects.
BPI paid special attention this year to improving and renewing the skills of its team. The company has developed a new communication and marketing approach by creating a new position and encouraging synergies between the countries to improve development efficiency. The internal sales teams proved their knowhow, and the projects in the pipeline promise a high margin potential.
In Brussels, the urban redevelopment of the former Solvay site continued with success: the 110 apartments of the first phase have been completed, and BPI secured planning permission for 198 apartments and a sales agreement for a hotel with 142 rooms as part of the next phase. Commercial success was also guaranteed for the 'Erasmus Gardens' project with 90% apartments sold in the first building and 40% in the second; construction of the two buildings began in June and December 2016 respectively. The Oosteroever project in Ostend, involving the redevelopment of a former port area into a residential area, was equally successful. The 105 apartments of the first phase have been completed, while 55 of the 56 housing units of the next two phases have already been sold.
Other projects have also made good progress, such as the 'Chaudron' project in Anderlecht and 'Les Hauts Prés' in Uccle, where Bioplanet opened its retail outlet. Planning applications have also been submitted for several new projects in the capital.
In the Brussels-Capital Region, the new 'Master Development Plan' will open up the submission of planning and environmental applications for the mixed-use project VICTOR in the Gare du Midi district in Anderlecht. Not far from there, another mixed-use project with a large residential part, 'Key West', is emerging by the canal. With the Partial Land Use Plan (PPA) due to be ratified shortly, BPI has initiated studies for planning and environmental applications. BPI also acquired the land control in an ambitious mixed-use residential, office and retail project on the site of Allianz on Place de Brouckère, in the centre of Brussels.
In Liège, the low-energy office project 'Ernest' is expected to see the first construction phase in 2017. In the context of another partnership, BPI has made progress in the planning of the largescale mixed-use project 'Bavière'.
BPI Luxembourg develops the Kons project in Luxembourg. Located opposite the station, this mixed-use project, which is due for completion by the end of 2016, will accommodate office, residential and retail space. As one of the tenants, ING will have its Luxembourg headquarters there. The project comprises 22,500 m² space and a BREEAM-certificate of Very Good rises up in the heart of the City of Luxembourg, cheek by jowl with the station on the other side of the square.
The location is ideal. With around 150,000 cross-border workers, the town is not free from busy traffic. Employers are well aware of this, and they know that an office building in the immediate vicinity of the railway station is highly attractive to employees, who as a consequence arrive at work less stressed, and therefore more efficient. The district also has a certain charm: it has kept its historical roots and its typical retail stores with their regular customers.
Following the acquisition with Immobel and the Giorgetti group of the major projects of Route d'Esch and Differdange in 2015, BPI Luxembourg continues its search for building lots to consolidate its position, and has thus won the Kiem project on the Kirchberg plateau.
Construction work on the mixed-use Kons project opposite Luxembourg station has finished, and the building was delivered in the first quarter of 2017. ING will have its head office there, and all the retail space is already let. BPI Luxembourg also received final planning permission for the offices and workshops of G4S in Gasperich, and continued sales of the serviced residence EdenGreen in Bettembourg (two projects completed in 2015). The company also undertakes the management, delegated project
management and sales of the Glesener project that was acquired by a private investor, on which construction work began at the beginning of 2016.
The project on Route d'Esch in Luxembourg City will cover a total of 35,000 m² residential, retail and office space. Sales kicked off in high gear, with an important number of apartments already being reserved. As the works will only begin in September 2017, the hangars on the site were put at the State's disposal during the past year to shelter refugees.
The Differdange site will accommodate a mixed-use complex of 7,000 m2 ; the works began at the beginning of 2017, and sales have already progressed very well.
BPI Polska launched or continued work on several attractive projects, mainly on the residential market. The company closed the sale of all but one of the 159 apartments of the Wola Tarasy project in Warsaw. Sales of the Wola Libre project, also in Warsaw, continued with success: all the retail space has been sold, as well as one-third of the 274 housing units. Construction began in 2016 and is due for completion in 2018.
Sales of the Four Oceans project in Gdansk, built by CFE Polska, were also a great success. The 190 apartments of the third tower block, completed in November 2016, have all been sold. There remain just 28 apartments to be sold in the fourth and final tower block, which is due for completion in July 2017.
Planning permission was granted for the iconic project 'Bulwary Książęce', in the heart of Wroclaw; construction work began in August 2016. 69 apartments of the 175 housing units in the first phase
have already been sold. A planning application was submitted at the end of the year for the second phase (189 apartments & retail space).
BPI Polska also acquired a site in Warsaw for the development of the Barska project, a residential property with 57 luxury apartments. Besides the management and marketing of projects in progress, the firm will focus in 2017 on the search for new acquisitions.
Situated on the banks of the river Oder, Wroclaw is Poland's fourth largest city. On one of the islands between two branches of the river and within spitting distance from the city's historical city centre, BPI Polska embarked on a large-scale property development project that will billet shops and homes alike. The design by French architectural engineering agency SUD is every bit as contemporary as it is dynamic and eagerly makes the most of its prime location close to the river.
The building permit for the first phase (174 apartments) was awarded in March 2016. Two months later, BPI Polska started sales. The master plan for the second phase was also awarded, which was a real success for the team. The plot is one hectare, on which BPI Polska will be erecting 22,000 m² of usable floor space in two phases: 4,600 m² of retail space with the remainder going to residential units, i.e. some 320 apartments. A first for CFE in the city that is also known as the Polish 'Silicon Valley' and is certain to gain European appeal and stature in the years to come.
Ann Vansumere Tel. : +32.2.661.13.97 [email protected]
CFE Polska DEME Dyod Jonas Roosens PETITDIDIERPRIOUX ARCHITECTES Philippe van Gelooven Studio Wasabi Tom D'Haenens Yann Bertrand
Yvan Glavie
Concerto Communication Agency
Rue Washington 65
1050 Brussels
This annual report is available in French, Dutch and English.
In the event of descrepancies between the editions, the French version shall prevail.
Dredging, marine engineering and environment / Contracting / Real Estate
| In million € | IFRS | ||||||
|---|---|---|---|---|---|---|---|
| 2012 | 2013 | Pro Forma 2013 DEME 100% |
2014 | 2015 | 2016 | ||
| Revenue | 1,898.3 | 2,267.3 | 3,346.1 | 3,510.5 | 3,239.4 | 2,797.1 | |
| EBITDA (3) | 199.1 | 213.2 | 460.9 | 479.5 | 504.9 | 465.9 | |
| Operating result (EBIT) (1) | 81.2 | 67.2 | 166.4 | 240.5 | 265.7 | 226.8 | |
| Profit before tax (1) | 52.5 | 28.0 | 110.2 | 224.8 | 233.1 | 202.8 | |
| Net result part of the group (1) | 49.4 | 7.9 | 61.7 | 159.9 | 175.0 | 168.4 | |
| Net result part of the group (2) | 49.4 | -81.2 | -27.4 | 159.9 | 175.0 | 168.4 | |
| Equity part of the group | 524.6 | 1,193.2 | 1,193.2 | 1,313.6 | 1,423.3 | 1,521.6 | |
| Net financial debt | 400.0 | 781.4 | 614.1 | 188.1 | 322.7 | 213.1 |
(1) Before items specific to the capital increase and the treatment of goodwill arising from the consolidation of the additional 50% stake in DEME as from 24 December 2013 arising from the contribution in kind and capital increase.
(2) After items specific to the capital increase and the treatment of goodwill arising from the consolidation of the additional 50% stake in DEME arising from the contribution in kind and capital increase.
(3) EBITDA: EBIT + amortization and depreciation + other non-cash items (under IFRS) The definition of EBITDA was changed as follows as from 2014 (including for restatement of the comparative figures of 2013): operating income on activities + amortization and depreciation + other non-cash items. As opposed to the operating income (EBIT), the operating income on activities does not include the earnings from associates and joint ventures
| IFRS | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2012 (*) | 2013 (pub lished) (**) |
2013 DEME 50% (**) |
2013 Pro Forma DEME 100% (**) |
2014 | 2015 | 2016 | ||
| EBIT/ Revenue | 4.3% | 3.0% | 1.7% | 5.0% | 6.9% | 8.2% | 8.1% | |
| EBITDA / Revenue | 10.5% | 9.4% | -1.0% | 13.8% | 13.7% | 15.6% | 16.7% | |
| Net result part of the group / Revenue |
2.6% | 0.3% | 0.8% | 1.8% | 4.6% | 5.4% | 6.0% | |
| Net result part of the group / equity part of the group |
9.9% | 1.5% | 1.5% | 11.8% | 13.4% | 13.3% | 11.8% |
(*) Amounts restated resulting from the change in accounting method arising from the application of IAS 19 revised.
(**) Before items specific to the capital increase and the treatment of goodwill arising from the consolidation of the additional 50% stake in DEME arising from the contribution in kind and capital increase, and restated in accordance with changes in accounting methods following the implementation of IFRS 10 and 11.
| 2012 (*) | 2013 (**) | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|
| Number of shares at 31/12 | 13,092,260 | 25,314,482 | 25,314,482 | 25,314,482 | 25,314,482 |
| Operating result (EBIT) | 6.22 | N/A ** | 9.5 | 10.5 | 9.0 |
| Net result part of the group | 3.75 | N/A ** | 6.32 | 6.9 | 6.7 |
| Gross dividend | 1.15 | 1.15 | 2.00 | 2.40 | 2.15 |
| Net dividend | 0.8625 | 0.8625 | 1.50 | 1.752 | 1.505 |
| Equity | 40.1 | 47.1 | 52.2 | 56.7 | 60.7 |
(*) Amounts restated resulting from the change in accounting method arising from the application of IAS 19 revised.
(**) Not meaningful following the change in scope and items relating to the capital increase and the treatment of goodwill.
| 2012 | 2013 | 2014 | 2015 | 2016 | ||
|---|---|---|---|---|---|---|
| Lowest price | EUR | 36.25 | 41.00 | 62.80 | 83.0 | 75.15 |
| Highest price | EUR | 49.49 | 66.64 | 89.70 | 127.7 | 108.25 |
| Price at the close of the FY | EUR | 43.84 | 64.76 | 85.02 | 109.1 | 103.5 |
| Average volume per day | Number shares |
11,672 | 14,628 | 15,015 | 16,128 | 14,390 |
| Market capitalisation at 31/12 | Mio EUR | 573.96 | 1,639.4 | 2,152.2 | 2,761.8 | 2,620.0 |
in million €
During the second semester 2015, the activities Multitechnics, Rail infra & Utility Networks and Building Belgium, Luxemburg, Poland and Tunisia were transferred under CFE Contracting SA, a 100% subsidiary of CFE SA and head of the segment. This internal reorganization goes with a change of scope within the segment Contracting as from January 1st 2016. This segment only includes the activities performed by CFE Contracting SA and its subsidiaries.
Besides the usual holding activities, this segment includes:
The column Pro forma 2015 represents the information's taking into account this new structure.
in million €
(*) Amounts restated in accordance with changes in accounting methods following the implementation of IFRS 10 and IFRS 11.
revenue in million €
Contracting Real Estate Dredging Other divisions and holding Total 2012 5.0 10.4 69.1 -3.3 81.2 2013 (published) -29.5 3.8 105.1 -12.2 67.2 2013 Pro forma DEME at 100% (**) -29.5 3.7 202.2 -10.0 166.4 2014 -7.5 7.1 241.2 -0.3 240.5 2015 -34.9 7.7 298.2 -5.3 265.7 2015 Pro forma (***) 7.5 7.7 298.2 -47.7 265.7 2016 20.0 4.3 207.4 -4.9 226.8
(*) Including results of associated companies and joint ventures.
(**) Amounts restated in accordance with changes in accounting methods following the implementation of IFRS 10 and IFRS 11.
(***) Including pro forma figures according to the new definition of the segment applicable as of 1 January, 2016
The Contracting division integrates the Construction, Multitechnics and Rail infra activities
| 9 | A. | Report on the financial statements for the financial year |
|---|---|---|
| 9 | 1. 2016 key figures | |
| 10 | 2. Analysis by division | |
| 16 | 3. Overview of the results | |
| 20 | 4. Dividend | |
| 20 | B. | Corporate governance statement |
| 20 | 1. Corporate governance | |
| 20 | 2. Composition of the Board of Directors | |
| 29 | 3. Operation of the Board of Directors and its committees |
|
| 32 | 4. Shareholder base | |
| 33 | 5. Internal control | |
| 39 | 6. Assessment of measures taken by the company in response to the directive on insider trading and market manipulation |
|
| 39 | 7. Transactions and other contractual relationships between the company, including related companies, and directors and executive managers |
|
| 39 | 8. Assistance agreement | |
| 39 | 9. Audit | |
| 40 | C. | Remuneration report |
| 40 | 1. Remuneration of the Board and committee members | |
| 41 | 2. CFE management | |
| 41 | 3. Remuneration of members of CFE's executive management |
|
| 43 | 4. Termination benefits | |
| 43 | 5. Variable remuneration of members of CFE's executive management |
|
| 43 | 6. Information about the right to claw back variable remuneration granted on the basis of incorrect financial information provided by members of CFE's executive management |
|
| 43 | D. | Policy regarding insurance |
| 44 | E. | Special reports |
| 44 | F. | Public offer to purchase shares |
| 44 | G. | Acquisitions and disposals |
| 44 | H. Creation of branches | |
| 44 | I. | Post-balance sheet events |
| 44 | J. | Research and development |
| 44 | K. | Information on business trends |
| 44 | L. | Audit Committee |
| 44 | M. Notice of the general meeting of shareholders of 4 May 2017 |
|
CFE's board of directors met on 23 February 2017 to finalize the financial statements for the year ended 31 December 2016, which will be submitted to the forthcoming general meeting of shareholders on 4 May 2017.
| In million € | 2016 | 2015 | Change 2016/2015 |
|---|---|---|---|
| -13.7% | |||
| Revenue | 2,797.1 | 3,239.4 | |
| Self-financing capacity (EBITDA) (*) | 465.9 | 504.9 | -7.7% |
| % of revenue | 16.7% | 15.6% | |
| Operating income on activities (*) | 227.6 | 228.9 | -0.6% |
| % of revenue | 8.1% | 7.1% | |
| Operating income (EBIT) (*) | 226.8 | 265.7 | -14.6% |
| % of revenue | 8.1% | 8.2% | |
| Net result part of the group | 168.4 | 175.0 | -3.8% |
| % of revenue | 6.0% | 5.4% | |
| Earnings per share (in €) | 6.65 | 6.91 | -3.8% |
| Gross dividend per share (in €) (**) | 2.15 | 2.40 | -10.4% |
(*) The definitions are included in the 'Consolidated financial statements' section of the financial report.
(**) Amount to be submitted for approval to the annual general meeting of 4 May 2017.
| Equity – share of the group | 1,521.6 | 1,423.3 | 6.9% |
|---|---|---|---|
| Net financial debt | 213.1 | 322.7 | -34.0% |
| Order book | 4,756.7 | 4,160.3 | 14.3% |
The CFE Group reported € 2,797.1 million revenue in 2016, which is down 13.7%. This decrease was expected at DEME, which saw vigorous activity in 2015.
Thanks to the substantial reduction of the operating losses of the non-transferred activities of CFE SA and DEME's strong performance, the EBITDA margin increased by 1.1% to 16.7%.
The net result, share of the group, amounted to € 168.4 million, which is slightly down compared to the exceptional year 2015.
The equity, share of the group, increased by € 98.3 million, despite the payment of a dividend of € 60.75 million in respect of the 2015 financial year. For the first time in CFE's history, its consolidated equity exceeded the symbolic figure of € 1.5 billion.
In view of the deferral of certain down payments on the vessels under construction and the effective control of the working capital requirement, the net financial debt decreased by 34.0% to reach € 213.1 million.
The order book reached a record level of € 4.76 billion, thanks to a large extent to the very high order intake at DEME.
Key figures (*)
| In million € | 2016 | 2015 | Change 2016/2015 |
|---|---|---|---|
| Revenue | 1,978.2 | 2,286.1 | -13.5% |
| EBITDA (**) | 447.4 | 489.2 | -8.5% |
| Operating income (**) | 207.4 | 298.2 | -30.4% |
| Net result share of the group | 155.4 | 201.3 | -22.8% |
| Net financial debt | 155.0 | 275.0 | -43.6% |
| Order book | 3,800.0 | 3,185.0 | +19.3% |
(*) Amounts restated to take account of the recognition at fair value of the identifiable assets and liabilities of DEME following the acquisition of an additional 50% of the DEME shares on 24 December 2013.
(**) The definitions are included in the 'Consolidated financial statements' section of the financial report.
The key figures shown below are presented according to the economic approach whereby the jointly controlled companies are proportionally consolidated (accounting rules applicable before 1 January 2014).
| In million € (WITHOUT RESTATEMENTS) |
2016 | 2015 | Change 2016/2015 |
|---|---|---|---|
| Revenue | 1,978.2 | 2,351.0 | -15.9% |
| EBITDA (*) | 450.1 | 558.4 | -19.4% |
| Operating income on activities (*) | 217.6 | 318.4 | -31.7% |
| Net result share of the group | 155.3 | 199.2 | -22.0% |
| Net financial debt | 154.6 | 266.7 | -42.0% |
| Orderbook | 3,800.0 | 3,185.0 | +19.3% |
(*) The definitions are included in the 'Consolidated financial statements' section of the financial report.
DEME's revenue amounted to € 1,978.2 million, i.e. down 15.9% compared to 2015. The previous year was marked by an exceptional level of activity in Africa with the widening and deepening of the Suez Canal.
During the year under review, DEME continued work on its two major projects in Singapore: the extension of Jurong Island (JIWE), and the Tuas Terminal - Phase 1 (TTP1) project.
Dredging International, a subsidiary of DEME, resumed work in Panama with the widening and deepening of the Pacific access channel of the Panama Canal.
2016 was an exceptional year for GeoSea, DEME's subsidiary specializing in offshore marine engineering. In the UK, the Race Bank project (transport and installation of 91 wind turbine foundations) is being finalized, while at the end of December GeoSea successfully installed the first foundation for the 56 wind turbines of the Galloper wind farm, situated 27 km off the Suffolk coast (EPCI contract). In Germany, the production of the 66 wind turbine foundations for the Merkur project (EPCI contract) is progressing according to plan.
| In % | 2016 | 2015 |
|---|---|---|
| Capital dredging | 34% | 48% |
| Maintenance dredging | 12% | 11% |
| Fallpipe et landfalls | 7% | 9% |
| Environment | 10% | 9% |
| Civil works | 3% | 0% |
| Marine works | 34% | 23% |
| Total | 1,978.2 | 2,351.0 |
| In % | 2016 | 2015 |
|---|---|---|
| Europe (EU) | 56% | 33% |
| Europe (non-EU) | 4% | 10% |
| Africa | 12% | 30% |
| Americas | 8% | 4% |
| Asia-Pacific | 13% | 12% |
| Middle East | 3% | 7% |
| India and Pakistan | 4% | 4% |
| Total | 1,978.2 | 2,351.0 |
The decrease in revenue inevitably weighed on the EBITDA and operating income, which are down compared to 2015. Nevertheless, it should be noted that the EBITDA margin, which amounts to 22.8% of revenue, remains well above the historical average.
It should be remembered that 2015 was marked by exceptional results generated by the project for the widening of the Suez Canal and the finalization of other important projects.
The order book (€ 3,800 million as of 31 December 2016) shows a 19.3% growth compared to 2015, which in turn was up 31.6% on year-end 2014.
This all-time high order book owes much to the commercial successes of DEME resulting in an order intake of € 2,593.3 million in 2016.
The main new orders in 2016 include:
the UK (Hornsea One project). The work will be carried out by Tideway, DEME's subsidiary specializing in the laying and protection of subsea cables and pipelines.
• Renewal of the maintenance dredging contract for the river Scheldt for a five-year period.
Moreover, as was announced earlier, two substantial orders won in 2016 are not yet included in the order book, notably:
Finally, DEME has landed several major contracts since the beginning of 2017, such as new dredging contracts in India and the Maldives, and the DBM contract for the design, construction and 15-year maintenance of the first section of the RijnlandRoute in the Netherlands. The project, which will be realized by DIMCO (DEME's subsidiary specializing in civil engineering works) and its partners, involves the construction of a 2.2 km bored tunnel, building a new 4 km road, and widening 12 km of motorway.
DEME's investments are twofold: those connected with the upgrading and renewal of the fleet, and those connected with the activities of DEME Concessions.
Investments in 2016 amounted to € 194.7 million according to the economic approach. This low level of investment is explained by the deferral of certain down payments on the vessels under construction.
As a reminder, in 2015, DEME had started building six new vessels:
Those vessels will progressively strengthen DEME's fleet from 2017 onwards.
In February 2017, DEME confirmed an order for two additional vessels with an overall budget of around € 500 million:
• 'SPARTACUS', a cutter suction dredger with a total power of 44,180 kW; it will be the world's most powerful and most state-of-the-art vessel in its class, and will be particularly
suited for dredging works on rocky beds and in the hardest and most compact types of soil, far from the shore ('Smart Mega Cutter Suction Dredger').
• 'ORION', a dynamic positioning crane vessel with a total power of 44,180 kW; with a lifting capacity of 3,000 tonnes up to a height of more than 50 metres, it will be deployed on offshore construction work, such as for the construction of the largest offshore wind farms, offshore services for customers in the oil and gas industry, and the dismantling of old offshore structures.
During the year, DEME - through its subsidiary DEME Concessions - injected its share in the equity and quasi-equity of the operating companies of two offshore wind farms: Merkur in Germany (12.5% stake) and Rentel in Belgium (18.9% stake). It should be pointed out that CFE also holds a 6.25% stake in Rentel through its 50% subsidiary, Green Offshore.
The improvement in working capital requirement thanks to, among other things, the receipt of new advances, coupled with a relatively low level of investment and solid operating cash flows, contributed to a substantial reduction in DEME's net financial debt, which now stands at € 154.6 million (economic approach), or € 112.1 million down compared to the previous year. In view of the investments planned in 2017, DEME's net financial debt is set to increase over the next financial year.
| In million € | 2016 | 2015 (*) | Change 2016/2015 |
|---|---|---|---|
| Revenue | 770.5 | 718.9 | 7.2% |
| Operating income (**) | 20.0 | 7.5 | 166.7% |
| Net result share of the group | 10.4 | 9.7 | 7.2% |
| Net treasury | 92.0 | 74.8 | 23.0% |
| Order book | 850.5 | 836.3 | 1.7% |
(*) Including pro forma figures according to the new definition of the segment applicable as of 1 January, 2016.
(**) The definitions are included in the "Consolidated Financial Statements" section of the financial report
Revenue amounted to € 770.5 million, up 7.2%.
Construction activity in Belgium shrank slightly in a competitive market.
In the third quarter, the Docks shopping centre (Brussels) was completed ahead of schedule. In Flanders, the structural work on AZ Sint-Maarten hospital (Mechelen) has been completed and the finishing works have begun, while several 'Schools of Tomorrow' have been completed.
The Luxemburg and Polish subsidiaries reported a marked increase in revenue, buoyed by a favourable economic situation.
The activity of the Multitechnics segment benefited from the vigorous growth of VMA, which won numerous contracts in Belgium and abroad.
2016 was a year of transition for the Rail Infra & Utility Networks segment before the ETCS Level 2 project (automatic braking system for trains) gathers momentum in 2017.
| In million € | 2016 | 2015(*) | Change in % |
|---|---|---|---|
| Construction | 548.5 | 516.9 | 6.1% |
| Buildings, Belgium | 405.6 | 419.1 | -3.2% |
| Buildings, International (**) | 142.9 | 97.8 | 46.1% |
| Multitechnics | 159.2 | 140.5 | 13.3% |
| Rail Infra & Utility Networks | 62.8 | 61.5 | 2.1% |
| Total Contracting | 770.5 | 718.9 | 7.2% |
(*) Including pro forma figures according to the new definition of the segment applicable as of 1 January, 2016.
(**) Exclusively Luxemburg, Poland and Tunisia.
Despite certain setbacks at a limited number of subsidiaries, there was a substantial increase in the division's operating income: € 20.0 million as against € 7.5 million in 2015.
Unlike in 2015, the Construction segment made a positive contribution to the operating income of the Contracting division, thanks to the recovery of CFE Bâtiment Brabant Wallonie and the good performance of CFE Bouw Vlaanderen, CFE Polska and CLE in Luxembourg. The efforts made in the area of operational excellence and selectivity in order intake have begun to bear fruit.
In the Multitechnics segment, the excellent results of VMA should be noted, whereas the HVAC segment had to contend with several very difficult projects that were completed in 2016.
| In million € | 31 December 2016 | 31 December 2015(*) | Change in % |
|---|---|---|---|
| Construction | 648.7 | 671.2 | -3.4% |
| Buildings, Belgium | 505.0 | 494.7 | 2.1% |
| Buildings, International (**) | 143.7 | 176.5 | -18.6% |
| Multitechnics | 143.4 | 115.9 | 23.7% |
| Rail Infra & Utility Networks | 58.4 | 49.2 | 18.7% |
| Total Contracting | 850.5 | 836.3 | 1.7% |
(*) Pro forma figures according to the new definition of the segment applicable as of 1 January, 2016
(**) Exclusively Luxemburg, Poland and Tunisia
The order book grew slightly to € 850.5 million as of 31 December 2016.
The order book of the Buildings segment in Belgium remained at a high level as a result of winning the ZNA project (new hospital in Antwerp in joint venture), the STIB (Brussels public transport) depot in Anderlecht (Brussels Region), and several residential buildings in Anderlecht on the site of Erasmus Gardens for BPI.
The order book of CLE (Luxemburg) and CFE Polska is down compared to 2015 given the very high level of activity in 2016. In view of orders that are expected to materialize shortly, the outlook remains favourable for these two entities.
On the other hand, a high order intake was reported by Multitechnics and Rail Infra & Utility Networks, in particular at VMA, which landed its first contract in the United States.
The division's net cash position stood at € 92 million as of 31 December 2016, up 23%. The improvement is explained by the operating cash flows generated by the Contracting entities, while the working capital requirement remained stable.
As of 1 January 2017, the subsidiaries VMA West, Vanderhoydonks and Nizet are integrated operationally in VMA.
| In million € | 2016 | 2015 | Change 2016/2015 |
|---|---|---|---|
| Revenue | 12.1 | 27.2 | -55.5% |
| Operating income (*) | 4.3 | 7.7 | -44.2% |
| Net result share of the group | 1.4 | 7.0 | -80.0% |
| Net financial debt | 87.6 | 90.3 | -3.1% |
| Order book | 5.0 | 6.7 | -25.4% |
(*) The capital employed of the real estate projects is defined as the sum of shareholders equity and net financial debt of the real estate division
| In million € | 31 December 2016 | 31 December 2015 |
|---|---|---|
| Properties being marketed | 17 | 14 |
| Properties under construction | 35 | 34 |
| Properties in development | 78 | 71 |
| Total | 130 | 119 |
(*) The capital employed of the real estate projects is defined as the sum of shareholders equity and net financial debt of the real estate division
During the financial year, several building lots were successfully acquired in Poland ('Barska' residential project in Warsaw totalling 3,500 m²) and in Belgium, where BPI will develop the 'Joyeuse Entrée' residential project in the European district of Brussels (5,400 m²).
In 2020, once the conditions precedent have been fulfilled, BPI will redevelop, in joint venture, the present headquarters of Allianz in the heart of Brussels. It is a mixed-use project of 55,000 m².
In Luxemburg, BPI won the contract issued by the Kirchberg fund for the development of a hundred moderately priced residential units (Kiem project).
In Belgium, BPI successfully continued to develop and market its three principal projects: 'Erasmus Gardens' in Anderlecht, 'Ernest' in Ixelles, and 'Oosteroever' in Ostend.
In Luxemburg, construction of the 'Kons' building has entered its final stages: the completion and transfer to the institutional investor is scheduled for March 2017.
In Poland, the third phase of the 'Ocean Four' project was completed at year-end, while phase four is due for completion by mid-2017. Virtually all apartments have been sold. In Warsaw and Wroclaw, the two residential projects under construction are progressing according to plan.
Planning permission has been obtained for three residential buildings on the Hauts-Prés site in Uccle and for the second phase of the 'Ernest' project in Ixelles (The Park). Marketing and construction of those two projects are due to start in 2017.
The value of real estate projects stood at € 130 million as of 31 December 2016, which is an € 11 million increase, while the division's net financial debt reached € 87.6 million.
In the absence of major transactions during the year, the net income of the division amounted to € 1.4 million (compared to € 7.0 million in 2015).
| In million € | 2016 | 2015(*) | Change 2016/2015 |
|---|---|---|---|
| Revenue | 36.3 | 207.2 | -82.5% |
| Operational result (**) | -4.9 | -47.8 | ns |
| Net result share of the group | 1.2 | -43.0 | ns |
| Net financial debt | 62.4 | 33.4 | 86.8% |
| Order book | 101.2 | 132.3 | -23.5% |
(*) Including pro forma figures according to the new definition of the segment applicable as of 1 January, 2016
(**) Definitions are listed under sections "Consolidated Financial Statements" of the financial report
Revenue amounted to € 60.3 million for the non-transferred activities of CFE SA (€ 229.0 million in 2015) and €-24.0 million for interdivision eliminations.
The substantial decrease in revenue is explained by the transfer of the marine civil engineering operations to DEME at year-end 2015 and by a sharply reduced level of activity in Africa following the completion in 2015 of several large-scale projects, more specifically in Algeria and Chad.
The operating income (€-4.9 million) was adversely affected by the recognition of additional losses on the project of the Mechelen railway station surroundings and on the Brussels-South wastewater treatment plant project, of which the first of three phases was completed in July 2016. It should be pointed out that a settlement was reached with the customer in the second half of 2016 with regard to turnaround times, additional billing and claims for the first two phases of the Brussels-South wastewater treatment plant project.
At the year-end, CFE was also able to finalize the Eko-Tower project in Lagos, Nigeria, and obtain the final settlements of several older building projects in Belgium, such as the schools project in Eupen and the CPAS (Welfare Office) in Brussels. These elements had a favourable impact on the results of the division.
Rent-A-Port, a 45% subsidiary of CFE, reported a satisfactory year thanks to the positive contribution from its activities in Vietnam. Besides the continuing sale of industrial land in the port area of Dinh Vu, Rent-A-Port succeeded, together with its partners, in securing a new port concession of 1,200 hectares in the province of Quang Ninh in North Vietnam.
The net result of the division Holding and non-transferred activities made a spectacular recovery to + € 1.2 million (compared to a net loss of € 43.0 million in 2015).
The operating loss was offset by the capital gain on the disposal of CFE's stake in two DBFM (Design, Build, Finance, Maintain) type operating companies, namely 25% in Locorail NV, responsible for maintaining and financing the Liefkenshoek rail link in Antwerp, and 18% in Coentunnel Company BV, responsible for maintaining and financing the second Coentunnel in Amsterdam.
Negotiations are continuing with the Chadian authorities to find a solution to refinance the remaining outstanding debts. Progress has been made, but to date nothing tangible has been acquired.
CFE's net exposure to that country amounts to € 60 million.
| Year ended 31 December (in thousands €) |
2016 | 2015 |
|---|---|---|
| Revenue | 2,797,085 | 3,239,406 |
| Revenue from auxiliary activities | 85,794 | 109,005 |
| Purchases | -1,504,685 | -1,831,454 |
| Wages, salaries & social charges | -533,200 | -547,043 |
| Other operating charges | -384,649 | -482,581 |
| Depreciations | -232,775 | -255,312 |
| Goodwill Impairment | 0 | -3,116 |
| Operating income on activities | 227,570 | 228,905 |
| Earnings from associates and joint ventures | -784 | 36,759 |
| Operating income | 226,786 | 265,664 |
| Gross financial cost | -31,521 | -31,720 |
| Other financial expenses and income | 7,567 | -869 |
| Financial result | -23,954 | -32,589 |
| Result before taxes | 202,832 | 233,075 |
| Income tax expense | -30,580 | -59,051 |
| Result of the year | 172,252 | 174,024 |
| Non-controlling interests | -3,841 | 937 |
| Result – share of the group | 168,411 | 174,961 |
| Year ended 31 December (in thousands €) |
2016 | 2015 |
| Result of the year | 172,252 | 174,024 |
| Financial instruments – change in fair values | 2,230 | -6,366 |
| Currency translation differences | -340 | -4,088 |
| Deferred taxes | 1,143 | 1,783 |
| Other elements of the comprehensive income to be reclassified to profit or loss in | 3,033 | -8,671 |
| Result of the year | 172,252 | 174,024 |
|---|---|---|
| Financial instruments – change in fair values | 2,230 | -6,366 |
| Currency translation differences | -340 | -4,088 |
| Deferred taxes | 1,143 | 1,783 |
| Other elements of the comprehensive income to be reclassified to profit or loss in subsequent period |
3,033 | -8,671 |
| Remeasurement on defined benefit plans | -18,901 | -197 |
| Deferred taxes | 6,510 | 1,099 |
| Other elements of the comprehensive income not to be reclassified to profit or loss in subsequent period |
-12,391 | 902 |
| Total elements of the comprehensive income directly accounted in equity | -9,358 | -7,769 |
| Comprehensive income | 162,894 | 166,255 |
| - attributable to the group | 159,178 | 166,489 |
| - attributable to non-controlling interests | 3,716 | -234 |
| Net result per share (€) (basic and diluted) Comprehensive income per share (€) (basic and diluted) |
6.65 6.29 |
6.91 6.58 |
| Year ended 31 December (in thousands €) |
2016 | 2015 |
|---|---|---|
| Intangible assets | 95,441 | 97,886 |
| Goodwill | 175,169 | 175,222 |
| Property, plant and equipment | 1,683,304 | 1,727,679 |
| Associates and joint ventures | 141,355 | 151,377 |
| Other non-current financial assets | 153,976 | 129,501 |
| Non-current derivative instruments | 510 | 1,381 |
| Other non-current assets | 23,518 | 19,280 |
| Deferred tax assets | 126,944 | 103,345 |
| Total non-current assets | 2,400,217 | 2,405,671 |
| Inventories | 94,836 | 77,946 |
| Trade receivables and other operating receivables | 1,160,306 | 1,192,977 |
| Other current assets | 38,430 | 125,029 |
| Current derivative instruments | 2,311 | 8,514 |
| Current financial assets | 48 | 70 |
| Assets held for sale | 19,916 | 0 |
| Cash and cash equivalents | 612,155 | 491,952 |
| Total current assets | 1,928,002 | 1,896,488 |
| Total assets | 4,328,219 | 4,302,159 |
| Issued capital | 41,330 | 41,330 |
| Share premium | 800,008 | 800,008 |
| Retained earnings | 714,527 | 607,012 |
| Defined benefits plans | -19,464 | -7,448 |
| Consolidated reserves and reserve related to hedging instruments | -7,337 | -10,710 |
| Translation differences | -7,505 | -6,915 |
| Equity – part of the group CFE | 1,521,559 | 1,423,277 |
| Non-controlling interests | 14,918 | 11,123 |
| Equity | 1,536,477 | 1,434,400 |
| Pensions and employee benefits | 51,215 | 41,054 |
| Provisions | 43,085 | 44,854 |
| Other non-current liabilities | 5,645 | 17,145 |
| Bond | 303,537 | 305,216 |
| Financial debts | 367,147 | 398,897 |
| Non-current derivative instruments | 18,475 | 33,359 |
| Deferred tax liabilities | 151,970 | 150,053 |
| Total non-current liabilities | 941,074 | 990,578 |
| Provisions for other current risks | 65,113 | 64,820 |
| Trade payables & other operating liabilities | 1,138,288 | 1,184,886 |
| Tax liability due for payment | 69,398 | 88,215 |
| Current financial debts | 154,522 | 110,558 |
| Current derivative instruments | 23,515 | 35,146 |
| Liabilities held for sale | 6,004 | 0 |
| Other current liabilities | 393,828 | 393,556 |
| Total current liabilities | 1,850,668 | 1,877,181 |
| Total equity and liabilities | 4,328,219 | 4,302,159 |
CFE's equity stood at € 1,536.5 million compared to € 1,434.4 million at year-end 2015.
The net financial debt amounted to € 213.1 million, which is € 109.6 million down compared to 31 December, 2015.
This debt breaks down into a long-term financial debt of € 821.4 million and a positive net cash position of € 608.3 million.
CFE SA has, for its part, confirmed medium-term credit facilities for its general financing needs totalling € 115 million, of which € 85 million had not been drawn down at year-end 2016. Both CFE and DEME are in compliance with the banking covenants.
| Year ended 31 December (In thousands €) | 2016 | 2015 |
|---|---|---|
| Cash flows relating to operating activities | 384,386 | 334,981 |
| Cash flows relating to investing activities | -214,504 | -258,879 |
| Cash flows relating to financing activities | -48,467 | -288,024 |
| Net increase/decrease in cash position | 121,415 | -211,921 |
| Shareholders' equity (excluding non-controlling interests) at start of period | 1,423,277 | 1,313,627 |
| Shareholders' equity (excluding non-controlling interests) at end of period | 1,521,559 | 1,423,277 |
| Net result share of the group for the period | 168,411 | 174,961 |
| ROE | 11.8% | 13.3% |
| (in € thousands) | Share capital |
Share premium |
Retained earnings |
Defined benefits pension plans |
Reserves rela- ted to hedging instru- ments |
Trans- lation differ- ences |
Equity at tributable to owners of the parent |
Equity at- tributable to non con- trolling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| 31 December 2015 | 41,330 | 800,008 | 607,012 | -7,448 | -10,710 | -6,915 | 1,423,277 | 11,123 1,434,400 | |
| Comprehensive income for the period |
168,411 | -12,016 | 3,373 | -590 | 159,178 | 3,716 | 162,894 | ||
| Dividends paid to shareholders |
-60,755 | -60,755 | -60,755 | ||||||
| Dividends paid to non-controlling interests |
-794 | -794 | |||||||
| Change in consolidation scope |
-141 | -141 | 873 | 732 | |||||
| December 2016 | 41,330 | 800,008 | 714,527 | -19,464 | -7,337 | -7,505 | 1,521,559 | 14,918 | 1,536,477 |
| 31 December 2016 | 31 December 2015 | |
|---|---|---|
| Total number of shares | 25,314,482 | 25,314,482 |
| Operating result after deduction of the net financial charges per share (in €) | 8.01 | 9.21 |
| Net result part of the group per share (in €) | 6.65 | 6.91 |
| (in thousands €) | 2016 | 2015 |
|---|---|---|
| Turnover | 46,911 | 203,188 |
| Operational result | -8,040 | -9,445 |
| Net financial result excluding non-recurring financial income | 58,969 | 66,910 |
| Non-recurring financial income | 9,487 | 108,529 |
| Non-recurring financial charges | -1,541 | -41,606 |
| Result before taxes | 58,875 | 124,388 |
| Taxes | -17 | -374 |
| Result of the year | 58,858 | 124,014 |
There was a substantial decline in the revenue of CFE SA. This is explained by the transfer of the 'Buildings Flanders' segment on 1 July 2015 and by the shrinking international activity and the decrease in civil engineering and building activity in the Brussels Region.
The operating result was adversely affected by the losses on civil engineering projects in Brussels and Flanders.
The financial result primarily consists of the dividend paid by DEME in respect of the 2015 financial year.
The capital gains on the disposal of Locorail and Coentunnel Company are shown under non-recurring financial income. In 2015, the income statement was favourably influenced by the internal capital gains resulting from the legal reorganization of the group.
| (in thousands €) | 31 December 2016 | 31 December 2015 |
|---|---|---|
| Assets | ||
| Fixed assets | 1,323,520 | 1,332,944 |
| Current assets | 236,408 | 327,577 |
| Total assets | 1,559,928 | 1,660,521 |
| (in thousands €) | 31 December 2016 | 31 December 2015 |
| Equity and liabilities | ||
| Equity | 1,197,582 | 1,193,150 |
| Provisions | 57,272 | 58,923 |
| Non-current liabilities | 132,580 | 152,580 |
| Current liabilities | 172,494 | 255,868 |
| Total equity and liabilities | 1,559,928 | 1,660,521 |
At the general meeting of shareholders on 4 May 2017, CFE's board of directors will propose a gross dividend of € 2.15 per share, representing a net dividend of € 1,505, or a total distribution of € 54,426,136.
The Company has adopted the Belgian Corporate Governance Code (2009) as its reference code.
CFE's corporate governance charter, established on the basis of this reference code, may be consulted on the Company's website (www.cfe.be).
The corporate governance charter was last modified on 23 February 2017. Apart from some cosmetic changes in the text
As at 31 December 2016, CFE's Board of Directors consisted of 11 members, whose terms of office began on the dates listed of the charter, amendments were only made to Part VII "Rules of conduct in financial transactions" in order to take into account the provisions of Regulation No 596/2014 of the European Parliament and of the Council on market abuse.
CFE's approach to corporate governance goes beyond compliance with the Code, taking the view that it is essential to base the conduct of its activities on an ethical approach to behaviour and decision-making and a strongly embedded corporate governance culture.
below and will expire immediately after the general meetings of shareholders in the years listed below:
| Start of term | End of term | |
|---|---|---|
| Renaud Bentégeat (*) | 18.09.2003 | 2017 |
| Piet Dejonghe (*) | 24.12.2013 | 2017 |
| Luc Bertrand | 24.12.2013 | 2017 |
| John-Eric Bertrand | 24.12.2013 | 2017 |
| Jan Suykens | 24.12.2013 | 2017 |
| Koen Janssen | 24.12.2013 | 2017 |
| Alain Bernard | 24.12.2013 | 2017 |
| Philippe Delusinne | 07.05.2009 | 2020 |
| Christian Labeyrie | 06.03.2002 | 2020 |
| Ciska Servais SPRL represented by Ciska Servais | 03.05.2007 | 2019 |
| Pas De Mots SPRL represented by Leen Geirnaerdt (**) | 07.10.2016 | 2017 |
(*) Managing director responsible for day to day management
(**) Leen Geirnaerdt was director in a personal capacity from 4 May 2016 to 7 October 2016.
It will be proposed to the general meeting of May 2017 to renew the director's mandates of Luc Bertrand, Jan Suykens, Piet Dejonghe, John-Eric Bertrand, Koen Janssen and Alain Bernard for a period of four years, ending after the annual general meeting of May 2021.
It will also be proposed to the general meeting to renew the director's mandate of Renaud Bentégeat for a period of three years and to nominate Pas De Mots SPRL with Leen Geirnaerdt as its permanent representative for a period of three years ending after the annual meeting of May 2020.
The table below summarizes the mandates and duties of the 11 Board members as at 31 December 2016.
| Luc Bertrand | Chairman of the Board of Directors |
|---|---|
| Ackermans & van Haaren Begijnenvest 113 B-2000 Antwerp |
Luc Bertrand was born in 1951 and in 1974 obtained a commercial engineering degree from KU Leuven. He started his career at Bankers Trust, where he worked as Vice-President and Regional Sales Manager, Northern Europe. In 1985, he was appointed director of Ackermans & van Haaren |
| Member of the Appointments and Remuneration Committee |
and was chairman of the executive committee until 2016. |
| Corporate offices: | |
| a- Listed companies: | |
| Chairman of the Board of Directors of Ackermans & van Haaren | |
| Chairman of the Board of Directors, Sipef | |
| Director of Atenor Group | |
| Director of Groupe Flo | |
| b- Non-listed companies: | |
| Chairman of the Board of Directors, DEME | |
| Chairman of the Board of Directors, Dredging International | |
| Chairman of the Board of Directors, Finaxis | |
| Director of Anfima | |
| Director of Baarbeek BV | |
| Director of Bank J.Van Breda & C° | |
| Director of Belfimas | |
| Director of BOS | |
| Director of Delen Investments CVA | |
| Director of Delen Private Bank | |
| Director of DEME Coordination Center | |
| Director of Groupe Financière Duval | |
| Director of Holding Groupe Duval (FR) | |
| Director of ING Belgium | |
| Director of JM Finn & Co (UK) | |
| Director of Scaldis Invest | |
| c- Associations: | |
| Chairman of the Board of Directors, Institut de Duve | |
| Chairman of Middelheim Promotors | |
| Member of the Board of Directors, VOKA | |
| Member of the Board of Directors, VOKA VEV | |
| Member of the Board of Directors, Institut de Médecine Tropicale | |
| Member of the Board of Directors, KU Leuven | |
| Manager of Mayer van den Bergh Museum | |
| Member of the Board of Directors, VKW Synergia | |
| Member of the General Council, Vlerick Leuven Gent School | |
CFE Avenue Herrmann-Debroux 40-42 B-1160 Brussels
Renaud Bentégeat was born in 1953 and holds a bachelor's degree in public law, a Master's degree (DEA) in public law, a Master's degree (DEA) in political analysis and a diploma from the Political Studies Institute of Bordeaux.
He began his career in 1978 at Campenon Bernard. He was then successively appointed head of the legal department, director of communication, administrative director and secretary-general responsible for legal services, communication, administration and human resources for Compagnie Générale de Bâtiment et de Construction (CBC).
From 1998 to 2000, he was director of building for the Greater Paris region at Campenon Bernard SGE, before being promoted to deputy general manager of VINCI Construction in Central Europe, and managing director of Bâtiments et Ponts Construction and Bâtipont Immobilier in Belgium. He has been managing director of CFE since 2003.
Renaud Bentégeat is an Officer of the Order of Leopold (Belgium), and Chevalier of the Légion d'Honneur and Chevalier of the Ordre National du Mérite (France).
a- Listed company: Managing Director of CFE b- Non-listed companies: Director of Bavière Developpement Director of Bizerte CAP 3000 Director of BPI Director of BPI Luxemburg Manager of BPI Polska Development Director of CFE Contracting Director of CFE Contracting Engineering Director of CFE Polska Director of CLE Director of DEME Director of Rent-A-Port Director of Green Offshore Director of SFE Member of the Supervisory Board of CFE Hungary c- Associations: President of the Chambre Française de Commerce et d'Industrie de Belgique (French Chamber of Commerce and Industry of Belgium) Director of CCI France International Member of the Supervisory Board of Solvay Brussels School
Foreign Trade Adviser for France
Ackermans & van Haaren Begijnenvest 113 B-2000 Antwerp
Piet Dejonghe was born in 1966 and has a degree in law (KU Leuven, 1989), a postgraduate degree in management (KU Leuven, 1990) and an MBA from INSEAD (1993). Before joining Ackermans & van Haaren in 1995, he worked as a lawyer at Loeff Claeys Verbeke and as a consultant at Boston Consulting Group.
a- Listed companies: Member of the Executive Committee, Ackermans & van Haaren Director of Groupe Flo Director of Lease Invest Real Estate b- Non-listed companies: Chairman of the Board of Directors, Distriplus Director of Baloise Belgium Director of Bank J.Van Breda & C° Chairman of Brinvest Director of Delen Private Bank Director of Delen Private Bank Luxembourg Director of DEME Director of Financière Flo Director of Finaxis Director of GB-INNO-BM Director of GIB Corporate Services Director of Groupe Financière Duval Director of Holding Groupe Duval Director of Profimolux Director of Sofinim Director of BPI, CFE Bouw Vlaanderen, CFE Bâtiment Brabant Wallonie, CFE Contracting, Voltis, CLE c- Association: Member of the Board of Directors of SOS-Villages d'Enfants Belgique
| John-Eric Bertrand | Director |
|---|---|
| Ackermans & van Haaren Begijnenvest 113 B-2000 Antwerp |
John-Eric Bertrand was born in 1977 and has a degree in commercial engineering (UCL 2001, magna cum laude), a Master's degree in International Management (CEMS, 2002), and an MBA from INSEAD (2006). Before joining Ackermans & van Haaren in 2008 as investment manager, John-Eric Bertrand worked as a senior auditor at Deloitte and as a senior consultant at Roland Berger Strategy Consultants. He has been on the Executive Committee of AvH since 1 July 2015. |
| Chairman of the Audit | Corporate offices: |
| Committee as of 4 May 2016 | a- Listed companies: |
| Member of the Executive Committee, Ackermans & van Haaren | |
| Director of Sagar Cements | |
| b- Non-listed companies: | |
| Chairman of the Board of Directors, Agidens Director of Sofinim |
|
| Director of Manuchar | |
| Director of Residalya | |
| Director of HPA | |
| Director of Axe Investments | |
| Director of Nizet Entreprise | |
| Director of Etablissements Druart | |
| Director of VMA | |
| Director of Oriental Quarries & Mines | |
| Director of Holding Groupe Duval | |
| Director of AvH Resources India | |
| Director of Telemond Holding | |
| Director of Henschel Engineering | |
| Director of Telehold | |
| Director of Extensa Group | |
| Director of Onco DNA | |
| Member of the Investment Committee of Inventures | |
| Director of Dredging, Environmental & Marine Engineering (DEME) | |
| c- Association: Director of Belgian Finance Club |
|
| Ackermans & van Haaren | Koen Janssen was born in 1970 and has a degree in civil engineering and electromechanics (KU |
|---|---|
| Begijnenvest 113 | Leuven, 1993), along with an MBA from IEFSI (France, 1994). He worked for Recticel, ING |
| B- 2000 Antwerp | Investment Banking and ING Private Equity before joining Ackermans & van Haaren in 2001. |
| Corporate offices: a- Listed companies: |
| Member of the Executive Committee, Ackermans & van Haaren | |
|---|---|
| b- Non-listed companies: | |
| Chairman of the Board of Directors, Société Nationale de Transport par Canalisations | |
| Director of Bedrijvencentrum Regio Mechelen | |
| Director of DEME | |
| Director of Dredging International | |
| Director of Napro | |
| Director of Nitraco | |
| Director of NMC International | |
| Director of Quinten Matsys (branch of SNTC) | |
| Director of Rent-A-Port | |
| Director of Green Offshore | |
| Director of Sofinim Lux | |
| Director of Sofinim | |
| Director of Terryn Group | |
| Director of Rentel | |
| Director of Otary RS | |
| c- Association: | |
| Director of Belgian Offshore Platform (BOP) VZW, permanent representative for Green | |
| Offshore NV. | |
| Jan Suykens | Director |
|---|---|
| Ackermans & van Haaren Begijnenvest 113 B-2000 Antwerp |
Jan Suykens was born in 1960 and has a degree in applied economics (UFSIA, 1982) and an MBA from Columbia University (1984). He worked for several years in corporate and investment banking at Générale de Banque before joining Ackermans & van Haaren in 1990. |
| Corporate offices: | |
| a- Listed companies: | |
| Chairman of the Executive Committee, Ackermans & van Haaren | |
| Chairman of the Board of Directors, Leasinvest Real Estate | |
| b- Non-listed companies: | |
| Chairman of the Board of Directors, Anima Care | |
| Chairman of the Board of Directors, Bank J.Van Breda & C° | |
| Vice-Chairman of the Board of Directors, Delen Private Bank | |
| Director of ABK bank | |
| Director of Anfima | |
| Director of AvH Coordination Center | |
| Director of Batipont Immobilier (BPI) | |
| Director of Corelio | |
| Director of Delen Private Bank Luxembourg | |
| Director of DEME | |
| Director of Extensa | |
| Director of Extensa Group | |
| Director of Finaxis | |
| Director of Green Offshore | |
| Director of Grossfeld PAP | |
| Director of HPA-Residalya | |
| Director of JM Finn & Co (UK) | |
| Director of Leasinvest Immo Lux SICAV-FIS | |
| Director of Mediacore | |
| Director of Oyens & Van Eeghen | |
| Director of Profimolux | |
| Director of Project TT | |
| Director of Sofinim | |
| Director of T&T Openbaar Pakhuis | |
| Director of T&T Parking | |
| Director of Algmene Aannemingen Van Laere | |
| c- Associations: | |
| Director of Antwerp Management School | |
| Director of De Vrienden van het Rubenshuis |
| Alain Bernard | Director |
|---|---|
| DEME Haven 1025 Scheldedijk 30 B-2070 Zwijndrecht |
Alain Bernard was born in 1955 and has a degree in civil engineering and construction (KU Leuven, 1978), along with a degree in civil engineering and industrial management (KU Leuven, 1979). Mr Bernard joined the DEME Group in 1980 as project manager. He was CEO of Dredging International and COO of the DEME group between 1996 and 2006. Alain Bernard was appointed CEO of the DEME group in 2006. |
| Corporate offices: a- Listed company: Member of the Steering Committee of CFE b- Non-listed companies: Chief Executive Officer and Director, DEME Director of various DEME Group subsidiaries Director of Aquafin Director of FIT (Flanders Investment & Trade) c- Associations: Union Royale des Armateurs Belges (Royal Belgian Shipowners' Association) Chairman of the Belgian Dredging Association |
| Philippe Delusinne | Independent Director | |
|---|---|---|
| RTL Belgium Avenue Jacques Georgin 2 |
Philippe Delusinne was born in 1957 and holds a diploma in Marketing & Distribution from ISEC Brussels and a Short MBA from the Sterling Institute of Harvard University. |
|
| B-1030 Brussels Member of the Audit Committee Member of the Appointments |
He began his career as an account executive at Ted Bates, and subsequently held the positions of account manager at Publicis, client services director at Impact FCB, deputy general manager at McCann Erikson, and Chief Executive Officer of Young & Rubicam in 1993. He has been Chief Executive Officer of RTL Belgium since March 2002. |
|
| and Remuneration Committee as of 4 May 2016 |
Corporate offices: a- Listed company: Member of the Supervisory Board of Métropole Télévision (M6) b- Non-listed companies: Managing Director of RTL Belgium Managing Director of Radio H Permanent representative of CLT-UFA, Managing Director of INADI, COBELFRA and NEW CONTACT SA CEO of RTL Belux & Cie SECS Managing Director of RTL Belux SA Chairman and Managing Director, IP Belgium Chairman and Managing Director, Home Shopping Service Belgium SA Chairman of New Contact SA Director of CLT-UFA SA Director of Agence Télégraphique Belge de Presse Director of MaRadio.be SCRL c- Associations: Director of the Belgian Association for Self-Regulation of Journalistic Ethics ASBL Member of the Audiovisual High Council (Belgium) Chairman of the Théâtre Royal de La Monnaie Chairman of Les Amis des Musées Royaux des Beaux-Arts de Belgique ASBL (Friends of the Royal Museums of Fine Arts of Belgium) |
|
| Christian Labeyrie | Director |
|---|---|
| VINCI 1, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex (France) Member of the Audit Committee |
Born in 1956, Christian Labeyrie is Executive Vice-President and Chief Financial Officer of the VINCI group, and a member of its Executive Committee. Before joining VINCI in 1990, he held various positions in the Rhône-Poulenc and Schlumberger groups. He began his career in the banking industry. Christian Labeyrie is a graduate of HEC, the Escuela Superior de Administración de Empresas (Barcelona) and McGill University (Canada), and holds a DECS diploma (advanced accounting degree). He is a Chevalier of the Légion d'Honneur and a Chevalier of the Ordre National du Mérite. |
| Corporate offices: a- Listed company: Member of the Executive Committee of the VINCI Group b- Non-listed companies: Director of VINCI Deutschland Director of Arcour Director of the Stade de France consortium Director of VFI Director of Amundi Convertibles Euroland of the Crédit Agricole Asset Management Group Director of VINCI USA Holding Inc. Chairman of ASF Holding Chairman of Cofiroute Holding Chairman of GECOM Manager of SCCV CESAIRE-LES GROUES Manager of SCCV HEBERT-LES GROUES Permanent representative of VINCI at Escota |
| Ciska Servais SPRL, represented by Ciska Servais |
Independent Director |
|---|---|
| Boerenlegerstraat 204 B-2650 Edegem |
Ciska Servais is a partner in the law firm Astrea. She is active in the field of administrative law, focusing in particular on environmental and town planning law, real estate law and construc tion law. She has extensive experience as a consultant in judicial proceedings and negotiations; she teaches university courses and is a regular speaker at seminars. |
| Chair of the Appointments and Remuneration Committee Member of the Audit Committee as of 4 May 2016 |
She graduated with a Bachelor's degree in law from the University of Antwerp (1989), and obtained a Master's degree (LL.M) in international legal cooperation from the Free University of Brussels (VUB) in 1990. She also obtained a special degree in ecology from the University of Antwerp (1991). |
| She started her internship in 1990 at the law firm Van Passel & Greeve. She became a partner at Van Passel & Vennoten in 1994 and, subsequently, at Lawfort in 2004. In 2006, she co-founded the law firm Astrea. |
|
| Ciska Servais publishes mainly on the subject of environmental law, such as on the wastewater treatment decree, environmental liability and regulations regarding the movement of soil. She is a member of the Antwerp Bar Association. |
|
| Corporate offices: a- Listed companies: Independent Director of Montea Comm. VA Vice-Chair of the Board, Montea Comm. VA Chair of the Remuneration Committee, Montea Comm. VA Member of the Audit Committee, Montea Comm. VA b- Non-listed company: Astrea BV CVBA |
Pas de Mots SPRL, represented by Leen Geirnaerdt
Leen Geirnaerdt has a degree in applied economic science (UFSIA, Cum Laude, 1996). She worked for several years at PricewaterhouseCoopers and USG People / Solvus Resources Group. She currently holds the position of CFO at USG People where she is a member of the Board of Directors.
Anne Frankstraat 1 B-9150 Kruibeke Member of the Audit Committee as of 7 October 2016
Corporate offices: a- Listed company:
Member of the Board of Directors and Chair of the Audit Committee of Wereldhave
Of the 11 members of the Board of Directors as at 31 December 2016, eight cannot be considered as independent under the terms of Article 526c of the Companies Code and the Belgian Corporate Governance Code. They are:
As at 31 December 2016, the independent directors are: Philippe Delusinne, Ciska Servais SPRL, represented by Ciska Servais, and Pas de Mots SPRL, represented by Leen Geirnaerdt.
It should be noted that all independent directors of CFE were able to carry out their assignment with complete independence of judgment in 2016.
None of CFE's directors (i) has been found guilty of fraud or any other crime, or punished by the regulatory authorities, (ii) has been involved in a bankruptcy, receivership or liquidation or (iii) has been prevented by a court of law from acting as a member of an administrative, management or supervisory body of a public company or from participating in the management or business decisions of a public company.
All directors are required to show independence of judgment, whether they are executive directors or not, and in the case of non-executive directors, whether they are independent or not.
Every director must organize his or her personal and professional affairs in such a way as to avoid any direct or indirect conflict of interest with the company.
The Board of Directors is particularly mindful of potential conflicts of interest with a director or a group company, and takes particular care to apply the special procedures provided for in Articles 523 and 524 of the Companies Code.
Transactions or other contractual relationships between the company, including its affiliated companies, and the directors must be concluded on normal market terms.
Non-executive directors are not authorized to conclude agreements with the company, whether directly or indirectly, relating to the supply of paid services, without the express consent of the Board of Directors. They must consult the Chairman, who decides whether or not to submit the exemption request to the Board of Directors.
As far as CFE is aware, no director has found himself in a situation of conflict of interest this year.
It is specified that certain directors hold offices in other companies whose activities sometimes compete with those of CFE.
With the assistance of the Appointments and Remuneration Committee, and if necessary that of outside experts, the Board of Directors, under the direction of its Chairman, regularly assesses its composition, its size and the way it functions, as well as the composition, size and operation of its specialist committees. The purpose of these assessments is to contribute to the continuous improvement of the company's governance while taking changing circumstances into account.
During these assessments, the Board of Directors checks, among other things, whether important matters are adequately prepared and discussed both by the Board itself and by its specialist committees.
It checks whether every director makes an effective contribution having regard to his skills, his attendance at meetings and his constructive involvement in discussions and decision-making, and also whether the current composition of the Board of Directors and its specialist committees is desirable.
The Board of Directors draws conclusions from this assessment of its performance by acknowledging its strengths and addressing its weaknesses. If necessary, this may involve a
proposal to appoint new members, a proposal not to re-elect existing members or the adoption of any measure considered appropriate to ensure that the Board of Directors functions effectively. The same applies to the specialist committees.
Once a year, the non-executive directors carry out an assessment of their interaction with the executive management. For this purpose, they meet once a year without the managing directors or any other executive directors attending.
The formal assessment of the functioning and performance of the Board of Directors took place in the fourth quarter of 2016. This assessment exercise was carried out with the support of Guberna, the Belgian Institute of Directors. The findings of this assessment were presented at the Board meeting of 1 December 2016.
The Board of Directors performs its duties in the interest of the Company.
The Board of Directors determines the Company's direction and values, its strategy and its key policies. It examines and approves related significant operations, ensures that they are properly executed and defines any measures needed to carry out its policies. It decides on the level of risk it is prepared to take.
The Board of Directors focuses on the long-term success of the Company by providing entrepreneurial leadership and by assessing and managing risks.
The Board of Directors ensures that the financial and human resources needed by the Company to achieve its objectives are available, and it puts in place the structures and means required to achieve these objectives. The Board of Directors pays special attention to social responsibility, gender balance and respect for diversity within the Company.
The Board of Directors approves the budget and examines and closes the accounts.
The Board of Directors:
With the exception of powers expressly reserved for the general meeting of shareholders and within the limits of the Company's objectives, the Board of Directors has the power to carry out all actions that are needed or useful to meet the Company's objectives.
The Board of Directors reports on the exercise of its responsibilities and management to the general meeting of shareholders. It prepares the resolutions to be put to the general meeting of shareholders.
Following the authorisation given by the general meeting of shareholders of 6 May 2010 and renewed by the general meeting of shareholders of 30 April 2014, the Board of Directors is authorised to increase the Company's capital – in one or more operations – by up to € 2,500,000, excluding issue premiums, by means of cash or non-cash contributions, by incorporation of reserves and with or without the issue of new shares. Within the scope of the authorised capital, the Board of Directors may decide to issue shares, in which case it determines the terms of issue of the new shares and, in particular, the issue price.
The authorised capital of CFE allows the issue of 1,531,260 additional shares in the event of a capital increase with issue of shares on the basis of their par value.
This authorization expires five years after the date of publication of the decision of the general meeting of 30 April 2014 in the Annexes to the "Moniteur Belge". As publication took place on 22 May 2014, the present authorization will expire on 21 May 2019.
The general meeting of shareholders of 30 April 2014 authorised CFE's Board of Directors to acquire CFE treasury shares. The nominal value or, where there is no nominal value, the accountable par of the shares being acquired must not exceed 20% of the company's subscribed capital, i.e. € 8,265,896.40. The shares can be purchased at a minimum price per share equal to the lowest closing price during the twenty (20) days preceding the date of acquisition of the CFE shares, minus ten percent (10%), and at a maximum price per share equal to the highest closing price during the twenty (20) days preceding the date of acquisition of the CFE shares, plus ten percent (10%).
This authorization expires on 23 May 2019.
The agreement of the general meeting of shareholders is not required for the acquisition of treasury shares by CFE with a view to distributing them to employees.
Subject to the application of the relevant legal provisions, the Board of Directors may decide to create and issue bonds, which may be bonds convertible into shares.
The Board of Directors is organised so as to ensure that decisions are taken in the interest of the Company and that work is executed efficiently.
The Board of Directors meets regularly and with sufficient frequency to perform its obligations effectively. It also meets whenever required in the interest of the Company.
In 2015, the Board of Directors considered all major issues concerning CFE. It met six times.
In particular, the Board of Directors:
The table below indicates the individual attendance rate of directors at Board meetings in 2016. Only the directors in office as at 31 December 2016 are included in the table.
| Directors | Attendance/Total number of meetings |
|---|---|
| Renaud Bentégeat | 6/6 |
| Luc Bertrand | 6/6 |
| Piet Dejonghe | 6/6 |
| Jan Suykens | 6/6 |
| Koen Janssen | 5/6 |
| John-Eric Bertrand | 6/6 |
| Christian Labeyrie | 4/6 |
| Philippe Delusinne | 5/6 |
| Ciska Servais SPRL, represented by Ciska Servais |
6/6 |
| Pas de Mots SPRL, represented by Leen Geirnaerdt (*) |
5/5 |
| Alain Bernard | 6/6 |
Except in the case of force majeure resulting from wars, uprisings or other public disturbances, the Board of Directors can only validly take decisions if at least half of the members are present or represented. Board members who are unable to attend a meeting may be represented by another Board member in accordance with the relevant laws and regulations; each member may only hold one proxy. Letters, faxes or other means of communication conveying the proxy vote are attached to the minutes of the Board meeting at which they are used.
If so decided by the chairman of the Board, meetings may be attended by all or some of the members via audio or video conference. These members are deemed to be present for the purpose of calculating quorum and majority.
Resolutions are passed by majority vote of the members present or represented.
In the event that members need to abstain from taking part in deliberations as a result of legal considerations, the said resolutions will be passed by majority vote of the other members present or represented.
In the event of a tie, the chairman of the meeting will have the casting vote.
After each meeting, the deliberations are recorded in minutes signed by the chairman of the Board of Directors and by a majority of the Board members who took part in the deliberations.
The minutes summarise the discussions, specify the decisions taken and, if applicable, any reservations raised by the board members.
They are recorded in a special register kept at the Company's head office.
The main characteristics of the Board of Directors' assessment process are stipulated in the internal regulations published in the Company's Corporate Governance Charter.
CFE did not award any shares, options or other rights to acquire shares in Compagnie d'Entreprises CFE in 2016.
At 31 December 2016, this committee comprised:
The committee met twice in 2016.
Over the course of the financial year, the committee examined:
• the fixed and variable remuneration paid to the managing directors;
(**) Independent directors
(*) The number of meetings also includes those attended by Leen Geirnaerdt in a personal capacity between 4 May 2016 and 7 October 2016.
The table below indicates the individual attendance rate of the members of the Appointments and Remuneration Committee at meetings in 2016. Only the directors in office as at 31 December 2016 are included in the table.
| Members | Attendance/ Total number of meetings |
|---|---|
| Ciska Servais SPRL, represented by Ciska Servais (*) |
2/2 |
| Luc Bertrand | 2/2 |
| Philippe Delusinne () (*) | 1/1 |
(*) independent directors (**) member as of 4 May 2016
meeting.
Members of the Appointments and Remuneration Committee are paid € 1,000 per meeting. The chair is paid € 2,000 per
The main characteristics of the Appointments and Remuneration Committee's assessment process are set out in the internal regulations published in the Company's corporate governance charter.
At 31 December 2016, this committee comprised:
(*) independent directors
CFE's Board of Directors pays particular attention to ensuring that Audit Committee members have financial, accounting and risk management skills.
John-Eric Bertrand chairs the Audit Committee as of 4 May 2016. He has been a member of the Audit Committee since 15 January 2015. John-Eric Bertrand has a degree in economics and finance. He has carried out numerous professional activities, more particularly in a firm of auditors and a strategic consulting firm. He joined Ackermans & van Haaren in 2008 as Investment Manager. In 2015, he became a member of the Executive Committee to monitor several strategic holdings. This confirms John-Eric Bertrand's competence in the areas of finance and auditing.
The Statutory Auditor participates in the work of the Audit Committee when the committee so requests.
This committee met four times during the 2016 financial year.
It examined:
The Audit Committee paid particular attention to the group's internal control and monitored steps taken by CFE to improve it.
The table below indicates the individual attendance rate of the members of the Audit Committee at meetings in 2016. Only the directors in office as at 31 December 2016 are included in the table.
| Members | Attendance/ Total number of meetings |
|---|---|
| John-Eric Bertrand | 4/4 |
| Philippe Delusinne (*) | 3/4 |
| Pas de Mots SPRL, represented by Leen Geirnaerdt () () (**) |
3/3 |
| Ciska Servais SPRL, represented by Ciska Servais () (*) |
3/3 |
| Christian Labeyrie | 2/3 |
| Christian Labeyrie | 4/4 |
| (*) independent directors |
(**) members as of 5 May 2016
(***)The number of meetings also includes those attended by Leen Geirnaerdt in a personal capacity between 4 May 2016 and 7 October 2016.
Members of the Audit Committee are paid € 1,000 per meeting. The chair is paid € 2,000 per meeting.
The main characteristics of the Audit Committee's assessment process are set out in the internal regulations published in the Company's corporate governance charter.
At the end of the financial year, CFE's share capital amounted to € 41,329,482.42, divided into 25,314,482 shares, with no declared par value. The Company's shares are registered or in electronic form.
The shares are registered until fully paid up. Once fully paid up, they may be converted into shares in electronic form, at the choice and expense of the shareholder.
The registry of registered shares is kept in electronic form and in hard copy. Management of the electronic registry has been entrusted to Euroclear Belgium (CIK SA).
Registered shares may be converted into shares in electronic form and vice-versa on request by their holders and at their expense. Shares in electronic form are converted into registered shares by making the corresponding entry in the register of CFE shareholders. Registered shares are converted into shares in electronic form by entering them into an account in the name of their owner or holder opened with an approved account-keeper or clearing house.
In accordance with the Act of 14 December 2005 on the abolition of bearer shares, CFE shares that had not yet been converted as of right or by their holders by 1 January 2014 were automatically converted into shares in electronic form and registered in a securities account by CFE in its own name.
As of that date, the rights attached to the shares have been suspended until the holders of those shares come forward and arrange for them to be entered in their name in the registry of registered shares or in a securities account held by an approved account-keeper or clearing house.
In pursuance of the Act of 21 December 2013 and in accordance with the provisions thereof, 18,960 shares of which the holder had not made himself known by the day of the sale were automatically sold on Euronext Brussels in July 2015. The proceeds of the sale have been deposited with the Caisse des Dépôts et Consignations until the persons who are able to validly prove ownership of the shares request repayment.
Persons requesting repayment will be liable for a fine of 10% of the sum or value of the shares in question per year overdue from 1 January 2016.
On 1 January 2026, the sale proceeds for which no repayment has been requested will be forfeited to the State.
CFE's equity base as of 31 December 2016 was as follows:
| - registered shares | 18,405,021 |
|---|---|
| - shares in electronic form | 6,909,461 |
| TOTAL | 25,314,482 |
Shareholders owning 3% or more of the voting rights relating to the shares they hold:
| Ackermans & van Haaren NV Begijnenvest 113 B-2000 Antwerp (Belgium) |
15,289,521 shares or 60.40% |
|---|---|
| VINCI Construction SAS 5, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex (France) |
3,066,460 shares or 12.11% |
During the 2016 financial year, CFE received no transparency notification pursuant to the Act of 2 May 2007.
At the close of the financial year, no shareholder owned shares with special rights of control.
Ownership of a CFE share entitles the owner to vote in CFE's general meeting of shareholders and automatically assumes approval of CFE's Articles of Association and the decisions of CFE's general meeting of shareholders. Shareholders' liability for the Company's commitments only extends to the value of the shares held.
The Company recognises only one owner per share as concerns the exercise of rights granted to shareholders. The Company may suspend the exercise of the rights attached to shares held jointly or subject to a life interest or pledge, until a single person is designated as beneficiary of these rights in respect of the Company.
The company's shareholders have rights conferred by the Belgian Companies Code and by the articles of association. They have the right to attend any of the company's general meetings of shareholders and to vote in them. Each share gives the right to one vote in a general meeting of shareholders. The conditions for being admitted to a general meeting of shareholders are set out in the company's articles of association and are also stated in the notice of meeting.
"Internal control may be defined as a system developed by the management body and implemented under its responsibility by executive management. It contributes to good management of the company's activities, the effectiveness of its operations and the efficient use of its resources, as a function of the goals, size and complexity of the company's activities.
More particularly, the internal control system aims to ensure:
(Excerpt from the guidelines relating to the Belgian act of 6 April 2010 and the Belgian Code of Corporate Governance (2009) published by the Corporate Governance Commission version 10/01/2011, page 8).
Like any other control system however, the internal control system, no matter how well designed and applied, cannot guarantee the absolute elimination of such risks.
The internal control system applies to CFE and the subsidiaries included in its scope of consolidation.
In 2016, the boards of directors of Rent-A-Port, Green Offshore (formerly RAP Energy) and Groep Terryn were responsible for internal control at those companies. However, CFE seeks to encourage the application of its own best practices through its representatives on these boards.
CFE's business activities require the teams exercising them to be close to their clients. To enable each entity manager to take the appropriate operating decisions rapidly, a decentralised organisation has been set up in the Dredging, Contracting and Real Estate Development divisions.
CFE's organisational structure necessitates delegating authority and responsibility to operational and functional participants at every level of the organisation. This delegation of powers to the operational and functional management is exercised in compliance with CFE's principles of conduct and operation:
transparency and loyalty of managers to their line management and functional departments;
compliance with all the laws and regulations applicable in countries where the group operates, regardless of the particular subject;
Following the legal reorganization of the group, which was finalized in November 2015, internal control is now organized as follows:
The role of the Steering Committee DEME is described in section 5.A.2.2.
In particular, it is responsible for the:
The management control and consolidation department sets the timetable for the preparation of interim and annual financial statements. These instructions are forwarded to the finance departments of the different entities concerned and accompanied by information or training sessions.
The management control and consolidation department is responsible for the accounting treatment of complex operations and ensures that they are validated by the Statutory Auditor.
• The Statutory Auditor informs the Audit Committee of any observations concerning the interim and annual financial statements before they are presented to the Board of Directors.
The divisions have their own operations control systems suited to the specific features of their activity.
Key performance indicators relating to sales, order intake, the order book and net financial debt is drawn up every month by the finance department on the basis of information forwarded by the various operational entities.
The managers of the various entities prepare a monthly report on key facts.
The budget procedure is common to all the group's divisions and their subsidiaries. It includes four annual meetings:
These meetings, which are attended by CFE's managing directors, CFE's CFO, the head of management control and consolidation, the CEO of the division concerned, the managing director or general manager of the entity concerned, its COO and CFO, examine:
For DEME, Rent-A-Port and Green Offshore, that information is passed on to CFE through its representatives on the Audit Committees of those entities.
The two managing directors are tasked with monitoring and controlling the activities that have not been transferred, namely PPP-Concessions, non-marine civil engineering in Belgium, and the International Buildings segment except Luxembourg, Poland and Tunisia.
They implement the strategy defined by CFE's Board of Directors, whose prior formal consent is required for each new project.
They are assisted in their task by the CFO, the human resources manager, and by the manager of CFE International.
CFE controls its dredging subsidiary at five different levels:
As in the past, the internal control system of DEME is implemented by its CEO, COO and CFO with the support of the Management Team and under the responsibility of the Board of Directors.
In this connection, DEME has taken several initiatives to strengthen internal control over its activities, such as:
The Board of Directors of CFE Contracting is composed of four directors (the two managing directors of CFE, the Chairman of the Executive Committee of CFE Contracting, and a representative of the controlling shareholder). The Board of Directors controls the Executive Committee, adopts the half-yearly and annual financial statements, and defines the division's strategy.
The Executive Committee of CFE Contracting is in charge of the daily management of the division and the implementation of the strategy defined by the Board of Directors.
The Executive Committee is chaired by the CEO of CFE Contracting and comprised as of 31 December 2016 the CFO of CFE, the managing director of CFE Bouw Vlaanderen (who is also general manager of the Multitechnics and Rail Infra & Utility Networks), and the managing director of CFE Bâtiment Brabant Wallonie.
Projects with a high risk profile, Construction projects worth more than € 50 million, and Multitechnics or Rail Infra & Utility Networks projects worth more than € 10 million must be approved by the Risk Committee before tendering. The Committee reviews the technical, commercial, contractual and financial risks of the projects that are submitted to its scrutiny.
The Risk Committee comprises the following members:
The internal auditor is an independent function, and his main task is to support the management and to help it improve the management of the risks and the opportunities for improvement associated with the various business activities of CFE Contracting.
The internal auditor reports in a functional way to the Audit Committee of CFE by submitting the annual audit plan and presenting the main findings of the audits carried out and a follow-up of the action plans. If necessary, additional audit assignments may be carried out at the request of the Audit Committee or of the Executive Committee. In 2016, the main topics covered by the internal audit were safety in the Rail entities (more particularly the safety systems, training and communication), human resources (soft HR aspects such as recruitment and talent management), and contractual risks (vis-à-vis our customers and our subcontractors).
The results of the audits are presented to the members of CFE's Audit Committee and to the Executive Committee (in order to agree the corrective actions to be taken).
The internal auditor is also responsible for keeping the risk identification up to date.
In 2016, several initiatives were undertaken to strengthen the internal control of CFE Contracting.
The different entities of the Construction segment (CFE Bouw Vlaanderen, CFE Bâtiment Brabant Wallonie, CFE Polska, CTE, CLE and Benelmat) have their own Boards of Directors composed of the managing directors or general managers of the company concerned, a managing director of CFE, the CFO of CFE, and the CEO of CFE Contracting.
Each entity also has a Management Committee responsible for the commercial policy and operational management of the entity.
The internal control of the Multitechnics and Rail Infra division is structured around Boards of Directors organised by cluster (Electro, HVAC and Rail Infra & Utility Networks) and composed of the respective general managers, the general manager of the segment, the CEO of CFE Contracting, the CFO of CFE, and a managing director of CFE.
The Board of Directors has the powers conferred on it by law. It is composed of the managing director of BPI, three directors of CFE (including the two managing directors), and the CFO of CFE.
The Board of Directors has set up an Investment Committee tasked with analysing and approving i) investment (or divestment) projects, and ii) the launch of the construction and/or marketing of all real estate projects. The Investment Committee is composed of the directors of BPI, the company secretary and the CFO of BPI. It should be noted that investments or divestments involving amounts of over € 10 million also require the formal consent of the Board of Directors of CFE.
For help with everyday business matters, the Managing Director is assisted by a Steering Committee composed of the managing director, the CFO of CFE and director of BPI, the CFO of BPI, the company secretary, the development director, the technical director, the director of BPI Luxemburg, and the Bruxelles-Wallonie Project Development Manager.
The real estate projects are systematically reviewed at least once every six weeks at the marketing, technical, legal and financial level.
The main characteristic of the Dredging and Contracting businesses is the commitment made when submitting a proposal to perform a task that is by its nature unique, for a price with predetermined terms and within an agreed time schedule.
The risk factors therefore relate to:
Dredging activities are performed by DEME and its subsidiaries.
DEME is one of the world's leading players in dredging. Its market includes both maintenance dredging and capital (infrastructure) dredging. The latter is particularly related to growth in world trade and decisions on the part of governments to invest in major infrastructure projects.
DEME has also developed a range of services for the oil and gas industry, including protection of offshore facilities and protection of deep-water subsea pipelines and cables.
DEME is also a major player in the development of offshore wind farms, operating in two areas:
• as a concession-holder via minority stakes in concessions;
• as a general contractor specialising in the construction and maintenance of offshore wind farms, capable of providing a comprehensive service to its clients.
DEME also operates in the environmental sector through DEC. This company specialises in the treatment of polluted sludge and sediments, along with the remediation of brownfield sites.
In 2015, DEME decided to set up a new division, comprising two new subsidiaries: DEME Infra Sea Solutions (DISS) and DEME Infra Marine Contractor (DIMCO), specializing in marine and river civil engineering. The establishment of this new division is inspired by DEME's aim to offer global and integrated solutions in dredging and marine civil engineering.
Through DBM (DEME Building Materials), DEME is also active in the aggregate supply market.
In its dredging, reclamation and hydraulic civil engineering operations, DEME faces not only the risks described in section 5.B.1.1, but also various specific operational risks related to:
weather conditions, including extreme events such as storms, tsunamis and earthquakes;
wear and tear affecting equipment;
As stated above, DEME has for several years been developing an offshore wind farm concession business. In this business, DEME faces specific risks related to these investments:
Dredging is primarily a maritime activity, which is characterised by its capital-intensive nature due to the need for regular investments in new vessels in order to keep the fleet at the leading edge of technology. For this reason, DEME is faced with complex investment decisions and specific operational risks relating to these investments:
DEME has qualified staff with the capacity to design dredgers and design and execute large-scale projects. Given the very nature of the activity and the many external factors to be taken into account, the risks inherent in this business cannot be completely eliminated.
The Contracting division encompasses the following activities:
Construction activity is concentrated in Belgium, Luxembourg, Poland and Tunisia. CFE Contracting specialises in building and refurbishing office buildings, residential properties, hotels, schools, universities, car parks, shopping and leisure centres, hospitals and industrial buildings.
This division operates mainly in Belgium through three clusters:
CFE Contracting has updated the risk identification that was formulated for the first time in October 2013. The assessment was carried out on the basis of three criteria: impact (financial, human and reputation consequences), frequency of occurrence, and level of control, resulting in a representation by specific area, thereby supplying the management with a tool to monitor the risks associated with its activities.
This risk identification is likely to evolve and will be regularly updated. The internal audit programme is defined on the basis of that risk identification, so as to focus more specifically on the areas that need to be prioritised.
The main risks that were identified during the update at year-end 2015 were the following:
The operational risks in the activities of the Contracting division are described in section 5.B.1.1.
The next update of the risk identification will take place in 2017.
BPI has developed its Real Estate Development business in Belgium, Luxembourg and Poland.
Real estate activity is directly or indirectly affected by certain macroeconomic factors (interest rates, propensity to invest, savings, etc.) and political factors (development of supra-national institutions, development plans, etc.) that influence the behaviour of participants in the market, in terms of both supply and demand.
This activity is also characterised by long operating cycles, which means that operators need to anticipate decisions and make longterm commitments.
In addition to general sector risks, each project has its own specific risks:
The different divisions of CFE are, by their very nature, subject to strong cyclical fluctuations. Nevertheless, this observation must be qualified for each segment or sub-segment of activity, since the key factors can vary between them.
For example:
CFE Contracting suffers from a chronic shortage of qualified supervisory staff and workers. The success of projects, in the study, preparation and execution phases, depends both on employees' qualifications and skills and on their availability in the labour market.
On the talent market, DEME should be able to attract, motivate and retain highly qualified staff to manage projects abroad.
CFE, DEME and BPI make major investments extending over long periods of time. In this context and in terms of the availability of long-term credit, project finance or major capital expenditure, those entities apply a policy of interest rate hedging where necessary. Nevertheless, interest-rate risk cannot be entirely eliminated.
Given the international nature of its activities and the fact that some contracts are performed in foreign currencies, the different divisions of the group are exposed to exchange-rate risk. To mitigate this risk, they engage in exchange-rate hedging and forward foreign exchange contracts. Nevertheless, exchange-rate risk cannot be entirely eliminated.
To reduce underlying solvency risk, CFE, DEME and CFE Contracting check the solvency of their clients when submitting quotations, regularly monitor accounts receivable, and adjust their positions with them where necessary. For clients showing a material credit risk, down payments and/or bank payment guarantees are required before work starts.
In markets outside Europe, if a country is eligible and the risk can be covered by credit insurance, CFE and DEME obtain coverage from organisations specialising in this area, such as Credendo Group.
Nevertheless, credit risk cannot be entirely eliminated.
While DEME, CFE Contracting and BPI are not significantly exposed to credit risk, CFE is confronted with late payments by the Chadian government. The net exposure amounted to € 60 million at year-end 2016.
In order to limit the liquidity risk, the entities of the CFE group increased their sources of financing, of which there are four:
CFE complied with all of its financial covenants at 31 December 2016, as did DEME.
CFE, DEME and CFE Contracting are potentially exposed to increases in the prices of certain raw materials used in their activities. Nevertheless, such increases should not be likely to have a significantly negative impact on their results. This is because a substantial portion of the contracts of CFE, DEME and CFE Contracting include price revision formulae that enable them to adjust selling prices in line with movements in commodity prices. Furthermore, the activities of CFE Contracting are carried out through a large number of contracts, many of them of short or medium duration which, even in the absence of a price revision formula, limits the impact of a rise in raw material prices. Finally, DEME hedges against rising diesel prices for contracts that do not contain price revision mechanisms.
Given the group's activities and its organisational structure, which reflects the local nature of its contracts, CFE considers that, overall, it is not dependent on a small number of clients, suppliers or subcontractors.
In view of the type of work it is asked to do, CFE Contracting may be involved in handling hazardous materials.
CFE Contracting takes all possible safety and health precautions for its workers and takes particular care over this point, although this risk cannot be entirely eliminated.
Like any company involved in dredging and marine activities, DEME pays particular attention to environmental risks, which fall into two categories:
Respect for the environment is one of the fundamental values upheld by the different divisions of CFE, which make every effort to limit the negative environmental impact of their activities.
Given the diversity of their activities and geographical locations, CFE and CFE Contracting are exposed to a complex regulatory environment as concerns the places where services are performed and the fields of activity involved. In particular, they are subject to rules concerning administrative contracts, public and private works contracts and civil liability.
In the construction sector, the builder's liability with respect to 10-year construction guarantees, liability for minor hidden defects and liability for indirect consequential damage – an emerging concept – can be interpreted broadly.
DEME has to deal with a changing and increasingly complex legal framework in certain countries in which it operates.
CFE and DEME are exposed to political risks, which fall into various categories: political instability, wars (including civil wars), armed conflicts, terrorism, hostage-taking, extortion and sabotage.
These represent potential threats to the security of CFE's staff and property. As a result, these risks are monitored closely and, if necessary, a project may be stopped if basic security conditions are no longer met. In this case, staff and equipment are transferred to a safer location.
DEME has appointed an Enterprise Security Officer to:
DEME has developed specific know-how and innovative technologies in various areas.
To protect its trade secrets and intellectual property relating to its innovations, DEME has filed numerous patent applications covering over 100 specific applications.
To carry out some of their real-estate, public-private partnerships and concession activities, CFE, DEME and BPI participate and will continue to participate in special-purpose companies which provide real guarantees in support of their credit facilities. The risk, in the event of the failure of this type of company and exercise of the guarantee, is that the proceeds from such exercise are not sufficient to cover some or all of the amount of shareholders' equity or equivalent used as collateral for setting up the credit facility.
CFE's acquisition of control over DEME on 24 December 2013 in no way alters the fact that DEME remains financially autonomous and so CFE does not advance any money or make any guarantee with respect to DEME or vice-versa.
CFE's policy on this matter is specified in its corporate governance charter.
A compliance officer (Fabien De Jonge) was appointed and an information programme has been in place since 2006 for senior management and employees who, through their job, have access to privileged information.
The policy on this matter is specified in the corporate governance charter.
There is no service contract binding the Board members with CFE or with any of its subsidiaries.
Ackermans & van Haaren entered into a service contract with CFE and DEME. The fees payable by CFE and by DEME for the 2016 financial year amounted to € 153 thousand and € 1,147 thousand respectively.
The Statutory Auditor is Deloitte Reviseurs d'Entreprises, represented by Michel Denayer and Rik Neckebroek.
At the ordinary general meeting of shareholders on 4 May 2016, shareholders renewed the appointment of the Statutory Auditor, Deloitte Reviseurs d'Entreprises, represented by Michel Denayer and Rik Neckebroek, for a period of three years, ending at the close of the ordinary general meeting of shareholders in May 2019. The fees paid by CFE amounted to € 117 thousand for the 2016 financial year.
Other costs for various assignments invoiced by Deloitte Reviseurs d'Entreprises amounted to € 21 thousand.
In addition, during the 2016 financial year, the costs invoiced by Deloitte for consultancy services amounted to € 127 thousand.
Deloitte audited the accounts of most of the companies within the CFE group.
For the other main groups and subsidiaries, the Statutory Auditor generally obtained the certification reports of those entities' auditors and/or interviewed them, and also performed certain additional checks.
| (in € thousands) | Deloitte | Other | ||||
|---|---|---|---|---|---|---|
| Amountt | % | Amount | % | |||
| Audit | ||||||
| Statutory audit, certification, examination of individual and consolidated accounts |
1,700.0 | 60.07% | 840.6 | 53.68% | ||
| Related work and other audits | 94.7 | 3.35% | 44.6 | 2.85% | ||
| Subtotal, audit | 1,794.7 | 63.42% | 885.2 | 56.53% | ||
| Other services | ||||||
| Legal, tax, corporate | 250.9 | 8.86% | 436.3 | 27.86% | ||
| Other | 784.3 | 27.72% | 244.4 | 15.61% | ||
| Subtotal, other services | 1,035.2 | 36.58% | 680.7 | 43.47% | ||
| Total statutory auditors' fees | 2,829.9 | 100% | 1,565.9 | 100% |
CFE's remuneration policy is designed to attract, retain and motivate staff in the office, technical, manual and managerial categories.
To help the Appointments and Remuneration Committee analyse the competitive situation, along with other factors involved in assessing remuneration, the Committee may use the services of internationally renowned remuneration consultants.
In 2016, a few changes were made to CFE's remuneration policy relative to 2015.
CFE's ordinary general meeting of shareholders of 4 May 2016 approved the payment of annual fees to the Chairman of the Board of Directors and each of the other directors to the amount of € 100,000 and € 20,000 respectively in proportion to the time they were in office.
The general meeting also approved the payment of attendance fees to the directors, with the exception of the Chairman of the Board, to the amount of € 2,000 per meeting.
The remuneration of the members of the Audit Committee and the Appointments and Remuneration Committee remain unchanged.
Board directors are also reimbursed for expenses incurred during the execution of their duties, according to conditions set by the Board of Directors.
The amount of fees paid directly or indirectly to the Board members for carrying out their duties within the group was as follows:
| (euros) | Fees CFE SA |
|---|---|
| C.G.O. SA, represented by Philippe Delaunois |
33,880 |
| Renaud Bentégeat | 32,000 |
| Piet Dejonghe | 32,000 |
| Luc Bertrand | 74,896 |
| Koen Janssen | 30,000 |
| Christian Labeyrie | 28,000 |
| John-Eric Bertrand | 32,000 |
| Consuco SA, represented by Alfred Bouckaert |
8,776 |
| Ciska Servais SPRL, represented by Ciska Servais |
32,000 |
| Leen Geirnaerdt | 14,579 |
| Pas de Mots SPRL, represented by Leen Geirnaerdt |
8,645 |
| Philippe Delusinne | 30,000 |
| Jan Suykens | 32,000 |
| Alain Bernard | 32,000 |
| Jan Steyaert | 8,776 |
| Total | 429,552 |
No agreement with any non-executive Board director providing for severance pay has come into force. It will be proposed to the general meeting of 4 May 2017 to maintain the same remuneration policy of the directors and the Chairman of the Board of Directors.
| Jan Steyaert | 2,000 |
|---|---|
| Consuco SA, represented by Alfred Bouckaert | 1,000 |
| Philippe Delusinne | 3,000 |
| John-Eric Bertrand | 7,000 |
| Christian Labeyrie | 4,000 |
| Leen Geirnaerdt | 2,000 |
| Pas de Mots SPRL, represented by Leen Geirnaerdt |
1,000 |
| Ciska Servais SPRL, represented by Ciska Servais |
2,000 |
| Total | 22,000 |
The Appointments and Remuneration Committee consists of non-executive directors, most of whom are independent directors.
| Ciska Servais SPRL, represented by Ciska Servais |
4,000 |
|---|---|
| Luc Bertrand | 2,000 |
| Philippe Delusinne | 1,000 |
| Consuco SA, represented by Alfred Bouckaert | 1,000 |
| Total | 8,000 |
The CFE group is led by the two managing directors, who are tasked with the daily management of the company, under the supervision of the group's Board of Directors.
They are assisted in their task at holding company level by the group's CFO, Fabien De Jonge, the Human Resources manager, Gabriël Marijsse, and the international manager D2C Partners, represented by Patrick Bonnetain.
The activities of DEME are overseen by a steering committee, composed as before of Renaud Bentégeat, Alain Bernard and Fabien De Jonge.
The Contracting division, which comprises most of the activities of the CFE group in construction, multitechnics and rail, is led by an Executive Committee composed of a CEO, Trorema SPRL, represented by Raymund Trost, and three other members, Frédéric Claes SA, represented by Frédéric Claes, Fabien De Jonge and 8822 SPRL, represented by Yves Weyts.
The activities of Real Estate Development are headed by a managing director, Artist Valley SA, represented by Jacques Lefèvre.
There were changes in the remuneration policy in 2016. Fixed and variable remuneration and other benefits were examined by the Appointments and Remuneration Committee.
After discussions, and specifically an assessment of performance relating to variable remuneration, the Appointments and Remuneration Committee made recommendations to the Board of Directors, which takes decisions on this matter.
The reference period for the annual variable remuneration of the managing directors (and the other members of the executive management) runs from 1 January to 31 December. Any payments of variable remuneration are made in April of the following year.
In addition to his fee as a Board member, i.e. € 32,000, Renaud Bentégeat, managing director, received gross annual remuneration of € 300,000 in respect of his executive functions within the CFE group. The remuneration of Renaud Bentégeat is governed by French law.
Renaud Bentégeat, managing director, also has the use of accommodation and a car provided by the company, representing a benefit of € 47,580.69 in 2016. In 2016, he benefits from a pension plan with CFE, for which the employer's contribution amounts to € 102,147.
The annual variable remuneration of Renaud Bentégeat is based on the performance of the CFE group as a whole and takes into account the safety performance, financial performance, cash position and reporting quality.
The amount of the annual variable remuneration is capped at 100% of the fixed remuneration, apart from the long-term variable remuneration.
For the 2016 financial year, it was decided to pay Renaud Bentégeat a bonus of € 200,000.
A long-term variable remuneration has been instituted, of which the criteria have been defined by the Appointments and Remuneration Committee. This remuneration will be based on the group's results over three years (2015, 2016 and 2017).
CFE did not award any shares, options or other rights to acquire shares in the company to Renaud Bentégeat, managing director, in 2016.
CFE did not award any shares, options or other rights to acquire shares in the company to Piet Dejonghe, managing director, in 2016.
The remuneration policy is designed to:
The proposed fixed and variable remuneration for members of CFE's executive management, other than the managing directors, are scrutinised by the managing directors and the group's HR manager. They are submitted to the Appointments and Remuneration Committee.
The Committee listens to explanations and, after discussions between its members, submits definitive proposals to the Board of Directors, which takes decisions on the matter.
The basic annual salary constitutes fixed remuneration and is based on a scale defined by the CFE Group's wage structure. There is a margin of appreciation as regards matters such as experience, duties, scarcity of technical skills and performance.
For operational members of CFE's executive management, i.e. those responsible for profit centres (subsidiaries), variable remuneration for the 2016 financial year depends on individual performance.
The assessment of this 'qualitative' performance is left to the discretion of the Appointments and Remuneration Committee.
The Board of Directors, at the proposal of the Appointments and Remuneration Committee, may also increase or reduce the amount of the variable remuneration that emerged from the pay scale set at the beginning of the year.
For functional managers, variable remuneration takes account of several factors:
The reference period for the variable remuneration runs from 1 January to 31 December. Any payments are made in April of the following year.
Remuneration for the operational members of the steering committee of DEME is set by the Board of Directors of DEME as proposed by the Remuneration Committee of DEME, composed of Renaud Bentégeat and Luc Bertrand.
The variable remuneration is based on four criteria: EBITDA, net result, net financial debt, and safety performance.
In 2016, members of CFE's executive management (other than the managing directors), namely Fabien De Jonge, Gabriel Marijsse, D2C Partners represented by Patrick Bonnetain, Alain Bernard, Trorema SPRL represented by Raymund Trost, Fédéric Claes SA represented by Frédéric Claes, 8822 SPRL represented by Yves Weyts, Artist Valley SA represented by Jacques Lefèvre, received:
| Fixed remuneration and fees | 2,483,171 |
|---|---|
| Variable remuneration | 2,124,652 |
| Payments to insurance plans (pension plans, health and accident insurance) |
280,481 |
| Company vehicle expenses | 34,401 |
| Total | 4,922,705 |
Members of CFE's executive management are covered by various types of pension plan. Some are members of defined-benefit plans, which vary according to whether they joined before or after 1 July 1986.
In order to harmonise the treatment of these members, a supplementary defined-benefit plan was set up in 2007. The IFRS service cost for defined-benefit plans amounted to € 92,209 in 2016.
There is also a pension plan that covers members of DEME's steering committee.
CFE has not awarded any shares, options or other rights to acquire shares in the company to members of CFE's executive management in 2016.
The Appointments and Remuneration Committee of the CFE group, with the consent of the Board of Directors, decided to set up a stock option plan for CFE Contracting. The four beneficiaries have accepted the offer, and the term of the options is seven years.
In addition, the Board of Directors, on the advice of the Appointments and Remuneration Committee, decided to set up a stock option plan for BPI (real estate development). The offer was made on 22 December 2016 to two beneficiaries (Jacques Lefèvre and Fabien De Jonge). The term of the options is eight years.
As regards termination benefit rules, in accordance with the Belgian Corporate Governance Act of 6 April 2010, applying as of 3 May 2010 and as agreed with the managing directors and members of CFE's executive management, the ordinary general meeting of shareholders of 04 May 2016 passed the following resolution:
For employees who are members of the executive management of CFE and DEME and with whom there was no existing agreement relating to termination benefits before 3 May 2010, the period of notice to be given or the amount of severance pay that will be paid in the event of termination of the employment contract (for reasons other than serious misconduct) by the employer shall be determined, in accordance with the Act of 26 December 2013 relating to the introduction of the single status, published in the "Moniteur Belge" on 31 December 2013.
This agreement, approved by the Board of Directors as proposed by the Appointments and Remuneration Committee, stipulates that if the employment contract is terminated by the employer (for reasons other than serious misconduct) the period of notice to be given or the amount of severance pay that will be paid is to be set at maximum 12 months' remuneration.
• an agreement came into force on 9 November 2015 for Trorema SPRL, represented by Raymund Trost.
This agreement, approved by the Board of Directors as proposed by the Appointments and Remuneration Committee, stipulates that if the employment contract is terminated by the employer (for reasons other than serious misconduct) the period of notice to be given or the amount of severance pay that will be paid is to be set at maximum 6 months' remuneration.
• an agreement came into force on 1 January 2016 for 8822 SPRL, represented by Yves Weyts.
This agreement, approved by the Board of Directors as proposed by the Appointments and Remuneration Committee, stipulates that if the employment contract is terminated by the employer (for reasons other than serious misconduct) the period of notice to be given or the amount of severance pay that will be paid is to be set at maximum 12 months' remuneration.
As regards variable remuneration rules, in accordance with the Belgian Corporate Governance Act of 6 April 2010, for periods beginning after 31 December 2010, the shareholders' meeting of 4 May 2016 passed the following resolution:
• For the managing directors and the members of the executive management, the current legislation, which requires variable remuneration to be spread over three years, and its related criteria are not appropriate (and therefore cannot be easily applied) to an executive management of which some members are close to retirement or bridging pension age.
This provision remains applicable to members of CFE's executive management.
The contracts between members of CFE's executive management, including those of the managing directors, on the one hand and the company on the other include a right for the company to claw back variable remuneration granted on the basis of incorrect financial information.
CFE SA systematically takes out comprehensive contractor insurance for all construction sites, which gives sufficient cover for operating and post-construction civil liability. The risk of terrorism is not included in this policy.
No special report was prepared in 2016.
Pursuant to Article 34 of the Belgian Royal Decree of 14/11/2007 concerning the obligations of issuers of financial instruments listed for trading on a regulated market, Compagnie d'Entreprises CFE SA notes that:
CFE SA increased its stake in Green Offshore NV (formerly Rent-A-Port Energy NV) to 50% as at 31 December 2016.
In 2016, CFE SA disposed of its stake in Locorail and Coentunnel Company BV.
CFE SA did not set up any branches in 2016.
No significant changes have occurred in the financial and commercial situation of the CFE Group since 31 December 2016.
DEME carries out ongoing research to increase the efficiency of its fleet. In addition, in partnership with universities and the Flanders region of Belgium, it carried out research into the production of sustainable marine energy. In partnership with private-sector companies, it carries out research into techniques to extract rare materials from the sea.
Given the high level of its order book, DEME expects its revenue to increase strongly in 2017.
The Contracting division is expected in 2017 to confirm the positive trend observed in 2016.
The real estate division should markedly increase net result in 2017.
The result of the Holding and non-transferred activities division will be strongly dependent on how the CFE Group's situation in Chad evolves.
John-Eric Bertrand chairs the Audit Committee as of 4 May 2016. He has been a member of the Audit Committee since 15 January 2015. John-Eric Bertrand studied economics and finance. He has carried out professional activities in a firm of auditors and a strategic consulting firm. He joined Ackermans & van Haaren in 2008 as Investment Manager. In 2015, he became a member of the Executive Committee entrusted with the financial and operational monitoring of several strategic holdings. This confirms John-Eric Bertrand's competence in the areas of finance and auditing.
The Board of Directors invites all shareholders and bondholders to attend the ordinary general meeting of shareholders, which shall take place at the company's head office at 40-42 avenue Herrmann-Debroux, 1160 Brussels, at 3pm on Thursday 4 May 2017.
Proposed resolution:
Approval of the statutory annual accounts for the financial year ended on 31 December 2016.
Proposed resolution:
Approval of the consolidated annual accounts for the financial year ended on 31 December 2016.
Approval to distribute a gross dividend of € 2.15 per share, corresponding to a net dividend of € 1,505 per share. The dividend will be payable as from 25 May 2017.
Approval of the remuneration report.
Approval with effect from 1 January 2017 of an annual remuneration for the Chairman of the Board of Directors and for each director, of € 100,000 and € 20,000 respectively, pro rata temporis of the exercise of their mandate during the year.
Approval of the payment of attendance fees to the directors, with the exception of the Chairman of the Board, to the amount of € 2,000 per meeting. The remuneration of the members of the Audit Committee and the Appointments and Remuneration Committee remains unchanged.
Approval to grant the auditor an annual remuneration of € 112,500 for his mandate as auditor of the company. Those fees are indexed annually.
Proposed resolution:
Discharge to the directors for and in connection with their duties during the financial year ended on 31 December 2016.
Discharge to the auditor for and in connection with his duties during the financial year ended on 31 December 2016.
Approval to renew the mandate of Piet Dejonghe for a period of four (4) years, ending after the annual general meeting of May 2021.
Approval to renew the mandate of Renaud Bentégeat for a period of three (3) years, ending after the annual general meeting of May 2020.
Approval to renew the mandate of Luc Bertrand for a period of four (4) years, ending after the annual general meeting of May 2021.
Approval to renew the mandate of Alain Bernard for a period of four (4) years, ending after the annual general meeting of May 2021.
Approval to renew the mandate of John-Eric Bertrand for a period of four (4) years, ending after the annual general meeting of May 2021.
Approval to renew the mandate of Koen Janssen for a period of four (4) years, ending after the annual general meeting of May 2021.
Proposed resolution:
Approval to renew the mandate of Jan Suykens for a period of four (4) years, ending after the annual general meeting of May 2021.
Approval to appoint Pas De Mots SPRL, having as its permanent representative Leen Geirnaerdt, for a period of three (3) years, ending after the annual general meeting of 2020. Pas De Mots SPRL and its permanent representative, Leen Geirnaerdt, meet the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.
Only shareholders who hold CFE shares at the latest on the 14th day prior to the general meetings, namely on 20 April 2017 at midnight (Belgian time) (the "Registration date"), and who confirm their intention to participate in the ordinary general meeting at the latest by 28 April 2017 at midnight (Belgian time), shall be allowed to attend the meeting, either in person or by proxy.
Each shareholder who owns shares on the Registration date may be represented at the ordinary general meeting.
Shareholders who wish to appoint a representative to represent them at the ordinary general meeting shall be required to complete and sign the proxy form, available on the website www.cfe.be, and to return it either by letter, for the attention of Mr Fabien De Jonge, Chief Financial Officer, avenue Herrmann-Debroux, 40-42 in 1160 Auderghem, or by e-mail to the following address: [email protected], at the latest by 28 April 2017 at midnight (Belgian time).
If the proxy is sent by e-mail, the proxy-holder must submit the signed original before the start of the meeting.
Each shareholder who owns shares on the Registration date may be represented at the ordinary general meeting.
Shareholders who wish to vote by post shall be required to complete and sign the postal voting form, available on the website www.cfe.be, and to send it exclusively by post for the attention of Mr Fabien De Jonge, Chief Financial Officer, avenue Herrmann-Debroux, 42 in 1160 Auderghem, at the latest by 28 April 2017 at midnight (Belgian time). The shareholder must indicate his voting preference on the postal voting form.
One or more shareholders who together hold at least 3% of the share capital may request the inclusion of items on the agenda for the ordinary general meeting of shareholders as well as file resolution proposals concerning the items to be dealt with already included or to be included on the agenda.
Shareholders who wish to exercise this right to add new items to the agenda or to file resolution proposals must satisfy the following conditions:
If one or more shareholders has requested the inclusion of items and/or proposed resolutions on the agenda, CFE shall publish at the latest by 19 April 2017 an agenda prepared according to the same procedure as this agenda. CFE shall also publish at the same time on its website the proxy voting and postal voting forms with any additional topics and related proposals and/or any standalone proposed resolutions added.
Any proxy forms and postal voting forms sent to the company before 19 April 2017 shall remain valid for the items on the agenda to which they relate. Furthermore, within the context of proxy voting, the representative shall be authorized to vote on the new items on the agenda and/or on the new proposed resolutions, without the need for any new proxy, if the proxy form expressly permits it. The proxy form may also specify that in such cases, the representative is obliged to abstain.
Each shareholder has the right to put questions to the directors and/or the auditor during the ordinary general meeting. The questions may be asked orally during the meeting or in writing before the meeting.
Shareholders who wish to ask questions in writing before the meeting shall be required to send an e-mail to the company at the latest by 28 April 2017 at midnight (Belgian time) to the following address: [email protected]. Only written questions asked by shareholders who will have satisfied the formalities for admission to the meeting (see item 1), shall receive an answer during the meeting.
Bondholders may attend the ordinary general meeting with a consultative vote only, by proving they are bondholders by producing, on the day of the general meeting, a certificate issued by the financial intermediary with which they hold their bonds.
Each shareholder and bondholder may obtain free of charge at the registered office of the company (avenue Herrmann-Debroux, 40-42 in 1160 Brussels), during office hours, a complete copy of the financial statements, consolidated financial statements as well as the directors' report, the agenda as well as the forms to vote by proxy and by post, and the form "Intention de participation". Requests for a free copy may also be sent by e-mail to the following address: [email protected].
All information relating to the general meeting of shareholders of 4 May 2017, including all documents related thereto, are available on the company's website at this address: www.cfe.be.
Consolidated financial statements
Consolidated statement of income
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Auditors' report
Parent-company statements of financial position and comprehensive income
Analysis of statements of financial position and comprehensive income
Parentcompany financial statements
| Capital employed | Intangible assets + goodwill + property, plant and equipment + working capital |
|---|---|
| Working capital | Inventories + trade receivables and other operating receivables + other current assets + non-cur rent assets held for sale - other current provisions - trade payables and other operating liabilities - tax payables - other current liabilities |
| Income from operating activities |
Turnover + revenue from auxiliary activities + purchases + wages, salaries and social charges + other operational charges and depreciation and goodwill depreciation |
| Operating income (EBIT) | Income from operating activities + earnings from associates and joint-ventures |
| EBITDA | Income from operating activities + amortisation and depreciation + other non-cash items |
| For the period ended 31 December (in € thousands) | Notes | 2016 | 2015 |
|---|---|---|---|
| Revenue | 4 | 2,797,085 | 3,239,406 |
| Revenue from auxiliary activities | 6 | 85,794 | 109,005 |
| Purchases | (1,504,685) | (1,831,454) | |
| Remuneration and social security payments | 7 | (533,200) | (547,043) |
| Other operating expenses | 6 | (384,649) | (482,581) |
| Depreciation and amortisation | 12-14 | (232,775) | (255,312) |
| Goodwill impairment | 13 | 0 | (3,116) |
| Income from operating activities | 227,570 | 228,905 | |
| Earnings from associates and joint ventures | 15 | (784) | 36,759 |
| Operating income | 226,786 | 265,664 | |
| Cost of gross financial debt | 8 | (31,521) | (31,720) |
| Other financial expenses & income | 8 | 7,567 | (869) |
| Net financial income/expense | (23,954) | (32,589) | |
| Pre-tax income | 202,832 | 233,075 | |
| Income tax expense | 10 | (30,580) | (59,051) |
| Net income for the period | 172,252 | 174,024 | |
| Attributable to owners of non-controlling interests | 9 | (3,841) | 937 |
| Net income share of the group | 168,411 | 174,961 | |
| Net income of the group per share (EUR) (diluted and basic) | 11 | 6.65 | 6.91 |
| For the period ended 31 December (in € thousands) | Notes | 2016 | 2015 |
|---|---|---|---|
| Net income share of the group | 168,411 | 174,961 | |
| Net income for the period | 172,252 | 174,024 | |
| Changes in fair value related to hedging instruments | 2,230 | (6,366) | |
| Currency translation differences | (340) | (4,088) | |
| Deferred taxes | 10 | 1,143 | 1,783 |
| Other elements of the comprehensive income to be reclassified to profit or loss in subsequent periods |
3,033 | (8,671) | |
| Re-measurement on defined benefit plans | 23 | (18,901) | (197) |
| Deferred taxes | 10 | 6,510 | 1,099 |
| Other elements of the comprehensive income not to be reclassified to profit or loss in subsequent periods |
(12,391) | 902 | |
| Other elements of the comprehensive income | (9,358) | (7,769) | |
| Comprehensive income: | 162,894 | 166,255 | |
| - Attributable to owners of the parent | 159,178 | 166,489 | |
| - Attributable to owners of non-controlling interests | 3,716 | (234) | |
| Net income attributable to owners of the parent per share (EUR) (diluted and basic) | 11 | 6.29 | 6.58 |
| For the period ended 31 December (in € thousands) | Notes | 2016 | 2015 |
|---|---|---|---|
| Intangible assets | 12 | 95,441 | 97,886 |
| Goodwill | 13 | 175,169 | 175,222 |
| Property, plant and equipment | 14 | 1,683,304 | 1,727,679 |
| Investments in associates and joint ventures | 15 | 141,355 | 151,377 |
| Other non-current financial assets | 16 | 153,976 | 129,501 |
| Derivative instruments – Non-current assets | 27 | 510 | 1,381 |
| Other non-current assets | 17 | 23,518 | 19,280 |
| Deferred tax assets | 10 | 126,944 | 103,345 |
| Total non-current assets | 2,400,217 | 2,405,671 | |
| Inventories | 19 | 94,836 | 77,946 |
| Trade and other operating receivables | 20 | 1,160,306 | 1,192,977 |
| Other current assets | 20 | 38,430 | 125,029 |
| Derivative instruments – Current assets | 27 | 2,311 | 8,514 |
| Current financial assets | 48 | 70 | |
| Assets held for sale | 19,916 | 0 | |
| Cash and cash equivalents | 21 | 612,155 | 491,952 |
| Total current assets | 1,928,002 | 1,896,488 | |
| Total assets | 4,328,219 | 4,302,159 | |
| Share capital | 41,330 | 41,330 | |
| Share premium | 800,008 | 800,008 | |
| Retained earnings | 714,527 | 607,012 | |
| Defined benefits pension plans | (19,464) | (7,448) | |
| Hedging reserves | (7,337) | (10,710) | |
| Currency translation differences | (7,505) | (6,915) | |
| Equity attributable to owners of the parent | 1,521,559 | 1,423,277 | |
| Non-controlling interests | 14,918 | 11,123 | |
| Equity | 1,536,477 | 1,434,400 | |
| Retirement benefit obligations and employee benefits | 23 | 51,215 | 41,054 |
| Provisions | 24 | 43,085 | 44,854 |
| Other non-current liabilities | 5,645 | 17,145 | |
| Bonds | 26 | 303,537 | 305,216 |
| Financial liabilities | 26 | 367,147 | 398,897 |
| Derivative instruments – Non-current liabilities | 27 | 18,475 | 33,359 |
| Deferred tax liabilities | 10 | 151,970 | 150,053 |
| Total non-current liabilities | 941,074 | 990,578 | |
| Current provisions | 24 | 65,113 | 64,820 |
| Trade & other operating payables | 20 | 1,138,288 | 1,184,886 |
| Income tax payable | 69,398 | 88,215 | |
| Current financial liabilities | 26 | 154,522 | 110,558 |
| Derivative instruments – Current liabilities | 27 | 23,515 | 35,146 |
| Liabilities held for sale | 6,004 | 0 | |
| Other current liabilities | 20 | 393,828 | 393,556 |
| Total current liabilities | 1,850,668 | 1,877,181 | |
| Total equity and liabilities | 4,328,219 | 4,302,159 |
| For the period ended 31 December (In thousand Euro) | Notes | 2016 | 2015 |
|---|---|---|---|
| Operating activities | |||
| Net income share of the group | 168,411 | 174,961 | |
| Depreciation and amortisation of intangible assets, property, plant & equipment | 232,775 | 255,312 | |
| Net provision expense | (3,941) | 20,938 | |
| Impairment on current and non-current assets | 9,460 | (233) | |
| Unrealized foreign exchange (gains)/losses | 10,546 | 8,531 | |
| Interest income & income from financial assets | (26,345) | (23,816) | |
| Interest expense | (42,668) | 39,470 | |
| Change in fair value of derivative instruments | (4,045) | (6,418) | |
| Income/(losses) from sales of property, plant & equipment | (2,874) | (18,405) | |
| Tax expense | 30,580 | 59,051 | |
| Income attributable to non-controlling interests | 3,841 | (937) | |
| Earnings from associates and joint ventures | 784 | (36,759) | |
| Cash flow from operating activities before changes in working capital | 376,524 | 471,695 | |
| Decrease/(increase) in trade receivables and other current and non-current receivables | 101,481 | (93,791) | |
| Decrease/(increase) in inventories | (19,113) | 16,286 | |
| Increase/(decrease) in trade payables and other current and non-current payables | (128,075) | 2,589 | |
| Cash flow from operating activities | 330,817 | 396,779 | |
| Interest paid | 11,431 | (39,470) | |
| Interest received | 8,046 | 8,104 | |
| Income tax paid/received | 34,092 | (30,432) | |
| Net cash flow from operating activities | 384,386 | 334,981 | |
| Investing activities | |||
| Sales of non-current assets | 7,138 | 31,670 | |
| Purchases of non-current assets | (188,873) | (276,527) | |
| Acquisition of subsidiaries net of cash acquired | 0 | 0 | |
| Variation of the investment percentage in associates | 36,456 | (556) | |
| Capital increase in investments in associates | 15 | (19,883) | (22,111) |
| Sale of subsidiaries | 0 | 20,543 | |
| New borrowings given to investments in associates | (49,342) | (11,898) | |
| Cash flow from investing activities | (214,504) | (258,879) | |
| Financing activities | |||
| Borrowings | 216,046 | (64,600) | |
| Reimbursements of borrowings | (203,758) | (172,798) | |
| Dividends paid | (60,755) | (50,626) | |
| Cash flow from financing activities | (48,467) | (288,024) | |
| Net Increase/(Decrease) in cash position | 121,415 | (211,921) | |
| Cash and cash equivalents at start of the year | 21 | 491,952 | 703,501 |
| Exchange rate effects | (1,212) | 372 | |
| Cash and cash equivalents at end of period | 21 | 612,155 | 491,952 |
Purchases and sales of subsidiaries net of cash acquired do not include entities that are not a business combination (segment Real Estate). They are not considered as investment operations and are directly reflected in cash flows from operating activities.
For the period ended 31 December 2016
| (in € thousands) | Share capital |
Share premium |
Retained earnings |
Defined benefits pension plans |
Hedging reserves |
Currency transla- tion dif- ferences |
Equity at tributable to owners of the parent |
Non con- trolling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| December 2015 | 41,330 | 800,008 | 607,012 | (7,448) | (10,710) | (6,915) | 1,423,277 | 11,123 1,434,400 | |
| Comprehensive income for the period |
168,411 | (12,016) | 3,373 | (590) | 159,178 | 3,716 | 162,894 | ||
| Dividends paid to shareholders |
(60,755) | (60,755) | (60,755) | ||||||
| Dividends from non controlling interests |
(794) | (794) | |||||||
| Change in consolidation scope and other movements |
(141) | (141) | 873 | 732 | |||||
| December 2016 | 41,330 | 800,008 | 714,527 | (19,464) | (7,337) | (7,505) | 1,521,559 | 14,918 | 1,536,477 |
Change in consolidation scope and other movements are presented among the main transactions described in the preamble.
| (in € thousands) | Share capital |
Share premium |
Retained earnings |
Defined benefits pension plans |
Hedging reserves |
Currency transla tion dif ferences |
Equity at tributable to owners of the parent |
Non con- trolling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| December 2014 | 41,330 | 800,008 | 488,890 | (8,350) | (6,127) | (2,124) | 1,313,627 | 7,238 | 1,320,865 |
| Comprehensive income for the period |
174,961 | 902 | (4,583) | (4,791) | 166,489 | (234) | 166,255 | ||
| Dividends paid to shareholders |
(50,626) | (50,626) | (50,626) | ||||||
| Dividends from non controlling interests |
(2,094) | (2,094) | |||||||
| Change in consolidation scope and other movements |
(6,213) | (6,213) | 6,213 | 0 | |||||
| December 2015 | 41,330 | 800,008 | 607,012 | (7,448) | (10,710) | (6,915) | 1,423,277 | 11,123 1,434,400 |
The share capital on 31 December 2016 was divided into 25,314,482 ordinary shares. These shares are without nominal value. The owners of ordinary shares have the right to receive dividends and have one vote per share in Shareholders' General Meetings.
On 23 February 2017, the board of directors proposed a dividend of € 54,426 thousand, corresponding to € 2.15 gross per share.
The final dividend is subject to shareholders approval in the Shareholders' General Meeting. The appropriation of income was not included in the financial statements at 31 December 2016.
The final dividend for the year ended 31 December 2015 was € 2.40 gross per share.
Notes to the consolidated financial statements for the year ended 31 december
| 56 | 1. | General policies |
|---|---|---|
| 58 | 2. | Significant accounting policies |
| 68 | 3. | Consolidation methods |
| 68 | Scope of consolidation | |
| 68 | Intragroup transactions | |
| 68 | Translation of the financial statements of foreign companies and establishments |
|
| 68 | Foreign currency transactions | |
| 69 | 4. | Segment reporting |
| 69 | Operating segments | |
| 70 | Consolidated statement of comprehensive income | |
| 72 | Revenue | |
| 72 | Breakdown of revenue in the contracting division | |
| 72 | Breakdown of revenue in the dredging division | |
| 72 | Order book | |
| 74 | Consolidated statement of financial position | |
| 75 | Consolidated statement of cash flows | |
| 75 | Other information | |
| 76 | Geographical information | |
| 77 | 5. | Acquisitions and disposals of subsidiaries |
| 77 | Acquisitions for the period ended 31 december 2016 | |
| 77 | Disposals for the period ended 31 december 2016 | |
| 77 | 6. | Revenue from auxiliary activities and other operating expenses |
| 78 | 7. | Remuneration and social security payments |
| 78 | 8. | Net financial income/expense |
| 78 | 9. | Non-controlling interests |
| 79 | 10. Income tax | |
| 79 | Recognized in comprehensive income | |
| 79 | Reconciliation of the effective tax rate | |
| 80 | Recognized deferred tax assets and liabilities | |
| 80 | Temporary differences or tax losses for which no deferred tax assets are recognized |
|
| 80 | Deferred tax income (expense) recognized in comprehensive income | |
| 80 | 11. Earnings per share | |
| 81 | 12. Intangible assets other than goodwill | |
| 82 | 13. Goodwill | |
| 84 | 14. Property, plant and equipment | |
| 86 | 15. Associates and joint arrangements | |
| 86 | Changes over the period | |
| 87 | Financial statements of associates and joint arrangements | |
| 88 | 16. Other non-current financial assets | |
| 89 | 17. | Other non-current assets |
| 89 | 18. Construction contracts | |
| 90 | 19. Inventories | |
| 90 | 20. Change in trade receivables and payables and other operatinvg receivables and payables |
|
| 91 | 21. Cash and cash equivalents | |
| 91 | 22. Grants | |
| 91 | 23. Employee benefits | |
| 96 | 24. Provisions other than those relating to retirement benefit obligations | |
| and non-current employee benefits | ||
| 96 | 25. Contingent assets and liabilities | |
| 97 | 26. Net financial debt | |
| 98 | 27. Financial risk management | |
| 106 | 28. Operating leases |
The Board of Directors authorized the publication of the CFE group's consolidated financial statements on 28 February 2017.
The consolidated financial statements should be read in conjunction with the Board of Directors' management report.
During the year 2016, DEME acquired:
Moreover, the companies Geka Bouw BV and CFE Nederland BV, which are 100% held by DEME Group have been merged and renamed "Dimco BV".
DEME Concessions Wind decreased its stake in the company C-Power Holdco from 19.67% to 10%. This company remains integrated under the equity method.
DEME sold its 5% stake in the company Coentunnel Company BV.
The companies Samamedi SPA, 100% held by DEME and the company Power at Sea Thornton NV, 51.10% held by DEME were dissolved.
The companies Kalis SA and Cetraval SA, 74.90% held by DEME have been merged with the company Ecoterres SA, also 74.90% held by DEME.
On June 29th, 2016 CFE Group, through its subsidiary CFE Contracting SA, increased its stake in Groep Terryn NV from 77.5% to 100%. Groep Terryn remains fully integrated.
On April 7th, 2016 CFE Group, through its subsidiary BPI SA, acquired a 100% stake in BPI Barska sp z.o.o. which is fully integrated.
On May 20th, 2016 CFE Group, through its subsidiary BPI SA, increased its stake in Foncière Sterpenich SA from 50% to 100%. This entity is now fully integrated.
On June 30th, 2016 the company Sogesmaint Luxemburg SA, 100% held by Sogesmaint SA was sold.
The companies C.I.W. SA and P.R.N.E. SA, 100% held by BPI Luxemburg SA were dissolved.
The company Immomax Sp z.o.o., a 47% subsidiary of BPI SA, bought 100% of the shares in Immomax II Sp z.o.o. where 47% were bought from CFE Polska Sp z.o.o. and 53% from a third party. Immomax II Sp z.o.o. remains integrated under the equity method.
End 2016, CFE Group, through its subsidiary BPI Luxemburg SA, increased its stake in Ronndriesch 123 SA from 50% to 100%. This entity will be sold in 2017; as a consequence, it is disclosed as "assets and liabilities held for sale" in the consolidated statement of financial position.
On June 29th, 2016 CFE SA sold its 25% stake in Locorail NV (project Liefkenshoek tunnel).
On July 13th, 2016 CFE Hungary Kft sold its 50% stake in CFE Betonplatform Kft.
On July 15th 2016, CFE SA increased its stake in Rent-A-Port Energy NV from 45.61% to 50%. Moreover, this company changed its name to Green Offshore NV.
On December 22nd, 2016 CFE SA sold its 18% stake in Coentunnel BV.
During the year 2015, DEME acquired:
During 2015, DEME sold all its shares, namely 50%, of the company Flidar NV.
Terramundo Ltd, a 37.45% subsidiary of DEME, has been dissolved in the second half of 2015.
In addition, DEME, through its subsidiary DIMCO, acquired, from CFE SA, a 100% stake in the company CFE Nederland BV. It should be noted that CFE Nederland BV owns 100% of GEKA Bouw BV. Those two companies which have now been consolidated in the dredging and environment segment remain fully consolidated.
On February 10th 2015, the company BPC Design & Engineering SA ("BDE") was created. This company is owned by CFE Bâtiment Brabant Wallonie – CFE BBW SA (99%) and CFE Bouw Vlaanderen NV (1%). CFE group has a 100% stake in both companies. BDE is fully consolidated.
On February 25th 2015, the sale of the road activity in Aannemingen Van Wellen NV was finalised and the stake (100%) is fully transferred to Aswebo, subsidiary of Group Willemen.
On March 2nd 2015, the subsidiary IFCC SA was renamed CFE Contracting SA. In 2016, this company became the leading company of the Contracting Division. In this perspective, stakes in entities operating in construction, multitechnics and rail have been transferred to CFE Contracting SA.
On March 25th 2015, the company "Société de Gestion de Chantiers" (SOGECH SA), a 100% subsidiary of CFE group, was dissolved.
On April 16th 2015, CFE Contracting SA, subsidiary of CFE group, acquired a 100% stake in the newly created company CFE Infra NV. This company is fully consolidated.
On June 30th 2015, CFE acquired a 50% stake of the non-controlling interests of the group Terryn at December 2014. The stake of CFE group increases therefore from 55.04% to 77.51%.
On November 30th 2015, CFE SA sold its entire stake, i.e. 100%, in CFE Nederland BV, to DIMCO, a subsidiary of DEME. It should be noted that CFE Nederland BV owns 100% of GEKA Bouw BV. Those two companies which have now been consolidated in the dredging and environment segment remain fully consolidated.
Given that BPI will become the leading company of the Real Estate Division, during the first semester of 2015, the stakes in the group real estate companies and the real estate assets owned by CFE Immo, branch of CFE SA were sold to BPI SA.
On March 31st 2015, through its subsidiaries BPI and Espace Midi, CFE group sold its stake in the company South City Hotel (20%). This company was integrated under the equity method.
On May 22nd 2015, BPI, subsidiary of CFE group, acquired a 31.2% stake in the company Goodways BVBA with a view to developing a real estate project in Anderlecht. This entity is integrated under the equity method.
On June 25th 2015, CLI, subsidiary of CFE group, acquired 33.3% of the newly created companies in Luxemburg M1 SA and M7 SA. These companies are integrated under the equity method.
On August 31st 2015, BPI, subsidiary of CFE group, sold a 50% stake of the company Pré de la Perche, decreasing its stake from 100% to 50%. This company is now integrated under the equity method.
On October 14th 2015, CFE Immo, sold its entire stake, i.e. 50%, of its subsidiary Immo PA 33 2.
On December 9th 2015, the company Investissement Léopold was dissolved.
Espace Midi, a 20% subsidiary of CFE Immo, was dissolved in the last quarter of 2015.
During the first six month of 2015, the stake of PPP Branch in Bizerte Cap 3000 SA was diluted from 25% to 20.01%.
The accounting principles used are the same as those used for the consolidated annual financial statements at December 31, 2015.
Amendments to IAS 1 Presentation of Financial Statements Disclosure Initiative (applicable for annual periods beginning on or after 1 January 2016)
Amendments to IAS 16 and IAS 38 Property, Plant and Equipment and Intangible Assets – Clarification of Acceptable Methods of Depreciation and Amortisation (applicable for annual periods beginning on or after 1 January 2016)
The application of these standards does not have a significant impact on the consolidated accounts of the group.
The group did not apply early the following standards and interpretations, application of which was not mandatory at 31 December 2016.
The potential impacts of these standards and interpretations on the consolidated accounts of the group are being determined. The Group does not expect these changes to have a significative impact on the Group's financial statements, with the exception of IFRS 15 and IFRS 16.
The IASB published a new standard IFRS 15 Revenue from contracts with customers. This standard will replace IAS 18 Revenue and IAS 11 Construction contracts. IFRS 15 defines how and when a company applying IFRS standards should recognise revenues from its activities. An additional explanatory disclosure will have to be provided.
As a consequence, the recognition of revenue from contracts with customers will be ruled by one standard based on a fivestep model. The rule will be applicable from January 1st, 2018. To determine the impact of the implementation of the standard, the ongoing contracts will be analysed to identify the performance obligations as defined by IFRS 15. Although the financial impact from the implementation of IFRS 15 cannot be estimated at this point in time, the group expects that revenue recognition can still be based on the principle of the percentage of completion. Timing of revenue recognition could however differ for a limited number of contracts.
IFRS 16 Leases was published in January 2016. This standard, not yet endorsed in EU, defines how a company applying IFRS will account, measure and disclose leases in financial statements. The standard requires from the lessee to account in the statement of financial position all assets and liabilities related to leases with a duration higher than 12 months, except for leased assets having a very low value.
The CFE Group's obligations relating to non-cancellable operating leases are disclosed in note 28. The application of IFRS 16 will lead to:
Compagnie d'Entreprises CFE SA (hereinafter referred to as the «Company » or «CFE») is a Belgian company incorporated and headquartered in Belgium. The consolidated financial statements for the year ended 31 December 2016 include the financial statements of the Company, its subsidiaries (the «CFE group») and interests in companies accounted for under the equity method.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) approved by the European Union.
The financial statements are stated in thousands of euros, rounded to the nearest thousand.
Equity instruments and equity derivatives are stated at cost where they do not have a quoted market price in an active market and where other methods of reasonably estimating fair value are clearly inappropriate and/or inapplicable.
Accounting policies are applied consistently.
The financial statements are presented before the appropriation of parent-company income proposed to the Shareholders' General Meeting.
The preparation of financial statements under IFRSs requires estimates to be used and assumptions to be made that affect the amounts shown in those financial statements, particularly as regards the following items:
These estimates assume the operation is a going concern and are made on the basis of the information available at the time. Estimates may be revised if the circumstances on which they were based alter or if new information becomes available. Actual results may be different from these estimates.
The consolidated financial statements include the financial statements of CFE Group and the financial statements of its subsidiaries and the entities on which it has control. CFE Group controls an entity when:
If CFE Group doesn't have the majority of voting rights in an entity, it is presumed to have enough rights to exert power over the entity if it has the ability to manage on its own the core
businesses of the entity. CFE Group takes into account all facts and circumstances when it assess if the voting rights held are enough to give the power to manage the entity, including the followings:
An entity is consolidated from the moment when the Group has control and is removed from the scope of consolidation when the group loses control over the entity. Revenues and expenses of a subsidiary acquired during the period are included in the consolidated income statement from the moment when the group obtained the control until the moment when the control is lost.
If necessary, adjustments are made to statutory accounts of subsidiaries in order to align their accounting methods to the ones used by the Group. All assets and liabilities, equity, revenues, expenses and cash flows related to transactions between groups companies are eliminated in the consolidated financial statements.
Changes in the group's interest in a subsidiary that do not result in a loss of control are recognized as equity transactions. The carrying amounts of the group's interests and non-controlling interests are adjusted to reflect changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Group grants an option to sell to the non-controlling interests of a subsidiary (i.e. where the non-controlling interests have a «put »), the related financial liability is deducted initially from non-controlling interests in equity.
Associated companies are those in which the CFE Group has significant influence. The significant influence is the power to take part in financial and operating policies of a company without having control or joint control over these policies.
A joint venture is an arrangement whereby the parties having joint control over the entity have rights to the entity's net assets. A joint control consist in sharing the control over an entity among different parties based on legal agreements and where all decisions related to core businesses require the agreement of all parties.
Assets, liabilities, revenues and expenses from joint-ventures and joint-operations are accounted for under the equity method in the consolidated financial statements unless the interest in the associate is, partly or fully, classified as held-for-sale. In that case, it is accounted for in accordance with IFRS 5. Under the equity method, an investment in a joint-venture or joint-arrangement is firstly recorded at cost in the consolidated financial statement and then adjusted to record the share of the group in the net result and in the comprehensive income of the associate. If the interest in the losses of an associate is higher than its investment,
CFE Group does not record its share in the future losses. Additional losses are recorded only if there is an obligation (legal or not) to give financial support to the entity.
Interests in joint ventures or joint arrangements are accounted for under the equity method from the date when the entity becomes a joint venture or joint arrangement. At the acquisition of the interest, any surplus between the cost of the investment and the share in the fair value of net assets of the entity is recorded as goodwill included in the carrying amount of the investment. Any surplus between the share of the group in the fair value of net assets and the cost of the investment after remeasurement is immediately recorded in the income statement during the period of acquisition of the investment.
A joint operation is a joint arrangement in which the parties (joint operators) have direct rights over the assets and direct obligations with respect to the entity's liabilities. A joint control consist in sharing the control on an entity among different parties based on legal agreements and where all decisions related to core businesses require the agreement of all parties to be taken. When a CFE Group entity starts activity in a joint operation, CFE recognizes in relation to its interest in the joint operation:
Transactions in currencies other than the euro are recognized at the exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate. Gains and losses resulting from the creation of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.
Non-monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate on the transaction date.
The assets and liabilities of CFE group companies whose functional currencies are other than the euro are translated into euros at the exchange rate on the balance sheet date. Income statements of foreign entities, excluding foreign entities in hyperinflationary economies, are translated into euros at an average exchange rate for the year (approximating the foreign exchange rates prevailing at the dates of the transactions).
Components of shareholders' equity are translated at historical rates.
Translation differences arising from this translation are recognized in the comprehensive income and these differences are recognized in the income statement in the year during which the entity is sold or liquidated.
| Currencies | 2016 closing rate |
2016 average rate |
2015 closing rate |
2015 average rate |
|---|---|---|---|---|
| Polish zloty | 4.4103 | 4.3634 | 4.265 | 4.184 |
| Hungarian forint | 309.83 | 311.4155 | 315.379 | 309.960 |
| US dollar | 1.0541 | 1.1067 | 1.087 | 1.110 |
| Singapore dollar | 1.5234 | 1.5276 | 1.535 | 1.526 |
| Qatari rial | 3.8402 | 4.0292 | 3.958 | 4.042 |
| Romanian leu | 4.5390 | 4.4904 | 4.524 | 4.441 |
| Tunisian dinar | 2.4260 | 2.3757 | 2.211 | 2.178 |
| CFA franc | 655.957 | 655.957 | 655.957 | 655.957 |
| Australian dollar | 1.4596 | 1.4882 | 1.490 | 1.478 |
| Nigerian naira | 321.7500 | 286.5937 | 216.39 | 219.56 |
| Moroccan Dirham | 10.6860 | 10.8542 | 10.797 | 10.813 |
| Turkish Lira | 3.7072 | 3.3443 | 3.175 | 3.020 |
Units of foreign currency per euro
Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognized in the income statement as an expense as incurred.
Expenditures on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, are capitalized if the product or process is technically and commercially feasible, the company has sufficient resources to complete development and the expenses can be reliably identified.
Capitalized expenditure includes all costs directly attributable to the asset necessary for its creation, production and preparation in view of its intended use. Other development expenditures are recognized as an expense as incurred.
Capitalized development expenditures are stated at cost less accumulated amortisation (see below) and impairment.
Other intangible assets acquired by the company are stated at cost less accumulated amortisation (see below) and impairment. Expenditure on internally generated goodwill and brands is recognized as an expense as incurred.
Subsequent expenditure on capitalized intangible assets is capitalized only when it enables the assets to generate future economic benefits over and above the performance level defined at the outset. All other expenditures are expensed as incurred.
Intangible assets are amortized using the straight-line method over their estimated useful lives at the following rates:
| • | Minimum | 5% | Operating concessions |
|---|---|---|---|
| • | 33.33% | Software applications |
Acquisitions of subsidiaries and companies are accounted for using the acquisition method. The consideration transferred in relation to a business combination is measured at fair value, and expenses related to the acquisition are generally taken to income when incurred.
When consideration transferred by the group in relation to a business combination includes contingent consideration, this contingent consideration is measured at its fair value on the acquisition date. Changes in the fair value of contingent consideration that relate to adjustments in the measurement period (see below) are recognized retrospectively; other changes in the fair value of the contingent consideration are recognized in the income statement.
In a business combination that takes place in stages, the group must remeasure the stake it previously held in the acquired company at fair value on the date of acquisition (i.e. the date on which the group obtained control) and recognize any gain or loss in net income.
On the date of acquisition, identifiable assets acquired and liabilities assumed are recognized at fair value on that date with the exception of:
If the initial recognition of a business combination is unfinished at the end of the financial reporting period during which the business combination occurs, the group must present provisional amounts relating to the items for which recognition is unfinished. These provisional amounts are adjusted during the measurement period (see below), or the additional assets or liabilities are recognized to take into account new information obtained about the facts and circumstances prevailing at the acquisition date and which, if they had been known, would have had an impact on the amounts recognized at that date.
Adjustments in the measurement period are a consequence of additional information about the facts and circumstances prevailing at the date of acquisition obtained during the "measurement period" (maximum of one year from the acquisition date).
Goodwill arising from a business combination is recognized as an asset on the date on which control was obtained (the acquisition date). Goodwill is measured as the excess of consideration transferred, non-controlling interests in the acquired company and the fair value of the stake already owned by the group in the acquired company (if any) over the net amount of identifiable assets acquired and liabilities assumed on the acquisition date.
Non-controlling interests are initially measured either at fair value, or at the non-controlling interests' share of the acquirer's recognized identifiable net assets. The basis of measurement is selected on a transaction-by-transaction basis.
Goodwill is not amortized, but is subject to impairment tests taking place annually or more frequently if there is an indication that the cash-generating unit to which it is allocated (generally a subsidiary) could have suffered a loss of value. Goodwill is expressed in the currency of the subsidiary to which it relates. If
the recoverable amount of the cash-generating unit is less than its carrying amount, the loss of value is first charged against any goodwill allocated to this unit, and then to any other assets of the unit in proportion to the carrying amount of each of the assets included in the unit. Goodwill is stated on the balance sheet at cost less impairment. Impairment of goodwill is not reversed in future periods. When a subsidiary is divested from the group, the resulting goodwill and other comprehensive income relating to the subsidiary are taken into account in determining the net gain or loss on disposal.
For companies accounted for under the equity method, the carrying amount of goodwill is included in the carrying amount of the investment in such companies.
If the net balance, at the acquisition date, of identifiable assets acquired and liabilities assumed is higher than the sum of the consideration transferred, non-controlling interests in the acquire and the fair value of the stake in the acquire previously owned by the group (if any), the surplus is recognized immediately in the income statement as a gain from a bargain purchase.
All property, plant and equipment are recorded in assets only when it is probable those future economic benefits will accrue to the entity and if its cost can be measured reliably. These criteria are applicable at initial recognition and in relation to subsequent expenditure.
All property, plant and equipment are recorded at historical cost less accumulated depreciation and impairment losses.
Historical cost includes the original purchase price, borrowing costs incurred during the construction period, and related direct costs (e.g. non recoverable taxes and transport costs). The cost of self-constructed assets includes the cost of materials, direct labour costs and an appropriate proportion of production overheads.
Subsequent expenditure is capitalized only when it increases the future economic benefits resulting from the item of property, plant and equipment. Repairs and maintenance costs that do not increase the future economic benefits of the asset to which they relate, are expensed as incurred.
Depreciation is calculated from the date the asset is available for use, according to the straight-line method and over the estimated economic useful life of the asset:
| trucks: | 3 years |
|---|---|
| other vehicles: | 3-5 years |
| other equipment: | 5 years |
| IT hardware: | 3 years |
| office equipment: | 5 years |
| office furniture: | 10 years |
| buildings: | 25-33 years |
| cutter dredgers and suction dredgers: |
18 years with residual value of 5% |
| floating dredgers and navigator boats: |
25 years with residual value of 5% |
| landing stages, boats, ferries and boosters: |
18 years without residual value |
| cranes: | 12 years with residual value of 5% |
| excavators: | 7 years without residual value |
| pipes: | 3 years without residual value |
| chains and site installations: | 5 years |
| various site equipment: | 5 years |
Land is not depreciated as it is deemed to have an indefinite life.
Borrowing costs directly linked to the acquisition, construction or production of an asset that requires a long time of preparation are included in the cost of the asset.
The acquisition cost is divided into two parts: a vessel component (92% of the acquisition cost), which is depreciated using the straight-line method and a depreciation rate that depends on the kind of vessel, and a maintenance component (8% of the purchase), which is depreciated over 4 years using the straightline method. For the "Jack-Up" vessels, it is estimated that the electrical rack and pinion jacking system as well as the crane are depreciated over a period of 10 years using the straight-line method.
When a vessel is acquired, spare parts are capitalized as a proportion of the purchase up to a maximum of 8% of the total vessel acquisition cost (100%), and are depreciated using the straight-line method over the remaining useful life from the date the asset is available for use.
Certain repairs are capitalized and depreciated using the straight-line method over 4 years from the time the vessel starts sailing again.
An investment property is a property held to generate rent, to achieve capital appreciation or both.
An investment property is different from an owner- or tenant-occupied property since it generates cash flows that are independent of the company's other assets.
Investment properties are measured on the balance sheet at cost, including borrowing costs incurred during the construction period, less depreciation and impairment.
Depreciation is calculated from the date the asset is available for use, according to the straight-line method and at a rate corresponding to the estimated economic useful life of the asset.
Land is not depreciated as it is deemed to have an indefinite life.
Where a lease transfers substantially all of the benefits and risks inherent in the ownership of an asset, it is regarded as a finance lease.
Assets held through finance leases are recognized at the lower of the present value of the minimum lease payments estimated at inception of the lease, or the fair value of the assets less accumulated depreciation and impairment losses.
Each lease payment is allocated between repayment of the debt and an interest charge, so as to achieve a constant rate of interest on the debt throughout the lease period. The corresponding obligations, net of finance charges, are recognized under financial debts. The interest element is expensed over the lease period.
Property, plant and equipment acquired under finance leases are depreciated over their useful lives or the term of the lease if the lease does not specify transfer of ownership at the end of the lease period.
Leases where the lessor retains all the benefits and risks inherent in owning the asset are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the term of the lease.
When an operating lease is terminated before the lease period has expired, any compensation paid to the lessor is recognized as an expense in the period in which termination takes place.
Each category of investment is recognized at its acquisition date.
This category includes available-for-sale shares in companies over which the CFE group has neither significant influence nor control. This is generally the case where the group owns fewer than 20% of the voting rights. Such investments are recognized at their fair value unless fair value cannot be reliably determined, in which case they are recognized at cost less impairment losses.
Investments in debt securities are classified as held-for-trading financial assets and are measured at their amortized cost, determined on basis of the "effective interest rate method". The effective interest rate method is used to calculate the amortized cost of a financial asset or liability and to allocate interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts over the future expected life of the financial instrument or, where appropriate, a shorter period, in order to obtain the net book value of the asset or financial liability. Gains or losses are recognized in the income statement. Impairment losses are taken to income.
Other investments held by the company are classified as being available-for-sale and are recognized at fair value. Gains or losses resulting from a change in the fair value of these financial assets are taken to others elements of the comprehensive income. Impairment losses are taken to income.
See section (L).
Derivative instruments are recognized at fair value through profit and loss unless there is documentation supporting hedge accounting (see section X).
Inventories are measured at the lower of weighted average cost and net realisable value.
The cost of finished products and work in progress comprises raw materials, other production materials, direct labour, other direct costs, borrowing costs incurred where the asset involves a long period of construction, and an allocation of fixed and variable production overheads based on the normal capacity of production facilities.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated completion costs and costs to sell.
Trade receivables are carried at cost less impairment losses. At the end of the accounting period, impairment losses are recognized on receivables where settlement is uncertain.
Where the profit or loss of a construction contract can be estimated reliably, contract revenue and expenses, including borrowing costs incurred where the contract exceeds the accounting period, are recognized in the income statement in proportion to the contract's percentage of completion at the closing date. The percentage of completion is calculated using the « cost to cost » method. An expected loss on the construction contract is immediately expensed.
Under the percentage of completion method, contract revenue is recognized as revenue in the income statement in the accounting periods in which the work is performed. Contract costs are recognized as an expense in the income statement in the accounting periods in which the work to which they relate is performed.
Costs incurred that relate to future activities on the contract are capitalized if it is probable that they will be recovered.
The CFE group has taken the option to present information related to construction contracts separately in the notes, but not on the balance sheet.
Cash and cash equivalents include cash and time deposits with an original maturity date of less than three months.
The carrying amounts of non-current assets - other than financial assets that fall within the scope of IAS 39, deferred tax assets and non-current assets held for sale - are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For intangible assets with an indefinite useful life and goodwill, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are taken to income.
The recoverable amount of receivables and held-to-maturity investments is the present value of future cash flows, discounted at the original effective interest rate applicable to these assets.
The recoverable amount of other assets is the greater of fair value less costs to sell and value in use. Value in use is the present value of estimated future cash flows.
In assessing value in use, estimated future cash flows are discounted using a pre-tax interest rate that reflects both current market interest rates and risks specific to the asset.
For assets that do not generate cash flows themselves, the recoverable amount is determined for the cash-generating units to which the assets belong.
An impairment loss in respect of receivables or held-to-maturity investments is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognized.
Impairment losses in respect of goodwill are never reversed. Impairment losses on other assets are only reversed if there has been a change in the estimates used to determine the recoverable amount.
An impairment loss can only be reversed to the extent that the asset's carrying amount, which has increased subsequent to the impairment, does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.
Purchases of own shares
When CFE shares are bought by the company or a CFE group company, the amount paid, including costs directly attributable to the purchase, is deducted from equity. Proceeds from selling shares are directly included in equity, with no impact on the income statement.
Provisions are recognized when the company has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
The amount recognized as provisions corresponds to the best estimate of the necessary expenditure to settle the current obligation at the balance sheet date. This estimate is obtained by using a pre-tax interest rate that reflects current market rates and the risks specific to the liability.
Provisions for restructuring are recognized when the company has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Provisions are not set aside for costs relating to the company's normal continuing activities.
Current provisions are provisions directly linked to each business line's own operating cycle, whatever the expected time of settlement of the obligation.
Provisions for after-sales service cover CFE group entities' commitments under statutory warranties relating to completed projects. They are estimated statistically on the basis of expenses incurred in previous years or individually on the basis of specifically identified problems. Provisions for after-sales services are recognized from the time that works begin.
A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
Provisions for disputes connected with operations mainly relate to disputes with customers, subcontractors, joint contractors or suppliers. Provisions for other current liabilities mainly comprise provisions for late delivery penalties and for other risks related to operations.
Non-current provisions correspond to provisions not directly linked to the operating cycle and whose maturity is generally greater than one year.
Post-employment benefits include pension plans and life insurance.
The company operates a number of defined-benefit and defined-contribution pension plans throughout the world.
In Belgium, some pension plan based on defined contribution plans are subject to a minimum guaranteed return by the employer and are therefore qualified as defined benefit plans.
The assets of these plans are generally held by separate institutions and are generally financed through contributions from the subsidiaries concerned and from employees. These contributions are determined on basis of recommendations from independent actuarial.
Post-employment benefits are either funded or non-funded.
Contributions to these pension plans are recognized as an expense in the income statement when incurred.
For these pension plans, costs are estimated separately for each plan using the projected unit credit method. The projected unit credit method considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately.
Under this method, the cost of providing pensions is charged to the income statement so as to spread the cost evenly over the remaining careers of employees covered by the plan, in accordance with the advice of actuaries who carry out a full assessment of these plans every year. The amounts charged to the income statement consist of current service cost, interest cost, the expected return on plan assets and past service cost.
The pension obligations recognized on the balance sheet are measured as the present value of the estimated future cash outflows, discounted at a rate corresponding to the yield on highquality corporate bonds with a maturity similar to that of the pension obligations, less any unrecognized past service costs and the fair value of plan assets.
Actuarial gains and losses are calculated separately for each defined-benefit plan. Actuarial gains and losses comprise the effects of differences between actuarial assumptions and actual figures, and the effects of changes in actuarial assumptions.
Actuarial gains and losses on assets or liabilities relating to post-employment benefits and resulting from experience adjustments and/or changes in actuarial assumptions are immediately taken to the others elements of the comprehensive income in the period in which they arise. These gains, losses and changes in the extent of recognized assets are presented in the statement of comprehensive income.
Interest expenses resulting from the accretion effect relating to pension obligations and similar liabilities, and financial income resulting from the expected return on plan assets, are recognized in the income statement under financial items.
The introduction of or changes to a new post-employment benefit plan or other long-term plans may increase the present value of the obligation with respect to defined-benefit plans for services rendered in previous periods, i.e. the past service cost. The past service cost related to post-employment benefit plans is recognized in income on a straight-line basis over the average period until the related benefits are received by employees. Benefits received after the adoption of or changes to a post-employment benefit plan, and past service costs relating to other long-term benefits, are immediately taken to income.
Actuarial calculations related to post-employment obligations and other long-term benefits are carried out by independent actuaries.
Bonuses granted to company employees and senior executives are based on targets relating to key financial indicators. The estimated amount of bonuses is recognized as an expense in the year to which they relate.
Interest-bearing borrowings are recognized at their initial amount less attributable transaction costs. Any difference between this net amount (after transaction costs) and repayment value is recognized in the income statement over the life of the loan, using the effective interest-rate method. See section J 2.1 for the definition of this method.
Derivative instruments are recognized at fair value through profit and loss unless there is documentation supporting hedge accounting (see section X).
Trade and other current payables are measured at nominal value.
Income tax for the period comprises current and deferred tax. Income tax is recognized on the income statement except to the extent that it relates to items recognized directly in equity or in others elements of the comprehensive income. In this case, deferred tax is also recognized in these items.
Current tax is the expected tax payable on the taxable income for the period and any adjustment to tax paid or payable in respect of previous years. It is calculated using tax rates in force at the balance sheet date.
Deferred tax is calculated using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Tax rates in force at the closing date are used to calculate deferred tax assets and liabilities.
Under this method, in the event of a business combination, the company is required to make a provision for deferred tax on the difference between the fair value of net assets acquired and their tax base.
The following temporary differences are not provided for: goodwill that is not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. A deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Revenue from a construction contract includes the initial amount of revenue defined in the contract and variations in the work specified by the contract, claims and performance bonuses to the extent that it is probable that these will generate revenue and that they can be reliably measured.
Contract revenue is measured at the fair value of the consideration received or receivable.
A variation may lead to an increase or a decrease in contract revenue.
A variation is an instruction by the customer for a change in the scope of the work to be performed under the contract. A variation is included in contract revenue when it is probable that the client will approve the variation and that amount of revenue resulting from this variation can be reliably measured.
Performance bonuses form part of contract revenue when the contract's percentage of completion is such that it is probable
that the specified performance level will be reached or exceeded and that the amount of the performance bonus can be reliably measured.
Contract revenue is recognized according to the percentage of completion of the contract activity at the closing date (calculated as the proportion of contract costs at the closing date and the estimated total contract costs).
An expected loss on a construction contract is immediately recognized.
In relation to the sale of goods and property, revenue is recognized when the material risks and rewards of ownership have been transferred to the buyer in substance, and no uncertainty remains regarding the recovery of the amounts due, associated costs or the possible return of goods.
Rental income and fees are recognized on a straight-line basis over the term of the lease.
Financial income comprises interest receivable on investments, dividends, royalties, foreign exchange gains and gains on hedging instruments that are recognized on the income statement.
Interest, royalties and dividends arising from the use of the company's resources by third parties are recognized when it is probable that the economic benefits associated with the transaction will flow to the company and the revenue can be measured reliably.
Interest income is recognized as it accrues (taking into account the passing of time and the effective return on the asset) unless collectability is in doubt. Royalty income is recognized on an accrual basis in accordance with the substance of the relevant agreement. Dividend income is recognized on the income statement on the date that the dividend is declared.
A government grant is recognized in the balance sheet initially as deferred income where there is reasonable assurance that it will be received and that the company will comply with the conditions attached to it. Grants that compensate the company for expenses incurred are systematically recognized as revenue on the income statement during the period in which the corresponding expenses are incurred.
Grants that compensate the company for the cost of an asset are systematically recognized on the income statement as revenue over the useful economic life of the asset. These grants are deducted from the value of the related asset.
Financial expenses comprise interest payable on borrowings, foreign exchange losses, and losses on hedging instruments that are recognized on the income statement.
All interest and other costs incurred in connection with borrowings, except those which were eligible to be capitalized, are taken to income as financial expenses. The interest expense component of finance lease payments is recognized in the income statement using the effective interest rate method.
Research, advertising and promotional costs are expensed in the year in which they are incurred. Development costs and IT systems development costs are expensed in the year in which they are incurred if they do not meet the criteria for capitalization.
The company uses derivative financial instruments primarily to reduce exposure to adverse fluctuations in interest rates, foreign exchange rates, commodity prices and other market risks. The company's policy prohibits the use of derivatives for speculation.
The company does not hold or issue derivative financial instruments for trading purposes. However, derivatives which do not qualify as hedging instruments as defined by IAS 39 are presented as instruments according IAS 39 held for trading.
Derivative financial instruments are recognized initially at cost. Subsequent to initial recognition, derivative financial instruments are measured at fair value. Recognition of any resulting unrealized gain or loss depends on the nature of the derivative and the effectiveness of the hedge.
The fair value of interest-rate swaps is the estimated amount that the company would receive or pay when exercising the swaps at the closing date, taking into account current interest rates and the solvency of the swap counterparty.
The fair value of a forward exchange contract is the quoted value at the closing date, and therefore the present value of the quoted forward price.
Where a derivative financial instrument hedges variations in cash flows relating to a recognized liability, a firm commitment or an expected transaction, the effective part of any gain or loss resulting from the derivative financial instrument is recognized directly in other elements of the comprehensive income and are presented in a separate reserve in equity.
When the firm commitment or the expected transaction results in the recognition of an asset or liability, the cumulative gain or loss is removed from the comprehensive income and is declared under a separate reserve in the equity.
Otherwise, the cumulative gain or loss is removed from equity and recognized in the income statement at the same time as the hedged transaction.
The ineffective part of any gain or loss on the financial instrument is taken to income. Gains or losses resulting from the time value of financial derivative instruments are recognized in the income statement.
When a hedging instrument or hedge relationship expires but the hedged transaction is still expected to occur, the cumulative unrealized gain or loss (at that point) remains in equity and is recognized in accordance with the above policy when the transaction occurs.
If the hedged transaction is expected not to occur, the cumulative unrealized gain or loss recognized in equity is immediately taken to income.
Where a derivative financial instrument hedges variations in the fair value of a recognized receivable or payable, any gain or loss resulting from the remeasurement of the hedging instrument is recognized in the income statement. The hedged item is also stated at the fair value attributable to the risk hedged, with any gain or loss being recognized in the income statement.
The fair value of hedged items, in respect of the risk hedged, is their carrying amount at the balance-sheet date translated into euro at the exchange rate at that date.
Where a foreign currency liability hedges a net investment in a foreign entity, translation differences arising on the translation of the liability into euro are recognized directly in "currency translation differences" under shareholders' equity.
Where a derivative financial instrument hedges a net investment in a foreign operation, the effective portion of the gain or the loss on the hedging instrument is recognized directly in "currency translation differences" under shareholders' equity, and the ineffective portion is taken to income.
If a derivative financial instrument hedges variations in cash flow relating to a recognized liability, a firm commitment or an expected transaction in the frame of a construction contract (mainly forward purchases of raw materials, or foreign exchange purchases or sales), a documentation of the cash flow hedge relationship as described in section (1) here above will not be prepared. Any gain or loss resulting from the derivative financial instrument is recognized in the income statement as a financial income or expense.
These instruments are however submitted to a test of efficiency based on the same methodology as utilized for hedge accounting.
The effective part of any gain or loss on the financial instrument is recognized as a cost of the construction contract (we refer to section (M) here above). This element is however not considered for determining the percentage of completion of the construction contract.
A segment is a distinguishable component of the CFE group that generates revenues and incurs expenses and whose operating income and losses are regularly reviewed by management in order to take decisions or determine its performance. The CFE group consists of four operating segments: Dredging and Environment, Contracting, Real Estate and Holding & non-transferred activities.
Stock options are measured at fair value on the grant date. This fair value is expensed using the straight-line method over the options' vesting period, based on an estimate of the number of options that will finally vest.
Companies in which the Group holds, whether directly or indirectly, the majority of voting rights enabling control to be exercised, are fully consolidated.
Companies over which the Group exercises joint control with another entity are consolidated under the equity method. This relates in particular to Rent-A-Port and some entities in the Real Estate division and the Dredging and environment division.
Companies over which the Group exercises significant influence are accounted for under the equity method. This mainly concerns PPP Schulen Eupen SA, Van Maerlant Property I SA & II SPRL, Van Maerlant Residential SA and C-Power NV within DEME.
| Number of entities | 2016 | 2015 |
|---|---|---|
| Full consolidation | 171 | 177 |
| Equity method | 122 | 108 |
| Total | 293 | 285 |
Reciprocal operations and transactions relating to assets and liabilities and income and expenses between companies that are consolidated or accounted for under the equity method are eliminated in the consolidated financial statements. This is done:
In most cases, the functional currency of companies and establishments is their local currency.
The financial statements of foreign companies of which the functional currency is different from that used in preparing the Group's consolidated financial statements are translated at the closing rate for balance-sheet items and at the average rate for the period for income-statement items. Any resulting translation differences are recognized under translation differences in consolidated reserves. Goodwill relating to foreign entities is considered as comprising part of the assets and liabilities acquired and is therefore translated at the exchange rate in force at the balance sheet date.
Transactions in foreign currency are translated into euros at the exchange rate on the transaction date. At the balance sheet date, financial assets and monetary liabilities denominated in foreign currencies are translated at the closing rate. Resulting exchange gains and losses are recognized under foreign exchange gains and losses and are shown under other financial income and other financial expense in the income statement.
Foreign exchange gains and losses arising on loans denominated in foreign currency or on foreign exchange derivatives used to hedge stakes in foreign subsidiaries are recorded in currency translation differences under equity.
Segment reporting is presented in respect of the group's operating segments. Segment profits, losses, assets and liabilities include items that can be attributed directly to a segment or allocated on a reasonable basis.
During the second semester 2015, the activities Multitechnics, Rail-infra and Building Belgium, Luxemburg, Poland and Tunisia were transferred under CFE Contracting SA, a 100% subsidiary of CFE SA and head of the segment. This internal reorganization goes with a change of scope within the segment Contracting as from January 1st, 2016. This segment only includes the activities performed by CFE Contracting SA and its subsidiaries.
CFE Group is made of four operating segments, which are:
The Dredging and Environment division – through DEME – operates in dredging (investment dredging and maintenance dredging), installation of off-shore wind turbines and sludge, the treatment of polluted earth and marine civil engineering.
Activities reported in the Contracting segment include:
The Real Estate segment develops real estate projects in Belgium, Luxemburg and Poland.
Besides the usual holding activities, this segment includes:
Consolidated statement of comprehensive income – comparison pro forma information at december 31, 2015
| (in € thousands) | Revenue | Income from operating activities | Operating income (EBIT) | Financial income | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2015 Pro forma (*) |
2016 | % Reve- nue |
2015 Pro forma(*) |
% Reve- nue |
2016 | % Reve- nue |
2015 Pro for- ma (*) |
% Reve- nue |
2016 | 2015 Pro forma (*) |
|
| Dredging and environment |
1,978,250 | 2,286,124 226,956 | 11.47% 266,096 11.64% 213,677 10.80% 305,692 | 13.37% (33,797) (48,494) | ||||||||
| Correction DEME | (5,276) | (6,546) | (6,253) | (7,523) | 7,029 | 11,019 | ||||||
| Contracting | 770,491 | 718,896 | 19,987 | 2.59% | 7,549 | 1.05% | 19,984 | 2.59% | 7,549 | 1.05% | (694) | (1,461) |
| Real Estate | 12,075 | 27,186 | (1,469) (12.17%) | 758 | 2.79% | 4,263 35.30% | 7,686 28.27% | (2,799) | (586) | |||
| Holding and non-transferred activities |
60,264 | 228,966 (12,770) | (38,936) | (5,027) | (47,724) | 6,307 | 6,933 | |||||
| Eliminations between segments |
(23,995) | (21,766) | 142 | (16) | 142 | (16) | ||||||
| Total consolidated |
2,797,085 3,239,406 227,570 | 8.14% 228,905 | 7.07% 226,786 | 8.11% 265,664 | 8.20% (23,954) (32,589) |
| (in € thousands) | Taxes | Net income of the group | Non-cash items | EBITDA | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2015 Pro forma (*) |
2016 | % Reve- nue |
2015 Pro forma (*) |
% Reve- nue |
2016 | 2015 Pro forma (*) |
2016 | % Reve- nue |
2015 Pro forma (*) |
% Reve- nue |
|
| Dredging and environment |
(20,416) (56,522) 155,334 | 7.85% | 199,196 | 8.71% 220,400 | 223,119 | 447,356 | 22.61% | 489,215 21.40% | ||||
| Correction DEME | (670) | (1,407) | 106 | 2,089 | 5,276 | 6,546 | ||||||
| Contracting | (9,228) | 124 | 10,351 | 1.34% | 9,732 | 1.35% | 12,758 | 27,644 | 32,745 | 4.25% | 35,193 | 4.90% |
| Real Estate | (18) | (132) | 1,446 | 11.98% | 6,967 25.63% | 2,034 | 1,142 | 565 | 4.68% | 1,900 | 6.99% | |
| Holding and non-transferred activities |
(201) | (1,111) | 1,079 | (43,004) | (2,175) | 17,569 | (14,945) | (21,367) | ||||
| Eliminations between segments |
(47) | (3) | 95 | (19) | 142 | (16) | ||||||
| Total consolidated |
(30,580) (59,051) | 168,411 | 6.02% | 174,961 5.40% | 238,293 276,020 | 465,863 16.66% 504,925 15.59% |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
Consolidated statement of comprehensive income – comparison published information and pro forma information at december 31, 2015
| (in € thousands) Revenue |
Income from operating activities | Operating income (EBIT) | Financial income | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 Pro forma (*) |
2015 | 2015 Pro forma (*) |
% Reve nue |
2015 | % Reve nue |
2015 Pro for ma (*) |
% Reve nue |
2015 | % Reve nue |
2015 Pro forma (*) |
2015 | |
| Dredging and environment |
2,286,124 | 2,286,124 | 266,096 11.64% 266,096 | 11.64% | 305,692 | 13.37% | 305,692 | 13.37% (48,494) | (48,494) | |||
| Correction DEME |
(6,546) | (6,546) | (7,523) | (7,523) | 11,019 | 11,019 | ||||||
| Contracting | 718,896 | 945,094 | 7,549 | 1.05% | (26,781) (2.83%) | 7,549 | 1.05% | (34,880) (3.69%) | (1,461) | (1,064) | ||
| Real Estate | 27,186 | 27,186 | 758 | 2.79% | 758 | 2.79% | 7,686 28.27% | 7,686 28.27% | (586) | (586) | ||
| PPP-Concessions | n.a | 1,350 | n.a | 2,015 | n.a | 1,326 | n.a | (191) | ||||
| Holding & non-transferred activities |
228,966 | n.a | (38,936) | n.a | (47,724) | n.a | 6,933 | n.a | ||||
| Holding | n.a | 0 | n.a | (6,621) | n.a | (6,621) | n.a | 6,727 | ||||
| Eliminations between segments |
(21,766) | (20,348) | (16) | (16) | (16) | (16) | ||||||
| Total consolidated |
3,239,406 3,239,406 | 228,905 | 7.07% 228,905 | 7.07% | 265,664 | 8.20% | 265,664 | 8.20% | (32,589) | (32,589) |
| (in € thousands) | Taxes | Net income of the group | Non-cash items | EBITDA | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 Pro forma (*) |
2015 | 2015 Pro forma (*) |
% Reve- nue |
2015 | % Revenue |
2015 Pro forma (*) |
2015 | 2015 Pro forma (*) |
% Reve- nue |
2015 | % Revenue |
|
| Dredging and environment |
(56,522) | (56,522) | 199,196 | 8.71% | 199,196 | 8.71% | 223,119 | 223,119 | 489,215 21.40% | 489,215 | 21.40% | |
| Correction DEME |
(1,407) | (1,407) | 2,089 | 2,089 | 6,546 | 6,546 | ||||||
| Contracting | 124 | (613) | 9,732 | 1.35% (34,138) | (3.61%) | 27,644 | 37,334 | 35,193 | 4.90% | 10,553 | 1.12% | |
| Real Estate | (132) | (132) | 6,967 25.63% | 6,967 | 25.63% | 1,142 | 1,142 | 1,900 | 6.99% | 1,900 | 6.99% | |
| PPP-Concessions | n.a | n.a | 1,135 | n.a | 841 | n.a | 2,856 | |||||
| Holding & non-transferred activities |
(1,111) | n.a | (43,004) | n.a | 17,569 | n.a (21,367) | n.a | |||||
| Holding | n.a | (374) | n.a | (269) | n.a | 7,038 | n.a | 417 | ||||
| Eliminations between segments |
(3) | (3) | (19) | (19) | (16) | (16) | ||||||
| Total | (59,051) | (59,051) | 174,961 | 5.40% 174,961 | 5.40% | 276,020 276,020 504,925 15.59% | 504,925 | 15.59% |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
consolidated
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Belgium | 949,078 | 978,527 |
| Other Europe | 1,007,547 | 910,863 |
| Middle East | 66,482 | 98,657 |
| Asia | 310,932 | 283,382 |
| Asia-Pacific | 24,506 | 108,289 |
| Africa | 272,287 | 773,537 |
| Americas | 166,253 | 86,151 |
| Consolidated total | 2,797,085 | 3,239,406 |
The breakdown of revenue by country is based on the countries in which services are provided.
In 2016, no customer accounted for more than 10% of group revenue.
Revenue from the sale of goods amounted to 9,130 thousand euros in 2016 (2015: € 10,491 thousand). These sales were generated by the Voltis and Terryn Timber Products subsidiaries.
Breakdown of revenue in the contracting division(*)
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Construction | 548,456 | 516,857 |
| Multitechnics | 159,249 | 140,537 |
| Rail | 62,786 | 61,502 |
| Contracting | 770,491 | 718,896 |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
The CFE group's Contracting revenue includes revenue generated through the Real Estate division.
The elimination of the revenue common to the Contracting division and Real Estate division, is done at inter-segment eliminations level.
Since the construction and selling activities of the Real Estate division do not take place simultaneously, internally generated revenue is accounted for as assets under construction and derecognized at the time of sale.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Capital Dredging | 668,249 | 1,130,133 |
| Civil works | 61,099 | 5,604 |
| Environmental contracting | 199,639 | 206,592 |
| Fallpipe and landfalls | 146,658 | 215,835 |
| Maintenance dredging | 235,021 | 261,774 |
| Marine works | 667,528 | 531,083 |
| Elimination of revenue from equity accounted entities |
56 | (64,897) |
| Total | 1,978,250 | 2,286,124 |
| (in € millions) | 2016 | 2015 | % of change |
|---|---|---|---|
| Contracting | 850.5 | 836.3 | +1.7% |
| Construction | 648.7 | 671.2 | (3.3%) |
| Rail | 58.4 | 49.2 | +18.7% |
| Multitechnics | 143.4 | 115.9 | +23.7% |
| Real Estate | 5.0 | 6.7 | n.s. |
| Dredging and Environment |
3,800.0 | 3,185.0 | +19.3% |
| Holding and non-transferred activities |
101.2 | 132.3 | (23.5%) |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
| 31 December 2016 (in € thousands) |
Dredging and Envi- ronment |
Contract- ing | Real Estate | Holding & non-trans- ferred activities |
Eliminations between divisions |
Consoli dated total |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 155,960 | 19,209 | 0 | 0 | 0 | 175,169 |
| Property, plant and equipment | 1,648,984 | 33,409 | 224 | 687 | 0 | 1,683,304 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | (20,000) | 0 |
| Other non-current financial assets | 98,860 | 160 | 32,913 | 22,043 | 0 | 153,976 |
| Other non-current assets | 318,519 | 4,586 | 44,424 | 1,266,368 | (1,246,129) | 387,768 |
| Inventories | 25,261 | 15,855 | 53,645 | 1,676 | (1,601) | 94,836 |
| Cash and cash equivalents | 527,733 | 43,481 | 5,574 | 35,367 | 0 | 612,155 |
| Internal cash position - cash pooling - assets | 0 | 61,005 | 0 | 60,714 | (121,719) | 0 |
| Other current assets | 790,584 | 253,355 | 54,552 | 154,630 | (32,110) | 1,221,011 |
| Total assets | 3,565,901 | 431,060 | 191,332 | 1,561,485 | (1,421,559) | 4,328,219 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,470,050 | 66,869 | 42,745 | 1,204,291 | (1,247,478) | 1,536,477 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | (20,000) | 0 |
| Bonds | 203,578 | 0 | 0 | 99,959 | 0 | 303,537 |
| Non-current financial liabilities | 327,193 | 9,916 | 38 | 30,000 | 0 | 367,147 |
| Other non-current liabilities | 214,909 | 12,472 | 14,792 | 28,467 | (250) | 270,390 |
| Current financial liabilities | 151,947 | 2,575 | 0 | 0 | 0 | 154,522 |
| Internal cash position - cash pooling - liabilities |
0 | 0 | 73,185 | 48,582 | (121,767) | 0 |
| Other current liabilities | 1,198,224 | 339,228 | 40,572 | 150,186 | (32,064) | 1,696,146 |
| Total equity and liabilities | 3,565,901 | 431,060 | 191,332 | 1,561,485 | (1,421,559) | 4,328,219 |
| 31 December 2015 - Pro forma (*) (in € thousands) |
Dredging and Envi- ronment |
Contract- ing | Real Estate | Holding & non-trans- ferred activities |
Eliminations between divisions |
Consoli dated total |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 155,959 | 19,210 | 53 | 0 | 0 | 175,222 |
| Property, plant and equipment | 1,693,799 | 31,573 | 207 | 2,100 | 0 | 1,727,679 |
| Non-current loans to consolidated group companies |
0 | 875 | 0 | 40,000 | (40,875) | 0 |
| Other non-current financial assets | 58,058 | 176 | 43,986 | 27,281 | 0 | 129,501 |
| Other non-current assets | 299,100 | 7,284 | 52,430 | 1,260,637 | (1,246,182) | 373,269 |
| Inventories | 11,259 | 23,268 | 44,965 | 55 | (1,601) | 77,946 |
| Cash and cash equivalents | 378,405 | 37,116 | 4,473 | 71,958 | 0 | 491,952 |
| Internal cash position - cash pooling - assets | 0 | 49,798 | 0 | 49,751 | (99,549) | 0 |
| Other current assets | 837,265 | 290,309 | 16,580 | 236,663 | (54,227) | 1,326,590 |
| Total assets | 3,433,845 | 459,609 | 162,694 | 1,688,445 | (1,442,434) | 4,302,159 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,381,998 | 58,899 | 21,769 | 1,219,422 | (1,247,688) | 1,434,400 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 40,875 | 0 | (40,875) | 0 |
| Bonds | 205,257 | 0 | 0 | 99,959 | 0 | 305,216 |
| Non-current financial liabilities | 339,249 | 9,653 | (5) | 50,000 | 0 | 398,897 |
| Other non-current liabilities | 225,416 | 9,073 | 18,179 | 33,797 | 0 | 286,465 |
| Current financial liabilities | 108,901 | 1,644 | 4,732 | 13 | (4,732) | 110,558 |
| Internal cash position - cash pooling - liabilities |
0 | 777 | 48,974 | 45,113 | (94,864) | 0 |
| Other current liabilities | 1,173,024 | 379,563 | 28,170 | 240,141 | (54,275) | 1,766,623 |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
| Dredging and Envi- ronment |
Contract- ing | Real Estate | Holding, non trans- ferred activities and elimi- nations |
Consoli dated total |
|
|---|---|---|---|---|---|
| Cash flow from operating activities before change in working | 357,777 | 35,414 | 670 | (17,337) | 376,524 |
| 403,757 | 559 | 21,839 | (41,769) | 384,386 | |
| (224,867) | (8,612) | 1,294 | 17,681 | (214,504) | |
| (28,939) | 15,162 | (21,957) | (12,733) | (48,467) | |
| 149,951 | 7,109 | 1,176 | (36,821) | 121,415 | |
| Dredging and Envi ronment |
Contract ing |
Real Estate | PPP Conces sions |
Holding and elimi nations |
Consoli dated total |
| Cash flow from operating activities before change in working capital |
461,325 | 6,634 | 2,029 | 2,204 | (497) | 471,695 |
|---|---|---|---|---|---|---|
| Net cash flow from (used in) operating activities | 335,196 | 7,075 | 3,828 | (3,493) | (7,625) | 334,981 |
| Cash flow from (used in) investing activities | (265,213) | (8,802) | (1,398) | (6,348) | 22,882 | (258,879) |
| Cash flow from (used in) financing activities | (271,497) | (9,812) | (2,408) | 9,169 | (13,476) | (288,024) |
| Net increase/(decrease) in cash position | (201,514) | (11,539) | 22 | (672) | 1,781 | (211,921) |
Cash flows from financing activities include cash pooling loans from other segments. A positive amount means a use of pooled cash. This item is also influenced by external financing, mainly in the Real Estate division, the holding company and the Dredging and Environment division. The Dredging and Environment division is not part of the CFE cash pooling arrangement.
| 31 December 2016 (in € thousands) |
Dredging and Environ- ment |
Contracting | Real Estate | Holding & non-trans- ferred activ- ities |
Consolidated total |
|---|---|---|---|---|---|
| Amortisation | (225,589) | (7,429) | (125) | 489 | (232,654) |
| Investments | 180,326 | 9,306 | 354 | 100 | 190,086 |
| Depreciation | (121) | 0 | 0 | 0 | (121) |
| 31 December 2015 (*) | Dredging | Contracting | Real Estate | Holding & | Consolidated |
| (in € thousands) | and Environ ment |
non-trans ferred activ ities |
total | ||
| Amortisation | (225,269) | (18,742) | (54) | (7,503) | (251,568) |
| Investments | 263,132 | 11,780 | 253 | 1,362 | 276,527 |
| Depreciation | (1,281) | (2,463) | 0 | 0 | (3,744) |
(*) Amounts adjusted in accordance with the internal organisation as of January 1st, 2016 as described here above.
The investments include the acquisitions performed as part of the group's investing activities and the acquisitions performed as part of the operating activities of the Real Estate division. The acquisitions through business combinations are not included in these amounts.
The operations of the CFE group in the Contracting and Real Estate divisions are mainly based in Belgium, Luxemburg and Poland.
Property, plant and equipment in the Contracting and Real Estate divisions are mainly based in Belgium.
Most of DEME's activities are performed by its fleet of vessels, which are owned by various companies, but their legal location does not reflect the economic reality of the business carried out by this fleet for the same companies. As a result, details of property, plant and equipment by company are not presented, since it is not possible to give a presentation that reflects the geographical areas where the activity was performed.
On June 29, 2016 CFE Group, through its subsidiary CFE Contracting SA, increased its stake in Groep Terryn NV from 77.5% to 100%. Groep Terryn NV remains fully integrated.
On July 15 2016, CFE SA increased its stake in Rent-A-Port Energy NV from 45.61% to 50% which remains integrated under the equity method. Moreover, this company changed its name to Green Offshore NV.
On June 29, 2016 CFE SA sold its 25% stake in Locorail NV.
On December 22, 2016 CFE SA sold its 18% stake in Coentunnel BV.
The other acquisitions concluded during the period are related to DEME and are described in the preamble.
Acquisitions and disposals of subsidiaries in the Real Estate division are not business combinations. Therefore the consideration paid is allocated to the land and buildings in stock. The main acquisitions and sales which occur in the real estate division are described here above in the preamble.
Revenue from auxiliary activities totalled € 85,794 thousand (2015: € 109,005 thousand) and included € 3,697 thousand of capital gains on non-current assets (2015: € 19,603 thousand), as well as rental income, compensation and income from the onward invoicing of various expenses totalling € 82,097 thousand (2015: € 89,402 thousand). Revenue from auxiliary activities decreases by 21% relative to 2015.
The revenue from auxiliary activities substantial decrease is mainly due to the decrease of capital gains on disposal of assets in the dredging and environment segment.
Other operating expenses are made of the following elements:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Miscellaneous goods and services | (371,981) | (453,267) |
| Impairment of assets | ||
| - Inventories | (2,222) | 78 |
| - Trade and other receivables | (1,835) | (4,124) |
| Net additions to provisions (excluding provisions for retirement benefit obligations) | (5,117) | (22,179) |
| Other operating expenses | (3,494) | (3,089) |
| Consolidated total | (384,649) | (482,581) |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Remuneration | (386,510) | (401,340) |
| Mandatory social security contributions | (108,929) | (113,109) |
| Other wage costs | (25,590) | (26,572) |
| Service cost related to defined-benefit pension plans | (12,171) | (6,022) |
| Consolidated total | (533,200) | (547,043) |
The average full-time equivalent number of staff in 2016 was 7,681 (2015: 7,917). Full-time equivalent headcount was 8,160 at 1 January 2016 (2015: 8,206) and 7,752 at 31 December 2016 (2015: 8,160).
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Cost of financial debt | (31,521) | (31,720) |
| Derivative instruments - fair value adjustments through profit and loss | 288 | 305 |
| Derivative instruments used as hedging instruments | 0 | 0 |
| Assets measured at fair value | 0 | 0 |
| Available-for-sale financial instruments | 0 | 0 |
| Assets and liabilities at amortized cost - interest income | 8,245 | 7,750 |
| Assets and liabilities at amortized cost - interest expense | (40,054) | (39,775) |
| Other financial income and expense | 7,567 | (869) |
| Realized / unrealized translation gains/(losses) | (4,868) | (7,794) |
| Dividends received from non-consolidated companies | 3,213 | 3,972 |
| Impairment of financial assets | 0 | 0 |
| Defined benefit plan financial cost | (343) | (868) |
| Other | 9,565 | 3,821 |
| Net financial income/expense | (23,954) | (32,589) |
The change in realized (unrealized) translation gains/(losses) compared to 2015 is mainly explained by variations in the euro rate compared with functional currencies of DEME subsidiaries. The other financial income are mainly related to the capital gains from the sale of stakes held in Design, Build, Finance and Maintenance projects (DBFM) Coentunnel and Liefkenshoektunnel.
In 2016, non-controlling interests in income amounted to (€ 3,841) thousand (2015: € 937 thousand) and related mainly to the group Terryn (€ 289 thousand) and dredging segment ((€ 4,130) thousand).
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Current tax | ||
| Tax expense for the period | 44,842 | 34,899 |
| Additions to/(releases from) provisions in previous periods | 397 | 52 |
| Total current tax expense | 45,239 | 34,951 |
| Deferred tax | ||
| Additions to and releases from temporary differences | (18,363) | (4,158) |
| Use of losses from previous periods | 232 | 27,915 |
| Deferred tax recognized on losses for the period | 3,472 | 343 |
| Deferred tax recognized on definitively taxed revenue | 0 | 0 |
| Total deferred tax expense/(income) | (14,659) | 24,100 |
| Tax income/expense recognized in others elements of the comprehensive income | 7,653 | 2,882 |
| Total tax expense recognized in comprehensive income | 38,233 | 61,933 |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Pre-tax income for the period | 202,832 | 233,075 |
| amount related to earnings from associates and joint venture | (784) | 36,759 |
| Pre-tax income, excluding associates and joint venture | 203,616 | 196,316 |
| Income tax at 33.99% | 69,209 | 66,728 |
| Tax effect of non-deductible expenses | 5,453 | 7,283 |
| Tax effect of non-recurring elements | 0 | 3,116 |
| Non-deductible expenses | 5,453 | 4,167 |
| Tax effect of non-taxable revenue | (3,199) | (47) |
| Tax credits and impact of notional interest | (23,099) | (9,220) |
| Other taxable revenue | 0 | 0 |
| Effect of different tax rates applicable to subsidiaries operating in other jurisdictions | (27,244) | (3,986) |
| Tax impact of using previously unrecognized losses | (356) | (11,616) |
| Tax impact of adjustments to current and deferred tax relating to previous periods | 3,091 | 1,343 |
| Tax impact of deferred tax assets on unrecognized losses for the period | 6,725 | 8,566 |
| Tax expense | 30,580 | 59,051 |
| Effective tax rate for the period | 15.02% | 30.08% |
The tax expense amounts to € 30,580 thousand in 2016, compared with € 59,051 thousand in 2015. The effective tax rate amounts to 15.02% in 2016 compared with 30.08% in 2015.
Recognized deferred tax assets and liabilities
| Assets | Liabilities | |||
|---|---|---|---|---|
| (in € thousands) | 2016 | 2015 | 2016 | 2015 |
| Property, plant and equipment and intangible assets | 12,287 | 11,257 | (121,715) | (125,800) |
| Employee benefits | 15,662 | 11,146 | 0 | 0 |
| Provisions | 87 | 312 | (37,666) | (35,170) |
| Fair value of derivative instruments | 5,978 | 4,690 | 0 | (88) |
| Other items | 59,885 | 46,906 | (44,801) | (40,621) |
| Tax losses | 167,311 | 155,933 | 0 | 0 |
| Gross deferred tax assets/(liabilities) | 261,210 | 230,244 | (204,182) | (201,679) |
| Unrecognized deferred tax assets | (82,054) | (75,273) | 0 | 0 |
| Tax netting | (52,212) | (51,626) | 52,212 | 51,626 |
| Net deferred tax assets/(liabilities) | 126,944 | 103,345 | (151,970) | (150,053) |
Tax loss carry forwards and other temporary differences for which no deferred tax assets are recognized amount to a € 246,114 thousand. As tax losses are mainly recognized by Belgian companies, those do not have an expiration date.
The "tax netting" item reflects the netting of deferred tax assets and liabilities per entity.
Temporary differences or tax losses for which no deferred tax assets are recognized
Deferred tax assets are not recognized where it is not probable that a future taxable profit will be sufficient to allow the subsidiaries to recover their tax losses.
Deferred tax income (expense) recognized in comprehensive income
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Deferred tax on the effective portion of changes in the fair value of cash flow hedges | 1,143 | 1,783 |
| Deferred tax on the revaluation of the defined benefit plans | 6,510 | 1,099 |
| Total | 7,653 | 2,882 |
Basic earnings per share are the same as diluted earnings per share due to the absence of any potential dilution in terms of ordinary shares in issue. Earnings per share is calculated as follows:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Net income attributable to shareholders | 168,411 | 174,961 |
| Comprehensive income attributable to owners of the parent | 159,178 | 166,489 |
| Number of ordinary shares at the balance sheet date | 25,314,482 | 25,314,482 |
| Weighted average number of ordinary shares | 25,314,482 | 25,314,482 |
| Earnings per share, based on the number of ordinary shares at the end of the period: | ||
|---|---|---|
| Basic (diluted) earnings per share (€) | 6.65 | 6.91 |
| Comprehensive income attributable to owners of the parent per share (€) | 6.29 | 6.58 |
| (in € thousands) | Concessions, patents and licences |
Development costs | Total |
|---|---|---|---|
| Acquisition costs | |||
| Balance at the end of the previous period | 131,863 | 2,060 | 133,923 |
| Effects of changes in foreign exchange rates | 153 | 19 | 172 |
| Acquisitions through business combinations | 0 | 0 | 0 |
| Acquisitions | 2,068 | 1,268 | 3,336 |
| Disposals | (1,671) | 0 | (1,671) |
| Scope exit | (6,169) | 0 | (6,169) |
| Transfers between asset items | 4 | 0 | 4 |
| Balance at the end of the period | 126,248 | 3,347 | 129,595 |
| Amortisation and impairment | |||
| Balance at the end of the previous period | (33,983) | (2,054) | (36,037) |
| Effects of changes in foreign exchange rates | (187) | (2) | (189) |
| Amortisation during the period | (4,640) | (1,286) | (5,926) |
| Acquisitions through business combinations | 0 | 0 | 0 |
| Disposals | 1,639 | 0 | 1,639 |
| Transfers between asset items | 190 | 0 | 190 |
| Scope exit | 6,169 | 0 | 6,169 |
| Balance at the end of the period | (30,812) | (3,342) | (34,154) |
| Net carrying amount | |||
| At 1 January 2016 | 97,880 | 6 | 97,886 |
| At 31 December 2016 | 95,436 | 5 | 95,441 |
Total acquired intangible assets amount to € 3,336 thousand and consist mainly of software licences and concession rights. Amortisation of intangible assets is recognized in under "amortisation" in the statement of comprehensive income and amounts to € 5,926 thousand.
Intangible assets meeting the definition in IAS 38 (Intangible Assets) are only recognized to the extent that future economic benefits are probable.
| (in € thousands) | Concessions, patents and licences |
Development costs | Total |
|---|---|---|---|
| Acquisition costs | |||
| Balance at the end of the previous period | 118,543 | 2,039 | 120,582 |
| Effects of changes in foreign exchange rates | 605 | 19 | 624 |
| Acquisitions through business combinations | 12,098 | 0 | 12,098 |
| Acquisitions | 841 | 2 | 843 |
| Disposals | (266) | 0 | (266) |
| Scope exit | (9) | 0 | (9) |
| Transfers between asset items | 51 | 0 | 51 |
| Balance at the end of the period | 131,863 | 2,060 | 133,923 |
| Amortisation and impairment | |||
| Balance at the end of the previous period | (21,824) | (267) | (22,091) |
| Effects of changes in foreign exchange rates | (611) | 0 | (611) |
| Amortisation during the period | (8,084) | (1,787) | (9,871) |
| Acquisitions through business combinations | (3,584) | 0 | (3,584) |
| Disposals | 161 | 0 | 161 |
| Transfers between asset items | (41) | 0 | (41) |
| Balance at the end of the period | (33,983) | (2,054) | (36,037) |
| Net carrying amount | |||
| At 1 January 2015 | 96,719 | 1,772 | 98,491 |
| At 31 December 2015 | 97,880 | 6 | 97,886 |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Acquisition costs | ||
| Balance at the end of the previous period | 395,977 | 394,721 |
| Acquisitions through business combinations | 0 | 1,256 |
| Disposals | 0 | 0 |
| Other changes | (53) | 0 |
| Balance at the end of the period | 395,924 | 395,977 |
| Impairment | ||
| Balance at the end of the previous period | (220,755) | (217,639) |
| Impairment during the period | 0 | (3,116) |
| Balance at the end of the period | (220,755) | (220,755) |
| Net carrying amount at 31 December | 175,169 | 175,222 |
In accordance with IAS 36 (Impairment of Assets), goodwills were tested for impairment at 31 December 2016.
| Business Net value of (in € thousands) goodwill |
Parameters of the model applied to cash flow projections |
Impairment losses rec ognized in |
|||||
|---|---|---|---|---|---|---|---|
| 2016 | 2015 | Growth rate |
Growth rate (terminal value) |
Discount rate |
Sensitivity rate |
the period | |
| - | |||||||
| 11,115 | 11,115 | 0% | 0% | 7.2% | 5% | 11,115 | - |
| 2,995 | 2,995 | 0% | 0% | 7.2% | 5% | 2,995 | - |
| 2,682 | 2,682 | 0% | 0% | 7.2% | 5% | 2,682 | - |
| 1,507 | 1,507 | 0% | 0% | 7.2% | 5% | 3,360 | - |
| 911 | 911 | 0% | 0% | 7.2% | 5% | 911 | - |
| 0 | 53 | 0% | 0% | 7.2% | 5% | 0 | - |
| 175,169 | 175,222 | 391,765 | - | ||||
| 155,959 | 155,959 | 0% | 0% | 8.0% | 5% | Gross value of goodwill 370,702 |
Cash-flows figures used in the impairment tests were taken from the 2017 budget presented to the Board of Directors. For the sake of caution, zero growth was assumed for future years and in determining terminal value.
A sensitivity analysis was carried out by varying cash flow and WACC figures by 5%. Since the value of entities is still higher than their carrying amount including goodwill, there was no indication of impairment.
The DEME group is considered as a cash generating unit and no impairment loss is identified in relation to DEME. The DEME group also carries out its own impairment tests.
| 2016 (in € thousands) |
Land and buildings |
Fixtures and equip ment |
Furniture, fittings and vehi cles |
Other property, plant and equipment |
Under con struction |
Total |
|---|---|---|---|---|---|---|
| Acquisition costs | ||||||
| Balance at the end of the previous period | 113,239 | 3,070,912 | 58,355 | 0 | 90,422 | 3,332,928 |
| Effects of changes in foreign exchange rates | (429) | 2,032 | (533) | 0 | 101 | 1,171 |
| Acquisitions | 6,625 | 108,484 | 4,884 | 0 | 66,756 | 186,749 |
| Transfers between asset items | 14,996 | 14,173 | 939 | 0 | (28,151) | 1,957 |
| Disposals | (3,661) | (104,849) | (2,935) | 0 | (13) | (111,458) |
| Change in consolidation scope | 0 | (68,281) | (437) | 0 | 0 | (68,718) |
| Balance at the end of the period | 130,770 | 3,022,471 | 60,273 | 0 | 129,115 | 3,342,629 |
| Depreciation and impairment | ||||||
| Balance at the end of the previous period | (54,244) | (1,503,845) | (47,160) | 0 | 0 | (1,605,249) |
| Effects of changes in foreign exchange rates | 349 | (2,737) | 372 | 0 | 0 | (2,016) |
| Depreciation | (3,795) | (218,270) | (4,785) | 0 | 0 | (226,850) |
| Transfers between asset items | (3,087) | 2,036 | (932) | 0 | 0 | (1,983) |
| Disposals | 2,562 | 102,657 | 2,837 | 0 | 0 | 108,056 |
| Change in consolidation scope | 0 | 68,280 | 437 | 0 | 0 | 68,717 |
| Balance at the end of the period | (58,215) | (1,551,879) | (49,231) | 0 | 0 | (1,659,325) |
| Net carrying amount | ||||||
| At 1 January 2016 | 58,995 | 1,567,067 | 11,195 | 0 | 90,422 | 1,727,679 |
| At 31 December 2016 | 72,555 | 1,470,592 | 11,042 | 0 | 129,115 | 1,683,304 |
At 31 December 2016, acquisitions of property, plant and equipment totalled € 186,749 thousand and mainly related to DEME. Investments decreased by € 88,935 thousand in 2016 in comparison with 2015.
The net carrying amount of finance lease assets amounts to € 121,664 thousand (2015: € 123,542 thousand). These finance leases mainly relate to the group DEME, the buildings of the subsidiaries Engema and Louis Stevens & Co NV, the trucks of the subsidiary Benelmat and the equipments of Compagnie Tunisienne d'Entreprise.
Depreciation on property, plant and equipment totalled € 226,850 thousand (2015: € 245,437 thousand).
The net carrying amount of property, plant and equipment used as collateral for certain loans totalled € 152,112 thousand (2015: € 313,244 thousand).
In 2015, DEME had started building six new vessels for a total amount of € 500 million. Furthermore, DEME confirmed in 2017 an order for two additional vessels, Spartacus and Orion, with an overall budget of about € 500 million.
| 2015 (in € thousands) |
Land and buildings |
Fixtures and equipment |
Furniture, fittings and vehicles |
Other property, plant and equipment |
Under construc- tion |
Total |
|---|---|---|---|---|---|---|
| Acquisition costs | ||||||
| Balance at the end of the previous period | 123,862 | 2,802,541 | 57,561 | 0 | 2,274 | 2,986,238 |
| Effects of changes in foreign exchange rates | 39 | 6,819 | (11) | 0 | (107) | 6,740 |
| Acquisitions through business combinations | (128) | 260,043 | (84) | 0 | 0 | 259,831 |
| Acquisitions | 3,687 | 177,943 | 7,012 | 0 | 87,042 | 275,684 |
| Transfers between asset items | (4,181) | (13) | (147) | 0 | 1,359 | (2,982) |
| Disposals | (10,040) | (176,421) | (5,976) | 0 | (146) | (192,583) |
| Balance at the end of the period | 113,239 | 3,070,912 | 58,355 | 0 | 90,422 | 3,332,928 |
| Depreciation and impairment | ||||||
| Balance at the end of the previous period | (50,613) | (1,385,290) | (47,060) | 0 | 0 | (1,482,963) |
| Effects of changes in foreign exchange rates | (188) | (5,775) | (16) | 0 | 0 | (5,979) |
| Acquisitions as part of business combinations |
0 | (53,908) | 29 | 0 | 0 | (53,879) |
| Depreciation | (12,474) | (227,647) | (5,316) | 0 | 0 | (245,437) |
| Transfers between asset items | 2,965 | 119 | 167 | 0 | 0 | 3,251 |
| Disposals | 6,066 | 168,656 | 5,036 | 0 | 0 | 179,758 |
| Balance at the end of the period | (54,244) | (1,503,845) | (47,160) | 0 | 0 | (1,605,249) |
| Net carrying amount | ||||||
| At 1 January 2015 | 73,249 | 1,417,251 | 10,501 | 0 | 2,274 | 1,503,275 |
| At 31 December 2015 | 58,995 | 1,567,067 | 11,195 | 0 | 90,422 | 1,727,679 |
Details of interests in companies accounted for under the equity method are set out below:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Balance at the end of the previous period | 151,377 | 159,290 |
| Acquisitions through business combinations | 0 | 0 |
| Acquisitions and transfers | 9,350 | (25,556) |
| CFE group share in net result of associates | (784) | 36,759 |
| Capital increase / (decrease) | 18,252 | 22,111 |
| Dividends | (15,221) | (1,699) |
| Change in consolidation scope | (20,120) | (34,184) |
| Other changes | (1,499) | (5,344) |
| Balance at the end of the period | 141,355 | 151,377 |
| Including goodwill in companies accounted for under the equity method | 30,058 | 32,058 |
All the entities over which the CFE group has significant influence are accounted for under the equity method. The CFE group does not have an interest in any associates whose shares are traded on a public market.
The scope changes mainly relate to the decrease of the stake held by DEME Concessions Wind BV in the company C-Power Holdco NV from 19.67% to 10%, and by the presentation of Ronndriesch's assets and liabilities as held for sale (real estate project in Luxemburg).
The list of the most significant associates and joint arrangements is set out in note 35, based on their percentage of interests in the CFE group, the segment in which they operate and the geographical area of their head office.
The condensed financial statements by segment presented below, are based on the IFRS financial statements of the associates and joint arrangements, or, if there is none, on their statutory accounts. Intercompany operations are not eliminated. The reconciliation between the statutory statements and the contribution to the consolidated accounts is presented after the financial indicators.
| December 2016 (in € thousands) |
Dredging and Environment |
Real Estate | Holding and non-transferred activities |
Total | ||||
|---|---|---|---|---|---|---|---|---|
| 100% | % Share | 100% | % Share | 100% | % Share | 100% | % share | |
| Income Statement | ||||||||
| Revenue | 641,813 | 260,774 | 78,405 | 38,836 | 8,942 | 2,779 | 729,160 | 302,389 |
| Net income share of the group | (30,470) | (13,278) | 1,848 | 2,089 | 5,029 | 2,164 | (23,593) | (9,025) |
| Financial Position | ||||||||
| Non-current assets | 1,988,992 | 260,814 | 40,445 | 11,193 | 193,915 | 58,406 | 2,223,352 | 330,413 |
| Current assets | 442,209 | 143,594 | 385,106 | 154,572 | 47,045 | 15,081 | 874,360 | 313,247 |
| Net equity | 420,230 | 54,025 | 22,046 | 13,520 | 23,463 | 14,160 | 465,739 | 81,705 |
| Non-current liabilities | 1,256,387 | 163,416 | 195,811 | 72,845 | 131,455 | 26,887 | 1,583,653 | 263,148 |
| Current liabilities | 754,584 | 186,967 | 207,694 | 79,400 | 86,042 | 32,440 | 1,048,320 | 298,807 |
| Net financial debt | 1,129,671 | 114,008 | (194,450) | (69,944) | (134,258) | (36,026) | 800,963 | 8,038 |
In the Dredging and Environment division, non-current assets mainly consist on 31 December 2016 of assets from the entities C-Power NV (€ 967,182 thousands at 100%) and Merkur offshore GMBH (€ 462,237 thousands at 100%). Contribution of those entities to the condensed net financial debt is respectively (€ 771,122 thousands at 100%) and (€ 160,623 thousands at 100%). Contribution of those entities to 2016 condensed net income is respectively (€ 8,788 thousands at 100%) and (€ 11,142 thousands at 100%).
Concerning the non-transferred activities, the net financial debt is related to the concession projects Eupen's schools (-€ 71,770 thousands at 100%) and to the companies Rent-A-Port and Green Offshore (-€ 35,044 thousands at 100%).
In the Real Estate division, non-current and current assets mainly consist of assets from the entities M1 SA (€ 46,618 thousands at 100%), PEF Kons Investment SA (€ 87,903 thousands at 100%), Immomax Sp z.o.o. (€ 20,066 thousands at 100%), La Réserve Promotions NV (€ 20,675 thousands at 100%), Victor Estate SA (€ 20,260 thousands at 100%), Erasmus Gardens (€ 32,944 thousands at 100%) and Rederij Ishtar BVBA (€ 22,772 thousands at 100%).
| December 2015 (in € thousands) |
Dredging and Environment |
Real Estate and contracting |
Holding and non-transferred activities |
Total | ||||
|---|---|---|---|---|---|---|---|---|
| 100% | % Share | 100% | % Share | 100% | % Share | 100% | % share | |
| Income Statement | ||||||||
| Revenue | 1,001,273 | 403,291 | 98,048 | 45,633 | 37,566 | 10,986 | 1,136,887 | 459,910 |
| Net income share of the group | 165,588 | 64,213 | 20,540 | 9,577 | 3,444 | 634 | 189,572 | 74,424 |
| Financial Position | ||||||||
| Non-current assets | 1,614,173 | 300,130 | 68,784 | 21,253 | 1,390,843 | 318,171 | 3,073,800 | 639,554 |
| Current assets | 603,617 | 237,714 | 362,215 | 151,245 | 86,590 | 25,464 | 1,052,422 | 414,423 |
| Net equity | 466,260 | 115,302 | 49,239 | 24,373 | (214,198) | (44,262) | 301,301 | 95,413 |
| Non-current liabilities | 1,151,720 | 177,700 | 178,268 | 69,892 | 1,582,941 | 354,438 | 2,912,929 | 602,030 |
| Current liabilities | 599,810 | 244,842 | 203,492 | 78,233 | 108,690 | 33,459 | 911,992 | 356,534 |
| Net financial debt | (1,096,507) | (160,848) | (58,279) | (13,873) (1,208,680) (270,086) (2,363,466) | (444,807) |
The reconciliation between the CFE Group's share in the statutory net assets of those entities and the carrying amount of the associates and joint arrangements is as follows:
| On 31 December 2016 (in € thousands, CFE's % share) |
Dredging and Environment |
Real Estate | Holding and non transferred activities |
Total |
|---|---|---|---|---|
| Net assets of the associates and joint arrangements before reconciling items |
54,025 | 13,520 | 14,160 | 81,705 |
| Reconciliation items | 31,799 | 27,302 | 10,258 | 69,359 |
| Negative associates and joint arrangements | (8,834) | 2,932 | (3,807) | (9,709) |
| CFE group's carrying amount of the investment | 76,990 | 43,754 | 20,611 | 141,355 |
| On 31 December 2015 (in € thousands, CFE's % share) |
Dredging and Environment |
Real Estate and contracting |
Holding and non transferred activities |
Total |
|---|---|---|---|---|
| Net assets of the associates and joint arrangements before reconciling items |
115,302 | 24,373 | (44,262) | 95,413 |
| Reconciliation items | 931 | 29,383 | 55,838 | 86,152 |
| Negative associates and joint arrangements | (33,981) | (484) | 4,277 | (30,188) |
| CFE group's carrying amount of the investment | 82,252 | 53,272 | 15,853 | 151,377 |
In the Dredging and Environment, Real Estate and Contracting divisions, reconciling items are mainly due to the recognition of the income in accordance with the Group accounting policies and the intercompany eliminations.
Negative associates and joint arrangements are entities integrated under equity method for which CFE group considers having an obligation to support the commitments and projects of those entities.
Other non-current financial assets amount to € 153,976 thousand at 31 December 2016 (2015: € 129,501 thousand). They mainly include the Group's subordinated loans granted to entities (€ 147,929 thousand).
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Balance at the end of the previous period | 129,501 | 109,341 |
| Acquisitions through business combinations | 0 | 0 |
| Acquisitions | 79,460 | 66,469 |
| Disposals and transfers | (55,783) | (46,178) |
| Impairment / reversals of impairment | 0 | (12) |
| Change in consolidation scope | (150) | 0 |
| Change in consolidation method | 0 | 0 |
| Effects of changes in foreign exchange rates | 948 | (119) |
| Balance at the end of the period | 153,976 | 129,501 |
At 31 December 2016 other non-current assets amounts to € 23,518 thousand and includes the non-current receivables detailed below:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Non-current receivables - DEME current accounts | 22,506 | 18,148 |
| Other non-current receivables (including bank guarantees) | 1,012 | 1,132 |
| Consolidated total | 23,518 | 19,280 |
Costs incurred added to profits less losses, along with progress billing, are determined on a contract-by-contract basis. The net amount due by or to customers is determined on a contract-by-contract basis as the difference between these two items.
As described in paragraphs (M) and (V) of the section relating to material accounting policies, the costs and revenues of construction contracts are recognized in expenses and revenue respectively based on the percentage of completion of the contract activity at the closing date. The percentage of completion is calculated based on the "cost to cost" method. An expected loss on a construction contract is recognized as an expense immediately.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Balance sheet data | ||
| Advances and payments on account received | (122,170) | (64,342) |
| Construction contracts in progress – assets | 353,236 | 259,060 |
| Construction contracts in progress – liabilities | (84,776) | (63,507) |
| Construction contracts in progress – net | 268,460 | 195,553 |
| Total income and expenses to date recognized on contracts in progress | ||
| Costs incurred plus profits recognized less losses recognized to date | 5,320,903 | 5,903,938 |
| Less invoices issued | (5,052,443) | (5,708,385) |
| Construction contracts in progress – net | 268,460 | 195,553 |
The excess of costs incurred over recognized losses and profits on progress billing include on the one hand, the portion of unbilled contract costs under "Trade receivables and other operating receivables" in the statement of financial position, and on the other hand, the surplus relating to construction work in progress is included in "other current assets".
The excess of progress billing over incurred costs and recognized profits and losses include on the one hand, the unbilled portion of contract costs under "Trade payables and other operating liabilities" in the statement of financial position, and on the other hand, the surplus relating to construction work in progress included in "other current liabilities".
Advances are amounts received by the contractor before the related work is performed.
The amount of customer retention payments is € 4,216 thousand, and is included in "Trade and other operating receivables".
At 31 December 2016, inventories amounted to € 94,836 thousand (2015: € 77,946 thousand) and broke down as follows:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Raw materials and auxiliary products | 57,038 | 31,543 |
| Impairment on inventories of raw materials and auxiliary products | (141) | (91) |
| Finished products and properties held for sale | 40,655 | 47,873 |
| Impairment on inventories of finished products | (2,716) | (1,379) |
| Inventories | 94,836 | 77,946 |
The change in "raw materials and auxiliary products" resulted mainly from an increase in inventories relating to the dredging and real estate activities.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Trade receivables | 958,235 | 968,093 |
| Less: provision for impairment of receivables | (27,034) | (23,144) |
| Net trade receivables | 931,201 | 944,949 |
| Other current receivables | 229,105 | 248,028 |
| Consolidated total | 1,160,306 | 1,192,977 |
| Other current assets | 38,430 | 125,029 |
| Trade and other operating payables | 1,138,288 | 1,184,886 |
| Other current liabilities | 393,828 | 393,556 |
| Consolidated total | 1,532,116 | 1,578,442 |
| Commercial and operating liabilities net of receivables | (333,380) | (260,436) |
We refer to note 27.7 for an analysis of credit risk. Trade receivables related to entities included in note 18 Construction contracts amount to € 906,348 thousand (2015: € 929,639 thousand).
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Short-term bank deposits | 10,409 | 13,863 |
| Cash in hand and at bank | 601,746 | 478,089 |
| Cash and cash equivalents | 612,155 | 491,952 |
Short-term bank deposits consist of money placed with financial institutions with an original maturity of less than three months. These deposits pay interest at a floating rate, usually linked to Euribor or Eonia.
The CFE group did not receive any grants in 2016.
The CFE group contributes to pension and early retirement plans in several of the countries in which it operates. These benefits are recognized in accordance with IAS 19 and are regarded as "post-employment" and "long-term benefit plans".
At 31 December 2016, the CFE group's net liability relating to obligations under pension and early-retirement post-employment benefits amounted to € 51,215 thousand (2015: € 41,054 thousand). These amounts are included in "Retirement benefit obligations and employee benefits". This item also includes provisions for other employee benefits for € 1,663 thousand (2015: € 1,336 thousand), mainly relating to the DEME group.
Post-employment benefit plans are classified either as defined-contribution or defined-benefit plans.
Defined-contribution pension plans are those under which the company makes certain contributions to an entity or separate fund in accordance with the plan arrangements. Where contributions have been made, the company has no additional obligation.
All plans that are not defined-benefit plans are presumed to be defined-benefit plans. These plans are either funded externally through pension funds or insurance companies ("funded plans") or funded within the CFE group ("unfunded plans"). For the main plans, an actuarial valuation is carried out every year by independent actuaries.
Post-employment benefit plans in which the CFE group takes part confer benefits to staff on retirement and death. All plans are funded externally through an insurance company (98.7% of obligations) or a self-administered pension fund (1.3% of obligations) unrelated to the CFE group. Obligations under defined-benefit plans break down geographically as follows: 78% in Belgium and 22% in the Netherlands.
Insured Belgian post-employment benefit plans are "Class 21" type plans, which means that the insurer guarantees a minimum return on contributions paid.
All plans comply with local regulations and minimum funding requirements.
Most of the CFE group's post-employment benefit plans are defined-benefit.
A number of staff members are covered by a "Class 21" type insurance-funded defined-contribution plan. Belgian law requires the employer to guarantee for defined-contribution plans a minimum return of 3.25% on employer contributions and a minimum return of 3.75% on employee contributions until year-end 2015, and a minimum return of 1.75% on contributions made after that date. As a result from the modification of this law at year-end 2015, these pension plans have been accounted for as defined benefit plans.
Construction workers are covered by the defined-contribution pension plan funded by the "fbz-fse Constructiv" multi-employer pension fund. This pension plan is also subjected to the Belgian law requiring a minimum return as mentioned here above.
Defined-benefit plans generally expose the employer to actuarial risks such as changes in interest rates, wages and inflation. The potential impact of these risks is illustrated by a sensitivity analysis, details of which are set out below.
The risk arising from benefits being spread over time is limited, since most plans involve a lump-sum payment. However, there is an option to pay annuities. If this option is used, the payment of annuities is handled through an insurance policy that converts the lump sum into an annuity. The risk of death in service is entirely covered through insurance. The risk of insurance companies becoming insolvent can be regarded as negligible.
The administration and governance of insured plans are handled by the insurance company. CFE ensures that insurance companies comply with all retirement laws.
Plan assets invested with an insurance are not subject to market fluctuations. The fair value of the insurance policies is either the present value of guaranteed future benefits (Netherlands) or the capitalized value of contributions paid, taking into account the return contractually agreed with the insurance company (Belgium).
Plan assets do not include the CFE group's own financial instruments or any building used by the CFE group.
Several defined-benefit pension plans in Belgium and in the Netherlands have been closed during 2016. This led to a curtailment effect with, as consequence, a decrease in the accrued rights and a release of provisions for defined benefit plan obligations. This generated the recognition of a profit of € 8,779 thousands in the income statement.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Provisions taken for defined-benefit and early retirement plan obligations | (49,552) | (39,718) |
| Accrued rights, partly or fully funded | (240,281) | (162,794) |
| Fair value of plan assets | 190,729 | 123,076 |
| Provisions taken for obligations on the balance sheet | (49,552) | (39,718) |
| Bonds | (49,552) | (39,718) |
| Assets | 0 | 0 |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| At 1 January | (39,718) | (40,240) |
| Charges recognized in income | (4,201) | (6,778) |
| Charges recognized in the other elements of the comprehensive income | (18,890) | (320) |
| Contributions to plan assets | 13,257 | 7,034 |
| Effect of business combinations | 0 | 0 |
| Other movements | 0 | 586 |
| At 31 December | (49,552) | (39,718) |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Charges recognized in income | (4,201) | (6,778) |
| Service cost | (12,171) | (6,022) |
| Discounting effects | (3,808) | (3,542) |
| Return on plan assets (-) | 2,999 | 2,674 |
| Unrecognized past service cost | 8,779 | 112 |
The cost of pension plans in the period is included under "Remuneration and social security payments" and under net financial items.
In 2016, the caption 'Unrecognized past service cost' includes the impact of the curtailment effect which is a consequence from the closing of several defined-benefits plans in Belgium and the Netherlands.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Charges recognized in the other elements of the comprehensive income | (18,890) | (320) |
| Actuarial gains and losses | (42,796) | (4,488) |
| Return on plan assets (excluding amounts recognized in income) | 23,906 | 4,168 |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| At 1 January | (206,189) | (157,786) |
| Service cost | (12,171) | (6,022) |
| Discounting effects | (3,808) | (3,542) |
| Contributions to plan assets | (1,095) | (1,033) |
| Benefits paid to beneficiaries | 13,173 | 7,317 |
| Remeasurement of liabilities (assets) | (42,861) | (4,600) |
| Actuarial gains and losses resulting from changes to demographic assumptions | (14,161) | 0 |
| Actuarial gains and losses resulting from changes to financial assumptions | (27,133) | (4,846) |
| Actuarial gains and losses resulting from experience adjustments | (1,567) | 246 |
| Unrecognized past service cost | 11,156 | (24) |
| Effect of business combinations | 0 | 0 |
| Effect of business disposals | 0 | 1,805 |
| Effect of exchange-rate changes | 0 | 0 |
| Reclassification of Belgian retirement plans subjected to a minimum return | 0 | (43,396) |
| Other movements | 1,514 | 1,091 |
| At 31 December | (240,281) | (206,189) |
According to the change in the Belgian law at year end 2015, the defined contribution plans financed by insurance companies under 'Class 21' were accounted as of December 31, 2015 as defined-benefits plans. This induced an increase of 'Service cost' in 2016.
The caption 'Actuarial gains and losses resulting from changes to demographic assumptions' shows in 2016 the consequences of the increase in life's expectancies and the increase of the average age of retirement.
The caption 'Actuarial gains and losses resulting from changes to financial assumptions' shows in 2016 the consequences of the decrease in the discount rate and the increase of the expected growth rate of salary increase.
The "effect of business disposals" item reflects in 2015 the impact on provisioned obligations of the disposal of Aannemingen Van Wellen NV on February 25th 2015.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| At 1 January | 166,471 | 117,546 |
| Return on plan assets (excluding amounts recognized in income) | 23,906 | 4,168 |
| Return on plan assets | 2,999 | 2,674 |
| Contributions to plan assets | 13,722 | 7,300 |
| Benefits paid to beneficiaries | (13,011) | (6,991) |
| Effect of business combinations | 0 | 0 |
| Effect of business disposals | 0 | (1,220) |
| Effect of exchange-rate changes | 0 | 0 |
| Reclassification of Belgian retirement plans subjected to a minimum return | 0 | 43,396 |
| Other movements | (3,358) | (401) |
| At 31 December | 190,729 | 166,471 |
The caption 'Return on plan assets (excluding amounts recognized in income)' increases in 2016 as a consequence of the decrease in the actualization rate.
The caption "effect of business disposals" item reflects in 2015 the impact on provisioned obligations of the disposal of Aannemingen Van Wellen NV on February 25th 2015.
Main actuarial assumptions at the end of the period (expressed as weighted averages)
| 2016 | 2015 | |
|---|---|---|
| Discount rate at 31 December | 1.30% | 2.10% |
| Expected rate of salary increases | 2.97% | 2.80% < 60 years and 1.80% > 60 years |
| Inflation rate | 1.80% | 1.80% |
| Mortality tables | MR/FR | MR/FR |
| 2016 | 2015 | |
|---|---|---|
| Duration (in years) | 15.24 | 13.54 |
| Average real return on plan assets | 16.3% | 5.8% |
| Contributions expected to be made to the plan in the next financial year | 12,492 | 6,999 |
| 2016 | 2015 | |
|---|---|---|
| Discount rate | ||
| 25bp increase | -3.7% | -3.7% |
| 25bp decrease | +3.9% | +3.4% |
| Growth rate | ||
| 25bp increase | +2.2% | +2.0% |
| 25bp decrease | -1.9% | -2.2% |
At 31 December 2016, these provisions amounted to € 108,198 thousand, a decrease of € 1,476 thousand relative to end 2015 (€ 109,674 thousand).
| (in € thousands) | After-sales service |
Other current liabilities |
Provisions for equity method |
Other non-cur- rent liabilities |
Total |
|---|---|---|---|---|---|
| Balance at the end of the previous period | 14,012 | 50,808 | 30,258 | 14,596 | 109,674 |
| Effects of changes in exchange rates | (62) | (128) | 0 | 0 | (190) |
| Transfers between items | 18 | (2,428) | (5,814) | 1,820 | (6,404) |
| Additions to provisions | 3,108 | 24,458 | 0 | 12,835 | 40,401 |
| Used provisions | (1,612) | (22,229) | 0 | (3,036) | (26,877) |
| Provisions reversed unused | 0 | (832) | 0 | (7,574) | (8,406) |
| Balance at the end of the period | 15,464 | 49,649 | 24,444 | 18,641 | 108,198 |
| of which current: |
65,113 | ||||
| non-current: | 43,085 |
Provisions for after-sales service increased by € 1,452 thousand to € 15,464 thousand at year end 2016. The change in 2016 was the result of additions to and/or reversals of provisions recognized in relation to 10-year warranties.
Provisions for other current liabilities decreased by € 1,159 thousand to € 49,649 thousand at year end 2016.
These provisions include:
When the CFE Group's share of losses exceeds its interest in an associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate. The amount of those commitments is accounted for in the non-current provisions, as the Group considers having the obligation to support those entities and their projects.
Provisions for other non-current liabilities include provisions for liabilities not directly related to site operations in progress.
Based on available information at the date on which the financial statements were approved by the Board of Directors, we are not aware of any contingent assets or liabilities, with the exception of contingent assets or liabilities related to construction contracts (for example, the group's claims against customers or claims by subcontractors) that can be described as normal in the construction sector and which are treated by applying the percentage-of-completion method during the recognition of revenue.
26.1. Net financial debt, as defined by the group, breaks down as follows:
| (in € thousands) | 31/12/2016 | 31/12/2015 | |||||
|---|---|---|---|---|---|---|---|
| Non current |
Current | Total | Non current |
Current | Total | ||
| Bank loans and other financial debt | (286,181) | (102,529) | (388,710) | (253,749) | (95,406) | (349,155) | |
| Bonds | (303,537) | 0 | (303,537) | (305,216) | (305,216) | ||
| Drawings on credit facilities | (30,000) | 0 | (30,000) | (50,000) | (50,000) | ||
| Borrowings under finance leases | (50,966) | (48,108) | (99,074) | (95,148) | (15,136) | (110,284) | |
| Total long-term financial debt | (670,684) | (150,637) | (821,321) | (704,113) | (110,542) | (814,655) | |
| Short-term financial debt | (3,885) | (3,885) | (16) | (16) | |||
| Cash equivalents | 10,409 | 10,409 | 13,863 | 13,863 | |||
| Cash | 601,746 | 601,746 | 478,089 | 478,089 | |||
| Net short-term financial debt/(cash) | 608,270 | 608,270 | 491,936 | 491,936 | |||
| Total net financial debt | (670,684) | 457,633 | (213,051) | (704,113) | 381,394 | (322,719) | |
| Derivative instruments used as interest-rate hedges | (8,539) | (4,917) | (13,456) | (8,517) | (7,611) | (16,128) |
| (in € thousands) | Less than 1 year |
Between 1 and 2 years |
Between 2 and 3 years |
Between 3 and 5 years |
Between 5 and 10 years |
More than 10 years |
Total 31/12/2016 |
|---|---|---|---|---|---|---|---|
| Bank loans and other financial debt | (102,529) | (75,197) | (61,350) | (90,340) | (59,294) | 0 | (388,710) |
| Bonds | (1,752) | (101,711) | (199,853) | (221) | 0 | 0 | (303,537) |
| Drawings on credit facilities | 0 | (30,000) | 0 | 0 | 0 | 0 | (30,000) |
| Borrowings under finance leases | (48,108) | (7,617) | (7,722) | (13,852) | (18,823) | (2,952) | (99,074) |
| Total long-term financial debt | (152,389) | (214,525) | (268,925) | (104,413) | (78,117) | (2,952) | (821,321) |
| Short-term financial debt | (3,885) | 0 | 0 | 0 | 0 | 0 | (3,885) |
| Cash equivalents | 10,409 | 0 | 0 | 0 | 0 | 0 | 10,409 |
| Cash | 601,746 | 0 | 0 | 0 | 0 | 0 | 601,746 |
| Net short-term financial debt | 608,270 | 0 | 0 | 0 | 0 | 0 | 608,270 |
| Change in net financial debt | 455,881 | (214,525) | (268,925) | (104,413) | (78,117) | (2,952) | (213,051) |
The present value of finance lease obligations amounted to € 48,108 thousand (2015: € 15,137 thousand). These finance leases mainly relate to DEME, and the buildings of the subsidiaries Louis Stevens & Co NV and Engema NV.
At 31 December 2016, the CFE group has confirmed long-term bank credit facilities of € 115 million, of which € 30 million were drawn at year end 2016.
At 31 December 2016, DEME has confirmed bank credit facilities of € 95 million which are not drawn at year end 2016. Moreover, DEME also has confirmed long-term credit facilities of € 425 million, which are not drawn at year end 2016, intended to finance the development of its fleet.
On 21 June 2012, CFE issued € 100 million of bonds maturing on 21 June 2018 and paying a coupon of 4.75%. On 14 February 2013, DEME issued € 200 million of bonds maturing on 14 February 2019 and paying a coupon of 4,145%.
Bank loans and other financial debts mainly concern DEME and loans relating to real-estate projects, and are without recourse against CFE.
Bilateral loans are subject to specific covenants that take into account factors such as financial debt and the ratio of debt to equity or non-current assets, as well as cash flow. CFE Group complies with all these covenants at 31 December 2016.
At year-end 2016, capital structure of the CFE Group is made of a net debt of € 213,051 thousand (note 26) and of a net equity of € 1,536,477 thousand. Moreover, the CFE group has confirmed bank credit facilities (note 26) and dredging activities have been provided with the opportunity to issue commercial papers. The equity of the group CFE includes share capital, share premium, consolidated reserves and non-controlling interests. The group CFE does not own any of its own shares or convertible bonds. The entire equity is used to finance the operations described in the corporate purposes of the subsidiaries.
The interest rate risk is managed is insured within each of the divisions of the group.
As far as the concessions are concerned, the interest rate risk management is performed considering two horizons.
On the one hand, a long-term horizon to secure and optimize the economic balance of the concession, and on the other hand, a short term horizon to optimize the average cost of debt. Derivative products are used such as interest rate swaps in order to hedge the interest rate risk. These hedging instruments equal at maximum the same notional amounts and the same due dates as the hedged debts. From an accounting point of view, these products are qualified as hedging operations.
As far as dredging is concerned, the group CFE, through its subsidiary DEME, has to face important financings in the context of the dredges investments. The objective is to reach an optimal balance between the financing cost and the volatility of the financial results. DEME uses derivative instruments as interest rate swaps (IRS) in order to hedge the interest rate risk. These hedging instruments equal generally the same notional amounts and generally have the same due dates as the hedged debts. From an accounting point of view, these products will not always be qualified as hedging operations.
The contracting activities are characterized by an excess of cash which partially compensate the property commitments. Cash management is mainly centralized through the cash pooling.
| (in € thousands) | Fixed rate Floating rate |
Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Type of debts | Amounts | Quota | Rate | Amounts | Quota | Rate | Amounts | Quota | Rate |
| Bank loans and other financial debts | 1,343 | 0.33% | 1.41% | 387,367 92.42% | 0.75% | 388,710 | 47.33% | 0.76% | |
| Bonds | 303,537 | 75.47% | 4.34% | 0 | 0.00% | 0.00% | 303,537 36.96% | 4.34% | |
| Credit line used | 0 | 0.00% | 0.00% | 30,000 | 7.16% | 1.40% | 30,000 | 3.65% | 1.40% |
| Loans related to finance lease | 97,316 | 24.20% | 1.02% | 1,758 | 0.42% | 3.96% | 99,074 | 12.06% | 1.08% |
| Total | 402,196 | 100% | 3.53% | 419,125 | 100% | 0.81% | 821,321 | 100% | 2.14% |
| (in € thousands) | Fixed rate | Floating rate | Floating rate copped + inflation |
Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Type of debts | Amounts | Quota | Rate Amounts | Quota | Rate Amounts | Quota | Rate Amounts | Quota | Rate | ||||
| Bank loans and other financial debts |
388,409 | 49.21% | 1.00% | 301 | 0.94% | 1.02% | 0 | 0.00% | 0.00% | 388,710 | 47.33% | 1.00% | |
| Bonds | 303,537 38.46% | 4.34% | 0 | 0.00% | 0.00% | 0 | 0.00% | 0.00% | 303,537 36.96% | 4.34% | |||
| Credit line used | 0 | 0.00% 0.00% | 30,000 | 93.58% | 1.40% | 0 | 0.00% | 0.00% | 30,000 | 3.65% | 1.40% | ||
| Loans related to finance lease |
97,316 | 12.33% | 1.02% | 1,758 | 5.48% | 3.96% | 0 | 0.00% | 0.00% | 99,074 | 12.06% | 1.08% | |
| Total | 789,262 | 100% | 2.29% | 32,059 | 100% | 1.54% | 0 | 0.00% | 0.00% | 821,321 | 100% | 2.26% |
The group CFE is subject to the risk of interest rates fluctuation on its result considering:
Nevertheless, the variation in the value of derivatives qualified as cash flow hedges does not impact directly the net result and is accounted for in the others elements of the comprehensive income.
The following analysis is performed by supposing that the amount of financial debts and derivatives as per December 31, 2016 is constant over the year.
A variation of 50 basis points in interest rate at the closing date would have had as consequence an increase or a decrease of the equity and result for the amounts indicated here below. For the needs of the analysis, the other parameters have been supposed constant.
| (in € thousands) | 31/12/2016 | |||||||
|---|---|---|---|---|---|---|---|---|
| Result | Equity | |||||||
| Impact of the sensitivity calculation +50bp |
Impact of the sensitivity calculation -50bp |
Impact of the sensitivity calculation +50bp |
Impact of the sensitivity calculation -50bp |
|||||
| Non-current debts (+portion due within the year) with variable rate after accounting hedge |
4,107 | (4,107) | ||||||
| Net short term Financial debt (*) | 19 | (19) | ||||||
| Derivatives not qualified as hedge | 0 | 0 | ||||||
| Derivatives qualified as highly potential or certain cash flow |
1,233 | (1,851) |
(*) excluding cash at bank and in hand
Instruments qualified as cash flow hedges at the closing date have the following characteristics:
| (in € thousands) | 31/12/2016 | ||||||
|---|---|---|---|---|---|---|---|
| <1 year Between Between 1 and 3 and 2 years 5 years |
> 5 years |
Notion al |
Fair value Asset |
Fair value liability |
|||
| Swap of interest rate receive floating rate and pay fixed rate | |||||||
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives hedge of highly probable: estimated cash flow |
0 | ||||||
| Swap of interest rate receive floating rate and pay fixed rate | |||||||
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives: hedge of certain cash flow | 0 |
| (in € thousands) | 31/12/2015 | |||||||
|---|---|---|---|---|---|---|---|---|
| <1 year Between Between 1 and 3 and 2 years 5 years |
> 5 years |
Notion al |
Fair value Asset |
Fair value liability |
||||
| Swap of interest rate receive floating rate and pay fixed rate | ||||||||
| Interest rate options (cap, collar) | ||||||||
| Interest rate derivatives hedge of highly probable: estimated cash flow |
0 | |||||||
| Swap of interest rate receive floating rate and pay fixed rate | ||||||||
| Interest rate options (cap, collar) | ||||||||
| Interest rate derivatives: hedge of certain cash flow | 0 |
| (in € thousands) | 31/12/2016 | ||||||
|---|---|---|---|---|---|---|---|
| <1 year Between 1 and 2 years |
Between 3 and 5 years |
> 5 years |
Notion al |
Fair value Asset |
Fair value liability |
||
| Swap of interest rate receive floating rate and pay fixed rate | |||||||
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives hedge of highly probable: estimated cash flow |
0 | 0 | 0 | ||||
| Swap of interest rate receive floating rate and pay fixed rate | 118,111 | 124,643 | 351,972 | 198,875 | 793,601 | 58 | (13,514) |
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives: hedge of certain cash flow | 118,111 124,643 | 351,972 | 198,875 793,601 | 58 | (13,514) |
| (in € thousands) 31/12/2015 |
|||||||
|---|---|---|---|---|---|---|---|
| <1 year Between 1 and 2 years |
Between 3 and 5 years |
> 5 years |
Notion al |
Fair value Asset |
Fair value liability |
||
| Swap of interest rate receive floating rate and pay fixed rate | |||||||
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives hedge of highly probable: estimated cash flow |
0 | 0 | 0 | ||||
| Swap of interest rate receive floating rate and pay fixed rate | 155,048 | 157,171 | 186,139 | 498,358 | (15,840) | ||
| Interest rate options (cap, collar) | |||||||
| Interest rate derivatives: hedge of certain cash flow | 155,048 | 157,171 | 186,139 | 498,358 | 0 (15,840) |
The group CFE and its subsidiaries does not practice a hedge on foreign exchange rates for its contracting and property activities as their markets are mainly situated within the euro zone. DEME practices exchange rate hedges taking into account the international character of the activity and the execution of markets in foreign currency. Changes in fair value are recorded as cost of contract if it occurs in the scope of a construction contract. Currencies subjected to exchange risk are listed in note 2.
When exchange rate risk related to a risk exposure at operational level would occur, the group policy consists in limiting the exposure to the fluctuation of foreign currencies.
The outstanding debts (without considering finance lease debts which are mainly in Euro) by currency are:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Euro | 821,321 | 814,655 |
| US Dollar | 0 | 0 |
| Other currencies | 0 | 0 |
| Total long term debts | 821,321 | 814,655 |
The following table discloses the fair value and the notional amount of exchange rate instrument issued (forward sales/purchase agreements) (+ : asset / - liability):
| (in € thousands) | Notional | ||||||
|---|---|---|---|---|---|---|---|
| USD US Dollar |
SGD Singapore Dollar |
GBP Pound | BRL Brazilian Rial |
Other | Total | ||
| Forward purchase | 41,213 | 9,476 | 6,713 | 0 | 6,175 | 63,577 | |
| Forward sale | 125,394 | 143,404 | 7,188 | 20,544 | 19,511 | 316,041 |
| (in € thousands) | Fair value | |||||||
|---|---|---|---|---|---|---|---|---|
| USD US Dollar |
SGD Singapore Dollar |
GBP Pound | BRL Brazilian Rial |
Other | Total | |||
| Forward purchase | 1,111 | 0 | 3 | 0 | 34 | 1,148 | ||
| Forward sale | (4,619) | (921) | 594 | (4,980) | (152) | (10,078) |
The fair value variation of exchange rate instruments is considered as a construction costs. This variation is presented as an operational result.
The group CFE, in particular through its subsidiary DEME, is exposed to exchange rate fluctuation risk on its result.
The following analysis is performed supposing that the amount of financial assets/liabilities and derivatives as per December, 31 2016 is constant over the year.
A variation of 5% of exchange rate (appreciation of the EUR) at closing date would have as a consequence an increase or a decrease of the equity and the result for the amounts disclosed here below. For the needs of the analysis, the other parameters have been supposed constant.
| (in € thousands) | 31/12/2016 – Result | ||||
|---|---|---|---|---|---|
| Impact of sensitivity calculation depreciation of 5% of the EUR |
Impact of sensitivity calculation appreciation of 5% of the EUR |
||||
| Non-current debts (+portion due within the year) with variable rate after accounting hedge |
1,715 | (1,552) | |||
| Net short term Financial debt | (803) | 727 | |||
| Working Capital | (991) | 896 |
Raw materials and furniture incorporated into the works constitute an essential element of the cost price.
Although some markets include price revisions clauses or revision formulas and that the group CFE sets up, in some cases, hedges of furniture prices (gas-oil), the risk of price fluctuation of raw materials cannot be completely excluded.
DEME is hedged against gas-oil fluctuations through the purchase of options or forward agreement on fuel. The fair value variation of these instruments is considered as construction costs. This variation is presented as an operating result.
The fair value of these instruments amounts to € -16,783 thousand at the end of 2016 (in comparison with € -47,237 thousand in 2015).
The group CFE is exposed to credit risk in case of insolvency of its clients. It is exposed to the counterparty risk in the context of cash deposits, subscription of negotiable share receivables, financial receivables and derivative products.
In addition, the group CFE set up procedures in order to avoid and limit the concentration of credit risk.
For large-scale export, if the country is eligible and the risk covered by credit insurance, DEME and CFE cover themselves regularly through competent bodies in this matter (Office National du Ducroire).
The group has defined a system of investment limits in order to monitor the counterparty risk. This system determines maximum amounts eligible for investment by counterparty defined according to their credit notations published by Standard & Poor's and Moody's.
These limits are regularly monitored and updated.
Regarding the risk on trade receivables, the group defined procedures in order to limit the risk. It should be noted that a large part of the consolidated sales is realized with public or semi-public clients.
In addition, CFE considers that the concentration of the counterparty risk for clients is limited due to the large number of clients.
In order to reduce the current risk, the group CFE monitors regularly its outstanding clients and adapts its position towards them. Regarding this matter, it should be noted that CFE executes two projects in Chad: the construction of The Grand Hotel and the building of the Ministry of Finance. During 2016, The Grand Hotel has been delivered to the satisfaction of the client. Meanwhile, negotiations are continuing with the Chadian authorities to find a solution to refinance the remaining outstanding debts. Progress has been made, but to date nothing tangible has been acquired.
CFE's net exposure to that country amounts to € 60 million.
The analysis of the delay of payment at year-end 2016 and 2015 is as follows:
| As per December, 31 2016 (in € thousands) | Closing | Not past due | < 3 months | < 1 year | > 1 year |
|---|---|---|---|---|---|
| Trade and other receivables | 1,150,401 | 772,755 | 105,356 | 37,288 | 235,002 |
| Gross total | 1,150,401 | 772,755 | 105,356 | 37,288 | 235,002 |
| Prov. Trade and other receivables | (30,268) | (4,543) | 0 | (1,225) | (24,500) |
| Total provisions | (30,268) | (4,543) | 0 | (1,225) | (24,500) |
| Total net amounts | 1,120,133 | 768,212 | 105,356 | 36,063 | 210,502 |
| As per December, 31 2016 (in € thousands) | Closing | Not past due | < 3 months | < 1 year | > 1 year |
|---|---|---|---|---|---|
| Trade and other receivables | 1,150,941 | 663,859 | 170,911 | 168,474 | 147,697 |
| Gross total | 1,150,941 | 663,859 | 170,911 | 168,474 | 147,697 |
| Prov. Trade and other receivables | (30,701) | (3,317) | (4,687) | (76) | (22,621) |
| Total provisions | (30,701) | (3,317) | (4,687) | (76) | (22,621) |
| Total net amounts | 1,120,240 | 660,542 | 166,224 | 168,398 | 125,076 |
The overdue amounts mainly relate to additional works and subsequent contract modifications accepted by the customers, but that are still subject to inclusion in the budget or that are part of a broader negotiation process.
The following table discloses the evolution of the provisions on trade and other receivables:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Cumulated provisions – balance at the end of the previous period | (30,701) | (22,846) |
| Change in consolidation scope | (216) | 18 |
| Impairment losses (reversal)/write-off during the period | (1,835) | (4,124) |
| Effects of changes and transfer to other items | 2,484 | (3,749) |
| Cumulated provisions – balance at the end of the period | (30,268) | (30,701) |
CFE could negotiate new bilateral credit lines under favourable conditions allowing the group to decrease the liquidity risk.
| 31 December 2016 (in € thousands) | Financial instru- ments not desig- nated as hedging instru- ments |
Deriv- atives desig- nated as hedging instru- ments |
Financial instru- ments available for sales |
Loans and trade re- ceivables at am- ortized costs |
Total of carrying amount |
Fair value measure- ments of financial assets by level |
Fair value of the class |
|---|---|---|---|---|---|---|---|
| Non-current financial assets | 510 | 6,046 | 147,930 | 154,486 | 154,486 | ||
| Investments (1) | 6,046 | 6,046 | Niveau 2 | 6,046 | |||
| Financial loans and receivables (1) | 147,930 | 147,930 | Niveau 2 | 147,930 | |||
| Interest rate derivatives – cash flow hedges |
510 | 510 | Niveau 2 | 510 | |||
| Current financial assets | 2,311 | 1,722,461 | 1,774,772 | 1,774,772 | |||
| Interest rate derivatives – non hedge | |||||||
| Trade and other receivables | 1,160,306 | 1,160,306 | Niveau 2 | 1,160,306 | |||
| Cash management financial assets | 2,311 | 2,311 | Niveau 2 | 2,311 | |||
| Cash equivalents (2) | 10,409 | 10,409 | Niveau 2 | 10,409 | |||
| Cash at bank and in hand (2) | 601,746 | 601,746 | Niveau 2 | 601,746 | |||
| Total assets | 2,821 | 6,046 | 1,920,391 | 1,929,258 | 1,929,258 | ||
| Non-current financial debts | 18,475 | 670,684 | 689,159 | Niveau 1 | 712,121 | ||
| Bonds Financial debts |
303,537 367,147 |
303,537 367,147 |
Niveau 2 | 314,777 378,869 |
|||
| Interest rate derivatives – cash flow hedges |
18,475 | 18,475 | Niveau 2 | 18,475 | |||
| Current financial liabilities | 18,585 | 4,930 | 1,292,810 | 1,316,325 | 1,317,431 | ||
| Interest rate derivatives – highly probable projected cash flow hedges |
14 | 14 | Niveau 2 | 14 | |||
| Interest rate derivatives – cash flow hedges |
4,916 | 4,916 | Niveau 2 | 4,916 | |||
| Exchange rate derivatives – non cash flow hedges |
10,313 | 10,313 | Niveau 2 | 10,313 | |||
| Other derivatives instruments – non hedge |
8,272 | 8,272 | Niveau 2 | 8,272 | |||
| Trade payables and other operating debts Bonds |
1,138,288 | 1,138,288 | Niveau 2 | 1,138,288 | |||
| Financial debts | 154,522 | 154,522 | Niveau 2 | 155,628 | |||
| Total liabilities | 18,585 | 23,405 | 1,963,494 | 2,005,484 | 2,029,552 |
(1) Included in items "Other non-current financial assets" and "Other non-current assets".
(2) Included in item "Cash and cash equivalents".
| 31 December 2015 (in € thousands) | Financial instru- ments not desig- nated as hedging instru- ments |
Deriv- atives desig- nated as hedging instru- ments |
Financial instru- ments available for sales |
Loans and trade re- ceivables at am- ortized costs |
Total of carrying amount |
Fair value measure- ments of financial assets by level |
Fair value of the class |
|---|---|---|---|---|---|---|---|
| Non-current financial assets | 1,381 | 2,811 | 126,690 | 130,882 | 130,882 | ||
| Investments (1) | 2,811 | 2,811 | Niveau 2 | 2,811 | |||
| Financial loans and receivables (1) | 126,690 | 126,690 | Niveau 2 | 126,690 | |||
| Interest rate derivatives – cash flow hedges |
1,381 | 1,381 | Niveau 2 | 1,381 | |||
| Current financial assets | 8,514 | 1,684,929 | 1,693,443 | 1,693,443 | |||
| Interest rate derivatives – non hedge | |||||||
| Trade and other receivables | 1,192,977 | 1,192,977 | Niveau 2 | 1,192,977 | |||
| Cash management financial assets | 8,514 | 8,514 | Niveau 2 | 8,514 | |||
| Cash equivalents (2) | 13,863 | 13,863 | Niveau 2 | 13,863 | |||
| Cash at bank and in hand (2) | 478,089 | 478,089 | Niveau 2 | 478,089 | |||
| Total assets | 9,895 | 2,811 | 1,811,619 | 1,824,325 | 1,824,325 | ||
| Non-current financial debts | 33,359 | 704,113 | 737,472 | Niveau 1 | 762,424 | ||
| Bonds Financial debts |
305,216 398,897 |
305,216 398,897 |
Niveau 2 | 315,824 413,241 |
|||
| Interest rate derivatives – cash flow hedges |
33,359 | 33,359 | Niveau 2 | 33,359 | |||
| Current financial liabilities | 27,535 | 7,611 | 1,295,444 | 1,330,590 | 1,346,326 | ||
| Interest rate derivatives – highly probable projected cash flow hedges |
288 | 288 | Niveau 2 | 288 | |||
| Interest rate derivatives – cash flow hedges |
7,323 | 7,323 | Niveau 2 | 7,323 | |||
| Exchange rate derivatives – non cash flow hedges |
4,795 | 4,795 | Niveau 2 | 4,795 | |||
| Other derivatives instruments – non hedge |
22,740 | 22,740 | Niveau 2 | 22,740 | |||
| Trade payables and other operating debts Bonds |
1,184,886 | 1,184,886 | Niveau 2 | 1,184,886 | |||
| Financial debts | 110,558 | 110,558 | Niveau 2 | 126,294 | |||
| Total liabilities | 27,535 | 40,970 | 1,999,557 | 2,068,062 | 2,108,750 |
(1) Included in items "Other non-current financial assets" and "Other non-current assets".
(2) Included in item "Cash and cash equivalents".
The fair value of financial instruments can be classified into three levels based on the degree to which the inputs to the fair value measurements are observable:
For short-term financial instrument, such as trade receivables and payables, the fair value is considered not to be significantly different from the carrying amount measured at amortized cost;
For floating rate liabilities, the fair value is considered not to be significantly different from the carrying amount measured at amortized cost;
The CFE group's obligations relating to non-cancellable operating leases are as follows:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Expiring in less than 1 year | 14,035 | 14,011 |
| Expiring in more than 1 year and up to 5 years | 17,434 | 18,346 |
| Expiring in more than 5 years | 10,603 | 11,182 |
| Total | 42,072 | 43,539 |
Total commitments given by the CFE group at 31 December 2016, other than real security interests, totalled € 1,119,534 thousand (2015: € 1,268,387 thousand). These commitments break down as follows:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Performance guarantees and performance bonds (a) | 856,445 | 905,798 |
| Bid bonds (b) | 36,175 | 11,292 |
| Repayment of advance payments (c) | 16,812 | 21,241 |
| Retentions (d) | 16,782 | 41,985 |
| Deferred payments to subcontractors and suppliers (e) | 82,451 | 77,405 |
| Other commitments given - including € 61,823 thousands of corporate guarantees at DEME | 110,869 | 210,666 |
| Total | 1,119,534 | 1,268,387 |
a) Guarantees given in relation to the performance of works contracts. If the construction entity fails to perform, the bank (or insurance company) undertakes to compensate the customer to the extent of the guarantee.
Total commitments received by the CFE group at 31 December 2016 totalled € 147,937 thousand (2015: € 104,830 thousand). These commitments break down as follows:
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Performance guarantees and performance bonds | 145,112 | 102,720 |
| Other commitments received | 2,825 | 2,110 |
| Total | 147,937 | 104,830 |
The CFE group is exposed to a number of claims that may be regarded as normal in the dredging and contracting industries. In most cases, the CFE group seeks to settle with the other party, and this substantially reduced the number of legal proceedings.
The CFE group tries to recover amounts receivable from its customers. However, it is not possible to estimate these potential assets.
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Assets with related parties | 429,373 | 333,963 |
| Non-current financial assets | 152,629 | 129,966 |
| Trade and other receivables | 249,703 | 195,383 |
| Other current assets | 27,041 | 8,614 |
| Liabilities with related parties | 83,187 | 121,433 |
| Other noncurrent liabilities | 4,905 | 11,461 |
| Trade and other liabilities | 78,282 | 109,972 |
| (in € thousands) | 2016 | 2015 |
|---|---|---|
| Revenues and expenses with related parties | 219,391 | 96,383 |
| Revenue and revenue from auxiliary activities | 229,925 | 129,240 |
| Purchases and other operating expenses | (15,569) | (35,672) |
| Net financial income/expense | 5,035 | 2,815 |
The remuneration paid to statutory auditors in respect of the whole group in 2016, including CFE SA, amounted to:
| (in € thousands) | Deloitte | Other | ||
|---|---|---|---|---|
| Amount | % | Amount | % | |
| Audit | ||||
| Statutory audit certification and examination of individual company and consolidated accounts |
1,700.0 | 60.07% | 840.6 | 53.68% |
| Related work and other audits | 94.7 | 3.35% | 44.6 | 2.85% |
| Subtotal, audit | 1,794.7 | 63.42% | 885.2 | 56.53% |
| Other services | ||||
| Legal, tax and employment | 250.9 | 8.86% | 436.3 | 27.86% |
| Other | 784.3 | 27.72% | 244.4 | 15.61% |
| Subtotal, other services | 1,035.2 | 36.58% | 680.7 | 43.47% |
| Total statutory auditors' fees: | 2,829.9 | 100% | 1,565.9 | 100% |
None.
| Name | Head Office | Group Interest (%) (Economic Interest) |
|
|---|---|---|---|
| EUROPE | |||
| Germany | |||
| GEOSEA INFRA SOLUTIONS GMBH INFRASEA SOLUTIONS Gmbh & co KG |
Bremen Bremen |
Dredging Dredging |
100% 100% |
| INFRASEA SOLUTIONS VERWALTUNGSGESELLSCHAFT MBH | Bremen | Dredging | 100% |
| NORDSEE NASSBAGGER UND TIEFBAU GMBH | Bremen | Dredging | 100% |
| OAM-DEME MINERALIEN GMBH | Hamburg | Dredging | 70% |
| Belgium | |||
| ABEB NV | Antwerp | Contracting | 100% |
| CFE BATIMENT BRABANT WALLONIE SA | Brussels | Contracting | 100% |
| BPC DESIGN & ENGINEERING SA | Brussels | Contracting | 100% |
| BE.MAINTENANCE SA BENELMAT SA |
Brussels Gembloux |
Contracting Contracting |
100% 100% |
| BRANTEGEM NV | Alost | Contracting | 100% |
| CFE BOUW VLAANDEREN NV | Wilrijk | Contracting | 100% |
| CFE CONTRACTING SA | Brussels | Contracting | 100% |
| ENGEMA SA | Brussels | Contracting | 100% |
| ETABLISSEMENTS DRUART SA ETEC SA |
Péronne-lez-Binche Manage |
Contracting Contracting |
100% 100% |
| GROEP TERRYN NV | Moorslede | Contracting | 100% |
| LOUIS STEVENS NV | Halen | Contracting | 100% |
| NIZET ENTREPRISES SA | Louvain-la-Neuve | Contracting | 100% |
| PROCOOL SA | Péronne-lez-Binche | Contracting | 100% |
| REMACOM NV VANDERHOYDONCKS NV |
Lochristi Alken |
Contracting Contracting |
100% 100% |
| VMA FOOD & PHARMA NV | Sint-Martens-Latem | Contracting | 100% |
| VMA NV | Sint-Martens-Latem | Contracting | 100% |
| VMA WEST NV | Waregem | Contracting | 100% |
| VOLTIS SA | Louvain-la-Neuve | Contracting | 100% |
| AGROVIRO NV | Zwijndrecht | Dredging | 74.90% |
| BAGGERWERKEN DECLOEDT EN ZOON NV CEBRUVAL BRUCEVAL SA |
Ostend Gosselies |
Dredging Dredging |
100% 74.90% |
| COMBINED MARINE TERMINAL OPERATIONS WORLDWIDE NV | Zwijndrecht | Dredging | 54.38% |
| D.E.M.E. BLUE ENERGY NV | Zwijndrecht | Dredging | 69.99% |
| D.E.M.E. BUILDING MATERIALS NV | Zwijndrecht | Dredging | 100% |
| D.E.M.E. ENVIRONMENTAL CONTRACTORS NV | Zwijndrecht | Dredging | 74.90% |
| D.E.M.E. NV D.E.M.E. COORDINATION CENTER NV |
Zwijndrecht Zwijndrecht |
Dredging Dredging |
100% 100% |
| DEME CONCESSIONS NV | Zwijndrecht | Dredging | 100% |
| DEME CONCESSIONS WIND NV | Zwijndrecht | Dredging | 100% |
| DEME CONCESSIONS INFRASTRUCTURE NV | Zwijndrecht | Dredging | 100% |
| DEME INFRASEA SOLUTIONS NV (DISS) | Zwijndrecht | Dredging | 100% |
| DEME INFRA MARINE CONTRACTORS NV (DIMCO) DREDGING INTERNATIONAL NV |
Zwijndrecht Zwijndrecht |
Dredging Dredging |
100% 100% |
| ECOTERRES SA | Gosselies | Dredging | 74.90% |
| ECOTERRES HOLDING S.A. | Gosselies | Dredging | 74.90% |
| EVERSEA NV | Zwijndrecht | Dredging | 100% |
| FILTERRES S.A. | Gosselies | Dredging | 56.10% |
| GEOSEA NV GEOSEA MAINTENANCE NV |
Zwijndrecht Zwijndrecht |
Dredging Dredging |
100% 100% |
| GLOBAL SEA MINERAL RESOURCES NV | Ostend | Dredging | 100% |
| GROND RECYCLAGE CENTRUM KALLO NV | Kallo | Dredging | 52.43% |
| GROND RECYCLAGE CENTRUM ZOLDER NV | Heusden-Zolder | Dredging | 36.70% |
| LOGIMARINE SA | Antwerp | Dredging | 100% |
| M.D.C.C. INSURANCE BROKER NV PURAZUR N.V. |
Brussels Zwijndrecht |
Dredging Dredging |
100% 74.90% |
| SCALDIS SALVAGE & MARINE CONTRACTORS NV | Anvers | Dredging | 54.38% |
| HDP CHARLEROI SA | Brussels | Holding | 100% |
| BATIPONT IMMOBILIER SA | Brussels | Real Estate | 100% |
| BRUSILIA BUILDING NV | Brussels | Real Estate | 100% |
| BPI SAMAYA SA DEVELOPPEMENT D'HABITATIONS BRUXELLOISES SA |
Brussels Brussels |
Real Estate Real Estate |
100% 75.33% |
| FONCIERE STERPENICH SA | Brussels | Real Estate | 100% |
| PROJECTONTWIKKELING VAN WELLEN NV | Kapellen | Real Estate | 100% |
| SOGESMAINT SA | Brussels | Real Estate | 100% |
| VAN MAERLANT SA | Brussels | Real Estate | 100% |
| Cyprus | |||
| BELLSEA LTD | Nicosia | Dredging | 100% |
| DREDGING INTERNATIONAL CYPRUS LTD | Nicosia | Dredging | 100% |
| DREDGING INTERNATIONAL SERVICES CYPRUS LTD | Nicosia | Dredging | 100% |
NOVADEAL LTD Nicosia Dredging 100% DEME CYPRUS LTD Cyprus Dredging 100% CONTRACTORS OVERSEAS LTD Oraklini Holding 100%
| Name | Head Office | Group Interest (%) (Economic Interest) |
|
|---|---|---|---|
| France | |||
| FRANCO-BELGE DE CONSTRUCTIONS INTERNATIONALES SAS | Paris | Holding | 100% |
| ENERGIES DU NORD SAS | Lambersart | Dredging | 100% |
| EUROP AGREGATS SARL | Lambersart | Dredging | 100% |
| SOCIETE DE DRAGAGE INTERNATIONAL SA | Lambersart | Dredging | 100% |
| United Kingdom | |||
| V.M.A. Midlands LTD | Yorkshire | Contracting | 100% |
| DEME BUILDING MATERIALS LTD | West Sussex | Dredging | 100% |
| DEME ENVIRONMENTAL CONTRACTORS UK LTD | Weybridge, Surrey | Dredging | 74.90% |
| NEW WAVES SOLUTIONS | London | Dredging | 100% |
| Luxemburg | |||
| COMPAGNIE LUXEMBOURGEOISE D'ENTREPRISES CLE SA | Strassen | Contracting | 100% |
| DREDGING INTERNATIONAL LUXEMBOURG SA | Windhof | Dredging | 100% |
| GEOSEA LUXEMBOURG SA | Windhof | Dredging | 100% |
| GEOSEA PROCUREMENT & SHIPPING Luxemburg SA | Windhof | Dredging | 100% |
| MARITIME SERVICES AND SOLUTIONS SA | Windhof | Dredging | 100% |
| SAFINDI SA | Windhof | Dredging | 100% |
| SOCIETE DE DRAGAGE LUXEMBOURG SA | Windhof | Dredging | 100% |
| SOCIETE FINANCIERE D'ENTREPRISES SFE SA | Strassen | Holding | 100% |
| BPI LUXEMBOURG SA | Strassen | Real Estate | 100% |
| RONNDRIESCH 123 SA | Luxemburg | Real Estate | 100% |
| Hungary | |||
| CFE HUNGARY EPITOIPARI KFT | Budapest | Contracting | 100% |
| VMA HUNGARY LLC | Budapest | Holding | 100% |
| Netherlands | |||
| D.E.M.E. BUILDING MATERIALS BV | Vlissingen | Dredging | 100% |
| DEME CONCESSIONS MERKUR BV | Breda | Dredging | 100% |
| DEME CONCESSIONS WIND BV | Breda | Dredging | 100% |
| DE VRIES & VAN DE WIEL BEHEER BV | Amsterdam | Dredging | 74.90% |
| DE VRIES & VAN DE WIEL KUST EN OEVERWERKEN BV | Amsterdam | Dredging | 87.45% |
| DIMCO BV | Dordrecht | Dredging | 100% |
| INNOVATION HOLDING B.V. | Breda | Dredging | 100% |
| INNOVATION SHIPOWNER B.V. | Breda | Dredging | 100% |
| INNOVATION SHIPPING B.V. | Breda | Dredging | 100% |
| TIDEWAY BV | Breda | Dredging | 100% |
| Poland | |||
| CFE POLSKA SP. Z.O.O. | Warsaw | Contracting | 100% |
| VMA POLSKA SP. Z.O.O. | Warsaw | Contracting | 100% |
| BPI BARSKA SP. Z.O.O. | Warsaw | Real Estate | 100% |
| BPI POLSKA DEVELOPMENT SP. Z.O.O. | Warsaw | Real Estate | 100% |
| BPI WROCLAW SP. Z.O.O. | Warsaw | Real Estate | 100% |
| IMMO WOLA SP. Z.O.O. | Warsaw | Real Estate | 100% |
| Romania | |||
| CFE CONTRACTING AND ENGINEERING SRL | Bucharest | Holding | 100% |
| Slovakia | |||
| CFE SLOVAKIA SRO | Bratislava | Holding | 100% |
| VMA SLOVAKIA SRO | Trencin | Contracting | 100% |
| Other European countries | |||
| VMA ELEKTRIK TESISATI VE INSAAT TICARET LIMITED SIRKETI | Istanbul, Turkey | Contracting | 100% |
| BAGGERWERKEN DECLOEDT EN ZOON ESPANA SA | Madrid, Spain | Dredging | 100% |
| BERIN ENGENHARIA DRAGAGENS E AMBIENTE S.A. | Lisbon, Portugal | Dredging | 100% |
| DREDGING INTERNATIONAL BULGARIA SERVICES EOOD | Sofia, Bulgaria | Dredging | 100% |
| DREDGING INTERNATIONAL ESPANA SA | Madrid, Spain | Dredging | 100% |
| DREDGING INTERNATIONAL UKRAINE LLC | Odessa, Ukraine | Dredging | 100% |
| DRAGMORSTROY LLC SOCIETA ITALIANA DRAGAGGI SPA |
Saint-Petersburg, Russia Rome, Italy |
Dredging Dredging |
100% 100% |
| AFRICA | |||
| Angola | |||
| DRAGAGEM ANGOLA SERVICOS LTDA | Luanda | Dredging | 100% |
| SOYO DRAGAGEM LTDA | Luanda | Dredging | 100% |
| Nigeria | |||
| DREDGING INTERNATIONAL SERVICES NIGERIA LTD | Lagos | Dredging | 100% |
| COMBINED MARINE TERMINAL OPERATORS NIGERIA LTD | Lagos | Dredging | 54.43% |
| Chad | |||
| CFE TCHAD SA | Ndjamena | Holding | 100% |
| Tunisia | |||
| COMPAGNIE TUNISIENNE D'ENTREPRISES SA CONSTRUCTION MANAGEMENT TUNISIE SA |
Tunis Tunis |
Contracting Holding |
100% 99.96% |
| Other African countries | |||
| DRAGAMOZ LIMITADA | Maputo, Mozambique | Dredging | 100% |
Financial Report 2016
110
| Name | Head Office | Group Interest (%) (Economic Interest) |
|
|---|---|---|---|
| ASIA | |||
| India | |||
| DREDGING INTERNATIONAL INDIA PVT LTD | New Dehli | Dredging | 99.78% |
| INTERNATIONAL SEAPORT DREDGING PTY LTD | Chennai | Dredging | 86% |
| Other Asian countries | |||
| DREDGING INTERNATIONAL MALAYSIA SDN BHD | Kuala Lumpur, Malaysia | Dredging | 100% |
| DREDGING INTERNATIONAL ASIA PACIFIC PTE LTD | Singapore | Dredging | 100% |
| DREDGING INTERNATIONAL MANAGEMENT CONSULTING SHANGHAI LTD | Shanghai, China | Dredging | 100% |
| FAR EAST DREDGING LTD MASCARENES DREDGING & MANAGEMENT LTD |
Hong Kong Ebene, Mauritius |
Dredging Dredging |
100% 100% |
| OFFSHORE MANPOWER SINGAPORE PTE LTD | Singapore | Dredging | 100% |
| AMERICAS | |||
| Brazil | |||
| DEC DO BRASIL ENGENHARIA AMBIENTAL LTDA | Rio de Janeiro | Dredging | 74.90% |
| DRAGABRAS SERVICOS DE DRAGAGEM LTDA | Rio de Janeiro | Dredging | 100% |
| Canada | |||
| TIDEWAY CANADA LTD | Halifax | Dredging | 100% |
| Other American countries | |||
| DREDGING INTERNATIONAL MEXICO SA | Mexico | Dredging | 100% |
| DREDGING INTERNATIONAL DE PANAMA SA | Panama | Dredging | 100% |
| LOGIMARINE SA DE CV | Mexico | Dredging | 100% |
| OFFSHORE MANPOWER SUPPLY PANAMA LTD | Panama | Dredging | 100% |
| SERVIMAR SA | Caracas, Venezuela | Dredging | 100% |
| PACIFIC | |||
| Australia | |||
| DREDGING INTERNATIONAL AUSTRALIA PTY LTD | Brisbane | Dredging | 100% |
| GEOSEA AUSTRALIA PTY LTD | Brisbane | Dredging | 100% |
All subsidiaries have a 31 December year end.
| Name | Head Office | Group Interest (%) (Economic Interest) |
|
|---|---|---|---|
| EUROPE | |||
| Belgium | |||
| BLUEPOWER NV | Zwijndrecht | Dredging | 35.00% |
| BLUE OPEN NV | Zwijndrecht | Dredging | 49.94% |
| BLUE GATE ANTWERP DEVELOPMENT NV | Zwijndrecht | Dredging | 25.46% |
| C-POWER NV | Ostend | Dredging | 6.46% |
| C-POWER HOLDCO NV | Zwijndrecht | Dredging | 10.00% |
| HIGH WIND NV | Zwijndrecht | Dredging | 50.40% |
| LA VELORIE SA | Froyennes | Dredging | 12.48% |
| OTARY RS NV | Ostend | Dredging | 18.89% |
| POWER@SEA NV | Zwijndrecht | Dredging | 51.10% |
| RENEWABLE ENERGY BASE OSTEND NV | Ostend | Dredging | 25.50% |
| RENTEL NV | Ostend | Dredging | 18.89% |
| SEDISOL SA | Farciennes | Dredging | 37.45% |
| SEASTAR NV | Ostend | Dredging | 20.04% |
| SILVAMO NV | Roeselare | Dredging | 37.45% |
| TERRANOVA NV | Zwijndrecht | Dredging | 43.73% |
| TOP WALLONIE SA | Mouscron | Dredging | 37.45% |
| PPP BETRIEB SCHULEN EUPEN | Eupen | Holding | 25% |
| PPP SCHULEN EUPEN SA | Eupen | Holding | 19% |
| GREEN OFFSHORE NV | Antwerp | Holding | 50% |
| RENT-A-PORT NV and subsidiaries | Antwerp | Holding | 45% |
| BARBARAHOF NV | Leuven | Real Estate | 40% |
| FONCIERE DE BAVIERE SA | Liège | Real Estate | 30% |
| BAVIERE DEVELOPPEMENT SA | Liège | Real Estate | 30% |
| BATAVES 1521 SA | Brussels | Real Estate | 50% |
| ERASMUS GARDENS SA | Brussels | Real Estate | 50% |
| ESPACE ROLIN SA | Brussels | Real Estate | 33.33% |
| EUROPEA HOUSING SA | Brussels | Real Estate | 33% |
| FONCIERE DE BAVIERE A SA | Liège | Real Estate | 30% |
| FONCIERE DE BAVIERE C SA | Liège | Real Estate | 30% |
| GOODWAYS SA | Antwerp | Real Estate | 31.20% |
| GRAND POSTE SA | Liège | Real Estate | 24.97% |
| Name | Head Office | Group Interest (%) | |
|---|---|---|---|
| (Economic Interest) | |||
| IMMOANGE SA | Brussels | Real Estate | 50% |
| IMMO KEYENVELD I SA | Brussels | Real Estate | 50% |
| IMMO KEYENVELD II SA | Brussels | Real Estate | 50% |
| IMMO PA 33 1 SA IMMO PA 44 1 SA |
Brussels Brussels |
Real Estate Real Estate |
50% 50% |
| IMMO PA 44 2 SA | Brussels | Real Estate | 50% |
| IMMOBILIERE DU BERREVELD SA | Brussels | Real Estate | 50% |
| LA RESERVE PROMOTION NV | Kapellen | Real Estate | 33% |
| LES JARDINS DE OISQUERCQ SPRL | Brussels | Real Estate | 50% |
| LES 2 PRINCES DEVELOPMENT SA | Brussels | Real Estate | 50% |
| LRP DEVELOPMENT BVBA | Gent | Real Estate | 33% |
| OOSTEROEVER NV | Ostend | Real Estate | 50% |
| PRE DE LA PERCHE CONSTRUCTION SA PROMOTION LEOPOLD SA |
Brussels Brussels |
Real Estate Real Estate |
50% 30.44% |
| REDERIJ ISHTAR BVBA | Ostend | Real Estate | 50% |
| REDERIJ MARLEEN BVBA | Ostend | Real Estate | 50% |
| VAN MAERLANT RESIDENTIAL SA | Brussels | Real Estate | 40% |
| VICTOR ESTATE SA | Brussels | Real Estate | 50% |
| VICTOR PROPERTIES SA | Brussels | Real Estate | 50% |
| VM PROPERTY I SA | Brussels | Real Estate | 40% |
| VM PROPERTY II SPRL | Brussels | Real Estate | 40% |
| Luxemburg | |||
| NORMALUX MARITIME SA | Windhof | Dredging | 37.50% |
| BAYSIDE FINANCE SRL | Luxemburg | Real Estate | 40% |
| BEDFORD FINANCE SRL | Luxemburg | Real Estate | 40% |
| CHATEAU DE BEGGEN SA ELINVEST SA |
Strassen Strassen |
Real Estate Real Estate |
50% 50% |
| M1 SA | Strassen | Real Estate | 33.33% |
| M7 SA | Strassen | Real Estate | 33.33% |
| PEF KONS INVESTMENT SA | Luxemburg | Real Estate | 33.33% |
| United Kingdom | |||
| FAIR HEAD TIDAL ENERGY PARK LTD | North Ireland | Dredging | 17.50% |
| WEST ISLAY TIDAL ENERGY PARK LTD | Scotland | Dredging | 17.50% |
| Poland | |||
| B-WIND POLSKA SP z.o.o. | Gdynia | Dredging | 51.10% |
| C-WIND POLSKA SP z.o.o. IMMOMAX S.P. z.o.o. |
Gdynia Warsaw |
Dredging Real Estate |
51.10% 47% |
| Other European countries | |||
| LIVEWAY LTD | Larnaca, Cyprus | Holding | 50% |
| LOCKSIDE LTD | Larnaca, Cyprus | Holding | 50% |
| CBD SAS | Ferques, France | Dredging | 50% |
| EXTRACT ECOTERRES SA | Villeneuve-le-Roi, France | Dredging | 37.45% |
| MERKUR OFFSHORE Gmbh | Hamburg, Germany | Dredging | 12.50% |
| MORDRAGA LLC | Saint-Petersburg, Russia | Dredging | 40% |
| OCEANFLORE BV | Kinderdijck, Netherlands | Dredging | 50% |
| AFRICA | |||
| Nigeria | |||
| COBEL CONTRACTING NIGERIA LTD | Lagos | Holding | 50% |
| Tunisia | |||
| BIZERTE CAP 3000 SA and its subsidiary | Tunis | Holding | 20% |
| AMERICAS | |||
| Brazil | |||
| DEME BRASIL SERVICOS DE DRAGAGEM LTDA | Rio de Janeiro | Dredging | 50% |
| MINERACOES SUSTENTAVEIS DO BRASIL SA | Sao Paulo | Dredging | 51% |
| ASIA | |||
| COSCOCS DEME NEW ENERGY ENIGNEERING CO LTD | Guangzhou,China | Dredging | 50% |
| DIAP DAELIM JOINT VENTURE PTE LTD | Singapore | Dredging | 51% |
| DIAP SHAP JOINT VENTURE PTE LTD | Singapore | Dredging | 51% |
| DREDGING INTERNATIONAL SAUDI ARABIA LTD | South Arabia | Dredging | 49% |
| MIDDLE EAST DREDGING COMPANY QSC DRAGAFI ASIAN PACIFIC PTE LTD |
Abu Dhabi Singapore |
Dredging Dredging |
44.10% 40% |
CFE Group also works with partnerships in temporary associations set-up in Belgium or in foreign countries for the execution of projects. Temporary associations, commonly used as special purpose vehicle in the construction sector, are not mentioned here above.
(Article 12(2) and 12(3) of Belgium's royal decree of 14/11/2007 relating to the obligations of issuers of financial instruments listed for trading on a regulated market)
We attest, in the name and on behalf of Compagnie d'Entreprises CFE SA and under that company's responsibility, that, to our knowledge,
Signatures
| Name: | Fabien De Jonge | Renaud Bentégeat |
|---|---|---|
| Function: | Administrative and Financial Director | Managing Director |
Piet Dejonghe Managing Director
Date: 23 February 2017
| Company | Compagnie d'Entreprises CFE |
|---|---|
| Head office | avenue Herrmann-Debroux 40-42, 1160 Brussels |
| Telephone | +32 2 661 12 11 |
| Legal form | public limited company (société anonyme) |
| Incorporated under Belgian law | |
| Date of incorporation | 21 June 1880 |
| Duration | indefinite |
| Accounting period | from 1 January to 31 December |
| Commercial register entry | RPM Brussels 0400 464 795 – VAT 400,464,795 |
| Place where legal documentation can be consulted |
head office. |
"The purpose of the company is to study and execute any work or construction within each and every of its specialist areas, in particular electricity and the environment, in Belgium or abroad, singly or jointly with other natural or legal persons, for its own account or on behalf of third parties belonging to the public or private sector.
It may also perform services related to these activities, directly or indirectly operate them or license them out or carry out any purchase, sale, rent or lease operation whatsoever in respect of such undertakings.
It may directly or indirectly acquire, hold or sell equity interests in any company or undertaking existing now or in the future by way of acquisition, merger, spin-off or any other means.
It may carry out any commercial, industrial, administrative or financial operations or operations involving movable or immovable property that are directly or indirectly related to its purpose, even partially, or that could facilitate or develop that purpose, either for itself or for its subsidiaries.
The shareholders' meeting may change the corporate purpose subject to the conditions specified in Article five hundred and fifty-nine of the Belgian Companies Code".
As required by law, we report to you in the context of our appointment as the company's statutory auditor. This report includes our report on the consolidated financial statements together with our report on other legal and regulatory requirements. These consolidated financial statements comprise the consolidated statement of financial position as at 31 December 2016, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes.
We have audited the consolidated financial statements of Compagnie d'Entreprises CFE SA ("the company") and its subsidiaries (jointly "the group"), prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. The consolidated statement of financial position shows total assets of 4,328,219 (000) EUR and the consolidated income statement shows a consolidated profit (group share) for the year then ended of 168,411 (000) EUR.
The board of directors is responsible for the preparation and fair presentation of consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA) as adopted in Belgium. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the statutory auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the statutory auditor considers internal control relevant to the group's preparation and fair presentation of consolidated 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 group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors, as well as evaluating the overall presentation of the consolidated financial statements. We have obtained from the group's officials and the board of directors the explanations and information necessary for performing our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In our opinion, the consolidated financial statements of Compagnie d'Entreprises CFE SA give a true and fair view of the group's net equity and financial position as of 31 December 2016, and of its results and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.
Without modifying the unqualified opinion expressed above, we draw your attention to the Note 27.7 of the financial statements which describes the uncertainties regarding the amount due by the State of Chad and the undertaken actions in order to facilitate its payment.
The board of directors is responsible for the preparation and the content of the directors' report on the consolidated financial statements.
As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we make the following additional statement, which does not modify the scope of our opinion on the consolidated financial statements:
• The directors' report on the consolidated financial statements includes the information required by law, is consistent with the consolidated financial statements and is free from material inconsistencies with the information that we became aware of during the performance of our mandate.
The statutory auditor
DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL
Represented by Rik Neckebroeck - Michel Denayer
Parent-company statements of financial position and comprehensive income
| For the period ended 31 December (In thousand Euro) | 2016 | 2015 |
|---|---|---|
| Non-current assets | 1,323,520 | 1,332,944 |
| Start-up costs | 0 | 0 |
| Intangible assets | 46 | 353 |
| Property, plant and equipment | 693 | 1,330 |
| Financial assets | 1,322,781 | 1,331,261 |
| - Related parties | 1,322,749 | 1,330,939 |
| - Other | 32 | 322 |
| Current assets | 236,408 | 327,577 |
| Receivables at more than 1 year | 0 | 0 |
| Inventories and work in progress | 8,097 | 61,267 |
| Receivables at up to 1 year | 196,447 | 193,570 |
| - Trade receivables | 53,033 | 66,110 |
| - Other receivables | 143,414 | 127,460 |
| Cash investments | 6 | 1,255 |
| Cash equivalents | 30,956 | 68,246 |
| Prepaid expenses | 902 | 3,239 |
| Total assets | 1,559,928 | 1,660,521 |
| Equity | 1,197,582 | 1,193,150 |
| Share capital | 41,330 | 41,330 |
| Share premium | 592,651 | 592,651 |
| Revaluation surplus | 487,399 | 487,399 |
| Reserves | 8,654 | 8,654 |
| Retained earnings/(losses) | 67,548 | 63,116 |
| Provisions and deferred tax | 57,272 | 58,923 |
| Liabilities | 305,074 | 408,448 |
| Liabilities at more than 1 year | 132,580 | 152,580 |
| Liabilities at up to 1 year | 172,494 | 254,898 |
| - Financial debt | 0 | 0 |
| - Trade payables | 37,211 | 73,870 |
| - Tax liabilities and down payments on orders | 11,925 | 51,783 |
| - Other payables | 122,694 | 129,245 |
| Prepaid income | ||
| 664 | 970 |
| For the period ended 31 December (In thousand Euro) | 2016 | 2015 |
|---|---|---|
| INCOME | ||
| Sales of goods and services | 48,296 | 273,031 |
| Cost of goods sold and services provided | (56,336) | (282,476) |
| - Merchandise | (26,800) | (182,245) |
| - Services and other goods | (17,763) | (65,923) |
| - Remuneration and social security payments | (12,538) | (29,267) |
| - Depreciation, amortisation, impairment and provisions | 1,214 | (3,750) |
| - Other | (449) | (1,291) |
| Operating income | (8,040) | (9,445) |
| Financial income | 75,396 | 182,849 |
| Financial expense | (8,481) | (49,016) |
| Pre-tax income | 58,875 | 124,388 |
| Tax (current and adjustments) | (17) | (374) |
| Net income | 58,858 | 124,014 |
| APPROPRIATION OF INCOME | ||
| Net income | 58,858 | 124,014 |
| Retained earnings | 63,116 | 0 |
| Dividend | (54,426) | (60,755) |
|---|---|---|
| Available reserves | 0 | 0 |
| Legal reserve | 0 | (143) |
| Retained earnings carried forward | 67,548 | 63,116 |
There was a substantial decline in the revenue of CFE SA. This is explained by the transfer of the 'Buildings Flanders' segment on 1 July 2015 and by the shrinking international activity and the decrease in civil engineering and building activity in the Brussels Region.
The operating result was adversely affected by the losses on civil engineering projects in Brussels and Flanders.
The financial result primarily consists of:
In 2015, the income statement was favourably influenced by the internal capital gains resulting from the legal reorganization of the group.
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