Annual report 2019

report of the board of management ANNUAL REPORT 2019 – BOSKALIS OPERATING RESULT BY SEGMENT (EBIT) (in EUR million) Dredging & Inland Infra Offshore Energy Towage & Salvage Non-allocated group (costs) result Extraordinary items EBIT NET PROFIT Net of fnancing expenses of EUR 15.7 million on balance, the pre-tax proft was EUR 95.0 million resulting in a net proft attributable to shareholders of EUR 74.9 million. In 2018 the net fnancing expenses amounted to EUR 13.3 million with a pre- and post-tax loss of EUR 413.8 million and EUR 435.9 million respectively. Adjusted for the extraordinary charges, the 2018 net proft amounted to EUR 82.8 million. ORDER BOOK In 2019 Boskalis acquired, on balance, EUR 3,041 million worth of new contracts. At the end of the year the order book, excluding our share in the order books of joint ventures and associates, stood at a record high level of EUR 4,722 million (end-2018: EUR 4,292 million). 40 related to operational and contractual issues on a limited number of offshore wind cables and decommissioning projects. In the offshore wind market circumstances have changed as a consequence of the move to zero subsidies and increased competition. Clients are keenly seeking for ways to further reduce cost. This resulted in an unexpected change in the attitude of clients which was reflected in a sharp increase in the number of disputes and protracted claim negotiations. Following a thorough review of the projects in hand, provisions in excess of EUR 100 million were made on a limited number of onerous contracts. Boskalis continues to be confdent that in time a substantial part of these provisions will be recovered. The combined result of Towage & Salvage increased to EUR 37.9 million (2018: EUR 33.1 million). A strong performance at Salvage with a number of mid- to large-sized contracts more than offset the decline within Towage caused by the sale of two towage joint ventures. The group result includes our share in the net result of joint ventures and associates, which on balance amounted to EUR 25.6 million (2018: EUR 28.4 million). This result is mostly attributable to the towage joint ventures. The Kotug Smit Towage and Saam Smit Towage joint ventures were held as an Asset Held For Sale in 2019 and consequently did not contribute to earnings thereby explaining the decline of the result. Non-allocated group income and expenses amounted to minus EUR 46.1 million and relate primarily to the usual non-allocated head-offce costs (2018: EUR 42.5 million). 2019 2018 107.5 -70.9 37.9 -46.1 82.3 110.7 123.4 5.0 33.1 -42.5 -519.5 -400.5

2019

2018

ORDER BOOK

(in EUR million) Dredging & Inland Infra

3,192.4 1,524.2

3,002.4 1,281.9

Offshore Energy Towage & Salvage

5.4

7.9

4,722.0

4,292.2

Total

DREDGING & INLAND INFRA Construction, maintenance and deepening of ports and waterways, land reclamation, coastal defense and riverbank protection, underwater rock fragmentation and the extraction of minerals using dredging techniques. Construction of roads and railroads, bridges, aqueducts, viaducts and tunnels including earthmoving, soil improvement and remediation – mainly in the Netherlands.

2019

2018

DREDGING & INLAND INFRA

(in EUR million) Revenue

1,517.7

1,428.7

241.6

EBITDA

243.8

3.3

Net result from JVs and associates

4.4

107.5

Operating result

123.4

3,192.4

Order book at year-end

3,002.4

EBITDA and operating result include our share in the net result of joint ventures and associates.

REVENUE Revenue from the Dredging & Inland Infra segment amounted to EUR 1,517.7 million (2018: EUR 1,428.7 million).

2019

2018

REVENUE BY REGION

(in EUR million) The Netherlands Rest of Europe Rest of the world

485.2 231.1 801.4

502.6 257.5 668.6

1,517.7

1,428.7

Total

The Netherlands Revenue in the Netherlands totaled EUR 485.2 million with the largest revenue contribution coming from the project IJburg II, the construction of an artifcial island in the IJmeer lake for the city of Amsterdam, the road project N3-A16 and miscellaneous dike reinforcement projects. These included the Houtrib dike, Markermeerdijken, the Waddensea dike between Eemshaven and Delfzijl and the dike on the island of Texel. Rest of Europe Revenue in the rest of Europe amounted to EUR 231.1 million consisting of numerous mainly port-related capital and maintenance projects throughout the home markets (United Kingdom, Germany, Sweden and Finland).