Boskalis Annual Report 2020

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ANNUAL REPORT 2020 – BOSKALIS FINANCIAL STATEMENTS 2020 A NUAL REPORT 2020 -- BOSKALIS FI ANCIAL STAT MENTS 20 On 27 January 2020 the Group obtained control of Horizon Group (Horizon) by acquiring the remaining 37.5% of the shares after the Group became a joint venture partner in Horizon in 2019 through the acquisition of 62.5% of these shares. As a result of this transaction, Boskalis will be able to optimize its successful and expanding position in the marine geophysical and geotechnical survey market. Horizon will continue to focus on its traditionally strong market position in the Middle East and Northwest Europe with opportunities to expand into the emerging offshore wind market in the Far East making it highly complementary to the position already held by Boskalis through Gardline in Northwest Europe and on the east coast of the United States. Since the acquisition, the activities of Horizon have contributed EUR 75.8 million to Group revenue and EUR 11.8 million profit to the Group net result. This takes into account both transaction costs related to the acquisition and the result arising from the book profit from revaluation to fair value of the Group’s existing stake in Horizon at the date of acquisition. Had the Group acquired control at the beginning of the year, management estimates that this would not have had an (additional) material impact on the consolidated revenue and result over 2020 . Revaluation of existing share in Horizon prior to business combination Under IFRS the transaction is accounted for as a sale of the 62.5% share in the Horizon joint venture and the subsequent acquisition of a 100% subsidiary. The fair value of the 62.5% investment in Horizon (sold) amounted to EUR 75.3 million and is based on the consideration paid for the remaining shares of 37.5%. As a result, the revaluation to fair value of the existing stake in Horizon resulted in a gain of EUR 1.4 million. This gain is included in the ‘Holding & Eliminations’ segment (in the ‘Operational segments’ table in note 4). Consideration paid On 27 January 2020 the Group paid an amount of EUR 45.4 million in cash for the remaining 37.5% of the shares. The net change in cash and cash equivalents, taking into account the cash and cash equivalents held by the acquired companies, amounts to EUR 30.1 million. Reconciliation with IFRS As required by IFRS, the information as presented above reconciles to the internal management information of the Board of Management. In measuring the financial performance of operational segments certain line items relating to exceptional items were presented differently in the internal management information compared to in the EU-IFRS consolidated financial statements. In the EU-IFRS Consolidated Statement of Profit or Loss the Result from operating activities (EBIT) shows a loss of EUR 55.6 million and contains impairment charges of EUR 157.5 million (see note 10). The impairment charges within joint ventures amounting to EUR 26.8 million are presented as a result in joint ventures in EU-IFRS-financial statements, the provisions provided for EUR 17.3 million are recorded for EUR 7.2 million under Raw materials, consumables, services and subcontracted work and for EUR 10.1 million under Personnel expenses, the gain on acquisition of Rever Offshore amounted to EUR 6.2 million is recorded under the other income. In this table above these items are presented as part of the exceptional charges. Similar in 2019, Results from operating activities (EBIT) shows a profit of EUR 110.7 million and includes reversal of impairment charges as a result of sales transactions of EUR 40.1 million and a book profit on the sale Saam Smit Towage of EUR 42.1 million. In this table above these items are presented as part of the exceptional income. EBITDA in the table above equals EBIT before depreciation, amortization, impairment and other exceptional charges. Group EBITDA as stated in the management information amounts to EUR 404.3 million (2019: EUR 375.8 million). 5. BUSINESS COMBINATIONS AND OTHER SIGNIFICANT TRANSACTIONS ACQUISITION OF OFFSHORE ACTIVITIES OF HORIZON