ANNUAL REPORT
NEM Holding B.V.
The power of 2009
Contents Introduction 3
Mission
6
Company profile
7
Countries in which NEM Holding is active
8
Management
9
Report and recommendations of the Supervisory Board
10
Report of the Board of Management
Financial Statements 2009 2
22
Consolidated balance sheet
23
Consolidated profit and loss account
24
Consolidated cash flow statement
28
Accounting policies
34 Notes to the consolidated balance sheet 37 Notes to the consolidated profit and loss account 38 Company balance sheet 39 Company profit and loss account 40
Notes to the company balance sheet
Other Information 44 Statutory rules concerning result appropriation 44
Proposed result appropriation for the financial year 2009
45 Auditor’s report 46 Five years in figures 50 Addresses 54 Colophon
Mission NEM Holding intends to be internationally recognised as the preferred partner for custom-made solutions and services in the field of industrial-, utility- and heat recovery steam generators and related equipment. In order to achieve this goal, we need to discern ourselves from our competitors by continuously developing custommade products, solutions and services which are unique or indispensable to our clients due to our know-how. Our innovative products, solutions and services are aimed at generating reliable energy in the most efficient manner, thereby taking into account our responsibility towards the environment and towards future generations.
3
4
NEM ANNUAL REPORT 2009
The Power of Steam
5
INTRODUCTION
Company profile On 3 July 2003 H.T.P. Investments B.V. (HTP) – a Dutch
Concentrated Solar Power
private equity investor – acquired 100% of the shares in
NEM supplies equipment for various types of solar
NEM B.V. (NEM). On 30 September of the same year,
power plants including Integrated Solar Combined Cycle
HTP transferred all NEM shares to NEM Holding B.V.
(ISCC). Other examples of NEM CSP systems are CSP
(NEM Holding).
steam cycle technology, back up (firm output) equipment and booster super heaters.
NEM, established in 1929, is a leading, global engineering company in the field of steam related equipment.
Diverters and Dampers
Since the 1960s, NEM supplies custom-made solutions
NEM Power-Systems, located in Reckling-
with regard to industrial, utility and heat recovery steam
hausen, Germany, is world leader in
generators for power generation and industrial appli-
the design and supply of exhaust gas
cations throughout the world. NEM’s Heat Recovery
systems, diverters and tight shut-off/
Steam Generators make up the largest portion of the
control dampers for large boiler plants,
company’s activities. The firm’s driving forces are its
Flue Gas Desulfurisation (FGD) plants,
distinctive know-how and continuous technological inno-
Selective Catalytic Reduction (SCR)
vation, with an eye for new applications such as steam
plants and process industries.
generation for enhanced oil recovery and solar power applications.
Special Products Our business unit in Leiden, provides specialist
6
NEM ANNUAL REPORT 2009
During 2008 NEM Holding B.V. acquired NEM Energy
products and services to operators of boilers worldwide
Services B.V. (NES), while in 2009 Standard Fasel B.V.
by using the know-how and resources available in both
and Powerspex Instrumentation B.V. were acquired by
NEM and NES.
NEM Holding through NES. Both NES and Standard Fasel were already part of the HTP group of companies.
Production facility Egypt NEM together with Al Hashemiah has built and commis-
NEM Holding’s head office is located in Leiden, the
sioned a production facility in the Free zone in Alexan-
Netherlands. The company consists of a number of busi-
dria, Egypt in order to manufacture piping spools. The
ness units, all of them specialised in a range of specific
facility is operational since October 2009.
products. Our product range can be divided as follows:
Services Heat Recovery Steam Generators
NEM Energy Services B.V consists of amongst others,
NEM’s core activity is the engineering and delivery of
Standard Fasel B.V., NEM Standard Fasel Manufacturing
various types of Heat Recovery Steam Generators
B.V., Powerspex Instrumentation B.V., NEM Standard
(HRSGs). Our business unit in Leiden supplies large
Fasel Tools 4 Rent B.V. and Energy Staff Resources &
HRSGs while our business unit in Hendrik Ido Ambacht
Recruitment B.V. The group of companies offers (re)
specialises in modular type HRSGs. This type of steam
design, construction, maintenance, overhaul and modifi-
generator uses the hot exhaust gasses produced by gas
cation services to flue gas – and water pipe boilers and
turbines to generate steam. This so-called combined auxiliaries. The clients are amongst others all major cycle process improves the plant’s efficiency by approxi-
Dutch power plants, oil refineries and waste incinerating
mately fifty percent.
plants. The legacy of this group comes from almost all large Dutch boiler manufacturers such as Stork, Royal
Industrial and Utility Boilers
Schelde and Standard Fasel Lentjes. NES is market lea-
Our business unit in Hengelo offers tailor-made solu
der in the Netherlands and has also operations abroad.
tions for fossil fired steam generators for industrial and
The company has its own manufacturing facilities and
utility applications. We also supply process heat reco-
state-of-the-art tooling & equipment warehouse.
very boilers as well as steam generators for enhanced oil recovery.
Waste-to-Energy As a niche activity, NEM maintains state-of-the-art designs for Waste-to-Energy Steam Generators for incineration of municipal waste and industrial or refinery waste gas to produce steam for power production.
Countries in which NEM is active
7
Management Board of Management G.J. Van Dijk (1960) Chief Executive Officer
J.J.J. Mulder (1964) Chief Financial Officer
Starting his career at Shell Internationale Petroleum
Jan Mulder joined NEM on 1 January 2008 and was
Maatschappij N.V., The Hague, Gerard Van Dijk sub
appointed Managing Director and Chief Financial Offi-
sequently joined NEM in 1994. After a number of years
cer for NEM on 1 April 2008. On 1 January 2009 he
active in project management at Leiden, the Nether-
was appointed Managing Director and Chief Financial
lands and as Branch Manager for NEM in Taiwan, he
Officer of NEM Holding. From 1985, he mainly worked
was appointed General Manager for the Business Unit,
in various companies in the dredging industry of which
NEM Industrial & Utility Boilers in 2001. He was appoin-
for the last eight years as Business Unit Controller with
ted Managing Director and Chief Executive Officer for
Royal Boskalis Westminster N.V. During this period he
NEM on 1 September 2006. On 1 January 2009 he was
was responsible for the regions Africa, Eastern Europe,
appointed Managing Director and Chief Executive Officer
Indian Subcontinent and the Middle East as well as the
of NEM Holding. Gerard Van Dijk graduated in 1988 with
Offshore Division.
a Master's in Mechanical Engineering at the University of Eindhoven.
J.H.N.M. Hendrikx (1949) Director Services Hans Hendrikx joined NES on 1 May 2005 and was
W. de Blauw (1953) Chief Operational Officer
appointed Managing Director and Chief Executive Officer
Willem de Blauw was appointed Managing Director and
for NES on 1 October 2005. On 1 January 2009 he was
Chief Operational Officer for NEM on 1 June 2006. On appointed Managing Director and Director Services of 8
NEM ANNUAL REPORT 2009
1 January 2009 he was appointed Managing Director and
NEM Holding. From 1994 he mostly worked as project
Chief Operational Officer of NEM Holding. He has more
manager for NEM on several international and national
than 30 years working experience, including 17 years
boiler projects, whilst in the period from 2004 to 2008
with the boiler department of Royal Schelde Group N.V.
he was involved in the restructuring of Standard Fasel
The last four years before joining NEM Willem de Blauw
B.V. and the integration of NES and Standard Fasel B.V.
worked for Fluor Corporation at the Operations & Maintenance business unit as Director Business Development in Europe, Middle East and Africa.
Supervisory Board W.P. de Pundert (1957) Chairman
K. Meertens (1957)
Appointed on 17 December 2009
Appointed on 17 December 2009
Nationality: Dutch
Nationality: Dutch
Former position: Chairman of the Board of Management
Former positions: Managing Director J.P. Morgan
of Agrostar N.V.
1997-2008, Partner McKinsey & Company 1986-1996
Other positions: Various board and executive functions
Other positions: Various board and executive functions
Report and recommendations of the Supervisory Board We hereby present the Annual Report 2009 for NEM Holding B.V. as compiled by the Board of Management in accordance with Article 23 of the Articles of Association and adopted by the Supervisory Board of NEM Holding B.V.
Financial Statements The financial statements have been audited and approved by Deloitte Accountants B.V. We refer to page 45 for the Auditor’s report.
Recommendations The Supervisory Board recommends that: • The shareholders approve the financial statements as presented • The Board of Management be discharged from its operational and statutory responsibilities and the Supervisory Board be discharged from its supervisory responsibilities for the financial year 2009 in accordance with Article 27 paragraph 2 of the Articles of Association • The profit for the financial year of € 11.2 million is to be transferred to other reserves. ANNUAL REPORT 2009 NEM
Appointment of the Supervisory Board On 17 December 2009 Mr. W.P. de Pundert and Mr. K. Meertens were appointed by the shareholders as Supervisory Board members. The position of a third member of the Supervisory Board is still vacant. Mr. W.P. de Pundert is appointed as Chairman of the Supervisory Board.
Activities of the Supervisory Board One formal meeting took place on 17 December 2009. During this meeting the strategy of NEM Holding B.V., the position of its competitors, budgets, projects and progress of the results were discussed. In addition a few informal meetings took place between individual members of the Supervisory Board and the Board of Management. These meetings were held both at the office of NEM Holding B.V. in Leiden and at the locations of the operating business units.
Appreciation for Board of Management and Employees The Supervisory Board wishes to express their appreciation to the Board of Management for the latter’s successful efforts to manage the company under challenging market circumstances. The Board furthermore thanks the Works Council and employees for their loyal attitude towards the company. Leiden, 8 April 2010 The Supervisory Board W.P. de Pundert, Chairman K. Meertens
9
Report of the Board of Management
10
NEM ANNUAL REPORT 2009
Summary
NEM USA Corp. Activities in the Middle East were also
NEM Holding was able to achieve good results and main-
expanded during the same year.
tain a strong order backlog in 2009, despite the global recession which undoubtedly had an impact on the busi-
In the course of 2009, H.T.P. sold the activities of
ness of NEM Holding. Revenues amounted to € 369.2
Standard Fasel B.V. to NES. With this acquisition, all
million, 10% lower than the € 409.6 million realised
New Build and Service Activities are now part of NEM
in 2008. The year’s order intake of € 242.2 million
Holding. In addition NES acquired Powerspex instrumen-
decreased with 53% compared with € 520.8 million in
tation B.V., NEM furthermore opened a new production
2008. The decrease of the order intake is reflected in
facility in Egypt in order to be less dependent on the
the order book as per 31 December 2009 which amoun-
manufacturing capacity and quality of third parties.
ted to € 342.7 million, compared with € 480.1 million as per 31 December 2008.
Market Developments Since its change of course in 2006, it has been NEM’s
The lower revenue achieved during the year had a direct
aim to become the preferred partner for custom-made
impact on the operational results which amounted to solutions in our field and to distinguish ourselves by € 12.2 million compared with € 18.9 million in 2008.
offering superior added-value to our clients. Thanks to
Our net result decreased to € 11.2 million compared
this strategy, NEM has been able to maintain a reason-
with the € 15.8 million in 2008. Although the results are
able order intake and a healthy backlog in comparison
lower than those of 2008, as can be seen in the 5-year
with many of NEM’s competitors or even companies
comparison, they are substantially higher than during
outside our branch, in spite of the economic downturn.
the period 2005-2007.
For instance, in March 2009 NEM received the order for the ‘Moerdijk’ project in the Netherlands. In April 2009,
In December 2008, NEM and NES successfully com-
the month of NEM’s 80th anniversary, NEM secured the
bined forces by bringing the two companies together
‘Enecogen’ project, also in the Netherlands, thanks to
under NEM Holding. This step has significantly increased
the combined forces of NEM and NES. Orders were also
opportunities for both companies with regard to the
received for Sasol (South Africa) and Porto (Portugal).
development of new projects, services and products. In addition, in line with our strategic plan, we have esta
Unfortunately, many of the conclusions drawn in NEM’s
blished a new subsidiary and business unit in the USA,
strategic plan still apply today. In previous years (2005-
2007) nearly all indicators for global economic growth showed an upward trend. Following the credit crisis which started in the United States in 2008, many economies (particularly those in the West) have been facing a severe slow-down or even a recession. Analysts argue about whether recovery of the global economy is going to be “V”, “W” or “L” shaped. Large banks and financial institutions have suffered severe losses and at present many of them including investors are still uncertain as to whether or not the worst is over. Power companies are still delaying billions of dollars of investment plans because depressed global markets are making it hard for them to raise the necessary financing. An unprecedented change in behaviour has been the intervention of governments worldwide in support of their countries’ respective economies by injecting billions of euros. No doubt these measures have had a positive influence on the global economy but the question remains whether this has been sufficient to create a sustainable growth. Also, the trend that governments of Western nations and people in general are becoming increasingly aware of the scarcity of fossil fuels and of the dependence on or even vulnerability to gas and oil supplies from countries such as Russia and Middle Eastern countries is unaltered. In June 2008, the price of oil reached $147 per barrel and the exchange rate of the euro against the dollar reached $1.57. In December 2008, the oil price dropped to below $50 per barrel and car sales worldwide plummeted. As expected, the oil price level increased to approximately $70 per barrel by the end of 2009 (exchange rate $1.47) owing to the limited availability of oil (and gas). In the long term, we expect the oil price to creep up slowly because of a scarcity of hydrocarbons but it is uncertain to what level. Although opinions still differ as to what exactly is causing climate change and whether this is mainly due to human interference with nature or not, climate change itself is globally recognised as a fact. Governments the world over have introduced measures to reduce the production of CO2. These include more stringent requirements on emissions, the levying of carbon tax and the sale of carbon credits. Energy companies are investigating the possibilities of reducing CO2 emissions by increasing plant efficiency, application of renewable energy and CO2 capturing and storage. Unfortunately, until now the price of energy is
ANNUAL REPORT 2009 NEM 11
12
NEM ANNUAL REPORT 2009
still too low to allow many of these installations to become economically viable without heavy subsidies. Governments are reluctant to increase the price per KWh or per unit of fuel, particularly in view of adverse economic developments. This problem is slowly being recognised and governments (such as in the Netherlands) are taking steps to increase the price per KWh. The two factors mentioned above, namely vulnerability to oil and gas supplies and the pressure to reduce CO2 emissions have forced governments in the West to consider the generation of electricity by using alternative sources of energy such as coal, nuclear and renewables such as wind and solar. The growth of Gross Domestic Product in those countries where NEM is active needs to be supported by a reliable source of electric power. Until now, coal and nuclear power are still not widely accepted as suitable energy sources, for example for political and environmental reasons. Since renewable energy sources are still not employed sufficiently to support the global need for electricity, natural gas appears to be the most logic alternative. On the one hand, this explains the sudden increase in the demand for Combined Cycle Power Plants in 2008. On the other hand, many of NEM’s competitors have burdened themselves with high risk-low margin projects in the years following the slowdown in the HRSG market in 2002-2004. They are now suffering the consequences. 2008 saw a surge in the order intake for HRSGs. This led to a workload that was too much to handle for some companies. As a result, some of them ran into financial difficulties despite the excellent market conditions in 2008, a situation that was aggravated by the slow market in 2009.
13
Financial Developments The highlights are: • Revenue E 369.2 million (-10%) • Order intake E 242.2 million (-53%) • Order book E 342.7 million (-29%)
107.0
• Operating result of E 12.2 million (E 18.9 million in 2008) • Net result of E 11.2 million (E 15.8 million in 2008)
148.9
Revenues Revenues for the financial year 2009 were E 369.2 million,
113.3
compared with E 409.5 million in 2008. Contrary to previous years, revenue was mainly realised inside Europe and in particular the Netherlands, through large HRSG projects and Services. Other European countries in which projects were executed were Portugal, Belgium and Spain. Outside
Revenues by geographical region (x € 1 million)
Europe projects were mainly executed in Egypt, Oman, Thailand and South Africa. The level of activities and revenue in Europe and the Netherlands is expected to remain high during 2010.
Revenues (x € 1 million) by geographical region 14
NEM ANNUAL REPORT 2009
The Netherlands Europe Outside Europe
Revenues (x € 1 million) by activities Heat Recovery Steam Generators Diverters and Dampers Services
2009
2008
2007
2006
2005
148.9 107.0 113.3 369.2
101.0 113.6 194.9 409.5
22.6 56.3 112.6 191.5
26.3 42.0 138.5 206.8
47.2 32.6 53.1 132.9
2009
2008
2007
2006
2005
286.6 23.6 59.0 369.2
305.0 39.9 64.6 409.5
165.5 26.0 - 191.5
183.2 23.6 - 206.8
94.2 12.1 26.6 132.9
Order intake The order intake for the financial year 2009 decreased in comparison with 2008. The total order intake was E 242.2 million compared with E 520.8 million for 2008. The order intake was spread widely in terms of activity, with the large HRSGs as main product. Geographically, the order
23.6
intake was achieved mainly in Europe. The large HRSG orders received for Moerdijk and EnecoGen (the Netherlands)
59.0
and the Modular HRSG orders for Sasol (South Africa), Porto (Portugal), and Vasilikos (Cyprus), as well as a large number of service contracts contributed to the order intake for 2009.
Order book As a result of the lower order intake in 2009, the order
286.6
book as at 31 December 2009 decreased to E 342.7 million compared with E 480.1 million as at 31 December 2008. The quality of the order book is good and a large part of the order book will be executed during the financial years 2010 and 2011. The order book is expected to increase further with the award of some major projects at the start of 2010.
Revenues by activities (x € 1 million)
Revenues (x € 1 million)
Operational & Net Result
500
Both operational and net results show a decrease compared to 2008. As a result of an increase in cost of work, a
400
substantial cost overrun on a specific project as well as an
300
increase in the indirect overhead costs, the operational result decreased significantly during 2009 to an amount of
200
E 12.2 million, compared with E 18.9 million in 2008. The
100 0
net interest income received contributed substantially to
133
207
192
410
369
2005
2006
2007
2008
2009
our net result in 2009. This amounted to E 11.2 million compared with E 15.8 million in 2008.
Banking facilities A group of financial institutions including ABN AMRO Bank NV, ING Bank NV, Rabobank Nederland and Euler Hermes
Order intake (x € 1 million)
Interborg NV (part of Allianz Group) increased its guarantee
600
facilities for NEM ending 2008. The total of these facilities
500
is at the required level in relation to our current level of
400
business and anticipated further growth. NES has its own
300
credit facility and a bank guarantee facility. The interest
banking facilities with Rabobank Nederland, consisting of a
200
rates payable are at normal market conditions.
100
Investments
0
ANNUAL REPORT 2009 NEM 15
245
173
370
521
242
2005
2006
2007
2008
2009
Acquisitions and investments in excess of an established amount require prior approval by the shareholders and, in certain circumstances, by the banks. During 2009 we invested both in tangible and intangible fixed assets. Total investments in tangible fixed assets for 2009 amounted to E 4.9 million (E 4.3 million in 2008). The main part of our
Order book (x € 1 million)
investment involved the newly-established production faci
500
lity in Egypt. Other investments were made mainly in plant and office equipment, machinery and automation. Total in-
400
vestment in intangible fixed assets amounted to E 1.7 mln.
300
The intangible fixed asset investment is the goodwill paid
200
for the purchase of Powerspex Instrumentation B.V. Further-
100
more, Standard Fasel B.V. was acquired from Worldwide
0
221
179
349
480
343
2005
2006
2007
2008
2009
Energy Services B.V., a group company of HTP Investments B.V. The funding for these acquisitions was and will be generated internally. In 2010, we expect the level of investment to decrease compared with 2009. Investments will consist of regular
Net result (x € 1 million)
replacement investments, as well as major investments
18
in ICT infrastructure and programs to support the NEM Holding business model.
15 12
Cash Position
9
As at year end, the net cash position was E 124.8 million.
6
continued to focus on further strengthening of our working
(E 88.9 million at 31 December 2008). During 2009 we capital position. In most cases, contractual payment condi-
3 0
3.3
3.1
0.5
15.8
11.2
2005
2006
2007
2008
2009
tions are in line with the project expenditure, generating positive cash flows from projects. This is reflected in the increase of our cash position during 2009.
Personnel and Organisation
professionalism are the key factors for the successful
Our people are the basis of our success. The products
execution of our projects. In 2010, NEM will continue to
supplied by NEM must be state-of-the-art and reliable.
invest in people.
The organisation therefore needs employees who are able to translate innovative ideas into tailor-made pro-
Research and Development
ducts. Effective management, inspiring leadership and a
In order to offer highly customised solutions to complex
fair reward system, is essential in enabling the growth in
energy problems, NEM has to constantly improve their
number and quality of employees and our business.
product range and develop new technologies/products
Based on the company business plan and strategy a HR
and applications.
policy was developed that contributes to company goals and employee needs. The plan outlines five key goals,
The Research & Development Department therefore
honesty and clarity, quantity and quality, the right reward
investigates the energy conversion market for demand
for the right work, balance and market orientation.
for new technologies and products in close cooperation with the Marketing Department. It defines and carries
In 2008, we started to develop a compensation and
out projects to further develop these new technologies
classification system that provides fair and equitable
and products. Furthermore, it gives guidance and sup-
salaries. This system will become effective in 2010 and
port to the regular NEM organisation to implement these
will also form the base for a performance management
results in the projects containing the new technologies
system. This will better support us in leadership develop-
or products.
ment and in recruiting and retaining the employees we 16
NEM ANNUAL REPORT 2009
need. Furthermore, in 2010 the existing employee bene-
The Research & Development Department works with
fits programs needs to be tuned to one program for NES.
a dedicated team to stimulate interaction with the Engineering Department. The current main focus of the
Employees (FTE’s) by activities Steam Generators Service and After Sales Diverters and Dampers Total
31.12.2009 31.12.2008 375 301 46 722
322 226 50 598
department is the development of equipment and systems for solar thermal power plants and fast-starting HRSGs. NES has developed a number of technologies. These solution-driven developments are established largely in
The goals that were defined for the NEM growth scenario
close cooperation with clients. The technologies deve
changed as a result of market developments. One of
loped are at the disposal of the complete client base. A
HR’s main goals continued to be to attract highly qualified
well-known product is the Tetratube, a NOx reduction pro-
personnel. Although the market situation changed, there
cess for waste incineration boilers.
is still a shortage in the labour market which makes it difficult to recruit these mainly technically-skilled person-
Supply Management
nel. The new approach to the labour market, employer
In cooperation with key suppliers NEM reserved manu-
branding, is bearing fruit. We developed a special internet
facturing capacity in advance of projects being awarded.
site for jobseekers and a recruitment ad campaign has
NEM succeeded in delivering goods and materials within
been launched. NEM Holding has been successful in ac-
the requirements to the various projects. Further frame
commodating personnel from Powerspex Instrumentation
agreements were signed during the year thereby crea-
B.V. and Standard Fasel B.V. through NES.
ting the basis for long-term cooperation. In 2010, we will be able to secure manufacturing of all our components.
NEM wants to offer a good perspective to all its employees. This is why NEM’s personnel policy offers opportu-
To maintain our competitiveness we have a firm base of
nities to employees for personal development, benefits
reliable suppliers and full attention is also given to sour-
and an informal organisational culture. The very low out-
cing, qualifying and developing new suppliers for the
flow of personnel indicates the company’s success in
next generation of power projects.
that respect. The manufacturing facility in Egypt was set up in order to Discussions with employee representatives from the
meet the guaranteed quality and capacity requirements
Works Council have been interactive and constructive.
for our worldwide projects. It is operational and has been producing piping materials among other things since
We are convinced that the combined know-how and
October 2009.
experience of our staff, their integrity, dedication and
Supply-related quality procedures have been updated in
order to establish an equal basis of NEM’s integral qua-
result in property damage, accidents, or impact on per-
lity system. We have succeeded in improving and increa-
sonal health. NEM Business Units possess ISO, ASME
sing staffing to a level that meets current and future
and/or SCC (HSE) accreditation among others. NEM
challenging targets in a rapidly changing supply chain
Energy Services will apply for the ASME S&R (construc-
environment.
tion and repair) certificate in 2010.
In order to service our clients with the timely delivery of
Risk Management
state-of-the-art products and services at an optimum
NEM Holding faces the same risks as any company ac-
price, NES has developed a network of reliable high tive in this branch of industry. Various types of risks have quality suppliers who understand the service industry. been identified and NEM actively endeavours to control Timely supply of high-alloy pressure parts is safeguar-
and eliminate them in order to achieve a more reliable
ded with our own production facilities in the North of the
product from a technical and financial point of view. In
Netherlands. Supplier performance is carefully and con-
order to do so NEM Holding recognises the following
stantly monitored.
risks.
IT & Facility Management
Pre-contractual Risks
In 2009, the ICT Department made considerable chan-
NEM Holding has a policy whereby major tenders are re-
ges in order to implement the requested innovative func-
viewed and approved by means of tender board mee-
tionality for the organisation. A new ICT architecture led
tings. The aim of the meetings is to identify and mitigate
to a new network between the Dutch subsidiaries. This
potential risks before a contract is awarded. A tighter
started the centralisation and it will be essential to
tender authorisation procedure has also been esta
achieve the desired level of service. The new network
blished. This categorises anticipated currency, price, cre-
will enable NEM to work on the same project simulta
dit and cash-flow risks, on which basis counter-measures
neously in several locations while simultaneously redu-
are established before a contract is signed. The aim of
cing IT complexity. ICT started a full-scale inventory of all
this is to create a reliable state-of-the-art product for our
of its applications with the goal of streamlining the total
clients in line with the mission statement of NEM Hol-
number of applications with no loss in functionality.
ding. This states that we endeavour to discern ourselves
Functional Application Management will be key to a more
by developing custom-made products, solutions and ser-
efficient production quality and to facilitating the goal of
vices that are unique or indispensable to our clients
reducing production time for NEM products.
thanks to our know-how. This aims to generate reliable energy in the most efficient manner, taking into account
NES implemented a new ERP system in 2009, offering
our responsibility in respect of the environment and fu-
flexible and accessible information, especially for project
ture generations.
management and control.
Operational Risks In 2010, a project documentation system and a RFID
Operational risks are mainly determined by the scale
system for tracking and tracing tools and equipment will
and complexity of a project, its location, the principal,
be implemented. We will make a start on ICT Architec-
the contractors and the financial and contractual terms
ture to further align ICT services with business require-
and conditions. It is the policy of NEM Holding to control
ments, initially concentrating on the handling of innova-
and limit these risks as far as possible. Project executi-
tive ICT projects.
on measures have been taken to minimise project risks.
Quality, Safety and Environment
Operational risks mainly involve engineering, thermal design, supply and construction.
The ongoing improvement of our quality, safety, health and environmental systems is an important part of our
Financial Risks
company policy. On the basis of this policy, our integra-
In addition to the operational risks, NEM Holding is also
ted control systems handle quality, health, safety and
exposed to financial risks during project execution. The
environmental aspects in an integrated approach. This
main risks are political developments, foreign exchange
approach enables our highly-qualified staff to deliver
exposures, supplier insolvency risk and non-payment
high-quality products in a professional manner. Safety
risks by main clients. In order to mitigate these risks,
and environment are also of major importance to achie-
NEM Holding follows strict rules in respect of political
ve total quality by complying with governmental and
and payment risks. With the exception of first-class
other safety and environmental regulations and by stri-
creditworthy clients, in principle all payment risks are
ving to eliminate any foreseeable hazards which could
covered by either credit insurance, letters of credit, ad-
ANNUAL REPORT 2009 NEM 17
vance payments and parent company guarantees. As a
work, passion, company pride and involvement are key
large part of our contract income is in euros, no financial
assets of the people of NEM Holding. In the Badjaran
hedge instruments are required. For the non-euro expen-
project, we expect to embed these characteristics even
ses, NEM Holding tries to secure contract income in the
deeper and stimulate cross-business unit cooperation.
same currency. NEM Holding therefore frequently has 18
NEM ANNUAL REPORT 2009
multicurrency contracts to cover its euro and non-euro
The project is subsidised significantly by the Dutch
expenses. When they arise, open positions in non-euro
NCDO, the National Committee for International Coope-
currency are fully hedged by means of forward contracts.
ration and Sustainable Development. Meanwhile, financial donations by and enthusiasm of other companies
In respect of its suppliers, NEM Holding evaluates and
and individuals have amounted to such extent that the
monitors the financial position of each of its major sup-
foundation may start similar projects for other villages in
pliers. NEM Holding has set various criteria to rate its
the coming years. It is NEM Holding’s wish to remain a
suppliers before contracts are signed. This is done in
partner of these laudable initiatives, thus staying true to
close cooperation between our Treasury and Supply De-
its aim to enable the generation of energy in a way that
partments. We only enter into contracts with qualifying
makes this world a better place to live in.
suppliers. This approach has delivered a reliable supplier base that the group can build on.
Corporate Social Responsibility
Outlook Estimates for future order intake have become extremely difficult based on the market developments described
NEM Holding’s corporate vision is ‘Enabling the genera-
above. In 2008-2009 the predictions of the GDP deve-
tion of energy in a way that makes this world a better
lopment per country had to be adjusted downward
place to live in, for present and for future generations.’
almost every month. By the end of 2009 for instance,
Consistent with our values and sense of social respon
just as global economy seemed to be improving, it be-
sibility, the foundation “Water for Gambia” was founded
came clear that Dubai was on the brink of bankruptcy. In
in 2009. Its aim is to provide the Gambian village of
Europe, Greece, Spain and Italy are in dire straits at the
Badjaran with clean drinking water by installing a solar-
beginning of 2010 and the impact on the euro is as yet
driven water purification installation. Central to the
unclear.
foundation’s philosophy is the commitment of the local people themselves. Each of them has given his or her
Currently, the total installed electric generating capacity
vote for the project. They carry out the installation while
worldwide is approximately 4300 GW. The expected
the foundation provides them with the means and orga-
growth in the requirement for electric generating capaci-
nisational skills. Along the way, it is expected that mo-
ty (based on macro economic data) for the coming years
dest economical opportunities will rise for Badjaran’s
is mainly caused by growth in China, India and to a les-
inhabitants.
ser extent, the Middle East. This expected growth in the
Besides providing the foundation with the necessary
requirement for electricity does not necessarily coincide
financial support, NEM Holding wishes to involve its own
with actual demand since the latter can also be influen-
people and make use of their organisational experience.
ced by short-term ‘psychological’ effects such as redu-
By using our internal communication tools optimally, we
ced consumer confidence, nervous financial institutions
expect our people to respond enthusiastically. Team-
etc.
Another important factor in the estimation of NEM Holding’s order intake for 2010 is the fact that by the end of 2009, NEM Holding was very well positioned for at least five very high potential CCPP projects. These will all be awarded in the first and second quarter of 2010. Two of these are for Siemens and are located in the Netherlands. The other three are for EPC contractors in Southern Europe and the projects are located in Europe and the Middle East. When these projects are indeed secured, this will mean an excellent start of the new-year and result in a solid backlog, especially against the background of difficult times. NES faces a slow market in the Benelux in 2010 with increasing competition. However, the group has oppor tunities in the global after-sales NEM market and synergies with NEM in the field of new boiler projects will be explored and exploited. Expectations for services in 2010 are therefore mildly optimistic. Given the uncertain global economic developments, it is hard to give accurate predictions for order intake in 2010. However, based on the orders in hand and the expected short-term order intake, we feel confident that in 2010 our revenues as well as our results will be in line with those realised in 2009. Leiden, 8 April 2010 The Board of Management G.J. Van Dijk W. de Blauw J.J.J. Mulder J.N.H.M. Hendrikx
ANNUAL REPORT 2009 NEM 19
Ø 1.391.980 KM
20
NEM ANNUAL REPORT 2009
The Power of the Sun
Ø 12.756 KM
EARTH
SUN
21
FINANCIAL STATEMENTS 2009
Consolidated balance sheet (before appropriation of the result, in thousands of euros)
Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 31 December 2009
31 December 2008
NOTES
FIXED ASSETS Intangible fixed assets
(1)
Tangible fixed assets
(2)
2,630 7,093
1,200 3,521 9,723
4,721
CURRENT ASSETS Inventories Receivables
(3)
Cash
(4)
TOTAL
1,704
1,684
78,796 124,797
97,856 88,891 205,297
188,431
215,020
193,152
22
GROUP EQUITY
(5)
40,869
37,115
PROVISIONS
(6)
9,635
4,713
CURRENT LIABILITIES TOTAL
(7)
164,516
151,324
215,020
193,152
Consolidated profit and loss account (in thousands of euros)
Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 1 January 2009
1 Januar y 2008
31 December 2009
31 December 2008
369,228
409,587
NOTES
REVENUES
(1)
OPERATING EXPENSES Cost of raw materials and consumables Subcontracted work and other external charges
89,560
104,414
191,747
222,427
Wages and salaries
(2)
41,781
36,701
Social securities and pension contributions
(3)
8,897
8,095
1,277
999
270 23,493
100 17,933
Depreciation of tangible fixed assets Amortisation of goodwill Other operating expenses
(4)
OPERATING RESULT
– 357,025
– 390,669
12,203
18,918
FINANCIAL INCOME AND EXPENSE 3,237
Intrest income Intrest income group companies Intrest expenses Intrest expenses group companies
RESULT BEFORE TAXATION Taxation
NET RESULT
(5)
2,918
-
30
– 223 – 144
– 146 – 364
23
2,870
2,438
15,073
21,356
– 3,819
– 5,526
11,254
15,830
Consolidated cash flow statement (in thousands of euros)
Comparative figures are adjusted for the acquisition of Standard Fasel B.V. 1 January 2009
1 Januar y 2008
31 December 2009
31 December 2008
12,203
18,918
Amortisation/depreciation
1,547
1,099
Movement in provisions
4,922
1,456
OPERATING RESULT Adjusted for:
Movement in working capital: Stocks Work in progress Receivables Current liabilities
– 925 45,919
19,060 – 22,113
– 50,050 56,148
Movement in working capital
40,053
51,092
CASH FLOW FROM ORDINARY ACTIVITIES
58,725
72,565
Interest received Interest paid 24
– 20 43,126
Taxation
3,237
2,948
– 223 – 3,819
– 146 – 5,526
CASH FLOW FROM OPERATING ACTIVITIES
– 805
– 2,724
57,920
69,841
Investments in intangible fixed assets
– 1,700
– 1,300
Investments in tangible fixed assets
– 4,859 10
– 4,266 989
Disposals of tangible fixed assets
CASH FLOW FROM INVESTMENT ACTIVITIES
– 6,549
– 4,577
-
– 3,903
– 144
– 364
Dividend paid
– 7,500
-
Group company loan
– 7,821 -
- – 10,000
Movement in equity Interest paid group companies
Shareholders’ loan
CASH FLOW FROM FINANCING ACTIVITIES MOVEMENTS IN LIQUIDITY
– 15,465
– 14,267
35,906
50,997
Net cash position at 1 Januar y
88,891 124,797
37,894 88,891
35,906
50,997
Net cash position at 31 December
MOVEMENTS IN LIQUIDITY
25
26
NEM ANNUAL REPORT 2009
The Power of Innovation
27
ACCOUNTING POLICIES & NOTES
Accounting Policies Activities
Acquisitions 2009
The activities of NEM Holding B.V., having its legal seat
NEM Energy Services B.V. acquired 100% of the shares
and is located Kanaalpark 159, Leiden, the Netherlands
in Standard Fasel B.V. from Worldwide Energy Services
and its group companies primarily consist of the engi-
B.V. (100% group company of H.T.P. Investments B.V.) as
neering and delivery of various types of Heat Recovery
per 31 December 2009 retrospectively as per 1 January
Steam Generators (HRSG’s) and the assembling, servi-
2009. Standard Fasel B.V. has utility boiler maintenance
cing, engineering and repairing of energy boilers of public
activities and sells shell type boiler solutions.
and industrial power stations and waste incineration plants.
Standard Fasel has been consolidated with the following amounts (in thousands of euros):
Group structure NEM Holding B.V. in Leiden is the head of a group of legal
entities. The ultimate parent company is H.T.P. Invest-
Assets Liabilities Total Operating Income Net profit
ments B.V., statutory seat at Goes, the Netherlands. A summary of the information required by articles 2:379 and 414 of the Netherlands Civil Code is given below:
2009
2008
10,478 2,657 19,736 2,435
7,414 2,029 16,757 1,467
NEM B.V., Leiden, the Netherlands, 100% • NEM GmbH, Oberhausen, Germany, 100%
The acquisition has been disclosed in accordance with
• HRSG Systems (Malaysia) Sdn.Bhd., Kuala Lumpur,
the “pooling of interest” method. The consolidated com-
Malaysia, 100% 28
NEM ANNUAL REPORT 2009
• Gulf Steam Generators L.L.C., Dubai, United Arab
parative figures of NEM Holding B.V. of 2008 have been adjusted as if the company was a subsidiairy in 2008.
Emirates, 100 % • NEM USA Corp., Greenville, South Carolina, USA, 100% • NEM-Al Hashemiah L.L.C., Alexandria Public Free Zone, Egypt, 80%
Furthermore NEM Energy Services B.V. acquired 100% of the shares in Powerspex Instrumentation B.V. as per 1 January 2009. The acquisition has been disclosed according to the purchase method. The company has mainly utility boiler related electrical and instrumentation
NEM Energy Services B.V., Hengelo, the Netherlands,
activities.
100% • NEM Standard Fasel Manufacturing B.V., Hengelo, the Netherlands, 100%
During the financial year 2009 NEM Energy Services B.V. established NEM Standard Fasel Tools 4 Rent B.V. as per
• Standard Fasel B.V., Utrecht, the Netherlands, 100%
24 July 2009 and Energy Staff, Resourcing & Recruiting
• NEM Standard Fasel Tools 4 Rent B.V., Hengelo,
B.V. as per 24 September 2009. Aforementioned com
the Netherlands, 100% • Powerspex Instrumentation B.V., Hengelo, the Netherlands, 100% • Energy Staff, Resourcing & Recruiting B.V., Utrecht,
panies have activities in the field of renting tools, accomplishment of toolmaintenance operations as well as the recruitment and selection of personnel on behalf of clients, temporary employment and send on secondment.
the Netherlands, 100% • Sustainable Energy Operations B.V., Hengelo,
NEM B.V. established NEM USA Corp. as per 6 June
the Netherlands, 100% (dormant company)
2009. A corporation duly organised under the laws of
• NEM Schelde Services B.V., Breda, the Netherlands, 100% (dormant company) • Standard Fasel Technical Services B.V., Utrecht,
the State of Delaware. The nature of principal business consists of service and sales of steam generating equipment, boilers and solar power systems.
the Netherlands, 100% (dormant company) • SFL Boiler Installations Sdn Bhd, Malaysia, 100% (dormant company) • NEM Energy Services Pte Ltd., Singapore, 100% has been liquidated in 2009.
Furthermore, NEM B.V. established together with Al Hashemiah Contracting Company (a joint stock company) as per 25 March 2009 NEM-Al Hashemiah L.L.C. in the Free Zone of Alexandria, Egypt. NEM B.V. legally holds an 80% participation in NEM-
Non consolidated companies:
Al Hashemiah L.L.C. However, it has been formally
• Tetratube B.V., Hengelo, the Netherlands, 50%
agreed that NEM B.V. holds 100% of the economic risks and rewards. Therefore, all risks and rewards will be recognised in the financial statements of NEM B.V. respec-
tively NEM Holding B.V. The purpose of the company is
Valuation of assets and liabilities and determination of
the fabrication of boilers and parts for electrical power
the result takes place under the historical cost conven-
plants and metal structures, maintenance and the provi-
tion. Unless presented otherwise as the relevant prin
sion of technical services associated.
ciple for the specific balance sheet item, assets and liabilities are presented at face value.
Related parties
Income and expenses are accounted for on a accrual
In addition to the companies referred to under the finan-
basis. Profit is only included when realised on the ba-
cial fixed assets, the following companies are related to
lance sheet date. Losses originating before the end of
the legal entity:
the financial year are taken into account if they have
• H.T.P. Investments B.V., Goes, the Netherlands
become known before preparation of the financial state-
• Worldwide Energy Services B.V., Goes,
ments.
the Netherlands
Changes in accounting principles No significant transactions were entered into with rela-
Due to changes in “de Richtlijnen voor de Jaarverslag-
ted parties other than mentioned in the notes to the
geving” 221 Work in progress on construction contracts,
balance sheet.
the presentation of the work in progress on construction contracts has been adjusted, as explained in more de-
Consolidation principles
tail in the principles for the valuation of work in progress
Financial information relating to group companies and
on construction contracts. As from financial year 2009,
other legal entities which are controlled by NEM Holding
work in progress on construction contracts is presented
B.V or where central management is conducted has
as a separate item in the balance sheet. This change in
been consolidated in the financial statements of NEM
accounting policy does not affect equity and result. The
Holding B.V. The consolidated financial statements have
comparative figures have been adjusted as well.
been prepared in accordance with the accounting prin ciples of NEM Holding B.V.
Financial instruments Financial instruments are both primary instruments,
The financial information relating to NEM Holding B.V. is
such as receivables and payables, and financial deriva-
presented in the consolidated financial statements. Ac-
tives. For the principles of primary financial instruments,
cordingly, in accordance with article 2:402 of the Nether-
reference is made to the treatment per balance sheet
lands Civil Code, the company financial statements only
item. For financial derivatives reference is made to the
contain an abridged profit and loss account.
paragraph foreign currencies.
Financial information relating to the group companies
Translation of foreign currency
and the other legal entities and companies included in
Assets and liabilities denominated in foreign currencies
the consolidation is fully included in the consolidated
are translated in euro’s at the exchange rates prevailing
financial statements, eliminating the intercompany rela-
at the balance sheet date. Transactions in foreign cur-
tionships and transactions.
rency during the financial year are recognised in the financial statements at the exchange rates prevailing at the
The results of newly acquired group companies and the
transaction date. The exchange differences resulting
other legal entities and companies included in the con-
from the translation as of balance sheet date, taking
solidation are consolidated from the acquisition date. At
into account possible hedge transactions, are recorded
that date the assets, provisions and liabilities are mea-
in the profit and loss account.
sured at fair values. Goodwill paid is capitalised, to which amortisation is charged based on the estimated
NEM Holding B.V. and its subsidiairies, in the normal
useful life. The results of participations sold during the
course of the business, enters into foreign currency hed-
year are recognised until the moment of disposal.
ges to reduce its exposure to market risks from chan-
General accounting principles for the preparation of the consolidated financial statements
ging currency rates. As at year-end the total foreign currency exposure is recognised at the rate as at balance sheet date. Exchange differences resulting from the translation of assets and liabilities of foreign currency denominated
The consolidated financial statements are prepared in
subsidiaries into euro’s at year-end rates of exchange
accordance with chapter 9 Book 2 of the Netherlands
are taken directly to reserves.
Civil Code.
ANNUAL REPORT 2009 NEM 29
Principles of valuation of assets and liabilities Intangible fixed assets Goodwill is calculated as the difference of cost and the net asset value of the entity acquired. Goodwill is capitalised and was amortised on a straight-line basis over the estimated useful economic life. Permanent decreases in value as at balance sheet date are taken into account.
Tangible fixed assets Tangible fixed assets are stated at purchase price less accumulated depreciation. Depreciation is based upon the expected economic life of the assets, applying the straight-line method.
Financial fixed assets Group companies in which NEM Holding B.V. holds more than 50% of the voting capital or in which NEM Holding B.V. has a decisive influence on managerial and financial policy are valued according to the equity method. Recei30
NEM ANNUAL REPORT 2009
vables on and loans to group companies and other receivables are stated at face value less any necessary provisions. Participations with a negative equity are valued at nil. If the company fully or partly guarantees the liabilities of the participation concerned a provision is formed, primarily comprising the receivables from this participation. The remainder is recognised under provisions, for the amount of the share in the losses incurred by the participation, or for the amount of payments the company is expected to make on behalf of these participations.
Inventories Stocks of raw materials and consumables are valued at historical cost less a provision deemed necessary for obsolescence.
Work in progress Work in progress is stated at direct costs less a provision for anticipated losses during production in the period up to completion. The invoiced instalments are deducted from the direct costs. The result recognised according to the percentage of completion method is added. A negative balance arises if the invoiced instalments Âexceed the cost incurred plus profits recognised on the works concerned. In case of situations involving claims, which are in the nature of the business, valuations are based on management’s best estimate.
Receivables Receivables are stated at face value less a provision where necessary. These provisions are determined by individual assessment of the receivables.
31
Provisions Provisions are set up in respect of actual or specific risks and commitments existing at balance sheet date, of which the size is uncertain but can be estimated using a reliable method. The other provisions are recognised at face value. For tax liabilities not yet payable due to differences between the valuation principles in the annual report and the valuation for tax purposes of the appropriate balance sheet items, a provision for deferred tax liabilities has been taken into account in the annual report amounting to the total of these differences multiplied by the current rate of taxation. These provisions are decreased by the tax receivables not yet demandable due to losses settled, as far it is probable that the future profits will be sufficient for settlement. The provisions for warranties concerns possible liabilities related to projects completed or supplies made. Additions to these provisions are basically related to cost of work. Exceptional costs incurred under warranties are charged to this provision. Other long-term employee benefits are those benefits that are part of the remuneration package, such as gratification and have a long-term character. The net liability for these employee benefits is the amount of the future remuneration that employees have earned in exchange for their services in the current and prior reporting pe riods. The calculation of the obligation can be compared with that of defined benefit plans. The provision is cal culated in accordance with the discounted cash flow method.
Pensions NEM Holding B.V. and its subsidiairies have various pension plans. These plans are financed through contribu tions to insurance companies and industry pension funds. NEM Holding B.V. and its subsidiairies only have defined contributions plans. Obligations for contribu tions to defined contribution plans are recognised as an expense in the profit and loss account as incurred. NEM Holding B.V. participates in the “Metalektro” industry wide pension scheme. Since NEM Holding B.V. and its subsidiairies have no obligation to additional funding in case of under funding, other than higher contributions in the future, it has been accounted for as a defined contribution plan. The industry fund has a coverage ratio of 100% as at 31 December 2009 (31 December 2008: 90%).
Principles for the determination of results
Cash flows in foreign currencies are translated at an 足estimated average rate. Exchange rate differences concerning finances are shown separately in the cash flow
Revenue recognition
statement.
NEM Holding B.V. and its subsidiairies heat recovery systems are generally manufactured based on long term
Corporate income taxes, issuance of share capital, inte-
contracts. Income on significant contracts extending
rest received and paid on operating activities and divi-
足beyond one year is recorded using the percentage of
dends received are presented under the cash flow from
completion method of accounting in the ratio that cost
operating activities. Interest paid on financing activities
incurred bears to estimated total cost at completion.
and dividends paid are presented under the cash flow from financing activities.
Changes in job performance and estimated profitability, including those arising from contract penalty revisions
The cost of group companies acquired is presented un-
and final contract settlements, may result in revisions to
der the cash flow from investment activities, so far as
costs and income and are recognised in the period in
payment has been made with cash and cash equiva-
which the revisions are determined. If the current con-
lents. The cash and cash equivalents of the group com-
tract estimate indicates a loss, a provision is made for
panies acquired are deducted from the purchase cost.
the anticipated loss. Transactions that do not result in exchange of cash and Small contracts are recognised using the completed
cash equivalents, such as financial leases, are not pre-
contract method. This method is used because the typi-
sented in the cash flow statement. The payment of lease
cal contract is completed in several months and the
terms on account of the financial lease contract is con-
足financial position and results of operations do not vary
sidered as an expenditure of financing activities as far
significantly from those, which would result from use of
as it concerns redemptions and as an expenditure of
the percentage of completion method. A contract is con-
operational activities as far as it concerns interest.
sidered complete when all costs have been incurred and the service or installation is performing according to specification and has been accepted by the customer.
Operating expenses Operating expenses comprise direct cost associated with the recognised revenues.
Taxation Corporate income tax is calculated at the applicable rate on the result for the financial year, taking into account permanent differences between profit calculated ac足 cording to the financial statements and profit calculated for tax purposes, and with which deferred tax assets (if applicable) are only valued in so far as their realisation is likely. As of the year 2009 NEM Holding B.V. is the head of the tax unity for all Dutch companies.
Principles for preparation of the cash flow statement The cash flow statement is prepared according to the indirect method. The funds in the cash flow statement consist of cash and cash equivalents. Cash equivalents can be considered as highly liquid investments.
ANNUAL REPORT 2009 NEM 33
Notes to the consolidated balance sheet (in thousands of euros)
Comparative figures are adjusted for the acquisition of Standard Fasel B.V. (1)
INTANGIBLE FIXED ASSETS
2009 Total
2008 Total
2,874 – 1,674
2,874 – 1,574
1,200
1,300
1,700 – 270
- – 100
1,430
– 100
4,574 – 1,944
2,874 – 1,674
2,630
1,200
Position as at 1 January Purchase Price Accumulated depreciation Book value
Movements in book value Investments Amorisation
Position as at 31 December Purchase Price Accumulated depreciation Book value
Goodwill relates to the acquisition of the service activities of Stork N.V. in the Netherlands in 2001 and 2002. Investments with regard to the financial year 2009 relates to the acquisition of Powerspex Instrumentation B.V. Amortisation is calculated at the following annual rates: Service activities of Stork N.V. 5% Powerspex Instrumentation B.V. 10%
34
(2)
TANGIBLE FIXED ASSETS
Land
Plant,
Other
and buildings
machiner y equipment
operating assets
2009 Total
2008 Total
Accumulated depreciation
483 – 12
4,604 – 3,262
9,165 – 7,457
14,252 – 10,731
10,977 – 9,734
Book value
471
1,342
1,708
3,521
1,243
Position as at 1 January Purchase Price
Movements in book value -
-
121
121
1,360
2,523
314
1,901
4,738
2,906
- – 29
- – 440
– 10 – 808
– 10 – 1,277
– 989 – 999
2,494
– 126
1,204
3,572
2,278
Accumulated depreciation
3,006 – 41
2,443 – 1,227
9,830 – 6,918
15,279 – 8,186
14,252 – 10,731
Book value
2,965
1,216
2,912
7,093
3,521
New consolidations Investments Disposals Depreciation Total movements
Postion as at 31 December Purchase Price
Depreciation is calculated at the following annual rates: Land and buildings 0 - 2,5% Plant, machinery and equipment 10 - 20% Other operating assets 20 - 33%
(3)
RECEIVABLES
31-12-2009
31-12-2008
66,999 8
82,973 -
Taxation
7,686
4,821
Prepayments and accruals
3,110 993
6,313 3,749
78,796
97,856
Trade receivables ( less provisions for doubtful debts ) Group companies
Other receivables
In general the receivables are due within one year. The total of the tax losses carried for ward amounts to € 43.0 million and can be compensated with profits until December 2011. A deferred tax asset of € 0.5 million is valued as per 31 December 2009 and is included in taxation receivables.
(4)
CASH Deposits Cash and bank balances
31-12-2009 45,756 79,041
31-12-2008 58,575 30,316
124,797
88,891
The outstanding deposits will mature on an average of 0,5 months after balance sheet date. An amount of approximately € 58.5 million (2008: € 40.9 million) is not at NEM’s free disposal. Cash collaterals have been deposited with ABN-AMRO Bank N.V., ING Bank N.V. and Rabobank (the Netherlands) in order to achieve bank guarantees for third parties and for ward contracts.
(5)
GROUP EQUITY Reference is made to the note to shareholders’ equity in the (company) financial statements. The 2008 comparative figures of the consolidated financial statements are adjusted for the acquisition of Standard Fasel B.V. according to the "pooling of interest" method. Therefore equity 2008 in the consolidated balance sheet increases with € 2,435 compared with the companies annual report of 2008.
(6)
PROVISIONS
Deferred
Deferred
taxation provision
Warranty provision
gratification provision
Other provisions
Total
-
2,452
805
-
3,257
Position as at 1 January 2008 Movements in book value Acquisition groupcompany
-
160
-
61
221
Addition
-
1,352
103
250
1,705
Withdrawal Release
- -
– 397 -
– 33 -
- – 40
– 430 – 40
Position as at 31 December 2008
-
3,567
875
271
4,713
4,335
1,297
229
-
5,861
- -
– 898 -
– 20 -
- – 21
– 918 – 21
4,335
3,966
1,084
250
9,635
Movements in book value Addition Withdrawal Release
Position as at 31 December 2009 Provisions have a predominantly long-term character.
Other provisions relate to a provision for pollution as well as a provision for major overhaul with regard to the Scheemda premises. The provision is in line with the cost estimated by experts.
35
(7)
CURRENT LIABILITIES
31-12-2009
31-12-2008
94,080 46,231
50,954 68,923
Group companies
7,208
12,784
Liabilities to bank
-
2,494
Work in progress Trade creditors
Taxation
3,800
1,244
Wage tax and social insurance contributions
1,941
1,854
575 10,681
986 12,085
164,516
151,324
31-12-2009
31-12-2008
851,709 – 945,789
651,095 – 702,049
– 94,080
– 50,954
28,461 – 122,541
34,863 – 85,817
– 94,080
– 50,954
Accrued costs on completed contracts Other amounts owed
Work in progress can be specified as follows: Cost of work including estimated margins recognised and provisions for anticipated losses Billings to date
Cost and estimated earnings in excess of billings 36
Billings in excess of costs and estimated earnings
In general current liabilities are due within one year. NEM Energy Services B.V. has creditfacilities with Rabobank. A € 4.0 million credit line and a € 4.5 million creditfacility for bank guarantees. The assets are pledged to the bank, a mortgage on the Scheemda premises of € 1.5 million has been granted. A minimum debt to equity ratio of 35% is required, the interest on money borrowed is Euribor + 1.8%. NEM Holding B.V. provides security for a guarantee facility of NEM B.V. up to a maximum of € 25 million. NEM Holding B.V. provides the banks of NEM B.V. a capital maintenance declaration and a no withdrawal certificate. Furthermore NEM Holding B.V. is severally responsible for the credit facilities of NEM B.V.
Contingent liabilities Guarantees, callable on demand, issued to third parties amount to € 161.1 million at 31 December 2009 (2008: € 149.8 million). The total contractual commitments in respect of lease and rental contracts amount to € 21.1 million (2008: € 13.8 million). The relevant commitment in 2010 amounts to € 4.9 million and the aggregate commitment in respect of the years 2011-2014 amounts to € 12.1 million with a commitment of € 4.1 million extending beyond 2014. NEM Holding B.V. and its subsidiairies are involved in various claims and legal actions arising in the ordinary course of the business. Where deemed necessary, provisions have been made.
Notes to the consolidated profit and loss account (in thousands of euros) Comparative figures are adjusted for the acquisition of Standard Fasel B.V. (1)
REVENUES Revenues by geographical region (in millions of euros) The Netherlands Europe Outside Europe
2009
2008
148.9 107.0 113.3
101.0 113.6 194.9
369.2
409.5
286.6
305.0
23.6 59.0
39.9 64.6
369.2
409.5
2009
2008
631 47 1
526 44 -
679
570
2009
2008
345 47 287
302 44 224
679
570
Revenues by activities (in millions of euros) Heat Recover y Steam Generators Diverters and Dampers Ser vice and After Sales
(2)
WAGES AND SALARIES Average number of personnel (FTE’s) by geographical region The Netherlands Europe Outside Europe
Average number of employees (FTE’s) by activities Heat Recovery Steam Generators Diverters and Dampers Ser vice and After Sales
Remuneration The remuneration paid in 2009 to the members of the Board of Management amounts to € 1,379 (2008: € 1,213) No remuneration has been paid to the members of the Super visor y Board.
(3)
SOCIAL SECURITIES AND PENSION CONTRIBUTIONS Social securities Pension contributions
(4)
2009
2008
4,153 4,744
3,777 4,318
8,897
8,095
OTHER OPERATING EXPENSES In accordance with Part 9 of Book 2 of the Netherlands Civil Code ( art.2.382a ) the auditor’s cost Deloitte Accountants B.V. amount to € 258 (2008: € 225).
(5)
TAXATION Taxation relates to taxation payable on results achieved in the Netherlands and other countries. The amount of tax payable has been calculated on the basis of corporate tax rates prevailing at the balance sheet date, taking into account any non deductable expenses. The tax position in the profit and loss account deviates from the average tax rates, which is mainly caused by a somewhat higher tax burden in Germany.
37
Company balance sheet
(before appropriation of the result, in thousands of euros)
31 December 2009
31 December 2008
NOTES
FIXED ASSETS Financial fixed assets
(1)
51,515
44,771 51,515
44,771
CURRENT ASSETS Receivables
(2)
Cash
4,013 579
TOTAL
SHAREHOLDERS’ EQUITY
51 16 4,592
67
56,107
44,838
(3)
Issued and paid up capital Other reserves Net result
40
40
29,575 11,254
25,147 14,363 40,869
39,550
38
CURRENT LIABILITIES TOTAL
(4)
15,238
5,288
56,107
44,838
Company profit and loss account (in thousands of euros)
1 January 2009
1 Januar y 2008
31 December 2009
31 December 2008
Other income and expense after taxation
11,679 – 425
14,394 – 31
NET RESULT
11,254
14,363
Share in result of participations after taxation
39
Notes to the company balance sheet (in thousands of euros)
GENERAL ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL STATEMENTS The company financial statements have been prepared in accordance with Title 9, Book 2 of the Netherlands Civil code. For the general principles for the preparation of the financial statements, the principles for valuation of assets and liabilities and determination of the results, reference is made to the notes to the consolidated financial statements, if not presented otherwise here after.
NOTES TO THE SPECIFIC ITEMS OF THE BALANCE SHEET (1)
FINANCIAL FIXED ASSETS
31-12-2009
31-12-2008
51,515
44,771
2009 Total
2008 Total
44,771 -
24,514 5,863
Share in results
11,679
14,394
Effect pooling of interest method Standard Fasel B.V.
– 2,435
-
Share premium reserve Dividend received
5,000 – 7,500
- -
Book value as at 31 December
51,515
44,771
31-12-2009
31-12-2008
4,013
51
Interest in group companies
Movements in interests held are as follows:
Book value as at 1 January New acquisitions
40
(2)
RECEIVABLES Taxation In general receivables are due within one year.
(3)
SHAREHOLDERS’ EQUITY
Position as at 31 December 2007
Issued and paid up capital
Other reser ves
Net result
Shareholders’ equity
40
24,591
556
25,187
- -
556 -
– 556 14,363
14,363
40
25,147
14,363
39,550
-
– 2,435
-
– 2,435
40
22,712
14,363
37,115
Movements Appropriation net result 2007 Net result 2008
Position as at 31 December 2008 Comparative figures adjustment for the acquisition of Standard Fasel B.V.
Position as at 1 January 2009 Movements Appropriation net result 2008
-
14,363
– 14,363
-
Distribution dividend 2008
- -
– 7,500 -
11,254
– 7,500 11,254
40
29,575
11,254
40,869
Net result 2009
Position as at 31 December 2009
On 31 December 2009 the Company’s authorised share capital, was made up of 40.000 ordinary shares, with a nominal value of € 1 each. No shares have been issued during the financial year.
(4)
CURRENT LIABILITIES Trade creditors Group companies Other amounts owed
31-12-2009
31-12-2008
8 15,202 28
5,288 -
15,238
5,288
In general current liabilities are due within one year.
CONTINGENT LIABILITIES The parent company is part of a fiscal unity for corporate income tax and V.A.T. purposes and for that reason it is jointly and severally liable for the tax liabilities of the whole fiscal unity.
SIGNING OF THE FINANCIAL STATEMENTS Leiden, 8 April 2010
The Board of Management
The Supervisory Board
G.J. Van Dijk
W.P. de Pundert, Chairman
W. de Blauw
K. Meertens
J.J.J. Mulder J.H.N.M. Hendrikx
41
42
NEM ANNUAL REPORT 2009
The Power of People
43
OTHER INFORMATION
Other Information Auditor’s report Reference is made to the auditor’s report as included
Proposed result appropriation for the financial year 2009
hereinafter.
Statutory rules concerning result appropriation
The Board of Management and the Supervisory Board propose to transfer the profit for the financial year 2009 of E 11.2 million to other reserves. This proposal has not been reflected in the Balance
In accordance with Article 25 of the Articles of AssoÂ
Sheet as at 31 December 2009 but is reflected in the
ciation the result for the year is placed at the disposal of
equity as net result for the year at the disposal of the
the general meeting of shareholders.
shareholders.
To: Annual General Meeting of Shareholders of NEM Holding B.V.
Opinion
Auditor’s report
fair view of the financial position of NEM Holding B.V. as
Report on the financial statements We have audited the accompanying financial statements
In our opinion, the financial statements give a true and at 31 December 2009, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
consolidated and company balance sheet as at 31 De-
Report on other legal and regulatory requirements
cember 2009, the consolidated and company profit and
Pursuant to the legal requirement under 2:393 sub 5
loss account for the year then ended and the notes.
part f of the Netherlands Civil Code, we report, to the
2009 of NEM Holding B.V. Leiden, which comprise the
extent of our competence, that the Report of the Board
Management’s responsibility
of Management is consistent with the financial state-
Management is responsible for the preparation and fair
ments as required by 2:391 sub 4 of the Netherlands
presentation of the financial statements and for the
Civil Code.
preparation of the Report of the Board of Management, both in accordance with Part 9 of Book 2 of the Nether-
Leiden, 8 April 2010
lands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant
Deloitte Accountants B.V.
to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
J. van der Steen ANNUAL REPORT 2009 NEM 45
Five years in figures (in millions of euros)
2009
2008
The Netherlands
148.9
Europe
107.0 113.3
2007
2006
2005
101.0
22.6
26.3
47.2
113.6 194.9
56.3 112.6
42.0 138.5
32.6 53.1
369.2
409.5
191.5
206.8
132.9
286.6
305.0
165.5
183.2
94.2
23.6 59.0
39.9 64.6
26.0 -
23.6 -
12.1 26.6
369.2
409.5
191.5
206.8
132.9
12.7 1.5
16.9 1.1
0.8 0.3
4.1 1.0
5.7 2.4
11.2 11.2
15.8 8.3
0.5 0.5
3.1 3.1
3.3 3.3
-
7.5
-
-
-
40.8
37.1
25.1
24.6
22.0
679
570
342
318
438
3.0
3.8
0.3
1.5
2.5
30.3
62.8
2.3
13.9
17.9
34.2
67.1
3.2
18.6
30.5
REVENUES BY GEOGRAPHICAL REGION:
Outside Europe
REVENUES BY ACTIVITIES: Heat Recover y Steam Generators Diverters and Dampers Service and After Sales
Cash Flow Depreciation Net result 46
Reser ves Dividend
Shareholders’ equity
Average number of employees
RATIOS Net result as % of revenues Net result as % of shareholders’ equity as per beginning of the year Cash flow as % of shareholders’ equity as per beginning of the year
Above-mentioned consolidated five years in figures contain the following companies: 2009: NEM Holding, NEM, NES, Standard Fasel 2008: NEM Holding, NEM, NES, Standard Fasel 2007: NEM Holding, NEM 2006: NEM Holding, NEM 2005: NEM Holding, NEM, NES The figures for 2006 with regard to the profit and loss account contains 15 months.
CONSOLIDATED BALANCE SHEET
2009
2008
Intangible fixed assets
2,630
1,200
-
-
3,125
Tangible fixed assets Financial fixed assets
7,093 -
3,521 -
1,243 -
911 -
1,493 -
Total fixed assets
9,723
4,721
1,243
911
4,618
1,704
1,684
759
724
673
-
-
-
18,180
-
Cash
78,796 124,797
97,856 88,891
47,806 37,894
32,180 29,797
44,225 34,697
Current assets
205,297
188,431
86,459
80,881
79,595
TOTAL
215,020
193,152
87,702
81,792
84,213
40
40
40
40
40
Net result
29,575 11,254
21,245 15,830
24,591 556
21,536 3,055
18,621 3,343
Equity
40,869
37,115
25,187
24,631
22,004
9,635
4,713
3,257
6,344
10,625
-
-
-
-
4,000
WORK IN PROGRESS
94,080
50,954
5,035
-
8,478
CURRENT LIABILITIES
70,436
100,370
54,223
50,817
39,106
215,020
193,152
87,702
81,792
84,213
2007
2006
2005
FIXED ASSETS
CURRENT ASSETS Stocks Work in progress Receivables
SHAREHOLDERS’ EQUITY Issued and paid-up capital Other reserves
PROVISIONS LONG-TERM DEBT
TOTAL
47
MOVEMENTS IN TANGIBLE FIXED ASSETS Net investments Depreciation
4,859
4,266
588
– 128
480
– 1,277
– 999
– 256
– 454
– 1,591
1.2
1.2
1.5
1.6
1.7
4.2
7.9
20.3
27.0
4.8
RATIOS Current assets/current liabilities (including work in progress) Equity/fixed assets Equity/long-term liabilities (including provisions) Equity/balance sheet total
4.2
7.9
7.7
3.9
1.5
19.0
19.2
28.7
30.1
26.1
48
NEM ANNUAL REPORT 2009
The Power of Combined Energy
49
ADDRESSES
Addresses NEM Holding B.V.
NEM-Al Hashemiah L.L.C.
Kanaalpark 159, 2321 JW Leiden
Alexandria Public Free Zone
P.O. Box 162, 2300 AD Leiden
Street 2/6, Block number 310
The Netherlands
Egypt
Telephone +31 71 579 2444
Telephone +2 016 552 3915
Fax +31 71 579 2792
HRSG Systems (Malaysia) Sdn.Bhd. NEM B.V.
C/O Level 18, The Gardens North Tower
Kanaalpark 159, 2321 JW Leiden
Mid Valley City, Lingkaran Syed Putra
P.O.Box 162, 2300 AD Leiden
Kuala Lumpur Poskod: 59200
The Netherlands
Malaysia
Telephone +31 71 579 2444 Fax +31 71 579 2792
NEM Energy Services B.V. Head office:
NEM GmbH (p/o NEM B.V.)
Demmersweg 21, 7556 BN Hengelo
Kanaalpark 159, 2321 JW Leiden
P.O. Box 845, 7550 AV Hengelo
P.O.Box 162, 2300 AD Leiden
The Netherlands
The Netherlands
Telephone +31 74 851 5555
Telephone +31 71 579 2444
Fax +31 74 851 5556
Fax +31 71 579 2792 Branch office: 50
NEM ANNUAL REPORT 2009
NEM Industrial & Utility Boilers
Scottweg 29 A, 4462 GS Goes
Demmersweg 140
P.O. Box 142, 4460 AC Goes
7556 BN Hengelo
The Netherlands
The Netherlands
Telephone +31 11 323 5600
Telephone +31 74 851 5888
Fax +31 11 323 5601
Fax +31 74 851 5889 Branch office:
NEM Modular Heat Systems
Mandenmakerstraat 130, 3194 DG Hoogvliet
Antoniuslaan 1
The Netherlands
3341 GA Hendrik-Ido-Ambacht
Telephone +31 10 416 5464
The Netherlands
Fax +31 10 838 0453
Telephone +31 78 684 1020 Fax +31 78 684 1022
Standard Fasel B.V. Head office:
NEM Power-Systems
Krommewetering 13, 3543 AP Utrecht
Sibylla-Merian-Strasse 3
P.O. Box 2435, 3500 GK Utrecht
45665 Recklinghausen
The Netherlands
Germany
Telephone +31 30 244 9211
Telephone +49 2361 98690
Fax +31 30 244 2596
Fax +49 2361 98294 Branch office:
Gulf Steam Generators L.L.C.
Seelenstraat 1a, 6004 RL Weert
Dubai Union House
The Netherlands
Port Saeed Road
Telephone + 31 49 552 6195
P.O. Box 43659, Dubai
Fax +31 49 552 6251
United Arab Emirates Branch office:
NEM USA Corp
Mandenmakersstraat 130, 3194 DG Hoogvliet
404 Parker Ivey Drive
The Netherlands
Greenville, SC 29607
Telephone +31 10 416 5464
United States of America
Fax +31 10 838 0453
Telephone +1 864 908 3800 Fax +1 864 254 9700
NEM Standard Fasel Manufacturing B.V. Haven N.Z. 8, 9679 TC Scheemda The Netherlands Telephone +31 59 759 1521 Fax +31 59 759 1862
NEM Standard Fasel Tools 4 Rent B.V. Alfred Marshallstraat 5, 7559 SE Hengelo The Netherlands Telephone +31 74 851 5397 Fax +31 74 851 5398
Energy Staff, Resourcing & Recruiting B.V. Krommewetering 13, 3543 AP Utrecht The Netherlands Telephone +31 30 244 9261 Fax +31 30 244 9260
ANNUAL REPORT 2009 NEM 51
52
NEM ANNUAL REPORT 2009
The Power of Dutch Design
53
54
NEM ANNUAL REPORT 2009
Colophon Editors
Jan Kooijman, Finance
Saskia Hageman, Communications
Jeroen Overduin, Communications
Design and prepress
Zabriski | communicatie | design (zabriski.nl)
Photography
NEM B.V.
Paul Honcoop
Van de Ridder Druk & Print, Nijkerk
ANNUAL REPORT 2009 NEM 55