Annual Report • Mar 27, 2015
Annual Report
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The Dutch language text of the annual report is the offi cial version. The English language version is provided as a courtesy to our shareholders. JENSEN-GROUP has verifi ed the two language versions and assumes full responsibility for matching both language versions.
In this report, the terms "JENSEN-GROUP" or "Group" refer to JENSEN-GROUP NV and its consolidated companies in general. The terms "JENSEN-GROUP NV" and "the Company" refer to the holding company, registered in Belgium. Business activities are conducted by operating subsidiaries throughout the world. The terms "we", "our", and "us" are used to describe the Group.
| Key fi gures per share | 4 |
|---|---|
| Key fi gures | 6 |
| Message to the shareholders | 8 |
| Profi le of the Group | 10 |
| JENSEN-GROUP Profi le |
13 |
| We think globally and act locally Activities 2014 Outlook 2015 |
|
| Information for shareholders and investors Share price evolution Communication strategy Change in shareholdings Shareholders' calendar |
16 |
| Litigation | 18 |
| Human Resources | 18 |
| Product Development | 19 |
| Investments and Capital Expenditures Outlook 2015 |
19 |
| Financial report | 21 |
| Key fi gures per share | December 31 | December 31 |
|---|---|---|
| Financial year ended (in euro) | 2014 | 2013 |
| Operating cash fl ow (EBITDA)1 | 2,86 | 2,39 |
| Net profi t share of the Group, continuing operations (= earnings per share) | 1,66 | 1,23 |
| Net cash fl ow continuing operations1 | 2,01 | 1,75 |
| Equity (= book value) | 8,97 | 7,83 |
| Gross dividend | 0,25 | 0,25 |
| Number of shares outstanding (average) | 7.868.170 | 7.999.536 |
| Number of shares outstanding (year-end) | 7.818.999 | 7.943.200 |
| Share price (high) | 16,26 | 13,46 |
| Share price (low) | 13,23 | 9,79 |
| Share price (average) | 14,64 | 10,96 |
| Share price (December 31) | 15,95 | 13,15 |
| Price/earnings (high) | 9,80 | 10,90 |
| Price/earnings (low) | 8,00 | 8,00 |
| Price/earnings (average) | 8,80 | 8,90 |
| Price/earnings (December 31) | 9,60 | 10,70 |
1 EBITDA and net Cash fl ow only include the provisions for other liabilities and charges and do not take into account the provisions for employee benefi t obligations. The comparable fi gures of last year are re-calculated accordingly.
Relative Price Performance JENSEN-GROUP BELAS Return Smallcaps
BELAS: Brussels All Shares
| Consolidated key fi gures Financial year ended (in thousands of euro) |
December 31 2014 |
December 31 2013 |
|---|---|---|
| Revenue | 239.632 | 221.416 |
| Operating profi t (EBIT) | 19.680 | 15.001 |
| Operating cash fl ow (EBITDA)1 | 22.483 | 19.120 |
| Net interest charges | 205 | 754 |
| Profi t before taxes | 18.229 | 13.523 |
| Net profi t continuing operations | 13.044 | 9.874 |
| Profi t discontinued operations | -62 | -72 |
| Net profi t (= share of the Group) | 12.982 | 9.802 |
| Added value | 99.506 | 92.186 |
| Net cash fl ow continuing operations1 | 15.847 | 13.993 |
| Equity | 70.100 | 62.210 |
| Net fi nancial debt/Net cash (-) | -6.382 | -2.720 |
| Working capital | 75.618 | 68.253 |
| Non-Current Assets (NCA) | 24.747 | 24.951 |
| Capital Employed (CE) | 100.365 | 93.204 |
| Market capitalization (high) | 127.936 | 107.674 |
| Market capitalization (low) | 104.096 | 78.315 |
| Market capitalization (average) | 115.190 | 87.675 |
| Market capitalization (December 31) | 124.713 | 104.453 |
| Entreprise value (December 31) (EV) | 118.331 | 101.733 |
| RATIOS | ||
| EBIT/Revenue | 8,21% | 6,78% |
| EBITDA/Revenue1 | 9,38% | 8,64% |
| ROCE (EBIT/CE) | 20,33% | 15,60% |
| ROE (Net profi t/Equity) | 19,72% | 16,91% |
| Gearing (Net debt/Equity) | - | - |
| EBITDA Interest coverage1 | 109,67 | 25,36 |
| Net fi nancial debt/EBITDA1 | -0,20 | 0,23 |
| Working capital/Revenue | 30,02% | 32,45% |
| EV/EBITDA (December 31)1 | 5,26 | 5,32 |
1 EBITDA and net Cash fl ow only include the provisions for other liabilities and charges and do not take into account the provisions for employee benefi t obligations. The comparable fi gures of last year are re-calculated accordingly.
After a good start in 2014 with profi table growth, the second half year was even stronger contributing to a new record revenue level for the full year. We maintain our local distribution strategy thereby increasing our global presence. This year JENSEN expanded in Japan and added a presence in New Zealand and the Middle East. Our acquisition in 2013 of JENSEN Österreich GmbH Austria, has resulted in considerable growth based on better market penetration. We will be maintaining our high level of investments in local sales and service companies and leverage our franchise with more products and services in all countries in which we have elected to be present. We continue to focus on operational effi ciency and improved project management.
Overall, the heavy-duty laundry market remains very competitive. We seek to match the expectations of our customers at all times by developing new products that enable us to be unique in the market place. Customers feed-back played a large part in our new product development plan in 2014. We have been able to take advantage of our experience with new product releases and an extended service offering.
In our "Go East" strategy, our offi ce in Japan has been active for the fi rst full year. We have extended our product range at our Xuzhou China plant with more products dedicated to the Chinese market. We are convinced that China still holds expansion potential in the laundry equipment industry even if the overall macro-economic indicators are indicating slower growth.
New products and services, geographic expansion and our focus on becoming more local in designated markets have contributed to this years' growth.
EBIT and net income increased as a result of the high overall capacity utilization throughout the year. Not only the amount of orders but more importantly the mix in orders is very important to reach full capacity utilization. The activity level over the last three quarters of the year was well balanced resulting in high capacity utilization of our plants. While we did not enjoy such an optimal mix of orders for the fi rst quarter 2014, this was compensated by an extraordinary good third quarter.
Despite an increase in working capital due to higher sales and investments, we remained debt free during 2014. Following the Group's announcement in November 2013 of a 10% share buyback program, we were able to buy 2.3% of treasury shares for a total amount of 2.5 million euro.
Continued investment in product development and in market presence enables us to better meet our customers' needs. Many of these developments are targeted at reducing consumption of energy and water as well as increasing the up-time of our products and services. Our CleanTech products enable our customers to cut their average water consumption to below 3 liters per kg linen. Our energy reduction program has made it possible to operate at below 1 KW/h per kg linen processed. Using gas as the energy source in our full product line increases the energy effi ciency and the steamless laundry is improving the ecological footprint of our customers. Our CleanTech efforts are setting new standards in our industry and are becoming state of the art.
A second important area of development is automation. The integration of technologies allows customers to monitor and track production in heavy-duty laundry operations in real-time. Our Cockpit software for large turnkey projects is well received by our customers. Cockpit ties our equipment and information together into a seamless laundry solution and positions us perfectly as a "One stop Shop" for our customers all over the world.
JENSEN-GROUP continues to invest in building a unique JENSEN culture within our many operations worldwide. The Group is managed by a truly international JENSEN Management Team. During 2014, JENSEN-GROUP continued to develop its international workforce and leaders. The focus is on providing better guidance to local operations and on better overall alignment with the group strategy in order to be the best global laundry solution provider with a local presence in each signifi cant market.
During the past decade, the Group has been through various economic recessions, mergers, divestments as well as a number of acquisitions. All of this has enhanced the experience of our management, staff and employees. Our continuing success demonstrates our ability to adapt quickly to different market conditions, making our brand, our products and our employees stronger. Our 2013 and 2014 performance confi rmed that our investments in Asia and in geographic expansion are leading to a brighter future. The results for 2014 represent a new record and therefore a target to beat.
We start 2015 with a higher order backlog than at the beginning of 2014. Customers are taking more time to order. Some customers are experiencing diffi culties in fi nancing larger projects, this is most noticeable in certain parts of Europe. Nevertheless, we were able to secure several large orders in Western Europe in the last quarter of 2014. Our investments in Asia and increased activity in the USA reduce our dependency on Europe. We rely on our highly motivated staff to continue to pursue each and every business opportunity in all existing markets. Broadening our presence makes the Group less vulnerable to a downturn in any given region of the world.
We thank our customers for their continued trust and loyalty. We will strive to meet their expectations in terms of the productivity, reliability, cost effectiveness and reduced environmental impact of our products.
We also thank our staff throughout the world for their dedication, their ability to constantly adapt and their drive to improve. As we set higher performance standards, we expect more from our human resources. We will continue to invest in our employees in order to make sure that we can continue to grow our company.
Last but not least, we thank our shareholders for their support to the Board of Directors and to management in our journey to be the leader in this industry.
Jesper Munch Jensen Raf Decaluwé
Chief Executive Offi cer Chairman of the Board of Directors
It is the aim of the JENSEN-GROUP (also referred to hereinafter as "The Group") to offer the best solutions to our customers worldwide in the heavy-duty laundry industry. We work for and with our customers to provide preferred laundry processing solutions by supplying sustainable single machines, systems and integrated solutions. We will continuously grow our people and our effi ciency so that we can offer environmental friendly innovative products and services. By combining our global skills and offering local presence to our customers, we will be able to maintain profi table growth and responsible industry leadership.
Through technical excellence, signifi cant investment in product development and specialized industry knowledge, the JENSEN-GROUP is able to plan, develop, manufacture, install and service everything from single machines and processing lines to complete turnkey solutions. Our partners include textile rental suppliers, industrial laundries, central laundries as well as hospital and hotel on-premise laundries. We believe that our customers know their laundry better than anybody else and that with the help of the JENSEN-GROUP's comprehensive laundry competence and experience we are able to fi nd the right solution for their specifi c requirements.
All products designed and manufactured by JENSEN are under the responsibility of two technology centers: washroom technology and fi nishing technology (fl atwork and garment). Next to this, JENSEN-GROUP is organized into 4 Business Regions spanning the world. The 2 technology centers develop, manufacture and deliver a full, innovative and competitive range of JENSEN products to our customers through our worldwide network of Sales and Service Centers (SSCs) and authorized local distributors. This worldwide distribution network together with our laundry design capabilities, project management expertise and our after sales service capability make JENSEN-GROUP uniquely positioned to act locally while meeting our customer's expectations fast and reliably whether his requirement is for a single machine or a complete turn-key solution anywhere in the world.
| 2014 | 240 | |
|---|---|---|
| 2013 | 221 |
The JENSEN-GROUP has a manufacturing platform of 5 factories in 5 countries (3 continents). Each manufacturing site focuses on specifi c technologies for the heavy-duty laundry industry.
The JENSEN-GROUP sells its products and services under the JENSEN brand through wholly-owned sales and service centers and through independent distributors worldwide.
Our market coverage, our extensive know-how, our turnkey project expertise and our range of heavy-duty machines and systems are unique for the heavy-duty laundry industry.
The JENSEN-GROUP generates its revenue geographically as follows:
| In million euro | Europe | North America | Other | Total |
|---|---|---|---|---|
| 2014 | 140 | 53 | 47 | 240 |
| 2013 | 132 | 44 | 45 | 221 |
12 ANNUAL REPORT 2014
JENSEN-GROUP is present with its own Sales and Service Centers in the most important markets and sells a range of single machines, systems, turnkey projects and services and spare parts.
JENSEN-GROUP produces equipment and solutions in the following manufacturing companies:
JENSEN-GROUP sells equipment and solutions through own sales and service centers (SSCs) and through independent distributors. The relative share of sales through our own SSCs has increased in recent years because they operate in the most important heavy-duty markets like Benelux, Germany, United Kingdom, Sweden, France, Italy, Switzerland, Austria, Middle East, Singapore, China, Australia, New Zealand, Japan, Brazil and North America. Sales and service centers play a critical coordination role for the increasing number of complex installation projects involving several of our production companies simultaneously. Local presence enables us to deliver after-sales services on demand to our customers. On top of that, we have an experienced distributor network base in more than 40 countries.
| In million euro | 2014 | 2013 | |
|---|---|---|---|
| Revenue | 239.6 | 221.4 | |
| EBIT | 19.7 | 15.0 | |
| Investments | 3.1 | 4.5 | |
| Number of employees | 1,224 | 1,130 |
Revenue increased thanks to a high order intake throughout the year and the realization of several large projects.
The Group benefi ted from a good order intake throughout the year. Also during the third quarter, the Group had a high order intake and this is rather exceptional. The Group enjoyed the benefi t of fl exible employment systems in various countries and of a very fl exible workforce.
The own sales and service centers (SSC) continue to generate the majority of our turnover, confi rming the importance of having our own local presence in the main markets. We further increased our presence by opening new Sales and Service Centers in Brazil and in New Zealand.
JENSEN-GROUP is a credible one-stop supplier for large turnkey projects worldwide.
Because of a higher activity level, leading to higher revenues to absorb overheads, profi tability is signifi cantly higher than in 2013.
For 2014, JENSEN-GROUP reports net investment of 3.1 million euro, mainly in equipment. The net investment of 4.5 million euro in 2013 was mainly related to the acquisition of its Austrian distributor and investment in equipment.
The order backlog is 33% higher; taking into account equipment already produced by year-end the order backlog is 13% higher than at December 31, 2013. JENSEN-GROUP considers the order backlog adequate to get off to a good start in 2015. The main business risks have not changed materially from last year. Major risk factors are the volatility in the fi nancial markets that affects our customers' investment decisions and their capacity to fi nd fi nancing, as well as competitive pressure. Other risks are exchange rate volatility and fl uctuating raw material prices, energy and transportation costs. We refer to the separate section in the report of the Board of Directors, setting out the risk factors associated with our business and industry.
The operational objectives for 2015 are to continue the growth in Asia, North and South America and to keep our sales and market share stable in Europe. In product development we are focusing our activities on further automation and on effi ciency gains for our customers when using our products or systems. Our internal processes are another continuous area of improvement. Examples are the development of a new quotation process and improved project management processes.
The JENSEN-GROUP share has been quoted on the Euronext Stock Exchange under the ticker JEN (Reuters: JEN.BR Bloomberg JEN.BB) since June 1997. The price of the JENSEN-GROUP shares can be found online on the following websites:
The JENSEN-GROUP stock price increased from 13.15 euro at the end of 2013 to 15.95 euro at the end of 2014, with an average daily trading volume of 4,163 shares compared with 3,692 in 2013 (see graph page 5).
The JENSEN-GROUP will maintain its communication strategy based on the following principles:
There were no changes in ownership during 2014.
The ownership structure as per December 31, 2014 is set out below:
The Investor Relations Manager is also available to meet individual shareholders, analysts, specialized journalists and institutional investors and enable them to see the JENSEN-GROUP's short and long-term potential, in respect of both the business as a whole and/or specifi c activities. Presentations, meetings and site visits are organized on request.
The JENSEN-GROUP's Annual Report, press releases and other information are available on the corporate website (http://www. jensen-group.com).
Shareholders wishing to convert registered shares into dematerialized shares can contact the Investor Relations Manager.
Shareholders and investors who want to receive the Annual Report, the fi nancial statements of JENSEN-GROUP NV, press releases or other information with respect to the JENSEN-GROUP can also contact the Investor Relations Manager.
JENSEN-GROUP NV Mrs. Scarlet Janssens Bijenstraat 6 BE 9051 Ghent (Sint-Denijs-Westrem) Belgium Tel. +32.9.333.83.30 E-mail: [email protected]
Provisions have been set up in respect of all claims that, based on prudent judgment, are reasonably founded. We keep track of all potential litigation and pending legal cases at a central level. In this chapter, we only cover cases against the Company or one of its subsidiaries. Pending issues per major category are:
Product liability claims:
Claims from employees:
Public liability:
Environmental risk:
• One pending matter in the USA
Most of these claims are covered by insurance. Based on legal advice taken, management does not expect these claims to signifi cantly impact the Group's fi nancial position or profi tability.
The number of employees at year-end has developed as follows:
| 2014 | 1,224 |
|---|---|
| 2013 | 1,130 |
The JENSEN-GROUP's key technologies encompass the entire laundry process, including the washroom itself, the logistics of moving linen and textiles, fi nishing with feeders, ironers and folders, as well as software technology to control the overall process. In short, a large number of different technologies are used in the process of recycling soiled linen and textiles into clean linen.
Given the wide range of technologies needed to cater for the needs of our customer base, we do not focus on fundamental research and development. Our task is to take existing technologies and incorporate them into our industry processes.
In recent years we have invested in further upgrading and expanding our product range and in particular in new software applications for our industry and in environmentally friendly products. Many developments that target resource savings for our customers are grouped under our CleanTech brand. Process control and production monitoring software are crucial in offering the customer a total laundry-operation solution.
Our Group has numerous patents on features of our machinery, and our product development teams in our various competence centers are continuously examining the possibility of protecting our developments.
Patents and notarial depositions are used primarily to prove prior art. We protect our patents on a case-by-case basis and primarily in the larger markets.
Generally the JENSEN-GROUP invests in the range of 2% to 3% of its turnover in Product Development every year. We believe this fi gure represents more or less the industry average.
During 2014, JENSEN-GROUP invested 3.1 million euro, mainly in in equipment and vehicles.
During 2013, JENSEN-GROUP invested 4.5 million euro, mainly in the acquisition of its Austrian distributor and in equipment.
The Group expects capital expenditure to be higher than depreciation charges. The Group will invest primarily in IT, machinery and leasehold improvement.
FINANCIAL REPORT 2014
Report of the Board of Directors 24
Results 2014
Outlook 2015
Risk factors
Conflict of Interest
Investments and Capital Expenditures
Use of financial instruments
Product Development
Corporate Governance Statement
Policy with respect to the appropriation of the result
Shareholding structure
Acquisition of own shares
Relationship among shareholders
Statutory Auditor
Issued capital
Dividend proposal
Appropriation of result
Significant post-balance sheet events
Statement of the Responsible Persons 50
Report of the Statutory Auditor 51
Consolidated statement of financial position 54
Consolidated statement of comprehensive income 56
Consolidated statement of changes in equity 58
Consolidated cash flow statement 60
Notes to the consolidated financial statements 61
JENSEN-GROUP's net profi t from continuing operations increased from 9.9 million euro in 2013 to 13.0 million euro refl ecting a higher annual turnover and high activity levels in the plants. The economic conditions remain uncertain and we experience strong competition for projects and market position all around the world.
The fi nancial result was in line with prior year. JENSEN-GROUP recorded a currency loss as compared to a gain in 2013. This is compensated by lower interest charges thanks to a better net cash position during the year.
On the balance sheet, working capital at closing date increased by 7.4 million euro compared to last year because of the higher activity during the year. The cash fl ow generated by the business resulted in a higher net cash position. Compared to December 2013, net cash increased by 3.7 million euro, from 2.7 million euro to 6.4 million euro. Also at the end of 2014, JENSEN-GROUP remains debt-free and is in full compliance with its bank covenants.
Headcount increased from 1,130 to 1,224 because of the higher activity level.
Revenue and operating profi t increased by 8% and 31% respectively as compared to 2013.
Net fi nancial result remained stable: in 2014, JENSEN-GROUP reported a currency loss compared to a currency gain in 2013. This is compensated by lower interest charges thanks to a better net cash position during the year.
The above-mentioned factors together resulted in an increase in net profi t from 9.8 million euro to 13.0 million euro.
The order backlog is 33% higher; taking into account equipment already produced by year-end the order backlog is 13% higher than at December 31, 2013. JENSEN-GROUP considers the level of orders adequate to get off to a good start in 2015.
The main business risks have not changed materially from last year. Major risk factors are the volatility in the fi nancial markets that affects our customers' investment decisions and capacity to fi nd fi nancing, as well as competitive pressure. Other risks are exchange rate volatility and fl uctuating raw material prices, energy and transport costs. The Group is also receiving more requests for fi nancing from specifi c customers. This increases our exposure to having to take back machinery over the life time of the fi nancing.
Net profi t depends on reaching a certain level of sales to absorb overhead costs. Any major drop of activity has an immediate effect on operating profi ts. The Group has 5 production sites, in the following countries:
• Sweden
Each production and engineering center ("PEC") is specialized in a specifi c part of the laundry operation (Washroom, Finishing Technology) or in a specifi c type of linen (fl atwork, garment or special applications such as mats, continuous roller towels or wipers).
The Group has its own distribution channels (Sales and Service Centers – or "SSC") in the most important markets:
Next to the SSCs, JENSEN-GROUP has sales representatives in:
On top of that, JENSEN-GROUP has an experienced distributor network in more than 40 countries.
Each SSC is staffed to handle turnkey projects and systems as well as single machine sales and after sales services.
In each PEC and SSC we have the supporting functions needed to administer the legal entity. In order to absorb these overheads, suffi cient volume is needed. The activity level determines production volume and can be infl uenced by factors beyond our control. Since our products are investment goods, the international investment climate, be it in healthcare but especially in hospitality (hotels and restaurants) and in industrial clothing, can have a signifi cant infl uence on the overall market and sales opportunities. The impact of a sudden decrease in turnover cannot be fully offset by a decrease in overheads and infrastructure costs and as such can have a negative impact on our activity level, our fi nancial condition and our operating results.
An important part of the business is to deliver solutions and machines to the textile rental industry. The ongoing consolidation and internationalization in this industry is making a signifi cantly greater part of the business dependent on relations with these larger groups.
JENSEN-GROUP purchases a large number of different components as well as raw materials such as black iron, stainless steel and aluminum. The price and availability of these raw materials and components are subject to market conditions affecting supply and demand. In a competitive market, there is no assurance that increases or decreases in raw material and other costs can be translated quickly into higher sales or lower purchase prices. Nor can there be any assurance that the loss of suppliers or components would not have a material adverse effect on our business, fi nancial condition and results of operations. We currently do not undertake commodity hedging.
Within the worldwide heavy-duty laundry market, JENSEN-GROUP encounters several competitors. There can be no assurance that signifi cant new competitors or increased competition from existing competitors will not have an adverse effect on our business, fi nancial condition and results of operations.
In addition, the Group may face competition from companies outside of the United States or Europe who have lower costs of production (including labor or raw materials). These companies may pass on these lower production costs as price decreases to customers and as a result, our revenues and profi ts could be adversely affected.
Sales of equipment and projects to international customers represent a major part of the net revenues. Demand for our products is and may be affected by economic and political conditions in each of the countries in which we sell our products and by certain other risks of doing business abroad, including fl uctuations in the value of currencies (which may affect demand for products priced in euro). We do hedge exchange rate fl uctuations between the major currencies for our operations, these being the EUR, USD, CHF, GBP, DKK, SEK, SGD, CNY, JPY, AUD and NZD.
In the aftermath of the banking crisis many customers experience diffi culties in obtaining fi nancing to invest in expansion or renewal. Under specifi c conditions JENSEN-GROUP is offering fi nancing solutions to customers. This creates exposure for the Company in terms of having to take back machinery over the life time of the fi nancing contract. We manage our exposure by aligning the price for take-back to the second-hand market values as much as possible.
JENSEN-GROUP sells to industrial laundries which handle, amongst others, linen for the healthcare sector. Policy choices can affect the standards of hygiene or the fi nancial capability of hospitals. This may infl uence product development in order to fi nd solutions for the most stringent hygiene requirements.
JENSEN-GROUP is dependent on the continued services and performance of the senior management team and certain other key employees. The employment agreements with senior management and key employees are for an indefi nite period of time. The loss of any key employee could have a material adverse effect on the business, fi nancial condition and results of operations because of their experience and knowledge of our business and customer relationships.
The Group is subject to comprehensive and frequently changing federal, state and local environmental, health and safety laws and regulations, including laws and regulations governing emissions of air pollutants, discharges of waste and storm water and the disposal of hazardous wastes. We cannot predict the environmental liabilities that may result from legislation or regulations adopted in the future, the effect of which could be retroactive. The enactment of more stringent laws or stricter interpretation of existing laws could require additional expenditures by us, some of which could have an adverse effect on our business, fi nancial condition and results of operations.
The Group is also subject to liability for environmental contamination (including historical contamination caused by other parties) at the sites it owns or operates. As a result, the Group is involved, from time to time, in administrative and judicial proceedings and inquiries related to environmental matters. There can be no assurance that we will not be involved in such proceedings in the future, and we cannot be sure that our existing insurance or additional insurance will provide adequate coverage against potential liability resulting from any such administrative and judicial proceedings and inquiries. The aggregate amount of future clean-up costs and other environmental liabilities could have a material adverse effect on our business, fi nancial condition and results of operations.
For the past several years, JENSEN has strictly followed an environmental remediation plan relating to our former Cissell manufacturing facility. The last sampling tests done by a third party environmental-engineering company each year, with an exhaustive review every fi ve years, are in line with expectations. The latest projected end date for this remediation plan is 2025. However, there can be no complete assurance that signifi cant additional civil liability or other costs will not be incurred by us in the future with respect to the Cissell facility or other facilities.
The operations are also subject to various hazards incidental to the manufacturing and transportation of heavy-duty laundry equipment. These hazards can cause personal injury and damage to and destruction of property and equipment. There can be no assurance that as a result of past or future operations, there will not be injury claims by employees or third parties. Furthermore, we also have exposure to present and future claims with respect to worker safety, workers' compensation and other matters. There can be no assurance as to the actual amount of these liabilities or the timing of them. Regulatory developments requiring changes in operating practices or infl uencing demand for, and the cost of providing, our products and services or the occurrence of material operational problems, including but not limited to the above events, may also have an adverse effect on our business, fi nancial condition and results of operations.
The Group is exposed to potential product liability risks that arise from the sale of our products. In addition to direct expenditures for damages, settlements and defense costs, there is a possibility of adverse publicity as a result of product liability claims. We cannot be sure that our existing insurance or any additional insurance will provide adequate coverage against potential liabilities and any such liabilities could adversely affect our business, fi nancial condition and results of operations.
At any given time, JENSEN-GROUP is a defendant in various legal proceedings and litigation arising in the ordinary course of business. Although we maintain insurance coverage, there is no assurance that this insurance coverage will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance coverage will be available in the future at economical prices or for that matter, available at all. A signifi cant judgment against us, the loss of a signifi cant permit or other approval or the imposition of a signifi cant fi ne or penalty could have an adverse effect on our business, fi nancial condition and future prospects.
The Group is exposed to market risk associated with adverse movements in interest rates. JENSEN-GROUP maintains long term interest rate hedges in order to limit this risk, but a general increase in interest rates might have an unfavorable effect on the overall investment climate and as such on our business, fi nancial condition and results of operations.
The JENSEN-GROUP's major fi nancial institution partners are Nordea and KBC. The Group's borrowing agreements include fi nancial covenants with one of the fi nancial institutions. These covenants could have a restricting effect on our fi nancial capacity.
The ability to make scheduled payments of principal and interest with respect to our indebtedness, to fund our planned capital expenditures and our research and development efforts and to fi nance our expansion in capacity, will depend on our ability to generate cash, on future fi nancial results and the development of the major fi nancial institutions we work with. These institutions, to a certain extent, are subject to the risk factors mentioned above.
Under Belgian company law, the members of the Board of Directors are required to give the Chairman prior notice of any agenda items in respect of which they have a confl ict of interest with the Company, either direct or indirect, whether of a fi nancial or other nature and to refrain from participating in the discussions of and voting on those items. This is also a standard item on the agenda of each Board meeting. No potential confl icts arose in the course of 2014.
Capital expenditures in 2014 amounted to 3.1 million euro (4.5 million euro in 2013), consisting primarily of equipment. Capital expenditures in 2013 consisted primarily of the acquisition of the group's Austrian distributor and of equipment.
The Company uses derivative fi nancial instruments to reduce its exposure to adverse fl uctuations in interest rates and foreign exchange rates. It is the Company's policy not to hold derivative instruments for speculative and trading purposes.
At December 31, 2014, currency bought forward hedges existed in an amount of 2.8 million euro and currency sold forward hedges existed in an amount of 15.9 million euro. The Company also had Interest Rate Swaps (IRS) outstanding in amounts of 18.9 million DKK with maturities from 2022 to 2024 and fi xed rates ranging from 4.86% to 5.11%.
The JENSEN-GROUP does not perform fundamental research, but undertakes continuous product development. These expenses in respect of the continued operations amounted to 4.5 million euro in 2014 (6.3 million euro in 2013). The JENSEN-GROUP does not capitalize development expenses since its business reality makes it very diffi cult to distinguish product enhancements from adaptations to specifi c circumstances, and to defi ne the future cash fl ows that will originate from these efforts. Since furthermore the development expenses are relatively stable and are a continuous process, the JENSEN-GROUP does not capitalize these efforts but expenses them as incurred.
JENSEN-GROUP has adopted the Belgian Corporate Governance Code in its revised 2009 version as its reference Code. The Code 2009 is available on www.corporategovernancecommittee.be. The Group has implemented the Belgian Corporate Governance Code since 2004, reviewing the major requirements of and evolution in the Code and evaluating the degree of compliance within the JENSEN-GROUP. To the best of our knowledge and belief, JENSEN-GROUP is compliant with the Corporate Governance Code.
As a result of these efforts, the Board of Directors of JENSEN-GROUP has adopted and has published the following charters:
These Charters can be found on our website www.jensen-group.com under Investor Relations/Corporate Governance. They are regularly reviewed and evaluated by the Board of Directors. The Charters are part of the day-to-day proceedings of the JENSEN-GROUP Board of Directors and Board Committees, and are to the best of our knowledge and belief compliant with the Code.
According to the "comply or explain" principle, the Company may deviate from the Code provided it duly explains the reasons for such deviation. Reasons could be linked to the Company's nature, organization and/or size. Based on its internal risk assessment as well as on the size of its operations, JENSEN-GROUP has outsourced the internal audit function to external parties. JENSEN-GROUP does not have an internal audit manager because:
The JENSEN-GROUP Audit Committee has concluded that an in-house internal audit function would not be an effective function. As an alternative, in consultation with the external auditor and on the basis of a risk analysis, the Audit Committee develops internal audit priorities and retains an independent outside audit fi rm for specifi c internal audit projects. It is considered that this approach is more effective than an in-house internal audit function. The Audit Committee can outsource the internal audit activity to a locally competent audit service provider.
Because of a change in the composition of the Board of Directors in the course of 2013, the Remuneration Committee and the Audit Committee consist temporarily of two members. The composition of the Committees will be adjusted to three members as soon as the proposed changes in the Board of Directors are approved and implemented which is expected to be at the next annual shareholders meeting on May 19, 2015.
The professional qualifi cations and duties of the Director(s) to be (re)-appointed were not stipulated in the invitation and notices to the next annual shareholders' meeting, given that these qualifi cations are already published in several press releases and annual reports and include broad international experience, operational knowledge and adequate fi nancial knowledge in order to function in an audit committee.
The information found in the Corporate Governance Charter is provided "as is" and is solely intended for clarifi cation purposes. The recommendations and policies found in the Charters are in addition to and are not intended to change or interpret any law or regulation, or the Certifi cate of Incorporation or Bylaws of the Company. By adopting these Charters, attachments and possible sub-charters, the Company does not enter into any obligation or contractual or unilateral commitments whatsoever. The Charters are intended as a guideline in the day-to-day proceedings of the Company. Competences and tasks attributed to the Board of Directors are to be seen as enabling clauses, not as mandatory rules or a compelling line of conduct.
In accordance with the provisions on corporate governance in the Law of December 17, 2008 and in the so-called Corporate Governance Law of April 6, 2010 (hereinafter referred to as "the Law"), JENSEN-GROUP has adopted and implemented a risk management and internal control process.
The following description of risk management and internal control is based on the Integrated Internal Control Framework and the Enterprise Risk Management Framework as published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The Board of Directors supervises the proper functioning of risk management and internal control through the Audit Committee. The Board of Directors has delegated to the Executive Management Team the task of implementing a risk management process and an internal control system and of reporting back to the Board on both topics at regular intervals.
Based on a framework model prepared by an external consultant, the Executive Management Team has developed a risk map describing the fi nancial, operational, strategic and legal risks. This risk map was prepared for the fi rst time in 2008 and is now reviewed on a regular basis. The map outlines both the probability of the different risks occurring, and the impact of their occurrence on the results. Measures to mitigate the risk exposure are evaluated. The Executive Management Team has presented the conclusions of this risk management exercise to the Audit Committee and to the Board of Directors. The Board discusses the major risks with management on an as needed basis, but at least once a year.
The Executive Management Team discloses quarterly a certain number of risk areas as perceived by the Executive Management Team. The Executive Management Team then re-examines those risks and formulates approaches to mitigate the risk and looks at various forms of transferring these risks to third parties in the areas in which a material risk exposure to the Company remains.
Internal control is a process, effected by the Board of Directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: a) Effectiveness and effi ciency of operations; b) Reliability of fi nancial reporting; and c) Compliance with laws and regulations.
The Board of Directors and the Executive Management Team have approved and adopted the JENSEN-GROUP Ethical Business Statement (hereinafter referred to as "the Statement"). The Statement sets forth the JENSEN-GROUP's mission as well as the Group's ethical values; it describes its rules of conduct as well as the transactions that are permissible between JENSEN-GROUP and third parties to the extent that these transactions are not covered by the legal provisions on confl ict of interest. Implementation and application of the JENSEN-GROUP Ethical Business Statement is mandatory for all of the companies of JENSEN-GROUP. The review of the Statement is integrated in every training session that is organized. The Statement is available on the corporate website www.jensen-group.com under Investor Relations/ Corporate Governance.
JENSEN-GROUP consists of several entities which are closely monitored by local management teams. JENSEN-GROUP headquarters further monitors the local management teams through quarterly operational and fi nancial reviews. In addition, the Company's Group Control and Reporting reviews the different entities on a quarterly basis.
JENSEN-GROUP monitors its business with a view toward achieving a certain level of ROCE (Return on Capital Employed).
All IFRS accounting principles, guidelines and interpretations are grouped in the accounting manual, which is part of the JENSEN-GROUP Procedures and Guidelines. The JENSEN-GROUP Procedures and Guidelines are available on the JENSEN intranet and accessible by all local management and staff of the Group. The accounting manual is updated on a regular basis. Additional reporting is undertaken as requested by management and/or the Audit Committee and where appropriate is included in the accounting manual.
The Financial Managers of the Group meet at regular intervals. During each such seminar, the Financial Managers are informed of relevant changes in IFRS. Training is provided on an as needed basis to ensure correct implementation of such changes.
A majority of the Group companies use the same ERP system. The policy has been adapted to move all of the Group companies to the same ERP system over time. All companies of the Group use the same software to report the fi nancial data for consolidation purposes.
Group management has introduced, after discussion with the Audit Committee, a set of key controls to provide reasonable assurance about the reliability of fi nancial reporting and of the fi nancial statements made available to external parties starting in 2009. Local management has implemented these key controls. The set of key controls is reassessed from time to time and amended if necessary.
Group Control and Reporting reviews every quarter all data submitted for consolidation for fi nancial accuracy, consistency with and any deviations from budgets and the explanations given, in order to ensure the accuracy of the reported data. Group Management then ensures proper follow up and actions on deviations from budget.
Monitoring is performed during the Business Board Reviews. These quarterly reviews include a fi nancial review which specifi cally focuses on major changes in P&L and balance sheet items, deviations from budgets as well as consistency in applying IFRS rules. The internal control system is monitored on a quarterly basis.
Management's monitoring of internal control is performed on a continuous basis. The performance of the individual companies is measured and compared to budgets and previous years' fi gures which may identify anomalies indicative of a control failure. Failures are promptly remedied.
All JENSEN-GROUP companies are audited or reviewed by the same accounting fi rm and signifi cant risk factors are reviewed consistently in the external audits of the different subsidiaries. The external auditor reports to the Audit Committee twice a year on their fi ndings and on signifi cant issues.
Relevant fi ndings by the Internal Audit (which is outsourced as described above) and/or by the Statutory Auditor are reported to both the Audit Committee and to the related management. Periodic follow-up is performed to ensure that corrective action has been taken.
All relevant fi nancial information is presented to the Audit Committee and to the Board of Directors so as to enable them to analyse the fi nancial statements. Prior to external reporting, all press releases and other fi nancial information is subject to:
The JENSEN-GROUP Audit Committee has decided that an in-house internal audit function would not be an effective function. In consultation with the external auditor and on the basis of a risk analysis, the Audit Committee has worked out an internal audit plan and retains an independent outside audit fi rm for specifi c internal audit projects. It is considered that this approach is more effective than an in-house internal audit function. The Audit Committee can outsource the internal audit activity to a locally competent audit service provider.
In 2014, an independent audit fi rm performed an internal audit at JENSEN USA. The audit fi ndings were discussed during the Audit Committee meeting of November 13, 2014. Control systems were rated as generally appropriate and functioning. Recommendations for improvement related mostly to suggestions for gains in effi ciency and effectiveness for the production planning system, the cost calculation used in the quotation phase and the post-production cost variance analysis.
Group Controlling provides management with transparent and reliable management information in a form and timeframe that enables them to effectively carry out their responsibilities.
Every year, Group Controlling prepares a fi nancial calendar for reporting in consultation with the Board of Directors and the Executive Management Team. The fi nancial calendar is designed to allow accurate and timely reporting to external stakeholders.
In the fi rst and third quarters, a trading update is released. At half-year, condensed consolidated interim information is reported and at year-end the full annual report is published. Prior to external reporting, all press releases and other fi nancial information are subject to appropriate controls by JENSEN-GROUP headquarters and to review by the Audit Committee and require approval of the Board of Directors.
The members of the Board of Directors are appointed by the shareholders, voting by simple majority, during the general meeting of shareholders.
The Company´s bylaws allow for appointment by cooptation. If cooptation occurs, it is considered as a transitional arrangement whereby the director-elect completes the mandate of the outgoing director as opposed to taking on a new mandate. For this reason the transition period is not considered as a mandate in the independence rule review, where the Company looks at total years of service on the Board of Directors.
The Company´s bylaws require the Board of Directors to have at least three but not more than eleven members. Board members are elected for terms of offi ce of no more than four years.
The Company´s bylaws are supplemented by the Charter of the Board of Directors. This Charter outlines and details the Board's role and responsibilities and is revised from time to time. This Charter includes 4 major chapters:
Functioning of the Board: directors' responsibilities, number of Board and Committee meetings, Company Secretary, setting the agenda of Board meetings, director compensation, orientation and education, CEO evaluation, management succession, director access to offi cers and employees, use of independent advisors.
For more details please consult our website on www.jensen-group.com under Investor Relations / Corporate Governance.
As in the past, the JENSEN-GROUP selects its Board members in a manner that allows for a balance in the profi les of the different members. A balance is sought between executive and non-executive directors, directors representing shareholders and independent directors, and also in respect of directors' professional backgrounds experience and gender. A majority of the members of the Board of Directors are not related to the Company's controlling shareholders.
Currently, JENSEN-GROUP has no female board members. The Remuneration Committee is well aware of the requirements of the Law of July 28, 2011 on gender diversifi cation and anticipates complying within the deadlines required. In the interim, the Remuneration Committee recommended the appointment of a new board member with specifi c experience in setting up and managing business in China. Although the Remuneration Committee looked around, they did not fi nd as of today a female candidate that fi ts the requirements of background and experience for this Board function.
The Company opts not to change the composition of the Board of Directors in the current set up; there is a balance in respect of skills and capability. When a vacancy on the Board occurs and a proposal for a new member needs to be made, the Remuneration Committee will see to it that the Law of July 28, 2011 on gender diversity is taken into account in order to ensure a due and timely compliance by the Company with the deadline imposed by the Law.
The composition of the Board of Directors of the JENSEN-GROUP, the attendance records of the individual Directors, as well as their remuneration packages, is as follows:
| Name | Function | Independent | "Term" Expiry |
Attendance Board meetings |
Commit- tees |
Attendance committees |
Remuneration |
|---|---|---|---|---|---|---|---|
| GOBES c.v.1 | Chairman | V | 2016 | 100% | AC | 100% | 94.000 |
| represented by Mr. Raf Decaluwé | RC | 100% | |||||
| Hans Werdelin1 | Director | V | 2016 | 100% | RC | 100% | 37.500 |
| SWID AG2 | Director | 2017 | 100% | - | |||
| represented by Mr. Jesper Munch Jensen | |||||||
| TTP bvba1 | Director | V | 2017 | 100% | AC | 100% | 40.500 |
| represented by Mr. Erik Vanderhaegen | |||||||
| Mr. Peter Rasmussen1 | Director | V | 2018 | 100% | 27.000 | ||
| Total | 199.000 | ||||||
| 1: Non-executive director | |||||||
| 2: Executive director, CEO, representing the reference shareholder |
AC: Audit committee
RC: Remuneration Committee
From left below: Jesper Munch Jensen, Hans Werdelin and Peter Rasmussen. From right below: Raf Decaluwé and Erik Vanderhaegen.
Gobes Comm.V., represented by Mr Raf Decaluwé. Mr. Decaluwé is the former CEO of the Bekaert Group. He held senior positions at Black & Decker and Fisher Price Toys prior to joining the Bekaert Group. Mr. Decaluwé is a Board member in various companies.
Mr. Hans Werdelin is the former CEO of Sophus Berendsen A/S. Mr. Werdelin holds positions as chairman or member of the Board in various companies.
TTP bvba, represented by Mr. Erik Vanderhaegen. Mr. Vanderhaegen is the former CFO of the JENSEN-GROUP and is currently Managing Director of NIBC Bank NV. Prior to that, he was M&A manager at Univeg NV/SA and corporate tax, audit and M&A manager at Bekaert NV/SA.
SWID AG, represented by Mr. Jesper Munch Jensen. Mr. Jensen is the CEO of the JENSEN-GROUP.
Mr. Peter Rasmussen is General Manager of Asia Base, a company specialized in market studies, establishments and acquisitions in China. Mr. Rasmussen holds positions as member of the Board in various companies in China.
The Board of Directors held fi ve meetings in 2014. The topics of discussion included:
Depending on the items on the agenda, members of senior management were invited to the meetings of the Board of Directors and to the meetings of the Board Committees. Mrs. Scarlet Janssens is the Company Secretary. Mr. Werner Vanderhaeghe, a Senior Counsel with Morgan, Lewis & Bockius LLP in Brussels and Frankfurt, acts as General Counsel of the Group.
The Board of Directors and the Board Committees conduct from time to time a self-evaluation exercise to determine whether the Board and its Committees are functioning effectively. This process includes the completion by all members of a self-evaluation questionnaire. The Group General Counsel or an external party summarizes the results, trends and comments from the individual replies. The results, trends and comments are discussed within the Board and focus on the Board's and the Board Committees' contribution to the Company and specifi cally on areas in which the Board or Executive Management believes that the Board or its Committees could improve. Action points are derived and implemented.
Individual assessments of the Board members are made on an ongoing basis during Board meetings in an informal way.
In 2014, an external party was retained to undertake an assessment of the Board of Directors. The results of this exercise and the proposed action plans will be discussed during the Board meeting of March 2015.
The Remuneration Committee consists of Gobes Comm.V. represented by Mr. Raf Decaluwé, who acts as Chairman of the Committee and Mr. Hans Werdelin. Because of a change in the composition of the Board of Directors in the course of 2013, the Remuneration Committee consists temporarily of two members. The composition of the Remuneration Committee will be adjusted to three members as soon as the proposed changes in the Board of Directors are approved by the annual shareholders' meeting in May 2015 and implemented.
The two current members of the Committee qualify as independent directors. The Remuneration Committee met twice in the course of 2014. The Committee analyzed and reviewed the remuneration and the bonuses of the Executive Management of the Group, discussed and approved the remuneration report and the contract of a new EMT member. Further, the Remuneration Committee motivated the exemption with respect to deferred bonus payments and discussed the composition of the Board of Directors, including gender diversifi cation within the Board of Directors. The Remuneration Committee conducted a search for new independent board members and proposed to the Board to request the shareholders at the Annual Shareholders' meeting of May 19, 2015 to nominate two new board members Mr. Wagner and Mrs. Buyse for election to the Board of Directors as an independent director.
In 2013, the Remuneration Committee conducted a self-assessment exercise. The results of the Remuneration Committee's self-assessment and the proposed action points for improvement were discussed at the Remuneration Committee meeting and at the meeting of the Board of Directors held in March 2014. The self-assessment report concluded that it would be better to have three members again and the Remuneration Committee therefore submitted a recommendation to the Board with a view towards returning to a six Board members structure in order to make it possible again for having three members serve on the Board Committees.
The Remuneration Committee uses its Charter as terms of reference. The Charter can be found on our website www. jensen-group.com under Investor Relations/Corporate Governance. The Charter covers:
The Audit Committee consists of TTP bvba, represented by Mr. Erik Vanderhaegen (Chairman) and Gobes Comm. V., represented by Mr. Raf Decaluwé. Because of a change in the composition of the Board of Directors in the course of 2013, the Audit Committee consists temporarily of two members. The composition of the Audit Committee will be adjusted as soon as the proposed changes in the Board of Directors are approved by the annual shareholders' meeting in May 2015 and implemented.
The two current members of the Committee qualify as independent directors. The Audit Committee met four times in the course of 2014. Two meetings were held in the presence of the external auditor PwC, represented by Mr. Filip Lozie. Items on the agenda of the Audit Committee included:
In 2014, the Audit Committee conducted a self-evaluation exercise to determine whether the Committee is functioning effectively. As a result of the self-assessment the Committee organized a better fl ow of information for itself on regulatory changes and accounting and reporting updates. The Committee recommended organizing an audit of ITrelated security in 2015.
The Audit Committee uses its Charter as terms of reference. The Charter is published on our website www.jensen-group. com under Investor Relations/Corporate Governance. The Charter includes such items as:
Senior management attends each Audit Committee meeting in part, with the remainder of the meeting reserved for an executive session with the external auditor and for the Audit Committee members only.
As required under Belgian Company law, the members of the Board of Directors are expected to give the Chairman prior notice of items on the agenda in respect of which they have a direct or an indirect confl ict of interest with the Company, either of a fi nancial or other nature, and to refrain from participating in the discussion and vote on those items. The Chairman and the Board monitor constantly potential confl icts of interest that do not fall within the defi nition as set forth by Company Law. The review of a potential confl ict of interest is a standard item on the agenda of each Board meeting.
No potential confl icts arose in the course of 2014.
In case of doubt, written confi rmation is sought from the director or the senior executive involved, stating the reasons for the absence of a confl ict of interest as more broadly defi ned.
To prevent privileged information from being used unlawfully by Directors or members of senior management, all persons involved have signed a policy to prevent insider trading.
The Company defi nes two periods during which trading in the Company's shares by Directors, by members of the Executive Management Team or by local management is restricted. These two restricted periods are between mid-January and the reporting of the annual results and between mid-July and the reporting of the half-year results.
All trading in JENSEN-GROUP shares requires prior authorization from the Compliance Offi cer. In addition, all Directors and members of the Executive Management Team are required to inform the Compliance Offi cer on a quarterly basis of any trading respectively to confi rm any non-trading in the Company's shares. Mrs. Scarlet Janssens is the Compliance Offi cer of JENSEN-GROUP NV. As of December 31, 2014, the members of the Board of Directors and senior management together held 210 shares. Next to this, Mr. Jesper M. Jensen owns indirectly shares in JENSEN-GROUP NV, see Note 8 – Equity. No warrants are outstanding.
The policy to prevent insider trading is included in the Charter of the Board of Directors. The Charter can be found on our website www.jensen-group.com under Investor Relations/Corporate Governance.
In 2005 the Bylaws of the Company were amended so as to authorize the Board of Directors to delegate its powers of day-to-day management to an executive committee in conformity with art. 524 bis of the Company Law. The Board of Directors has not acted on that authorization to date.
In the course of 2009, an Executive Management Team (EMT) was appointed. The EMT consists since 2012 of the Chief Executive Offi cer (CEO), the Chief Financial Offi cer (CFO), the Executive Director Sales and Innovations, the Executive Director Washroom Technology and the Executive Director Finishing Technology. The CEO chairs the Executive Management Team meetings.
The Executive Management Team is responsible for:
the nature, organization and size of the Group;
The Executive Management Team meets at least every quarter and consists of:
From left to right: Steen Nielsen, Christoph Ansorge, Jesper Munch Jensen, Markus Schalch, Martin Rauch.
Jesper Munch Jensen, permanent representative of SWID AG, started his career at Swiss Bank Corporation and worked as a stockbroker on the Swiss Stock Exchange (1984-1987). After obtaining an MBA degree from Lausanne Business School, he joined the JENSEN-GROUP as an assistant general manager of JENSEN Holding (1991). Mr. Jensen became CEO of the JENSEN-GROUP in 1996.
Christoph Ansorge is former Vice President at Agfa-Gevaert and former Member of the BOM Agfa-Gevaert Aktiengesellschaft für Altersversorgung. He held senior positions in Strategy, Finance & Administration and Operations within Agfa-Gevaert Group. Prior to that, he was Manager at Bayer AG Germany. Mr. Ansorge served as a board member of JENSEN-GROUP NV from November 2011 until December 2013. As from October 1, 2013, Mr. Ansorge became general manager at JENSEN GmbH. Mr. Ansorge joined the Executive Management Team in January 2014 as Vice President of Washroom Technology.
Steen Nielsen holds a degree in Civil Engineering and a Bachelor of Commerce & Finance. Between 1978 and 1987 he worked for F.L. Smidth & Co. as a sales and divisional manager. Mr. Nielsen joined the JENSEN-GROUP in 1987 as sales and marketing director and has been Director of Flatwork Technology since 2006.
Martin Rauch holds a Bachelor of Science degree in Electrical Engineering. After his studies in 1989, he joined JENSEN AG Burgdorf and held various positions in the technical and commercial areas. Mr. Rauch became General Manager of JENSEN AG Burgdorf in 2003 and Managing Director of JENSEN SWEDEN AB following the formation of the Garment Technology Business Unit in 2006. Mr. Rauch joined the JENSEN-GROUP Management Team as Director of Garment Technology that year and is, as per January 1, 2014, Executive Director of Sales and Innovations.
Markus Schalch has a Master of Arts in Finance and Accounting from the Hochschule St. Gallen. He started his career in an audit fi rm for two years prior to joining the Alstom Group in various fi nance positions. In 2000, Mr. Schalch joined a leading Swiss telecommunication fi rm where he became CFO of Swisscom Systems Ltd. (2002-2004) and was then appointed CFO of Swisscom Solutions AG (2005 till August 2007). Mr. Schalch joined the JENSEN-GROUP in September 2007 as CFO.
The remuneration policy is intended to attract and retain the qualifi ed and talented employees that are needed to support the long term development and growth of the Company.
By offering a competitive compensation package, the Company intends to stimulate individual performance and to align the employees' individual interests with those of the shareholders and other stakeholders.
The compensation of the Board, the CEO and the Executive Management Team are reviewed by the Remuneration Committee and approved by the Board of Directors. The shareholders approve the Remuneration Report.
The market conformity of compensation packages of the Board of Directors and of the Executive Management Team is periodically checked with the support of external, independent advisors.
The remuneration of the non-executive Directors is based on their responsibility and their specifi c tasks within the Board of Directors. The fees for non-executive Directors, with the exception of the Chairman, consist of a fi xed remuneration of 17,000 euro and an attendance fee of 2,000 euro per Board meeting and 1,000 euro if the Board meeting is by telephone. Members of Board Committees receive a fi xed fee of 7,500 euro per year and an attendance fee of 1,500 euro per meeting. This does not apply to the Chairman of the Board of Directors. The Chairman of the Board of Directors receives a fi xed fee of 94,000 euro per year. Directors do not receive any variable compensation. The CEO does not receive any compensation as a member of the Board. The total fees paid to Board members and members of the Board Committees amount to 199,000 euro, which is within the amount of 350,000 euro approved by the shareholders. The amount paid out during 2014 was lower because of a change in the composition of the Board of Directors which numbered fi ve members in 2014. During the next shareholders meeting on May 19, 2015 the Board will suggest to revert to six members, thereby allowing to adjust the composition of the Board Committees to three members.
The following Director received additional compensation for services and assistance rendered in connection with specifi c projects and assignments as an advisor to the Company, on top of his Board fees: Asia Base Research Suzhou Co. Ltd, a company of which Mr. Peter Rasmussen is the shareholder delivered consultancy services for 315,652.97 CNY to JENSEN-GROUP.
Mr. Jesper M. Jensen owns indirectly shares in JENSEN-GROUP NV, see Note 8 – Equity.
The Remuneration Committee prepares all recommendations relating to the appointment and the remuneration of the Executive Management Team based on proposals by the Chief Executive Offi cer. The Committee discusses in detail the remuneration policy, pay levels and the individual performance evaluations of members of the Executive Management Team. The external auditor reviews the conformity of the remuneration paid out to the Executive Management Team with the amounts proposed by the Remuneration Committee and approved by the Board of Directors. The Remuneration Report is approved by the Shareholders.
Executive Management remuneration is composed of a base salary and variable compensation that are paid out in cash, pension plans depending on managers' country of residence, life insurance, other customary insurances and benefi ts. Appointments to the board of directors of certain subsidiaries can also be remunerated. Executive managers are provided with all resources needed to perform their duties.
The variable compensation is in a range of 20% to 30% of the total remuneration, except for the Chief Executive Offi cer, whose variable compensation is targeted to amount up to 50% of total remuneration. There is a cap above and a minimum target below which no variable compensation is paid. The variable remuneration of Executive Management (CEO and EMT) is based on performance against the following objectives:
The Group targets that are to be achieved are defi ned by the Board of Directors, as part of the annual budget review process, whereby the budget is fi rst evaluated in the context of the strategic plan.
For the year 2014 the Group targets were operating profi t and working capital performance.
The shareholders approved during the annual meeting of May 2014 an extension of the exemption from the Law on Corporate Governance of April 6, 2010 and in particular of its provision requiring the spread of objectives and variable compensation payments over several years during a term of fi ve years expiring at the annual meeting of May 2019.
Where pension plans are customary, Executive Management participates in such pension plans.
As set forth in the section on Remuneration of the Board of Directors, the CEO does not receive any compensation as a member of the Board.
The CEO invoices his services through a separate company 'SWID AG'. The other Executive Management Team members are salaried employees.
Total gross salaries paid to the Executive Management Team, including the CEO, in the course of 2014 amounted to 1,856,800 euro. The amount is higher than prior year because of the composition of the Executive Management Team: the Executive Management Team was composed of 5 members compared to 4 members in 2013. The amount is composed as follows:
| 2014 | 2014 | 2013 | 2013 | |
|---|---|---|---|---|
| In euro | CEO | EMT, | CEO | EMT, |
| excluding CEO | excluding CEO | |||
| Basic remuneration | 980,446 | 721,350 | ||
| Invoiced services | 449,100 | 449,100 | ||
| Variable remuneration | 178,000 | 173,369 | 182,560 | 202,697 |
| Fixed expenses | 19,760 | 19,495 | ||
| Fringe benefi t | 40,820 | 29,204 | ||
| Pension plan | 15,305 | 15,066 | ||
| Total | 627,100 | 1.229,700 | 631,660 | 987,812 |
The basic remuneration includes the salaries of the salaried EMT members. It represents their total fi xed compensation before local taxes and obligatory pension contributions. The basic remuneration includes the remuneration received for appointments to the Board of Directors of certain subsidiaries.
The CEO invoices his services through a separate company SWID AG. The amounts disclosed above include the amounts, totaling 627,100 euro (631,660 euro in 2013) that SWID AG invoiced to the Company. Invoiced services include basic remuneration, variable remuneration, fi xed expenses, fringe benefi ts and pension plans.
The variable remuneration is based on performance against objectives as described above. The amount paid out in 2014 is based on the performances of 2013. The variable remuneration is paid out in cash or in the employees' pension plan depending on the applicable legislation and on the preference of the employee.
Fixed expenses relate primarily to representation allowances.
The fringe benefi ts include the value of the company cars of the employees as well as the related car insurance premiums.
The pension plan is the contribution of the employer to a pension plan above contributions required by law. One manager participates in a defi ned contribution pension plan. Two managers participate in a defi ned benefi t plan.
As required by law, salaries of the Executive Management Team members are disclosed on a global basis. The Remuneration Committee discusses all individual salaries and checks whether the remuneration paid is in line with market conditions. The market conformity of compensation packages is periodically checked with the assistance of external, independent advisors. The Board of Directors approves the remuneration amounts. The last remuneration report was approved by the shareholders.
The agreements with respect to termination of senior managers vary from country to country, subject to the applicable legislation. Legal conditions apply in countries where there is a given practice, and for countries where there is no such practice, a severance payment of up to, but not exceeding, two years' salary is granted. Mr. Steen Nielsen has a 24 months termination agreement, Mr. Jesper Munch Jensen and Mr. Christoph Ansorge have an 18 months termination agreement. There are no change of control clauses included in the management contracts. Three managers have twoyear non-competition clauses exercisable at the request of the Company. No special compensation is given in the event of voluntary departure.
No loans have been granted to members of the Executive Management Team. No unusual transactions or confl icts of interest have occurred.
The Executive Management Team holds a total of 210 shares:
No warrants are outstanding. There are no stock option plans.
The Company has adopted a policy of distributing 0.25 euro per share annually unless the results or the fi nancial situation do not allow such dividend.
The major shareholders are:
JENSEN INVEST (including treasury shares): 53.9% Petercam: 8.7% Free fl oat: 37.4%
The voting rights are described in note 8 - equity.
The Board of Directors of November 14, 2013 decided to implement a share repurchase program to purchase a maximum of 800,300 treasury shares or 10% of the Company's shares. The shares are bought at the stock exchange by an investment bank mandated by the Board of Directors. The buy-back mandate expires on October 4, 2017. As per December 31, 2014, JENSEN-GROUP holds 183,969 treasury shares.
There is no agreement between the reference shareholders listed above.
The statutory auditor is PwC Bedrijfsrevisoren, represented by Mr. Filip Lozie.
The statutory auditor received worldwide fees of 327,795 euro (excl. VAT) for auditing the statutory accounts of the various legal entities of the Group and the consolidated accounts of the JENSEN-GROUP. Apart from his mandate, the statutory auditor received during 2014 additional fees of 60,506 euro (excl. VAT). Of this amount, 9,100 euro was invoiced to JENSEN-GROUP NV and relates to tax advice. The JENSEN-GROUP has appointed a single audit fi rm for the audit of the consolidated fi nancial statements.
At December 31, 2014, the issued share capital is 30.7 million euro, represented by 8,002,968 ordinary shares without nominal value.
There are no preference shares.
The Bylaws allow for the purchase of own shares. The Board of Directors of November 14, 2013 decided to implement a share buyback program to purchase a maximum of 800,300 treasury shares or 10% of the Company's shares. The shares are bought at the stock exchange by an investment bank mandated by the Board of Directors. The buy-back mandate expires on October 4, 2017. As per December 31, 2014, JENSEN-GROUP holds 183,969 treasury shares. Pursuant to article 74, §6, of the Law of April 1, 2007, JENSEN INVEST A/S disclosed to both the FSMA and to JENSEN-GROUP NV that, at September 1, 2007, it held in concert more than 30% of the shares with voting rights in JENSEN-GROUP NV.
Further details of the shareholders' notifi cation are disclosed in note 8 - equity.
JENSEN-GROUP has a dividend policy of distributing 0.25 euro per share annually unless the results or the fi nancial statement do not allow such dividend. Based on the excellent results for 2014, the Board of Directors proposes to add a one-time dividend of 0.15 euro per share. The dividend pay out will amount to 3,112,873.85, based on the number of shares as per December 31, 2014. No dividend will be distributed to the treasury shares.
JENSEN-GROUP NV, the parent Company, reported in its statutory accounts a net profi t of 1,945,606.77 euro. The Board proposes to appropriate this result as follows:
| In euro | ||
|---|---|---|
| Profi t of the year | 1,945,606.77 | |
| Treasury shares | 1,731,032.08 | |
| Dividend | 3,112,873.85 | |
| Withdrawals from retained earnings | -2,898,299.16 |
This brings the total amount of retained earnings to 69,016,851.66 euro.
There are no signifi cant post-balance sheet events.
Ghent, March 4, 2015
We hereby certify, to the best of our knowledge, that the consolidated fi nancial statements as of December 31, 2014, prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal requirements applicable in Belgium, give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Company and the entities included in the consolidation taken as a whole, and that the management report includes a fair review of the development and performance of the business and the position of the Company and the entities included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Jesper M. Jensen Markus Schalch Chief Executive Offi cer Chief Financial Offi cer
STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS' MEETING ON THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2014
In accordance with the legal requirements, we report to you on the performance of our mandate of statutory auditor. This report includes our opinion on the consolidated fi nancial statements, as well as the required additional statement. The consolidated fi nancial statements comprise the consolidated statement of fi nancial position as at 31 December 2014 and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and consolidated cash fl ow statement for the year then ended, and notes, comprising a summary of signifi cant accounting policies and other explanatory information.
We have audited the consolidated fi nancial statements of Jensen-Group NV ("the Company") and its subsidiaries (jointly "the group"), prepared in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium. The consolidated accounts of the Group are set forth on pages 54 to 107. The total of the consolidated statement of fi nancial position amounts to KEUR 157.743 and the consolidated statement of comprehensive income shows a profi t for the year of KEUR 12.982.
The board of directors is responsible for the preparation and fair presentation of these consolidated fi nancial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the board of directors determines, is necessary to enable the preparation of consolidated fi nancial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISAs). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the statutory auditor's judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the statutory auditor considers internal control relevant to the group's preparation and fair presentation of the consolidated fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors, as well as evaluating the overall presentation of the consolidated fi nancial statements.
We have obtained from the board of directors and the company's offi cials the explanations and information necessary for performing our audit.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion.
In our opinion, the consolidated fi nancial statements give a true and fair view of the group's net equity and consolidated fi nancial position as at 31 December 2014 and of its consolidated fi nancial performance and its consolidated cash fl ows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium.
The board of directors is responsible for the preparation and the content of the directors' report on the consolidated fi nancial statements.
In the context of our mandate and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we provide the following additional statement which does not impact our opinion on the consolidated fi nancial statements:
• The directors' report on the consolidated fi nancial statements includes the information required by law, is consistent with the consolidated fi nancial statements and does not present any material inconsistencies with the information that we became aware of during the performance of our mandate.
Antwerp, 4 March 2015
The Statutory Auditor PwC Bedrijfsrevisoren bcvba Represented by
Filip Lozie* Partner
*Filip Lozie BVBA Board Member, represented by its fi xed representative, Filip Lozie
| (in thousands of euro) | notes | December 31, 2014 | December 31, 2013 |
|---|---|---|---|
| Total Non-Current Assets | 33.651 | 30.592 | |
| Intangible assets | 4.1 | 5.755 | 6.121 |
| A. Land and buildings | 10.215 | 10.766 | |
| B. Plant, machinery and equipment | 4.758 | 4.288 | |
| C. Furniture and vehicles | 2.748 | 2.493 | |
| D. Other tangible fi xed assets | 1.155 | 1.185 | |
| E. Assets under construction and advance payments | 116 | 98 | |
| Property, plant and equipment | 4.2 | 18.992 | 18.830 |
| A. Trade debtors | 1.652 | 198 | |
| B. Other amounts receivable | 773 | 625 | |
| Trade and other long term receivables | 7 | 2.425 | 823 |
| Deferred taxes | 5 | 6.479 | 4.818 |
| Total Current Assets | 124.092 | 106.837 | |
| A. Raw materials and consumables | 18.001 | 15.429 | |
| B. Goods purchased for resale | 11.066 | 10.287 | |
| C. Advance payments | 2.201 | 765 | |
| Inventories | 31.268 | 26.481 | |
| A. Trade debtors | 50.012 | 46.192 | |
| B. Other amounts receivable | 3.829 | 2.622 | |
| C. Gross amounts due from customers for contract work | 6 | 25.550 | 16.917 |
| D. Derivative Financial Instruments | 20 | 12 | 233 |
| Trade and other receivables | 7 | 79.403 | 65.964 |
| Cash and cash equivalents | 18 | 13.009 | 14.029 |
| Assets held for sale | 21 | 412 | 363 |
| TOTAL ASSETS | 157.743 | 137.429 |
| (in thousands of euro) | notes | December 31, 2014 | December 31, 2013 |
|---|---|---|---|
| Equity attributable to equity holders | 8 | 70.100 | 62.210 |
| Share Capital | 34.068 | 35.799 | |
| Other reserves | -5.612 | -4.222 | |
| Retained earnings | 41.644 | 30.633 | |
| Non-Current Liabilities | 20.746 | 15.107 | |
| Borrowings | 9 | 4.599 | 3.441 |
| Deferred income tax liabilities | 5 | 319 | 205 |
| Provisions for employee benefi t obligations | 10 | 15.309 | 11.006 |
| Derivative fi nancial instruments | 20 | 519 | 455 |
| Current Liabilities | 66.897 | 60.112 | |
| Borrowings | 9 | 2.028 | 7.795 |
| Finance lease obligations | 9 | 73 | |
| Provisions for other liabilities and charges | 11 | 9.869 | 11.619 |
| A. Trade debts | 16.359 | 14.075 | |
| B. Advances received for contract work | 6 | 14.853 | 7.262 |
| C. Remuneration and social security | 10.513 | 9.624 | |
| D. Other amounts payable | 1.711 | 1.158 | |
| E. Accrued expenses | 6.635 | 5.022 | |
| F. Derivative fi nancial instruments | 20 | 737 | 44 |
| Trade and other payables | 12 | 50.808 | 37.185 |
| Current income tax liabilities | 4.192 | 3.440 | |
| TOTAL EQUITY AND LIABILITIES | 157.743 | 137.429 |
| (in thousands of euro) | notes | December 31, 2014 | December 31, 2013 |
|---|---|---|---|
| Revenue | 6 | 239.632 | 221.416 |
| Raw materials and consumables used | -113.739 | -102.223 | |
| Services and other goods | -26.082 | -25.307 | |
| Employee compensation and benefi t expense | -77.023 | -74.668 | |
| Depreciation, amortisation, write downs of assets, impairments | 13 | -3.161 | -4.430 |
| Total expenses | -220.005 | -206.628 | |
| Other Income / (Expense) | 53 | 213 | |
| Operating profi t before tax and fi nance (cost)/ income | 19.680 | 15.001 | |
| Financial income | 1.722 | 3.123 | |
| Interest income | 1.122 | 1.444 | |
| Other fi nancial income | 600 | 1.679 | |
| Financial charges | -3.173 | -4.601 | |
| Interest charges | -1.327 | -2.198 | |
| Other fi nancial charges | -1.846 | -2.403 | |
| Net fi nancial charges | 14 | -1.451 | -1.478 |
| Profi t before tax | 18.229 | 13.523 | |
| Income tax expense | 15 | -5.185 | -3.649 |
| Income taxes | -5.180 | -3.638 | |
| Deferred taxes | -5 | -11 | |
| Profi t for the year from continuing operations | 13.044 | 9.874 | |
| Result from discontinued operations | 21 | -62 | -72 |
| Consolidated profi t for the year | 12.982 | 9.802 |
| (in thousands of euro) | notes | December 31, 2014 | December 31, 2013 |
|---|---|---|---|
| Other comprehensive income: | |||
| Items that may be subsequently reclassifi ed to Profi t and Loss | |||
| Financial instruments | -403 | 939 | |
| Currency translation differences | 2.270 | -1.276 | |
| Items that will not be reclassifi ed to Profi t and Loss | |||
| Actual gains/(losses) on Defi ned Benefi t Plans | -4.826 | 1.667 | |
| Tax on OCI | 1.569 | -782 | |
| Other comprehensive income for the year | -1.390 | 548 | |
| Total comprehensive income for the year | 11.592 | 10.350 | |
| Profi t attributable to: | |||
| Equity holders of the company | 12.982 | 9.802 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the company | 11.592 | 10.350 | |
| Basic and diluted earnings per share (in euro's) | 16 | 1,65 | 1,23 |
| Weighted average number of shares | 7.868.170 | 7.999.536 |
| (In thousands of euro) | Capital | Share premium |
Reclassifi - cation of Treasury shares |
Capital | Total Translation Share differences |
Hedging Reserves |
Actuarial gains and losses on Defi ned Benefi t Plans |
Total other Reserves |
Retained earnings |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2012 | 30.710 | 5.813 | 0 | 36.523 | 1.009 | -977 | -4.802 | -4.770 | 22.832 54.585 | |
| Result of the period | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9.802 | 9.802 |
| Other comprehensive income | ||||||||||
| Currency Translation Difference | 0 | 0 | 0 | 0 | -1.276 | 0 | 0 | -1.276 | 0 | -1.276 |
| Financial instruments | 0 | 0 | 0 | 0 | 0 | 939 | 0 | 939 | 0 | 939 |
| Defi ned Benefi t Plans | 0 | 0 | 0 | 0 | 0 | 0 | 1.667 | 1.667 | 0 | 1.667 |
| Tax on OCI | 0 | 0 | 0 | 0 | 0 | -282 | -500 | -782 | -782 | |
| Total other comprehensive income/ | 0 | 0 | 0 | 0 | -1.276 | 657 | 1.167 | 548 | 0 | 548 |
| (loss) for the year, net of tax | ||||||||||
| Dividend paid out | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2.001 | -2.001 |
| Treasury shares | 0 | 0 | -724 | -724 | 0 | 0 | 0 | 0 | 0 | -724 |
| December 31, 2013 | 30.710 | 5.813 | -724 | 35.799 | -267 | -320 | -3.635 | -4.222 | 30.633 62.210 |
| (In thousands of euro) | Capital | Share premium |
Reclassifi - cation of Treasury shares |
Capital | Total Translation Share differences |
Hedging Reserves |
Actuarial gains and losses on Defi ned Benefi t Plans |
Total other Reserves |
Retained earnings |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2013 | 30.710 | 5.813 | -724 | 35.799 | -267 | -320 | -3.635 | -4.222 | 30.633 62.210 | |
| Result of the period | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 12.982 | 12.982 |
| Other comprehensive income | ||||||||||
| Currency Translation Difference | 0 | 0 | 0 | 0 | 2.270 | 0 | 0 | 2.270 | 0 | 2.270 |
| Financial instruments | 0 | 0 | 0 | 0 | 0 | -403 | 0 | -403 | 0 | -403 |
| Defi ned Benefi t Plans | 0 | 0 | 0 | 0 | 0 | 0 | -4.826 | -4.826 | 0 | -4.826 |
| Tax on OCI | 0 | 0 | 0 | 0 | 0 | 121 | 1.448 | 1.569 | 0 | 1.569 |
| Total other comprehensive income/ | 0 | 0 | 0 | 0 | 2.270 | -282 | -3.378 | -1.390 | 0 | -1.390 |
| (loss) for the year, net of tax | ||||||||||
| Dividend paid out | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.971 | -1.971 |
| Treasury shares | 0 | 0 | -1.731 | -1.731 | 0 | 0 | 0 | 0 | 0 | -1.731 |
| December 31, 2014 | 30.710 | 5.813 | -2.455 | 34.068 | 2.003 | -602 | -7.013 | -5.612 | 41.644 70.100 | |
| (in thousands of euro) | notes | December 31, 2014 | December 31, 2013 |
|---|---|---|---|
| Cash fl ows from operating activities | 21.861 | 19.110 | |
| Profi t for the year from continuing operations | 13.044 | 9.874 | |
| Adjusted for | |||
| - Current and deferred tax | 3.638 | 4.074 | |
| - Interest and other fi nancial income and expenses | 1.451 | 1.478 | |
| - Depreciation, amortization and impairments | 14 | 3.267 | 3.192 |
| - Write downs of trade receivables | 14 | 695 | -153 |
| - Write downs of inventory | 14 | 591 | 345 |
| - Changes in provisions | -825 | 300 | |
| Changes in working capital | -7.709 | 7.278 | |
| Changes in stocks | -5.378 | 1.583 | |
| Changes in long- and short-term amounts receivable | -15.736 | 13.918 | |
| Changes in trade and other payables | 13.405 | -8.223 | |
| Corporate income tax paid | -4.433 | -2.795 | |
| Corporate income tax paid | -4.433 | -2.795 | |
| Net cash generated from operating activities - continuing operations | 9.719 | 23.593 | |
| Net cash generated from operating activities - discontinued operations | -111 | -56 | |
| Net cash generated from operating activities - total | 9.608 | 23.537 | |
| Net cash used in investing activities | -3.063 | -4.460 | |
| Purchases/sales of intangible and tangible fi xed assets | -3.063 | -3.220 | |
| Acquisition of subsidiaries (net of cash acquired) | 24 | -1.240 | |
| Cash fl ow before fi nancing | 6.545 | 19.077 | |
| Net cash used in fi nancing activities | -8.294 | -5.738 | |
| Treasury shares | 8 | -1.731 | -724 |
| Net other fi nancial charges | 14 | -1.246 | -724 |
| Dividend | 8 | -1.971 | -2.001 |
| Repayments of borrowings | - | -3.141 | -1.535 |
| Interest paid | 14 | -1.327 | -2.198 |
| Interest received | 14 | 1.122 | 1.444 |
| Net Change in cash and cash equivalents | -1.749 | 13.339 | |
| Cash, cash equivalent and bank overdrafts at the beginning of the year | 11.087 | -976 | |
| Exchange gains/(losses) on cash and bank overdrafts | 2.270 | -1.276 | |
| Cash, cash equivalent and bank overdrafts at the end of the year | 18 | 11.608 | 11.087 |
| The notes on pages 61-107 are an integral part of these consolidated fi nancial statements. |
The JENSEN-GROUP (hereafter "the Group") is one of the major suppliers to the heavy-duty laundry industry. The Group markets its products and services under the JENSEN brand and is the leading supplier to the heavy-duty market. The product range varies from transportation and handling systems, tunnel washers, separators, feeders, ironers and folders to complete project management for fully-equipped and professionally managed industrial laundries. The JENSEN-GROUP has operations in 20 countries and distributes its products in more than 40 countries. Worldwide, the JENSEN-GROUP employs 1,224 people.
JENSEN-GROUP NV (hereafter "the Company") is incorporated in Belgium. Its registered offi ce is at Bijenstraat 6, 9051 Sint-Denijs-Westrem, Belgium.
The JENSEN-GROUP shares are quoted on the Euronext Stock Exchange.
The Board of Directors approved the present consolidated fi nancial statements for issue on March 4, 2015.
These consolidated fi nancial statements are for the 12 months ended December 31, 2014 and are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. These annual fi nancial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective as at December 31, 2014 and which have been adopted by the European Union.
These consolidated fi nancial statements have been prepared under the historical cost convention, as modifi ed by the revaluation of available-for-sale fi nancial assets, and fi nancial assets and fi nancial liabilities (including derivative instruments) at fair value through profi t or loss.
These consolidated fi nancial statements are prepared on an accrual basis and on the assumption that the Group is a going concern and will continue in operation for the foreseeable future.
The preparation of the fi nancial statements requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the fi nancial statements. The areas involving a higher degree of judgment or complexity, or where assumptions and estimates are signifi cant to the consolidated fi nancial statements, are disclosed in the accounting policies.
The following new standards and amendments to standards are mandatory for the fi rst time for the fi nancial year beginning 1 January 2014 and are applicable for the Group:
The following new standards and amendments to standards are mandatory for the fi rst time for the fi nancial year beginning 1 January 2014 but are not applicable for the Group:
The following new interpretation and amendments to standards have been issued and have been endorsed by the European Union, but are not mandatory for the fi rst time for the fi nancial year beginning 1 January 2014. We expect that following of them will be appicable for the Group:
The following new standards and amendments to standards have been issued, but are not mandatory for the fi rst time for the fi nancial year beginning 1 January 2014 and have not been endorsed by the European Union. We expect that following of them will be applicable for JENSEN-GROUP:
'Annual Improvements (2012–2014 cycle)'. The amendments include IFRS 5, 'Non-current assets held for sale and discontinued operations', IAS 19, 'Employee benefi ts', IFRS 7, 'Financial instruments: disclosures' and IAS 34, 'Interim fi nancial reporting'.
IFRS 15 'Revenue from contracts with customers'.
The following new standards and amendments to standards have been issued, but are not mandatory for the fi rst time for the fi nancial year beginning 1 January 2014 and have not been endorsed by the European Union. We don't expect that following of them will be applicable for JENSEN-GROUP:
The Group is currently assessing the impact of these standards.
The main accounting policies defi ned by the Group are as follows:
The consolidated fi nancial statements are presented in euro and rounded to the nearest thousand.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases.
The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquire on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifi able net assets.
Acquisition-related costs are expensed as incurred.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the group's accounting policies.
The preparation of the fi nancial statements involves the use of estimates and assumptions, which may have an impact on the reported values of assets and liabilities at the period-end as well as on certain items of income and expense for the period. Estimates are based on economic data, which are likely to vary over time, and are subject to a degree of uncertainty. They mainly pension liabilities. We refer to note 10 – provision for employee benefi t obligations.
The consolidated fi nancial statements presented in this report have been prepared in euro.
The conversion of assets, liabilities and commitments which are denominated in foreign currencies is based on the following guidelines:
The results and fi nancial positions of all the Group entities (none of which has the currency of a hyperinfl ationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings are taken to shareholders' equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognized in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Contract costs are recognized when incurred.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable.
When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profi table, contract revenue is recognized over the period of the contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.
The Group uses the 'percentage of completion method' to determine the appropriate amount to recognize in a given period. The stage of completion is measured by reference to the contract costs incurred up to the balance sheet date as a percentage of total estimated costs for each contract. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.
The Group presents as an asset the gross amount due from customers for contract work for all contracts in progress for which costs incurred plus recognized profi ts (less recognized losses) exceed progress billings. Progress billings not yet paid by customers and retentions are included within 'trade and other receivables'.
The Group presents as a liability the gross amount due to customers for contract work for all contracts in progress for which progress billings exceed costs incurred plus recognized profi ts (less recognized losses).
Royalties and rentals are recognized as income when it is probable that the economic benefi ts associated with the transaction can be suffi ciently measured and will fl ow to the Group. The income is recognized on an accrual basis in accordance with the substance of the relevant agreement.
Research costs are charged to the income statement in the year in which they are incurred.
The JENSEN-GROUP does not capitalize development expenses since its business reality makes it very diffi cult to distinguish product enhancements from adaptations to specifi c circumstances, and to defi ne the future cash fl ows that will originate from these efforts. Since furthermore the development expenses are relatively stable and are a continuous process, the JENSEN-GROUP does not capitalize these efforts but expenses them as incurred.
Investments in licenses, trademarks, etc. are capitalized with a minimum amount of 50.000 euro and amortized over 5 years.
On the acquisition of a new subsidiary, the difference between the acquisition price and the Group share of the identifi able assets, liabilities and contingent liabilities of the consolidated subsidiary, after adjustments to refl ect fair value, is recorded in the consolidated balance sheet under assets as goodwill. Goodwill is not amortized but tested for impairment annually, or more frequently, if events or changes in circumstances indicate a possible impairment. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to a cash-generating unit for the purpose of impairment testing.
Property, plant and equipment are recorded at their acquisition value or construction cost less accumulated depreciation and impairment losses and increased, where appropriate, by ancillary costs.
The Group has broken down the cost of property plant and equipment into major components. These major components, which are replaced at regular intervals, are depreciated over their useful lives.
The cost of property, plant and equipment does not include any borrowing costs.
Tangible fi xed assets are depreciated on a straight-line basis over their estimated useful lives from the month of acquisition onwards. If necessary, tangible fi xed assets are considered as a combination of various units with separate useful lives.
The annual depreciation rates are as follows:
| Annual Depreciation rates | ||
|---|---|---|
| Buildings | 3.33% | 30y |
| Infrastructure | 10% | 10y |
| Roof | 10% | 10y |
| Installations, plant and machinery | 10% – 33% | 3y – 10y |
| Offi ce equipment and furnishings | 10% – 20% | 5y – 10y |
| Computer | 20% - 33% | 3y – 5y |
| Vehicles | 20% - 33% | 3y – 5y |
Assets other than inventories, deferred tax assets, employee benefi ts and derivative fi nancial instruments and assets arising from construction contracts are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
Whenever the carrying amount of an asset exceeds its recoverable amount (being the higher of its fair value less cost to sell and its value in use), an impairment loss is recognized in the profi t and loss statement. The value in use is the present value of estimated future cash fl ows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit to which the assets belong.
Reversal of impairment losses recognized in prior years is recorded in income up to the initial amount of the impairment loss, when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. Goodwill is tested for impairment at least once a year. Impairment on goodwill can never be reversed at a later date.
A fi nancial lease is a lease that transfers substantially all risks and rewards incident to ownership of an asset to the lessee. When a fi xed asset is held under a fi nancial lease, its value is recorded as an asset at the present value, at the beginning of the lease term, of the future minimum lease payments during the lease term. Lease payments are apportioned between the fi nance charge and the reduction of the outstanding liability in order to obtain a constant rate of interest on the debt over the lease term.
Property, plant and equipment acquired under fi nance leases is depreciated over the shorter of the useful life of the asset and the lease term.
When assets are leased out under a fi nance lease, the amount due from the lessee should be recognized in the balance sheet as a receivable at an amount equal to the Group's net investment in the lease, and the same amount is refl ected in turnover. Over the lease term, rentals are apportioned between a reduction in the net investment in the lease and fi nance income. The recognition of fi nance income is based on a pattern refl ecting a constant periodic rate of return on the Group's net investment. The net investment in the lease is the gross investment in the lease discounted at the interest rate implicit in the lease. The gross investment in the lease is equal to the minimum lease payments plus any unguaranteed residual accruing to the Group as lessor.
Leases in which a signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.
Inventories are valued at the lower of cost or net realizable value. Cost is determined by the fi rst-in, fi rst-out (FIFO) method. For produced inventories, cost means the full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and variable selling expenses.
A provision is recognized in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event, and when it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount of the provision is the best estimate of the expenditure required to settle the present value of the obligation at the balance sheet date. The provisions are discounted when the impact of the time value of money is material.
Some of the Group's employees are eligible for retirement benefi ts under defi ned contribution and defi ned benefi t plans.
An external, independent actuarial prepares the calculation of the provision for employee benefi t plans. The calculation is based on the projected unit credit method.
Contributions to defi ned contribution plans are recognized as an expense in the income statement as incurred.
For defi ned benefi t plans, the amount recorded in the balance sheet is determined as the present value of the benefi t obligation less the fair value of any plan assets. All past service costs are recognized in P&L.
The actuarial gains and losses are recognized in the period in which they occur outside profi t and loss, in the consolidated statement of comprehensive income.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the value of assets and liabilities for tax purposes and their carrying amounts in the consolidated fi nancial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profi t will be available against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income 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 tax assets and liabilities relate to income tax 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 tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized 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 provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Accrued charges are costs that have been charged against income but not yet disbursed at balance sheet date. Deferred income is revenue that will be recognized in future periods.
Financial instruments are recorded at trade date. The fair value of the fi nancial instruments is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date.
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy or fi nancial reorganization, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash fl ows, discounted at the effective interest rate.
Cash and cash equivalent includes cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Amounts payable are carried at nominal value at the balance sheet date
The Company uses derivative fi nancial instruments to reduce the exposure to adverse fl uctuations in interest rates and foreign exchange rates. It is the Company's policy not to hold derivative fi nancial instruments for speculative or trading purposes.
Derivative fi nancial instruments are recognized initially at fair value. Subsequent to initial recognition, derivative fi nancial instruments are stated at fair value. Recognition of any resulting gain or loss depends on the nature of the item being hedged. Derivative fi nancial instruments that are either hedging instruments that are not designated or do not qualify as hedges are carried at fair value, with changes in value included in the income statement.
Where a derivative fi nancial instrument is designated as a hedge of the variability in cash fl ows of a recognized asset or liability, a fi rm commitment or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative fi nancial instrument is recognized directly in other comprehensive income. When the fi rm commitment or forecasted transaction results in the recognition of an asset or liability, the cumulative gain or loss is removed from other comprehensive income and included in the initial measurement of the acquisition cost or other carrying amount of the asset or liability.
Otherwise the cumulative gain or loss is removed from other comprehensive income and recognized in the income statement at the same time as the hedged transaction. The ineffective part of any gain or loss is recognized in the income statement immediately. Any gain or loss arising from changes in the time value of the derivative fi nancial instrument is excluded from the measurement of hedge effectiveness and is recognized in the income statement immediately.
When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur, the cumulative gain or loss at that point remains in other comprehensive income and is recognized in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss recognized in other comprehensive income is recognized in the income statement immediately.
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.
Non-current assets (or disposal groups) are classifi ed as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is recovered principally through a sale transaction rather than through a continuing use.
The consolidated cash fl ow statement reports the cash fl ow during the period classifi ed by analyzing the cash fl ow from operating, investing and fi nancing activities.
On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.
The Company is operating in a single business segment: Heavy-Duty Laundry Division.
All accounting periods presented represent 12 months of operations starting on January 1 of each year.
There are no changes in the accounting policies compared with the accounting policies used in the preparation of the consolidated fi nancial statements as per December 31, 2013.
The parent Company, JENSEN-GROUP NV, and all the subsidiaries that it controls are included in the consolidation.
On February 20, 2014 JENSEN New Zealand was incorporated.
On June 11, 2013 JENSEN Brasil and on July 3, 2013 JENSEN Japan Co. have been incorporated. On August 16, 2013 JENSEN-GROUP took over its Austrian distributor ÖWM.
The total laundry industry can be split up into Consumer, Commercial and Heavy Duty laundry. The JENSEN-GROUP entities serve end-customers in the Heavy Duty laundry segment. They follow the same process. The JENSEN-GROUP sells its products and services under the JENSEN brand through own sales and service companies and independent distributors worldwide. In this way the JENSEN-GROUP operates only in one single segment.
The following table presents revenue and certain asset information based on the Group's geographical areas. The basis for attributing revenues is based on the location of the customer:
| (in thousand of euro) | Europe + CIS | America | Middle East, Far East and Australia TOTAL OPERATIONS | |||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Revenue from external customers 140.055 132.069 | 52.509 | 44.044 | 47.068 | 45.303 | 239.632 | 221.416 | ||
| Other segment information | ||||||||
| Non-current assets | 21.984 | 20.548 | 2.606 | 2.581 | 2.582 | 2.645 | 27.172 | 25.774 |
| Non allocated assets | 130.571 | 111.655 | ||||||
| Total assets | 157.743 | 137.429 | ||||||
| Capital expenditure: | -2.284 | -4.402 | -387 | -11 | -392 | -47 | -3.063 | -4.460 |
The difference between non-current assets in the table above (27.2 million euro) and the non-current assets as per the consolidated statement of fi nancial position (33.7 million euro) relates to the deferred tax assets (6.5 million euro).
| (in thousands of euro) | Know how | Goodwill | Other intangibles | Licenses | TOTAL |
|---|---|---|---|---|---|
| Gross carrying amount January 1, 2013 | 345 | 6.677 | 0 | 329 | 7.351 |
| Translation differences | -2 | -60 | 0 | 32 | -30 |
| Additions | 0 | 852 | 432 | 251 | 1.536 |
| Gross carrying amount December 31, 2013 | 343 | 7.470 | 432 | 612 | 8.857 |
| Translation differences | 0 | -47 | 0 | 0 | -47 |
| Additions | 0 | 0 | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 | -166 | -166 |
| Gross carrying amount December 31, 2014 | 343 | 7.423 | 432 | 446 | 8.644 |
| Accumulated amortization, write-downs, | 308 | 1.946 | 0 | 232 | 2.486 |
| impairments January 1, 2013 | |||||
| Additions | 35 | 0 | 150 | 65 | 250 |
| Accumulated amortization, write-downs, | 343 | 1.946 | 150 | 297 | 2.736 |
| impairments December 31, 2013 | |||||
| Additions | 0 | 0 | 115 | 39 | 154 |
| Accumulated amortization, write-downs, | 343 | 1.946 | 265 | 336 | 2.890 |
| impairments December 31, 2014 | |||||
| Net carrying amount December 31, 2013 | 0 | 5.524 | 283 | 315 | 6.121 |
| Net carrying amount December 31, 2014 | 0 | 5.477 | 168 | 110 | 5.754 |
The know-how relates to the technology for specifi c folding equipment, purchased in the acquisition of JENSEN Italia s.r.l.
The goodwill arises mainly from the acquisitions of JENSEN France, JENSEN Switzerland, JENSEN Australia, JENSEN SIPANO (Sweden), JENSEN Benelux, JENSEN Italia and ÖWM, Austria.
JENSEN-GROUP identifi es the cash fl ow-generating units as being the Group. JENSEN-GROUP assists the heavy-duty laundry industry worldwide by designing and supplying sustainable single machines as well as systems and integrated solutions. The success of JENSEN-GROUP results from combining the global skills with the local presence. The non-current assets of the plants are managed together and the cash fl ows generated by the usage of these plants come from one group of global customers that are approached with same deliverable, being the optimization of the heavy duty laundry activity. Therefore the non-current assets of the plants are allocated to one CGU for impairment testing purposes.
Goodwill is subject to a yearly impairment test that is based on a number of critical judgments, estimates and assumptions, based on fair value and applying a discounted free cash fl ow approach. JENSEN-GROUP believes that its estimates are very reasonable; they are based on the past experience, external sources of information (such as long-term growth rate and discount rate) and refl ect the best estimates by management. The recoverable amount of the goodwill is determined based on a calculation of its value in use to the cash-generating unit to which it is allocated.
The main judgments, assumptions and estimates for the cash-generating unit are:
The test includes a sensitivity analysis on key assumptions used, among them the WACC, free cash fl ow and long-term growth percentage: The occurrence of any of the following individual less favorable assumptions would not lead to an impairment of goodwill: WACC of 11%, free cash fl ow of 95% of the projections of free cash fl ows used for the calculation of the impairment test and a long term growth of 1%.
Although JENSEN-GROUP believes that its judgments, assumptions and estimates are appropriate, actual results may differ from these estimates under different assumptions or conditions.
The other intangible fi xed assets amounting to 0.2 million euro relate to the acquisition of ÖWM.
The licenses relate to the capitalization of the license costs of the ERP system and for other IT tools.
Development costs of 4.5 million euro (6.3 million euro in 2013) were expensed during the year. These costs are accounted for in the lines 'services and other goods', 'employee compensations and benefi t expense' and 'depreciation, amortization, write down of assets'.
| (In thousands of euro) | Land & Buildings |
Plant machinery and equipment |
Funiture and vehicules |
Ohter tangible assets |
Assets under construction |
TOTAL |
|---|---|---|---|---|---|---|
| Gross carrying amount January 1, 2013 | 26.575 | 17.847 | 4.562 | 1.986 | 0 | 50.970 |
| Translation differences | -363 | -272 | 48 | -24 | 0 | -611 |
| Additions | 405 | 1.180 | 1.936 | 4 | 98 | 3.623 |
| Disposals | 0 | -548 | -369 | 0 | 0 | -917 |
| Transfers | 10 | 0 | -10 | 0 | 0 | 0 |
| Gross carrying amount December 31, 2013 | 26.627 | 18.207 | 6.167 | 1.966 | 98 | 53.065 |
| Translation differences | 485 | 393 | 143 | -56 | -95 | 870 |
| Additions | 170 | 1.389 | 1.248 | 22 | 170 | 2.999 |
| Disposals | -131 | -80 | -138 | -150 | 0 | -499 |
| Transfers | 0 | 39 | 18 | 0 | -57 | 0 |
| Gross carrying amount December 31, 2014 | 27.151 | 19.948 | 7.438 | 1.782 | 116 | 56.435 |
| Accumulated depreciation, write down | 15.138 | 13.435 | 2.982 | 597 | 0 | 32.152 |
| and impairment January 1, 2013 | ||||||
| Translation differences | -246 | -38 | -81 | 13 | 0 | -352 |
| Depreciation | 959 | 637 | 1.078 | 171 | 0 | 2.845 |
| Disposals | 0 | -115 | -295 | 0 | 0 | -410 |
| Transfers | 10 | 0 | -10 | 0 | 0 | 0 |
| Accumulated depreciation, write down | 15.861 | 13.919 | 3.674 | 781 | 0 | 34.235 |
| and impairment December 31, 2013 | ||||||
| Translation differences | 257 | 245 | 115 | -170 | 0 | 447 |
| Depreciation | 939 | 1.104 | 1.022 | 166 | 0 | 3.231 |
| Disposals | -121 | -78 | -121 | -150 | 0 | -470 |
| Transfers | 0 | 0 | 0 | 0 | 0 | |
| Accumulated depreciation, write down | 16.936 | 15.190 | 4.690 | 627 | 0 | 37.443 |
| and impairment December 31, 2014 | ||||||
| Net carrying amount December 31, 2013 | 10.766 | 4.288 | 2.493 | 1.185 | 98 | 18.830 |
| Net carrying amount December 31, 2014 | 10.215 | 4.758 | 2.748 | 1.155 | 116 | 18.992 |
During 2014, the net carrying amount of tangible fi xed assets remained stable. Excluding depreciation charges in the income statement of 3.3 million euro, tangible fi xed assets increased by 3.4 million euro.
The investments in 2014 related mainly to equipment upgrades and vehicles.
The investments in 2013 related mainly to equipment upgrades and to the acquisition of the Austrian distributor ÖWM.
The fi nancial leasing covers mainly machinery and equipment of JENSEN GmbH.
Machinery includes the following amounts where the Group is a lessee under a fi nance lease:
| December 31, 2014 | December 31, 2013 |
|---|---|
| 1.512 | 1.502 |
| -1.126 | -1.020 |
| 386 | 482 |
The carrying value of the property, plant and equipment pledged as security for liabilities amounts to 3.8 million euro (21.7 million euro at December 2013).
Deferred tax assets and liabilities are attributable to the following items:
| (In thousands of euro) | December 31, 2012 |
Charged/credited to the income statement |
Charged/ credited to equity |
Exchange differences |
December 31, 2013 |
|---|---|---|---|---|---|
| Inventories | 550 | 84 | 0 | 0 | 634 |
| Fixed assets | 755 | -304 | 0 | 0 | 451 |
| Provisions | 3.272 | 360 | -500 | 0 | 3.132 |
| Tax losses | 431 | -12 | 0 | 368 | 787 |
| Deferred taxes on differences between | 237 | -208 | 0 | 0 | 29 |
| tax and local books | |||||
| Currency result in other comprehensive income | -214 | -155 | 0 | -369 | |
| Change in tax rate | 65 | -65 | 0 | 0 | |
| Financial instruments | -58 | 289 | -282 | 0 | -51 |
| Total deferred tax assets (net) | 5.038 | -11 | -782 | 368 | 4.613 |
| (In thousands of euro) | December 31, 2013 |
Charged/credited to the income statement |
Charged/ credited to equity |
Exchange differences |
December 31, 2014 |
|---|---|---|---|---|---|
| Inventories | 634 | 101 | 0 | 0 | 735 |
| Fixed assets | 451 | 198 | 0 | 0 | 649 |
| Provisions | 3.132 | 129 | 1.448 | 0 | 4.709 |
| Tax losses | 787 | -236 | 0 | -17 | 534 |
| Deferred taxes on other differences between | 29 | 25 | 0 | 0 | 54 |
| tax and local books | |||||
| Currency result in other comprehensive income | -369 | -211 | -580 | ||
| Financial instruments | -51 | -11 | 121 | 0 | 59 |
| Total deferred tax assets (net) | 4.613 | -5 | 1.569 | -17 | 6.160 |
The split between long term and short term deferred taxes is as follows:
| (in thousands of euro) | Deferred taxes | |
|---|---|---|
| Long term | 3,119 | |
| Short term | 3,041 | |
| Total deferred tax assets | 6,160 |
The deferred tax assets originate mainly from JENSEN GmbH (1.7 million euro), JENSEN USA (1.4 million euro), JENSEN AG Burgdorf (0.7 million euro) and JENSEN Italia (0.5 million euro).
Deferred tax assets have been recorded because Management and the Board are convinced that, in accordance with the Company's valuation rules, the assets can be realized within a reasonable time frame.
The deferred tax assets increased because of additional deferred tax assets recognized on timing differences.
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Contract revenue | 239.632 | 221.416 |
| Balance sheet information of pending projects: | ||
| Gross amounts due from customers for contract work | 25.550 | 16.917 |
| Advances received | 14.853 | 7.262 |
Construction contracts are valued based on the percentage of completion method. At December 31, 2014 gross amounts due from customers for contract work included 5.7 million euro of accrued profi t (3.1 million euro at December 31, 2013).
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Trade debtors | 55.660 | 50.012 |
| Provision for doubtful debtors | -3.996 | -3.622 |
| Taxes | 892 | 310 |
| Other amounts receivable | 2.436 | 1.897 |
| Gross amounts due from customers for contract work | 25.550 | 16.917 |
| Deferred charges and accrued income | 1.274 | 1.040 |
| Derivative fi nancial instruments | 12 | 233 |
| Total trade and other receivables | 81.828 | 66.787 |
| Less non-current portion | ||
| Trade debtors | 1.652 | 198 |
| Other amount receivable | 773 | 625 |
| Non-current portion | 2.425 | 823 |
| Current portion | 79.403 | 65.964 |
The increase in non-current trade debtors relates to certain customer contracts with longer payment terms.
The other amounts receivable include cash guarantees in an amount of 0.6 million euro.
Advances received from customers, mainly on project activities, are recognized in "Accounts and notes payable" in accordance with the accounting principle whereby receivables and payables may not be netted off.
The increase in the trade and other receivables relates to the higher activity level.
At December 31, 2014, the issued share capital was 30.7 million euro, represented by 8,002,968 ordinary shares without nominal value. There were no preference shares. All shares are fully paid.
At December 31, 2013, share capital was 30.7 million euro, represented by 8,002,968 ordinary shares without nominal value. There are no preference shares. All shares are fully paid.
Detailed information on the capital statement as per December 31, 2013 and 2014 is set out below.
| CAPITAL STATEMENT (position as at December 31, 2014) | Amounts (in thousand of euro) |
Number of shares |
|---|---|---|
| A. Capital | ||
| 1. Issued capital | ||
| - At the end of the previous year | 30.710 | |
| - Changes during the year | 0 | |
| - At the end of this year | 30.710 | |
| 2. Capital representation | ||
| 2.1 Shares without nominal value | 30.710 | 8.002.968 |
| 2.2 Registered or bearer shares | ||
| - Registered | 4.141.342 | |
| - Bearer/dematerialized | 3.861.626 | |
| B. Own shares held by | ||
| - the company or one of its subsidiaries | 2.455 | 183.969 |
| C. Commitments to issue shares | ||
| 1. As a result of the exercise of CONVERSION RIGHTS | 0 | 0 |
| 2. As a result of the exercise of WARRANTS | 0 | 0 |
| D. Authorized capital not issued | 42.715 |
The following declarations have been received of holdings in the company's share capital:
JENSEN Invest A/S, JF Tenura ApS, the heirs of Mr. Jørn M. Jensen, Mr. Jesper M. Jensen, The Jorn M. Jensen and Lise M. Jensen Family Trust, Mrs. Anne M. Jensen and Mrs. Karine Munk Finser
JENSEN INVEST A/S, Ejnar Jensen Vej 1, 3700 Rønne, Denmark
| Number of shares | Total shares | % | |
|---|---|---|---|
| - number of shares | 4.131.576 | 8.002.968 | 51,63% |
| - Voting rights | 4.131.576 | 7.818.999 | 52,84% |
The chain of control is as follows: 51,6% of the shares in JENSEN-GROUP are held by JENSEN Invest A/S and 0,02% by the heirs of Mr. Jørn M. Jensen. JF Tenura Aps holds 100% of the shares in Jensen Invest A/S. SWID AG, represented by Mr. Jesper M. Jensen holds and controls 51% of the shares in JF Tenura Aps. The other 49% of the shares in JF Tenura Aps are held by Mrs Anne Munch Jensen and Mrs Karine Munk Finser as the ultimate benefi cial owners of the Jörn Munch Jensen and Lise Munch Jensen Family Trust.
| Number of shares | Total shares | % | |
|---|---|---|---|
| - number of shares | 693.344 | 8.002.968 | 8,66% |
| - Voting rights | 693.344 | 7.818.999 | 8,87% |
The chain of control is as follows: Petercam NV has 100% participation in PMS. Petercam NV has 100% participation in Petercam Luxembourg.
| CAPITAL STATEMENT (position as at December 31, 2013) | Amounts (in thousand of euro) |
Number of shares |
|---|---|---|
| A. Capital | ||
| 1. Issued capital | ||
| - At the end of the previous year | 30.710 | |
| - Changes during the year | 0 | |
| - At the end of this year | 30.710 | |
| 2. Capital representation | ||
| 2.1 Shares without nominal value | 30.710 | 8.002.968 |
| 2.2 Registered or bearer shares | ||
| - Registered | 4.141.218 | |
| - Bearer/dematerialized | 3.861.750 | |
| B. Own shares held by | ||
| - the company or one of its subsidiaries | 724 | 59.768 |
| 0 |
|---|
| 0 |
The following declarations have been received of holdings in the company's share capital:
JENSEN INVEST A/S, Ejnar Jensen Vej 1, 3700 Rønne, Denmark
| Number of shares | Total shares | % | |
|---|---|---|---|
| - number of shares | 4.131.576 | 8.002.968 | 51,63% |
| - Voting rights | 4.131.576 | 7.943.200 | 52,01% |
The chain of control is as follows: 51,6% of the shares in JENSEN-GROUP are held by JENSEN Invest A/S and 0,02% by the heirs of Mr. Jørn M. Jensen. JF Tenura Aps holds 100% of the shares in Jensen Invest A/S. SWID AG, represented by Mr. Jesper M. Jensen holds and controls 51% of the shares in JF Tenura Aps. The other 49% of the shares in JF Tenura Aps are held by Mrs Anne Munch Jensen and Mrs Karine Munk Finser as the ultimate benefi cial owners of the Jörn Munch Jensen and Lise Munch Jensen Family Trust.
| Petercam NV | |||
|---|---|---|---|
| Petercam NV, Place Sainte Gudule 19, 1000 Brussel, Belgium | |||
| Number of shares | Total shares | % | |
| - number of shares | 693.344 | 8.002.968 | 8,66% |
| - Voting rights | 693.344 | 7.943.200 | 8,73% |
The chain of control is as follows: Petercam NV has 100% participation in PMS. Petercam NV has 100% participation in Petercam Luxembourg.
Each share has one vote. The voting rights are in line with the Companies' Code. The articles of association do not include other regulations with respect to voting rights.
The regulations with respect to transfer of shares are in line with the Companies' Code. The articles of association do not include other regulations with respect to transfer of shares.
The share premium results primarily from the merger of LSG, which then took the name of JENSEN-GROUP.
The ending balance of the share premium is 5.8 million euro.
The articles of association (art. 11) allow the Board of Directors to buy back own shares.
The Board of Directors of November 14, 2013 decided to implement a share repurchase program to buy back a maximum of 800,300 or 10% of its shares. The shares are bought at the stock exchange by an investment bank mandated by the Board of Directors. The buy-back mandate expires on October 4, 2017. As per December 31, 2014, JENSEN-GROUP holds 183,969 treasury shares.
In this annual report the consolidated fi nancial statements are expressed in thousands of euro. All balance sheet captions of foreign companies are translated into euro, which is the Company's functional and presentation currency, using closing rates at the end of the accounting year, except for capital and reserves, which are translated at historical rates. The income statement is translated at average rates for the year. The resulting translation difference, arising from the translation of capital and reserves and the income statement, is shown in a separate category of equity under the caption 'translation differences'.
The exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. In total, 0.6 million euro of currency losses are transferred from fi nancial result to other comprehensive income.
| Currency | Average rate (per euro) | Closing rate (per euro) | |||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| USD | 1.3285 | 1.3281 | 1.2141 | 1.3791 | |
| DKK | 7.4548 | 7.4579 | 7.4453 | 7.4593 | |
| GBP | 0.8061 | 0.8493 | 0.7789 | 0.8337 | |
| SEK | 9.0985 | 8.6515 | 9.3930 | 8.8591 | |
| SGD | 1.6823 | 1.6619 | 1.6058 | 1.7414 | |
| CHF | 1.2146 | 1.2311 | 1.2024 | 1.2276 | |
| AUD | 1.4719 | 1.3777 | 1.4829 | 1.5423 | |
| NZD | 1.5995 | 1.6206 | 1.5525 | 1.6762 | |
| CNY | 8.1857 | 8.1646 | 7.5358 | 8.3491 | |
| JPY | 140.31 | 129.66 | 145.23 | 144.72 | |
| BRL | 3.1211 | 2.8687 | 3.2207 | 3.2576 |
The exchange rates used for the translation were as follows:
The Group designates foreign exchange contracts and interest rate swaps as 'cash fl ow hedges' of its foreign currency and interest exposure. Any change in fair value of the hedging instrument and the hedged item (attributable to the hedged risk), as of inception of the hedge, is deferred in OCI if the hedge is deemed effective (note 20).
At year-end, an amount of 0.6 million euro was deferred in equity.
Gains and losses recognized in the hedging reserve in OCI on forward foreign exchange contracts as of December 31, 2014 will be released to the income statement at various dates between one and six months.
Gains and losses recognized in the hedging reserve in equity on interest rate swap contracts as of December 31, 2014 will be continuously released to the income statement until the repayment of the bank borrowings.
The JENSEN-GROUP has four defi ned benefi t plans. In line with prior years, the Group adopted the amended IAS 19 'Employee Benefi ts' and to recognize all actuarial gains and losses directly in OCI. The accumulated loss of the four plans amounts to 7.0 million euro.
JENSEN-GROUP has a dividend policy of distributing 0.25 euro per share annually unless the results or the fi nancial statement do not allow such dividend. Based on the excellent results for 2014, the board proposes to add a one-time dividend of 0.15 euro per share. The dividend will amount to 3,112,873.85 euro. No dividend will be distributed to the treasury shares.
The shareholders' meeting of May 2014, decided to distribute a dividend of 0.25 euro per share on the results of 2013, amounting to 1,985,800.00 euro. No dividend was distributed to the treasury shares.
JENSEN objectives when managing capital are to safeguard JENSEN's ability to continue as a going concern in order to provide returns for shareholders and benefi ts for other stakeholders and to maintain an optimal structure to reduce the cost of capital.
The non-current and current borrowings can be summarized as follows:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 | |
|---|---|---|---|
| Finance lease obligations | 0 | 0 | |
| LT loans with credit institutions | 3.113 | 3.441 | |
| LT factoring | 1.486 | ||
| Total non-current borrowings | 4.599 | 3.441 | |
| (in thousands of euro) | December 31, 2014 | December 31, 2013 | |
| Current portion of LT borrowings | 331 | 3.771 | |
| Finance lease obligations | 0 | 73 | |
| Credit institutions | 1.401 | 2.942 | |
| Payments received (factoring) | 296 | 1.082 | |
| Total current borrowings | 2.028 | 7.868 | |
| Total borrowings | 6.627 | 11.309 |
Total borrowings decreased from 11.3 million euro at December 31, 2013 to 6.6 million euro at December 31, 2014. The cash and cash equivalents decreased from 14.0 million euro to 13.0 million euro. All this together resulted in an increase in net cash of 3.7 million euro, from 2.7 million euro to 6.4 million euro. JENSEN-GROUP remains debt-free at the end of 2014.
The Group factored trade receivables in a total amount of 1.8 million euro (1.5 million euro long term and 0.3 million euro short term). As the risks and rewards are not substantially transferred to the related party, the factoring arrangement does not result in the derecognition of any amount from the balance sheet.
The following table gives the maturities of the non-current debt:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 | |
|---|---|---|---|
| Between 1 and 2 years | 629 | 331 | |
| Between 2 and 5 years | 1.908 | 1.000 | |
| Over 5 years | 2.062 | 2.110 | |
| Total non-current borrowings | 4.599 | 3.441 |
The exposure of the Group's borrowings to interest rate changes and the contractual re-pricing dates before and after the effect of the IRS (interest rate swaps) at balance sheet date is as follows:
| (In thousands of euro) | Less than 1 year |
Between 1 and 2 years |
Between 2 and 5 years |
Over 5 years | TOTAL |
|---|---|---|---|---|---|
| Credit institutions | 1.732 | 332 | 1.005 | 1.776 | 4.845 |
| Payments received (factoring) | 296 | 297 | 903 | 286 | 1.782 |
| Total | 2.028 | 629 | 1.908 | 2.062 | 6.627 |
| IRS covered | 0 | 283 | 848 | 1.417 | 2.548 |
| Total | 2.028 | 346 | 1.060 | 645 | 4.079 |
Management believes that the carrying value of the loans at fi xed rate approximates to the fair value.
For details on the IRS we refer to note 20.
The carrying amounts of the Group's borrowings are denominated in the following currencies:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 | |
|---|---|---|---|
| EUR | 3.747 | 8.384 | |
| USD | 0 | 106 | |
| DKK | 2.470 | 2.819 | |
| CHF | 0 | 0 | |
| Other | 410 | 0 | |
| Total | 6.627 | 11.309 |
With respect to the Group's borrowings, debt covenants are in place (equity ratio and EBITDA multiple). During the year, there were no breaches of these covenants.
| (in thousands of euro) | December 31, 2014 December 31, 2013 |
||
|---|---|---|---|
| Mortgages | 1.995 | 2.265 | |
| Pledges on assets | 0 | 106 | |
| Guarantee by parent company | 1.401 | 6.192 | |
| Total | 3.396 | 8.563 |
The carrying value of the property, plant and equipment pledged as security for liabilities amounts to 3.8 million euro.
| (in thousands of euro) | December 31, 2014 | December 31, 2013 | |
|---|---|---|---|
| Provisions for Defi ned Benefi t Plan | 14.842 | 10.280 | |
| Provisions for other employee benefi ts | 467 | 726 | |
| Total provisions for employee benefi t obligations | 15.309 | 11.006 |
The provision for other employee benefi ts relate to a defi ned contribution plan in Austria and pre-pensions in Germany and in the Benelux.
JENSEN GmbH, JENSEN France, JENSEN Italia and JENSEN AG Burgdorf maintain defi ned retirement benefi t plans. These plans generally provide benefi ts that are related to an employee's remuneration and years of service.
The weighted average duration of the defi ned benefi t obligation is 18 years.
The Group recognizes all actuarial gains and losses directly in Other Comprehensive Income (OCI). The accumulated actuarial loss of the 4 plans amounts to 7.0 million euro.
At December 31, 2014, the total net liability amounted to 14.8 million euro. The net liability increased because of changes in the assumptions, especially a decrease in the discount rate.
For the defi ned benefi t plans, the net outcome for 2014 was 0.7 million euro.
| (in thousands of euro) | 2014 | 2013 |
|---|---|---|
| Current service cost | 337 | 402 |
| Interest cost | 441 | 411 |
| Interest income on plan assets | -112 | -83 |
| Administrative expenses and taxes | 14 | 19 |
| Pension expenses | 680 | 749 |
The change in net liability recognized during 2014 and 2013 is set out in the table below:
| (in thousands of euro) | 2014 | 2013 |
|---|---|---|
| Net (liability)/assets at the start of the year | ||
| Unfunded status | -10.280 | -11.770 |
| Pension expenses recognized in the income statement | -680 | -749 |
| Employer contribution or benefi ts paid by employer | 217 | 181 |
| Benefi ts paid directly by the company | 485 | 493 |
| Net (liability) at December 31 | -14.841 | -10.280 |
|---|---|---|
| Translation differences | -48 | 33 |
| Net transfer in | -87 | 0 |
| Amounts recognised in OCI | -4.448 | 1.532 |
The changes in defi ned benefi t obligations and plan assets can be summarized as follows:
| (in thousands of euro) | 2014 | 2013 |
|---|---|---|
| Change in Defi ned Benefi t Obligation (DBO) | ||
| DBO at January 1 | 14.582 | 15.939 |
| Current service costs | 337 | 402 |
| Interest cost | 441 | 411 |
| Benefi ts paid | -418 | -1.061 |
| Premiums paid | -78 | -69 |
| Participants' contribution | 177 | 152 |
| Effect of changes in demographic assumptions | 0 | 9 |
| Effect of changes in fi nancial assumptions | 4.316 | -1.205 |
| Effect of experience adjustments | 108 | -294 |
| Curtailment (gain) / loss | 0 | 0 |
| Business combinations | 87 | 397 |
| Plan settlements | 0 | 0 |
| Exchange rate differences | 144 | -99 |
| DBO at December 31 | 19.694 | 14.582 |
| (in thousands of euro) | 2014 | 2013 |
| Change in Plan Assets | ||
| Fair value of plan assets at January 1 | 4.302 | 4.170 |
| Contributions | 879 | 826 |
| Actuarial gains/(losses) | -19 | 37 |
| Interest income on plan assets | 112 | 83 |
| Benefi ts paid | -418 | -1.061 |
| Premiums paid | -78 | -69 |
| Plan settlements | 0 | 0 |
| Business combinations | 0 | 397 |
| Administrative expenses | -20 | -12 |
| Translation differences | 95 | -69 |
| Fair value of plan asset at December 31 | 4.853 | 4.302 |
| (in thousands of euro) | 2014 | 2013 |
|---|---|---|
| Defi ned Benefi t Obligation at the end of the period | -19.694 | -14.582 |
| Fair value of plan assets at the end of the period | 4.853 | 4.302 |
| Unfunded status | -14.842 | -10.280 |
The major assumptions made in calculating the provisions can be summarized as follows:
| Discount rate | Rate of price infl ation | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Switzerland | 1,10% | 2,60% | 0,80% | 0,80% | |
| France | 1,60% | 3,40% | 2,00% | 2,00% | |
| Germany | 1,90% | 3,40% | 2,00% | 2,00% | |
| Italy | 1,90% | 3,40% | 2,00% | 2,00% |
| expected rates of salary increas | |||
|---|---|---|---|
| 2014 | 2013 | ||
| Switzerland | 1,50% | 1,50% | |
| France | 2,00% | 3,00% | |
| Germany | 3,00% | 3,00% | |
| Italy | 0,00% | 0,00% |
For the Swiss plan, the assets match the liabilities.
Through its defi ned benefi t plans, the Group is exposed to a number of risks, the most signifi cant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If plan assets underperform this yield, this will create a defi cit.
The sensitivity of the defi ned benefi t obligation to changes in the assumptions is:
| (in thousands of euro) | Change in assumption | Impact on DBO | |
|---|---|---|---|
| Discount rate | -25bp | 919 | |
| +25bp | -866 | ||
| Salary increase rate | -20bp | -315 | |
| +24bp | -16 | ||
| Pension increase rate | -18bp | -281 | |
| +23bp | 296 | ||
| Mortality | -1 | -508 | |
| +1 | 514 |
The above sensitivity analyses are based on a change in assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
The percentage of plan assets by asset allocation is as follows: Equity securities: 3.6% Debt securities: 56.9% Real estate: 17.2% Other: 22.3%
The contributions expected to be paid to the plan during the annual period beginning after the reporting period is estimated to 0.8 million euro.
There is one pension plan in place in Belgium that is legally structured as a Defi ned Contributions plan. The cost of this plan for JENSEN-GROUP NV amounted to 0.06 million euro for accounting year 2014.
Because of the Belgian legislation applicable to 2nd pillar pension plans (so-called " Vandenbroucke Law "), all Belgian Defi ned Contribution plans have to be considered under IFRS as Defi ned Benefi t plans. The Vandenbroucke Law states that in the context of defi ned contribution plans, the employer must guarantee a minimum return of 3.75% on employee contributions and 3.25% on employer contributions.
Because of this minimum guaranteed return for Defi ned Contributions plans in Belgium, the employer is exposed to a fi nancial risk (there is a legal obligation to pay further contributions if the fund does not hold suffi cient assets to pay all employee benefi ts relating to employee service in the current and prior periods). These plans should therefore be classifi ed and accounted for as a Defi ned Benefi t plans under IAS 19.
In the past the Company did not apply the Defi ned Benefi t accounting for these plans because higher discount rates were applicable and the return on plan assets provided by insurance companies was suffi cient to cover the minimum guaranteed return. As a result of the continuously low interest rates offered by the European fi nancial markets, employers in Belgium effectively assumed a higher fi nancial risk related to the pension plans with a minimum fi xed guaranteed return than in the past, requiring them to measure the potential impact of Defi ned Benefi t accounting for these plans.
We made an estimate of the potential additional liabilities as at December 31, 2014 and these are assessed as not signifi cant.
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Provisions for warranties | 7.533 | 8.203 |
| Provisions for take-back obligations | 666 | 270 |
| Other provisions | 1.670 | 3.146 |
| Provisions for other liabilities and charges | 9.869 | 11.619 |
Changes in provisions can be analyzed as follows:
| (in thousands of euro) | December 31, 2013 |
Additions | Reversals (Utilizations) |
Translation Differences |
December 31, 2014 |
|---|---|---|---|---|---|
| Provisions for warranties | 8.203 | 2.473 | -3.457 | 314 | 7.533 |
| Provisions for take-back obligations | 270 | 407 | -13 | 2 | 666 |
| Other provisions | 3.146 | 140 | -1.508 | -108 | 1.670 |
| Total provisions | 11.619 | 3.020 | -4.978 | 208 | 9.869 |
A provision is recorded for expected warranty claims on products sold during the year. Assumptions used to calculate the provision for warranty claims are based on current sales levels and current information on warranty calls under the standard warranty period (up to 18 months) for the main products.
A provision for take-back obligations is recorded when JENSEN-GROUP sells equipment to a customer for which the customer wants to enter into a leasing contract with a Leasing Company. In some cases, the Leasing Company requires a take-back clause.
The other provisions are set up for legal claims that, based on prudent judgment, are reasonably funded. Most of these claims are covered by insurance. Based on legal advice taken, management does not expect these claims to signifi cantly impact the Group's fi nancial position or profi tability.
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Trade debts | 16.359 | 14.075 |
| Advances received for contract work | 14.853 | 7.262 |
| Remuneration and social security | 10.513 | 9.624 |
| Other amounts payable | 1.711 | 1.158 |
| Accrued expenses | 6.635 | 5.022 |
| Derivative fi nancial instruments | 737 | 44 |
| Total trade and other payables | 50.808 | 37.185 |
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Depreciation, amortization | 3.267 | 3.192 |
| Write downs on trade debtors | 695 | -153 |
| Write downs on inventory | 591 | 345 |
| Change in provisions | -1.392 | 1.046 |
| Total depreciation, amortization, write downs of assets | 3.161 | 4.430 |
Financial income and expenses and other fi nancial income and expenses break down as follows:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Financial income | 1.722 | 3.123 |
| Interest income | 1.122 | 1.444 |
| Other fi nancial income | 247 | 218 |
| Currency gains | 353 | 1.461 |
| Financial cost | -3.173 | -4.601 |
| Interest charges | -1.327 | -2.198 |
| Other fi nancial charges | -1.053 | -982 |
| Currency losses | -793 | -1.421 |
| Total net fi nance cost | -1.451 | -1.478 |
The revaluation of balance sheet positions and hedging contracts at closing rate results in a currency gain or loss. Depending on the nature of the currency result, it is recorded in operating or fi nancial result.
The other fi nancial charges relate especially to bank charges.
Income tax expenses can be analyzed as follows:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Current taxes | -5.180 | -3.638 |
| Deferred taxes | -5 | -11 |
| Total income tax expense | -5.185 | -3.649 |
Relationship between tax expense and accounting profi t as per December 31, 2014 and December 31, 2013:
Reconciliation of effective tax rate:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Accounting profi t before taxes | 18.229 | 13.523 |
| Theoretical income tax expense | 5.230 | 3.531 |
| Theoretical tax rate | 29% | 26% |
| Tax effect of disallowed expenses | 92 | 531 |
| Tax effect of use of tax losses | -137 | -413 |
| Actual tax expenses | 5.185 | 3.649 |
| Effective tax rate | 28% | 27% |
The theoretical tax rate is the weighted average of the theoretical tax rates of the different entities.
The theoretical tax rate increased from 26% in 2013 to 29% in 2014. This is because the percentage is the weighted average of the theoretical tax rates of all the individual entities. Profi t increased in countries with high theoretical tax rates and decreased in countries with low theoretical tax rates.
Basic earnings per share are calculated by dividing the Group share in the profi t for the year of 13.0 million euro (9.8 million euro in 2013) by the weighted average number of ordinary shares outstanding during the years ended December 31, 2014 and 2013. The treasury shares acquired during the year are taken into account for the calculation of the weighted average number of shares outstanding.
| 2014 | 2013 | |
|---|---|---|
| Basic earnings per share (in euro) | 1.65 | 1.23 |
| Weighted avg shares outstanding | 7,868,170 | 7,999,536 |
Most of the JENSEN-GROUP leases relate to buildings, vehicles and computer equipment under a number of operating lease agreements. The future lease payments under these operating leases are due as follows:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| < 1 year | 1.513 | 1.548 |
| >1 year < 5 years | 2.553 | 2.721 |
| > 5 years | 327 | 453 |
| Total operating leases | 4.393 | 4.722 |
The profi t for the year includes operating lease expenses of 1.6 million euro.
Cash, cash equivalents and bank overdrafts include the following for the purpose of the cash fl ow statement:
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Cash and cash equivalent | 13.009 | 14.029 |
| Overdraft | -1.401 | -2.942 |
| Net cash and cash equivalents | 11.608 | 11.087 |
The consolidated statements of cash fl ows are presented on a consistent basis. As such, they do not isolate the effect of currencies on individual line items but only in total via the 'translation gains/(losses) on cash and bank overdrafts' caption. With respect to the evolution, the following comment can be made:
Cash increased because of the higher operating result, offset by a higher working capital.
JENSEN-GROUP has given the following commitments.
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Letters of intent | 1.401 | 6.192 |
| Bank guarantees | 9.653 | 5.516 |
| Mortgages | 1.995 | 2.265 |
| Repurchase agreements | 6.638 | 2.688 |
Management does not expect these contingencies to signifi cantly impact the Group's fi nancial position or profi tability.
Exposure to foreign currency, interest rate and credit risk arises in the normal course of the JENSEN-GROUP business. The Company analyzes each of these risks individually and defi nes strategies to manage the economic impact on the JENSEN-GROUP's performance in line with its internal policies.
Derivative fi nancial instruments are valued by an independent fi nancial institution, based on the interest and currency rates on the liquid markets. The fi nancial instruments have level 2.
Reconciliation of assets and liabilities
| (in thousands of euro) | December 31, 2014 | December 31, 2013 |
|---|---|---|
| Assets: Derivative Financial Instruments | 12 | 233 |
| Long term liabilities: Derivative Financial Instruments | -519 | -455 |
| Short term liabilities: Derivative Financial Instruments | -737 | -44 |
| Total | -1.244 | -266 |
| Fair value forex contracts | -725 | 197 |
| Fair value Interest Rate Swaps | -519 | -455 |
| Fair value contracts NZD extended | -8 | |
| Total | -1.244 | -266 |
The JENSEN-GROUP incurs currency risks on borrowings, investments, (forecasted) sales, (forecasted) purchases whenever they are denominated in a currency other than the functional currency of the subsidiary. The currencies giving rise to risk are primarily the US Dollar, Swiss Franc, Swedish Krona, Danish Krone, British Pound, Chinese Yuan, Australian Dollar and New Zealand Dollar.
The main derivative fi nancial instruments used to manage foreign currency risk are forward exchange contracts.
It is the company's policy not to hold derivative instruments for speculative or trading purposes.
With respect to currencies, the JENSEN-GROUP adopts the policy of:
As such these hedges are considered as cash fl ow hedges. They are contracted as a matter of procedure regardless of any expectations with regard to foreign currency developments.
All foreign exchange contracts are centralized within the JENSEN-GROUP treasury department and are contracted purely on the basis of the input of the different subsidiaries.
The currency risks resulting from translations of the fi nancial statements of non-euro based companies are not hedged (note 8 – Equity).
The table below provides an indication of the company's net foreign currency positions per December 31, 2014 and December 31, 2013 as regards fi rm commitments and forecasted transactions. The open positions are the result of the application of JENSEN-GROUP risk management policy. Positive amounts indicate that the Company has a long position (net future cash infl ows) while negative amounts indicate that the Company has a short position (net future cash outfl ows).
| 2014 (in thousands of euro) | Total exposure | Total derivatives | Open position |
|---|---|---|---|
| USD/EUR | 9.090 | -9.930 | -840 |
| GBP/EUR | 1.243 | -660 | 583 |
| AUD/EUR | 2.431 | -2.217 | 214 |
| CNY/EUR | -112 | 112 | 0 |
| CHF/EUR | 545 | -1.800 | -1.255 |
| SEK/EUR | -1.895 | 2.249 | 354 |
| NZD/EUR | 878 | -878 | 0 |
| 2013 (in thousands of euro) | Total exposure | Total derivatives | Open position |
|---|---|---|---|
| USD/EUR | 1.546 | -1.759 | -213 |
| GBP/EUR | 2.034 | -1.900 | 134 |
| AUD/EUR | 4.526 | -4.533 | -7 |
| CHF/EUR | -685 | 697 | 12 |
| SEK/EUR | -2.188 | 1.670 | -518 |
| CNY/EUR | -1.200 | 1.208 | 8 |
Except for a part of the Washroom Technology, all production is generated in European subsidiaries of which the activities are conducted in euro (or euro related currencies) and in Swedish Krone.
The table below gives an overview of the sensitivity analysis as per 2014:
| (in thousand of euro) | Change in currency | Impact EBIT1 |
|---|---|---|
| USD | -14,79% | -2.068 |
| 14,79% | 2.786 | |
| SEK | -9,12% | 666 |
| 9,12% | -799 | |
| GBP | -8,02% | -684 |
| 8,02% | 803 | |
| CHF | -2,98% | 11 |
| 2,98% | -12 | |
| AUD | -13,61% | -1.452 |
| 13,61% | 1.910 | |
| NZD | -8,24% | -33 |
| 8,24% | 39 |
1: The estimation is based on the standard deviation of daily volatilities of the foreign exchange rates during the past 360 days at December 31, 2014 and using a 95% confi dence interval.
These calculations are a purely theoretical calculation and do not take into account the gain or loss of sales resulting from the increased relative weakness or strength of currencies.
At December 31, 2014, the Group held the following foreign exchange contracts. Balances due within 12 months equal their carrying balances as the impact of the discount is not signifi cant.
| Curr | Sell | Avg exchange rate | Maturity | Fair value (in thousands of euro) |
|---|---|---|---|---|
| USD | 12.818.604 | 1,29 | 16-03-15 | -620 |
| GBP | 520.355 | 0,79 | 17-02-15 | -7 |
| AUD | 3.303.255 | 1,49 | 24-02-15 | 1 |
| NZD | 1.452.082 | 1,65 | 5-03-15 | -51 |
| SEK | 4.169.380 | 9,14 | 15-04-15 | 12 |
| CHF | 2.175.127 | 1,21 | 20-02-15 | -10 |
| Curr | Buy | Avg exchange rate | Maturity | Fair value (in thousands of euro) |
|---|---|---|---|---|
| SEK | 25.073.033 | 9,27 | 18-03-14 | -43 |
| CNY | 904.982 | 8,08 | 20-04-14 | -8 |
All of these foreign exchange contracts are designated and effective as cash fl ow hedges. The changes in fair value over 2014 amounting to -0.2 million euro after taxes have been deferred in equity. No ineffectiveness has been recorded.
At December 31, 2013, the Group held the following foreign exchange contracts. Balances due within 12 months equal their carrying balances as the impact of the discount is not signifi cant.
| Curr | Sell | Avg exchange rate | Maturity | Fair value (in thousands of euro) |
|---|---|---|---|---|
| USD | 5.667.592 | 1,36 | 4-02-14 | 68 |
| GBP | 1.607.360 | 0,85 | 4-03-14 | -27 |
| AUD | 6.861.306 | 1,51 | 10-03-14 | 111 |
| SEK | 1.995.302 | 8,68 | 20-01-14 | 5 |
| Curr | Buy | Avg exchange rate | Maturity | Fair value (in thousands of euro) |
| CHF | 850.000 | 1,22 | 6-01-14 | -5 |
| SEK | 16.991.571 | 8,94 | 5-02-14 | 17 |
| CNY | 10.000.000 | 8,28 | 30-06-14 | 15 |
| USD | 3.335.703 | 1,38 | 14-03-14 | 13 |
All of these foreign exchange contracts were designated and effective as cash fl ow hedges. The changes in fair value over 2013 amounting to -0.07 million euro after taxes were deferred in equity. No ineffectiveness was recorded.
The Company uses derivative fi nancial instruments to reduce exposure to adverse fl uctuations in interest rates. It is the Company's policy not to hold derivative instruments for speculative or trading purposes.
With respect to interest rates, the JENSEN-GROUP adopts the policy of having:
All fi nancing within the JENSEN-GROUP is centralized in the treasury department. This makes it easier for the JENSEN-GROUP to respect its policy of hedging using IRS.
As per December 31, 2013, JENSEN-GROUP did not reach the internal ratio and had only 30% of the total outstanding loans with long-term maturities. In December 2013, JENSEN-GROUP signed a long-term credit facility that will enable the Group to fulfi l this ratio in the future.
In respect of interest-bearing fi nancial liabilities, the table below indicates their effective interest rates at balance sheet date as well as the periods in which they roll over. Balances due within 12 months equal their carrying balances as the impact of the discount is not signifi cant.
| 2014 (in thousands of euro) |
Effective interest rate |
Carring amount | < 1 month | > 1 month < 3 months |
> 3 months < 12 months |
1–5 years | > 5 years |
|---|---|---|---|---|---|---|---|
| Floating rate | |||||||
| EUR | 0,1%-1,52% | 989 | 989 | 0 | 0 | 0 | 0 |
| DKK | 0,1%-1,52% | 2.470 | 22 | 45 | 202 | 1.083 | 1.118 |
| RMB | 6,1%-9,6% | 412 | 412 | 0 | 0 | 0 | 0 |
| Total | 3.871 | 1.423 | 45 | 202 | 1.083 | 1.118 | |
| Fixed rate | |||||||
| EUR | 1,32% | 974 | 4 | 11 | 47 | 254 | 658 |
| Factoring | |||||||
| EUR | 1.782 | 25 | 49 | 222 | 1.200 | 286 | |
| Total | 2.756 | 29 | 60 | 269 | 1.454 | 944 |
| 2013 (in thousands of euro) |
Effective interest rate |
Carring amount | < 1 month | > 1 month < 3 months |
> 3 months < 12 months |
1–5 years | > 5 years |
|---|---|---|---|---|---|---|---|
| Floating rate | |||||||
| EUR | 0%-1,52% | 4.097 | 4.097 | 0 | 0 | 0 | 0 |
| DKK | 0%-1,52% | 2.160 | 0 | 52 | 155 | 824 | 1.130 |
| Total | 6.257 | 4.097 | 52 | 155 | 824 | 1.130 | |
| Fixed rate | |||||||
| EUR | 1,32% - 2,8% | 4.288 | 0 | 16 | 3.297 | 253 | 723 |
| USD | 5,76% | 106 | 0 | 27 | 80 | 0 | 0 |
| DKK | 2,5%-5,11% | 658 | 0 | 37 | 110 | 254 | 257 |
| Total | 5.052 | 0 | 79 | 3.486 | 507 | 980 |
The following table sets out the conditions of the interest rate swaps:
| 2014 Curr |
SWAP amount | Fixed interest | Maturity | Fair value (in thousands of euro) |
|---|---|---|---|---|
| DKK | 8.362.335 | 4,86% | 30-12-22 | -201 |
| DKK | 10.608.509 | 5,11% | 30-12-24 | -319 |
| TOTAL in EUR | 2.548.029 | -519 |
The interest rate swaps are designated and effective as cash fl ow hedges. The changes in fair value over 2014 amounting to -0,05 million euro after taxes have been deferred in equity. No ineffectiveness has been recorded.
| 2013 Curr |
SWAP amount | Fixed interest | Maturity | Fair value (in thousands of euro) |
|---|---|---|---|---|
| DKK | 9.204.116 | 4,86% | 30-12-22 | -183 |
| DKK | 11.531.068 | 5,11% | 30-12-22 | -271 |
| Total | 2.779.776 | -455 |
The interest rate swaps were designated and effective as cash fl ow hedges. The changes in fair value over 2013 amounting to 0.7 million euro after taxes were deferred in equity. No ineffectiveness was recorded.
As disclosed in the above table, 3.9 million euro of the Company's interest bearing fi nancial liabilities bear a variable interest rate; 2.5 million euro are covered by an Interest Rate Swap resulting in a net variable interest rate exposure of 1.3 million euro. The Company estimates that the reasonably possible change of the market interest rates applicable to its fl oating rate debt is as follows:
| (in thousands of euro) | Carring amount | Effective interest rate | Possible rates at December 31, 2013 |
|---|---|---|---|
| EURO | 1.323 | 0%-1.5% | 0.25% – 1.75% |
Applying the reasonably possible increase/decrease in the market interest rate mentioned above to our fl oating rate debt at December 31, 2014, with all other variables held constant, 2014 profi t would have been 0.003 million euro lower/higher.
Credit risk is the risk that one party to a fi nancial instrument will fail to discharge an obligation and cause the other party to incur a fi nancial loss.
Under the Group's credit policy, project customers are required to either provide an advance payment or to provide a guarantee (ex. L/C, bank guarantees). We examine the creditworthiness of each new customer and of existing customers that start buying higher amounts.
There are no important concentrations above 15% of the total outstanding receivables with respect to a single (group of) customer(s).
The consolidated ageing balance of the trade receivables is as follows. Balances due within 12 months equal their carrying balances as the impact of the discounting is not signifi cant.
| 2014 (in thousands of euro) |
Current | < 60 days | > 60 days | > 90 days < 90 days overdue < 120 days overdue |
> 120 days overdue |
Total |
|---|---|---|---|---|---|---|
| Outstanding trade receivables | 36.158 | 10.384 | 1.131 | 765 | 7.222 | 55.660 |
| Collateral held as security | 0 | 0 | 0 | 0 | 0 | 0 |
| Net exposure | 36.158 | 10.384 | 1.131 | 765 | 7.222 | 55.660 |
| Provisions accounted for | -3.996 | |||||
| Total | 51.664 |
| 2013 (in thousands of euro) |
Current | < 60 days | > 60 days | > 90 days < 90 days overdue < 120 days overdue |
> 120 days overdue |
Total |
|---|---|---|---|---|---|---|
| Outstanding trade receivables | 36.945 | 4.629 | 1.403 | 860 | 5.977 | 49.814 |
| Collateral held as security | 0 | 0 | 0 | 0 | 0 | 0 |
| Net exposure | 36.945 | 4.629 | 1.403 | 860 | 5.977 | 49.814 |
| Provisions accounted for | -3.622 | |||||
| Total | 46.192 |
Management reviews on a timely basis whether specifi c provisions are needed based on the ageing list. Trade receivables are recorded at their nominal value, less provision for impairment. The provision for impairment refl ects both the likelihood of being paid and the timing of the cash fl ow. The total provision for doubtful debtors recorded as per December 31, 2014 amounts to 4.0 million euro.
The roll forward of the provision for doubtful debtors is set out below:
| Provision Doubtful Debtors opening balance | 3.622 | |
|---|---|---|
| Additions | 1.094 | |
| Reversals | -80 | |
| Exchange difference | -640 | |
| Provision Doubtful closing balance | 3.996 |
The bank credit ratings (Moody's) as per December 31, 2014 are as follows:
Nordea: Aa3 KBC: A2
The assets held for sale amounting to 0.4 million euro relate to the building in Kentucky (prior CLD activities). The costs related to the building (0.06 million euro) are presented as result from discontinued operations.
The shareholders of the Group as per December 2014 are:
JENSEN INVEST (including treasury shares): 53.9% Petercam: 8.7% Free fl oat: 37.4%
JENSEN INDUSTRIAL GROUP A/S and JENSEN DENMARK A/S are part of a tax consolidation in Denmark together with JENSEN INVEST, the majority shareholder of the group. The tax consolidation regime obliges all Danish resident companies that are members of the same domestic or international group to fi le a joint group tax return which enables them to manage the impact of tax losses in Denmark within the group. As a result of this, JENSEN INVEST received for 2014 a reimbursement of 0.003 million euro of taxes. This was not to the detriment of the JENSEN-GROUP shareholders in 2014.
Key management compensation can be summarized as follows:
| In thousands of euro | 2014 | 2013 | |
|---|---|---|---|
| Fees paid to Board members | 199 | 230 | |
| Gross salaries paid to senior managers | 1,857 | 1,619 |
Asia Base Research Suzhou Co. Ltd, a company of which Mr. Peter Rasmussen is the shareholder delivered consultancy services for 315,652.97 CNY to JENSEN-GROUP.
On August 16, 2013 JENSEN-GROUP took over its Austrian distributor ÖWM as from April 1, 2013.
JENSEN-GROUP took over the distribution of JENSEN machinery, the servicing of its equipment in Austria and approximately 12 employees.
Revenues will remain nearly unchanged, as revenues from JENSEN machinery sold in Austria are already included in the consolidated fi gures.
The table below gives an overview of the acquisition-date fair value of the total consideration transferred and the remaining amount of goodwill recognized for the acquisition:
| Non current assets | 602 | |
|---|---|---|
| Current assets | 1371 | |
| Non current liabilities | -325 | |
| Current liabilities | -1260 | |
| Net assets acquired | 388 | |
| Group share in net assets acquired | 388 | |
| Goodwill | 852 | |
| Purchase price | 1240 | |
| Net cash out for acquisitions of subsidiaries | 1240 | |
The statutory auditor is Pwc Bedrijfsrevisoren, represented by Mr. Filip Lozie.
The statutory auditor received worldwide fees of 327,795 euro (excl. VAT) for auditing the statutory accounts of the various legal entities of the Group and the consolidated accounts of the JENSEN-GROUP. Apart from its mandate, it received during 2014 additional fees of 60,506 euro (excl. VAT). Of this amount, 9,100 euro was invoiced to JENSEN-GROUP NV and relates to tax advice. The JENSEN-GROUP has appointed a single audit fi rm for the audit of the consolidated fi nancial statements.
There are no signifi cant post-balance sheet events.
| Registered offi ce | Participating percentage |
|---|---|
| Bijenstraat 6 | Parent Company |
| 9051 Sint-Denijs-Westrem | |
| Corporation Trust Center | 100% |
| Orange Street 1209 | |
| Wilmington - Delaware | |
| Aberdeen loop 99 | 100% |
| Panama City, FL 32405 | |
| 831 South 1st Street | 100% |
| KU 40203 Louisville | |
| Unit 5, Network 11 | 100% |
| Thorpe Way Industrial Estate | |
| Banbury, Oxfordshire OX16 4XS | |
| No. 6 Jalan Kilang #02-01 | 100% |
| Dadlani Industrial House | |
| Singapore 159406 | |
| Industrivej 2 | 100% |
| 3700 Rønne | |
| Industrivej 2 | 100% |
| 3700 Rønne | |
| Switzerland | ||
|---|---|---|
| JENSEN AG Burgdorf | Buchmattstrasse 8 | 100% |
| 3400 Burgdorf | ||
| JENSEN AG Holding | Buchmattstrasse 8 | 100% |
| 3400 Burgdorf | ||
| Sweden | ||
| JENSEN Sweden AB | Företagsgatan 68 | 100% |
| 504 94 Borås | ||
| JENSEN SIPANO AB | P.O. Box 1088 | 100% |
| 171 22 Solna | ||
| JENSEN Sweden Holding AB | Box 363 | 100% |
| 503 12 Borås | ||
| France | ||
| JENSEN France SAS | 2 "Village d'entreprises" | 100% |
| ZA de la Couronne des Près | ||
| Avenue de la Mauldre | ||
| 78680 Epône | ||
| Germany | ||
| JENSEN GmbH | Jörn-Jensen-Straße 1 | 100% |
| 31177 Harsum | ||
| Australia | ||
| JENSEN Laundry Systems Australia PTY Ltd. | Unit 16, 38-46 South Street | 100% |
| Rydalmere NSW 2116 | ||
| New Zealand | ||
| JENSEN New Zealand Ltd | Minter Ellison Rudd Watts | 100% |
| 88 Shortland Street | ||
| Auckland, 1010 | ||
| Italy | ||
| JENSEN Italia s.r.l. | Strada Provinciale Novedratese 46 | 100% |
| 22060 Novedrate |
| China | ||
|---|---|---|
| JENSEN Industrial Laundry Technology | Phoenix Avenue, | 100% |
| (Xuzhou) Co., Ltd | Xuzhou Clean Technology Zone | |
| 221121 Xuzhou, | ||
| Jiangsu Province, | ||
| P.R. China | ||
| Austria | ||
| JENSEN Austria Holding GmbH | Julius-Raab-Platz 4 | 100% |
| 1010 Wien | ||
| JENSEN ÖSTERREICH GmbH | Reinhartsdorfgasse 9 | 100% |
| A-2324 Schwechat-Rannersdorf | ||
| Japan | ||
| JENSEN Japan Co., Ltd. | 4-9-1-203 Imagawa, Urayasu-city | 100% |
| 279-0022 Japan | ||
| Brazil | ||
| JENSEN-GROUP BRASIL COMERCIO | Rua Riachuelo 460 | 100% |
| E SERVICOS DE EQUIPAMENTOS | CEP 18035-330 Sorocaba-SP | |
| DE LAVANDERIA LTDA |
SUMMARY STATUTORY FINACIAL STATEMENTS
JENSEN-GROUP NV
| Assets as at | December 31 | December 31 | |
|---|---|---|---|
| (in thousands of euro) | 2014 | 2013 | |
| Fixed assets | 87.074 | 89.122 | |
| Intangible assets | 140 | - | |
| Tangible fi xed assets | 278 | 232 | |
| Financial fi xed assets | 86.656 | 88.890 | |
| Current assets | 32.966 | 28.764 | |
| Stocks and contracts in progress | 1.228 | 986 | |
| Amounts receivable within one year | 3.086 | 2.708 | |
| Treasury shares | 2.455 | 724 | |
| Cash at bank and on hand | 26.155 | 24.314 | |
| Deferred charges and accrued income | 42 | 32 | |
| TOTAL ASSETS | 120.040 | 117.886 |
| December 31 | December 31 | |
|---|---|---|
| 2014 | 2013 | |
| 111.067 | 112.234 | |
| 30.710 | 30.710 | |
| 5.814 | 5.814 | |
| 5.527 | 3.795 | |
| 69.017 | 71.915 | |
| 1.270 | 1.324 | |
| 1.270 | 1.324 | |
| 7.703 | 4.328 | |
| 7.353 | 3.787 | |
| 349 | 541 | |
| 120.040 | 117.886 |
| Financial year ended (in thousands of euro) |
December 31 2014 |
December 31 2013 |
|
|---|---|---|---|
| Operating income | 15.863 | 18.445 | |
| Turnover | 15.181 | 18.398 | |
| fi nished goods and contracts in progress | 224 | -263 | |
| Other operating income | 459 | 310 | |
| Operating charges | -14.769 | -17.613 | |
| Raw materials, consumables and goods for resale | 7.828 | 10.800 | |
| Services and other goods | 4.696 | 4.385 | |
| Remuneration, social security and pensions | 2.074 | 2.130 | |
| Depreciation | 115 | 271 | |
| Write-downs | 69 | 40 | |
| Provisions for liabilities and charges | -54 | -47 | |
| Other operating charges | 41 | 34 | |
| Operating profi t | 1.094 | 832 | |
| Financial result | -46 | 1.679 | |
| Financial income | 456 | 2.186 | |
| Financial charges | -502 | -507 | |
| Profi t on ordinary activities for the year | |||
| before taxes | 1.048 | 2.511 | |
| Extraordinary result | 1.013 | 4 | |
| Extraordinary income | 1.013 | 4 | |
| Extraordinary charges | 0 | 0 | |
| Profi t for the year before taxes | 2.061 | 2.515 | |
| Taxes | -116 | -161 | |
| Income taxes | -116 | -161 | |
| Profi t for the year | 1.946 | 2.354 |
| Financial year ended | December 31 | December 31 | |
|---|---|---|---|
| (in thousands of euro) | 2014 | 2013 | |
| Profi t to be appropriated | 73.861 | 73.425 | |
| Profi t (loss) for the period available for appropriation | 1.946 | 2.354 | |
| Profi t (loss) brought forward | 71.915 | 71.071 | |
| Appropriations to capital and reserves | -1.731 | 476 | |
| to legal reserves | - | 1.200 | |
| to reserves for own shares | -1.731 | -724 | |
| Result to be carried forward | -69.017 | -71.915 | |
| Profi t to be carried forward | 69.017 | 71.915 | |
| Distribution of profi t | -3.113 | -1.986 | |
| Dividends | -3.113 | -1.986 |
| (in euro) | 2014 (12 months) |
2013 (12 months) |
|
|---|---|---|---|
| Current profi t per share after taxes (1) | 0,12 | 0,29 | |
| Number of shares outstanding (average) | 7.868.170 | 7.999.536 | |
| Number of shares outstanding (yearend) | 7.818.999 | 7.943.200 |
(1) The current profi t after tax is the same as the net profi t excluding extraordinary gains and losses (both adjusted for taxes).
In accordance with article 105 of the Belgian Companies Act, a summary version of the statutory financial statements of JENSEN-GROUP NV is presented. These have been drawn up in accordance with Belgian Accounting Standards. The management report and statutory financial statements of JENSEN-GROUP NV and the report of the statutory auditor thereon are filed with the appropriate authorities, and are also available at the Company's registered offices.
The statutory auditor has issued an unqualified opinion on the statutory financial statements of JENSEN-GROUP NV.
JENSEN-GROUP NV has both a holding function and a commercial function as the sales and service company for the Benelux area.
The operating result of JENSEN-GROUP NV increased thanks to lower costs.
During 2014, JENSEN-GROUP NV sold its participation in JENSEN Australia to JENSEN Industrial Group A/S. This transaction resulted in an extra-ordinary income of 1 million euro.
The Board of Directors of November 14, 2013 decided to implement a share repurchase program to buy back a maximum of 800,300 or 10% of the company's shares. The shares are bought at the stock exchange by an investment bank mandated by the Board of Directors. The buy-back mandate expires on October 4, 2017. As per December 31, 2014, JENSEN-GROUP holds 183,969 treasury shares.
The full version of the statutory financial statements of JENSEN-GROUP NV is available on the corporate website www.JENSEN-GROUP.com.
The valuation rules are in accordance with the Royal Decree of January 31, 2001.
Since JENSEN-GROUP NV has a holding function, we emphasize that, in accordance with our valuation rules and accounting legislation in Belgium, fi nancial fi xed assets are valued at their initial acquisition price or paid-in capital. Write-offs on the fi nancial fi xed assets are taken when they are deemed to be of a permanent nature. If it appears that write-offs taken previously are no longer needed, they are reversed. Financial fi xed assets are never valued above acquisition price or paid-in capital.
The intangible fi xed assets consist of goodwill that arises from the acquisitions of the distribution activity in the Benelux. For statutory purposes, goodwill is amortized over a period of fi ve years.
Tangible fi xed assets are recorded at their acquisition value or construction cost, increased, where appropriate, by ancillary costs. Tangible fi xed assets are depreciated on a straight-line basis over their estimated useful life from the month of acquisition onwards.
On tangible fi xed assets, the depreciation rules are:
| Caption | Method | Rate |
|---|---|---|
| Infrastructure | Straight line | 10% |
| Installations, machinery and equipment | Straight line | 20% |
| Offi ce equipment and furniture | Straight line | 20% |
| Vehicles | Straight line | 20% |
Inventories are valued at the lower of cost or net realizable value. Cost is determined by the fi rst-in, fi rst-out (FIFO) method. For produced inventories, cost means the full cost including all direct and indirect production costs required to bring the inventory items to the stage of completion at the balance sheet date. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and variable selling expenses.
The Company uses the 'percentage of completion method' to determine the appropriate amount to recognize in a given period. The stage of completion is measured by reference to the contract costs incurred up to the balance sheet date as a percentage of total estimated costs for each contract. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.
Trade amounts receivable and other amounts receivable are carried at nominal value. Allowances are made to amounts receivable where uncertainty exists as to the receipt or payment dates of the whole or a part of the balance. Supplementary write-offs are also recorded where the realizable value at the balance sheet date is lower than the carrying value.
Deposits with fi nancial institutions are carried at nominal value. Write-downs are applied where the realizable value at the balance sheet date is lower than the historical cost.
Provisions for liabilities and charges are assessed on an individual basis to address the risks and future costs which they are intended to cover. They are maintained only to the extent that they are required following an updated assessment of the liabilities and charges for which they were created.
Amounts payable are carried at nominal value at the balance sheet date. The only elements which are recorded in the accrued charges and deferred income accounts are charges payable at the balance sheet date in respect of past or prior years.
The Company uses derivative fi nancial instruments to reduce its exposure to adverse fl uctuations in interest rates and foreign exchange rates. It is the company's policy not to hold derivative instruments for speculative or trading purposes.
Derivative fi nancial instruments are recognized initially at cost, their premium is amortized pro rata temporis. At yearend, the fi nancial instruments are calculated at market value using the mark-to-market mechanism. The unrealized losses are recognized in the income statement whereas the unrealized gains are deferred.
The hedged balance sheet positions (outstanding receivables and payables) are recorded at the hedging rate.
The Company may undertake both in Belgium and abroad, any and all industrial, trade, fi nancial, bonds and stocks and real property transactions that are likely to extend or further its business directly or indirectly or that are related therewith. It may acquire any and all movable and real property items, even if these are related neither directly nor indirectly to the Purpose of the Company.
It may obtain, in any manner, an interest in any and all associations, ventures, business or companies that pursue the same, a similar or related purpose or that are likely to further its business or facilitate the sale of its products or services, and it may cooperate or merge therewith.
| Date | Share Capital | Currency | Number of shares |
|---|---|---|---|
| 24/05/2002 | 42,714,560 | euro | 8,264,842 |
| 20/05/2008 | 42,714,560 | euro | 8,252,604 |
| 13/01/2009 | 42,714,560 | euro | 8,039,842 |
| 30/11/2011 | 42,714,560 | euro | 8,002,968 |
| 04/10/2012 | 30,710,108 | euro | 8,002,968 |
ANNUAL REPORT 2014 119
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