Annual Report (ESEF) • Feb 23, 2024
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* Sections on Corporate profile, Financial highlights, and The Brunel share constitute integral components of the Report from the board of directors.
We celebrated many highlights in 2023: continued high-single-digit growth, internal promotions to leadership positions, high engagement scores from clients, candidates and internal colleagues, many new clients acquired, lots of talent attracted and strong financial performance during the first three quarters. Unfortunately, we then came up against unexpected headwinds later in the year. The impact of high interest rates and inflation on the offshore wind industry caused sudden project stops, while projects in the pipeline were reconsidered. These developments hit our perm business at Taylor Hopkinson quite hard. At the same time, we saw the German market cool off to some degree, alongside a slowdown in our other permanent placement projects. This industry-wide slowdown forced us to take quick and smart action. In the last quarter, we adjusted our cost levels where necessary and stepped up execution of our entrepreneurial sales approach. Our Capital Markets Day in November showcased how we have executed our strategy over the last three years. We now have a nicely diversified portfolio of markets and capabilities. Our conversion ratio has grown significantly, and we are on track to reach multi-year goals. We presented data on expected capital investments in our focus markets – data which gives us high confidence that our clients will be needing us more and more in the quarters and years to come. Accordingly, we reconfirmed our growth ambitions, with new tooling, smarter processes and greater leverage of our infrastructure further driving conversion and profitability. In the year under review, we also made important progress in executing our ESG strategy. We trained many colleagues on reducing unconscious bias and continued working with autism organisations around the world to connect talent along this spectrum with job opportunities. At the same time, our foundation enlarged the Brunel Foundation Forest, organised ‘Offshore Wind for Kids’ events and engaged in Trash and Trace events with clients, candidates and our own staff. A unique infrastructure of more than 12,000 Brunellers serving more than 1000 clients in over 45 countries leaves us strongly positioned to benefit from the energy and digital transformations. Thanks to our high integrity standards, our entrepreneurial spirit, our results-driven mindset and our passion for people, we are ready and able to turn every business challenges we encounter into profitable opportunities. Why? Because Brunellers make it happen! We would like to thank all our clients and all Brunellers for strengthening our position once again in 2023.
Jilko Andringa
CEO
Brunel International N.V.
Brunel was founded in 1975 by graduate engineer Jan Brand. Starting with the placement of a single fellow engineer, the foundation was laid for what became a global provider of business services that today specialises in the flexible placement of professionals.
A powerful network of specialists
The company has continued to grow and diversify over the years, but has always maintained Jan Brand’s original focus: placing highly qualified, mainly technical, specialists in challenging assignments. What began as a family-run business with strong ambitions has grown beyond all expectations and resulted in a durable and sustainable business model. Throughout repeated international expansion, Brunel has retained a company culture driven by entrepreneurship and talent. It has fostered the capability and agility to deliver globally. And it has continued to provide high-quality and fully compliant solutions and services.
Connecting specialists to pioneering projects
Brunel connects the most talented and experienced specialists to present-day pioneering projects. With 120+ offices and a powerful network of more than 12,000 specialists around the world, we deliver Project and Consulting Solutions, Workforce Solutions and Global Mobility Solutions that transform global projects in Renewables, Conventional Energy, Mining, Life Sciences, Future Mobility, Industrials & Technology and many other sectors.
Caring about a better future
Having a passion for people and caring deeply for the environment is not only part of Brunel’s DNA: It is also reflected in the company’s culture and values. Social responsibility is taken very seriously, and the company’s ambition is to build both a better planet and a better future for professionals. Since 2022, the company has achieved its goal of becoming carbon neutral by reducing its carbon footprint and compensating for unavoidable emissions through three projects based on community, nature and technology. By providing job opportunities for specialists and preparing them for future challenges through continuous upskilling, Brunel is contributing to a more sustainable society. By connecting specialists from all over the world, Brunel embraces diversity, inclusion and belonging. Upholding high integrity standards, the network of specialists is redefining and shaping the future, driving and developing ground-breaking new technologies to accelerate clients’ digital transformations and energy transitions.
Management of Brunel
Change in leadership
In 2023, Graeme Maude served with distinction as the Chief Operating Officer and as a member of the Board of Directors, contributing significantly to the strategic and operational achievements of the year. His hard work and dedication drove strategic transition and better positioning of Brunel for future success. Maude will leave Brunel at the end of his 4-year term in May 2024.
Board of Directors for 2024
As we transition into 2024, the Board of Directors will streamline its structure to consist of two core members: the Chief Executive Officer and the Chief Financial Officer.
Drs. J.T. (Jilko) Andringa
Chief Executive Officer, male (1966)
Jilko Andringa was appointed Chief Executive Officer of Brunel International N.V. on 7 December 2017 and reappointed on 11 May 2021. His most recent position before transferring to Brunel was as President Northern Europe of ManpowerGroup. Before that Jilko Andringa held management positions at Randstad. Andringa started his career at Exxon (Esso) Benelux. He completed his graduate degree in Business Economics and Marketing at the University of Groningen.
Other directorships: member of the Supervisory Board of EW Facility Services and the Johan Cruyff Arena.
Drs. P.A. (Peter) de Laat, RA
Chief Financial Officer, male (1972)
Peter de Laat was appointed Chief Financial Officer of Brunel International N.V. on 1 May 2014 and reappointed on 14 May 2018 and on 19 May 2022. After having obtained his Master Degree in Business Economics, Peter de Laat worked for sixteen years with Deloitte Accountants and was, amongst other members of the team, responsible for the audit of Brunel. In 2012, De Laat joined Brunel and from April 2013 held the position of Director Finance and Control.
New Brunel Executive Leadership Team
To continue our successful strategic execution, our profitable growth performance and to drive better conversion ratios, we are proud to announce the creation of our Executive Leadership Team (ELT), effective from January 1st, 2024. This dynamic team unites a breadth of expertise and a shared commitment to excellence. The ELT comprises of our CEO, CFO and four internal promoted leaders, each bring a wealth of knowledge and strategic acumen to their respective roles:
We enter 2024 with a leadership team that embodies our corporate values and possesses the vision to lead Brunel to next level of success.
The Brunel Executive Leadership Team: Front row: Stefan de Boer, Tania Sinibaldi, Jon Proctor. Back row: Joanita Oud, Jilko Andringa, Peter de Laat.# Annual Report 2023
EUR million, unless stated otherwise
| 2023 | 2022 | |
|---|---|---|
| Profit | ||
| Revenue | 1,331 | 1,182 |
| Gross Profit | 274 | 252 |
| Operating costs | 217 | 191 |
| Underlying EBIT | 61 | 60 |
| Result before tax | 50 | 48 |
| Tax | 18 | 17 |
| Group result after tax | 32 | 31 |
| Net income | 32 | 29 |
| Ratios | ||
| Change in revenue on previous year | 12.6% | 31.4% |
| Gross margin | 20.6% | 21.3% |
| Operating profit / Revenue | 4.2% | 5.2% |
| Group result after tax / Revenue | 2.4% | 2.6% |
| Balance | ||
| Working capital | 297 | 255 |
| Total equity | 312 | 318 |
| Balance sheet total | 611 | 547 |
| Net cash flow | 13 | -16 |
| Ratios | ||
| Total equity / total assets | 51.1% | 58.1% |
| Current assets / current liabilities | 2.59 | 2.53 |
| Workforce (number) | ||
| Employees total (average) | 12,712 | 12,639 |
| Employees direct (average) | 11,138 | 11,187 |
| Employees indirect (average) | 1,574 | 1,452 |
| Employees total (year-end) | 12,539 | 12,562 |
| Employees direct (year-end) | 10,939 | 11,083 |
| Employees indirect (year-end) | 1,600 | 1,479 |
| Shares in EUR | ||
| Earnings per share | 0.63 | 0.58 |
| Shareholders’ equity per share | 5.98 | 6.05 |
| Dividend per share | 0.55 | 0.55 |
| Highest price | 13.46 | 12.6 |
| Lowest price | 9.72 | 8.31 |
| Closing price at 31 December | 11.18 | 9.58 |
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Brunel International N.V. Annual Report 2023
4 4 report from the board of directors
At Brunel, we are guided by our core values of passion for people, integrity, results-driven and entrepreneurship. We operate with a long-term perspective and a strong commitment to sustainability. We strive to consider the perspectives of all stakeholders and the broader societal impact of our actions. To us, sustainability means ensuring long-term success and profitability, fostering the career development of our professionals and specialists, fostering strong relationships with customers and suppliers, staying current with new technologies, meeting stakeholder expectations, and investing in the communities in which we operate.
Our passion for people drives us to connect specialists with clients on a global scale. With over 12,000 specialists representing nearly 100 different nationalities, we take our responsibility to them seriously and provide them with fair employment terms, safety, and security, and career development support.
To achieve success in customer engagement, experience, and loyalty, it is important to adopt data-driven, creative, and customer-centric strategies that utilise the latest technologies to provide exceptional service and value to customers. At Brunel, we have implemented initiatives such as our digital journey and innovation hub, which harness technology and creativity to enhance the connection between our customers and our business.
Note: The Report from the Board of Directors (consisting of page 8 up to and including 95 , page 116 up to and including 119, and page 208 up to and including 210), and such parts of the Annual accounts as referred to in the Report from the Board of Directors, comprise the “Bestuursverslag” within the meaning of article 2:391 of the DCC.
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Brunel International N.V. Annual Report 2023
Our mission, vision and core values define what Brunel is aiming to achieve and how we want to conduct business. Brunel’s business model has resulted in quality service delivery, manageable risks, and a business that achieves growth and creates value for our stakeholders. The diagram provides a synopsis of our business model, and should be read in conjunction with the rest of the annual report.
Passionate and results-driven internal employees are critical for Brunel to provide quality service to clienTs and career advancement opportunities for specialists
Talented specialists focus on deliverables, innovation and creativity
In order to attract and retain the assets, Brunel continues to operate:
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report from the board of directors
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Brunel International N.V. Annual Report 2023
The global leadership team is responsible for driving the execution of our strategy. Comprised of regional directors of our largest regions, as well as leaders in client management, verticals, human resources, marketing, IT, finance, and legal, the team reports directly to the ELT, which includes the CEO and CFO. This transformation aims to ensure that our business can fully leverage its assets to execute our strategy effectively and position us for the next phase of growth.
We manage our business through 8 regional businesses, each supported by global functions in areas such as marketing, digital, finance, human resources, sales, process, legal and commercial, and IT. The level of support and interaction between
| Australasia | DACH + CZ | Global Head of IT & Digital | Global Marketing & Communications | Global Legal & Compliance | Global Corporate Finance & Control | Global Sales Enablement | Global Commercial | Life Sciences | Mining | Americas | Australasia | Rest of World | Middle East & India | The Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Managing Director of Operations | ||||||||||||||
| Managing Director of Operations | ||||||||||||||
| Global Head of People & Culture | CFO | CEO | Board of Directors | Executive Leadership Team | Renewables | Conventional Energy | Taylor Hopkinson | ICE Asia |
these businesses and global functions is determined by market and client opportunities, as well as the scale and maturity of our regional business. This operating model allows us to benefit from the strengths of both local-to-local relationships and corporate expertise, enabling us to stay agile and respond quickly to market opportunities as they arise.
Brunel has established a global infrastructure connecting all continents through regional hubs located in Amsterdam, Bremen, Doha, Houston, Delft, Perth, and Singapore by sharing financial and commercial resources. This structure enables our commercial activities, business development, account management and recruitment to be fully focused on clients and candidates, while being supported by well-functioning regional hubs. This centralised model enables efficient and cost-effective operations, improves communication between employees and managers, and ensures effective risk management, internal control, and compliance activities.
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Brunel International N.V.# Annual Report 2023
The world around us is rapidly evolving, and to confront it we need to have a system in place to adapt to the changes and keep track of it. Employees at different layers and in all regions monitor key business environment indicators. The top seven indicators below are most relevant for Brunel’s business worldwide.
Our response: “Risks, risk management and control system - Unfavourable macro-economic conditions/geo political situation”, page 65
Indicator: Competition
Our response: “Risks, risk management and control system - Human capital risk” page 68.
Indicator: Client demands
“Fostering an impactful brand across the globe is a key success factor to attract and retain both specialists and clients. As we systematically develop our brand, we are receiving more applications and client requests via our own channels than ever before.”
Nicole Kirleis
Global Head of Marketing and Communications
Our local operations in the Netherlands and Germany are heavily influenced by macroeconomic trends. These markets primarily use macroeconomic trends as leading indicators.# Brunel International N.V. Annual Report 2023
However, for other markets, we conduct additional analysis to gain a more accurate outlook. This includes analysing specific market indicators like capital investment and general business indicators. Brunel’s diversification initiative has led to the growth and promising development of our Life Sciences market, resulting in its inclusion as a global vertical.
The oil and gas CAPEX market is expected to grow at 4.27% CAGR, led by North America, with the US accounting for 70% of investments. Annual upstream investment will need to increase from $499 billion in 2022 to $640 billion in 2030 to ensure adequate supplies. The total number of expected FID projects is projected to reach approximately 150, with a combined value approaching $600 billion between 2024 and 2026. Talent shortage looms, with up to 40,000 needed workers by 2025, as younger generations find oil and gas industry unattractive.
In the short term, the offshore wind industry is facing challenges due to geopolitical, economic, and supply-chain factors, affecting deployment targets for the next 3 to 5 years. However, the long-term outlook for offshore wind remains strong, driven by global commitments to combat climate change. To reach long-term targets beyond 2030, collaboration between governments and the industry is crucial. The offshore wind industry anticipates a skills shortage even with capacity adjustments, but rationalising global ambitions in the short term may enhance project deliverability by alleviating supply chain and skills constraints.
Mined Commodities like Lithium, Cobalt, Graphite and Rare Earths are essential for the energy transition and digital economy. They are critical to producing electric vehicles (EVs), wind turbines and the technologies necessary to burn less fossil fuels. Predictions are that between 2021-2025 there will be an 300 percent increase in demand for Nickel and Lithium for use in EV batteries. Almost 400 new mines needed to meet future EV battery demand. CAPEX is increasing due to rising costs of pre-planned investments, and major mining companies like Fortescue, Rio Tinto, and BHP are expected to contribute substantial green capital expenditure starting from 2023 onwards, with investments in renewable energy infrastructure leading to progress in emission reduction.
The global Life Sciences market size was valued at USD 70588.93 million in 2022 and is expected to expand at a CAGR of 11.75% during the forecast period, reaching USD 137462.05 million by 2028. In the life sciences industry, R&D is a top priority this year, with a focus on innovative product development and investments in R&D and digital innovation. AI is accelerating drug development, reducing R&D time, and reshaping clinical trials, with potential benefits by 2030. Digital transformation is on the rise in response to the COVID-19 pandemic, but many biopharma companies are still working on becoming digitally mature.
1 This commentary is produced by Fitch solutions Country Risk and Industry Research and is not a comment about Fitch Ratings’ Credit Opinions or Credit Ratings. Nor is any of the background obtained from, or in conjunction with, Fitch Ratings credit analysis.
1 1 Global network, local presence
TH TH TH TH 5 5 5 5 TH TH TH
26 report from the board of directors
2 3 7 4 6 6 TH TH TH TH 5 5 5 5 TH TH
27 Brunel International N.V. Annual Report 2023
We identify the Environmental, Social and Governance topics which we believe have the greatest impact on our business and the greatest level of concern to stakeholders along our value chain. We do this through a multi-stakeholder process. An overview of our regular engagement with these stakeholders is provided in the below table.
| WHO ARE OUR STAKEHOLDERS? | WHAT ARE THEIR AREAS OF INTERESTS? | HOW WE RESPONDED (through our strategic pillars and other frameworks) |
|---|---|---|
| Employees, Specialists and future professionals | Training, development and career opportunities Recognition, fair salaries and benefits Open, collaborative, safe and healthy working environment Clear vision and direction Diversity & inclusion Job satisfaction and pride Job opportunities Job market information Environmental, social and governance (ESG) topics |
People and culture (page 36) Digital journey (page 42) Specialist community (page 31) Capabilities (page 34) |
| Clients | On time delivery and quality of services Reliable and value-adding partnership Proactive, relevant recruitment and project manpower advice Availability of required skills Environmental, social and governance (ESG) topics |
Sales enablement (page 68) Quality, speed and efficiency (page 16) Ownership (page 18) Capabilities (page 34) Diversification (page 31) |
| Shareholders and financial institutions | Attractive and sustainable growth Effective risk management and control environment Responsible investment Environmental, social and governance (ESG) topics |
Risk management (page 60) Performance (page 82) Corporate governance (page 76) |
| Government, regulators, NGOs and local communities | Contribute to the economic and social develop in local community Create employment and be a major force in the economy Responsible approach to tax High standards of ethics and integrity Environmental, social and governance (ESG) topics |
Corporate social responsibilities (page 44) |
28 report from the board of directors
As part of our efforts to initiate our alignment with the requirements of the EU Corporate Sustainability Reporting Directive (CSRD), we conducted a materiality analysis in 2023 following the concept of “double materiality” inspired by the principles described in the ESRS. Under this concept, we define a material sustainability matter as a topic which significantly influences the organisation or on which the organisation has a significant influence. This includes direct and indirect as well as positive and negative influences. To identify these material topics, we engaged with and gathered input from various internal and external stakeholders. In performing this assessment, we created an extensive list of topics which was narrowed down into a shorter list of topics that stakeholders were asked to score on materiality. We used different sources as input to our lists of topics, including international standards & frameworks, Brunel’s historical materiality analysis, sector trends & media analysis, and peers & competitors. The double materiality assessment addresses both financial materiality as well as impact materiality. A final list of 9 sustainability matters is listed below. Based on the prioritised sustainability matters, four ESRS standards will be triggered.
| Sustainability matter | ESRS topical standards |
|---|---|
| Environmental topics | ESRS E1 Climate change |
| Exposure to traditional (oil & gas) energy clients | |
| Contribution to the energy transition through clients | |
| GHG emissions and energy consumption | |
| Social topics | ESRS S1 Own workforce |
| Employee safety & security | |
| Diversity, inclusion & belonging | |
| Talent attraction, development & career opportunities | |
| Labour conditions and human rights in the value chain (incl. candidates) | |
| ESRS S2 Workers in the value chain | |
| Governance topics | ESRS G1 Business conduct |
| ESRS S4 Consumers and End-users | |
| Data privacy & cybersecurity | |
| Ethical business and compliance |
In preparing for CSRD compliance, we conducted a double materiality assessment. The material topics identified through this assessment are the starting point for compliance with CSRD requirements. This enables us to identify material impacts, risks and opportunities associated with them. We see these material topics and emerging areas play a key role in strategic focus areas and themes for Brunel to explore and act upon. Consequently, we have initiated the process of defining concrete actions and setting targets for each topic in 2024. Brunel will need to comply with the CSRD from reporting year 2024.
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| Metric | Target 2027 | Progress 2023 |
|---|---|---|
| Revenue | High single digit YOY growth | On track |
| Gross profit | High single digit YOY growth | On track |
| Profitability | EBIT/GP >32% yearly fall through 40 – 50% | On track |
| EBIT | >6.5% | On track |
| Conversion ratio | >32% in 2027 | On track |
| Culture Connected specialists | > 13,000 contracting specialists | On track |
| >2,000 perm specialists | On track | |
| Market leading engagement NPS | >25% | On track |
We are a recognised leader in customised and sustainable workforce and project solutions. By connecting the expertise of our specialists to pioneering projects we empower our clients to lead the way in current and future industry transformations, creating a better future for people and the planet.# DIVERSIFICATION
We expand our business by entering selected market segments (verticals). By executing locally and connecting globally, we aim to achieve market-leading positions within our target markets. Utilising our global infrastructure, we will reshape how Brunel connects to its market and capture a greater volume and diverse range of opportunities.
Highlight: Vertical diversification (Gross profit share)
| 2020 | 2023 | |
|---|---|---|
| 25% | 17% | |
| 5% | 9% | |
| 4% | 13% | |
| 6% | 12% | |
| 10% | 7% | |
| 25% | 15% | |
| 8% | 3% | |
| 6% | 6% | |
| 4% | 14% | |
| 12% | 7% |
Our ability to attract the most talented specialists will form extensive and powerful communities, where like-minded people meet, knowledge can be shared and where innovative ideas emerge from everyday challenges. These communities will nurture, develop and encourage progression of talent. Combined with our capability to connect the specialists to exceptional career opportunities in all the industries we cover, our communities will generate a strong gravitation, of leading talents and clients towards Brunel.
Brunel International N.V. Annual Report 2023
“ Our unique global recruitment platform lets us collaborate with industry-leading partners like Microsoft to benefit from the latest innovations. We continuously improve the way we work, striving towards our goal of operational excellence”. Stefan de Boer Global Head of IT & Digital
Highlight: Talent attraction and retention
Talent Scarcity
Brunel’s response:
Increased Candidate Volume
| 2020 | 2023 | |
|---|---|---|
| Applications | 172,152 | 327,718 |
| Unique Candidates | 99,305 | 220,812 |
on track focus to reach the next level
Brunel International N.V. Annual Report 2023
BUILDING A leading specialist within the chosen services that we provide. We are proud of the quality of service we deliver, and we are recognised by our customers and contractors for this. Our continuing focus on specialisation provides us with a deep insight into the market, allowing us to challenge our customers and make them more successful. This approach combined with our global network, positions Brunel as a valued partner to its customers.
Highlight: Expanding our end-to-end solutions
Brunel provides custom support, international network and local knowledge to deliver seamless solutions.
Capabilities:
Ready for the next level
Brunel leverages advanced recruitment techniques and strategic workforce planning to streamline talent acquisition and enhance overall performance.
Brunel seamlessly transfers individuals, teams and even whole businesses to new locations – from the next state or region to the farthest corners of the planet.
Capabilities:
Brunel International N.V. Annual Report 2023
Disciplined execution is the relentless focus on executing strategy, keeping the momentum going throughout the year. All three elements - people, process and system - must operate seamlessly in order for Brunel to develop into a truly successful and inspired enterprise.
Highlight: Delivering growth
Key Drivers
Ready for the next level
| Delivery | 2020 | 2023 (LTM) |
|---|---|---|
| Growth Gross Profit | 191 | 274 |
| Conversion ratio | 13% | 15% |
| EBIT | 30 | 61 |
on track focus to reach the next level
Brunel International N.V. Annual Report 2023
We are proud of our corporate culture at Brunel. We are explorers, developers and entrepreneurs in the spirit of our namesake Isambard Kingdom Brunel. We are people from many nations, working around the globe united by our pursuit of quality and mutual appreciation, as well as our values:
Social metric | ESG programme pillar – Our people
Attracting and developing our people with the right skills remains a constant priority for Brunel. We believe that to meet our business goals and create long-term shareholder value we must continue to attract and retain the most talented through continuous learning and engage, motivate and support employee well-being initiatives. We continually seek ways to further embed diversity and inclusion through our culture, process and employee experience.
Our updated CSR strategy chooses to focus on the following aspects:
Entrepreneurship
Integrity
Results-driven
Passion for people
Brunel International N.V. Annual Report 2023
Female leadership and management
| 2023 | 2022 | |||
|---|---|---|---|---|
| Female | Male | Female | Male | |
| # % | # % | # % | # % | |
| Global leadership team | 5 29.4% | 12 70.6% | 4 25% | 12 75% |
| Global leadership team’s direct reports | 53 39% | 82 61% | 43 36% | 76 64% |
Global Net Promotor Score
In 2023, the Net Promoter Score (NPS) for contractors rose to 54, up from 52 in 2022, while the clients’ NPS slightly decreased to 48 from 50. The total number of respondents also increased in 2023, with 429 clients and 2,191 candidates, compared to 325 clients and 1,563 candidates in 2022. To enhance our services, we have refined our feedback approach. We now solicit NPS feedback not only at the start and end of projects but also biannually for longer ones. This change aims to gain continuous insights. To streamline the process, we have reduced the number of questions but will seek more detailed feedback from detractors to better understand improvement areas.
Company Monitor
| 2023 | 2022 | |
|---|---|---|
| Participation rate (100% scale) | 88% | 88% |
| Engagement rate (10-point scale) | 8 | 8.1 |
Brunel aims to create and maintain a work culture that understands and promotes diversity and inclusion, which are essential elements for the success of Brunel and all its employees. Brunel is working towards an organisation where all (future) Brunellers feel empowered to develop and grow. At Brunel, we not only accept differences - we embrace them, support them, and thrive on them for the benefit of our employees, clients, and community. In order to fulfil this challenge, Brunel has set the following goals:
Brunel International N.V. Annual Report 2023
This challenge will be developed into an action plan, outlining the objectives, investments, and approach. This plan will be presented to Diversity in Business within six months after the signing of the Diversity Charter.
Around the globe, our regions are forming their own Regional DIB Council. Our Americas and Australasia regions have already established committees for their regions and will support other regions as they build their committees. The role of the Regional DIB Council is to provide representation from different backgrounds within the organisation, who meet on a specific cadence to discuss what is being actioned on DIB, how it’s working and providing advice on what to do. Our Regional DIB Councils will develop and execute their own Regional DIB Strategy aligning with the Global DIB framework set out in this communication. Each Regional DIB Council will meet with the Board of Directors and Global People & Culture to discuss progress, actions and opportunities.# REPORT FROM THE BOARD OF DIRECTORS
Some regions we understand may require some time before a fully functional committee is set up, until such time, Regional HR will work closely with their Regional Management to adopt regional DIB goals.
Unconscious bias training is essential for Brunel as it promotes diversity and inclusiveness, improves decision-making, increases employee morale, enhances reputation, and drives innovation. By recognising and addressing unconscious biases, employees can make objective decisions, feel valued and respected, and contribute to a diverse and innovative workplace. The global leadership team completed unconscious bias training in late 2022, and starting February 2022, unconscious bias training is a mandatory training for all indirect Brunel employees. This commitment to reducing unconscious bias extends not only to our interactions with each other, but also to our business processes, including job descriptions, interviews, and other HR-related activities.
Ensure we continuously upskill our people to be future ready by providing to our professionals and communities (specialists, employees) meaningful, impactful and engaging first-class content. The Brunel Academy has been fully established with a focus on four core pillars:
Brunel policies and strategy:
| Directs | Directs and Indirects | Directs and Indirects Succession Focus | Directs | |
|---|---|---|---|---|
| Setting the foundation for Brunellers | X | |||
| Upskilling our people in the most demanded competences | X | X | ||
| Encouraging never-ending expansion of skills and knowledge | X | X | ||
| Developing the leadership that drives our strategy | X | X | X |
At Brunel, we believe in continuous employee development and growth. That’s why we conduct employee performance appraisals twice annually to provide regular feedback and support for our employees. Additionally, we have established Personal Development Plans, Career Development Ladders, and various training programmes to help our employees achieve their career goals. These tools and resources not only foster personal growth but also align our employees’ skills and aspirations with the company’s objectives and goals. Our commitment to providing comprehensive support for our employees’ professional development demonstrates our belief in creating a positive work environment that fosters growth, innovation, and success.
At Brunel, we understand that employee satisfaction extends beyond just salary compensation. That’s why we offer a comprehensive range of non-salary benefits to our employees, designed to enhance their overall well-being and work-life balance. To accommodate the diverse needs of our global workforce, our non-salary benefits programme is tailored to each region. Our regions have the autonomy to develop their own non-salary benefits packages, which may include but are not limited to education and training programmes, insurance coverage, bike leasing options, sports activities, and discounts for cultural events. Our commitment to providing a wide array of non-salary benefits demonstrates our dedication to creating a positive and supportive work environment for our employees. We believe that these benefits not only increase employee satisfaction but also contribute to the overall success of our company.
At Brunel, we recognise the importance of supporting our employees both inside and outside of the workplace. To demonstrate this commitment, we are implementing a number of programmes aimed at improving their overall well-being. One example of this is the Global Employee Assistance Programme (EAP) that has been introduced in Brunel Australasia for all direct and indirect employees. The EAP is available 24/7 and offers qualified assistance to improve relationships, communication, mental health, work-life balance, and more. The programme also covers a range of other issues such as addiction, grief, retirement, and elder care. Brunel fully subsidizes the EAP, ensuring that employees have access to these services at no cost. For those who require more specialized or long-term support, the EAP will assist in selecting an appropriate specialist or service.
Brunel has adapted to the hybrid working trend by offering home office facilities and a flexible work schedule of three days in the office and two days from home. This flexible approach to work allows our employees to create a work-life balance that suits their individual needs and supports their productivity and overall well-being. It applies to jobs in which a hybrid working arrangement is possible without disruption to the delivery of our services.
Brunel is a powerful network of specialists connecting the most talented and experienced specialists with both present-day and pioneering projects. United with one goal: to deliver outstanding and intelligent solutions. Combined with our dedication to every single employee we pave the way for exceptional career opportunities.
| Category | Metric |
|---|---|
| Loyalty | 868k social followers |
| 264k returning website visitors | |
| Awareness | 179m impressions |
| Interest | 3.2m clicks |
| Desire | 268k new social followers |
| 1.2m website visitors | |
| Action | 326k Applications |
Our 2024 Vision encompasses a layered approach to enhance Global IT activities across our organisation, focusing on Compliance, Flexibility, Collaboration, and Efficiency:
This layer overarches all Global IT activities within the ‘Flexibility’, ‘Collaboration’ and ‘Efficiency’ layer to be compliant with the latest regulations.
This layer contains tools that stimulate flexibility in the way stakeholders could work within and outside the organisation.
Strategic items:
Tools of the ‘Flexibility’ layer stimulate collaboration, but the layer also contains tools that stimulate collaboration between the different stakeholder groups.
Strategic items:
Synergy between tools of ‘Flexibility’, ‘Collaboration’ and ‘Compliancy’ layer results in more organisational efficiency.
Strategic items:
We aim to provide best-in-class journeys for our clients and candidates. Supported by market leading digital services we deliver a positive experience with every touch point. By mapping the digital journey of our clients we identify dissatisfiers we can improve their journey step-by-step.
We have an active M&A strategy in place to accelerate our strategy execution and we allocate our own capital to support it.
Accelerating diversification strategy and market penetration in core markets through adding renewables and Life Sciences companies, showing fast growth or with large market share who most likely will operate in multiple regions.
Investment in businesses that add both knowledge and provide increased capabilities to Brunel, with the dual purpose of (i) Leveraging Brunel’s infrastructure and customer base (ii) Moving Brunel to a more value-add supplier and higher margin business. This focus is on high-end consultancy-based engineering specialists which have high value, high margin and good reputation in the Netherlands and DACH region.
Brunel recognises ESG as the practice of considering material environmental, social and governance issues in the business process. We are encouraged to align with the ESG approaches that are most relevant to the Professional & Commercial Service industry and that best suit the strategy we manage. Brunel’s ESG journey started from acknowledging the concerns about sustainability, i.e. environmental issues, labour issues and business decisions on how to not deplete the resources and how to keep our business on sound footing, followed by taking sustainability as part of Brunel’s strategy formulation 2018 as the first key milestone. We have been following through on our sustainability promises by creating long-term value, i.e.# report from the board of directors
Maximising local employment opportunities to build local economic growth (page 56), pursuing transparent and responsible tax governance and strategy (page 56), respecting human rights (page 55). Another key milestone in our ESG journey is creating an impactful sustainability strategy which covers the overarching social, environmental, and governance concerns in Brunel’s policies, practices, and decision-making.
Building a better planet for our future professionals
Build a better future for professionals
Integrity and compliance define our leadership style
In the meantime, we are fully aware that the corporate accountability is beyond implementing sustainability initiatives but also tracking their impact. In an effort to better calculate the results of our initiatives, we are moving towards more metric-based ESG criteria to track our social and ecological performance. This commitment will be executed through our updated strategy.
44 report from the board of directors
“ Our global footprint, combined with our local experience and industry knowledge, enables us to deliver best-in-class and compliant solutions that meet all our clients’ needs. We walk our clients through every phase of their projects, which is why we are a preferred partner for pioneering projects.”
Wouter Verloop
Global Head of Sales Enablement
45 Brunel International N.V. Annual Report 2023
In addition to measuring our own performance and direct impact, we also acknowledge that some of our clients operate in sectors with high environmental or social impact. Many of our clients in these sectors are progressively positioning themselves for the energy transition. We support our clients to take a role in transitioning to a low-carbon world by delivering the right skills. To lead the way on the world’s energy transition Brunel partnered up with Taylor Hopkinson, a trusted recruitment partner to renewable energy leaders that delivers market-leading solutions within the full life cycle of renewable energy projects. Together, we will create a diverse, global workforce that will support the world’s transition to sustainable energy – vital if we want to deliver our net-zero ambition. By combining Brunel’s extensive global footprint with Taylor Hopkinson’s deep sector knowledge, network and track record, we can set a new benchmark for service and quality.
In 2023, we have updated our global environmental policy. This policy prioritises Brunel’s social and environmental responsibility, overseen by executive leadership. Key commitments include carbon footprint reduction and adherence to international standards and legal regulations. Employees are encouraged to integrate environmental concerns into their activities, promoting sustainability across the company.
The Brunel Foundation was founded in 2012 by Maritska Aarts and Femke Dijkstra, two passionate Brunellers who shared the goal of doing good together. It has grown into a global foundation that supports Brunel’s ESG strategy and the UN Sustainable Development Goals, and continuously inspires us to positively impact the environment and contribute to a better society.
Mission: We help create a better future for professionals and a better planet for future professionals.
Purpose: Be a catalyst for change:
* Healthier planet - life on land and below water.
* Inclusive society - positively influence the labour market for people with autism.
How:
* We inspire and encourage our employees to contribute to society and make sustainable choices when and where they can.
* We create engagement on all levels, bottom up, capture and connect passion, talent & intrinsic motivation.
46 report from the board of directors
In line with our mission to safeguard the environment, different Trash ‘n Trace activities were set up in 2023. Brunel colleagues from various parts of the world rolled up their sleeves and joined forces in both group and individual clean-ups. Altogether they collected around 676 kg of litter. The numbers in the Global Trash ‘n Trace Challenge with Litterati grew to over 493,000 pieces of litter picked and registered.
In 2023 the size of our Brunel Foundation Forest has grown to a total of 19,000 trees, in 8 regions worldwide. Various regions have made tree gifting part of the onboarding process, as a gift for clients, candidates or at other events. In line with our ESG strategy, we’re supporting this initiative of reforestation by our trusted partner EcoMatcher, taking part in long-lasting climate action, contributing to making earth a greener planet.
Making sustainable choices is essentially about building new habits. All changes we make together daily, will impact the environment on a global scale. That’s why the Brunel Foundation inspires and encourages Brunel colleagues to make sustainable choices when and where they can. By means of sustainable corporate gifting, supporting Plastic Free July and upcycling of old Brunel materials, the foundation inspires Brunellers to take action to reduce their own environmental footprint.
The Brunel Foundation believes that involving kids at an early age in fun activities related to renewable energy is a great way to create awareness for the environment in general and to inspire them to join the industry later in life. Supported by Taylor Hopkinson, 1760 children across the world were set to learn about engineering, technology and renewables thanks to our partnership with OffshoreWind4Kids.
Meaningful change starts with increased awareness. That’s why the Brunel Foundation organised events such as webinars, panel discussions, AUT in the Brunel Office interviews and walk-in coaching sessions about autism. All with the aim to create mutual understanding, looking beyond prejudice and make each other successful. Don’t judge talent by its cover.
More and more people want to be part of something worthwhile, get behind something they believe in. In the upcoming years, the Brunel Foundation will keep on supporting Brunel’s ESG strategy by intensifying the impact of the four Planet pillars and our Autism focus for People. We will aim to extend employee engagement and the infrastructure of our activities to support the regions to do their bit in giving back. By means of surprising partnerships and innovative projects, the foundation wishes to inspire (future) professionals to create a more sustainable world, together.
47 Brunel International N.V. Annual Report 2023
We recognise the following ESG themes based on our double materiality assessment and keep improving on ESG performance by tracking its related metrics.
| Key themes | Metrics and topics | Reference |
|---|---|---|
| Environmental | Exposure to traditional (oil & gas) energy clients | |
| Contribution to the energy transition through clients | ||
| GHG emissions and energy consumption | ||
| Carbon footprint | Page 49 | |
| Percentage of electric cars in fleet | Page 49 | |
| Electricity use from renewable sources (%) or renewable electricity production (MWh) | Page 49 | |
| Energy consumption (MWh) | Page 49 | |
| EU taxonomy regulation | Page 51 | |
| Social | Employee safety & security | |
| Diversity, inclusion & belonging | ||
| Talent attraction, development & career opportunities | ||
| Labour conditions and human rights in the value chain (incl. candidates) | ||
| Leadership development | Page 37 | |
| Absenteeism | Page 53 | |
| (near miss) incidents | Page 53 | |
| NPS/employee satisfaction | Page 38 | |
| Retention rate | Page 13 | |
| Employee engagement | Page 37 | |
| Governance | Data privacy & cybersecurity | |
| Ethical business and compliance | ||
| ESG policy | Page 44 | |
| Anti-corruption/Bribery | Page 70 | |
| Whistle-blowing | Page 70 | |
| Code of Conduct | Page 54 | |
| Health & Safety | Page 53 | |
| Data protection & privacy | Page 56 | |
| ESG criteria included in remuneration | Page 110 | |
| Business Ethics – Respecting human rights | Page 54 | |
| Business Ethics – Tax strategy and governance | Page 56 | |
| Business Ethics – Local employment | Page 56 | |
| Reduce exposure to the conventional energy industry | Page 24 | |
| Sustainability as part of strategy – Brunel Foundation | Page 46 |
48 report from the board of directors
Given the potential for climate change to drive transformation across entire economic sectors, climate change plays an important role in our ESG Strategy. We retrieved insights into our own carbon emissions over the last year for which the main sources are our offices, road transport and air travel. In line with the Greenhouse Gas (GHG) Protocol, we collected the necessary data to calculate our own carbon footprint resulting in the figures below.
| Emissions(tCO2e) | Source | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Offices | 3,347 | 2,011 | 2,109 | 1,700 | |
| Road transport | 4,743 | 4,544 | 4,137 | 4,700 | |
| Air travel | 22,390 | 9,482 | 4,233 | 3,900 | |
| Total | 30,480 | 16,073 | 10,479 | 10,300 |
The Greenhouse Gas Protocol splits greenhouse gas emissions into three scopes:
| Emissions(tCO2e) | Source | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Scope 1 | 5,283 | 4,974 | 4,753 | 5,280 | |
| Scope 2 | 2,807 | 1,581 | 1,493 | 1,120 | |
| Scope 3 | 22,390 | 9,482 | 4,233 | 3,900 | |
| Total | 30,480 | 16,037 | 10,479 | 10,300 |
To drive down our own emissions, we have drafted a Carbon Reduction Plan outlining our actions to achieve net zero emissions. In coordination with all the offices in every region, we identified four main reduction measures that will be taken in the upcoming years:
Our aim is to realise all measures for all offices around the world. Nonetheless, we acknowledge that the context of every region is different and not every measure can be fully implemented in each region. The switch to green electricity is, for example, largely dependent on the availability of renewable energy and the charging infrastructure for electric vehicles is still in development in many countries. Given the nature of our own operations, a complete reduction of CO2 emissions is impossible. Since our specialists work at local and international companies, where often they need to be physically present,
“We leverage the latest technological advancements to enhance the experiences of our clients and specialists, and improve efficiency and engagement. We are confident that the coming year will bring even more opportunities to implement innovative solutions and further accelerate our progress.”
Alexander van Dijk
Global Head of Digital
business travel is responsible for a significant share of total emissions. To compensate for unavoidable emissions, we have developed an offsetting approach, through compensation projects. With the increase of business, also our CO2 emissions have increased. The offset for 2023 was 18.296 tCOs. We are currently re-aligning our offsetting strategy with our anticipated growth.
The EU Taxonomy establishes an EU-wide classification framework intended to provide businesses and investors with a common language to identify and report on to what degree economic activities can be considered environmentally sustainable through the creation of activity specific sustainability criteria. Under the requirements of the EU Taxonomy, companies currently in scope of Directive 2014/95/EU on the disclosure of non-financial information, which has been implemented into Dutch law through the Decree disclosure on nonfinancial information (‘Besluit bekendmaking niet-financiële informatie’), need to disclose the proportion of their activities that are taxonomy-eligible and taxonomy-aligned in terms of their turnover, Capital Expenditures (CAPEX) and Operating Expenses (OPEX) including certain qualitative information.
We have assessed the extent of eligibility as well as the alignment of our economic activities with the six environmental objectives: Climate change mitigation, Climate change adaptation, water and marine resources, circular economy, pollution, biodiversity and ecosystems as defined by Article 9 of the Taxonomy Regulation. Our assessment on the eligibility and alignment of our business activities with the Taxonomy is made based on EU Delegated Acts. For the assessment of eligibility, we consider the NACE macro sectors and activities listed in the Annexes for all the above-mentioned objectives, as published by the EU. Our revenue-generating activities still do not fall under any of the activities described in those Annexes as they mostly apply to specific sectors with high CO2 emissions. Consequently, the proportion of our current revenue that can be considered as Taxonomy eligible and Taxonomy-aligned is 0%. The applied denominator for EU Taxonomy turnover is defined as Revenue as disclosed in the consolidated financial statements. For the CAPEX and OPEX KPIs, our efforts to make our offices and facilities more sustainable through activities such as the implementation of energy management systems and energy efficient lighting, can be considered as eligible activities. Based on our assessment we identified 18 % (2022: 0% eligible and aligned) of CAPEX under the economic activity of renovation of existing buildings to be eligible but not aligned, and for OPEX, 0.02% (2022: 0% eligible and aligned) under the economic activity of operation of personal mobility devices, cycle logistic is eligible and aligned with the criteria of substantial contribution to climate change mitigation of the climate change mitigation objective. For assessing the extent of alignment, we reviewed the criteria in article 3 of the Regulation (EU) 2022/852 and the associated technical screening criteria included in the Delegated Acts. We identified the portion of our eligible activities that meet all technical criteria and can thus be considered as Taxonomy-aligned activities. Such activities are included as part of the numerators of the respective KPIs. We ensured that expenditures are not double counted and are only allocated once to each of the KPIs.
The denominator for the CAPEX KPI includes additions in Intangible assets, Property, plant & equipment (PP&E), and Lease assets, including reassessment. The denominator for the OPEX KPI is determined based the EU Taxonomy definition which covers direct non-capitalized costs that relate to operation of personal mobility devices, cycle logistics and any other direct expenditures relating to the day-to-day servicing of assets or property, plant and equipment. This differs from the total of operating expenses in our financial statements. Our assessment is based on our interpretations of how the regulation applies to our business activities and the impact thereof on eligibility and alignment. We will continue to assess our eligibility and the extent of EU Taxonomy alignment in 2024. Future guidance could result in more accurate definitions and altered decision-making in meeting reporting obligations that may come into force, which could impact future EU Taxonomy reporting. For the completed templates as provided by the EU Taxonomy Navigator can be found on pages 208-210, is considered part of our Report from the Board of Directors.
In 2023, we have built upon our 2022 pandemic experiences to prioritise the safety and well-being of our team, clients, and candidates. We have maintained strong HSE standards, adapting them to specific country, sector, and job requirements. Our updated Well-being, Health & Safety Strategy continues our mission to support well-being, health, and safety. In 2023, we’re focused on global process improvements. We continue to support remote work while emphasizing client and candidate interactions, providing HSE training and office equipment for a healthy work environment, whether on-site or remote.
Number and types of injuries
| All entities consolidated | 2023 | 2022 |
|---|---|---|
| Fatalities | 0 | 0 |
| Lost Time Injuries | 15 | 7 |
| Medical Treatment Injuries | 3 | 17 |
| Alternate Duties Injuries | 0 | 0 |
| Total Recordable Injuries | 18 | 28 |
We utilise the injuries and incident classifications which are commonly used throughout the world. In the event that Brunel is to report directly to a HSE Regulator or client then Brunel.
Number and types of incidents
| All entities consolidated | 2023 | 2022 |
|---|---|---|
| First Aid Injuries | 42 | 47 |
| Restricted Work Injuries | 8 | 22 |
| Near Miss Incident | 8 | 3 |
| Equipment Incident | 5 | 7 |
| Environmental Incidents | 0 | 0 |
| Total | 63 | 79 |
Absenteeism rate for directs and indirects the Netherlands and Germany
Considering the different stakeholder requirements, companies’ activities and safety related policies, the health and safety implementation in entities of Brunel Netherlands and Brunel Germany is relatively comparable. Therefore, we disclose the absenteeism (i.e.illness) rates of these entities.
| | 2023 | 2022 |
| :-------------------------- | :------ | :------ |
| Netherlands Directs | 4.33% | 4.93% |
| Netherlands Indirects | 3.84% | 4.02% |
| Germany Directs | 4.87% | 5.52 % |
| Germany Indirects | 3.22% | 4.11% |
At Brunel, one of our core values is “passion for people,” which underscores our commitment to respecting the human rights of all stakeholders throughout our value chain. We are dedicated to actively assessing potential human rights impacts and taking proactive measures to ensure that our influence on people’s lives remains consistently positive. As a collective group, we uphold the principles of the International Labour Organisation (ILO), recognising the significance of all fundamental human rights identified by ILO conventions. Brunel fully endorses these conventions, which encompass essential aspects of workers’ and individuals’ rights. These fundamental human rights are deeply embedded in Brunel’s organisational culture. Instead of treating human rights as a standalone issue, we seamlessly integrate them into various Brunel policies, including our code of conduct, equal opportunity policy, HSE policy, fitness for work policy, and privacy policy. These policies are accessible on our intranet, in our employee handbook and corporate website https://brunelinternational.net/corporate-governance/policies-and-procedures/default.aspx. We remain committed to upholding and promoting these fundamental principles and rights, reflecting our dedication to ethical and responsible business practices in alignment with the latest amendments made by the ILO in 2022.# Report from the Board of Directors
In this year’s annual report, we report on the human rights most applicable to Brunel throughout this report:
Brunel respects workers’ rights to join unions and complies with legal requirements in each country. Brunel’s operations vary in size, culture and industry. We have experienced different types of labour or industry union relationships. This means in some countries or industries, unions are more active than others. Therefore, we do not have a group policy but rather a general positive attitude towards trade union relationships. To enhance working relationships and reduce conflicts, we honour employees’ collective bargaining rights and promote regular communication. For instance, in Germany, we have a trade union agreement in line with the Equal Pay Act. In Australia, our local entity has established enterprise agreements under the Fair Work Act, covering aspects like salaries, employment conditions, consultation procedures, dispute resolution, and authorised wage deductions. Agreement implementation is part of project-specific HR management plans.
We strictly adhere to labour standards and prohibit forced labour, child labour, modern slavery, or any labour that violates ILO conventions. Our code of conduct emphasises this commitment, and we are continuously improving our efforts to prevent forced labour.
At Brunel, we have a strict zero-tolerance policy for improper conduct such as discrimination, harassment, and workplace bullying. We actively monitor compliance with non-discrimination regulations and have found no instances of noncompliance. All employees are expected to adhere to our policies on equal opportunity, anti-discrimination, and the prevention of bullying and harassment. Our core value of “passion for people” underscores our commitment to promoting equality and justice throughout our organisation.
We are committed to endorsing the ILO principle of effectively abolishing child labour, which entails ensuring that every child has the opportunity for full physical and mental development. In Australia, our local entity has established enterprise agreements with various industries and workers’ unions under the Fair Work Act framework. These agreements cover aspects such as salary rates, employment conditions, consultation processes, dispute resolution procedures, and authorised wage deductions, all of which are part of project-specific HR management plans. Given Brunel’s core focus on technical graduates and experienced professionals, the risk of violating the principle of child labour within our business is extremely minimal. Our dedication to ethical practices remains steadfast.
As an employer, Brunel provides comprehensive employment benefits, including medical insurance, paid sick leave, annual leave, and end-of-service benefits as mandated by local laws. Additional benefits, such as life insurance and accidental death and dismemberment insurance, are provided based on specific assignments. We also offer extra benefits, like return tickets to employees’ home countries, particularly for expatriates in the Middle East. Our business model focuses on highly educated and skilled professionals, allowing us to offer competitive salaries in all countries where we operate, including India, Africa, and Asia. This ensures a high standard of living for our employees.
Security concerns and conflict zones continue to be prominent in specific regions, notably Africa and Asia, where high-risk areas are prevalent and conflicts occur frequently. Brunel has established comprehensive policies and procedures designed to ensure the safety and security of our employees operating in these high-risk regions.
Privacy is a fundamental human right we respect. It is also an essential cultural element for Brunel to be a reliable business partner and earn the confidence of our people. Data is very relevant to Brunel’s core business especially in the global trends of digital transformation and data-driven innovation. Brunel commits to the GDPR standard as our guiding principles of data protection. Brunel has used the implementation of GDPR to strengthen our culture of privacy, for example, implementing policies and procedures to reduce human errors, actively monitoring data centre environment and maintaining it up-to-date. Moreover, we continue to raise the awareness of privacy risks among our employees when handling personal data in different business processes (“IT and digital related risks” page 69). In 2023, we have reported zero data breaches.
Brunel has a robust data privacy and cybersecurity framework in place, as evidenced by our ISO 27001 certification. This certification demonstrates our commitment to protecting sensitive information and ensuring the privacy and security of our stakeholders. Our certification has recently been renewed and will remain in effect until 2025, underscoring our ongoing commitment to best practices in data protection.
In some of our operating markets, there has been a focus on attracting existing local expertise and, where necessary, bringing in international specialists to train and develop the local talents of the future. Our operations in Kazakhstan, Papua New Guinea, Brazil and Thailand are good examples of maximising local employment opportunities to build local economic growth.
At Brunel, we believe in maintaining a transparent and ethical tax policy as a fundamental aspect of doing business. Our tax strategy supports our overall business strategy of delivering stakeholder satisfaction and achieving sustainable growth. Alignment with Brunel’s core value of integrity, which means adhering to both the letter and the spirit of external requirements from regulators and the law is monitored. We strive to demonstrate this level of corporate integrity in all of our actions and interactions with stakeholders, including customers, suppliers, employees, shareholders, regulators, and society. Our tax approach also takes into account our sustainability strategy, recognising that the taxes we pay are a vital financial resource in achieving our sustainability agenda, which is updated in accordance with the framework of the United Nations Sustainable Development Goals (UN SDGs). In the regular risk appetite discussions with both the Board of Directors and the Supervisory Board, global tax risk exposure and mitigating actions are also discussed, in conjunction with the reported compliance risks. Our tax strategy has been discussed and approved by the Board of Directors and reviewed by the Supervisory Board.
"Energy transition projects reflect our role in helping deliver key infrastructure to achieve a lower-carbon future. We are deploying our multi-disciplinary engineering and execution capabilities with over 25 years of experience in offshore pipelines and infrastructure, now supporting CC(U)S projects”
Jeroen van Drunen
Managing Director Europe & Africa and Global Sponsor Conventional Energy
In line with our business operations, Brunel has a transparent tax structure and does not utilize tax havens (as defined by the European Commission’s ‘blacklist’) for tax avoidance purposes. Complying with tax laws and paying our fair share of taxes is an essential component of our corporate social responsibility as it contributes to fostering economic growth in the countries in which we operate, particularly in developing countries. In addition to paying a substantial amount of corporate income tax, we also pay significant amounts in taxes such as wage taxes, withholding taxes, and value-added taxes. Given the nature of our business, wage tax is a significant area for us in terms of both compliance and the amount paid. As tax compliance is a crucial aspect of our service delivery, it is our policy to effectively manage associated risks and comply with all applicable tax laws, rules, and regulations. Transactions conducted between group companies located in different countries adhere to the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises and other relevant transfer pricing regulations. Our aim is to comply fully with both the letter and the spirit of the law. To that end, we employ qualified and experienced tax professionals, implement appropriate tax policies and procedures, regularly assess tax risks as part of our risk assessment process, and apply tax risk management using the same policies, procedures, and controls that govern financial reporting risk management. We also engage reputable tax advisors at both the local and group level to provide advisory and compliance services. We strive to establish open and transparent relationships with tax authorities in all countries in which we operate to provide certainty with respect to tax matters and ensure compliance with regulations. Brunel and a tax authority may enter into consultation with each other on tax-related issues and subsequently conclude tax agreements. Such agreements create advanced certainty for Brunel and tax transparency towards the relevant tax authorities, in line with our tax policy, which requires us to act in line with the letter and spirit of the law.# Report from the Board of Directors
Brunel conducts annual global employee surveys through the Meyer Monitor to assess motivation, strategy, diversity, inclusion, and business ethics as part of our commitment to regularly promoting ethical standards and accountability.
At Brunel, we prioritise upholding professional integrity and ensuring compliance with ethical standards through our Compliance Policy and Speak-Up Line. These measures ensure that our employees are equipped to address any concerns they may have and maintain a culture of transparency and accountability. Our commitment to ethical behaviour is continually updated with the latest standards to ensure that we remain a responsible and trustworthy organisation. Any Speak-Up Line reports are taken seriously and discussed with the global board, with actions taken with respect and integrity.
The Board of Directors supervises risk management for Brunel’s strategy and operations. Brunel entities identify and manage risks with support from regional financial control and the CFC department, following a global and regional steering model. The board regularly reviews the risk framework, assesses top risks, and communicates and implements actions throughout the organisation.
Brunel regards risk management as a value-creating activity, emphasising long-term sustainable management. The board places importance on controlling strategic, operational, compliance, commercial, and financial risks to achieve goals and ensure business continuity. Risk appetite is reevaluated annually to align with the evolving strategy.
Specifically, Brunel reinforces its management of fraud risks, given the increase in online business and data breaches. Measures include incident reporting, IT security, and raising employee awareness. Internal fraud risks are addressed in meetings of financial controllers. The board holds annual discussions on risk management with the audit committee, Supervisory Board, and external auditor.
In this reporting cycle, no material risks or uncertainties affecting Brunel’s continuity for the next twelve months have been identified.
The Board of Directors defines the risk appetite of Brunel, i.e. the level of risk that Brunel is willing to take in order to achieve its objectives, and sets the risk appetite by our strategy, code of conduct, company values, authority schedules and policies. The following risk categories fully align with Brunel’s strategy, purpose, vision and core values.
| Risk category | Risk description | Risk appetite |
|---|---|---|
| Strategic risks (S) | Risks which affect or are created by Brunel’s business strategy and could affect Brunel’s long-term positioning and performance | Low - moderate |
| Operational risks (O) | Risks which affect Brunel’s ability to execute its strategic plan | Low - moderate |
| Compliance risks (C) | Risks of non-compliance with laws, regulations, local standards, Brunel’s code of conduct | Zero tolerance |
| Financial and reporting risks (F) | Risks include areas such as financial reporting, valuation, currency, liquidity and impairment risks | Low |
Brunel has embraced COSO ERM’s updated guidance, “Integrating Strategy and Performance,” to seamlessly infuse risk management into our everyday business operations, aligning with our purpose, vision, and core values. In the previous reporting cycle, we applied this framework to enhance our practices across five critical areas: governance and culture, strategy and goal setting, performance, review and revision, and information communication and reporting.
Governance and culture
Effective governance and culture are essential for effective enterprise risk management. As a company listed on the Amsterdam Stock Exchange, Brunel adheres to the guidelines of Dutch law and the Dutch Corporate Governance Code for good corporate governance. Our risk management is integrated into our governance structure, resulting in a widely accepted code of conduct, a whistleblower procedure, compliance training for new employees, refresher courses for existing employees and on-the-job training programmes.
We assess the effectiveness and compliance with the code of conduct through:
* Periodic activities conducted within the internal control framework
* Reports received through the whistleblowing process
* Checks included in standard operating procedures, such as the contracting procedure
Results of these activities are reported to the Board of Directors, with any violations communicated to relevant corporate departments for appropriate action in line with policies. The Board of Directors, equipped with the necessary skills, experience, and business acumen, bears accountability and responsibility for risk oversight. Periodically, they visit our operating companies, sometimes accompanied by a controller from CFC, to facilitate complex decision-making, oversee financial progress, and monitor the realization of business objectives.
Strategy and objective setting
The Board of Directors plays a crucial role in ensuring that Brunel’s risk management framework, strategy, and objective-setting are integrated seamlessly into the strategic planning process. During the strategy execution phase, the updated risk appetite statement serves as the foundation for identifying, evaluating, and responding to risks.
Performance
We identify internal and external factors that may affect strategy execution, discussing key risks and risk assessments with our global leadership team, controllers, and management. We use this information to manage risks in alignment with our risk appetite.
Review and revision
The review and revision component of our risk management process focuses on monitoring performance. By effectively monitoring risk management, we gain insight into the relationship between risk and performance. All Brunel entities are required to comply with general policies, rules, and procedures designed to control risks.
Information, communication and reporting
Communicating our internal risk management and control systems throughout the organisation is an ongoing process. Effective communication also occurs at all levels of the organisation, both upward and downward as well as laterally. Each year, Brunel’s financial community holds an international meeting, attended by the CFO, CFC department, and all regional financial controllers, to discuss best practices and the latest developments in financial management and internal controls, and to implement action plans throughout the group.
The established policies, procedures, control, and monitoring activities include, but are not limited to the following:
| Risk category | Key risks | Monitor and control |
|---|---|---|
| Strategic risk | • Unfavourable macro-economic conditions /geopolitical situation • Competition • Dependency on key clients • Strategy updates |
• Annual business reviews |
| Operational risk | • Human capital risk • IT and digital risks • Productivity • Uniform IT systems |
• Contracting procedures • Weekly KPI reporting • Monthly management reporting • Quarterly business reviews • Site visits • Insurances |
| Compliance risk | • Compliance • Contract negotiations and management • Tax • Reporting and disclosures |
• Legal counselling • Anti-bribery and corruption policy and training • Contract approval policy and procedure • Internal control via business control |
| Financial and reporting risks | • Financial reporting • Financial risks • Uniform IT systems |
• Accounting and control manual • Internal control via business control • CFC department • Monthly reporting • Quarterly reviews • Treasury • Audit |
| Fraud risks | • Internal fraud risks • External fraud risks |
• Internal control • Awareness |
To maintain effective control of our current environment, Brunel evaluates residual risk, which signifies the remaining risk level after implementing existing risk response plans. Residual risk’s consequences may encompass significant direct or indirect adverse effects on Brunel’s business, operations, volumes, financial condition, performance, reputation, and other interests. In our report on page 63, we highlight and elaborate on our most prominent company-specific risks and the evolving trends in residual risk, assuming full implementation of our risk response plans. These risks and response plans are not exhaustive and may require adjustment from time to time.# Report from the Board of Directors
| Strategic risks | Operational risks | Compliance risks | Financial risks | Competition | Compliance | Productivity | Financial reporting | Contract negotiation and -management | Macroeconomics | IT and digital risks | Dependence on key clients | Human capital risks | Financial risks | Tax | Increased | Decreased | No change | High likelihood and impact | Medium likelihood and impact | Low likelihood and impact |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Brunel International N.V. Annual Report 2023
Our operations may be negatively impacted by adverse macro-economic conditions and global geopolitical situations in our main markets. Competition and our reliance on key clients and cyclical industries can affect profitability and market share. We consider these risks when developing and executing our business strategies. We regularly update and review our strategies for each operating unit to ensure alignment with our plan and establish financial and operational reporting procedures.
In our Capital Markets Day by the end of 2023, we communicated the progress of our global strategy execution, “Strategy 2025: Momentum — post-Covid profitable growth acceleration.” This update reintroduced our strategic pillars and key enablers for accelerated growth. The Board of Directors also re-evaluated the operating environment, reassessed key risks impacting the strategy, adjusted risk appetite, and implemented risk mitigation measures.
During the budget cycle, we conduct annual reviews of all businesses with support from the CFC department. Entities prepare their budgets, and the Board of Directors discusses business strategy, budget planning, and opportunities and threats with local management to achieve the budget. Approved budgets form the basis for setting local management targets. We maintain a list of key performance indicators relevant to successful strategy execution.
Risk description
Unfavourable macro-economic conditions and geopolitical instability can negatively impact Brunel’s growth and margins. These conditions may lead to lost sales, increased costs, employee safety concerns, and compliance risks.
Key aspects
* Dependency on countries – Brunel’s performance relies on the economic and geopolitical conditions in its operational countries
* Multiple major economies face the possibility of recession
* Inflation and political tensions: Higher inflation and slower growth can disrupt policymaking and escalate political tensions
* ESG expectations: Investors and stakeholders demand increased commitment to ESG principles, even amidst energy challenges. In mining, there’s a focus on metals vital for the green transition.
* Temporary downturn in the offshore wind sector
* Climate change and energy transition
Key mitigating measures
* Diversification and capabilities building
Brunel expands its service offerings by diversifying into new sectors, acquiring clients from emerging verticals, and expanding operations into promising business regions. Our robust portfolio now includes a range of solutions such as project and consulting services, workforce solutions, and global mobility solutions
* Maintain flexibility in cost structure globally
To mitigate the potential negative impact of adverse economic conditions, Brunel carefully controls the ratio of contractors to permanent employees within our secondment business, ensuring the optimal mix. Additionally, all newcomers to Brunel, whether internal or external hires, initially receive temporary contracts, with the possibility of transitioning to longer-term contracts based on their performance.
* Enhancing Timely Client Payments
All regions are actively initiating and implementing programmes to ensure timely payment from clients.
Change in risk
↑ Overall, despite the diminishing economic impact of Covid-19, the ongoing geopolitical conflict, supply chain disruption and high inflation continues to hinder complete global economic recovery, affecting growth in various industries.
Link to strategy
* Capabilities
* Diversification
Risk description
Actions by both existing international and local competitors, as well as emerging competitors, have the potential to undermine Brunel’s competitive advantages and adversely impact its financial performance.
Key aspects
* Margin pressure – intense competition puts pressure on our margins
* Service delivery – competition will try to match and beat our service quality
* Reputation – reputational damage for Brunel will drive our clients towards our competitors
* Disruptive technologies/business models – increasing use of social media for recruitment and a trend towards outsourced recruitment models, with associated margin pressures, can also adversely impact
Key mitigating measures
* Identify Differentiators:
Our sales teams acknowledge peer margin pressures. To mitigate competition, regions implement strategies like core discipline focus, niche identification, upselling to existing clients, and unique product development. Brunel enhances global talent sourcing and recruitment efficiency, fostering a specialist community that distinguishes us from peers.
* Improve Commercial Management:
Our regional commercial teams serve as primary contacts for tenders in their respective regions. We have enhanced contract approvals, risk analysis, and intercompany procedures, now fully operational.
* Margin Analysis:
We employ margin analysis as a decision-making tool at both project and sales team levels to optimise our profit potential.
Change in risk
- Our global connectivity and innovative solutions continues to distinguish us from competitors.
Link to strategic pillars
* Capabilities
* Diversification
Brunel International N.V. Annual Report 2023
Our ability to attract and retain qualified employees is critical to our success. Inability to do so could harm our business and inhibit our ability to operate and achieve growth. Improving productivity is also crucial and any failure to do so could have an adverse effect on our results of operations. Information technology systems are an essential component of our operations and any cyberattacks, systems failures, or other disruptions affecting these systems could have a negative impact on our business. The Board of Directors meets with the management team of each operating unit on a monthly basis to discuss performance. The agenda includes financial and operational performance, forecasts, risk management, and progress made in achieving strategic goals. Monitoring and controlling operational risk factors is integrated into the monthly control cycle.
Reporting:
We use various tools to assess our growth, productivity, profitability, working capital and cash flow as part of our planning and control cycle. Key Performance Indicators (KPIs) are used to measure and monitor performance against budgets, forecasts, the previous year, and our strategic goals. We have various reports in place to maintain full insight into performance and strategy execution.
Uniform IT systems:
Brunel has established a centralised IT infrastructure and unified applications for key business processes worldwide. This global setup ensures that all commercial and compliance information is stored and accessible in a secured Cloud environment. Key business processes are connected through customised system interfaces, enabling us to replace manual controls with automated controls. The IT organisation also emphasises the segregation of duties across all IT functions, further enhancing Brunel’s internal control system when managing third-party related potential financial risks. Our IT infrastructure is regularly reviewed to ensure it has the capacity to cope with a major data or system loss or security breach. We continue to invest in software and penetration testing to mitigate these risks. As part of the annual audit of the financial statements, we request our external independent auditor to perform audit procedures over cyber and IT security.
Contracting procedures:
In each region, the appointed risk manager monitors regional and local contracting procedures. The risk managers, who usually have rich experience in contracting, client requirements, and compliance with tax and other legislation, review all agreements or binding offerings to determine the risk factor. The risk depends on a number of factors such as margin, location, services, and insurance requirements. Every high-risk contract is reviewed by the global commercial team (which includes corporate legal) and must be approved by the global commercial director. The global commercial director reports to the Board of Directors on significant and high-risk contracts at least on a monthly basis. The global commercial team meets annually to share knowledge with each other and discuss commercial-related topics.
Insurances:
Brunel has an insurance manual in place, including insurance policies in the fields of employment relationships, liabilities, and business continuity. We regularly review insurable risks and our insurance policy coverage.
"We are consolidating our position as the world’s leading renewables recruitment and global mobility experts. Our focus is on greater growth and deeper specialism, further collaboration with Brunel colleagues across the regions, plus expansion of our Business Intelligence offering to our global client base”
Fiona McRae
General Manager
Taylor Hopkinson
Brunel International N.V. Annual Report 2023
Risk description
Our growth prospects are significantly reliant on key clients and their ongoing commitment to doing business with Brunel.# Key aspects
* Client Dependency: Given our reliance on a few major clients, the loss of one of these key accounts could have a detrimental impact on our business.
* Complacency: Historically, a significant portion of our business has been provided by our major accounts, fostering a complacent culture. This may further intensify our dependence on key accounts.
The main risk is our inability to create successors for key management personnel due to insufficient succession planning, a small top management team, and a scarcity of qualified managers internally. The shortage of qualified internal staff could limit further growth. This risk category also includes factors like employee engagement, talent development, skills availability, and turnover.
Information technology risks, including cyber-attacks, fraud, data breaches, and privacy issues, are increasing and can severely impact our reputation, finances, and operations. These risks also pertain to challenges in digital transformation.
Recruiting CRM platform:
* Efficiency advantages of the Microsoft Power Platforms and AI capabilities
* Centralisation of data and improvement of collaboration
* Strengthens and automates processes and provides actionable business insights
* Scalability and accessibility from anywhere
Global IT & Digital platform:
* Fully cloud based, Microsoft technology with best in class add on applications for the recruitment
* Enables collaboration across the globe
* State of the art recruitment technology provided by Mercury
* Marketing Automation by CM.com
* (Robot) Process Automation by Power Automate and UI path
* Realtime reporting and data analyses by Microsoft Power BI
* Security features of the Microsoft cloud, with implemented products like Microsoft Defender, Sentinel
* Data governance via Microsoft Purview
This is particularly relevant to our secondment business in Europe, where employment contracts are established through client agreements. The premature termination of deployed employees can lead to productivity loss. To address this promptly, we track daily productivity and provide weekly reports. Additionally, we monitor the following factors:
* Bench strength
* Absenteeism due to illness
Potential changes in employment laws could increase compliance costs and risks. Taking on high contractual liabilities without a solid delivery process can impact our business. Complex tax laws may lead to wage errors and higher compliance expenses. Effective compliance risk management starts with top-level management. Our internal control framework ensures organisation-wide assurance with flexibility for local adaptations. Brunel’s internal controls are regularly reviewed to identify and manage significant risks. They provide reasonable assurance, not absolute protection, against losses. Tax compliance is integrated to prevent unexpected tax charges. We encourage standard contracts and review high-risk ones with the corporate legal department per our global contract approval policy. Business integrity is a core value at Brunel. Our leadership and culture are deeply ingrained with these values, demonstrated through leading by example. Every new employee undergoes eLearning on our business principles and pledges to uphold them. To maintain ongoing compliance, we offer regular refresher training on our core values, business principles, and pertinent compliance policies. These policies are integral to both our onboarding process and refresher training, seamlessly integrated into our internal control framework.
Risk description
Failure to adhere to laws, regulations, and local standards, including tax regulations, can occur due to inadequate knowledge of specific jurisdictional provisions or their interpretational ambiguity, leading to potential penalties and reputational harm. To mitigate financial and reputational risks, Brunel ensures compliance with regulations across several key areas.
Key aspects
* Tax
* HR
* Legal
* Health and safety
* Anti-bribery and corruption
* Privacy and data protection
* Financial reporting
Key mitigating measures
* Increase and retain compliance knowledge: Provide regular trainings and update sessions to key personnel about changes in rules and regulations.
* Increase communication of business integrity: Our leadership tone is rooted in our core values, shaping our leadership style and defining our organisational culture. We have effectively promoted leadership by example, aligning it with our core values and business principles. This includes conducting annual knowledge-sharing meetings for our commercial staff and financial controllers, as well as delivering training on corporate policies.
* Using technology to manage compliance: Brunel regularly upgrades business systems to standardize sales and finance processes. We have Data Protection Officers to oversee GDPR compliance and privacy regulations. Our authorization matrix and ISMS ensure data security and business continuity by proactively managing risks.
Change in risk
− Potential future changes in employment laws and regulations may require costly compliance efforts and increase the risk of non-compliance. Our mitigation measures are designed to address this risk effectively.
Link to strategic pillars
* Our culture
Risk description
The possibility of entering onerous, unenforceable, or unclear contract terms can lead to non-compliance and increased costs. As we prioritise further growth and expand our client base, the risk of encountering such contracts has risen.
Key aspects
* Margin – Onerous or unfavourable contracts may exert pressure on margins
* Liabilities – Such contracts may also increase liabilities
* Insufficient client relationship management could reduce deal sizes while raising the cost of acquiring new clients
Key mitigating measures
* Improving commercial management by setting up regional commercial teams as focal points of contact for tenders, with improved contract approval procedures, pricing escalation procedures, risk analysis and assessment processes, and intercompany procedures. Development and promotion of sales transactions under the company generated contract templates. Material contracts undergo underwriter review for adherence to policy terms. Global insurance programme kept abreast of business requirements.
* Increasing awareness by improving awareness of client contract creation in sales operations and finance departments across different regions and standardising contract templates. Management ensures understanding of contract risks and their potential impact during contract negotiations.
* Managing contract obligations by improving visibility and control over fulfilment, expirations, renewals, and key events tracking.
Change in risk
− By effectively implementing additional initiatives focused on communication, procedures, and knowledge sharing within our mitigation measures, we can successfully reduce the growing risk. As a result, the residual risk remains unchanged.
Link to strategic pillars
* Capability building
* Disciplined execution
* Strong brand
The monitoring of internal risk management and control systems is an ongoing process of improvement at Brunel. The Board of Directors and local managers regularly review these systems through frequent communication between the Corporate Finance and Control (CFC) department and local financial management, as well as through weekly operational and monthly financial reports. The CFC department is composed of controllers with backgrounds in auditing, controlling, and consulting. The department reports directly to the Board of Directors, and its main activities include reviewing monthly reports of all entities, monitoring tax compliance, and conducting frequent visits to operating entities. During these visits, various aspects such as the accuracy of monthly reporting compliance with policies and procedures and follow-up on the external independent auditor’s finding from previous years are verified. CFC visits all operating entities of Brunel at least once every two years. Additionally, CFC advises local management on how to improve their internal risk management and control systems.
Brunel has implemented a comprehensive internal control framework, which is led by CFC. This framework has been shown to add value by identifying opportunities and standardising procedures. It also serves as a basis for the internal auditor to test the operating effectiveness of controls.
The Accounting and Control Manual is designed to prescribe accounting policies and reporting requirements to ensure accurate, timely, and complete reporting in a consistent manner throughout the group in accordance with IFRS. CFC updates this manual annually. The manual includes policies on reporting, valuation principles and definitions,
* internal control activities,
* authorization rules,
* tax compliance procedures,
* contracting procedures,
* and treasury procedures.
Internal audit: To strengthen the effectiveness of Brunel’s internal control system and risk management framework, an independent internal audit function has been implemented to provide objective assurance to the audit committee and senior management. This internal audit function uses a risk-based approach to assess and make recommendations on the effectiveness of existing controls. In 2023, the internal audit function was unable to complete all items of the internal audit plan. Going forward, additional regional support and selection of topics based on the risks and the expectations of the Audit Committee, are expected to make the performance of the internal audit function more efficient.
External audit: The external independent auditor is responsible for auditing Brunel’s annual financial statements. The independent auditor prepares findings in the form of (interim) board reports and reports them directly to the audit committee. The external independent auditor attends all meetings of the audit committee, and is also authorised to attend the general meeting of shareholders and address any questions raised.
Risk description
Brunel’s global operations expose us to diverse jurisdictions and intricate tax systems. Given the nature of our business, taxation constitutes a substantial portion of our expenses. As compliance is integral to our services, tax compliance represents a significant business risk for Brunel. Depending on the jurisdiction, tax regulations and interpretations can evolve, potentially leading to additional tax expenses.
Key aspects
* Additional cost
* Reputation damage
Key mitigating measures
* Formal procedures and monitoring systems around tax compliance: Updated procedures are available to all local offices. Depending on the tax type, monitoring is conducted by the commercial team, payroll team, and regional finance departments. The CFC conducts monthly reviews of all tax positions and manages tax regulations globally. Any new tax matters are promptly reported directly to the CFO.
* Engage reputable tax advisors: We have observed shifts in tax laws and interpretations, particularly in the developing countries where we operate. Local tax authorities have adopted a more opportunistic or even aggressive stance, resulting in unexpected tax claims, an excessive number of tax audits, and a reluctance to settle disputes outside of the courtroom. To mitigate these tax risks, we have engaged reputable tax advisors to ensure compliance.
* Training: Promote tax compliance training and seminars among relevant employees to ensure Brunel’s local knowledge remains current.
Change in risk
− Our implemented mitigating measure are able to manage the current tax risk.
Link to strategic pillars
* Disciplined execution
Risk description
Financial reporting risk can emerge throughout the organisation due to events, conditions, external and internal factors, as well as decisions made by individuals within the company. It can also stem from inaction.
Key aspects
* People - skills, knowledge and responsibilities
* Processes and procedures
* Information systems
Key mitigating measures
* Training - Provide relevant employees trainings to keep Brunel’s local knowledge up-to-date.
* Continuous improvement - Regional finance teams review and improve measures and controls for financial reporting risks regularly. Actions include addressing risks such as unclear responsibilities, inadequate skills and knowledge, and improving reporting processes and procedures for accuracy and timeliness.
Change in risk
− We have improved our internal controlling and monitoring to manage this risk.
Link to strategic pillars
* Disciplined execution# Annual Report 2023
“Our focus is to empower Life Sciences companies with tailored, dynamic, and adaptable workforce solutions, ensuring access to top talent and enabling the adoption of sustainable innovation for long-term success and industry excellence.”
Kerrianne MacMullin
Vice President Canada and Global Sponsor Life Sciences
74
Risk description
Fraud – An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.
Types of fraud:
* External fraud- coming from outside the organisation
* Internal fraud – coming from inside the organisation
Key aspects
Internal fraud
* Asset misappropriation
* Corruption
* Financial statement fraud
External fraud
* Fake president scam
* Man in the middle
* Phishing
* Impersonation/pretexting
* Diversion theft
* Ransomware
* Hacking
* Fraud on booking flights on Corporate Account
Key mitigating measures
Internal Control
* Execute all internal control activities
* During the annual controller meeting, CFO led the “fraud risk” discussion with all controllers.
Awareness
* IT audits, including hacking attempts and phishing emails among other approaches;
* Continuous updates of fraud/phishing attempts and annual refresher courses for data protection (includes phishing) to raise awareness;
* Any unusual payment requests from the members of the Board of Directors (CEO and CFO) or other Senior Management (Regional Directors, Country Directors, Regional Finance Controllers or Finance Managers) should be verified with CFC;
* Requests to transfer money to unknown bank accounts will never be sent by a single director, will never be sent without any proper documentation and will never be sent without the knowledge of any of the members of CFC;
* Any requests for authentication of bank details or for information on bank account details coming from bank officials should be verified with CFC and with previously known bank contact details;
* Requests to change the bank account details of (direct or indirect) employees or (IC) vendors and suppliers should be verified by phone making use of the already existing contact details of the designated party;
* A procedure should be in place to control changes in bank accounts for payments (four eye principle).
Risk description
Brunel is a reliable business partner with a limited amount of goodwill in our assets. Our most significant financial assets consist of accounts receivable, which are spread across more than two thousand clients. While we strive for timely collections, the possibility of uncollectible debts cannot be disregarded.
Key aspects
* Account receivables
* Accrued income
* Currency risks
Key mitigating measures
* Reduce the impact of legacy issue - To mitigate risk of delayed payments in certain regions, we have implemented an escalation matrix for accounts receivable follow-up, clear invoicing guidelines and stricter actions for outstanding accounts.
* Credit rating - We also perform routine credit risk reviews for our global customers, with a particular focus on new and top clients, to enhance visibility and explore potential mitigation strategies.
Change in risk − We have increased our account receivables collecting efforts to offset the increased risk on our customer’s side
Link to strategic pillars
* Disciplined execution
75
Brunel International N.V. Annual Report 2023
Brunel International N.V.’s understanding of corporate governance is based on applicable laws, the rules and regulations applicable to companies listed on the NYSE Euronext Amsterdam stock exchange and the Dutch Corporate Governance Code (the “Code”). The Code contains principles and best practices on the governance of listed companies and their accountability to their shareholders on this topic. The full text of the Code is available on www.mccg.nl.
This chapter describes the principal aspects of Brunel’s corporate governance structure and how the Code is applied. If applicable, explanations for deviating from the Code’s best practice stipulations are provided. The Board of Directors and Supervisory Board are responsible for maintaining the corporate governance structure and for ensuring compliance with that structure. They render joint account on these issues to the General Meeting of Shareholders. The Supervisory Board and Board of Directors’ regulations are published on the company’s website. The key aspects of Brunel’s corporate governance structure and compliance with the Code will be submitted for discussion at the 2024 Annual General Meeting. The corporate governance structure at Brunel and the deviations from the Code are based on current conditions and views within Brunel. Conditions may change which may lead to adjustments in the structure and in the way in which Brunel complies with the Code. Every substantial change to the corporate governance structure of the company will be submitted to the General Meeting of Shareholders for discussion on a separate agenda item. Brunel’s view and strategy on the central feature of sustainable long-term value creation and the realisation thereof, are explained in the report of the Board of Directors. The Board of Directors’ report also describes the company’s risk appetite and the integration of risk management and internal control systems into the work processes.
Every day, we are committed to an inclusive workforce, and we understand diversity and inclusion are essential for a successful working culture, business and community. Leading an inclusive culture is key to set the tone and example. Both the Board of Directors and the Supervisory Board acknowledge the added value of diversity in a broader context, and male/female diversity in particular. Brunel’s current diversity and inclusion policy, and the policy regarding the Supervisory Board and Board of Directors have been implemented with this in mind. The action plan specified measures to implement the policy and target figures for the Board of Directors and the sub-top. Because Brunel is a listed company, the company has a so-called appointment quota rather than a target figure for the Supervisory Board.
| Number | Target Percentage | |
|---|---|---|
| Members at year-end 2023 | 3 | |
| Women | 0 | |
| Target percentage of women | At least 25% | |
| Target percentage of men | At least 25% |
Considering the current composition, a target figure of at least 25% female representation in the Board of Directors is deemed appropriate and ambitious. Reaching a balanced male/female ratio is a challenge in the long term, because there are significant intervals between vacancies in the Board of Directors. In 2023, there were no vacancies. The Supervisory Board is responsible for the composition of the Board of Directors. In the event that there is a
76
report from the board of directors
vacancy in the Board of Directors, the Remuneration and Appointments committee will prepare and guide the selection procedure. In the commissioning, specific attention is paid to the female candidates: at least 50% of the candidates on longlists should be female. The Supervisory Board strives to have at least 50% of the candidates on the shortlist be female as well.
| Number | Percentage | Target Percentage | |
|---|---|---|---|
| Members at year-end 2023 | 16 | ||
| Women | 4 | 25% | |
| Target for women | At least 40% | ||
| Target for men | At least 40% |
The sub-top is composed of officers who are part of the senior management. As per year-end 2023, the sub-top comprised 17 employees, 5 of whom were female. The Board of Directors is responsible for diversity in the sub-top. Recruitment of candidates for the sub-top, defined as jobs that are part of the company’s GLT, is done by the business with guidance from the global People & Culture department. The latter department maintains the following guiding principles for recruitment that should broadly foster diversity:
* Working method in recruitment involving conscious focus on diversity when filling vacancies.
* The language used in vacancies will be focused on the target group: meaning men or women, cultural background or young people.
* Recruitment agencies are aware of our need for diversity in the workforce, without the need for concrete agreements.
* The aim is for at least 50% of the candidates invited, whether or not they were found through a search agency, are women. There is a caveat for this in that it is difficult for certain technical jobs, given the number of women with certain technical educations.
Brunel is bound by the legal assimilation quota for Supervisory Boards. There is no target figure for the Supervisory Board. As per year-end 2023, the Supervisory Commission consists of two men (66,6%) and one woman (33,3%), achieving the quota of at least one-third men and at least one-third women. In the profile is stated that the Supervisory Board seeks a balanced composition, taking into account the aspects relevant for the company, such as nationality, age, gender and background in terms of education and career experience. With regard to the male/female ratio, the Supervisory Board will act in line with legal requirements and the board endorses the goal of said legal requirements. If there is a vacancy in the Supervisory Board, the selection procedure will be prepared and guided by the Remuneration and Appointments committee. The selection will always be carried out by a search agency. In the commissioning, specific attention is paid to the female candidates: at least 50% of the candidates on the longlist should be female. The Supervisory Board strives to have at least 50% of the candidates on the shortlist be female as well. In the course of 2023, a vacancy for expansion opened up in the Supervisory Board. The selection process is in advanced stage but has not yet been concluded.# Brunel International N.V. Annual Report 2023
Just Spee will resign from the Supervisory Board after the 2024 General Meeting. For his replacement the selection process had been initiated.
Tasked with the management of the company, the Board of Directors is responsible for setting Brunel’s purpose, vision, strategy and focus on sustainable long-term value creation; execution of its implementation; taking responsibility for Brunel’s overall results and addressing corporate responsibility issues. The Board of Directors operates in accordance with the interests of Brunel and is to that end required to consider all appropriate interests associated with the company. The Board of Directors is responsible for complying with all relevant primary and secondary legislation, the risk profile associated with the strategy, the corporate responsibility issues relevant to the company, its financing, and its external communications. The Board of Directors is required to report developments on the abovementioned subjects to, and discuss the internal risk management and control systems with, Brunel’s Supervisory Board and its Audit Committee.
Brunel’s Articles of Association determine that the Supervisory Board consists of a minimum of three members. The Supervisory Board is charged with supervising the Board of Directors and the general course of affairs of Brunel, as well as advising the Board of Directors. The Supervisory Board evaluates the corporate structure and the control mechanisms established by the Board of Directors. In performing its duties, the Supervisory Board takes into account the relevant interest of the company’s stakeholders, and, to that end, consider all appropriate interests associated with the company. Members of the Supervisory Board perform their duties without mandate and independent of any particular interest in the business of the company. The Supervisory Board is responsible for the quality of its own performance and for this purpose annually reviews its performance. The responsibility for proper performance of its duties is vested in the Supervisory Board as a whole. Brunel ensures that there are structured reporting lines to the Supervisory Board.
The Audit Committee assists the Supervisory Board in fulfilling its supervisory responsibilities for the integrity of the financial reporting process, the system of internal business controls and risk management, the external audit process, the external auditor’s qualifications, independence and performance.
The Chair of the Supervisory Board ensures the proper functioning of the Board and its committees and acts on behalf of the Supervisory Board as the main contact for the Board of Directors. The Vice-Chair replaces the Chair when required and acts as contact for the other Board members concerning the functioning of the Chair. The Supervisory Board regulations and the resignation schedule are posted on the company’s website, www.brunelinternational.net.
The authorised capital of Brunel International N.V. is EUR 5,998,000 divided into 199,600,000 ordinary shares and one priority share. The par value of the ordinary shares is EUR 0.03 each. On 31 December 2023 the number of outstanding shares was 50,400,988.
The priority share, which has a par value of EUR 10,000, has been issued to Stichting Prioriteit Brunel, subject to the condition precedent that the majority shareholder loses its majority share in Brunel’s share capital. The priority share will be fully paid up as soon as the issue becomes unconditional. The protective stipulations are included in the Articles of Association of Brunel and are posted on the company’s website.
According to The Netherlands Authority for the Financial Markets (AFM) register on notification of substantial holdings, Brunel founder Mr J. Brand directly or indirectly holds a capital interest of approximately 60,05%, with corresponding voting rights.
report from the board of directors
“With core commodities being critical for the acceleration of the energy transition, we put a focus on accompanying our clients in a more sustainable approach, while improving their DIB practices and increasing their use of technology for safer and more efficient results.”
Tania Sinibaldi
Managing Director of Operations and Global Sponsor Mining
Brunel is required to hold an Annual General Meeting of Shareholders within six months after the end of the financial year in order to, among other things, adopt the Annual accounts and to decide on any proposal concerning dividends. Further to Dutch law, the release from liability of the members of the Board of Directors and release from the liability of Supervisory Board members for the performance of their respective duties during the financial year are also agenda items for this meeting.
Each shareholder has the right to attend General Shareholder’s Meetings, either in person or by written or electronic proxy, to address the meeting and to exercise voting rights, subject to the provisions of Brunel’s Articles of Association. An eligible shareholder has the aforementioned rights if registered as shareholder on the applicable record date as set by the Board of Directors. Each of the shares in Brunel’s share capital carries the right to cast one vote. Unless otherwise required by Dutch law or Brunel’s Articles of Association, resolutions are passed by a simple majority of votes cast by the shareholders present or represented at the meeting.
On 11 May 2023 the Annual General Meeting charged the external auditor with the task of auditing Brunel’s Annual accounts.
Amendment to Brunel’s Articles of Association can take place upon a proposal of the Board of Directors approved by the Supervisory Board and adopted by the General Meeting of Shareholders. A proposal to amend the Articles of Association must be stated in a notice convening a General Meeting of Shareholders. The proposal shall be passed upon an absolute majority of the votes cast in the General Meeting of Shareholders. The Articles of Association were last amended by the general meeting of shareholders of 14 May 2020.
The corporate governance statement (as referred to in article 2(a) in conjunction with articles 3 through 3(b) of the decree on additional requirements for annual reports and including the information required under Article 10 of the Takeover Directive can be found on the Company’s website www.brunelinternational.net.
report from the board of directors
Best practice provision 4.2.3
Information for analysts, shareholders, the press and other parties in the financial markets is provided in accordance with the relevant recommendations in the Code. However, Brunel does not entirely comply with the public nature of meetings, for example through transmission on the internet, as we believe this implies a disproportionate burden for our organisation.
Best practice provision 4.3.3
In 2005, the General Meeting of Shareholders decided to discontinue the adoption of the rules applicable to the full two-tier board structure (“structuurregime”). The Supervisory Board was granted the right to submit a binding nomination in the case of the appointment of Directors and Supervisory Directors. In deviation from best practice provision 4.3.3. such nomination may only be rejected by the General Meeting of Shareholders by means of a two-thirds majority of votes cast, representing more than half the issued capital. These criteria were prescribed as the Supervisory Board considered it necessary, considering Brunel’s specific circumstances, to ensure that its position is as strong as possible in the current structure.
In 2023 Brunel realised strong top-line growth across all regions as we leverage our capabilities and client relationships with both existing and exciting new clients to realise pioneering projects across the world. Whilst doing so, we improved our diversification into exciting markets where we see robust growth ahead. We remain therefore ambitious about our growth path, while also acknowledging that 2023 was not without its challenges. In particular, headwinds in Q4 particularly affected our results in Taylor Hopkinson and the DACH region and required quick action with an eye on the future. In Europe we show growth at a different rate due to a combination of a higher headcount, inflation and a lower productivity. Other regions, such as Australasia and Americas achieved strong growth while being vigilant on cost control.
Overall, revenue increased by 13% (18% organically) to EUR 1.3 billion (excluding the impact of working days, currencies, acquisitions and divestments). The gross margin decreased from 21.3% to 20.6%, mainly due to a change in the mix between the staffing business in Europe and the global regions. The increase in overhead expenses was 13% and is mostly driven by investments in our organisation to support continued revenue growth and inflation.
In our analysis, we have excluded € 4.8 million of one-off expenses to present the true operational performance of our business, resulting in underlying EBIT. The performance of the individual regions in this section is discussed on this underlying basis. This provides a clearer picture of our company’s ongoing profitability, as we exclude one-off costs which mainly related to restructuring costs in DACH.
Basic and diluted earnings per share (EPS) increased from € 0.58 in 2022 to € 0.63 in 2023. The effective tax rate for 2023 ended at 35.8% (2022: 35.2%). The direct headcount decreased from 11,083 at 31 December 2022 to 10,939 at 31 December 2023.# Report from the board of directors
| Brunel International N.V. | Total | Increase | Decrease |
|---|---|---|---|
| Revenue | 1,181,824 | 31,039 | 17,428 |
| 31,280 | 21,162 | -28 | |
| 1,331,535 | 20,035 | 0 | |
| -6,732 | 22,879 | 11,649 |
| Brunel International N.V. | EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 | Total | Increase | Decrease |
|---|---|---|---|---|---|---|---|---|
| EBIT | -9,111 | 30,578 | 60,874 | -21,203 | 61,138 | |||
| 2,018 | 60,874 | 1,961 | 399 | -1,522 |
Working capital increased by 20.0%. The increase is driven by the higher working capital requirement to support our revenue growth, but also a higher level of trade receivables. We are working on improving all facets of our credit control and collection efforts and will focus on reducing our TDO metric. Nevertheless, there is no material change in the (relative) amounts in the aging of accounts receivable or accrued income and based on discussions with the largest clients there is no concern on the collectability of outstanding positions (Refer to Note. 9 in the Annual Accounts, where the expected credit losses are disclosed). The net cash balance at 31 December 2023 is EUR 31.8 million (EUR 77.8 million per 31 December 2022), of which EUR 20.2 million is restricted (EUR 15.5 million per 31 December 2022). Overdraft facilities are in place to be able to fund continued growth or potential M&A activities. The goodwill on the balance sheet is tested for impairment annually and has sufficient headroom.
| -762 | -163 | -1,968 | 2,514 | -2,213 | -4,817 | 61,138 |
| 56,321 |
Brunel International N.V. Annual Report 2023
“In 2023, our achievements include expanding globally, establishing new entities in China and strengthening our Asian team with talented Brunellers. We successfully diversified our growing verticals, and now our focus is to transform exciting bids and opportunities into tangible success.”
Jon Proctor
Managing Director of Operations and Global Sponsor Renewables
| Revenue and EBIT development | ||
|---|---|---|
| Revenue | 2022 | 2023 |
| EBIT |
This region includes Germany with both its secondment and project business, as well as Switzerland, Austria and Czech Republic. The German economy had a rough year due to persistent inflation, high energy prices and weak foreign demand. In 2023 we continued our growth. For the full year, revenue increased by 8.7%. The gross margin slightly decreased in total with 0.9 ppt. Due to 2 working days less than 2022 the gross margin decreased with 0.7ppt (EUR 1.8 million). Compared to the fourth quarter of 2022 the growth in Q4 of 2023 the growth stalled due to the forementioned German economic circumstances. The operating expenses increased by 9.9%, mainly driven by increased staff and one-off staff related costs. As a result, EBIT decreased by 3.1% to EUR 23.6 million.
We expect a single digit revenue growth especially in Germany. Additional focus is aligning the organisation’s operational cost in line with growth.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 | Total | Increase | Decrease |
|---|---|---|---|---|---|---|---|
| -2,038 | -5,622 | 24,362 | 6,898 | 23,599 |
The Netherlands increased its revenue by 12% year on year. This was mainly driven by higher sales rates, higher headcount, and a higher share of freelancers (compared to own staff). This growth was achieved despite 2023 having one less working day than 2022. Gross margin decreased with 2.7 ppt due to the aforementioned freelancer split, wage inflation, and lower productivity due to a higher bench %. Operational costs increased by EUR 1.0 million, mainly as a result of higher staff costs. As a result, EBIT is EUR 0.2 million lower than last year.
We expect single digit revenue growth, driven by moderate headcount increases, and higher rates and productivity. There are also 2 additional working days in 2024. Inflationary pressures will continue to have an impact on staff costs.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| Total | Increase | Decrease | EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 |
|---|---|---|---|---|---|---|---|
| -5,217 | 16,489 | 16,652 | 6,072 | -1,018 |
This region includes Australia and Papua New Guinea. Our business in the region realised a growth rate in EBIT in excess of 60%, driven by increased project work and headcount mobilisation at our existing client base in combination with a mix of new clients. Next to growth in revenue and gross margin in the region, our operating costs increased as additional staff was hired in 2023 to support our operations, subsequently it resulted in EUR 2.0 million additional EBIT.
We expect to continue our positive trend in 2024 through a combination of top-line growth by continuing to leverage our relationships with existing clients, focusing on high-margin projects and leveraging on our operating capacities.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 | Total | Increase | Decrease |
|---|---|---|---|---|---|---|---|
| 870 | 5,267 | -2,128 | 3,250 | 3,275 |
The main countries in this region are Qatar, Kuwait, United Arab Emirates (Dubai) and India. Although the region achieved top-line growth, we did face challenges as a large project was completed sooner than anticipated and the commencement of a large infrastructure project in Qatar was delayed to 2024. Additionally, our gross margin declined by 2.6 ppts to 14.1% following a change in the client mix. To support growth in coming years, we did make an investment in indirect personnel. Movements in other operating costs were limited, resulting in EUR 2.0 million lower EBIT.
We are hopeful to achieve another year of top-line growth as exciting projects for clients in Qatar, Dubai and India fill our pipeline, but we also aim to improve our margins by participating in more markets and projects and by focusing on growth in recruitment revenue. To drive these results, we expect a trend reversal in our headcount development in this region early in 2024.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| Total | Increase | Decrease | EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 |
|---|---|---|---|---|---|---|---|
| -645 | 12,285 | 14,253 | 2,450 | -3,773 |
Key countries in the Asia region are China, Singapore, Japan, Malaysia, Thailand, and Indonesia. Our primary focus in the region remains centered on the construction of heavy equipment and components for the Energy industry, aligning with a notable upward trend in such projects. The region successfully translated a significant portion of increased volume into profitability, elevating the EBIT margin by 1 percentage point to 7% resulting in 27% more EBIT compared to last year. The growth is mainly driven by our operations in Indonesia and China.
Our outlook is continued growth, we attribute it to favorable market conditions aligning with our capabilities and further boosted by the integration of commissioning capabilities following the acquisition of ICE.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 | Total | Increase | Decrease |
|---|---|---|---|---|---|---|---|
| 11,873 | -4,743 | 9,359 | 3,577 | 3,679 |
The Americas grew significantly compared to 2022. Revenue increased by 21%, mainly driven by higher headcount and increased sales rates. This increase resulted in a gross profit increase of EUR +4.9 million (+25%). Opex increased with EUR 3.0 million, mainly driven by higher staff costs. EBIT was EUR 4.5 million, an increase of EUR 2.0 million (+76%) versus 2022.
For 2023 we expect revenue growth in the Americas to continue, with increased contractor headcount and recruitment revenues. Staff costs will increase to facilitate this growth, which will partially offset the anticipated increase in gross profit.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| EBIT 2023 | OPEX3 | Gross Margin impact | Volume impact | EBIT 2022 | Total | Increase | Decrease |
|---|---|---|---|---|---|---|---|
| -2,954 | 4,547 | 2,586 | 4,368 | 548 |
Taylor Hopkinson was acquired in December 2021. In the second year, Taylor Hopkinson contributed EUR 94.8 million to our full year revenue. Following the growth in 2022 investments in staff were made. From Q3 onwards, the off-shore renewable industry postponed investments due to increased investment costs (e.g. interest and materials). This was felt by an instant drop of recruitment positions to be filled, even though contracting revenue grew with 15.6%. EBIT percentage before acquisition related cost was -0.7% lower. The operating costs include EUR 2.4 million acquisition related expenses.
In co-operation with the Brunel subsidiaries, we expect growth in the renewable market as we continue to see a healthy pipeline of projects around the globe.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| Total | Increase | Decrease | EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 |
|---|---|---|---|---|---|---|---|
| -2,827 | -1,280 | -998 |
Rest of World includes Belgium and Europe & Africa. Until the divestment in June 2022, Rest of World also included the results for our activities in Russia until May, when we sold the activities to local management in May 2022.
We continue to see a healthy pipeline of projects in the regions, and we expect growth in these markets.
| Headcount development | ||
|---|---|---|
| 2022 | 2023 |
| Total | Increase | Decrease | EBIT 2023 | OPEX | Gross Margin impact | Volume impact | EBIT 2022 |
|---|---|---|---|---|---|---|---|
| -4 | 946 |
While Brunel achieved growth in most of its markets, it also achieved diversification through double-digit growth in, amongst other sectors, the Renewable Energy and Life Sciences markets.# Report from the Board of Directors
The Board of Directors is responsible for Brunel’s risk management and control systems, and for reviewing its effectiveness. The internal risk management and control systems, as described earlier, aim to manage the key risks that may prevent us from achieving our business objectives. However, the risk management and control systems cannot provide full assurance of preventing all control gaps, material misstatements, cases of fraud, or violations of laws and regulations.
In 2023, the Board of Directors has reviewed and analysed the strategic, operational, financial and reporting and compliance risks to which the group was exposed, and has reviewed the design and operational effectiveness of Brunel’s risk management and control systems. The Board of Directors shared the outcome of these reviews with the Audit Committee and the Supervisory Board, and discussed these with our external independent auditor. Brunel’s risk management and control systems should ensure consistent and reliable financial reporting, both internally and externally.
In accordance with the Dutch Corporate Governance Code, we have assessed the design and operational effectiveness of our internal risk management and control systems. Based on the activities performed during 2023, and in accordance with best practice provision 1.4.3, the Board of Directors considers that:
Following section 5:25c, paragraph 2, under c of the Dutch Act on Financial Supervision (Wet op Financieel Toezicht) the members of the Board of Directors confirm that to the best of their knowledge:
These 2023 Annual accounts give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole. This is in accordance with IFRS as endorsed by the European Union.
This annual report gives a true and fair view of the company’s position and the undertakings included in the consolidation taken as a whole as of 31 December 2023 and of the development and performance of the business for the financial year then ended. This annual report includes a description of the principal risks and uncertainties that the company faces.
Amsterdam, 23 February 2024
The Board of Directors
J.T. Andringa
P.A. de Laat
A.G. Maude
CEO
CFO
COO
We hereby present the report of the Supervisory Board for the year 2023.
The Supervisory Board has taken note of the report of the Board of Directors for the 2023 financial year. The Annual accounts and the notes thereto have been audited by Ernst & Young Accountants LLP, who provided an unqualified audit opinion. The Supervisory Board concurs with the Board of Directors’ proposal to pay out a dividend of EUR 0.55 per share. The Annual accounts will be submitted to the General Meeting of Shareholders for adoption by the shareholders on May 16, 2024. We recommend the General Meeting of Shareholders to adopt the Annual accounts and discharge the members of the Board of Directors.
The Supervisory Board supervises the strategy of the Board of Directors and the general course of business at the company and its affiliated enterprise and provides the Board of Directors with advice. The Supervisory Board not only focuses on the effectiveness of the company’s internal risk management and control systems and the integrity and quality of its financial reporting, but also on its policies regarding sustainability and safety. In the performance of its duties, the Supervisory Board acts in the interests of the company and its affiliated companies and in doing so takes into account the legitimate interests of the company’s stakeholders. The Supervisory Board also takes into account the social aspects of business operations that are relevant to the company. The Articles of Association of Brunel International N.V. and the Regulations for the Supervisory Board of Brunel International N.V. include rules with respect to board meetings and resolutions. The Articles of Association of Brunel International N.V. are available on the company’s website.
The Supervisory Board’s supervision of the Board of Directors includes aspects such as how the Board of Directors executes the strategy with a view to sustainable long-term value creation, the realisation of both financial and sustainability goals, the risks associated with business activities, the structure and operation of the internal risk management and control systems, the process of financial reporting, compliance with legal and regulatory requirements, shareholder relations, the activities of the Board of Directors with respect to the culture within the company, the operation of the reporting procedures related to abuses and irregularities and the social aspects of business operations that are relevant to the company.
Geopolitical tensions caused more military conflict and economic warfare. Inflation has risen globally, largely due to rising energy prices, interest rates have increased. The availability of materials and manpower also came under pressure. Until September, we continued our path of high organic growth in revenue, gross profit and EBIT. Brunel outperformed the European market trends but also experienced a slowdown in the last quarter of the year. We had continued strong profitable growth in Americas, Australasia and Asia. Unfortunately, inflation impacted the business case of certain US based offshore wind projects and public biddings in Europe, leading to a slowdown in the permanent placement business in Taylor Hopkinson in the second half of the year. Further, the profitability growth in our Middle East & India region was impacted by the earlier completion of one large project and the postponed start of another project. The strategic positioning, with focus on chosen global segments (Renewables, Conventional Energy, Mining and Life Sciences), continues to show positive indicators. Brunel is in a good position to continue on its course for growth while maintaining its industry-leading position.
In full alignment it has been decided that Graeme Maude (COO) will leave Brunel at the end of his 4-year term in May 2024. With his appointment in 2020, Brunel has undergone a strategic transformation. Graeme Maude has played a pivotal role in Brunel’s journey towards identifying diversified market potential, devising a comprehensive strategy, fostering new capabilities, and establishing a robust framework for growth including development of its internal talent pool. The organisation now requires a more focused operating model. In mutual agreement it has been decided that Graeme Maude will not be part of this new structure. In order to continue the successful strategic execution, it was decided to create a diverse and multi skilled leadership team. Setting up this new leadership team will also create career development opportunities for talented Brunel leaders, at multiple levels in the organisation, both short term and long term.
Beside the periodical financial performance reviews, topics discussed during the year under review were: risk assessment and risk management, fraud risk, the group’s working capital and cash position, M&A, vertical strategy, talent development, digitisation and cybersecurity. These discussions included presentations by the Board of Directors on strategy, operations and financial performance. The total equity/total assets solvency ratio of the company is 51.1% (2022: 58.1 %) and the cash position remains healthy. The national and international laws and regulations relating to the company cover areas such as employment, work permits, health and safety, anti-bribery and corruption, economic and trade sanctions, foreign exchange and taxes. The Supervisory Board has discussed how compliance with relevant laws and regulations can be ensured. Non-compliance is reported via the periodic consultation with the Supervisory Board. The Supervisory Board obtained information from the Board of Directors regarding the extent and nature of various regulations and how compliance is monitored internally.
Brunel’s strategy is focused on sustainable long-term value creation. In line with good governance practices, the Board of Directors updates the strategy regularly. Since the last strategy update in 2021, much progress has been made to realise our goals across our strategic pillars diversification, specialisation, capability building and disciplined execution. In 2023, the recalibrated strategy for 2024-2027 to drive us to further successes was presented. The Supervisory Board was closely involved in this process. The Supervisory Board has discussed subjects that touch on strategy and sustainable long-term value creation in practically all of its meetings.# report from the supervisory board
The Supervisory Board will monitor the implementation of the strategy.
The Supervisory Board was kept abreast of the developments in the field of Corporate Governance, the implementation of the Diversity at the top Act, and relevant national and European legislation on ESG-related matters.
Chair (b. 1961, male, Dutch)
Appointed: AGM May 2021
Current term: 2021 – 2025
Former main directorship: President of Signify Europe
Other directorships: Chair of the Supervisory Board of Deli Home B.V. Member of the Supervisory Board of Diagnostiek voor U Member of Topteam Sport - SportInnovator
Vice-Chair (b. 1965, male, Dutch)
Appointed: AGM 2017
Current term: 2021 – 2025
Former main directorship: CEO of Endemol B.V. CEO of Stage Entertainment B.V.
Other directorships: President of the Royal Netherlands Football Association (KNVB) Member Executive Committee UEFA Chair of the Supervisory Board of Stichting Nederlands Comite Unicef Vice-Chair of the Supervisory Board of Stichting OLVG Member of the Supervisory Board of Attractiepark and Camping Duinrell B.V. Member of the Supervisory Board of Asito Dienstengroep
Supervisory Board Member (b. 1963, female, Dutch)
Appointed: AGM May 2019
Current term: 2023-2027
Profession: Full Professor of Marketing and Director of the Marketing and Supply Chain Center at Nyenrode Business University
Other directorships: Member of the Supervisory Board of Royal KPN N.V. Member of the Supervisory Board of Vereniging Eigen Huis Member of the Supervisory Board of Fonds Gehandicaptensport Board member of Nederlandse Vereniging Poppodia en Festivals Member of the Supervisory Board of NLinBusiness
The General Meeting of Shareholders of 11 May 2023 reappointed Ms Koelemeijer as member of the Supervisory Board for a period ending at the close of the Annual General Meeting of Shareholders in 2027.
The members of the Supervisory Board are appointed for a term of four years and may thereafter be reappointed for another four-year period. They may then subsequently be reappointed again for a period of two years, which appointment may be extended at most two years. Candidates nominated for appointment or reappointment must meet the criteria as shown in the drawn-up profile.
The aim is to compose the Supervisory Board in such way that there is an appropriate measure of diversity as regards expertise, experience, competencies, other personal qualities, gender identity, age, nationality, and (cultural) background that best enables the Supervisory Board to discharge its various obligations in relation to the company and its stakeholders. The current composition of the Supervisory Board meets the legal quota. The diversity policy and plan of approach pertaining to the Board of Directors and Supervisory Board has been included in the governance report. Currently the Supervisory Board consist of one third of women.
In 2023, the Supervisory Board held six regular meetings of which two meetings Mr Spee was unable to attend. The meetings were attended by the entire Board of Directors except for two absences of Mr Maude. The scheduled meetings of the Audit Committee were held on the same days as the Supervisory Board’s meetings. Messrs. Spee and Maude were given the opportunity to express their view and to discuss the items on the agenda with the Chair prior to the meetings. The regular meetings were preceded by internal consultations within the Superviory Board. All members of the Remuneration and Appointments committee attended all meetings of said committee. The Supervisory Board further held six closed meetings that were not attended by the Board of Directors. Outside the regular meetings there was frequent contact between members of the Supervisory Board, as well as with members of the Board of Directors. The Chair of the Supervisory Board met with the Chief Executive Officer on a regular basis to discuss various issues, in particular the business situation, special business transactions and the overall situation of the Brunel group. The Chair of the Supervisory Board regularly informed the other members about the content of these meetings. The company’s external auditor attended the meeting in which the financial statements for 2023 were discussed.
| Supervisory Board members | Supervisory Board | Audit committee | Remuneration committee |
|---|---|---|---|
| F.I.M. (Frank) van der Vloed | 6/6 | 5/5 | 2/2 |
| Drs. J.J.B.M. (Just) Spee | 4/6 | 3/5 | 2/2 |
| Prof. Dr. ir K (Kitty) Koelemeijer | 6/6 | 5.5 | 2/2 |
According to the guidelines of the Dutch Corporate Governance Code (the ‘Code’), Brunel is not obliged to set up separate Audit, Remuneration and Selection and Appointment committees. However, Brunel has had an Audit Committee since 2001 and has opted to retain the structure. Since August 2018, all members of the Supervisory Board are also members of the Audit Committee. The entire Supervisory Board also serves as the Remuneration and Selection and Appointment Committees. By-laws and terms of reference for both the Supervisory Board and its Committees are posted on the company’s website.
The evaluation of the performance of the Board of Directors, and of its individual members was discussed in the absence of the Board of Directors.
At a private meeting, the Supervisory Board reflected on its own performance and that of its individual members, and members received individual feedback from the Chair of the Supervisory Board. In its own estimation, and in accordance with best practice provision 2.1.4 of the code, the Supervisory Board has a balanced composition of knowledge and experience. The composition of the Supervisory Board is such that the members can operate independently and critically vis-à-vis one another, the Board of Directors, and any particular interests involved within the meaning of best practice provisions 2.1.7, 2.1.8 and 2.1.9 of the Code. The evaluation for 2023 showed that the members of the Supervisory Board agree that there is an open, respectful attitude among them and between them and the Board of Directors, where the goal is always to find improvements for the company. In line with the use of the self-assessment, the decision was made to have the 2024 self-assessment led by an external party.
The Remuneration Committee met twice in 2023. The work of the Remuneration Committee focused on the 2022 performance and the individual performance reviews of the members of the Board of Directors, the preparation of the remuneration report 2022, amendment of the remuneration policy, and target setting for 2023. The remuneration report outlines the remuneration policy, provides a description of implementation of the remuneration policy, and sets out the remuneration of the members of the Board of Directors. The Annual General Meeting of 11 May 2023 did not provide any comments to the 2022 remuneration report. Further, the Annual General Meeting of 11 May 2023 approved the amended remuneration policy. The remuneration policy and 2023 remuneration report are posted on the company’s website.
The Audit Committee is chaired by Ms. Koelemeijer. All members of the Supervisory Board are also members of the Audit Committee. The Board of Directors, the internal auditor and the external independent auditor attend the Audit Committee meetings. The Supervisory Board selects the external independent auditor. The Audit Committee has a supervisory role regarding the integrity of the internal and external financial reports of the company, risk management, and information technology. The Audit Committee met six times in 2023: prior to the publication of the full-year 2022 figures, prior to announcing the quarterly results and to discuss the external independent auditor’s audit plan for 2023 and interim findings. The discussion on the scope of the audit included 2023 key audit matters as identified by the external independent auditor. Recurring items for the Audit Committee meetings such as risk assessment and risk management, tax compliance, IT systems, internal controls, compliance with laws and regulations, and the quality of the finance function were discussed. Furthermore, the set up and performance of the commercial team, that monitors and strengthens contractual risk management, has been evaluated.
The Annual General Meeting of 11 May 2023 appointed Ernst & Young Accountants LLP (EY) as auditor of the company’s Annual accounts for the financial year 2023.
From an internal control perspective, Brunel is organised in regions and countries. In each region and country, a finance director is responsible for internal control for the activities in his/her area. These finance directors meet with the CFO on a monthly basis. Furthermore, compensation and hiring/dismissal of these finance directors is the responsibility of the CFO in order to provide sufficient independence towards local general managers. Besides the local finance directors, Brunel has a separate team of controllers in Amsterdam in the Corporate Finance and Control (CFC) department. Core competences are auditing, reporting and controlling. The majority of the CFC team members have worked with a big four audit firm before joining Brunel.# report from the supervisory board
In addition to group reporting, CFC performs internal control activities, both in desktop reviews and during site visits. CFC also provides the group with accounting manuals and guidelines for internal control procedures, as well as a multiday global meeting with the local finance directors.
The internal auditor reports to the Audit Committee. The purpose of Brunel’s internal audit function is to provide independent, objective assurance and consulting services designed to add value and improve Brunel’s operations. The mission of internal audit is to enhance and protect organisational value by providing risk-based and objective assurance, advice, and insight. The internal audit function helps Brunel accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. The internal auditor reports functionally to the Audit Committee and administratively (i.e. day-to-day operations) to the Board of Directors.
Based on the size of Brunel and activities of the Corporate Finance & Control department, Brunel choose for a hybrid setup of the internal audit function. In 2023, the internal audit function completed most items of the internal audit plan. The topics that have not been completed will be reconsidered in 2024. Going forward, additional regional support and selection of topics based on the risks and the expectations of the Audit Committee, are expected to make the performance of the internal audit function more efficient.
During 2023, the Audit Committee also discussed with the Board of Directors the updated risk assessment that was performed by the Board of Directors in cooperation with commercial management and the regional finance directors. This concerns risks associated with the strategy and the nature of the business, and the way that the Board of Directors monitors the design and operation of the internal risk management systems. Risk assessment and risk management systems are being further embedded in the reporting structure to support decision making and achieving of strategic objectives in the coming years. The relevant risks to the company are described in the section “Risks, risk management and control systems” of this annual report.
In 2023, an update on the IT strategy was discussed as well as developments on existing IT infrastructure.
The Board of Directors informed the Supervisory Board on the processes for the preparation of the financial reports and how the quality of the financial reporting is monitored. Based on this and the report of the external independent auditor, the Supervisory Board believes the Board of Directors adequately interprets its responsibility for the quality of the financial information.
The Audit Committee has discussed the Annual accounts, annual report, Supervisory Board’s report, management letter and risk management policy with the Board of Directors and the external independent auditor. The Supervisory Board assessed the independence of the auditor. It was concluded that threats to independence are absent. The Supervisory Board believes that the external independent auditor provided the Supervisory Board with all relevant information in order to exercise its supervisory responsibilities.
The Supervisory Board discussed with the Board of Directors how to consider the interests of shareholders as well as the issues raised by shareholders at the last Annual General Meeting. The Supervisory Board believes that the company acted in a constructive and careful way regarding the shareholders’ interests.
Brunel International N.V. Annual Report 2023
The Supervisory Board approved the operational and financial objectives of the company, and also approved the strategy designed to achieve the objectives and the preconditions associated with that strategy. The Supervisory Board endorsed the Board of Directors’ efforts on corporate social responsibility and the particular aspects that are relevant to the enterprise. Furthermore, no matters occurred which, under the law, the statutes or the Code, requires the approval of the Supervisory Board.
In 2023, no matters occurred involving conflicts of interest of directors, Supervisory Board members, shareholders and/or external independent auditor that are of material significance to the company and/or the respective directors, members, shareholders and/or external independent auditor. Information on related party transactions is included under note 27 to the Annual accounts.
Amsterdam, 23 February 2024
The Supervisory Board
F.I.M. van der Vloed, Chair
J.J.B.M. Spee, Vice-Chair
K. Koelemeijer
Brunel International N.V. Annual Report 2023
The remuneration of the members of the Board of Directors is the responsibility of the Supervisory Board as a whole. Decisions by the Supervisory Board should be in accordance with the remuneration policy for members of the Board of Directors as approved by the General Meeting of Shareholders. Decisions regarding the remuneration of the members of the Supervisory Board are taken by the General Meeting of Shareholders.
The remuneration policy’s objective is to attract, motivate and retain qualified and expert executives to Brunel International N.V. (the ‘Company’ or ‘Brunel’), an internationally operating company that is listed on the stock exchange and specialises in the supply of flexible knowledge and capacity, and to contribute to the Company’s strategy, long-term interests and sustainability. The Supervisory Board believes that the remuneration policy expedites the short-term operational performance and the objectives for the strategy for sustainable long-term value creation within the meaning of best practice provision 1.1.1 of the Dutch corporate governance code (the ‘Code’). The Annual General Meeting of 11 May 2023 adopted the amended remuneration policy. The revisions relate to amendments of the STI, LTI, and total variable compensation as percentage of the fixed gross annual remuneration, and the replacement of LTI component Share Appreciation Right (‘SARs’) with performance shares. The amended remuneration policy is effective the fiscal year 2024 and is published on the Company’s website www.brunelinternational.net. In accordance with the requirements of Article 2:135a paragraph 2 of the Dutch Civil Code, the remuneration policy will be submitted for adoption to the General Meeting of Shareholders every four (4) years. The annual general meeting did not provide any comments to the 2022 remuneration report. The 2023 remuneration report will be provided to the shareholders meeting for a non-binding ‘advisory vote’.
The remuneration structure for the Board of Directors is designed to balance short-term operational performance with the long-term objectives of the Company, assuring that the interest of the members of the Board of Directors and Supervisory Board are closely aligned to those of the Company, its business and its stakeholders. The Company intends to offer the Managing Directors a remuneration package that is competitive to a relevant labour market peer group. To define this market a reference group of Dutch cross industry and European sector specific companies that are comparable in terms of size, is created. This reference group includes Arcadis, B&S Group, For Farmers, Fugro, Ordina, Sif Holding, Sligro, Vopak, Adesso, All for One, Allgeier, Amadeus Fire, Bertrandt, Ricardo, Robert Walters and Sthree The total compensation for members of the Board of Directors is defined in the remuneration policy as a combination of fixed compensation, variable compensation, pension and other benefits. In line with this policy, the Supervisory Board determines a total compensation level for each member of the Board of Directors, reflecting the specific roles, responsibilities, qualifications, experience and expertise of the individual. In addition to that, the remuneration committee conducts regular scenario analyses to determine the long-term effect of the level and structure of compensation granted to each Board Member. Each year the remuneration committee reviews these total compensation levels to ensure they remain competitive and provide proper and risk-based incentives. Based on the results of the annual competitiveness review and discussions with the Members of the Supervisory Board regarding their remuneration level and structure, the remuneration committee may recommend changes to the compensation levels. Before the remuneration policy as a whole is determined, and the level of remuneration of individual Board Members is fixed, scenario analysis are made of the variable remuneration components and the consequences that they could have on the level of remuneration of the Board Members. The level and structure of the remuneration of the Board Members is determined by reference to the scenario analysis carried out and with due regard for the employment conditions of the employees of Brunel, including their remuneration and the development of relevant pay ratios, compared to those of the Members of the Board of Directors and Supervisory Board. In determining the level and structure of the remuneration of Board Members, both financial and non-financial indicators relevant to the long-term objectives of the Company are taken into account.# Board of Directors
The members of the Board of Directors, and the dates of commencement of their board membership are:
In line with best practice provision 2.2.1, the members of the Board of Directors have been appointed for a period of four (4) years. The Members of the Board of Directors have an engagement agreement with Brunel International N.V. rather than an employment contract. The agreements with the Members of the Board of Directors include a termination arrangement, which is in line with best practice provision 3.2.3 of the Code. Either party to the engagement agreement may terminate the engagement agreement by giving six months’ notice.
The remuneration package, following the adoption of the remuneration policy, contains the following components:
The fixed pay supports the recruitment and retention of directors of the calibre required to implement our strategy. It reflects the individual’s skills, experience, performance and the role within the Company. The Supervisory Board determined the fixed compensation of the members of the Board of Directors for 2023 at:
108 remuneration report
Brunel believes that variable compensation strengthens the commitment of the Members of the Board of Directors to the company’s objectives, business strategy, risk tolerance and long-term performance. The variable component of the total remuneration package consists of short- and long-term components. Performance targets and conditions are derived from our strategy and annual business plans. The targets are assigned prior to the relevant year and assessment of realisation is conducted after year-end by the Supervisory Board. The aggregate annual variable remuneration for a Member of the Board of Directors, assuming the achievement of all applicable targets, objectives and conditions underlying such variable remuneration, shall not exceed 125% of the fixed gross annual remuneration of the CEO. For the other Member of the Board of Directors the aggregate annual variable remuneration shall not exceed 100% of their fixed gross annual remuneration.
The STI incentivises year-on-year delivery of financial, strategic and operational objectives selected to support the annual business strategy and the ongoing enhancement of shareholder value. The ability to recognise performance through an annual bonus enables to manage our cost base flexibility and react to events and market circumstances. The Supervisory Board ensures that the targets agreed are both challenging and realistic. The short-term bonus scheme for the members of the board of directors rewards both financial performance and individual performance. The financial targets (budget, sales, margin, profitability, EBIT and control of operating capital) reflect the financial parameters considered by the supervisory board to be critical with regard to the realisation of Brunel’s long-term objectives and strategy (total weighing 75%). The individual targets comprise objectives on professional growth and strategic milestones (total weighing 25%). The short-term bonus may not exceed 75% of the fixed annual compensation of the CEO. For the other board members the maximum short-term bonus opportunity is 50% of the fixed annual compensation. The realisation of each financial or individual target can independently result in bonus payment. The supervisory board allocates the bonus based on the achievement of the targets of members of the board of directors and determines the associated pay-out. The short-term incentive compensation is paid in cash.
Based on the results in 2023, the Supervisory Board has considered the extent to which the performance delivered meets the quantitative targets and also the individual targets have been assessed.
109 Brunel International N.V. Annual Report 2023
| % of total | Bandwidth | Actual Achieved CEO | Actual Achieved CFO | Actual Achieved COO | ||
|---|---|---|---|---|---|---|
| Financial targets for CEO, CFO and COO | ||||||
| Revenue of EUR 1,385 million* | 20% | 95%-105% | EUR 1,331 | 11% | 11% | |
| Underlying EBIT of EUR 70 million* | 40% | 95%-105% | EUR 61.1 | 0% | 0% | |
| Cash collection (TDO of 78 days)* | 15% | 78-80 days | 85 | 0% | 0% | |
| Individual targets for CEO | ||||||
| Vertical strategy - revenue growth for Renewable, Future Mobility and Life Sciences | 15% | 33% | ||||
| Candidate attraction & retention - implement reporting system | 10% | 10% | 10% | 10% | ||
| Individual targets for CFO | ||||||
| Cost efficiency DACH | 10% | 27% | 0% | |||
| Implementation CSRD | 10% | Partly 5% | ||||
| Improve investor relations | 5% | 0% | ||||
| Individual targets for COO | ||||||
| Growth of US business | 15% | 96%-104% | Partly 7.5% | |||
| Acquisitions - Presentation of at least 2 achievable, meaningful targets | 10% | 10.0% | ||||
| Total achieved | 36% | 16% | 28.5% |
* 50% of the potential for these targets is achieved when the bottom of the range is met. The remaining 50% is distributed equally over the range.
For the year 2023, the long-term variable component consists of a Stock Appreciation Rights (SAR) scheme. This scheme emphasizes the sustainable growth of operating profit and market share as well as the realization of the company’s long-term policies. SAR provide an incentive to the Directors to continue their employment with the company and serve to align the interests of the Directors with the long-term interest of shareholders and other stakeholders. The amount of SAR as long-term incentive is determined annually by the Supervisory Board based on the assessment of the long-term development of the company. The SAR term is five years and can only be exercised after a period of three years has passed since they were granted. The application of a vesting period encourages long-term thinking and long-term value creation. In this way an important part of the remuneration is directed at the longer term, which is in line with the company’s strategic vision of sustainable long-term value creation. If employment ends, the SARs will lapse.
110 remuneration report
In 2023, the following SARs have been granted:
| Director | Number of SARs | Exercise price in EUR |
|---|---|---|
| J.T. Andringa | 140,000 | 11.58 |
| P.A. de Laat | 95,000 | 11.58 |
| A.G. Maude | 95,000 | 11.58 |
The pension scheme for Members of the Board of Directors is a defined contribution plan. The contributions are fully borne by the company.
The company has issued no loans or guarantees to Members of the Board of Directors.
The Supervisory Board has the authority to claim back variable bonus compensation that has been paid out to the extent such payment was based on incorrect information, including financial statements, concerning the achievement of targets or the occurrence of circumstances that the bonus compensation was dependent on.
The table below summarizes the 2023 compensation elements of the members of the Board of Directors.
| 2023 (2022) in EUR | Base salary | Short-term bonus | Pension | Other benefits* | Share based payments ** | Total | Fixed proportion (%) | |
|---|---|---|---|---|---|---|---|---|
| J.T. Andringa | 625 (600) | 169 (391) | 15 (13) | 36 (36) | 113 (9) | 958 (1.049) | 69 (61%) | |
| P.A. de Laat | 445 (430) | 36 (176) | 12 (10) | 36 (21) | 95 (-17) | 624 (620) | 77 (73%) | |
| A.G. Maude | 445 (430) | 63 (187) | 17 (14) | 259 (36)*** | 110 (56) | 894 (723) | 54 (64%) |
* Represents a fixed allowance for expenses.
** Represents the fair value of options and SARs earned and/or forfeited as recorded in the profit and loss account for 2023.
*** In 2023 an amount of EUR 223k termination benefit is included. For the SARs granted in 2019, the intrinsic value was nil at the vesting date in 2022.
111 Brunel International N.V. Annual Report 2023
| SARs outstanding per December 31, 2023 | Year of granting | Exercise price in EUR | Fair value in EUR * | Exercise period ends in | |
|---|---|---|---|---|---|
| J.T. Andringa | 50,000 | 2019 | 12.78 | 2.18 | February 2024 |
| 15,000 | 2020 | 6.39 | 1.48 | July 2025 | |
| 40,000 | 2021 | 9.08 | 2.49 | February 2026 | |
| 70,000 | 2022 | 11.92 | 2.77 | February 2027 | |
| 140,000 | 2023 | 11.58 | 2.60 | February 2028 | |
| P.A. de Laat | 50,000 | 2019 | 12.78 | 2.18 | February 2024 |
| 15,000 | 2020 | 6.39 | 1.48 | July 2025 | |
| 40,000 | 2021 | 9.08 | 2.49 | February 2026 | |
| 50,000 | 2022 | 11.92 | 2.77 | February 2027 | |
| 95,000 | 2023 | 11.58 | 2.60 | February 2028 | |
| A.G. Maude | 40,000 | 2021 | 9.08 | 2.49 | February 2026 |
| 50,000 | ** 2022 | 11.92 | 2.77 | February 2027 | |
| 95,000 | ** 2023 | 11.58 | 2.60 | February 2028 |
* Reflects the fair value at the grant date.
** Will be forfeited upon Graeme Maude’s departure in May 2024.
The valuation model to calculate the fair value of the SARs is the Black and Scholes model. The reference dates are the date of granting, and precisely three years later. As per December 31, 2023, the SARs granted in 2019 and 2020 can be exercised. The share price at 31 December 2023 was EUR 11.18.
The movement of the SARs outstanding during 2023 is as follows:
| J.T. Andringa | P.A. de Laat | A.G. Maude | Total | |
|---|---|---|---|---|
| Balance at 1 January | 175,000 | 205,000 | 120,000 | 500,000 |
| Granted | 140,000 | 95,000 | 95,000 | 330,000 |
| Exercised | 0 | 0 | -30,000 | -30,000 |
| Expired | 0 | -50,000 | 0 | -50,000 |
| Balance at 31 December | 315,000 | 250,000 | 185,000 | 750,000 |
112 remuneration report
The Company has subsidiaries and consolidates the financial information of other Brunel companies. No remuneration was charged to or incurred by those subsidiaries in the financial year.
The pay ratio of CEO compensation compared to the average employee compensation during 2023:
| 2023 | 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|---|
| J.T. Andringa | 10.2 | 11.6 | 12.6 | 13.8 |
The term ‘pay ratios’ as referred to in best practice provision 3.4.1, section iv, is understood to mean the ratio between (i) the total annual remuneration of the CEO and (ii) the average annual remuneration of the employees of the company and the group companies whose financial data the company consolidates, where:
i.# the brunel share
Brunel International N.V. is a public limited liability company. Its authorised capital is EUR 6 million, divided into 199.6 million ordinary shares and one priority share. The par value of the ordinary shares is EUR 0.03 each. The par value of the priority share is EUR 10,000. The priority share has not been issued.
Brunel International N.V. ordinary shares are listed at the NYSE Euronext stock exchange in Amsterdam (ticker symbol BRNL). Since 2015, Brunel has been listed on the Amsterdam Small Cap Index (AScX). Since April 2011, options on Brunel shares have also been traded on NYSE Liffe, the derivatives market of NYSE Euronext.
The total number of shares outstanding on 31 December 2023 is 50,400,988 (2022: 50,400,988), giving a market capitalisation of EUR 563 million at that time.
According to the AFM register on notification of substantial holdings, Mr J. Brand, the company’s founder, directly or indirectly holds a capital interest of approximately 60.05%, with corresponding voting rights.
As at 31 December 2023, other than the interest of Mr. J. Brand, there were no other shareholdings that exceeded the participating interest treshold of 3% of the share capital or the voting rights of Brunel International N.V.
For this year we propose to the general meeting of shareholders to pay a dividend of EUR 0.55 per share.
| years end | high | low | Brunel Share price (EUR) | Share price development (EUR) |
|---|---|---|---|---|
| 2023 |
| EPS | Dividend (% = pay out ratio) |
|---|---|
| 71% | |
| 200% | |
| 200% | |
| 61% | |
| 0% | |
| 100% | |
| 97% | |
| 74% | |
| 95% | |
| 92% | |
| Brunel earning per share (EUR) |
8
Financial statements 2023
* Consolidated financial statements
* Consolidated balance sheet as at 31 December 2023
* Consolidated profit and loss account for the year ended 31 December 2023
* Consolidated statement of comprehensive income for the year ended 31 December 2023
* Consolidated cash flow statement for the year ended 31 December 2023
* Consolidated statement of changes in equity for the year ended 31 December 2023
* Notes to the consolidated Annual accounts
* Company financial statements
* Company balance sheet as at 31 December 2023
* Company profit and loss account for the year ended 31 December 2023
* Notes to the company balance sheet and profit and loss account
x EUR 1,000, before profit appropriation
| 31 December 2023 | 31 December 2022 | |
|---|---|---|
| Non-current assets | ||
| Goodwill (3) | 44,268 | 44,443 |
| Other intangible assets (4) | 24,657 | 21,259 |
| Property, plant and equipment (5) | 11,952 | 11,620 |
| Right-of-use assets (6) | 37,223 | 43,962 |
| Financial assets at amortised cost (7) | 6,717 | 8,689 |
| Investments accounted for using the equity method (8) | - | - |
| Non-current restricted cash (10) | 5,618 | 8,769 |
| Deferred income tax assets (22) | 17,265 | 14,725 |
| Total non-current assets | 147,700 | 153,467 |
| Current assets | ||
| Trade and other receivables (9) | 351,374 | 303,050 |
| Income tax receivables (22) | 7,429 | 2,994 |
| Restricted cash (10) | 14,556 | 6,768 |
| Cash and cash equivalents (10) | 90,225 | 80,861 |
| Total current assets | 463,584 | 393,673 |
| Total assets | 611,284 | 547,140 |
| Group equity (14) | ||
| Share capital | 1,517 | 1,517 |
| Share premium | 86,145 | 86,145 |
| Reserves | 182,140 | 187,627 |
| Unappropriated result | 31,652 | 29,390 |
| Shareholders’ equity | 301,454 | 304,679 |
| Non-controlling interest (14) | 11,081 | 13,138 |
| Total equity | 312,535 | 317,817 |
| Non-current liabilities | ||
| Provisions (11) | 7,129 | 6,750 |
| Deferred income tax liabilities (22) | 2,460 | 1,782 |
| Lease liability (6) | 27,028 | 32,449 |
| Other non-current liabilities (12) | 83,448 | 32,604 |
| Total non-current liabilities | 120,065 | 73,585 |
| Current liabilities | ||
| Lease liability (6) | 12,179 | 13,176 |
| Trade and other payables (13) | 150,098 | 130,629 |
| Income tax payables (22) | 16,407 | 11,933 |
| Total current liabilities | 178,684 | 155,738 |
| Total liabilities | 298,749 | 229,323 |
| Total equity & liabilities | 611,284 | 547,140 |
x EUR 1,000
| 2023 | 2022 | |
|---|---|---|
| Revenue (28) | 1,330,535 | 1,181,824 |
| Direct personnel expenses (17) | (1,056,953) | (929,708) |
| Contribution margin | 273,582 | 252,116 |
| Indirect personnel expenses (17) | (147,647) | (128,549) |
| Depreciation and amortisation (19) | (22,019) | (21,328) |
| Other expenses (20) | (47,595) | (41,365) |
| Total operating costs | (217,261) | (191,242) |
| Operating profit | 56,321 | 60,874 |
| Exchange differences (21) | (2,891) | (2,311) |
| Interest income (21) | 904 | 545 |
| Interest expenses (21) | (4,232) | (1,173) |
| Financial income and expense | (6,219) | (2,939) |
| Loss on disposal of subsidiaries (2) | - | (10,431) |
| Share of profit or loss of associates accounted for using the equity method (8) | - | - |
| Group result before tax | 50,102 | 47,504 |
| Tax (22) | (17,943) | (16,740) |
| Group result for the period | 32,159 | 30,764 |
| Net income attributable to equity holders of the parent (ordinary shares) | 31,652 | 29,390 |
| Net income attributable to non-controlling interest | 507 | 1,374 |
| Net income for the year | 32,159 | 30,764 |
| Basic earnings per share in euro (23) | 0.63 | 0.58 |
| Diluted earnings per share in euro (23) | 0.63 | 0.58 |
x EUR 1,000
| 2023 | 2022 | |
|---|---|---|
| Net income | 32,159 | 30,764 |
| Other comprehensive income | ||
| Items that may be reclassified subsequently to profit or loss | ||
| Exchange differences arising on translation of foreign operations | (7,832) | 9,284 |
| Income tax relating to components of other comprehensive income (22) | 732 | (634) |
| (7,100) | 8,650 | |
| Items that will not be reclassified subsequently to profit or loss | ||
| Actuarial gains/(losses) on defined benefit plans (11) | (255) | 733 |
| (255) | 733 | |
| Total other comprehensive income (net of tax) | (7,355) | 9,383 |
| Total comprehensive income | 24,804 | 40,147 |
| Attributable to: | ||
| Ordinary shareholders | 24,572 | 38,625 |
| Non-controlling interest | 232 | 1,522 |
| Total comprehensive income | 24,804 | 40,147 |
x EUR 1,000
| 2023 | 2022 | |
|---|---|---|
| Cash flow from operating activities | ||
| Result after tax | 32,159 | 30,764 |
| Adjustments for: | ||
| Income tax expense (22) | 17,943 | 16,740 |
| Depreciation and amortisation (19) | 22,019 | 21,328 |
| For the year ended 31 December 2023 | ||
| x EUR 1,000 | ||
| Cash flow from operating activities | ||
| Profit before tax | 85,190 | 70,080 |
| Adjustments for: | ||
| Depreciation and amortization | 6,536 | 6,558 |
| Impairment charges | 547 | 679 |
| Amortization of right-of-use assets | 14,237 | 15,056 |
| Provisions | 661 | 571 |
| Share-based payments | 1,723 | (190) |
| Loss on disposal of subsidiaries | - | 10,431 |
| Other non-cash expenses | 1,482 | 4,176 |
| Interest income | (904) | (545) |
| Interest expense | 4,232 | 1,173 |
| Exchange differences | 1,559 | 1,352 |
| Changes in: | ||
| Receivables | (53,853) | (49,818) |
| Provisions | 380 | (183) |
| Trade and other payables | 7,844 | 11,467 |
| Restricted cash | (5,230) | 3,790 |
| (50,859) | (34,744) | |
| Income tax paid | (19,193) | (23,563) |
| Interest paid | (3,379) | (754) |
| Interest received | 950 | 165 |
| Cash flow generated from operating activities | 7,733 | 26,333 |
| Cash flow from investing activities | ||
| Additions to property, plant and equipment | (2,998) | (3,088) |
| Additions to intangible fixed assets | (8,734) | (8,183) |
| Disposals of property, plant and equipment | 17 | 49 |
| Disposals of intangible assets | 3 | - |
| Acquisition of subsidiaries | - | (733) |
| Disposal of subsidiaries | - | (9,497) |
| Repayment of loans by third parties | 402 | - |
| Cash flow used in investing activities | (11,311) | (21,452) |
| Cash flow from financing activities | ||
| Dividend non-controlling interest | (2,222) | (2,240) |
| Dividend ordinary shareholders | (27,721) | (22,680) |
| Proceeds from drawing of loans and borrowings | 59,968 | 18,634 |
| Principal elements of lease payments | (14,008) | (14,731) |
| Cash flow used in financing activities | 16,017 | (21,017) |
| Total cash flow | 12,439 | (16,136) |
| Cash and cash equivalents at 1 January | 80,861 | 93,757 |
| Exchange rate fluctuations | (3,075) | 3,240 |
| Cash and cash equivalents at 31 December | 90,225 | 80,861 |
x EUR 1,000
| Share Capital | Share Premium | Translation reserve | Share based payments | Retained earnings | Unappropriated result | Attributable to ordinary shareholders | Non-controlling interest | Total | |
|---|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2022 | 1,517 | 86,145 | 3,511 | 237 | 165,827 | 30,999 | 288,236 | 13,693 | 301,929 |
| Net income | - | - | - | - | - | 29,390 | 29,390 | 1,374 | 30,764 |
| Exchange differences arising on translation of foreign operations | - | - | 9,136 | - | - | - | 9,136 | 148 | 9,284 |
| Actuarial gains/(losses) | - | - | - | - | 733 | - | 733 | - | 733 |
| Income tax relating to components of other comprehensive income | - | - | (634) | - | - | - | (634) | - | (634) |
| Total comprehensive income | - | - | 8,502 | - | 733 | 29,390 | 38,625 | 1,522 | 40,147 |
| Cash dividend (14) | - | - | - | - | (22,680) | - | (22,680) | (2,240) | (24,920) |
| Share based payments (15) | - | - | - | 470 | 28 | - | 498 | - | 498 |
| Acquisition of subsidiary (1) | - | - | - | - | - | - | - | 163 | 163 |
| Appropriation of result | - | - | - | - | 30,999 | (30,999) | - | - | - |
| Balance at 31 December 2022 | 1,517 | 86,145 | 12,013 | 707 | 174,907 | 29,390 | 304,679 | 13,138 | 317,817 |
| Net income | - | - | - | - | - | 31,652 | 31,652 | 507 | 32,159 |
| Exchange differences arising on translation of foreign operations | - | - | (7,557) | - | - | - | (7,557) | (275) | (7,832) |
| Actuarial gains/(losses) | - | - | - | - | (255) | - | (255) | - | (255) |
| Income tax relating to components of other comprehensive income | - | - | 732 | - | - | - | 732 | - | 732 |
| Total comprehensive income | - | - | (6,825) | - | (255) | 31,652 | 24,572 | 232 | 24,804 |
| Cash dividend (14) | - | - | - | - | (27,721) | - | (27,721) | (2,222) | (29,943) |
| Share based payments (15) | - | - | - | (143) | - | - | (143) | - | (143) |
| Gain on liquidation of subsidiary (12) | - | - | - | - | 67 | - | 67 | (67) | - |
| Appropriation of result | - | - | - | - | 29,390 | (29,390) | - | - | - |
| Balance at 31 December 2023 | 1,517 | 86,145 | 5,188 | 564 | 176,388 | 31,652 | 301,454 | 11,081 | 312,535 |
125
Brunel International N.V.’s main participations are listed below. These are included in the consolidated Annual accounts of Brunel International N.V. Unless otherwise stated, all these participations are, directly or indirectly, wholly-owned and Brunel has full or over half of the voting power. Some non-material participations are not included in the list.
Brunel International UK Ltd (registration number: SC66400) is exempt from the audit of its accounts under section 479A of the UK Companies Act 2006. Brunel GmbH (registration number: HRB 16935 HB) has made use of the exemptions under Section 264 (3) of the German Commercial Code. Brunel Car Synergies GmbH (registration number: B 31858) has made use of the exemptions under Section 264 (3) of the German Commercial Code. Brunel Service GmbH & Co. KG (registration number: HRA 26399 HB) has made use of the exemptions under Section 264b of the German Commercial Code. The company has issued joint and several liability statements in accordance with Section 403, Part 9, Book 2 of the Dutch Civil Code for all Dutch subsidiary companies, mainly serving as subholding companies.
126
Brunel International N.V., registered at the chamber of commerce under number 24261450, public limited liability company incorporated and domiciled in Amsterdam, the Netherlands and listed on the Euronext Amsterdam. Approximately 60,05% of the capital interest is held by Noverhead Holding Sàrl, a company owned by Brunel’s founder Mr. J. Brand. The head office of the company is located in Amsterdam, the address is:
John M. Keynesplein 33
1066 EP Amsterdam
The Netherlands
The consolidated Annual accounts of Brunel include the company and its subsidiaries (together referred to as ‘Brunel’). A summary of the main subsidiaries is included on page 127 of this report. The Annual accounts were signed and authorised for issue by the Board of Directors and released for publication on 23 February 2024. The Annual accounts and the dividend proposal are subject to adoption by the General Meeting of Shareholders on 16 May 2024. Unless stated otherwise all the information in these Annual accounts is in thousands of Euro, which is the Company’s functional currency. All financial information presented in Euro has been rounded to the nearest thousand. Brunel’s activities are mainly contracting and recruitment services. (more than 90% share in the overall revenue).
The Annual accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and also comply with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code. The Annual accounts have been prepared under the historical cost convention, unless indicated otherwise.
Brunel has prepared the financial statements on the basis it will continue to operate as a going concern.# Annual accounts 2023
The consolidated Annual accounts include the financial information of Brunel International N.V. and its subsidiaries. Subsidiaries relate to companies controlled directly or indirectly by Brunel International N.V. These companies are listed on page 127. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The results of acquired or disposed companies are consolidated from the date on which control is transferred and the date the control is ceased, respectively. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from Brunel’s equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Subsequent to an acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of the Company.
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
The excess of the:
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.
129
When a company or business is acquired, the acquirer recognises goodwill as an asset. Goodwill is recognised for the future economic benefits arising from assets acquired that are not individually identified and separately recognised. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. Impairment of goodwill will be tested at least annually. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Changes in ownership interests in subsidiaries that do not result in loss of control are dealt with in equity. Goodwill is allocated to groups of cash-generating units for the purpose of impairment testing. The allocation is made to those groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
Goodwill at acquisition date is measured as:
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in the profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
The recoverable amount is based on the higher of the fair value less cost of disposal and value in use. The value in use is determined by means of cash flow projections based on the actual operating results adjusted for non-cash items (mainly depreciation) and the expected future performance. The latter is based on management’s estimates and assumptions of revenue growth and development of operating margins, assessed with external data.
Acquisition-related intangible assets (customer databases and trade names) that are acquired by the group and have definite useful lives are stated at cost less accumulated amortisation and impairment losses. When an intangible asset is acquired in a business combination, its cost is the fair value at the date of its acquisition. This cost is determined on a basis that reflects the estimated amount that the entity would have paid for the asset in an arm’s length transaction between knowledgeable and willing parties, based on the best information available.
Amortisation of acquisition-related intangible assets is charged to depreciation and amortisation on a straight-line basis over their estimated useful lives, from the date they are available for use. The residual values and useful lives are reviewed at each balance sheet date and adjusted, if appropriate. Refer to note 4 Other intangible assets for further details.
Acquired software (licences) and developed software are stated at cost less accumulated amortisation and impairment losses. Expenditures in relation to the development of identifiable and unique software products used by the group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets and amortised over their estimated useful lives. Capitalised costs include personnel expenses of software development and an appropriate portion of relevant overhead. Expenditures associated with maintaining computer software programmes are recognised as an expense when incurred. Amortisation of software applications is charged to depreciation and amortisation on a straight-line basis over their estimated useful lives, from the date they are available for use.The residual values and useful lives are reviewed at each balance sheet date and adjusted, if appropriate. Acquired computer software licences are amortised, using the straight-line method, over their useful lives.
Property plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditures that are directly attributable to the acquisition of the assets. Depreciation of property, plant and equipment is charged to operating expenses on a straight-line basis over their estimated useful lives, from the date they are available for use. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised as other income or expenses in the consolidated profit and loss account.
Associates are all entities over which the group has significant influence but not control, generally accompanying 30 Annual accounts 2023 a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The group’s investment in associates includes goodwill identified on acquisition. This equity method includes the carrying amount of the investment together with all other long-term interests.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
The group classifies its financial assets in the following measurement categories:
* those to be measured subsequently at fair value (either through OCI or through profit or loss), and
* those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership. For the write off-policy refer to note 9 of the financial statements.
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:
* Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.
* FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/
131 Brunel International N.V. Annual Report 2023 (losses), and impairment expenses are presented as separate line item in the statement of profit or loss.
* FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
The group subsequently measures all equity investments at fair value. Where the group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the group’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
Brunel from time to time enters into put-call option arrangements as part of acquisition transactions. The present value of the portion of the put and call options that is unconditional upon recognition is recorded as a liability as per the date of the contractual agreement, with the corresponding loss being recognised directly in equity. The group initially recognises put/call option assets and liabilities over non-controlling interest at the present value of the expected redemption value. Subsequently they are measured at amortised cost using the effective interest method. Where the exercise price of the option is conditional and requires continued service by the holders of the non-controlling interest, it is accounted for as a post-combination benefit in accordance with IAS 19.
The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables, see note 9 for further details.
Trade receivable and other receivables are initially measured at the amount of the transaction price. Subsequent measurement is at amortised costs less provision for impairment. For the provision for impairment, the group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 1 January 2023 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. In addition to the expected credit loss assessment the group also applies judgement for the write-off of receivables where it is reasonably certain that the collection will not take place.
In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
Cash and cash equivalents include cash in hand and deposits held at call with banks.For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in trade and other payables in the balance sheet. If the cash in hand and/or deposits do not meet the criteria of cash and cash equivalents, it is classified as restricted cash.
Provisions are recognised for legally enforceable or constructive obligations as a result of a past event and for which the settlement is likely to require an outflow of resources and to the extent these can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at an interest rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the obligation.
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Restoration provisions are recognised for rented real estate objects where the group is, after lease contract expiration, liable to bring the object back to its original state. Estimated amounts for legal claims are provided for at the lowest amount at which the group expects the claim to be reasonably settled. Provided amounts for legal claims are categorised to be settled within one year after the balance sheet date, unless the group has the right to defer settlement for more than one year.
Provision for illness
In accordance with applicable legal requirements, the Group recognises liabilities for other long-term employee benefit plans, such as schemes related to illness and long-term disability. Where long–term disability benefit depends on the length of service of the employee, an obligation arises as the employee renders service, which is to be measured according to the probability that payment will be required and the length of time for which payment is expected to be made. If, however, the level of benefit is the same for all disabled employees regardless of years of service, the expected cost is recognised only when an event causing disability occurs.
Pension obligations
The group operates various post-employment schemes, mostly defined contribution pension plans and two defined benefit plans. For defined contributions, the Group’s obligation is limited to the payment of these annual contributions. The contributions constitute net periodic costs for the year in which they are due and are included in personnel expenses and/or cost of services. The liability recognised in the consolidated balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. The interest cost is calculated by applying the discount rate to the balance of the defined benefit obligation. This cost is included in employee benefit expense in the consolidated profit and loss account. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in other reserves in the consolidated statement of changes in equity and in the consolidated balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the consolidated profit and loss account as past service costs.
Loans and borrowings
Loans and borrowings are initially recognised at fair value less attributable transaction costs. Subsequent to initial recognition, loans and borrowings are stated at amortised cost. Any difference between the proceeds and the amount to be repaid is recognised in finance costs during the term of the borrowings, using the effective interest method.
Other non-current liabilities
Long-term liabilities are recognised initially at fair value, net of transaction costs incurred. Long-term liabilities are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated profit and loss account over the period of the long-term liabilities using the effective interest method.
Trade and other payables
Trade and other payables are initially stated at fair value and subsequently measured at amortised cost using the effective interest method.
Foreign currency and exchange differences
Monetary balance sheet items denominated in foreign currencies are translated at the rates of exchange prevailing at the balance sheet date; profit and loss account items are translated at the average rates during the financial year. Exchange differences relating to transactions in foreign currency are recorded in the exchange differences. Exchange differences due to the consolidation of foreign companies are charged or credited directly in other comprehensive income to the translation reserve. For the purpose of presenting consolidated Annual accounts, the assets and liabilities of the group’s foreign operations are translated into Euro using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period.
Functional and presentation currency
The group operates in countries with different currencies. All companies have, as their functional currency, the local
133 Brunel International N.V. Annual Report 2023
currency of the country in which they operate, which is their primary economic environment. The functional currency of the parent company, as well as of the majority of its subsidiaries, is the Euro. The translation reserve comprises all translation differences arising from the translation of the net investment in activities in currencies other than the Euro. Such translation differences are recognised initially in other comprehensive income and presented in this separate component of shareholders’ equity and recognised in the consolidated statement of profit and loss on disposal of the net investment. The translation reserve also includes the tax effect on translation differences.
Repurchase and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserves. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium.
Share-based payments related to long-term incentive plan
Brunel has a share-based payment arrangement under which a performance share plan is offered to the senior management (excluding Board of Directors) of the company. These awards are settled in ordinary shares. The fair value of deferred shares granted to employees for nil consideration under the short-term incentive scheme is recognised as an expense over the relevant service period, being the year to which the bonus relates and the vesting period of the shares. The fair value is measured at the grant date of the shares and is recognised in equity in the share-based payment reserve. The fair value is calculated based on the Black-Scholes option valuation model. The number of shares expected to vest is estimated based on the non-market vesting conditions. The estimates are revised at the end of each reporting period, and adjustments are recognised in profit or loss and the share-based payment reserve. Where shares are forfeited due to failure by the employee to satisfy the service or non-market vesting conditions, any expenses previously recognised in relation to such shares are reversed effective from the date of the forfeiture. The deferred shares are acquired by the Brunel International N.V. in June 2021 and are held as treasury shares until such time as they are vested.
Share Appreciation Rights (SAR)
The SAR scheme is a cash settled plan. The fair value of these SAR’s is charged to the indirect personnel expenses from the grant date through vesting date. The fair value of the SAR is determined at every year-end based on the Black-Scholes option valuation model. At each balance sheet date, the group revises its estimates of the number of SAR’s that are expected to become exercisable subject to continued employment based on this non-market vesting condition. The impact of the revision of original estimates, if any, is recognised in the indirect personnel expenses with a corresponding entry to liabilities. The SAR liability relates to SAR’s granted by the group to its employees under its SAR scheme. The SAR’s granted are conditional upon continued employment. The vesting period is three years. The SAR’s can be exercised during two years after vesting on condition that the employee is still in the service of the company. Due to the cash settlement method of the SAR’s, the rights are subject to a mark-to-market valuation exercise to measure the fair value on the specific balance date. When (re)measuring the fair value on the reporting date, the expected life of the right is determined based on the expectation regarding exercise behaviour of the participants.# Exercise behaviour is influenced by for example share price development.
The group recognises revenue for contracting and secondment over time as the group’s customer simultaneously receives and consumes all of the benefits provided by the group. When the group is the principal in a transaction and thus controls a promised service (employment of contractors) before transferring that service to clients (hours worked), the transactions are recorded gross in the consolidated profit and loss account. If the group acts as an agent and is not the employer and thus only arranges for another party to provide services to customers, revenues are reported on a net basis. Recruitment revenue is recognised once the service has been completed, being in principle when the candidate starts and the customers starts to benefit from the group’s services. For fixed price contracts, the group takes on the responsibility for the execution (on top of supplying manpower). In some cases the group creates or enhances an asset that the customer controls as the asset is enhanced or created. In other cases the group does not create an
asset with an alternative use and the group has an enforceable right to payment for performance completed to date. The group recognises the fixed price contract revenue over time. The revenue is measured at the amount of consideration to which the group expects to be entitled to. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds four months. The transaction price is therefore not adjusted for the effects of a significant financing component.
Under rendering of services the performance obligation is providing temporary personnel. The following types of revenue are recognised;
The group uses practical expedient and does not disclose the amount of the remaining performance obligations for contracts with original expected duration of less than one year in accordance with IFRS 15.B16.
Direct personnel expenses relate to costs attributed directly to the services provided. Indirect personnel expenses relate to costs attributed directly to the group’s internal staff.
Contribution margin is defined as revenue minus direct personnel expenses.
Foreign currency transactions are translated into the functional currency at the exchange rate applicable at the date of the transactions. Currency translation differences resulting from the settlement of these transactions and the translation of the monetary assets and liabilities denominated in foreign currency at the balance sheet date are recognised in the exchange differences in the consolidated profit and loss account. Foreign exchange differences relating to bank balances are recorded in the financial income and expense, other foreign exchange differences are recorded in the operating profit.
Interest income comprises interest received on outstanding deposits and interest costs comprise interest due on funds drawn, calculated using the effective interest method and interest on lease liabilities, calculated using the incremental borrowing rate.
Pension plans prevailing within the group are mostly defined contribution plans, which are funded through payments to independent entities. The group has no legal or constructive obligations to pay further contributions if these separate entities do not hold sufficient assets to pay all employees the pension benefits relating to employee service in the current and prior periods. The regular contributions constitute net periodic costs for the year in which they are due and are included within direct and indirect personnel expenses.
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Government grants where the primary condition is that the group should purchase, construct or otherwise acquire non-current assets (including property, plant and equipment) are recognised as deferred income in the
Brunel International N.V.
Annual Report 2023
Annual accounts and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the group with no future related costs are recognised in profit or loss in the period in which they become receivable.
The group leases various offices, cars and other office equipment. Rental contracts are typically made for fixed periods of 6 months to 8 years but may have extension options as described below. Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of property where the group is a lessee and the consideration on lease and non-lease components or the stand-alone prices are not clearly stated, it has elected not to separate lease and non-lease components and instead account for these as a single component. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use-asset and a corresponding lease liability at the date at which the leased asset is available for use by the group. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use-asset in a similar economic environment with similar terms and conditions. To determine the incremental borrowing rate, the group:
The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use-asset. Lease payments are allocated between principal and finance costs. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use-assets are measured at cost comprising the following:
Right-of-use-assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Payments associated with short-term leases of property, cars and other office equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a term of 12 months or less. Low value assets comprise IT equipment and small items of office furniture. Some property leases contain variable payment terms, usually subject to inflation corrections.
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Extensions and termination options are included in a number of property, cars and other office equipment leases across the group. These are used to maximise the operational flexibility in terms of managing the assets used in the group’s operations.# The majority of extension and termination options held are exercisable only by the group and not by the respective lessor. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). For leases of property the following factors are normally the most relevant: • If there are significant penalties to terminate (or not extend), the group is typically reasonably certain to extend (or not terminate); • If any leasehold improvements are expected to have a significant remaining value, the group is typically reasonably certain to extend (or not terminate); • Otherwise, the group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. Most extension options in cars and other office equipment leases have not been included in the lease liability, because the group could replace the assets without significant cost or business disruption.
The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes tax liabilities where appropriate on the basis of amounts expected to be paid to the tax authorities. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using applicable rates. Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Annual accounts and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to funding items charged or credited directly to equity, in which case the related deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
The consolidated cash flow statement has been prepared according to the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments including paid or received interest, and items of income or expense associated with investing or financing cash flows.
137 Brunel International N.V. Annual Report 2023
Operating segments have been identified on the basis of internal reports about components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. Chief operating decision maker consists of the chief executive officer, the chief financial officer and the chief operating officer. Information reported to the group’s chief operating decision maker is focused at components engaged in providing services in a particular economic environment and line of business from those of other segments. A geographical segment is engaged in providing services in a particular economic environment which are subject to risks and returns that are different from those segments operating in other economic environments. The group attributes revenue to countries based on the geographical location of the entity that delivers the service. In vast majority of cases this location is the same as where our professionals perform work for our clients. The main operating segments are: DACH (Germany, Austria, Switzerland and Czech Republic), The Netherlands, Americas, Australasia, Europe & Africa, Middle East & India, Asia and Taylor Hopkinson. This is the basis on which internal reports are provided to the chief operating decision maker for assessing performance and determining the allocation of resources within the group. All regions exceeding 10% of total revenue, EBIT or assets are reported separately. The remaining regions are combined in Rest of World.
In the preparation of Annual accounts, management makes certain critical accounting estimates and assumptions concerning the future. The resulting reported amounts will, by definition, rarely equal the related actual outcome. Estimates and judgments are continually evaluated and are based on historical experience and various other factors, including expectations of future events, which are believed to be reasonable under the circumstances. The following estimates, assumptions and judgments have an inherent significant risk of potentially causing material adjustments to the carrying amounts of assets and liabilities within the next financial year. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period or in the period of the revision and future periods if the revision affects both current and future periods.
The group tests whether intangible assets have suffered any impairment, in case of triggering events and at least annually for goodwill. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.The recoverable amounts of cash-generating units have been determined using, amongst other instruments, value-in-use calculations. These calculations require the use of estimates. Based on these impairment tests, impairment losses, if any, are identified. However, should the actual performance of these cash-generating units become materially worse compared to the performance based on the estimates, possible impairment losses could arise, or could deviate from the detected impairment losses. This impairment loss or deviation could have impact on the carrying amounts of the intangible assets. For the impairment testing of goodwill, refer to note 3.
The group has receivables on third parties in numerous countries. Significant judgment is required in determining the collectability of the receivables. The group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Refer to note 9.
The group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide deferred tax asset on, amongst other items, tax losses carry-forward. There are many uncertain factors that influence the amount of the tax losses carry-forward, especially the expected future taxable profits. The group recognises deferred tax assets on tax losses carry forward based on their best estimates. When the actual results are different from the amounts that were initially estimated, such differences will impact the income tax in the consolidated profit and loss account and the deferred tax assets and/or deferred tax liabilities in the period in which these deviations occur. Refer to note 22.
The group’s objectives when managing capital are to: • safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
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• maintain an optimal capital structure to reduce the cost of capital In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.# Capital Risk Management
Consistent with others in the industry, the group monitors capital on the basis of the net cash/(debt) position: At year-end 2023 Brunel’s net cash/(debt) balances are as follows:
| Capital risk management | 2023 | 2022 |
|---|---|---|
| Non-current restricted cash (10) | (10) | 5,618 |
| Restricted cash (10) | 14,556 | 6,768 |
| Cash and cash equivalents (10) | 90,225 | 80,861 |
| Loans and borrowings | -78,590 | -18,634 |
| Total net cash/(debt), excluding lease liabilities | 31,809 | 77,764 |
Under the terms of the bank loan the group is required to comply with financial covenants (refer to note 12). The group complied with these covenants throughout the reporting period.
The dividend policy of the group is aimed at maximising the distributions to the shareholders, while reserving enough capital to ensure the ability to continue as a going concern and to fund planned growth. The group’s strategy is to use existing cash and cash flows instead of long-term credit facilities to finance further growth. Refer to note 14 for the final dividends.
No changes compared to the previous period with relation to the capital management strategy.
Brunel’s activities are exposed to a variety of financial risks, including foreign currency exchange rates and interest rates. The group’s overall risk management programme focuses to minimise potential adverse effects on the financial performance of the group. This programme is implemented and carried out under policies approved by the Board of Directors.
Brunel maintains sufficient cash to fund its ongoing operations. In addition the company has availability of funding through a committed credit facility to minimise liquidity risk (refer to note 12). Within the group derivative financial instruments are not used nor are hedging activities undertaken. The department Corporate Finance & Control monitors the worldwide cash position. For the maturity analysis on leases, trade account receivable and provisions, refer to notes 6, 9 and 11.
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x EUR 1,000
Currency fluctuations affect the consolidated results, because a portion of the cash flow is generated in other currencies than Euro. The group limits the foreign exchange risk by maintaining a back-to-back policy, meaning that the management strives to have both income and expenses to be generated locally in the same currency. Due to the back-to-back policy, the foreign exchange risk of the group is limited to the exchange risk over the results in foreign currencies and the trade receivable and cash positions in foreign currencies. The foreign currencies that can have a material effect on the consolidated profit and loss account of the group are the US dollar and the Australian dollar.
The carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
| Assets | 31 December 2023 | 31 December 2022 | Liabilities | 31 December 2023 | 31 December 2022 |
|---|---|---|---|---|---|
| US Dollar | 110,139 | 74,458 | US Dollar | 10,894 | 9,424 |
| Australian Dollar | 30,590 | 26,263 | Australian Dollar | 8,558 | 6,242 |
| 140,729 | 100,721 | 19,452 | 15,666 |
The following table details the group’s sensitivity to a 10% increase and decrease in the Euro against the relevant foreign currencies. These percentages represent management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a change in foreign currency rates. A positive number below indicates an increase in profit and other equity when the Euro weakens 10% against the relevant currency. For a 10% strengthening of the Euro against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.
| US dollar Impact 2023 | US dollar Impact 2022 | Australian dollar Impact 2023 | Australian dollar Impact 2022 | |
|---|---|---|---|---|
| Profit or loss | 648 | 482 | -74 | 17 |
| Other equity | 5,236 | 4,394 | 2,307 | 2,218 |
| Total equity | 5,884 | 4,876 | 2,233 | 2,235 |
| Revenue | 22,101 | 19,175 | 14,825 | 13,606 |
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. The group has no significant concentrations of credit risk. The most important items on the consolidated balance sheet that are imposed to credit risk are the trade and other receivables. The trade accounts receivable include an allowance for expected credit losses (refer to note 9). Generally, services are provided to large and financially strong companies. In order to minimise credit risk exposure Brunel intensively monitors the payment behaviour of its customers. Internal policies limit the amount of credit exposure to any financial institution. Despite these internal procedures, uncollectible debts cannot be ruled out, but the risk of a material erosion of the operating profit is small. Receivables will be written-off when clearly uncollectible due to bankruptcy or other similar factors. In any case, as long as
140
Annual accounts 2023
no bankruptcy or court ruling has occurred, the group will continue chasing debtors to receive the outstanding amount.
As per 31 December 2023 the largest receivable against a single counterparty amounted to EUR 22.9 million (31 December 2022: EUR 17.0 million). For 2023, largest revenue from transactions with a single external customer amounted to EUR 95.1 million (2022: EUR 60.7 million).
The group has performed a sensitivity analysis on the credit loss rates, by calculating multiple scenarios, which gave no reason to increase the credit loss rates. Also, compared to 2022, there are no material changes in the (relative) amounts in the aging buckets, meaning the aging of the accounts receivables has not significantly changed, where the biggest portion is in the first buckets (67% is not due yet, and 17% is overdue by 1 month). The total days outstanding (TDO) has slightly increased compared to 2022. In discussions with the group’s most significant clients, no indications of uncollectibility were received.
The maturities of financial liabilities as at 31 December 2023 are expected to be:
| Carrying amount | Within 1 year | 2 - 5 years | More than 5 years | |
|---|---|---|---|---|
| Lease liabilities | 39,207 | 12,179 | 23,581 | 3,447 |
| Loans and borrowings | 78,590 | 0 | 78,590 | 0 |
| Put-option liabilities | 13,192 | 8,334 | 4,858 | 0 |
| Trade and other payables | 140,285 | 140,285 | 0 | 0 |
| Other liabilities | 1,479 | 1,479 | 0 | 0 |
| Total financial liabilities | 272,754 | 162,277 | 107,029 | 3,447 |
Due to the nature of the group’s business the operating cash flows are substantially independent of changes in market interest rates. The general policy is to keep interest rates on net debt floating as much as possible. We believe this adds value for shareholders in the long term, as over time floating interest rates are on average significantly lower than fixed interest rates.
If the interest rate had been 1 percentage point higher on average during 2023, with all other variables held constant, net interest expenses for the year would have increased by EUR 0.6 million.
If the interest rate had been 2 percentage points higher on average during 2023, with all other variables held constant, net interest expenses for the year would have increased by EUR 1.3 million.
For the year 2024 we do not expect the financial structure to change significantly.
141
Brunel International N.V. Annual Report 2023
On 12 September 2022 the Brunel Energy Holding B.V. acquired 51% of the issued share capital of International Commissioning and Engineering Pte. Ltd. (‘ICE’). Established in 2007, ICE is a Project Risk Assurance and Commissioning & Start-Up company which specializes in the coordination and delivery of large-scale Oil & Gas, Infrastructure and Energy projects. Headquartered in Singapore, ICE’s management services span the complete project lifecycle, providing effective oversight and assurance across all phases from initial assessment through to construction, commissioning, and operation. By combining ICE’s specialist project assurance, execution & delivery expertise with Brunel’s existing global recruitment, workforce and mobilisation services, the organisation plans to offer a unique fusion of the two capabilities.
In the acquisition, Brunel acquired control over ICE by acquiring 51% of the stake which consists of 127,500 ordinary shares. Fair value of the acquisition compensation amounted to EUR 2.2 million, out of which EUR 0.7 million has been paid as of the acquisition date. Remaining payments are spread over the period of 5 years.
The company has entered into a put / call option agreement with the non-controlling interest of ICE to acquire the remaining 49% shares over the period of 3 years. The 49% stake consists of 122,500 ordinary shares – it has been considered as a non-controlling interest. The agreement requires continuous employment of the non-controlling interest of ICE, accounted for in line with IAS 19. The 49% stake is treated as a non-controlling interest, as the terms and conditions of the put / call option does not result in the transfer of the risks and rewards of the remaining 49% to Brunel. The expectation of the amount to be paid for the future services as part of continuous employment was EUR 7.4 million to be paid over three years starting from year three of the share purchase agreement. The basis for determining the amount of payment is expected performance ICE, in particular EBITDA and gross profit. Based on the estimated pay-out no accrual was recognized during the year 2023.
Brunel controls the entity and is exposed to and has rights to variable returns from its involvement with the entity and can affect these returns through its power to direct its activities. ICE is fully consolidated from the date on which control was transferred to the group.# 1. Acquisitions
The fair value of the assets and liabilities arising from the above-mentioned acquisition of ICE, based on the purchase price allocation, can be summarized as follows:
| Disclosure note | Amounts |
|---|---|
| Cash | 12 |
| Trade receivables | 34 |
| Other receivables and prepayments | 6 |
| Software | 187 |
| Property | 1,814 |
| Tradename | 288 |
| Trade payables | -17 |
| Other current liabilities | -1,814 |
| Deferred tax liability | -182 |
| Net identifiable assets acquired | 328 |
| Less: non-controlling interest | -161 |
| Add: goodwill | 2,056 |
| Purchase consideration | 2,223 |
| Net cash acquired included in the working capital | -12 |
| Fair value of the deferred consideration | -1,479 |
| Statement of cash flows, acquisition of subsidiaries | 733 |
(*) Property Plant and Equipment includes an office building (held for sale) which will be sold and the proceeds from the sale will be used to settle the Long term liabilities. As per the share purchase agreement all gains or losses on the sale of the property and repayment of the associated liability are the responsibility of the seller. All acquired cash is operational. The goodwill is attributable to the synergies with the acquired business. It will not be deductible for tax purposes. The group elected to recognise the non-controlling interests at its proportionate share of the acquired net identifiable assets. The acquired business has contributed revenues of EUR 0.2 million and EBIT of EUR -0.1 million to the group for the period from 12 September 2022 up to 31 December 2022. If the acquisition had occurred on 1 January 2022, the business would have contributed revenues of EUR 0.2 million and EBIT of -0.4 million respectively.
In the 2022 a decision was made to exit Russia. As a result, the following entities were sold to local management:
The sale took place and control passed to local management on 20 June 2022 as per the share purchase agreement. The result on the sale is calculated as follows:
| Amounts | |
|---|---|
| Goodwill | 267 |
| Other intangible assets | 165 |
| Property, plant & equipment | 207 |
| Right-of-use assets | 775 |
| Trade and other receivables | 17,314 |
| Cash and cash equivalents | 9,497 |
| Other current liabilities | (7,152) |
| Net assets disposed | 21,073 |
| Proceeds on disposal of subsidiary | (9,430) |
| Reclassification of foreign currency Translation reserve | (614) |
| Intercompany loan waiver | (598) |
| Total loss on disposal | 10,431 |
Considering that the movement of cash from Russia was not possible at the moment of the sale, the company did not receive any proceeds from the transaction. The proceeds are included within loan receivables from third parties as disclosed in note 7.
Cash flow from disposal:
| Amounts | |
|---|---|
| Net proceeds from disposal of subsidiaries | - |
| Net cash disposed included in working capital | -9,497 |
| Statement of cash flows, disposal of subsidiaries | -9,497 |
The financial performance and cash flow information presented are for the five months ended 31 May 2022.
Financial performance:
| 2022 | |
|---|---|
| Revenue | 18,198 |
| Cost of sales | -15,538 |
| Expenses | -2,399 |
| Profit before income tax | 261 |
| Income tax | -84 |
| Net income for the year | 177 |
Cash position:
| 2022 | |
|---|---|
| Net cash inflow/(outflow) from operating activities | 3,351 |
| Net cash (outflow) from investing activities | -61 |
| Net cash (outflow) / inflow from financing activities | -116 |
| Net increase in cash generated (utilized) by the subsidiary | 3,175 |
Movements during the year:
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 44,920 | 42,864 |
| Accumulated impairment and exchange rate movements | -477 | -312 |
| Balance at 1 January | 44,443 | 42,552 |
| Changes in carrying amount: | ||
| Additions | 0 | 2,056 |
| Exchange rate movements | -175 | -165 |
| Balance at 31 December | 44,268 | 44,443 |
| At cost at 31 December | 44,920 | 44,920 |
| Accumulated impairment and exchange rate movements | -652 | -477 |
| Balance at 31 December | 44,268 | 44,443 |
Goodwill has been allocated for impairment testing purposes to the following cash-generating units:
| 2023 | 2022 | |
|---|---|---|
| Brunel Americas | 5,010 | 1,138 |
| Middle East & India | 244 | 0 |
| The Netherlands | 2,827 | 0 |
| Brunel Australasia | 4,706 | 4,500 |
| Brunel DACH | 6,335 | 2,844 |
| Brunel Europe & Africa | 1,053 | 0 |
| Asia | 6,385 | 2,065 |
| Taylor Hopkinson | 17,708 | 33,896 |
| Balance at 31 December | 44,268 | 44,443 |
During the year 2023 a change in the reporting structure of Taylor Hopkinson triggered a re-allocation of the goodwill to the other cash generating units. The re-allocation was performed based on the relative value approach. In 2022 the addition in goodwill of EUR 2.1 million is related to the acquisition of ICE.
Impairment testing
In the financial year the company assessed the recoverable amount of goodwill. The recoverable amount of the main cash-generating units for which goodwill is capitalised is based on value in use. The value in use is determined by means of cash flow projections based on the actual operating results adjusted for non-cash items (mainly depreciation) and the expected future performance. The latter is based on management’s estimates and assumptions of revenue growth and development of operating margins, assessed with external data. The forecasted cash flows have been derived from the budget 2024. The value in use of the cash-generating units resulted in no impairment compared to the carrying amount as at 31 December 2023. Management has projected cash flow forecasts over a period of five years. The annual budget is used as a basis for the projection in the first year whereas key assumptions were applied for the extrapolation of the results to the period after the first year.
Key assumptions for 2024-2028 (2023-2027) used in calculation of the value in use for the cash-generating unit Brunel Americas are:
| 2023 | 2022 | |
|---|---|---|
| Revenue growth | 15.0% | 17.2% |
| Budgeted contribution margin | 15.1% | 15.5% |
| Operating costs increase | 10.5% | 12.2% |
| Terminal growth rate | 2.0% | 2.0% |
| Pre tax discount factor | 22.0% | 16.8% |
Depreciations and investments plans Depreciations are used for new or replacing investments Depreciations are used for new or replacing investments
Key assumptions for 2024-2028 (2023-2027) used in calculation of the value in use for the cash-generating unit Brunel Australasia are:
| 2023 | 2022 | |
|---|---|---|
| Revenue growth | 9.6% | 8.0% |
| Budgeted contribution margin | 16.5% | 17.8% |
| Operating costs increase | 8.4% | 4.8% |
| Terminal growth rate | 3.0% | 3.0% |
| Pre tax discount factor | 27.9% | 22.1% |
Depreciations and investments plans Depreciations are used for new or replacing investments Depreciations are used for new or replacing investments
Key assumptions for 2024-2028 (2023-2027) used in calculation of the value in use for the cash-generating unit Brunel DACH are:
| 2023 | 2022 | |
|---|---|---|
| Revenue growth | 10.0% | 8.2% |
| Budgeted contribution margin | 34.0% | 35.0% |
| Operating costs increase | 3.0% | 6.2% |
| Terminal growth rate | 2.0% | 0.0% |
| Pre tax discount factor | 13.7% | 15.1% |
Depreciations and investments plans Depreciations are used for new or replacing investments Depreciations are used for new or replacing investments
Key assumptions for 2024-2028 (2023-2027) used in calculation of the value in use for the cash-generating unit Taylor Hopkinson are:
| 2023 | 2022 | |
|---|---|---|
| Revenue growth | 10.0% | 14.9% |
| Budgeted contribution margin | 29.1% | 24.3% |
| Operating costs increase | 10.4% | 14.5% |
| Terminal growth rate | 2.0% | 2.0% |
| Pre tax discount factor | 15.6% | 15.7% |
Depreciations and investments plans Depreciations are used for new or replacing investments Depreciations are used for new or replacing investments
All cash-generating units have sufficient headroom available to cover variations in assumptions.
The other intangible assets consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Software | 19,738 | 14,795 |
| Trade names | 623 | 1,102 |
| Customer databases | 4,296 | 5,361 |
| Balance at 31 December | 24,657 | 21,259 |
The amortisation rates are as follows:
Residual values are considered to be zero.
Movements during the year:
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 50,646 | 42,528 |
| Accumulated amortisation | -35,850 | -32,701 |
| Balance at 1 January | 14,795 | 9,827 |
| Changes in carrying amount: | ||
| Additions | 8,734 | 8,183 |
| Through business combinations | 0 | 187 |
| Through divestments | 0 | -165 |
| Disposals | -3 | 0 |
| Amortisation | -3,790 | -3,272 |
| Exchange rate | 2 | 35 |
| Total changes | 4,943 | 4,968 |
| At cost at 31 December | 58,863 | 50,646 |
| Accumulated amortisation and impairment | -39,125 | -35,850 |
| Balance at 31 December | 19,738 | 14,795 |
Software mainly includes financial and business supporting software acquired. The average remaining amortisation period is three years. In 2023 a part of the software with an at cost value of EUR 482 (2022: 159) that was fully amortised has been written off from both the at cost value and the accumulated impairment.
Movements during the year:
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 1,509 | 1,221 |
| Accumulated amortisation and impairment | -407 | 0 |
| Balance at 1 January | 1,102 | 1,221 |
| Changes in carrying amount: | ||
| Additions | 0 | 282 |
| Amortisation | -479 | -407 |
| Exchange rate | 0 | 6 |
| Balance at 31 December | 623 | 1,102 |
| At cost at 31 December | 1,509 | 1,509 |
| Accumulated amortisation and impairment | -886 | -407 |
| Balance at 31 December | 623 | 1,102 |
The additions for the year 2022 relate to intangible assets recognised as part of the acquisition of ICE with a value of EUR 282.
Movements during the year:
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 6,426 | 6,426 |
| Accumulated amortisation and impairment | -1,065 | 0 |
| Balance at 1 January | 5,361 | 6,426 |
| Changes in carrying amount: | ||
| Amortisation | -1,065 | -1,065 |
| Balance at 31 December | 4,296 | 5,361 |
| At cost at 31 December | 6,426 | 6,426 |
| Accumulated amortisation and impairment | -2,130 | -1,065 |
| Balance at 31 December | 4,296 | 5,361 |
| Office equipment | Computer systems | Property | Total | |
|---|---|---|---|---|
| At cost at 1 January | 26,687 | 6,482 | 0 | 33,169 |
| Accumulated depreciation | -19,274 | -4,560 | 0 | -23,834 |
| Balance at 1 January 2022 | 7,413 | 1,922 | 0 | 9,335 |
| Changes in carrying amount: | ||||
| Additions | 1,932 | 1,156 | 0 | 3,088 |
| Through business combinations | 0 | 0 | 1,814 | 1,814 |
| Disposals | -11 | -45 | 0 | -56 |
| Depreciation | -1,577 | -785 | 0 | -2,362 |
| Exchange rate | -134 | -65 | 0 | -199 |
| Total changes 2022 | 210 | 261 | 1,814 | 2,285 |
| At cost at 31 December | 27,821 | 7,249 | 1,814 | 36,884 |
| Accumulated depreciation | -20,198 | -5,067 | 0 | -25,265 |
| Balance at 31 December 2022 | 7,623 | 2,183 | 1,814 | 11,620 |
| Changes in carrying amount: | ||||
| Additions | 2,053 | 945 | 0 | 2,998 |
| Disposals | -12 | -4 | 0 | -16 |
| Depreciation | -1,667 | -872 | 0 | -2,539 |
| Exchange rate | -104 | -7 | 0 | -111 |
| Total changes 2023 | 270 | 62 | 0 | 332 |
| At cost at 31 December | 29,565 | 7,725 | 1,814 | 39,104 |
| Accumulated depreciation | -21,672 | -5,480 | 0 | -27,152 |
| Balance at 31 December 2023 | 7,893 | 2,245 | 1,814 | 11,952 |
Depreciation rate 20-40% 20-40% 20-40% 20-40%
No leased items are included in property, plant and equipment. Residual values are considered to be zero. The carrying amount equals the estimated fair value of the assets. In 2023 part of the property, plant and equipment with an at cost value of EUR 429 (2022: EUR 1,159) that was fully depreciated has been written off from both the at cost value and the accumulated depreciation.
147 Brunel International N.V. Annual Report 2023
This note provides information for leases where the group is a lessee.
The balance sheet shows the following amounts relating to leases:
| 2023 | 2022 | |
|---|---|---|
| Right of use asset - Property | 31,517 | 40,421 |
| Right of use asset - Cars | 5,606 | 3,471 |
| Right of use asset - Others | 100 | 70 |
| Total | 37,223 | 43,962 |
| Lease liability | ||
| Current | 12,179 | 13,176 |
| Non-current | 27,028 | 32,449 |
| Total | 39,207 | 45,625 |
Additions to the right-of-use assets during 2023 amount to EUR 0.4 million (2022: EUR 10.4 million), of which EUR 0.3 million (2022: EUR 9.7 million) relates to property and EUR 0.1 million relates to cars and other leases (2022: EUR 0.7 million each). Lease remeasurements, that mainly relate to lease modifications, amount to EUR 5.7 million (2022: EUR 7.7 million), consisting of EUR 2.3 million (2022: EUR 6.4 million) increase in property and EUR 3.3 million (2022: EUR 1.4 million) increase in cars. During the current financial year, the financial effect of revising lease terms to reflect the effect of exercising extension and termination options has already been reflected in the lease liability for properties as it is reasonably certain that these extension options will be exercised, and termination options will not the exercised. Lease extensions on cars and other office equipment are not expected to have a significant impact, as assets can be easily replaced with little cost to the group. Lease payments for some contracts include inflationary increases, but there are no other variable lease payments that depend on an index or rate.
The consolidated profit and loss account shows the following amounts related to leases:
| 2023 | 2022 | |
|---|---|---|
| Depreciation charge of right-of-use asset | ||
| Property | -11,645 | -10,974 |
| Cars | -2,465 | -3,203 |
| Other | -37 | -45 |
| Total | -14,147 | -14,222 |
| Interest expense (included in financial Income & expense) | -550 | -454 |
| Expense relating to Short-term and low-value leases (included in note 17 - direct employee expenses) | -4,207 | -4,305 |
| Expense relating to Short-term and low-value leases (part of operating costs) | -3,052 | -2,366 |
The total cash outflow for leases in 2023 was EUR 18.3 million (2022: EUR 17.5 million), of which EUR 14.0 million (2022: EUR 14.7 million) are principal elements of recognised lease liabilities.
148 Annual accounts 2023
The tables below show the group’s lease liabilities and their respective maturity groupings. Tables include the effect of discounting which is not material.
Maturity 2023
| Lease liabilities | Property | Cars | Others | Total |
|---|---|---|---|---|
| Less than 1 year | 9,454 | 2,690 | 35 | 12,179 |
| Between 1 and 2 years | 7,263 | 2,195 | 30 | 9,488 |
| Between 2 and 3 years | 6,490 | 842 | 26 | 7,358 |
| Between 3 and 4 years | 3,830 | - | 13 | 3,843 |
| Between 4 and 5 years | 2,892 | - | - | 2,892 |
| More than 5 years | 3,447 | - | - | 3,447 |
| Total | 33,376 | 5,727 | 104 | 39,207 |
Maturity 2022
| Lease liabilities | Property | Cars | Others | Total |
|---|---|---|---|---|
| Less than 1 year | 11,047 | 2,104 | 24 | 13,175 |
| Between 1 and 2 years | 9,166 | 1,376 | 16 | 10,558 |
| Between 2 and 3 years | 6,883 | 70 | 12 | 6,965 |
| Between 3 and 4 years | 5,777 | - | 11 | 5,788 |
| Between 4 and 5 years | 2,685 | - | 8 | 2,693 |
| More than 5 years | 6,445 | - | - | 6,445 |
| Total | 42,003 | 3,550 | 71 | 45,624 |
The financial fixed assets are measured at amortised cost and consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Loans receivable from third parties | 6,116 | 8,077 |
| Loans receivable from minority shareholders | 601 | 612 |
| Balance at 31 December | 6,717 | 8,689 |
Movements during the year:
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 8,077 | 0 |
| Additions at fair value | 0 | 8,077 |
| Redemptions | -402 | 0 |
| Unwind of discount | 920 | 0 |
| Remeasurement loss | -920 | 0 |
| Exchange rate movements | -1,559 | 0 |
| Balance at 31 December | 6,116 | 8,077 |
The loans receivable from third parties are related to the proceeds on the divestment of Russia in 2022 (refer to note 2), and existing financing arrangements provided to the disposed entities for the purpose of working capital which are continued under the new ownership. Originally the loans were to be repaid in four equal annual installments, with the first payment scheduled on 31 December 2023. In 2023, a revised payment plan was agreed with the counterparties. The new payment plan consists of monthly installments that will result in full repayment by December 2026. In 2023 Brunel has received the first installments in accordance with the revised payment plan. The loans receivable from third parties are denominated in Russian Ruble and carry 4% interest rate per annum. The total loan receivable was recognised initially at fair value by discounting cash flows using a market related lending rate of 11.5% and is measured subsequently at amortised cost using the effective interest rate method. The group has reassessed the fair value of the loans at reporting date, with consideration of the uncertainty with respect to sanctions and the possible effect that this might have on the repayment of the loan. The fair value approximates the carrying value at year-end. At the reporting date there has been no significant increase in credit risk compared to initial recognition date. The loan therefore carries a credit risk under stage 1.
As at 31 December 2023 the group has an investment in one associate which, in the opinion of the directors, is material to the group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. The associate is fully impaired, no further cash injections will be made, and therefore there is no risk of further losses.
| Name of entity | Country of incorporation | % of ownership interest | Nature of relationship | Measurement method | Carrying amount 2023 | Carrying amount 2022 |
|---|---|---|---|---|---|---|
| IBR Solucões Limitada | Angola | 49% | Associate | Equity method | * | * |
The tables below provide summarised financial information for the associate that is material to the group. The information disclosed reflects the amounts presented in the Annual accounts of the relevant associate and not Brunel International N.V.’s share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policy.
| 2023 | 2022 | |
|---|---|---|
| Current assets | -22 | -37 |
| Current liabilities | -4,863 | -5,081 |
| Long-term liabilities | -324 | -549 |
| Net assets at 31 December | -5,209 | -5,667 |
| 2023 | 2022 | |
|---|---|---|
| Opening net assets 1 January | -5,667 | -4,969 |
| Profit / (loss) for the period | 0 | 0 |
| Foreign exchange | 458 | -698 |
| Closing net assets at 31 December | -5,209 | -5,667 |
150 Annual accounts 2023
| 2023 | 2022 | |
|---|---|---|
| Revenue | 0 | 0 |
| Profit / (loss) for the period | 0 | 0 |
As Brunel’s interest in IBR Solucões Limitada has been impaired and Brunel does not have any further legal or constructive obligations to make payments to or on behalf of IBR Solucões Limitada, additional losses are no longer recognised.
The trade and other receivables consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Trade accounts receivables | 330,181 | 285,547 |
| Less: allowance for expected credit losses | -2,156 | -2,717 |
| Trade accounts receivables, net of expected credit losses | 328,024 | 282,829 |
| Prepayments | 7,097 | 6,441 |
| Other receivables | 16,252 | 13,780 |
| Balance at 31 December | 351,374 | 303,050 |
All receivables have an expected term of less than one year. The carrying amount of these receivables equals the fair value. The trade accounts receivables are hold-to-collect contractual cash flows and consist of balances that are billed and in the process of being billed to the group’s customers. The billed and unbilled portions have substantially the same risk characteristics. Performance obligations on the unbilled receivables have been met, the billing is only conditional on the passage of time. The group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on the payment profiles of sales over a period of 36 month before 1 January 2023 and the corresponding historical credit losses experienced within this period.The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables and other known matters. The group has performed a sensitivity analysis on the credit loss rates, by calculating multiple scenarios, which gave no reason to increase the credit loss rates. Also, compared to 2022, there are no material changes in the (relative) amounts in the aging buckets, meaning the aging of the accounts receivables has not significantly changed, where the biggest portion is in the first buckets (67% is not due yet, and 17% is overdue by 1 month). The total days outstanding (TDO) has slightly increased compared to 2022. In discussions with the group’s most significant clients, no indications of uncollectibility were received. The movement in this allowance is as follows:
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 2,717 | 3,386 |
| Fully provided receivables which are written off | -906 | -653 |
| Change in allowance recognised in result | 369 | 12 |
| Exchange rate movements | -24 | -28 |
| Balance at 31 December | 2,156 | 2,717 |
Ageing of past due and not impaired trade accounts receivables is as follows:
| 2023 | 2022 | |
|---|---|---|
| Trade accounts receivable - Not due | 256,754 | 217,472 |
| 1-30 days - past due | 37,708 | 37,187 |
| 31-60 days - past due | 12,590 | 15,537 |
| 61-90 days - past due | 5,137 | 6,560 |
| 91-120 days - past due | 4,947 | 2,939 |
| 120+ days - past due | 13,044 | 5,852 |
| Balance at 31 December | 330,181 | 285,547 |
151 Brunel International N.V. Annual Report 2023
The loss allowance as at 31 December 2023 was determined as follows:
| Trade accounts receivable | Balance at 31 December | Expected loss rate | Loss allowance |
|---|---|---|---|
| Trade accounts receivable - Not due | 256,754 | 0.02% | 62 |
| 1-30 days - past due | 37,708 | 0.01% | 2 |
| 31-60 days - past due | 12,590 | 0.03% | 4 |
| 61-90 days - past due | 5,137 | 0.33% | 17 |
| 91-120 days - past due | 4,947 | 0.30% | 15 |
| 120+ days - past due | 13,044 | 15.77% | 2,057 |
| Balance at 31 December | 330,181 | 2,156 |
The loss allowance as at 31 December 2022 was determined as follows:
| Trade accounts receivable | Balance at 31 December | Expected loss rate | Loss allowance |
|---|---|---|---|
| Trade accounts receivable - Not due | 217,472 | 0.11% | 231 |
| 1-30 days - past due | 37,187 | 0.09% | 33 |
| 31-60 days - past due | 15,537 | 0.15% | 23 |
| 61-90 days - past due | 6,560 | 0.24% | 16 |
| 91-120 days - past due | 2,939 | 1.02% | 30 |
| 120+ days - past due | 5,852 | 40.74% | 2,384 |
| Balance at 31 December | 285,546 | 2,717 |
The specific credit terms granted vary from 14-90 days. These terms are based on the general terms and conditions of Brunel and/or specific agreements with individual customers. Generally, services are provided to large and financially strong companies. In order to minimise credit risk exposure Brunel intensively monitors the payment behaviour of its customers based on specific agreements with individual customers and their credit worthiness. Based on historical behaviour of our customers we do not expect any material write-offs and therefore the expected credit loss rates are not highly sensitive. The current assessment of the counterparty risk of our customers is that we do not expect any material write-offs. This assumption is based on the current payment behaviour of our clients. Additionally the company is in frequent contact with clients that have amounts outstanding past the due date.
152 Annual accounts 2023
Restricted cash, cash and cash equivalents consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Non-current restricted cash | 5,618 | 8,769 |
| Current restricted cash | 14,556 | 6,768 |
| Cash and cash equivalents | 90,225 | 80,861 |
| Balance at 31 December | 110,399 | 96,398 |
The restricted cash relates to fixed term deposits and cash margins provided as security towards bank guarantees, for which the withdrawal of funds is not permitted before the maturity date. It is held with the aim of securing contracts with customers. Due to the operational nature of the transactions related to restricted cash, the group recognises any cash flows from such transactions as operating activities. If maturity of fixed term deposits and cash margins is within 12 months the balance is classified as current, otherwise non-current. Of the total balance of cash and cash equivalents, EUR 44.1 million (2022: EUR 37.1 million) is not freely disposable on the grounds of issued bank guarantees for office leases and client contracts. The fair value approximates the carrying value.
| Balance at 1 January 2023 | Additions | Withdrawals | Release | Balance at 31 December 2023 | |
|---|---|---|---|---|---|
| Pension obligation | 1,499 | 320 | 0 | -42 | 1,777 |
| Restoration provision | 520 | 51 | 0 | 0 | 571 |
| Legal claims | 405 | 31 | 0 | 0 | 436 |
| Illness | 4,326 | 848 | 0 | -829 | 4,345 |
| Total | 6,750 | 1,250 | 0 | -871 | 7,129 |
The restoration provision represents the provision for returning rented real estate objects to the original state at the end of the lease contract. The estimate may vary as a result of the utilisation of the leased premises and sub-lease arrangements where applicable. The provisions are expected to be settled within five years of the balance sheet date, except for pension obligations, which will mature after five years. The provision for illness represents the obligation for continuation of wage payment during extended periods of illness and disability. Aside from the pension provision, as disclosed below, other provisions are not sensitive to changes in underlying assumptions.
153 Brunel International N.V. Annual Report 2023
The amounts recognised in the consolidated balance sheet and the movements in the defined benefit obligation over the year are as follows:
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 1,499 | 2,220 |
| Reclassification | ||
| Current service cost | 6 | 15 |
| Interest expense | 58 | 28 |
| Total amount recognised in profit or loss | 64 | 43 |
| Remeasurements: | ||
| Result from change in financial assumptions | 45 | -787 |
| Experience (result) | 36 | 53 |
| Total amount recognised in other comprehensive income | 81 | -734 |
| Payments from plan: | ||
| Benefit payments | -42 | -30 |
| Balance at 31 December | 1,602 | 1,499 |
The group operates a defined benefit pension plan in Germany (Brunel Car Synergies) under regulatory frameworks. The defined benefit pension plan is managed jointly by Brunel and Bochumer Verband. This plan is a final salary pension plan, which provides benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to retirement. In the plans, pension payments are generally updated in line with the retail price index. This is an unfunded plan and no plan assets are applicable. The main risks in relation to this plan relate to the key variables in the actuarial calculations (i.e. changes in bonds yields, inflation risks and life expectancy). Significant actuarial assumptions for the pension plan are:
| Assumptions | 2023 | 2022 |
|---|---|---|
| Discount rate | 3.71% | 3.91% |
The sensitivity of the defined benefit obligation to changes in the principal assumption is:
| Impact on defined benefit obligation | 2023 | 2022 |
|---|---|---|
| Discount rate -0,5% | +8% | +8% |
| Discount rate +0,5% | -7% | -7% |
The group operates a pension plan in Belgium (Brunel Belgium NV) under regulatory frameworks. This is a plan with, according to local regulations, a guaranteed minimum return for plan participants, due to which Brunel is accounting for it as if it were a defined benefit plan. The net liability is EUR 0.2 million.
The other non-current liabilities consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Put-option liabilities (1) | 4,858 | 12,491 |
| Deferred consideration (1) | 0 | 1,479 |
| Loans and borrowings | 78,590 | 18,634 |
| Balance at 31 December | 83,448 | 32,604 |
The deferred consideration relates to the acquisition of ICE during the year 2022, the amount will be paid within a year and therefore is part of the trade and other payables. Refer to note 13.
In December 2021 Brunel Energy Holding B.V. acquired 72% of the issued share capital of Seafox Apollo 1 Ltd, the sole shareholder of the Taylor Hopkinson Group. A put and call option agreement was signed for the remaining 28%. The consideration for the remaining 28% is based on meeting certain gross profit and EBITDA targets over the next three years. The expected amount to be paid if the pre-determined levels of gross profit and EBITDA levels were met and certain
154 Annual accounts 2023
employees remained within the Group, was determined at EUR 17.1 million as at 31 December 2021. This amount is remeasured at each reporting date based on expected performance. An amount of EUR 8.6 million was recognized as a put-option liability during the year 2021, since 50% of the amount to be paid is not based on continuous employment. The other 50% of the put-option liability is recognized through the profit and loss account as a post combination benefit expense over the 3-year period post-acquisition, depending on continued employment of certain Taylor Hopkinson employees. As at 31 December 2023 the value of the put-option liability is EUR 13.1 million. The model inputs used for determining the liability as of the year ended 31 December 2023 included:
• Discount rate: 0.8%
During the year 2023 the company recognised EUR 0.9 million (2022: EUR 4.2 million) costs for post combination benefits. The movement of put-option liabilities is as follows:
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 12,491 | 8,570 |
| Post combination benefits related to acquisitions | 922 | 4,164 |
| Payments | -221 | 0 |
| Current part of put-option liabilities | -8,334 | 0 |
| Foreign exchange | 0 | -243 |
| Balance at 31 December | 4,858 | 12,491 |
During the year an agreement was reached with one of the option holders of Taylor Hopkinson where the exercise of the put-option will take place in the first quarter of 2024, therefore a portion of the liability is classified as current. The payments relating to put-option liabilities will be included in the cashflow statement as a cash flow used in financing activities.## 13. Trade and other payables
The trade and other payables consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Trade payables | 24,559 | 22,897 |
| Taxes and social security charges | 35,806 | 33,670 |
| Pensions | 2,569 | 1,157 |
| Accrued employee expenses | 58,022 | 53,761 |
| Current part of put-option liabilities | 8,334 | 0 |
| Current part of deferred consideration | 1,479 | 0 |
| Accrued expenses | 6,535 | 6,846 |
| Other liabilities | 12,794 | 12,298 |
| Balance at 31 December | 150,098 | 130,629 |
Trade and other payables have an expected term of less than one year. The majority of trade payables and taxes and social security charges are due within a range of 1–45 days. The majority of the other liabilities and accrued employee expenses are due within a range of 1–180 days. The carrying amount of these liabilities equals the fair value.
The authorised capital is EUR 5,998,000 divided into one priority share with a nominal value of EUR 10,000 and 199.6 million ordinary shares with a nominal value of EUR 0.03. The subscribed capital consists of 50,400,988 ordinary shares (2022: 50,400,988) with a value of EUR 1,512,030 (2022: EUR 1,512,030). All ordinary shares are fully paid.
The movement in the number of issued shares is:
| 2023 | 2022 | |
|---|---|---|
| Issued at 1 January | 50,400,988 | 50,400,988 |
| Acquisition of treasury shares | 0 | 0 |
| Issued at 31 December | 50,400,988 | 50,400,988 |
Except for the translation reserve, all reserves are freely distributable. In the year under review a cash dividend of EUR 0.55per share was paid. The proposed dividend for 2023 will be EUR 27.7million or EUR 0.55per share. Further information is provided in the consolidated statement of changes in equity on page 126 of this report.
The priority share, which has a par value of EUR 10,000, has been issued to Stichting Prioriteit Brunel, subject to the condition precedent that the majority shareholder loses its majority share in Brunel International’s share capital. The priority share will be fully paid up as soon as the issue becomes unconditional. The priority share is acts as protection for the majority shareholder. The priority share is intended to ensure that the company can achieve its objectives in compliance with the company’s values and culture. The priority share entitles the holder, among other things, to make proposals to designate another body as authorised to issue shares or to limit or exclude the pre-emptive rights and to approve decisions of the Board of Directors to acquire fully paid-up shares by the company. Resolutions to amend the Articles of Association and dissolve the Company require the prior approval of the priority shareholder. The Board of Directors, with the approval of the priority shareholder, determines the portion of profits to be reserved. Where appropriate, it is up to the priority shareholder to determine whether an interim dividend will be paid. For as long as the priority share has not yet been issued to a third party, all the rights attached to the priority share are exercised by the General Meeting, unless the context otherwise requires or otherwise provided for in the Articles of Association which can be consulted on the company’s website.
In 2021 the company acquired 173,636 of its own shares through purchases on Euronext Amsterdam stock exchange. The total amount paid to acquire the shares was EUR 2.0 million and has been deducted from shareholders’ equity. The shares are held as treasury shares. The company intends to reissue these shares to senior management (excluding the Board of Directors) under the performance share plan if the conditions are met.
The movement in non-controlling interest is as follows:
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 13,138 | 13,693 |
| Result for the year | 507 | 1,374 |
| Dividend | -2,222 | -2,240 |
| Liquidation of subsidiary | -67 | 0 |
| Through business combinations | 0 | 161 |
| Exchange rate movements | -275 | 150 |
| Balance at 31 December | 11,081 | 13,138 |
Set out below is summarised financial information for the main non-controlling interests that are material to the group. The amounts disclosed for each subsidiary are before inter-company eliminations. The non-controlling interest acquired through business combinations in 2022 relates to the acquisition of ICE (refer to note 1). In 2023 Brunel Muscat LLC, with operating activities in Oman, was liquidated.
| Middle East & India | Taylor Hopkinson | Other | Total | |
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Non-current assets | 6,263 | 9,757 | 38,918 | 41,199 |
| Current assets | 55,879 | 49,031 | 53,453 | 22,977 |
| Current liabilities | -12,525 | -13,856 | -27,225 | -13,118 |
| Non-current liabilities | -41,976 | -35,201 | -34,029 | -15,036 |
| Net assets per 31 December | 7,641 | 9,731 | 31,117 | 36,022 |
| Accumulated non-controlling interests | 1,891 | 2,428 | 8,632 | 9,993 |
| Dividend paid to non-controlling interests | 2,222 | 2,240 | 0 | 0 |
| Revenue | 105,380 | 105,062 | 93,920 | 83,228 |
| Profit (loss) | 7,264 | 9,143 | -4,160 | -3,152 |
| Result allocated to non-controlling interests | 1,813 | 2,295 | -1,154 | -874 |
Middle East & India includes the non-controlling interests in our entities in Kuwait (25%), Qatar (25%) and Oman (30%). The non-controlling interests in Taylor Hopkinson is 28%. The other non-controlling interest includes the non-controlling interest in Kazakhstan (50%) and Indonesia (51% of net assets / 0% of result) and ICE (49% - refer to note 1). For a number of specific entities within the Middle East & India, Brunel has voting rights of 49% due to local enacted laws that limit foreign ownership. There are other arrangements in place that establish that Brunel has control. Brunel’s voting rights in relation to Taylor Hopkinson are 72%.
| 2023 | 2022 | |
|---|---|---|
| Share appreciation rights | 1,859,656 | -772,701 |
| Share based payments related to the long-term incentive plan | -135,907 | 523,836 |
| Total expenses arising from share-based payments | 1,723,749 | -248,865 |
The measurement date fair value of the SAR’s is determined based on the Black-Scholes option valuation model. In this model the expected volatility is based on historical volatility for the corresponding periods of the Company shares (25.5% - 50.9%), the expected dividend yield is based on the dividend policy and set at 4.0%, the expected remaining years (0.2 – 4.2 years) and a risk free interest in the range of 2.04% and 3.78%. The risk free interest is based on the yield of AAA rated EU government bonds with a maturity commensurate to the expected life of the respective award.
| 2023 | 2022 | |
|---|---|---|
| Weighted average grant date fair value | 1.39 | 1.13 |
| Costs recognised | 1,859,656 | -772,701 |
| Total liability | -3,062,980 | 1,987,482 |
| Intrinsic value of the liability | - | - |
| 2023 | 2022 | |
|---|---|---|
| Number of SAR’s | Weighted average exercise price (EUR) | |
| SAR’s as at 1 January | 3,396,500 | 11.33 |
| SAR’s granted | 1,252,300 | 11.58 |
| SAR’s forfeited | 276,200 | 11.27 |
| SAR’s expired | 463,000 | 12.78 |
| SAR’s exercised | 389,750 | 11.96 |
| SAR’s as at 31 December | 3,519,850 | 11.14 |
| SAR’s exercisable as at 31 December | 788,250 | 11.43 |
The costs recognised in the consolidated profit and loss account amount is based on portion of time passed by the end of the year and fair value at year end. Costs are spread over the period in which employees provide services.
In June 2021, Brunel announced its intention to repurchase 173,636 ordinary shares in order to meet the obligations under the planned performance share plan for senior management (excluding Board of Directors). The performance share plan is conditional to targets for financial year 2023. Shares will vest in the beginning of 2024 with a lock-up period of two years. Senior management do not receive any dividends and are not entitled to vote in relation to the deferred shares during the vesting period. The fair value of the rights at grant date of EUR 10.41 per share was estimated using the Black-Scholes option valuation model.The model inputs for share awards granted during the year ended 31 December 2021 included:
* Grant date: 1 July 2021
* Vesting date: 28 February 2024
* Share price at grant date: EUR 10.94
* Expected price volatility: 35.13%
* Expected dividend yield: 2%
* Risk free rate: 2.492%
| Year granted | 2023 | 2022 |
|---|---|---|
| As at 1 January | 137,229 | 173,636 |
| Granted during the year | 0 | 0 |
| Vested during the year | 0 | 0 |
| Forfeited during the year | -76,615 | -36,407 |
| As at 31 December | 60,614 | 137,229 |
Weighted average remaining contractual life of the deferred shares outstanding at the end of period: 0.69 1.69
Costs recognised in EUR -135,907 523,836
The group leases various offices, cars and other office equipment under non-cancellable operating leases expiring within 6 months to 5 years. The leases have varying terms, escalation clauses and renewal rights. On renewal the terms of the leases are renegotiated. The group has recognised right-of-use assets for the majority of leases, except for short-term and low-value leases that are disclosed below. See note 6 for further information.
| 2023 | 2022 | |
|---|---|---|
| Expire in year 1 | 344 | 201 |
| Expire in years 2-5 | 0 | 0 |
| Expire in years 6 and later | 0 | 0 |
| Balance at 31 December | 344 | 201 |
Brunel Service GmbH & Co. KG was subject to a tax audit in Germany regarding the years 2013-2018. In the tax audit, the deductibility of interest expenses was challenged. During the year 2023 Brunel has reached a settlement for an amount of EUR 4 million with the German tax authorities (refer to note 22). There is no remaining exposure (2022: EUR 13.4 million).
Events after balance sheet date
No material events have occurred post-reporting date that warrant disclosure.
159 Brunel International N.V. Annual Report 2023
Notes to the consolidated profit and loss account
x EUR 1,000, unless stated otherwise
The direct and indirect personnel expenses consist of the following amounts:
| 2023 | 2022 | |||
|---|---|---|---|---|
| Direct | Indirect | Direct | Indirect | |
| Salaries | 775,566 | 86,956 | 630,786 | 75,100 |
| Social charges | 47,034 | 12,906 | 42,970 | 11,356 |
| Pension charges | 27,226 | 3,229 | 23,668 | 2,517 |
| Other | 207,127 | 44,556 | 232,284 | 39,576 |
| Total | 1,056,953 | 147,647 | 929,708 | 128,549 |
The pension schemes in the group can all be classified as defined contribution, except for one defined benefit plan in Germany and one in Belgium (refer to note 11). The other direct personnel expenses include visa, logistic and other services provided to direct employees. These expenses are typically reimbursed by our customers. The other direct personnel expenses include EUR 4.2 million in short-term or low-value leases.
160 Annual accounts 2023
Remuneration of directors
The directors’ remunerations charged to the results in 2023 (2022) are set out below:
| Short-term employee benefits | Share based payments | Total | ||||
|---|---|---|---|---|---|---|
| Salary | Bonus | Pension | Other | |||
| Board of Directors: | ||||||
| J.T. Andringa, CEO | 625 (600) | 169 (391) | 15 (13) | 36 (36) | 113 (9) | 958 (1,049) |
| P.A. de Laat, CFO | 445 (430) | 36 (176) | 12 (10) | 36 (21) | 95 (-17) | 624 (620) |
| A.G. Maude, COO | 445 (430) | 63 (187) | 17 (14) | 259 (36)* | 110 (56) | 894 (723) |
| Supervisory Board: | ||||||
| F. van der Vloed | 70 (66) | - | - | - | - | 70 (66) |
| J.J.B.M. Spee | 60 (64) | - | - | - | - | 60 (64) |
| J.A. van Barneveld (stepped down as of 19 May 2022) | - (22) | - (22) | - | - | - | - (44) |
| K. Koelemeijer | 60 (60) | - | - | - | - | 60 (60) |
| 1,705 (1,672) | 268 (754) | 44 (37) | 331 (93) | 318 (48) | 2,666 (2,604) |
In 2023 an amount of EUR 223k termination benefit is included.
Mr Andringa has 24,947 shares in the company, in addition to 315,000 SAR’s.
SAR rights of directors
| Year granted | 2019 | 2020 | 2021 | 2022 | 2023 | Total |
|---|---|---|---|---|---|---|
| J.T. Andringa, CEO | 50,000 | 15,000 | 40,000 | 70,000 | 140,000 | 315,000 |
| P.A. de Laat, CFO | 50,000 | 15,000 | 40,000 | 50,000 | 95,000 | 250,000 |
| A.G. Maude, COO | - | - | 40,000 | 50,000 | 95,000 | 185,000 |
Range of exercise prices in EUR
12.78
6.25
-
9.04
9.08
11.92
11.58
161 Brunel International N.V. Annual Report 2023
In various countries, governments have put in place a wide variety of employment protection programmes mainly due to the COVID-19 pandemic, exceptionally allowing for partial or full reduction of working hours or compensation for personnel costs. This compensates for (part of) salaries and/or social security charges of the employees impacted (e.g. in China, Singapore, Hong Kong and Belgium). We have accounted for these programmes in accordance with IAS 20 ‘Accounting for Government Grants and Disclosure of Government Assistance’. These employment protection programmes reduced our operating expenses by EUR 0.1 million for the period (2022: EUR 0.1 million). We also made use of government programmes relating to our direct employees. The total effect of these programmes on our direct personnel expenses amounted to EUR 0.1 million (2022: EUR 0.2 million). The total cash inflow from these programmes amounted to EUR 0.1 million in 2023 (2022: EUR 0.3 million).
The costs for depreciation and amortisation in the consolidated profit and loss account consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Other intangible assets (4) | 5,334 | 4,744 |
| Property, plant and equipment (5) | 2,539 | 2,362 |
| Right-of-use assets (6) | 14,146 | 14,222 |
| Total | 22,019 | 21,328 |
The 2023 other expenses amount to EUR 47.6 million (2022: EUR 41.4 million). The other expenses comprise marketing expenses, IT expenses, office and other overhead costs.
Audit costs
The audit costs consists of the following:
| Ernst & Young Accountants LLP Member firms / affiliates | Total | Pricewaterhouse Coopers Accountants N.V. Member firms/affiliates | Total | |
|---|---|---|---|---|
| 2023 | 2022 | |||
| Audit of the financial statements | 725 | 595 | 1,320 | 658 |
| Other audit procedures | - | 95 | 95 | - |
| Tax services | - | 38 | 38 | - |
| Other non-audit fees | - | - | - | - |
| Total | 725 | 728 | 1,453 | 658 |
The fees listed above relate to the procedures applied to the Company and its consolidated group entities by Ernst & Young Accountants LLP (2022: PricewaterhouseCoopers Accountants N.V) as the external independent auditor as referred to in Section 1, subsection 1 of the Audit Firms Supervision Act (‘Wet toezicht accountantsorganisaties - Wta’) as well as by member firms and affiliates of Ernst & Young (2022: PricewaterhouseCoopers), including their tax services and advisory groups. The audit fees relate to the audit of the 2023 Annual accounts, regardless of whether the work was performed during the financial year. Our independent auditor, Ernst & Young (2022: PricewaterhouseCoopers) has rendered, for the period to which our statutory audit relates, in addition to the audit of the statutory Annual accounts the following services to the company and its controlled entities:
162 Annual accounts 2023
| 2023 | 2022 | |
|---|---|---|
| Exchange differences non-operational debtors and creditors | (1,094) | (1,058) |
| Exchange differences financial fixed assets | (1,559) | (1,352) |
| Exchange differences cash and cash equivalents | (238) | 100 |
| Exchange differences | (2,891) | (2,311) |
| Interest income banks | 431 | 299 |
| Interest income other | 473 | 246 |
| Interest income | 904 | 545 |
| Interest expense banks | (2,331) | (182) |
| Interest expense lease liability | (554) | (454) |
| Interest expense other | (1,347) | (537) |
| Interest expense | (4,232) | (1,173) |
| Financial income & expense | (6,219) | (2,939) |
The exchange differences on financial fixed assets relate to the foreign exchange loss on the loans receivable from third parties (refer to note 7).
| 2023 | 2022 | |
|---|---|---|
| Current tax (Income) / expense | 20,041 | 18,727 |
| Deferred tax (Income) / expense | -2,098 | -1,987 |
| Tax (Income) / expense | 17,943 | 16,740 |
In 2023, the effective tax rate on the result before tax is 35.8% (2022:35.2%).
163 Brunel International N.V. Annual Report 2023
The reconciliation between the actual tax expense and the tax expense based on the Dutch corporate income tax rate (2023 and 2022: 25.8%) is as follows:
| 2023 | 2022 | |||
|---|---|---|---|---|
| Income tax at Dutch corporate income tax rate | 12,926 | 25.8% | 12,256 | 25.8% |
| Permanent differences: | ||||
| Difference with foreign tax rates | -870 | -1.7% | -467 | -1.0% |
| Weighted average applicable tax rate | 12,056 | 24.1% | 11,789 | 24.8% |
| Adjustment previous years | 3,968 | 7.9% | 100 | 0.2% |
| Non-deductible items | 1,054 | 2.1% | 4,456 | 9.4% |
| Tax losses not recognised as deferred tax asset | 589 | 1.2% | 359 | 0.8% |
| Changes in valuation of deferred taxes | -1,095 | -2.2% | -574 | -1.2% |
| Other taxes | 1,370 | 2.7% | 610 | 1.3% |
| Effective tax charge | 17,943 | 35.8% | 16,740 | 35.2% |
The weighted average applicable tax rate and the effective tax rate are strongly affected by changes in the mix of results of subsidiaries in countries with different tax rates and/or systems. Countries with alternative minimum taxes had a relatively higher share in the results. The non-deductible items in 2022 are mostly related to the loss on the disposal of the operations in Russia (refer to note 2). Change in valuation of deferred tax assets has an effect of 2.2 percentage points in 2023, compared to 1.2 percentage points in 2022, and are mainly driven by the recognition of a deferred tax asset in the USA (EUR 4.9 million) and a derecognition in The Netherlands relating to the group’s investment in a global IT organization (EUR 3.5 million). In 2023 Brunel has settled the tax audit in Germany for fiscal years 2013-2018 (refer to note 16). As a result, an additional tax expense of EUR 4 million was recorded for adjustment previous years.
164 Annual accounts 2023
Movement schedule tax assets and liabilities
During the financial year an amount of EUR 0.7 million was credited directly to other comprehensive income (2022: EUR 0.6 million debited) for tax relating to foreign exchange results recorded in the other comprehensive income.# 22. Deferred tax
The deferred tax assets originate from accumulated tax losses (mainly from Austria, Germany, United Kingdom and United States) and temporary differences. Recognition and derecognition of these assets are based on the forecasted results for the relevant group companies. The deferred tax liabilities relate to temporary differences in the valuation of intangible assets that were a result of business combinations.
| Current Deferred Tax | Total Balance at 1 January 2022 | Tax assets | Tax liability | ||||
|---|---|---|---|---|---|---|---|
| 2,085 | 13,344 | 15,429 | |||||
| -15,068 | -2,253 | -17,321 | |||||
| -12,983 | 11,091 | -1,892 | |||||
| Movements during the year | |||||||
| Paid / received | 23,563 | 0 | 23,563 | ||||
| Through profit and loss | -18,727 | 1,987 | -16,740 | ||||
| Through business combinations | 0 | -182 | -182 | ||||
| Through divestment | -207 | -5 | -212 | ||||
| Through other comprehensive income | -634 | 0 | -634 | ||||
| Exchange rate adjustment | 49 | 53 | 102 | ||||
| 4,044 | 1,852 | 5,896 | |||||
| Balance at 31 December 2022 | |||||||
| Tax assets | 2,994 | 14,725 | 17,719 | ||||
| Tax liability | -11,933 | -1,782 | -13,715 | ||||
| -8,939 | 12,943 | 4,004 | |||||
| Movements during the year | |||||||
| Paid / received | 19,193 | 0 | 19,193 | ||||
| Through profit and loss | -20,041 | 2,098 | -17,943 | ||||
| Through other comprehensive income | 731 | 0 | 731 | ||||
| Exchange rate adjustment | 79 | -237 | -158 | ||||
| -39 | 1,861 | 1,822 | |||||
| Balance at 31 December 2023 | |||||||
| Tax assets | 7,429 | 17,265 | 24,694 | ||||
| Tax liability | -16,407 | -2,460 | -18,866 | ||||
| -8,977 | 14,805 | 5,828 |
Deferred tax assets amounting to EUR 10.0 million (2022: EUR 5.4 million) are dependent on future taxable profits in excess of the profits arising from the reversal of existing temporary differences. Unused tax losses for which no deferred tax assets have been recognised amount to EUR 37.1 million (2022: EUR 65.4 million). All tax losses, either recognised or unrecognised can be offset with future profits. Dependant on the country EUR 1.6 million of the unrecognised losses will expire within 5 years, the remainder can either be offset within 15 years (EUR 1.3 million) or indefinitely (EUR 34.2 million).
165
Brunel International N.V. Annual Report 2023
Deferred tax assets
| Deferred tax assets in relation to: | Opening balance | Through business combi-nations | Through divest-ments | Recognis-ed in P&L | Exchange rate adjusted | Closing balance |
|---|---|---|---|---|---|---|
| Temporary differences in allowance for doubtful debt | 183 | 0 | 0 | 0 | 3 | 186 |
| Temporary differences valuation other intangible assets | 6,631 | 0 | 0 | 541 | 0 | 7,172 |
| Temporary differences in accruals employee expenses | 1,740 | 0 | -249 | 475 | 3 | 1,969 |
| 8,554 | 0 | -249 | 1,016 | 6 | 9,327 | |
| Recognised tax losses | 4,790 | 0 | 0 | 558 | 50 | 5,398 |
| Total deferred tax assets | 13,344 | 0 | -249 | 1,574 | 56 | 14,725 |
Deferred tax liabilities
| Deferred tax liabilities in relation to: | Opening balance | Through business combi-nations | Through divest-ments | Recognis-ed in P&L | Exchange rate adjusted | Closing balance |
|---|---|---|---|---|---|---|
| Temporary differences valuation other intangible assets | -1,973 | -182 | 0 | 380 | 0 | -1,775 |
| Temporary differences in accruals employee expenses | -280 | 0 | 244 | 33 | -4 | -7 |
| Total deferred tax liabilities | -2,253 | -182 | 244 | 413 | -4 | -1,782 |
| Total deferred tax assets and liabilities | 11,091 | -182 | -5 | 1,987 | 52 | 12,943 |
Deferred tax assets
| Deferred tax assets in relation to: | Opening balance | Through business combi-nations | Through divest-ments | Recognis-ed in P&L | Exchange rate adjusted | Closing balance |
|---|---|---|---|---|---|---|
| Temporary differences in allowance for doubtful debt | 186 | 0 | 0 | 0 | -4 | 182 |
| Temporary differences valuation other intangible assets | 7,172 | 0 | 0 | -3,508 | 0 | 3,664 |
| Temporary differences in accruals employee expenses and other | 1,969 | 0 | 0 | 1,525 | -87 | 3,407 |
| 9,327 | 0 | 0 | -1,983 | -91 | 7,253 | |
| Recognised tax losses | 5,398 | 0 | 0 | 4,761 | -148 | 10,011 |
| Total deferred tax assets | 14,725 | 0 | 0 | 2,778 | -239 | 17,265 |
Deferred tax liabilities
| Deferred tax liabilities in relation to: | Opening balance | Through business combi-nations | Through divest-ments | Recognis-ed in P&L | Exchange rate adjusted | Closing balance |
|---|---|---|---|---|---|---|
| Temporary differences valuation other intangible assets | -1,775 | 0 | 0 | 388 | 0 | -1,387 |
| Temporary differences in accruals employee expenses | -7 | 0 | 0 | -68 | 1 | -74 |
| Temporary differences relating to undistributed earnings of subsidiaries | 0 | 0 | 0 | -1,000 | 0 | -1,000 |
| Total deferred tax liabilities | -1,782 | 0 | 0 | -680 | 1 | -2,460 |
| Total deferred tax assets and liabilities | 12,943 | 0 | 0 | 2,098 | -238 | 14,805 |
166
Annual accounts 2023
Temporary differences for which no deferred tax assets have been recognised amount to EUR 16.4 million and relate to the group’s investments in a global IT organisation. The group has undistributed earnings of EUR 55.4 million which, if paid out as dividends, would be subject to tax in the hands of the recipient. An assessable temporary difference exists, and the group has recognised a deferred tax liability of EUR 1.0 million for EUR 10.0 million of these temporary differences. For the remainder no deferred tax liabilities have been recognised as the group is able to control the timing of distributions from these subsidiaries, and it is not expected to distribute these profits in the foreseeable future.
The group is within the scope of the OECD Pillar Two model rules. Pillar two has been enacted or substantively enacted in various jurisdictions in which Brunel operates, and will come into effect from 1 January 2024. Since the Pillar Two legislation was not effective at the reporting date, the group has no related top-up tax exposure. The group applies the exemption to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023. The group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. At the moment, it is not yet clear if Brunel should be considered as part of the group of its majority shareholder, Noverhead Holding Sàrl, under Pillar Two. For Brunel group, the assessment of the potential exposure to Pillar Two income taxes was prepared considering the safe harbour rules, and is based on the most recent tax filings, country-by-country reporting and financial statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions where the transitional safe harbour relief does not apply and the Pillar Two effective tax rate is below 15%. The Group does not expect a material exposure to Pillar Two income taxes in those jurisdictions.
| 2023 | 2022 | |
|---|---|---|
| Weighted average number of ordinary shares for the purpose of basic earnings per share | 50,400,988 | 50,400,988 |
| Effect of dilutive potential ordinary shares from share based payments | 60,614 | 137,212 |
| Weighted average number of ordinary shares for the purpose of diluted earnings per share | 50,461,602 | 50,538,200 |
| Net income for ordinary shareholders in EUR | 31,651,865 | 29,390,540 |
| Basic earnings per share in EUR | 0.63 | 0.58 |
| Diluted earnings per share in EUR | 0.63 | 0.58 |
167
Brunel International N.V. Annual Report 2023
The majority of the items on the consolidated cash flow statement are, on an individual basis cross-referenced to the relevant notes on the consolidated profit and loss account and the consolidated balance sheet. For the remainder of the material items, the reconciliation between amounts included in the consolidated cash flow statement and related amounts in the consolidated profit and loss account and the consolidated balance sheet are shown below.
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 303,050 | 263,873 |
| Acquisition of subsidiaries | 0 | 40 |
| Disposal of subsidiaries | 0 | -17,314 |
| Change in allowance for bad debt | -369 | -12 |
| Change in receivables | 53,853 | 49,818 |
| Exchange rate movements | -5,161 | 6,645 |
| Balance at 31 December | 351,373 | 303,050 |
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 130,629 | 124,905 |
| Acquisition of subsidiaries | 0 | 1,832 |
| Disposal of subsidiaries | 0 | -7,416 |
| Change in trade and other payables | 7,844 | 11,467 |
| Reclassification to trade and other payables | 9,813 | 0 |
| Exchange rate movements | 1,812 | -159 |
| Balance at 31 December | 150,098 | 130,629 |
The other non-cash expenses mostly consist of the impairment of trade and other receivables (refer to note 9) and the post combination benefits relating to acquisitions (refer to note 12).
168
Annual accounts 2023
The Board of Directors, the Supervisory Board, majority shareholder and participations are considered to be related parties. For information about the Directors’ remuneration reference is made to note 17. Transactions with related parties were made on terms equivalent to those that prevail in arm’s length transactions. Included under other operating expenses is an amount of EUR 79 (2022: EUR 79) paid as consultancy fee to the majority shareholder of Brunel International N.V.
x EUR 1,000, unless stated otherwise
Operating segments have been identified on the basis of internal reports about components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. Information reported to the group’s chief operating decision maker is focused at components engaged in providing services in a particular economic environment from those of other segments. A geographical segment is engaged in providing services in a particular economic environment which are subject to risks and returns that are different from those segments operating in other economic environments. The main regions are: DACH (Germany, Austria, Switzerland and Czech Republic), the Netherlands, Americas, Australasia, Europe & Africa, Middle East & India, Asia and Taylor Hopkinson. This is the basis on which internal reports are provided to the chief operating decision maker for assessing performance and determining the allocation of resources within the Group. All regions exceeding 10% of total revenue, EBIT or assets are reported separately. Unallocated relates to the corporate assets and corporate costs that do not relate to a specific segment. The remaining regions are combined in Rest of World. The region Russia & Caspian was dissolved in June 2022 after the divestment of the operations in Russia (refer to note 2).# Brunel International N.V. Annual Report 2023
The revenues are not further disaggregated by streams since the only material revenue is contracting. The transactions between operating segments are on an arm’s length basis in a manner similar to third parties.
| Segments | Revenue 2023 | Revenue 2022 | Contribution margin 2023 | Contribution margin 2022 | Operating profit 2023 | Operating profit 2022 |
|---|---|---|---|---|---|---|
| DACH region | 249,278 | 229,242 | 85,826 | 80,966 | 20,124 | 24,362 |
| Netherlands | 213,205 | 190,326 | 56,582 | 55,727 | 16,103 | 16,652 |
| Australasia | 192,893 | 161,854 | 20,355 | 16,210 | 5,267 | 3,250 |
| Middle East & India | 160,709 | 143,281 | 22,588 | 23,911 | 12,285 | 14,253 |
| Americas | 177,840 | 146,560 | 24,832 | 19,917 | 4,547 | 2,586 |
| Asia | 182,248 | 161,086 | 30,809 | 23,553 | 11,873 | 9,359 |
| Taylor Hopkinson | 94,877 | 83,228 | 18,759 | 17,454 | -3,051 | -1,280 |
| Rest of World | 93,873 | 93,901 | 13,832 | 14,379 | 2,336 | 2,642 |
| Unallocated | 0 | 0 | 0 | 0 | -13,163 | -10,950 |
| Eliminations | -34,388 | -27,654 | 0 | 0 | 0 | 0 |
| Total | 1,330,535 | 1,181,824 | 273,582 | 252,116 | 56,321 | 60,874 |
The group attributes revenue to countries based on the location of the geographical location of the entity that delivers the service. In vast majority of the cases, the location is the same as where our professionals perform work for our clients, with the following exceptions:
| Segments | Direct personnel expenses 2023 | Direct personnel expenses 2022 | Indirect personnel expenses 2023 | Indirect personnel expenses 2022 |
|---|---|---|---|---|
| DACH region | 163,452 | 148,276 | 41,177 | 34,011 |
| Netherlands | 156,623 | 134,599 | 25,753 | 24,652 |
| Australasia | 172,537 | 145,644 | 10,664 | 9,075 |
| Middle East & India | 138,121 | 119,369 | 6,336 | 6,011 |
| Americas | 153,007 | 126,643 | 14,521 | 12,770 |
| Asia | 151,439 | 137,533 | 12,352 | 8,566 |
| Taylor Hopkinson | 76,118 | 65,775 | 14,643 | 13,926 |
| Rest of World | 80,044 | 79,523 | 7,340 | 6,903 |
| Unallocated | 0 | 0 | 14,861 | 12,635 |
| Eliminations | -34,388 | -27,654 | 0 | 0 |
| Total | 1,056,953 | 929,708 | 147,647 | 128,549 |
| Segments | Balance sheet total 2023 | Balance sheet total 2022 | Non-current assets 2023 | Non-current assets 2022 | Investment in IA & PPE 2023 | Investment in IA & PPE 2022 |
|---|---|---|---|---|---|---|
| DACH region | 90,985 | 95,332 | 20,684 | 24,415 | 230 | 807 |
| Netherlands | 63,624 | 57,633 | 14,647 | 15,916 | 1,153 | 1,638 |
| Australasia | 54,532 | 53,517 | 5,489 | 6,107 | 112 | 86 |
| Middle East & India | 80,717 | 68,810 | 2,907 | 2,738 | 227 | 322 |
| Americas | 65,379 | 47,500 | 3,112 | 3,179 | 98 | 187 |
| Asia | 95,560 | 86,709 | 9,039 | 10,530 | 939 | 267 |
| Taylor Hopkinson | 91,961 | 64,176 | 39,190 | 41,199 | 60 | 293 |
| Rest of World | 54,222 | 51,289 | 1,609 | 1,257 | 183 | 96 |
| Unallocated | 14,304 | 22,174 | 21,423 | 15,942 | 8,730 | 7,576 |
| Total | 611,284 | 547,140 | 118,100 | 121,283 | 11,732 | 11,272 |
*Non-current assets exclude financial instruments and deferred tax assets.
| Segments | Tax expense/income 2023 | Tax expense/income 2022 | Current & Long-term liabilities 2023 | Current & Long-term liabilities 2022 | Depreciation and Amortisation 2023 | Depreciation and Amortisation 2022 |
|---|---|---|---|---|---|---|
| DACH region | 11,466 | 7,617 | 47,457 | 41,175 | 6,055 | 5,607 |
| Netherlands | 4,220 | 4,285 | 46,324 | 45,098 | 4,714 | 5,016 |
| Australasia | 1,864 | 670 | 13,886 | 10,509 | 527 | 571 |
| Middle East & India | 1,169 | 1,240 | 49,548 | 44,910 | 1,171 | 1,143 |
| Americas | -3,991 | 302 | 10,673 | 9,723 | 610 | 624 |
| Asia | 2,910 | 2,584 | 33,681 | 34,575 | 2,724 | 1,853 |
| Taylor Hopkinson | -562 | 870 | 25,032 | 17,783 | 2,081 | 1,924 |
| Rest of World | 409 | 929 | 14,986 | 12,017 | 661 | 1,433 |
| Unallocated | 457 | -1,757 | 57,162 | 13,533 | 3,476 | 3,157 |
| Total | 17,942 | 16,740 | 298,749 | 229,323 | 22,019 | 21,328 |
The total number of direct and indirect employees with the group companies is set out below:
| Direct 2023 | Indirect 2023 | Direct 2022 | Indirect 2022 | |
|---|---|---|---|---|
| DACH region | 2,062 | 435 | 2,042 | 405 |
| Netherlands | 1,726 | 270 | 1,667 | 279 |
| Australasia | 1,575 | 124 | 1,375 | 107 |
| Middle East & India | 2,103 | 167 | 2,235 | 139 |
| Americas | 1,028 | 147 | 929 | 125 |
| Asia | 1,424 | 156 | 1,481 | 132 |
| Taylor Hopkinson | 466 | 136 | 447 | 102 |
| Rest of World | 754 | 75 | 1,011 | 104 |
| Unallocated | - | 64 | - | 59 |
| Total | 11,138 | 1,574 | 11,187 | 1,452 |
| Total workforce | 12,712 | 12,639 |
| Direct 2023 | Indirect 2023 | Direct 2022 | Indirect 2022 | |
|---|---|---|---|---|
| DACH region | 2,008 | 438 | 2,133 | 412 |
| Netherlands | 1,753 | 274 | 1,718 | 281 |
| Australasia | 1,692 | 128 | 1,491 | 109 |
| Middle East & India | 1,930 | 174 | 2,260 | 155 |
| Americas | 958 | 142 | 999 | 143 |
| Asia | 1,381 | 177 | 1,511 | 135 |
| Taylor Hopkinson | 402 | 124 | 312 | 112 |
| Rest of World | 815 | 78 | 659 | 70 |
| Unallocated | - | 65 | - | 62 |
| Total | 10,939 | 1,600 | 11,083 | 1,479 |
| Total workforce | 12,539 | 12,562 |
The tables below provide an overview of the activities with regard to our global vertical approach.
| Conven-tional Energy | Future mobility | Industrials & Technology | Life Sciences | Mining | Renew-ables | Financial Services | Public Sector | Other | Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | ||||||||||
| DACH region | 10,590 | 95,387 | 80,874 | 25,996 | 1,076 | 12,811 | - | - | 22,544 | 249,278 |
| The Nether- lands | 4,262 | 9,020 | 24,392 | 10,087 | 297 | 15,663 | 50,153 | 84,411 | 14,920 | 213,205 |
| Australasia | 92,004 | - | 505 | 675 | 76,652 | 8,036 | 5,796 | 293 | 8,932 | 192,893 |
| Middle East & India | 142,173 | 43 | 2,669 | 41 | 268 | 5,979 | - | - | 9,536 | 160,709 |
| Americas | 127,312 | 8 | 846 | 8,960 | 29,487 | 9,703 | - | - | 1,524 | 177,840 |
| Asia | 115,995 | 3,804 | 1,878 | 1,071 | 40,752 | 14,876 | - | - | 3,872 | 182,248 |
| Taylor Hopkinson | - | - | - | - | - | - | 94,877 | - | - | 94,877 |
| Rest of world | 27,008 | 182 | 2,795 | 2,913 | 1,611 | 13,691 | - | - | 11,285 | 59,485 |
| Total | 519,344 | 108,444 | 113,959 | 49,743 | 150,143 | 175,636 | 55,949 | 84,704 | 72,613 | 1,330,535 |
| Conven-tional Energy | Future mobility | Industrials & Technology | Life Sciences | Mining | Renew-ables | Financial Services | Public Sector | Other | Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | ||||||||||
| DACH region | 12,681 | 74,484 | 90,734 | 13,057 | 145 | 6,164 | - | - | 31,977 | 229,242 |
| The Nether- lands | 5,139 | 2,773 | 22,270 | 7,487 | 65 | 5,234 | 48,397 | 90,324 | 8,637 | 190,326 |
| Australasia | 73,906 | - | 1,217 | 6 | 53,157 | 13,051 | 9,434 | - | 11,083 | 161,854 |
| Middle East & India | 115,590 | 40 | 1,019 | 68 | 114 | 2,541 | - | - | 23,909 | 143,281 |
| Americas | 108,204 | 237 | 768 | 8,831 | 21,104 | 6,672 | - | - | 744 | 146,560 |
| Asia | 114,559 | 309 | 2,865 | 1,362 | 26,691 | 12,188 | - | - | 3,112 | 161,086 |
| Taylor Hopkinson | - | - | - | - | - | - | 83,222 | - | 6 | 83,228 |
| Rest of world | 30,793 | 298 | 2,737 | 3,085 | 1,641 | 13,108 | - | - | 14,585 | 66,247 |
| Total | 460,872 | 78,141 | 121,610 | 33,896 | 102,917 | 142,180 | 57,831 | 90,324 | 94,054 | 1,181,824 |
In 2023 the group has updated its disaggregation of revenue, as a result the following changes were made:
x EUR 1,000, before profit appropriation
| 31 December 2023 | 31 December 2022 | |
|---|---|---|
| Non-current assets | ||
| Other intangible assets (30) | 18,297 | 13,330 |
| Property, plant & equipment (30) | 809 | 409 |
| Right-of-use assets (31) | 2,132 | 2,435 |
| Investments accounted for using the equity method (32) | 315,641 | 283,563 |
| Deferred tax income assets | 4,027 | 7,540 |
| Total non-current assets | 340,906 | 307,277 |
| Current assets | ||
| Trade and other receivables (33) | 34,431 | 11,391 |
| Income tax receivables | 3,146 | 0 |
| Cash and cash equivalents (34) | 0 | 785 |
| Total current assets | 37,577 | 12,176 |
| Total assets | 378,483 | 319,453 |
| Shareholders' equity (37) | ||
| Share capital | 1,517 | 1,517 |
| Share premium | 86,145 | 86,145 |
| General reserve | 176,388 | 174,907 |
| Translation reserve | 5,188 | 12,013 |
| Share based payments | 564 | 707 |
| Unappropriated result | 31,652 | 29,390 |
| Total shareholders' equity | 301,454 | 304,679 |
| Non-current liabilities | ||
| Lease liabilities (31) | 1,369 | 1,742 |
| Loans and borrowings (36) | 38,476 | 0 |
| Total non-current liabilities | 39,845 | 1,742 |
| Current liabilities | ||
| Lease liabilities (31) | 765 | 693 |
| Other current liabilities (35) | 36,419 | 9,817 |
| Income tax payables | 0 | 2,522 |
| Total current liabilities | 37,184 | 13,032 |
| Total liabilities | 77,029 | 14,774 |
| Total equity & liabilities | 378,483 | 319,453 |
x EUR 1,000
| 2023 | 2022 | |
|---|---|---|
| Revenue (38) | 18,644 | 16,269 |
| Indirect personnel expenses (39) | -14,066 | -11,946 |
| Depreciation and amortisation (29-31) | -4,075 | -3,941 |
| Other expenses (40) | -13,775 | -11,332 |
| Total operating costs | -31,916 | -27,219 |
| Operating profit | -13,272 | -10,950 |
| Exchange differences | -215 | -22 |
| Interest income | 15 | -83 |
| Interest expenses | -1,151 | -45 |
| Financial income and expense | -1,351 | -150 |
| Result before tax | -14,623 | -11,100 |
| Tax | 479 | 2,801 |
| Share of profit of investments accounted for using the equity method (41) | 45,796 | 37,689 |
| Net result | 31,652 | 29,390 |
x EUR 1,000, unless stated otherwise
The company financial statements of Brunel International N.V are prepared in accordance with the legal requirements of Part 9, Book 2 of the Dutch Civil Code. The company has made use of the possibility based on Article 362, paragraph 8, Part 9, Book 2 of the Dutch Civil Code to prepare company financial statements based on the accounting policies used for the consolidated financial statements. Foreign currency has been translated, assets and liabilities have been valued, and net income has been determined, in accordance with the accounting principles for the valuation of assets and liabilities and determination of profit on pages 129 until 137.
Investments in consolidated subsidiaries are entities over which the company has control, i.e. the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are recognised from the date on which control is transferred to the company or its intermediate holding entities. They are derecognised from the date that control ceases. The company applies the acquisition method to account for acquiring subsidiaries, consistent with the approach identified in the consolidated financial statements.The consideration transferred for the acquisition of a subsidiary is the fair value of assets transferred, liabilities incurred to the former owners of the acquiree, and the equity interests issued by the company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in an acquisition are measured initially at their fair values at the acquisition date and are subsumed in the net asset value of the investment in consolidated subsidiaries. Acquisition-related costs are expensed as incurred. The subsidiaries are measured and presented in accordance with the equity method.
Receivables are mainly receivables on subsidiaries. The accounting policy on trade and other receivables is included in the consolidated financial statements. The expected credit losses, if any, are eliminated in the carrying amount of these receivables.
The accounting policy on other current liabilities is included within the consolidated financial statements.
Brunel International N.V. provides management services, business IT management, design, implementation, and support services. Revenue from providing services is recognised in the accounting period in which the services are rendered.
This concerns software.
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 42,374 | 34,917 |
| Accumulated amortisation | -29,044 | -26,215 |
| Balance at 1 January | 13,330 | 8,702 |
| Changes in carrying amount | ||
| Additions | 8,200 | 7,457 |
| Amortisation | -3,232 | -2,829 |
| Balance at 31 December | 18,297 | 13,330 |
| At cost at 31 December | 50,574 | 42,374 |
| Accumulated amortisation | -32,276 | -29,044 |
| Balance at 31 December | 18,297 | 13,330 |
The amortisation rate for software is 20-40% per annum.
In 2023 no software that was fully amortised has been written off from both the at cost value and the accumulated amortisation (2022: nihil).
| 2023 | 2022 | |
|---|---|---|
| At cost at 1 January | 945 | 826 |
| Accumulated depreciation | -536 | -396 |
| Balance at 1 January | 409 | 430 |
| Changes in carrying amount | ||
| Additions | 530 | 119 |
| Depreciation | -130 | -140 |
| Balance at 31 December | 809 | 409 |
| At cost at 31 December | 1,475 | 945 |
| Accumulated depreciation | -666 | -536 |
| Balance at 31 December | 809 | 409 |
The depreciation rate for property, plant & equipment is 20-40% per annum.
In 2023 no property, plant & equipment that was fully depreciated has been written off from both the at cost value and the accumulated depreciation (2022: nihil).
Movements during the year: This note provides information for leases where the company is a lessee.
The company balance sheet shows the following amounts relating to leases:
| 2023 | 2022 | |
|---|---|---|
| Right of use asset | ||
| Right of use asset - Property | 1,872 | 2,314 |
| Right of use asset - Cars | 260 | 121 |
| Total | 2,132 | 2,435 |
| Lease liability | ||
| Current | 765 | 693 |
| Non-current | 1,369 | 1,742 |
| Total | 2,134 | 2,435 |
Additions to the right-of-use assets during 2023 amount to EUR 0.2 million (2022: EUR 0.1 million).
The profit and loss account shows the following amounts related to leases:
| 2023 | 2022 | |
|---|---|---|
| Depreciation charge of right-of-use assets | ||
| Depreciation | -713 | -972 |
| Interest expense | -1 | 0 |
| Expense relating to Short-term and low-value leases (included other expenses) | -115 | -89 |
The total cash outflow for leases in 2023 was EUR 0.8 million (2022: EUR 0.8 million).
The investments accounted for using the equity method consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Subsidiaries | 314,688 | 283,070 |
| Funding of group companies | 953 | 494 |
| Balance at 31 December | 315,641 | 283,563 |
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 283,070 | 264,810 |
| Capital contributions | 1,700 | 1,250 |
| Profit for the year | 45,796 | 37,689 |
| Dividend payment | -8,500 | -30,223 |
| Share based payments | -203 | 394 |
| Divestments | -155 | -98 |
| Actuarial gains/(losses) | -255 | 733 |
| Exchange rate movements | -6,765 | 8,514 |
| Balance at 31 December | 314,688 | 283,070 |
See the consolidated financial statements for a list of the subsidiaries.
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 494 | 482 |
| Additions | 470 | 0 |
| Exchange rate movements | -10 | 12 |
| Balance at 31 December | 953 | 494 |
The interest rate for funding of group companies is based on our global transfer pricing policy. The interest rate is around 5%. There are no repayment schedules as this depends on the cash flow of the group company. The fair value approximates the book value.
Trade and other receivables consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Group companies | 28,987 | 7,452 |
| Other receivables | 5,444 | 3,939 |
| Balance at 31 December | 34,431 | 11,391 |
All trade and other receivables fall due within one year. The fair value approximates the book value. The expected credit loss is negligible.
Cash at bank and in hand are freely disposable. The fair value approximates the book value.
The other current liabilities consist of the following:
| 2023 | 2022 | |
|---|---|---|
| Group companies | 31,302 | 3,606 |
| Other current liabilities | 5,117 | 6,211 |
| Balance at 31 December | 36,419 | 9,817 |
All current liabilities fall due within one year. The fair value approximates the book value. The expected credit loss is negligible.
The loans and borrowings relate primarily to a revolving credit facility (refer to note 12 of the consolidated financial statements).
| 2023 | 2022 | |
|---|---|---|
| Balance at 1 January | 0 | 0 |
| Proceeds from drawing | 38,476 | 0 |
| Balance at 31 December | 38,476 | 0 |
Composition of and changes in shareholders’ equity:
| Legal Share Capital | Share Premium | General Reserve | Share based payments | Translation reserve | Unappropriated result | Total | |
|---|---|---|---|---|---|---|---|
| Balance at 31 December 2021 | 1,517 | 86,145 | 165,827 | 237 | 3,511 | 30,999 | 288,236 |
| Exchange differences result | 8,502 | 8,502 | |||||
| Actuarial gains/(losses) | 733 | 733 | |||||
| Share based payments | 28 | 470 | 498 | ||||
| Result financial year | 29,390 | 29,390 | |||||
| Cash dividend | (14) | (22,680) | (22,680) | ||||
| Appropriation of result | (30,999) | - | |||||
| Balance at 31 December 2022 | 1,517 | 86,145 | 174,907 | 707 | 12,013 | 29,390 | 304,679 |
| Exchange differences result | (6,825) | (6,825) | |||||
| Actuarial gains/(losses) | (255) | (255) | |||||
| Liquidation loss on non-controlling interests | 67 | 67 | |||||
| Share based payments | (143) | (143) | |||||
| Result financial year | 31,652 | 31,652 | |||||
| Cash dividend | (14) | (27,721) | (27,721) | ||||
| Appropriation of result | (29,390) | - | |||||
| Balance at 31 December 2023 | 1,517 | 86,145 | 176,388 | 564 | 5,188 | 31,652 | 301,454 |
In the year under review a dividend of EUR 0.55 per share was paid. The proposed dividend for 2023 will be EUR 0.55 per share.
The gross profit in the company profit and loss account relates to management fees charged to group entities.
Salaries, social security charges, and pension expenses for employees of Brunel International N.V. amounted to EUR 7.2 million, EUR 0.7 million, and EUR 0.4 million, respectively, for 2023 (2022: expenses of EUR 6.4 million, EUR 0.6 million, and EUR 0.3 million, respectively). The remainder largely consists of staff costs for employees of other group companies that are recharged to Brunel International N.V. At the end of 2023 Brunel International N.V. employed 65 people (2022: 62), all in the Netherlands. On average during the year Brunel International N.V. employed 64 people (2022: 59). Besides the Board of Directors and their personal assistants, these concern the group finance, legal, IT, and HR departments.
The 2023 other expenses amount to EUR 13.8 million (2022: EUR 11.3 million) and comprise IT expenses, marketing expenses, office, and other overhead costs.
| 2023 | 2022 | |
|---|---|---|
| Profit group companies | 45,796 | |
| Other |
Other Disclosures of director’s remuneration and audit fees are included in notes 17 and 20 to the consolidated Annual accounts.
The company has guaranteed the liabilities for its Dutch participations Brunel Nederland B.V. and Brunel Energy Holding B.V. Brunel International N.V. has guaranteed towards Brunel GmbH its receivable on Brunel Car Synergies GmbH. At 31 December 2023, this receivable amounts to EUR 2.0 million (2022: EUR 2.0 million). Brunel International N.V. has guaranteed towards Liberty Mutual Surety Europe B.V. EUR 5.6 million (2022: EUR 5.1 million) and towards HSBC Bank (China) Company Ltd EUR 1.4 million (2022: EUR 1.5 million). No other guarantees have been provided (2022: EUR 0.0 million). Brunel International N.V. has issued a letter of credit towards HSBC for the credit facility of Brunel India Private Ltd. The letter of credit amounts to EUR 6.8 million (2022: EUR 2.6 million) and is undrawn as per year-end 2023. Brunel International N.V. has guaranteed the ultimate balance of sums payable under the credit facility (refer to note 12). Brunel International N.V. is part of the Dutch fiscal unity for corporate income taxes, as well as for value-added taxes. As a consequence, the company bears joint and several liabilities for the debts with respect to corporate income taxes and value-added taxes of the fiscal unity. The company settles corporate income taxes, based on the fiscal results before taxes of the subsidiaries belonging to the fiscal unity.
No material events have occurred post-reporting date that warrant disclosure.
Amsterdam, 23 February 2024
The Board of Directors The Supervisory Board
J.T. Andringa J.J.B.M. Spee
P.A. de Laat F.I.M. van der Vloed
A.G. Maude
K. Koelemeijer# Annual Report 2023
Article 26.2 The board of directors determines the part of the Company’s profits which will be added to the reserves, subject to the approval of the holder of the priority share*.
Article 26.3 The remaining part of the Company’s profits is at the disposal of the shareholders for distribution of profit.
The priority share, which has a par value of EUR 10,000, has been issued to Stichting Prioriteit Brunel, subject to the condition precedent that the majority shareholder loses its majority share in Brunel International N.V.’s share capital. The priority share will be fully paid up as soon as the issue becomes unconditional. The protective stipulations are included in the articles of association of Brunel International N.V. and are posted on the company’s website.
* Pursuant to Article 4.3, as long as the priority share is not subscribed, the rights attached to this share are exercised by the general meeting of shareholders
183 Brunel International N.V. Annual Report 2023
To: the shareholders and Supervisory Board of Brunel International N.V.
We have audited the financial statements for the financial year ended 31 December 2023 of Brunel International N.V. based in Amsterdam, the Netherlands. The financial statements comprise the consolidated and company financial statements. In our opinion:
The consolidated financial statements comprise:
The company financial statements comprise:
184 other information
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the Our responsibilities for the audit of the financial statements section of our report.
We are independent of Brunel International N.V. (the company) in accordance with the EU Regulation on specific requirements regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The following information in support of our opinion and any findings were addressed in this context, and we do not provide a separate opinion or conclusion on these matters.
Brunel International N.V. is a global provider of secondment, project management, recruitment and consultancy services. We paid specific attention in our audit to a number of areas driven by the operations of the group and our risk assessment. We determined materiality and identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error in order to design audit procedures responsive to those risks and to obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
| Materiality | EUR 6.8 Million |
|---|---|
| Benchmark applied | 0.5% of revenue |
| Explanation | We applied revenue as benchmark as in our perception, it is an important and stable performance indicator for the company and the users of the financial statements. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons. We agreed with the Supervisory Board that misstatements in excess of EUR 340,000, which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds. |
runel International N.V. is at the head of a group of entities. The financial information of this group is included in the consolidated financial statements. Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent
185 Brunel International N.V. Annual Report 2023
of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.
Following our assessment of the risk of material misstatement to the consolidated financial statements, we have selected nine components which required an audit of the complete set of financial information (Full Scope). Furthermore, we selected four components requiring audit procedures on specific account balances that we considered had the potential for the greatest impact on the group financial statements (Specific Scope).
With the exception of one operating company in Scotland, the audit of the foreign operating companies in scope of our audit were performed by teams of EY Global member firms. We have:
As a result of our scoping of the consolidated financial statement, specific account balances and the performance of audit procedures at different levels in the organisation, our actual coverage varies per financial statement account balance and the depth of our audit procedures per account balance varies depending on our risk assessment. Accordingly, our audit coverage of the group’s revenues and total assets can be summarised as follows:
| Revenues | Total assets | |
|---|---|---|
| Full scope | 66% | 58% |
| Specific scope | 23% | 9% |
| Other procedures | 11% | 33% |
186 other information
By performing the procedures mentioned above at components of the group, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion on the consolidated financial statements.
We ensured that the audit teams both at group and at component levels included the appropriate skills and competences which are needed for the audit of a listed client in the contracting and recruiting industry. We included specialists in the areas of IT audit (including cybersecurity), taxes, forensic, compliance with laws and regulations on temporary employment, sustainability, valuation of goodwill and share based payments.
Climate change and the energy transition are high on the public agenda. Issues such as CO2 reduction impact financial reporting, as these issues entail risks for the business operation, the valuation of assets and provisions or the sustainability of the business model and access to financial markets of companies with a larger CO2 footprint. The Board of Directors summarised Brunel International N.V.’s commitments and obligations, and reported in the ‘Environmental, social and governance (ESG) Commitment’ section of the Report from the Board of Directors how the company is addressing climate-related and environmental risks. The impact of climate change is not identified as one of the top risks for the Company. As part of our audit of the financial statements, we evaluated the extent to which climate-related risks, the effects of the energy transition, the company’s net zero commitment and the exposure in sectors with high environmental and/or social impact, are taken into account in estimates and significant assumptions.Furthermore, we read the Report from the Board of Directors and considered whether there is any material inconsistency between the non-financial information ‘Environmental, social and governance (ESG) Commitment’ section and the financial statements. Based on the audit procedures performed, we do not deem climate-related risks to have a material impact on the financial reporting judgements, estimates or significant assumptions as at 31 December 2023.
Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and we cannot be expected to detect non-compliance with all laws and regulations, it is our responsibility to obtain reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Our audit response related to fraud risks
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of the company and its environment and the components of the system of internal control, including the risk assessment process and the Board of Directors’ process for responding to the risks of fraud and monitoring the system of internal control and how the Supervisory Board exercises oversight, as well as the outcomes.
187 Brunel International N.V. Annual Report 2023
We refer to the Risks, risk management and control systems section of the Report from the Board of Directors for the Board of Directors’ (fraud) risk assessment and the Risk and internal risk management systems section of the Supervisory Board report in which the Supervisory Board reflects on this risk assessment. We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as the code of conduct and whistle blower procedures. We evaluated the design and the implementation of internal controls designed to mitigate fraud risks. As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery and corruption in close co-operation with our forensic specialists. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present. We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance. We addressed the risks related to management override of controls, as this risk is present in all companies. For these risks we have performed procedures among other things to evaluate key accounting estimates for management bias that may represent a risk of material misstatement due to fraud, in particular relating to important judgment areas and significant accounting estimates as disclosed in the general notes to the financial statements. We have also used data analysis to identify and address high-risk journal entries and evaluated the business rationale (or the lack thereof) of significant extraordinary transactions, including those with related parties.
The following fraud risks identified required significant attention during our audit:
Presumed risks of fraud in revenue recognition
Fraud risk
We presumed that there are risks of fraud in revenue recognition. We evaluated the pressure or incentive from quantitative targets in bonus scheme for the Board of Directors and other members of management and expectations from shareholders as revenue is considered a key performance indicator. We considered that material misstatement may result from improper cut-off per balance sheet date.
Our audit approach
We describe the audit procedures responsive to the presumed risk of fraud in revenue recognition in the description of our audit approach for the key audit matter ”Improper revenue recognition”. We considered available information and made enquiries of relevant executives, directors, internal audit function, legal and the Supervisory Board. The fraud risks we identified, enquiries and other available information did not lead to specific indications for fraud or suspected fraud potentially materially impacting the view of the financial statements.
Our audit response related to risks of non-compliance with laws and regulations
We performed appropriate audit procedures regarding compliance with the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Furthermore, we assessed factors related to the risks of non-compliance with laws and regulations that could reasonably be expected to have a material effect on
188 other information
the financial statements from our general industry experience, through discussions with the Board of Directors, reading minutes, inspection of internal audit reports and performing substantive tests of details of classes of transactions, account balances or disclosures. We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any indication of (suspected) non-compliance throughout the audit, in particular related to international laws and regulations related to temporary employment. We refer to our key audit matter ‘Non-compliance with laws and regulations relating to temporary employment’. Finally, we obtained written representations that all known instances of non-compliance with laws and regulations have been disclosed to us.
Our audit response related to going concern
As disclosed in section ‘Going concern’ in the general notes to the financial statements, the financial statements have been prepared on a going concern basis. When preparing the financial statements, the Board of Directors made a specific assessment of the company’s ability to continue as a going concern and to continue its operations for the foreseeable future. We discussed and evaluated the specific assessment with the Board of Directors exercising professional judgment and maintaining professional skepticism. We considered whether the Board of Directors’ going concern assessment, based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, contains all relevant events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Based on our procedures performed, we did not identify material uncertainties about going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern.
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.
189 Brunel International N.V. Annual Report 2023
Revenue is one of the key indicators of the company’s performance and considered a main focus of the users of the financial statements. We refer to sections ‘Revenue from contracts with customers’ and ‘Rendering of services’ in the General notes to the consolidated annual accounts for the material accounting policy information, types of contracts and services and other explanatory information related to revenue. The vast majority of the group’s revenue relates to contracting and secondment. This revenue is recognized simultaneously with providing the service. As mentioned in the section ‘Our audit response related to fraud risks’ above, we identified a fraud risk relating to improper revenue recognition. Given the main focus of users of the financial statements and the identified fraud risk, we consider improper revenue recognition a key audit matter.
Our audit procedures included, amongst others, evaluating the appropriateness of the company’s revenue recognition accounting policies in accordance with IFRS 15 “Revenue from Contracts with Customers”, and whether the accounting policies have been applied consistently. We have obtained an understanding of the revenue recognition process within the contracting and secondment business and evaluated the company’s controls relevant to revenue recognition. Furthermore, we have performed the following substantive audit procedures:
We concur with the revenue recognised in the financial statements.
190 other information
As at 31 December 2023, the Trade accounts receivable balances amount to EUR 330 million (2022: EUR 286 million) and represents 54% (2022: 52%) of the group’s total assets.# Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Brunel International N.V.
We have audited the consolidated financial statements of Brunel International N.V. (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at December 31, 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at December 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
We conducted our audit in accordance with auditing standards of the Netherlands, including the auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and its subsidiaries and to meet our other ethical responsibilities, in accordance with the requirements of the Netherlands Act on the supervision of accountancy (Wet toezicht accountantsorganisaties - Wtra) and relevant ethical requirements for accountants. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In section ‘Recoverability of receivables’ contracts’ in the General notes to the consolidated Annual accounts, the company explains that it has receivables on third parties in various countries. These receivables include accrued income. Significant judgment is required in determining the collectability of the receivables. The group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables and revenue to be invoiced (accrued income). Further reference is made to note 9. Trade and other receivables. We identified a higher risk of overstatement of the trade accounts receivable, specifically on balances which are overdue, and given the amounts involved, we consider this a key audit matter.
Our audit procedures included, amongst others, evaluating the appropriateness of the company’s accounting policies related to expected credit losses in accordance with IFRS 9 “Financial Instruments”, and whether the accounting policies have been applied consistently. We have obtained understanding of the provisioning process of trade accounts receivable and evaluated the company’s controls relevant to the expected credit loss calculations for the trade accounts receivable. Furthermore, we have performed the following substantive audit procedures:
We concur with the valuation of trade accounts receivable recognised in the financial statements.
The group operates worldwide and has to comply with a wide variety of laws and regulations in over 40 countries. As the applicable laws and regulations relating to temporary employment are mostly country specific, there is higher complexity for the group to comply with these laws and regulations. In addition, due to the nature of the business, omissions in the payments of wage tax and other payroll related charges may have a material impact on the financial statements and could result to reputational damage. We refer to section ‘Compliance risks monitoring and control‘ in Chapter ‘Risks, risk management and controls’, that explains that non-compliance with laws and regulations, and local standards, including tax regulations, can occur due to inadequate knowledge of specific jurisdictional provisions or their interpretational ambiguity, leading to potential penalties and reputational harm. We focused on this risk of non-compliance with applicable laws and regulations for temporary employment, as this is the core business of the company and may have a material impact on the financial statements. We therefore consider this a key audit matter.
We have obtained understanding of Brunel’s processes to comply with and monitor and control compliance with laws and regulations relating to temporary employment. Our procedures included, among others, interviews with responsible employees across the globe. Furthermore, our procedures include evaluating the company’s controls relating to non-compliance with laws and regulations. Furthermore, we have performed the following substantive audit procedures:
We noted no material findings based on our procedures performed.
The annual report contains other information in addition to the financial statements and our auditor’s report thereon. Based on the following procedures performed, we conclude that the other information:
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 and Section 2:135b sub-Section 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
The Board of Directors is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information required by Part 9 of Book 2 of the Dutch Civil Code. The Board of Directors and the Supervisory Board are responsible for ensuring that the remuneration report is drawn up and published in accordance with Sections 2:135b and 2:145 sub section 2 of the Dutch Civil Code.
We were engaged by the general meeting as auditor of Brunel International N.V. on 11 May 2023, as of the audit for the year 2023.
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit of public-interest entities.
Brunel International N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF). In our opinion the annual report prepared in the XHTML format, including the (partially) marked-up consolidated financial statements as included in the reporting package by Brunel International N.V., complies in all material respects with the RTS on ESEF.
The Board of Directors is responsible for preparing the annual report, including the financial statements, in accordance with the RTS on ESEF, whereby the Board of Directors combines the various components into a single reporting package. Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard 3950N, ”Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument” (assurance engagements relating to compliance with criteria for digital reporting). Our examination included amongst others:
The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRSs and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Directors is responsible for such internal control as the Board of Directors determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the Board of Directors is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, the Board of Directors should prepare the financial statements using the going concern basis of accounting unless the Board of Directors either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.# Supervisory Board's Responsibilities
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements.
The "Information in support of our opinion" section above includes an informative summary of our responsibilities and the work performed as the basis for our opinion.
Our audit further included among others:
* Performing audit procedures responsive to the risks identified, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
* Obtaining an understanding of internal control relevant to the audit 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 company’s internal control.
* Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
* Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
* Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect, we also submit an additional report to the audit committee of the Supervisory Board in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
Utrecht, 23 February 2024
Ernst & Young Accountants LLP
R.H.A. Duim
Certain parts of this Annual Report contain financial measures that are not measures of financial performance under IFRS. These are commonly referred to as non-IFRS financial measures and include items such as organic growth revenue, Organic growth Gross profit, Organic growth operating costs, underlying EBIT.
Although the non-IFRS financial measures presented are not measures of financial performance under IFRS, the company uses these measures to monitor the underlying performance of its business and operations. These measures have not been audited or reviewed by the company’s external auditor. Furthermore, these measures might not be indicative of the company’s historical operating results, nor are such measures meant to be predictive of the company’s future results. These measures are presented in this Annual Report because the company considers them an important supplemental measure of its performance and believes that these and similar measures are widely used in the industry in which it operates as a means of evaluating a company’s operating performance.
The company discloses comparable growth as a supplemental non-IFRS financial measure, as the company believes that the presentation of comparable growth is a meaningful measure for investors to evaluate the performance of the company’s business activities over time. The company determines comparable revenue growth by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days. The company also believes that the presentation of underlying EBIT, EBIT (after one-off) provide useful information to investors on the development of the company’s business and enhance the ability of investors to compare profitability across the years. In the case of underlying EBIT and EBIT (after one-off) ratio, the company believes that these measures make the underlying performance of its businesses more transparent by factoring out restructuring costs and other incidental charges which are not directly related to the operational performance of the company.
| ACT vs PY Reported | FX | Work. days | Organic 2023A | Reported 2023A | Divestments | Restated Reported 2022A | Organic 2022A | Δ% | Δ% | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,330.5 | 36.6 | 6.5 | 1,373.6 | 1,181.8 | (18.2) | 1,163.7 | 13% | 18% | |
| Direct personnel expenses | (1,057.0) | (31.3) | (3.2) | (1,091.4) | (929.7) | 15.5 | (914.2) | 14% | 19% | |
| Gross Profit | 273.6 | 5.3 | 3.4 | 282.2 | 252.1 | (2.7) | 249.5 | 9% | 13% | |
| Operating costs | (212.5) | (3.5) | 0.0 | (216.0) | (191.2) | 1.8 | (189.4) | 11% | 14% | |
| Underlying EBIT | 61.1 | 1.8 | 3.4 | 66.2 | 60.9 | (0.8) | 60.0 | 0% | 10% | |
| One-offs* | (4.8) | - | - | (4.8) | - | - | - | |||
| EBIT | 56.3 | 1.8 | 3.4 | 61.4 | 60.9 | (0.8) | 60.0 | -7% | 2% |
Until Q2-2023, the company assessed like-for-like changes, which excluded currency effects, acquisitions, and disposals while comparing with growth over previous year. However, due to the increasing significance of working days and in alignment with common industry practices, starting from Q3-2023, the company transitioned to measuring performance based on organic growth changes rather than like-for-like changes.
| 2022A | ACT vs PY Reported | FX | Acquisition | Like for like | Work. days | Organic 2022A | Reported 2021A | Like for like 2021A | Organic 2021A | Δ% | Δ% | Δ% | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,181.8 | (48.3) | (83.2) | 1,050.3 | (12.8) | 1,037.4 | 899.7 | (20.6) | 879.1 | 31% | 19% | 18% | |
| Direct personnel expenses | (929.7) | 41.0 | 65.8 | (822.9) | 12.3 | (810.6) | (689.1) | 16.5 | (672.6) | 35% | 22% | 21% | |
| Gross Profit | 252.1 | (7.3) | (17.5) | 227.3 | (0.6) | 226.8 | 210.6 | (4.0) | 206.6 | 20% | 10% | 10% | |
| Operating costs | (191.2) | 4.1 | 18.7 | (168.4) | 2.3 | (166.1) | (162.9) | 2.3 | (160.6) | 17% | 5% | 3% | |
| Underlying EBIT | 60.9 | (3.2) | 1.3 | 59.0 | 1.7 | 60.7 | 47.7 | (1.7) | 45.9 | 28% | 28% | 32% | |
| One-offs | - | - | - | - | - | - | - | - | - | ||||
| EBIT | 60.9 | (3.2) | 1.3 | 59.0 | 1.7 | 60.7 | 47.7 | (1.7) | 45.9 | 28% | 28% | 32% |
| Revenue FY 2023 | Reported FY 2023 | FX FY 2023 | Work days FY 2023 | Organic Growth FY 2023 | Reported FY 2022 | Divestments FY 2022 | Restated Reported FY 2022 | Organic FY 2022 | Δ% | Δ% | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| DACH region | 249.3 | (0.3) | 2.0 | 251.0 | 229.2 | 229.2 | 9% | 9% | |||
| The Netherlands | 213.2 | - | 0.8 | 214.0 | 190.3 | 190.3 | 12% | 12% | |||
| Australasia | 192.9 | 12.6 | 0.8 | 206.3 | 161.9 | 161.9 | 19% | 27% | |||
| Asia | 182.2 | 9.7 | 0.8 | 192.7 | 161.1 | 161.1 | 13% | 20% | |||
| Middle East & India | 160.7 | 6.0 | 0.7 | 167.4 | 143.3 | 143.3 | 12% | 17% | |||
| Americas | 177.8 | 6.0 | 0.7 | 184.6 | 146.6 | 146.6 | 21% | 26% | |||
| Taylor Hopkinson | 94.9 | 2.9 | 0.4 | 98.2 | 83.2 | 83.2 | 14% | 18% | |||
| Rest of world | 94.0 | 0.5 | 0.4 | 94.9 | 93.5 | (18.2) | 75.3 | 1% | 26% | ||
| Eliminations | (34.6) | (1.0) | 0.0 | (35.5) | (27.2) | (27.2) | 27% | 30% | |||
| Total | 1,330.5 | 36.6 | 6.5 | 1,373.6 | 1,181.8 | (18.2) | 1,163.7 | 13% | 18% |
198 other information
* One-offs- Exceptional nonrecurring items that distort the true operational performance of the business. It provides a clearer picture of the company’s ongoing profitability by eliminating the impact of restructuring costs, integration and M&A costs related to acquisitions and other exceptional items.
* Net Cash – the sum of all cash and cash equivalent, restricted cash minus loans and borrowings
* Directs/specialists - Direct employees are those employees of an entity that are billed to an external client.
* Indirect - Staff whose time is not billable to a client.
* EBIT – Operating profit.
* EBIT% (underlying)- Operating profit excluding restructuring costs, acquisition-related charges and other incidental charges expressed as a percentage of total revenue.
* Conversion ratio (EBIT/GP) – A performance measure on how Brunel’s EBIT develops in relation to the Gross Profit. This makes the performance per region better comparable, taking out margin differences between regions.
* Rev/Directs – The ratio of total revenue to the direct employees.
* Revenue growth organic – The percentage of growth in revenue compared to the previous period, measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days.
* Gross Profit growth organic- The percentage of growth in contribution margin over the previous period, measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days.
* Operating cost growth organic - The percentage of growth in operating cost over the previous period, measured by excluding the impact of one-offs, currencies, acquisitions, disposals and by adjusting for working days.
* EBIT growth organic - The percentage of growth in operating profit over the previous period, measured by excluding the impact of one-offs, currencies, acquisitions, disposals and by adjusting for working days.
199 Brunel International N.V. Annual Report 2023
10
| 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Profit | |||||||||||
| Net revenue | 1,330.5 | 1,181.8 | 899.7 | 892.6 | 1,041.1 | 914.6 | 790.1 | 884.9 | 1,228.9 | 1,386.6 | 1,283.4 |
| Gross profit | 273.6 | 252.1 | 210.6 | 191.4 | 209.4 | 208.9 | 182.7 | 187.1 | 230.0 | 249.0 | 230.7 |
| Operating profit | 56.3 | 60.9 | 47.7 | 28.8 | 17.4 | 34.1 | 17.9 | 26.8 | 56.1 | 74.7 | 72.3 |
| Result before tax | 50.1 | 47.5 | 46.9 | 28.5 | 16.4 | 32.4 | 14.6 | 24.2 | 56.7 | 75.4 | 72.5 |
| Group result after tax | 32.2 | 30.8 | 33.0 | 17.5 | 0.1 | 21.5 | 7.8 | 10.6 | 37.6 | 48.9 | 49.9 |
| Net income | 31.7 | 29.4 | 31.0 | 15.6 | 3.8 | 20.6 | 7.6 | 10.1 | 37.1 | 48.4 | 49.5 |
| Cash flow (net profit + depreciations / impairment) | 53.7 | 50.7 | 49.5 | 36.4 | 27.4 | 28.0 | 15.6 | 18.4 | 45.5 | 56.7 | 55.9 |
| Depreciation and amortisation | 22.0 | 21.3 | 18.5 | 20.8 | 23.6 | 7.4 | 8.0 | 8.3 | 8.4 | 7.8 | 6.0 |
| Additions to tangible fixed assets | 3.0 | 3.1 | 2.2 | 3.6 | 3.7 | 2.0 | 2.9 | 1.4 | 4.1 | 3.1 | 2.6 |
| Workforce | |||||||||||
| Average over the year | 12,712 | 12,639 | 11,222 | 11,669 | 13,677 | 13,499 | 11,086 | 10,796 | 12,495 | 13,725 | 13,073 |
| Balance sheet information | |||||||||||
| Non-current assets | 147.7 | 153.5 | 136.7 | 79.4 | 88.9 | 43.3 | 41.2 | 36.0 | 40.7 | 41.4 | 36.0 |
| Working capital | 297.2 | 255.4 | 226.7 | 228.4 | 225.3 | 246.4 | 232.5 | 259.7 | 310.4 | 290.8 | 246.1 |
| Total equity | 312.5 | 317.8 | 301.9 | 274.8 | 273.8 | 283.4 | 269.0 | 293.7 | 347.7 | 328.3 | 278.1 |
| Balance sheet total | 611.3 | 547.1 | 501.8 | 426.0 | 437.5 | 395.5 | 378.9 | 399.7 | 479.4 | 492.6 | 438.5 |
| Ratios | |||||||||||
| Change in revenue on previous year | 12.6% | 31.4% | 0.8% | -14.3% | 13.8% | 15.8% | -10.7% | -28.0% | -11.4% | 8.0% | 3.8% |
| Gross profit / net revenue | 20.6% | 21.3% | 23.4% | 21.4% | 20.1% | 22.8% | 23.1% | 21.1% | 18.7% | 18.0% | 18.0% |
| Operating profit / net revenue | 4.2% | 5.2% | 5.3% | 3.2% | 1.7% | 3.7% | 2.3% | 3.0% | 4.6% | 5.4% | 5.6% |
| Group result / net revenue | 2.4% | 2.6% | 3.7% | 2.0% | 0.0% | 2.4% | 1.0% | 1.2% | 3.1% | 3.5% | 3.9% |
| Total equity / total assets | 51.1% | 58.1% | 60.2% | 64.5% | 62.6% | 71.7% | 71.0% | 73.5% | 72.5% | 66.5% | 63.4% |
| Current assets / current liabilities | 2.59 | 2.53 | 2.40 | 2.90 | 2.67 | 3.33 | 3.21 | 3.50 | 3.42 | 2.81 | 2.57 |
| Shares (in EUR) | |||||||||||
| Earnings per share | 0.63 | 0.58 | 0.61 | 0.31 | 0.08 | 0.41 | 0.15 | 0.20 | 0.75 | 0.99 | 1.02 |
| Shareholders’ equity per share | 5.98 | 6.05 | 5.71 | 5.39 | 5.50 | 5.59 | 5.33 | 5.81 | 6.96 | 6.64 | 5.71 |
| Dividend per share | 0.55 | 0.55 | 0.45 | 0.30 | - | 0.25 | 0.15 | 0.40 | 1.50 | 0.70 | 0.55 |
| Highest price | 13.46 | 12.60 | 12.16 | 9.13 | 14.46 | 16.55 | 16.87 | 19.69 | 20.65 | 26.00 | 23.25 |
| Lowest price | 9.72 | 8.31 | 7.29 | 4.58 | 8.09 | 10.23 | 10.85 | 13.45 | 12.95 | 12.73 | 15.50 |
| Closing price at 31 December | 11.18 | 9.58 | 11.24 | 7.30 | 9.01 | 10.92 | 15.20 | 15.39 | 16.80 | 13.60 | 22.25 |
201 Brunel International N.V. Annual Report 2023
11
❶Americas (United States, Brazil, Canada, Guyana, Mexico, Suriname)
❷Asia (Singapore, China, Indonesia, Japan, Korea, Malaysia, Myanmar, Thailand, Vietnam)
❸Australasia (Australia, New Zealand, Papua New Guinea)
❹DACH (Germany, Austria, Czech Republic, Switzerland)
❺Europe and Africa (the Netherlands, Albania, Belgium, Denmark, France, Greece, Israel, Italy, Kazakhstan, Mozambique, Namibia, Nigeria, Norway, Poland, Romania, Spain, United Kingdom)
❻Middle East and India (India, Iraq, Kuwait, Qatar, United Arab Emirates)
❼The Netherlands
❽Taylor Hopkinson (TH: United Kingdom, Mexico, Singapore, Spain, Taiwan, United States)
TH 1 1 7 4 5 5 5 5 6 6 2 TH TH TH 3 TH TH 2
203 Brunel International N.V. Annual Report 2023
BRAZIL Rio de Janeiro
CANADA Calgary Toronto
GUYANA Georgetown
MEXICO Mexico City
SURINAME Paramaribo
UNITED STATES OF AMERICA Boston Houston Salt Lake City
CHINA Dalian Hong Kong Nantong Qingdao Shanghai Shenzhen I Shenzhen II Zhuhai
MALAYSIA Kuala Lumpur Sarawak
INDONESIA Balikpapan Batam Jakarta
JAPAN Tokyo
MYANMAR Yangon
SINGAPORE Singapore
SOUTH KOREA Geoje-si
THAILAND Chonburi
VIETNAM Ho Chi Minh City
AUSTRALIA Brisbane Mackay Maitland Melbourne Perth
NEW ZEALAND New Plymouth
PAPUA NEW GUINEA Port Moresby
AUSTRIA Salzburg Vienna Innsbruck Graz
CZECH REPUBLIC Prague
GERMANY Bremen Aachen Augsburg Berlin Bielefeld Bochum Braunschweig Dortmund Dresden Düsseldorf Duisburg Erfurt Essen Frankfurt Hamburg Hannover Heilbronn Karlsruhe Kassel Kiel Köln Leipzig Lindau Mannheim München Nürnberg Osnabrück
204 worldwide offices
Regensburg Reutlingen Rostock Saarbrücken Stuttgart Ulm Würzburg Wuppertal
BRUNEL CAR SYNERGIES GmbH Dortmund Hildesheim
SWITZERLAND Zürich
ALBANIA Tirana
BELGIUM Mechelen
DENMARK Copenhagen
FRANCE Paris
GREECE Athens
ISRAEL Tel Aviv
ITALY Milan
KAZAKHSTAN Atyrau
MOZAMBIQUE Maputo
Namibia Windhoek
THE NETHERLANDS Amsterdam
NIGERIA Lagos
NORWAY Stavanger
ROMANIA Bucharest
POLAND Plock
SPAIN Madrid
UNITED KINGDOM Birmingham
INDIA Bangalore Chennai Mumbai
IRAQ Baghdad
KUWAIT Kuwait City
QATAR Doha
UNITED ARAB EMIRATES Dubai
205 Brunel International N.V. Annual Report 2023
THE NETHERLANDS Amsterdam Eindhoven Enschede Groningen Delft Utrecht Zwolle
UNITED KINGDOM Glasgow (Head office) London
MEXICO Mexico City
SINGAPORE Singapore
SPAIN Valencia
TAIWAN Taipei
UNITED STATES OF AMERICA Boston
ICE SINGAPORE Singapore
206 worldwide offices
207 Brunel International N.V. Annual Report 2023
| Turnover | Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’) | Economic Activi-ties (1) | Code (2) | Absolute turnover (3) | Proportion of Turnover (4) | Climate Change Mitigation (5)* | Climate Change Adaptation (6) | “Water (7)” | “Pollution(8)” | “Circular Economy(9)” | Biodiversity and ecosystems (10) | Climate Change Mitigation (11) | Climate Change Adaptation (12) | “Water(13)” | “Pollution(14)” | “Circular Economy(15)” | “Biodiversity(16)” | “Minimum Safeguards(17)” | “Taxonomy aligned proportion of total turn-over, year N (18)**” | “Category (enabling activity) (20)” | “Category(transitional activity)(21)” |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Text | “Millions, EUR” | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % |
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||||
| A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||
| Turnover of environmen-tally sustainable activities (Taxonomy- aligned) (A.1) | 0.00 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||||
| Turnover of Taxonomy-el-igible but not environ-mentally sustainable activities (not Taxono-my-aligned activities) (A.2) | 0.00 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Total (A.1+A.2) | 0.00 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| B. |
DNSH criteria (‘Does Not Significantly Harm’)
| Economic Activities (1) | Code (2) | Absolute CapEx (3) | Proportion of CapEx (4) | Climate Change Mitigation (5)* | Climate Change Adaptation (6) | Water (7) | Pollution(8) | Circular Economy(9) | Biodiversity and ecosystems (10) | Climate Change Mitigation (11) | Climate Change Adaptation (12) | Water(13) | Pollution(14) | Circular Economy(15) | Biodiversity(16) | Minimum Safeguards(17) | Taxonomy aligned proportion of total CapEx, year N (18)** | Category (enabling activity) (20) | Category(transition-al activity)(21) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Text | Thousands, EUR | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | 18% | 0% | E | T | |||||||||||||||
| A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned) | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | E | |||
| 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||
| 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||
| 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||
| 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||
| CapEx of environmentally sustainable activities (Taxonomy- aligned) (A.1) | 0,00 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | 0% | |||
| A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned) | 0% | 0% | |||||||||||||||||
| CapEx of Taxonomy-eligi-ble but not environmental-ly sustainable activities (not Taxonomy-aligned activities) (A.2) | 2.053,47 | 18% | 0% | 0% | 0% | 0% | |||||||||||||
| Total (A.1+A.2) | 2.053,47 | 18% | |||||||||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | 82% | ||||||||||||||||||
| Capex of Taxonomy-non-eligible activities | 9.653,82 | 82% | |||||||||||||||||
| Total (A+B) | 11.707,29 | 100% |
208
DNSH criteria (‘Does Not Significantly Harm’)
| Economic Activities (1) | Code (2) | Absolute OpEx (3) | Proportion of OpEx (4) | Climate Change Mitigation (5)* | Climate Change Adaptation (6) | Water (7) | Pollution (8) | Circular Economy(9) | Bio-diversity and eco-systems (10) | Climate Change Mitigation (11) | Climate Change Adaption (12) | Water (13) | Pollution (14) | Circular Economy(15) | Biodiversity (16) | Minimum Safeguards(17) | Taxonomy aligned proportion of total OpEx, year N (18)** | Category (enabling activity) (20) | Category(transitional activity)(21) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Text | Thousands, EUR | % | % | % | % | % | % | % | % | % | % | % | % | % | % | % | |||
| A. TAXONOMY-ELIGIBLE ACTIVITIES | 0% | 0% | E | T | |||||||||||||||
| A.1. Environmentally sustainable activities (Taxonomy-aligned) | 0% | 100% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | E | |||
| 6.4. Operation of personal mobility devices, cycle logistic | N77.11, N77.21 | -39,8 | 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | |||||||
| 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||||||||
| 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||||||||
| 0% | Y | Y | Y | Y | Y | Y | Y | 0% | E | ||||||||||
| OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | -39,78 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | Y | Y | Y | Y | Y | 0% | |||
| A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | 0% | 0% | |||||||||||||||||
| OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 0,00 | 0% | |||||||||||||||||
| Total (A.1+A.2) | -39,78 | 0% | |||||||||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | 100% | ||||||||||||||||||
| OpEx of Taxonomy-non-eligible activities | 217.417,24 | 100% | |||||||||||||||||
| Total (A+B) | 217.377,46 | 100% |
209
Brunel International N.V. Annual Report 2023
Integrated reporting - research and analysis
Kaikai Jing, Brunel International N.V.
Communications
Brunel International N.V.
Nicole Kirleis and Alison Gauzin, Brunel International N.V.
Photography
Gregor Servais (Brunel management and Supervisory Board) and others
Printing
Drukkerij Perka
Design
Wim Bosboom - badd.nl
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colophon
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