Report- Year 2012 - 132e
corporate financial yearAnnual report 2012
www.cfe.be
Renaud Philippe
Bentégeat	 Delaunois
Despit...
3Annual report 2012
Renaud
Bentégeat	
Philippe
Delaunois
Managing Director President of the Board
of Directors
Despite tou...
4
6
Strategy
CFE’s expertise
increasingly valued
around the world
10
2012
highlights
14
Board of
Directors
18
Management
T...
5Annual report 2012
24
The group CFE
worldwide
18
Key figures
2012
27
Financial
report
16
Operational chart
of the group C...
6
CFE’s expertise increasingly
valued around the world
In 2012, the CFE group pursued its policy of international expansio...
7Annual report 2012
Customer satisfaction is a key part of the
CFE group’s business model and identity. It
is one of the g...
8
countries and could also expand into coun-
tries like Chad and Nigeria, not to mention
Asia, where CFE EcoTech is alread...
9Annual report 2012
CFE’s values
The CFE group is an international group of contractors working
in various disciplines, an...
10
2012
highlights
January
A new backhoe dredger, the Peter the Great, is launched.
February
A new Rail & Road division is...
11Annual report 2012
March
MEDCO (Middle East Dredging Company Q.S.C.) wins the contract
to dredge the approach channel as...
12
October
CFE’s Multitechnics division acquires Ariadne, based in Limburg and
specialising in automation.
CFE and its par...
jaarverslag 2012
Board of Directors
1. Renaud Bentégeat Managingdirector 2. C.G.O. SA, represented by Philippe Delaunois C...
14
1
15Annual report 2012
Management Team
1.Gabriel Marijsse
Director Human Resources
2. Michel Guillaume
Director Sustainable ...
16
PPP & Concessions
participations
Hôtel de Police
Charleroi
Real estate &
Management services
*
polska
*
66%
20%
23 janu...
17Annual report 2012
International Finance Center CFE
Dredging & environment
asia
australia
belgium
india
mexico
middle ea...
18
Consolidated statement of comprenhensive income in millions of EUR	
IFRS
2008 2009 2010 2011 2012
Revenue 1,728.4 1,602...
19Annual report 2012
Important comment :
In early 2012. CFE set up its new
rail & road division. This division
includes th...
20
Ratios
IFRS
2008 2009 2010 2011 2012
EBIT/ revenue 6.6% 5.7% 5.6% 4.7% 4.3%
EBIT/ cashflow 61.3% 54.4% 50.7% 49.5% 44.1...
21Annual report 2012
Trend comparing the CFE price with the Bel 20 index
70
5,000
80
100
90
1/12/2011
1/01/2012
1/02/2012
...
22
account or to the company’s registered
offices for recording in the shareholders’
register. The number of split shares ...
23Annual report 2012
7. Date and signature of the person
named under point 3
October 11, 2007 - Christian Labeyrie.
On Jul...
24
The group CFE worldwide
25Annual report 2012
26
27Financial report 2012
Financial
report
management report of the board of directors
consolidated financial statements
28
Table of content
MANAGEMENT REPORT OF THE BOARD OF DIRECTORS
A. Report on the accounts of the financial year 30
1. Over...
29Financial report 2012
5B.1.1 Operational risks 56
5B.1.1.1 The act of construction 56
5B.1.1.2 Real estate 57
5B.1.1.3 P...
30
MANAGEMENT REPORT OF THE BOARD OF DIRECTORS
A. Report on the accounts of the financial year
CFE’s Board of Directors me...
31Financial report 2012
Net result part of the group consolidated by division
As of December 31 % variation
In millions € ...
32
Analysis of the order book and results by division
Construction division
Revenue
In millions € 2012 2011 % variation
Ci...
33Financial report 2012
Rail & Road division
In early 2012, CFE set up its new rail & road division. This division include...
34
Real Estate & Management Services division
Despite a temporary dip in sales at the end of the first quarter, 2012 was a...
35Financial report 2012
Revenue by geographical area
% 2012 2011
Europe (EU) 45% 52%
Europe (non-EU) 4% 8%
Africa 12% 11%
...
36
PPP-Concessions division
Revenue
Revenue totalled €11.7 million (€2.9 million in 2011), supported by 45% -owned subsidi...
37Financial report 2012
2. Parent company financial statements
CFE SA’s revenues fell slightly. The decline was due to low...
38
B. Corporate governance declaration
1. Corporate governance
The Company has adopted the Belgian Company Code (2009) as ...
39Financial report 2012
2.1 Mandates and duties of Board members
Board directors
The table below summarises the mandates a...
40
Philippe Delusinne
RTL Belgium
Avenue Jacques Georgin, 2
B-1030 Brussels
Member of the Audit Committee
Independent dire...
41Financial report 2012
Bernard Huvelin
VINCI
1, cours Ferdinand-de-Lesseps
F-92851 Rueil-Malmaison Cedex
Director
Born in...
42
Jean Rossi
VINCI Construction
5, cours Ferdinand-de-Lesseps
F-92851 Rueil-Malmaison Cedex
Director
Born on 6 November, ...
43Financial report 2012
BVBA Ciska Servais,
represented by Ciska Servais
Boerenlegerstraat, 204
B-2650 Edegem
Chair of the...
44
Proposed reappointment of directors in the ordinary shareholders’ general meeting
Renaud Bentégeat’s term of office as ...
45Financial report 2012
Directors must inform the Board of Directors when a conflict of interest arises, and must refrain ...
46
3. Operation of the Board of Directors and its committees
3.1 The Board of Directors	
Role and jurisdiction of the Boar...
47Financial report 2012
3. Powers of the Board of Directors with regard to acquisition of treasury shares
		
The Annual Ge...
48
Operation of the Board of Directors
The Board of Directors is organised so as to ensure that decisions are taken in the...
49Financial report 2012
If so decided by the chairman of the Board, meetings may be attended by all or some of the members...
50
3.3 The Audit Committee
At December 31, 2012, this committee comprised:
•	Jan Steyaert, chair (*)
•	Philippe Delusinne ...
51Financial report 2012
4. Shareholder base
4.1 Equity and shareholder base
At the close of the financial year, CFE’s shar...
52
4.4 Exercise of shareholder rights
“The company’s shareholders have rights conferred by the Belgian Company Code and by...
53Financial report 2012
5A.2. Organisation of internal control
5A.2.1 Principles of action and behaviour
CFE’s business ac...
54
5A.3. Identification of risk and risk management system
As of 2006, CFE set up a system for identifying the main risks ...
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
CFE  - Annual Report 2012
Upcoming SlideShare
Loading in...5
×

CFE - Annual Report 2012

1,045

Published on

CFE - Annual Report 2012

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,045
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "CFE - Annual Report 2012 "

  1. 1. Report- Year 2012 - 132e corporate financial yearAnnual report 2012 www.cfe.be Renaud Philippe Bentégeat Delaunois Despite tough economic conditions in 2012, CFE’s net profit of the group was almost €50 million
  2. 2. 3Annual report 2012 Renaud Bentégeat Philippe Delaunois Managing Director President of the Board of Directors Despite tough economic conditions in 2012, CFE’s net profit of the group was almost €50 million, while operating income was similar to the 2011 figure. CFE bolstered its financial position with a €100 million bond issue, which was fully subscribed in less than an hour, showing the level of investor confidence in the group. The order book remains strong and grew substantially in internation- al markets, offsetting declines in both Western and Eastern Europe. This bodes well for performance in 2013. The Rail & Road division (created in 2012 following the acquisition of REMACOM) and the Real Estate & Management Services division performed particularly well. The Multitechnics division added a new skill with the acquisition of Ariadne in Limburg. The Dredging & Environment division considerably increased its or- der book. DEME also carried out a significant financial transaction in early 2013, successfully issuing €200 million of 6-year bonds. The synergies between the CFE group’s divisions and the good fit between its various activities proved their worth more than ever in 2012. This also shows the wisdom of the group’s structure and its operating methods, which involve paying particular attention to its staff. It was no accident that the CFE group won two awards for its human resources policy in 2012. It was awarded Diversity accredita- tion by the Brussels Capital region, and won the 2012 Top Employer award for its conscientious, committed approach to its staff. This same conscientious, committed mindset also forms the basis of all the work CFE does for its customers, along with its desire to meet their requirements as effectively as possible at all times. By tak- ing this approach, CFE was able to ensure customer satisfaction in 2012, and will be able to continue doing so in future. This approach has also sustained long-term business relations and will continue to do so, and is leading to new relationships of trust between CFE and clients all around the world. Editorial
  3. 3. 4 6 Strategy CFE’s expertise increasingly valued around the world 10 2012 highlights 14 Board of Directors 18 Management Team Table of content ReportYear 2012 - 132th corporate financial yearAnnual report 2012
  4. 4. 5Annual report 2012 24 The group CFE worldwide 18 Key figures 2012 27 Financial report 16 Operational chart of the group CFE Real estate development Multitechn. Rail&Road Dredging PPP-Conc.
  5. 5. 6 CFE’s expertise increasingly valued around the world In 2012, the CFE group pursued its policy of international expansion in all its businesses. It not only strengthened its presence in countries in which it has been operating for several years, but also substantially expanded its range of activities by winning several large contracts in new countries. The group is now aiming to establish a long-term presence in these countries. Its efforts will be sup- ported by the excellent quality of its work, stemming from its commitment to customer satisfaction. Strategy
  6. 6. 7Annual report 2012 Customer satisfaction is a key part of the CFE group’s business model and identity. It is one of the group’s core values, and one that it does not intend to let slip. It is this focus on customer satisfaction that has en- abled the group to gain a strong image as a serious, credible and trustworthy company. This image is fully justified and generates future opportunities by promoting custom- er loyalty and supporting efforts to win new business all around the world. The group’s structure and operating methods ensure that each entity devel- ops leading-edge expertise, and that its various business areas complement each other. Crucially, the group has great ca- pacity for innovation in a diverse range Artist impression of the new port in Doha, Qatar of high-potential business areas such as dredging, renewable energies and sustain- able construction techniques. It also has cutting-edge equipment with which to put innovation into practice, and is generating increasing synergies between its various entities. In this way, CFE remains a harmo- nious, balanced group generating top-level performance, and it is constantly growing and diversifying. In addition, its wide range of skills and activities enable it to provide comprehen- sive, co-ordinated solutions in-house. This is a considerable benefit for customers, particularly given that customers in CFE’s business areas often require comprehen- sive solutions. Dredging: conquering new markets As regards DEME’s dredging business, the aim is to be present in new markets. In the fast-growing Australian market, for exam- ple, DEME won a prestigious contract from Wheatstone in 2012. As a result, Australia will represent 30% of DEME’s revenue in 2013. With this contract and the contract for the new port in Doha, Qatar, DEME won the two largest dredging contracts in the world last year. This success bodes well for the future, and means that DEME can look forward with confidence. The group’s innovation strategy, which was already showcased by its research into off- shore wind power and the C-Power project off the coast of Belgium, also resulted in remarkable progress in tidal power in 2012, along with research into rare metals buried in the oceans. These advances mean that the group is able to win new contracts in niche areas that it has created, using the highly sophisticated tools and vessels at its disposal. DEME’s considerable investments in ul- tra-modern vessels and dredgers between 2008 and 2012 went entirely to schedule. As a result, the dredging business has caught up with its rivals and is now very well equipped to bid for all contracts in the market. Accordingly, DEME’s investments will pause in 2013. Ongoing international expansion efforts in construction and special techniques The international expansion of the group’s construction activities was clearly con- firmed by its successful moves into Africa and Asia. This process will continue as CFE seeks to transform contracts into a long- term presence, taking advantage of the excellence it has shown when performing work. The Multitechnics division pursued its ex- pansion strategy, and its electricity, heat- ing and ventilation activities now cover all of Belgium. The group’s latest acquisition, Ariadne, enhances this good geographical coverage. Efforts are now focusing abroad, with VMA already operating in Hungary, Po- land and Turkey. The Multitechnics division may increase its presence further in these
  7. 7. 8 countries and could also expand into coun- tries like Chad and Nigeria, not to mention Asia, where CFE EcoTech is already oper- ating in Sri Lanka and Vietnam. The right project in the right place In Belgium, as elsewhere, location remains crucial in the real estate market, and the CFE group’s operations are exemplary in this respect. All of its real-estate projects have excellent locations. Examples are the Belview project at the bottom of Rue Bel- liard in the centre of Brussels, the residen- tial conversion of Solvay’s former head of- fice on Chaussée d’Ixelles, a stone’s throw from the Avenue de la Toison d’Or, and the office project on land close to the Gare du Midi in Brussels, which is a particularly at- tractive site, including from the sustainable development point of view. In general, all land on which the group is developing pro- jects is excellently located, whether in Bel- gium, Luxembourg or Poland. Rail tracklaying works A new division focusing on trans- port infrastructure In 2012, the group set up its new Rail & Road division, combining businesses re- lating to the construction and equipment of railways and roads. Alongside ENGE- MA and Louis Stevens & Co, which are two growing companies operating in rail electrification, and the roads business of Aannemingen Van Wellen, the CFE group acquired Remacom, which specialises in laying rail tracks, in order to offer a com- prehensive solution. The group is planning to expand the Rail & Road division interna- tionally, enabling it to export its expertise in the medium term. Further international expansion in public-private partnerships The group is also taking an international approach to public-private partnerships, in which the PPP-Concessions division is currently working on projects such as the Liefkenshoek railway tunnel in Antwerp, the Turnhout car park, the Charleroi police station and the Eupen schools project. This international focus is shown by the Coentunnel project in the Netherlands and the Bizerte concession in Tunisia. Howev- er, Rent-A-Port has seen the greatest in- ternational development. In Vietnam, Rent- A-Port is handling the extension of Hai Phong port, and is working on expanding its activities in the region. Rent-A-Port also operates in Nigeria, and is involved in the Duqm concession in Oman, which is likely to see significant growth in future. More generally, the PPP-Concessions division is aiming to achieve gradual international expansion in its activities. Since this division shows major synergies with many of the group’s other operations, this expansion will support CFE’s efforts to export its expertise in the next few years. Strategy
  8. 8. 9Annual report 2012 CFE’s values The CFE group is an international group of contractors working in various disciplines, and customer satisfaction is its main ob- jective. Everywhere in the world, the group’s primary aim is to offer the best solutions in order to build for the future. To achieve this, the group relies on certain values: Safety first VSafety is the group’s key priority. The quest for profit will never take precedence over the quest for safety. Generating sustained profits By adopting the mission of building for the future, the group inevitably takes a long-term view of profits, with all that implies in terms of quality and customer satisfaction. Passionate about what we do Expertise is vital, but not sufficient. Commit- ment to individual projects and a passion for our business is needed. Meeting commitments When CFE gives its word to a customer, partner or subcontractor, it keeps it. In par- ticular, the group complies with agreed deadlines. Stronger together The good fit between the group’s various businesses and synergies between divi- sions and companies strengthen not only the group’s position, but also that of each entity. Proud of our achievements In businesses where people can see and touch what the group has created, each employee, regardless of their position in the group, is proud of his or her achieve- ments. Promoting diversity All employees, whether they be male or fe- male, from Belgium or elsewhere, have the same opportunities in terms of recruitment and promotion, and receive equal pay for equal work. The group supports cultural diversity in its teams. Open, transparent and integrated The group is organised in a decentralised way, and each company retains a degree of autonomy. As a logical consequence, the group shows a high degree of openness, transparency and integrity.
  9. 9. 10 2012 highlights January A new backhoe dredger, the Peter the Great, is launched. February A new Rail & Road division is created, following the acquisition of Remacom, which specialises in laying rail tracks. The CFE group signs its first contract in Algeria: an office building designed by architecture firm ASTP for BNP Paribas, in the fast developing new administrative district of the Algerian capital. Dredging International Australia wins the dredging contract for the Wheatstone LNG project on the west coast of Australia. May CFE Immo, in partnership with another real-estate developer, acquires the very well located Solvay site in Brussels. The site will be redeveloped and will be the home of a major real-estate project in the next few years. DEME launches its new rock-cutter suction dredger, the Ambiorix. In late May 2012, CFE issues €100,000,000 of 6-year bonds maturing on 21 June 2018. The issue is a big success, and is fully subscribed. Highlights
  10. 10. 11Annual report 2012 March MEDCO (Middle East Dredging Company Q.S.C.) wins the contract to dredge the approach channel as part of the New Port project commissioned by the Qatari government’s New Port Project Steer- ing Committee. A DP2 jack-up vessel, the Neptune, is launched. This vessel is particularly well suited to transporting and installing wind turbines at sea, and all other types of heavy offshore constructions. April In Sri Lanka, CFE EcoTech - in conjunction with CFE International - wins the contract for a water treatment and supply project, involving the installation of two drinking water stations in the mountains. June King Albert II of Belgium officially opens the new Diabolo rail complex in the presence of various Belgian ministers. Two major wastewater treatment plants are opened at Sclessin (150,000 population equivalent) and Vallée du Hain (90,000 pop- ulation equivalent). GeoSea, DEME’s Belgian subsidiary specialising in offshore construction, signs a contract with Northwind NV for the construc- tion and installation of foundations for a wind power project off the Belgian coast. August Aquapark Duinenwater in Knokke-Heist opens to the public. This is the country’s most sustainable and environmentally friendly swim- ming complex in Belgium, featuring solar panels, heat recovery and passive cooling.
  11. 11. 12 October CFE’s Multitechnics division acquires Ariadne, based in Limburg and specialising in automation. CFE and its partners complete the construction, as general contractors, of Chad’s future Finance and Budget Ministry building in N’Djamena. CFE wins the contract to build a children’s hospital in Bucharest, Romania. September The foundation stone of the new Charleroi police station - which won a MIPIM Award in March 2012 - is laid. The Gouden Boom project is inaugurated in Bruges. DEME launches its most powerful heavy-lift jack-up vessel, the Innovation I. November DEME launches its new rock-cutter dredger, the Amazone. Offshore & Wind Assistance launches two vessels for maintaining offshore wind farms and other offshore installations. December CLi, in partnership, signs a contract for the redevelopment of Galérie Kons, opposite the main train station in Luxembourg. Highlights
  12. 12. jaarverslag 2012 Board of Directors 1. Renaud Bentégeat Managingdirector 2. C.G.O. SA, represented by Philippe Delaunois ChairmanoftheBoardofDirectors 3. SA Consuco, represented by Alfred Bouckaert Independent director, Member of the Remuneration and Nomination Committee 4. Richard Francioli Director, Member of the Remuneration and Nomination Committee 5. Bvba Ciska Servais, represented by Ciska Servais, Independent director, Chair of the Nomination and Remuneration Committee 6. Philippe Delusinne Independent director, Member of the Audit Committee 7. Jan Steyaert Independent director, Chair of the Audit Committee 8. Christian Labeyrie Director, Member of the Audit Committee 9. Bernard Huvelin Director 10. Jean Rossi Director 1 6 2 7 3 8 4 9 5 10 13Annual report 2012
  13. 13. 14 1
  14. 14. 15Annual report 2012 Management Team 1.Gabriel Marijsse Director Human Resources 2. Michel Guillaume Director Sustainable Development Chairman Sogesmaint-CBRE 3. Lode Franken Deputy General Manager construction division Director DEME General Manager CFE Nederland 4. Frédéric Claes Managing Director BPC Director Amart 5. Youssef Merdassi General Manager CFE International (including CFE Hungary, CFE Slovakia, CFE România*, CFE Middle East, CFE Tchad, CFE Algérie and COBEL Contracting Nigeria Ltd). 6. Jacques Ninanne Deputy General Manager Corporate – Chief Financial Officer Chairman of Terryn group 7. Patrick Van Craen Managing Director CLE Director Tunisia and Morocco Director and General Manager CLi 8. Christophe Van Ophem General Manager CFE Brabant 9. Jacques Lefèvre Managing Director BPI General Manager CFE Immo 10. Renaud Bentégeat Managing Director of the CFE group Chairman of the management committee of DEME 11. Bernard Cols General Manager of the multitechnics division Director CFE Polska 12. Diane Zygas General Manager of the PPP-Consessions division 13. Yves Weyts General Manager of the Rail & Road division Managing Director Aannemingen Van Wellen Director synergies and communication 14. patrick Verswijvel General Manager MBG Manager Civil Engineering Belgium and Luxembourg
  15. 15. 16 PPP & Concessions participations Hôtel de Police Charleroi Real estate & Management services * polska * 66% 20% 23 january, 2013 only the main companies and branches are shown * branches Operational chart Rail & RoadMultitechnics parking turnhout 45% 45% 18% 25% 50% 25% 19% 100% * 65% * polska * luxembourg
  16. 16. 17Annual report 2012 International Finance Center CFE Dredging & environment asia australia belgium india mexico middle east nigeria the netherlands philippines spain uk dredging & land reclamation environmental services renewable energy sources terminal and marine services marine aggregates hydraulic engineering and marine works deep sea mining belgium the netherlands uk 50% 100c/72m/0y/32k 0c/100m/100y/0k 69c/0m/100y/0k logo OCEANFLORE CMYK Construction MiddleEast Tchad Tunisie * * * 49% * 55% 50%
  17. 17. 18 Consolidated statement of comprenhensive income in millions of EUR IFRS 2008 2009 2010 2011 2012 Revenue 1,728.4 1,602.6 1,774.4 1,793.8 1,898.3 Operating result (EBIT) 112.4 88.6 99.1 84.9 81.4 Profit before tax 95.4 76.8 85.2 69.2 52.2 Net profit of the group 69.9 61.7 63.3 59.1 49.1 Gross self-financing (1) 185.4 174.0 195.0 171.5 184.6 EBITDA (2) 196.2 184.2 197.3 181.6 199.1 Equity – part of the group (before distribution) 357.7 413.3 466.1 501.7 532.4 Annual growth IFRS 2008 2009 2010 2011 2012 Revenue 17.8% -7.3% 10.7% 1.1% 5.8% EBIT 12.9% -19.8% 8.4% -14.2% -4.1% Result of the year 12.0% -11.7% 2.5% -6.7% -16.9% (1) Gross self-financing margin: see consolidated cash flow statement on page 75 of the consolidated financial report. (2) EBITDA: EBIT + depreciation and impairements + other non- cash items (under IFRS) Consolidated statement of financial position in millions of EUR IFRS 2008 2009 2010 2011 2012 Equity 368.2 423.8 475.5 508.8 538.6 Working Capital 133.5 152.3 248.0 350.8 400.0 Investments in tangible and intangible assets 156.8 190.2 223.3 217.6 205.9 Depreciation 73.4 82.1 98.3 100.6 119.7 Key figures
  18. 18. 19Annual report 2012 Important comment : In early 2012. CFE set up its new rail & road division. This division includes the activities of ENGEMA (installation of overhead contact lines and rail signalling) and Louis Stevens & Co (rail signalling)- pre- viously included in the multitech- nics division- along with the road business of Aannemingen Van Wel- len. and the activities of specialist track-layer Remacom. which was acquired at the start of the year. The environmental activities of CFE (CFE EcoTech) have been transferred to the multitechnics division. Data by division 3500 2008 2009 2010 2011 previous segments 2011 new segments 2012 3000 1096 1202 1202 1659 1061 968 109 128 9 17 845 826 112 162 76 66 9 8 113 166 8 14 1110 1010 983 964 2500 2000 1500 1000 500 0 Key figures Evolution of the order book Real estate development Construction Multitechn. Rail&Road Dredging PPP-Conc. 2000 1800 1600 1400 1200 1000 800 600 400 1900 1700 1500 1300 1100 900 700 500 300 100 200 2008 2009 2010 2011 previous segments 2011 new segments 2012 754.4 7.5 11.7 3.6 3.4 2.9 2.9 882.9 882.9 957.5701.3 900.3 140.7 148.6 27.1 19.8 742.5 707.8 135.2 175.6 91.8 99.3 37.4 26.0 149.8 156.3 26.0 35.0 800.0 717.8 655.5 645.2 0 Evolution of the revenue 70 80 90 100 120 110 2008 2009 2010 2011 previous segments 2011 new segments 2012 60 86.5 1 -1.9 -3.7 -2.2 -2.2 -2.5 67.6 67.6 3.7 69.172.8 86.5 6.36.0 7.4 7.2 11.5 10.2 7.4 4.6 9.0 9.4 4.7 10.1 10.0 5.1 3.2 9.4 1.8 5.7 10.4 50 40 30 20 10 0 Evolution of the operating result Real estate development Construction Multitechn. Rail&Road DredgingPPP-Conc. Real estate development Construction Multitechn. Rail&Road DredgingPPP-Conc.
  19. 19. 20 Ratios IFRS 2008 2009 2010 2011 2012 EBIT/ revenue 6.6% 5.7% 5.6% 4.7% 4.3% EBIT/ cashflow 61.3% 54.4% 50.7% 49.5% 44.1% EBITDA/ revenue 11.4% 11.5% 11.1% 10.1% 10.5% Net profit of the group / equity – part of the group 19.5% 14.9% 13.6% 11.8% 9.2% Net profit of the group / revenue 4.0% 3.9% 3.6% 3.3% 2.6% Data in EUR per share 2008 2009 2010 2011 2012 Number of shares at 31/12 13,092,260 13,092,260 13,092,260 13,092,260 13,092,260 Operating result 8.59 6.77 7.57 6.49 6.22 Gross self-financing margin 14.16 13.3 14.89 13.10 14.10 Net profit of the group 5.34 4.17 4.83 4.51 3.75 Gross dividend 1.2 1.2 1.25 1.15 1.15 Net dividend 0.9 0.9 0.9375 0.8625 0.8625 Equity – part of the group 27.3 31.6 35.6 38.3 40.7 The stock exchange 2008 2009 2010 2011 2012 Lowest price EUR 22.90 16.00 32.10 35.03 36.25 Highest price EUR 72.50 42.00 54.84 59.78 49.49 Price at the close of the FY EUR 29.25 35.50 53.71 37.99 43.84 Average volume per day shares 17,240 24,035 17,412 15,219 11,672 Market capitalisation at 31/12 Mio EUR 382.95 464.78 703.19 497.4 573.96 Key figures
  20. 20. 21Annual report 2012 Trend comparing the CFE price with the Bel 20 index 70 5,000 80 100 90 1/12/2011 1/01/2012 1/02/2012 1/03/2012 1/04/2012 1/05/2012 1/06/2012 1/07/2012 1/08/2012 1/09/2012 1/10/2012 1/11/2012 1/12/2012 60 4,500 50 4,000 40 3,500 30 3,000 20 2,500 10 2,000 0 1,500 For the year 2012 BEL20CFE 70 5,000 80 100 90 31/12/2007 31/12/2008 31/12/2009 31/12/2010 31/12/2011 311/12/2012 60 4,500 50 4,000 40 3,500 30 3,000 20 2,500 10 2,000 0 1,500 Over the last five year BEL20CFE Some information on the share and exercise of the rights Key figures As of December 31, 2011, CFE’s capital is made up of 13,092,260 shares. On October 8, 2007, the extraordinary shareholders meeting approved: - the proposal of the Board of Directors to dematerialise the company’s shares at January 1, 2008; - the proposal of the Board of Directors to divide by 20 the six hundred and fifty four thousand six hundred and thirteen (654,613) shares – without nominal value, fully paid up and representing the com- pany’s total capital of twenty one million three hundred and seventy four thousand nine hundred and seventy one euros and forty three centimes (€21,374,971.43) at January 1, 2008. Accordingly, since that date, the company’s capital is represent- ed by thirteen million and ninety two thou- sand two hundred and sixty (13,092,260) shares. The share dematerialisation and splitting process is still under way. The split of the registered shares has been carried out automatically and shareholders have been automatically recognised as the owners of the appropriate number of split shares in the shareholders’ register. The split of bearer shares recorded in the share register at January 1, 2008 has been carried out automatically and shareholders have been allocated the appropriate num- ber of split shares. For the exchange and split of bearer shares still physically held, shareholders must either hand these in to a financial institution of their choice for registration in a stock
  21. 21. 22 account or to the company’s registered offices for recording in the shareholders’ register. The number of split shares will be recorded in the stock account or in the shareholders’ register. Since January 1, 2008, the exercise of any rights attached to bearer shares has been suspended for as long as they are physi- cally held. Since that date, to participate in a shareholders meeting, the holders of such bearer shares must apply to have the shares exchanged for registered shares or have them dematerialised. Bearer shares issued by the company that have been neither registered nor recorded in the shareholders’ register will be con- verted legally into dematerialised shares on December 31, 2013. Euroclear Belgium has been appointed as the executor. Registered shares are held in electronic form and Euroclear Belgium (CIK SA) is in charge of managing them. There has been no issue of convertible bonds or warrants. Degroof bank has been appointed as the Main Paying Agent. Financial institutions with whom holders of financial instruments may exercise their financial rights are Banque Degroof, BNP Paribas Fortis and ING Belgique. Voting rights On October 16, 2007, CFE was informed by VINCI Construction, by virtue of the clauses of article 74, paragraph 7 of the Belgian law dated April 1, 2007 relating to takeover bids, about the following notification being made to the Bank, Financial and Insurance Commission: Disclosure to the CBFA, pursu- ant to Article 74, § 6, of the Law of April 1, 2007, by a person who, at September 1, 2007, individually holds more than 30% of the secu- rities with voting rights in a com- pany listed on Eurolist, Alternext by Euronext or the Free Market (Marché libre/Vrije Markt) F-92500 Rueil-Malmaison (France) Telephone : 33 1 47 16 35 00 Contact person : Mr. Christian Labeyrie 4. Chain of control VINCI, owning 86.64% of the voting rights of VINCI CONSTRUCTION, holds the exclusive control of this last one. The remaining balance 13.36% of voting rights is in the hands of SO- COFREG, 100% owned by VINCI. VINCI is a private limited company listed on the stock exchange of Paris. As a result of the fragmented shareholders- compositition of VINCI, no one exer- cises control on the company. 5. Number and percentage of securi- ties with voting rights held by the person named under point 2 Number of securities with voting rights held 306,644 securities Percentage 46.84% 6. Date and signature of the person named under point 2 October 11, 2007 - François Ravery 1. Name of the issuer of the securi- ties with voting rights that are held Compagnie d’Entreprises CFE 2. Full identity of the natural or legal person who, at September 1, 2007, individually holds more than 30% of the securities with voting rights is- sued by the company named under point 1 Legal person: VINCI CONSTRUCTION - société par actions simplifiée 5 cours Ferdinand-de-Lesseps F-92500 Rueil-Malmaison (France) Telephone : 33 1 47 16 39 00 Contact person: Mr. François Ravery 3. Full identity of the natureal and/or legal person(s) ultimately controlling the legal person named under point 2 Legal person : VINCI - société anonyme 1 cours Ferdinand-de-Lesseps
  22. 22. 23Annual report 2012 7. Date and signature of the person named under point 3 October 11, 2007 - Christian Labeyrie. On July 28, 2008, VINCI Construction informed CFE about the information transmitted to the Belgian Banking, Finance and Insurance Commission (CBFA) by VINCI Construction. Accord- ing to this information, VINCI Con- struction owns 46.84 % of the capital of CFE. This percentage has remained unchanged since the last declaration on October 11, 2007. Furthermore, VINCI Construction does not own any other shares in a similar construction company owning shares in CFE. On August 19, 2009, VINCI Construc- tion informed CFE that the participa- tion of VINCI Construction into CFE remained unchanged since the last declaration on September 1, 2008, wereby VINCI Construction owns 46.84 % of the capital of CFE. On August 19, 2010, CFE received a copy of the new change notification submitted by VINCI Construction to CBFA, the banking, finance and insur- ance commission of Belgium. Although VINCI Construction continues to hold 46.84% of CFE’s share capital, the share capital of VINCI Construction, previously held 86.64% by VINCI and 13.36% by SOCOFREG, a wholly owned subsidiary of VINCI, is held 100% directly by VINCI since March 22, 2010. On August 16, 2012, VINCI Construc- tion informed CFE, in accordance with Article 74 of the Belgian act of April 1, 2007, that there had been no change in the ownership of its capital since the previous notification on August 19, 2011, when it was 46.84%. Belgian regulations regarding transparency The shareholder structure that is reported below can be found in the notifications that CFE has received on the date on which the annual accounts were closed, and in conformity with the regulations regarding transparency (Title II of the law of the May 2, 2007 on the publication of important par- ticipations in issuers, whose shares are list- ed for trading on a regulated market, and in conformity with various other regulations). VINCI Construction S.A.S., with regis- tered headquarters in the Cours Ferdi- nand-de-Lesseps 5 at F-92500 Rueil Mal- maison (France), was on September 1, vinci Company listed on the Paris stock exchange (CAC 40) 100% directly vinci constr uction cfe 46.84% 2008 the owner of 6,132,880 shares with voting rights in the Compagnie d’Entrepris- es CFE SA, or 46.84 % of the voting rights of the company. VINCI SA, which exercises exclusive control over VINCI Construction, is the ultimate controlling shareholder of Compagnie d’Entreprises CFE SA.
  23. 23. 24 The group CFE worldwide
  24. 24. 25Annual report 2012
  25. 25. 26
  26. 26. 27Financial report 2012 Financial report management report of the board of directors consolidated financial statements
  27. 27. 28 Table of content MANAGEMENT REPORT OF THE BOARD OF DIRECTORS A. Report on the accounts of the financial year 30 1. Overview of the year 30 Consolidated revenue by division 30 Operating income by division 30 Net result part of the group consolidated by division 31 Consolidated order book by division 31 Analysis of the order book and results by division 32 2. Parent company financial statements 37 3. Capital remuneration 37 B. Corporate governance declaration 38 1. Corporate governance 38 2. Composition of the Board of Directors 38 2.1 Mandates and duties of Board members 39 2.2 Evaluation of the independence of Board directors 44 2.3 Legal situation of Board directors 44 2.4 2.4.1 2.4.2 2.5 2.5.1 2.5.2 Conflict of interest Rules of conduct Application of procedures Assessment of the Board of Directors, its committees and members Method of assessment Assessment of performance in 2012 44 44 45 45 45 45 3. Operation of the Board of Directors and its committees 46 3.1 The Board of Directors 46 3.2 The Remuneration and Nomination Committee 49 3.3 The Audit Committee 50 4. Shareholder base 51 4.1 Equity and shareholder base 51 4.2 Shares including special rights of control 51 4.3 Voting rights 51 4.4. Exercise of shareholder rights 52 5. Internal control 52 5A Internal control and risk management 52 5A.1 Introduction 52 5A.1.1 Definition – frame of reference 52 5A.1.2 Scope of application of internal control 52 5A.2 Organisation of internal control 53 5A.2.1 Principles of action and behaviour 53 5A.2.2 Internal control players 53 5A.3 Identification of risk and risk management system 54 5A.4 Main internal control procedures 54 5A.4.1 Compliance with laws and regulations 54 5A.4.2 Application of the general directive 54 5A.4.3 Procedures relating to commitments – risk committees 54 5A.4.4 Procedures relating to monitoring of operations 55 5A.4.5 Procedures relating to the production and processing of accounting information 55 5A.5 Actions carried out to strengthen internal control and risk management 56 5B Risk factors 56 5B.1 Risks common to the segments in which the CFE group is active 56
  28. 28. 29Financial report 2012 5B.1.1 Operational risks 56 5B.1.1.1 The act of construction 56 5B.1.1.2 Real estate 57 5B.1.1.3 PPP-Concessions business 57 5B.1.1.4 Dredging 57 5B.1.2 The economic climate 58 5B.1.3 Management and workforce 58 5B.2 Market risks (interest rates, exchange rates, insolvency) 58 5B.2.1 Interest rates 58 5B.2.2 Exchange rates 58 5B.2.3 Credit 58 5B.2.4 Liquidity 58 5B.3 Raw material risks 59 5B.4 Dependence on customers/suppliers 59 5B.5 Environmental risks 59 5B.6 Legal risks 59 5B.7 Risks specific to the CFE group 59 5B.7.1 Special Purpose Companies 59 5B.7.2 Stake in DEME 59 6. Evaluation of measures taken by the Company in response to the directive on insider trading and market manipulation 60 7. Transactions and other contractual relationships between the Company, including related companies, and the Board directors and company directors 60 8. Assistance agreement 60 9. Corporate controls 61 C. Remuneration report 62 1.1 Remuneration of the Board and committee members 64 1.1.1 Directors' fees 64 1.1.2 Remuneration of Audit Committee members 65 1.1.3 Remuneration of Remuneration and Nomination Committee members 65 1.1.4 Remuneration of the managing director 65 1.2 Remuneration of senior management 65 1.2.1 CFE management 65 1.2.2 Level of remuneration 66 D. Insurance policy 66 E. Special reports 66 F. Takeover bid 66 G. Acquisitions 66 H. Creation of branches 66 I. Post-balance sheet events 67 J. Research and Development 67 K. Outlook 67 L. Audit Committee 67 M. Notice of the Annual General Meeting of May 2, 2013 67
  29. 29. 30 MANAGEMENT REPORT OF THE BOARD OF DIRECTORS A. Report on the accounts of the financial year CFE’s Board of Directors met on 27 February 2013. The board finalised the financial statements for the year ended 31 December 2012, which will be submitted to shareholders for approval in the 2 May 2013 shareholders’ meeting. 1. Overview of the year Consolidated revenue by division As of December 31 % variation In millions € 2012 2011 Contracting • Construction • Rail & Road • Multitechnics 900.8 645.2 99.3 156.3 897.1 655.5 91.8 149.8 +0.4% -1.6% +8.2% +4.3% Real Estate & Management Services 35.0 26.0 n.s. Dredging & Environment 957.5 882.9 +8.4% PPP-Concessions 11.7 2.9 n.s. Holding and consolidation adjustments -6.7 -15.2 n.s. Total 1,898.3 1,793.8 +5.8% Operating income by division As of December 31 % variation In millions € 2012 2011 Contracting • Construction • Rail & Road • Multitechnics +5.0 -2.5 +5.7 +1.8 +12.5 +3.2 +4.6 +4.7 -60.0% - +23.9% -61.7% Real Estate & Management Services +10.4 +9.4 +10.6% Dredging & Environment +69.1 +67.6 +2.1% PPP-Concessions +3.7 -2.2 - Holding and consolidation adjustments -6.8 -2.3 - Total +81.4 +84.9 -4.1%
  30. 30. 31Financial report 2012 Net result part of the group consolidated by division As of December 31 % variation In millions € 2012 2011 Contracting • Construction • Rail & Road • Multitechnics +3.6 -1.3 +4.0 +0.9 +5.2 -0.6 +3.6 +2.2 -30.8% - +11.1% -59.1% Real Estate & Management Services +5.7 +6.3 -9.5% Dredging & Environment +43.3 +51.0 -15.1% PPP-Concessions +3.1 -1.9 - Holding and consolidation adjustments -6.6 -1.6 - Total +49.1 +59.1 -16.9% Consolidated order book by division As of December 31 % variation In millions € 2012 2011 Contracting • Construction • Rail & Road • Multitechnics 1,195.6 964.2 65.8 165.6 1,171.9 983.2 76.0 112.7 +2.0% -1.9% -13.4% +46.9% Real Estate & Management Services 14.1 8.4 n.s. Dredging & Environment 1,658.5 1,202.0 +38.0% PPP-Concessions - - - Holding and consolidation adjustments - - - Total 2,868.2 2,382.3 +20.4% Consolidated revenue was €1,898 million on 31 December 2012 representing a 5.8% increase relative to 31 December 2011 (4.9% on a comparable structure basis). Contracting revenue rose by 0.4% (-1.6% on a comparable structure basis) to €900.8 million, with €645.2 million from construction, €99.3 million from rail & road and €156.3 million from multitechnics. Revenue from real estate & management services increased, with ongoing firm performance in terms of both business activity and sales. Dredging & environment revenue rose by 8.4% to €957.5 million (CFE share). Order intake on 31 December 2012 totalled €2,385 million, including €925 million in contracting and €1,414 million in dredging & environment. The order book ended the year at €2,868.2 million, up 20.4% relative to 31 December 2011. This growth was driven mainly by dredging & environment, which posted a 38% increase. Operating income amounted to €81.4 million, down 4.1% relative to 31 December 2011. This decrease was mainly the result of the construction and multitechnics activities. Real estate & management services, PPP-concessions and rail & road posted good earnings, higher than in 2011.The dredging business had a difficult first half impacted by depreciation charges but improved as the year progressed. Net income part of the group amounted to €49.1 million versus €59.1 million on 31 December 2011.
  31. 31. 32 Analysis of the order book and results by division Construction division Revenue In millions € 2012 2011 % variation Civil Engineering 138.5 192.2 -27.9 % Buildings, Benelux 432.7 354.1 +22.2 % Buildings, International 74.0 109.2 -32.2 % Total 645.2 655.5 -1.6% Revenue fell slightly in 2012. However, evolutions are quite different within the division: • Contraction in the Civil Engineering business. Major contracts won four years ago are gradually coming to an end. • Growth in the Buildings business in Belgium. This growth was driven mainly by CFE Brabant, BPC and Aannemingen Van Wellen. • Reduced Buildings activity in Central Europe. Most of the decline happened in Poland, where 2012 revenue was only a quarter of the 2011 level. • Limited, temporary decrease in buildings activity in major export markets. This decline was due to delayed starts and longer-than-expected build-up periods in the group’s projects Order book In millions € As of December 31 2012 As of December 31 2011 % variation Civil Engineering 190.6 233.5 -18.4% Buildings, Benelux 527.8 607.9 -13.2% Buildings, International 245.8 141.8 +73.3% Total 964.2 983.2 -1.9% The main trends were as follows: • Difficulty replenishing the order book in civil engineering due to a contracting market • Reduction in the buildings, Benelux order book • Strong growth in the buildings, International order book Operating income The division’s operating income turned negative (€-2.5 million). There were losses totalling €13 million at BAGECI and CFE Poland as well as in Qatar. Problems with various projects and business levels that were too low to cover overheads prompted CFE to implement major restructuring measures in these entities at the end of the first halfyear. Results from other companies were generally satisfactory following positive developments in certain matters. Arbitration proceedings initiated at the request of a client in relation to a major Dutch project, came to an end. The parties adopted a new deadline to reach a balanced, definitive agreement in the first halfyear of 2013. Net income part of the group The division made a net loss of €-1.3 million versus €-0.6 million in 2011.
  32. 32. 33Financial report 2012 Rail & Road division In early 2012, CFE set up its new rail & road division. This division includes the activities of ENGEMA (installation of overhead contact lines and rail signalling) and Louis Stevens & Co (rail signalling)- previously included in the multitechnics division- along with the road business of Aannemingen Van Wellen, and the activities of specialist track-layer Remacom, which was acquired at the start of the year. Revenue The Rail & Road division’s revenue grew by 8.2% (2.4% at constant scope) to €99.3 million.There was organic growth at ENGEMA and Louis Stevens & Co, while revenue in the Road business was comparable to the 2011 figure. Order book The order book ended the year at €65.8 million, down 13.4% relative to 31 December 2011 (-18.8% at constant scope). The outlook remains positive, since some large contracts are currently out to tender. Operating income Operating income was €5.7 million versus €4.6 million in 2011 due to Remacom entering the scope of consolidation. In general, all of the division’s companies posted satisfactory earnings. Net income part of the group Net income was €4 million, slightly higher than the 2011 despite a higher tax charge. Multitechnics division Revenue The multitechnics division generated revenue of €156.3 million, up 4.3% relative to the previous year (-4% at constant scope). International revenue increased -supported by VMA, which won contracts from major carmakers in Turkey, Poland and Hungary- while revenue fell slightly in Belgium. Order book The order book totalled €165.6 at end 2012, up 46.9% relative to 31 December 2011.The order book grew strongly at almost all subsidiaries, particularly CFE EcoTech due to orders in Vietnam and Sri Lanka,VMA -following further international expansion- Nizet Entreprise and Druart. Operating income Although most subsidiaries posted satisfactory operating income, the divisional total fell to €1.8 million from €4.7 million in 2011. This temporary decline was due solely to a one-off loss at a subsidiary in western Flanders. The necessary restructuring measures have been taken. Net income part of the group Taking into account the financial result, tax and non-controlling interests, net income was €0.9 million, versus €2.2 million in 2011.
  33. 33. 34 Real Estate & Management Services division Despite a temporary dip in sales at the end of the first quarter, 2012 was an excellent year in terms of property sales and revenue amounted to €35 million (€26 million in 2011). The value of real estate projects developed as follows: Value of real estate projects In millions € As of December 31, 2012 As of December 31, 2011 Properties at the marketing stage 19 9 Properties at the construction stage 45 54 Properties at the development stage 102 68 Total 166 131 Although the value of properties at the marketing stage was boosted by the completion of a building at the end of the year, the total remains low (11%), reflecting the group’s successful marketing policy. The value of properties at the construction stage fell because of the aforementioned completion. Construction is fully underway on the Brusilia and Van Maerlant residential projects. Properties at the development stage increased substantially due to the acquisition, in partnership with another developer, of the very well located Solvay site in Brussels, along with the acquisition of a stake in the Bavière project in Liège. Operating income Operating income increased in 2012 to €10.4 million (€9.4 million in 2011). Net income part of the group Net income fell slightly because of heavier financial expenses caused by the higher level of properties at the construction and development stages. It totalled €5.7 million, versus €6.3 million in 2011. Dredging & Environment division (The amounts stated in this section relating to DEME are at 100%, whereas CFE owns 50% of the company). Revenue DEME generated revenue of €1,915 million, up 8.4% relative to the previous year (€1,766 million). Revenue by business area % 2012 2011 Capital dredging 51% 44% Maintenance dredging 14% 20% Fallpipe et landfalls 11% 12% Environment 10% 12% Marine works 14% 12% Total (in million €) 1,915 1,766
  34. 34. 35Financial report 2012 Revenue by geographical area % 2012 2011 Europe (EU) 45% 52% Europe (non-EU) 4% 8% Africa 12% 11% Americas 9% 10% Asia-Pacific 20% 11% Middle East 8% 5% India and Pakistan 2% 3% Total (in million €) 1,915 1,766 Order book DEME’s order book grew strongly (by 38%) to €3,317 million versus €2,404 million at 31 December 2011. The increase was the result of winning three large contracts in the first half of the year. In Australia, DEME won the contract to dredge the approach channel, the manoeuvring area and the berths for the Wheatstone LNG project. In Qatar, DEME’s MEDCO subsidiary -in which it owns a 44% stake- won the contract of the new port, reclaim 4.5km² of land and build two breakwaters using rock placement techniques. In the North Sea, DEME signed a contract with Northwind for the construction and installation of foundations for a wind-power project off the Belgian coast. Operating income Fleet utilisation fell in the first part of 2012, with some dredgers undergoing major maintenance and repair work, while depreciation was higher following the delivery of new dredgers. However, business in the second part of the year enabled DEME to achieve firm operating income, higher than the 2011 figure, due to a satisfactory fleet utilization rate. EBITDA rose by 17.4% to €350.1 million versus €298.3 million in 2011. Operating income was €140.4 million (€137.3 million in 2011). Net income part of the group Net income fell as a result of higher financial expenses and totalled €89.4 million (€104.2 million in 2011). Investment In 2012, DEME completed its 2008-2012 investment plan by launching seven large new vessels: • Backhoe dredger “Peter the Great” • Sea-going rock-cutter dredger “Ambiorix” • Sea-going dredger “Amazone” • DP2 jack-up vessel “Neptune” • High-tech jack-up vessel “Innovation” • Two rapid auxiliary vessels DEME’s net financial debt at end 2012 was €742 million after the aforementioned investment plan, versus €651 million at end 2011. In early 2013, DEME carried out a €200 million bond issue. The proceeds are intended to refinance some of DEME’s existing debt, while diversifying the company’s financing sources. The issue was fully subscribed. Developments Through one of its subsidiaries and in conjunction with other Otary shareholders, DEME won new concessions for three North Sea wind- power projects off the coast of Belgium (Rentel, Seastar and Mermaid) with combined capacity of 900MW.
  35. 35. 36 PPP-Concessions division Revenue Revenue totalled €11.7 million (€2.9 million in 2011), supported by 45% -owned subsidiary Rent-A-Port, whose Vietnam project saw good progress. CFE’s own business still consists partly of studies. Projects relating to the Liefkenshoekspoortunnel (Antwerp), Coentunnel (Amsterdam), schools in Belgium’s German-speaking community (Eupen) and the Charleroi police station are still in the construction phase. CFE was selected or pre-selected for projects relating to the new prison in Haren and the Liège tram line. Operating income Operating income turned positive as a result of Rent-A-Port, totalling €3.7 million in 2012 (€-2.2 million in 2011), with CFE’s study-related costs remaining well under control. Net income part of the group Net income part of the group was €3.1 million versus €-1.9 million in 2011 Holding company and consolidation adjustments Net income part of the group was negative (€-6.6 million) due to revenue levels that did not cover overheads, the cost of developing the new management system, and the fall in fair value of hedging instruments.. Notes to the consolidated financial statements, cash flow and CAPEX tables Net financial debt(*) was €400 million at end 2012 versus €420 million at 30 June 2012 and €351 million at 31 December 2011. This figure breaks down into long-term debt of €479 million, offset by net cash of €79 million. Cash flows relating to investing activities amounted to €197 million, compared with €179 million in 2011. Investments mainly arose from DEME’s capital expenditure program. The need for working capital remains stable. After payment of the dividend with respect to 2011 (€15.1 million), shareholders’ equity totalled €539 million. CFE has €100 million of confirmed long-term credit facilities for its general financing needs, of which €65 million were unused at 31 December 2012. DEME’s investments in dredgers and other marine equipment are subject to separate financing arrangements secured on those assets. In late May 2012, CFE issued €100 million of 6-year bonds maturing on 21 June 2018. The issue was a success, and was fully subscribed. (*) Net financial debt at 31 December 2012 does not include the fair value of derivative instruments, which represented a liability of €37.1 million at 31 December 2012. Year ended 31 December (in thousands €) 2012 2011 Cash flows relating to operating activities 150,008 102,592 Cash flows relating to investing activities -196,951 -179,124 Cash flows relating to financing activities 95,152 111,450 Net increase/(decrease) in cash position 48,189 34,918 Shareholders' equity (excluding non-controlling interests) at start of period 501,702 466,061 Shareholders' equity (excluding non-controlling interests) at end of period 532,419 501,702 Net income part of the group for the period 49,069 59,081 ROE 9.8% 12.7%
  36. 36. 37Financial report 2012 2. Parent company financial statements CFE SA’s revenues fell slightly. The decline was due to lower business levels in civil engineering. Major contracts won four years ago are gradually coming to an end. Operating profit, was affected by the difficulties encountered by the branch BAGECI, is decreasing and becomes negative. It amounted to €-0.7 million. Income from financial assets fell because of a reduction in dividends paid by subsidiaries, while the cost of debt increased. Net profit after tax decreased by almost 38% to €23.3 million. Profit and loss account CFE SA (Belgian accounting standards): (in thousands €) 2012 2011 Sales and other income 407,806 431,649 Revenue 349,506 361,506 Operating profit/(loss) -721 663 Financial result 24,294 30,762 Profit from ordinary activities 23,574 31.425 Exceptional income 44 696 Exceptional expenses -273 -175 Profit/(loss) before tax 23,345 31,946 Income tax -5 190 Profit for the year 23,341 32,136 3. Capital remuneration At the Shareholders Meeting of 2 May 2013, CFE SA’s Board of Directors will show its confidence in the future by proposing to maintain a gross dividend per share of €1.15, the same as the dividend paid in 2011, corresponding to a net dividend of €0.8625 per share and a total pay-out of €15,056,099. Retained earnings after the dividend payment will amount to €54,422,043.
  37. 37. 38 B. Corporate governance declaration 1. Corporate governance The Company has adopted the Belgian Company Code (2009) as its reference code. CFE’s corporate governance charter, established on the basis of the reference code, may be consulted on the Company’s website www.cfe.be. In its corporate governance charter, CFE applies the principles of the Belgian Company Code (2009). Furthermore, CFE construes corporate governance as going beyond compliance with the code in the belief that it is essential to base the conduct of its activities on behavioural and decision-making ethics and a strongly grounded culture of corporate governance. 2. Composition of the Board of Directors On December 31, 2012, CFE’s Board of Directors consisted of 10 members, whose terms of office began on the dates listed below and will expire immediately after the Annual General Meetings of the years listed below: Start of term Expiry of term C.G.O. SA, represented by Philippe Delaunois ** 06.05.2010 2014 Renaud Bentégeat * 18.09.2003 2013 Philippe Delusinne 07.05.2009 2013 Richard Francioli 13.09.2006 2013 Bernard Huvelin 23.06.2005 2014 Christian Labeyrie 06.03.2002 2013 Jean Rossi 06.05.2010 2014 Consuco SA, represented by Alfred Bouckaert 06.05.2010 2014 BVBA Ciska Servais, represented by Ciska Servais 03.05.2007 2015 Jan Steyaert 07.05.2009 2013 * Managing director responsible for day-to-day operation ** Mr Philippe Delaunois has been a member of CFE’s Board of Directors in a personal capacity since May 5, 1994 The term of office of Board directors is four years for those appointed or whose mandates were renewed after January 1, 2005. During the general meeting of 2 May 2013, the Board of Directors will propose the shareholders to renew the mandate of four directors for a limited period of three years (instead of four).This limited period of the new mandates is justified by the obligation the company will have in 2016 to appoint one third women in the board of directors, according to the law of 28 July 2011 aiming to guarantee the presence of women in the Board of Directors of quoted companies.
  38. 38. 39Financial report 2012 2.1 Mandates and duties of Board members Board directors The table below summarises the mandates and duties of the 10 Board members as of December 31, 2012. C.G.O. SA, represented by Philippe Delaunois CFE Avenue Herrmann-Debroux, 40-42 B-1160 Brussels Chairman of the Board of Directors Independent director Born in 1941, Philippe Delaunois graduated as a civil engineer-steel from the Mons Polytechnic University and as a commercial engineer from the Mons State University. He is also a graduate of Harvard Business School. He spent most of his career in the steel industry, and until 1999, was managing director and general manager of Cockerill-Sambre. An Officer of the Order of Léopold and Chevalier of the Légion d’Honneur, he was chosen Manager of the Year in 1989, was chairman of the Union Wallonne des Entreprises (Walloon Business Association) from 1990 to 1993, and has been honorary consul of Austria for Hainaut and Namur since 1990. Directorships: a- listed companies: Director of Mobistar SA Director of SABCA SA b- non-listed companies: Director of mutual pension insurance company Intégrale Director of CLi, CLE SA, DEME NV and ETEC SA (Entities of CFE Group) c- associations: Director of Europalia ASBL Director of the ASBL Ordre de Léopold Director of the Chapelle Musicale Reine Elisabeth Renaud Bentégeat CFE Avenue Herrmann-Debroux, 40-42 B-1160 Brussels Managing director Born in 1953, Renaud Bentégeat holds a bachelor’s degree in public law, a master’s (DEA) in public law, a master’s (DEA) in political analysis and a diploma from the Political Studies Institute of Bordeaux. He began his career in 1978 at Campenon Bernard. He was then successively named head of legal services, director of communication, administrative director and secretary general responsible for legal services, communication, administration and human resources for Compagnie Générale de Bâtiment et de Construction (CBC). From 1998 to 2000, he was regional director of building construction for Campenon Bernard SGE’s Greater Paris region, before being promoted to deputy general manager of VINCI Construction in Central Europe, and managing director of Buildings et Ponts Construction and Bâtipont Immobilier in Belgium. Since 2003, he has been the managing director of CFE. He is also a member of VINCI’s Management and Coordination Committee. Renaud Bentégeat is an Officer of the Order of Léopold and Chevalier of the Ordre National du Mérite (France). Directorships: a- listed companies: Managing director of CFE SA b- non-listed companies: Director and Chairman of the Management Committee of DEME NV Director of various companies within the CFE group Chairman and CEO of Compagnie Générale de Bâtiment et de Construction (CBC) Chairman and CEO of Ufimmo c- associations: President of the Chambre Française de Commerce et d’Industrie de Belgique (French Chamber of Commerce and Industry of Belgium), Vice-President of the Association des Entrepreneurs Belges de Grands Travaux (ADEB-VBA) (Association of Belgian Construction Contractors) Foreign Trade Adviser for France
  39. 39. 40 Philippe Delusinne RTL Belgium Avenue Jacques Georgin, 2 B-1030 Brussels Member of the Audit Committee Independent director Philippe Delusinne was born in 1957 and is the holder of a diploma in marketing and distribution from ISEC in Brussels and a Short MBA from the Sterling Institute of Harvard University. He started his career at Ted Bates as an account executive. He subsequently held the positions of account manager at Publicis, client services director at Impact FCB, deputy general manager at McCann Erikson and chief executive officer of Young & Rubicam in 1993. He has been chief executive officer of RTL Belgium since March 2002. Directorships: a- listed companies: Member of the Supervisory Board of Métropole Télévision (M6), Paris b- non-listed companies: Managing director of RTL Belgium SA Managing director of Radio H SA Managing director of RTL Belux SA Chairman and managing director of IP Plurimedia SA Representative of CLT-UFA, Managing director of Cobelfra SA Representative of CLT-UFA, Managing director of New Contact SA Managing director of INADI SA Managing director of New Contact SA Director of CLT-UFA SA Director of BEWEB SA Chairman of HOME SHOPPING SERVICE BELGIUM SA Director of FRONT SA c- associations: Member of the High Council for the Audiovisual Sector Vice-President of the Théâtre Royal de La Monnaie Chairman of les Amis des Musées Royaux des Beaux-Arts de Belgique (Friends of the Royal Museums of Fine Arts of Belgium) Chairman of the Association of Commercial Television in Europe (A.C.T.) Director of the Association for Self-Regulation of Journalistic Ethics (ASBL) Richard Francioli VINCI Construction 1, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex Member of the Remuneration and Nomination Committee Director Richard Francioli was born in Dole (France) in 1959. After graduating from the Ecole Supérieure de Commerce d’Angers, he started his career with the VINCI group in 1983 with a traineeship as a corporate volunteer (VSNE) on the Ain Shams hospital project in Cairo. He subsequently held the following positions within the group: regional manager for the North for Sogea Construction, provincial manager for Sogea Construction and chairman of VINCI Construction Filiales Internationales. He was appointed chairman of VINCI Construction in March 2006 and, as from January 1, 2010, is head of VINCI’s Contracting business. Directorships: a- listed companies: Member of the Executive Committee, member of the Management and Co-ordination Committee and Executive Vice-President of VINCI Director of Entrepose Contracting (France) b- non-listed companies: Member of the Supervisory Board of VINCI Deutschland GmbH (Germany) Director of VINCI Plc (England) Representative of VINCI Construction on the Board of Directors of Doris Engineering (France) Representative of VINCI Construction on the Board of Directors of Cofiroute (France) Director of VINCI Energies (France) Director of Soletanche Freyssinet SA (France)
  40. 40. 41Financial report 2012 Bernard Huvelin VINCI 1, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex Director Born in 1937, Bernard Huvelin is an HEC graduate. He joined SGE (which later became VINCI) in 1962. He became secretary general in 1974, deputy general manager from 1982 to 1988, member of the Management Board from 1988 to 1990, deputy general manager from 1991 to 1997, chief executive officer from 1997 to 1999, and director and chief executive officer from 1999 to 2005. Bernard Huvelin is an Officer of the Légion d’Honneur and Chevalier of the Ordre National du Mérite. Directorships: b- non-listed companies: Director of Soficot Director of the Stade de France consortium Chairman of VFI c- associations: Vice-President of the European Construction Industry Federation Adviser to the European Economic and Social Committee Christian Labeyrie VINCI 1, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex Member of the Audit Committee Director Born in 1956, Christian Labeyrie is executive vice-president and chief financial officer of the VINCI group,and a member of its Executive Committee.Before joiningVINCI in 1990,he held various positions in the Rhône-Poulenc and Schlumberger groups. He started his career in the banking industry. Christian Labeyrie is a graduate of HEC, the Escuela Superior de Administración de Empresas (Barcelona) and McGill University (Canada), and holds a DECS diploma (advanced accounting degree). He is a Chevalier of the Légion d’Honneur and a Chevalier of the Ordre National du Mérite. Directorships: a- listed companies: Member of the Executive Committee of the VINCI group b- non-listed companies: Director of Eurovia Director of VINCI Park Director of VINCI Deutschland Director of ASF Director of Escota Director of Arcour Director of the Stade de France consortium Director of VFI Director of the company LCL Actions Euro, part of Crédit Agricole Asset Management Board Member of the Banque de France – Hauts-de-Seine branch
  41. 41. 42 Jean Rossi VINCI Construction 5, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex Director Born on 6 November, 1949, Jean Rossi has an engineering degree from the Ecole Spéciale des Travaux Publics de Paris (ESTP). He started his career as a works engineer at Pradeau et Morin.He moved to become operations director and then managing director of SNEG. After that, he held several positions at SOGEA, a VINCI group subsidiary, including director of building and civil engineering, regional director, director in charge of Northern France, director in charge of France excluding the Paris region, and chief operating officer, before becoming the company’s chairman in 2001. In 2007, he is chairman of VINCI Construction France and become chief operating officer of VINCI Construction in June 2007. In 2008, he became a member of VINCI’s Executive Committee and was appointed chairman of VINCI Construction in 2010. Directorships a- listed companies: Member of the Executive Committee of VINCI Director of Entrepose Contracting SA b- non-listed companies: Chairman of VINCI Construction Chairman of Société Générale de Travaux Director of Soletanche Freyssinet SA Director of VINCI Energies SA Vice-President of FNTP (Fédération Nationale Travaux Publics) c- associations: Honorary Chairman of EGF-BTP SA Consuco, represented by Alfred Bouckaert Avenue de Foestraets, 33A B-1180 Brussels Member of the Remuneration and Nomination Committee Independent director Born in 1946,Alfred Bouckaert has a degree in economics from KUL (the Catholic University of Louvain). He started his career in 1968 as a stockbroker at JM Finn & Co in London. In 1972, he joined Chase Manhattan Bank where he held various commercial and credit posts before becoming commercial banking manager for Belgium.He was appointed general manager for Chase in Copenhagen (Denmark) in 1984. Two years later, be became general manager and country manager for Chase in Belgium. In 1989, Chase Manhattan Bank sold its Belgian business to Crédit Lyonnais and Alfred Bouckaert was made responsible for merging the two banks’ operating activities in Belgium. In 1994, Crédit Lyonnais asked Alfred Bouckaert to head the bank’s European operations. In 1999, he took over the management of AXA Royale Belge and was also appointed country manager for the Benelux countries. He became general manager for Northern Europe (Belgium, Netherlands, Luxembourg, Germany and Switzerland) in 2005 and was appointed to AXA’s Management Board in October 2006 with responsibility for Northern, Central and Eastern Europe business. In April 2007, he was appointed chairman of the Board of Directors of AXA Belgium, retaining this position until 27 April 2010. In 2011, he was appointed Chairman of the Board of Directors of Dexia Bank Belgium. Directorships: a- listed companies: Director of Leasinvest Real Estate b- non-listed companies: President of Belfius Bank & Insurance Belgium Director of Vandemoortele SA Director of Bank van Breda Director of Finaxis Director of Ventosia (sicav of the notaries) Director of Vesalius Sicar (Luxemburg) Director of Vesalius Biocapital II Arkiv c- associations: Director of French Chamber of Commerce and Industry of Belgium Director of the Institut de Duve (ICP)
  42. 42. 43Financial report 2012 BVBA Ciska Servais, represented by Ciska Servais Boerenlegerstraat, 204 B-2650 Edegem Chair of the Nomination and Remuneration Committee Independent director Ciska Servais is a partner in legal firm Astrea. She is active in the field of administrative law, focusing in particular on environmental and town planning law, real estate law and construction law. She has extensive experience as a consultant in judicial procedures and negotiations; she teaches university courses and is a regular speaker at seminars. She graduated with a bachelor’s degree in law from the University of Antwerp (1989), and a complementary master’s (LL.M) in international legal cooperation at the Free University Brussels (V.U.B.) in 1990. She also graduated with a special diploma in ecology from the University of Antwerp (1991). She started her traineeship in 1990 at the legal firm Van Passel & Greeve. She became a partner in Van Passel & Vennoten in 1994 and, subsequently, in Lawfort in 2004. In 2006, she co-founded the legal firm Astrea. Ciska Servais publishes mainly on the subject of environmental law, including on the wastewater treatment decree, environmental liability and regulations regarding the movement of soil. She is a member of the Antwerp Bar. Directorships: b Non-listed companies: Astrea bv cvba Jan Steyaert Mobistar Boulevard Reyers, 70 B-1030 Brussels Chair of the Audit Committee Independent director Born in 1945, Jan Steyaert has been active for the greater part of his career in the telecom sector. He started his career as a company auditor. In 1970, he joined Telindus (a company listed on the stock market) where he successively held the positions of chief financial officer, chief executive officer and chairman of the Management Board of the Telindus Group and its affiliated companies until 2006. He has been a member of the Board of Directors of Mobistar since its creation in 1995 and has been its chairman since 2003. He is an Officer of the Order of Léopold II and has been appointed a Chevalier in the Order of the Crown. Directorships: a- listed companies: Chairman of Mobistar SA b- non-listed companies: Director of Credoc SA Director of Portolani SA Director of Automation SA Chairman of Advisory Board of Front SA Director of e-Novates NV Director of Blue Corner NV Director of 4iS NV c- associations: Director of Anima Eterna ASBL Director of VVW ASBL Chairman of the Dhondt-Dhaenens Foundation and Museum in Deurle
  43. 43. 44 Proposed reappointment of directors in the ordinary shareholders’ general meeting Renaud Bentégeat’s term of office as a director will expire at the end of the ordinary general meeting of shareholders of May 2, 2013. A proposal will be made to the general meeting of shareholders of May 2, 2013 to reappoint Renaud Bentégeat as director for a four-year term expiring at the end of the ordinary general meeting of shareholders held in 2017. Renaud Bentégeat is not an independent director according to the independence criteria defined in Article 526c of Belgium’s Company Code and in the country’s Corporate Governance Code. Richard Francioli’s term of office as a director will expire at the end of the ordinary general meeting of shareholders of May 2, 2013. A proposal will be made to the general meeting of shareholders of May 2, 2013 to reappoint Richard Francioli as director for a three-year term expiring at the end of the ordinary general meeting of shareholders held in 2016. Richard Francioli is not an independent director according to the independence criteria defined in Article 526c of Belgium’s Company Code and in the country’s Corporate Governance Code. Christian Labeyrie’s term of office as a director will expire at the end of the ordinary general meeting of shareholders of May 2, 2013. A proposal will be made to the general meeting of shareholders of May 2, 2013 to reappoint Christian Labeyrie as director for a three-year term expiring at the end of the ordinary general meeting of shareholders held in 2016. Christian Labeyrie is not an independent director according to the independence criteria defined in Article 526c of Belgium’s Company Code and in the country’s Corporate Governance Code. Philippe Delusinne’s term of office as a director will expire at the end of the ordinary general meeting of shareholders of May 2, 2013. A proposal will be made to the general meeting of shareholders of May 2, 2013 to reappoint Philippe Delusinne as director for a three-year term expiring at the end of the ordinary general meeting of shareholders held in 2016. Philippe Delusinne is an independent director according to the independence criteria defined in Article 526c of Belgium’s Company Code and in the country’s Corporate Governance Code. Jan Steyaert’s term of office as a director will expire at the end of the ordinary general meeting of shareholders of May 2, 2013. A proposal will be made to the general meeting of shareholders of May 2, 2013 to reappoint Jan Steyaert as director for a three-year term expiring at the end of the ordinary general meeting of shareholders held in 2016. Jan Steyaert is an independent director according to the independence criteria defined in Article 526c of Belgium’s Company Code and in the country’s Corporate Governance Code. 2.2 Evaluation of the independence of Board directors Of the 10 members of the Board of Directors on December 31, 2012, six may not be considered as independent under the terms of Article 526 ter of the Belgian Company Code and the Corporate Governance Code: • Renaud Bentégeat, who is the managing director of the Company; • Christian Labeyrie, Richard Francioli, Bernard Huvelin and Jean Rossi, who represent the controlling shareholder, VINCI Construction; • C.G.O. SA, represented by Philippe Delaunois, who has held more than two consecutive mandates. According to rulings made at the Annual General Meetings of May 7, 2009, May 6, 2010 and May 5, 2011, the independent directors are Philippe Delusinne, BVBA Ciska Servais, represented by Ciska Servais, Jan Steyaert and Consuco SA, represented by Alfred Bouckaert. It should be noted that all CFE’s independent directors were able to carry out their mission with complete independence in 2012. 2.3 Legal situation of Board directors None of the Board directors of CFE (i) has been found guilty of fraud or any other infraction or public sanction by the regulatory authorities, (ii) has been associated with a bankruptcy, receivership or liquidation or (iii) has been prevented by a Court from acting as a member of an administration, management or supervisory board of a public company or from participating in the management or business decisions of a public company. 2.4 Conflict of interest 2.4.1 Rules of conduct All directors are required to show independence of judgment, whether they are executive directors or not, and in the case of non-executive directors, whether they are independent or not. Every director must organise his or her personal and professional affairs in such a way as to avoid any direct or indirect conflict of interest with the company.
  44. 44. 45Financial report 2012 Directors must inform the Board of Directors when a conflict of interest arises, and must refrain from taking part in discussions and abstain from voting on the point concerned, in accordance with the provisions of the Companies Code on the subject. Any abstention due to a conflict of interest must be published in accordance with the provisions of the Companies Code. The Board of Directors is particularly mindful of potential conflicts of interest with a shareholder or group company, and takes particular care to apply the special procedures provided for in Articles 523 and 524 of the Companies Code. Transactions or other contractual relationships between the company, including its associated companies, and the directors must be concluded on normal market terms. Non-executive directors are not authorised to conclude agreements with the company, whether directly or indirectly, relating to the supply of paid services, without the express consent of the Board of Directors. They must consult the Chairman, who decides whether or not to submit the request for a derogation to the Board of Directors. 2.4.2. Application of procedures As far as CFE is aware, no director has found himself in a situation of conflict of interest this year, and the applicable rules of conduct have been observed. Certain directors hold offices in other companies whose businesses sometimes compete with those of CFE. Four directors were also appointed on a proposal of the VINCI Group, CFE’s controlling shareholder. 2.5. Assessment of the Board of Directors, its committees and members 2.5.1. Method of assessment With the assistance of the Appointments and Remuneration Committee, and potentially that of outside experts, the Board of Directors, under the direction of its Chairman, regularly assesses its composition, its size and the way it functions, as well as the composition, size and operation of its specialist committees. The purpose of these assessments is to contribute to the continuous improvement of the company’s governance while taking changes of circumstances into account. During these assessments, the Board of Directors checks, among other things, whether important matters are adequately prepared and discussed both by the Board itself and by its specialist committees. It checks whether every director makes an effective contribution having regard to his skills, his attendance at meetings and his constructive involvement in discussions and decision-making, and also whether the current composition of the Board of Directors and its specialist committees is desirable. Special attention is also paid to the assessment of the Chairman of the Board of Directors. The Board of Directors learns the lessons of this assessment of its performance by acknowledging its strong points and correcting its weaknesses. If necessary, this may involve a proposal to appoint new members, a proposal not to re-elect existing members or the adoption of any measure considered appropriate to ensure that the Board of Directors functions effectively. The same applies to the specialist committees. Once a year, the non-executive directors carry out an assessment of their interaction with executive management. For this purpose, they meet once a year without the CEO or any other executive directors attending. 2.5.2. Assessment of performance in 2012 In November 2012 and in their December 4, 2012 meeting, members of the Board of Directors discussed the operating methods of the Board and its committees, with the aim of making them more effective. In the December 4, 2012 Board meeting, a decision was taken to carry out a more formal and comprehensive appraisal. This will take place in 2013.
  45. 45. 46 3. Operation of the Board of Directors and its committees 3.1 The Board of Directors Role and jurisdiction of the Board of Directors Role of the Board of Directors The mission of the Board of Directors is carried out in the interest of the Company. The Board of Directors determines the orientations and values, the strategy and the key policies of the Company; it examines and approves related significant operations; it ensures that they are well executed and defines any measures needed to carry out its policies. It decides on the level of risk it agrees to take. The Board of Directors focuses on the long-term success of the Company by providing entrepreneurial leadership and by conducting risk evaluation and management. The Board of Directors ensures that the financial and human resources needed by the Company to achieve its objectives are available, and it puts in place the structures and means required to achieve these objectives. The Board of Directors pays special attention to social responsibility, a good gender balance and diversity in general within the Company. The Board of Directors approves the budget and examines and closes the accounts. The Board of Directors: • verifies that management has put in place a global internal control and risk management system and that this system is correctly implemented; • takes all measures needed to ensure the integrity of the financial statements; • supervises the activities of the Statutory Auditor; • reviews the performance of the managing director and senior management; • ensures that the specialised committees of the Board of Directors function well and efficiently. Jurisdiction of the Board of Directors 1. General powers of the Board of Directors With the exception of powers expressly reserved for the Annual General Meeting and within the limits of the Company’s objectives, the Board of Directors has the power to carry out all actions that are needed or useful to meet the Company’s objectives. The Board of Directors reports on the exercise of its responsibilities and management to the Annual General Meeting. It prepares the proposed resolutions to be considered by the Annual General Meeting. 2. Powers of the Board of Directors with regard to capital increases (authorised capital) Following the authorisation given by the Annual General Meeting, the Board of Directors is authorised to increase the Company’s capital – in one or more operations – within a maximum amount of €2,500,000, excluding issue premiums, by means of cash or non-cash contributions, by incorporation of reserves and with or without the issue of new shares. In the framework of authorised capital, the Board of Directors decides on the issue of shares, determines the terms of issue of the new shares and, in particular, the issue price. The authorised capital of CFE allows issue of 1,531,260 additional shares in the event of a capital increase with issue of shares on the basis of their par value. This authorisation expires on May 21, 2015, but can be renewed one or more times, in accordance with the relevant legal provisions.
  46. 46. 47Financial report 2012 3. Powers of the Board of Directors with regard to acquisition of treasury shares The Annual General Meeting of May 7, 2009 authorised CFE’s Board of Directors to acquire a maximum of 1,309,226 CFE treasury shares. The acquisition can be made at a price equal to the average of the closing price of the last 20 days of trading of CFE shares on Euronext Brussels immediately preceding the acquisition, plus a maximum of ten per cent (10%) or minus a maximum of fifteen per cent (15%). This authorisation expires on May 25, 2014, but can be renewed one or more times, in accordance with the relevant legal provisions. The agreement of the Annual General Meeting is not required for the acquisition of treasury shares by CFE with a view to distributing them to employees. By virtue of an express statutory provision, treasury shares held by CFE that are quoted on the primary market of a stock exchange or officially listed on a stock exchange located in a member state of the European Union may be transferred without the prior authorisation of the Annual General Meeting. 4. Powers of the Board of Directors with regard to the issue of bonds Subject to the application of the relevant legal provisions, the Board of Directors may decide on the creation and issue of bonds, which may be bonds convertible into shares. “On May 22, 2012, the Board of Directors decided to carry out a bond issue. The bonds were issued on June 21, 2012. The issue was very successful, with all of the bonds on offer being subscribed. The bonds were listed for trading on Euronext Brussels on June 21, 2012. The full terms and conditions of the bond issue are set out in the bond issue prospectus of May 29, 2012, which is available on the company’s website (www.cfe.be). The special general meeting of shareholders that took place on October 10, 2012 approved the change-of-control clause in the bond issue prospectus”.
  47. 47. 48 Operation of the Board of Directors The Board of Directors is organised so as to ensure that decisions are taken in the interest of the Company and that its work is executed efficiently. Meetings of the Board of Directors The Board of Directors meets regularly and with sufficient frequency to perform its obligations effectively. It also meets whenever required in the interest of the Company. The Board has increased the number and duration of its meetings, some of which include visits to ongoing projects. In 2012, the Board of Directors ruled on all major issues concerning the Company. It met six times. In particular, the Board of Directors performed the following tasks: • approved the financial statements for the year 2011 and the interim financial statements for 2012; • examined the 2012 budget and its updates; • examined the 2013 budget • examined the CFE group’s five-year plan, and defined strategic guidelines • examined the group’s financial position and changes in its debt levels; • decided to carry out a €100 million bond issue • discussed major acquisition projects and decided to acquire Remacom NV and Ariadne NV • decided, on the basis of proposals made by the Remuneration and Nomination Committee, on the terms of remuneration and bonuses for the managing director and senior management; • decided on the fees payable to Audit Committee and Remuneration and Nomination Committee members; • decided to put the change-of-control clause accepted as part of the May 29, 2012 bond issue to the special general meeting of shareholders of October 10, 2012 for approval. The table below indicates the individual attendance rate of directors at Board meetings in 2012. Board directors Attendance/Total number of meetings C.G.O. SA, represented by Philippe Delaunois 6/6 Renaud Bentégeat 6/6 Philippe Delusinne 6/6 Richard Francioli 5/6 Bernard Huvelin 6/6 Christian Labeyrie 5/6 Jean Rossi 5/6 Consuco SA, represented by Alfred Bouckaert 5/6 BVBA Ciska Servais, represented by Ciska Servais 6/6 Jan Steyaert 6/6 Mr Jacques Ninanne was appointed Secretary of the Board of Directors. Therefore, he participated in 2012 in Board meetings. The decision-making process within the Board of Directors Except in the case of force majeure resulting from wars, uprisings or other public disturbances, the Board of Directors can only validly deliberate if at least half of the members are present or represented. Board members who are unable to attend a meeting may be represented by another Board member. In accordance with legal and regulatory provisions, each member can have only one proxy vote. Letters, telegrams, telexes, faxes or e-mail messages conveying the proxy vote are attached to the minutes of the Board meeting at which they are used.
  48. 48. 49Financial report 2012 If so decided by the chairman of the Board, meetings may be attended by all or some of the members via audio or video conference.These members are deemed to be present for the purpose of calculating quorum and majority. The company secretary takes the necessary steps to organise any such audio or video conference. Resolutions are passed by majority vote of the members present or represented. In the event that members need to abstain from taking part in deliberations as a result of legal considerations, the said resolutions will be passed by majority vote of the other members present or represented. In the event of a tie, the chairman of the Board of Directors will cast the deciding vote. After each meeting, the deliberations are recorded in minutes signed by the chairman of the Board of Directors and by a majority of the Board members who took part in the deliberations. The minutes summarise the discussions, specify the decisions taken and, if applicable, any reservations raised by the board members. They are recorded in a special register kept at the Company’s head office. The main characteristics of the evaluation process of the Board of Directors are stipulated in the internal regulations published in the Company’s Corporate Governance Charter. 3.2 The Remuneration and Nomination Committee At December 31, 2012, this committee comprised: • BVBA Ciska Servais, represented by Ciska Servais, chair (*) • Richard Francioli • Consuco SA, represented by Alfred Bouckaert (*) (*) independant directors The committee met three times in 2012. Over the course of the financial year, the committee examined, notably: • the fixed and variable remuneration paid to the managing director; • the fixed and variable remuneration paid to senior management; • the annual remuneration report (under the Belgian Law of 6 April 2010); • the group directors insurance policy; • the remuneration of the directors; • the analysis of the succession plan for CFE’s chief financial officer; • CFE’s general organization chart. The table below indicates the individual attendance rate of the members of the Remuneration and Nomination Committee at meetings in 2012. Members Attendance/Total number of meetings BVBA Ciska Servais, represented by Ciska Servais, chair (*) 3/3 Richard Francioli 3/3 Consuco SA, represented by Alfred Bouckaert (*) 3/3 (*) independent directors Members of the Remuneration and Nomination Committee are paid €1,000 per session; the chair is paid €2,000 per session. The main characteristics of the evaluation process of the Remuneration and Nomination Committee are stipulated in the internal regulations published in the Company’s corporate governance charter.
  49. 49. 50 3.3 The Audit Committee At December 31, 2012, this committee comprised: • Jan Steyaert, chair (*) • Philippe Delusinne (*) • Christian Labeyrie (*) independent directors CFE’s Board of Directors pays particular attention to ensuring that Audit Committee members have financial, accounting and risk management skills. Mr Jan Steyaert chairs the Audit Committee. He meets the independence criteria defined in Article 526 ter of the Belgian Company Code. Mr Jan Steyaert has a degree in economics and finance. He has held various posts, including working for an auditing firm and for Telindus, a listed company, where he was initially CFO, then CEO and then chairman of the Board of Directors.The foregoing bears out Mr. Steyaert’s competence in terms of accounting and auditing. The Statutory Auditor participates in the work of the Audit Committee when the committee so requests. This committee met four times during the financial year. It performed the following tasks: • examined the financial statements for the year 2011 and the interim financial statements for 2012; • examined the draft 2013 budget before it was presented to the Board of Directors; • examined both the operational and financial aspects of the five-year plan; • assessed the tasks of the Statutory Auditor and, together with him, redefined the content of these tasks, taking into account known changes arising during the financial year; • examined the organisation of the finance department; • undertook a review of the principal risks; • reviewed the tax situation; • monitored the development and implementation of the ERP project adopted in 2010. The Audit Committee paid particular attention to the Company’s internal control and monitored the procedures initiated by CFE to improve this control. The table below indicates the individual attendance rate of the members of the Audit Committee at meetings in 2011. Members Attendance/Total number of meetings Jan Steyaert (*) 4/4 Philippe Delusinne (*) 4/4 Christian Labeyrie 3/4 (*) independent directors Members of the Audit Committee are paid €1,000 per session; the chair is paid €2,000 per session. The main characteristics of the evaluation process of the Audit Committee are stipulated in the internal regulations published in the Company’s Corporate Governance Charter.
  50. 50. 51Financial report 2012 4. Shareholder base 4.1 Equity and shareholder base At the close of the financial year, CFE’s share capital amounted to €21,374,971, represented by 13,092,260 shares, with no declared par value. The Company’s shares are registered or dematerialised securities. The shares are registered until fully paid up. Once fully paid up, they may be converted into dematerialised securities, at the choice and expense of the shareholder. The registry of registered shares is held in electronic form. Management of the registry has been entrusted to Euroclear Belgium (CIK SA). Registeredsharesmaybeconvertedintodematerialisedsharesandvice-versaonrequestbytheirholderandattheirexpense.Dematerialised shares are converted into registered shares by making the corresponding entry in the register of CFE shareholders. Registered shares are converted into dematerialised shares by entry into an account in the name of their owner or holder opened with an approved account-holder or a body responsible for cancellation and removal of the entry in the register of shareholders. Bearer shares in the Company already registered in a securities account as of January 1, 2008 automatically exist in dematerialised form as of this date. Bearer shares not registered in a securities account as of January 1, 2008 are converted into dematerialised securities at the time of their registration in a securities account or later, as the case may be. Bearer shares that are not registered in a securities account as of December 31, 2013, will be automatically converted into dematerialised securities on that date. CFE’s shareholder base as of December 31, 2012 is shown below: Number of shares without declaration of par value 13,092,260 • registered shares 6,185,480 • dematerialised shares 6,866,500 • bearer shares 40,280 Shareholders owning 3% or more of the voting rights attached to the shares they hold: VINCI Construction SAS 5, cours Ferdinand-de-Lesseps F-92851 Rueil-Malmaison Cedex (France) 46.84%, or 6,132,880 shares 4.2 Shares including special rights of control At the close of the financial year, no shareholder owned shares with special rights of control. 4.3 Voting rights Ownership of a CFE share entitles the owner to vote in CFE’s Annual General Meeting and automatically assumes approval of CFE’s Articles of Association and the decisions of CFE’s Annual General Meeting. Shareholders can only be held liable for the commitments of the Company up to the amount of the shares held. The Company recognises only one owner per share as concerns the exercise of rights granted to shareholders.The Company may suspend the exercise of the rights attached to shares held in co-ownership, usufruct or under pledge, until a single person is designated as beneficiary of these rights in respect of the Company. Since January 1, 2008, the exercise of any rights attached to physical bearer shares is suspended until they are registered in a securities account or in the register of shareholders.
  51. 51. 52 4.4 Exercise of shareholder rights “The company’s shareholders have rights conferred by the Belgian Company Code and by the articles of association. They have the right to attend any of the company’s general meetings of shareholders and to vote in them. Each share gives the right to one vote in a general meeting of shareholders. The conditions for being admitted to a general meeting of shareholders are set out in the company’s articles of association and are also stated in the notice of meeting. In 2012, there were two general meetings of shareholders. The ordinary general meeting of shareholders was held, in accordance with the articles of association, on 3 May 2012. In this meeting, shareholders approved the company’s financial statements for the period ended 31 December 2011”. The special general meeting of shareholders that took place on October 10, 2012 approved the change-of-control clause in the bond issue prospectus». 5. Internal control 5.A Internal control and risk management 5A.1 Introduction 5A.1.1 Definition – frame of reference “Internal control may be defined as a system developed by the management body and implemented under its responsibility by executive management. It contributes to good management of the company’s activities, the effectiveness of its operations and the efficient use of its resources, as a function of the goals, size and complexity of the company’s activities. More particularly, the internal control system aims to ensure: • the application (execution and optimisation) of the policies and goals set by the management body (e.g. performance, profitability, protection of resources, etc.); • the reliability of financial and non-financial information (e.g. preparation of the financial statements, the management report, etc. ; • compliance with laws, regulations and other legal texts (e.g. the Articles of Association, etc.)”. (Excerpt from the guidelines in the framework of the Law of April 6, 2010 and the Belgian Code of Corporate Governance (2009) published by the Corporate Governance Commission - version 10/01/2011, page 8). Like any other control system however, the internal control system, no matter how well designed and applied, cannot guarantee the absolute elimination of such risks. 5A.1.2 Scope of application of internal control The internal control system applies to CFE and the subsidiaries included in its scope of consolidation. In the specific case of DEME, Rent- A-Port, Groep Terryn,Van De Maele Multi-Techniek, Sogesmaint-CBRE, Remacom,Ariadne and ETEC, internal control is the responsibility of their Boards of Directors. However, CFE seeks to encourage the application of its own best practices through its representatives on these boards.
  52. 52. 53Financial report 2012 5A.2. Organisation of internal control 5A.2.1 Principles of action and behaviour CFE’s business activities require the teams exercising them to be close to their clients. To enable each profit centre manager to rapidly take the appropriate operating decisions, a decentralised organisation has been set up in the construction, real estate development and management services, multitechnics and PPP–Concessions divisions. CFE’s organisational structure necessitates delegating authority and responsibility to operational and functional players at every level of the organisation. Delegation is exercised in the framework of a general directive and in compliance with CFE’s principles of action and operation: • strict compliance with the rules common to the entire group in terms of entering into commitments, risk taking, acceptance of new business, and reporting of financial, accounting and management information; • transparency and loyalty of managers to their line management and functional departments; • compliance with all the laws and regulations applicable in countries where the group operates, regardless of the particular subject; • communicating the group’s rules and guidelines to all employees; • safety of people (employees, service providers, subcontractors, etc.); • the search for financial performance. 5A.2.2 Internal control players The Board of Directors of CFE is a collegial body responsible for controlling management of the Company, setting strategic guidelines for it and ensuring satisfactory operation of the Company. It rules on all major questions pertaining to the group. The Board of Directors has set up specialised committees for auditing the accounts and for remuneration and nominations. The Steering Committee, also known as the “Committee of 15” consisted on December 31st, 2012 of: • The managing director responsible for day-to-day management of the group; • The corporate deputy general manager and finance and administration manager of the group; • The deputy general manager of the Construction division; manager of CFE Netherlands; • The managing director of BPC, who is also responsible for the supervision of Amart; • The manager of CFE Brabant; • The manager of MBG; • The general manager of the Rail & Road division, managing director of Aannemingen Van Wellen, also manager of communication and group synergies; • The manager of CFE International; • The manager of CFE Qatar; • The manager of CLE and the Luxembourg real-estate subsidiaries; • The manager of CFE Real Estate and managing director of BPI; • The general manager of the Multitechnics division; • The manager of PPP-Concessions division; • The group human resources manager; • The group sustainable development manager. The Steering Committee is responsible for implementing group strategy, application of policies related to management of the group and the general directive mentioned above. The holding company has a limited structure appropriate to the group’s decentralised organisation. The functional departments of the holding company are tasked with establishing and ensuring correct application of group rules and procedures and decisions made by the managing director. On the financial level, cash management is centralised at the level of the holding company.As concerns the subsidiaries, the express approval of the holding company’s finance department is required before entering into relations with a banking organisation. The holding company also directly manages specific project financing. CFE does not have an audit department.
  53. 53. 54 5A.3. Identification of risk and risk management system As of 2006, CFE set up a system for identifying the main risks to which it is exposed. The identification of risks is regularly updated. The risks are described in point 5B. The identification process reveals that the main risks are at operational level. This is because the main characteristic of the sector lies in the commitment made on submission of a proposal to build a structure that is by its nature unique, for a price with predetermined terms and within an agreed time schedule. 5A.4. Main internal control procedures The procedures covered by this section are common to the whole group in accordance with the preceding definition of scope. 5A.4.1 Compliance with laws and regulations The applicable laws and regulations set behavioural standards and are an integral part of the control process. The legal department of the holding company monitors developments in the legal field in order to identify the different rules applicable to the group and passes this information on to the members of the Steering Committee and employees concerned. 5A.4.2 Application of the general directive The general directive issued by CFE’s managing director to Executive Committee members defines the operations requiring prior information or approval by CFE’s senior management or functional departments. The directive covers the following areas: • risks taken in contracts; • the acquisition or sale of real estate assets; • the acquisition or sale of other tangible assets; • the acquisition of companies; • human resources; • administrative and legal management; • banking relations and financial undertakings; • financial information; • internal and external communication; • ethical behaviour; • social and civic engagement responsibility. These operating rules must be respected by all CFE senior managers. This general directive is transmitted by each senior manager to subsidiary and branch office managers. Additional directives covering more restrictive rules may be formulated by CFE senior managers for their sphere of jurisdiction and addressed to employees with the requisite authority at the head of a profit centre. However, additional directives may not, under any circumstances, constitute an exception to CFE’s operating rules. 5A.4.3 Procedures relating to commitments – Risk Committees Given the specific nature of the business activities, strict upstream control procedures are applied. CFE’s Risk Committee reviews: • the terms and conditions of submission of works proposals which, by virtue of their size, implementation of new technology, the specific financial engineering features, inclusion of specific social obligations or their location, carry a specific risk, whether technical, legal, financial, social or other. The general directive sets thresholds for automatic examination prior to submission of such proposals; • all public-private partnership and concession operations.

×