Annual Report • Apr 28, 2015
Annual Report
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| Letter from the CEO | 4 |
|---|---|
| Directors' report | 6 |
| Declaration by the board and executive management |
11 |
| Financial statements - Group | 12 |
| Financial statements - Parent company | 41 |
| Shareholder information | 56 |
| Corporate governance | 58 |
| Auditor's report | 64 |
| Key figures Group | 66 |
| Definitions | 67 |
Bouvet is a Scandinavian consultancy which works for important players in all major sectors of society. Its work contributes to such areas as stable energy supply, a more efficient public sector, an improved health service, more secure banks, greater media diversity, a better health, safety and environmental performance in the oil industry, less administration in the transport sector, and an improved customer experience in retailing.
The company designs, develops and manages IT and digital communication solutions, and advises on their use. At 31 December 2014, it had 1 008 employees at 14 offices in Norway and Sweden. Bouvet's consultants have backgrounds in a diverse array of disciplines. A growing number of assignments call for a multidisciplinary approach, and the company is able to put together fruitful combinations of expertise. Such teams are actually able to achieve the integrated solutions which people want above all. Tools, methods and personnel are chosen with care. That is the way Bouvet wins the trust of its clients.
Closeness to the client is crucial for creating good solutions and for understanding the client's language, culture and business. So Bouvet is located near to them. Its projects are entrenched locally, but draw on expertise from across the company. Bouvet's ambition to be the most credible consultancy with the most satisfied personnel and clients puts it under an obligation to both clients and employees.
%
| NOK MILLION | 2014 | 2013 | 2012 |
|---|---|---|---|
| Operating revenue | 1 132.6 | 1 112.8 | 1 030.3 |
| Operating profit (EBIT) | 79.2 | 95.1 | 78.2 |
| Profit for the year | 57.0 | 69.8 | 56.6 |
| EBIT-margin | 7.0 % | 8.5 % | 7.6 % |
| Equity ratio | 34.3 % | 35.9 % | 34.7 % |
| Number of employees (year end) | 1 008 | 931 | 881 |
%TURNOVER PUBLIC/PRIVATE TURNOVER PER BUSINESS
Turnover from customer 100 % public owned: 34.3 %
Turnover from customer
wholly or partially private owned: 65.7 %
| Oil & gas | 35.1 % |
|---|---|
| Public administration and defence | 17.9 % |
| Transportation | 8.5 % |
| Power supply | 8.2 % |
| Retail | 6.3 % |
| Media, IT and telecom | 6.1 % |
| Service industry | 5.9 % |
| Industry | 4.5 % |
| Health and social welfare services | 3.4 % |
| Bank and finance | 2.3 % |
| Other | 1.8 % |
NUMBER OF EMPLOYEES (YEAR END)
Motivated, committed and satisfied employees provide satisfied customers and good results! We carried out a number of highly interesting assignments in 2014. These have yielded solutions which help many people to enjoy a better life and our clients to reach their goals. The impact this has on society and the good feedback we receive motivate us even more. Results from the employee survey in 2014 show that our staff are satisfied and set great store by the culture, range of work and collaboration we offer. Even though revenues from Statoil, our biggest client, sank substantially in 2014, we achieved growth in turnover. Profit was somewhat lower than the year before. We acquired many new and pleasant colleagues with new and highly interesting expertise during 2014. The acquisition of Blinc and the takeover of Capgemini's office in Trondheim have strengthened our position in the market.
We found 2014 an exciting year. Progress continued with our expertise and services in communication, information technology and consultancy. That means we are in the forefront of developments and can deliver a multidisciplinary range of services which ensures good integrated solutions for our clients. A growing number of these are using us as strategic partners in shaping digital solutions. That helps to enhance efficiency and to create new business opportunities for them. We want to be near to and collaborate closely with our clients. Very good feedback from users and management at clients show that this is important and right.
During 2014, we also worked for enterprises which are important social players. Assignments we carried out contributed to such areas as stable energy supply, a more efficient public sector, an improved health service, more secure banks, greater media diversity, a better health, safety and environmental performance in the oil industry, less administration in the transport sector, and an improved
customer experience in retailing. Clients who used our services in 2014 include Statkraft, Statnett, Hafslund, Agder Energi, Skagerak, Lyse Energi, Altibox, Yara, Hydro, the South-East Norway, Western Norway and Central Norway Regional Health Authorities, DNB, Sparebanken Vest, Ikano Bank, Gjensidige, TV2, NRK, Canal Digital, Statoil, Wintershall, Total, BP, ConocoPhillips, GDF Suez, Det Norske Oljeselskap, Aibel, MHWirth, National Oilwell, Sporveien, the Norwegian National Rail Administration, the Norwegian Public Roads Administration, Viking Redningstjeneste, Avinor, the Norwegian armed forces, the State Agency for the Recovery of Fines, Damages and Costs, the Norwegian Customs and Excise, the Norwegian Government Agency for Financial Management, the Norwegian Directorate for Education and Training, the Swedish Transport Agency, Sandnes, Oslo and Bergen local authorities, several county councils, the Skåne Regional Council, Tine, Coop, Reitan Gruppen and Vinmonopolet. We increased our turnover with virtually all of these during the year.
Market challenges were also faced by our company in 2014. As a result of cost-cutting in the oil industry, we experienced a substantial decline in turnover from Statoil, our biggest client. This meant that our organisation in several regions had to find work from other clients in order to maintain a high level of activity for our consultants. I am impressed by the fantastic commitment which meant that, despite this change, we managed to increase our workforce and our turnover during the year. Expertise acquired over many years of working for Statoil has been sold to other oil companies and new clients have been won.
We have motivated, able and pleasant employees. Organic growth combined with the acquisition of the Blinc company and Capgemini's office in Trondheim meant that our workforce exceeded 1 000 people during 2014. Many apply to work for us because we a Norwegian-owned company, have a regional organisation, are committed to local expertise development and execute assignments in close collaboration with clients. Employees identify our culture as very important for their job satisfaction. It helps to ensure a great deal of knowledge sharing, low staff turnover and not least good deliveries. The 2014 employee survey revealed that 91 per cent of our staff think this is a great place to work. The involvement, good humour and commitment of my colleagues help every day to make my life fun and eventful.
Our company has a strong position in the market, and I am confident that 2015 will be a year when we take market shares. Our clients are developing continuously, and will need assistance from the best consultancy in Norway and Sweden – namely us. We will continue to develop our expertise so that we can remain the front runner and offer a broad range of services, we will continue to produce solutions which digitise our clients and help them to make progress, and we will continue to operate in an efficient manner so that we rank again as one of the most profitable consultancies in the business in 2015.
And it will continue to be fun to work with us in 2015, and not least to go to work here.
"Motivated, committed and satisfied employees provide satisfied customers and good results!"
Sverre Hurum CEO
Bouvet had a good year in 2014. The group achieved growth in turnover, but profit was somewhat lower than in 2013. Profitability declined primarily because of a 3.5 per cent reduction in the billing ratio for the group's consultants from the year before. That in turn was largely the result of a substantial fall in operating revenues from the company's biggest client during 2014 compared with 2013.
Bouvet's strategy is to develop its range of services on the basis of market opportunities and requirements, and it grew in important new areas during 2014. The Blinc consultancy, which delivers advice on and solutions for customer relationship management (CRM), was acquired in the first quarter. During the fourth quarter, Bouvet took over Capgemini's regional office in Trondheim. This was in line with the company's strategy of building a strong local presence. The group delivered a broader range of services to existing clients in 2014, while securing a number of large new clients.
Bouvet delivers services in the fields of communication, information technology and consultancy. The group became an important strategic partner for many enterprises during 2014, and supports them by designing digital solutions which enhance efficiency and create new business opportunities. Clients appreciate Bouvet's good grasp of their business and that the group, through its broad range of services, can be a turnkey supplier. The group reinforced its position as a leading supplier of advisory and development services during 2014, and is concerned to maintain long-term client relationships.
The regional model with local offices provides clear advantages for both marketing work and competitiveness. Many enterprises prioritise suppliers of business-critical solutions and services which have a local entrenchment and presence. Establishing long-term relationships with the client and thereby learning its business and systems is also easier. This model helps Bouvet to overcome the client's challenges more effectively.
Closeness to the client also opens opportunities to collaborate in continuously developing the company's services. Bouvet participated on a number of occasions in 2014 in strategically important collaboration projects for developing new services and products. One consequence in 2014 was the company's creation
of a department to develop Sesam, an integration product. Bouvet also won a number of prizes during the year for solutions developed in cooperation with its clients.
Bouvet continuously receives positive feedback for its technical and social expertise, proposals for solutions, business comprehension and ability to deliver. Clients set great store by its ability to develop important knowledge. Combined with the close relationship maintained with the group's clients, this makes it possible to implement assignments with a high degree of integrity.
Having a strategy to ensure a long-term and stable client base is important for Bouvet. This approach means that a steadily growing number of clients return to obtain expanded support from the company.
Long-term client relations mean that the group is less exposed to cyclical fluctuations and reduce its sales costs.
Revenue from the group's 20 largest clients accounted for 55 per cent of its overall revenues in 2014. Satisfied clients will always be the best ambassadors, and good references are valuable in sales work.
Bouvet has also demonstrated that it continues to win orders from new clients.
Bouvet has increased its market share in recent years. Results show that the company has an appropriate business model and a range of services which are well adapted to client needs. Thanks to a clear focus on principles for managing its business, Bouvet is perceived as a solid, well-run and reputable company.
The Norwegian market for services provided by Bouvet is good, and the group is experiencing good demand. In Sweden, the market is rather weaker and competition tougher. Power supply, retailing, the public sector, transport and the oil/gas industry are Bouvet's biggest categories. Large clients in other sectors were also served by the company during 2014.
Digital solutions are steadily gaining ground in business processes at the clients. Production of goods and services is being digitised at the same time as retailing and customer dialogue become ever more digital. Enterprises have a need to convey a unified image across the many channels through which dialogue with customers is pursued. These trends create increased demand for services which require both business understanding and expertise in communication and technology. Bouvet is accordingly well positioned in relation to this development.
Bouvet pays great attention to innovation and development of services. The company is a front-runner in a trend towards digitisation of market communication and public services, where a growing number of players have a digital output. Bouvet now has a broad range of services, which allows it to be both a strategic adviser and a development partner when clients seek to apply technology in new ways. Service design, management systems, multichannel strategies, mobility and security are important areas where the company supports its clients.
Bouvet had operating revenues of NOK 1 132.6 million in 2014, up by 1.8 per cent from the year before. A 6.2 per cent increase in the average number of employees compared with 2013 contributed to the growth in operating revenues. These earnings were also affected by a 2.8 per cent rise in prices for the group's hourly based services from 2013. At the same time, the billing ratio for the group's consultants declined by 3.5 percentage points from 2013.
Bouvet uses the services of external consultants in those cases where it lacks the capacity to meet demand with its own personnel or where the client requires leading-edge expertise outside the company's own priority areas. The sub-consultant share of total revenues was 10.1 per cent, down from 14.3 per cent in 2013.
Overall expenses in Bouvet grew by 3.5 per cent in 2014 to reach NOK 1 053.4 million.
The growth in operating expenses related primarily to increased payroll costs because the average number of employees rose during the period. These costs grew by NOK 40.4 million or 5.4 per cent from 2013 to 783.8 million, while the average number of employees grew by 6.2 per cent. The cost of sales fell by NOK 15.4 million or 10.1 per cent to NOK 136.6 million. This decline reflected reduced use of sub-consultants. Other operating costs rose by 7.2 per cent from 2013 to NOK 119.7 million.
Bouvet experienced a general rise of 3.5 per cent in employee pay during 2014, compared with 3.7 per cent the year before.
Bouvet achieved an operating profit (EBIT) of NOK 79.2 million in 2014, compared with NOK 95.1 million the year before. That represents a decline of 16.8 per cent from 2013. The EBIT margin was seven per cent, compared with 8.5 per cent in 2013. Bouvet's long-term goal is an EBIT margin of 10 per cent.
A 3.5 percentage point decline in the billing ratio for the group's consultants from 2013 had a negative effect on the EBIT margin. The EBIT margin was also negatively affected because prices for the group's hourly based services grew by 0.7 per cent less than payroll costs per work-year. The group will continue to devote great attention to improving operational efficiency even further, while working actively to raise hourly rates.
Net profit was NOK 57 million, down from NOK 69.8 million in 2013. Earnings per issued share came to NOK 5.45, compared with NOK 6.75 in 2013.
Bouvet had a total balance sheet of NOK 447.1 million at 31 December 2014, compared with NOK 445.4 million a year earlier. Higher turnover led to a marginal increase in accounts receivable in 2014. The group has good control with and overview of its receivables, and regards them as sound.
Consolidated equity at 31 December came to NOK 153.5 million, compared with NOK 159.8 million in 2013. Bouvet paid a total of NOK 62.3 million in dividend to shareholders during the year. The group's capital adequacy measured by the carried equity ratio was 34.3 per cent at 31 December 2014, compared with 35.9 per cent a year earlier. Bouvet's aim is to maintain an equity ratio in excess of 30 per cent.
Bouvet's cash flow from operations was NOK 48.8 million, compared with NOK 99.4 million in 2013. Liquid assets of NOK 118.6 million take the form of bank deposits.
Consolidated investment totalled NOK 30.3 million in 2014. Purchases of new operating equipment accounted for NOK 12.1 million of this total, and investment in intangible assets for NOK 4 million. A further NOK 14.2 million was invested in connection with the acquisition of businesses and companies. The group disposed of business assets totalling NOK 0.5 million during the year, so that net investment for 2014 came to NOK 29.8 million compared with NOK 11.1 million the year before.
The board takes the view that Bouvet has sufficient capital to finance the group's liabilities, investment needs and operations from internal funds.
Net profit for parent company Bouvet ASA came to NOK 51.2 million, compared with NOK 61.1 million in 2013. The bulk of the company's profit comprises recognised dividend and
group contribution from the Bouvet Norge AS subsidiary, and the decline for the year primarily reflected reduced income from Bouvet Norge. The investment in Bouvet Norge is the parent company's principal asset. Liabilities for the parent company primarily comprise provision for dividend and debt to subsidiaries. Cash flow from operations was negative at NOK 1.6 million, compared with a negative NOK 4.7 million in 2013.
Pursuant to section 3, sub-section 3a of the Norwegian Accounting Act, the board confirms that the going concern assumption is realistic, and the accounts for 2014 have been prepared on that basis. This is based on the group's long-term forecasts as well as its equity and liquidity positions.
Bouvet is exposed to various risk and uncertainty factors, which are operational, market-related and financial in character. Managing and dealing with uncertainty factors form an integrated part of business operations in order to help attain the company's strategic and financial goals.
The board of Bouvet ensures that the company's executive management identifies all relevant risk factors and that the necessary risk management systems and tools are available to reduce the scope of undesirable incidents of a strategic, operational or financial character.
The most important financial risks to which the group is exposed relate to liquidity and credit. The board makes continuous assessments and specifies guidelines for the way these risks should be handled by the executive management.
Bouvet's client portfolio consists mainly of large and financially sound enterprises and organisations with high credit ratings, and the group has no significant credit risk related to a single counterparty or several counterparties which can be regarded as a group because of similarities in the credit risk.
The group reduces its exposure by subjecting new clients to a credit assessment before possible significant credit is approved.
Liquidity risk is that the group will be unable to meet its financial obligations as and when they fall due.
The group manages this type of risk by maintaining sufficient liquid assets at all times to be able to meet its financial obligations when they fall due, under both normal and extraordinary conditions.
A continuous overview is maintained of the maturity structure of the group's financial obligations, which in general takes account of all possibilities that early redemption might be required.
At 31 December, the group had no interest-bearing debt and bank deposits of NOK 118.6 million. It also possessed undrawn credit facilities totalling NOK 50.8 million.
Market risk relates primarily to external factors which could affect fair value and/or future cash flows.
Changes in interest rates affect both financial income and financial expences. Bouvet had no interest-bearing debt at 31 December 2014. The company's interest rate risk is accordingly limited to a possible reduction in financial income, and can accordingly be characterised as limited.
The bulk of the group's business is conducted in Norwegian kroner, and risk related to foreign exchange fluctuations can accordingly be characterised as limited.
Financial developments in Bouvet depend primarily on market and price trends in the Scandinavian market for services related to communication, information technology and advisory.
With a high proportion of fixed costs, the company is exposed to fluctuations in the level of activity. Bouvet's strategy is to utilise services from external consultants when it does not have sufficient capacity to meet demand with its own workforce. This provides increased flexibility in adapting to the market conditions prevailing at any given time.
The sub-consultant share of total revenues in 2014 was 10.1 per cent, compared with 14.3 per cent in 2013.
Although Bouvet seeks to reduce the consequences of undesirable incidents through risk management systems, risk factors will always remain which cannot be adequately addressed by preventive measures. The company accordingly seeks to cover this type of risk as far as possible through the purchase of insurance policies.
The company had 1 251 shareholders at 31 December. Its 20 largest shareholders owned 6 445 453 shares, which corresponded to 63 per cent of total issued shares.
The Bouvet share was priced at NOK 76 at 31 December, compared with NOK 89 a year earlier. This price varied over the year between a low of NOK 70.25 at 13 October and a peak of NOK 95 at 15 April. The share price fell by 14.6 per cent over the year. Including a dividend of NOK 6 per share for fiscal 2013, the return in 2014 was negative at 7.9 per cent. A total of 1.32 million Bouvet shares were traded in 714 transactions during the year, compared with 1.62 million in 618 transactions in 2013.
The share capital of the company at 31 December was NOK 10 250 000, divided between 10 250 000 issued shares with a nominal value of NOK 1.00. This was unchanged from the year before. The company held 19 688 of its own shares at 31 December, compared with 19 356 a year earlier.
The board was mandated by the AGM on 20 May 2014 to increase the share capital of the company by up to NOK 1 million to finance other companies and businesses. In addition, the board was mandated to increase the share capital by up to NOK 200 000 in connection with the share saving programme for company employees. The board was also mandated to acquire the company's own shares up to a total nominal value of NOK 1 025 000 for use as full or partial settlement in the acquisition of businesses and to have a holding of shares in hand for that purpose, and for implementing the share saving programme for company employees.
These mandates run until 30 June 2015.
The group aims to give its shareholders a return in the form of dividend and rising share value which is at least on a par with alternative investments offering a comparable level of risk. A dividend is proposed to the extent that the board feels this would not have a negative effect on the group's growth ambitions and capital structure.
A dividend of NOK 6 per share proposed by the board was approved by the AGM on 20 May 2014, and the share was traded ex-dividend from 21 May.
Bouvet's goal is to be a company which creates positive spin-offs in society. It does this by creating value as a company, by contributing to development and efficiency improvements at its clients, and by being a good employer. Many of Bouvet's deliveries make a positive contribution to society by creating new services for the population and the business community, enhanced security and more efficient utilisation of society's resources. Increased expertise with digital solutions is a political objective in Norway, and Bouvet also plays its part in this area through the contributions made by its employees to national and local fora.
The employees are Bouvet's most important resources. Great emphasis is accordingly given to job satisfaction and professional development. The latter is secured by making provision for seminars, certification and knowledge sharing, and by making learning an integrated part of doing the job. As well as offering challenging assignments, Bouvet works actively to retain and strengthen a good social environment. It has succeeded in these efforts, and its workforce turnover is below the industry average. The high level of commitment among its personnel helps to manifest the group's expertise in the market and to establish Bouvet as an attractive place to work.
An employee survey was conducted in 2014 by Great Place to Work. One of its findings was that 91 per cent of personnel agreed with the statement "All things considered, I believe this is a great place to work". The results of the survey place Bouvet among the 10 best companies in its class in Great Place to Work's rankings.
Total sickness absence for 2014 was 75 346 hours or 4.2 per cent, down from 4.4 per cent the year before. No serious working accidents occurred during 2014. Bouvet has contracts with local medical centres to provide an occupational health service.
Health, safety and the environment are a priority area in Bouvet. It has established documented routines and divisions of responsibility which are observed in this area. These include local safety delegates and working environment committees.
Bouvet Norge is working long-term to increase the percentage of women among its employees. The female proportion increased from 25 per cent in 2013 to 27 per cent. The distribution in management is 23 per cent. Women and men in comparable jobs receive the same pay.
All Bouvet employees are duty-bound to contribute to a positive and professional working environment. This means that they will treat each other with respect, and that all forms of discrimination are unacceptable. That includes discrimination on the basis of religion, skin colour, gender, sexual orientation, age, nationality, race or disability.
Bouvet's goal is to be as environment-friendly as possible. Action in this area is described in a separate report concerning CSR on the group's website. Bouvet has initiated a process of securing certification as an Eco-Lighthouse. The offices in Kristiansand, Oslo, Grenland and Trondheim have been certified, and more offices are due to be follow suit during 2015.
Bouvet regards all forms of corruption as unacceptable. Guidelines and routines in this area are described in the report on CSR posted to the group's website.
Bouvet Norge appreciates the importance of clear ethical guidelines for its employees. As a consultancy, compliance with these is particularly important. These guidelines include always giving the client the advice which is best for it, observing applicable legislation and statutory regulations, and requiring employees to show respect for others in their work.
A programme entitled Cornerstones for Bouvet's Management was initiated in 2014 for all managers. Behaving in a trustworthy manner towards clients and employees is an important element in this programme, which had been taken by all managers up to February 2014.
Bouvet works on the basis of a regional model where closeness to the clients is important. The group has 11 offices in Norway and three in Sweden, located in Arendal, Bergen, Forus, Haugesund, Kristiansand, Malmö, Oslo, Sandvika, Skien, central Stavanger, Stockholm, Trondheim, Sandefjord and Örebro. Employees increased from 931 to 1 008 during 2014.
Bouvet will continue to build on its regional strategy, and aims to occupy a leading position in the regions where it operates.
Consolidated net profit for 2014 was NOK 57 million, compared with NOK 69.8 million the year before. Parent company equity before provision for dividend at 31 December 2014 amounted to NOK 76.5 million.
The board proposes that the net profit of NOK 51.2 million for Bouvet ASA in 2014 be transferred to other equity. It also proposes that a dividend of NOK 51.3 million be paid, corresponding to NOK 5.00 per share.
Bouvet operates in rapidly changing markets, which makes it difficult to know anything certain about future development and growth. The group is exposed to industries where activity and the need for further digitisation remains high. Bouvet accordingly expects demand for its services to be good in both public and private sectors.
The group has displayed a good ability to continue developing its expertise and establishing new client relations as demand in the market changes. Bouvet is also organised in such a way that it is constantly prepared to adjust its business to changing markets. It has also been able to adapt its client base and service range to meet market demand. Bouvet is therefore well positioned for future profitable growth.
Bouvet's client base, the expertise of its employees and its strong financial position ensure that it is positioned to take further market share. The group's strategy is to grow organically through the appointment of additional competent employees and through the acquisition of businesses which can provide the group with new expertise and clients.
The board regards the group's prospects as good.
Oslo, 16 April 2015 The board of directors of Bouvet ASA
Åge Danielsen Chair
Ingebrigt Steen Jensen Director
Randi Helene Røed Deputy Chair
Egil Christen Dahl
Director
Grethe Høiland Director
Sverre Hurum President and CEO
The board of directors and the chief executive officer have today reviewed and approved the directors' report and the annual consolidated and parent company financial statements for Bouvet ASA at 31 December 2014.
We hereby confirm that, to the best of our knowledge:
Oslo, 16 April 2015 The board of directors of Bouvet ASA
Åge Danielsen
Chair
Ingebrigt Steen Jensen Director
Randi Helene Røed Deputy Chair
Egil Christen Dahl Director
Grethe Høiland Director
Sverre Hurum President and CEO
1 January - 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| Revenue | 5 | 1 132 598 | 1 112 774 |
| Operating expenses | |||
| Cost of sales | 6 | 136 645 | 151 996 |
| Personnel expenses | 7 | 783 760 | 743 334 |
| Depreciation fixed assets | 11 | 10 201 | 9 404 |
| Amortisation intangible assets | 13 | 3 138 | 1 303 |
| Other operating expenses | 8, 21 | 119 692 | 111 644 |
| Total operating expenses | 1 053 436 | 1 017 681 | |
| Operating profit | 79 162 | 95 093 | |
| Financial items | |||
| Other interest income | 2 616 | 2 599 | |
| Other financial income | 860 | 310 | |
| Other interest expense | -358 | -328 | |
| Other finance expense | -703 | -536 | |
| Net financial items | 2 415 | 2 045 | |
| Ordinary profit before tax | 81 577 | 97 138 | |
| Income tax expense | |||
| Tax expense on ordinary profit | 9 | 24 596 | 27 297 |
| Total tax expense | 24 596 | 27 297 | |
| Profit for the year | 56 981 | 69 841 | |
| Assigned to: | |||
| Shareholders in parent company | 55 737 | 68 677 | |
| Non-controlling interests | 1 244 | 1 164 |
1 January - 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| Items that may be reclassified through profit or loss in subsequent periods | |||
| Currency translation differences | -339 | 336 | |
| Sum other income and costs | -339 | 336 | |
| Profit for the period | 56 981 | 69 841 | |
| Total comprehensive income | 56 642 | 70 177 | |
| Assigned to: | |||
| Shareholders in parent company | 55 398 | 69 013 | |
| Non-controlling interests | 1 244 | 1 164 | |
| Diluted earnings per share | 10 | 5.39 | 6.67 |
| Earnings per share | 10 | 5.45 | 6.75 |
at 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | |||
| Deferred tax asset | 4,9 | 0 | 155 |
| Goodwill | 4,13,14 | 31 230 | 18 745 |
| Other intangible assets | 4,13 | 15 125 | 6 001 |
| Total intangible assets | 46 355 | 24 901 | |
| Fixed assets | |||
| Office equipment | 11 | 10 088 | 9 733 |
| Office machines and vehicles | 11 | 2 682 | 1 941 |
| IT equipment | 11 | 11 576 | 11 044 |
| Total fixed assets | 24 346 | 22 718 | |
| Financial non-current assets | |||
| Other long-term receivables | 11 | 11 | |
| Total financial non-current assets | 11 | 11 | |
| Total non-current assets | 70 712 | 47 630 | |
| CURRENT ASSETS | |||
| Work in progress | 4,12 | 106 625 | 84 476 |
| Trade accounts receivable | 15 | 131 129 | 125 451 |
| Other short-term receivables | 16 | 20 027 | 18 658 |
| Cash and cash equivalents | 17 | 118 568 | 169 222 |
| Total current assets | 376 349 | 397 807 | |
| TOTAL ASSETS | 447 061 | 445 437 |
at 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Paid-in capital | |||
| Share capital | 18 | 10 250 | 10 250 |
| Own shares - nominal value | -20 | -19 | |
| Share premium | 10 000 | 10 000 | |
| Total paid-in capital | 20 230 | 20 231 | |
| Earned equity | |||
| Other equity | 130 128 | 136 869 | |
| Total earned equity | 130 128 | 136 869 | |
| Non-controlling interests | 3 174 | 2 729 | |
| Total equity | 153 532 | 159 829 | |
| DEBT | |||
| Long-term debt | |||
| Deferred tax | 9 | 156 | 0 |
| Other provisions for obligations | 513 | 0 | |
| Total long-term debt | 669 | 0 | |
| Short-term debt | |||
| Trade accounts payable | 36 733 | 31 863 | |
| Income tax payable | 9 | 24 176 | 28 557 |
| Public duties payable | 109 388 | 106 347 | |
| Other short-term debt | 22 | 122 563 | 118 841 |
| Total short-term debt | 292 860 | 285 608 | |
| Total liabilities | 293 529 | 285 608 | |
| TOTAL EQUITY AND LIABILITIES | 447 061 | 445 437 |
1 January - 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Ordinary profit before tax | 81 577 | 97 138 | |
| Taxes paid | 9 | -28 284 | -19 847 |
| (Gain)/loss on sale of fixed assets | -215 | -41 | |
| Ordinary depreciation | 11 | 10 201 | 9 404 |
| Amortisation intangible assets | 13 | 3 138 | 1 303 |
| Share based payments | 4 828 | 3 980 | |
| Changes in work in progress, accounts receivable and accounts payable | -22 957 | -12 026 | |
| Changes in other accruals | 475 | 19 469 | |
| Net cash flow from operating activities | 48 762 | 99 381 | |
| Cash flows from investing activities | |||
| Sale of fixed assets | 452 | 1 293 | |
| Purchase of fixed assets | 11 | -12 065 | -10 746 |
| Purchase of intangible assets | 13 | -4 021 | -1 660 |
| Purchase of business | 2 | -12 250 | 0 |
| Investment in subsidiaries - net cash | 2 | -1 957 | 0 |
| Net cash flow from investing activities | -29 842 | -11 114 | |
| Cash flows from financing activities | |||
| Purchase of own shares | -12 800 | -11 539 | |
| Sales of own shares | 7 069 | 6 671 | |
| Dividend payments | -62 300 | -52 022 | |
| Net cash flow from financing activities | -68 031 | -56 891 | |
| Net changes in cash and cash equivalents | -49 111 | 31 377 | |
| Cash and cash equivalents at the beginning of the period 1) | 167 679 | 137 845 | |
| Cash and cash equivalents at the end of the period | 118 568 | 169 222 | |
| Unused credit facilities | 50 806 | 50 820 |
1) Cash and cash equivalents in 2014 is adjusted with cash flow NOK 1 543 thousand from aquicition of subsidiary.
| NOTE | NOK 1000 | SHARE CAPITAL |
OWN SHARES |
SHARE PREMIUM |
TOTAL PAID IN EQUITY |
OTHER EQUITY |
NON-CON TROLLING INTERESTS |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|---|
| Equity at 01.01.2013 | 10 250 | -1 | 10 000 | 20 249 | 119 756 | 2 336 | 142 341 | |
| Total comprehensive income | 69 013 | 1 164 | 70 177 | |||||
| 18 | Purchase/sale of own shares (net) | -18 | -18 | -4 850 | -4 868 | |||
| Employee share scheme | 4 200 | 4 200 | ||||||
| 18 | Dividend | -51 250 | -771 | -52 021 | ||||
| Equity at 31.12.2013 | 10 250 | -19 | 10 000 | 20 231 | 136 869 | 2 729 | 159 829 | |
| Equity at 01.01.2014 | 10 250 | -19 | 10 000 | 20 231 | 136 869 | 2 729 | 159 829 | |
| Total comprehensive income | 55 398 | 1 244 | 56 642 | |||||
| 18 | Purchase/sale of own shares (net) | -1 | -1 | -5 661 | -5 662 | |||
| Employee share scheme | 5 021 | 5 021 | ||||||
| 18 | Dividend | -61 500 | -800 | -62 300 | ||||
| Equity at 31.12.2014 | 10 250 | -20 | 10 000 | 20 230 | 130 128 | 3 174 | 153 532 |
The Group financial statements of Bouvet ASA for the period ending on 31 December 2014 were approved in a board meeting on 16 April 2015.
Bouvet ASA is a public limited company incorporated in Norway and listed on Oslo Børs. The Group's main office is located in Sandakerveien 24C, 0513 Oslo, Norway. The Group delivers consultancy services and training within information technology. The Group's business concept is to create opportunities and increase the efficiency of their customers' processes by means of new ideas and new technology in close cooperation with the customer.
The Group's financial statements of Bouvet for the accounting year 2014 have been prepared in accordance with international accounting standards and interpretations accepted by the EU, mandatory for the accounting year 2014.
The financial statements are based on the principles of historic cost.
The Group financial statements have been prepared on the basis of uniform accounting principles for uniform transactions and events under otherwise equal circumstances.
The Group's presentation currency is Norwegian Kroner (NOK) and the parent company's functional currency is NOK. Balance sheet items in subsidiaries with a functional currency other than NOK are converted to Norwegian kroner by applying the currency rate applicable on the balance sheet date. Currency conversion differences are booked against other comprehensive income. Income statement items are converted by applying the average currency rate for the period.
The Group financial statements include Bouvet ASA and companies under the controlling interest of Bouvet ASA. Controlling interest is normally achieved when the Group owns more than 50% of the shares in the company, and the Group is able to exercise actual control over the company.
The purchase method is applied when accounting for mergers. Companies that are sold or purchased during the year are included in the Group accounts from the date when a controlling interest is achieved and until the control ends.
All other investments in financial instruments are accounted for in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
Inter-company transactions and balances, including internal profit and unrealized profit and loss have been eliminated.
Management has used estimates and assumptions that have affected assets, liabilities, revenue, expenses and information on potential liabilities. This particularly applies to the revenue recognition of customer projects. Future events may imply that the estimates change. Estimates and the underlying assumptions are considered on a continuous basis. Changes in accounting estimates are recognised in the period the changes arise. In the event that the changes also apply for future periods, the effect is distributed over current and future periods. Ref. note 4.
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in foreign currency are converted to Norwegian kroner by applying the rate applicable on the balance sheet date. Non-monetary items valued at historic rate denominated in foreign currency are translated to Norwegian kroner by applying the rate applicable at the transaction date. Non-monetary items assessed at real value denominated in foreign currency are translated at the rate applicable on the balance sheet date. Exchange rate changes are recognized in the income statement as they occur during the accounting period.
Asset and liabilities in foreign enterprises, with another functional currency than Norwegian kroner, are converted to Norwegian kroner by applying the rate applicable on the balance sheet date. Revenue and expenses are converted based on average rate for the reporting period.
Currency translation differences are reported in the statement of other income and costs. When a foreign enterprise is disposed in a way where Bouvet ASA no longer is in control, currency translation differences are expensed and simultaneously reversed in the statement of other income and costs.
Bouvet mainly sells services. Revenue is recognised when it is probable that transactions will generate future financial benefits for the Group and the size of the amount can be reliably estimated. Sales revenue is presented net of value added tax and potential discounts.
Revenue from the sale of products is recognised when the significant risks and rewards of ownership of the products have passed to the buyer.
Revenue from the sale of services is recognised after a signed contract is received and in line with the deliveries. Customer projects are recognised in line with the project's degree of completion, when the outcome of the transaction can be reliably estimated. Progress is measured as accrued hours in relation to totally estimated hours. When the transaction's result cannot be reliably estimated only revenue equaling accrued project costs are taken to income, provided that it is likely that the revenue will be greater than accrued project costs. Any estimated loss on a project will be fully recognised in the income statement in the period when it is identified that the contract will result in a loss.
The Group is not reporting internally on business areas or segments from an accounting point of view. The Group's business is uniform and managed as one segment with projects running across the departments. Risks and earnings are followed up by departments in homogenous consultancy departments with the same markets, on a project basis and per consultant. This does not give grounds for segment reporting; hence management does not prepare such reports. Should there be changes in the Group's activities, it will be considered whether the changes necessitate segment reporting.
Financial information regarding geographical allocation of revenue is presented in note 5.
The tax expense consists of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all temporary differences between book and tax value on assets and liabilities, with the exception of
Deferred tax assets are recognised when it is probable that the tax jurisdiction will make sufficient profit in future periods to utilise the tax asset. The companies recognise previous not recorded deferred tax assets to the extent that it is probable that the Group can utilise the deferred tax asset. Likewise, the Group will reduce the deferred tax assets when it is considered unlikely that the deferred tax asset can be utilised.
Deferred tax and deferred tax assets are measured on the basis of the expected future tax rates of the Group companies where temporary differences have arisen.
Deferred tax is disclosed at a nominal value and classified as long-term debt in the balance sheet.
Tax payable and deferred tax assets are set-off directly against equity to the extent that the underlying items are booked against equity.
Fixed assets are valued at cost less accumulated depreciation and impairment losses. When assets are sold or disposed of, the gross carrying amount and depreciation are reversed, and any gain or loss on the sale or disposal is recognised in the income statement.
The gross carrying amount of fixed assets is the purchase price, including duties/taxes and direct acquisition costs related to making the fixed asset ready for use. Subsequent costs, such as repair and maintenance costs, are normally expensed when incurred, whereas other expenses expected to increase future economic benefits are balance sheet recorded.
Depreciation is calculated using the straight-line method over the following periods.
| Office equipment | 5-10 years |
|---|---|
| Office machines and vehicles | 5 years |
| IT equipment | 3 years |
The depreciation periods and methods are assessed each year. The residual value is estimated every year-end and changes in the estimate for residual value is accounted for as an estimation change.
Leases where most of the risk lies with the other contracting party are classified as operating leases. Lease payments are classified as operating costs and recognised in the income statement during the contract period.
Intangible assets acquired separately are recorded at cost. Costs related to intangible assets at acquisitions are disclosed at real value in the Group's opening balance. Balance sheet recorded
intangible assets are carried at cost less any accumulated amortisation and impairment losses.
The cost of intangible assets includes the purchase price and any duties/taxes.
Internally generated intangible assets, with the exception of capitalised development costs, are not capitalised, and expenditure is charged to profit and loss in the year in which the expenditure is incurred.
The useful lives are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Goodwill is not depreciated, but tested annually for impairment.The amortisation period and method are assessed at least once a year. Changes in amortisation method and/or period are treated as a change in estimate.
Expenses relating to research are recognised in the income statement when incurred. Expenses related to development are balance sheet recorded to the extent that the product or the process is technically and commercially viable, and the Group has adequate resources to complete the development. Expenses recorded in the balance sheet include materials, direct salary costs and a portion of directly attributable joint expenses. Development costs are recorded in the balance sheet at cost less accumulated depreciation and impairment losses. Balance sheet recorded development costs are depreciated on a straight-line basis and over the asset's estimated useful life.
The difference between cost at acquisition and the Group's share fair value of net measureable assets at the time of acquisition is classified as goodwill. Concerning investments in associated companies, goodwill is included in the investment's balance sheet recorded value.
In the balance sheet, goodwill is recognised at cost less any accumulated amortisation.
Assets and liabilities taken over in mergers are recognised at fair value in the Group's opening balance.
The allocation of cost at mergers is changed if any new information on fair value at the date of the take-over of control arises and 12 months ahead.
Goodwill is tested at least annually for impairment. In this connection, goodwill is allocated to cash flow generating units or groups of cash generating units expected to have synergy effects of the merger.
Equity at real value in excess of acquisition cost Equity at real value in excess of acquisition cost at mergers is immediately recognised as income at the time of the acquisition.
In accordance with IAS 39 Financial Instruments: Recognition and Measurement, financial instruments are classified within the scope of IAS 39 in the following categories: at fair value with changes in value through profit or loss, held to maturity, loans and receivables, available for sale and other liabilities.
The Group has financial instruments in the form of trade accounts receivable and payable, recognised at amortised cost.
Trade accounts receivables are initially recognised at fair value plus any transaction costs. Trade accounts receivables are subsequently carried at amortised cost using the effective interest method, if the amortisation effect is material. The carrying amount is subsequently reduced by any impairment losses. Provisions for impairment are made when there are objective indicators that the group will not receive their contractual payments.
The carrying amount of trade accounts receivable and payable is approximately equal to fair value, as they are agreed at "normal" conditions and normally have a short period to maturity.
Cash includes cash in hand and bank deposits. Cash equivalents are short-term liquid investments that can be converted to cash within three months and at a known amount.
Financial instruments are classified as liabilities or equity in accordance with the underlying financial reality.
Interest, dividend, profit and loss related to a financial instrument classified as debt will be presented as expense or income. Distributions to owners of financial instruments classified as equity will be set off directly against equity. When rights and obligations connected to how distributions from financial instruments will be carried out depend on certain types of uncertain future events and are outside both the issuer's and owner's control, the financial instrument will be classified as debt if it, at the time of issue, is improbable that the issuer will have to pay cash or other financial assets. In that case, the financial instrument is classified as equity.
On repurchase of own shares, costs including directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement
Transaction costs directly relating to an equity transaction are set off directly against equity after deducting tax expenses.
The Group has a defined contribution plan by which it is committed to contribute to each employee's pension plan with a fixed amount. The future pension depends on the size of the contributions and the yield on the pension savings. The Group's obligation is fully met when paid. The pension costs are charged as an expense when accrued.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The share scheme is treated in accordance with IFRS 2. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. The difference between fair value after the allocation and charged amount is updated on a running account against the equity.
A provision is recognised when the Group has an obligation as a result of a previous event and it is probable that a financial settlement will take place as a result of this obligation and the size of the amount can be measured reliably. If the effect is considerable, the provision is calculated by discounting estimated future cash flows using a discount rate before tax that reflects the market's pricing of the time value of money and, if relevant, risks specifically linked to the obligation.
Potential restructuring provisions are recognised when the Group has approved a detailed, formal restructuring plan and the restructuring has either started or been publicly announced within the company.
Provisions for loss-making contracts are recognised when the Group's estimated revenues from a contract are lower than unavoidable costs which were incurred to meet the obligations pursuant to the contract.
Unlikely contingent liabilities are not recognised in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are very unlikely to be incurred.
Contingent assets are not recognised in the annual accounts but are disclosed if there is a certain probability that a benefit will be added to the Group.
New information on the Group's position at the balance sheet date is taken into account in the financial statements. Events after the balance sheet date that do not affect the Group's
position at the balance sheet date, but will affect the Group's position in the future, are stated if significant.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the group are listed below.
It is assessed that non of the standards, amendments and interpretation to existing standards will have material impact on the financial statement as the currently is presented, however they may have impact in the future.
IFRS 9 will eventually replace IAS 39 Financial Instruments: Recognition and Measurement. In order to expedite the replacement of IAS 39, the IASB divided the project into phases: classification and measurement, hedge accounting and impairment. New principles for impairment were published in July 2014 and the standard is now completed. The parts of IAS 39 that have not been amended as part of this project have been transferred into IFRS 9.
The Standard is not yet approved by the EU. For entities outside the EU/EEA with a statutory obligation to keep accounts, the Standard will be effective for accounting periods beginning on or after 1 January 2018. IFRS 9 may have an effect on the classification and measurement of the Groups financial assets and financial liabilities. The Group will quantify the effects in conjunction with the other phases, when issued, to present a comprehensive picture.
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard applies to all revenue contracts and provides a model for the recognition and measurement of sales of some non-financial assets (e.g., disposals of property, plant and equipment).
The Standard is not yet approved by the EU. For entities outside the EU/EEA with a statutory obligation to keep accounts, the Standard will be effective for accounting periods beginning on or after 1 January 2017. IFRS 15 may have a prospective effect on the revenue recognition.
The amendments to IAS 1, issued as part of IASBs Disclosure Initiative, further encourage companies to apply professional judgment in determining what information to disclose and how to structure it in their financial statements.
The amendments are not yet approved by the EU. For entities outside the EU/EEA with a statutory obligation to keep
accounts, the amendments will be effective for accounting periods beginning on or after 1 January 2016.
Acquisition of the business Capgemini Trondheim On 31 October 2014, Bouvet Norge AS (subsidiary of Bouvet ASA) acquired 100 percent of the business Capgemini Trondheim. This implies taking over the employees , customer relations and customer contracts together with existing lease obligations. The takeover was financed by NOK 12.3 million in cash. The Group applied external advisors at the acquisition.
Capgemini's office in Trondheim was owned by the consultancy company Capgemini AS, whose head office is in Oslo. The strategy of Capgemini is to focus on larger projects with an offshoring component. The office in Trondheim serves smaller
and local customers, which fits with Bouvet's regional strategy. The purchase resulted in a goodwill of NOK 8.9 million and an added value of NOK 3.4 million related to customer relations. The goodwill is subject to an annual impairment test, while intangible assets are subject to impairment test at any indication on a fall in value. It is expected that the acquisition will have a positive influence on future earnings and have synergy effects on existing business.
On the 1 November 2014, Capgemini's office in Trondheim, including employees, was incorporated with Bouvet's office in Trondheim.
The acquisition of Capgemini Trondheim had the following effect on Bouvet ASA's group account per acquisitions date:
| NOK 1000 | ADDED VALUE | ACQUISITION 2014 |
|---|---|---|
| Fixed assets/customer relations | 3 400 | 3 400 |
| Current assets | 0 | 0 |
| Long-term debt | 0 | 0 |
| Short-term debt | 0 | 0 |
| Net identifiable assets and liabilities | 3 400 | 3 400 |
| Goodwill at acquisition | 8 850 | 8 850 |
| Purchase amount | 12 250 | 12 250 |
| Cash | 12 250 | |
| Purchase amount | 12 250 | |
| Paid in cash | 12 250 | |
| Cash received | 0 | |
| Net cash out | 12 250 |
The acquired company has an estimated contribution with NOK 6.0 million to the Group turnover and NOK 0.6 million to the Group's profit before tax in the period between the purchase and the balance sheet date.
Included in the value of goodwill are employees and expected synergies with Bouvet Norge's existing business.
Had the acquisition been carried out on 1 January 2014, the Group's estimated total turnover for the entire period would have been NOK 1 159.4 million and the Group's estimated profit before tax would have been NOK 85.5 million.
On 31 March 2014, Bouvet Norge AS (subsidiary of Bouvet ASA) acquired 100 percent of the shares in Blinc AS. The takeover was financed by NOK 3.5 million in cash. In addition there is a possibility for an additional remuneration which depends upon the financial performance for the period 1 April 2014 until 31 March 2016. The additional remuneration will be adjusted with a factor up or down depending on the outcome of the results. Minimum additional remuneration for the acquisition to be paid is NOK 0.0 million and maximum additional remuneration is NOK 8.0 million. NOK 3.5 million was settled as the shares were transferred and possible additional remuneration will be settled 31 May 2016. The Group applied external advisors at the acquisition.
Blinc AS is a consultancy company delivering CRM, mobility and advisory services, with offices located at Lysaker. The acquisition of Blinc AS complete Bouvet's business within customer experience and dialogue marketing and competence with in SAP CRM. The purchase resulted in a goodwill of NOK 3.5 million and an added value of NOK 4.7 million related to customer relations. The goodwill is subject to an annual impairment test, while intangible assets are subject to impairment test at any indication on a fall in value. It is expected that the acquisition will have a positive influence on future earnings and have synergy effects on existing business.
On 1 April 2014, Blinc AS, including employees, was incorporated with Bouvet's office in the East.
The acquisition of Blinc AS had the following effect on Bouvet ASA's group account per acquisitions date:
| NOK 1000 | BALANCE SHEET VALUE 2014 |
ADDED VALUE | ACQUISITION 2014 |
|---|---|---|---|
| Fixed assets/customer relations | 74 | 4 745 | 4 819 |
| Current assets | 3 497 | 0 | 3 497 |
| Long-term debt | 0 | -1 281 | -1 281 |
| Short-term debt | -3 119 | 0 | -3 119 |
| Net identifiable assets and liabilities | 452 | 3 464 | 3 916 |
| Goodwill at acquisition | 0 | 3 536 | 3 536 |
| Purchase amount | 452 | 7 000 | 7 452 |
| Cash | 3 500 | ||
| Estimated additional remuneration | 3 952 | ||
| Purchase amount | 7 452 | ||
| Paid in cash | 3 500 | ||
| Cash received | 0 | ||
| Net cash out | 3 500 |
The acquired company has contributed with NOK 6.0 million to the Group turnover and NOK - 1.1 million to the Group's profit before tax in the period between the purchase and the balance sheet date.
Included in the value of goodwill are employees and expected
synergies with Bouvet Norge's existing business.
Had the acquisition been carried out on 1 January 2014, the Group's total turnover for the entire period would have been NOK 1 135.3 million and the Group's profit before tax would have been NOK 81.4 million.
The following subsidiaries are included in the consolidated accounts:
| COMPANY | COUNTRY | MAIN BUSINESS LINE | RESULTS 2014 | EQUITY 31.12.2014 |
OWNERSHIP | VOTING SHARE |
|---|---|---|---|---|---|---|
| Ontopia AS 1) | Norway | IT consultancy | 32 | 3 502 | 100 % | 100 % |
| Nordic Integrator Management AS 2) | Norway | IT consultancy | 3 | 1 149 | 100 % | 100 % |
| Olavstoppen AS 3) | Norway | IT consultancy | 3 111 | 7 934 | 60 % | 60 % |
| Bouvet Sverige AB (former Zekundera AB) 4) | Sweden | IT consultancy | -5 825 | 2 594 | 100 % | 100 % |
| Bouvet Norge AS 5) | Norway | IT consultancy | 63 215 | 224 990 | 100 % | 100 % |
1) Consolidated from 1 April 2007
2) Consolidated from 1 July 2007
3) Established in March 2010
4) Consolidated from 1 October 2008. Bouvet Sverige AB has to subsidiaries; Bouvet Stockholm AB and Bouvet Syd AB.
5) Established 10 February 2011. The Company has taken over the operations previously held by Bouvet ASA.
Interests held by non-controlling interests in the Group's activities and cash flows:
| COMPANY | LOCATION | MAIN BUSINESS LINE | OWNERSHIP | VOTING SHARE |
|---|---|---|---|---|
| Olavstoppen AS | Stavanger | IT consultancy company | 40 % | 40 % |
Summary of financial information regarding non-controlling interests (40 %)
| NOK 1000 | 2014 |
|---|---|
| Revenue | 11 015 |
| Profit for the year | 1 244 |
| Total comprehensive income | 1 244 |
| Non-current assets | 53 |
| Current assets | 5 991 |
| Total assets | 6 044 |
| Equity | 3 174 |
| Long-term debt | 0 |
| Short-term debt | 2 870 |
| Total equity and liabilities | 6 044 |
| Dividend | 800 |
In preparing the financial statements in accordance with IFRS, the Group's management has applied estimations based on their best judgement and on assumptions considered to be realistic. Unexpected situations or changes in market conditions can result in changed estimations and thereby have an effect on the company's assets, liabilities, equity and result.
The Group's most significant accounting estimations concern the following items:
The Group is primarily delivering its services based on time and material used. The Group has some income from fixed price or target price projects where the Group shall deliver a predefined result at a price that is either fixed or has elements causing income per hour not to be known before the projects are finalised. For these projects the income is recorded in correlation with the degree of completion. Progress is measured as incurred hours in relation to totally estimated hours. For the accounting year 2014, 4.0 percent of the Group's income was generated by projects with such an element of uncertainty and the income is recorded based on the degree of completion. (Ref. note 12.) For the accounting year 2013 corresponding figures was 4.6 percent.
The Group's balance recorded goodwill and other intangible assets are annually assessed for impairment and any reversal of previous write-downs (ref. note 14).
Bouvet ASA distributes costs for acquired businesses on acquired assets and liabilities based on an estimated fair value at acquisition. The Group has performed the necessary analysis to decide the fair value of acquired assets and liabilities. The management has to perform substantial judgement in deciding on methods, estimates and assumptions for these valuations. Significant purchased intangible assets recognised comprise customer contracts and customer relations. Assumptions used for assessing intangible assets include, but are not limited to, the expected economic life of customer contracts and the customer relationship based on lapse of customers. Assumptions used for assessing assets include, but are not limited to, the replacement costs for fixed assets. Management's calculations of fair value are based on assumptions considered to be fair, but with an inherent uncertainty. As a consequence, the actual result may deviate from the calculations.
a) Information about geographical allocation of revenue Revenue from external customers attributable to:
| NOK 1000 2014 |
||||
|---|---|---|---|---|
| Norway | 1 091 559 | 1 077 784 | ||
| Sweden | 37 286 | 31 361 | ||
| Other countries | 3 753 | 3 629 | ||
| Total income | 1 132 598 | 1 112 774 |
See note 11 for geographical allocation of fixed assets.
b) Information about major customers
Included in revenue in 2014 is NOK 206.9 million (2013: NOK 309.8 million) from the groups largest customer.
| NOK 1000 2014 |
|||
|---|---|---|---|
| Hired consultants | 99 211 | 122 149 | |
| Hired training instructors | 10 347 | 9 161 | |
| Purchase of training documentation | 817 | 1 248 | |
| Out-of-pocket expenses and travels invoiced customers | 9 152 | 4 904 | |
| Purchase of software and hardware for resale | 17 118 | 14 534 | |
| Total cost of sales | 136 645 | 151 996 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Salary | 638 863 | 594 377 |
| Bonus/profit sharing | 14 172 | 27 425 |
| Social security tax | 102 221 | 93 062 |
| Pension costs (see note 20) | 23 259 | 20 480 |
| Personnel insurance | 4 233 | 3 631 |
| Other expenses | 6 233 | 6 019 |
| Government grant related to R&D | -1 440 | 0 |
| Capitalised development expenses | -3 781 | -1 660 |
| Total salary expenses | 783 760 | 743 334 |
| Average number of man-labour years: | ||
| Administration, sales and management | 115 | 107 |
| Other employees | 830 | 766 |
| Total | 945 | 873 |
| Average number of employees: | ||
| Administration, sales and management | 118 | 109 |
| Other employees | 840 | 793 |
| Total | 958 | 902 |
See note 23 for transactions with related parties.
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Office premises | 27 757 | 29 274 |
| Travel and transport | 12 451 | 11 804 |
| Social costs and welfare initiatives | 22 719 | 17 115 |
| Office supplies, EDP etc. | 18 306 | 16 996 |
| Competence development | 7 101 | 7 000 |
| Recruitment costs | 8 048 | 7 707 |
| Marketing expenditure | 4 399 | 3 606 |
| External services | 6 641 | 6 262 |
| Other expenses | 12 270 | 11 880 |
| Total other operating expenses | 119 692 | 111 644 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Tax payable | 25 449 | 29 066 |
| Changes in deferred taxes | -853 | -1 769 |
| Tax expense | 24 596 | 27 297 |
| NOK 1000 2014 |
||||
|---|---|---|---|---|
| Calculated tax payable | 25 449 | 29 066 | ||
| Government grant related to R&D | -1 440 | 0 | ||
| Payable tax (receivable) subsidiary in Sweden | 168 | -457 | ||
| Tax payable recognised directly in equity | 0 | -52 | ||
| Total income tax payable | 24 176 | 28 557 |
| NOK 1000 | 2013 | |
|---|---|---|
| Ordinary profit before tax | 81 577 | 97 138 |
| Calculated tax 27% | 22 026 | 27 199 |
| Not tax deductible costs | 994 | 231 |
| Non taxable income | 0 | -13 |
| Tax losses carry forward not recognised | 1 517 | 118 |
| Other permanent differences | 59 | -260 |
| Impact of change in tax rate | 0 | 22 |
| Tax expense | 24 596 | 27 297 |
| Effective tax rate | 30 % | 28 % |
| NOK 1000 2014 |
|||
|---|---|---|---|
| Basis for deferred tax asset | |||
| Fixed assets | 0 | -2 795 | |
| Other differences | -3 858 | -3 445 | |
| Tax losses carry forward | -17 123 | -11 483 | |
| Of this tax losses carry forward Sweden, not recorded in the balance sheet | 16 117 | 11 376 | |
| Basis deferred tax asset - gross | -4 863 | -6 347 | |
| Basis deferred tax liability | |||
| Intangible assets | 1 759 | 2 413 | |
| Fixed assets | 2 793 | 7 | |
| Other differences | 890 | 3 288 | |
| Basis deferred tax liability - gross | 5 442 | 5 708 | |
| Basis deferred tax - net | 579 | -639 | |
| Net recognised deferred tax/ deferred tax asset (-) | 156 | -155 |
The basic earnings per share are calculated as the ratio between the profit for the year that is attributable to the shareholders in the parent company of NOK 55.74 million (NOK 68.68 million in 2013) divided by the weighted average number of ordinary shares throughout the year of 10.22 millions (10.17 millions in 2013). EBIT per share is calculated as the ratio between this year's operating profit attributable
to the shareholders in the parent company NOK 77.54 million (NOK 93.56 million in 2013) divided by the weighted average number of ordinary shares throughout the accounting year.
When calculating diluted earnings per share, the weighted average basic shares outstanding is adjusted for dilutive effects from the employee share scheme (see note 19).
| 2014 | 2013 | |
|---|---|---|
| EBIT (NOK 1000) | 77 538 | 93 555 |
| Profit for the year (NOK 1000) | 55 737 | 68 677 |
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average basic shares outstanding | 10 220 261 | 10 174 317 |
| Weighted average diluted shares outstanding | 10 346 049 | 10 292 902 |
| EBIT per share (NOK) | 7.59 | 9.20 |
| Diluted EBIT per share (NOK) | 7.49 | 9.09 |
| Earnings per share (NOK) | 5.45 | 6.75 |
| Diluted earnings per share (NOK) | 5.39 | 6.67 |
| Weighted average shares | ||
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average own-shares | -29 739 | -75 683 |
| Weighted average basic shares outstanding | 10 220 261 | 10 174 317 |
| Dilutive effects from employee share scheme | 125 788 | 118 585 |
| Weighted average diluted shares outstanding | 10 346 049 | 10 292 902 |
| NOK 1000 | EDP EQUIPMENT |
OFFICE MACHINES AND VEHICLES |
FIXTURES AND FITTINGS |
TOTAL 2014 | EDP EQUIPMENT |
OFFICE MACHINES AND VEHICLES |
FIXTURES AND FITTINGS |
TOTAL 2013 |
|---|---|---|---|---|---|---|---|---|
| Acquisition cost | ||||||||
| Accumulated 1 January | 24 014 | 4 451 | 15 923 | 44 387 | 30 051 | 4 200 | 12 525 | 46 776 |
| Additions of the year | 8 006 | 1 731 | 2 329 | 12 065 | 6 759 | 558 | 3 434 | 10 751 |
| Disposals of the year | -6 362 | -900 | -67 | -7 329 | -12 796 | -307 | -36 | -13 140 |
| Accumulated 31 December | 25 657 | 5 281 | 18 184 | 49 123 | 24 014 | 4 451 | 15 923 | 44 387 |
| Depreciation | ||||||||
| Accumulated 1 January | 12 969 | 2 510 | 6 190 | 21 669 | 17 249 | 2 189 | 4 710 | 24 148 |
| Disposals of ordinary depreciation | -6 341 | -684 | -67 | -7 092 | -11 540 | -307 | -36 | -11 883 |
| This year's ordinary depreciation | 7 454 | 773 | 1 974 | 10 201 | 7 260 | 628 | 1 516 | 9 404 |
| Accumulated 31 December | 14 082 | 2 599 | 8 096 | 24 777 | 12 969 | 2 510 | 6 190 | 21 669 |
| Book value | ||||||||
| Book value at 1 January | 11 044 | 1 941 | 9 733 | 22 718 | 12 802 | 2 011 | 7 815 | 22 628 |
| Book value at 31 December | 11 576 | 2 682 | 10 088 | 24 346 | 11 044 | 1 941 | 9 733 | 22 718 |
| Depreciation rate | 20-33% | 20% | 10-20% | 20-33% | 20% | 10-20% | ||
| Economic life | 3-5 years | 5 years | 5-10 years | 3-5 years | 5 years | 5-10 years | ||
| Depreciation method | linear | linear | linear | linear | linear | linear |
Booked value of total fixed assets, except for deferred tax assets and financial assets, located in Norway is NOK 66 million (2013: NOK 43 million), and the remaining fixed assets is located in Sweden NOK 4 million (2013: NOK 4 million).
The Group recognises as income, sales of services in line with the deliveries. Customer projects are recognised as income in accordance with the project's degree of completion, provided that the outcome of the transaction can be reliably estimated. Progress is measured as incurred hours in relation to total estimated hours. In the event that the outcome of the transaction cannot be reliably estimated, only income corresponding to incurred project costs are taken to income, given that it is likely that the income will be greater than the incurred project costs. Any estimated loss on a project will be fully recognised in the income statement in the period when it is identified that the project will result in a loss. Included in other short-term debt are provisions for losses on fixed price contracts with NOK 0.1 million (2013: NOK 2.18 million). The provision for loss covers remaining work on the contracts.
At the balance sheet date, processed but not billed services amounted to NOK 106.63 million (2013: NOK 84.48 million). NOK 94.96 million (2013: NOK 75.88 million) of these was services delivered on running account, and NOK 11.67 million (2013: NOK 8.59 million) was related to customer projects. Services delivered on running accounts at the end of accounting year 2014 was invoiced to customers at the beginning of January 2015. Net received prepayments from customer projects amounted to NOK 4.63 million (2013: NOK 3.14 million) at balance sheet date. At the balance sheet date in total NOK 45.99 million (2013: NOK 46.66 million) was recognised as income and NOK 52.14 million (2013: NOK 34.57 million) was recognised as costs on still running customer projects. Accrued income related to customer projects is settled based on degrees of completion as described above and in notes 1 and 4.
Intangible assets and goodwill are related to added value from the acquisitions of the subsidiaries Blinc AS, Nordic Integrator Management AS, Ontopia AS and Bouvet Sverige AB, and also the business Capgemini Trondheim, cost related to development of software, and internally developed intranet and internet homepage.
| NOK 1000 | CUSTOMER | RELATIONS SOFTWARE | INTRANET/ INTERNET |
GOODWILL | TOTAL 2014 |
CUSTOMER | RELATIONS SOFTWARE INTRANET | GOODWILL | TOTAL 2013 |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Acquisition cost | ||||||||||
| Accumulated 1 January | 4 743 | 1 823 | 4 341 | 18 745 | 29 652 | 4 642 | 1 823 | 2 681 | 18 457 | 27 603 |
| Exchange rate variances | 18 | 0 | 0 | 39 | 57 | 101 | 0 | 0 | 288 | 389 |
| Addition purchase of subsidiary | 8 146 | 240 | 0 | 12 446 | 20 832 | 0 | 0 | 0 | 0 | 0 |
| Self-developed intangible assets | 0 | 3781 | 0 | 0 | 3 781 | 0 | 0 | 1 660 | 0 | 1 660 |
| Disposals of the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Accumulated 31 December | 12 907 | 5 844 | 4 341 | 31 230 | 54 322 | 4 743 | 1 823 | 4 341 | 18 745 | 29 652 |
| Depreciation | ||||||||||
| Accumulated 1 January | 2 921 | 1 232 | 753 | 0 | 4 906 | 2 420 | 1 049 | 134 | 0 | 3 603 |
| Exchange rate variances | -77 | 0 | 0 | 0 | -77 | 0 | 0 | 0 | 0 | 0 |
| Disposals of ordinary depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| This year's ordinary depreciation | 2 088 | 182 | 868 | 0 | 3 138 | 501 | 183 | 619 | 0 | 1 303 |
| Accumulated 31 December | 4 932 | 1 414 | 1 621 | 0 | 7 967 | 2 921 | 1 232 | 753 | 0 | 4 906 |
| Book value | ||||||||||
| Book value 1 January | 1 822 | 591 | 3 588 | 18 745 | 24 746 | 2 222 | 774 | 2 547 | 18 457 | 24 000 |
| Book value 31 December | 7 975 | 4 430 | 2 720 | 31 230 | 46 355 | 1 822 | 591 | 3 588 | 18 745 | 24 746 |
| Depreciation rate | 10% | 10% | 20% | IA | 10% | 10% | 20% | IA | ||
| Economic life | 10 years | 10 years | 5 years not decided | 10 years | 10 years | 5 years not decided | ||||
| Depreciation method | linear | linear | linear | N/A | linear | linear | linear | N/A |
Depreciation relates to customer relations, software and internally developed intranet and internet homepage. The value of customer relations is based on expected future cash flows before tax, discounted with a relevant discount rate taking into consideration expected term to maturity and risk at the time of group formation. The value of software is based on expected future maintenance income. Intranet and internet homepage are depreciated based on estimated useful life.
Goodwill is not depreciated, but an impairment test is carried out at least once a year. Impairment testing of goodwill is discussed in note 14.
Recognised goodwill in the Group at 31.12.2014 constitutes NOK 31.2 million. This is mainly related to the acquisitions of Nordic Integrator Management AS (NOK 15.3 million) that took place in 2007 and Bouvet Sverige AB (NOK 3.0 million) that took place in 2008, and the acquisitions in 2014 of the business Capgemini Trondheim (NOK 8.9 million) and of Blinc AS (NOK 3.5 million). Capgemini's business in Trondheim has been integrated with Bouvet's business in Trondheim and Blinc AS has been merged with Bouvet Norge AS.
After the acquisition of Nordic Integrator Management AS , Capgemini Trondheim and Blinc AS the businesses has been integrated into Bouvet's business respectively in Bergen, Trondheim and East, in such a way that they do not represent separate cash generating units. They will be measured together with cash flows from remaining business in respectively in Bergen, Trondheim and East. Bouvet Sverige is considered to be a separate cash generating unit within the Group. All goodwill from these acquisitions are allocated to the respective cash generating units.
The impairment test was carried out by the Group itself in connection with the preparation of results for the fourth quarter.
The recoverable amount is based on an assessment of the enterprise's value in use. The value in use is calculated based on a discount of expected future cash flows before tax, discounted with a relevant discount rate before tax considering term to maturity and risk. The interest rate applied for discounting cash flows is 8 percent before tax. This is based on a risk free interest rate of 3 percent, with an additional risk premium of 5 percent. The discount rate is based on a calculated WACC derived from CAPM methodology. The WACC applied in discounting the future cash flows is based on a risk free interest rate, market risk premium, asset beta, gearing and corporate tax rate.
The projection of cash flows is based on budget for the first five years. The cash flows are based on historic figures for the division, and an expectation of moderate growth in the total market and prices on services is considered. In the management's opinion, it is a reasonable assumption, that it will continue to be a demand for such IT services. After the five year period, a prudent estimate of 2% nominal growth in net cash flows is included.
Capgemini's business in Trondheim was acquired in 2014. In the management's view, this was a reasonably favourable purchase. The value is, however, based on some key assumptions. In the event that these assumptions develop considerably differently from expectations, this may imply a necessity to write down the goodwill a total of NOK 8.9 million. If employees leave and
there is no growth and development in Trondheim, but rather stagnation the business could be subject to write downs if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
Blin AS was acquired in 2014. In the management's view, this was a reasonably favourable purchase. The value is, however, based on some key assumptions. In the event that these assumptions develop considerably differently from expectations, this may imply a necessity to write down the goodwill a total of NOK 3.5 million. If employees leave and there is no growth and development in CRM in East, but rather stagnation the business could be subject to write downs if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
Bouvet Sverige AB was acquired in 2008. In the management's view, this was a reasonably favourable purchase. The value is, however, based on some key assumptions. In the event that these assumptions develop differently from expectations, this may imply a necessity to write down the goodwill that has a total value of NOK 3.0 million. If employees leave as a consequence of the acquisition, if there is no growth or development in the Swedish market, but on the contrary the unit experiences stagnation, the business area could be subject to write downs if other assumptions are constant. The Group believes that no reasonably possible change in any of the key assumptions used for impairment testing would cause the amount of any of the cash generating units to exceed its recoverable amount.
Nordic Integrator Management AS was acquired in 2007. In the management's view, this was a reasonably favourable purchase, and the value of the company at least exceeds the compensation of NOK 21.3 million. The value is, however, based on some key assumptions. In the event that these assumptions develop considerably differently from expectations, this may imply a necessity to write down the goodwill. If employees leave as a consequence of the acquisition, if there is no growth in services delivered to the bank and finance sector or if Bergen as a geographic area experiences stagnation, the business area could be subject to write downs if other assumptions are constant. The Group's opinion is that no changes in any key assumptions within a reasonable opportunity set will cause the booked value of the cash generating unit to exceed the recoverable amount.
| NOK 1000 | 2013 | |
|---|---|---|
| Gross trade accounts receivable | 131 154 | 125 603 |
| Provisions for losses | -25 | -152 |
| Trade accounts receivable | 131 129 | 125 451 |
The provision for losses on trade accounts receivable for 2014 amounts to NOK 25 000 (2013: NOK 152 000).
Losses on trade accounts receivable are classified as other operating expenses in the income statement. See note 24 for assessment of credit risk.
Movements in the provision for loss are as follows:
| NOK 1000 | 2013 | |
|---|---|---|
| Opening balance | 152 | 186 |
| Provision of the year | 25 | 0 |
| Realised loss this year | -89 | 0 |
| Reversal of previous provision | -63 | -34 |
| Closing balance | 25 | 152 |
At 31.12., the Group had the following trade accounts receivable due, but not paid or written off:
| NOK 1000 | TOTAL | NOT DUE | <30 D | 30-60D | 60-90D | >90D |
|---|---|---|---|---|---|---|
| 2014 | 131 129 | 103 452 | 25 225 | 630 | 1 422 | 400 |
| 2013 | 125 451 | 111 013 | 11 737 | 2 292 | 273 | 136 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Advances to employees | 8 174 | 7 506 |
| Prepaid rent | 1 312 | 260 |
| Prepaid software | 7 009 | 3 722 |
| Prepaid other expenses | 3 218 | 6 116 |
| Other receivables | 314 | 1 054 |
| Total other short-term receivables | 20 027 | 18 658 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Cash in hand and at bank - unrestricted funds | 82 803 | 135 682 |
| Deposit account - guarantee rent obligations | 4 158 | 4 093 |
| Employee withheld taxes - restricted funds | 31 607 | 29 447 |
| Cash and cash equivalents in the balance sheet | 118 568 | 169 222 |
The group has unused credit facilities of NOK 50.8 million per 31.12.2014 (NOK 50.8 million in 2013). There are no restrictions on the use of these funds.
| SHARES IN THOUSANDS | 2014 | 2013 |
|---|---|---|
| Ordinary shares, nominal value NOK 1 | 10 250 | 10 250 |
| Total number of shares | 10 250 | 10 250 |
| NO. OF SHARES | SHARE CAPITAL | ||||
|---|---|---|---|---|---|
| NOK 1000 | 2014 | 2013 | 2014 | 2013 | |
| Ordinary shares issued and fully paid at 31.12. | 10 250 | 10 250 | 10 250 | 10 250 | |
| Own shares at nominal value | -20 | -19 | -20 | -19 |
Throughout the year, Bouvet ASA has sold 159 668 own shares to employees within the group at a total amount of NOK 11.3 million, giving an average sales price of NOK 71.07 per share (which includes the element of remuneration). The cash consideration for these shares was NOK 6.0 million. The Company owns 19 688 own shares per 31 December 2014.
The nominal value of the share is NOK 1. All shares in the company have equal voting rights and are equally entitled to dividend. The computation of earnings per share is shown in note 10.
The 20 main shareholders at 31.12.2014 are:
| SHAREHOLDER | NUMBER OF SHARES |
OWNERSHIP INTEREST |
|---|---|---|
| VARNER KAPITAL AS | 1 070 000 | 10.44 % |
| STENSHAGEN INVEST AS | 824 992 | 8.05 % |
| MP PENSJON PK | 669 904 | 6.54 % |
| HURUM, SVERRE FINN | 506 584 | 4.94 % |
| KLP AKSJE NORGE VPF | 435 313 | 4.25 % |
| KOMMUNAL LANDSPENSJONSKASSE | 302 569 | 2.95 % |
| VEVLEN GÅRD AS | 300 000 | 2.93 % |
| VERDIPAPIRFONDET DNB NORDIC TECHNO | 298 659 | 2.91 % |
| STUBØ, ERIK | 236 084 | 2.30 % |
| STOREBRAND NORGE I | 230 948 | 2.25 % |
| VERDIPAPIRFONDET HANDELSBANKEN | 219 140 | 2.14 % |
| VERDIPAPIRFONDET EIKA NORGE | 213 952 | 2.09 % |
| J.P. MORGAN CHASE BANK N.A. LONDON | 191 945 | 1.87 % |
| TELENOR PENSJONSKASSE | 186 800 | 1.82 % |
| DYVI INVEST AS | 150 000 | 1.46 % |
| STOREBRAND VEKST | 133 649 | 1.30 % |
| VOLLE, ANDERS | 125 908 | 1.23 % |
| VERDIPAPIRFONDET DNB NORDEN (III) | 125 406 | 1.22 % |
| VERDIPAPIRFONDET DNB SMB | 123 600 | 1.21 % |
| JP MORGAN CHASE BANK, NA | 100 000 | 0.98 % |
| Remaining shareholders | 3 804 547 | 37.12 % |
| Total | 10 250 000 | 100.00 % |
The company has paid the following dividends:
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Ordinary dividend for 2013: NOK 6.00 per share | 61 500 | |
| Ordinary dividend for 2012: NOK 5.00 per share | 51 250 | |
| Total | 61 500 | 51 250 |
Proposed dividend to be approved at the annual general meeting amounts to NOK 5.00 per share.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The offer does not include employees paid by the hour. The scheme consists of annual offers where each employee can subscribe for shares once per calendar year. The share scheme is approved for one year at a time.
The share scheme gives the employee the opportunity to subscribe for shares at a value of NOK 7 500 per year against a deduction in salary of NOK 6 000, of which Bouvet is subsidising the employee with NOK 1 500. Bouvet will give a corresponding number of shares free of charge if the
employee keeps the shares for two years and is still employed.
In 2014 a total of 68 640 shares were sold at a rate of NOK 78.00 minus a 20 percent discount. 715 employees have joined the scheme, and 96 shares per employee were distributed. The previous year 57 288 shares were sold at a rate of NOK 85.00 minus a 20 percent discount.
The Group also has established an additional share scheme for the management. The share scheme consist of annual offers where each member can subscribe for shares one time each calendar year. The share scheme is approved for one year at a time.
The share scheme gives members of the management the opportunity to subscribe for shares at a value of NOK 22 500 per year at market value without any subsidising from Bouvet. Bouvet will give a corresponding number of shares free of charge if the manager keeps the shares for two years and is still employed.
In 2014 a total of 21 984 shares were sold at a rate of NOK 78.00. A total of 79 employees have joined the scheme. The previous year 20 504 shares were sold at a rate of NOK 85.00.
In 2014 a total of 69 044 shares was provided free of charge in
relation to the 2012 share scheme. (In 2013: 57 704 shares related to the 2011 share scheme).
The share scheme is treated in accordance with IFRS 2. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. The calculated fair value are recognised as an expense with an corresponding amount directly in equity over the vesting period. NOK 4.8 million in compensation costs have been charged in 2014 (in 2013 NOK 4.1 million). Remaining estimated compensation costs at 31 December 2014 for the years 2015 and 2016 are NOK 7.2 million.
The Group is required to have an occupational pension scheme in accordance with the Norwegian law on required occupational pension ("lov om obligatorisk tjenestepensjon"). The Group's pension schemes satisfy the requirements of this law, and represents a defined contribution plan. At the end of the year there were 1 008 participants in this defined contribution plan.
The Group has a defined contribution plan for all employees in Norway. The Group's obligation is to give a contribution of 3 percent between 1G and 6G and 5 percent between 6G and 12G, to each employee's pension savings. The future pension depends on the size of the contributions and the return on the pension savings. The Group's commitment is fully met when paid. At the end of the accounting year, 1 008 employees were part of this scheme. The expensed contribution in Norway amounted to NOK 20.7 million and NOK 18.7 million in 2014 and 2013 respectively. In Sweden the expensed contribution amounted to NOK 2.6 million in 2014 and NOK 1.8 million in 2013, thus for the group the total expensed contribution amounted to NOK 23.3 million for 2014 and NOK 20.5 million for 2013.
Reconciliation of this year's total pension expense:
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Contribution plan - paid contribution for the year | 23 259 | 20 480 |
| This year's recognised pension costs (note 7) | 23 259 | 20 480 |
The group has entered into several operating leases for vehicles and office machines. The agreements related to office machines contain an option to extend.
| The lease costs included: | ||
|---|---|---|
| NOK 1000 | 2014 | 2013 |
| Ordinary lease payments | 1 352 | 1 466 |
Future payments related to non-cancellable leases fall due for payment as follows:
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Within 1 year | 1 246 | 1 152 |
| 1 to 5 years | 736 | 1 604 |
| Future lease commitment | 1 982 | 2 756 |
The group has the following lease commitments connected with office premises. End of period is the same as termination of contract.
| CITY | END OF PERIOD | ANNUAL LEASE |
|---|---|---|
| Arendal | 2016 | 195 |
| Bergen | 2018 | 1 208 |
| Haugesund | 2017 | 760 |
| Kristiansand | 2016 | 490 |
| Malmø | 2015 | 604 |
| Oslo 1) | 2016 | 7 258 |
| Sandefjord | 2015 | 341 |
| Sandvika | 2016 | 488 |
| Skien | 2017 | 428 |
| Stavanger - Forus | 2021 | 5 907 |
| Stavanger - Vågen | 2018 | 1 979 |
| Stockholm | 2017 | 469 |
| Trondheim - Kjøpmannsgt | 2015 | 497 |
| Trondheim - Skipsbygget | 2018 | 745 |
| Örebro | 2018 | 230 |
| Total | 21 599 |
1) The excisting lease agreement in Oslo will be terminated in 2016. A new lease agreement for new premises from 2017 is already signed. This lease agreement terminates in 2026 and will have an annual lease of NOK 10 587 thousand.
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Prepayments from customers | 13 536 | 10 845 |
| Accrued salary, holiday pay and bonus | 86 265 | 90 251 |
| Employees' holiday and time-off balance | 12 326 | 13 664 |
| Other short-term debt | 10 436 | 4 081 |
| Total | 122 563 | 118 841 |
NOK 1000
| NAME | ROLE | FEES PAID IN 2014 | FEES PAID IN 2013 |
|---|---|---|---|
| Åge Danielsen | Chairman of the Board | 250 | 250 |
| Randi H. Røed | Vice-chairman of the Board | 150 | 150 |
| Grethe Høiland | Board member | 125 | 125 |
| Ingebrigt Steen Jensen | Board member | 125 | 125 |
| Egil Christen Dahl | Board member | 125 | 0 |
| Axel Borge | Employee representative | 0 | 30 |
| Kay Vare Johnsen | Employee representative | 0 | 30 |
| Sissel Johnsen Mannsåker | Employee representative | 0 | 30 |
| Total | 775 | 740 |
From 2014 the employee representation will discontinue. The employee representation will continue in the subsidiaries.
| NAME | SALARY | BONUS | PENSION CONTRIBUTION |
OTHER REMUNERATION |
TOTAL 2014 |
|---|---|---|---|---|---|
| Sverre F. Hurum , CEO | 2 281 | 430 | 40 | 251 | 3 002 |
| Erik Stubø, CFO | 2 061 | 430 | 41 | 50 | 2 582 |
| Total | 4 342 | 860 | 81 | 301 | 5 584 |
See note 19 for information about the share scheme.
| NAME | SALARY | BONUS | PENSION CONTRIBUTION |
OTHER REMUNERATION |
TOTAL 2013 |
|---|---|---|---|---|---|
| Sverre F. Hurum , CEO | 2 155 | 272 | 38 | 231 | 2 696 |
| Nils Olav Nergaard, deputy managing director 1) | 411 | 0 | 0 | 2 139 | 2 550 |
| Erik Stubø, CFO | 1 965 | 272 | 39 | 52 | 2 328 |
| Total | 4 531 | 544 | 77 | 2 422 | 7 574 |
1) The deputy managing director left in February 2013. Other remuneration is mostly connected to severance. In addition a payment of NOK 3.4 million has been done, including final payment, in June 2014.
See note 19 for information about the share scheme.
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Åge Danielsen | Chairman of the Board | 0 |
| Randi H. Røed | Vice-chairman of the Board | 0 |
| Grethe Høiland | Board member | 0 |
| Ingebrigt Steen Jensen | Board member | 0 |
| Egil Christen Dahl | Board member | 300 000 |
| Total | 300 000 |
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Sverre F. Hurum | CEO | 506 584 |
| Erik Stubø | CFO | 236 084 |
| Total | 742 668 |
| TYPE | 2014 | 2013 |
|---|---|---|
| Ordinary audit *) | 737 | 742 |
| Tax advice | 108 | 79 |
| Other services | 151 | 87 |
| Total | 996 | 908 |
1) In addition there are fees to auditors, other than the group auditor, that amounts to NOK 50 000 in 2014 and NOK 17 000 in 2013.
The CEO has an agreement of 12 months' pay after termination of employment. No other key management personnel has any agreement of pay after termination of employment.
The Group has only financial instruments related to trade and other receivables and trade accounts payable, involving both credit risk and liquidity risk.
The Group is mainly exposed to credit risk connected with trade accounts receivable, deposits with banks and other short-term receivables. The Group is reducing its exposure against credit risk by requiring that all third parties, like customers, shall be approved and subject to an assessment of credit verification procedures.
The Group has no significant credit risk connected with one single contracting party or several that can be considered a group due to similarities in credit risk.
The Group has guidelines ensuring that sales are made only to customers without previous payment problems and that outstanding balances do not exceed set credit limits.
In the Group's view, the maximum risk exposure is the carrying value of trade accounts receivable (note 15), deposits with banks (note 17) and other short-term receivables (note 16).
The liquidity risk is the risk that the Group will not be able to service its financial obligations when due. The Group's strategy to manage liquidity risk is to have adequate liquid funds at all times to be able to meet the financial obligations when due, under normal as well as extraordinary circumstances, without risking unacceptable losses or bad reputation. Unused credit facilities are described in note 17.
The following table illustrates the maturity structure of the Group's financial commitments, based on non discounted contractual payments. In instances where the counterpart can require an earlier redemption, the amount is stated in the earliest period payment can be demanded. In the event that commitments can be required redeemed at request, these are included in the first column (less than 1 month).
| REMAINING PERIOD | ||||||
|---|---|---|---|---|---|---|
| NOK 1000 | LESS THAN 1 MONTH |
1-3 MONTHS | 3-12 MONTHS | 1-5 YEARS | MORE THAN 5 YEARS |
TOTAL |
| 31.12.2014 | ||||||
| Trade accounts payable | 35 225 | 1 508 | 0 | 0 | 0 | 36 733 |
| Other financial commitments 1) | 5 503 | 208 | 16 493 | 78 228 | 82 723 | 183 156 |
| REMAINING PERIOD | ||||||
|---|---|---|---|---|---|---|
| NOK 1000 | LESS THAN 1 MONTH |
1-3 MONTHS | 3-12 MONTHS | 1-5 YEARS | MORE THAN 5 YEARS |
TOTAL |
| 31.12.2013 | ||||||
| Trade accounts payable | 30 441 | 1 422 | 0 | 0 | 0 | 31 863 |
| Other financial commitments 1) | 4 551 | 192 | 14 228 | 56 699 | 6 317 | 81 987 |
1) Maturity not-accounted commitments related to lease agreements.
The main objective of the Group's management of the capital structure is to ensure a solid equity to secure further operations and also to have the ability to pursue opportunities for further profitable growth.
By producing satisfactory ratios connected with equity and debt, the Group will be able to support operations and thereby maximise the value of the shares.
The Group controls its capital structure and carries out required changes based on a continuous assessment of the present financial conditions and the possible prospects and opportunities in the short and mid-long term.
The capital structure is managed by adjusting dividend distributions, repurchasing own shares, reducing the share capital or by issuing new shares. There have been no changes in guidelines in this area in 2013 or 2014.
The Group is following up its capital structure by reviewing the equity share, defined as equity in percent of total capital. Group policy is to have an equity share in excess of 30 percent. The equity share was 34 percent per 31.12.2014.
There have been no events after the balance sheet date significantly affecting the Group's financial position.
1 January - 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| Revenue | 0 | 0 | |
| Operating costs | |||
| Salary costs | 2 | 930 | 867 |
| Other operating costs | 3 | 1 805 | 2 083 |
| Total operating costs | 2 735 | 2 950 | |
| Operating profit | -2 735 | -2 950 | |
| Financial items | |||
| Other interest income | 12 | 3 | |
| Received dividend and group contribution | 54 253 | 65 357 | |
| Other financial income | 663 | 0 | |
| Other interest expense | -880 | -1 160 | |
| Other finance expense | -149 | -127 | |
| Net financial items | 53 899 | 64 073 | |
| Ordinary profit before tax | 51 164 | 61 123 | |
| Income tax expense | |||
| Tax expense on ordinary profit | 4 | 0 | 0 |
| Total tax expense | 0 | 0 | |
| Profit for the year | 51 164 | 61 123 | |
| Attributable to: | |||
| Other equity | 51 164 | 61 123 |
at 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Financial non-current assets | |||
| Shares in subsidiaries | 6 | 130 166 | 122 298 |
| Total financial non-current assets | 130 166 | 122 298 | |
| Total non-current assets | 130 166 | 122 298 | |
| CURRENT ASSETS | |||
| Trade accounts receivable group company | 6 | 54 180 | 64 998 |
| Other short-term receivables | 7 | 5 | 0 |
| Cash and cash equivalents | 8 | 893 | 524 |
| Total current assets | 55 078 | 65 522 | |
| TOTAL ASSETS | 185 244 | 187 820 |
at 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Paid-in capital | |||
| Share capital | 9 | 10 250 | 10 250 |
| Own shares - nominal value | 9 | -20 | -19 |
| Share premium | 9 | 10 000 | 10 000 |
| Total paid-in capital | 20 230 | 20 231 | |
| Earned equity | |||
| Other equity | 5 025 | 5 897 | |
| Total earned equity | 5 025 | 5 897 | |
| Total equity | 25 255 | 26 128 | |
| DEBT | |||
| Long-term debt | |||
| Loan from group company | 6 | 40 000 | 40 000 |
| Total long-term debt | 40 000 | 40 000 | |
| Short-term debt | |||
| Short term debt to group company | 6 | 68 094 | 59 762 |
| Public duties payable | 485 | 430 | |
| Other short-term debt | 9,11 | 51 410 | 61 500 |
| Total short-term debt | 119 989 | 121 692 | |
| Total liabilities | 159 989 | 161 692 | |
| TOTAL EQUITY AND LIABILITIES | 185 244 | 187 820 |
1 January - 31 December
| NOK 1000 | NOTE | 2014 | 2013 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Ordinary profit before tax | 51 164 | 61 123 | |
| Group contribution and dividend | -54 251 | -64 197 | |
| Changes in other accruals | 1 526 | -1 601 | |
| Net cash flows from operating activities | -1 561 | -4 675 | |
| Cash flows from investing activities | |||
| Purchase and investment in subsidiary | 6 | 0 | -1 207 |
| Net from financing to group companies | 6 | 6 121 | 7 840 |
| Net cash flows from investing activities | 6 121 | 6 633 | |
| Cash flows from financing activities | |||
| Purchase of own shares | 9 | -12 800 | -11 539 |
| Sale of own shares | 9 | 7 069 | 6 612 |
| Group contribution payments | 63 040 | 54 508 | |
| Dividend payments | 9 | -61 500 | -51 250 |
| Net cash flows from financing activities | -4 191 | -1 669 | |
| Net changes in cash and cash equivalents | 369 | 289 | |
| Cash and cash equivalents at the beginning of the year | 524 | 235 | |
| Cash and cash equivalents at the end of the year | 893 | 524 |
1 January - 31 December
| NOTE | NOK 1000 | SHARE CAPITAL |
OWN SHARES |
SHARE PREMIUM |
TOTAL PAID-IN EQUITY |
OTHER EQUITY |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|
| Equity at 01.01.2013 | 10 250 | -1 | 10 000 | 20 249 | 7 062 | 27 311 | |
| Income for the year | 61 123 | 61 123 | |||||
| 9 | Purchase/sale of own shares (net) | -18 | -18 | -4 850 | -4 868 | ||
| Employee share scheme | 4 062 | 4 062 | |||||
| 9 | Proposed dividend | -61 500 | -61 500 | ||||
| Equity at 31.12.2013 | 10 250 | -19 | 10 000 | 20 231 | 5 897 | 26 128 | |
| Equity at 01.01.2014 | 10 250 | -19 | 10 000 | 20 231 | 5 897 | 26 128 | |
| Income for the year | 51 164 | 51 164 | |||||
| 9 | Purchase/sale of own shares (net) | -1 | -1 | -5 661 | -5 662 | ||
| Employee share scheme | 4 875 | 4 875 | |||||
| 9 | Proposed dividend | -51 250 | -51 250 | ||||
| Equity at 31.12.2014 | 10 250 | -20 | 10 000 | 20 230 | 5 025 | 25 255 |
The financial statements of Bouvet ASA for the period ending on 31 December 2014 were approved in a board meeting on 16 April 2015.
Bouvet ASA is a public limited company incorporated in Norway and listed on Oslo Børs. The company's main office is located in Sandakerveien 24C, 0513 Oslo, Norway.
The financial statements of Bouvet ASA for the accounting year 2014 have been prepared in accordance with the Norwegian Accounting act and general accepted accounting principles in Norway (NGAAP).The financial statements are based on the principles of historic cost.
The company's functional currency and presentation currency is Norwegian Kroner (NOK).
Management has used estimates and assumptions that have affected the income statement and the valuation of assets and liabilities, together with potential assets and liabilities at balance sheet date under preparation of the financial statements in accordance with general accepted accounting principles in Norway (NGAAP).
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in foreign currency are translated to Norwegian kroner by applying the rate applicable on the balance sheet date. Non-monetary items valued at historic rate denominated in foreign currency are translated to Norwegian kroner by applying the rate applicable at the transaction date. Non-monetary items assessed at real value denominated in foreign currency are translated at the rate applicable on the balance sheet date. Exchange rate changes are recognised in the income statement as they occur during the accounting period.
Shares in subsidiaries are initially recognized at cost in the parent company financial statement. Subsequently the investments are recognized at cost unless there is a need for impairment. An impairment to fair value will be recognized if the decrease in value is not assessed to be temporarily and it is in accordance with good accounting practice. Any impairment will be reversed if the basis for impairment is not longer applicable.
Dividend, group contribution and other distributions from subsidiaries are recognized as income in the year the distribution has been recognized as a liability in the subsidiary. If the distribution from the subsidiary exceeds the Company's share of profit after the subsidiary was acquired, the excess amount will be treated as repayment of invested capital, and thus recognized as a reduction of the investment.
The tax expense consists of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all temporary differences between book and tax value on assets and liabilities, with the exception of
Deferred tax assets are recognised when it is probable that the company will make sufficient profit in future periods to utilise the tax asset. The company recognises previous not recorded deferred tax assets to the extent that it is probable that the company can utilise the deferred tax asset. Likewise, the company will reduce the deferred tax assets when it is considered unlikely that the deferred tax asset can be utilised.
Deferred tax and deferred tax assets are measured on the basis of the expected future tax rate.
Deferred tax is disclosed at a nominal value and classified as long-term debt in the balance sheet.
Tax payable and deferred tax assets are set-off directly against equity to the extent that the underlying items are booked against equity.
Cash includes cash in hand and bank deposits. Cash equivalents are short-term liquid investments that can be converted to cash within three months and at a known amount.
The cash flow statement is prepared in accordance with the indirect method. Cash and cash equivalents comprise cash in hand bank deposits and other liquid short term assets.
Trade and other short term receivables are recognized at nominal amount less of any impairment. Provision for doubtful debt is based on individual assessments for each of the receivables. If relevant, there may be unspecified provision for doubtful debt for covering expected loss on trade receivables.
Own shares
On repurchase of own shares, costs including directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement.
Transaction costs directly relating to an equity transaction are set off directly against equity after deducting tax expenses.
The company has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The share scheme is treated in accordance with NGAAP 15A. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. The difference between fair value after the allocation and charged amount is updated on a running account against the equity.
New information on the company's position at the balance sheet date is taken into account in the financial statements. Events after the balance sheet date that do not affect the company's position at the balance sheet date, but will affect the company's position in the future, are stated if significant.
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Board remuneration | 775 | 740 |
| Social security tax | 115 | 107 |
| Other remunerations | 40 | 20 |
| Total salary expenses | 930 | 867 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Office premises | 54 | 25 |
| Travel and transport | 19 | 15 |
| Office supplies, EDP etc. | 127 | 58 |
| Marketing expenditure | 0 | 127 |
| External services | 938 | 1 253 |
| Other expenses | 667 | 605 |
| Total other operating expenses | 1 805 | 2 083 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Tax payable | 0 | 0 |
| Changes in deferred taxes | 0 | 0 |
| Tax expense | 0 | 0 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Ordinary profit before tax | 51 164 | 61 123 |
| Permanent differences | -1 164 | -1 123 |
| Group contribution | -50 000 | -60 000 |
| Basis for tax payable | 0 | 0 |
| Tax 27% being tax payable on this year's profit | 0 | 0 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Calculated tax payable | 0 | 0 |
| Tax payable recognised directly in equity | 0 | 0 |
| Total income tax payable | 0 | 0 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Profit before tax | 51 164 | 61 123 |
| Tax calculated based on 27% | 13 814 | 17 114 |
| Non taxable income | -13 814 | -17 114 |
| Tax expense | 0 | 0 |
| Effective tax rate | 0 % | 0 % |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Basis deferred tax - net | 0 | 0 |
| Net recognised deferred tax/ deferred tax asset (-) | 0 | 0 |
The basic earnings per share are calculated as the ratio between the profit for the year that is attributable to the shareholders of NOK 51.16 million (NOK 61.12 million in 2013) divided by the weighted average number of ordinary shares throughout the year of 10.22 millions (10.17 millions in 2013). EBIT per share is calculated as the ratio between this year's operating profit of NOK -2.74 million (NOK -2.95 million in
2013) divided by the weighted average number of ordinary shares throughout the accounting year.
When calculating diluted earnings per share, the weighted average basic shares outstanding is adjusted for dilutive effects from the employee share scheme (see note 10).
| 2014 | 2013 | |
|---|---|---|
| EBIT (NOK 1000) | -2 735 | -2 950 |
| Profit for the year (NOK 1000) | 51 164 | 61 123 |
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average basic shares outstanding | 10 220 261 | 10 174 317 |
| Weighted average diluted shares outstanding | 10 346 049 | 10 292 902 |
| EBIT per share (NOK) | -0.27 | -0.29 |
| Diluted EBIT per share (NOK) 1) | -0.27 | -0.29 |
| Earnings per share (NOK) | 5.01 | 6.01 |
| Diluted earnings per share (NOK) 1) | 4.95 | 5.94 |
| Weighted average shares | ||
| Weighted average shares issued | 10 250 000 | 10 250 000 |
| Weighted average own-shares | -29 739 | -75 683 |
| Weighted average basic shares outstanding | 10 220 261 | 10 174 317 |
| Dilutive effects from employee share scheme | 125 788 | 118 585 |
| Weighted average diluted shares outstanding | 10 346 049 | 10 292 902 |
1) Potential diluted options are not included in the calculations because they do not have dilutive effect.
The following subsidiaries are included in the consolidated accounts:
| COUNTRY | MAIN BUSINESS LINE | BOOK VALUE | OWNERSHIP | VOTING SHARE |
|---|---|---|---|---|
| Norge | IT-konsulentselskap | 4 529 | 100 % | 100 % |
| Norge | IT-konsulentselskap | 3 375 | 100 % | 100 % |
| Norge | IT-konsulentselskap | 1 200 | 60 % | 60 % |
| Sverige | IT-konsulentselskap | 14 456 | 100 % | 100 % |
| Norge | IT-konsulentselskap | 106 606 | 100 % | 100 % |
| 130 166 | ||||
1) Consolidated from 1 April 2007.
2) Consolidated from 1 July 2007.
3) Established in March 2010.
4) Consolidated from 1 October 2008. Bouvet Sverige AB has to subsidiaries; Bouvet Stockholm AB and Bouvet Syd AB.
5) Established 10 February 2011. The Company has taken over the operations previously held by Bouvet ASA.
Loans, receivables and liabilities between Bouvet ASA and its subsidiaries:
| NOK 1000 COMPANY |
LOANS TO SUBSIDIARIES |
CURRENT RECEIVABLES DUE FROM SUBSIDIARIES |
LOANS FROM SUBSIDIARIES |
CURRENT LIABILITIES TO SUBSIDIARIES |
|---|---|---|---|---|
| Bouvet Norge AS | 0 | 53 051 | 40 000 | 68 094 |
| Olavstoppen | 0 | 27 | 0 | 0 |
| Bouvet Sverige AB including subsidiaries | 0 | 1 102 | 0 | 0 |
| Total | 0 | 54 180 | 40 000 | 68 094 |
See note 3 in Group accounts for specification of results and equity in subsidiaries, and information about non-controlling interests.
| NOK 1000 2014 |
2013 | |
|---|---|---|
| Advances to board members | 5 | 0 |
| Total other short-term receivables | 5 | 0 |
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Cash in hand and at bank - unrestricted funds | 493 | 170 |
| Employee withheld taxes - restricted funds | 400 | 354 |
| Cash and cash equivalents in the balance sheet | 893 | 524 |
| SHARES IN THOUSANDS | 2014 | 2013 |
|---|---|---|
| Ordinary shares, nominal value NOK 1 | 10 250 | 10 250 |
| Total number of shares | 10 250 | 10 250 |
| NO. OF SHARES | SHARE CAPITAL | |||
|---|---|---|---|---|
| NOK 1000 | 2014 | 2013 | 2014 | 2013 |
| Ordinary shares issued and fully paid at 31.12 | 10 250 | 10 250 | 10 250 | 10 250 |
| Own shares at nominal value | -20 | -19 | -20 | -19 |
Throughout the year, Bouvet ASA has sold 159 668 own shares to employees within the group at a total amount of NOK 11.3 million, giving an average sales price of NOK 71.07 per share (which includes the element of remuneration). The cash consideration for these shares was NOK 6.0 million. The Company owns 19 688 own shares per 31 December 2014.
The nominal value of the shares is NOK 1. All shares in the company have equal voting rights and are equally entitled to dividend. Calculation of earnings per share are disclosed in note 5.
The 20 main shareholders at 31.12.2014 are:
| SHAREHOLDER | NUMBER OF SHARES |
OWNERSHIP INTEREST |
|---|---|---|
| VARNER KAPITAL AS | 1 070 000 | 10.44 % |
| STENSHAGEN INVEST AS | 824 992 | 8.05 % |
| MP PENSJON PK | 669 904 | 6.54 % |
| HURUM, SVERRE FINN | 506 584 | 4.94 % |
| KLP AKSJE NORGE VPF | 435 313 | 4.25 % |
| KOMMUNAL LANDSPENSJONSKASSE | 302 569 | 2.95 % |
| VEVLEN GÅRD AS | 300 000 | 2.93 % |
| VERDIPAPIRFONDET DNB NORDIC TECHNO | 298 659 | 2.91 % |
| STUBØ, ERIK | 236 084 | 2.30 % |
| STOREBRAND NORGE I | 230 948 | 2.25 % |
| VERDIPAPIRFONDET HANDELSBANKEN | 219 140 | 2.14 % |
| VERDIPAPIRFONDET EIKA NORGE | 213 952 | 2.09 % |
| J.P. MORGAN CHASE BANK N.A. LONDON | 191 945 | 1.87 % |
| TELENOR PENSJONSKASSE | 186 800 | 1.82 % |
| DYVI INVEST AS | 150 000 | 1.46 % |
| STOREBRAND VEKST | 133 649 | 1.30 % |
| VOLLE, ANDERS | 125 908 | 1.23 % |
| VERDIPAPIRFONDET DNB NORDEN (III) | 125 406 | 1.22 % |
| VERDIPAPIRFONDET DNB SMB | 123 600 | 1.21 % |
| JP MORGAN CHASE BANK, NA | 100 000 | 0.98 % |
| Remaining shareholders | 3 804 547 | 37.12 % |
| Total | 10 250 000 | 100.00 % |
The company has paid the following dividends:
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Ordinary dividend for 2013: NOK 6.00 per share | 61 500 | |
| Ordinary dividend for 2012: NOK 5.00 per share | 51 250 | |
| Total | 61 500 | 51 250 |
Proposed dividend to be approved at the annual general meeting amounts to NOK 5.00 per share.
The Company did not have any employees in 2014 or 2013. All of the Group's costs related to the share scheme are expensed in the respective subsidiaries.
The Group has a share scheme including all employees not under notice and who have, at the latest, started work on the first day of the month when the offer is made. The offer does not include employees paid by the hour. The scheme consists of annual offers where each employee can subscribe for shares once per calendar year. The share scheme is approved for one year at a time.
The share scheme gives the employee the opportunity to subscribe for shares at a value of NOK 7 500 per year against a deduction in salary of NOK 6 000, of which Bouvet is subsidising the employee with NOK 1 500. Bouvet will give a corresponding number of shares free of charge if the employee keeps the shares for two years and is still employed.
In 2014 a total of 68 640 shares were sold at a rate of NOK 78.00 minus a 20 percent discount. 715 employees have joined the scheme, and 96 shares per employee were distributed. In 2013 57 288 shares were sold at a rate of NOK 85.00 minus a 20 percent discount.
The Group also has established an additional share scheme for the management. The share scheme consist of annual
offers where each member can subscribe for shares one time each calendar year. The share scheme is approved for one year at a time.
The share scheme gives members of the management the opportunity to subscribe for shares at a value of NOK 22 500 per year at market value without any subsidising from Bouvet. Bouvet will give a corresponding number of shares free of charge if the manager keeps the shares for two years and is still employed.
In 2014 a total of 21 984 shares were sold at a rate of NOK 78.00. A total of 79 employees have joined the scheme. The previous year 20 504 shares were sold at a rate of NOK 85.00.
In 2014 a total of 69 044 shares was provided free of charge in relation to the 2012 share issue program. (In 2013: 57 704 related to the 2011 programme).
The share scheme is treated in accordance with Norwegian Accounting Standard 15A. The fair value of the scheme is calculated at the grant date and expensed over the vesting period of 2 years. NOK 4.8 million in share based payment costs have been charged the subsidiaries in 2014 in addition to the bonus shares described above (In 2013 NOK 4.1 million was charged). Remaining estimated compensation costs at 31 December 2014 for the years 2015 and 2016 are NOK 7.2 million.
| NOK 1000 | 2014 | 2013 |
|---|---|---|
| Other short-term debt | 160 | 0 |
| Accrued dividend payment | 51 250 | 61 500 |
| Total | 51 410 | 61 500 |
NOK 1000
| NAME | ROLE | FEES PAID IN 2014 | FEES PAID IN 2013 |
|---|---|---|---|
| Åge Danielsen | Chairman of the Board | 250 | 250 |
| Randi H. Røed | Vice-chairman of the Board | 150 | 150 |
| Grethe Høiland | Board member | 125 | 125 |
| Ingebrigt Steen Jensen | Board member | 125 | 125 |
| Egil Christen Dahl | Board member | 125 | 0 |
| Axel Borge | Employee representative | 0 | 30 |
| Kay Vare Johnsen | Employee representative | 0 | 30 |
| Sissel Johnsen Mannsåker | Employee representative | 0 | 30 |
| Total | 775 | 740 |
From 2014 the employee representation will discontinue. The employee representation will continue in the subsidiaries.
Key management has received its remuneration from Bouvet Norge AS. For information about the remuneration to the management see note 23 to the consolidated financial statements.
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Åge Danielsen | Chairman of the Board | 0 |
| Randi H. Røed | Vice-chairman of the Board | 0 |
| Grethe Høiland | Board member | 0 |
| Ingebrigt Steen Jensen | Board member | 0 |
| Egil Christen Dahl | Board member | 300 000 |
| Total | 300 000 |
| NAME | ROLE | NO. OF SHARES |
|---|---|---|
| Sverre F. Hurum | CEO | 506 584 |
| Erik Stubø | CFO | 236 084 |
| Total | 742 668 |
| TYPE | 2014 | 2013 |
|---|---|---|
| Ordinary audit | 180 | 183 |
| Tax advice | 29 | 29 |
| Other services | 151 | 40 |
| Total | 360 | 252 |
The CEO has an agreement of 12 months' pay after termination of employment. No other key management personnel has any agreement of pay after termination of employment.
The Company is currently a holding company, and does have a limited amount of financial instruments except for its investment in subsidiaries and group receivables and group payables. For information about the Company's treatment of financial risks such as liquidity risk and capital management, see note 24 to the consolidated financial statements.
There have been no events after the balance sheet date significantly affecting the Company's financial position.
| NOK | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|
| Market value at 31 Dec | 779.0 mill. | 912.3 mill. | 663.3 mill. | 717.5 mill. |
| Share price at 31 Dec | 76.00 | 89.00 | 65.00 | 70.00 |
| Share price/ total equity per share | 5.07 | 5.71 | 4.68 | 5.21 |
| Dividend paid | 6.00 | 5.00 | 5.00 | 4.10 |
The Bouvet share is listed on the Oslo Stock Exchange under the ticker code BOUVET.
Its price decreased by 14.61 per cent during 2014. The company's market value was NOK 912.3 million at 1 January 2014 and had fallen to NOK 779.0 million at 31 December.
The Bouvet share will be a profitable investment for its owners through the increase in its value and payment of dividend. In accordance with the company's dividend policy, a significant part of the previous year's net profit will be distributed to the owners.
The annual general meeting held in 2014 resolved to pay a dividend of NOK 6.00 per share.
Bouvet communicates openly about conditions relevant to its financial position and future development so that market players can form the best possible picture of the company. All shareholders will be treated equally, and information will be provided at the right time, in a precise form and sufficiently comprehensive.
Price-sensitive information is made available to the whole market simultaneously through the Oslo Stock Exchange announcement system. The company's website is an important tool for ensuring that available information is comprehensive and updated. All information is also made available on the company's website at www.bouvet.no. Bouvet will work continuously on improving the site, so that its pages are updated with relevant data at all times.
Bouvet does not publish forecasts for key figures in coming periods, but bases its comments on expected general market trends.
In connection with the presentation of interim results, the company's management holds a presentation where investors, analysts, the media and other stakeholders can meet senior executives. Four such presentations were given in 2014.
One Norwegian stockbroker provide analyses of the company:
• ABG Sundal Collier
The Bouvet share traded between NOK 70.25 per share and NOK 95.00 per share in 2014. A total of 1 321 524 shares were traded on the Oslo Stock Exchange through 714 transactions. The company's share price at 31 December 2014 was NOK 76.00 per share.
Issued shares at 31 December 2014 totalled 10 250 000, with a nominal price of NOK 1.00 per share.
The company had 1 251 shareholders at 31 December, including 1 177 Norwegian and 74 foreign.
The 20 largest shareholders owned 62.88 per cent of the shares. Bouvet owned 19 688 of its own shares at 31 December 2014, compared with 19 356 the year before.
| EVENT | DATE |
|---|---|
| Annual General Meeting | 19 May 2015 |
| First quarter 2015 | 12 May 2015 |
| Second quarter 2015 | 27 August 2015 |
| Third quarter 2015 | 5 November 2015 |
| Fourth quarter 2015 | End February 2016 |
In connection with the presentation of interim results, the company's management holds a presentation where investors, analysts, the media and other stakeholders can meet senior executives. The presentations are held in Oslo.
Nordea Bank Norge ASA Registrar service P O Box 1166 Sentrum NO - 0107 Oslo
The chief financial officer is the company's primary spokesperson for financial information, such as interim and annual reports. The chief executive will be the primary contact on other issues, such as important contracts and other pricesensitive information.
Other members of Bouvet's executive management may serve as spokespersons in special cases where appropriate.
| 2014 | 2013 | 2012 | 2011 | |
|---|---|---|---|---|
| Highest share price (NOK) | 95.00 | 89.50 | 83.75 | 72.00 |
| Lowest share price (NOK) | 70.25 | 57.00 | 61.25 | 57.00 |
| Number of trades | 714 | 618 | 400 | 417 |
| Number of shares traded | 1 321 524 | 1 621 418 | 1 987 735 | 947 000 |
| Shares at 31 December | 10 250 000 | 10 250 000 | 10 250 000 | 10 250 000 |
| SPREAD | NO OF SHAREHOLDERS | TOTAL NO OF SHARES | PERCENTAGE |
|---|---|---|---|
| 1 - 100 | 187 | 15 146 | 0.14 % |
| 101 - 1 000 | 658 | 293 152 | 2.86 % |
| 1 001 - 10 000 | 314 | 899 518 | 8.78 % |
| 10 001 - 100 000 | 73 | 2 696 731 | 26.31 % |
| 100 001 - 1 000 000 | 18 | 5 275 453 | 51.47 % |
| 1 000 001 - | 1 | 1 070 000 | 10.44 % |
| Total | 1 251 | 10 250 000 | 100.00 % |
Bouvet ASA (Bouvet) is concerned to practise good corporate governance in order to strengthen confidence in the company and thereby contribute to the best possible long-term value creation with the lowest possible risk to the benefit of shareholders, employees and other stake¬holders. Good corporate governance is intended to regulate the division of roles between shareholders, the board and the executive management more comprehensively than is required by legislation.
Bouvet is subject to formal requirements for reporting on its corporate governance. Pursuant to section 3, sub-section 3b of the Norwegian Accounting Act, the company is obliged to report on its principles for and practice of corporate governance. In addition, the Oslo Stock Exchange requires an annual report on the company's principles in compliance with the applicable Norwegian code of practice for corporate governance (the code) issued by the Norwegian Corporate Governance Board (NCGB).
This report applies for fiscal 2014, and is based on the disposition specified in the legislation as well as the main points in the code.
The board of directors of Bouvet complies with the applicable code from the NCGB, published on 23 October 2013 with amendments of 21 December 2013, as well as with the revised code published on 20 October 2014. The board is responsible for implementing sound principles for corporate governance in the company. Bouvet provides an annual overall report of its principles for corporate governance and compliance with these in its annual report, and this information is also made available on the company's website at www.bouvet.no.
An annual review of the report on corporate governance is conducted by the board and the executive management, and the report for 2014 was adopted on 16 April 2015.
Confidence in the company's management and business is crucial for Bouvet's present and future competitiveness. The company practises open management, and thereby builds trust both in-house and externally.
Relations between owners and the company will be characterised by respect for the owners, good and timely information and equal treatment of shareholders.
A general principle for Bouvet is that the company will behave in a trustworthy manner towards its employees, clients, government agencies and other stakeholders. Guidelines for Bouvet's CSR are available on the company's website.
Bouvet delivers services related to communication, information technology and advisory. The company is a strategic partner
for a number of enterprises, and helps these to design, develop and administer digital solutions which create new business opportunities. Bouvet has a regional model where closeness to the clients is the key element. Long-term client relationships are forged through local expertise and entrenchment.
A detailed presentation of Bouvet's business is available on its website at www.bouvet.no.
Bouvet has experienced growth in turnover, and still has opportunities for further profitable expansion. To benefit from these opportunities, the group will maintain a solid equity and good liquidity.
Consolidated equity at 31 December 2014 was NOK 153.5 million, corresponding to an equity ratio of 34.3 per cent. Bouvet's goal is an equity ratio of just over 30 per cent. The board accordingly regards the group's capital structure as satisfactory.
The Bouvet share will be a profitable investment for its owners through the increase in its value and the payment of dividend. As a contribution to ensuring good corporate governance, the board has resolved that the group's dividend policy will be to distribute a significant proportion of the previous year's net profit to the owners. When considering proposals for a dividend, the executive management and the board will take account of the following considerations:
Major investments will normally be funded through new financing in the form of debt, equity or a combination of these. However, the dividend payout ratio can be reduced if substantial investments are planned. Dividend can be lower than the goal if the retained profit can be profitably invested for the owners.
The board must explain the reasons for its proposed dividend payout to the general meeting.
In the board's view, mandates from the general meeting to increase the share capital should be limited to defined purposes and remain valid for up to a year. The general meeting should therefore consider board mandates to increase the share capital separately for each purpose, rather than awarding an umbrella mandate.
Bouvet held its annual general meeting on 20 May 2014. This awarded the board a mandate to increase the share capital of the company by up to NOK 1 million for financing the acquisition of other companies and businesses. In addition, the board has a mandate to increase the share capital by a maximum of NOK 200 000 in order to implement the share saving programme for group employees.
Both mandates run until 30 June 2015.
As a general rule, existing shareholders will have a pre-emptive right to the allocation of and subscription to significant share issues. Should the general rule be waived, the reason for doing so will be published in the stock exchange announcement issued in connection with the capital increase.
The board believes that mandates to purchase the company's own shares must remain valid for a period no longer than to the next annual general meeting.
A mandate was held by the board at 31 December 2014 to acquire up to 1 025 000 of the company's own shares to serve as full or partial settlement for the acquisition of businesses, to provide a holding of shares in hand for that purpose, and to implement the company's share saving programme for group employees. These transactions will be conducted through the stock exchange or in others ways at prevailing stock exchange prices, and such a way that the principle of the equal treatment of shareholders is observed. The mandate runs until 30 June 2015.
Bouvet has a single share class, and each share carries one vote. Shareholders will be treated equally unless qualified grounds exist for an alternative approach. Efforts will be made to conduct possible transactions by the company in its own shares through the stock exchange or in others ways at prevailing stock exchange prices.
Bouvet's routines specify that, in general, no transactions should be conducted between the group and its shareholders, directors, senior executives or their close associates. Should any of these have an interest in a transaction involving the group, the board must be informed and take up the matter for consideration if necessary. Unless the transaction is insignificant, the board will secure third-party assessments of the transaction and otherwise assure itself that no form of unfair treatment of shareholders, elected officers, employees or others is involved.
Bouvet's shares are freely negotiable, and the company's articles of association place no restrictions on transferability.
The general meeting is the company's highest authority.
Bouvet will facilitate the participation of as many shareholders as possible at the general meeting, and ensure that it functions as an effective meeting place for the shareholders and the board so that the owners can exercise their rights.
Notice of the meeting and supporting documents will be issued in good time before the meeting is to take place, and posted to the company's website no later than 21 days in advance. All shareholders with a known address in the Norwegian Central Securities Depository (VPS) will receive the documents in the post at least 21 days before the general meeting takes place. Pursuant to article 6 of the articles of association, it is sufficient that related documents are made available on the company website. A shareholder may however demand to be sent supporting documents concerning matters that are to be considered at the General Meeting. Supporting documents shall include all necessary documentation so that the shareholders can decide on all matters to be discussed. The deadline for attendance registration is five working days prior to the meeting.
Shareholders unable to attend in person will be given an opportunity to vote by proxy. The company will provide information on the procedure for appointing a proxy or appoint a person who can act as proxy for the shareholder. A proxy form will also be prepared which makes it possible for the shareholder to specify how their proxy should vote on each item to be considered and over each candidate for election.
The board, the nomination committee and the auditor will attend the annual general meeting, together with representatives of the executive management. In addition, at least one director will attend all extraordinary general meetings.
The board determines the agenda for the general meeting. The main items on the agenda comply with the requirements of the Public Limited Companies Act as well as article 6 of the company's articles of association. As recommended by the code, each general meeting appoints a person to act as its independent chair. Minutes of general meetings are published on the company and Oslo Stock Exchange websites.
Article 7 of the company's articles of association specifies that Bouvet will have a nomination committee. Instructions for the
committee's work have been drawn up and adopted by the general meeting.
Pursuant to the articles of association, the committee will comprise three members elected for a two-year term.
The committee's job is to recommend candidates for election to the board and to make a recommendation on directors' fees. These recommendations should be justified, and include relevant information on the candidates and their independence. An overview of the nomination committee's members is available on the company's website.
Article 5 of the articles of association specifies that the board will consist of five to eight directors.
Bouvet's board of directors consisted at 31 December 2014 of five shareholder-elected directors, including two women and three men. The chief executive is not a director.
The shareholder-elected directors have long and varied experience from the energy, banking/finance and public administration sectors, and have expertise in the fields of organisation, marketing, management and finance. An overview of the directors can be found on the company's website.
The composition of the board ensures that it can operate independently of special interests. All the shareholder-elected directors are regarded as independent of the executive management, substantial business contacts and the company's principal shareholders.
An overview of each director's shareholding in Bovet is provided in note 23 to the annual financial statements for 2014.
Deviation from the code: Directors can be elected by law for up to four years, but the code recommends that their term of office does not last longer than two. Bouvet's articles of association do not regulate the process of electing and replacing directors.
The board has overall responsibility for planning and execution of the group's strategy and activities, including its organisation, remuneration policy and risk management. The board also has overall responsibility for control and supervision. The duties and responsibilities of the board are dictated by applicable legislation, the parent company's articles of
association, and mandates and instructions adopted by the general meeting.
These duties and responsibilities can be divided into two principal categories:
An annual plan has been approved by the board for its work. This focuses on the board's duties: to develop the group's strategy and monitor its implementation. In addition, the board will exercise supervision to ensure that the group meets its business goals and manages risk in a wise and satisfactory manner.
The board discusses all matters relating to the group's activities which are of significant importance or of a special character. A total of 11 board meetings were held in 2014.
Pursuant to the Public Limited Companies Act, the division of the board's roles and duties is enshrined in a formal mandate which includes specific rules and guidelines for the board's work and decisions.
The chair is responsible for ensuring that the work of the board is conducted in an efficient and proper manner and in compliance with applicable legislation.
In addition to the chair, the board has an independent chair to lead the discussion on issues where the chair has a conflict of interest or is unable to attend.
The board is responsible for appointing the chief executive. The board also adopts instructions, authorities and terms for the chief executive.
Periodic reports which comment on the group's financial status are received by the board. Where interim reporting is concerned, the company observes the deadlines set by the Oslo Stock Exchange.
The board has established two sub-committees, for audit and compensation respectively. Instructions have been adopted by the board for the work of these bodies.
The audit committee is elected by and from among the directors for a period of two years or until its members cease to sit on the board. The committee has three members, including one shareholder-elected director and two worker directors, who possess the expertise required to exercise their duties. At least one of its members must be independent of the business and have accounting or auditing qualifications.
A list of committee members is available on the company website.
The committee's primary function is to conduct an independent check of the company's financial reporting, auditing, internal control and overall risk management.
The committee can initiate the investigations it finds necessary for discharging its duties, which includes obtaining external advice and support. The committee will not take decisions on behalf of the board, but will present its assessments and recommendations to the board.
The committee will meet as frequently as it finds necessary, but not less than four times a year. The committee determines for itself who is to attend meetings. Apart from the committee's members, the chief financial officer and a representative of the external auditor will normally attend.
The committee will have separate meetings at least once a year with a representative of the external auditor and the chief executive respectively.
Bouvet has established a compensation committee which comprises three directors and which is independent of the company's executive management. Members of the committee are appointed by the board for a period of two years or until they cease to be directors. A list of the committee's members is available on the company website.
This sub-committee is charged with assessing the content and principles of the group's pay and bonus system, and for preparatory work ahead of a discussion of these issues by the full board in cooperation with the chief executive. The sub-committee compares remuneration in Bouvet in part with other companies, and presents proposals to the full board on possible changes.
The board evaluates its work and competence annually.
The board and executive management of Bouvet place great emphasis on establishing and maintaining routines for risk management and internal control. An annual review of the most important risks affecting the business is conducted by the board, with special attention paid to the following aspects.
Training and motivating employees is a key factor in Bouvet's business. It regards a high quality of work, openness and honesty in relations between individuals and the group as important principles. Systematic efforts are made to ensure that the workforce is professionally up-to-date and developing well. The group is committed to maintaining a good social environment. Another goal is that the working day will not last longer than is necessary for employees to have good leisure time. Bouvet conducts annual working environment (climate) surveys as part of its internal control.
In addition to the instructions enshrined in its contracts of employment, Bouvet has established in-house rules for employees and pays attention to training in and understanding of these regulations.
The Bouvet group has prepared internal guidelines for monthly, quarterly and annual financial reporting, including routines for internal control. The audit committee monitors the internal control systems, and the group's CFO attends audit committee meetings. Consolidated financial statements are presented in accordance with the applicable IAS/IFRS.
Financial results and key figures are presented to the board on a monthly basis together with the executive management's presentation of the group's position. The group does not use budgets, but prepares a business plan for the year as a whole. Deviations from the business plan, with the focus on central key figures, are reported to and considered by the board on a monthly basis. Forecasts for the development of profits and liquidity over the coming 12 months are prepared on a monthly basis and presented to the board.
All projects where the group has a delivery responsibility are reviewed and the remaining work re-estimated on a monthly basis in order to ensure correct accrual of the projects in the financial reporting.
Regular surveys are conducted to secure information on client satisfaction.
Bouvet invoices most of its projects on an on-going basis. But the group also delivers projects where a predefined result is to be supplied at a price which is fixed or contains elements of fixed pricing. Variances may arise in such cases between the final income per hour and the calculated income per hour at start-up and during execution of the projects. A continuous assessment is made of risk associated with projects.
Bouvet conducts an annual review of both clients and suppliers to identify counterparty risk. New clients are also subject to a thorough assessment to identify any risk they may present.
The general meeting determines directors' fees on the basis of proposals from the nomination committee.
Fees are fixed and independent of the results achieved. Information on all remuneration paid to directors is presented in note 23 to the annual financial statements. No options are awarded to directors.
The board determines the chief executive's terms of employment and sets guidelines for the remuneration of other senior executives.
The main principle applied by Bouvet for determining the pay and other remuneration of the chief executive and other senior executives is that these persons will be offered competitive terms. In addition, Bouvet will offer terms which encourage a commitment to and value creation for the group and its shareholders, and which strengthen the loyalty of senior employees to the business.
All Bouvet's incentive schemes are collective, and no programmes of this kind are reserved exclusively for the chief executive and other senior executives.
Bouvet's profit-sharing model comprises two components:
Performance-based remuneration cannot exceed 50 per cent of ordinary annual pay.
The chief executive and other senior executives have three months notice, calculated from the end of the calendar month in which they resign/are dismissed. The chief executive has a 12-month pay guarantee in addition to the agreed period of notice, subject to the reporting of all other income in the period to Bouvet for deduction from payments by the group. The right to this pay guarantee will be lost if the chief executive is dismissed on legitimate grounds pursuant to the regulations of the Working Environment Act.
Information on all benefits paid to the executive management is provided in note 23 to the annual accounts.
Bouvet takes the view that objective, detailed and frequent information to the market is essential for a correct valuation of the Bouvet share, and accordingly pursues a continuous dialogue with analysts and investors.
Information about important events in Bouvet as well as its periodic reporting of results are published in accordance with the guidelines to which the group is subject through its listing on the Oslo Stock Exchange.
Bouvet seeks continuously to publish all relevant information to the market in a timely, efficient and non-discriminatory manner. All stock exchange announcements are made available on the company and Oslo Stock Exchange websites.
The group will provide the same information to all shareholders at the same time. To the extent that analysts or shareholders contact it for further details, Bouvet and the board will ensure that only information which has already been made public is provided.
Bouvet's website is an important tool in its communication policy. All published information will be posted to this site, which will also be used to receive proposals to the nomination committee and other communications from shareholders.
The group holds quarterly open presentations. These provide an overview of operational and financial developments in the previous quarter as well as an overview of market prospects and the outlook for the business. These presentations are given by the chief executive. Interim reports and presentation materials are made available on the group's website.
The board determines the group's financial calendar, which specifies the dates for the publication of interim reports and the annual general meeting. This calendar is published by the end of December via the Oslo Stock Exchange's information system and on the Bouvet website.
In the event of a bid for the parent company's shares, the board and the executive management will ensure that all shareholders are treated equally and have access to sufficient information to be able to reach a decision on the offer. Unless otherwise instructed by the general meeting, the board will not deploy defensive mechanisms to prevent the implementation of the bid.
The board will provide shareholders with its view of the offer and, providing they have reached a decision on this, directors are duty-bound to inform shareholders whether they personally intend to accept the bid.
Should the board find that it is unable to recommend whether the shareholders should accept the bid, it will explain the reasons why such a recommendation cannot be given. An explanation must be provided if the board's decision is not unanimous.
The board will consider whether an assessment should be obtained from an independent expert.
Bouvet is audited by Ernst & Young AS.
The group does not use the auditor as a consultant unless this has been approved in advance by the board or its chair. A plan for their work is submitted annually by the external auditor to the board, and this plan will specify planned services other than auditing.
The auditor attends the board meeting which deals with the annual accounts. During this meeting, the auditor will review the audits performed, possible changes to the company's auditing principles, assessments of significant accounting estimates, assessment of the company's internal controls and all cases where disagreement has arisen between the auditor and the executive management.
At least once a year, the auditor will conduct a review with the audit committee of the company's internal control system and possible weaknesses, with suggestions of improvement. In addition, the board and the auditor will hold at least one meeting a year without the chief executive or other executive personnel being present.
The auditor's fee will be presented to the chair of the audit committee, who evaluates it and makes a recommendation to the general meeting. Information on the auditor's fee is provided in note 23 to the annual financial statements.
Statsautoriserte revisorer Ernst & Young AS
Dronning Eufemias gate 6, NO-0191 Oslo Oslo Atrium, P.O.Box 20, NO-0051 Oslo
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 Fax: +47 24 00 29 01 www.ey.no Medlemmer av den norske revisorforening
To the Annual Shareholders' Meeting of Bouvet ASA
We have audited the accompanying financial statements of Bouvet ASA, comprising the financial statements for the Parent Company and the Group. The financial statements of the Parent Company comprise the balance sheet as at 31 December 2014, the statements of income, cash flows and changes in equity for the year then ended and a summary of significant accounting policies and other explanatory information. The financial statements of the Group comprise the consolidated statement of financial position as at 31 December 2014, the statements of income, comprehensive income, cash flows and changes in equity for the year then ended as well as a summary of significant accounting policies and other explanatory information.
The Board of Directors and Chief Executive Officer are responsible for the preparation and fair presentation of these financial statements in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway for the financial statements of the Parent Company and the International Financial Reporting Standards as adopted by the EU for the financial statements of the Group, and for such internal control as the Board of Directors and Chief Executive Officer determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements for the Parent Company and the Group.
In our opinion, the financial statements of Bouvet ASA have been prepared in accordance with laws and regulations and present fairly, in all material respects, the financial position of the Company as at 31 December 2014 and its financial performance and cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
In our opinion, the financial statements of the Group have been prepared in accordance with laws and regulations and present fairly, in all material respects, the financial position of the Group as at 31 December 2014 and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards as adopted by the EU.
Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Directors' report [and in the statements on corporate governance and corporate social responsibility] concerning the financial statements, the going concern assumption and the proposal for the allocation of the result is consistent with the financial statements and complies with the law and regulations.
Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, «Assurance Engagements Other than Audits or Reviews of Historical Financial Information», it is our opinion that the Board of Directors and Chief Executive Officer have fulfilled their duty to ensure that the Company's accounting information is properly recorded and documented as required by law and generally accepted bookkeeping practice in Norway.
Oslo, 17. April 2015 ERNST & YOUNG AS
Petter Larsen State Authorised Public Accountant (Norway)
(This translation from Norwegian has been made for information purposes only.)
| NOK 1000 | 2014 | 2013 | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|
| INCOME STATEMENT | |||||
| Operating revenue | 1 132 598 | 1 112 774 | 1 030 349 | 897 245 | 710 641 |
| EBITDA | 92 501 | 105 800 | 88 327 | 95 863 | 72 062 |
| Operating profit (EBIT) | 79 162 | 95 093 | 78 236 | 88 018 | 64 737 |
| Ordinary profit before tax | 81 577 | 97 138 | 80 179 | 89 875 | 67 013 |
| Profit for the year | 56 981 | 69 841 | 56 557 | 63 884 | 48 958 |
| EBITDA-margin | 8.2 % | 9.5 % | 8.6 % | 10.7 % | 10.1 % |
| EBIT-margin | 7.0 % | 8.5 % | 7.6 % | 9.8 % | 9.1 % |
| BALANCE SHEET | |||||
| Non-current assets | 70 712 | 47 630 | 46 639 | 40 741 | 38 620 |
| Current assets | 376 349 | 397 807 | 363 656 | 352 695 | 274 884 |
| Total assets | 447 061 | 445 437 | 410 295 | 393 436 | 313 504 |
| Equity | 153 532 | 159 829 | 142 341 | 137 618 | 116 827 |
| Long-term debt | 669 | 0 | 1 723 | 6 191 | 5 160 |
| Short-term debt | 292 860 | 285 608 | 266 231 | 249 610 | 191 517 |
| Equity ratio | 34.3 % | 35.9 % | 34.7 % | 35.0 % | 37.3 % |
| Liquidity ratio | 1.29 | 1.39 | 1.37 | 1.41 | 1.44 |
| CASH FLOW | |||||
| Net cash flow operations | 48 762 | 99 381 | 97 384 | 57 831 | 36 403 |
| Net free cash flow | 18 921 | 88 267 | 80 165 | 48 475 | 26 383 |
| Net cash flow | -49 111 | 31 377 | 23 490 | 2 026 | -34 431 |
| Cash flow margin | 4.3 % | 8.9 % | 9.5 % | 6.4 % | 5.1 % |
| SHARE INFORMATION | |||||
| Number of shares | 10 250 000 | 10 250 000 | 10 250 000 | 10 250 000 | 10 250 000 |
| Weighted average basic shares outstanding | 10 220 261 | 10 174 317 | 10 249 900 | 10 247 431 | 10 172 510 |
| Weighted average diluted shares outstanding | 10 346 049 | 10 292 902 | 10 369 686 | 10 362 238 | 10 261 874 |
| EBIT per share | 7.59 | 9.20 | 7.49 | 8.44 | 6.33 |
| Diluted EBIT per share | 7.49 | 9.09 | 7.41 | 8.35 | 6.28 |
| Earnings per share | 5.45 | 6.75 | 5.41 | 6.13 | 4.78 |
| Diluted earnings per share | 5.39 | 6.67 | 5.35 | 6.06 | 4.74 |
| Equity per share | 14.98 | 15.59 | 13.89 | 13.43 | 11.40 |
| Dividend per share | 6.00 | 5.00 | 5.00 | 4.10 | 6.25 |
| EMPLOYEES | |||||
| Number of employees (year end) | 1 008 | 931 | 881 | 779 | 642 |
| Average number of employees | 958 | 908 | 848 | 716 | 602 |
| Operating revenue per employee | 1 182 | 1 226 | 1 215 | 1 253 | 1 180 |
| Operating cost per employee | 1 100 | 1 121 | 1 123 | 1 130 | 1 073 |
| EBIT per employee | 83 | 105 | 92 | 123 | 108 |
| EBITDA | Operating profit + depreciation fixed assets and intangible assets |
|---|---|
| EBIT | Operating profit |
| EBITDA-margin | EBITDA / operating revenue |
| EBIT-margin | EBIT / operating revenue |
| Equity ratio | Equity / total assets |
| Liquidity ratio | Current assets / Short-term debt |
| Net free cash flow | Net cash flow operations + Net cash flow investments |
| Cash flow margin | Net cash flow operations / Operating revenue |
| Number of shares | Number of issued shares at the end of the year |
| Weighted average basic shares outstanding | Issued shares adjusted for own shares on average for the year |
| Weighted average diluted shares outstanding | Issued shares adjusted for own shares and share scheme on average for the year |
| EBIT per share | EBIT / weighted average basic shares outstanding |
| Diluted EBIT per share | EBIT / weighted average diluted shares outstanding |
| Earnings per share | Profit after tax / weighted average basic shares outstanding |
| Diluted earnings per share | Profit after tax / weighted average diluted shares outstanding |
| Equity per share | Equity / number of shares |
| Dividend per share | Paid dividend per share througout the year |
| Operating revenue per employee | Operating revenue / average number of employees |
| Operating cost per employee | Operating cost / average number of employees |
| EBIT per employee | EBIT / average number of employees |
The Group has offices in Oslo, Trondheim, Bergen, Haugesund, Stavanger, Kristiansand, Arendal, Skien, Sandvika, Sandefjord, Malmö, Örebro and Stockholm. Our philosophy is that competence should be utilized across the company, while projects are attached locally. This means that our customers will have a local account manager and project manager, but access to competence independent of its location.
Sandakerveien 24c, bygg D11 Box 4430 Nydalen 0403 Oslo Tel: (+47) 23 40 60 00
Vikaveien 29 4817 His Tel: (+47) 23 40 60 00
Solheimsgaten 15 5058 Bergen Tel: (+47) 55 20 09 17
Klostergata 33 Klosterøya 3732 Skien Tel: (+47) 23 40 60 00
STAVANGER Fabrikkveien 10 4033 Stavanger Tel: (+47) 51 20 00 20
Strandkaien 36 4005 Stavanger Tel: (+47) 52 82 10 17
5538 Haugesund Tel: (+47) 52 82 10 17 TRONDHEIM Kjøpmannsgata 35 7011 Trondheim Tel: (+47) 23 40 60 00
SANDEFJORD Klinestadmoen 9 3241 Sandefjord Tel: (+47) 23 40 60 00 STOCKHOLM
Arenavägen 45, 16 tr 121 77 Johanneshov Tel: (+46) 8 578 771 00
Södergatan 3 211 34 Malmö Tel: (+46) 40 636 60 00
Storgatan 3 70361 Örebro Tel: (+46) 0 709 431 411
www.bouvet.net
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