Boskalis Annual Report 2018

93

Revenue by activity can be specified as follows:

REVENUE

2018

2017 REVISED

Contracting activities

2,119,808

1,907,986

Service activities

449,741

434,637

2,569,549

2,342,623

Revenue from contracting activities mainly comprises net revenue from the operational segments of Dredging & Inland Infra and Offshore Energy (excluding marine transport and other offshore services), and salvage projects. For most of the contracting activities the most common type of contract is based on a fixed/lump sum price. In these cases the contractor’s price must take into account virtually all the operational risks as well as the costs and other risks associated with the procurement of materials and subcontractor services. In most cases it is not possible to charge clients for any unforeseen costs and the Group acts as contractor and principal of the engagement. Revenue from services rendered to third parties is primarily realized in the Offshore Energy (marine transport and other services) operational segment and in the joint ventures within the Towage & Salvage operational segment. The services are usually charged at day rates. Contracts are not included in the order book until agreement has been reached with the client. The Group estimates that approximately 40% of the order book will be executed next year (31 December 2017: 50%). Actual execution depends on several factors, such as weather, soil, technical conditions, cooperation with subcontractors, the availability of cargo, and other factors. 7. OTHER INCOME AND OTHER EXPENSES Other income mainly relates to book profits on the disposal of property, plant and equipment of EUR 7.1 million (2017: EUR 8.0 million). Other income in the prior year also included the gross result of EUR 24.1 million on the bargain purchase of the Gardline Group (see note 5.1). Other expenses relates to book losses on the disposal of equipment, amounting to EUR 2.5 million (2017: EUR 0.7 million). Other expenses in the prior year also included EUR 0.9 million relating to the divestment of the remaining stake in Fugro N.V. (see note 5.1). 8. RAW MATERIALS, CONSUMABLES, SERVICES AND SUBCONTRACTED WORK As part of this line item operating lease costs relating to leased equipment are reported for an amount of EUR 29 million (2017: EUR 31 million). The value of the order book equals the contract revenue of projects yet to be completed and services yet to be rendered at balance sheet date and amounts to EUR 4.3 billion (2017: EUR 3.5 billion).

9. PERSONNEL EXPENSES

2018

2017

Wages and salaries Social security expenses

- 352,013 - 39,278 - 1,542 - 41,133 - 433,966

- 370,803 - 35,376 - 1,046 - 39,061 - 446,286

Pension expenses for defined benefit pension plans Pension expenses for defined contribution pension plans

A number of senior managers participates in a long-term incentive plan based upon the development of the share price, which is settled on a cash basis. The fair value of the related liability for the year is included as part of the personnel expenses in the statement of profit or loss. The related charge for 2018 amounts to EUR 1.6 million (2017: EUR 2.0 million) and the corresponding liability is EUR 4.6 million (2017: EUR 4.8 million). For the remuneration of the Board of Management and the Supervisory Board refer to note 30.2.

In 2018 expenses for reorganization were incurred for an amount of EUR 6.8 million, mainly in connection with the decision to exit the low end of the transport market, which are fully reported under Raw materials,

ANNUAL REPORT 2018 – BOSKALIS A L REP RT 2018 -- BOSKALIS