Boskalis_Annual Report_2017

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At year-end 2016 the assets and liabilities held for sale related to the subsidiary Aannemingsmaatschappij Markus B.V., which was sold on 12 January 2017. The transaction did not result in a book result.

BUSINESS COMBINATIONS AND OTHER SIGNIFICANT TRANSACTIONS IN PRIOR YEAR 5.4 On 1 July 2016 the Group obtained control over the maritime and offshore wind energy-related activities of VolkerWessels for a total cash consideration of EUR 180 million. The net change in cash and cash equivalents, taking into account the cash and cash equivalents held by the acquired companies, amounted to EUR 78 million. Before this business combination, the Group’s share of 50% in VBMS was recognized as a joint venture. Under IFRS this transaction is accounted for as a sale of the 50% share in VBMS, on which a gain of EUR 39.8 million was recognized in the Statement of Profit or Loss, and subsequent an acquisition of a 100% subsidiary. The goodwill arising from this acquisition amounts to EUR 154.9 million. The contribution of this business combination to the Group in 2016 was EUR 292 million to revenue and EUR 14 million to net profit. On 31 March 2016 the Group obtained control over the German dredging activities of STRABAG Wasserbau GmbH for a cash consideration of EUR 70.7 million. The business combination resulted in a gain on acquisition that was recognized in the Statement of Profit or Loss of EUR 11.0 million (net gain: EUR 7.5 million). The contribution to the Group in 2016 was EUR 8.7 million to revenue and EUR 3.0 million to net profit, respectively. On 7 April 2016 the Group completed the merger of its European harbor towage activities with those of KOTUG International B.V. Each partner has a 50% participation in the established joint venture, Kotug Smit Towage B.V. The Group received proceeds relating to this transaction of EUR 90 million, which are reported as Cash flow from divestment. The book profit arising from the transaction amounted to EUR 34.0 million (EUR 37.0 million after tax). 6. REVENUE Revenue from construction contracts (IAS 11) and services on a project base, by analogy, amounts to approximately EUR 1.8 billion (2016: EUR 1.8 billion). This mainly comprises the net revenue of the Dredging & Inland Infra and Offshore Energy (excluding sea transport and related services) segments and typically involves work in progress. Movements in the value of work in progress, consisting of cumulative incurred costs plus profit in proportion to progress less provisions for losses, together with the work done and completed during the reporting period, determine the revenue for these activities. The revenue from services rendered to third parties is primarily realized in the Offshore Energy (including sea transport and related services) and Towage & Salvage operational segments. The revenue from services amounts to approximately EUR 0.5 billion (2016: EUR 0.8 billion). For projects executed in a joint operation, the segments only report their own share in the revenue and results recognized, resulting in no material related party transactions between segments that need to be eliminated. On 1 December 2016 the Group completed the sale of its investment in SMIT Amandla Marine. The sale resulted in a net consideration of EUR 38.5 million and a book profit of EUR 8.3 million.

Revenue by region can be specified as follows:

REVENUE

2017

2016

497,771 856,522 359,024 256,392 84,840 282,656

The Netherlands Rest of Europe Australia / Asia

552,166

1,078,648

283,658 134,555 232,553 314,746

Middle East

Africa

North and South America

2,337,205

2,596,326

A region is determined as the location in which projects are realized and services are provided; for sea transport the region refers to the (nearest) port of arrival of the transport or the project location for offshore installation. A large part of the Group’s revenue is generated on projects for a variety of clients in various countries and geographical areas. Because of the often-incidental nature and spread of the contracts none of these clients qualifies structurally as a material client in relation to the total revenue of the Group.

ANNUAL REPORT 2017 – BOSKALIS A N AL REP RT 2017 -- BOSKALIS