...brings concepts to life
Annual Report 2014
Teamwork divides the task and multiplies the success
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Teamwork is key to our success The year 2014 was both dynamic and financially difficult for our firm. Many new business initiatives took place, while at the same time major operational problems in Germany and to a lesser extent the USA led to an unusual and disappointing result. Business generally developed very well, however: our overall revenue target was met, resulting in a year-on-year growth by 13%, and profitability was good in the important Dutch and British National Offices. Though our EBIT suffered, our firm has continued to strengthen its presence in the market segments and geographical areas we choose to develop. While it looks as though the extensive investments in this development didn’t pay off in the report year, we have further strengthened both our market presence and our internal organisation. We are fortunate to have made similar investments in earlier years; these have enabled us to address the difficulties in 2014 effectively. Likewise, the investments we made this year will not just help us achieve our long-term Business Plan goals, but also make us more resilient to any adversity in the near future. Clearly we will put a strong focus on restoring overall financial performance in 2015; at the turn of the year the first signs of that recovery have started to appear. Despite the financial challenges we encountered in 2014, our firm is fundamentally healthy and successful. Whether it is an International Practice team using firmwide know-how superbly to win a contract; a Group support team that responds within minutes to the needs of a National Office; or a project team that receives kudos from a client for providing an unexpectedly efficient solution: we continuously witness examples of our firm’s quality and appreciation.
Teamwork is a major factor that drives our success. The more than 600 staff members of our firm inspire each other every day to bring concepts to life. Their combining different skills, experience levels, customs and cultures leads to the best possible results. This also makes Deerns a great place to work; our staff members nurture and covet our core values as a team. With our size increasing again substantially in 2015, we will place extra emphasis on how we all live up to these values in our daily professional lives. One of the means with which we will do this is a Covenant, carefully developed by the International Management Team together with local management in 2014, which will be shared with and subscribed by all in the coming year. This Covenant describes in twelve simple but essential points how we act in our daily work, in dealing with our clients, and in dealing with our colleagues. This Annual Report provides you with some impressions of our teamwork and its results. It shows how our staff members collaborate - internally, in alliances with other firms to serve our clients, and with our clients. On behalf of all of my colleagues I invite you to read this Annual Report. We offer it to you with pride, but also with gratitude towards our clients and partners who permit us to thrive and to work together well benefiting our clients, ourselves and also, in a modest way, the globe’s future.
Jan Karel Mak, Chief Executive Officer
The Group Executive Board (from left to right) Erik Lousberg, Jan Karel Mak, Roel Rooskens, Olivier Severini
Deerns Annual Report 2014
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Contents Deerns at a glance 7 Who we are 8 Strategy 10 Markets and Clients 11 Key figures 12
Governance 15 Report of the Executive Board 16 Report of the Supervisory Board 32
Annual Figures Consolidated balance sheet as at 31 December 2014 Consolidated statement of income and expenses for the year 2014 Consolidated cash flow statement for the year 2014 Notes to the financial statements of the consolidated annual report Notes to the consolidated balance sheet as per 31 December 2014 Notes to the consolidated statement of income and expenses for the year 2014 Independent auditor’s report on the summary financial statements
35 36 38 39 40 42 47 50
Contact Information
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Deerns Annual Report 2014
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“There was a close cooperation and a greater understanding for each other’s interests”
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Staff of Schiphol Hotel Property Company, Mecanoo (architect) and Deerns The new Hilton Schiphol hotel is one of The Netherlands’ first major projects that was designed with BIM (Building Information Modelling). The project team broke new ground when they started working in this advanced manner in 2008. This resulted in a high team spirit between all disciplines that were involved in the design, execution and exploitation of the hotel. And as everyone worked within the same virtual environment, there was a closer cooperation and a greater understanding of each other’s needs and goals. The outcome was that all building parts were perfectly geared towards one another in order to create an optimal sustainable, comfortable and safe hotel.
work Hilton Hotels & Resorts hotel, Amsterdam Airport Schiphol Design of the complete technical installation The building of the new Hilton Schiphol hotel started in April 2013. The hotel is built in front of the current Hilton, just beside the road that leads to the airport terminal. This dynamic location in fact contributed to the design of the hotel. With its remarkable, smooth exterior façade the building will become an icon for this international airport. Hotel guests too will experience this grandeur when they enter the building. Here they will find conference facilities, meeting rooms, a bar, a ballroom for 600 people and an atrium surrounded by a 45 metres high ‘bed house’ with 433 rooms. The new Hilton Schiphol hotel will be completed by the 4th quarter 2015.
Deerns Annual Report 2014
Deerns at a glance
team
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Deerns at a glance
Who we are The technology with which we surround ourselves is becoming more complex and more intelligent. We see this in the buildings where we live and work and in the infrastructures through which we move and exchange information. This rapidly changing world needs a vision which reaches beyond today’s challenges. We need ideas that respond to growing global prosperity, to the need of more people for a comfortable and healthy living environment, and to the concerns of climate change and resource depletion. In short, we need ideas with both vision and ambition.
As an independent engineering firm which operates worldwide, Deerns has the capacity to make these ideas a reality. We establish lasting relationships with our clients so that we understand not just their questions, but their underlying needs and business processes. Moreover, to help our clients realise their vision, we combine our international network’s expertise and experience with local entrepreneurship and a solid cultural grounding in specific markets. Thanks to this synergy, Deerns has done very successful project work for many Airports, Healthcare organisations, Data Centres, Laboratory and Cleanroom users and Real Estate developers. And our innovative approach within the fields of building systems, energy supply and building physics has proven itself in every area of our service. From concept to design to supervision to aftercare: Deerns brings concepts to life. Our Vision • We exist for our clients to help them create a sustainable, safe and comfortable built environment. • We are here for our staff to provide an inspiring professional community that offers optimal opportunities for personal development. • We serve society in contributing to solving key global problems (e.g., climate change) by dedicating the talents of our top engineers to creating optimal solutions. Our Teamwork Approach At Deerns, we believe in the power of teamwork teamwork that includes collaboration with our partners and clients. We like to challenge them, and to be
C Competence
E Entrepreneurship
challenged by them, to bring ambitious concepts to life. Together we create synergy and reach shared goals by combining our different views, skills and areas of expertise. With our clients we develop and maintain long-term relationships by delivering quality engineering, by thoroughly understanding the needs associated with their business process, and by maintaining a profound service orientation. Entertaining long-term relationships with our clients allows us to provide them with the best possible consultancy and engineering services. Internally, we foster an innovative and professional atmosphere in which our staff flourish and share a sense of moral ownership. Therefore Deerns invests heavily in attracting, developing, engaging and retaining talented professionals with whom we build the teams that deliver superior quality to our clients. We seek to offer an environment of mutual respect and minimal hierarchy but also one of high professional demands and standards, as the best way to nurture satisfaction and professional happiness in our organisation. In our investment and innovation policies, we take a long-term perspective unhampered by shortterm return obligations. Our Core Values Deerns respects and nurtures the following five core values: CEDRIC. Competence: The interest of our clients is served primarily by providing quality in the work we do. We
DR I Design Reputation Integrity
C Cooperation
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therefore focus on maintaining and advancing our competence as engineers, consultants and project managers in our recruitment, performance review, training & development, control mechanisms and procedures, and support systems. Entrepreneurship: As professional services providers, our senior consultants, managers and project leaders are our primary sales persons. This large group can show and convince potential clients of the benefits of using Deerns. Moreover, all staff members will contribute to the value of our firm and our quality by displaying entrepreneurial behaviour - i.e., a willingness to investigate new, better ways of working, to take responsibility and to seek new combinations of knowledge resources. Design Reputation: We invest in long-term relationships with our clients and will therefore do what is needed to protect and enhance our reputation as a high-quality firm and as efficient, cooperative members of design teams. We put long-term client satisfaction and long-term value ahead of short-term gains and will do what it takes to keep our clients satisfied with our performance. Integrity: Towards clients, project partners and sub-contractors we will behave in an ethically responsible manner. We work only in the interest of our clients, observing societal needs and codes, and contributing to sustainable solutions. Cooperation: Part of the value we add to our clients is in the effective and efficient cooperation with project partners. Towards our colleagues, we behave in a professional manner as true team members and leaders, providing our colleagues as needed with our knowledge, experience and coaching. The free exchange of technical knowledge, staff and market information is a cornerstone of our success as One Firm. These values are unchanged from the past, and they are fully shared by all staff, whether in older or younger offices, whether a newer office resulted from autonomous growth or from an acquisition. Our values distinguish Deerns from competitors by how we work with clients and with each other, rather than simply by what we do.
Deerns Annual Report 2014
Organisational Principles Deerns operates across its international network as One Firm. Core values, style, technical and client service quality are shared globally. We foster a culture of team spirit and international collaboration to create synergies in knowledge exchange, experience sharing and rapid response capabilities. We seek to maintain a spirit of keen local entrepreneurship and to keep internal rules and regulations to a minimum, adhering to the ‘subsidiarity principle’: the notion that only those things will be done at a specific organisational level which cannot be dealt with at a level closer to where our client interactions take place. This maximises the liberty of local management and consulting staff to act as they see fit in the interest of their clients and markets. Only those decisions are made centrally that really require a central approach. Our Ambition While maintaining our approach of providing superior client service, we strive to contribute to the development of a more sustainable world through practical innovations. While we are proud to be serving clients in solving hundreds of technical problems each year swiftly and efficiently, we know to be at our best in bringing concepts to life by designing integrated solutions to complex housing, performance and energy challenges in complex and demanding client organisations. 2014 was the first year of execution of the Business Plan 2014-2017 developed by our International Management Team. Based upon our Vision and our Values, this plan outlines our ambition to substantially increase our global presence. The execution of this plan will allow us to serve our international clients even better, to provide an even more inspiring and knowledge-intensive professional environment for our staff, and to enhance our capability of reducing mankind’s ecological footprint. In making development investments, our financial management approach is careful and defensive, and focuses on long-term return on investment rather than on short-term EBIT. Our shareholders support the resulting cash-flow sacrifices to be made.
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Deerns at a glance
Strategy To that end, we pursue the following three strategic goals:
1 To build globally consistent and superior quality in the services we provide in our International Practices
3 To establish a solid presence in key markets beyond Europe
Deerns America currently focuses on the Data Centre and Airport practices. We are in the process of upscaling our presence in the United States, working to find the right firm that meets our quality demands and fits with our core values for a successful acquisition. In February 2014, Deerns and Sistenge Ltd., a premier Brazilian Data Centre contracting firm, together launched the joint venture “Deerns Data Centre Design S.A.”. This enterprise provides fully 2 To develop a comprehensive service portfolio integrated Data Centre design and consultancy in our European offices services to clients in Brazil and has already embarked Tekst nog niet gereed on its first projects. As a historically Dutch firm, our service portfolio in the Netherlands is well developed, with strong and well respected services in our prime segments Health Our office in the United Arab Emirates continued to Care, Airports, Data Centres, Clean Technology expand its engineering staff in response to the volume and Public and Commercial Real Estate. In all other of project work in the Middle East, primarily in the National Offices, we focus on broadening our service Airport segment. portfolio within all these prime market segments. Our other initiatives aimed at strengthening our European network and market position include: We have increased our global coverage in each International Practice by assigning or recruiting Practice Leaders, adding highly experienced staff and investing in sharing knowledge, best practices and experience throughout the firm. We have expanded our service portfolio to boost the added value we offer our clients. Additionally, in every National Office we have developed new capabilities related to our International Practices.
• Opening a National Office in Istanbul, Turkey, and the opening of a second office in Ankara in 2015; • Continued business development in the Russian Federation with our partner Marecon; • The successful start of our second office in the UK which has already become a well-established office.
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Markets and Clients Besides our designs for new buildings and urban infrastructures, Deerns also works in the redevelopment, renovation and upgrading of existing infrastructure. We operate in the commercial and public Real Estate markets, Cultural and Sports facilities, Health Care, Clean Technology, Data Centre and Airport markets. We create flexible, technically advanced concepts for our clients that are adaptable to changing needs. We design concepts that, time and again, achieve the optimal balance between user needs, a minimal ecological footprint, and investment and operating costs.
In all our offices, we are broadening our portfolio, using knowledge and cross-border experience, combined with a strong understanding of local regulations, building practices and pricing conditions. Commercial and Public Real Estate Today’s clients are focused on the performance of their building more than ever before. Building services can take up 35% of building costs. Thus the consulting engineer is of vital importance in today’s integrated project teams. Our experience and expertise has resulted in some of the world’s most advanced and sustainable buildings: buildings that will stand the test of time. We are proud to participate in the creation of a comfortable, safe and sustainable built environment and to be a valued partner in so many design processes. Health Care Over the past 85 years, Deerns has been able to establish itself as a very reliable, expert driven and innovative partner in the design of hospitals and Health Care facilities. Considering the fact that in the Netherlands Deerns has been involved in the design of approximately 45% of the 120 general hospitals, as well as all 8 University Hospitals, the firm is recognised as the market leader in this country. With the international growth of the Deerns Group, Health Care has become an international activity, and we now serve clients in various other countries as well. Clean Technology Deerns delivers solutions for facilities where contamination control is of paramount importance. Our experts have decades of expertise and experience in developing, designing and putting into operation contamination controlled research and manufacturing facilities. Our projects include every type of research and production space, both new and renovated, providing improved efficiencies, flexibility, and peoplecentered spaces that meet twenty-first century technical standards.
Deerns Annual Report 2014
Data Centres Deerns has extensive experience in Data Centres, specialising in Data Centre facilities of large financial institutions, large internet service providers and telecommunication companies. We offer a full package of services for the development of innovative, reliable and green Data Centres. For this, we have created many technological innovations and new management and control concepts. We have worked for over 50 different clients, on more than 350,000 m2 white space and more than 1,000 MW of IT power. Airports In the 40 years that Deerns has been active in the aviation sector, we have realised over a hundred sustainable, comfortable and safe airports around the world. We have thorough knowledge of all airport processes and systems. That is why we are able to convert technical requirements into an integral design in which terminal systems, airfield operation systems, sustainable energy supply, and MEP and transport systems are logically combined.
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Deerns at a glance
2014 in Key Figures A presence in 12 countries National offices Belgium Brazil
France Germany
Markets
Project locations Italy Spain
Airports
The Netherlands Turkey
United Kingdom USA
Russia Dubai
Clean Technology Data Centres Health Care Commercial and Public Real Estate
Revenue
70
Revenue by Market Segment in million euro
million euro
Airports Clean Technology
EBIT
Projects
395
500
thousand euro
5.2
Data Centres
20.0
Health Care
8.2
New Services
0.8
Commercial and Public Real Estate
â‚Ź 70,023,230.to be exact
9.2
26.6
Innovations Int. Innovation Competition Stimulate the development of new concepts to deliver right solutions for our clients.
27 innovations 5 nationalities
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Staff Members
560 fte 24
Professional Diversity
Deerns Live
Background in %
All staff members connected
electrical
15
76
%
23
support
%
other technical expertise
24
38 mechanical
Stimulating talents
Illness rate
2.87%
CIA Programme
Deerns Concept Studio
To develop leadership and problem solving capabilities, and support the implementation of our Business Plan.
To develop a mindset of creative thinking and operating within the firm.
37 participants 8 nationalities
10 editions 149 participants
Major Areas of Revenue in million euro
United Kingdom € 15.9
The Netherlands € 34.7
Carbon footprint
2,498
Net total CO2 emission
Deerns Annual Report 2014
Other National Offices € 7.4
Germany € 12.0
Deerns Multiplier (CO2 savings)
995
In our key projects alone, we saved 995 times the CO² emissions generated by our own business activities.
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team Pictured: staff of HC RT, Philips, HOMIJ – Bosman Combination and Deerns Not pictured: Deloitte/AKD, OVG, PLP/ Architecture and G&S Bouw When you have the ambition to build the most sustainable office building, you definitely need a strong team. A team in which people challenge each other to aim for the highest achievable. This is exactly what happened at The Edge. Project Manager Robert van Alphen of OVG was able to successfully create commitment with all parties involved and an atmosphere of mutual respect for each other’s roles within the project. This encouraged all team members to look beyond their own field of expertise to improve the building’s sustainability. The result is that The Edge has the highest BREEAM-certificaton ever awarded.
work The Edge, head office of Deloitte/AKD, Amsterdam Zuidas With its enormous glass façade, The Edge forms a landmark at the South Axis, a major business district in Amsterdam. But it’s not only the architecture that makes this building a paragon of innovation. First and foremost it’s the highly sustainable building systems: by applying smart sensors and measuring and control equipment to installations for light, climate and access control, all building performance can be accurately monitored. Hereby energy demands can be perfectly geared towards the actual needs of staff. And there are even more exploitation costs that can be reduced. For example, why clean a meeting room when you know it has not been used?
Governance
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“Challenge each other to aim for the highest�
Deerns Annual Report 2014
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Governance
Report of the Executive Board The technological developments in the buildings in which we live and work and in the infrastructures in which we move and exchange information, result in an increasing demand for the highly specialised design services which we delivered in 2014. In this report year, we further boosted our reputation as a high quality firm and safeguarded our position as a top player in the market, as suppliers of highly specialised technical expertise, as cooperative members of design teams and, increasingly, as overall leaders of complex technical design projects.
We have become the prime technology partner for many of our clients. We understand their needs and business processes. To help our clients achieve their vision, we combine our international network’s expertise and experience with local entrepreneurship and knowledge of specific markets. We expanded our International Practice teams, while increasing our presence in the National Offices. We now have a worldwide reputation as a prime provider of Data Centre design. We have taken important steps in several Cleanroom Technology market segments and our Airport Practice has continued its successful growth. In building design, we have yet again improved our market share, with new sustainable flagship projects (France, Germany, the Netherlands) entering our reference book. Our 40 years of specialist Health Care expertise in the Netherlands has resulted in invitations to discuss projects in many other countries. This year we invested in adapting and diversifying into new market segments to bring all National Offices in line with our target market segments. This enabled us to work more and more in international teams, providing the perfect balance between local knowledge and optimal specialist expertise. As we work in teams with internationally and nationally active building partners, including architects, developers and constructors, Deerns embraces and leads new developments in the design process, such as Building Information Modeling, from which our clients benefit. We made great investments to maintain our leading position in this advanced, integrated type of technical design. We have again attracted and inspired many great new colleagues – from Turkey to Brazil. Major market gains were achieved in the United Kingdom, where we dramatically increased our first office (London) and opened a second one (Manchester); in Turkey, where we successfully launched a new office in Istanbul;
and in Brazil, where we built our Data Centre design venture in São Paulo. Across the firm, we implemented integrative support tools such as our ERP system (Vision), a quick communication vehicle (Yammer) and a sophisticated knowledge exchange platform (Deerns Live). The emerging ‘Circles’ (of market/practice leaders, of Financial, HR, Communication and CSR support teams, of international ‘Commitment-in-Action Teams’ and – though still in their infancy – of technology/expert knowledge leaders) started delivering on the promise we made with them: fast, non-bureaucratic, inspirational and effective harmonising and energising vehicles. However, there have been challenges too this year. Despite strengthening our reputation and presence in our markets, we also faced difficulties. In Germany, we suffered heavy unexpected losses on a few key projects. We also faced setbacks in the US market. Although we reach our budgeted revenue, these results had a severe impact on our EBIT. National Offices In our largest National Office, the Netherlands, the market suffered from more than one negative factor. Following a deep commercial Real Estate crisis, there is still an enormous surplus of office Real Estate. As residential building was still at a minimum after the worldwide financial crisis – which led to a housing price collapse in the Netherlands – we saw a strong supply of engineering services leading to an equally strong competitive environment. Moreover, uncertainties about restructuring and financing in the Dutch Health Care market severely weakened demand in hospital design. In this shrinking Dutch market, we have yet again strengthened our position and reputation, and experienced solid growth in revenue and in profitability. This growth, partially built on projects outside the Netherlands, is in line with the ambitious
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goals laid down in our Business Plan 2014-2017. Some examples of successful design projects in 2014 are assignments for Amsterdam Airport Schiphol, Abu Dhabi International Airport, Turkcell (Istanbul), Amphia Hospital (Breda), Medisch Centrum Alkmaar, Tergooi Hospital (Hilversum), ASML (near Eindhoven), and the design of ‘The Edge’, a new landmark office building in Amsterdam developed by OVG. The latter project’s extremely sustainable design was awarded the highest attainable BREEAM Outstanding Certificate - with the highest ever score globally of 98.36%. The Dutch team continued to broaden its horizon to markets outside the Netherlands, acquiring Data Centre and Health Care projects in the Middle East. In the Netherlands, new markets were entered (e.g. the food production sector and “smart” industrial zones). An internal organisational transition from a regional to a fully market-oriented advisory group structure was carried out smoothly. After the financially difficult year 2013, 2014 was even more challenging in Germany. Financial performance continued to decline as a result of a small number of difficult project contracts: these exposed us to major cost outlays often resulting from difficulties experienced by other design partners (architects, project managers). At the same time, the integration of the three former organisations in Germany did not progress as planned and internal operational and efficiency issues became apparent. In June 2014, steps were taken at leadership level; the Group Executive Board’s German member stepped back to dedicate his energy entirely to his other role as German director. Among the wide range of measures started in July (and partially continuing into 2015) are the following: a new financial manager was recruited. A leadership development programme was carried out with the top-30 staff, with a strong focus on efficiency improvement. Internal communications were improved, and Germany-wide capacity planning and sales coordination were set up. The financial ‘bleeder’ projects were addressed at top level to gradually get them under control. The organisational structure was changed to reflect the integration of the formerly separate three entities and to allow for a more integrated project approach. Finally, towards the end of the year cost reduction measures were defined to take effect in the first half of 2015. All of these measures could not prevent a severe financial loss by Deerns Germany over 2014. Fortunately, Deerns’ reputation in Germany has continued to grow and we boast a 150-strong high-quality team in this important market that has shown strong dedication and perseverance under difficult circumstances.
Deerns Annual Report 2014
In the United Kingdom, we continued the extremely strong revenue growth already experienced in 2013. Revenue and EBIT grew beyond the 2014 budget, and made Deerns UK a magnificent example of growth based on client trust, design reputation and competence. Underlying this highly successful development was the hard work of a fast growing highly capable British team and its steadfast leadership. Many new talented staff members were recruited in 2014, bringing the total team strength in London and Manchester to some 70 full-time staff. The team in London is involved with large-scale Data Centre projects not just in the UK but across Europe. For the very young Manchester office (opened only in December 2013) a removal to new premises with more room was prepared towards the end of the year; in northern England Deerns acquired its first major contracts in the British Clean Tech market. To support the strongly growing organisation, a Human Resources Manager and a Senior Project Operations Director were recruited. To allow for a strong in-house management of the large, complex projects Deerns UK is carrying out, a number of highly experienced project managers were also recruited. While Deerns UK is by now well-known and strong in the Data Centre market, diversification into the clean technology and commercial market sectors has started and progressed very well throughout 2014.
“ We more and more work in international teams, providing the perfect balance between local knowledge and optimal specialist expertise.”
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Governance
In the United States, the Data Centre and Airport Practices remained the core of our Denver office in 2014. Although still one of our smaller offices, the team is highly specialised and highly qualified, and works on many fast track and technically complex projects for our growing list of clients. The staff expanded into the sustainable office building sector, and the first projects were completed in the Clean Technology sector. Architectural relationships in recent years have grown into successful and mutually beneficial partnerships for projects. As financial performance was lacklustre at the start of the year, a brief strategy study was conducted to define the best course of action to develop our activities within the framework of our Business Plan strategy. It was decided to close the unsuccessful office in Chicago, reduce indirect cost in our Denver office, and intensify efforts to achieve a stronger presence via an acquisition. Through the year, intensive contacts have been maintained sequentially with a few potential acquisition candidates. The financial performance of Deerns America improved towards the end of the year. It has been a challenging year for Deerns Italy as well, due to the local economic situation. The Real Estate market – traditionally the key market for our Milan office - is still in bad shape, with few new developments being undertaken. In response, Deerns Italy strongly invested in diversifying into other market segments, notably Data Centres, Clean Technology, Airports and Health Care. In these segments, many market contacts were developed, resulting in successes via the acquisition of our first Data Centre and Airports projects in 2014. To optimise these market approach efforts, the organisation was changed from a discipline-oriented one to a market-oriented one. Restructuring costs were high; apart from the stagnant Real Estate sector, outdated labour regulations in Italy are an unfortunate factor that limits our performance and development opportunities here. Major efforts were made to drive down the volume of accounts receivable (another characteristic aspect of our Italian business), and a valuation correction was made on work in progress. Combined, these factors led to a slightly negative result over 2014.
2014 was a very difficult year for the French economy, with the construction industry registering its poorest result over the last 5 years and shrinking in volume by 5%. In France, Deerns nonetheless had a solid year, albeit without growth. Next to our well-reputed work in the realm of building sustainability, we have now also acquired a reputation as high-quality Office Real Estate designers. Deerns France invested in its sales force to diversify its activities into new markets. Office Real Estate and Clean Technology Practice leaders were recruited; the search for a Data Centres Practice leader was ongoing at the end of the year. Only in its second year after the acquisition of the former Ibinser in Barcelona, Deerns in Spain succeeded in becoming profitable. The team in Barcelona and Madrid has grown in all market segments served. Relationships with big investment funds active in Spain, notably Blackstone Property, Patron Capital, Meridia Capital and Varde Partners, have been developed. Deerns Spain will support these clients with technical due diligence of their acquisitions and with the development of their Real Estate projects. Deerns Spain implemented the Group’s ERP system, Vision, and started to design projects with 3D software. In Belgium, the development of Deerns’ Antwerp office was hampered by difficulties in recruiting the required talents. However, in the course of the year, the recruitment efforts started to pay off. Simultaneously, the number of interesting projects carried out in Belgium, largely supported by the Dutch office, further increased. Prospects for a good future in this relatively small but potentially attractive market appear to be good. Deerns has been observing the Turkish market with great interest over the last few years and successfully started developing this market from our offices in the Netherlands, with initial projects in the Data Centre and Clean Technology segments. With the appointment of a Managing Director in July and the opening of an office in Istanbul, Deerns Turkey is now a National Office. The festive opening event took place on 19th November in the presence of representatives from all the market segments in which Deerns operates. The event was covered with great interest by both printed and digital media. Deerns Turkey completed its first Data Centre project for Istanbul Stock Exchange; a second project in this segment is a new Data Centre for one of the GSM operators in Turkey. In 2014, many market relationships were established and avenues towards other major projects opened.
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Not a National Office in the strict sense, but a promising joint-venture is our Brazilian entity ‘Deerns Data Centre Design S.A.’, in which Deerns Group and the well-reputed São Paulo Data Centre contracting firm Sistenge equally participate. After a relatively long preparation period, the joint venture was officially launched in February with a well-attended party in down-town São Paulo. This was followed by the establishment of many potential client relations, our first Data Centre design contracts for major private clients, and the recruitment of management and engineering staff. Though development of the Brazilian economy has slowed down, the backlog in technical infrastructure, high energy prices and shortage of competent engineering capacity bode well for our future in the Brazilian Data Centre market. Our International Practices For years we have had an international focus on the Airport, Data Centre and Clean Technology markets. We are now well known and respected in these markets for our highly skilled and experienced consultants, our specialist market knowledge and our strong international client base. Airports In 2014, the International Airport Practice became a truly global practice within the Group, with most of our national offices regularly serving clients in this segment, among which premier airports such as Schiphol (Amsterdam), Charles de Gaulle (Paris), Denver International Airport, Fraport (Frankfurt), Fiumicino (Rome), and Abu Dhabi Airport. In the latter project, Deerns staff from various National Offices together with a newly recruited international project team worked closely together: a fine ‘One Firm’ experience, supported by Deerns leadership at top level to ensure optimum exchange of best practices and an unrivalled service level. Deerns’ 50 years of experience in 100+ airports worldwide has resulted in a thorough understanding of all stakeholders in the airport environment. Deerns is one of the few engineering consultancies with expertise in virtually all facets of airport systems. We proved our leadership by sharing our expertise, vision, skills and USPs at conferences, events and leading airport platforms/networks. We also expanded our services in Baggage Handling and Airport Master planning. These strategic capabilities will enable us to better serve our airport and architect clients, especially where it comes to an integrated view on airport expansion and the improvement of airports’ passenger experience and handling security.
Deerns Annual Report 2014
Clean Technology In 2014, Deerns strengthened its foothold as an international designer and consultant in specific Clean Technology market applications: electronics, pharmaceuticals, biotechnology and high containment labs. Projects were carried out for both existing and new clients in Germany, the Netherlands, Belgium, the United Kingdom, Russia and Spain. We also successfully entered new clean technology market applications for high-end food, PV solar and nuclear applications in Spain, Belgium and the Netherlands. Our expertise encouraged leading international high tech companies and institutes (e.g. ASML, NXP, Takeda, IMEC) to continue to select Deerns for design, consultancy and business strategy services. In 2014, we recruited several international top consultants, creating a team of 55 dedicated staff working on Clean Technology projects. Data Centres We are known worldwide as a prime provider of Data Centre design and industry leader in Data Centre energy efficiency. Our ability to deliver innovative, costeffective and reliable Data Centres has helped us enter the Turkish market with new assignments for leading Telecom and financial institutes. We also won projects in virtually all our other National Offices, with especially spectacular new projects in Germany, Abu Dhabi and Brazil. We continue introducing new concepts and innovations to the markets, such as the eCube project (a different way of cooling the Data Centre) in 2014. We developed strategic partnerships worldwide to provide end-to-end services for financial, co-location and corporate Data Centres. Internal developments As a truly specialist engineering firm, we need to be close to our target market segments. In most of our National Offices steps were taken in 2014 to improve our market orientation; regional, discipline or services oriented teams have become market-oriented teams in many of our offices, which also facilitates the exchange of knowledge among National Offices and helps develop our international expertise. As National Offices grew, we have appointed dedicated local HR, Finance and Communication managers. For the smaller National Offices, support was provided again by the Group HR, Finance and Communication teams. Virtual teams regularly meet as “Support Circles” (with the relevant Group managers as their hubs) to share best practices, coordinate approaches and provide support. The IT Support function has been
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Governance
restructured into a Netherlands-based Shared Services Centre for all National Offices, with local IT support in the larger National Offices. Using this concept of the efficient, low-bureaucracy “Support Circles”, other virtual teams have started “Circles” to share knowledge and best practices, such as the International Real Estate Team (IRET) and the firm-wide Building Information Modeling (BIM) team. The firm’s International Management Team has further developed its leadership role. Together with the Group Executive Board, it develops and executes the Deerns Business Plan, develops new strategic insights and evaluates Group Executive Board initiatives. The participants in our ‘Commitment in Action’ (CIA) programme a group of talented professionals, have completed their official programme and are now engaged in driving the implementation of the Business Plan and communicating our strategy and core values throughout the organisation. A dedicated leadership programme, mentioned above, addressing the current issues in the German office, was launched in 2014. In teams, its 35 participants analysed different topics and provided feedback to the German Management Team to create more internal commitment as well as a broader, fresh view on the topics at hand.
Innovation development The building sector may not be the most dynamic part of the economy generally, but technical and process changes in building, contracting and environmental demands are developing fast. To stay on top of those developments, we closely monitor the trends that may affect our future success and invest in our ability to adapt to, and where possible, anticipate them. Innovation is therefore important for us: innovations in the technologies we use in our designs, process innovations, e.g. in the roles we play in our projects, and innovations in our systems and methods. Innovation is not something that comes from a small group of managers, nor are innovations developed in isolated research environments. Instead, innovations come from those who are in daily contact with clients, from those who grapple with technical constraints and challenges, from those who are inspired by clients and colleagues to do things more cleverly. Thus, many innovators are focused on serving their clients, rather than on spreading their innovative ideas throughout the firm to make them available to other client teams. To improve this, we launched a firm-wide International Innovation Competition this year. The 27 entries were judged by an expert jury comprising internal and external members from the relevant industries: representatives from a Swiss/Dutch architect, a French airport operator, and an international Data Centre operator. The winning Italian/French/Dutch team presented an impressive innovation on laser scanning, the first of the innovation examples described below.
International team wins first ‘Deerns International Innovation Competition’
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From Laser scanning to Facility Management with BIM Deerns has developed a unique concept combining technology and engineering consultancy services to efficiently generate a dynamic, reliable and up-to-date database of the technical assets of a building. 3D laser scanning and a predefined Building Information Modeling process (BIM) are used to optimise and support design, construction, renovation and management of building operations. This concept has proven to provide highest quality building data and help minimise operations risks. With this we have already been able to make considerable savings for clients whose existing complex technical infrastructure need charting before upgrading. Smart Utility Networks Deerns’ ‘Smart Utility Networks’ achieve synergies between buildings and within urban areas that result in a secure, reliable and cost efficient energy supply, via the storage, buffering and re-use of energy resources and the use of renewable energy resources. Furthermore, Smart Utility Networks involve lower investment costs and operational expenses. Sharing Elevator Capacity: exploring the Unused Potential of Stacked Mixed-Use High-Rise Buildings This idea explores the capacity potential available in elevator systems in multifunctional high-rise buildings when these are shared by different user groups. By cleverly using this potential, the number of elevators in such buildings can be reduced, saving core and lobby floor space. The potential benefit has been explored by performing an extensive series of elevator simulations. Research shows that the potential reduction in the required number of elevators could be as much as 22 to 47%, and the required amount of core area could be reduced by an amazing 20 to 29%. The Cube Revolution In a close partnership with E3C and ttsp hwp seidel, Deerns was asked to further develop the Cube Concept, a new way of cooling a Data Centre. The servers are cooled through passive rear rack doors and hence the servers generate their own cold air. This concept results in high cost savings in the mechanical and electrical systems due to amongst others the smaller power need and construction materials (building volume can be cut by 50%). Overall, the concept results in 25%
Deerns Annual Report 2014
cost saving compared to the most cost efficient TIER III Data Centres that we have developed until now. With ttsp hwp seidel as general planner and Deerns as MEP consultant we are implementing this concept in a project for Airbus in Germany. ‘The Edge’: a Supremely Sustainable Office Building Real Estate Developer OVG developed a new office building called ‘The Edge’ for the global accounting firm Deloitte and the Dutch law firm AKD in Amsterdam. Deerns provided the technological engineering and fit-out of the systems, handled project management and delivered aftercare. ‘The Edge’ has been designed to provide very high class comfort in an extremely sustainable environment. Among the numerous smart and innovative solutions, the entire building is fitted with Philips LED luminaires and control systems. Local climate and lighting can be managed individually, e.g. with smartphone or tablet, as well as being centrally controlled and monitored. Variables of room occupation, temperature, ventilation, CO2, daylight, LED lighting, energy consumption of electric equipment and charging of electric vehicles are all part of the sustainability equation. The systems technology also allows for smart planning of maintenance and cleaning activities. The LVM5 Office Building - One of Germany’s First Energy Plus Buildings Our client, the German insurance company LVM, aimed to create a truly futuristic building meeting the standards of Generation 2020+ buildings as determined by the EU Directive ‘Energy Performance of Buildings’. The building’s energy design is based on taking advantage of the interdependencies of the building shell, the technical workplace installations for IT services and lighting, the use of eco-friendly geothermal and solar energy, and of the decentralised ventilation units in combination with window ventilation. Bosco Verticale The Bosco Verticale, designed by Studio Boeri in Milan, is formed by two high-rise buildings. The two skyscrapers are covered with vegetation: 21,000 plants including trees, shrubs and vines. The 850 trees can reach heights of four to six metres. Deerns designed the systems providing an energy centre feeding the whole site and internally optimising peak loads. The Bosco Verticale has achieved a LEED Gold rating.
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Governance
Staff development Our firm aims to attract, engage and retain talented staff and to support and excite them in their personal development in line with the objectives of our firm. We wish to create a working environment that stimulates our staff members to achieve excellent results and to their career at Deerns as an important part of their lives. This vision is the foundation for our HR strategy, with a focus on recruitment, succession planning, learning and development, and performance management.
Recruitment In 2014, we put a great deal of effort into strategic recruitment of new professional staff in many of our National Offices.
Mobility A great example of international mobility in 2014 was the staffing of a big international airport project in Abu Dhabi. Staff from the Netherlands, France and Italy join the project based on mid and long term assignments. The challenge was to bring people with exactly the right knowledge and experience levels together and facilitate them at the project office to develop their skills to then subsequently leverage these upon return to their own National Offices. The process requires developing a sound understanding of the relevant cultures and cultural differences among the team members and at the client location.
accepted. Working at the Midfield Construction Site is a unique and exciting experience. Let me mention some of the benefits of working on this project. Firstly, you will learn a great deal from working with different customs, architecture, materials, rules, styles, procedures, etc. You will meet new people from many different cultures. Working abroad also means communicating in different languages. Many different nationalities work here in Abu Dhabi, although the majority of those are Asian. This means that in meetings with the contractor for example, you have to listen very carefully to ensure you understand the underlying message.
Victor Willemse (Deerns the Netherlands) about the Midfield Terminal Project in Abu Dhabi:
When I heard about the project, I was immediately enthusiastic to join this huge effort. In 2014, Deerns offered me the opportunity to work on this international project, an opportunity I eagerly
We were able to fill a relatively high fraction of management positions with female candidates (including the Managing Director for Deerns Turkey, a Group Development Officer, a Marketing and Communication Manager for Deerns the Netherlands, a Financial Manager for Deerns Italy, and an HR manager for Deerns UK). Different National Offices made different efforts to recruit suitable candidates; the German job market posed the greatest challenges.
New procedures - which you are not always used to - have to be followed strictly, for example for material submittals. All materials have to be approved by us as the consultant, before the contractor can bring them into the work. Many companies are involved in this huge project, both on the consultant’s side as well as on the contractor’s side. The local authorities are yet another party. Strict local rules have to be followed and discussed to get the required approval. Working abroad is good for your experience and I can wholeheartedly it.
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Succession planning For the continuity of the firm, the development of successors at all levels is critically important. Strong HR planning and management will help give potential successors for leadership positions the right opportunity at the right time and provide coaching to grow into these key positions.
In 2014, a group of high potentials were identified firm-wide (30% female, with overall female staff being 24%). Within this group, we identified 10% as potential successors for senior management positions. In the coming years, steps will be taken to recruit more top talents.
We actively encourage internal promotions within or between the National Offices. An important prerequisite for the international mobility of staff is optimal collaboration among the National Offices with regard to sharing vacancies and information about staff who are keen to work abroad on short or long term assignments. This is coordinated by an International Mobility Team.
As an important development tool we offer development opportunities in other National Offices. Talented staff members use this to broaden their perspectives and skills, and leverage the knowledge they bring to a new office, as well as the newly acquired knowledge they bring back to their ‘home’ office to innovate and create new market opportunities.
Rodolphe Huard from Deerns France:
I had the opportunity to work on a project for Deerns Brazil. For this Data Centre project we had to provide testing and commissioning services to ensure that the systems were in line with the specifications. We worked with an international team of Dutch, Brazilian and French engineers. Deerns Brazil coordinated all parties and was the liaison to the client. Deerns The Netherlands was the main consultant to provide engineering services, to manage the project, write the Testing & Commissioning procedures and finally approve the
Deerns Annual Report 2014
systems. I was in charge of coordinating the tests on site that were performed by the subcontractors, ensure that the systems performance results were satisfactory and wrote the final report to the client. My work began in Europe where I liaised with my colleagues to understand exactly the work that had been provided so far and the scope of work that Deerns was expected to deliver. It was an important moment to understand the project and make the required connections for preparing the mission abroad. With an electrical background, managing the work for all disciplines (M&E) was not an easy job for me. But, I received a strong support from the firm, including from the UK, Dutch and French National Offices. The local team, including staff from Deerns Brazil, had solid experience in construction. They were also very keen on expanding their skills in engineering. Combining these skills – engineering consultants on the one hand and practical construction on the other - was very valuable for the whole team and ultimately, for the client. Teamwork – from the beginning to the end of the project – was definitely key to the success of the project, as was combining and taking advantage of the cultural differences.
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Governance
Learning and development To ensure human capital remains a competitive advantage in the future, we invest in training and development programmes in each National Office as well as in the organisation as a whole. As a meritocracy, we invest in the development of our staff members based exclusively on their proven capabilities and potential, regardless of their personal, professional or geographical background. We inspire everyone to work according to our core values, CEDRIC: CompetenceEntrepreneurship-Design Reputation-IntegrityCooperation. To support the implementation of our Business Plan, to develop leadership, team building and problem solving capabilities and to enhance our internal knowledge and understanding of Deerns Group’s vision and strategy, we have developed the Commitment in Action programme (CIA). 37 staff members (of which 24% female and of eight different nationalities) participated. Noble Lilliestierna (Deerns America) and Davide Giovenzana (Deerns United Kingdom), both participants, share their experience:
“ The focus on working with multicultural and multi-personality teams gave us perspective on how to delegate and create an effective group.”
“The CIA Programme was a reflection of Deerns’ burgeoning international ambitions and was enriching for both personal and professional development. We found that the focus on working with multicultural and multi-personality teams gave us perspective on how our contributions fit with others’ efforts and how best to delegate and create an effective group. In these team environments, we also learned about the power of non-judgmental feedback and how honesty and forthrightness can help foster an excellent working experience built on foundation of mutual respect. Even harmonious groups can run into breakdowns and we practiced conversational techniques that were invaluable in creating breakthroughs for our own team’s project. One of the most rewarding aspects of the programme was the opportunity to put faces to the Deerns Group by meeting the members of the Group Executive Board and hearing their very interesting stories as well as getting to know our colleagues from all over the world.” Another firm-wide initiative is the Deerns Concept Studio (DCS). DCS is an annual internal training programme aimed at developing problem solving, creative thinking and presentation techniques. An international group of 16 participants is now involved in this programme that embraces themes like brainstorming techniques, teamwork, presentation workshops and interactive sessions with architects. This year, we celebrated the 10th edition of the Deerns Concept Studio. After 10 years, we have communicated the DCS mindset in every department of the organisation and the skills and goals promoted by DCS are found in every Deerns project. DCS is a significant contributor to the innovative character of our projects. For Deerns the Netherlands, an in-house Development Programme has been set up for the professional staff members. This programme focuses on developing sales and consulting skills through training sessions such as Sales, English language, and Technical Reporting. By offering feedback sessions and coaching, staff members were able to further develop their personal skills. This in-house Development Programme will serve as a best practice for other National Offices.
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As mentioned above, in Germany a dedicated development programme was organised for 35 managers and professionals. This was aimed at developing leadership skills and further aligning with the Deerns Business Plan 2014-2017, as well as stimulating personal involvement to improve the operational excellence and efficiency and create a team spirit among the offices. Deerns Germany has introduced an English language course to help staff members participate in international projects. However, it was even more important to become ‘One Firm’ as Deerns Germany. As mentioned above, a dedicated development programme was organised for 35 managers and professionals. This was aimed at promoting leadership skills and further alignment with the Deerns Business Plan 2014-2017, as well as stimulating personal involvement to improve the operational excellence and efficiency and create a team spirit among the offices. Julia Blume, a participant in this programme, tells us about her learning: “Under the guidance of our two coaches, I learned a lot about how to improve my personal efficiency and people leadership, most of which I started applying immediately in my daily work. Through the work in our programme teams, I felt that we took a great step towards becoming ‘One Firm’ in Germany. Besides all the concrete results that we generated, which will help us guarantee a uniform quality level across all our offices and improve project efficiency, I particularly valued getting to know many colleagues from the other offices. This helped remove initial barriers between the former “foreign” offices and changed our attitude towards Deerns’ ‘One Firm’ notion. I am looking forward to sharing this experience with all our colleagues in our German offices.” Lastly, Deerns also helps students to develop, and proactively appoints interns who can work on their thesis and use their knowledge in Deerns’ projects. In the Netherlands, for example, we generally have 10 interns working on various topics at any one time. They come from various universities (predominantly Delft and Eindhoven University of Technology).
Deerns Annual Report 2014
Performance management To ensure alignment amongst our staff we developed a harmonised approach to performance appraisals and a uniform competency language in 2014. As the basis of these performance reviews we have harmonised job structures into five job families within each of which a career path has been set out. Relevant competences, in connection with the Deerns core values, have been determined for each job family; the core values have been translated into behaviours such as teamwork, initiative and quality orientation. Besides this focus on performance review based on relevant competences, Deerns introduced a system of target setting and evaluation. Staff At the end of the year, the Deerns Group employed 560 (FTE) staff members, 24% of whom are female (within the International Management Team, 20% is female), with an average age of 41. The overall illness rate was 2.65% in 2013, in 2014 it increased slightly to 2.87%. Risk management Maintaining our financial health requires our firm to balance our efforts to maximise our business opportunities with properly identifying, assessing and minimising the risks involved. This requires clarity on what risks we are prepared to take, as well as on the responses we must have in place to manage these risks. The summary below provides an overview of the main business risks we face and of how we manage them.
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Governance
Risk
Risk response
Markets The demand for our services is to a large extent of a cyclical nature and vulnerable to the impact of external factors such as governmental austerity programmes (recently: the Netherlands), the economic demise of a market due to political developments (currently: Russia). Such developments can result in a sharp drop in revenue in these markets and/or price pressure leading to unsustainable margins.
• Sufficient portfolio spread (geographical and segmental); • Regular evaluation of market situations and trends; regular focused discussions with relevant managers; • Maintenance of flexibility in our cost base to allow quick responses to declining revenue.
Projects Project revenue may drop below project cost due to factors such as the increasingly adversarial culture in building design projects (Germany), client tendencies to impose more risks upon us, or contracting and partner situations forcing us to seriously overproduce (Germany, ‘HOAI culture’). Another relevant risk is non-payment or severely delayed payment by clients with financial difficulties or questionable ethics.
• Rigid project acceptance criteria including solid financial projection, application of the ‘four-eye principle’ in evaluating contract offers, and Group Executive Board approval when significant project risks are involved; • Insurance against third party liability and professional indemnity; • Sales management training to deal with complex project contracts; • Financial management training of project managers; • Close monitoring of project results (monthly); • Pro-active follow-up of accounts receivable; • Credit vetting of new clients before contract acceptance.
Staff capacity and quality Imbalance between the availability of skilled engineering and management staff and client demand, jeopardising either our business plan revenue goals or our short-term profitability. Skilled staff is difficult to find in parts of our markets.
• Adequate recruitment planning, with periodic monitoring and follow-up. • Careful staff training and development.
Key staff members leaving the firm.
• An adequate development and succession plan, updated at least once a year, for all key positions; • Regular checks on the competitiveness of our remuneration package; • Development of knowledge management systems and processes to make tacit knowledge explicit.
Liquidity Not meeting the criteria agreed in our bank covenant; inability to use the credit line as needed.
• Ensuring bank criteria to be met at all times: quarterly calculation of the solvency ratio, rolling 3-month cash flow forecast. Timely action in case of forecast downturn in liquidity and/or debtor securitisation capacity.
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Risk
Risk response
Acquisitions Value drop of an acquired firm due to departure of key staff and/or key clients, and/or acceptance of undisclosed financial burdens or risks associated with an acquisition.
• Rigid finance, HR, cultural, legal, and client due diligence carried out by knowledgeable acquisition team including proper external consultants as needed, including in-depth interviews with key staff and key clients; • Clearly defined representations and warranties of the seller in case of a share deal; • Simulation of potential closure costs to assess risk impact of a potential acquisition in advance; • E xemplary cultural and business integration of any acquisition.
IT Forced interruption of work processes for an extended period in one or more offices due to ICT malfunctions and/or loss of data access. Unauthorised access to our network, cyber-attacks etc.
• Rigid back-up and recovery procedures enabling a restart within maximum 24 hours; • E xplicit safety protocols, rigid access controls, firewalls etc.
Loss of assets Fire, burglary/theft or other calamities occurring in an office.
• An up-to-date and communicated business continuity plan. • Well-communicated and enforced workplace back-up procedures (real and virtual ‘clean desk’ policies).
Reputation Massive reputation loss in a major market segment caused by serious project incidents.
• Adequate professional and project management skills developed and maintained by line management with Group HR support.
Serious misconduct or fraud of staff members causing reputation loss.
• Appropriate knowledge exchange facilitated via International Practices and Technology exchange circles, supporting by an inspired One Firm spirit. • Maintaining CEDRIC culture via internal communications, exemplary leadership behaviour, the development of a Firm Covenant supporting our core values (principles) and development of a Code of Conduct (rules).
Taxes Non-compliance risks resulting from increasing complexities of cross-border projects and staff exchange, in particular related to VAT and personal income taxes.
• Adequate external tax advice; risk-awareness building in self-audits of National Offices; adequately filing and documenting.
Deerns Annual Report 2014
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Governance
Corporate Social Responsibility Since half of our staff worked in a National Office other than the Netherlands in 2014, it had become high time to start viewing our Corporate Social Responsibility policy and practices in an international context. For the first time, we established our environmental performance on an international level. We have calculated both the CO2 footprint and the Deerns Multiplier of our largest National Offices. From now on, we will also establish our goals for the entire Deerns Group: by the end of 2017, we want to have reduced our CO2 emissions to 3.8 tonnes per fte (12% reduction compared to 4.3 tonnes/ fte in 2014), and we want to have increased our Deerns Multiplier to at least 1,500 (up 57% from the number in 2014: 995). Through our ‘One Firm’ principle, each National Office will contribute to the common end goal. The goals are ambitious, but certainly within our reach. For example, over the past five years we have already achieved good results in the Netherlands. Our carbon footprint has been reduced by around 18% and our Multiplier has nearly doubled. Besides improving our environmental performance, we will particularly focus on international cooperation in the social domain. Reducing our own environmental footprint Our travel kilometres are responsible for the majority of our CO2 footprint. We have therefore taken particular measures to limit the number of kilometres and further reduce our CO2 emissions per kilometre. The latter is being achieved by promoting the use of public transport and energy-efficient staff lease cars. All of these should have the highest energy performance grading (in the Netherlands: label ‘A’). Furthermore, all firm-owned cars (those in the Netherlands available for car sharing) are completely electric (3) or hybrid (7). To stimulate energy-efficient driving behaviour, the Dutch National Office has been taking part in the annual ‘Greendriver Challenge’ competition for the last few years. All of these activities contributed to the reduction by more than 29% in CO2 emissions from Dutch automotive business travel compared to 2009.
For our business flights booked, we provide compensation via the ‘Climate Neutral Group’ for the total air travel-related CO2 emissions. The environmental footprint of our seven Dutch office locations is reduced by energy conservation measures and the use of sustainably generated energy. We also limit the use of raw materials where possible, notably paper; the office paper used has been sustainably produced and is recycled. Reducing the CO2 footprint of our clients Since our inception in 1928, we have developed sustainable solutions for numerous clients. Our energy concepts remain by far the biggest driving force towards achieving a substantial CO2 reduction. Our goal is to design all new building projects in one year in such a sustainable way that they qualify for recognised certification. To achieve this, we actively offer our clients more sustainable solutions than they initially request. An outstanding example is the office building ‘The Edge’ in Amsterdam: the Head office of Deloitte accountants and law firm AKD is one of the most sustainable buildings in the world, boasting a ‘BREEAM Outstanding’ certificate with the highest score ever! The most promising innovations, that were entered in our international innovation competition, will be further developed in 2015 to be applied in sustainability client projects. Our Staff Cooperation and knowledge sharing are important for providing an optimal service to our clients. This is fostered by an open and non-hierarchical working atmosphere and intensive internal cooperation – things that greatly contribute to everyone’s personal fulfilment and general satisfaction in the workplace. In 2014 we developed a firm-wide Covenant that describes our staff members‘ commitment to how we want to work and communicate within the firm and with our clients. Though in 2015 we will also issue a set of behavioural rules in the form of a new, firm-wide Code of Conduct, we feel that a principle-based approach deserves priority: an approach in which example-setting, discussion of emerging ethical issues and coaching rather than issuing instructions are central.
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Social engagement Achieving significant CO2 savings for our clients is intertwined with our daily work. It is part of our ambition to operate our business as socially responsibly as possible. In addition, supporting social initiatives contributes to this philosophy. Not only do we consider partnerships in the field of sustainability important; we also want to support initiatives that may be somewhat removed from our field of work, but that still celebrate innovation, talent development and the use of that talent, and knowledge exchange. Here are some examples of initiatives we support. • YES!Delft: In various ways Deerns supports this centre of entrepreneurs of the Technical University of Delft which promotes technical entrepreneurship. This incubator foundation inspires students, professionals and scientists to become entrepreneurs and offers practical guidance in how to establish and develop new companies. • The annual Princess Christina contest for young musicians (the Netherlands): sponsorship.
• Politecnico di Milano (Technical University of Milan): Deerns experts gave several lectures and helped students with their thesis. • Sports: Deerns is a long-time sponsor of the ‘Koninklijke – Holland Beker’ event, the annual prestigious international rowing regatta in the Netherlands, and also sponsored the ‘Head First’ race there: a charity ergometer regatta of about 8 km in Rotterdam, the Netherlands, whose proceeds will go towards research into Alzheimer’s disease. • Deerns is a member of, and contributes to the leadership of organisations such as: the industry associations NL Ingenieurs (the Netherlands) and VDI (Germany); the national “Green Building Councils” in the Netherlands, Germany, France and the US; environmental professional associations such as the “Vereniging van Milieuprofessionals” (the Netherlands) and the “European Network of Environmental Professionals” (Belgium), and advisory bodies and funding organisations of various universities (the Netherlands, Germany, Belgium, Italy).
Deerns Carbon footprint
Deerns Multiplier (CO2 savings)
2,498
995
tonnes Net CO2 emission in 2014.
In our key projects alone, we saved 995 times the CO² emissions generated by our own business activities. This corresponds to the average annual emissions of 2 conventional power plants.
Deerns Annual Report 2014
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Governance
Activities not reflected in the annual figures As this report went to press, the following activities and events occurring in 2015 are known and relevant to report. • On 24th March 2015, Paul Smits will step down as the Chairman of the Supervisory Board at the end of this term, after having served for twelve years in the capacity of Chairman of the former Foundation of Deerns the Netherlands and later in the current Supervisory Board of Deerns Group. He will be succeeded by Mr Peter de Neef, currently CEO of the Dutch firm ‘e-Traction’. • Deerns Turkey is in the process of opening a second office in this country, now in Ankara, to be able to better serve local clients in the region.
“ We see continued growth of the appreciation for our innovative, costreducing approaches to building design, maintenance and retrofit.”
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Outlook on 2015 The prime focus for 2015 will be on restoring profitability and balancing a prudent cash management with the key investments needed to fulfil our Business commitments. Some of these investments will be aimed at strengthening the performance of those National Offices that in 2014 appeared to be most in need of such support. Deerns Germany’s profitability may be expected to recover as a result of the fundamental measures taken in 2014, which will be supplemented by further steps in early 2015: steps towards leadership development, Finance and HR support quality improvement, strict client selection and contract management, and indirect cost reduction. Recruitment of high-calibre professional staff is a major challenge in Germany to which extra energy will be dedicated; as we are fortunate to see a strong client demand for our services and motivated staff, growing Deerns Germany according to business plan is really only limited by our professional staff numbers. While Deerns America is no longer loss-making at the turn of the year, we will concentrate on efforts to improve the scale of our presence in the US by acquiring a firm that meets our quality demands and fits with our core values. Based on these improvements and on the positive outlook in all of our other National Offices, we expect Deerns Group to generate a decent profit again in 2015. Along with the focus on profitability we will be concentrating upon fully implementing and thus increasing the benefits of support tools such as Deerns Live, knowledge exchange Circles, technical standardisation, and Group-wide HR policies. While working on harmonisation and further increased international exchange, we will maintain our culture of Subsidiarity – we only do at a central level those things which cannot be done at a level closer to the market. With this we optimise the benefits of internal entrepreneurship for our leadership talents and for the firm in which they do their work. We already reap the fruits of this Subsidiarity in the form of a flexible, easy internal collaboration: a natural, smooth and fast exchange of knowledge, technology, staff, and market information. We expect revenue growth to continue along the lines of our 2013-2017 Business plan; this expectation is based on our budgeted assumptions of further expansion in the United Kingdom, a restored revenue
Deerns Annual Report 2014
level in Germany, some growth in the Netherlands (largely via international work, notably in the Middle East), development in the new Turkish market, and potentially a step change in the USA resulting from an acquisition. From a more general market perspective, we see continued growth of the appreciation for our highquality, high-dedication technical engineering services and our innovative, cost-reducing approaches to building design, maintenance and retrofit. Many of our National Offices are renewing and extending their service portfolios: without straying too far from what we see as our technical core competences, they develop new activities and skills to keep our response and management at par with the ever larger and more challenging projects clients entrust us with. In all our client work, in 2015 we will strive again to increase our impact on energy and material efficiency, and beyond our client projects we will invest in further increasing our own operational sustainability. Currently, Deerns the Netherlands – where, for example, all of our 10 firm-owned cars are now fully electric or hybride – is the frontrunner in measuring, analysing and reducing its ecological footprint.
This positive view on the coming year is based on our confidence in the full dedication and high quality of our staff. Apart from software, desks and computers, our professionals and their support staff are the only resources we have to deliver the quality, dedication and passion for our client’s success – resources that we will proudly offer again in 2015.
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Governance
Report of the Supervisory Board Regarding the annual statements over 2014, BDO certified professional accountants provided an unqualified audit opinion on 27th March 2015. After discussing the results with the Executive Board, both Boards signed the annual statements. The Supervisory Board agrees with the proposal of the Executive Board to restrict the dividend over 2014 to the interim dividend paid in March 2015 of € 340,570 and to add the remainder of the net earnings to the reserves. We advised the General Meeting of Shareholders to accept this Annual Report and to discharge the Executive Board from its duties over the year 2014.
In 2014, the Supervisory Board met with the Executive Board seven times and with the General Assembly of Shareholders twice. It also held a separate meeting with the CEO to discuss staff development. Supervisory Board members attended a market strategy development meeting with external attendees in January as well as a staff development strategy meeting in September. The Supervisory Board member responsible for the financial audit met with the CFO preceding each Supervisory Board meeting. In January 2015, the Supervisory Board carried out a self-evaluation. Finance The 2013 annual figures were discussed in the meeting on 27th March 2014, while the outcomes of the first six months of 2014 were discussed in August. In 2014, no real recovery of the Dutch market segments in which Deerns operates was observed. Further rationalisation measurements were taken and implemented in the Dutch organisation to maintain acceptable margins. Although revenue development of the firm was in line with forecasts, in early 2014 it became clear that the financial performance of the firm would not meet the EBIT goals set for the year. The problems that had already emerged towards the end of 2013 in the German operations continued in 2014 despite measures introduced in 2013. Consequently, further unexpected heavy losses on some key projects in Germany had to be accounted for. Another setback involved the continuing losses in the US operations. These disappointing financial developments were a priority for both the Supervisory Board and Executive Board. Further measures were taken to improve the situation in Germany and the US. In Germany, among other steps the management was strengthened and the order intake process was improved, with a tighter oversight on contract conditions, while
the management and legal support of a few large, loss-making projects were intensified. In the US, the overhead level was scaled back to balance the revenue levels and discussions were initiated with potential acquisition partners. The Supervisory Board was highly impressed by the outperformance of the UK operations of the 2014 plan, as has been the case in 2013. The process of improving financial forecasting quality which was started in 2013 was also continued. The Supervisory Board feels that, despite the unforeseen underperformance in Germany, overall the business control function within the National Offices as well as the effectiveness of the functional reporting lines from these to Group Control improved substantially during 2014. Strategy and targets In June 2014, the Supervisory Board approved the Deerns’ Business Plan 2014-2017. This Business Plan reflects Deerns’ strategy to continue focusing on international expansion and strengthening existing market positions by expanding services in each country to include all niche areas of expertise. The plan is highly ambitious, signalling both internally and to the outside world that Deerns stands for a truly entrepreneurial firm, ready, willing and able to improve its market position. Other strategic topics discussed by the Supervisory Board in its various meetings were: • Risk exposure and risk management; • Market developments and the competitive position of the firm; • Bank agreements and other financing arrangements; • Budget forecasting; • Development of the cash flow.
33
Performance and composition of the Supervisory Board The Supervisory Board was properly informed by the management throughout the year and thus feels that it has been able to play a vital role in governing the Deerns Group. All three members act fully independently. Assessment of Deerns’ performance and outlook As in 2013, during 2014 Deerns faced a challenging business environment resulting from the worldwide financial and economic situation, and particularly the economic and Real Estate crisis in the Netherlands. Despite the good development of revenues, some heavy loss making projects in Germany and losses in the US resulted in a disappointing, slightly negative net result for the Group. The Supervisory Board feels that the management has taken and implemented adequate measures to return to profitability with a healthy margin. The Supervisory Board is of the opinion that, despite the disappointing profit outcome, the firm has a strong basis and further developed its international market position in terms of innovative power, focus on sustainability and acquisition of landmark projects in 2014. The Supervisory Board wishes to express its appreciation to all staff members and the management for their efforts, ambition and results. The members of the Supervisory Board signed this year’s report and Financial Statements in fulfilment of its legal obligation pursuant to article 2:101 section 2 of the Dutch Civil Code. Rijswijk, 24th March 2015, The Supervisory Board of Deerns Groep B.V. Paul Smits (Chairman), Mirjam Nouwen, Victor van der Chijs
Deerns Annual Report 2014
Additional functions of the members of the Supervisory Board (31–12–2014) Paul Smits • President AVRO (a Dutch public broadcasting foundation) • President Supervisory Board RET NV (Rotterdam Transport Authority) • President Stichting ‘Het Kunkelsorgel’ (a charity that maintains a church organ) • Member Advisory Board Ciber Nederland BV (a private corporation) • Member Supervisory Board Byelex BV (a private corporation) • Member Supervisory Board De Oude Stad BV (a private corporation) • Member Advisory Board ASP4ALL (a private corporation)
Mirjam Nouwen • Vice-president Supervisory Board AvroTros (a Dutch public broadcasting foundation) • President Supervisory Board NHF (a Dutch Mortgage Fund) • President Supervisory Board Moonen Packaging Group B.V. (a private corporation) • Member Board Stichting Derdengelden YourGift Cards B.V. (a foundation prescribed by Dutch Central Bank regulation, holding gift card funds) • President Board J.C. Ruigrok Stichting (a Dutch charity)
Victor van der Chijs • President of University of Twente • Member Management Board VSNU (federation of Dutch universities) • Member Management Board 3TU Federation (federation of Dutch technical universities) • Member Executive Board Twente Board (a regional public-private partnership) • Member Board of Trustees Kennisland Foundation (a foundation aimed at mobilising knowledge for societal renewal) • Member Dutch Creative Council (an industry association) • Member Supervisory Board RET NV (Rotterdam Transport Authority) • Member Advisory Board Van Berlo Industries Eindhoven (a private corporation) • Member Board of Trustees ‘Nederlands Fonds voor de Film’ Foundation
34
team Deerns airport specialists from The Netherlands, the UK, Greece, the USA, Jordan, Italy, Denmark and India. Now that the Abu Dhabi Midfield Terminal Complex is in its implementation phase, the pressure on the international Deerns team increases. As with any project of this enormous size and complexity, the team members have to cope with unforeseen issues and new demands from the client at the last minute. The only way to keep their heads cool under these circumstances (and at temperatures up to 50°C) is by working as a solid team. By smartly making use of each other’s expertise, experience and different backgrounds and by knowing that they’re all working towards the same goal: realising one of the world’s largest and most advanced airport terminals.
work Midfield Terminal Complex, Abu Dhabi International Airport Design and implementation of the ICT, security, apron and aircraft handling systems. The Abu Dhabi Midfield Terminal Complex stands out for its breathtaking design, its dazzling size and its unprecedented technological complexity. When the airport opens in 2017, it will be the result of strong teamwork between ADAC (Abu Dhabi Airport Company), KPF (architect) and, besides many other consulting and engineering firm, Deerns. Deerns is responsible for the design, planning and implemen tation of all airport specific systems, both inside and outside the terminal building. An huge challenge that took almost seven years of inside and outside preparation. With a complex that is expected to process more than 30 million passengers by 2020, nothing has been left to chance.
Kohn Pedersen Fox Associates (KPF)
Annual Figures
35
Deerns Annual Report 2014
“Keeping our heads cool by working as a team”
36
Annual Figures
Consolidated balance sheet as at 31 December 2014 Assets in euros
2014
2013
Fixed assets Intangible fixed assets Goodwill
1,839,664
1,453,461
Tangible fixed assets Other fixed assets
2,680,781
2,559,893
Financial fixed assets Participations in group companies Investments in affiliated companies Deferred tax asset
52,542 1,657,800
30,277 38,371 748,600
Current assets Work in progress
9,823,489
6,724,330
Receivables Trade debtors Receivables from affiliated companies Other receivables and current assets
Cash and banks
Total assets
15,047,173 65,090 1,747,248
15,526,705 57,093 1,934,044 16,859,511
17,517,842
1,157,298
1,572,946
34,071,085
30,645,720
37
Liabilities in euros Share of the company in group equity Third parties share in group equity Provisions Current liabilities Amount owed to credit institutions Trade creditors Liabilities to shareholders and affiliated companies Taxes and social security premiums Other liabilities and accrued expenses
Total liabilities
Deerns Annual Report 2014
2014
2013
11,648,668
11,799,746
−
156,397
1,550,757
1,488,344
3,708,971 5,672,354
3,365,731 3,822,708
2,599,394 3,055,574 5,835,367
1,236,227 3,169,172 5,607,395 20,871,660
17,201,233
34,071,085
30,645,720
38
Annual Figures
Consolidated statement of income and expenses for the year 2014 In euros
2014
Invoiced revenue Changes work in progress Revenue
66,999,395 3,023,835
Subcontracted work Other external costs Wages and salaries Social security charges Pension contributions Depreciation and amortisation Other operating expenses Total operating expenses
11,716,596 3,075,078 31,239,317 4,969,700 2,090,952 889,334 15,647,508
2013 62,342,474 -497,884
70,023,230
61,844,590 7,755,835 1,515,357 28,169,562 4,369,755 1,975,163 927,212 14,809,913
69,628,485
59,522,797
Operating result
394,745
2,321,793
Interest and simular expenses Consolidated result from operational activities before taxation
-178,721
-122,796
216,025
2,198,997
Taxes on income
-96,865 119,159
-449,844 1,749,153
-7,193
4,167
111,967
1,753,320
−
-83,210
111,967
1,670,110
Share in result from participations Consolidated result from operational activities after taxation Result share of third parties Net consolidated result after taxation
Consolidated statement of comprehensive income and expenses In euros
2014
2013
111,967
1,670,110
Exchange rate differences
129,080
-1,849
Total comprehensive income for the year
241,047
1,668,261
Profit for the year Items that may be subsequently reclassified to the statement of income and expenses:
39
Consolidated cash flow statement for the year 2014 In euros Cash flow from operating activities Operating result Adjustments for Depreciation and amortisation Result from participations not through participations Movements in provisions Exchange rate differences
2014
2013
394,745
2,321,793
1,068,525
1,003,604
-7,193 62,414 129,080
4,167 616,179 -1,849 1,252,827
Changes in working capital: Change work in progress Receivables Accounts payable (excluding banks)
-3,099,159 658,332 3,327,186
-586,788 3,357,106
-178,721 -96,865
-122,796 -449,844
− -156,396
-83,210 83,210 -431,983 2,101,946
Cash flow from operating activities Cash flow from investment activities Investments in intangible assets Investments in tangible fixed assets Investments in fixed financial assets Deferred tax asset Disposal of tangible fixed assets Disposal of financial fixed assets Acquisitions Cash flow from investment activities
490,038 -829,958 -246,868 886,357 2,533,929
Cash flow from business activities Interest paid Taxes on income Income from participations in group and associated companies / Share third parties Change in third parties share in group equity
1,622,101
− -1,124,131 -469,666 -909,200 18,182 16,106 −
-572,639 2,784,467 -85,423 -760,636 − -748,600 29,526 -4,252 −
-2,468,709
-1,569,385
Cash flow from financing activities Short term debt Dividend paid
− -392,125
− -430,000
Movements in cash
-758,888
785,082
-1,792,785 -758,888
-2,577,867 785,082
-2,551,673
-1,792,785
Changes in cash Balance at the beginning of the financial year Movement during financial year Balance at financial year end
Deerns Annual Report 2014
40
Annual Figures
Notes to the financial statements of the consolidated annual report Basis of preparation The financial statements have been prepared in accordance with the Dutch Civil Code, Book 2 Chapter 9. Consolidation principles The consolidated accounts comprise the fully consolidated financial statement information for Deerns Groep B.V. and its group companies in which Deerns Groep B.V. has majority control. The financial statements of the parent and its subsidiaries are combined on a line by line basis by adding together like items of assets, liabilities, equity, income and expenses. Due to the fact that there is no materiality and no activity in the financial statements of Schmidt Reuter Telematic Consult GmbH and M+I Raadgevend Ingenieursbureau voor Milieu en Innovatie B.V. the financial statements are not consolidated. Third party shares in the consolidated equity have been shown separately.
The consolidated accounts comprise the financial statements of: • Deerns America LLC, Denver (United States), 100% • Deerns Nederland B.V., The Hague (The Netherlands), 100% • Deerns Holding GmbH, Berlin (Germany), 100% • Deerns Deutschland GmbH, Berlin (Germany), 100% • Deerns Italia SPA, Milan (Italy), 100% • Deerns S.L., Barcelona (Spain), 100% • Deerns UK Ltd, London (United Kingdom), 100% • Deerns France SASU, Paris (France), 100% • Deerns België BvbA, Antwerp (Belgium), 100% • Deerns Consulting Engineers Bina Alt Yapi insaat ve teknik tasarim Limited Sirketi, Istanbul (Turkey), 100% Estimates In preparing the financial statements the directors, in accordance with general accepted Dutch accounting principles, make several estimates and assumptions that help to determine the reported amounts in the financial statements. The actual results may deviate from the estimates made. Comparative figures The comparative figures are reclassified where necessary to facilitate comparison with the financial statements of this year. Valuation of assets and liabilities Assets and liabilities are presented at nominal value, unless mentioned otherwise. Tangible and intangible fixed assets are stated at purchase price or at manufacturing costs. Depreciation is calculated on a straight line basis over the estimated useful life of the asset. Goodwill is the positive difference between the acquisition price of the participating interests and the net asset value at the time of their acquisition, less amortisation. Capitalised goodwill is amortised, on a straight line basis, over a period of twenty years. Deerns carries out projects commissioned by third parties under previously concluded contracts. Contract costs are recognised as incurred. When the outcome of a contract can be estimated reliably, contract revenue and profits are recognised over the period of the contract, applying the percentage of completion method. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense within projects in progress. Projects are disclosed collectively in the balance sheet, either as an asset or as a liability to clients by virtue of the contracts. Deerns presents the gross amount due from clients for contract work
41
for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed progress billings as an asset. Deerns presents the gross amount due to clients for contract work for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses) as a liability. Accounts receivable are shown after deduction of a provision for bad and doubtful debts where appropriate. Cash and bank balances are freely disposable, unless stated otherwise. Provisions are formed for liabilities and risks arising in the ordinary course of the business. The provision for deferred taxes relates to timing differences between book and tax values of tangible fixed assets. It is calculated on the basis of the applicable tax rate in the country concerned. Accounting principles applied to the profit and loss statement Invoiced revenue is the invoiced amount of provided services to third parties excluding any value added taxes. Revenue is the sum of net turnover and change in work in progress. Profit is determined as revenue minus all expenses relating to the reporting period. Costs are determined in accordance with the accounting policies applied to the balance sheet. Profit is realised in the year in which the sales are recognised. Losses are taken upon recognition. Other income and expenses are allocated to the periods to which they relate. The amortisation and depreciation charges disclosed in the profit and loss statement are based on a fixed percentage based on the assets’ useful lives. The difference between purchase price and net asset value of acquisitions is recognized as badwill if the purchase price is less than the net asset value. Badwill is recognized as result after deduction of expected losses and any non monetary assets of the acquired subsidiary. Badwill is recognized as negative amortization. Income tax is calculated on the profit disclosed in the income statement at the prevailing rate and making allowance for any tax facilities. Cash flow statement The cash flow statement has been prepared using the indirect method.
Deerns Annual Report 2014
42
Annual Figures
Notes to the consolidated balance sheet as per 31 December 2014 Assets in euros Fixed assets 1 Intangible fixed assets
Goodwill
Balance as at 1 January 2014 Costs Accumulated amortisation
1,528,362 -74,901
Book value as at 1 January 2014
1,453,461
Movements: Investments Amortisation
469,666 -83,463
Balance movements
386,203
Balance as at 1 January 2014 Costs Accumulated amortisation
1,998,028 -158,364
Book value intangible fixed assets as at 31 December 2014
1,839,664
2 Tangible fixed assets Balance as at 1 January 2014 Costs Accumulated depreciation Accumulated currency translation differences
Other fixed assets 8,793,126 -6,224,519 -8,714
Book value as at 1 January 2014
2,559,893
Movements: Additions Depreciation Disposals Reversal of depreciation Currency translation differences
1,100,019 -985,062 -69,000 50,819 24,113
Balance movements Balance as at 31 December 2014 Costs Accumulated depreciation Accumulated currency translation differences Book value tangible fixed assets as at 31 December 2014
120,888 9,824,144 -7,158,762 15,399 2,680,781
43
Financial fixed assets in euros
2014
2013
1
1
−
30,276
1
30,277
1
390
-
14,608
5,000
5,000
−
15,274
3,099
3,099
3 Participations in group companies M+I Raadgevend Ingenieursbureau voor Milieu en Innovatie B.V., Heiloo (The Netherlands), 100% Schmidt Reuter Telematic Consult GmbH, Cologne (Germany), 0%, indirect interest
On June 13 2014 Schmidt Reuter Telematic Consult GmbH was incorporated to Deerns Deutschland GmbH reducing the investment value to zero. 4 Investments in affiliated companies Participation Bouw Commissioning Nederland B.V., Bodegraven (The Netherlands), 50% Participation Yxion Deerns Pharma B.V., Rijswijk, (The Netherlands), 0% Participation Marecon LLC, Moscow, (Russian Federation), 50% Participation Deerns-Naco B.V., Rijswijk, (The Netherlands), 0% Participation Consorzio Red, Milan (Italy), 9% Deerns DC Design SA, Sao Paulo (Brazil), 50%
44,442 52,542
38,371
1,657,800
748,600
1,657,800
748,600
During 2014 the companies Yxion Deerns Pharma B.V. and Raadgevend Ingenieursbureau Deerns-Naco B.V. were liquidated.
5 Deferred tax asset Deferred tax asset
The deferred tax asset is arising from fiscal losses in Deerns Deutschland GmbH which are expected to be recovered in the future. In 2015, Deerns is expecting to recover €270,000.
Deerns Annual Report 2014
44
Annual Figures
Notes to the consolidated balance sheet as per 31 December 2014 (continued) Assets in euros
2014
2013
6 Work in progress Work in progress
9,823,489
6,724,330
Work in progress Work in progress Work in progress positive value Work in progress negative value
11,174,355 -1,350,866
11,709,117 -4,984,787
Work in progress
9,823,489
6,724,330
16,313,919 -1,314,746
16,936,661 -1,409,956
15,047,173
15,526,705
60,090 − 5,000
52,040 4,389 664
65,090
57,093
139,153 1,608,095
584,134 1,349,910
1,747,248
1,934,044
139,153
584,134
139,153
584,134
Current assets
Receivables 7 Trade debtors Trade debtors Bad debts provision
8 Receivables from affiliated companies Receivable from Bouw Commissioning Nederland B.V. Receivable from Yxion Deerns Pharma B.V. Receivable from Deerns Marecon LLC
9 Other receivables and current assets Taxes and social security premiums Other receivables and current assets
Taxes and social security premiums Corporate Income Tax
45
Financial fixed assets in euros
2014
2013
9,818 218,675 167,488 162,425 100,431 116,705 63,849 63,304 42,059 38,493 27,771 23,991 2,189 − 120,100
7,667 298,620 79,209 498,565 214,665 35,238 71,098 83,453 123,271 54,076 70,184 1,716 35,184
1,157,298
1,572,946
10 Cash and banks Cash ABN AMRO Bank N,V, Bankia TEB Kreissparkasse Köln Unicredit HypoVereinsbank AG Volksbank AG KBC Banca Popolare di Milano Banque HBSC Wells Fargo ING Bank N,V, Rabobank Other banks
At 31 December 2014 Deerns had access to a credit facility with the Rabobank in The Hague amounting to € 6,702,731 based on the amount of debtor claims outstanding within Deerns Nederland B.V. and Deerns Deutschland GmbH not older than 3 months. The maximum possible credit facility amounts to € 8,500,000 and the maximum debit balance allowed by the bank without exceeding the credit facility limit in total is: Deerns Nederland B.V. € 8,500,000, Deerns Groep B.V. € 1,000,000 and Deerns Deutschland GmbH € 250,000. The principal borrower for both facilities is Deerns Nederland B.V. The interest rate is one month EURIBOR plus a margin of 2.50% points.
Deerns Annual Report 2014
46
Annual Figures
Notes to the consolidated balance sheet as per 31 December 2014 (continued) Liabilities in euros
2014
2013
−
156,397
-
156,397
1,550,693 64
1,394,644 93,700
1,550,757
1,488,344
1,303,137
604,697
1,296,257 −
604,697 26,833
2,599,394
1,236,227
875,457 1,035,641 467,521 507,226 169,729
1,513,281 994,184 90,260 466,312 105,135
3,055,547
3,169,172
1,271,777 660,278 201,000 777,924 2,924,388
887,317 731,883 − 1,400,251 2,587,944
5,835,367
5,607,395
Share of the company in group equity The share of the comany in group equity is further specified in the notes to the company balance sheet. Third parties share in group equity Third parties share in Deerns France SASU
11 Provisions Deferred taxes Other provisions
The total provision for deferred taxes concerns long-term liabilities. Current liabilities 12 Liabilities to shareholders and affiliated companies Amounts owed to Douwe Aukes Beheer B.V. Amounts owed to Beheer- en Beleggingsmij Giulia Groenhoven B.V. Amounts owed to Deerns-Naco B.V.
The interest rate applied to the liabilties to shareholders and affiliated companies is one month EURIBOR plus a margin of 2.00% points. 13 Taxes and social security premiums Value added tax Wage tax and social security Corporate income tax Pension premiums Other taxes
14 Other liabilities and accrued expenses Holiday pay accrual Unconsumed holiday rights Reorganisation costs Personnel bonus and profit sharing Other payables
47
Notes to the consolidated statement of income and expenses for the year 2014 In euros
2014
2013
34,444,890 12,053,557 2,811,590 4,144,195 1,577,532 1,516,575 584,123 9,240,118 180,685 827,104 1,223,054 432 1,419,375
32,012,527 12,985,407 2,750,811 1,650,579 1,600,613 3,314,634 149,028 4,597,760 32,318 612,144 398,261 − 1,740,508
70,023,230
61,844,590
1,687,503 49,737 1,337,838
1,022,474 92,412 400,471
3,075,078
1,515,357
31,239,317
28,169,562
493,368
496,469
15 Geographical segmentation revenue (by destination) The Netherlands Germany Italy Middle East France Belgium Russia Finland United Kingdom Spain Turkey Rest of Europe Other
16 Other external costs Travel and reimbursement of expenses Costs of reproductions Other external expenses
17 Salaries and wages Salaries and wages Remuneration of directors Average number of staff members During 2014 560 staff members were employed on the basis of a full time contract of services (2013: 525).
Deerns Annual Report 2014
48
Annual Figures
Notes to the consolidated statement of income and expenses for the year 2014 (continued) In euros
2014
2013
83,463 805,871
40,406 886,806
889,334
927,212
83,463 -
74,901 -34,495
83,463
40,406
985,062 -179,191
928,704 -41,898
805,871
886,806
5,860,465 3,557,898 2,777,575 3,210,380 241,190
4,867,435 3,059,079 2,653,347 3,341,922 888,130
15,647,508
14,809,913
4,699,535 1,160,930
3,911,387 956,048
5,860,465
4,867,435
Auditors fee The breakdown of the fee for the audit firm responsible for the audit of the annual accounts is: Audit annual account Other Audit Assignments
57,500 17,757
60,000 5,554
Total
75,257
65,554
178,721
122,796
18 Depreciation Depreciation of intangible fixed assets Depreciation of tangible fixed assets
Depreciation of intangible fixed assets Amortisation of goodwill Badwill release regarding Deerns Italia SPA
Depreciation of tangible fixed assets Other fixed assets Result on sale of tangible fixed assets 19 Other operating expenses Other staff expenses Housing expenses Travel expenses Office expenses General expenses
Other staff expenses Hired capacity Other staff expenses
General expenses
20 Interest and similar expenses Other interest expenses
49
In euros
2014
2013
-684,282 758,385 − -170,969
-399,321 -102,219 274,942 -223,246
-96,866
-449,844
216,025
2,198,997
21 Taxes on income Corporate income tax Deferred taxation Corporate income tax previous years Foreign corporate income tax
Effective tax rate Profit before taxation Income tax charge using the weighted average applicable tax rates
24.3%
Italian regional production tax (IRAP) Other Tax charge Effective tax rate
-52,492
25.7%
-45,551 1,177 -96,866 44.8%
-566,232 -64,629 181,017 -449,844
20.5%
Deerns Groep B.V. is liable for taxation on taxable profits in the following jurisdictions at the rates below:
Belgium France Germany Italy Spain The Netherlands United Kingdom Turkey United States of America
34.0% 33.3% 29.6% 31.4% 25.0% 24.8% 21.0% 20.0% 40.0%
34.0% 33.3% 29.6% 31.4% 25.0% 24.8% 23.0% 20.0% 40.0%
-5,153 -4,011 − 1,971 −
− -708 4,571 389 -85
-7,193
4,167
−
-83,210
22 Income from participations in group and associated companies Deerns DC Design Brasil S.A. Raadgevend Ingenieursbureau Deerns-Naco B.V. Yxion Deerns Pharma B.V. Bouw Commissioning Nederland B.V. A2DP VOF
23 Result share of third parties Third parties share in Deerns France SASU
Deerns Annual Report 2014
50
Annual Figures
Independent auditor’s report on the summary financial statements To: the General Meeting and the Management of Deerns Groep B.V. The accompanying summary financial statements, which comprise the summary balance sheet as at 31 December 2014, the summary profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information, are derived from the audited financial statements of Deerns Groep B.V. for the year ended 31 December 2014. We expressed an unqualified audit opinion on those financial statements in our auditor’s report dated March 27th, 2015. Those financial statements, and the summary financial statements, do not reflect the effects of events that occurred subsequent to the date of our auditor’s report on those financial statements. The summary financial statements do not contain all the disclosures required by Part 9 of Book 2 of the Dutch Civil Code. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Deerns Groep B.V. Management’s responsibility Management is responsible for the preparation of a summary of the audited financial statements in accordance with the principles described on page 40. Auditor’s responsibility Our responsibility is to express an opinion on the summary financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standard 810, “Engagements to report on summary financial statements”.
Opinion In our opinion the summary financial statements derived from the audited financial statements of Deerns Groep B.V. for the year ended 31 December 2014, are consistent, in all material respects, with those financial statements, in accordance with the principles described on page 40. The Hague, 27 March 2015 BDO Audit & Assurance B.V. on its behalf, C.H. Uitbeijerse RA
51
Deerns Annual Report 2014
52
team
Deerns Group
M
T
E
K
H
L
F
P
Group Executive Board
National Offices
A Jan
J
Karel Mak
K
CEO B C D
Roel Rooskens
L
CFO
M
Olivier Severini
C
Member
N
Erik Lousberg
D
Member
O
E Sjoerd
Hora Siccama
Strategic Advisor to GEB
P Q R S
JosĂŠ Roberto Enz Lui Lars Mostert Lars Schumacher Christian Lohoff Olivier Severini Miquel CastellvĂ Erik Lousberg Xavier Crolla Wouter Kok George Pollock Rob Nash-Boulden Rabia Recla
R
Brazil Germany Germany Germany Italy, France Spain The Netherlands The Netherlands The Netherlands United Kingdom United States of America Turkey
Group Support Staff B Roel
Rooskens
Finance F
Linda Heuperman Human Resources
G
Marcel Schellekens
Corporate Social Responsibility
H
Ragna Ouwerkerk Communication
I Carolien
Brinks
Group Development Officer
International Practices T
Daan Eijgendaal Airports
P Wouter
Kok
Data Centres U
Eric Stuiver Clean Technology
O
D
b
53
a
J
Q
U
C
G
S
Organisation Chart Deerns Group
Supervisory Board Support Staff
Deerns Group
Finance
Executive Board
HR CSR Communication
Deerns Annual Report 2014
United States of America
United Kingdom
Turkey
Spain
The Russian Federation
The Netherlands
Italy
Germany
France
Brazil
Secretariat
Belgium
N
International Practices Airports Data Centres Clean Technology
I
54
Contact Information Deerns Group
Belgium
Italy
Rijswijk, the Netherlands Fleminglaan 10 2289 CP Rijswijk PO Box 1211 2280 CE Rijswijk +31 88 374 0000 contact@deerns.com www.deerns.com
Antwerp Kammenstraat 18 2000 Antwerp +32 3 205 37 74 antwerpen@deerns.com www.deerns.be
Milan via Guglielmo Silva, 36 20149 Milan +39 02 36167 888 milano@deerns.com www.deerns.it
Brazil
The Netherlands
São Paulo Avenida Paulista, 1079 – 7º e 8º andar CEP 01311 – 200 São Paulo +55 11 5594 0367 info.brasil@deerns.com www.deerns.com.br
Amsterdam Constellation Building Stationsplein 428 1117 CL Schiphol PO Box 75153 1070 AD Amsterdam +31 88 374 0000 amsterdam@deerns.com www.deerns.nl
France Paris 30, rue Notre-Dame des Victoires 75002 Paris +33 1 70 91 75 50 paris@deerns.com www.deerns.fr
Eindhoven Klokgebouw 125 Strijp-S Terrein 5617 AB Eindhoven PO Box 1009 5602 BA Eindhoven +31 88 374 0220 eindhoven@deerns.com www.deerns.nl
Germany Berlin Helmholtzstraße 2-9 10587 Berlin +49 30 3980 1920 berlin@deerns.com www.deerns.de Cologne Graeffstraße 5 50823 Köln +49 221 574 1201 koeln@deerns.com www.deerns.de Stuttgart Widdumhofstraße 12 70499 Stuttgart +49 711 139830 stuttgart@deerns.com www.deerns.de
Groningen De Deimten 11 9747 AV Groningen PO Box 1540 9701 BM Groningen +31 88 374 0200 groningen@deerns.com www.deerns.nl Maastricht Adelbert van Scharnlaan 170b 6224 JX Maastricht +31 88 374 0210 maastricht@deerns.com www.deerns.nl
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Nijmegen Toernooiveld 300 6525 EC Nijmegen PO Box 31269 6503 CG Nijmegen +31 88 374 0230 nijmegen@deerns.com www.deerns.nl Rijswijk Fleminglaan 10 2289 CP Rijswijk PO Box 1211 2280 CE Rijswijk +31 88 374 0000 contact@deerns.com www.deerns.nl Zwolle Grote Voort 5 8041 AM Zwolle +31 88 374 0000 contact@deerns.com www.deerns.nl The Russian Federation Moscow Khokhlovskiy side-street 13 bld. 1 floor 3 109028 Moscow www.deerns.ru Spain Barcelona Avda. Diagonal, nº 534, 5º 2a 08006 Barcelona + 34 93 205 90 40 barcelona@deerns.com www.deerns.es Madrid Avenida de la Abufera, nº 321, 1ª, 7 28031 Madrid +34 917 558 179 madrid@deerns.com www.deerns.es
Deerns Annual Report 2014
Turkey
United States
Ankara Kizilirmak Mah. 1445 SK. The Paragon B Blok 2 / 113 Çukurambar Postakodu: 06510 Çanka / Ankara +90 312 2586332 www.deerns.com.tr
Denver 110 16th Street Suite #1200 Denver, CO 80202 +1 720 880 1820 info@deernsamerica.com www.deernsamerica.com
Istanbul Bilim Sok Sun Plaza Kat:15 Maslak Sarıyer / İstanbul +90 212 366 02 32 www.deerns.com.tr United Arab Emirates Dubai Gold & Diamond Park Building 2, Office 2260 PO Box 282664 Dubai U.A.E. +971 4 341 80 80 www.deerns.com United Kingdom London Pentagon House 52 – 54 Southwark Street SE1 1UN London +44 20 3640 6940 london@deerns.com www.deerns.co.uk Manchester 2nd Floor The Observatory Chapel Walk M2 1HL Manchester +44 16 1413 0670 manchester@deerns.com www.deerns.co.uk
Deerns Group Fleminglaan 10 2289 CP Rijswijk PO Box 1211 2280 CE Rijswijk +31 88 374 0000 The Netherlands contact@deerns.com www.deerns.com