Annual Report • Feb 28, 2019
Annual Report
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Regulated information within the meaning of the Royal Decree of 14 November 2007
Antwerp, February 28, 2019
Press release
2018
"Ackermans & van Haaren fully focussed on the further expansion of its core sectors in 2018. The fact that the resulting contribution of these participations has increased by 35.4 million euros (+13%), to a record level of 312.4 million euros, is satisfactory to us.
We have made strategic choices within the portfolio throughout the year, and have sold our participations in Atenor, BDM-Asco and Distriplus. This has freed up people and resources for new initiatives aiming at sustainable growth of Ackermans & van Haaren, both within the current portfolio as through new investments, such as the recently announced new participation in Biolectric."
Jan Suykens, CEO - Chairman of the executive committee
• DEME and CFE both achieved a significant growth in revenue. Combined with the capital gain achieved by Rent-A-Port in Vietnam and the first contribution from the participation in the Rentel offshore wind farm (via Green Offshore), this also translates into an increase of 27.5 million euros in the contribution of 'Marine Engineering & Contracting', to 118.1 million euros.
| (€ million) | 2018 | 2017 |
|---|---|---|
| Marine Engineering & Contracting | 118.1 | 90.6 |
| Private Banking | 121.3 | 113.9 |
| Real Estate & Senior Care | 65.3 | 54.3 |
| Energy & Resources | 7.7 | 18.2 |
| Contribution from core segments | 312.4 | 277.0 |
| Growth Capital | -6.9 | -1.3 |
| AvH & subholdings | -13.7 | -10.6 |
| Net capital gains(losses) / impairments | -2.2 | 17.6 |
| Result before remeasurement | 289.6 | 282.7 |
| Remeasurement | - | 19.8 |
| Consolidated net result | 289.6 | 302.5 |
| (€ million) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Net equity (part of the group - before allocation of profit) |
3,176.5 | 2,972.2 |
| Net cash position of AvH & subholdings |
102.9 | 80.2 |
The Board of Directors proposes to the ordinary General Meeting of 27 May 2019 to increase the dividend per share to 2.32 euros, an increase by 5.5% compared to the dividend of 2.20 euros that was paid out in 2018. This proposal amounts to a total payment of 77.7 million euros.
Ackermans & van Haaren aims to further develop its portfolio in 2019, both by strengthening existing participations as by new investments. The group has ample financial resources to do so, which can be supplemented by the proceeds of asset disposals.
Combined with the good positioning of the group's core participations, the Board of Directors is therefore looking forward to the results of 2019 with confidence.
| 2018 | 2017 | |
|---|---|---|
| Number of shares | ||
| Number of shares | 33,496,904 | 33,496,904 |
| Net result per share (€) | ||
| Net result per share | ||
| Basic | 8.74 | 9.13 |
| Diluted | 8.71 | 9.09 |
| Dividend per share | ||
| Gross dividend | 2.32 | 2.20 |
| Net dividend | 1.62 | 1.54 |
| Net equity per share (€) | ||
| Net equity per share | 95.81 | 89.70 |
| Evolution of the stock price (€) | ||
| Highest (August 29) | 160.5 | 156.20 |
| Lowest (December 27) | 127.7 | 125.75 |
| Closing price (December 31) | 131.8 | 145.15 |
(1) Incl. participation via AXE Investments
(2) Not consolidated - fully diluted
31/12/2018
| (€ million) | 2018 | 2017 |
|---|---|---|
| DEME | 92.8 | 94.5 |
| CFE | 17.3 | 17.4 |
| Rent-A-Port | 5.3 | -4.3 |
| Green Offshore | 2.7 | -0.2 |
| A.A. Van Laere | - | -16.8 |
| Total | 118.1 | 90.6 |
DEME (AvH 60.4%) realised an increase of its turnover by 12.3%, to 2,645.8 million euros in 2018 (2017: 2,356.0 million euros). As in 2017, the activities of the DEME subsidiaries GeoSea, Tideway, A2Sea and EverSea, which are being grouped into a new structure - DEME Offshore - since the beginning of 2019, made a substantial contribution to this.
In Germany, GeoSea completed the Merkur project in 2018, and has already installed 63 of the 87 foundations for the Hohe See project. Work on the Hornsea One (UK) and Horns Rev 3 (Denmark) offshore wind farms is also progressing well. The whole range of activities relating to offshore renewable energy (also including dredging, stone dumping, ...)
represent a total of 1,216.6 million euros (over 46% of the total DEME group turnover), compared to 1,138.9 million euros in 2017.
But the turnover in traditional dredging work also increased compared to the previous year, by 61.0 million euros to 882.2 million euros (+7.4%). The TTP1 project (Tuas Terminal - phase 1) in Singapore is approaching its final phase, and the deepening work at the port of Szczecin in Poland was started. Maintenance dredging work mainly took place in Belgium, Africa, India and Germany.
DEME achieved a turnover of 163.4 million euros in its environmental activities, an increase of 11.1 million euros compared to the previous year. In this activity, there is a dispute with the client Rijkswaterstaat (Netherlands) regarding the execution of the Julianakanaal contract. Finally, DIMCO, which is specialised in water-bound civil construction, experienced a strong increase in its activities in the Netherlands, where 3 large projects were launched: the RijnlandRoute, the lock at Terneuzen and the A24 Blankenburg connection.
In H2 2018, DEME expanded its economic rights on the Qatar-based Middle East Dredging Company (MEDCO) to 95% (previously 44.1%). The participation in MEDCO is therefore fully consolidated as of Q3. This also eliminates the need to explain economic figures (i.e. with a proportional consolidation of the jointly controlled subsidiaries) with regard to DEME, as was still the case in previous communications.
DEME achieved a slight increase of its EBITDA to 458.9 million (2017: 455.5 million euros), which results in an EBITDA margin on turnover of 17.3%. The impact on the profitability due to the late delivery of the Living Stone cable installation vessel and the self-propelled jack-up vessel Apollo in the first half of the year was largely offset in the second half of the year. Due to higher depreciations as a result of various new vessels, the operating result decreased. The net result remained more or less stable at 155.6 million euros (2017: 155.1 million euros).
| (€ million) | 2018 | 2017 |
|---|---|---|
| Turnover | 2,645.8 | 2,356.0 |
| EBITDA | 458.9 | 455.5 |
| Net result | 155.6 | 155.1 |
| Equity | 1,401.4 | 1,321.8 |
| Net financial position |
-555.8 | -285.7 |
In the fourth quarter of 2018, DEME was also able to add the following 3 large contracts, with a total value of approximately 1.5 billion euros, to its order book.
Thanks to these contracts, DEME's order book increased by 13.9% to 4,010 million euros, compared to 3,520 million euros at the end of 2017. Only the Fehmarnbelt project (710 million euros), which concerns the construction of the world's largest submerged road and railway tunnel between Denmark and Germany, has not yet been included in this order book. The required environmental permits have been obtained in the meantime, but may still be subject to appeal procedures.
In 2018, DEME invested a total of 441.3 million euros in the execution of its ambitious fleet investment programme, mainly for the Orion, Spartacus, Living Stone and Apollo. The group placed an order for the two self-propelled split barges 'Bengel' and 'Deugniet' (3,500 m³) and the two trailing suction hoppers 'River Thames' (2,300 m³) and 'Meuse River'(8,300 m³) in September, for a total value of 133 million euros. The vessels will be constructed by Royal IHC, and are expected to join the fleet in 2020. As a result of the above-mentioned full consolidation of MEDCO, DEME has included MEDCO's fleet in its figures since then. This represents a total amount of 79.6 million euros, mainly relating to the cutter vessels Al Jaraf and Al Mahaar. In addition, DEME has invested more than 30 million euros in participations in and the financing of concessions of offshore wind farms.
DEME's net financial debt increased in the course of 2018 to 555.8 million euros, an increase by 270.1 million euros compared to 2017. This evolution is the result of the investments in the renovation and expansion of the fleet and of an evolution of DEME's working capital, which has become less negative in the course of 2018 as a result of the utilisation of the advance payments received at the end of 2017, among other aspects. DEME repaid its bond for an amount of 200 million euros on the due date in February 2019.
As previously announced, Luc Vandenbulcke (aged 47, civil engineer) succeeded to Alain Bernard as CEO of DEME on 1 January 2019. Luc Vandenbulcke has been active within the DEME group for 21 years, and is the founder and CEO of the GeoSea subsidiary, one of the fastest-growing and most successful operations within DEME. Alain Bernard will concentrate on his role as Director of DEME and as chairman of DEME Concessions and GSR.
In 2019, DEME is expected to realise a revenue of approximately the same size as that of 2018. The impact of new vessels in the fleet for a full year is expected to be compensated by the scheduled major overhaul of the important installation vessel Innovation. In 2019, the operating margin (EBITDA) is again expected to remain within the historical range of 16% to 20% over the entire year.
CFE (AvH 60.4%) achieved a turnover that peaked at 994.9 million euros (including 139.8 million euros turnover from the Van Laere group that was acquired at the end of 2017), compared to 710.5 million euros in 2017.
CFE Contracting achieved a turnover of 934.6 million euros in 2018 (2017: 717.6 million euros) and realized a high level of activity, as in 2017, in Belgium, in Luxembourg and in Poland. Although a number of entities of the Contracting division in Belgium recorded a slight drop in their order book compared to 31 December 2017, the order book of CFE Contracting increased to 1,320.3 million euros, especially in Flanders, and to a lesser extent in Luxembourg. The further integration of Van Laere and its subsidiaries into the CFE group progressed in a positive manner, as expected. A number of companies from the Contracting division achieved significantly higher operating results in 2018, such as CFE Polska and VMA Druart (HVAC). The results in Tunisia, on the other hand, deteriorated again, and, with an amount of 6 million euros, weighed on the profits for 2018. CFE Contracting achieved a net profit of 15.2 million euros compared to 15.4 million euros in 2017.
Within the Real Estate Development division, following the successful marketing of the residential projects Ernest The Park in Ixelles, Erasmus
CFE: Breakdown by division (excl. DEME)
| (€ million) | Turnover | Net result(1) | ||
|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | |
| Construction | 692.5 | 499.8 | ||
| Multitechnics | 170.6 | 155.3 | ||
| Rail Infra | 71.5 | 62.5 | ||
| Contracting | 934.6 | 717.6 | 15.2 | 15.4 |
| Real estate development | 94.7 | 10.9 | 9.3 | 22.3 |
| Holding, non-transferred items and eliminations |
-34.4 | -18.1 | -6.6 | -13.7 |
| Total | 994.9 | 710.5 | 17.9 | 23.9 |
(1) Including contribution from rent-A-Port and Green Offshore
DEME - Borkum Riffgrund
Gardens in Anderlecht and Voltaire in Schaerbeek, BPI launched other projects,such as Park West in Brussels, Zen Factory in Lot-Beersel and Grand Poste in Liège. In the Grand Duchy, BPI Luxembourg continued on the Kiem (Kirchberg-plateau) and Fussban (Differdange) projects, and obtained the building permits for its Livingstone project in Luxembourg City. BPI Polska completed two major projects in 2018: Immo Wola in Warsaw and the first phase of Bulwary Ksiazce in Wroclaw. At the end of December 2018, the real estate portfolio amounted to 139 million euros (2017: 133 million euros). The net result of this division in 2017 was positively affected by the capital gain on the sale of the Kons and Oosteroever projects. The main contributors to the 2018 profit of 9.3 million euros (2017: 22.3 million euros) were, in particular: the development projects Ernest The Park (Brussels), Kiem (Luxembourg), Erasmus Gardens (Anderlecht) and 2 completed projects in Poland, where profit can only be recognised at the end of the project.
The turnover from the non-transferred activities of CFE continued to fall, to 27 million euros (before eliminations). The only significant construction site that is still in operation is the construction of the new 'Brussels South' water purification station, the second phase of which was commissioned in 2018 within the foreseen period, to the satisfaction of the customer. The full commissioning will not take place until 2020.
In the course of H2 2018, CFE received payments for the equivalent of 7.5 million euros on its outstanding receivables from the Chad government amounting to 60 million euros. The conditions of a refinancing proposal for the receivables in connection with the Grand Hotel were officially approved by the Chad government. They are now awaiting validation by the Board of Directors of the Afrexim bank.
The operating activities of Rent-A-Port (AvH 72.2%) were mainly situated in Vietnam, as was the case in previous years. Thanks to the increased availability of land since the second half of the year, more land handovers were realised this year compared to 2017. The infrastructure in the first industrial zone, the Dinh Vu Industrial Zone, has already been largely developed.
In addition, at the end of 2018, 50% of the Deep C Green Energy company, which is responsible for the electricity distribution on the Dinh Vu Industrial Zone (Vietnam), was sold to the large Japanese energy company Tepco, resulting in a substantial capital gain.
CFE - AZ Sint Maarten - Mechelen
The infrastructure in Oman is still insufficiently developed to serve a critical mass of customers. The infrastructure work at the port of Duqm are progressing well, however.
At the beginning of 2019, AvH and CFE each purchased an additional 5% of the capital of Rent-A-Port from the co-founders, as a result of which, together, they now own 100% of the capital of this company.
The construction activities on the Rentel offshore wind farm were successfully completed in 2018. As expected, the first renewable electricity from this wind farm was injected in the Belgian electricity network in the middle of 2018. The wind farm was fully operational as a Belgian power station (309 MW) at sea at the end of 2018. Through Green Offshore, which is a 50/50 investment vehicle of AvH and CFE, AvH has a participation (beneficial) of 10.03% in Rentel and 7.02% in SeaMade.
Thanks to an appropriate legislative framework that was approved by the federal government at the end of 2017, the development of the Mermaid and Seastar offshore wind farms could be accelerated. In the course of 2018, Mermaid and Seastar were merged under the name SeaMade NV (58 wind turbines, 487 MW), and in December 2018 SeaMade reached its 'financial close'.
Together, Rentel and SeaMade will provide renewable energy to 700,000 households, making a reduction of 1,200,000 tons of CO2 emissions possible on an annual basis.
| (€ million) | 2018 | 2017 |
|---|---|---|
| FinAx/Finaxis | -0.4 | -0.9 |
| Delen Private Bank | 88.5 | 83.3 |
| Bank J.Van Breda & C° | 33.2 | 30.8 |
| BDM-Asco | - | 0.7 |
| Total | 121.3 | 113.9 |
The combined assets entrusted by the clients of Delen Private Bank and Bank J.Van Breda & Cº amounted to 45.4 billion euros per 31 December 2018 compared to 47.8 billion euros per 31 December 2017. This 5% decline was fully attributable to the negative development of the financial markets in Q4 2018.
At the request of the National Bank of Belgium, the shareholding structure of Delen Private Bank and Bank J.Van Breda & Co was simplified, without changing the conditions of the partnership between Ackermans & van Haaren on the one hand and the Delen family on the other hand. AvH has, through its 100% subsidiary FinAx, a direct 78.75% stake in both banks, instead of through the joint holding structure Finaxis, as it was previously. Promofi (Delen family) participates directly for 21.25% in Delen Private Bank and Bank J.Van Breda & Co .
Under custody and advisory
The assets under management of Delen Private Bank (AvH 78.75%) reached a consolidated (Delen Private Bank, JM Finn, Oyens & Van Eeghen) level of 37,713 million euros at the end of 2018 (end of 2017: 40,545 million euros).
| (€ million) | 2018 | 2017 |
|---|---|---|
| Delen Private Bank | 27,673 | 29,410 |
| JM Finn | 9,563 | 10,475 |
| Oyens & Van Eeghen | 476 | 660 |
| Total | 37,713 | 40,545 |
Despite an organic net growth of the assets under management of both existing and new private clients, these assets decreased as a result of the decline on the equity markets in the fourth quarter of 2018. Even during this unfavourable stock market climate, the inflow of capital into Delen Private Bank remained considerable in 2018. In the first half of the year, this inflow even reached a record level in Belgium, and consisted almost exclusively of discretionary asset management. The recently opened new branches in Knokke, Leuven, Campine and Namur contributed to the increasingly strong inflow from the regional offices of Delen Private Bank, as did the successful cooperation with the Bank J.Van Breda & Cº network. At JM Finn, the currency evolution of the British pound against the euros (-0.8%) also contributed to a decline. In the Netherlands, asset management for institutional investors was disposed of, resulting in a reduction of 165 million euros in assets under management.
| (€ million) | 2018 | 2017 |
|---|---|---|
| Gross revenues | 384.3 | 366.9 |
| Net result | 112.4 | 105.8 |
| Equity | 742.9 | 678.8 |
| Assets under management | 37,713 | 40,545 |
| Core Tier1 capital ratio (%) | 30.9 | 29.3 |
| Cost-income ratio (%) | 55.3 | 53.7 |
Delen Private Bank
Banque J.Van Breda & C°
As the decline in assets under management only occurred in the fourth quarter, the consolidated gross operating income of Delen Private Bank increased by 4.7% to 384.3 million euros in 2018. The growth of Delen Private Bank entails investments, however, in particular in IT and commercial staff. The pace of recruitments and cost increases slowed down already during the last months of the year. At JM Finn, the increase in costs (in local currency) is also explained by the higher personnel costs and an increase in expenses for marketing and IT. The cost-income ratio slightly rose compared to 2017 and amounted to 55.27% (44.7% at Delen Private Bank, 85.43% at JM Finn). The net profit increased to 112.4 million euros in 2018 (compared to 105.8 million euros in 2017), including the contribution of JM Finn, which amounted to 7.3 million euros.
The consolidated shareholder's equity of Delen Private Bank amounted to 742.9 million euros on 31 December 2018 (compared to 678.8 million euros at the end of 2017). The Core Tier 1 - capital ratio of 30.9% is well above the sector average.
René Havaux will succeed to Paul De Winter as chairman of the executive committee of Delen Private Bank from March 31, 2019. Together with Jacques Delen and Paul De Winter, René Havaux is also at the base of the successful strategy of discretionary asset management and patrimonial advice for mainly private clients.
Bank J.Van Breda & C° (AvH 78.75%) closed 2018 with a record result. Assets invested by clients grew by 526 million euros (+4%) to 14.3
| (€ million) | 2018 | 2017 |
|---|---|---|
| Bank product | 143.8 | 141.4 |
| Net result | 42.2 | 39.1 |
| Equity | 549.8 | 538.7 |
| Off-balance sheet products | 9,392 | 9,177 |
| Client deposits | 4,877 | 4,566 |
| Loan portfolio | 4,797 | 4,529 |
| Core Tier1 capital ratio (%) | 13.6 | 14.2 |
| Cost-income ratio (%) | 61.0 | 59.1 |
billion euros, of which 9.4 billion euros of off-balance sheet products (+2%) and 4.9 billion euros of client deposits (+7%). This confirms the trust of the clients in the bank. Of this, 5.6 billion euros has been entrusted to Delen Private Bank in asset management. The total credit portfolio increased by 6% to 4.8 billion euros. Impairment losses on loans amounted to 0.05% of the average credit portfolio, or 2.4 million euros. This cautious policy has in no way put a brake on credit production.
Despite a challenging interest rate and market environment, the growth in terms of commercial volumes leads to a 2% increase in bank product, to 144 million euro. Costs increased by 5% to 88 million euros, mainly as a result of future-oriented investments in commercial strength, IT and the launch of Bank de Kremer. Although the cost-income ratio increases from 59% to 61%, Bank J.Van Breda & C° still ranks among the better performing Belgian banks. The consolidated net profit increased by 8% to 42.2 million euros (39.1 million euros in 2017).
Shareholder's equity (group share) increased from 539 million euros at the end of 2017 to 550 million euros at the end of 2018. This growth of the shareholder's equity enables to continue the rhythm of the commercial growth without compromising a healthy leverage, the main protection for deposit holders. The solvency expressed as shareholder's equity on assets (leverage ratio) amounted to 8.6%, a multiple of the required 3% under Basel III.
Bank de Kremer was launched in June. This division of Bank J.Van Breda & Cº is focussing on asset management for private individuals. With the Bank de Kremer app, everyone can map his/her assets and obtain an insight in his/her financial future.
| (€ million) | 2018 | 2017 |
|---|---|---|
| Leasinvest Real Estate | 11.9 | 14.9 |
| Extensa Group | 27.2 | 29.9 |
| Anima Care | 4.7 | 4.4 |
| HPA | 21.5 | 5.1 |
| Total | 65.3 | 54.3 |
Leasinvest Real Estate (LRE, AvH 30.0%) closed 2018 with a net result (group share) of 38.2 million euros, compared to 47.5 million euros at the end of 2017. This decrease can mainly be explained by the lower revaluation result of real estate, which contained several one-off positive effects in 2017.
At the end of 2018, the fair value of the consolidated real estate portfolio, including project developments, for the first time exceeded 1.0 billion euros (compared to 903.0 million euros at the end of 2017). LRE acquired several buildings in 2018: the Montoyer 14 office building in Brussels (investment of 11.4 million euros), 2 additional office buildings in the EBBC Business Park in the immediate vicinity of the airport in Luxembourg (an investment of 64.1 million euros), and the iconic Hangar 26/27 building on the Eilandje in Antwerp (with a surface area of 9,370 m², an investment of 22.6 million euros). The Treesquare and Montoyer 63 office buildings were (provisionally) accepted in 2018. Including the participation of 10% in REIT Retail Estates, the fair value of the portfolio reached a value of 1.1 billion euros at the end of 2018.
The rental yield amounted to 6.45% at the end of 2018, compared to 6.44% at the end of 2017. Rental income slightly decreased to 56.2 million euros (2017: 56.9 million euros) after the sale of the Swiss portfolio and 5 logistics properties in Belgium in the course of 2017, which were not fully compensated by the rental income from the properties acquired in Luxembourg and Austria in 2017. Moreover, most acquisitions of buildings in 2018 only took place in the second half of the year, so that they only contributed to the 2018 results to a limited extent. More important is that the 'like-for-like' rental income increases by 1.7 million euros.
The total occupation rate amounted to 94.26% compared to 94.80% at the end of 2017.
The capital increase of 4 October 2018, amounting to 84 million euros, had a positive impact on the balance sheet and on the debt ratio. At the end of 2018, shareholder's equity (group share) amounted to 476 million euros (2017: 382 million euros). As a result, the debt ratio decreased to 53.53% (57.14% at the end of 2017). AvH has exercised its full rights in this capital increase and has made a total additional investment of 25 million euros in LRE.
| 2018 | 2017 | |
|---|---|---|
| Real estate portfolio fair value (€ mio) | 1,037.1 | 903.0 |
| Rental yield (%) | 6.45 | 6.44 |
| Occupancy rate (%) | 94.26 | 94.80 |
Leasinvest Real Estate - Hangar 26/27 - Antwerp Extensa - Tour & Taxis - Gare Maritime - Brussels (artist impression)
The net result of the Extensa Group (AvH 100%) stabilised at a high level in 2018: 27.2 million euros in 2018, compared to 29.9 million euros in 2017.
The building permit for the 'Gare Maritime' at Tour & Taxis in Brussels was received in November 2018. In the meantime, the renovation of this former railway station is proceeding according to plan, and the mixeduse area (catering businesses, theme shops, culture and entertainment) will be opened in 2020. Building permits were also provided for an underground car park (900 cars) and various residential buildings (including a residential care facility with approx. 200 beds and 250 apartments). The construction work and the sale of the Riva project (139 apartments) are progressing well, as are the preparatory demolition works for the new Picard bridge. The upper floors of the Hôtel de la Poste have been restored to their former splendour and will be put into use from the second quarter of 2019 as a meeting center. Finally, the Extensa Group has applied for a building permit to convert the former customs building on the site, Hôtel des Douanes, into a hotel with 100 rooms.
97% of the 'ilôt A' residential project (909 apartments) on the Cloche d'Or site (Luxembourg) has now been sold. The commissioning of the last apartments is scheduled for 2020. In the meantime, the pre-sale of a new 'ilôt D' residential project (162 units in phase 1) was also successfully launched. The office building leased to Alter Domus (10,000 m²) was sold to international investors in October 2018. The new headquarters of Deloitte Luxembourg was completed and sold in January 2019. Several other office projects are under development, such as the 'Bijou' (6,021 m²) and 'Spaces' (4,261 m²) buildings, and a new headquarters for Intesa Sanpaolo (10,829 m²).
Anima Care (AvH 92.5%) achieved a turnover of 84.3 million euros in 2018. The increase by 9.1 million euros (+12%) compared to 2017 was a result of both the improvement in the turnover of the existing residences and of an expansion of the perimeter. The impact of the temporary capacity reduction in Aalst and Berlare as a result of the expansion and renovation works, was offset by better results at the other sites. The EBITDAR increased to 18.3 million euros (2017: 16.1 million euros), and the net profit to 5.1 million euros in 2018 (2017: 4.8 million euros).
2018 was again a year of intensive investments in the development of a high-quality care offer. Anima Care acquired the Ark van Noé residential care facility, with 57 nursing home beds, operated in Grote-Spouwen (Bilzen), early in 2018. The new extension with 30 convalescence beds in Aalst was put into use in October 2018. In addition, thorough renovation work is in progress in Kruyenberg (Berlare), Anima Care obtained the long-awaited building permit for the development of a care centre (197 nursing home beds, 80 service flats) at Tour & Taxis, and an agreement was signed for the construction of a new care centre (housing about 150 senior citizens) in Braine-L'Alleud.
In Berlare, Anima Care sold the real estate of a well-functioning retirement home (for the first time) and leased it back for the long term. This transaction, which only has a limited impact on the 2018 results as the achieved capital gain of 7.5 million euros will be spread over 25 years, has provided Anima Care with the confirmation of significant latent capital gains on its property portfolio. This transaction in any case allows for the financing of the ongoing projects of Anima Care without having to rely on further capital injections from the shareholders.
Per 31 December 2018, Anima Care is operating 2,097 beds: 1,785 nursing home beds, 107 convalescence beds and 205 service flats, spread over 21 care centres (9 in Flanders, 8 in Brussels, 4 in Wallonia).
HPA (AvH 71.7%) achieved a turnover of 120.3 million euros in 2018, an increase by 5% compared to 2017. This evolution is the result of the expansion of the perimeter with one new residence (Château Vacquey), as well as the continuous commercial efforts. The EBITDAR increased to 57.9 million euros, including the capital gain realised on the sale of real estate. The net result amounted to 30.0 million euros (2017: 7.1 million euros).
In early July 2018, HPA indeed sold the real estate of 14 of its residential care centres to the French real estate group Icade Santé. HPA's subsidiary Residalya continues to be the tenant and operator of these residential care centres. The transaction values the assets concerned at 189 million euros and provides AvH with a capital gain (group share) of 21.3 million euros. HPA implemented a capital reduction in Q4 2018, so that this transaction has also resulted in cash proceeds for AvH.
The HPA network at the end of 2018 consisted of 2,647 beds, spread over 35 residences.
Contribution to the AvH consolidated net result
| (€ million) | 2018 | 2017 |
|---|---|---|
| SIPEF | 7.8 | 15.9(1) |
| Sagar Cements | -0.1 | 0.4 |
| Oriental Quarries & Mines | - | -0.2 |
| NMP | - | 2.1 |
| Total | 7.7 | 18.2 |
(1) Excluding a non-recurrent remeasurement gain of € 19.8 mio, which in the overview on page 2 is reported separately.
SIPEF (AvH 31.59%) produces sustainable and traceable palm oil that is certified according to the RSPO regulations. The other SIPEF products (rubber, bananas and tea) are certified by The Rainforest Alliance. By purchasing shares on the stock exchange, AvH has increased its participation from 30.25% at the beginning of the year to 31.59% at the end of the year.
SIPEF realised an increase in its total palm oil production by 6.3%, to 351,757 tonnes, in 2018 (2017: 330,958 tonnes). This means that the 350,000-tonne mark was exceeded for the first time. Own production amounted to 290,441 tonnes, an increase by 6.7%. The production in the fourth quarter remained well below expectations, however, due to excessive rainfall in Sumatra.
| (Tonne)(1) | 2018 | 2017 |
|---|---|---|
| 351,757 | 330,958 | |
| 7,982 | 8,179 | |
| 2,422 | 2,402 | |
| 27,788 | 29,772 |
(1) Own + outgrowers
As a result, SIPEF did not realise the 9% increase in production that was announced earlier. Due to high stocks of vegetable oils in the markets and the uncertainty caused by geopolitical tensions, the palm oil price fell to a low of 460 USD per tonne in the second half of the year.
Due to the higher volumes sold at substantially lower prices, the turnover of palm oil decreased by 13.7%. The other products (rubber, bananas and tea) also saw a decline in turnover. The depreciation of the local currencies, on the other hand, enabled SIPEF to keep the production costs under control. The net result, before the capital gain on the sale of BDM-Asco, amounted to 22.7 million USD compared to 64.5 million USD in 2017. Including this capital gain of 7.4 million USD, the net result amounts to 30.1 million USD.
| (USD million) | 2018 | 2017 |
|---|---|---|
| Turnover | 275.3 | 321.6 |
| EBIT | 50.1 | 90.3 |
| Net result | 30.1 | 139.7(1) |
| Equity | 644.5 | 634.6 |
| Net cash position | -121.4 | -83.7 |
(1) Including USD 75.2 mio remeasurement gain on the PT Agro Muko acquisition
The acquisition of Dendymarker in 2017, and the additional concessions in Musi Rawas in 2018 will result in SIPEF cultivating almost 100,000 hectares 5 years from now, of which more than 80,000 hectares are already planted.
SIPEF - Plantation with mature palms
SIPEF - Rubber plantation
Sagar Cements
Sagar Cements (AvH 17.57%) has increased its turnover by more than 17%, from 9.8 billion INR (132 million euros) in 2017 to 11.5 billion INR (142 million euros) in 2018. This increase in turnover is the result of the capacity expansion of the grinding facility in Vizag (from 0.3 million tonnes to 1.5 million tonnes) and of the increase in capacity utilisation. Sagar was able to only partially offset the negative impact of the historically low sales prices, however, by maintaining stable costs/tonne. This was made possible by further measures to improve the energy efficiency, including the commissioning of a 6 MW heat recovery system and the further reduction of the average transportation distances to 285 km after the acquisition of the BMM and Vizag plants. The net result amounted to -0.1 million euros (2017: 2.5 million euros).
In January 2019, Sagar announced its plans to further expand its cement production capacity to 8.25 million tonnes per year through the construction of a 1.5 million tonnes grinding station in East India (Orissa) and a 1 million tonnes cement factory in Central India (Madya Pradesh). This expansion will be financed by a mix of debts and the preferential allotment of convertible warrants for an amount of 2.26 billion INR (28 million euros). This is in line with Sagar Cements' strategy of increasing its capacity to 10 million tonnes by 2025, and to further expand its market reach into regions with a strong potential for growth.
AvH will participate in the preferential awarding on a 50/50 basis, thereby increasing its interest to 21.85% after the operation. This represents an additional investment of 14 million euros.
Contribution to the AvH consolidated net result
| (€ million) | 2018 | 2017 |
|---|---|---|
| Contribution of participations | -6.9 | -1.3 |
| AvH & subholdings | -13.7 | -10.6 |
| Capital gains(losses)/ impairments |
-2.2 | 17.6 |
| AvH & Growth Capital | -22.8 | 5.7 |
Agidens (AvH 86.3%, incl. an indirect stake via AXE Investments) achieved an increase in turnover by 16%, to 82.6 million euros, and a net result of -5.0 million euros in 2018 (2017: -0.4 million euros). 2018 was a very challenging year due to the major impact of a loss-making project in the Netherlands that will be completed in 2019. The order book remains well-filled and amounted to approximately 50 million euros at the end of 2018.
At AXE Investments (AvH 48.3%), the results of the participation in the Xylos IT company, together with the rental income from the Ahlers building, determined the annual result (0.2 million euros) of the investment company.
Euro Media Group (EMG, AvH 22.5%) achieved a turnover of 306.6 million euros (2017: 304.2 million euros) in a busy sports year in 2018 (including turnover on productions at the Olympic Winter Games in South Korea and the football World Cup in Russia). Under the leadership of an extended management, EMG realised an EBITDA of 55.4 million euros (2017: 55.0 million euros), and a net profit of 0.8 million euros in 2018 (2017: -4.6 million euros). EMG is fully capitalising on technological innovation in the TV productions sector (both UHD technology and automated productions) and on the consolidation trend within the sector. For example, EMG announced the acquisition of Telegenics, a major player in the UK, on 14 February 2019.
The core activities of the group Manuchar (AvH 30.0%) performed strongly and contributed 18.2 million USD to the group result. In addition to the sale of chemicals, trading in steel, plastics and paper have made a particularly strongly contribution to this. The year 2018 closed however with a negative result for the group (-10.6 million USD, 2017: 0.2 million USD), due to substantial impairment losses on the sodium sulphate production site in Mexico (negative contribution of 28.8 million USD). This production was discontinued in May 2018, and the remaining book value was reduced to the estimated realisation value.
Mediahuis (AvH 13.2%) achieved a consolidated turnover of 819.2 million euros and a net result of 28.3 million euros in 2018 (2017: 14.9 million euros). Telegraaf Media Groep, which has been 100% owned by Mediahuis from the beginning of 2018, made a significant contribution to the growth of the group's result. In addition, Mediahuis took major steps in the field of digital transformation, such as through the investment in Wayne Parker Kent (increase of the stake from 16.5% to 100%, with closing in Q1 2019), and through the merger of Zimmo and Hebbes into a single real estate platform: Zimmo. In the area of audiovisuals, Mediahuis entered into an agreement with Telenet for the sale of its 30% stake in De Vijver Media, the company behind channels VIER, VIJF and ZES, and the Woestijnvis production house. The approval of this transaction by the Belgian competition authority is expected in the second quarter of 2019.
Telemond Groep (AvH 50.0%) achieved a 22% increase in turnover in 2018 thanks to the strong growth of the market and further product diversification. The record volumes in the hoisting sector have made the subsidiaries Teleskop and Montel into world market leaders in their segment. Teleyard, which focuses more on the maritime sector, also grew by 25% last year, and was able to significantly improve its profitability, despite difficult market conditions. Henschel Engineering Automotive has now completed and stabilised the start-up phase of the new Crafter product line, which experienced a difficult start-up in 2018. The group booked a net profit of 4.1 million euros (2017: 2.5 million euros).
Turbo's Hoet Groep (THG, AvH 50.0%) was appointed as the importer for Ford Trucks for Russia in 2018, and was nominated as 'Overall Best Performing Dealer 2018' by DAF. The group opened new service points in Erembodegem and in the Grand Duchy of Luxembourg. The leasing and renting fleet also expanded again, to a total of 4,507 units. Thanks to its sustained efforts and presence in Eastern Europe (Bulgaria, Russia, Belarus, Romania), Turbo's Hoet Groep achieved a significant increase in its turnover for the third year in a row, to 532.7 million euros (14%). Despite the unfavourable development of exchange rates in Q4 2018, TGH achieved a net profit of 10.1 million euros (2017: 9.7 million euros).
AvH acquired a 2.45% participation in EVS, market leader in live video technology for TV broadcasting, at the end of 2018, for an amount of 7.4 million euros.
Mediahuis
Telemond
Early March 2018, AvH entered into an agreement regarding the sale of its 10.53% stake in Atenor to the other reference shareholders, consisting of Stéphan Sonneville, 3D, Luxempart and Alva. The transaction was finalised in Q2 2018 at 45 euros per share and provided AvH with cash proceeds of 26.7 million euros and a capital gain of 8.7 million euros.
In June 2018, AvH and SIPEF finalised the sale of the BDM-Asco insurance group, which had already been announced at the end of 2017, to the American listed insurance company The Navigators Group, Inc. AvH realised a capital gain of 6.1 million euros on the sale of its stake.
In October, Sofinim sold its 50% participation in Distriplus, owner of the Di and Planet Parfum brand names, to Groupe Jacques Bogart. This French group is listed on the Paris stock exchange and specialises in the development, production and sale of perfumes and luxury cosmetics. Distriplus contributed -30.7 million euros to the 2018 group results, including the negative result contribution during the first 9 months of the year (-12.9 million euros).
At the end of February 2019, AvH acquired a 60% participation in Biolectric alongside the founder and CEO, Philippe Jans. Biolectric, founded in 2011, is the market leader in the production and sale of compact biogas installations (< 100 kW) intended for cattle and pig farms and water purification stations. Thanks to the anaerobic digestion technique, methane gas from manure is converted into usable energy (electricity and heat), avoiding the emission of harmful greenhouse gases. Biolectric's activity hence contributes to a climate-efficient agricultural production, which is totally in line with AvH's 'Partners for Sustainable Growth' mission.
The auditor has confirmed that his review of the consolidated annual accounts has been substantially completed and that no meaningful corrections have come to its attention that would require an adjustment to the financial information included in this press release.
Antwerp, February 27, 2019
Ernst & Young Bedrijfsrevisoren BCVBA represented by Patrick Rottiers(1) & Wim Van Gasse(1) Partners
(1) Acting on behalf of a BVBA/SPRL
Ackermans & van Haaren is a diversified group operating in 4 core sectors: Marine Engineering & Contracting (DEME, one of the largest dredging companies in the world - CFE, a construction group with headquarters in Belgium), Private Banking (Delen Private Bank, one of the largest independent private asset managers in Belgium, and asset manager JM Finn in the UK - Bank J. Van Breda & C°, niche bank for entrepreneurs and the liberal professions in Belgium), Real Estate & Senior Care (Leasinvest Real Estate, a listed real estate company - Extensa, a major land and real estate developer with a focus on Belgium and Luxembourg) and Energy & Resources (SIPEF, an agroindustrial group in tropical agriculture).
At an economic level, the AvH group represented in 2018 a turnover of 5.9 billion euros and employed 22.709 people through its share in the participations. The group focuses on a limited number of strategic participations with a significant potential for growth. AvH is listed on Euronext Brussels and is included in the BEL20 index, the Private Equity NXT index and the European DJ Stoxx 600 index.
All press releases issued by AvH and its most important group companies as well as the 'Investor Presentation' can also be consulted on the AvH website: www.avh.be. Anyone who is interested to receive the press releases via email has to register to this website.
| May 23, 2019 | Interim statement Q1 2019 |
|---|---|
| May 27, 2019 | Ordinary general meeting |
| August 31, 2019 | Half-year results 2019 |
| November 23, 2019 | Interimstatement Q3 2019 |
For further information please contact:
Jan Suykens CEO - Chairman executive committee Tel. +32.3.897.92.36
Tom Bamelis CFO - Member executive committee Tel. +32.3.897.92.42 e-mail: [email protected]
| 1. | Consolidated income statement 18 | |
|---|---|---|
| 2. | Consolidated statement of comprehensive income 19 | |
| 3. | Consolidated balance sheet 20 | |
| 4. | Consolidated cash flow statement 22 | |
| 5. | Statement of changes in consolidated equity 23 | |
| 6. | Segment reporting 24 | |
| • Consolidated income statement per segment | ||
| • Consolidated balance sheet per segment | ||
| • Consolidated cash flow statement per segment | ||
| 7. | Explanatory notes to the financial statements 36 | |
| 8. | Main risks and uncertainties 41 | |
| 9. | Events after balance sheet date41 | |
| 10. Additional disclosure IFRS 942 | ||
| 11. Lexicon 44 |
| (€ 1,000) | 2018 | 2017 |
|---|---|---|
| Revenue | 4,458,181 | 3,950,575 |
| Rendering of services | 207,745 | 206,973 |
| Lease revenue | 10,239 | 8,974 |
| Real estate revenue | 316,576 | 227,897 |
| Interest income - banking activities | 95,126 | 97,563 |
| Fees and commissions - banking activities | 61,224 | 55,637 |
| Revenue from construction contracts | 3,626,080 | 3,262,584 |
| Other operating revenue | 141,192 | 90,948 |
| Other operating income | 14,290 | 14,484 |
| Interest on financial fixed assets - receivables | 7,858 | 7,301 |
| Dividends | 5,677 | 6,864 |
| Government grants | 0 | 0 |
| Other operating income | 754 | 318 |
| Operating expenses (-) | -4,127,873 | -3,654,866 |
| Raw materials and consumables used (-) | -2,272,906 | -2,005,126 |
| Changes in inventories of finished goods, raw materials & consumables (-) | -16,488 | 22,932 |
| Interest expenses Bank J.Van Breda & C° (-) | -24,841 | -25,869 |
| Employee expenses (-) | -842,070 | -765,902 |
| Depreciation (-) | -297,044 | -269,315 |
| Impairment losses (-) | -40,533 | -12,724 |
| Other operating expenses (-) | -658,139 | -587,750 |
| Provisions | 24,149 | -11,113 |
| Profit (loss) on assets/liabilities designated at fair value through profit and loss | 3,704 | 31,960 |
| Financial assets - Fair value through P/L (FVPL) | 2,974 | 0 |
| Investment property | 730 | 31,960 |
| Profit (loss) on disposal of assets | 50,421 | 83,841 |
| Realised gain (loss) on intangible and tangible assets | 7,510 | 10,868 |
| Realised gain (loss) on investment property | 0 | -2,798 |
| Realised gain (loss) on financial fixed assets | 42,168 | 73,181 |
| Realised gain (loss) on other assets | 743 | 2,591 |
| Profit (loss) from operating activities | 398,723 | 425,993 |
| Finance income | 59,867 | 55,645 |
| Interest income | 10,414 | 10,830 |
| Other finance income | 49,454 | 44,815 |
| Finance costs (-) | -99,305 | -112,836 |
| Interest expenses (-) | -36,295 | -42,237 |
| Other finance costs (-) | -63,010 | -70,599 |
| Derivative financial instruments designated at fair value through profit and loss | 114 | 633 |
| Share of profit (loss) from equity accounted investments | 153,853 | 140,859 |
| Other non-operating income | 716 | 2,385 |
| Other non-operating expenses (-) | 0 | 0 |
| Profit (loss) before tax | ||
| 513,968 | 512,680 | |
| Income taxes Deferred taxes |
-72,195 6,452 |
-57,022 16,082 |
| Current taxes | -78,647 | -73,104 |
| Profit (loss) after tax from continuing operations | 441,773 | 455,657 |
| Profit (loss) after tax from discontinued operations | 0 | 0 |
| Profit (loss) of the period | 441,773 | 455,657 |
| Minority interests | 152,134 | 153,128 |
| Share of the group | 289,639 | 302,530 |
| Earnings per share (€) | ||
| 1. Basic earnings per share | ||
| 1.1. from continued and discontinued operations | 8.74 | 9.13 |
| 1.2. from continued operations | 8.74 | 9.13 |
| 2. Diluted earnings per share | ||
| 2.1. from continued and discontinued operations | 8.71 | 9.09 |
| 2.2. from continued operations | 8.71 | 9.09 |
For the first time adoption of IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers, we refer to Disclosure 7.1 New IFRS standards.
| (€ 1,000) | 2018 | 2017 |
|---|---|---|
| Profit (loss) of the period | 441,773 | 455,657 |
| Minority interests | 152,134 | 153,128 |
| Share of the group | 289,639 | 302,530 |
| Other comprehensive income | 1,904 | -30,691 |
| Elements to be reclassified to profit or loss in subsequent periods | ||
| Net changes in revaluation reserve: financial assets available for sale | -14,321 | |
| Net changes in revaluation reserve: bonds - Fair value through OCI (FVOCI) | 31 | |
| Net changes in revaluation reserve: hedging reserves | -6,793 | 19,599 |
| Net changes in revaluation reserve: translation differences | 8,816 | -30,190 |
| Elements not to be reclassified to profit or loss in subsequent periods | ||
| Net changes in revaluation reserve: shares - Fair value through OCI (FVOCI) | -156 | |
| Net changes in revaluation reserve: actuarial gains (losses) defined benefit pension plans | 6 | -5,778 |
| Total comprehensive income | 443,677 | 424,966 |
| Minority interests | 149,061 | 151,834 |
Share of the group 294,615 273,132
For the first time adoption of IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers, we refer to Disclosure 7.1 New IFRS standards.
For a breakdown of the item 'Share of the group and Minority interests' in the results of 2018, we refer to the segment reporting on page 25 of this report.
As a result of the application of the new accounting standard "IFRS 9 Financial Instruments", as explained on page 36 of this report, financial assets are as of 2018 broken down into three categories on the balance sheet. Another consequence of the application of this new rule is that, as of 2018, fluctuations in the "fair value" of financial assets are reported in the consolidated income statement instead of in the unrealized results. The only exception to this rule are the fair value fluctuations in the investment portfolio of Bank J.Van Breda & C° and Delen Private Bank, which in the table above is divided into shares and bonds.
Hedging reserves arise from fluctuations in the fair value of hedging instruments used by group companies to hedge against risks. Several group companies have hedged against a possible rise in interest rates. Across the group, the total unrealized loss on hedging instruments, mainly on interest rates and exchange rates, has increased by 6.8 million euros (including minority interests) in 2018.
Translation differences arise from fluctuations in the exchange rates of group companies that report in foreign currencies. In 2018, the euro decreased in value against most relevant currencies, which on balance is reflected in positive translation differences of 8.8 million euros.
With the introduction of the amended IAS 19 accounting standard in 2013, the actuarial gains and losses on certain pension plans are recognized directly in the other comprehensive income.
| I. Non-current assets 9,768,821 9,255,476 Intangible assets 176,802 179,567 Goodwill 339,738 349,523 Tangible assets 2,711,097 2,572,877 Land and buildings 348,592 479,686 Plant. machinery and equipment 1,865,980 1,615,815 Furniture and vehicles 29,372 28,822 Other tangible assets 4,518 4,713 Assets under construction and advance payments 462,635 443,558 Operating lease - as lessor (IAS 17) 0 283 Investment property 1,137,531 945,488 Participations accounted for using the equity method 1,184,765 1,240,746 Financial fixed assets 296,467 267,186 Available for sale financial fixed assets 102,335 Financial assets : shares - Fair value through P/L (FVPL) 113,526 Receivables and warranties 182,941 164,851 Non-current hedging instruments 2,000 5,649 Amounts receivable after one year 185,495 177,109 Trade receivables 0 6,958 Finance lease receivables 178,971 160,765 Other receivables 6,524 9,386 Deferred tax assets 108,297 109,219 Banks - receivables from credit institutions and clients after one year 3,626,628 3,408,112 II. Current assets 4,371,576 4,192,378 Inventories 332,385 329,400 Amounts due from customers under construction contracts 85,755 74,292 Investments 494,420 467,882 Available for sale financial assets 467,879 Financial assets held for trading 3 Financial assets : shares - Fair value through P/L (FVPL) 37,291 Financial assets : bonds - Fair value through OCI (FVOCI) 456,813 Financial assets : shares - Fair value through OCI (FVOCI) 316 Financial assets - at amortised cost 0 Current hedging instruments 451 4,553 Amounts receivable within one year 1,449,334 1,321,413 Trade debtors 1,138,482 1,066,152 Finance lease receivables 64,367 55,139 Other receivables 246,485 200,122 Current tax receivables 29,516 19,030 Banks - receivables from credit institutions and clients within one year 1,424,040 1,304,957 Banks - loans and advances to banks 127,693 88,863 Banks - loans and receivables (excluding leases) 936,664 908,056 Banks - cash balances with central banks 359,683 308,038 Cash and cash equivalents 513,588 637,027 Time deposits for less than three months 56,661 35,152 Cash 456,927 601,875 Deferred charges and accrued income 42,088 33,824 III. Assets held for sale 25,067 21,159 Total assets 14,165,464 13,469,013 |
(€ 1,000) | 2018 | 2017 |
|---|---|---|---|
For more details regarding the impact of the first time application of IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers, we refer to Disclosure 7.1 New IFRS standards.
The breakdown of the consolidated balance sheet by segment is shown on page 28-29 of this report. This reveals that the full consolidation of Bank J.Van Breda & C° (Private Banking segment) has a significant impact on both the balance sheet total and the balance sheet structure of AvH. Bank J.Van Breda & C° contributes 5,820.0 million euros to the balance sheet total of 14,165.5 million euros, and although this bank is solidly capitalized with a Core Tier1 ratio of 13.6%, its balance sheet ratios, as explained by the nature of its activity, are different from those of the other companies in the consolidation scope. To improve the readability of the consolidated balance sheet, certain items from the balance sheet of Bank J.Van Breda & C° have been summarized in the consolidated balance sheet.
| (€ 1,000) | 2018 | 2017 |
|---|---|---|
| I. Total equity | 4,357,996 | 4,195,272 |
| Equity - group share | 3,176,447 | 2,972,208 |
| Issued capital | 113,907 | 113,907 |
| Share capital | 2,295 | 2,295 |
| Share premium | 111,612 | 111,612 |
| Consolidated reserves | 3,124,841 | 2,905,611 |
| Revaluation reserves | -34,190 | -17,482 |
| Financial assets available for sale | 23,579 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 1,569 | |
| Financial assets : shares - Fair value through OCI (FVOCI) | 228 | |
| Hedging reserves | -13,529 | -10,204 |
| Actuarial gains (losses) defined benefit pension plans | -14,996 | -15,083 |
| Translation differences | -7,462 | -15,774 |
| Treasury shares (-) | -28,111 | -29,828 |
| Minority interests | 1,181,549 | 1,223,064 |
| II. Non-current liabilities | 2,435,214 | 2,477,286 |
| Provisions | 80,048 | 86,381 |
| Pension liabilities | 62,904 | 58,134 |
| Deferred tax liabilities | 191,983 | 212,268 |
| Financial debts | 1,340,204 | 1,388,177 |
| Bank loans | 1,120,304 | 877,470 |
| Bonds | 143,356 | 435,327 |
| Subordinated loans | 18,916 | 5,354 |
| Finance leases | 53,927 | 66,147 |
| Other financial debts | 3,700 | 3,880 |
| Non-current hedging instruments | 59,203 | 50,397 |
| Other amounts payable after one year | 32,543 | 26,761 |
| Banks - non-current debts to credit institutions. clients & securities | 668,329 | 655,168 |
| Banks - deposits from credit institutions | 0 | 0 |
| Banks - deposits from clients | 594,294 | 607,368 |
| Banks - debt certificates including bonds | 0 | 0 |
| Banks - subordinated liabilities | 74,035 | 47,800 |
| III. Current liabilities | 7,372,201 | 6,796,455 |
| Provisions | 50,760 | 59,166 |
| Pension liabilities | 358 | 289 |
| Financial debts | 672,919 | 499,467 |
| Bank loans | 214,864 | 163,833 |
| Bonds | 275,826 | 99,959 |
| Subordinated loans | 4,580 | 0 |
| Finance leases | 9,924 | 15,230 |
| Other financial debts | 167,724 | 220,445 |
| Current hedging instruments | 12,569 | 8,405 |
| Amounts due to customers under construction contracts | 224,540 | 235,704 |
| Other amounts payable within one year | 1,734,272 | 1,641,461 |
| Trade payables | 1,487,232 | 1,352,745 |
| Advances received on construction contracts | 1,270 | 2,505 |
| Amounts payable regarding remuneration and social security | 189,210 | 186,022 |
| Other amounts payable | 56,559 | 100,189 |
| Current tax payables | 56,212 | 64,691 |
| Banks - current debts to credit institutions. clients & securities | 4,551,832 | 4,191,182 |
| Banks - deposits from credit institutions | 27,634 | 27,458 |
| Banks - deposits from clients | 4,232,779 | 3,898,145 |
| Banks - debt certificates including bonds | 275,208 | 253,114 |
| Banks - subordinated liabilities | 16,211 | 12,465 |
| Accrued charges and deferred income | 68,739 | 96,089 |
| IV. Liabilities held for sale | 54 | 0 |
| Total equity and liabilities | 14,165,464 | 13,469,013 |
| (€ 1,000) | 2018 | 2017 |
|---|---|---|
| I. Cash and cash equivalents, opening balance | 637,027 | 754,315 |
| Profit (loss) from operating activities | 398,723 | 425,993 |
| Reclassification 'Profit (loss) on disposal of assets' to cash flow from divestments | -50,421 | -83,841 |
| Dividends from participations accounted for using the equity method | 67,565 | 62,392 |
| Other non-operating income (expenses) | 716 | 2,385 |
| Income taxes | -78,111 | -47,135 |
| Non-cash adjustments | ||
| Depreciation | 297,044 | 269,315 |
| Impairment losses | 40,661 | 12,881 |
| Share based payment | -362 | 1,915 |
| Profit (loss) on assets/liabilities designated at fair value through profit and loss | -3,704 | -31,960 |
| (Decrease) increase of provisions | -21,268 | 11,226 |
| (Decrease) increase of deferred taxes | -6,452 | -16,082 |
| Other non-cash expenses (income) | -2,091 | 4,186 |
| Cash flow | 642,299 | 611,275 |
| Decrease (increase) of working capital | -213,822 | -62,693 |
| Decrease (increase) of inventories and construction contracts | -58,347 | -31,726 |
| Decrease (increase) of amounts receivable | -308,384 | 93,961 |
| Decrease (increase) of receivables from credit institutions and clients (banks) | -336,488 | -553,537 |
| Increase (decrease) of liabilities (other than financial debts) | 96,120 | 9,621 |
| Increase (decrease) of debts to credit institutions, clients & securities (banks) | 379,047 | 419,257 |
| Decrease (increase) other | 14,230 | -268 |
| Cash flow from operating activities | 428,478 | 548,583 |
| Investments | -1,103,222 | -1,165,097 |
| Acquisition of intangible and tangible assets | -505,916 | -491,841 |
| Acquisition of investment property | -182,707 | -126,121 |
| Acquisition of financial fixed assets | 19,842 | -304,012 |
| New amounts receivable | -54,112 | -27,820 |
| Acquisition of investments | -380,329 | -215,302 |
| Divestments | 538,011 | 724,102 |
| Disposal of intangible and tangible assets | 16,027 | 20,459 |
| Disposal of investment property | 3,500 | 113,502 |
| Disposal of financial fixed assets | 159,945 | 214,987 |
| Reimbursements of amounts receivable | 9,241 | 13,344 |
| Disposal of investments | 349,297 | 361,809 |
| Cash flow from investing activities | -565,211 | -440,994 |
| Financial operations | ||
| Interest received | 10,412 | 10,820 |
| Interest paid | -40,343 | -47,945 |
| Other financial income (costs) | -12,852 | -24,519 |
| Decrease (increase) of treasury shares | 768 | -6,993 |
| (Decrease) increase of financial debts | 158,592 | -9,743 |
| Distribution of profits | -73,019 | -67,638 |
| Dividends paid to minority interests | -76,820 | -56,548 |
| Cash flow from financial activities | -33,262 | -202,566 |
| II. Net increase (decrease) in cash and cash equivalents | -169,995 | -94,978 |
| Change in consolidation scope or method | -2,794 | -21,890 |
| Capital decrease HPA (minorities) | -8,483 | 150 |
| Capital increase Leasinvest Real Estate (minorities) | 58,767 | 0 |
| Capital increase expenses Leasinvest Real Estate deducted directly from equity | -1,644 | 0 |
| Impact of exchange rate changes on cash and cash equivalents | 709 | -570 |
| III. Cash and cash equivalents - ending balance | 513,588 | 637,027 |
The first time adoption of IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers has no impact on the cash flow statement.
| (€ 1,000) | Revaluation reserves | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Issued capital & share premium |
Consolidated reserves |
available for sale Financial assets |
Hedging reserves |
Actuarial gains (losses) defined benefit pension plans |
Translation differences |
Treasury shares |
group share Equity - |
Minority interests |
Total equity | |||
| Opening balance, 1 january 2017 | 113,907 2,682,090 | 31,145 | -18,635 | -11,569 | 10,974 | -24,830 2,783,083 | 1,133,265 3,916,348 | |||||
| Profit | 302,530 | 302,530 | 153,128 | 455,657 | ||||||||
| Non-realised results | -7,566 | 8,431 | -3,514 | -26,748 | -29,397 | -1,294 | -30,691 | |||||
| Total of realised and unrealised results |
0 | 302,530 | -7,566 | 8,431 | -3,514 | -26,748 | 0 | 273,132 | 151,834 | 424,966 | ||
| Distribution of dividends of the previous financial year |
-67,638 | -67,638 | -56,548 | -124,186 | ||||||||
| Operations with treasury shares | -4,998 | -4,998 | -4,998 | |||||||||
| Other (a.o. changes in consol. scope / beneficial interest %) |
-11,371 | -11,371 | -5,487 | -16,858 | ||||||||
| Ending balance, 31 December 2017 |
113,907 2,905,611 | 23,579 | -10,204 | -15,083 | -15,774 | -29,828 2,972,208 | 1,223,064 4,195,272 | |||||
| Revaluation reserves | ||||||||||||
| (€ 1,000) |
| Issued capital & share premium |
Consolidated reserves |
available for sale Financial assets |
Fair value through OCI Bonds - (FVOCI) |
Fair value through OCI Shares - (FVOCI) |
Hedging reserves |
Actuarial gains (losses) defined benefit pension plans |
Translation differences |
Treasury shares |
group share Equity - |
Minority interests |
Total equity | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Closing balance, 31 December 2017 |
113,907 2,905,611 | 23,579 | -10,204 | -15,083 | -15,774 | -29,828 2,972,208 | 1,223,064 4,195,272 | |||||
| Impact IFRS 9 - Reclassification & measurement |
21,684 | -23,579 | 1,544 | 351 | 0 | 0 | 0 | |||||
| Impact IFRS 9 - Expected Credit loss | -9,866 | -9,866 | -5,458 | -15,324 | ||||||||
| Impact IFRS 15 - Revenue from contracts with customers |
-9,392 | -9,392 | -6,158 | -15,550 | ||||||||
| Opening balance, 1 January 2018 | 113,907 2,908,037 | 0 | 1,544 | 351 | -10,204 | -15,083 | -15,774 | -29,828 2,952,951 | 1,211,448 4,164,398 | |||
| Profit | 289,639 | 289,639 | 152,134 | 441,773 | ||||||||
| Non-realised results | 24 | -123 | -3,325 | 87 | 8,312 | 4,976 | -3,072 | 1,904 | ||||
| Total of realised and unrealised results |
0 | 289,639 | 0 | 24 | -123 | -3,325 | 87 | 8,312 | 0 | 294,615 | 149,061 | 443,677 |
| Distribution of dividends of the previous financial year |
-73,019 | -73,019 | -76,820 | -149,839 | ||||||||
| Operations with treasury shares | 1,716 | 1,716 | 1,716 | |||||||||
| Other (a.o. changes in consol. scope / beneficial interest %) |
184 | 184 | -102,141 | -101,957 | ||||||||
| Ending balance, 31 December 2018 |
113,907 3,124,841 | 0 | 1,569 | 228 | -13,529 | -14,996 | -7,462 | -28,111 3,176,447 | 1,181,549 4,357,996 |
For comments on the unrealized results, see Note 2 on page 19 of this report. The impact of the new accounting standard "IFRS 9 Financial instruments" is explained in Disclosure 7.1 New IFRS Standards on page 36 of this report.
In 2018 AvH didn't buy any treasury shares to hedge stock option obligations to its staff. During that same period, beneficiaries of the stock option plan exercised options on 23,000 AvH shares. As at December 31, 2018, options are granted on a total of 334,000 AvH shares. To hedge that obligation, AvH had exactly a total 334,000 treasury shares in portfolio on that same date.
In addition, 304,867 shares were purchased and 300,709 shares sold in 2018 as part of the agreement that AvH has concluded with Kepler Cheuvreux to support the liquidity of the AvH share. Kepler Cheuvreux acts entirely autonomously in those transactions,
but as they are carried out on behalf of AvH, the net purchase of 4,158 AvH shares in this context has an impact on AvH's equity. This net purchase of 4,158 shares in 2018 puts the total number of shares held by AvH as part of this liquidity agreement at 9,415.
The item 'Other' in the column 'Minority interest' is explained by the capital increase at Leasinvest Real Estate (70% participation by minority interests), the capital reduction at HPA (28% paid to minority interests) and the simplification of the structure of the Finaxis group (no more reporting of minority interests in Delen Private Bank). For the latter item we refer to Section 6 of the notes, Segment reporting, p. 24.
The item "Other" in the colomn "Consolidated reserves" includes a.o. the eliminations of results on sales of treasury shares, the impact of the acquisition of minority interests and the impact of the measurement of the purchase obligation resting on certain shares.
Segment 1
DEME (global integration 60.45%), CFE (global integration 60.45%), Rent-A-Port (global integration 72.20%) and Green Offshore (global integration 80.22%).
The acquisition of 12,000 CFE shares (+0.05%) on the stock market at the end of 2018 also explains the slight increase at DEME, Rent-A-Port and Green Offshore. This additional stake will contribute to the consolidated result as of 2019.
Segment 2
Delen Investments CVA (equity method 78.75% till 3Q2018), Delen Private Bank (Equity method 78.75% as of 4Q2018), Bank J.Van Breda & C° (global integration 78.75%), Finaxis (global integration 78.75% till 3Q2018) and FinAx (global integration 100% as of 4Q2018).
As of December 31, 2018, the structure of the Finaxis group has been simplified as follows:
Both the merger and division were approved with retroactive effect in the accounts to October 1, 2018, at 0.00h.
This internal restructuring was carried out at the request of the National Bank of Belgium in order to guarantee an appropriate supervisory structure for Delen Private Bank and Bank J.Van Breda & C°.
The internal restructuring involves a change in the direct shareholding of the two credit institutions without altering the final control structure, while at the same time safeguarding the pre-existing agreements between the two shareholder groups, Ackermans & van Haaren and the Jacques Delen family. The Ackermans & van Haaren group essentially retains a 78.75% stake in the two credit institutions, which is held directly by a newly formed company, coupled with agreements at shareholder level. This structure is aligned to the pre-existing final shareholder structure in the credit institutions and the pre-existing contractual arrangements and control structure between Ackermans & van Haaren and the Jacques Delen family, and therefore implies a continuation of the successful collaboration between both partners.
For the rest, the composition of this segment has not changed since year-end 2017. In the consolidated balance sheet of 2017, the participation in BDM-Asco had already been reclassified to 'Assets held for sale' in light of the announced sale to the US insurance company Navigators Group, Inc. This transaction was closed in 1H2018.
Extensa (global integration 100%), Leasinvest Real Estate (global integration 30%), Leasinvest Real Estate Management (global integration 100%), Anima Care (global integration 92.5%) and HPA (global integration 71.7%). HPA is the structure that owns 100% of Residalya (operation of retirement homes) and 100% of Patrimoine & Santé Expansion (which owns real estate operated by Residalya). Both Residalya and Patrimoine & Santé Expansion are fully consolidated by HPA.
The composition of this segment has not changed in 2018.
Segment 4
SIPEF (equity method 31.6%), AvH India Resources (global integration 100%) and Sagar Cements (equity method 17.6%).
AvH's stake in SIPEF increased slightly from 30.25% to 31.59% in 2018.
Segment 5
In April 2018, Sofinim (AvH 100%) sold its entire participation (10.53%) in Atenor and its 50% stake in Distriplus in October.
During the first half of 2018, AvH's shareholding percentage in Financière EMG increased from 22.24% to 22.51% and in Corelio from 26.17% to 26.21%. Both these movements are the result of minor changes in the shareholder structure of those companies and not of additional direct investments by AvH.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2018 |
|
| Revenue | 3,757,557 | 167,429 | 448,113 | 13 | 87,057 | -1,989 | 4,458,181 |
| Rendering of services | 3,180 | 204,574 | 1,833 | -1,843 | 207,745 | ||
| Lease revenue | 8,656 | 1,583 | 10,239 | ||||
| Real estate revenue | 94,696 | 221,880 | 316,576 | ||||
| Interest income - banking activities | 95,126 | 95,126 | |||||
| Fees and commissions - banking activities | 61,224 | 61,224 | |||||
| Revenue from construction contracts | 3,543,530 | 82,550 | 3,626,080 | ||||
| Other operating revenue | 116,151 | 2,423 | 20,076 | 13 | 2,674 | -146 | 141,192 |
| Other operating income | 7,670 | 701 | 4,402 | 0 | 2,712 | -1,194 | 14,290 |
| Interest on financial fixed assets - receivables | 7,619 | 110 | 1,254 | -1,124 | 7,858 | ||
| Dividends | 50 | 701 | 4,293 | 634 | 5,677 | ||
| Government grants | 0 | ||||||
| Other operating income | 824 | -70 | 754 | ||||
| Operating expenses (-) | -3,537,890 | -116,061 | -358,598 | -74 | -117,308 | 2,059 | -4,127,873 |
| Raw materials and consumables used (-) | -2,078,801 | -150,385 | -43,720 | -2,272,906 | |||
| Changes in inventories of finished goods, raw materials & consumables (-) | -27,361 | 10,836 | 38 | -16,488 | |||
| Interest expenses Bank J.Van Breda & C° (-) | -24,841 | -24,841 | |||||
| Employee expenses (-) | -637,476 | -42,857 | -124,631 | -37,106 | -842,070 | ||
| Depreciation (-) | -272,495 | -4,446 | -17,131 | -2,972 | -297,044 | ||
| Impairment losses (-) | -19,802 | -3,011 | -4,438 | -13,283 | -40,533 | ||
| Other operating expenses (-) | -528,755 | -37,102 | -74,007 | -74 | -20,261 | 2,059 | -658,139 |
| Provisions | 26,799 | -3,804 | 1,158 | -4 | 24,149 | ||
| Profit (loss) on assets/liabilities designated at fair value through profit and loss |
0 | 0 | 6,285 | 0 | -2,581 | 0 | 3,704 |
| Financial assets - Fair value through P/L (FVPL) | 5,555 | -2,581 | 2,974 | ||||
| Investment property | 730 | 730 | |||||
| Profit (loss) on disposal of assets | 7,879 | 482 | 30,692 | 0 | 11,368 | 0 | 50,421 |
| Realised gain (loss) on intangible and tangible assets | 7,530 | -29 | 9 | 7,510 | |||
| Realised gain (loss) on investment property | 0 | ||||||
| Realised gain (loss) on financial fixed assets | 349 | -27 | 30,721 | 11,125 | 42,168 | ||
| Realised gain (loss) on other assets | 509 | 234 | 743 | ||||
| Profit (loss) from operating activities | 235,215 | 52,551 | 130,894 | -61 | -18,752 | -1,124 | 398,723 |
| Finance income | 55,233 | 8 | 4,375 | 0 | 339 | -88 | 59,867 |
| Interest income | 7,501 | 8 | 2,661 | 332 | -88 | 10,414 | |
| Other finance income | 47,732 | 1,714 | 8 | 49,454 | |||
| Finance costs (-) | -71,945 | 0 | -26,951 | -6 | -1,616 | 1,212 | -99,305 |
| Interest expenses (-) | -20,638 | -16,482 | -388 | 1,212 | -36,295 | ||
| Other finance costs (-) | -51,307 | -10,469 | -6 | -1,228 | -63,010 | ||
| Derivative financial instruments designated at fair value throughprofit and loss |
0 | -10 | 124 | 0 | 0 | 114 | |
| Share of profit (loss) from equity accounted investments | 21,910 | 107,089 | 18,860 | 8,040 | -2,047 | 153,853 | |
| Other non-operating income | 0 | 716 | 0 | 0 | 0 | 716 | |
| Other non-operating expenses (-) | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) before tax | 240,413 | 160,355 | 127,302 | 7,973 | -22,075 | 0 | 513,968 |
| Income taxes | -49,769 | -11,465 | -9,618 | 0 | -1,343 | 0 | -72,195 |
| Deferred taxes | 91 | 916 | 5,774 | -328 | 6,452 | ||
| Current taxes | -49,860 | -12,381 | -15,392 | -1,015 | -78,647 | ||
| Profit (loss) after tax from continuing operations | 190,644 | 148,890 | 117,685 | 7,973 | -23,418 | 0 | 441,773 |
| Profit (loss) after tax from discontinued operations | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) of the period | 190,644 | 148,890 | 117,685 | 7,973 | -23,418 | 0 | 441,773 |
| Minority interests | 72,563 | 27,589 | 52,405 | 266 | -689 | 152,134 | |
| Share of the group | 118,081 | 121,300 | 65,279 | 7,707 | -22,729 | 289,639 |
The consolidated revenue increased in 2018 by 507.6 million euros (+12.8%) to 4,458.2 million euros compared with the previous year.
This increase was to a large extent realized in the "Marine Engineering & Contracting" segment, and reflects the buoyant activity reported by both DEME and CFE. The successful sales by Extensa of its residential property developments and the further expansion of the retirement home groups Anima Care in Belgium and Residalya in France also contributed to this turnover increase, as did Agidens (in "AvH & Growth Capital"). Revenue in the "Private Banking" segment increased by 2.6%. Since the participation in Delen Private Bank is accounted for using the equity method, this revenue (and the corresponding charges) relates exclusively to Bank J.Van Breda & C°, which in 2018 again succeeded in compensating the pressure on interest margins with higher commissions and increased income from car finance. In the "Energy & Resources" segment, all participations are now accounted for using the equity method, following the sale of the stake in Nationale Maatschappij der Pijpleidingen (NMP) at year-end 2017.
In line with the increased revenue, the operating expenses increased as well, more particularly by 473.0 million euros (+12.9%). In keeping with the evolution of the revenue, the costs increased in all segments, with the exception of Energy & Resources, as a result of the participation in NMP leaving the consolidation scope as was mentioned earlier.
Impairment losses of 40.5 million euros were charged to profit and loss in 2018, and consist primarily of 13.3 million euros additional impairment losses on Distriplus, 8.4 million euros net impairment losses at CFE (including an additional 10 million euros Expected Credit Loss), 6.0 million euros impairment losses on goodwill recognized by DEME on the final recognition of the purchase price of MEDCO, G-Tec and A2Sea, and 3.0 million euros (incl. Expected Credit Loss) on outstanding loans to clients of Bank J.Van Breda & C°.
The impairment losses were offset by the reversal of provisions: 11.4 million euros worth of provisions that CFE had constituted in the past, and 15.4 million euros for contingent liabilities which AvH had recognized on the acquisition of control over CFE in 2013, given that the relevant underlying risks have since been reduced or provided for by CFE itself.
In 2018, the profit on assets/liabilities designated at fair value through profit and loss related primarily to the increase in fair value (market price) of the 1,192,418 Retail Estates shares in the portfolio of Leasinvest Real Estate, the net positive increase in fair value of investment property at Leasinvest Real Estate and Extensa, and, finally, the decrease in fair value of AvH's portfolio investments.
Capital gains (losses) were realized in 2018 on the sale of miscellaneous equipment by DEME and CFE (totalling 7.5 million euros), to the amount of 29.8 million euros on the sale by HPA of a company owning the real estate of 14 retirement homes operated by Residalya, and to the amount of 11.1 million euros in the "AvH & Growth Capital" segment (including a capital gain of 8.7 million euros on the disposal of the stake in Atenor, a capital gain of 6.1 million euros on the disposal of BDM-Asco, and an additional loss of 4.5 million euros on the disposal of the 50% stake in Distriplus in 4Q2018). The 'Profit (loss) on disposal of assets' totalled 50.4 million euros in 2018, or 33.4 million euros below the capital gains realized in 2017, which were favourably influenced by a.o. capital gains on (the companies owning) the real estate developments Kons and Oosteroever at CFE and on the sales of the participations in NMP and Ogeda.
The slight decrease in the profit from operating activities compared with last year is explained entirely by the lower net capital gains that were realized in 2018.
The finance costs in 2018 were 39.4 million euros higher than the finance income end they turn out 17.8 million euros net less negative than in 2017.
The share of profit (loss) from equity accounted investments was 153.9 million euros, compared with 140.9 million euros in 2017.
The income taxes increased in 2018 by 15.2 million euros to 72.2 million euros. Adjusted for the profit from the equity accounted companies, which is recognized after tax, this amounts to a tax cost of 20.0%.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2017 |
|
| Revenue | 3,279,471 | 163,256 | 420,694 | 13,197 | 76,362 | -2,405 | 3,950,575 |
| Rendering of services | 4,459 | 189,296 | 13,156 | 2,324 | -2,262 | 206,973 | |
| Lease revenue | 7,407 | 1,567 | 8,974 | ||||
| Real estate revenue | 10,900 | 216,997 | 227,897 | ||||
| Interest income - banking activities | 97,563 | 97,563 | |||||
| Fees and commissions - banking activities | 55,637 | 55,637 | |||||
| Revenue from construction contracts | 3,191,328 | 71,255 | 3,262,584 | ||||
| Other operating revenue | 72,783 | 2,649 | 12,834 | 41 | 2,783 | -143 | 90,948 |
| Other operating income | 7,093 | 2,637 | 3,405 | -3 | 1,622 | -271 | 14,484 |
| Interest on financial fixed assets - receivables | 7,093 | 134 | 275 | -201 | 7,301 | ||
| Dividends | 1 | 2,637 | 3,271 | -3 | 959 | 6,864 | |
| Government grants | 0 | ||||||
| Other operating income | 388 | -70 | 318 | ||||
| Operating expenses (-) | -3,083,651 | -111,323 | -344,696 | -9,987 | -107,684 | 2,475 | -3,654,866 |
| Raw materials and consumables used (-) | -1,818,638 | -148,606 | -6,411 | -31,471 | -2,005,126 | ||
| Changes in inventories of finished goods, raw materials & consumables (-) | 13,306 | 9,466 | 161 | 22,932 | |||
| Interest expenses Bank J.Van Breda & C° (-) | -25,869 | -25,869 | |||||
| Employee expenses (-) | -574,152 | -43,981 | -111,674 | -1,059 | -35,035 | -765,902 | |
| Depreciation (-) | -240,747 | -5,248 | -18,644 | -1,920 | -2,755 | -269,315 | |
| Impairment losses (-) | 9,734 | -1,660 | -2,398 | -18,400 | -12,724 | ||
| Other operating expenses (-) | -462,909 | -33,581 | -73,013 | -596 | -20,125 | 2,475 | -587,750 |
| Provisions | -10,245 | -984 | 173 | -57 | -11,113 | ||
| Profit (loss) on assets/liabilities designated at fair value through profit and loss |
0 | 0 | 31,960 | 0 | 0 | 0 | 31,960 |
| Financial assets held for trading | 0 | ||||||
| Investment property | 31,960 | 31,960 | |||||
| Profit (loss) on disposal of assets | 47,657 | 1,484 | -2,758 | 355 | 37,103 | 0 | 83,841 |
| Realised gain (loss) on intangible and tangible assets | 10,845 | 3 | 20 | 10,868 | |||
| Realised gain (loss) on investment property | -2,798 | -2,798 | |||||
| Realised gain (loss) on financial fixed assets | 36,812 | 2 | 23 | 352 | 35,992 | 73,181 | |
| Realised gain (loss) on other assets | 1,483 | 17 | 1,090 | 2,591 | |||
| Profit (loss) from operating activities | 250,570 | 56,054 | 108,605 | 3,562 | 7,403 | -201 | 425,993 |
| Finance income | 51,106 | 13 | 3,615 | 13 | 1,660 | -762 | 55,645 |
| Interest income | 7,906 | 13 | 2,664 | 9 | 1,000 | -762 | 10,830 |
| Other finance income | 43,199 | 951 | 4 | 661 | 0 | 44,815 | |
| Finance costs (-) | -83,653 | 0 | -27,867 | -88 | -2,190 | 963 | -112,836 |
| Interest expenses (-) | -25,198 | -17,469 | -88 | -446 | 963 | -42,237 | |
| Other finance costs (-) | -58,456 | -10,399 | -1,744 | 0 | -70,599 | ||
| Derivative financial instruments designated at fair value throughprofit and loss |
0 | -85 | 718 | 0 | 0 | 633 | |
| Share of profit (loss) from equity accounted investments | -13,639 | 106,921 | 10,979 | 37,560 | -962 | 140,859 | |
| Other non-operating income | 1,231 | 1,154 | 0 | 0 | 0 | 2,385 | |
| Other non-operating expenses (-) | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) before tax | 205,614 | 164,057 | 96,050 | 41,047 | 5,911 | 0 | 512,680 |
| Income taxes | -45,067 | -19,526 | 8,689 | -1,035 | -83 | 0 | -57,022 |
| Deferred taxes | 5,112 | -3,281 | 13,882 | -10 | 379 | 16,082 | |
| Current taxes | -50,179 | -16,245 | -5,194 | -1,024 | -462 | -73,104 | |
| Profit (loss) after tax from continuing operations | 160,547 | 144,531 | 104,739 | 40,013 | 5,828 | 0 | 455,657 |
| Profit (loss) after tax from discontinued operations | 0 | 0 | 0 | 0 | 0 | 0 | |
| Profit (loss) of the period | 160,547 | 144,531 | 104,739 | 40,013 | 5,828 | 0 | 455,657 |
| Minority interests | 69,959 | 30,608 | 50,392 | 2,087 | 82 | 153,128 | |
| Share of the group | 90,588 | 113,923 | 54,347 | 37,925 | 5,746 | 302,530 | |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2018 |
|
| I. Non-current assets | 3,127,131 | 4,554,231 | 1,662,897 | 221,606 | 220,361 | -17,405 | 9,768,821 |
| Intangible assets | 89,603 | 1,528 | 85,197 | 475 | 176,802 | ||
| Goodwill | 177,127 | 134,247 | 28,363 | 339,738 | |||
| Tangible assets | 2,382,353 | 44,401 | 257,420 | 26,923 | 2,711,097 | ||
| Investment property | 1,137,531 | 1,137,531 | |||||
| Participations accounted for using the equity method |
194,547 | 585,540 | 32,765 | 221,606 | 150,307 | 1,184,765 | |
| Financial fixed assets | 181,135 | 1,054 | 95,159 | 36,524 | -17,405 | 296,467 | |
| Financial assets : shares - Fair value through P/L (FVPL) | 3,255 | 91,824 | 18,447 | 113,526 | |||
| Receivables and warranties | 177,880 | 1,054 | 3,335 | 18,077 | -17,405 | 182,941 | |
| Non-current hedging instruments | 9 | 1,295 | 696 | 2,000 | |||
| Amounts receivable after one year | 2,448 | 156,875 | 22,618 | 3,554 | 185,495 | ||
| Trade receivables | 0 | ||||||
| Finance lease receivables | 156,875 | 22,096 | 178,971 | ||||
| Other receivables | 2,448 | 522 | 3,554 | 6,524 | |||
| Deferred tax assets | 99,909 | 2,663 | 3,147 | 2,578 | 108,297 | ||
| Banks - receivables from credit institutions and clients after one year |
3,626,628 | 3,626,628 | |||||
| II. Current assets | 1,875,800 | 1,992,452 | 362,626 | 412 | 150,736 | -10,451 | 4,371,576 |
| Inventories | 181,451 | 150,415 | 519 | 332,385 | |||
| Amounts due from customers under construction contracts |
50,943 | 26,042 | 8,770 | 85,755 | |||
| Investments | 3 | 457,129 | 113 | 37,175 | 494,420 | ||
| Financial assets : shares - Fair value through P/L (FVPL) | 3 | 113 | 37,175 | 37,291 | |||
| Financial assets : bonds - Fair value through OCI (FVOCI) | 456,813 | 456,813 | |||||
| Financial assets : shares - Fair value through OCI (FVOCI) | 316 | 316 | |||||
| Financial assets - at amortised cost | 0 | ||||||
| Current hedging instruments | 275 | 176 | 451 | ||||
| Amounts receivable within one year | 1,200,042 | 93,266 | 114,678 | 50,150 | -8,801 | 1,449,334 | |
| Trade debtors | 1,093,581 | 30,895 | 15,123 | -1,116 | 1,138,482 | ||
| Finance lease receivables | 63,682 | 685 | 64,367 | ||||
| Other receivables | 106,461 | 29,584 | 83,097 | 35,028 | -7,685 | 246,485 | |
| Current tax receivables | 24,257 | 881 | 3,282 | 4 | 1,092 | 29,516 | |
| Banks - receivables from credit institutions and clients within one year |
1,424,040 | 1,424,040 | |||||
| Banks - loans and advances to banks | 127,693 | 127,693 | |||||
| Banks - loans and receivables (excl. finance leases) |
936,664 | 936,664 | |||||
| Banks - cash balances with central banks | 359,683 | 359,683 | |||||
| Cash and cash equivalents | 390,746 | 9,355 | 62,785 | 409 | 50,293 | 513,588 | |
| Time deposits for less than three months | 28,240 | 1 | 4,552 | 23,868 | 56,661 | ||
| Cash | 362,506 | 9,354 | 58,234 | 409 | 26,425 | 456,927 | |
| Deferred charges and accrued income | 28,083 | 7,605 | 5,312 | 2,738 | -1,649 | 42,088 | |
| III. Assets held for sale | 19,753 | 5,314 | 25,067 | ||||
| Total assets | 5,002,931 | 6,546,683 | 2,045,277 | 222,018 | 376,412 | -27,856 | 14,165,464 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine | Private | Real Estate & | Energy & | AvH & | Eliminations | Total | |
| Engineering & Contracting |
Banking | Senior Care | Resources | Growth Capital | between segments |
2018 | |
| I. Total equity | 1,726,910 | 1,265,115 | 830,804 | 222,012 | 313,154 | 4,357,996 | |
| Shareholders' equity - group share | 1,044,472 | 1,149,019 | 450,091 | 222,012 | 310,853 | 3,176,447 | |
| Issued capital | 113,907 | 113,907 | |||||
| Share capital | 2,295 | 2,295 | |||||
| Share premium | 111,612 | 111,612 | |||||
| Consolidated reserves | 1,071,973 | 1,147,315 | 457,491 | 212,576 | 235,486 | 3,124,841 | |
| Revaluation reserves | -27,501 | 1,704 | -7,400 | 9,436 | -10,429 | -34,190 | |
| Financial assets : bonds - Fair value through OCI (FVOCI) | 1,569 | 1,569 | |||||
| Financial assets : shares - Fair value through OCI (FVOCI) Hedging reserves |
-3,501 | 228 -71 |
-10,281 | 117 | 208 | 228 -13,529 |
|
| Actuarial gains (losses) defined benefit pension plans | -15,427 | -145 | -9 | -871 | 1,455 | -14,996 | |
| Translation differences | -8,573 | 123 | 2,891 | 10,190 | -12,092 | -7,462 | |
| Treasury shares (-) | -28,111 | -28,111 | |||||
| Minority interests | 682,439 | 116,096 | 380,713 | 2,301 | 1,181,549 | ||
| II. Non-current liabilities | 962,984 | 707,047 | 773,470 | 9,118 | -17,405 | 2,435,214 | |
| Provisions | 66,913 | 8,874 | 2,836 | 1,425 | 80,048 | ||
| Pension liabilities | 57,553 | 4,528 | 823 | 62,904 | |||
| Deferred tax liabilities | 119,441 | 70,884 | 1,657 | 191,983 | |||
| Financial debts | 703,997 | 647,804 | 5,808 | -17,405 | 1,340,204 | ||
| Bank loans | 598,767 | 516,311 | 5,227 | 1,120,304 | |||
| Bonds | 29,805 | 113,552 | 143,356 | ||||
| Subordinated loans | 18,902 | 14 | 18,916 | ||||
| Finance leases | 37,997 | 15,363 | 567 | 53,927 | |||
| Other financial debts | 18,528 | 2,578 | -17,405 | 3,700 | |||
| Non-current hedging instruments | 9,354 | 14,048 | 35,801 | 59,203 | |||
| Other amounts payable after one year | 5,725 | 11,268 | 15,322 | 228 | 32,543 | ||
| Banks - debts to credit institutions, clients & securities | 668,329 | 668,329 | |||||
| Banks - deposits from credit institutions | 0 | ||||||
| Banks - deposits from clients | 594,294 | 594,294 | |||||
| Banks - debt certificates including bonds Banks - subordinated liabilities |
74,035 | 0 74,035 |
|||||
| III. Current liabilities | 2,313,036 | 4,574,521 | 440,950 | 6 | 54,139 | -10,451 | 7,372,201 |
| Provisions | 44,205 | 18 | 6,536 | 50,760 | |||
| Pension liabilities | 358 | 358 | |||||
| Financial debts | 357,997 | 296,612 | 25,679 | -7,367 | 672,919 | ||
| Bank loans | 137,010 | 76,480 | 1,374 | 214,864 | |||
| Bonds | 200,137 | 75,689 | 275,826 | ||||
| Subordinated loans | 4,573 | 7 | 4,580 | ||||
| Finance leases | 8,325 | 1,301 | 299 | 9,924 | |||
| Other financial debts | 7,952 | 143,141 | 23,999 | -7,367 | 167,724 | ||
| Current hedging instruments | 10,990 | 1,546 | 33 | 12,569 | |||
| Amounts due to customers under construction contracts | 216,222 | 740 | 7,579 | 224,540 | |||
| Other amounts payable within one year | 1,601,027 | 13,764 | 101,105 | 2 | 19,490 | -1,116 | 1,734,272 |
| Trade payables | 1,412,207 | 15 | 66,434 | 2 | 9,689 | -1,116 | 1,487,232 |
| Advances received | 1,270 | 1,270 | |||||
| Amounts payable regarding remuneration and social security | 150,717 | 9,892 | 20,221 | 8,381 | 189,210 | ||
| Other amounts payable Current tax payables |
38,103 43,666 |
3,857 75 |
13,180 11,569 |
4 | 1,420 899 |
56,559 56,212 |
|
| Banks - debts to credit institutions, clients & securities | 4,551,832 | 4,551,832 | |||||
| Banks - deposits from credit institutions | 27,634 | 27,634 | |||||
| Banks - deposits from clients | 4,232,779 | 4,232,779 | |||||
| Banks - debt certificates including bonds | 275,208 | 275,208 | |||||
| Banks - subordinated liabilities | 16,211 | 16,211 | |||||
| Accrued charges and deferred income | 38,930 | 6,928 | 24,355 | 493 | -1,967 | 68,739 | |
| IV. Liabilities held for sale | 54 | 54 | |||||
| Total equity and liabilities | 5,002,931 | 6,546,683 | 2,045,277 | 222,018 | 376,412 | -27,856 | 14,165,464 |
The consolidated balance sheet total of AvH increased further in 2018 to 14,165.5 million euros at year-end 2018, compared with 13,469.0 million euros the previous year.
As was already mentioned in earlier reports, the full consolidation of the participation in Bank J.Van Breda & C° (78.75%) has a considerable impact on both the total size and the composition of the consolidated balance sheet of AvH. Due to its specific banking activity, Bank J.Van Breda & C° has a significantly greater balance sheet total than the other companies of the group: out of an overall balance sheet total of 14,165.5 million euros, the full consolidation of Bank J.Van Breda & C° alone already accounts for 5,820.0 million euros. Moreover, as a financial institution, Bank J.Van Breda & C° has a distinct balance sheet structure that is tailored to its activities. Although Bank J.Van Breda & C° is one of the best capitalized financial institutions in Belgium, it clearly has different balance sheet ratios than the other participations of the group. A number of items from the balance sheet of Bank J.Van Breda & C° are grouped under separate items in the consolidated balance sheet of AvH for distinction purposes.
The strong commercial dynamic of Bank J.Van Breda & C°, which is reflected, among other things, in a further increase of the loan portfolio (assets) and deposits received (liabilities), accounts for nearly half of the increase in the group's balance sheet total in 2018. The rest of the growth is spread over several balance sheet items and generally illustrates the growth of the group's activities over the past year.
The limited decrease in goodwill (9.8 million euros) is primarily the result of the final recognition of DEME's acquisition of the stakes in A2Sea and G-TEC; both transactions had been provisionally recognized in the balance sheet at year-end 2017.
DEME again made substantial investments in 2018 to a total amount of 441.3 million euros in the modernization and expansion of its fleet. In 2018, the Apollo and the Living Stone were brought into service, while building work continued on the Spartacus and the Orion. This investment volume far exceeds the 256.9 million euros worth of depreciation that was recognized. Furthermore, in 2H2018 DEME acquired exclusive control over its Qatar-based MEDCO subsidiary, which is now fully consolidated instead of being accounted for using the equity method as before. As a result, the MEDCO vessels, which include the cutters Al Mahaar and Al Jarraf, now appear on the balance sheet of DEME (and therefore of AvH) where they represent an amount of 79.6 million euros.
Although Anima Care and Residalya both made additional investments in their retirement homes, the tangible assets in "Real Estate & Senior Care" decreased by 121.1 million euros. This is explained by the sale in 3Q2018 by HPA of the real estate of 14 sites operated by Residalya to Icade Santé, an investor specializing in healthcare real estate. This transaction, in which the underlying real estate was valued at 189 million euros, earned HPA a net capital gain of 29.8 million euros, and made 148.1 million euros worth of real estate assets disappear from the balance sheet of HPA.
Supported by the 84 million euros fresh funds contributed by the shareholders on the occasion of the public capital increase, Leasinvest Real Estate invested 127.2 million euros in real estate assets in 2018, putting the portfolio at year-end 2018, including 1.6 million euros remeasurement gain, at 1,037.1 million euros (including leasing). The main investments in 2018 were the purchase of 2 office buildings in the EBBC complex in Luxembourg, the Hangar 26/27 building in Antwerp, and Montoyer 14 in Brussels. Extensa also owns investment property, including leased buildings on the Tour & Taxis site in Brussels, worth a total of 133.3 million euros.
The participations accounted for using the equity method represented a carrying value of 1,184.8 million euros at year-end 2018. The decrease in this item compared with the previous financial year is primarily explained by the simplification of the shareholder structure of Delen Private Bank and Bank J.Van Breda & C°. AvH now holds a direct 78.75% stake in both banks via its 100% subsidiary FinAx instead of previously via a joint holding structure Finaxis. The cooperation agreements with respect to the two banks as well as the shareholders'agreements remain unchanged, as does the consolidation method. With regard to the stake in Delen Private Bank, a direct shareholding (78.75%) is accounted for using the equity method as of 4Q2018 instead of 100% through Finaxis, adjusted for a minority interest of 21.25%.
The increase in financial fixed assets in the "Marine Engineering & Contracting" segment is the result of additional investments by DEME and Green Offshore in wind power project companies (such as Merkur (D) and Seamade (B)). The increase in financial fixed assets at Leasinvest Real Estate is the result of an increase in the Retail Estates share price and of the participation, to the amount of 12.9 million euros, in the capital increase of Retail Estates in 1H2018. At the end of 2018 AvH acquired also a 2.45% stake in EVS.
As of 2018, the investments are broken down into several categories according to the accounting treatment of the results that might be realized on those investments. The bond portfolio of Bank J.Van Breda & C° increased by 29.1 million euros compared with last year, whereas the composition of AvH's investment portfolio in "AvH & Growth Capital" remained virtually unchanged.
The short-term portion of loans to clients at Bank J.Van Breda & C° decreased slightly compared with last year. On the other hand, more cash is invested with central banks and other credit institutions.
The volume of cash and cash equivalents at the other fully consolidated participations remains high, amounting to 513.6 million euros at year-end 2018.
The assets held for sale at year-end 2018 consisted of the Kennedy building in Luxembourg from the portfolio of Leasinvest Real Estate and a number of smaller properties of Extensa, Anima Care and HPA. AvH signed a sales agreement, albeit still containing a condition precedent, for its 45% participation in Transpalux.
The evolution of the consolidated equity is explained in section 5.
The deposits (including subordinated) received from clients of Bank J.Van Breda & C° increased by 351.7 million euros (+7.7%), with a stronger growth of the short-term portion.
The financial debts of the other fully consolidated participations increased by 125.5 million euros. The long-term portion of that debt decreased by 48.0 million euros, whereas the short-term portion increased by 173.5 million euros. This evolution is partly explained by the approaching maturity date of the bonds of DEME (200 million euros on February 14, 2019) and of Leasinvest Real Estate (75 million euros on October 9, 2019), and their reclassification to short-term financial debt. DEME accounts for 122.8 million euros of the increase in financial debt due to the sustained investment efforts and the movements in working capital.
The other amounts payable within one year decreased by 43.6 million euros, thanks among other things to the payment in September 2018 of the final tranche of 28 million euros that was still outstanding to NPM Capital for the acquisition in 2016 of its 26% minority interest in Sofinim.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between |
Total | |
| Contracting | segments | 2017 | |||||
| I. Non-current assets | 2,839,219 | 4,410,084 | 1,565,916 | 204,048 | 242,594 | -6,385 | 9,255,476 |
| Intangible assets | 91,363 | 2,930 | 84,670 | 605 | 179,567 | ||
| Goodwill | 186,821 | 134,247 | 28,455 | 349,523 | |||
| Tangible assets | 2,126,568 | 41,578 | 378,527 | 26,204 | 2,572,877 | ||
| Investment property | 945,488 | 945,488 | |||||
| Participations accounted for using the equity method |
154,177 | 679,973 | 28,204 | 204,048 | 174,344 | 1,240,746 | |
| Financial fixed assets | 167,868 | 818 | 75,144 | 29,740 | -6,385 | 267,186 | |
| Available for sale financial fixed assets | 18,003 | 74,550 | 9,781 | 102,335 | |||
| Receivables and warranties | 149,865 | 818 | 594 | 19,959 | -6,385 | 164,851 | |
| Non-current hedging instruments | 921 | 3,662 | 1,066 | 5,649 | |||
| Amounts receivable after one year | 7,737 | 138,029 | 23,024 | 8,319 | 177,109 | ||
| Trade receivables | 2,418 | 4,540 | 6,958 | ||||
| Finance lease receivables | 138,029 | 22,736 | 160,765 | ||||
| Other receivables | 5,320 | 288 | 3,779 | 9,386 | |||
| Deferred tax assets | 103,763 | 735 | 1,338 | 3,382 | 109,219 | ||
| Banks - receivables from credit | |||||||
| institutions and clients after one year | 3,408,112 | 3,408,112 | |||||
| II. Current assets | 1,843,121 | 1,828,829 | 371,492 | 424 | 169,859 | -21,347 | 4,192,378 |
| Inventories | 148,260 | 180,744 | 396 | 329,400 | |||
| Amounts due from customers under construction contracts |
46,077 | 20,359 | 7,856 | 74,292 | |||
| Investments | 3 | 427,712 | 153 | 40,013 | 467,882 | ||
| Available for sale financial assets | 427,712 | 153 | 40,013 | 467,879 | |||
| Financial assets held for trading | 3 | 3 | |||||
| Current hedging instruments | 4,154 | 399 | 4,553 | ||||
| Amounts receivable within one year | 1,082,719 | 84,743 | 114,901 | 59,907 | -20,857 | 1,321,413 | |
| Trade debtors | 1,007,332 | 46,560 | 14,750 | -2,490 | 1,066,152 | ||
| Finance lease receivables | 54,568 | 571 | 55,139 | ||||
| Other receivables | 75,387 | 30,175 | 67,770 | 45,156 | -18,367 | 200,122 | |
| Current tax receivables | 13,783 | 4,411 | 22 | 813 | 19,030 | ||
| Banks - receivables from credit institutions and clients within one year |
1,304,957 | 1,304,957 | |||||
| Banks - loans and advances to banks | 88,863 | 88,863 | |||||
| Banks - loans and receivables (excl. finance leases) |
908,056 | 908,056 | |||||
| Banks - cash balances with central banks | 308,038 | 308,038 | |||||
| Cash and cash equivalents | 524,994 | 3,762 | 48,930 | 402 | 58,939 | 637,027 | |
| Time deposits for less than three months | 35,107 | 1 | 3 | 41 | 35,152 | ||
| Cash | 489,887 | 3,761 | 48,927 | 402 | 58,898 | 601,875 | |
| Deferred charges and accrued income | 23,131 | 7,256 | 1,993 | 1,935 | -491 | 33,824 | |
| III. Assets held for sale | 11,686 | 3,613 | 5,860 | 21,159 | |||
| Total assets | 4,682,340 | 6,250,598 | 1,941,021 | 204,472 | 418,314 | -27,732 | 13,469,013 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2017 |
|
| I. Total equity | 1,626,817 | 1,351,777 | 707,868 | 204,466 | 304,344 | 4,195,272 | |
| Shareholders' equity - group share | 981,360 | 1,095,291 | 389,692 | 204,466 | 301,400 | 2,972,208 | |
| Issued capital | 113,907 | 113,907 | |||||
| Share capital | 2,295 | 2,295 | |||||
| Share premium | 111,612 | 111,612 | |||||
| Consolidated reserves | 1,006,643 | 1,093,851 | 387,336 | 202,778 | 215,003 | 2,905,611 | |
| Revaluation reserves | -25,283 | 1,439 | 2,356 | 1,688 | 2,317 | -17,482 | |
| Financial assets available for sale | 1,860 | 8,804 | 12,916 | 23,579 | |||
| Hedging reserves | -743 | -183 | -9,302 | 20 | 4 | -10,204 | |
| Actuarial gains (losses) defined benefit pension plans Translation differences |
-15,262 -9,278 |
33 -271 |
-21 2,876 |
-644 2,312 |
810 -11,412 |
-15,083 -15,774 |
|
| Treasury shares (-) | -29,828 | -29,828 | |||||
| Minority interests | 645,457 | 256,487 | 318,176 | 2,944 | 1,223,064 | ||
| II. Non-current liabilities | 928,196 | 684,166 | 867,427 | 3,882 | -6,385 | 2,477,286 | |
| Provisions | 76,843 | 4,572 | 3,545 | 1,421 | 86,381 | ||
| Pension liabilities | 53,149 | 3,995 | 790 | 200 | 58,134 | ||
| Deferred tax liabilities | 129,641 | 704 | 80,410 | 1,513 | 212,268 | ||
| Financial debts | 656,857 | 737,232 | 474 | -6,385 | 1,388,177 | ||
| Bank loans | 366,402 | 511,068 | 877,470 | ||||
| Bonds | 231,378 | 203,948 | 435,327 | ||||
| Subordinated loans | 5,354 | 5,354 | |||||
| Finance leases | 45,427 | 20,247 | 474 | 66,147 | |||
| Other financial debts | 8,296 | 1,969 | -6,385 | 3,880 | |||
| Non-current hedging instruments | 7,209 | 8,572 | 34,616 | 50,397 | |||
| Other amounts payable after one year | 4,497 | 11,155 | 10,834 | 274 | 26,761 | ||
| Banks - debts to credit institutions, clients & securities | 655,168 | 655,168 | |||||
| Banks - deposits from credit institutions | 0 | ||||||
| Banks - deposits from clients | 607,368 | 607,368 | |||||
| Banks - debt certificates including bonds | 0 | ||||||
| Banks - subordinated liabilities | 47,800 | 47,800 | |||||
| III. Current liabilities | 2,127,327 | 4,214,655 | 365,726 | 7 | 110,087 | -21,347 | 6,796,455 |
| Provisions | 59,047 | 12 | 108 | 59,166 | |||
| Pension liabilities | 289 | 289 | |||||
| Financial debts | 235,162 | 223,352 | 51,560 | -10,607 | 499,467 | ||
| Bank loans | 116,042 | 47,791 | 163,833 | ||||
| Bonds | 99,959 | 99,959 | |||||
| Finance leases | 7,921 | 2,342 | 4,967 | 15,230 | |||
| Other financial debts | 11,241 | 173,218 | 46,593 | -10,607 | 220,445 | ||
| Current hedging instruments | 7,445 | 800 | 160 | 8,405 | |||
| Amounts due to customers under construction contracts | 224,657 | 11,047 | 235,704 | ||||
| Other amounts payable within one year | 1,491,839 | 13,252 | 100,206 | 3 | 46,411 | -10,250 | 1,641,461 |
| Trade payables | 1,277,741 | 10 | 68,028 | 3 | 8,177 | -1,213 | 1,352,745 |
| Advances received | 2,505 | 2,505 | |||||
| Amounts payable regarding remuneration and social security | 152,612 | 8,177 | 17,565 | 7,669 | 186,022 | ||
| Other amounts payable | 61,487 | 5,065 | 12,108 | 30,565 | -9,036 | 100,189 | |
| Current tax payables | 42,538 | 3,437 | 18,429 | 4 | 283 | 64,691 | |
| Banks - debts to credit institutions, clients & securities | 4,191,182 | 4,191,182 | |||||
| Banks - deposits from credit institutions | 27,458 | 27,458 | |||||
| Banks - deposits from clients | 3,898,145 | 3,898,145 | |||||
| Banks - debt certificates including bonds | 253,114 | 253,114 | |||||
| Banks - subordinated liabilities | 12,465 | 12,465 | |||||
| Accrued charges and deferred income | 66,639 | 5,683 | 23,472 | 786 | -491 | 96,089 | |
| IV. Liabilities held for sale | 0 | ||||||
| Total equity and liabilities | 4,682,340 | 6,250,598 | 1,941,021 | 204,472 | 418,314 | -27,732 | 13,469,013 |
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2018 |
|
| I. Cash and cash equivalents - | |||||||
| opening balance | 524,994 | 3,762 | 48,930 | 402 | 58,939 | 637,027 | |
| Profit (loss) from operating activities | 235,215 | 52,551 | 130,894 | -61 | -18,752 | -1,124 | 398,723 |
| Reclassification 'Profit (loss) on disposal of assets' to cash flow from divestments |
-7,879 | -482 | -30,692 | -11,368 | -50,421 | ||
| Dividends from participations accounted for using the equity method |
5,825 | 52,263 | 1,766 | 73 | 7,638 | 67,565 | |
| Other non-operating income (expenses) | 716 | 716 | |||||
| Income taxes | -55,685 | -11,465 | -9,618 | -1,343 | -78,111 | ||
| Non-cash adjustments | |||||||
| Depreciation | 272,495 | 4,446 | 17,131 | 2,972 | 297,044 | ||
| Impairment losses | 19,802 | 3,148 | 4,429 | 13,283 | 40,661 | ||
| Share based payment | -1,498 | 163 | 973 | -362 | |||
| Profit (loss) on assets/liabilities designated at fair value through profit and loss |
-6,285 | 2,581 | -3,704 | ||||
| (Decrease) increase of provisions | -24,250 | 4,304 | -1,126 | -196 | -21,268 | ||
| (Decrease) increase of deferred taxes | -91 | -916 | -5,774 | 328 | -6,452 | ||
| Other non-cash expenses (income) | -3,070 | 269 | -120 | 830 | -2,091 | ||
| Cash flow | 442,363 | 103,336 | 100,768 | 12 | -3,054 | -1,124 | 642,299 |
| Decrease (increase) of working capital | -213,714 | 10,645 | 9,511 | 18 | -26,446 | 6,165 | -213,822 |
| Decrease (increase) of inventories and construction contracts | -64,473 | 10,631 | -4,505 | -58,347 | |||
| Decrease (increase) of amounts receivable | -289,957 | -28,245 | -1,824 | 19 | 5,459 | 6,165 | -308,384 |
| Decrease (increase) of receivables from credit institutions and clients (banks) |
-336,488 | -336,488 | |||||
| Increase (decrease) of liabilities (other than financial debts) | 134,724 | -2,394 | -9,905 | -1 | -26,304 | 96,120 | |
| Increase (decrease) of debts to credit institutions, clients & securities (banks) |
379,047 | 379,047 | |||||
| Decrease (increase) other | 5,993 | -1,275 | 10,608 | -1,096 | 14,230 | ||
| Cash flow from operating activities | 228,649 | 113,981 | 110,279 | 30 | -29,500 | 5,041 | 428,478 |
| Investments | -450,192 | -368,096 | -239,731 | -7,360 | -39,780 | 1,937 | -1,103,222 |
| Acquisition of intangible and tangible assets | -453,483 | -5,867 | -43,084 | -3,482 | -505,916 | ||
| Acquisition of investment property | -182,707 | -182,707 | |||||
| Acquisition of financial fixed assets | 53,965 | -289 | -12,990 | -7,360 | -13,485 | 19,842 | |
| New amounts receivable | -50,674 | -236 | -950 | -4,188 | 1,937 | -54,112 | |
| Acquisition of investments | -361,704 | -18,625 | -380,329 | ||||
| Divestments | 34,152 | 330,654 | 107,664 | 0 | 65,541 | 538,011 | |
| Disposal of intangible and tangible assets | 15,834 | 155 | 38 | 16,027 | |||
| Disposal of investment property Disposal of financial fixed assets |
9,564 | 3,500 103,477 |
46,904 | 3,500 159,945 |
|||
| Reimbursements of amounts receivable | 8,755 | 486 | 9,241 | ||||
| Disposal of investments | 330,654 | 45 | 18,598 | 349,297 | |||
| Cash flow from investing activities | -416,039 | -37,442 | -132,067 | -7,360 | 25,760 | 1,937 | -565,211 |
| Financial operations | |||||||
| Interest received | 7,501 | 8 | 2,659 | 332 | -88 | 10,412 | |
| Interest paid | -23,934 | -17,234 | -388 | 1,212 | -40,343 | ||
| Other financial income (costs) | -3,605 | -8,196 | -6 | -1,045 | -12,852 | ||
| Decrease (increase) of treasury shares | 768 | 768 | |||||
| (Decrease) increase of financial debts | 136,537 | 50,704 | -20,548 | -8,102 | 158,592 | ||
| Distribution of profits | -73,019 | -73,019 | |||||
| Dividends paid intra group | -36,695 | -55,913 | -7,410 | 100,017 | 0 | ||
| Dividends paid to minority interests | -24,060 | -15,161 | -37,600 | -76,820 | |||
| Cash flow from financial activities | 55,745 | -71,065 | -17,076 | -6 | 6,118 | -6,977 | -33,262 |
| II. Net increase (decrease) in cash and cash equivalents | -131,646 | 5,474 | -38,865 | -7,336 | 2,378 | -169,995 | |
| Transfer between segments | 7,360 | -7,360 | 0 | ||||
| Change in consolidation scope or method | -3,314 | 119 | 401 | -2,794 | |||
| Capital decrease HPA (minorities) | -30,000 | 21,517 | -8,483 | ||||
| Capital increase Leasinvest Real Estate (minorities) | 83,961 | -25,193 | 58,767 | ||||
| Capital increase expenses LRE deducted directly from equity | -1,644 | -1,644 | |||||
| Impact of exchange rate changes on cash and cash equivalents | 712 | 2 | -17 | 12 | 709 | ||
| III. Cash and cash equivalents - | |||||||
| ending balance | 390,746 | 9,355 | 62,785 | 409 | 50,293 | 0 | 513,588 |
The cash flow over the full year 2018 amounted to 642.3 million euros, which is 31.0 million euros up on 2017. Nevertheless, the profit from operating activities, after adjustment for the profit from divestments, is in line with last year, and 31.0 million euros more income taxes were paid.
The profit from operating activities is lower than in 2017 for all segments, except "Real Estate & Senior Care" where capital gains were realized (especially the 29.8 million euros capital gains which HPA realized on the sale of the real estate of 14 retirement homes operated by Residalya).
The cash flow increase in 2018 is primarily explained by the increase in the non-cash items included in the operating result in 2018: 27.7 million euros more depreciation, 27.8 million euros more impairment losses, 28.3 million euros less profit on assets/liabilities designated at fair value, and 9.6 million euros less release of deferred taxes. The provisions showed an opposite evolution: in 2018, the operating result comprised a release of provisions to the amount of 21.3 million euros, whereas in 2017 additional provisions worth 11.2 million euros had been constituted.
The growth of activity reported by DEME in particular resulted in an extra 213.8 million euros working capital requirement; consequently, the cash flow from operating activities amounted to 428.5 million euros, which is 120.1 million euros lower than in 2017. This increase in working capital follows an increase that had already occurred in 2017, albeit 151.1 million euros less than in 2018.
On balance, investments across the AvH group exceeded divestments by 565.2 million euros. In 2017, that balance stood at 441.0 million euros.
In 2018, DEME made additional investments worth a total of 441.3 million euros in tangible assets, while CFE invested 12.2 million euros. Furthermore, in 2H2018 DEME acquired exclusive control over its Qatar-based MEDCO subsidiary (with a positive net cash impact of 72.5 million euros).
Anima Care and HPA spent 22.2 million euros and 18.7 million euros respectively on the expansion of their retirement home network, but at the same time sold companies owning the real estate of Anima Care's Kruyenberg care centre (sold to Baltisse) and 14 residences operated by Residalya (sold to Icade Santé). HPA subsequently distributed 30 million euros of that amount to its shareholders (through a capital reduction).
Leasinvest Real Estate expanded its real estate portfolio in 2018 with the acquisition of 2 office buildings of the EBBC complex in Luxembourg, Hangar 26/27 in Antwerp, Montoyer 14 in Brussels, and investments in other projects that were already in portfolio at 31/12/2017. Leasinvest Real Estate also followed for its part the capital increase of Retail Estates, which represented an additional investment of 12.9 million euros. Those investments were financed by a capital increase of 84 million euros that was carried out in 4Q2018.
Extensa, too, continued in 2018 to invest in the Tour & Taxis site: in 2018, those investments were primarily intended for the construction of a new underground car park and the refurbishment of the Gare Maritime. At the end of 2018, the office building on the site of Cloche D'Or in Luxemburg that is leased to Alter Domus was sold to international investors.
The acquisition of investments should be seen in combination with the disposal of investments as part of the ALM policy of Bank J.Van Breda & C°.
The investments in the "AvH & Growth Capital" segment, besides the increase of the participation in SIPEF and our share in the capital increase of LRE (transfer between segments), primarily related to the acquisition of a 2.45% stake in EVS at year-end 2018 and additional investments and/or financing of OncoDNA, Healthquad (an Indian fund focused on the health care sector) and Distriplus. In that same segment, the disposal of the stakes in Atenor, BDM-Asco and an additional tranche of 3% of Koffie Rombouts yielded a total of 46.9 million euros.
The interest paid by the group decreased by 7.2 million euros net compared with the previous year, while the net interest charges in 2018 did not exceed 29.9 million euros. Despite the increased net financial debt position in "Marine Engineering & Contracting" during the year (particularly DEME), the interest paid in that segment decreased by 6.4 million euros.
To finance its activities and investments, AvH incurred 158.6 million euros worth of extra financial debts. In 2017, the group had reduced its financial debt by 9.7 million euros, with a lower cash flow from investing activities. In line with the favourable development of the results of 2017 reported by most group companies, 25.6 million euros more in dividends was paid out in 2018 outside the group by AvH and subsidiaries. The cash flow from financial activities resulted in a net outflow of 33.3 million euros, compared with 202.6 million euros in 2017.
CFE, Finaxis, Leasinvest Real Estate, HPA and the subsidiary of Extensa developing the Cloche d'Or residential real estate project in Luxembourg account for most of the dividends paid to minority interests by group companies.
The lower cash flow from operating activities, coupled with increased investments and a less negative cash flow from financial activities, resulted in a 170.0 million euros decrease in cash and cash equivalents.
| (€ 1,000) | Segment 1 | Segment 2 | Segment 3 | Segment 4 | Segment 5 | ||
|---|---|---|---|---|---|---|---|
| Marine Engineering & Contracting |
Private Banking |
Real Estate & Senior Care |
Energy & Resources |
AvH & Growth Capital |
Eliminations between segments |
Total 2017 |
|
| I. Cash and cash equivalents - | |||||||
| opening balance | 639,458 | 5,857 | 63,191 | 6,046 | 39,762 | 754,315 | |
| Profit (loss) from operating activities | 250,570 | 56,054 | 108,605 | 3,562 | 7,403 | -201 | 425,993 |
| Reclassification 'Profit (loss) on disposal of assets' to cash flow from divestments |
-47,657 | -1,484 | 2,758 | -355 | -37,103 | -83,841 | |
| Dividends from participations accounted for using the equity method |
7,863 | 46,594 | 375 | 7,561 | 62,392 | ||
| Other non-operating income (expenses) | 1,231 | 1,154 | 2,385 | ||||
| Income taxes | -35,180 | -19,526 | 8,689 | -1,035 | -83 | -47,135 | |
| Non-cash adjustments | |||||||
| Depreciation | 240,747 | 5,248 | 18,644 | 1,920 | 2,755 | 269,315 | |
| Impairment losses | -9,734 | 1,751 | 2,463 | 18,400 | 12,881 | ||
| Share based payment | 1,057 | 57 | 801 | 1,915 | |||
| Profit (loss) on assets/liabilities designated at fair value through profit and loss |
-31,960 | -31,960 | |||||
| (Decrease) increase of provisions | 9,641 | 1,615 | -87 | 57 | 11,226 | ||
| (Decrease) increase of deferred taxes | -5,112 | 3,281 | -13,882 | 10 | -379 | -16,082 | |
| Other non-cash expenses (income) | -938 | 5,220 | 3 | 2 | -101 | 4,186 | |
| Cash flow | 411,431 | 100,964 | 95,291 | 4,480 | -689 | -201 | 611,275 |
| Decrease (increase) of working capital | 152,296 | -179,168 | -6,217 | 22,657 | -31,097 | -21,163 | -62,693 |
| Decrease (increase) of inventories and construction contracts | -34,321 | 1,790 | 805 | -31,726 | |||
| Decrease (increase) of amounts receivable | 158,341 | -45,296 | -17,233 | 22,645 | 1,114 | -25,611 | 93,961 |
| Decrease (increase) of receivables from credit institutions and clients (banks) |
-553,818 | 281 | -553,537 | ||||
| Increase (decrease) of liabilities (other than financial debts) | 29,543 | 3,260 | 5,071 | -294 | -32,407 | 4,448 | 9,621 |
| Increase (decrease) of debts to credit institutions, clients & securities (banks) |
419,257 | 419,257 | |||||
| Decrease (increase) other | -1,267 | -2,571 | 3,874 | 305 | -610 | -268 | |
| Cash flow from operating activities | 563,727 | -78,203 | 89,074 | 27,137 | -31,787 | -21,364 | 548,583 |
| Investments | -687,533 | -219,797 | -204,727 | -44,261 | -8,779 | -1,165,097 | |
| Acquisition of intangible and tangible assets | -459,968 | -4,531 | -21,596 | -3,837 | -1,909 | -491,841 | |
| Acquisition of investment property | -126,121 | -126,121 | |||||
| Acquisition of financial fixed assets | -205,814 | -51,286 | -40,425 | -6,488 | -304,012 | ||
| New amounts receivable | -21,751 | -195 | -5,724 | -150 | -27,820 | ||
| Acquisition of investments | -215,071 | -231 | -215,302 | ||||
| Divestments | 92,430 | 357,989 | 213,067 | 10,578 | 50,039 | 724,102 | |
| Disposal of intangible and tangible assets | 19,402 | 6 | 1,001 | 3 | 47 | 20,459 | |
| Disposal of investment property | 1,500 | 112,002 | 113,502 | ||||
| Disposal of financial fixed assets | 58,528 | 4 | 97,574 | 10,574 | 48,308 | 214,987 | |
| Reimbursements of amounts receivable | 13,001 | 95 | 248 | 13,344 | |||
| Disposal of investments | 357,979 | 2,395 | 1,435 | 361,809 | |||
| Cash flow from investing activities | -595,103 | 138,192 | 8,340 | -33,683 | 41,260 | -440,994 | |
| Financial operations | |||||||
| Interest received | 7,878 | 13 | 2,681 | 9 | 1,000 | -762 | 10,820 |
| Interest paid | -30,330 | -18,044 | -88 | -446 | 963 | -47,945 | |
| Other financial income (costs) | -13,354 | -10,140 | 4 | -1,029 | -24,519 | ||
| Decrease (increase) of treasury shares | -6,993 | -6,993 | |||||
| (Decrease) increase of financial debts | 32,413 | -54,150 | -1,440 | -7,730 | 21,163 | -9,743 | |
| Distribution of profits | -67,638 | -67,638 | |||||
| Dividends paid intra group | -43,932 | -48,825 | -166,544 | -13,678 | 272,979 | 0 | |
| Dividends paid to minority interests | -21,554 | -13,253 | -17,073 | -4,559 | -109 | -56,548 | |
| Cash flow from financial activities | -68,879 | -62,066 | -263,269 | -19,752 | 190,035 | 21,364 | -202,566 |
| II. Net increase (decrease) in cash and cash equivalents | -100,255 | -2,078 | -165,855 | -26,299 | 199,508 | -94,978 | |
| Transfer between segments | -11,334 | 151,218 | 40,425 | -180,309 | 0 | ||
| Change in consolidation scope or method | -234 | -18 | -1,894 | -19,744 | -21,890 | ||
| Capital increases (minorities) | 150 | 150 | |||||
| Impact of exchange rate changes on cash and cash equivalents | -2,642 | 2,120 | -25 | -22 | -570 | ||
| III. Cash and cash equivalents - | |||||||
| ending balance | 524,994 | 3,762 | 48,930 | 402 | 58,939 | 637,027 |
7.1. Basis for the presentation of the condensed financial statements
The condensed consolidated financial statements of AvH relating the financial year 2018 are issued in accordance with IAS 34.
Following new standards and amendments to existing standards published by the IASB, are applied as from January 1, 2018.
The final version of IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting.
AvH makes use of the possibility not to restate the comparative figures. As a result, for both the classification and measurement of financial instruments and the determination of expected credit losses the impact is recorded in the opening balance at 1/1/2018, without adjustment of the previous periods.
IFRS 9 identifies three categories for the classification of financial assets according to how the assets are measured: amortized cost, fair value through other comprehensive income, and fair value through profit & loss. The IAS 39 categories of held-to-maturity investments, loans and receivables, and available-for-sale financial assets cease to exist.
The new classification of financial assets and liabilities at amortized cost is determined in two steps:
Except at Bank J.Van Breda & C° and Delen Private Bank, the changes in fair value in the portfolio 'Available-for-sale financial assets' are recognized through profit and loss as from January 1, 2018. Consequently, the unrealized capital gains were reclassified (within the equity) to the consolidated reserves in the opening balance to the amount of 21.7 million euro (share of the group). After that, the classification (changes in fair value through profit and loss or through other comprehensive income) of each new acquisition is determined per instrument.
The introduction of IFRS 9 involves a changeover from an 'incurred loss' model to an 'expected loss' model as regards impairments. Under IFRS 9, a provision must be constituted for expected losses at the start of a contract.
Bank J.Van Breda & C° has developed a model to determine 'expected credit loss'. The credit portfolio is subdivided into three stages:
The credit losses for stages 1 and 2 are determined on the basis of a model developed internally in accordance with the rules of IFRS 9. Given the quality of the loan portfolio of Bank J.Van Breda & C°, the impact on the opening equity is limited to -3.3 million euros (pre-minorities). Delen Private Bank reports a minimal impact of -0.1 million euros (pre-minorities). The implementation of IFRS 9 at Bank J.Van Breda & C° and Delen Private Bank is explained in more detail in Note 10 on page 42.
In accordance with IFRS 9, an impairment loss of 12 million euros was recognized on the outstanding receivables in CFE's opening balance on 1/1/2018. The evaluation of CFE's financial assets considers the present value of expected losses if the borrower defaults on its obligations. Expected credit losses are calculated based on a weighted average of expected credit losses arising from multiple scenario's. Implementation of this model on the receivables owned by CFE on the Chadian State leads to a decrease of the opening equity at 1st January 2018 by an amount of 12 million euros.
No material impact has been noticed for the AvH group's other participations following the initial application of IFRS 9 – expected credit losses.
The new hedge accounting principles will have no significant impact.
IFRS 15 introduces a five-step model to recognize revenue from contracts with customers. Under IFRS 15, revenue from the transfer of goods or services is recognized in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
AvH implemented the new standard on 1/1/2018 and has opted for the modified retrospective method, which means that the opening balance of the equity at January 1, 2018 is adjusted without adjustment of the comparative figures of the previous year. In this approach, IFRS 15 is applied to contracts which were not yet completed on the date of initial application; these contracts are restated as if IFRS 15 was always applicable.
The analysis performed at DEME shows that certain contracts (EPCI) contain separately identifiable performance obligations, namely obligations relating to purchase and installation activities. Until the end of 2017, these standard contracts were always treated as one single contract under IAS 11, but according to IFRS 15 the different performance obligations give each separately rise to revenue recognition. The impact of this restatement caused the opening equity to decrease by 15.6 million euros (preminorities) at January 1, 2018. The other participations reported no material impact.
IFRS 16 Leases: This new standard sets out the principles for the recognition, measurement, presentation and disclosure of leases (1/1/2019) and replaces IAS 17. As a result, all operating lease and rental obligations (such as real estate leases) must appear on the balance sheet. A first estimate will be included in the annual report.
| (€ 1,000) | 31-12-2017 | IFRS 9 Classification & measurement |
IFRS 9 Expected Credit loss 'Private Banking' |
IFRS 9 Expected Credit loss 'Other Segments' |
IFRS 15 | Opening balance (1-1-2018) |
|---|---|---|---|---|---|---|
| I. Non-current assets | 9,255,476 | 0 | -2,819 | 0 | 0 | 9,252,657 |
| Intangible assets | 179,567 | 179,567 | ||||
| Goodwill | 349,523 | 349,523 | ||||
| Tangible assets | 2,572,877 | 2,572,877 | ||||
| Land and buildings | 479,686 | 479,686 | ||||
| Plant. machinery and equipment | 1,615,815 | 1,615,815 | ||||
| Furniture and vehicles | 28,822 | 28,822 | ||||
| Other tangible assets | 4,713 | 4,713 | ||||
| Assets under construction and advance payments | 443,558 | 443,558 | ||||
| Operating lease - as lessor (IAS 17) | 283 | 283 | ||||
| Investment property | 945,488 | 945,488 | ||||
| Participations accounted for using the equity method | 1,240,746 | 0 | -61 | 0 | 0 | 1,240,685 |
| Financial fixed assets | 267,186 | 0 | 0 | 0 | 0 | 267,186 |
| Available for sale financial fixed assets | 102,335 | -102,335 | 0 | |||
| Financial assets : shares - Fair value through P/L (FVPL) | 102,335 | 102,335 | ||||
| Financial assets : bonds - Fair value through OCI (FVOCI - recycling) | 0 | |||||
| Financial assets : shares - Fair value through OCI (FVOCI - no recycling) | 0 | |||||
| Financial assets - at amortised cost | 0 | |||||
| Receivables and warranties | 164,851 | 164,851 | ||||
| Non-current hedging instruments | 5,649 | 5,649 | ||||
| Amounts receivable after one year | 177,109 | 0 | -544 | 0 | 0 | 176,565 |
| Trade receivables | 6,958 | 6,958 | ||||
| Finance lease receivables | 160,765 | -544 | 160,221 | |||
| Other receivables | 9,386 | 9,386 | ||||
| Deferred tax assets | 109,219 | 0 | 1,088 | 0 | 0 | 110,307 |
| Banks - receivables from credit institutions and clients after one year |
3,408,112 | 0 | -3,302 | 0 | 0 | 3,404,810 |
| II. Current assets | 4,192,378 | 0 | -32 | -12,000 | 0 | 4,180,346 |
| Inventories | 329,400 | 329,400 | ||||
| Amounts due from customers under construction contracts | 74,292 | 74,292 | ||||
| Investments | 467,882 | 0 | -32 | 0 | 0 | 467,850 |
| Available for sale financial assets | 467,879 | -467,879 | 0 | |||
| Financial assets held for trading | 3 | -3 | 0 | |||
| Financial assets : shares - Fair value through P/L (FVPL) | 40,170 | 40,170 | ||||
| Financial assets : bonds - Fair value through OCI (FVOCI - recycling) | 427,139 | -32 | 427,107 | |||
| Financial assets : shares - Fair value through OCI (FVOCI - no recycling) | 573 | 573 | ||||
| Financial assets - at amortised cost | 0 | |||||
| Current hedging instruments | 4,553 | 4,553 | ||||
| Amounts receivable within one year | 1,321,413 | 0 | 0 | -12,000 | 0 | 1,309,413 |
| Trade debtors | 1,066,152 | -12,000 | 1,054,152 | |||
| Finance lease receivables | 55,139 | 55,139 | ||||
| Other receivables | 200,122 | 200,122 | ||||
| Current tax receivables | 19,030 | 19,030 | ||||
| Banks - receivables from credit institutions and clients within one year |
1,304,957 | 1,304,957 | ||||
| Banks - loans and advances to banks | 88,863 | 88,863 | ||||
| Banks - loans and receivables (excl. finance leases) | 908,056 | 908,056 | ||||
| Banks - cash balances with central banks | 308,038 | 308,038 | ||||
| Cash and cash equivalents | 637,027 | 637,027 | ||||
| Time deposits for less than three months | 35,152 | 35,152 | ||||
| Cash | 601,875 | 601,875 | ||||
| Deferred charges and accrued income | 33,824 | 33,824 | ||||
| III. Assets held for sale Total assets |
21,159 | 21,159 | ||||
| 13,469,013 | 0 | -2,851 | -12,000 | 0 | 13,454,162 |
| (€ 1.000) | 31-12-2017 | IFRS 9 Classification & measurement |
IFRS 9 Expected Credit loss 'Private Banking' |
IFRS 9 Expected Credit loss 'Other Segments' |
IFRS 15 | Opening balance (1-1-2018) |
|---|---|---|---|---|---|---|
| I. Total equity | 4,195,272 | 0 | -3,324 | -12,000 | -15,550 | 4,164,398 |
| Shareholders' equity - group share | 2,972,208 | 0 | -2,618 | -7,248 | -9,392 | 2,952,951 |
| Issued capital | 113,907 | 113,907 | ||||
| Share capital | 2,295 | 2,295 | ||||
| Share premium | 111,612 | 111,612 | ||||
| Consolidated reserves | 2,905,611 | 21,684 | -2,618 | -7,248 | -9,392 | 2,908,037 |
| Revaluation reserves | -17,482 | -21,684 | 0 | 0 | 0 | -39,166 |
| Financial assets available for sale | 23,579 | -23,579 | 0 | |||
| Financial assets : bonds - Fair value through OCI (FVOCI - recycling) | 1,544 | 1,544 | ||||
| Financial assets : shares - Fair value through OCI (FVOCI - no recycling) | 351 | 351 | ||||
| Hedging reserves | -10,204 | -10,204 | ||||
| Actuarial gains (losses) defined benefit pension plans | -15,083 | -15,083 | ||||
| Translation differences | -15,774 | -15,774 | ||||
| Treasury shares (-) | -29,828 | -29,828 | ||||
| Minority interests | 1,223,064 | 0 | -706 | -4,752 | -6,158 | 1,211,448 |
| II. Non-current liabilities | 2,477,286 | 0 | 473 | 0 | -3,077 | 2,474,682 |
| Provisions | 86,381 | 0 | 473 | 0 | 0 | 86,854 |
| Pension liabilities | 58,134 | 58,134 | ||||
| Deferred tax liabilities | 212,268 | 0 | 0 | 0 | -3,077 | 209,191 |
| Financial debts | 1,388,177 | 1,388,177 | ||||
| Bank loans | 877,470 | 877,470 | ||||
| Bonds | 435,327 | 435,327 | ||||
| Subordinated loans | 5,354 | 5,354 | ||||
| Finance leases | 66,147 | 66,147 | ||||
| Other financial debts | 3,880 | 3,880 | ||||
| Non-current hedging instruments | 50,397 | 50,397 | ||||
| Other amounts payable after one year | 26,761 | 26,761 | ||||
| Banks - debts to credit institutions, clients & securities | 655,168 | 655,168 | ||||
| Banks - deposits from credit institutions | 0 | 0 | ||||
| Banks - deposits from clients | 607,368 | 607,368 | ||||
| Banks - debt certificates including bonds | 0 | 0 | ||||
| Banks - subordinated liabilities | 47,800 | 47,800 | ||||
| III. Current liabilities | 6,796,455 | 0 | 0 | 0 | 18,627 | 6,815,082 |
| Provisions | 59,166 | 59,166 | ||||
| Pension liabilities | 289 | 289 | ||||
| Financial debts | 499,467 | 499,467 | ||||
| Bank loans | 163,833 | 163,833 | ||||
| Bonds | 99,959 | 99,959 | ||||
| Finance leases | 15,230 | 15,230 | ||||
| Other financial debts | 220,445 | 220,445 | ||||
| Current hedging instruments | 8,405 | 8,405 | ||||
| Amounts due to customers under construction contracts | 235,704 | 235,704 | ||||
| Other amounts payable within one year | 1,641,461 | 0 | 0 | 0 | 18,627 | 1,660,088 |
| Trade payables | 1,352,745 | 18,627 | 1,371,371 | |||
| Advances received | 2,505 | 2,505 | ||||
| Amounts payable regarding remuneration and social security | 186,022 | 186,022 | ||||
| Other amounts payable | 100,189 | 100,189 | ||||
| Current tax payables | 64,691 | 64,691 | ||||
| Banks - debts to credit institutions, clients & securities | 4,191,182 | 4,191,182 | ||||
| Banks - deposits from credit institutions | 27,458 | 27,458 | ||||
| Banks - deposits from clients | 3,898,145 | 3,898,145 | ||||
| Banks - debt certificates including bonds | 253,114 | 253,114 | ||||
| Banks - subordinated liabilities | 12,465 | 12,465 | ||||
| Accrued charges and deferred income | 96,089 | 96,089 | ||||
| IV. Liabilities held for sale | 0 | 0 | ||||
| Total equity and liabilities | 13,469,013 | 0 | -2,851 | -12,000 | 0 | 13,454,162 |
| (€ 1.000) | 31-12-2017 | 31-12-2018 | Difference |
|---|---|---|---|
| A2Sea & G-TEC | A2Sea & G-TEC | ||
| Preliminary assessment | Final assessment | ||
| Tangible assets | 186,675 | 190,964 | 4,289 |
| Cash and cash equivalents | 38,945 | 38,945 | 0 |
| Other current and non-current assets & liabilities | -23,474 | -21,560 | 1,914 |
| Net assets (100%) | 202,146 | 208,349 | 6,203 |
| Non-acquired minorities | 702 | 869 | 167 |
| Net assets - group share | 202,848 | 209,218 | 6,370 |
| Goodwill (post allocation) | 7,410 | 704 | -6,706 |
| Purchase price | 210,258 | 209,922 | -336 |
On 31 August 2017, GeoSea, a subsidiary of DEME, acquired 100% of the shares of the fully consolidated company A2Sea. In the fourth quarter of 2017, GeoSea acquired 72,5% of the shares of the fully consolidated Belgian company G-TEC.
The fair value of the identifiable assets and liabilities of both new entities was provisionally assessed on 31 December 2017. During the first half year of 2018, the accounting of the business combinations A2Sea and G-TEC has been finalized and following adjustments have been reflected in the consolidated financial statements.
As the total net impact of the difference between the provisional and final accounting of the business combination is not significant to the financial statements as a whole, the 2017 comparative financial statements have not been restated and the effect is reflected in the 2018 income statement.
The final assessment of the business combination resulted in a remaining goodwill (704 thousand euros).
The following valuation methods were used:
| (€ 1,000) | MEDCO |
|---|---|
| Tangible assets | 79,636 |
| Cash and cash equivalents | 72,454 |
| Financial debts (current and non-current) | -35,330 |
| Other current assets & liabilities | -95,851 |
| Other non-current assets & liabilities | -26,191 |
| Net assets (group share) | -5,282 |
| Goodwill | 5,282 |
| Purchase price of the additional stake of 50,9% + Revaluation of the stake of 44,1% | 0 |
On 3 September 2018, DEME acquired additional economic rights from Middle East Dredging Company QSC "MEDCO", increasing the group's beneficial interest from 44.1% to 95%. As a result, MEDCO's consolidation method has changed: it remained consolidated using the equity method until the third quarter of the financial year, after which it was fully consolidated.
This takeover meets the definition of a business combination in accordance with IFRS 3 - Business Combinations, which requires the application of the "acquisition method":
The work to value the identifiable assets and liabilities at fair value was completed within a time frame compatible with that of the annual closing. This valuation exercise, carried out in accordance with the AvH group's accounting methods, is final at 31 December 2018.
The following valuation methods have been used to determine the fair value of the main identifiable assets and liabilities:
This transaction did not result in a cash settlement. At the end of the transaction, DEME acquired MEDCO's cash, generating a positive net cash flow of 72,454 thousand euros.
The revaluation of the historical stake generates a remeasurement gain of 10,605 thousand euros. The total unallocated goodwill generated by the transaction amounts to 5,282 thousand euros and was written down at 31 December 2018.
Ackermans & van Haaren is active in several segments, each (more or less) cyclically sensitive : dredging & infrastructure, oil & energy markets (DEME, Rent-A-Port, Green Offshore), construction (CFE), evolution on the financial markets and interest rates (Delen Private Bank, JM Finn and Bank J.Van Breda & C°), real estate and interest rates evolution (Extensa & Leasinvest Real Estate) and the evolution of commodity prices (SIPEF, Sagar Cements). The segments in which the Growth Capital participations are active, are also confronted with seasonal or cyclical activities.
| 2018 | 2017 | |
|---|---|---|
| I, Continued and discontinued operations | ||
| Net consolidated profit, share of the group (€ 1,000) | 289,639 | 302,530 |
| Weighted average number of shares (1) | 33,144,068 | 33,138,637 |
| Basic earnings per share (€) | 8.74 | 9.13 |
| Net consolidated profit, share of the group (€ 1,000) | 289,639 | 302,530 |
| Weighted average number of shares (1) | 33,144,068 | 33,138,637 |
| Impact stock options | 96,122 | 125,089 |
| Adjusted weighted average number of shares | 33,240,190 | 33,263,725 |
| Diluted earnings per share (€) | 8.71 | 9.09 |
| 2018 | 2017 | |
| II, Continued activities | ||
| Net consolidated profit from continued activities, share of the group (€ 1,000) | 289,639 | 302,530 |
| Weighted average number of shares (1) | 33,144,068 | 33,138,637 |
| Basic earnings per share (€) | 8.74 | 9.13 |
| Net consolidated profit from continued activities, share of the group (€ 1,000) | 289,639 | 302,530 |
| Weighted average number of shares (1) | 33,144,068 | 33,138,637 |
| Impact stock options | 96,122 | 125,089 |
| Adjusted weighted average number of shares | 33,240,190 | 33,263,725 |
| Diluted earnings per share (€) | 8.71 | 9.09 |
(1) Based on number of shares issued, adjusted for treasury shares in portfolio.
| 2018 | 2017 | |
|---|---|---|
| Treasury shares as part of the stock option plan |
||
| Opening balance | 357,000 | 352,000 |
| Acquisition of treasury shares | 71,000 | |
| Disposal of treasury shares | -23,000 | -66,000 |
| Ending balance | 334,000 | 357,000 |
In 2018 AvH didn't buy any treasury shares to hedge stock option obligations to its staff. During that same period, beneficiaries of the stock option plan exercised options on 23,000 AvH shares. As at December 31, 2018, options are granted on a total of 334,000 AvH shares. To hedge that obligation, AvH had exactly a total 334,000 treasury shares in portfolio on that same date.
| 2018 | 2017 | |
|---|---|---|
| Treasury shares as part of the liquidity contract |
||
| Opening balance | 5,257 | 2,278 |
| Acquisition of treasury shares | 304,867 | 120,338 |
| Disposal of treasury shares | -300,709 | -117,359 |
| Ending balance | 9,415 | 5,257 |
In addition, 304,867 shares were purchased and 300,709 shares sold in 2018 as part of the agreement that AvH has concluded with Kepler Cheuvreux to support the liquidity of the AvH share. Kepler Cheuvreux acts entirely autonomously in those transactions, but as they are carried out on behalf of AvH, the net purchase of 4,158 AvH shares in this context has an impact on AvH's equity. This net purchase of 4,158 shares in 2018 puts the total number of shares held by AvH as part of this liquidity agreement at 9,415.
Bank J.Van Breda & C° follows strict procedures to recognize impairments on outstanding receivables. The total cost of loan losses (incl. expected credit loss) increased in relation to last year to 3.0 million euros, which is still very low (2017: 1.7 million euros)
In view of the disappointing developments at Distriplus in the course of 2018, AvH decreased its exposure to Distriplus by 13.3 million euros. This impairment loss comes on top of AvH's share (50%) in the loss of Distriplus, which was accounted for using the equity method and which in itself already comprises a substantial impairment loss (AvH share: 8.1 million euros) on intangible assets. In October, Sofinim sold its 50% participation in Distriplus to Groupe Jacques Bogart.
In application of the new accounting standard IFRS 9 - Expected Credit Loss, CFE has recorded in the opening balance per 01.01.2018 an impairment loss of 12 million euros with regard to Chad and has added an additional 10 million euros expected credit loss provision to the 2018 profit and loss account.
DEME has booked an impairment loss of 5.3 million euros on goodwill in the consolidated accounts as a result of the first full integration of MEDCO. The final assessment of the first integration of the participations in A2Sea and G-TEC, which were acquired in 2017, in the consolidation also led to an impairment loss of 0.7 million euro in 2018.
At December 31, 2018, AvH further reduced the provision for contingent liabilities which it had set aside at year-end 2013 in respect of its stake in CFE by 15.4 million euros (AvH share: 9.3 million euros) to 28.9 million euros (AvH share: 17.5 million euros). This reversal is justified by the disappearance of the underlying risks for which the provision had been constituted at year-end 2013 of by provisioning in the financial statements of CFE itself.
For a description of the main risks and uncertainties, please refer to our annual report for the financial year ended 31/12/2017. The composition of AvH's portfolio changed only slightly during the year; accordingly, the risks and the spread of those risks have not changed fundamentally in relation to the situation at the end of the previous year.
Several group companies of AvH (such as DEME, CFE, Rent-A-Port, SIPEF, Telemond, Manuchar, Turbo's Hoet Groep, Agidens,...) are also internationally active and are therefore exposed to related political and credit risks. In this context, reference is also made to section 7.7 Impairments with regard to CFE's exposure to the risk of non-payment in Chad.
When disposing of participating interests and/or activities, AvH and its subsidiaries are regularly required to provide certain warranties and representations. These may give rise to claims - legitimate or otherwise - from buyers for compensation on that basis. AvH received no such claims in 2018.
AvH did not acquire any new consolidated participations in 2018. The subsidiaries of AvH invested in the further expansion of their activities. AvH believes that those investments do not fundamentally alter the risk profile; they are follow-up investments by companies in which the Group has been a shareholder for some time now.
Several group companies of AvH (such as DEME, CFE, Agidens...) are actively involved in the execution of projects. This always entails a certain operational risk, but also means that certain estimates of profitability need to be made at the end of such a project. This is inherent in such activity, as is the risk of disagreements with customers over divergent
costs or changes in execution and the collection of these receivables. In the Netherlands, DEME was in 2018 involved in a dispute with Rijnwaterstaat regarding the implementation of the Juliana canal project. On the basis of the information that is currently available, DEME is not able to reliably estimate the financial consequences.
In the current market context, AvH is focusing more than ever on its role as proactive shareholder in the companies in which it has a stake. By participating in risk committees, audit committees, technical committees etc. at DEME, CFE, Rent-A-Port and Agidens, AvH specifically monitors the risks in its contracting division from a very early stage.
As regards the risk of value adjustments on assets, reference is made to section 7.7 Impairments.
In its role as proactive shareholder, AvH also sees to it that the companies in which it participates organize themselves in such a way as to comply with current laws and regulations, including all kinds of international and compliance rules.
DEME is fully cooperating with the judicial investigation into the circumstances around the award of a contract that has already been implemented. In the current circumstances, the financial impact on DEME cannot be reliably estimated.
At the end of February 2019, AvH acquired a 60% participation in Biolectric alongside the founder and CEO, Philippe Jans. Biolectric, founded in 2011, is the market leader in the production and sale of compact biogas installations (< 100kW) intended for cattle and pig farms and water purification stations. Thanks to the anaerobic digestion technique, methane gas from manure is converted into usable energy (electricity and heat), avoiding the emission of harmful greenhouse gases. Biolectric's activity hence contributes to a climate-efficient agricultural production, which is totally in line with AvH's 'Partners for Sustainable Growth' mission.
IFRS 9 identifies three categories for the classification of financial assets according to how the assets are measured: amortised cost, FVOCI (fair value through other comprehensive income) and FVTPL (fair value through profit & loss). The IAS 39 categories held to maturity, loans & receivables and available for sale cease to exist.
In the matter of the classification and measurement of financial liabilities, IFRS 9 is largely similar to IAS 39.
The new classification under IFRS 9 is the result of a number of assessments made by Bank J.Van Breda & C° for the different groups of financial instruments.
The business model (BM) test is carried out for every group of interest-bearing financial assets that are managed in the same way with regard to cash flow generation:
Assessment of the contractual cash flow characteristics or SPPI test is carried out per product group (interest-bearing financial assets with similar cash flow characteristics) or, where necessary, on an individual basis. It is assessed whether the instrument generates cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding (SPPI: solely payments of principal and interest).
For example, this test may fail if there is a major mismatch between the reference interest rate used and the repricing time period (such as with a monthly repricing at a one-year interest rate), or if an excessive early repayment penalty is charged, or if the amount or timing of the cash flows can be unilaterally changed by a counterparty.
The shares and funds currently in the investment portfolio are not held for trading purposes. Bank J.Van Breda & C° opts to recognize these instruments in the category FVOCI when implementing IFRS 9 for the first time. Any capital gains/losses realized on sales are not reclassified to profit and loss (no recycling).
Derivatives are always recognized in the category FVTPL. A small part of these are forward exchange contracts entered into with clients and any hedges of those contracts with credit institutions. The majority are interest rate swaps that are held to hedge the interest rate risk of the credit portfolio: they will continue to be treated administratively as fair value hedges under IAS 39 until a new macro hedging standard is introduced.
The table below shows that the new classification of financial assets and liabilities has no impact on the opening balance at 1/1/2018 of Bank J.Van Breda & C°, based on the assessments made (without the impact of ECLs, see below).
The introduction of IFRS 9 involves a changeover from an 'incurred loss' model to an 'expected loss' model. Under IFRS 9, a provision must be constituted for expected losses at the start of a contract. In general, all financial assets will carry a provision for credit losses (save for a few exceptions).
The different portfolios of financial assets are subdivided into three stages:
significant increase in credit risk is observed since the start of the contract, a provision for credit losses is constituted over the expected life of the contract.
• Stage 3 contracts are non-performing contracts for which impairments continue to be recognized individually.
A valuation model calculates the credit losses for stages 1 and 2 in line with the literature on IFRS9 ECL modelling. Nothing changes for the non-performing credits in stage 3 (incurred credit loss).
The '1-year expected credit loss' and 'lifetime expected credit loss' are calculated for each individual contract on the basis of the repayment schedule and the following model parameters:
The staging in the event of a significant increase (or decrease) in credit risk is done on an individual contract level ('bottom-up' staging) based on certain criteria such as payment arrears, renegotiations, and rating category. The internal credit rating is used for the individual staging. As this is a criterion based on past history, a distinct 'collective staging' logic is used as well to take into account the macroeconomic outlook.
IFRS 9 allows an exemption (low credit risk exemption) to a portfolio with a low risk profile (e.g. bonds in a liquidity portfolio). For such a portfolio, a simplified way is allowed to determine an increased risk. This, however, is an exceptional situation where on the basis of the low credit risk at the reporting date it may be concluded that there has been no significant increase in credit risk.
The bond portfolio is modelled according to the same principles as those used for the credit portfolio (as described above). The PD modelling is based on migration matrices supplied by rating agency DBRS. For bonds we also apply the 'low credit risk exemption': as long as those bonds retain their investment grade rating category, they remain in stage 1. Should a bond migrate to a 'non-investment grade' rating category, Bank J.Van Breda & C° will do one of the following:
The following tables show the total exposure (on and off-balance sheet) and expected credit losses for the 'performing loans' in the credit, Van Breda Car Finance and bond portfolios (excluding interbank exposures, which in our modelling do not give rise to expected credit losses).
| (€1,000) | Total exposure (on and off-balance sheet) |
Estimated credit loss |
|---|---|---|
| Credit portfolio | 4,542,325 | 3,124 |
| Van Breda Car Finance portfolio | 390,457 | 1,194 |
| Bond portfolio | 417,620 | 32 |
| Total | 5,350,403 | 4,350 |
| (€1,000) | Total exposure (on and off-balance sheet) |
Estimated credit loss |
|---|---|---|
| No arrears | 5,165,683 | 3,743 |
| 1-30 days in arrears | 167,936 | 345 |
| 31-60 days in arrears | 15,381 | 242 |
| 61-90 days in arrears | 1,370 | 20 |
| More than 90 days in arrears | 34 | 1 |
| Total | 5,350,403 | 4,350 |
Based on the above calculations, the net impact on the equity of the opening balance of Bank J.Van Breda & C° at 1/1/2018 is -3,263 KEUR as a result of expected credit losses on financial assets (stages 1 & 2).
| Assets | Equity | ||
|---|---|---|---|
| Expected credit losses | - 4,350 | Reserves | -3,263 |
| Deferred tax assets | +1,087 | ||
| Equity reported at 31/12/2017 (incl. minorities) | 538,838 |
| Impact of IFRS 9 ECL | -3,263 |
|---|---|
| Adjusted equity in opening balance at 1/1/2018 | 535,575 |
Delen Private Bank has reviewed the above criteria and concludes that, as far as classification and measurement of financial liabilities and financial assets is concerned, there is no impact on the opening balance at 1/1/2018. The organization, processes and governance are adjusted in order that the formal assessments and the review can be carried out in a going concern.
The changes in fair value in the portfolio "available-for-sale financial assets" are recognized through profit and loss as from January 1. Consequently, the unrealized capital gains are reclassified (within the equity) to the consolidated reserves in the opening balance to the amount of 304 KEUR. After that, the classification (changes in fair value through profit and loss or through other comprehensive income) of each new acquisition will be determined per instrument.
The introduction of IFRS 9 involves a changeover from an "incurred loss" model to an "expected loss" model as regards impairments. Under IFRS 9, a provision must be constituted for expected losses at the start of a contract. The expected credit losses (ECL) are determined on an individual basis. Given the quality of the credit portfolio of Delen Private Bank, the impact on the opening equity is very limited (-61 KEUR).
• EBITDAR: EBITDA plus rent cost.
• Net financial position: Cash & cash equivalents and investments minus short and long term financial debt.
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