GB Steel Group annual report 2018 English

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On the cover: 23 by 8 by 1.75 metres and weighing 120 tons: the dock gate Nauta Heeg supplies to Koninklijke De Vries Scheepsbouw in Makkum. Photo: Cinema43.

Content

PHOTO: NO DUTCH NO GLORY

Preface

3

About GB Steel Group

4

Financial developments during the financial year

8

Our vision on trends and market developments

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Outlook 2019

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Photography Dirk Jansen

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Design ANNUAL REPORT 2018 GB STEEL GROUP

puur!fct B.V. Almere


Preface “Daddy, what’s that thing here on the door?” We’re in an old car and my son is pointing at the window handle. “It is to open and close the window”, I reply. “Huh? Doesn’t that work with a button?” This is one of those moments when you realise how fast things are changing. Sometimes you need surprising remarks before you realise what the impact of change is on people. My son is growing up in a different time. To him it goes without saying that windows open or close naturally by pushing a button. He can’t imagine this was ever different. And my son is not the only one, for that matter. Also my daughter and their peer group are all growing up in a time when so much is different from what it used to be for the group of people who are twenty or thirty years older. A window handle is just one example. It is not only product innovation, but also the division of the population in young and old which calls for change. And that is not even a specific feature of this time. It is of all time. One day my children will start to work. Their peers may become our customers and suppliers. They will take digital ordering for granted. Who knows, perhaps even through blockchain technology. To the best of the customer’s knowledge, design will then be realised together with one of the construction partners in a single parametric model. Are we short of parking spaces? Hang on, this report shows there is a surplus of spaces somewhere else. Will we let the cars drive autonomously to the empty parking garage? Or is it cheaper to dismantle the floor of the parking garage and mount it on top of another one? Ok, I am getting carried away. My point is clear. The world is constantly changing. The rationale of man’s existence is continual innovation and adjustment. For those who were familiar with window handles this feels less comfortable, but fortunately you get used to anything. Although, getting used to it ... The button has meanwhile been replaced by a menu in a touch screen. Indeed, you don’t even have to touch it. You can also ask nicely if the window can be opened... Flexibility is also very important to our custom solutions. We are good at it. What makes me proud is the fact that our company has so many loyal customers. Following a successful project, large and smaller customers choose to cooperate with us in the next project as well. They rely on us to help them make

the choices that satisfy their clients, like we did before. In our ever-changing world it is good to experience there are constant values. The feeling that we are going to get this job done as well - reliability - is such a constant value. Indeed, such a new job is always a challenge, even if we have been doing this work for years. That is what makes our world so interesting. Each question is unique and requires adaptability. A new tipper on a new chassis, but then in such a way that the carrier can also take more driving equipment along in the tipper, saving fuel costs. A data centre that needs to be constructed faster, for which prefabricated façades are the ideal solution. Making a long-span heavy lattice truss over not one but two docks. “We know that you can do it, will you help us again with this as well?”, we hear our customer then say. Taking up challenges together is the best thing to do! We love this profession. We love to solve complex, constructive problems. We love to manage risks, take opportunities, and adapt to the situation time and again, for that is what makes building worthwhile. Variety and challenge are the reasons we love to go to work. Indeed, customers do not become loyal without reason. They do so because of our dedicated employees who make decisions day in day out and help them. Our employees are not alone. They call in the assistance of suppliers. The same suppliers that helped so well the last time. For we believe in teamwork. Working together to achieve the best results for us, our suppliers, for our customers and their clients. It inspires confidence, and self-confidence. Our financial performance in 2018 was better than ever before. Both the sales and the profit have never been higher. That is good, but not the most important thing. It offers opportunities to focus future investments on human and other resources, so that tomorrow’s customer will choose to work with us again. We are working on it. You will find more information about our plans in this annual report. Will you join us in reading it?

Bob Soetekouw Managing Director ANNUAL REPORT 2018 GB STEEL GROUP

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About GB Steel Group GB Steel Group B.V. heads a group of four steel processing divisions supplying the international construction and transport sector.

Figure 1 Organisation chart GB Steel Group

Production Automation

Steel construction, commercial-industrial

Kampstaal

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ANNUAL REPORT 2018 GB STEEL GROUP

Financial management

Marketing & Communication

Roofing and cladding, commercial-industrial

Kamplacon

HRM

Steel construction, infra-marine

Nauta Heeg

Facility management

IT

Tippers, containers and belt unloaders

Vossebelt


The organisation chart in figure 1 shows that the construction-related companies Kampstaal (consisting of Kampstaal B.V. and Kampstaal Meppel B.V.) and Kamplacon B.V. focus on non-residential construction and industry. Together they supply steel, roof and wall structures, whether or not in combination with solar panels. Organisation-wise, these companies work closely together to improve the service to customers. With custommade solutions, construction benefits from short lines of communication and a sound organisation. This is becoming increasingly important now that building projects have become larger and more complex. The Schiphol-based P3 parking garage and the many data centres around Amsterdam are fine cases in point. Staalbouw Nauta Heeg B.V. has its emphasis on hydraulic works in ports and inland waterways, both in the Netherlands and abroad. The large production site with direct access to open water, with conservation possibilities close by, is very well suited to assemble large and heavy structures. Think for example of collision protection, bridges, locks, mooring facilities, equipment construction and structures for seaports. In 2018, Nauta’s activities included bridge roads for the Ring Groningen project and tower structures for ports in Scandinavia.

The parking garage P3 at Schiphol was embellished and expanded in 2018. With over 5,000 spaces it is the largest aboveground parking garage in the Netherlands. Cooperation within the fixed construction team ensured a rapid completion time. PHOTO: SCHIPHOL

Nauta supplies a 120-ton dock gate to De Vries Scheepsbouw in Makkum.

With custom-made solutions, construction benefits from short lines of communication and a sound organisation. ANNUAL REPORT 2018 GB STEEL GROUP

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Vossebelt B.V. is a supplier for the transport sector. Vossebelt designs and produces tippers, containers and belt unloaders for road construction, earth moving and the recycling sector. We supply these products to truck dealers, coachbuilders, public authorities and directly to carriers. You can expect a highgrade and robust product from Vossebelt. Everything is aimed at supplying exactly the product that helps the user. Smart engineers contribute their ideas to offer solutions that provide just a few more possibilities which differentiates them from standard products from stock. And as this rolling stock is heavily used, it can stand some rough handling. This quality does not go unnoticed. More and more carriers, from small to very large, prefer the handsome and robust Vossebelt rolling stock. Cooperation within the group ensures smarter solutions for the customers. Construction and industry has challenging processes. At the start of a project there are many uncertainties, ranging from the building of the product, the process to reach the finished product and the moment delivery has to take place. Cooperation leads to economy of scale which enables us to cope with all these fluctuations. Synergy provides us with the additional expertise to draw on within the group. Finally, a sound organisation with support from the group in the HR area, marketing, production

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automation, facility management, finance and IT is indispensable to run the operation efficiently.

Management In previous communications the transition of GB Steel Group as a family business towards the next generation was identified. The last stage, the transfer of shares, was concluded in 2018. This implies a minor business restructuring. The name of the original holding GB Steel Group B.V. with the Dutch Chamber of Commerce number 39032067 was changed into Liberté B.V., holding the same Chamber of Commerce number. It is now the personal holding of one of the shareholders. In addition, three new personal holdings have been founded belonging to the new shareholders. They include a new holding founded under the ‘old’ name of GB Steel Group B.V., with Chamber of Commerce number 72240687. Figure 2 further shows that Hordal B.V. is no longer a member of the GB Steel Group B.V. Due to the little synergy between Hordal en the other companies in the group, it was decided to have Hordal operate under the management of Liberté. Due to the business restructuring at the level of GB Steel Group B.V., there are no comparative figures available with the previous year.

The GB Steel Group management board is unchanged and under the management of the Managing Director. The management team of the entire group consists of the directors and managers of the underlying BVs and the group controller. The management board consists entirely of men and the rest of the company also shows a large inequality between the number of men and women, of which the management board is well aware. It goes without saying that in the recruitment and selection process this is a point of consideration and the target group consists of both men and women. We aim for a betterbalanced spread.

Cooperation within the group ensures smarter solutions for the customers.

Figure 2 Legal structure

GB Steel Group B.V.

Kampstaal beheer B.V.

Nauta beheer B.V.

Beijer beheer B.V.

Kamplacon beheer B.V.

Vossebelt beheer B.V.

Kampstaal B.V.

Staalbouw Nauta Heeg B.V.

Kampstaal Meppel B.V.

Kamplacon B.V.

Vossebelt B.V.

100%

100%

100%

100%

100%

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Financial developments during the financial year The year 2018 has ended above expectations for GB Steel Group, in terms of both sales and results. If we compare the two with the former holdings (now LibertĂŠ B.V.), both sales and results have increased. Sales in construction have risen. We benefit from our long-term investments in quality, which has resulted in our customers entrusting also new and follow-up assignments to us. Because these same investments were made in staff, this sales increase did not lead to any problems. Reliability of supply in construction was as high as ever at Kampstaal, Kamplacon and Nauta, just as the customers were used to.

Also in 2018 Vossebelt was in the black. Moreover the sales grew again, this time by 10%. Both the capacity utilisation and the order result increased. It remains a challenge to deliver the large number of tippers and other products in time. We are working unabatedly to reduce delivery times and to deliver in time. To this end, we have created extra production capacity and made other organisational adjustments. We are proud that more and more carriers prefer the Vossebelt rolling stock and we do all we can to serve these customers as effectively and efficiently as possible with smart tailor-made solutions.

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Turnover and profit on equity capital

The good performance does not lead to a higher equity or a higher balance sheet total compared to LibertÊ’s figures of 2017. This is due to the share transfer, which was mentioned before, and the consequent business restructuring, on which occasion a new holding was founded for GB Steel Group.

70

60

45% 40%

50 35% 40

30%

Investments Last year was mostly dominated by the preparation for large investments, such as a new office, a new company canteen and a new plasma arc cutting machine for Nauta. With these investments we wish to take advantage of our opportunities in the Dutch hydraulic works. The cutting machine can be called unique and versatile, because of its capacity to cut and drill very thick sheet-metal work and tubes three-dimensionally. Also at Kamplacon we have invested in a new machine. A new positive and negative angle-bending machine will provide Kamplacon with the opportunity to produce bend work faster and more accurately for a smooth finishing of buildings. No new funds were attracted from outside the group for all these larger investments and the smaller investments that were not mentioned. Solvency and liquidity can be said to be healthy and above market average. Finally, with 29% the return on equity is beyond expectations.

25% 30 20% 20

15% 10%

10 5% 0%

0

2015

2016

2017

2018

2019 (prognosis)

Turnover in millions of euros

Return on equity

CNC and machine construction

Infra-marine steel construction

Construction and recycling transport

Construction and recycling transport Return on equity

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Debt / EBITDA 1.8 1.5

Investments 2017, 2018 and 2019

1.2

Buildings and sites

0.9 0.6

Machines and installations 0.3 0

Inventory

2015

2016

2017

2018

2019 (prognosis)

Transport material

Human resources

Return on equity Software

30% 0

2017

500

1,000

1,500

2,000

2,500

3,500

25%

x € 1,000

20%

3,000

15%

2018 Prognosis 2019

10% 5% 0%

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2015

2016

2017

2018

2019 (prognosis)

ANNUAL REPORT 2018 GB STEEL GROUP


Solvency

53%

Solvency 70%

cooperating=

Sales growth

less failure costs

60%

65%

50% 40%

increase 2015-2018

Automation

30%

Robotizing single piece production is an important part of our strategy. Keep following us for more news.

20% 10%

Return on equity

29%

0%

2015

2016

2017

2018

2019 (prognosis)

7.4

Current ratio 1.8

Our motto is: ‘satisfied employees lead to satisfied customers’ We presented 12 statements to our employees, based on the Investors in People quality system. This gave us an understanding of the satisfaction and our points of improvement.

Our objective is to emit 37% less CO2 in 2020 compared to 2015. At the end of 2018 we had saved 30%, while production increased by 22%. Normalised this means a 43% reduction. The saving is equivalent to the energy consumption of 76 households.

1.6 1.4 1.2 1.0 0.8 0.6 0.4

#wemakesteelwork

0.2 0.0

2015

2016

2017

2018

Normalised in connection with a 22% production increase.

2015-18

-30% 2015-18

-43% CO 2 reduction

76 house-

holds

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Our knowledge and experience remove uncertainties at an early stage, mitigating the risks.

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PHOTO: MERCURY ENGINEERING ANNUAL REPORT 2018 GB STEEL GROUP


Our vision on trends and market developments Often the construction sector makes negative headlines because of the far too high risks and budget overspendings. This is not surprising. The trend is that the market itself, i.e. the architects, engineering consultancies, construction firms and suppliers, receive more responsibility and freedom to shape both the design and the execution. The customer has a need, but the demand is not yet fully fleshed out in the structural contract documents. This calls for uncertainties, because not all information is available from the start and the parties will have to gather that information themselves. “Your wish is our command”, no longer applies. Now it is: “You have questions, we have followup questions”. This also means that budgets can turn out less welldefined, which requires market parties to communicate clearly with corresponding rather than conflicting interests. The entire supply chain has to cooperate more closely to optimise the customer’s return on investment and to operate within the budget themselves. Because of the increased uncertainty, our customers look out for a partner with whom they can best control the risks. It is in their own interest to do so, and early in the tender process. Our knowledge and expertise is needed to get answers to all the questions and reduce any uncertainties.

How can we create modular parking facilities as soon as possible, that can flexibly be adjusted to an increasing or a decreasing need?

How can we convert the present logistic buildings in the dense urban areas into data centres?

How can we make an existing control tower suitable for a larger airport?

How can we ensure extra capacity for data centres close to the internet hub AMS-IX as soon as possible?

How can we prefabricate to step up a construction project and increase its quality?

How do we build a Green House that is fully circular and thus can be dismantled?

How can we build safe roads in a densely populated area with tunnels, bridges and motorway signals?

There are many more questions conceivable that you can only answer if you work together more smartly.

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Customers will be reassured if you can draw from a network to generate answers to all these questions. Partners who you know have helped you before. One concern less in these hectic times! We are proud that our loyal customers appreciate our knowledge, flexibility and reliability and trust us with their new assignments. They have experienced what we call in a nutshell #wemakesteelwork. However, it is not straightforward. Staying relevant is more than doing what we did yesterday. A better performance requires constant change, as the world is constantly changing as well. Our agility, our adaptability is the ticket to success. And our strategic plan is the basis to continue to be successful.

Strategic plan In 2018 we continued to work on the growth pillars of our strategic plan (figure 3). It is our ambitious objective to run in the top of the Dutch manufacturing industry in 2020, measured annually by the Management Team magazine. We do not regard a high ranking as a matter of prestige, but as a criterion for our performance in comparison to other industrial companies in the Netherlands.

Figure 3 Growth pillars

co-creation

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efficiency

the team

ANNUAL REPORT 2018 GB STEEL GROUP

sustainability

innovation

With the high level of finishing it has to offer, is a fixed value for extensions to the Dutch high-voltage network.


We decide on the specific details in various ways. First of all, we let the boundaries of departments and operations blur. On our successful projects, we cooperate more closely in construction teams as early as possible in the construction process, in project teams with suppliers and other stakeholders and in project teams within our group. We are convinced that closer cooperation and sharing knowledge will result in commitment, job satisfaction and consequently in better results and fewer failure costs. This way we rapidly built the largest aboveground parking garage in the Netherlands holding more than 5,000 parking spaces, P3 near Schiphol, in a construction team with Ballast Nedam and our regular partners in the chain. With the same team we also worked on the extension of the Antoni van Leeuwenhoek hospital parking garage.

Making an existing control tower higher and thereby making it suitable for an expansion of Lelystad Airport? A fine and challenging project for Kampstaal and Kamplacon. We placed extra rings between the base and the top so that the air-traffic controllers can be sure they have a more elevated viewpoint.

Committed cooperation is closely related to our pillar to upgrade our HR policy. As a statutory two-tier company, we instituted a group works council in 2018. Changes are hardly ever implemented top-down. The works council is not only meant to contribute to broad support for the plans, but we are also convinced that the employees in all strata of the organisation can supply input, provided that they know the objective better and understand what we are working on together. ‘Motivated and passionate employees lead to satisfied customers’ is our motto (the we from #wemakesteelwork). Moreover, our employees are providing substance to growth through self-development. From the shop floor to management we are developing our personal skills. Besides we ensure new influx by improving the alignment to schools, using traineeships and work-study programmes, and by becoming members of steering groups for schools in the vicinity.

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The care for our employees is not only a success story. Unfortunately, our work with steel also involves safety risks of which we must constantly be aware. At the time of writing, it is not long ago that one of our mechanics lost his life in a fatal accident during the construction of a parking garage in Amersfoort. Safety always comes first. Together we have deeply felt and still feel the responsibility, but also the grief. Another issue in our strategy is our social responsibility. Together we support charitable causes and spare the environment by reducing CO2 emissions for a liveable climate. Our ISO14001:2015 system contributes to this objective. Thanks to solar panels, LED lighting and other measures we emitted 30% less CO2 than in 2015, while production has increased by 22% since 2015. For comparison: the reduction corresponds with the annual emission of 76 households. If we bring the volumes of 2015 and 2018 up to the same level, this would even signify a 43% reduction. Our care for the climate also involved an active contribution to circularity. Steel can very well be recycled without being remelted. With smart designs we ensure that it can be both assembled and disassembled and set up again elsewhere. For example, we contributed to the smart circular design of the Green House in Utrecht and of Perron038 in Zwolle and we rebuilt a used parking garage that had become redundant elsewhere. We also provided for a better exploitation of buildings by converting existing logistic buildings into data centres or by the creation of longer spans. Finally, the state of the art robotics will offer us unique possibilities, if we can apply it in the right way. For example, in 2018 we worked hard to achieve our goal of robotizing the single piece production. The combination of smart software and robotics will make it possible to

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efficiently convert drawings into robot software. However, that is not just a matter of buying, implementing and pushing a button. Here, too, cooperation is the word. Cooperation within the group and cooperation with suppliers from which the right questions and answers emerge. We are not looking for quick solutions, we need thorough solutions, and in 2018 we have come closer to robotizing semi-finished products and steel structures. Our strategic plans are effective. With a number 53 ranking we further moved up in the top 100 of the Dutch manufacturing industry according to the Management Team magazine in 2018. Higher sales, higher profit, higher employee satisfaction and our constant values reliability, sincerity, drive and respect for man and the environment have contributed to this.


The combination of smart software and robotics will make it possible to efficiently convert drawings into robot software.

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Outlook 2019 We started 2019 with a well-filled order book. Many assignments are following from previous work that was executed satisfactorily. This will not go unnoticed by new customers in the market. Therefore, we are positive about demand and again, we expect a slight sales growth for all divisions this year. As for the result we expect an approximately equal return on sales. We expect a healthy return on equity, but it will not be able to equal 2018 in view of the amount of the equity.

Confirmed by the results of the past few years, we will continue to invest to strengthen our market position. The strategic plan provides the specific details and ongoing projects will increasingly have visible effects. Because of the longer lead times of innovation projects, many preparations were made in 2018, but the actual investments will take place in 2019. For example, the first robot installation of single piece semi-finished products is scheduled. In addition the new office of Nauta will be opened and the new multi-purpose cutting machine be put into use. On the roof of the Kampstaal production site in Meppel solar panels will be installed, so that we can produce more sustainably there as well. Furthermore we are elaborating

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plans to meet the demand for prefabricated structures. Sustainability will be extended also to our car fleet, where we are stimulating electric cars. During the middle year of our 3-year strategy we will continue to work on continuous improvement. Although we look back on 2018 with satisfaction, we take a matter-offact view on where improvements can be made. Besides the growth pillars mentioned, on which our work will continue into 2019 as well, we see growth potential for the Dutch hydraulic works. We will also continue to work on the integration of marketing and sales, and we will further intensify the collaboration between Kampstaal and Kamplacon.


These plans are regarded as the catalysts for our performance. If we are able to maintain our profitability at this level, it will offer unprecedented opportunities for further growth. Are you curious to know where this will take us? Remember first and foremost that the former window handle was transformed into a button. This button has meanwhile been replaced by a menu in a touch screen, which we might just as well simply address with: “Can you open the left front window?� Keep following us on LinkedIn, Facebook and Instagram to stay informed of the latest developments.

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GB Steel Group B.V. Distributieweg 10 8304 BJ Emmeloord Postbus 1009 8300 BA Emmeloord The Netherlands T +31 (0) 527 69 80 20 E info@gbsteelgroup.com W www.gbsteelgroup.com

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#wemakesteelwork


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