IMPLENIA AT A GLANCE
Implenia plans and builds for life. With pleasure.
3.3
108
Revenue, CHF bn
EBIT excl. PPA, CHF m
8227 Employees
944
Core markets
Implenia | Annual Report 2015
10
Years of Implenia
Switzerland Germany Austria Norway Sweden
T +41 58 474 74 74 F +41 58 474 74 75 www.implenia.com
An integral part of Global Reporting Initiative “GRI B”
Market capitalisation, CHF m
5
Implenia Ltd. Industriestrasse 24 8305 Dietlikon Switzerland
Sustainability
Working together as “One Company” through four business segments
Annual Report 2015
Development
Switzerland
Infrastructure
International
KEY FIGURES
THE YEAR IN BRIEF
39.1%
2013
1.901 54.2%
36.8%
0.50
2012
33.4%
1.00
47.6%
1.10
71.9%
273.5
224.5 48.3%
251.4
1.50
Implenia made good progress in 2015. Operating income was better than in 2014 on a comparable basis, and operating cash flow increased significantly, reflecting the Group’s solid operating performance and financial strength. Bilfinger Construction was successfully integrated, strengthening the Group’s market presence in Europe. The acquisition also increased Implenia’s know-how and capabilities as an infrastructure expert. Meanwhile, Implenia has continued to optimise processes and structures, and has embedded the “One Company” model more firmly. These investments in markets and operational excellence are making Implenia fit for the future.
29.2%
100
40.6%
27.3%
41.3%
200
46.0%
266.9
300
1.80
2.00
Implenia makes itself fit for the future
1.60
400
1.40
Gross dividend (in CHF)
343.3
Return on invested capital (ROIC) (in %)
0
Invested capital (in CHF million) ROIC (operating income / invested capital) ROIC (excl. PPA)
2015
2014
2011
2015
2014
2013
20121
2011
0
Distribution ratio (in %) Distribution ratio (in %) excl. PPA
Implenia Online Annual Report 2015
1 CHF 0.10 one-off anniversary dividend
1 Restated
Convenient – Implenia’s Annual Report 2015 is also available online in German, English and French. HTML-based and optimised for any device, including laptops, tablets and smartphones. Just click your way through it!
Consolidated key figures
Consolidated revenue EBIT Business Units excl. PPA
1
EBIT Business Units Operating income comparable2 Operating income Consolidated profit excl. PPA
1
Consolidated profit
2015
2014
CHF 1,000
CHF 1,000
3,288,200
2,919,760
Δ
Δ like for like3
12.6%
15.1%
107,724
103,407
4.2%
5.4%
86,173
103,407
(16.7%)
(15.5%)
102,552
101,156
1.4%
2.6%
79,936
108,464
(26.3%)
(25.2%)
67,849
73,006
(7.1%)
(5.4%) (27.1%)
52,018
73,006
(28.7%)
EBITDA
161,360
151,252
6.7%
9.0%
Free cash flow before acquisitions
103,561
75,541
37.1%
44.8%
16,178
67,168
(75.9%)
(67.8%)
Net cash position (as at 31.12.)
388,106
401,477
(3.3%)
(1.4%)
Equity (as at 31.12.)
623,776
629,789
(1.0%)
1.2%
Free cash flow
Order book (as at 31.12.)
5,133,513
3,001,753
71.0%
74.1%
Production output
3,430,459
3,087,216
11.1%
13.7%
7,960
6,378
24.8%
Headcount (FTE; as at 31.12.)
1 Excluding PPA from Bilfinger Construction 2 Excluding PPA from Bilfinger Construction, prior year without IAS 19 variance from 2015 to 2014 3 Foreign currency adjusted
You will find Implenia’s Online Annual Report 2015 at: Focus report on “One Company”
annualreport.implenia.com
Implenia follows an integrated business model, providing services for its customers from a single source. We introduce some of the people who make it all work. From pages 59, 117 and 161.
Or just scan this QR code with your smartphone:
CONTENTS
2015 – A year in pictures
2
90
Young Generation
ANNUAL REPORT 2015
5
96
Health & Safety
Letter to shareholders
6
CEO and CFO in conversation 10 Annual Report 2015 16 Development 28 Switzerland 34 Infrastructure 40 International 46 Corporate Center 52 Technical Center 56 “ONE COMPANY” REPORTAGE 59 JOHANNELUND TUNNEL
Vision and values, strategy and 71 business model Employees 80
104 Sustainability 108 Information for investors 117 “ONE COMPANY” – PONT ROUGE 121 CORPORATE GOVERNANCE 133 Board of Directors 147 Group Executive Board 161 “ONE COMPANY” – SUE & TIL 165 REMUNERATION REPORT 181 FINANCIAL REPORT 182 Consolidated financial statements of the Implenia Group 278 Statutory financial statements of Implenia Ltd. 292 Locations
IMP.117.EN.Mar16
294 Contacts, dates and impressum
This Annual Report is also available in French and German. The original German version is binding. An HTML version of the Annual Report is also available online at annualreport.implenia.com.
20 15 A year in pictures
Apr
29
Blyth
July
1
ENGLAND
STRENGTHENED /// Implenia strengthens its financial and strategic flexibility by placing a CHF 175 million subordinated convertible bond. The bond has an annual coupon of 0.5%.
RECORD-BREAKING /// Implenia helps lay the world’s longest maritime DC cable. The job includes tunnelling and civil engineering work between the UK and Norway and will be finished in the summer of 2017.
Oct
14
2
FUTURE-ORIENTED /// Implenia and an external partner publish a widely acclaimed study on the repurposing of office properties. The study shows how investors can benefit economically and simultaneously help alleviate the housing shortage.
COMPLETED /// Implenia successfully completes tunnelling work for the new U5 underground railway line in Berlin. Work began on this major infrastructure project in the German capital in 2011.
17
22
4
May
10
SUSTAINABLE /// Implenia, as developer and total contractor, is building the sustainable sue&til residential complex in Winterthur. This is Switzerland’s largest ever timber construction project and it is being built to achieve Minergie certification. It also meets “2000 Watt Society” criteria.
19
INAUGURATED /// Power for more than 1000 houses: Switzerland’s largest photovoltaic plant goes on line in Zuchwil. As general planner, Implenia was responsible for engineering services.
SIGNED /// SBB Immobilien AG awards Implenia a CHF 250 million order as total contractor to build the Pont Rouge development in G eneva. This Group-wide project will be completed in the autumn of 2018.
23
PASSED /// About 75 Implenia apprentices – including office employees, bricklayers and road builders – celebrate the completion of their courses with a boat trip on Lake Lucerne. A good two-thirds of them will continue their careers at Implenia.
650
OPENED /// The opening of the new headquarters of Japan Tobacco International (JTI) in Geneva was celebrated in the presence of politicians and representatives of the business community. Implenia executed the unique large-scale project as total contractor.
23
Aug
CELEBRATORY /// Here’s to a good a safe tunnelling project – Implenia celebrates the start of work on shafts (Section 2.1) for the Semmering Base Tunnel in Austria.
Nov
13
TRIED OUT /// Around 60 children around Switzerland come to Implenia to find out more about construction on the annual “National Futures Day”. Traditional gender roles are challenged with a special project for girls.
22
EXCEPTIONAL /// Implenia builds Switzerland’s first patient hotel in Lausanne as total contractor. The contract was won thanks to the Group’s expertise in healthcare projects and its wide range of services.
Syndicated loan increased to:
16
10
27
9
COMMISSIONED /// Implenia is chosen to build an 18 kilometre section of road, including transport and drainage systems for the E39 near Bergen in Norway. The contract volume is worth around CHF 180 million.
WON /// Implenia wins two project contracts worth a total of CHF 110 million: the Jardin du Paradis residential development in Biel and an industrial project in Châtel-Saint-Denis. Evidence of Business Unit Buildings’ strong market position.
CHF 3
June
CHOSEN AGAIN /// Implenia wins a further major order at the Semmering Base Tunnel in Austria. The Gloggnitz Tunnel contract (Section 1.1) is worth around CHF 92 million.
23
SIGNIFICANT /// The SBB commissions Implenia to build the new Bözberg railway tunnel for around CHF 145 million. The order is an important success for the Group’s Swiss tunnelling business.
APPRECIATED /// The Verband Baukader Schweiz – the Swiss Construction Managers Association – awards its Cadre d’Or prize to Implenia’s Head of Trainees Olga Bolliger-Kuriger for exceptional service to apprentice training.
Kvilldal
23
RECOGNISED /// Our wooden construction specialists win second prize in the national Prix Lignum 2015 for the Giesserei project in Winterthur. The jury recognises four Implenia projects overall.
8
2
NORWAY
million
25
Mar
BLESSED /// A traditional ceremony marks the start of work on the 1.5 kilometre tunnel for Nuremberg’s U3 underground railway line. Implenia is scheduled to finish the project in mid-2018.
Dec
7
million
6
RENEWED /// Implenia increases its expiring syndicated loan by CHF 150 million to CHF 650 million and moves early to extend it to September 2020. The renewal underlines the Group’s attractive risk profile.
18 EARLY /// Thanks to the outstanding efforts of all concerned, Implenia completes building work on the Swissmill Tower in Zurich around five weeks ahead of schedule.
MODERNISED /// UBS AG chooses Implenia to renovate its head office in Zurich. The listed building is being refurbished in line with the latest energy standards.
4
HONOURED /// The Health & Safety Awards are presented for the first time at the management conference. Each year Implenia awards the Golden Helmet to a construction site, SCHWEDEN team or individual for outstanding achievements in the field of Health & Safety at work.
175
CHF
Feb
POPULAR /// In the annual Universum survey of around 12,000 students, Implenia was chosen as one of the top 20 most attractive employers in the Swiss engineering sector. ADOPTED /// Voters in Winterthur agree to the plans for the old Sulzer site. Implenia builds the first 2000 Watt development, which includes homes and the new headquarters of the Zurich University of Applied Sciences in Winterthur.
30
ADAPTED /// Implenia adapts its operational structure as part of the integration of Bilfinger Construction. Implenia now operates through four segments: Development, Switzerland, Infrastructure and International.
SECURED /// Implenia secures the contract for a combined bridge and road project in Alvdal as well as a new girder bridge in Trondheim. With these projects the Group is underlining its proven expertise in realising complex infrastructure and bridge construction projects.
PRIZE WINNING /// The Kaeng Krachan elephant enclosure in Zurich Zoo wins the Ulrich Finsterwalder engineering prize. Implenia’s timber construction specialists were instrumental in turning the plans into reality.
21
Jan
ACQUIRED /// Implenia acquires infrastructure division of German competitor. The acquisition strengthens the Group’s position in the European infrastructure market and brings 1900 new colleagues on board.
DEBUT /// Implenia wins its first contract in Sweden with the three-lane, 7.2 kilometre Johannelund Tunnel. The contract, worth around CHF 235 million, is an important milestone on the way to becoming one of the leading providers in Scandinavia’s infrastructure construction sector.
18
18
Sept
SUCCESSFUL /// Business magazine Bilanz gives the 2014 Annual Report first prize in the design category. After bronze and silver in previous years, Implenia finally wins gold. Full order books
5.1
billion
CHF 21
TRUSTED /// Implenia wins a EUR 380 million contract to build a section of the Albvorland Tunnel near Stuttgart (Section 2). It is executing the project as “One Company”.
31
PLEASED /// Implenia reports well filled order books at the end of the year. At more than CHF 5 billion, orders on hand were significantly higher than a year previously (+71%).
A year of growth Implenia can look back on a successful year. The Group has tripled its directly addressable market volume, added around 1,600 full-time jobs to its headcount and strengthened its position as an internationally respected expert in demanding infrastructure projects. “A year in pictures� gives you an insight into the significant events and projects of 2015. Everything Implenia does is based on its sustainable values.
Operational and financial excellence We deliver an outstanding operational and financial performance.
Reliability We are a reliable partner you can count on.
Customer orientation Customer-oriented solutions are our priority.
Awareness of opportunities and risks With business constantly on our minds, we recognise opportunities and risks in a timely manner.
Integrity Integrity lies at the core of our actions.
Sustainability We take responsibility for ourselves as well as for our environment and society.
Transparency Transparency is the principle guiding us in our internal and external dealings with stakeholders.
Innovation Our future depends on our ability to keep up with the times and move forward.
Annual Report 2015
4–5
Letter to shareholders 6 — CEO and CFO in conversation 10 — Annual Report 2015 16 — Development 28 Switzerland 34 — Infrastructure 40 — International 46 — Corporate Center 52 — Technical Center 56 “One Company” Reportage Johannelund Tunnel 59 — Vision and values, strategy and business model 71 Employees 80 — Young Generation 90 — Health & Safety 96 — Sustainability 104 — Information for investors 108 — “One Company” – Pont Rouge 117
LETTER TO SHAREHOLDERS
Dear Shareholders
The acquisition and integration of Bilfinger Construction was the central event of 2015. It has changed the face of Implenia: compared with the previous year the Group has grown by more than 1,600 employees, it has tripled its directly addressable market volume and positioned itself internationally as a respected expert in demanding infrastructure projects. At the same time, Implenia’s established business has performed well, and in financial terms has carried on the good work of the previous year. Operating income has, as announced, gone up on a comparable basis, i.e. before amortisation of intangible assets acquired through the takeover and adjusted for the IAS 19 differences compared to the prior year. Free cash flow before acquisitions also went up substantially. The very pleasant order backlog reinforces the market position of the Implenia Group, which this year celebrates its tenth anniversary. The best of both worlds We adjusted our operational structure with effect from 1 July 2015 in order to make best use of the strategic opportunities brought by the takeover of Bilfinger Construction. Our guiding principle here was to combine the existing expertise and proven capabilities of both companies and so merge the best of both worlds. For this reason the integration was planned and implemented together with former Bilfinger Construction employees. The integration work required a great deal of effort and exceptional commitment, but all the hard work has paid off: ten years after the founding of the company Implenia is stronger and more competitive than ever.
6–7
Order backlog at record levels We were able to harvest the fruits of our joint efforts in the second half of 2015 in the form of major infrastructure orders in our core German and Austrian markets. Overall, the order backlog at Group level was more than 70% higher at the end of 2015 than a year previously. There are two important points here. Firstly, alongside the acquisition of Bilfinger Construction, outstanding organic order intake in Switzerland and internationally contributed strongly to this growth. And secondly, as well as quantity, Implenia has seen an increase in the quality of the order book in comparison with the previous year. Good operating performance Implenia increased its Business Unit EBIT, before amortisation costs for intangible assets acquired through the takeover of Bilfinger Construction, to CHF 107.7 million during the year under review, which is 4.2 percent higher than in 2014. The good performances in project development, Swiss business and infrastructure construction made particularly significant contributions to this solid result. Meanwhile, international business did not meet expectations. As announced in August, operating income – excluding PPA and adjusted for the changes in IAS 19 since the previous year – was higher than in 2014. After adjustment, consolidated profit for 2015 was CHF 67.8 million. Unleashing the Group’s potential with the “One Company” model In 2015 Implenia focused hard on the “One Company” approach, which seeks to join together all the expertise and all the different disciplines within the Group more effectively. In other words to shift from a Business Unit-oriented organisational structure to a structure focused rigorously on the actual project. By strengthening cooperation and the internal network, synergies are exploited and operational fitness is improved. This bundling of strengths and capabilities will make us more profitable. Likewise, our order acquisition and customer focus is being strengthened.
LETTER TO SHAREHOLDERS
Code of Conduct and compliance updated In 2015 we thoroughly revised and enhanced the guidelines set out in the Code of Conduct, which applies to all employees and business partners. All of our employees were obliged to refresh their knowledge of issues such as preventing corruption, antitrust law and data protection, and show they had done so by passing a test. A new compliance organisation was also introduced. These measures will help to reinforce stakeholders’ trust in Implenia. Implenia’s digitisation strategy Digitisation is bringing fundamental change to many areas of the economy, and the construction industry is no exception. Implenia recognised this trend in good time and formulated a company-wide digitisation strategy. One of the important topics is what’s known as Building Information Modeling (BIM) – digital planning of the construction and operation of buildings and structures. BIM lets us visualise construction projects and construction processes as 3D models, which makes planning more reliable. By adding the dimensions of time and costs to the 3D model, it becomes a 4D and then a 5D model. Implenia has a dedicated team within the Technical Center to help the Business Units use BIM. Financing secured on better terms In June 2015 Implenia successfully placed a CHF 175 million subordinated convertible bond maturing in 2022. In addition, the company’s existing syndicated credit facility of CHF 500 million was increased to CHF 650 million in August 2015 and extended for a further five years. By diversifying the Group’s debt capital in terms of maturities and giving it even greater financial strength, this helps Implenia retain its entrepreneurial freedom and reinforces its attractive risk profile. Dividends The Board of Directors is proposing an ordinary dividend of CHF 1.80 per share to the General Meeting of Shareholders of Implenia Ltd. on 22 March 2016 (prior year: CHF 1.80), plus an anniversary dividend of CHF 0.10 per share to celebrate 10 years of Implenia. This is Implenia’s way of thanking all of its shareholders for their confidence in the Group.
8–9
Outlook Despite increased economic and political uncertainties in the Swiss home market, our improved market positioning in Europe and full order books see us starting the new year in confident mood. We expect to see a slight decline in building construction in Switzerland in 2016, and a recovery in the market for civil works. In the core markets of Germany, Austria, Norway and Sweden, the infrastructure construction market should continue to perform well thanks to extensive public sector investment plans. Thanks The fact that Implenia Group was able to get through this challenging year so successfully is due mainly to our employees. In 2015 they committed themselves to the company at all levels, focussed fully on our core business – construction – and also helped greatly with the integration of Bilfinger Construction. We would like to thank them very much for this. Thanks also to our customers for the trust they have placed in us, and to you, our valued shareholders, for your loyalty.
Henner Mahlstedt Chairman of the Board of Directors
Anton Affentranger CEO
CEO AND CFO IN CONVERSATION
“We need to exploit market opportunities more effectively”
The acquisition of Bilfinger Construction has made Implenia’s business much more international. The volumes are there, and now the task is to raise profitability. CEO Anton Affentranger and CFO Beat Fellman talk about how the Group is keeping itself fit for the future, and about the challenges that lie ahead. Mr Affentranger, you are a passionate long-distance runner and that certainly keeps you fit. What about Implenia, though? Is it fit for the future? Anton Affentranger: Our markets and our customers’ requirements have become more challenging. Strategically, it’s crucial that we continually improve our fitness. Over the last year we have worked intensively on this, and have invested in markets and operational excellence. We’ve made ourselves fitter, but the markets will continue to challenge us, so we need to keep getting better. One of the investments you made in markets was the acquisition of Bilfinger Construction. This significantly expanded Implenia’s position in Germany. Why Germany in particular? Anton Affentranger: This acquisition didn’t just make our position much stronger in Germany, but in Austria and Scandinavia too. It was also an investment in expertise and skills, and it has given us new references. We have made an important investment in the Group’s future and fitness. Beat Fellmann: Before the acquisition, Implenia had barely been active at all in the German market. It’s the largest infrastructure market in Europe, so it was important to strengthen our position there. Anton Affentranger: The acquisition also reduced the risk represented by our depen dence on the Swiss market.
10–11
Infrastructure business now occupies a central position in the Group’s structure. Why are you so sure that Implenia will do well here? Anton Affentranger: Of course nobody was waiting for Implenia, but the acquisition gave us new customer relationships as well as new expertise. In Germany we’ve been flying our daisy flags right at the heart of the capital with the U5 Berlin underground railway project. This sends out a clear signal: we are active in the market and want to be successful. Beat Fellmann: Bilfinger’s infrastructure division was very successful, especially in areas like foundation engineering. In Germany we are now the number one in this area, making us the market leader in a key part of the infrastructure market. Overall the unit was and is well positioned. It’s a new market for us as a Group, but for the unit in Germany it’s very much the home market. It’s the ideal addition for us. What risks do you think are associated with the expansion and the focus on infrastructure? Anton Affentranger: The greatest risk is ourselves. We want to unleash the potential of our Group as a whole, and to do this we need to improve the interplay between our regions, Business Units and central service providers. As “One Company” we need to leave geographical and organisational boundaries behind us. Then we can bring Implenia closer to its markets and its customers. There is still a lot of work to do here. Beat Fellmann: From the outside it looks as though the acquisition has been completed, but cultural changes take more time and are very challenging. We are internationalising our company, which requires new skills, concepts, systems and processes, a flexible organisation and an open attitude from employees. With these things in place we will achieve greater success with our broader geographical position. We will be working on this for the next few years.
CEO AND CFO IN CONVERSATION
In Norway and now Sweden, Implenia is again primarily active in infrastructure construction. How do you see the potential of these markets? Anton Affentranger: They are attractive markets. Funding and investment plans for infrastructure projects are in place. In both countries our focus remains on infrastructure construction, where we want to be market leader. But we clearly still have more potential to exploit in terms of market penetration. In Switzerland, by contrast, all the big infrastructure projects have been built. And there won’t be as much building construction as in recent years. What will the strategic cornerstones be for I mplenia in its home market? Anton Affentranger: It’s true that we’ve come down a little from the peak of the last few years in building construction. Nevertheless the market is still at a high level. We think most of the growth will be in modernisation. For infrastructure we believe the growth opportunities will mainly come in the medium term, driven by the need for renovation. But this is just one side of the equation. It’s much more important for us to become better at executing the existing volumes in the market. And this will only be possible through operational excellence. How will I mplenia achieve this operational excellence? Anton Affentranger: Key elements here are the Implenia Management System (IMS) 2.0, Building Information Modeling (BIM), Lean Construction and digitisation. We invested a lot in optimising processes and structures last year, and we’ll continue to do so. Beat Fellmann: We have various cards that we can play in coming years to increase the Group’s profitability even further. Implenia is now of a size that enables it to realise synergy effects more efficiently. We definitely have to mention procurement here as well. Thanks to our position in Germany we’ll benefit more in future from the Eurozone.
12–13
“Strategically, it’s crucial that we continually improve our fitness. Over the last year we have worked intensively on this, and have invested in markets and operational excellence.” Anton Affentranger, CEO
But how has business in Switzerland performed as a whole? Anton Affentranger: Thanks to good projects we’ve performed very well in the Development sector. Modernisation also continues to perform strongly. Looking at the language regions, we have performed particularly well in the French-speaking part of Switzerland, and in the German-speaking part we have increased our efforts to get closer to our markets and customers. We also saw a very healthy order intake for complex building construction projects. We’ve already mentioned the key word: digitisation is becoming increasingly important in the construction industry. Where is Implenia in this process? Anton Affentranger: The construction industry is probably one of the most inefficient sectors of all. Not just in Switzerland or Germany, but worldwide. Digitisation is now a reality and it’s set to change the construction industry’s business model fundamentally. Any company wanting to survive in the market will need to respond to the challenge. Digitisation will bring significant improvements in the design of material flows and will help optimise the use of machinery and equipment, to name just two examples.
CEO AND CFO IN CONVERSATION
“We have various cards that we can play in coming years to increase the Group’s profitability even further. I mplenia is now of a size that enables it to realise synergy effects more efficiently.” Beat Fellmann, CFO
As we move more and more towards electronically supported processes, the world in which the Group and its employees operate is changing. How is I mplenia ensuring that it recognises new trends and is in a position to respond appropriately to future developments? Anton Affentranger: When we discussed the business plan up to 2018 at the Group Executive Board meeting in July, we decided we should get the company’s younger employees to challenge our vision for the future. So workshops were organised in all the key markets for the “Young Generation” that we wanted to hear from. We asked employees under 30 years of age to tell us how they see the future of the industry and of Implenia, and what it will take to ensure they are still working for us in 10 years’ time. Beat Fellmann: With “Young Generation” we want to involve employees who often get overlooked but who actually represent the future. Of course there are other voices that need to be heard, and our goal has to be to listen to all the different generations and take their best ideas forward. This is how we can improve our fitness, make ourselves attractive as an employer and have employees who are proud of their Implenia. The internal training and development opportunities we provide help too. We’ve continued to invest in developing trainees and have made specialist career paths more attractive. We also continued the “Winning the Future” leadership programme in 2015.
14–15
What are the most urgent tasks that I mplenia needs to tackle in 2016? Anton Affentranger: The market environment won’t get any easier, but the potential is there and we need to exploit market opportunities more effectively. We also need to make progress on sustainability. We discussed our strategy with the Group’s stakeholders in autumn, and asked them what they would change and what they think the priorities should be. It was interesting to find that the internal and external views were actually the same. The decisive factor for successful projects is a good balance between environmental, social and economic aspects. What about the Group’s financial targets? Beat Fellmann: Implenia has solid financial foundations, thanks in part to the successful placement of a convertible bond in the middle of the year. We’ve set ourselves the mediumterm EBIT target of CHF 140 to 150 million. We want to achieve this under our own steam. In this context we regard Bilfinger Construction as a catalyst to help us accelerate the process. Interview by Reto Aregger
ANNUAL REPORT 2015
Implenia – “One company, one goal, one spirit”
5,134 (3,002)
161 (151)
104 (76)
Order book, CHF m
EBITDA, CHF m
Free cash flow before acquisitions, CHF m
3,430 (3,087) 108 (103)
41% (48%)
Production output, CHF m
ROIC excl. PPA
EBIT excl. PPA, CHF m
Four business segments
Development Property development in S witzerland from initial idea through to the finished construction project.
Switzerland Generalist for construction in Switzerland – from new buildings to modernisation to road construction and civil works.
Infrastructure Large and complex tunnelling and foundation engineering projects in Implenia’s home markets and beyond.
International Regional provider for civil works in Germany, Austria, Norway and Sweden as well as for building construction in neighbouring German-speaking countries.
16–17
Successful year for I mplenia
Implenia performed well in 2015. As announced, the Group improved its operating income on a comparable basis. Operating cash flow went up significantly and all investments – including the acquisition of Bilfinger Construction – were funded from ongoing business. Thanks to its strong market positioning and successful project acquisition, the Group starts the current year with record order books. In addition to a good operating performance, Implenia is investing in the future: The Group significantly improved its market presence in Europe through the acquisition of Bilfinger construction, and continued to develop its technological expertise.
ANNUAL REPORT 2015
Swiss construction activity remains at high level After years of continuous growth, the Swiss construction industry entered a consolidation phase in 2015, though activity remains at a high level by long-term comparison. 2015 was marked by the Swiss National Bank’s abolition of the minimum euro exchange rate. This produced some benefits for Implenia in purchasing but increased its risks in the Swiss market. Political risks, such as the uncertainties about implementation of the so-called “Mass Immigration Initiative”, are strengthening this trend. Homes remain attractive investments More and more people are finding it hard to fund a home purchase. This is partly to do with affordability rules and partly a result of self-regulation by the banks with regard to core capital and the amortisation obligation. However, in an environment of negative returns on financial investments, housing is one of the few remaining attractive options for institutional investors.
Consolidated key figures Δ like for like3
2015
2014
CHF 1,000
CHF 1,000
3,288,200
2,919,760
12.6%
15.1%
107,724
103,407
4.2%
5.4%
86,173
103,407
(16.7%)
(15.5%)
102,552
101,156
1.4%
2.6%
Operating income
79,936
108,464
(26.3%)
(25.2%)
Consolidated profit excl. PPA1
67,849
73,006
(7.1%)
(5.4%)
Consolidated profit
52,018
73,006
(28.7%)
(27.1%)
EBITDA
161,360
151,252
6.7%
9.0%
Free cash flow before acquisitions
103,561
75,541
37.1%
44.8%
16,178
67,168
(75.9%)
(67.8%)
Consolidated revenue EBIT Business Units excl. PPA1 EBIT Business Units Operating income comparable
2
Free cash flow
Δ
Net cash position (as at 31.12.)
388,106
401,477
(3.3%)
(1.4%)
Equity (as at 31.12.)
623,776
629,789
(1.0%)
1.2%
Order book (as at 31.12.)
5,133,513
3,001,753
71.0%
74.1%
Production output
3,430,459
3,087,216
11.1%
13.7%
7,960
6,378
24.8%
Headcount (FTE; as at 31.12.)
1 Excluding PPA from Bilfinger Construction 2 Excluding PPA from Bilfinger Construction, prior year without IAS 19 variance from 2015 to 2014 3 Foreign currency adjusted
18–19
FABI with effect in Switzerland from 2016 In general, purchasing power remains high in Switzerland, the labour market is stable, financing conditions are attractive and there is unbroken demand from institutional investors. So despite a slightly higher vacancy rate, the fundamental data is still good for the housing market. In effect too much has been built in peripheral regions, but the vacancy rate in central regions remains low. The volume of infrastructure construction declined during the reporting period. Several major projects came to an end and delays to new projects led to lower spending by the public sector. The new fund for “Financing and Upgrading Switzerland’s Rail Infrastructure (FABI)” will only begin to have an effect in 2016. Infrastructure investments in Germany and Austria remained more or less stable. In Germany, the federal states and municipalities spent less, while the national government invested more. Contrasting trends were evident in Austria too, with continuing high investment in transport on the one hand, but much lower expenditure on water and energy supply on the other. In Sweden and Norway, the tunnel and infrastructure market, which is strategically relevant for Implenia, was buoyant. Despite the sharp fall in oil prices, economic growth continued in Norway. Given how attractive these two Scandinavian markets are, it was no surprise to see an intensification of international competition in both.
Key balance sheet figures 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
Cash and cash equivalents
877,108
731,534
19.9%
Real estate transactions
196,087
229,777
(14.7%)
Other current assets Non-current assets Total assets
Δ
1,068,281
982,649
8.7%
584,001
413,699
41.2%
2,725,477
2,357,659
15.6% 48.2%
489,002
330,057
1,612,699
1,397,813
15.4%
623,776
629,789
(1.0%)
2,725,477
2,357,659
15.6%
388,106
401,477
(3.3%)
Investments in real estate transactions
65,381
54,974
18.9%
Investments in fixed assets
58,843
49,151
19.7%
Equity ratio
22.9%
26.7%
–
Financial liabilities Other liabilities Equity Total equity and liabilities Net cash position
ANNUAL REPORT 2015
Consolidated revenue (in CHF million)
EBITDA (in CHF million)
3,500
200
3,000
3,288 2,920
150
2,500 2,000
100
151.3
5.2%
161.4
4.9%
1,500 1,000
50
500 0
0 2014
2015
2014
2015
Margin (in %)
Revenue up on previous year thanks to acquisition In 2015 Implenia generated consolidated revenue of CHF 3,288 million, which is CHF 368.4 million more than in 2014. CHF 487.9 million of this revenue is due to the acquisition of Bilfinger Construction. The negative currency effects caused by the strength of the Swiss franc relative to the euro, Norwegian krone and Swedish krona reduced consolidated revenue by 2.2%. Operating income up on comparable basis Implenia increased its EBITDA by 6.7% to CHF 161.4 million in the period under review. Excluding amortisation costs for intangible assets acquired through the takeover of Bilfinger Construction, Business Unit EBIT went up by 4.2% year-on-year to CHF 107.7 million, or by 5.4% after adjusting for currency movements (like for like). On a comparable basis, Implenia Group’s 2015 operating income came to CHF 102.6 million. As forecast, this is slightly higher than the previous year’s result. After adjusting for IAS 19
20–21
EBIT Business Units (in CHF million)
(in CHF million)
120
120 103.4
Operating income
108.5
107.7
100
102.6
100 86.2
80
80
60
60 3.5%
40
3.3% 2.6%
20 0
40
79.9
3.7% 3.1% 2.4%
20 0
2014
2015
Margin (in %) Margin (in %) excl. PPA EBIT Business Units excl. PPA
2014
2015
Margin (in %) Margin (in %) excl. PPA Operating income excl. PPA
variation, the 2014 figure was CHF 101.2 million. After taking into account the amortisation costs of CHF 22.7 million, the Group reported operating income of CHF 79.9 million in 2015. Negative currency effects totalled CHF 1.2 million. The Development, Switzerland and Infrastructure segments achieved results at or above the prior-year level. Business in the Swiss home market was particularly impressive. The Inter national Segment remained below expectations, as the disappointing performance in Norway was not completely offset by the other countries. Consolidated profit excluding PPA reached CHF 67.8 million, after CHF 73.0 million in 2014. Reported consolidated profit for 2015 was CHF 52.0 million.
Key figures from the Bilfinger Construction acquisition (in CHF million)
Purchase price
144.9
Contribution to revenue
487.9
Order book at acquisition
679.0
Goodwill
87.9
Fair value adjustments from PPA at acquisition
52.2
Amortisation of fair value adjustments from PPA 2015
22.7
ANNUAL REPORT 2015
Consolidated profit (in CHF million)
(in CHF million)
Free cash flow
100
120 103.6
80
100 73.0
60
67.8
80
75.5 67.2
52.0 60
40
2.5% 2.1%
20 1.6%
0
40 16.2
20 0
2014
2015
Margin (in %) Margin (in %) excl. PPA Consolidated profit excl. PPA
2014
2015
Free cash flow before acquisitions
Ability to generate cash and create value Free cash flow for 2015 came to CHF 103.6 million before the Bilfinger Construction acquisition. This is 37.1% higher than in the previous year (2014: CHF 75.5 million). After taking the acquisition into account, there was still a positive free cash flow of CHF 16.2 million. Implenia was therefore able to finance the acquisition of Bilfinger Construction from current business, proving the Group’s cash generating ability. In 2015 Implenia once again generated sustainable value. Despite the costs associated with the Bilfinger Construction acquisition, it posted a high return on capital of 29.2%, which is significantly greater than the average cost of capital of 9.5%. The difference to the previous year’s ROIC figure of 48.3% is explained by the acquisition. Financing renewed, solid capital base In June 2015, Implenia successfully issued a subordinated convertible bond of CHF 175 million with an interest rate of 0.5% and a term of seven years. In addition, at the end of June 2015 the current syndicated credit facility was renewed early. It was also increased by CHF 150 million to CHF 650 million and its term extended to 2020. The renewal gives Implenia funding on better and more flexible terms.
22–23
Return on invested capital (ROIC) (in %)
Net cash position (in CHF million)
400
500
400
300
401.5
388.1
273.5 300
224.5 200 48.3% 40.6%
100
29.2%
0
200
100
0 2014
2015
2014
2015
Invested capital (in CHF million) ROIC (operating income / invested capital) ROIC (excl. PPA)
Invested capital
Current assets excl. cash and cash equivalents Non-current assets (excl. pension assets) Less debt capital (excl. financial liabilities and pension liabilities) Total invested capital
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
1,264,368
1,212,426
4.3%
583,868
408,001
43.1%
(1,574,705)
(1,395,886)
(12.8%)
273,531
224,541
21.8%
2015
20141
Δ
CHF 1,000
CHF 1,000
Δ
Operating income
Development
36,303
35,705
1.7%
Switzerland
38,770
38,392
1.0%
Infrastructure
8,099
13,019
(37.8%)
International
3,001
16,291
(81.6%)
Miscellaneous / Holding
(6,237)
Total operating income
79,936
1 Restated, see page 224, note 5
5,057 (223.3%) 108,464
(26.3%)
ANNUAL REPORT 2015
Order book
Production output
(in CHF million)
(in CHF million)
6,000
6,000 5,134
5,000
5,000 943
4,000
4,000 3,430
3,000
3,002
3,000
445 691
2,000 1,000
1,721
3,087
2,000 2,470
1,866
0
1,000 0
2014
2015
2015
2014
For third subsequent year and beyond For second subsequent year For subsequent year
Order book 31.12.2015
31.12.20141
CHF 1,000
CHF 1,000
Switzerland
2,648,111
2,025,744
30.7%
Infrastructure
1,603,166
646,532
148.0%
878,596
329,477
166.7%
3,640
–
–
5,133,513
3,001,753
71.0%
2015
20141
Δ
CHF 1,000
CHF 1,000
International Miscellaneous / Holding Total order book
Δ
1 Restated, see page 224, note 5
Production output
173,068
141,139
22.6%
2,463,925
2,656,683
(7.3%)
Infrastructure
507,514
274,226
85.1%
International
713,198
415,513
71.6%
Miscellaneous / elimination of intra-Group services
(427,246)
(400,345)
6.7%
Total production output
3,430,459
3,087,216
11.1%
Development Switzerland
1 Restated, see page 224, note 5
24–25
At the end of 2015 Group shareholders’ equity stood at CHF 623.8 million, which is roughly the same level as at the end of 2014 (CHF 629.8 million), even though a dividend was distributed and currency and IAS 19 effects reduced shareholders’ equity by another CHF 42 million. However, the placement of the convertible bond had a positive influence, increasing shareholders’ equity by around CHF 15.2 million. The acquisition of Bilfinger Construction led to an increase in total assets to CHF 2,725 million (2014: CHF 2,358 million). This reduced the equity ratio to 22.9%, compared with 26.7% at the end of the prior year. Implenia still has a very solid equity base by industry standards. Full order book At the end of 2015 the Group order book, at CHF 5,134 million, was 71.0% higher than the prior-year level (2014: CHF 3,002 million). A net CHF 349 million (net = after deduction of executed work) was due to the first-time consolidation of Bilfinger Construction. The very good organic growth in orders in the first six months actually accelerated in the second half of the year. The Infrastructure and International Segments saw an excellent order intake and more than doubled the size of their order books. The high growth of around 30% posted by the Switzerland Segment is also worth noting – especially since the market as a whole has entered a phase of consolidation. Measured by pre-calculated margins, the quality of the order book is also better than it was a year previously. The acquisition of Bilfinger Construction led to a significant 24.8% increase in headcount. At the end of 2015 Implenia Group had 7,960 employees (full-time equivalents, including temporary employees), compared with 6,378 employees at the end of 2014.
ANNUAL REPORT 2015
Sustained growth in home markets The volume of planned construction spending in Switzerland rose again in the second half of 2015 after falling markedly in the previous two years. The construction industry thus consolidated its position at a high level. Various forecasts predict a slight growth in construction investment in 2016. However, political and economic uncertainties remain as a result of the “Mass Immigration Initiative” and the strength of the Swiss franc. Residential construction activity is likely to remain high. However, it is improbable to see further increase since no new impetus is expected either on the interest rate front or from immigration. Operating conditions remain good overall. Contracts from the CHF 6.4 billion railway infrastructure fund are gradually coming into the civil engineering sector, but these are only likely to provide a marginal boost this year. Trends in residential and infrastructure construction could therefore diverge. Infrastructure construction will bottom out in 2016 and probably pick up momentum again from 2017. Implenia also remains optimistic about its core markets in Germany, Austria, Norway and Sweden. Judging by the various multi-year plans announced by government bodies and public sector institutions, there will be plenty of investment in infrastructure. Germany remains intent on making the necessary investments in renewing and expanding its infrastructure. Funds for repairing bridges have been doubled, Deutsche Bahn has increased its investment plans by a third, and more federal funds have been earmarked for road construction. The transport sector in Austria will be shored up by the “Zielnetz 2025+” strategic rail plan and by an increased budget for national road building. Norway’s politicians are discussing an expansion of the longterm investment programme “National Transport Plan 2014 – 2023”. The plan currently envisages public sector investments in transport infrastructure (rail and road), as well as energy and water supply, of 508 billion Norwegian krone. The counterpart to this programme in Sweden, the “National Transport Plan 2014 – 2025” is worth 522 billion Swedish krona, and the intention is to make an almost linear increase in the annual funds provided over the coming years.
26–27
Implenia is ready for the future The acquisition of Bilfinger Construction puts Implenia in a stronger position in terms of technical competence and geographical reach in Europe. The Group has now reached a size that allows it to exploit synergies more effectively, and operates in markets with potential. Sound market prospects make Implenia optimistic about 2016. Order books are well-filled and of good quality, which ensures a high level of visibility. Confidence is backed up by Implenia’s healthy finances and by the progress made by the company during the year under review. Over the last year, the Group has invested in optimising collaboration, processes and structures. This includes investments in technologies and initiatives like ”One Company“, Lean Construction, Building Information Modeling (BIM) and the Implenia Management System (IMS) 2.0. With the aim of further increasing its own operational excellence, Implenia will continue to devote considerable energy to these topics. The company believes it is well positioned to make full use of future opportunities and market potential. The communicated medium-term EBIT target of CHF 140 – 150 million for the 2016 / 2017 period thus remains valid.
DEVELOPMENT
Property development in Switzerland from initial idea through to finished construction project.
766,829 (791,326)
196 (230)
Land reserves, m²
Real estate portfolio, CHFÂ m
5,030 (4,747)
49 (54)
Residential units in development
Headcount, FTE
28–29
Development Segment has impressive project portfolio
– Previous year’s record result matched – Lifted by the real estate markets of the Greater Zurich and Lake Geneva regions – Major sustainable projects in the pipeline
EBIT Development (in CHF million)
Residential units sold 2015 ( in %)
40 36.3
35.7
32.8%
(+17.2%)
30
34.1%
(+6.2%)
20 20.9%
22.4%
65.9%
(–6.2%)
53.8%
(+18.2%)
10
3.7%
(–21.6%)
9.7%
0
(–13.8%)
2014
1
2015
ROIC (in %) 1 Restated, see page 224, note 5
by type Condominium ownership Investment properties
by region Zurich East Middle West
DEVELOPMENT
In 2015 the Development Segment, which includes all the Group’s real estate project development activities in Switzerland, matched the previous year’s record result. EBIT came to CHF 36.3 million, which is 1.7% higher than in 2014 (CHF 35.7 million). This strong result is due to the team’s consistent per formance, the quality of the project portfolio and the continuing dynamism of property markets in the Zurich and Lake Geneva regions. Sustainable major projects Notable developments in the Zurich region include the two major projects that Implenia is building to sustainable criteria in Winterthur: The first is “sue & til”, Switzerland’s largest timber-built housing development, which is currently being built in the town district of Neuhegi for an overall investment volume of CHF 162 million. This is a “One Company” project involving all of Implenia’s units (see also page 161). The second is “Werk 1”, a new mixed neighbourhood being built on the old Sulzer site. As well as housing this will include the new main centre of the ZHAW Zurich University of Applied Sciences. The design plan for “Werk 1” was approved in a city referendum in March 2015.
Key figures Development
EBIT Headcount (FTE; as at 31.12.) 1 Restated, see page 224, note 5
2015
20141
CHF 1,000
CHF 1,000
Δ
36,303
35,705
1.7%
49
54
(9.3%)
30–31
Because of all the successful projects it has started, but also because of a more cautious approach to land purchases in the current market environment, the land bank was reduced from CHF 230 to 196 million. However, the current land bank continues to form a solid basis for this business’s future successful development.
Development Segment’s share of Group’s operational unit results
33.7% EBIT excl. PPA
0.7% Headcount, FTE
A leader in real estate project development In the Development Segment, Implenia brings together its expertise in project development, from initial idea to completed building. As a partner for private and institutional property developers, Implenia develops and realises sustainable property and sites in Switzerland, and can utilise its own very solid land bank. It concentrates especially on housing, health and the ageing population, and has a geographically broad project portfolio with a focus on the strong growth regions of Zurich and Lake Geneva.
DEVELOPMENT
Key projects Campus Santé, Le Grand-Saconnex In the Geneva municipality of Le Grand-Saconnex Implenia is developing and building the “Campus Santé” office complex. The building will house the head offices of various international public health organisations, including that of “The Global Fund”, the internationally active fund set up in 2002 to fight AIDS, malaria and tuberculosis. Implenia is working on this project until the end of 2017 as total contractor on behalf of CSA Real Estate Switzerland Commercial, an investment group run by the Credit Suisse Investment Foundation. Ifang site, Schwerzenbach An apartment block is being built close to the railway station in Schwerzenbach, with 128 rental apartments, four studios and 495 m² of retail space. The individual homes combine environmentally conscious living with a high level of comfort. Certified to Minergie standards, the building – an Implenia project development – is enhancing the whole area by providing high density housing in a central location. Residences du Lac, Morges Implenia is constructing a complex of buildings with a total floorspace of 16,000 m² in the municipality of Morges. The seven buildings fulfil the Minergie standard, and are being built by Implenia as total contractor. Commissioned by a group including investment fund Bonhôte- Immobilien and the housing cooperative Coopélia, the project should be completed by the end of November 2018.
32–33
Campus Santé, Le Grand-Saconnex
SWITZERLAND
Generalist for construction in Switzerland – from new buildings to modernisation to road construction and civil works.
2,648 (2,026)
64% (56%)
Order book, CHF m
Visibility*
2,464 (2,657)
3,855 (4,023)
Production output, CHF m
Headcount, FTE
* Visibility: Order backlog for the current year / planned production output
34–35
Switzerland Solid work in the home market
– Previous year’s good result matched – Modernisation and French-speaking Switzerland drive the growth – Healthy order intake underlines improvement in total and general contractor business EBIT Switzerland (in CHF million) 40
38.4
Production output 2015 ( in %) 38.8
21.9% (–1.7%)
31.8%
(+2.0%)
30
10.7%
36.6%
(+2.2%)
(+1.5%)
20
43.4%
1.5%
1.6%
9.3%
(–0.9%)
(–2.8%)
10
0
32.7% 20141
2015
Margin (in %) 1 Restated, see page 224, note 5
(+1.5%)
by business segment Modernisation Total and general contracting Building construction Construction
by region Zurich East Middle West
13.6%
(–1.8%)
SWITZERLAND
The Switzerland Segment’s result for the year under review matched the previous year’s level. EBIT came to CHF 38.8 million, compared to CHF 38.4 million in 2014. The segment continues to play a decisive role, contributing two-thirds of the production output of Implenia’s operating units. Successes in conversion business and French-speaking Switzerland There was a strong upward trend in the modernisation of residential and commercial buildings in 2015. One of the great successes was winning the contract to refurbish the listed head office building of UBS, the major Swiss bank, in Bahnhofstrasse, Zurich. Business across Switzerland’s linguistic regions was satisfactory overall: while there was another sparkling performance in building construction, road building and civil works in French-speaking Switzerland, business in German-speaking Switzerland was not as dynamic. The surfacing and gravel works, by contrast, were able to build on the good results of the prior year.
Key figures Switzerland 2015
20141
CHF 1,000
CHF 1,000
2,391,575
2,583,492
(7.4%)
38,770
38,392
1.0%
Order book (as at 31.12.)
2,648,111
2,025,744
30.7%
Production output
2,463,925
2,656,683
(7.3%)
3,855
4,023
(4.2%)
Revenue EBIT
Headcount (FTE; as at 31.12.) 1 Restated, see page 224, note 5
Δ
36–37
Slightly improved, but still unsatisfactory performance in general and total contracting business and building construction – promising project acquisitions The 2015 results in our traditional general and total contractor business were below expectations. In the first six months especially, business failed to meet our targets. The performance improved in the second half of the year, but – as announced – not enough to make up for the first half. Various major project contracts promise a strong performance to come. S BB Immobilien AG, for example, has awarded Implenia the total contractor mandate for the first stage of the “Pont Rouge” development in Geneva, with an investment volume of CHF 250 million (see page 117). On the Labitzke site in Zurich, Implenia is constructing eight buildings with 277 homes for around CHF 90 million on behalf of real estate company Mobimo. Significantly higher order intake At CHF 2,648 million, the order backlog is an impressive 30.7% higher than in the previous year. The excellent order growth seen in the first half continued during the second six months of the year.
Switzerland Segment’s share of Group’s operational unit results
51.6%
36.0%
Order book
EBIT excl. PPA
63.9%
55.7%
Production output
Headcount, FTE
Generalist builder in Switzerland The Switzerland Segment includes Implenia’s services for modernising residential and commercial properties, general and total contracting, building construction, road building and civil works. The segment also includes the surfacing and gravel works in Switzerland and wooden construction. Modernisation brings together the segment’s capabilities in conversion and renovation, from consultancy to implementation. As general and total contractor Implenia offers comprehensive services from a single source.
SWITZERLAND
Key projects Schöllenen Gorge, Uri In the midst of the breathtaking scenery of the Schöllenen Gorge, 1300 metres above sea level in Canton Uri, Implenia is renovating the Göschenen – Andermatt highway on behalf of ASTRA, the Swiss Federal Roads Office. The job includes renewing the Heuegg gallery, creating a cycle path and refurbishing retaining walls. Owing to the weather, Business Unit Construction German-speaking Switzerland, which is responsible for the contract, can only work on it from Easter to October. Completion is scheduled for 2019. Pont Rouge, Geneva Around 550 residential units as well as offices and commercial premises, covering a total floorspace of 120,000 m², are currently being built close to the centre of Geneva. SBB Immobilien AG asked Implenia to act as total contractor for the first stage of the project, which involves a total investment volume of around CHF 250 million. The contract awarded to Business Unit Buildings is proof of the Group’s comprehensive expertise in building construction. Cantonal road, Romont–Vaulruz Implenia, as total contractor, has renovated the cantonal road between Romont and Mézières on behalf of Canton Fribourg. In order to minimise haulage journeys and save on raw materials, excavated material was being recycled and reused on site. The work, executed by Construction French-speaking Switzerland, was completed in August 2015. Conversion of TownTown, Zurich Conversions of office premises are worthwhile, as the fast growing Modernisation business proves. Working for moser bau immobilien ag as total contractor, for example, Implenia is converting a run-down office building into 35 apartments, three studios and four commercial units. Once the renovation is complete the property will fulfil the Minergie standard. Handover to the client is scheduled for spring 2017.
38–39
Schöllenen Gorge, Uri
INFRASTRUCTURE
Large and complex tunnelling and foundation engineering projects in Implenia’s home markets and beyond.
1,603 (647)
82% (52%)
Order book, CHF m
Visibility*
508 (274)
931 (517)
Production output, CHF m
Headcount, FTE
* Visibility: Order backlog for the current year / planned production output
40–41
Infrastructure Excellent performance as infrastructure expert
– Tunnelling continues to perform well in Switzerland and abroad – Solid operational performance overall – Impressive order intake
EBIT Infrastructure (in CHF million)
Production output 2015 ( in %) 6.0%
20
(+6.0%)
1.5%
(+0.2%)
7.7%
17.5
(+7.7%)
15
10.5%
13.0
(+6.9%)
47.0%
44.5%
(+18.2%)
10 8.1
55.5%
(–46.2%)
(–18.2%)
7.2%
5
4.2%
1.9%
0 20141
27.3%
(+25.4%)
2015
Margin (in %) Margin (in %) excl. PPA EBIT excl. PPA 1 Restated, see page 224, note 5
by business segment Tunnelling Foundation engineering
by region Switzerland Germany Austria Norway Sweden Others
INFRASTRUCTURE
The Infrastructure Segment performed well in 2015. Before deducting amortisation costs for intangible assets acquired through the takeover of Bilfinger Construction, EBIT came to CHF 17.5 million. This is 34.4% higher than in the previous year (CHF 13.0 million), underlining the segment’s excellent operational performance. Reported EBIT came to CHF 8.1 million.
Infrastructure projects going well Tunnel construction sites in Switzerland continued to perform very well, contributing greatly to the excellent result. In addition, the major NEAT project was completed definitively and had its final impact on results. Most of our projects outside Switzerland also went well – both the ones that Implenia was already doing and the ones added to the Group’s portfolio with the acquisition of Bilfinger Construction. Key figures Infrastructure
Revenue EBIT excl. PPA2 EBIT Order book (as at 31.12.) Production output Headcount (FTE; as at 31.12.) 1 Restated, see page 224, note 5 2 Excluding PPA from Bilfinger Construction
2015
20141
CHF 1,000
CHF 1,000
Δ
418,915
179,961
132.8%
17,497
13,019
34.4%
8,099
13,019
(37.8%)
1,603,166
646,532
148.0%
507,514
274,226
85.1%
931
517
80.1%
42–43
Strong performance in acquisitions During 2015, Infrastructure was successful at acquiring projects in all its defined home markets. In Switzerland, for example, it was awarded the contract for the new Bözberg railway tunnel, worth CHF 145 million. In Austria Implenia secured Lot 1.1, at Semmering, the second of three tunnel sections (Implenia’s share is worth the equivalent of around CHF 190 million). In Germany Implenia won the contract, worth the equivalent of CHF 410 million for the Albvorland Tunnel section of the new Wendlingen-Ulm rail line. And in the Scandinavian market orders included the one for the Johannelund Tunnel in Sweden worth CHF 235 million (see reportage on page 59). The Infrastructure Segment saw the order backlog increase substantially to CHF 1,603 million, representing growth of almost 150%.
Infrastructure Segment’s share of Group’s operational unit results
31.3%
16.2%
Order book
EBIT excl. PPA
13.2%
13.4%
Production output
Headcount, FTE
Specialist for challenging infrastructure projects in Europe The Infrastructure Segment focuses on tunnel construction and foundation engineering in Europe. The segment brings together Implenia’s tunnelling, foundation engineering, large-scale project and design / planning capabilities. These services are offered in the home markets of Switzerland, Germany, Austria, Sweden and Norway. In addition, the Global Projects sub-unit bids for large, complex infrastructure projects outside our home markets and also takes on project management.
INFRASTRUCTURE
Key projects Baugrube PMUII joint venture, Berlin (DE) As part of the Baugrube PMUII consortium, Implenia is working on the deep repair and improvement of Berlin’s famous Museum Island. The project includes extensive foundation engineering works: limited working height, the old structures involved and the discrepancies between planning documents and reality are presenting the on-site team with many logistical and technical challenges. The project, worth EUR 13.9 million, underlines the Group’s expertise in foundation engineering. Patek Philippe, Plan-les-Ouates Implenia executes the foundation engineering and groundwork for a new Patek Philippe watch factory in Canton Geneva. The prestigious watchmaker is centralising all of its production, research and training operations, which are currently spread throughout the canton, at the new facility. Building work is scheduled for completion in August 2016. Semmering Base Tunnel, Section 1.1, Gloggnitz (AT) Construction work began on the Gloggnitz Tunnel in Lower Austria in 2015. The tunnel, which is more than seven kilometres long, is being built by a consortium led by Implenia. The project, worth EUR 456.6 million, was commissioned by ÖBB Infrastruktur AG and forms part of the Semmering Base Tunnel. Johannelund Tunnel, Stockholm (SE) Implenia is carrying out construction on the first section of the future Stockholm city bypass. Lot 403 includes the two three-lane main shafts of the Johannelund Tunnel, a total of 7.2 kilometres, as well as the entrance and exit ramps and the associated power and ventilation installations. At peak times, approximately 180 employees will be working on the CHF 235 million project. You can read more about the Johannelund Tunnel in the reportage on page 59.
44–45
Baugrube PMUII joint venture, Berlin (DE)
INTERNATIONAL
Regional provider for civil works in Germany, Austria, Norway and Sweden as well as for building construction in neighbouring German-speaking countries.
879 (329)
57% (60%)
Order book, CHF m
Visibility*
713 (416)
2,096 (901)
Production output, CHF m
Headcount, FTE
* Visibility: Order backlog for the current year / planned production output
46–47
International Regional divergences in performance
– Result before amortisation costs similar to previous year’s – Business solid in all countries except Norway – Strong acquisitions performance
EBIT International (in CHF million)
Production output 2015 ( in %)
20
13.3%
(+3.9%)
16.3 15.2
15
9.6%
20.9%
(+8.3%)
(–3.0%)
48.0%
10
7.2%
3.9%
7.5%
(+7.2%)
50.4%
(+4.2%)
(+7.5%)
21.5%
(–8.4%)
2.1%
5 3.0 0.4%
0 2014
1
21.6%
(+21.6%)
2015
Margin (in %) Margin (in %) excl. PPA EBIT excl. PPA 1 Restated, see page 224, note 5
by business segment Infrastructure works Tunnelling Building construction Niches
by region Norway Germany Austria Sweden Others
(–41.3%)
INTERNATIONAL
The International Segment, with its regional businesses in Germany, Austria, Norway and Sweden, as well as Implenia’s production plants outside Switzerland, reports an adjusted EBIT of CHF 15.2 million, compared with CHF 16.3 million in the previous year. Amortisation costs for fair value adjustments from the acquisition of Bilfinger Construction reduced the EBIT figure by CHF 12.2 million. The fall in the value of the euro, the Norwegian krone and the Swedish krona also had a negative impact on 2015 results. The currency effects at revenue and EBIT level amounted to CHF 72.0 million and CHF 1.1 million respectively. Reported EBIT for fiscal 2015 was CHF 3.0 million. Regional divergences in performance The new Germany & Austria operational unit started the year under review well and made a positive contribution to earnings. However, business in Norway was not as good as expected, and the solid performance in Sweden was not sufficient to compensate. As announced in the middle of the year, the expansion of operational structures and personnel in Norway weighed on results. In addition, the projects taken on in Norway as part of the Bilfinger Construction acquisition are less profitable on average. Key figures International
Revenue EBIT excl. PPA2 EBIT
2015
20141
CHF 1,000
CHF 1,000
Δ
708,997
415,513
70.6%
15,153
16,291
(7.0%)
3,001
16,291
(81.6%) 166.7%
Order book (as at 31.12.)
878,596
329,477
Production output
713,198
415,513
71.6%
2,096
901
132.6%
Headcount (FTE; as at 31.12.) 1 Restated, see page 224, note 5 2 Excluding PPA from Bilfinger Construction
48–49
The performance of the gravel plants in Mali and the Ivory Coast was particularly pleasing; despite negative currency effects they increased their contribution to earnings in Swiss franc terms. Successful order acquisition Implenia was very successful at acquiring new projects in Norway and Sweden. The new orders obtained in 2015 include a set of transport links in Stockholm: a tunnel and two bridges, one for motorised traffic and one for pedestrians and cyclists, are being built between the Kvarnholmen peninsula and the suburb of Nacka. Reasons to be confident about the future of business in Norway include the acquisition of the major CHF 180 million order to build an 18 kilometre long section of the E39 highway. The excellent acquisition performance is reflected in the order backlog, which at the end of December 2015 at CHF 879 million was a remarkable 166.7% higher than a year previously.
International Segment’s share of Group’s operational unit results
17.1%
14.1%
Order book
EBIT excl. PPA
18.5%
30.2%
Production output
Headcount, FTE
Regionally embedded provider in Western Europe The International Segment includes Implenia’s activities in its home markets of Germany, Austria, Norway and Sweden, as well as its gravel plants in Mali and the Ivory Coast. Implenia Germany & Austria is the provider for regional customers in German- speaking countries outside Switzerland that need services for civil works, general civil engineering, maintenance and repair, and selective building construction. Implenia Scandinavia offers comprehensive services for complex infrastructure projects including conventional tunnelling. It also provides niche services for road and rail. The International Segment’s goal is to further expand its market position.
INTERNATIONAL
Key projects Kvarnholmsförbindelsen, Nacka (SE) Close to Stockholm, Implenia is building a new transport link between the Kvarnholmen peninsula and the suburb of Nacka. The project, commissioned by Nacka municipality, includes a 185 metre-long arched bridge over the Svindersviken River, a 44 metre pedestrian and bicycle bridge, and a 260 metre tunnel through the Ryssbergen hill. For commuters the new direct connection will significantly reduce travel time between the two centres from mid-2016. Niederfinow boatlift, Berlin (DE) Implenia, working as part of a consortium, is building a new boat lifting facility in Niederfinow on behalf of Germany’s Federal Waterways and Shipping Authority (WSV). This will help boats overcome the 36 metre height difference in the Oder-Havel canal. The new lift will be able to cope with longer and wider boats laden with double layers of containers. It will also be able to carry boats with greater draught. Implenia’s share of the contract for this complex infrastructure project comes to EUR 74 million. Train station modernisation, Graz (AT) After five years of construction, Implenia completed its work on Graz main train station in October 2015. Lot 3.11, commissioned by ÖBB Infrastruktur AG, included challenging structural work as well as subterranean and track construction. Implenia built underpasses and retaining walls as well as the foundations for the platform roofs, and also converted the existing entrance building. The work had to be carried out in very tight spaces as the station continued to operate.
50–51
Kvarnholmsförbindelsen, Nacka (SE)
CORPORATE CENTER
Corporate Center
The Corporate Center provides central services for the entire Implenia Group. It focuses on the needs of the operational units. The Corporate Center helps create value at Implenia through efficient processes and by defining common standards and technical principles. Implenia’s Corporate Center brings together the following central services: Corporate Con trolling, Procurement, Legal, Marketing / Communications, Investment Management, Treasury, Insurances, Investor Relations and Business Development. All of these departments are actively involved in implementing the corporate strategy. They provide services to support the various operational Business Units, always striving for effectiveness, efficiency, a high level of customer orientation and high quality.
Focal points of 2015 Integration of Bilfinger Construction The acquisition and integration of Bilfinger Construction dominated activity at the Corpo rate Center in 2015. Since practically no head office functions were taken over, the relevant services had to be provided by the existing Corporate Center units. Treasury, Controlling, Legal, Marketing / Communications and Insurances were particularly affected. In most areas the addi tional work could only be handled successfully by adjusting processes and structures. Certain functions also began to build up resources outside Switzerland. For example, the Legal Service expanded its team by adding two employees in Germany. For the Corporate Controlling depart ment, the main task was to integrate the acquired Business Units into the existing financial or ganisation. Financial instruments and processes were harmonised and the Financial Controlling department was created to take charge of integrating the international units, such as Infrastructure,
52–53
Corporate Center organisation
Business Development Investor Relations
Corporate Controlling
Treasury
Procurement Corporate Center
Marketing / Communications
Legal
Insurances
Investment Management
Germany & Austria and Scandinavia, into the controlling system. Marketing / Communications carried out a comprehensive rebranding exercise at all new Implenia sites to ensure the Group continues to present a uniform appearance. All the integration activities were supported cen trally by the Business Development department, which also put together detailed road maps with the new areas to ensure successful implementation of their business plans.
CORPORATE CENTER
Strong I mplenia Ambassadors At the end of 2015 Implenia’s brand ambassa dors Simone Brändli and Ruedi Wild celebrated a double victory at the Phuket Challenge, bringing a fitting end to a successful season for the two triathletes.
Procurement improved purchasing conditions significantly by bundling together Groupwide purchasing volumes in many areas. The removal of the minimum euro-Swiss franc exchange rate also improved purchasing terms in the Eurozone. Furthermore, by taking a Group-wide approach to logistics, new purchases and rentals could be avoided. In 2015 all insurance policies were sent out for tender as scheduled; here too Implenia benefited from the additional scale created by Bilfinger Construction. Attractive insurance conditions have thus been secured for another three years. Financing base expanded In June 2015 Implenia successfully placed a 7-year, CHF 175 million subordinated convert ible bond. In addition, the company’s existing syndicated loan of CHF 500 million was increased to CHF 650 million in August 2015 and extended by a further five years. This further diversified the debt capital base in terms of maturities and sources of finance, and brought Implenia’s financial strength up to the accustomed high level following the acquisition of Bilfinger Con struction.
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Code of Conduct renewed and deepened Since 2010 Implenia has had a Code of Conduct that is binding on all employees but also applies to the Group’s suppliers and business partners. In 2015 the Group thoroughly revised and augmented the Code. All employees refreshed their knowledge of topics such as prevent ing corruption, complying with anti-trust law and data protection, and completed a test on these subjects. The Group launched a new edition of an e-learning training module to help with this. A new compliance organisation was also introduced. These measures are helping to sustain Implenia’s image and reinforce stakeholders’ trust in the company. “One Company” as a central success factor For the Corporate Center, and the whole Group, promoting the “One Company” approach was a priority in 2015. By implementing more efficient processes, strengthening internal, cross-disciplinary collaboration and promoting internal networking, the Group optimised its operations and became even more effective.
IT In 2015 Group IT focused on three important topics in addition to its day-to-day business: introducing a new ERP in Scandinavia, implementing numerous improvements to I mplenia’s systems in Switzerland, and preparing for the integration of Bilfinger Construction’s systems into the existing systems landscape. In the autumn, I mplenia imported all of Bilfinger Construction’s salary payment data; wage and salary statements were generated by I mplenia’s computer centre for the first time.
TECHNICAL CENTER
Technical Center
The Technical Center brings together and develops Implenia’s technical capabilities, as well as driving sustainability and inno vation within the company. In order to fulfil its tasks effectively, the Technical Center, like the Corporate Center, maintains close links with operational Business Units. The Technical Center works together with operational areas on lean processes, and actively promotes innovation and continuous improvement of technical skills. Implenia develops these skills across all disciplines and deploys them throughout the whole Group. The Technical Center also acts as the driver for sustainability, which is a key part of Implenia’s strategy. The focus here is on the company’s employees and on the materials, technologies and processes it uses. You will find detailed information about HSE (Health/Safety/Environment) and Sustainability in the relevant chapters starting on pages 96 and 104 respectively. Technical Risk Management Technical Risk Management’s job is to identify risks, mitigate them in collaboration with the operating units and thus reduce costs. This process begins early in the bid phase of projects at Group level. This process was reorganised in 2015 with the aim of standardising project bids across the Group and making them more transparent overall. Equipment & Technology Services
In 2015, following the integration of Bilfinger Construction, three technological units – Machinery & Electrical, Formwork and Construction Materials Technology – were merged into Equipment & Technology Services (ETS). The services provided by ETS include site equipment planning, and the optimisation, development and testing of construction materials. ETS also maintains and supplies complex formwork systems, machinery and equipment. Operational excellence Increasing the Group’s operational efficiency is the core task of the Technical Center. The aim is to achieve this by integrating systems, processes, expertise and personnel within each construction project – from the bidding phase to the moment when the keys are handed over. By using the Implenia Management System 2.0 (IMS), lean management approaches, Building Information Modeling (BIM), the innovation process, quality management and a newly devel oped digitisation strategy, integrated project management can be applied across all areas. Here is an overview of some of the strategies:
56–57
Technical Center organisation
Technical Risk Management
Equipment & Technology Services
Operational Excellence
HSE1 & Sustainability
Technical Center
1 HSE: Health / Safety / Environment
Lean Management During the last financial year, the Technical Center continued to develop lean construction principles for building construction, infrastructure and project development jobs. One example of this is the “sue & til” residential development in Winterthur (see also page 161). The concrete results of the optimisations included reduced construction time, lower costs and fewer defects. In 2015 the Technical Center trained more than 200 project managers and site managers in Lean Construction; this training will continue in 2016. IMS 2.0 Implenia introduced IMS 2.0 to the building construction and modernisation businesses in 2015, and accompanied this with intensive training. Compared with the previous version, IMS 2.0 provides better integration of systems, processes and people in construction projects. Roll-out into the project development business was also begun in 2015. IMS 2.0 uses innovative methods and technologies to help professionalise project management.
TECHNICAL CENTER
Smart site surveys The Technical Center is driving the use of 3D-based technologies.
BIM
During the last financial year, the Technical Center formulated the roadmap up to 2018 for the Group-wide introduction of Building Information Modeling (BIM). BIM is based on the use of virtual 3D models that replicate the physical result of the construction job. The models are enriched with information generated by the planning, construction and operational processes. When the dimensions of time and costs are added in, the 3D model becomes a 4D and then a 5D model, which improves the decision-making process, quality assurance and communica tions. Implenia is already using BIM on building construction and infrastructure jobs with a total contract volume of more than CHF 1 billion.
Use of BIM in key projects – One Company project Werk 1, Winterthur: BIM is supporting decision-making in the architectural competition with regard to design, costs, space utilisation and sustainability criteria. – Albvorlandtunnel, Wendlingen-Ulm: BIM-based construction documentation including planning, workflow simulation, cost planning and digital progress reporting. – Hydroelectric plant, Hagneck: Use of diggers with 3D machine control in terrain modeling. – E6 Vinstra-Sjoa / Stabekk stasjon: Use of drones for 3D surveying, progress monitoring and video documentation.
“Winning the Johannelund Tunnel section underlines Implenia’s market position as a leading partner in Scandinavia for large-scale infrastructure projects with demanding tunnel-building requirements.” Johannelund Tunnel: a major infrastructure project From the mid-2020s the 21 kilometre “Förbifart Stockholm” will connect the north and south of the Swedish capital. Around 95 percent of the bypass will be underground, including the Johannelund Tunnel, which is one of the first construction lots. Implenia has won the contract for the 3.6 km section of the main tunnel, which is worth around CHF 235 million. As well as the two main shafts, the order also includes four single-lane entry and exit ramps, four access tunnels, several cross-shafts as well as electricity and ventilation installations.
Svend Amland, Managing Director Sweden, Implenia Scandinavia
Strong presence in Sweden
The Johannelund Tunnel, part of Stockholm’s planned city bypass, is a significant infrastructure contract for I mplenia – and it was won thanks in no small part to the application of the new “One Company” strategy.
Like many cities, Sweden’s capital has a problem with through traffic. Stockholm’s authorities have been planning a north-south bypass motorway on the western edge of the city for almost 40 years, but implementation of this complex project has repeatedly been delayed by environmental concerns and political changes. A good stretch of the planned route runs close to sensitive wetlands around Lake Mälaren, which also happens to be Sweden’s largest drinking water reservoir. Over the last five years Trafikverket, the Swedish transport agency, has developed a solution and come up with plans that satisfy all the relevant requirements. The key element of “Förbifart Stockholm” is that the bypass runs almost exclusively through tunnels, which keeps the environmental impact to a minimum.
The project was divided into six lots and then sent out for statutory tender. Huge infrastructure contract for Implenia In August 2015 I mplenia’s bid for Lot FSE 403 beat four rival offers to win the contract for one of the first sections of the whole project. This includes the two three-lane main shafts of the Johannelund Tunnel, each 3.6 kilometres long, as well as the entrance and exit ramps and the associated power and ventilation installations. “This is exactly the kind of project that’s helping to position us as the leading provider in the Scandinavian market: large infrastructure projects with tunnelling as a central element – and all from a single source,” says Svend Amland. Implenia’s Managing Director for the Swedish market, who can look back on
“The ‘One Company’ approach is our future. It’s been welcomed with open arms by all the employees, and put into practice with real passion.” Jiri Englen, Production Manager “Johannelund Tunnel”, Implenia Scandinavia
37 years in the construction industry, is also taking the lead on the initial phase of the Johannelund project. He is being supported by Production Manager Jiri Englen. Amland tells us that I mplenia’s decision to bid for the Johannelund section was part of a clear strategy: “This was technically and financially the most interesting lot for us”. The tunnels run through rock, so construction will require blasting and drilling. “One major issue is the four and a half million tonnes of spoil that we’ll have to take away. This places hefty demands on our logistics operation and on the local road network. After all, we are not far from Stockholm city centre,” says Englen. The offer was put together by an interdisciplinary team of experts from various parts of the company, including planning and budgeting specialists, who worked on the bid between August 2014 and July 2015.
Cooperation is the key to success The Johannelund Tunnel is not just technically interesting; it is also one of the first building projects that Implenia is tackling using its “One Company” approach. The principle is simple: the project itself is always at the centre, rather than the individual departments working on it. The Business Units and departments involved form a joint project team, which is responsible for the project as a unified whole and shares in the success. Everyone pulls in the same direction and communicates with one voice, internally and with the customer. “One Company” promotes cooperation within Implenia across all departmental and geographic boundaries, and brings the company closer to the customer. This is how Svend Amland sees it too: “Bringing together different departments and all the different knowledge that is spread around the business is one of the
“Bringing together people and expertise from such different disciplines – including roadbuilding, tunnelling and foundation engineering – adds enormous value.” Svend Amland, Managing Director Sweden, Implenia Scandinavia
most difficult challenges for any large organisation. ‘One Company’ enables us to act as a single integrated business.” Pooling skills and know-how in a project-focused team also has a positive effect on the quality of results – which is obviously good for the customer – as well as on the profitability of the project for the company, Amland tells us. All of the departments that are important for the project are already represented in the bidding phase, he adds. The project was started under predecessor firm Bilfinger Construction. Implenia won the contract not least thanks to the great experience within the Group. In addition to Implenia Scandinavia’s unit in Sweden, Business Unit Infrastructure was involved as lead manager, while technical services were provided by the centralised departments in Switzerland and Germany.
Successful start to the project The actual project work began in August 2015. “We decided to work in the same office as the tender team for the first three or four months to ensure the optimum transfer of knowledge from the bid phase to the execution phase.” The project team currently consists of around 20 people and will grow, according to Amland, to 35 by 2017. That’s when the work will be going full steam ahead. Team members include some who have already worked on projects in Sweden with the predecessor company, while others are new recruits. Their tasks include project and production management, contractual and administrative activities, technical support, HSE (Health/Safety/ Environment), construction management and quality assurance.
“The whole management team, including the Group Executive Board, supports the model, and there are clear implementation guidelines. It’s important to know that there are resources available within the company that we can use and rely on.” Jiri Englen, Production Manager “Johannelund Tunnel”, Implenia Scandinavia
Work has also begun on the construction site itself. Sheet pile walls are being built, ramps are being made to allow equipment to get in and excavated material to be removed, and blasting has begun. The actual tunnel construction starts in summer 2016. At its peak, the project will involve around 180 workers. “One Company” in practice “We’re already benefiting a lot from Group-wide collaboration,” Svend Amland says with satisfaction. The particular characteristics of the foundations required are being clarified with experts from Business Unit Infrastructure, while specialists from Implenia in Norway have been brought in to help with the tunnelling. “They have had a lot of experience with blasting and drilling through rock.” Lining the tunnel shafts is another complex design and execution challenge for which expertise is being sourced from various parts of the company.
“Doing what we’ve done on the Johannelund project, i.e. bringing together people and expertise from so many different disciplines – like roadbuilding, tunnelling and foundation engineering – adds enormous value.” This isn’t just the case from the Production Manager’s view, says the enthusiastic Jiri Englen. “The ‘One Company’ approach is our future. It’s been welcomed with open arms by all the employees, and put into practice with real passion.” For project, production and construction managers especially, it’s important to know “that Implenia has internal resources available that we can call on and use.” Svend Amland knows that “One Company” is still in its infancy and will require further refinement. The whole management, including the Group Executive Board, supports the model, and there are clear implementation guidelines. “The ‘One Company’ idea is already working at the Johannelund Tunnel and
“We decided to work in the same office as the tender team for the first three or four months to ensure the optimum transfer of knowledge from the bid phase to the execution phase.” Svend Amland, Managing Director Sweden, Implenia Scandinavia
will be applied more consistently in other projects that we’re currently bidding for. But we need to keep developing the model, build up the internal networking and come up with smart practical solutions.” More of our own services, fewer subcontractors To reinforce the benefits of the “One Company” model, I mplenia is using more of its own resources on the Johannelund Tunnel, where previously it would have brought in subcontractors. “We want to do as many of the jobs as possible. For the first time, we’re employing the tunnel workers rather than using an external provider. We’re investing in tunnelling machines and other equipment so we can do as much as possible ourselves.” Implenia is thus ensuring that all the right people are sitting round the table, that all the processes are woven together effectively and that the project meets the highest quality standards.
Amland sees significant advantages on the planning and management side too: “It’s only natural that external consul tants feel less committed to a project and don’t bring the same sense of loyalty to the company.” It’s crucial that Implenia does the work itself in as many areas as possible: “A company puts itself in a risky position if it only concentrates on a couple of specialist areas.” Different Business Units pulling in different directions is a thing of the past, as far as Svend Amland is concerned. As a member of I mplenia’s leadership team in Scandinavia, he monitors the competition too. “I’ve seen that companies which don’t present a united front have great difficulties.” Englen adds: “At I mplenia we work every day on the ‘One Company’ model and we see a great future in it.”
“We can already suggest optimisations in the preparatory phase. This helps us work more efficiently when we’re actually executing the project, because we have more time for our own planning and at the same time can increase the quality of our service.” Emma Lestander, Site Manager “Johannelund-Tunnel”, Implenia Scandinavia
Facts & Figures “Johannelund Tunnel” Customer Trafikverket (Swedish Transport Administration) Planning URS – ÅF Construction contractor Implenia Scandinavia Length Twelve kilometres of tunnel in total Volume of spoil 1,700,000 m3 / 4,500,000 tonnes Project remit Two main shafts, four single-lane entry and exit ramps, four access tunnels, cross-shafts, electricity and ventilation installations Challenges Drilling and blasting work beneath a densely populated area of Stockholm, groundwater, noise pollution and traffic Size of contract SEK 2.1 bn
70–71
Into the future with a clear vision
Implenia’s success is built on a clear vision and strategy, and a set of values shared by all its employees. Based on its integrated business model, Implenia can offer a full range of services along the whole construction value chain – and all from a single source.
VISION AND VALUES, STRATEGY AND BUSINESS MODEL
Vision
We develop and build the Switzerland of tomorrow. Our mission is to help shape Switzerland’s future by developing and implementing innovative projects.
Sustainability is our passion. Sustainability is an integral part of everything Implenia does. Being a sustainable company is the only way we can be fit for the future. We also assume responsibility for the environment and society.
I mplenia plans and builds for life. With pleasure.
We shape Europe’s infrastructure. We want to become a leader in attractive European markets and be at the forefront of shaping infrastructure development.
We want to be the partner of choice for customers and employees. For our customers, we want to remain or become their partner of choice. The same holds true for our employees. The only way we can give our customers top performances is if we are “the place to be” for our employees.
Our brand promise is an integral part of Implenia’s vision. It succinctly describes who we are: a construction company that develops and carries out construction projects with passion.
What we are aiming for The construction industry is in a constant state of flux. Stakeholder requirements and environmental conditions are always changing. The vision provides the framework for Implenia’s long-term development. With innovative solutions and a passion for construction, we are designing and building the Switzerland and Europe of tomorrow.
72–73
Values
Sustainability We take responsibility for ourselves as well as for our environment and society.
Reliability
Integrity
We are a reliable partner you can count on.
Integrity lies at the core of our actions.
Awareness of opportunities and risks
Innovation Our future depends on our ability to keep up with the times and move forward.
Our values
Transparency
Customer orientation Customer-oriented solutions are our priority.
With business constantly on our minds, we recognise opportunities and risks in a timely manner.
Operational and financial excellence
Transparency is the principle guiding us in our internal and external dealings with stakeholders.
We deliver an outstanding operational and financial performance.
Built on shared values The vision will only be fulfilled if all employees are pulling in the same direction. This requires everyone to think and act in line with a common set of values. IÂmplenia has formulated principles that form the foundations of its corporate culture and that everyone in the Group is expected to live up to, actively and consistently. These shared values make IÂmplenia strong.
VISION AND VALUES, STRATEGY AND BUSINESS MODEL
Strategy sets a forward-looking tone Implenia’s goal is to generate value sustainably. In order to achieve this, the company pursues the following priorities: − Integrated solutions thanks to a “One Company” approach As “One Company”, Implenia encourages collaboration across the different Business Units. Its services range from development to general contracting and execution. By combining these skills, it exploits synergies and creates tailor-made solutions for customers. The reportage section of this year’s Annual Report focuses on the topic of “One Company” – from page 59. − Consistently focused on customer and market needs Implenia wants its customers to see it as the preferred partner for all construction projects. That is why it focuses on customer needs and manages projects using experts who can create added value for the customer. In this way Implenia can grow together with its customers in target markets. A good example of this is the relatively new Modernisation unit, which offers huge potential in areas such as conserving energy through energy-efficient construction techniques, and densification in urban centres. − Preferred partner for employees All of Implenia’s accomplishments grow from within, so the well-being and development of its employees are very important to the company. Implenia offers its people opportunities and interesting jobs in which they can develop continually.
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Integrated business model
Consultancy
Planning
Execution
Consultancy Development and design Complete service Total contracting / Project management General contracting Execution Our services Strategic advice Location, market and target group analysis Portfolio analysis Feasibility studies Strategy development and scenario modelling
Our services Overall economic perspective Urban development Site access Building design and planning Permits Construction planning
Our services Organisation and coordination Project management and construction work Managing targets: costs, quality, deadlines, market value Commissioning / handover
Added value for our customers — Optimising the value of existing and new real estate projects and portfolios — Customised solutions that focus consistently on our customers’ requirements — Reduced number of interfaces
VISION AND VALUES, STRATEGY AND BUSINESS MODEL
− Sustainable Implenia always pays particular attention to the development of sustainable solutions. For information on Implenia’s comprehensive commitment to sustainability, please see the “Sustainability” chapter (from page 104), or the latest 2014 / 2015 Sustainability Report, which will be published in summer 2016. − For operational excellence in construction Implenia is committed to construction and is always striving for operational excellence in the construction value chain. The Group makes targeted investments in the development of streamlined processes, in IT and in innovation (see the “Technical Center” chapter starting on page 56 for examples). − For a strong financial performance This strategy enables Implenia to achieve an impressive long-term financial performance. The Group exploits its full potential and uses synergies created by cross-disciplinary collaboration and by the consolidation of central functions in the Corporate Center, IT and Technical Center. It also practices strict cost control.
76–77
Broad-based structure Implenia’s structure is built on operational and functional units. The operational units focus on their core areas of expertise, but work hand in hand with each other. They are assisted by the Technical Center, IT, Human Resources and the centralised Group functions provided by the Corporate Center. –
Operational units The operational units are responsible for Implenia’s core businesses: Modernisation & Development, Buildings, Infrastructure, Construction German-speaking Switzerland, Construction French-speaking Switzerland, Scandinavia and Germany & Austria. You can find more information from page 28.
− Corporate Center The Corporate Center provides central services to support the operational areas. These services include Corporate Controlling, Business Development, Investor Relations, Legal, Marketing / Communications, Investment Management, Treasury, Insurance and Procurement. For more information, see the “Corporate Center” chapter starting on page 52. − Technical Center The Technical Center is Implenia’s “technical conscience”. It covers four areas: HSE & Sustain ability, Operational Excellence, Technical Risk Management, and Equipment & Technology Services, and is closely linked with the operational Business Units. The Technical Center brings together specific technologies such as Machinery & Electrical and Formwork, as well as optimising processes, developing innovations and driving sustainability. For more information, see the “Technical Center” chapter starting on page 56.
VISION AND VALUES, STRATEGY AND BUSINESS MODEL
Group CEO Anton Affentranger*
Human Resources
Technical Center
Thomas Foery
Jörg Kaiser
IT Guido Schmidt
Moderni sation & Development
Buildings
Infrastructure
Construction Germanspeaking Switzerland
Construction Frenchspeaking Switzerland
Scandinavia
Germany & Austria
CFO / Corporate Center
Adrian Wyss**
Anton Affentranger* a.i.1
René Kotacka*
Christof Gämperle*
André Métral*
Petter Vistnes*
Stefan Roth**
Beat Fellmann*2
* Member of the Group Executive Board (GEBO) ** Business Unit Head 1 On 3 February 2016, a management committee consisting of Anton Affentranger, CEO, Jens Vollmar (management responsibility) and Christian Wick (technical responsibility) took over management of Business Unit Buildings. The CEO remains in charge of the Business Unit until further notice. 2 In his function as CFO / Corporate Center, Beat Fellmann’s direct reports include Nicolas Ecoffey (Head of Corporate Controlling), German Grüniger (General Counsel) and Jens Sasse (Head of Procurement).
Operational units Functional units
Back from left: Beat Fellmann (CFO / Head Corporate Center, Member GEBO), Christof Gämperle (Head of Business Unit Construction German-speaking Switzerland, Member GEBO), Petter Vistnes (Head of Business Unit Scandinavia, Member GEBO), Stefan Roth (Head of Business Unit Germany & Austria), Nicolas Ecoffey (Head of Corporate Controlling), Guido Schmidt (Head of IT), René Kotacka (Head of Business Unit Infrastructure, Member GEBO), Jens Vollmar (Management responsibility for Business Unit Buildings), German Grüniger (General Counsel), André Métral (Head of Business Unit Construction French-speaking Switzerland, Member GEBO), Adrian Wyss (Head of Business Unit Modernisation & Development) Front, from left: Thomas Foery (Head of Human Resources), Jens Sasse (Head of Procurement), Anton Affentranger (CEO, Member GEBO), Jörg Kaiser (Head of Technical Center)
78–79
EMPLOYEES
Shaping the future together
Get stuck in and do it yourself – That was Implenia’s message at Swiss Futures Day. Girls are interested in a career in construction too. The day gives girls and boys from 5th to 7th grade a chance to learn about different professions. Trainees and employees at Implenia’s head office in Dietlikon and in various offices around Switzerland gave the young visitors an insight into their daily working lives, and showed what a wide variety of different jobs are available in the construction industry: from bricklayer, to clerical worker to building site manager. There was also an opportunity for visitors to do their own building. “My biggest dream is to one day build my own house with my own hands,” said one enthusiastic participant. The foundations have already been laid.
The faces behind the Group
80–81
Personal development. Strong community. Implenia people.
Sustainable success is only possible if the company can rely on first-class employees. It is not enough simply to find the best employees. The important thing is to ensure these employees are inspired by the company’s goals over the long term. Implenia believes that this happens when people in the company are encouraged to develop and express themselves. The key is to offer exciting projects and jobs, interesting career entry opportunities, a comprehensive range of training and development options, and all sorts of different ways of progressing in the company. In short, Implenia wants to be the partner of choice for current and future employees. Construction projects have become increasingly complex in recent years. Mastering the new challenges demands professional and social competence, experience, passion and motivation. But a really top performance also requires a good working environment. This is why relationships between everyone at Implenia are based on trust, responsibility, a focus on performance and fairness. Thanks to the company’s flat structures, decision-making paths are short and people are given a lot of responsibility. Management delegates decision-making authority down to the lowest level possible, which strengthens independence and motivation, as well as making processes more efficient. Implenia encourages its workers to achieve the exceptional, and rewards them accordingly. The Group guarantees all of its employees equal treatment regardless of their ethnicity, colour, gender, sexual orientation, religion or political views.
EMPLOYEES
Full-time employees by country of origin 2015
Ratio of on-site employees to office-based employees at end-2015
11.3% 1.7% 2.5% 3.1%
30.2%
41%
3.2% 5.2% 6.4%
59% 14.0% 22.4%
Switzerland Germany Portugal Norway Italy
France Austria Spain Sweden Other
On-site Office-based staff
Competitive pay. Modern employment conditions. A modern human resources policy has to include transparent, fair, competitive remuneration. This helps a business recruit the best employees and motivate them to do their jobs well. Office staff are paid according to their function, knowledge, problem-solving abilities and level of responsibility. For on-site personnel, IÂmplenia complies with statutory minimum wage requirements (collective employment agreements) and makes general wage adjustments by joint agreement. In addition, IÂmplenia grants individual wage increases on the basis of employee appraisals. Management staff are paid a basic salary plus a flexible component linked to target attainment. Employment rules and social benefits meet modern standards and in many cases go beyond the statutory requirements. For example, employees benefit from attractive pension arrangements and an extra week’s holiday, while fathers can have a week of paternity leave and mothers 16 weeks of maternity leave.
82–83
A growing workforce. Increasing internationalisation. More women. A broader geographical presence has also brought a significant increase in the size of the Group’s workforce. At the end of the year Implenia employed 7,960 people (full-time equivalents, including temporary employees). The fluctuation rate across the company in 2015 came to 10.9% (excluding seasonal fluctuations), which is 0.7% lower than in the previous year. Of Implenia’s total permanent workforce, 6,850 are men and 862 are women. At 11.2%, the proportion of female employees in Switzerland went up again on the previous year (2014: 9.0%). People from more than 70 nations work for the Group. Headcount (FTE) Office and on-site staff
Development Switzerland Infrastructure International Miscellaneous / Holding Total employees (FTE, excl. temporary staff) Temporary staff Total employees (FTE) 1 Restated, see page 224, note 5
end-2015
end-20141
49
54
3,855
4,023
931
517
2,096
901
514
282
7,445
5,777
515
601
7,960
6,378
EMPLOYEES
Creating career prospects From apprentices to executives, Implenia promotes career development for all its staff. Talented people are given the opportunity to apply their skills profitably at Implenia and to deepen these skills (pictured: Dominik Roth, Head of Construction Execution, who received the “Goldener Baumaster” award for best result in the master builders’ exam in 2014).
Individual training and development programs. Developing key capabilities. Implenia offers its employees an attractive range of training and development courses. The Group follows clear goals with its courses. On the one hand they are designed to develop and encourage young talent within the company; on the other they enable employees to master the challenges of their job and become more productive. How is this achieved in concrete terms? By giving employees the latitude and opportunity to develop within the company over the long term. “Icademy” is Implenia’s in-house training and development concept. It encourages structured individual development of employees’ key skills and abilities. Based on transparent criteria for promotion, job grading and development, training measures are defined to suit employees’ specific work and hierarchical level. Specialist careers – strengthening technical and professional skills. Within this specialist career concept, Implenia offers modules covering things like business basics, employment law, claims management and preparing for work. Other modules are being developed all the time. Last year saw Implenia refining its construction manager profile and defining a specific competency model for the next step in an individual’s personal development. The ultimate aim is to create a consistent career and development model for the whole Group. Training is offered in the form of classroom sessions, on-the-job training or certificated courses.
84–85
“Winning Performance” and “Winning the Future”. Developing leaders. Our managers are crucial to the achievement of our corporate objectives. Working in networks has become more important, as have communicative and teamwork skills. Implenia believes it is crucial to have a shared understanding of what management means, and it aims to strengthen its managers’ leadership skills. Two years ago, for example, the Group launched a multi-part management training concept focused on strategy, management, leadership, communication and operational excellence. A programme introduced in 2014, “Winning Performance”, focuses on future leaders and on managers who have not been in the role for long. It trains them in strategy, team leadership, communication, and personal and social skills. The Group-wide programme encourages people to exchange ideas and experiences, and helps to cement the corporate culture. For experienced senior managers Implenia has developed the “Winning the Future” leadership programme in close collaboration with the Executive School of the University of St. Gallen. In 2015 the programme was held for the second time with employees from all language regions. This time round the contents of the Leadership, Customer Orientation and Operational Excellence, and Finance modules were focused more strongly on current challenges. Participants complete the course by presenting their business case to the Group Executive Board and Board of Directors. Recognising potential. Developing talent. Implenia systematically continued to expand its talent management process during the period under review. This included line managers working closely with HR officers to identify development potential in their staff so that individuals can be given the right development opportunities to help them deal with future challenges. The talent management process also lies at the heart of selecting participants for the management development programme (see above). With its 12-month trainee program, Implenia also offers graduates an attractive entryway into the world of work. Its trainee program has now been expanded to include commercial trainees. The programme consists of a variety of practical and theoretical modules, giving a comprehensive insight into different areas of the business and providing a solid basis for further career ambitions. As well as developing talented people in-house, such talent also has to be recruited on the labour market, which is why Implenia works so closely with the university sector. It is, for example, helping to fund the Excellence Scholarship Programme at the Swiss Federal Institute of Technology (the “ETH”) in Zurich. The programme provides additional training to outstanding young talents to prepare them for working in Switzerland.
EMPLOYEES
Strengthening learning. Taking social responsibilities seriously. Implenia believes that training young skilled employees is not only a social responsibility, but also that it very directly helps a business reach its corporate goals. The dual education system used in Switzerland, and to some extent in Germany and Austria, is a decisive success factor in the education of young people. Implenia wants to position itself as a benchmark for promoting young talent in the construction industry so it can increase the number of young people it recruits. During the period under review a total of 280 apprentices were employed by Implenia in on-site or office-based roles. Implenia apprentices finishing 2015
2014
Offered work
Apprentices finishing
Offered work
8
3
6
1
0
0
2
1
56
42
57
38
Infrastructure
5
3
4
4
International
5
3
0
0
74
51
69
44
Apprentices finishing
Corporate Center Development Switzerland
Total Total of young people doing apprenticeships at Implenia in 2015
ca. 280
ca. 220
Over the summer around 75 apprentices completed their training at Implenia. Around twothirds of the successful apprentices have been given jobs at the company. In order to implement the apprenticeship strategy consistently and support its trainers in their work, the Group has had a “Head of Trainees” since 2014. The main focuses of this role are to increase the number of apprentices and coordinate all the relevant activities across the Group.
86–87
Shared vision Thanks to the “Young G eneration” initiative, implemented in 2015, there is even greater communication between the generations within the Group. Young employees formulated their vision for Implenia’s future in workshops together with the GEBO.
The “Young Generation” speaks. Shaping the future together. Implenia set up the “Young Generation” initiative in July 2015 to address issues relating to the future of work, society and business. Young employees from all regions attended a number of workshops to produce a shared vision of the future. What are the main challenges and influencing factors for the industry in 2025? What innovations and technologies will be used? What about sustainability? What will be expected in future from employees and managers? A delegation of participants, all around 30 years of age, discussed their expectations and proposed solutions with the GEBO, which then used the discussion as a basis for immediate measures and a list of medium-term objectives. This intergenerational cooperation will be expanded further in future so the “Young Generation” is systematically integrated into decision-making processes throughout all areas of the company. You can get to know some of the members of the Young Generation – in the article starting on page 90.
EMPLOYEES
Supporting employees and managers With more than 8200 employees, Implenia is Switzerland’s largest construction and construction services company. The Human Resources department provides employees and managers with active support on personnel issues.
Well informed employees. Dialogue-oriented communication. Implenia maintains an open, dialogue-oriented culture of discussion. The Group pursues a prompt, target-group-oriented and transparent communication policy towards its employees. For example, last year the CEO wrote a personal letter directly to employees on around 20 occasions, covering subjects such as the latest state of the business, individual projects, corporate culture, general economic conditions and prospects for the future. Meanwhile, the “Impact” employee magazine, a central tool for internal communications, is posted out to all Group employees twice a year. The magazine is published in four languages and provides both information and entertainment. Employees can find all the documents relevant to them on the intranet. The “One company, many stories” section includes the latest stories from around the company. Employees also receive information every quarter about the latest decisions made by the Group Executive Board. Implenia puts on information events about concrete subjects as well and encourages dialogue through the use of blogs, discussion forums and personal exchanges with management.
88–89
People who find themselves in difficult situations have an even greater need for information and support. This is particularly the case with employees who have suffered an accident or illness. Implenia’s internal occupational health management team (BGM) is in charge of giving them the support they need. Medical professionals trained specifically in occupational health matters provide personal care as well as help with administrative challenges. They also work on preventing health problems within the company: in 2015 the team ran a voluntary vaccination program for all employees, and organised courses on stopping smoking, ergonomics in the workplace and coping with stress. You can find more information about BGM in the chapter on Health & Safety (from page 96). Code of Conduct. Close cooperation. Clear rules. In a people-centred organisation, the rules for working together must be clearly defined. The Code of Conduct, amended and expanded in 2015, sets out Implenia’s principles as a responsible company, and contains the rules for how employees should relate to each other, to business partners and to the authorities. The Code forms an integral component of employment contracts and is binding on all staff. Interactive e-learning programmes in all the company languages are used to communicate the main principles and legal requirements. All employees are obliged to complete these e-learning modules as part of their Implenia induction programme, and take a final test at the end of the course. The objective is to ensure all employees know the rules contained in the Code of Conduct and apply them in their day-to-day lives.
Implenia acknowledged as top employer In 2015 I mplenia was once again named as one of Switzerland’s most attractive employers. In a widely respected survey of the 100 best employers, the company was once again named in the top 20 engineering firms. Around 12,000 students from almost 50 Swiss universities and colleges took part in the Universum Swiss Student Survey in 2015.
YOUNG GENERATION
The future belongs to the young
Implenia’s new “Young Generation” initiative seeks to inject the energy and ideas of young people directly into the company and the Group Executive Board (GEBO). At the same time participants are benefiting from a new network of contacts within the Group. There’s no right or wrong answer to the question of what the future will bring. In order to be ready for tomorrow, however, we have to set the right course today. The goal is to make the most realistic assessment possible of the future. Implenia’s GEBO wanted to know, therefore, what young people under the age of 30 thought the future would be like. From their perspective what are the biggest challenges? What topics should Implenia focus on if it wants to position itself successfully in the market for the long term? This was the idea that gave birth to the “Young Generation”. No panic There’s a lively atmosphere in the hotel lobby where the meeting with members of the Young Generation is being held. Around 200 Implenia managers are already here for their traditional meeting with the company’s top executives. It’s a great opportunity for the Young Generation ambassadors to present their ideas for developing the initiative. The last details of their presentation still have to be discussed, but Mandy Neitzel and Marie Richtsteiger, representatives from Switzerland and Germany, are calmness personified in the run-up to the meeting. Sigrid Gunnemark has only just entered the lobby, however, and is showing some signs of stress. The flight from Sweden was delayed and she wants to check in to the hotel before the meeting. But getting overexcited about things like this is not her thing. Perhaps this is the much vaunted coolness of so-called “Generation Y”. We sit at a table in the lobby and ask the three what they expect of the future.
90–91
“There is a lot of potential within the Group, especially in project execution. There’s so much knowledge and experience. We’re not using this enough at the moment, and we have to get better at it in future. New communications tools will definitely play a decisive role here.” Sigrid Gunnemark, Tender Engineer, Scandinavia
What do you think will be the biggest challenges and influencing factors for the construction industry in 10 years time? Mandy Neitzel: Increasing globalisation and technological progress are two factors. The question we have to ask ourselves is whether we just want to be a follower, or whether we can help lead the way. With regard to major projects, I assume that complexity and the risks will keep on rising. Sigrid Gunnemark: Yes, I also think that projects are going to continue getting bigger and thus also more complex. But I’m confident that as a Group we have the potential to deal with this complexity. We have so much knowledge and experience at hand. We’re not using this enough at the moment, and we have to get better at it in future. And if we are to cope with this growing complexity, we’re going to have to be good at integrating new forms of communication into our processes. Marie Richtsteiger: I absolutely agree about new means of communication, but this has to be more than just e-mail and mobile phones. I’d like to see an internal platform where we can share best practices and lessons learned. It would help us to benefit from our colleagues’ knowledge and experience. Sigrid Gunnemark: This would definitely be a first step in the right direction. But other technological changes, like Building Information Modeling (BIM), are going to have a big impact on project management. We need much more cooperation along the whole value chain within the Group, but also in our dealings with customers and suppliers.
YOUNG GENERATION
“As someone working in IT, I see very directly that we are sometimes still exchanging information in very traditional ways. Cooperation, including cooperation across geographical borders and across Business Units has only just begun and it’s forcing us to try new approaches.” Mandy Neitzel, Requirements Engineer, Group IT
As you just said, the cooperation has to be better within the Group. How is it from your perspective? Are people cooperating well? Mandy Neitzel: I can’t give you a definitive answer, but as someone working in IT, I see very directly that we are sometimes still exchanging information in very traditional ways. Cooperation, including cooperation across geographical borders and across Business Units has only just begun and it’s forcing us to try new approaches. Things are going pretty well among Young Generation participants, but it’ll take a bit more time elsewhere (grins). Marie Richtsteiger: I’d certainly like things to move quicker (laughs). We can’t just operate at “Implenia pace”, because the world around us is moving at another tempo. We have to adapt and take a long hard look at the way we share information within the Group.
92–93
The idea of the Young Generation is nearly a year old: in 2015 selected employees from Scandinavia, Germany, Austria and Switzerland were invited to various workshops where they had a chance to discuss some key Young Generation topics: sustainability, culture, and innovation & technology. A delegation of ambassadors then presented the best proposals to come out of these workshops to Implenia’s highest operational management body, the GEBO. CEO Anton Affentranger was full of praise: “With their clear thinking these young people have very acutely identified where action is needed, and outlined some initial solutions.” Following the meeting, the GEBO signed off some immediate measures. “The commitment is there from top management, so I’m confident that the project has a chance of lasting success,” says Mandy Neitzel, who works as a Requirements Engineer in the IT department in Wallisellen. “But there are still some open questions about the organisation and structure of Young Generation,” she adds. Is there a difference between the generations in terms of whether and how much knowledge and experience is shared? Mandy Neitzel: I don’t know if there really is a difference, but the fact is that it’s always been the older generation showing the younger the best way to do things. With increasing digitisation, this paradigm is changing. In future, older people will also learn and benefit from younger. Sigrid Gunnemark: I haven’t experienced people from older generations being reluctant to share their experience. But it’s different when dealing with customers and suppliers. Then it quickly gets down to financial considerations. It’s quite normal for people not to disclose all the details. With things changing so quickly, do you think that employees will need to have different abilities? Marie Richtsteiger: I don’t believe that fundamentally different skills will be required. But greater demands will be placed on managers. You’ll not only need good technical skills, but will also require a lot of “soft” skills. We’ll also see hierarchies flattening out more. Otherwise organisations won’t be able to keep up with the faster-moving world around them.
YOUNG GENERATION
“I don’t believe that fundamentally different skills will be required. But greater demands will be placed on managers. You’ll not only need good technical skills, but will also require a lot of ’soft’ skills.” Marie Richtsteiger, Junior Project Manager, Germany & Austria
Sigrid Gunnemark: I would go further, because in the technological field there’s quite a lot going on that requires new skills and openness from employees. I also think it’s important to build up employees’ capacity to think and act for themselves. I’ll only really invest everything I have if I have the opportunity to change things myself... Mandy Neitzel: ... yes, Sigrid’s definitely right. Empowerment is an important issue. It’s partly to do with training and education, but it’s also about giving and taking responsibility. I think it’s equally important in this context to provide long-term development opportunities within a company. You’ll only keep employees at Implenia if you show them that their potential can be fulfilled within the Group. Motivation and passion are the keys to success Sigrid Gunnemark has worked since summer 2014 as an engineer in the tendering department at Implenia Sweden. She joined the Group in 2015 when it acquired Bilfinger Construction. She got her first experiences of the construction industry in 2012 when studying structural engineering at the Chalmers University of Technology in Gothenburg. “The Young Generation is a unique opportunity for young employees to feed their ideas into the Group – and at the very highest level,” says the 27-year-old. “We’re currently trying to find the right structure for
94–95
the group and the right way of working,” Marie Richtsteiger tells us. Management fired the starting shot for the initiative, and now it’s up to the Young Generation to organise themselves. “We’re setting up separate delegations in the three regions, Scandinavia, Germany & Austria and Switzerland,” explains the Junior Project Manager. These will elect their national committees, consisting of three people who will in turn elect a representative to sit on the Group Committee. “The great challenge will be to find a common denominator between the Young Generation’s ideas and Management’s ideas,” says Richtsteiger with a smile. You said that in future, demands will increase on managers in particular. Can you say in more detail what you expect to see? Mandy Neitzel: We all have different interests, strengths and weaknesses. Managers must be able to engage with these individual needs. Sigrid Gunnemark: Yes, the focus should be more on the needs of the employees. I don’t mean that you have to please everyone all the time, but you do have to make sure that you put the right people in the right place so they can make the most of their potential and abilities. Or you may have to concentrate on helping them overcome their weaknesses. Marie Richtsteiger: That would make everyone more committed and more prepared to give their all to a project. Mandy Neitzel: And these are exactly the kind of people that a company can rely on.
The Young Generation still has a lot of work to do; but with this initiative Implenia is giving the youngest people in the Group a chance to have their voices heard. How successful this is depends mainly on the commitment of Young Generation participants. “One thing that we have already gained is a network of contacts within the Group,” says Sigrid Gunnemark in conclusion: “And friendships have already developed out of this network.” All three agree that this is definitely good for Implenia.
HEALTH & SAFETY
Norwegians show the way!
Reinforcing safety culture Implenia held its first Health & Safety Week in Norway in 2015. Around 650 Implenia employees, subcontractors, suppliers and customers took part. Emergency response and fire drills, first-aid courses, advice on ergonomics in the workplace, climbing training and workshops for working at heights – these are just some of the activities carried out during the week. In addition, 28 safety inspections were conducted to make existing sites safer. Employees joined in wholeheartedly and the event was so successful that Health & Safety Week 2016 is already being planned.
96–97
Health & Safety at Implenia
Eyes up, look ahead, and keep thinking – that’s the philosophy at Implenia, because when you work in construction there are always risks to manage. Last year, Implenia made Health & Safety a top priority. Thanks to intensive training and communication, as well as regular safety inspections on construction sites, the number of accidents was reduced by another 22%. Despite this success, the principle remains: Health & Safety is still of paramount importance and the following slogan is as applicable as ever: Safety before profit! Most accidents on construction sites can be prevented, and that is precisely Implenia’s goal: accidents that endanger the health or safety of employees or other people must be prevented. This is set out explicitly in the Group’s Code of Conduct: “By keeping strictly to safety rules we create a safe and motivational working environment.” Since 2014, Health & Safety has been a fixed item on the agenda of every Group Executive Board meeting, underlining the high priority Implenia gives to workplace safety and protecting health.
HEALTH & SAFETY
Safety at work Health & Safety at work is very important to Implenia. Wearing the right protective clothing and securing barri ers correctly are two of the keys to safety on site.
Defined processes create clarity Implenia carried out a variety of programmes and campaigns in 2015 to sharpen em ployees’ awareness of safety matters. The objective is to strengthen the safety culture – in Scandinavia, Germany, Austria and Switzerland. Health & Safety processes lie at the heart of all this. These processes are an essential part of the Implenia Management System (IMS) and include the following principles: 1. Health & Safety is simultaneously an individual and a management responsibility. 2. I always wear my personal protective equipment. 3. If life or health are at risk I say “stop!” in good time. 4. I know my Health & Safety regulations. 5. Zero tolerance of alcohol and drugs at work. 6. I take fatigue and excessive stress seriously. 7. I know what to do in an emergency. 8. I hide nothing and report all dangerous situations.
98–99
Implenia’s Safety Officers (SOs) are responsible for implementing Health & Safety processes in the Business Units. SOs will ideally spend at least 70% of their working hours at construc tion sites. Implenia continued to expand its SO organisation during the period under review. Accurate reporting and evaluation of incidents are important tasks within the Health & Safety organisation. They help Implenia identify what improvements need to be made and introduce appropriate preventive measures. In 2016 SOs receive intensive training on dangerous items and the environment so they can cover the full range of HSE (Health/Safety/Environment) issues professionally. During the reporting period the integration of Health & Safety was intensified as an integral part of work preparation (AVOR). Health & Safety should now be a focus as soon as a construc tion site is being planned. There will be a dedicated AVOR Health & Safety training course in 2016. Regular HSE workshops and steering committee meetings ensure that experiences are exchanged within the Health & Safety organisation. New areas for action and potential for improvement are identified together. One of the decisions taken in 2015 was to streamline control, audit and documentation obligations into optimised processes, develop a standardised training concept and formulate a specific Health & Safety governance system. Best of both worlds In the wake of the Bilfinger Construction acquisition, Health & Safety was one of the central focuses of integration work. The Health/Safety/Environment (HSE) Sector, part of the Technical Center, had already been strengthened with additional personnel in 2014, and there was a fur ther expansion during the year under review. The sector is now led by two managers – a Head of Switzerland and a Head of Europe. Implenia is currently working on a uniform, Group-wide approach to accident figure reporting. The merger between Implenia and Bilfinger Construc tion created synergies in Health & Safety: the best of both cultures has been preserved and the merger is being seen as an opportunity to learn from each other.
HEALTH & SAFETY
Prizewinner Kristine Wangen, Project Manager for Norwegian public construction directorate Statsbygg (left) presents the “Golden Helmet” to Implenia’s Quality and HSE Manager Kathrine Lybekk.
Safety is a management issue With Health & Safety, an example has to be set every day. Managers and senior staff have to act as role models. Apprentices and new employees should be able to count on their man agers doing the right thing. Personal safety equipment is a good example: if managers wear it consistently, other employees will follow suit. Implenia is doing more work in this area in 2016: an internal information campaign with leaflets and posters is planned with the aim of increasing managers’ awareness of their duties as role models.
Golden Helmet for I mplenia I mplenia was awarded the “Golden Helmet” for its work as general contractor on the K202 project in Oslo’s government district. Statsbygg, the public-sector construction directorate, gives the prize to construction companies that put a particular focus on health and safety on their sites and that fulfil strict requirements. Further proof of the effectiveness of I mplenia’s occupational Health & Safety systems.
100–101
Occupational Health & Safety film stars 2015 saw the first presenta tion of the newly created I mplenia Health & Safety Awards. Nominees were presented to Implenia staff in short videos before votes were cast to choose the winner.
Emergency planning and first aid training If, despite all the precautions, an accident happens, the key thing is to act quickly to limit the damage. On Implenia construction sites, there are detailed rules about how to respond in an emergency – from initial reporting to the formation of a local task force. These emergency plans are available to all employees and are the subject of regular training. To ensure that any one affected by an accident or emergency is treated quickly, Implenia arranged for 75 employ ees to receive first aid training from qualified paramedics last year. In the French-speaking part of Switzerland employees with first aid training are identified by a special sticker – white cross on a green background – on the back of their helmets. Implenia safety standards extended to subcontractors Implenia’s Health & Safety principles and safety standards also apply to subcontractors and suppliers. From 2016 work contracts will include a specification sheet detailing the relevant requirements. These include the obligation for each subcontractor to carry out a risk analysis before starting work. Subcontractors will also have to nominate a person responsible for Health & Safety who always has to be present on site during the work. Last but not least, subcontractors are obliged to give their employees, temporary workers and suppliers training in the content of the Code of Conduct. In this way, Implenia ensures that its Health & Safety rules are obeyed at all sites.
HEALTH & SAFETY
Occupational accidents (incidents per 1000 full-time posts (FTE))
Non-occupational accidents (incidents per 1000 full-time posts (FTE); basis: All units in Switzerland; as at 31.12.2015, excl. relapses)
143
103 2015
87
96 2013
2014
100
2015 1
2014
0
2013
0 2012
50
2011
50
2012
100
100
86
100
2011
150 110
150
148
200 159
200
1 Including Bilfinger Construction
Accident numbers down again Pleasingly, the numerous Health & Safety initiatives and immediate actions, such as the increased on-site presence of Safety Officers and the simplification of reporting procedures, had an impact in 2015: the overall number of accidents per 1000 full-time employees across the Group went down from 110 to 86 (–22%). Injuries caused by tools and equipment as a propor tion of total accidents were also reduced, from 19% in the previous year to 13% in 2015. The optimisation of training and instruction was one of the things that helped here. The positive trend in accident figures provides an incentive to redouble efforts in the area of Health & Safety. The goal is to reduce the number of accidents still further and to practice systematic occupational health management. The generic term “lack of concentration” is often given as the cause of accidents. This has prompted Implenia to start thoroughly investigating the underlying cause of accidents by meticulously questioning and examining each individual in cident. More frequent inspections by the people responsible for the sites should also help here. Because as previously mentioned, safety is a management issue.
102–103
Accidents by type 2015
31%
Slips and trips
19%
Manual load handling
13%
Tools and equipment
11%
Eye injuries
26%
Others
Non-occupational accidents went up by 18% during the period under review compared with the previous year. Most accidents occurred when playing ball sports, on the roads or as a result of slips and trips in home and garden. The breakdown of absences due to accidents at work and non-work-related accidents was more or less the same as in 2014. Absence due to illness also remained about the same. 65% of absences were the result of illness, with another 21% down to accidents at work and 14% caused by non-work-related accidents. When caring for and reintegrating employees who have suffered from accidents or fallen ill as a result of their work, Implenia works with in-house health managers who support the individuals con cerned and co-ordinate their treatment. In 2015 the internal occupational health management (BGM) team dealt with 539 cases. Of these, 145 employees are under examination or in therapy, while the remaining 394 have been able to return to work. First Health & Safety Award The newly created Implenia Health & Safety Award was presented for the first time in February 2015 during the annual internal management conference. The deserved winner was Antonio Barbagallo, Foreman at the “La Petite Prairie” construction site in Nyon, who noticed that one of his colleagues was suffering the first signs of a heart attack. By giving first aid im mediately, he saved the colleague’s life. From 2015 onward, Implenia is using the Health & Safety Award to celebrate outstanding achievements in the field of Health & Safety at work by a construction site, team or individual. It should also encourage employees to be more aware of their responsibility for Health & Safety. A jury selects four projects from the proposals submitted. The winner is then voted for by all Implenia employees.
SUSTAINABILITY
Third Sustainability Report
Exclusively online Implenia is publishing its third sustainability report at the same time as its 2016 half-year report. Among other things the publication, prepared in line with the Global Initiative’s revised GRI 4.0 guidelines, reveals the extent to which the company has achieved the goals set out in its last Sustainability Report (2012 / 13), as well as defining new goals for 2016 / 2017. The report is only available online, and can be found at http://sustainability.I mplenia.com. The information it contains has been optimised for all devices, including laptops, tablets and smartphones, and enriched with various multimedia elements, such as animations, films and reportage.
104–105
Implenia lives up to its responsibilities
Since launching its sustainability initiative in 2009, Implenia has moved a significant way towards its aim of being a thoroughly sustainable company. However, there is still much to be done. The Sustainability Report, which will be published for the third time in summer 2016, will provide details of what has been achieved and about Implenia’s new objectives. Switzerland’s construction industry employs around 7% of the national workforce and contributes substantially to the country’s prosperity by creating 5% of its total economic added value. The sector’s influence on the environment and on resource consumption is disproportionately large: it accounts for around 30% of Switzerland’s greenhouse gas emissions, 40% of its energy consumption and approximately half of its waste. Construction clearly has a great responsibility when it comes to sustainability. As the leading company in the Swiss construction industry, the challenge for Implenia is of particular relevance. Five priorities for sustainability Implenia’s sustainability work is guided and influenced by megatrends such as mobility, the “Energiewende” (“energy turnaround”, the move towards renewables), urban sprawl and resource scarcity. The Group’s activities revolve around five priorities: Implenia wants to provide sustainable products and services, to offer employees an attractive working environment, to respect the natural environment, to work for society and to achieve financial excellence.
SUSTAINABILITY
Sustainability makes a difference Implenia’s commitment from 2009 to now Anchored in the vision
Commitment strengthened
2009
Training and development intensified
2010
2011
Sustainable Construction Network Switzerland
2012
Resources
1. Qualification
2. a lu a Ev
Ground
3
Subcontractor/ supplier management
4
5
6
Costs
5. Suspension
s 3. Cla
Value retention
Internal standards introduced GeNaB ®
tio
n
Location and architecture
2
4.
1
t ion
0
e l o p m e nt Dev
Community
First Eco-Drive training
First report published
Supplier requirements defined
Sustainable products and services The construction industry has an enormous impact on the environment. Implenia always tries to find sustainable approaches, especially with projects it has developed itself. The Group also requires its suppliers to operate sustainably and is actively committed to sustainable construction standards.
Attractive working environment Implenia wants to be an attractive employer and does a lot to protect the health of its employees and ensure their safety. The Group is also committed to its employees’ well-being and their professional training and development.
Respect for the environment Implenia has set itself ambitious environmental targets. Among other things, the company is keen to increase its energy efficiency and in so doing cut its CO2 emissions and consumption of resources. Implenia uses a tailor-made system to monitor its environmental performance systematically.
s if
ic a
106–107
Energy / resource consumption
Participation certificate for SNBS pilot phase
Winning Performance / Winning the Future
Materiality analysis with internal and external stakeholders
1,245
1,155
1,043
9,116 21,462
2,380
3,824
2013
2014
2015
2016
Implenia
Code of Conduct Unternehmens- und Verhaltensrichtlinien
Code of Conduct enhanced
Second report published
Third report will be published
Social commitment and compliance The Code of Conduct provides binding guidelines for all the company’s activities. It contains principles for dealing with customers, business partners and employees as well as rules on environmental and social issues. Implenia involves all stakeholders in dialogue and informs the public transparently about its activities.
Financial excellence Implenia aims to create sustainable value. The Group always focuses its structures on market requirements and uses efficient, customer-oriented processes. It maintains its entrepreneurial freedom by striking a good balance between opportunities and risks.
INFORMATION FOR INVESTORS
Information for investors Key data Ticker symbol
IMPN
Security number
2 386 855
ISIN
CH002 386 8554
Share capital Share capital (in CHF 1,000) Number of registered shares issued Of which treasury shares Number of outstanding registered shares Par value of each registered share (in CHF) Conditional / authorised capital (in CHF 1,000)
31.12.2015
31.12.2014
31.12.2013
31.12.2012
31.12.2011
18,841
18,841
35,097
35,097
35,097
18,472,000 18,472,000 18,472,000 18,472,000 18,472,000 163,105
155,301
102,316
100,046
179,006
18,308,895 18,316,699 18,369,684 18,371,954 18,292,994 1.02
1.02
1.90
1.90
1.90
4,710
9,421
17,548
17,548
17,548
31.12.2015
31.12.2014
31.12.2013 31.12.20121
31.12.2011
Key figures Earnings per share (in CHF)
2.64
3.77
4.11
3.82
Price-earnings ratio
19.4
15.3
15.8
10.4
7.2
Equity per share (in CHF)
33.1
33.6
32.8
28.8
29.1
Gross dividend2 (in CHF) Dividend yield Dividend yield adjusted for tax effect3 Distribution ratio4
3.31
1.90
1.80
1.60
1.40
1.10
3.7%
3.1%
2.5%
3.5%
4.7%
5.5%
4.7%
3.7%
5.2%
6.9%
71.9%
47.6%
39.1%
36.8%
33.4%
1 Restated 2 2011 – 2012 payment from capital contribution reserves 2013 CHF 0.72 payment from capital contribution reserves and CHF 0.88 from reduction in par value 2015 CHF 1.80 ordinary dividend, CHF 0.10 one-off anniversary dividend (subject to the Annual General Meeting of Shareholders’ approval of profit distribution) 3 Calculated with a tax rate of 33% 4 Based on number of outstanding shares as at 31.12.
108–109
Breakdown of share capital by type of shareholder
Breakdown of shareholders by size of shareholding
(shares with and without voting rights)
(shares with and without voting rights) 0.3%
14.1% 1.6%
35.0%
4.8%
6.5%
35.0% 13.1%
9.2%
15.6%
40.3%
24.5%
Legal entities Pension funds Investment funds / foundations Banks / insurance companies Private individuals Unregistered shares
1172 shareholders with 1 – 100 shares 2305 shareholders with 101 – 1,000 shares 390 shareholders with 1001 – 10,000 shares 80 shareholders with 10,001 – 100,000 shares 17 shareholders with more than 100,000 shares Unregistered shares
Distribution policy Over time, Implenia is aiming for a payout ratio of 50%.
Shareholder structure Shareholders owning more than 3% of share capital (as at 31 December 2015) Name
Number of shares
Percentage of share capital
Parmino Holding AG / Max Rössler
2,980,500
16.14%
Chase Nominees Ltd.
1,442,416
7.81%
Rudolf Maag
1,000,000
5.41%
INFORMATION FOR INVESTORS
Share performance Share price 2015, relative performance –12.0% (incl. comparison with SPI) 130% 120% 110% 100% 90% 80% 70% Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Implenia N
Source: Bloomberg
Dec
SPI
Share price since 6 March 2006 (first trading day), relative performance +47.8% (incl. comparison with SPI) 300% 250% 200% 150% 100% 50% 2006 Source: Bloomberg
2007
2008
2009
2010
2011
2012
2013
2014
Implenia N
2015
SPI
110–111
Share performance 2015
2014
2013
2012
2011
Year-high (in CHF per share)
68.20
72.40
66.75
40.70
32.50
Year-low (in CHF per share)
45.55
47.30
38.70
22.95
19.50
Price as at 31.12. (in CHF per share)
51.10
57.75
65.05
39.90
23.65
Annual performance in %
(11.5%)
(11.2%)
63.0%
68.7%
(26.0%)
Average number of shares traded per day
46,663
42,419
43,207
32,024
16,990
943,919
1,066,758
1,201,604
737,033
436,863
Stock market capitalisation as at 31.12. (in CHF 1,000) Source: Bloomberg
INFORMATION FOR INVESTORS
Bonds Bonds The first ever bond issued by Implenia, worth CHF 200 million, falls due on 12 May 2016, so in 2014 a second bond was issued worth CHF 125 million, with a 1.625% coupon and a tenyear term (matures on 15 October 2024). This was followed in June 2015 by a subordinated convertible bond worth CHF 175 million with a coupon of 0.5 percent and a due date in 2022 (expiry date: 30 June). The transaction was very well received by the market. The offer was oversubscribed several times, which is why the originally planned issue volume of CHF 150 million was raised to CHF 175 million. The conversion price is CHF 75.06 (conversion premium of 32.5%) and the bond will be convertible into 2.33 million registered shares of Implenia Ltd., equivalent to 12.6 percent of currently outstanding shares. The shares to be delivered as a result of conversion will be made available by providing new shares from the conditional capital. Shareholders’ preferential right to subscribe to the convertible bond were excluded for this offer. The conversion price can change if circumstances change (see convertible bond prospectus of 23 June 2015). Specifically, the conversion price is reduced by the difference between the dividends per share paid out from 23 June 2015 and the original dividend paid of CHF 1.80 per share (partial dividend protection). Credit Suisse’s credit research department covered the bond for the first time last year and gave it a rating of “Mid BBB / stable”. In 2015 both UBS and ZKB confirmed their rating of “BBB / stable”.
Price history of 3.125% bond, CHF 200 million, 2010 – 16 (ISIN CH0112193518) 110% 108% 106% 104% 102% 100% 2010 Source: Bloomberg
2011
2012
2013
2014
2015
112–113
Price history of 1.625% bond, CHF 125 million, 2014 – 24 (ISIN CH0253592767) 110% 105% 100% 95% 4 th quarter 2014
1st quarter 2015
2 nd quarter 2015
3 rd quarter 2015
4 th quarter 2015
Source: Bloomberg
Price history of 0.5% convertible bond, CHF 175 million, 2015 – 22 (ISIN CH0023868554) 104% 102% 100% 98% 96% Jul 2015 Source: Bloomberg
Aug 2015
Sep 2015
Oct 2015
Nov 2015
Dec 2015
INFORMATION FOR INVESTORS
Overview of key figures Five-year Implenia Group overview
Order book (as at 31.12.)
2015
2014
2013
20121
2011
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
5,133,513
3,001,753
3,190,380
3,101,010
3,153,915
Income statement Production output
3,430,459
3,087,216
3,288,021
2,998,694
2,776,666
Consolidated revenue
3,288,200
2,919,760
3,057,414
2,800,443
2,522,646 93,529
EBIT Business Units
86,173
103,407
113,952
108,829
Miscellaneous / Holding
(6,237)
5,057
1,663
1,458
147
Operating income
79,936
108,464
115,615
110,287
93,676
Depreciation and amortisation EBITDA Consolidated profit
81,424
42,788
42,786
43,444
46,813
161,360
151,252
158,401
153,731
140,489
52,018
73,006
82,634
76,870
61,351
Cash flow statement Cash flow from operating activities Cash flow from investment activities Cash flow from financing activities Free cash flow
145,194
116,901
123,277
178,146
102,449
(129,016)
(49,733)
(44,352)
(44,533)
(35,138)
136,119
85,778
(29,757)
(19,168)
(14,270)
16,178
67,168
78,925
133,613
67,311
Investment activities Investments in real estate transactions Real estate disposals Investments in fixed assets 1 Restated
65,381
54,974
51,665
89,384
76,459
(98,648)
(42,598)
(85,003)
(83,899)
(29,946)
58,843
49,151
54,064
40,353
38,720
114–115
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
31.12.2013 31.12.20121 CHF 1,000
CHF 1,000
31.12.2011 CHF 1,000
Balance sheet Cash and cash equivalents
877,108
731,534
582,581
537,358
402,532
Real estate transactions
196,087
229,777
217,473
251,690
247,047
Other current assets Non-current assets Total assets Financial liabilities Other liabilities Equity Total equity and liabilities Net cash position
1,068,281
982,649
982,297
869,809
820,059
584,001
413,699
414,023
415,272
418,065
2,725,477
2,357,659
2,196,374
2,074,129
1,887,703
489,002
330,057
211,512
215,964
209,073
1,612,699
1,397,813
1,356,174
1,308,567
1,135,102
623,776
629,789
628,688
549,598
543,528
2,725,477
2,357,659
2,196,374
2,074,129
1,887,703
388,106
401,477
371,069
321,394
193,459
Capital structure Equity ratio in %
22.9
26.7
28.6
26.5
28.8
Long-term liabilities in %
16.2
17.3
13.3
16.1
15.7
Short-term liabilities in %
60.9
56.0
58.1
57.4
55.5
7,445
5,777
5,781
5,886
5,648
Headcount (FTE)2
2015
2014
20131
2012
2011
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
Key figures EBITDA margin in %3
4.9
5.2
5.2
5.5
5.6
Operating income margin in %3
2.4
3.7
3.8
3.9
3.7
29.2
48.3
46.0
41.3
27.3
Return on Invested Capital (ROIC) in % 1 Restated 2 Excl. temporary staff 3 Basis: consolidated revenue IFRS
INFORMATION FOR INVESTORS
Communications, contacts and dates Communications Implenia follows an open, transparent and purposeful information policy in the interests of its shareholders, investors and the general public. In its periodic and ad hoc reporting, Implenia is committed to equal treatment of all stakeholder groups with regard to timing and content. Comprehensive information is available to all investors, journalists and interested members of the public at www.implenia.com under the “Investors” link. All the latest investor presentations are available here too. By clicking through to the “Media / News Service” link on the site, interested parties can subscribe to our ad hoc communications or order physical copies of our Annual Report and Half-Year Report. As in previous years, in 2015 the CEO, CFO and Head of Investor Relations presented the company to institutional investors at roadshows, conferences and meetings. Almost half of the investor contacts took place in Switzerland. Outside Switzerland, investor communication was ramped up significantly in the USA and Scandinavia. As is traditional, Implenia held two conferences on the financial results in 2015 – half-year and full-year – for journalists and analysts.
Contacts For ongoing communication with shareholders, investors, journalists and analysts: Serge Rotzer, Head of Investor Relations T +41 58 474 07 34, F +41 58 474 95 29 serge.rotzer@implenia.com Philipp Bircher, Head of Communications Group T +41 58 474 74 77, F +41 58 474 95 03 philipp.bircher@implenia.com
Dates 2016 Annual General Meeting
22.3.2016
Ex-date (dividend distribution)
24.3.20161
Record date (dividend distribution)
29.3.20161
Payment date (dividend distribution)
30.3.20161
Media and analysts’ conference on the 2016 first-half results
23.8.2016
Media and analysts’ conference on the 2016 full-year results
23.2.2017
2017 Annual General Meeting
22.3.2017
1 Dates subject to approval of dividend distribution by AGM.
“The culture in a ‘One Company’ project team is fundamentally different: we construction people take part in discussions right from the start. Ultimately you can also feel the difference in the quality of our work.” “Pont Rouge” in Geneva One of the region’s largest real estate projects is being built on the site surrounding the future Lancy – Pont Rouge railway station in Geneva. The client, SBB Immobilien, has commissioned Implenia to act as total contractor for the first phase of this major construction project. Five mixed-use properties are being built. The 120,000 square metres of floorspace will include offices, commercial units and supplementary infrastructure. Located at the foot of the Lancy hills, around 600 new residential units will complement the commercial development.
Alain Coudurier, Project Manager Special Foundations “Pont Rouge”, Implenia Infrastructure
“What difference does ‘One Company’ make? For me there are three essential points. Firstly, transparency is increased; secondly, communication is improved; and thirdly, everyone involved has a clear financial target.” Laurent Jarlégant, Overall Project Manager “Pont Rouge”, Implenia Buildings
Facts & figures “Pont Rouge” Customer SBB Immobilien AG Planning Pont 12 (architects), EDMS (civil engineer), Weinmann Energies (technical engineer) Construction contractor Implenia Switzerland Ltd. Project remit Five buildings with a floor area of 120,000 m² The challenge Foundation engineering close to the rail tracks Special features Aiming for DGNB Gold certification Investment volume CHF 250 million
Corporate Governance
120–121
Group structure and shareholders 123 — Capital structure 127 — Board of Directors 133 — Group E xecutive Board 147 — Compensation, shareholdings and loans 152 — Shareholders’ participation rights 155 Changes of control and defence measures 158 — Auditors 158 — Information policy 159 — “One Company” – sue & til 161
CORPORATE GOVERNANCE
Corporate governance
As required by the SIX Swiss Exchange AG’s Directive on Information Relating to Corporate Governance of 1 September 2014 (Directive Corporate Governance, DCG), this chapter describes those main principles of Implenia Group’s organisation and structure that directly or indirectly affect the interests of shareholders and other stakeholders. Unless stated otherwise, information is correct as of the balance sheet date (31 December 2015). The structure and numbering of this chapter accord with the appendix to the SIX Swiss Exchange AG’s Directive Corporate Governance (DCG) of 1 September 2014. Information on remuneration, profit-sharing and loans is summarised in the Remuneration Report, which starts on page 165. Implenia’s principles and rules regarding corporate governance are set out in its Articles of Association and organisational regulations. Rules on acceptable business practices and stan dards of behaviour for all Implenia Group employees are set out in its Code of Conduct. The Articles of Association of 24 March 2015 and the Organisational and Management Regulations of 21 December 2015, both of which applied on the balance sheet date of the year under review, as well as the Code of Conduct that was revised during the year under review, are available on Implenia’s website under the following links. http://www.implenia.com http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html http://www.implenia.com/en/about-us/corporate-governance/organizational-and-management- regulations.html http://www.implenia.com/en/about-us/corporate-governance/code-of-conduct.html
122–123
1. Group structure and shareholders 1.1 Group structure Implenia Ltd. is a holding company, which directly or indirectly controls all the companies within the Implenia Group. 1.1.1 Operational Group structure At the end of December 2014 Implenia announced its acquisition of Bilfinger Construction. As part of the integration of the former Bilfinger Construction, Implenia adjusted its operational structure during the year under review. Implenia’s Infrastructure unit now focuses on international tunnel and foundation engineering projects. The Group also operates internationally through its Scandinavia and Germany & Austria units. Implenia remains active in Switzerland with its Modernisation & Development, Construction German-speaking Switzerland and Construction French-speaking Switzerland units. These operational units are supported by the Technical Center and the central Group functions pooled in the Corporate Center.
As a result of the adjustments to the operational structure, segment reporting was also changed. As from the 2015 half-year results, Implenia now reports on the basis of the following segments. Development Segment In the Development Segment, Implenia brings together its expertise in real estate project development, from initial idea to completed building. Switzerland Segment The Switzerland segment includes the Modernisation, Buildings, Construction German- speaking Switzerland and Construction French-speaking Switzerland units. Modernisation brings together the Group’s capabilities in conversion and renovation, from consultancy to implementation. Buildings offers its supra-regional customers in Switzerland integrated services for complex buildings, ranging from planning and coordination to actual construction. The Construction German-speaking Switzerland and Construction French-speaking Switzerland units are the face of Implenia in the Swiss market for roadbuilding, civil engineering and regional building construction capabilities. Infrastructure Segment The Infrastructure Segment brings together Implenia’s transnational activities in tunnelling and foundation engineering.
CORPORATE GOVERNANCE
Group CEO Anton Affentranger*
Human Resources
Technical Center
Thomas Foery
Jörg Kaiser
IT Guido Schmidt
Moderni sation & Development
Buildings
Infrastructure
Construction Germanspeaking Switzerland
Construction Frenchspeaking Switzerland
Scandinavia
Germany & Austria
CFO / Corporate Center
Adrian Wyss**
Anton Affentranger* a.i.1
René Kotacka*
Christof Gämperle*
André Métral*
Petter Vistnes*
Stefan Roth**
Beat Fellmann*2
* Member of the Group Executive Board (GEBO) ** Business Unit Head 1 On 3 February 2016, a management committee consisting of Anton Affentranger, CEO, Jens Vollmar (management responsibility) and Christian Wick (technical responsibility) took over management of Business Unit Buildings. The CEO remains in charge of the Business Unit until further notice. 2 In his function as CFO / Corporate Center, Beat Fellmann’s direct reports include Nicolas Ecoffey (Head of Corporate Controlling), German Grüniger (General Counsel) and Jens Sasse (Head of Procurement).
Operational units Functional units
124–125
International Segment The International Segment includes Implenia’s activities in the German, Austrian, Norwegian and Swedish markets, as well as its foreign gravel plants. Implenia Scandinavia offers its customers comprehensive services for complex infrastructure projects including conventional tunnelling. It also provides niche services for road and rail. Implenia Germany & Austria is the expert provider for regional customers in German-speaking countries outside Switzerland that need services for civil works, general civil engineering, maintenance and repair, and building construction. Miscellaneous / Holding Segment The Miscellaneous / Holding Segment comprises the Technical Center and the central Group functions. Technical Center The Technical Center works together with the operational units to promote health & safety, environmental management and sustainability. It also works on lean processes and promotes further technical progress as the driving force behind innovation and continuous improvement. It helps reduce technological risks and thereby cut costs.
The Machinery & Electrical Engineering (MEE) and Formwork Construction (FC) units, along with the Central Laboratory, are now also part of the Technical Center, which helps ensure good networking with operational units based in Switzerland. It also ensures that the whole Group benefits from expertise relating to construction-related innovation, patents and services. Central Group functions The Corporate Center provides central services to support the operational Business Units. These services include Corporate Controlling, Business Development, Investor Relations, Legal, Financial Risk Management, Investment Management, Treasury, Marketing / Communications, Insurances and Procurement. The Human Resources and IT departments, which also supply central services, report directly to the CEO. Group Executive Board The Group Executive Board is the executive committee and is made up of the Chief Executive Officer, the Chief Financial Officer as well as other members designated by the Board of Directors.
CORPORATE GOVERNANCE
1.1.2 Listed companies within the Group Implenia Ltd., registered office in Dietlikon (Canton Zurich), is a Swiss company that has been listed on the SIX Swiss Exchange AG (security no. 2.386.855, ISIN code CH0023868554, abbreviation IMPN) since 6 March 2006. Its consolidated holdings do not include any listed companies. 1.1.3 Unlisted companies within the Group The unlisted companies within the Group, including their official names, registered offices, share capital and the stake held by the Group, are shown on pages 272–273 in the notes to the Financial Report. 1.2 Significant shareholders Stock Exchange Law dictates that shareholders of a listed company in Switzerland whose voting rights reach, exceed or fall below certain thresholds based on their proportion of total share capital must report and disclose these movements.
According to the information available to the company, the shareholders listed below held more than 3 percent of Implenia Ltd.’s share capital and voting rights on 31 December 2015. Significant shareholders Shareholder
Parmino Holding AG / Max Rössler
Percentage of share capital
16.1%
Chase Nominees Ltd.
7.8%
Rudolf Maag
5.4%
For the year between 1 January and 31 December 2015, all disclosure notifications received by Implenia Ltd. concerning shareholdings within the meaning of Article 20 of the Federal Act on Stock Exchanges and Securities Trading of 24 March 1995 (Stock Exchange Act, SESTA) are shown by the Disclosure Office of the SIX Swiss Exchange AG under the following link: https://www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html
Implenia Ltd. has received no disclosure notifications about shareholdings since 1 January 2016. 1.3 Cross-shareholdings There are no cross shareholdings.
126–127
2. Capital Structure 2.1 Capital As at 31 December 2015, Implenia Ltd.’s share capital amounts to CHF 18,841,440 divided into 18,472,000 registered shares with a par value of CHF 1.02 each. The shares are fully paid up. In addition, as at the balance sheet date, Implenia Ltd. has conditional capital of CHF 3,768,288 and authorised capital of 3,768,288 francs. Based on this conditional and authorised capital, share capital could be increased in line with the criteria set out in Art. 3a and 3b of the Articles of Association of 24 March 2015 (hereinafter “Articles of Association”) by a total of CHF 4,710, 360. 2.2 Conditional and authorised capital in particular Conditional capital (Art. 3b of the Articles of Association) The share capital can be increased by a maximum of CHF 3,768,288 by issuing a maximum of 3,694,400 fully paid-up registered shares with a par value of CHF 1.02 each by exercising conversion and / or option rights issued in conjunction with bonds or other financial market instruments of the Company or one of its Group companies. If bonds or other financial market instruments carrying conversion and / or option rights are issued, the shareholders do not have a subscription right. The current owners of conversion and / or option rights are entitled to subscribe to new shares. The conversion and / or option conditions will be determined by the Board of Directors (Art. 3b Para. 1 of the Articles of Association).
When issuing bonds or other financial market instruments carrying conversion and / or option rights, the Board of Directors is authorised to restrict or cancel the pre-emptive subscription rights of the shareholders if the shares are issued to finance or re-finance the acquisition of other companies or parts of companies or to invest in other companies, for new investment projects, or to refinance issued bonds or other financial market instruments or for the purpose of issuance on national or international markets. If the pre-emptive subscription right is cancelled by the Board of Directors, the following applies: the bonds or other financial market instruments are floated at market conditions (including the dilution clauses standard to the market) and new shares are issued in accordance with the prevailing conversion and option conditions. Conversion rights may be exercised for a maximum period of 15 years and option rights for a maximum period of 10 years from the relevant issue date. The conversion or option price and its method of calculation are determined at market conditions, with the stock exchange price applying to the shares of the Company (Art. 3b Para. 3 of the Articles of Association).
CORPORATE GOVERNANCE
The acquisition of shares through the exercise of conversion and / or option rights and every subsequent transfer are subject to the restrictions of Art. 7 of the Articles of Association (Art. 3b Para. 2 of the Articles of Association). If the Board of Directors exercises its right to create share capital pursuant to Art. 3a (authorised share capital; see explanation below), the Board of Directors will no longer be entitled to exercise its right in this respect to issue bonds or other financial market instruments pursuant to Art. 3b of the Articles of Association (conditional share capital) for the same amount, since share capital pursuant to Art. 3a of the Articles of Association (authorised share capital) and Art. 3b of the Articles of Association (conditional share capital) together may be raised only by a maximum of CHF 4,710,360.00 (Art. 3b Para. 4 of the Articles of Association). Authorised capital (Art. 3a of the Articles of Association) The Board of Directors is authorised to increase the share capital at any time up to 26 March 2017 by a maximum of CHF 3,768,288 by issuing a maximum of 3,694,400 fully paid-up registered shares with a par value of CHF 1.02 each. The share capital may be increased by partial amounts (Art. 3a Para. 1 of the Articles of Association).
The Board of Directors determines the issue date, issue price, type of contribution, c onditions for the exercise of subscription rights and the date for the beginning of dividend entitlement. The Board of Directors may issue new shares by way of a firm underwriting by a banking institution or consortium and a subsequent offer to the current shareholders. The Board of Directors may allow subscription rights that are not exercised to expire or place shares for which subscription rights were granted but not exercised with the public at market conditions (Art. 3a Para. 3 of the Articles of Association). The Board of Directors is authorised to restrict or cancel the subscription rights of shareholders and allot the shares to third parties if the shares are issued for the purpose of the acquisition of companies or parts of companies or investments in other companies or to finance or re-finance such transactions (Art. 3a Para. 4 of the Articles of Association). The subscription and acquisition of the new shares and every subsequent share transfer are subject to the restrictions of Art. 7 of the Articles of Association (Art. 3a Para. 2 of the Articles of Association). If the Board of Directors exercises its right to issue bonds or other financial market instruments pursuant to Art. 3b of the Articles of Association (conditional share capital), the Board of Directors will no longer be entitled to exercise its right in this respect to create share capital pursuant to Art. 3a of the Articles of Association (authorised share capital) for the same amount, since share capital pursuant to Art. 3a (authorised share capital) and Art. 3b (conditional share capital) together may be raised only by a maximum of CHF 4,710,360.00 (Art. 3a Para. 5 of the Articles of Association).
128–129
2.3 Changes in capital over the last three financial years On 25 March 2014 the Annual General Meeting decided to decrease the share capital by reducing the nominal value from CHF 1.90 to CHF 1.02 per share. The reduction amount of CHF 0.88 per share was used to repay shareholders. As part of this capital decrease, the AGM also decided to adjust the nominal value of the maximum amount of conditional capital at the time.
On 24 March 2015, the Annual General Meeting of Shareholders decided to create authorised and conditional capital in accordance with the conditions described under 2.2 above. The AGM also decided to cancel the existing conditional capital (Art. 3a of the Articles of Association at that time). There were no capital increases from the newly created conditional or authorised share capital during the year under review. On 23 June 2015, Implenia Ltd. issued a subordinated convertible bond worth CHF 175,000,000 (abbreviation: IMP15, ISIN: CH0285509359). This convertible bond is due for repayment on 30 June 2022 provided it is not redeemed, converted, bought back or cancelled before then. The convertible bond has an annual coupon of 0.5%. The conversion price is CHF 75.06. The shares to be delivered as a result of conversion will be made available by providing new shares from the conditional capital. There was no conversion during the year under review. Changes in capital over the last three financial years
Share capital
31.12.2015
31.12.20141
31.12.20131
1000 CHF
1000 CHF
1000 CHF
18,841
18,841
35,097
Statutory capital reserves – Reserves from capital contributions Statutory retained earnings
132
132
13,356
16,185
16,185
16,185 188,127
Retained earnings – Profit carried forward
277,796
235,440
– Profit for the year
35,153
75,304
47,313
Treasury shares
(8,833)
(8,405)
(5,149)
339,274
337,497
294,929
Total equity 1 Restated
CORPORATE GOVERNANCE
2.4 Shares and participation certificates As at 31 December 2015, the share capital is divided into 18,472,000 fully paid-up registered shares with a par value of CHF 1.02 each. Each share entitles the holder to one vote at the General Meeting of Shareholders and to dividends. There are no voting right shares or other shares with similar advantages. Neither are there any participation certificates. 2.5 Dividend-right certificates There are no dividend-right certificates. 2.6 Limitations on transferability and nominee registrations 2.6.1 Percentage clause There is no statutory percentage clause which would allow any limitation of transferability of Implenia Ltd.’s shares pursuant to Art. 685d Para. 1 Swiss Code of Obligations. Pursuant to Art. 7 Para. 4b of the Articles of Association, the Board of Directors can refuse to enter an owner of registered shares as a shareholder with voting rights in the Share Register if information available to Implenia Ltd. indicates that recognition of this owner as a shareholder would or could prevent Implenia Ltd. and / or its subsidiaries from providing the legally required evidence about the composition of its shareholder body and / or the beneficial owners of the shares. The Implenia Group is active in project development and real estate business. Consequently, the corporation is specifically entitled to refuse to register persons abroad (pursuant to the Federal Law on the Acquisition of Real Estate by Persons Abroad, BewG), if this could raise any doubt about the Swiss control of the company and / or its subsidiaries.
The details of how this article is implemented are set out in the Regulation on Registration of Registered Shares and Keeping of the Share Register of Implenia Ltd. of 4 February 2013 (“Registration Regulations”). The Registration Regulations can be found on the Implenia website. http://www.implenia.com/en/investor-relations/shares/regulations.html
Para. 5 of the Registration Regulations states that the Board of Directors shall enter a foreign shareholder in the Share Register as a shareholder with voting rights, provided: i. the foreign shareholder meets the conditions that apply to all shareholders (points 2 to 4 of the Registration Regulations) ii. total foreign-owned shares entered with voting rights in the Share Register (including the shares of the foreign shareholder concerned) do not account for more than 20% of all shares entered with voting rights in the Share Register, and iii. the number of shares entered with voting rights in the Share Register that are held by the foreign shareholder concerned does not exceed 10% of all shares entered with voting rights in the Share Register.
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Above these limits, foreign shareholders will only be registered if a decision by the com petent authorities is presented at Implenia Ltd.’s headquarters to the effect that Implenia Ltd. and its subsidiaries shall not be considered as foreign-controlled even after the new foreign shareholder is entered in the Share Register. Any shareholder falling within the definition of a person living abroad as per Art. 5 of the Federal Law on the Acquisition of Real Estate by Persons Abroad (BewG) in conjunction with Art. 6 BewG shall be considered as a foreign shareholder. Nominees that have not disclosed the shareholders they represent shall also be regarded as foreign shareholders as defined in this clause. 2.6.2 Granting exceptions No requests for exceptions were received during the year under review. No exceptions were granted. 2.6.3 Admissibility of nominee registrations According to point 4 of the Registration Regulations, nominees are persons who do not explicitly declare in their application for registration that they hold the shares for their own account. According to Art. 7 Para. 4a of the Articles of Association, nominees will be entered in the Share Register if they declare in writing that they are prepared to disclose the names, addresses and shareholdings of any persons for whose account they are holding the shares, or if they disclose this information immediately when first requested.
The precise wording can be read in the Articles of Association. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
Pursuant to point 4 of the Registration Regulations, the Board of Directors will enter nominees in the Share Register as shareholders with voting rights up to an acknowledged percentage of 1% of the total share capital entered in the commercial register, as long as the nominees declare in writing that they are prepared to disclose the names, addresses and shareholdings of any person for whose account they are holding the shares and provided they immediately disclose this information in writing on first request. The nominee must have concluded agreements with the Board of Directors regarding its position. Registered shares held by a nominee will only be entered in the Share Register with voting rights above this 1% limit if the nominee concerned discloses the names, addresses, place of residence or domicile and shareholdings of any person for whose account they are holding 0.25% or more of the share capital entered in the Commercial Register.
CORPORATE GOVERNANCE
Further information can be found in the Registration Regulations. http://www.implenia.com/en/investor-relations/shares/regulations.html
Registration as a nominee requires the nominee to make a legally valid application in accordance with the appendix to the Registration Regulations (Application for Registration as Nominee). The relevant form is on the Implenia website. http://www.implenia.com/en/investor-relations/shares/regulations.html
2.6.4 Procedure and conditions for cancelling privileges granted under the Articles of Association and limitations on transferability There are no privileges under the Articles of Association, cancellation of transferability restrictions requires a resolution by the General Meeting adopted by at least two thirds of the votes represented at the meeting and an absolute majority of the nominal value of shares represented at the meeting (Art. 16 Para. 1c of the Articles of Association). 2.7 Convertible bonds and options On 23 June 2015, Implenia Ltd. issued a subordinated convertible bond worth CHF 175,000,000 (abbreviation: IMP15, ISIN: CH0285509359) This convertible bond is due for repayment on 30 June 2022 provided it is not redeemed, converted, bought back or cancelled before then. The convertible bond has an annual coupon of 0.5%. The conversion price is CHF 75.06. The convertible bond will be convertible into around 2.33 million shares of Implenia Ltd., which is equivalent to around 12.6% of currently outstanding shares. The shares to be delivered as a result of conversion will be made available by providing new shares from the conditional capital.
There are no other outstanding convertible bonds or options.
132–133
3. Board of Directors 3.1 Members of the Board of Directors During the year under review the Board of Directors of Implenia Ltd. consisted of Hubert Achermann as Chairman, Hans-Beat Gürtler as Vice Chairman, as well as Chantal Balet Emery, Calvin Grieder, Patrick Hünerwadel and Henner Mahlstedt as Members. Markus Dennler, who served as Chairman for the first quarter of the year under review, did not stand for re- election at the Annual General Meeting of Shareholders on 24 March 2015. Hubert Achermann was elected as Chairman of the Board of Directors in his place. Henner Mahlstedt was also elected to the Board as a new Member. From the Annual General Meeting of Shareholders on 24 March 2015 until the end of the reporting year the Board of Directors therefore consisted of six members.
On 3 February 2016 Hubert Achermann resigned from the Board of Directors of Implenia Ltd. with immediate effect. The Board of Directors appointed Henner Mahlstedt as new Chairman of the Board of Directors for the remaining term of office. None of the Members of the Board of Directors performs an operational management role for Implenia or any of its group companies. Neither has any Member of the Board of Directors been part of the Executive Board / Group Executive Board of Implenia Ltd. or any of its Group companies during the last three financial years. No Member of the Board of Directors has any significant business relationships with the Implenia Group.
CORPORATE GOVERNANCE
Hubert Achermann (up to 3 February 2016) (born 1951, Swiss) Hubert Achermann was Chairman of the Board of Directors from 25 March 2015 to 3 February 2016 having been a Member of the Board of Directors from March 2013. From 2004 to September 2012 Hubert Achermann was CEO of KPMG Schweiz and performed several key roles at international level. He began his career in 1982 at FIDES Treuhandgesellschaft. From 1987 to 1994 he headed the company’s Lucerne office. In 1992 he was made Partner and Vice Chairman of the Board of Directors of KPMG Schweiz, and in 1994 joined the Executive Board, where he was responsible for tax and law. Hubert Achermann is a Member of the Board of Directors and Chair of the Audit Committee of Georg Fischer AG. Hubert Achermann is also a Member of the Board of Directors, Chair of the Audit Committee and Member of the Risk Committee at UBS Switzerland AG. He is Chairman of the Board of Trustees of the “LUCERNE FESTIVAL”, the “Friends of LUCERNE FESTIVAL” Foundation, and the “Salle Modulable” Foundation. Hubert Achermann is also a Member of the Board of Trustees of the “Ernst von Siemens Music Foundation” and the “Kühne Foundation”. Hubert Achermann studied law at the University of Bern and then qualified to practice law in Canton Lucerne in 1977. He gained his doctorate in law (Dr. iur.) in 1983 with a dissertation on international civil procedural law.
Hans-Beat Gürtler (born 1946, Swiss) Hans-Beat Gürtler has been Vice Chairman of the Board of Directors since October 2011. He has been a Member of the Board of Directors since April 2010. Hans-Beat Gürtler is management partner at Varuma AG, a privately held Swiss investment company in Basel, as well as a Member of the Board of Basilea Pharmaceutica AG in Basel. He is also a Member and Chairman of the Boards of Directors of several private Swiss companies, most of them start-ups and SMEs, primarily in the pharmaceuticals / biotech sector. Prior to joining Varuma AG, he held the position of Global CEO at Novartis Animal Health, where he was responsible for the worldwide business, including research, development, manufacturing and marketing of animal pharmaceuticals for pets and farm animals. Previously, Mr. Gürtler held various increasingly senior management positions at Ciba-Geigy Ltd. As CEO of Mahissa, Ciba-Geigy’s seeds business in Spain, he lived in Barcelona for several years. Hans-Beat Gürtler holds a commercial diploma.
134–135
Chantal Balet Emery (born 1952, Swiss) Chantal Balet Emery has been a Member of the Board of Directors since March 2013. She is a consultant lawyer and notary at the Pratifori notary’s office and an honorary member of the consultancy Fasel, Balet, Loretan, d’Arenberg (FBLA). From 1994 to 2008 she headed the Western Swiss office of the economiesuisse business association in Geneva. From 1984 to 1994 she worked as a self-employed lawyer and notary in Canton Valais. She is Chair of the Fédération romande pour l’énergie and a Member of the Boards of Directors of the following companies: Vaudoise Assurances Holding SA, Vaudoise Générale, Compagnie d’Assurances SA, Vaudoise Vie, Compagnie d’Assurances SA, Mutuelle Vaudoise, Société Coopérative, Walliser Kantonalbank, Robert Gilliard SA Vins, Gillard-Juat SA and OLF SA.
Calvin Grieder (born 1955, Swiss) Calvin Grieder has been a Member of the Board of Directors since March 2013. He grew up in the USA and graduated as a process engineer from the Federal Institute of Technology in Zurich (ETH). He then held various management positions in Swiss and German companies in the fields of control engineering, automation, and plant design (Georg Fischer, Bürkert, Mikron and SIG). In these roles he was mainly responsible for successfully developing and expanding international business. In 2001 Calvin Grieder moved from Swisscom to Bühler Group, which he has led as CEO ever since. Since February 2014 he has also been Chairman of the Board of Directors. He a Member of the Board of Directors Givaudan SA.
CORPORATE GOVERNANCE
Henner Mahlstedt (born 1953, German)
Patrick Hünerwadel (born 1959, Swiss) Patrick Hünerwadel has been a Member of the Board of Directors since March 2006. He is a partner at the Lenz & Staehelin law firm (since 1994) and he teaches courses in company law and general law of obligations at the University of St. Gallen. Patrick Hünerwadel is also the Managing Director of Stanley Works (Europe) GmbH in Dübendorf, a Member of the Board of Trustees of the Vontobel Foundation and a Member of the Board of Directors of Vontrust AG. He was a Member of the Board of Directors of Batigroup Holding AG from 1997, and Vice Chairman from 1999 until the merger with Zschokke Holding AG. He holds a degree and a doctorate in law from the University of St. Gallen. Patrick Hünerwadel qualified to practice law in Zurich.
Henner Mahlstedt has been a Member of the Board of Directors since March 2015. He studied civil engineering at the Technical University of Braunschweig. From 1980 to 2001 Henner Mahlstedt held various management positions at Strabag Hoch- und Ingenieurbau AG in Hamburg, Berlin and Cologne, from 1997 to 2001 as a Member of the Executive Board. He then served as CEO of Pegel & Sohn GmbH + Co KG in Berlin before moving in 2003 to take charge of the new federal states for Hochtief Group. In 2005 he was appointed to the Executive Board of Hochtief Construction AG in Essen; from 2007 until the end of 2010 he was the Chairman of the Executive Board. Henner Mahlstedt was then appointed Chairman of the Executive Board of Hochtief Solutions AG in Essen. From 2007 to 2012 he was also a Member of the Global Group Executive Committee of Hochtief AG. In addition, he held various positions on the committees of the German Construction Industry Federation and the German Society for Concrete and Construction Technology. Henner Mahlstedt has worked at Mahlstedt Consultants GbR since mid-2012. He is also a member of the advisory board of Huesker Synthetic GmbH and Franzen Holding GmbH, and is a lecturer at Westfälische Hochschule.
136–137
3.2 Other activities and vested interests This information is given above in the individual profiles of the Members of the Board of Directors. 3.3 Provisions in the Articles of Association relating to the number of activities allowed under Art. 12 Para. 1 Section. 1 of the VegüV. At the General Meeting of Shareholders on 24 March 2015, the General Meeting, at the request of the Board of Directors, reduced the number of mandates that Members of the Board of Directors and the Group Executive Board could hold. According to the amended Art. 22e of the Articles of Association, the number of mandates that members of the Board of Directors can take in the top management and administrative bodies of legal entities outside the Implenia Group that are registered in the Swiss Commercial Register or similar foreign register is limited to a maximum of 14 mandates, of which no more than four may be at listed companies. If mandates are exercised in different legal entities within one group, or on behalf of one group or legal entity, these are counted altogether as one mandate. A Member can exceed the maximum limits for a short time in line with the Articles mentioned above.
The Articles of Association with the precise wording of the provision mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
3.4 Elections and terms of office 3.4.1 Length of terms of office and limits on terms of office The term of office of Board Members is one year. This commences on the date of election and finishes at the end of the next Annual General Meeting, unless the Member resigns or is dismissed before this (Art. 18 Para. 3 of the Articles of Association). The Members of the Board can be re-elected at any time (Art. 18 Para. 4 of the Articles of Association), but are subject to an upper age limit of 70 years. They must leave the Board at the Annual General Meeting of Shareholders following their 70th birthday (Art. 18 Para. 5 of the Articles of Association).
CORPORATE GOVERNANCE
3.4.2 First election The dates on which each Member of the Board of Directors was first elected are given in the following table: Member of the Board of Directors
First elected
Hubert Achermann (until 3 February 2016)
27.3.2013
Hans-Beat Gürtler
14.4.2010
Chantal Balet Emery
27.3.2013
Calvin Grieder Patrick Hünerwadel Henner Mahlstedt
27.3.2013 20.12.2005 24.3.2015
3.4.3 Principles of the election procedure In accordance with the Ordinance Against Excessive Pay at Publicly Listed Companies (“VegüV”), Members of the Board of Directors are elected individually by the AGM based on Art. 9b of the Articles of Association. The Chairman of the Board of Directors, the Members of the Remuneration Committee (Nomination and Remuneration Committee) and the independent proxy are also elected by the AGM in accordance with this provision of the Articles of Association. Also in line with the relevant provisions of the VegüV, Members of the Board of Directors and of the Nomination and Remuneration Committee are elected individually (Art. 18, Para. 2 of the Articles of Association).
With regard to dealing with a vacancy in Chairmanship of the Board of Directors, or with the Nomination and Remuneration Committee not having sufficient Members, or with the company not having an independent proxy, the Articles of Association do not include any provisions that deviate from Art. 4 Para. 4 VegüV, Art. 7 Para. 4 VegüV and Art. 8 Para. 6 VegüV.
138–139
3.5 Internal organisational structure 3.5.1 Allocation of tasks within the Board of Directors Apart from the election of the Chairman of the Board of Directors and the Members of the Nomination and Compensation Committee by the AGM, the Board of Directors constitutes itself and appoints the Vice Chairman of the Board of Directors and the Secretary to the Board of Directors.
There is no formal distribution of responsibilities within the Board of Directors except for the Chairman of the Board of Directors’ powers of authority as described here. The tasks and powers of the Chairman of the Board of Directors are as defined by the law, the Articles of Association, the Organisational and Management Regulations of 21 December 2015 (“Implenia’s OR”) and the Table of Responsibilities of 21 December 2015 (“Table of Responsibilities”), as well as by any specific resolutions of the Board of Directors. The Chairman chairs meetings of the Board of Directors. In urgent cases, he is allowed to perform the duties of the Board of Directors by himself. This applies in particular if a decision cannot be taken by the Board of Directors in time, and if the Chairman may reasonably expect the Board to agree with his actions. In such cases the Chairman must inform the other Members of the Board of Directors immediately (Section 2.8a Implenia’s OR). The Chairman can also ask the CEO and other Members of the Group Executive Board for any information at any time. These people must also brief him on all important business. The Chairman ensures that the other Members of the Board of Directors are briefed on significant developments in good time (Section 2.8b of Implenia’s OR). If the Chairman is absent or unable to carry out his duties or exercise his powers, the Vice Chairman, or if necessary another Member of the Board of Directors to be chosen by the Board, shall do so in his place (Section 2.8c Implenia’s OR). Implenia’s OR (excluding the Table of Responsibilities) can be found on the Implenia website. http://www.implenia.com/en/about-us/corporate-governance/organizational-and-management-regulations.html
CORPORATE GOVERNANCE
3.5.2 Members, tasks and areas of responsibility of the committees of the Board of Directors The Board of Directors has formed two committees, the Audit Committee and the Nomination and Remuneration Committee. The Board disbanded the Sustainability Committee during the year under review.
The Audit and the Nomination and Remuneration Committee analyse the areas assigned to them by the Board of Directors and submit reports to the Board of Directors to help it prepare its resolutions and perform its supervisory function. The Chairs of the individual committees inform the Board of Directors about all major points and give recommendations for the decisions that have to be taken by the Board as a whole. The committees’ tasks and responsibilities are set out in Implenia´s OR and in the Table of Responsibilities appended to the OR, as well as in regulations issued by the Board of Directors. The committees and their Members for the year under review are shown in the table below: Member of the Board of Directors
Audit Committee
Nominations and Remuneration Committee
•
•
Hubert Achermann (until 3 February 2016) Hans-Beat Gürtler Chantal Balet Emery Calvin Grieder
• (Chairman)
Patrick Hünerwadel
• (Chairman)
Henner Mahlstedt
•
•
The Audit Committee consists of at least two Members of the Board of Directors, who are appointed by the Board of Directors. The Audit Committee handles all Board business relating to the monitoring and structuring of the accounting system, financial controlling (including internal control system), financial planning and risk management. It coordinates and harmonises the work of the internal and external auditors. It is also responsible for regular communication with the internal and external auditors and formulates instructions for the internal and external audit. It has the authority to order special audits (Section 3.2 Implenia’s OR).
140–141
The Nomination and Remuneration Committee is made up of between two and four Members of the Board of Directors. The Members of the Nomination and Remuneration Committee are elected individually by the General Meeting of Shareholders. The Nomination and Remuneration Committee prepares the Board of Directors’ and Group Executive Board’s succession planning and helps the Board of Directors select suitable candidates for positions on the Board of Directors and Group Executive Board. The Nomination and Remuneration Committee helps the Board of Directors, the CEO and others decide on, and make proposals to the General Meeting about, remuneration at the company’s most senior levels, i.e. the Board of Directors and Group Executive Board (Section 3.3 Implenia’s OR). The principles governing the tasks and responsibilities of the Nomination and Remuneration Committee in relation to remuneration are determined by the General Meeting in Art. 21a of the Articles of Association. The committees organise themselves. The Board issues regulations in response to committee proposals. The committees are fundamentally advisory bodies; decision-making power is reserved for the Board of Directors as a whole. The committees only have decision-making power when this is stipulated in the Table of Responsibilities or committee regulations, or by special resolution of the Board of Directors; there was no such delegation of decision-making power during the year under review. The committees are authorised to carry out or commission investigations into all matters relating to their area of responsibility. They can bring in independent experts to help. The Board of Directors can appoint ad hoc committees for specific tasks and allocate powers of preparation, monitoring and / or decision-making to these committees (Section 3.1 Paras. 1 and 6 Implenia’s OR). No ad hoc committees were formed during the year under review.
CORPORATE GOVERNANCE
3.5.3 Working method of the Board of Directors and its committees The Board of Directors and its committees meet as often as business requires, but at least six times a year (Board of Directors), three times a year (Audit Committee), or twice a year (Nomination and Remuneration Committee). Meetings take place at the invitation of the chair of the committee concerned. Invitations are accompanied by an agenda and meeting documents. In addition, each member is entitled to request that a meeting be convened and can request that items are added to the agenda. Each meeting of the Board of Directors is chaired by the Chairman of the Board; the committee meetings are led by the committee chairs. Meetings are quorate if the majority of members are in attendance. Members who take part in the meeting via telephone or video conference shall be regarded as being present at the meeting. The Board of Directors and its committees pass resolutions and elect members by simple majority of the votes cast by attending members. Abstentions are not permitted. If votes are tied the person chairing the meeting has the casting vote. The results of discussions and the resolutions made are minuted. The CEO, the CFO and, where required, further Members of the Group Executive Board take part in the meetings of the Board of Directors. The Board of Directors also holds regular meetings without the participation of the CEO, the CFO or Members of the Group Executive Board (Section 2.3c Implenia’s OR).
The Chairman of the Board of Directors participates in meetings of the Audit Committee as well as of the Nomination and Remuneration Committee as a standing guest. The Audit Committee’s meetings are generally also attended by the CEO, the CFO, and the Head of Corporate Controlling, where necessary the Head of Internal Audit, and, if required by the business at hand, one or more representatives of the external auditors and other persons selected by the Chair. Meetings of the Nomination and Remuneration Committee are generally also attended by the CEO, the CFO and the Head of Human Resources Group. Guests at meetings of the Board of Directors and the committees have no voting rights (Section 3 of the Regulations of the Nomination and Remuneration and Audit Committees). Furthermore, Members of the Group Executive Board do not attend meetings of the Nomination and Remuneration Committee or of the Board of Directors if their own performances are being assessed, or if their remuneration is being discussed (Section 3 of the Regulations of the Nomination and Remuneration Committee). During the year under review, the Board of Directors held fourteen meetings convened by its Chairman, with six of these meetings taking the form of a telephone conference. The average length of its meetings was around five hours. The average length of the telephone conferences was around half an hour. The Group Executive Board was always present in the persons of the CEO and CFO.
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The Audit Committee met three times during the year under review. These meetings lasted just over four hours on average. The CEO, the CFO and the Head of Corporate Controlling took part in the meetings of the Audit Committee. The auditor attended every committee meeting during the year under review. The Nomination and Remuneration Committee held three meetings. These meetings lasted nearly two hours on average. The CEO attended every committee meeting. In addition, the CFO and the Head of Human Resources Group attended the meetings. However, they were not present when their own remuneration was discussed and their performance was appraised. 3.6 Definition of areas of responsibility The Board of Directors delegates management of Implenia Group to the CEO to the extent that the law, the Articles of Association, or Implenia’s OR do not stipulate otherwise, and provided that responsibilities are not delegated to the Group Executive Board or its individual Members.
The CEO is responsible for operational management and for representing Implenia Group to the extent that these duties are not assigned to other bodies by the law, the Articles of Association or Implenia’s OR (incl. the Table of Responsibilities). He is responsible for managing the Group’s business and for representing the Group, and especially for its operational management and for implementing strategy. Unless these are reserved for the Board of Directors, he is empowered to arrange or perform the duties and powers of authority assigned to him by Implenia’s OR, and / or delegate these to qualified subordinated units if he instructs and monitors them accordingly. The CEO is supported in managing the business by the Members of the Group Executive Board, all of whom report directly to him. The CEO is responsible for reporting to the Chairman of the Board of Directors and to the Board of Directors (Section 4.1 et seq. Implenia’s OR). The Group Executive Board consists of the CEO, the CFO and other Members appointed by the Board of Directors. All Members of the Group Executive Board are appointed and deselected by the Board of Directors (Section 4.3 Implenia’s OR).
CORPORATE GOVERNANCE
The Group Executive Board has the powers detailed in the Table of Responsibilities plus those delegated to it by the Board of Directors or CEO in individual cases. It meets as often as business requires but at least once a quarter. Within the Group Executive Board the CEO has the casting vote as well as a right of veto on the matters indicated in the Table of Responsibilities. Essentially, the CEO has this right of veto over transactions with strategic importance or major financial implications (Section 4.3 Implenia’s OR). The CFO is responsible for all of the company’s and Implenia Group’s financial concerns to the extent that these are not expressly assigned to other bodies or individuals. He is also responsible for managing the Corporate Center, which provides services for the subsidiaries all across the group. The CFO reports to the CEO (Section 4.4 Implenia’s OR). As well as the powers of authority reserved under Art. 716a of the Swiss Code of Obligations, the Board of Directors also takes decisions on the following major areas of business as shown in the Table of Responsibilities: –– –– –– –– –– –– –– ––
––
Purchases or sales of holdings with an enterprise value of CHF 25 million or more; Entering into or ending long-term joint ventures or strategic partnerships (lasting for longer than one project); Defining target markets and deciding to enter a market; Defining financial policy principles (level of debt and financial indicators); Defining the funding concept; Obtaining debt capital (credit facilities, bonds, private placements and other capital market transactions, leasing, hire purchase) of more than CHF 50 million; Fundamental issues and guidelines relating to the investment of financial resources; Issuing group guarantees, warranties, bid, performance and payment bonds etc., other collateral, and contingent liabilities outside regular business activity worth more than CHF 5 million; Use of derivative financial products when not deployed exclusively to reduce risks.
144–145
3.7 Information and control instruments vis-à-vis the Group Executive Board To monitor how the CEO and members of the Group Executive Board perform the tasks entrusted to them, the Board of Directors has the following information and control tools at its disposal: Information and control tools Annual
Semiannual
Quarterly
MIS (Management Information System)
•
Financial statements (balance sheet, income statement, operating accounts, cash flow statement, by Business Unit and consolidated)
•
Budget (by Business Unit and consolidated)
•
Rolling three-year plan (by Business Unit and consolidated)
•
Risk management report
Monthly
•
The MIS (Management Information System) provides monthly reporting on how business is going. The MIS report contains information about turnover, margins, costs and the operating result, plus information about orders on hand, capital spending, invested capital, liquidity and headcount. The relevant documents are submitted to the Group Executive Board and the Board of Directors together with a quarterly updated commentary and an estimate for the year as a whole. The accounts are reported every quarter with the IFRS financial report and the internal reporting, which details the business performance to date and gives an estimate of year-end figures. As part of the budget planning for the following year, the key figures used in the MIS are estimated on the basis of expected economic developments, and defined along with the business goals for each Business Unit. These are then used to prepare the budgeted balance sheet, income statement, cash flow statement and liquidity position. The annual planning for the coming three calendar years (rolling three-year plan) is done in the same way as the budget.
CORPORATE GOVERNANCE
Operational and financial risks in each Business Unit are assessed every half year by the responsible operational managers and consolidated by the Finance Department. The recorded risks are divided for the most part into “key projects”, “other projects”, “financial risks” and “management risks”, and evaluated qualitatively (scale and likelihood) and quantitatively (worst / real / best case). The measures taken by the operational managers are then monitored by the Corporate Controlling Department. The Head of Corporate Controlling presents a commentary on and explanation of the risk management report directly to the Audit Committee. The internal control system is examined by the external auditor, which reports its findings to the Board of Directors in accordance with the law (Art. 728a Para. 1 Section 3, and 728b Para. 1 SCO). Reports on the individual information tools are prepared and consolidated by the Finance department. These are then presented simultaneously to the Board of Directors and Group Executive Board. At meetings of the Group Executive Board and the Audit Committee the reporting is presented and explained by the CFO and Head of Corporate Controlling. The Group Executive Board presents the Board of Directors with a detailed analysis at each meeting of the Board. The CEO, the CFO and the Head of Corporate Controlling provide detailed information about the course of business, comment on this and answer questions posed by the Members of the Audit Committee. The Board of Directors has hired a recognised audit company to perform the internal audit function. The main focuses of the internal audit are set by the Audit Committee on the basis of the multi-year audit plan. During the year under review the focus was on compliance and following up previous audits. The plan for internal audit activities is implemented in consultation with the CFO. The internal auditor prepared reports in line with the audit plan and submitted these to the Audit Committee together with the necessary comments and recommendations. The Internal Audit Unit reports directly to each meeting of the Audit Committee. The internal auditor’s reports are given to the external auditors without qualification. There is regular communication between the internal and external auditors.
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4. Group Executive Board The Group Executive Board consists of the CEO, the CFO / Head of Corporate Center and other members designated by the Board of Directors. On 31 December 2015 the Members of the Group Executive Board were Anton Affentranger (CEO), Beat Fellman (CFO and Head of the Corporate Center), Christof Gämperle (Member and Head of Implenia Construction German-speaking Switzerland), René Kotacka (Member and Head of Implenia Infrastructure), André Métral (Member and Head of Implenia Construction French-speaking Switzerland) and Petter Vistnes (Member and Head of Implenia Scandinavia). During the course of the year under review, René Zahnd and Christoph Wüstemann left the Group Executive Board. 4.1 Members of the Group Executive Board (see following pages)
CORPORATE GOVERNANCE
Anton Affentranger (born 1956, Swiss)
Beat Fellmann (born 1964, Swiss)
Anton Affentranger has been CEO of Implenia since October 2011. From March 2006 to September 2011 he was Chairman of the Board of Directors. Between 6 April 2009 and 31 August 2010 he was the Executive Member of the Board (as Chairman and CEO). He is also the founder and chairman of Affentranger Associates AG and various start-up companies. Anton Affentranger worked for UBS in New York, Hong Kong and Geneva, and was a Member of the bank’s Executive Board at its head office in Zurich. He was also partner and CEO of the private bank Lombard Odier & Cie and CFO of Roche Holding AG. In 1999 he joined the Board of Directors of Zschokke Holding AG, becoming Chairman in 2003. Anton Affentranger graduated from the University of Geneva with an economics degree. On 1 October 2011 he was appointed by the Board as the new CEO of Implenia. On the same date he stepped down from the Board of Directors of Implenia and from the operational management of his private companies.
Beat Fellmann has been a Member of Implenia’s Group Executive Board since October 2008 and since this date has also been CFO and Head of the Corporate Center. He graduated with a degree in economics from the University of St. Gallen, and he is also a qualified auditor. He began his career as an internal auditor with the international industrial group Bühler, where he became assistant to the CEO and Chairman before becoming a specialist in financing projects. In 1998 he joined Holcim Group, where he was Head of Financial Holdings. In this role he reported to the CFO and was responsible for all financial and holding companies worldwide. In January 2005 Beat Fellmann became deputy group CFO at Holcim and was also made responsible for group tax, as well as for the management company’s IT, finance and controlling. Beat Fellman has served as a Member of the Swiss Takeover Board (TOB) since 1 January 2014. Furthermore, he has been a Member of the Board of Directors of Vitra Holding AG since 1 January 2016.
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René Kotacka (born 1962, Swiss)
Christof Gämperle (born 1962, Swiss) Christof Gämperle has been a Member of the Group Executive Board of Implenia since February 2013. Since that date he has also been responsible for Business Unit Construction German-speaking Switzerland. Before that he was General Counsel of Implenia Group from 1 August 2010. Christof Gämperle qualified in law from the University of St. Gallen as lic.iur.HSG, and then began his career in the Legal Service of Canton St. Gallen’s Civil Engineering Office. From 1993 to 1997 Gämperle was Deputy General Secretary in the Canton St. Gallen Building Department. For the next six years he was in charge of the legal service there before being appointed General Secretary in 2003. Christof Gämperle performed this role until he joined Implenia in 2010. Christof Gämperle is a Member of the Board of Trustees of the Kliniken Valens und Walenstadtberg Foundation.
René Kotacka has been a Member of the Group Executive Board of Implenia since December 2014. Since that date he has also been responsible for Business Unit Infrastructure (previously Tunnelling & Civil Engineering). René Kotacka graduated as a construction engineer from the Federal Institute of Technology (ETH) in 1988. In the same year he began his career at Implenia’s predecessor firm Zschokke (AG Heinr. Hatt-Haller), immediately becoming a construction manager and then a site manager for various tunnelling projects. Around the start of the new millennium René Kotacka became project manager and head of technical management for the “Aeschertunnel”, part of Zurich’s western bypass. He was then responsible for various subsurface new build and refurbishment projects as project manager and member of the construction committee. In 2006 René Kotacka was appointed Head of International Production and Refurbishment. In 2011 he then took on responsibility for acquisitions at the Tunnelling & Civil Engineering unit and became a member of the Implenia Tunnelling & Civil Engineering Management Committee. Rene Kotacka is a Delegate of the Schweizerischer Baumeisterverband and a Member of the Board of Directors of Versuchstollen Hagerbach AG.
CORPORATE GOVERNANCE
Petter Vistnes (born 1964, Norwegian) André Métral (born 1964, Swiss) André Métral has been a Member of Implenia’s Group Executive Board since February 2013. Since this date, he has also been Head of Business Unit Construction French-speaking Switzerland. Having graduated in construction engineering from ETH Zurich he started his career in 1989 with the Z schokke Group in Geneva. André Métral initially worked as a structural engineer, then as an expert in geotechnics and foundation engineering, taking part in studies for and execution of complex infrastructure projects. He soon became Head of Geotechnics and Foundation Engineering in Western Switzerland. In 2011 André Métral became Head of the Infra West Division, which covered all areas of activity associated with construction, buildings, civil engineering and production in Western Switzerland.
Petter Vistnes has been in charge of Business Unit Scandinavia (formerly Norge) since July 2011. In February 2013 Petter Vistnes was appointed as a Member of the Group Executive Board. He studied Civil Engineering at the Norwegian Institute of Technology (NTNU) from 1985 to 1989, He then worked for the Norwegian Public Roads Administration. From 1993 to 2002 Petter Vistnes took on various positions within the international construction and real estate group NCC, ending up as manager of the southern region construction division. Betonmast AS appointed Petter Vistnes as CEO in 2002. During the same period he added to his academic qualifications with a masters in strategic management. He remained CEO of Betonmast AS until Implenia Group took over Betonmast Anlegg AS (the civil engineering division of Betonmast) in July 2011 and integrated it into the Group as Implenia Norge.
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4.2 Other activities and vested interests This information is given above in the individual profiles of the Members of the Group Executive Board. 4.3 Rules included in the Articles of Association relating to the number of permitted activities allowed under Art. 12 Para. 1 Section. 1 of VegĂźV. At the General Meeting of Shareholders on 24 March 2015, the General Meeting, at the request of the Board of Directors, reduced the number of mandates that Members of the Board of Directors and the Group Executive Board could hold. According to Art. 22e of the Articles of Association, the number of mandates that members of the Group Executive Board can take in the top management and administrative bodies of legal entities outside the IÂmplenia Group that are registered in the Swiss Commercial Register or similar foreign register is limited to nine mandates, if each is approved by the Nomination and Remuneration Committee, of which one may be at a listed company. If mandates are exercised in different legal entities within one group, or on behalf of one group or legal entity, these are counted altogether as one mandate. A member can exceed the maximum limits for a short time.
The Articles of Association with the precise wording of the provision mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
4.4 Management contracts There are no management contracts with third parties.
CORPORATE GOVERNANCE
5. Compensation, shareholdings and loans 5.1 Content and method of determining the compensation and shareholding programmes For the content and method of determining compensation and the granting of shares and loans to Members of the Board of Directors and Group Executive Board, please see the separate Remuneration Report starting on page 165. 5.2 Rules set out in the Articles of Association 5.2.1 Rules on the principles of remuneration laid down in the articles of association The principles for remunerating the Members of the Board of Directors are set out in Art. 22a of the Articles of Association. This states that their overall maximum remuneration approved by the General Meeting consists of the remuneration until the next AGM, plus estimated social security charges and contributions to social security and pension institutions as well as additional insurance charges and other fringe benefits that are paid by the company and that qualify as remuneration. According to the above Article, the Board of Directors can determine that a portion of the remuneration is paid in shares. In this case, it defines the conditions, including the time of allocation and valuation, and decides on any retention period.
According to the current rules on the remuneration of Members of the Board of Directors, Members receive an annual fixed payment. There is no performance-related component to their remuneration. The rules on the remuneration of Members of the Board of Directors also state that Members of the Board of Directors receive ²∕ ³ of the payment due in cash, and ¹∕ ³ in shares of Implenia Ltd. The shares are blocked for trading for three years. The principles for compensating Members of the Group Executive Board are set out in Art. 22b of the Articles of Association. According to Para. 1 of Art. 22b of the Articles of Association, their maximum overall remuneration as approved by the General Meeting consists of the annual basic remuneration, the maximum remuneration under the short-term profit plan, the value of the maximum allocation under the long-term participation plan, plus estimated employer social security charges and contributions to social security, pension and savings plans and similar institutions, insurance charges, and other fringe benefits.
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The short-term components of remuneration are based, according to Para. 2 of Art. 22b of the Articles of Association, on objective performance values relating to the Group’s or a business segment’s results, to goals calculated in comparison to the market, other companies or comparable parameters, and / or to individual goals, the achievement of which is usually measured during a one-year period. The long-term components of remuneration are based, according to Para. 3 of Art. 22b of the Articles of Association, on the company’s long-term growth, and allow employees to partici pate appropriately in such growth. Finally, Para. 4 of Art. 22b of the Articles of Association states that the Group Executive Board’s remuneration takes the form of cash, shares, comparable instruments or units, or noncash benefits or services. The Board of Directors can also stipulate that if a predefined event such as a change of control or termination of an employment contract occurs, exercise conditions and exercise periods or retention periods can be shortened or cancelled, remuneration may be paid on the assumption that goals are achieved, or remuneration may be forfeited. The additional amount for remunerating Members of the Group Executive Board appointed after the General Meeting is set out in Art. 15 Para. 5 of the Articles of Association. According to this, the company is authorised to pay Members of the Group Executive Board who join or take on additional responsibilities during a period for which the Group Executive Board’s remuneration has already been approved an additional amount of no more than 50% of the applicable total amount of remuneration paid to the Group Executive Board if the overall amount approved for the period in question is insufficient to pay the new Members. The additional amount does not have to be approved by the General Meeting and may be used by the company for all types of remuneration. On 24 March 2015 the General Meeting of Shareholders decided to amend this article to ensure that the remuneration of a new Member of the Group Executive Board or of a Member of the Group Executive Board who takes on additional tasks is capped to ensure their remuneration is no more than 25% higher than the maximum remuneration of the Chief Executive Officer (CEO) in the preceding fiscal year. The Articles of Association with the precise wording of the provisions mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
CORPORATE GOVERNANCE
5.2.2 Rules in the articles of association on loans, credit facilities and postemployment benefits for Members of the Board of Directors and the Group Executive Board Art. 22c of the Articles of Association stipulates that payments into insurance and pension schemes outside the occupational pension scheme or similar foreign institutions are permitted if approved by the General Meeting individually or as part of an overall amount.
The Articles of Association do not include any provisions about granting loans or credit facilities to Members of the Board of Directors or the Group Executive Board. The Articles of Association with the precise wording of the provision mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
5.2.3 Rules in the articles of association on General Meeting votes about remuneration General Meeting votes on remuneration paid to the Members of the Board of Directors and Group Executive Board are governed by Art. 15a of the Articles of Association.
Para. 1 of Art. 15a of the Articles of Association states that each year the General Meeting needs to give prospective approval to the Board of Directors’ proposals about the maximum total amount paid to the Board of Directors for the period up to the next AGM and the overall amount paid to the Group Executive Board for the next financial year. Based on Para. 2 of Art. 15a, the Board of Directors can make proposals to the General Meeting about the maximum total amounts or individual elements of remuneration for other periods, or about additional sums for special elements of remuneration, and additional pro posals for approval.
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Approval of the Board of Directors’ proposals relating to remuneration is by relative majority without consideration of abstentions pursuant to Para. 3 of Art. 15a of the Articles of Association. If the General Meeting rejects a proposal from the Board of Directors, the Board of Directors must determine the steps to be taken. It can convene an Extraordinary General Meeting or set a maximum total amount or several maximum partial amounts taking into account all the relevant factors and submit this / these to the next General Meeting for approval. The company can pay remuneration within such a maximum total or partial amount subject to approval by the General Meeting. The Articles of Association with the precise wording of the provisions mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
6. Shareholders’ participation rights 6.1 Voting rights restrictions and representation All shareholders who are registered on the relevant cut-off date may participate in and vote at the Annual General Meeting of Shareholders on 22 March 2016. There are no restrictions on the right to vote of shareholders entered in the Share Register by this time. Each share has one vote.
Registration as a shareholder with voting rights may be refused (i) to shareholders which, when requested to do so by Implenia Ltd., do not expressly declare that they acquired and hold the shares in their own name and for their own account or, if acting as nominees, they do not declare in writing that they are prepared to reveal the names, addresses and number of shares held of the persons for whom they hold the shares, or if they do not immediately disclose this information on first request (Art. 7 Para. 4a of the Articles of Association), (ii) if the recognition of a purchaser as a shareholder may prevent Implenia from providing the proof required by law concerning the composition of its body of shareholders (Art. 7 Para. 4b of the Articles of Association).
CORPORATE GOVERNANCE
As mentioned above, the Board of Directors may also reach agreements with nominees about their disclosure obligations (see section 2.6 above and the Registration Regulations). http://www.implenia.com/en/investor-relations/shares/regulations.html
No exceptions were granted during the year under review. The above restrictions on registration and voting rights prescribed by the Articles of Asso ciation can be removed by changing the Articles of Association. This requires a resolution by the General Meeting adopted by at least two thirds of the votes represented at the meeting and an absolute majority of the nominal value of shares represented at the meeting (Art. 16 Para. 1 of the Articles of Association). In accordance with Art. 13 Para. 3 of the Articles of Association, shareholders who cannot take part in the General Meeting in person may be represented by another shareholder with voting rights (using a written power of proxy) or by their legal representative. Company representation and custodian representation pursuant to Art. 689c and 689d of the Swiss Code of Obligations are not allowed (Art. 11 VegßV). Pursuant to Art. 13 Para. 4 of the Articles of Association, minors and persons in guardianship may be represented by their legal representative, married persons by their spouse and legal entities by an authorised signatory or by another authorised representative; this applies even if such representatives are not shareholders of the company. The chairperson of the General Meeting of Shareholders shall decide on the admissibility of a representative (Art. 13 Para. 5 of the Articles of Association). At the Annual General Meeting of Shareholders on 22 March 2016 it will once again be possible to issue instructions and powers of attorney electronically. The Articles of Association include no further regulations about the issuing of instructions to the independent proxy or electronic participation in the General Meeting. The applicable rules are set out in the invitation to the meeting. 6.2 Statutory quorums The General Meeting of Shareholders makes its resolutions by the majorities stipulated by law. The Articles of Association do not stipulate any different majorities, except for the one needed for the removal or simplification of the restriction on the transferability of shares, which requires a resolution of the General Meeting approved by at least two thirds of the votes represented and an absolute majority of the nominal value of shares represented (Art. 16 Para. 1 of the Articles of Association). Resolutions about mergers, demergers and transformations are governed by the provisions of the Swiss Mergers Act.
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6.3 Convocation of the General Meeting of Shareholders The Annual General Meeting of Shareholders takes place each year no later than six months after the end of the financial year (Art. 10 Para. 2 of the Articles of Association). It is convened by the Board of Directors and the invitation must be published in the Swiss Commercial Gazette at least 20 days before the meeting together with the agenda items and proposals. Holders of registered shares may also be informed in writing (Art. 10 Para. 1 and Art 11 Para. 1 of the Articles of Association). The Board of Directors decides on the location of the General Meeting of Shareholders.
The invitations to and minutes of General Meetings are posted on the IÂmplenia website. http://www.implenia.com/en/investor-relations/general-meeting.html
6.4 Inclusion of items on the agenda At the General Meeting of Shareholders on 24 March 2015 the threshold for submitting an item for the agenda was reduced. In accordance with Art. 11 Para. 2 of the Articles of Association shareholders representing at least 1 percent of the issued share capital can propose an item for the agenda. Such a request, together with details of the proposals, must be received in writing by the Board of Directors at least 45 days before the General Meeting. 6.5 Entry in the Share Register Shareholders who are entered with voting rights in the Share Register on the relevant cutoff date will be sent an invitation to the General Meeting. The cut-off date for acquiring the right to vote at the General Meeting of Shareholders is set by the Board of Directors, based on Art 13. Para 2. of the Articles of Association. The dates concerned are stated in the invitation to the meeting.
The Articles of Association with the precise wording of the provisions mentioned above can be found on the website. http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html
CORPORATE GOVERNANCE
7. Changes of control and defence measures 7.1 Duty to make an offer The Articles of Association contain no “opting out” or “opting up” clauses. This means that a shareholder who directly, indirectly or acting in concert with third parties, acquires equity securities of Implenia which, added to equity securities already owned, exceed the threshold of 33¹∕ ³ percent of the company’s voting rights, must make an offer to acquire all listed equity securities of the company. 7.2 Change of control clauses No agreements relating to change of control have been made with the Members of the Board of Directors, the Members of the Group Executive Board or other executives.
8. Auditors 8.1 Duration of the mandate and term of office of the lead auditor Since 2006 the auditor has been PricewaterhouseCoopers AG (Zurich). The duration of the auditing mandate given to PricewaterhouseCoopers AG is one financial year (Art. 22 of the Articles of Association). The current mandate began on 24 March 2015.
Christian Kessler is the Lead Auditor. He performed the role of Lead Auditor for the first time for the audit of the 2013 financial year. In accordance with Art. 730a of the Swiss Code of Obligations, the Lead Auditor performs the mandate for a maximum of seven years. 8.2 Auditing fees During the year under review, total fees invoiced by the auditing company came to CHF 1,392,800 (prior year: CHF 1,064,500). 8.3 Additional fees Total additional fees for the year under review come to CHF 807,815 (prior year: CHF 1,011,549). The additional fees were approved in advance by the Audit Committee and related in particular to tax consultancy mandates as well as mandates connected to the acquisition of Bilfinger Construction.
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8.4 Information instruments pertaining to the external audit The main task of the Audit Committee is regularly and effectively to monitor the auditor’s reporting to ensure its quality, integrity and transparency.
Representatives of the auditors attended all three meetings of the Audit Committee during the financial year. The auditing schedule, including fees, is presented to and discussed with the Members of the Audit Committee. The auditor presents any important observations in writing to the Audit Committee together with appropriate recommendations.
9. Information policy Implenia is committed to open, transparent and regular communication with shareholders, the capital market and the general public. The CEO, CFO and Head of Investor Relations are available as contacts for shareholders, investors and analysts, and the Head of Communications Group as contact for the media. The most important information is communicated regularly as follows: –– –– ––
Annual results (February / March): Publication of Annual Report, press and analysts’ con ference Half-year results (August / September): Publication of Half-year Report, press and analysts’ conference General Meeting of Shareholders (March / April)
Over the course of the year, Implenia provides information on important business developments via media releases and letters to shareholders. As a company listed on the SIX Swiss Exchange Implenia is subject to “ad hoc publicity” rules, i.e. it must publish potentially price-sensitive information. Implenia also cultivates a dialogue with investors and the media through special events and road shows.
CORPORATE GOVERNANCE
The website at www.implenia.com is available to shareholders, the capital market and the public as a constantly accessible, up-to-date information platform. It includes the most important facts and figures relating to Implenia, as well as financial publications, presentations on important developments and the dates of all relevant events (General Meetings, press conferences, etc.). Interested parties can subscribe to the free e-mail news service. All press releases are posted on the website when released. There is also an archive of press releases dating back to 2005. http://www.implenia.com/en/investor-relations.html http://www.implenia.com/en/investor-relations/publications_1/financial-publications/2015.html http://www.implenia.com/en/investor-relations/media-releases.html http://www.implenia.com/en/investor-relations/media-releases/news-service.html
Contact for Shareholders, Investors and Analysts Serge Rotzer Head of Investor Relations Implenia Ltd. Industriestrasse 24 8305 Dietlikon T +41 58 474 07 34 F +41 58 474 95 29 serge.rotzer@Implenia.com Contact for the media Philipp Bircher Head of Communications Group Implenia Ltd. Industriestrasse 24 8305 Dietlikon T + 41 58 474 74 77 F + 41 58 474 95 03 philipp.bircher@Implenia.com
“sue & til” in Winterthur On the former Sulzer site in the Neuhegi district of Winterthur, Implenia, which owns the plot, is building the sustainable “sue & til” residential development in close cooperation with the city authorities. As well as homes, the development includes public-use spaces on the ground floor. It will be the biggest ever timber construction project in Switzerland, and this use of wood is helping it to fulfil the most stringent sustainability criteria. “sue & til” is being built in accordance with the Minergie standard and meets the objectives of the 2000 Watt Society (SIA energy efficiency path – MB 2040).
“We’re really pleased with what we’ve achieved so far. Thanks to improved communication and transparency with our negotiating partners, we’ve been able to build up a lot of trust, and this has had a positive influence on the approval procedures.” Andrea Kamer, “sue & til” Project Manager, Implenia Modernisation and Development
“Within the ‘One Company’ approach, we have clear rules that are applied rigorously. The change from a line management to a project management structure means these processes get the support they need at this level too.” René Lutz, Overall Project Leader “sue & til”, Implenia Modernisation and Development
Facts & Figures “sue & til” Customers Implenia Immobilien AG and Allianz Suisse Immobilien AG Planning weberbrunner architekten AG, Soppelsa Architekten GmbH Construction contractor Implenia Ltd. Project remit 307 apartments, of which 51 condominiums and around 1,200 m2 of commercial space Challenges Complicated logistics on the construction site, prefabricated wooden elements and bathrooms Special features Mobile building materials recycling plant, Switzerland’s largest timber construction project Investment volume CHF 162 million
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Introduction and legal basis 166 — Setting remuneration 167 — Remuneration policy and structure 168 Actual remuneration paid to the Group Executive Board and Board of Directors in 2015 174 — Shareholdings and management loans 177 — Approval of the Remuneration Report 178
REMUNERATION REPORT
Remuneration Report
In accordance with the applicable provisions, this Remuneration Report describes the remuneration paid to Members of the Board of Directors and Group Executive Board of Implenia Ltd., as well as the remuneration structure and the type and size of payments actually made during the period under review. 1. Introduction and legal basis This Remuneration Report was produced in accordance with the relevant provisions of the Ordinance Against Excessive Pay at Stock Exchange Listed Companies (VegüV), the Swiss Code of Best Practice for Corporate Governance and the Swiss Code of Obligations, as well as with the rules contained in the chapter on remuneration, shareholdings and loans in the SIX Swiss Exchange Ltd.’s Directive on Information Relating to Corporate Governance. In this Remuneration Report the Board of Directors discloses the type and amount of remuneration actually paid to the Board of Directors and the Group Executive Board of Implenia Ltd. It also includes details of the remuneration policy and remuneration structure. The payments shown under Para. 4 and 5.3 were checked by the auditor. The Remuneration Report is being presented to shareholders at the forthcoming General Meeting on 22 March 2016 for a consultative vote.
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2. Setting remuneration 2.1 Powers of authority and processes In accordance with the provisions of the Ordinance Against Excessive Pay at Stock Exchange Listed Companies (VegüV), the Articles of Association give the General Meeting of Shareholders the authority (Art. 15a of the Articles of Association) each year to approve, in response to a proposal from the Board of Directors, the maximum total remuneration
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paid to the Board of Directors for the period up to the next AGM and the total remuneration paid to the Group Executive Board for the next financial year.
These prospective decisions by the General Meeting empower the Board of Directors to pay remuneration within the approved total maximum amounts. The Board of Directors makes proposals for approval by the General Meeting about the maximum overall amounts of remuneration paid to Members of the Board of Directors and Members of the Group Executive Board, as well as deciding about the payment of individual remuneration (within the approved maximum overall amounts). The Board of Directors decides on the remuneration paid to the Chief Executive Officer (CEO) and to its own Members in response to the Nomination and Remuneration Committee’s proposals. The Board of Directors decides on remuneration paid to the Members of the Group Executive Board in response to a proposal from the CEO. The remuneration paid to Members of the Board of Directors and Members of the Group Executive Board is regularly reviewed by the Board of Directors in response to proposals from the Nomination and Remuneration Committee and after considering the market situation. 2.2 Nomination and Remuneration Committee’s duties and powers of authority The duties, tasks and areas of responsibility of the Nomination and Remuneration Committee (NRC) include:
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Succession planning for the Board of Directors and Group Executive Board Periodic review of succession planning for other key positions within the Implenia Group Preparation of Implenia Group’s remuneration policy Recommendations about remuneration for the Board of Directors, the CEO and the other Members of the Group Executive Board Setting targets for the CEO and the other Members of the Group Executive Board Regular appraisal of the performance of the CEO and the other Members of the Group Executive Board, in consultation with the Chairman of the Board of Directors
REMUNERATION REPORT
The NRC has a support and advisory role. Authority to decide on the proposals to be made to the General Meeting about the maximum total amounts and to decide on the payment of individual remuneration within these total amounts rests with the Board of Directors unless expressly ruled otherwise. The NRC consists of at least two Members of the Board of Directors. The CEO, the CFO and the Head of Human Resources Group usually attend the meetings of the NRC as guests and support its work. They do not participate in voting and are not present when their own remuneration is discussed or performance appraised. The NRC meets at least twice a year in the first and final quarters of the year. At the start of the year the degree to which targets were achieved in the previous year, and the targets for the current year are discussed. The CEO presents a proposal for appraisal and remuneration of Members of the Group Executive Board. In response to a proposal from the Nomination and Remuneration Committee, the Board of Directors then takes the necessary decision on achievement of targets in the past financial year and on target setting for the current year. The NRC regularly reviews the remuneration of the Board of Directors, the CEO and other Members of the Group Executive Board. When required it makes proposals to the Board of Directors about changes. After every meeting the whole Board of Directors is informed about the discussions and the resulting recommendations of the NRC.
3. Remuneration policy and structure 3.1 Remuneration policy principles Implenia’s remuneration structure, which applies to all employees, has several levels and is based on a modern, transparent, performance-oriented remuneration policy. Remuneration at Implenia...
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is fair, appropriate, transparent and competitive. establishes a link to long-term sustainable corporate development. takes account of the level of responsibility, the quality of the work and the size of the workload for each function. puts the company in a position to attract and retain highly qualified staff so that it can reach its strategic goals.
The remuneration structure encompasses fixed and performance-related remuneration components that are aligned to the corporate strategy, and that take account of the competition and the growth dynamic, as well as reflecting Implenia’s functional level model. The performance-related component is determined by the annual target setting and performance appraisal process.
168–169
The individual’s remuneration depends on the area of responsibility and the complexity of the function. The remuneration structures are designed to ensure that remuneration is pegged close to the relevant market medians. At the individual level, the annual target income is usually set within a range of 80% to 120% of the market median. The most important factor when calculating the salary is the employee’s overall performance. Since 2012, Implenia has operated a formalised annual target setting and performance appraisal process. 3.2 Remuneration structure for Group Executive Board Remuneration paid to the Members of the Group Executive Board is reviewed annually based on the principles described under 3.1. As well as a market comparison, function, performance, experience and effort are taken into account. Discretion is used in the weighting of these criteria.
The remuneration of the Members of the Group Executive Board is also reviewed by external consultants to ensure it is competitive, appropriate and in line with the market. The last such review was carried out in 2013 by the global business consultancy Hay Group. This was done using a reference market of eight companies that have recruited from Switzerland’s top executive market to fill similar roles. The emphasis here is on companies from industrial sectors, or those providing services to industry, that are comparable to Implenia Ltd. in size (number of employees, turnover) and business activity. The reference market included ABB Ltd, Forbo Holding AG, Geberit International AG, Holcim Ltd, Kühne + Nagel International AG, Rieter Holding AG, Schindler Holding AG and Sika AG. With companies of different size to Implenia, comparability is achieved by using the Hay Group Chart-Profile Method, which eliminates potential distortions. The Hay Group had no further mandates with Implenia. There is no reason to believe that the remuneration of the management of the companies used for reference has changed significantly in the meantime. Remuneration paid to Members of the Group Executive Board is composed of three parts: a fixed basic salary in cash, a variable performance-related salary in cash, and remuneration in shares. The share component is paid as a fixed number of shares. The CEO’s remuneration is based on the same principles as those used for the other Members of the Group Executive Board, apart from the share portion, which is distributed every half-year over three years and is linked to a forfeit clause. This forfeit clause states that if the employment contract is terminated, the claim to any shares not yet transferred is forfeited from the beginning of the notice period.
REMUNERATION REPORT
The total remuneration paid to the Group Executive Board and CEO must not exceed the maximum total amount approved by the General Meeting for the financial year concerned. According to Art. 15a Para. 5 of the Articles of Association, the company is authorised to pay Members of the Group Executive Board who join or take on additional responsibilities during a period for which the Group Executive Board’s remuneration has already been approved an additional amount of no more than 50% of the applicable total amount of remuneration paid to the Group Executive Board if the overall amount approved for the period in question is insufficient to pay the new Members. The additional amount does not have to be approved by the General Meeting and may be used by the company for all types of remuneration. As a result of the amendments to the Articles of Association made by the Annual General Meeting of Shareholders on 24 March 2015 at the request of the Board of Directors, the remuneration of a new Member of the Group Executive Board or of a Member of the Group Executive Board who takes on additional tasks is capped to ensure their remuneration is no more than 25% higher than the maximum remuneration of the Chief Executive Officer (CEO) in the preceding fiscal year. Basic salary in cash The basic salary in cash is paid out every month in equal instalments and accounts for around 55% of annual target income when the employment contract is signed. Variable salary in cash The variable salary in cash is a payment partly for achieving individual qualitative goals, and partly for reaching the company’s financial targets. The variable salary in cash is paid as a percentage (around 20% on contract signing) of the annual target income and is based on predefined performance benchmarks. It is only paid if the defined performance targets are achieved. Exceeding or failing to achieve one or all of the targets leads to an increase (up to a maximum of 200%) or a reduction (down to 0%) of this remuneration component.
The variable salary in cash depends on the attainment of previously defined personal, qualitative targets in accordance with Management by Objectives (30%), and on the achievement of Implenia Ltd.’s financial targets (70%). These financial targets are determined on the basis of the annual budget of Implenia Ltd. The basis for assessment is made up of: a) 50%: achievement of the budgeted Group EBITDA b) 50%: achievement of the budgeted invested capital at Group level. Once the annual results are available the CEO assesses the extent to which the Members of the Group Executive Board have achieved their defined performance targets. The NRC does the same for the CEO. In both cases, the decision on remuneration rests with the Board of Directors.
170–171
Share portion Shares are allocated as a fixed number of shares that cannot be changed for the duration of the contract. The share component is defined as a percentage – around 25% – of annual target income when the employment contract is signed. The value of the allocated shares in Swiss francs is calculated using the closing price on the last trading day of the financial year (for 2015: 30 December 2015) on the SIX Swiss Exchange. The shares are transferred at the end of the reporting period. The shares may not be sold or pledged or be encumbered in any other way during the three-year period following allocation. The blocking period carries on even if the employment relationship ends. This restriction on the right of disposal does not affect dividends, subscription rights for capital increases or the exercise of voting rights. Expenses As well as the expenses rules that apply to all employees, Members of the Group Executive Board are also covered by additional rules for senior employees to provide lump-sum compensation for entertainment and out-of-pocket expenses. Both sets of rules are approved by the responsible cantonal tax authorities. Pension benefits There are no special pension benefits for Members of the Group Executive Board. Pension and social costs comprise the employer’s contribution to social insurance and to the mandatory and supplementary occupational benefits cover. The share component of remuneration is not insured by the pension fund. According to Art. 22c of the Articles of Association, payments into insurance and pension schemes outside the occupational pension scheme or similar foreign institutions are permitted if approved by the General Meeting individually or as part of an overall amount. Employment contracts Members of the Group Executive Board have permanent employment contracts that can be terminated on one year’s notice. They are not entitled to contractual joining or leaving payments (“golden parachutes”, “golden handshakes”, etc.).
REMUNERATION REPORT
3.3 Remuneration structure for the Board of Directors The size, basis, and components of the remuneration paid to the Board of Directors are based on the Regulation on Compensating Members of the Board of Directors of Implenia Ltd. The remuneration structure for the Board of Directors is reviewed regularly.
The total remuneration paid to the Board of Directors must not exceed the maximum total amount approved by the General Meeting for the period concerned. The remuneration paid to the Board of Directors was last reviewed in 2012 and adjusted on the basis of benchmark analyses against other Swiss companies working in the construction and associated industries, such as Forbo Holding AG, Geberit AG and Sika AG. The analysis was corrected for distorting effects. There is no reason to believe that the remuneration of the Boards of Directors at these companies has changed significantly in the meantime. The NRC intends to arrange another review of the Board of Directors’ remuneration during the coming financial year. Members of the Board of Directors receive an annual fixed remuneration. There is no performance-related component to their remuneration. The amount of remuneration for each function (Chairman, Vice Chairman, Chair of the Audit Committee, Member) is set based on the market analysis mentioned above, and after taking account of the entitlements detailed in the Regulation on Compensating Members of the Board of Directors. The regulation stipulates lump-sum compensation of CHF 340,000 for the Chairman of the Board of Directors, CHF 170,000 for the Vice Chair and for the Chair of the Audit Committee, and CHF 130,000 for each of the other Members of the Board of Directors. Two-thirds of this remuneration is paid in cash and one-third in the form of shares. The number of shares is calculated by taking the average price of Implenia Ltd. shares during the month of April in the year of office. The allocation was carried out toward the end of the year on 22 December 2015. The shares are blocked for a period of three years from allocation. The block continues to apply even after a person has left the Board, except in cases of disability and death.
172–173
During the year under review the Board of Directors made a change to the regulations governing remuneration paid to Members of the Board of Directors: as from their next year of office, the share portion due to each Member of the Board will be calculated on the basis of the average price of Implenia Ltd. shares in the December of the year of office. Shares will be allocated on the first stock exchange trading day of the following month. Thanks to this change, it will no longer be necessary when calculating the Board of Directors’ maximum overall remuneration for the General Meeting of Shareholders to allow for any price fluctuations between the calculation period and the allocation date. No severance payment was made to former Board Member Markus Dennler when he left the Board at the end of his year of office. No joining premium was paid to Henner Mahlstedt, who was elected as a new Member of the Board of Directors by the Annual General Meeting of Shareholders on 24 March 2015.
Function
Total CHF
Of which in Implenia Ltd. shares*
Chairman of the Board of Directors
340 000
1/3
Vice Chairman
170 000
1/3
Chair of the Audit Committee
170 000
1/3
Other Members of the Board of Directors
130 000
1/3
* Average price for April
Expenses The Members of the Board of Directors have their expenses reimbursed based on the Regulation on Compensating Members of the Board of Directors of Implenia Ltd. and in line with the rules for the Members of the Group Executive Board (see 3.2). Pension benefits Statutory and regulatory social security contributions due on remuneration paid to Members of the Board of Directors are paid by Implenia Ltd. According to Art. 22c of the Articles of Association, payments into insurance and pension schemes outside the occupational pension scheme or similar foreign institutions are permitted if approved by the General Meeting individually or as part of an overall amount. 3.4 Changes in the remuneration structure for the 2016 and 2017 financial years Implenia Ltd.’s current transparent remuneration structure has proven effective. The Board of Directors believes that the objectives of fair, appropriate, transparent and competitive remuneration at all levels of the Implenia Group have been achieved. The remuneration structure also creates the greatest possible link to long-term sustainable corporate development. Consequently, no significant changes are envisaged for the remuneration structure for the 2016 and 2017 financial years.
REMUNERATION REPORT
4. Actual remuneration paid to the Group Executive Board and Board of Directors in 2015 4.1 Remuneration for current company officers The total of all remuneration paid to the Group Executive Board and the Members of the Board of Directors in the year under review is CHF 8.7 million (prior year: CHF 10.3 million). The following information complies with the requirements of Art. 14 –16 VegüV. The total of all remuneration paid to serving Members of the Group Executive Board during the year under review is shown below. The amounts shown include remuneration paid to Members who left the Group Executive Board during the period under review.
The total remuneration paid in 2015 is lower than in 2014. Anton Affentranger has irrevocably waived all the variable remuneration, worth CHF 0.3 million, to which he is entitled. In the previous year he waived his entitlement to 12,500 shares worth CHF 0.6 million. Group Executive Board Fixed remuneration
One-time remuneration
Variable remuneration1
CHF 1000
CHF 1000
CHF 1000
gross
gross
gross
20153
900
–
– 10
25,000
1,085
310
2,295
20144
900
–
200
12,50010
626
312
2,038
20155
1,624
200
472
19,700
845
593
3,734
20146
2,169
244
589
25,623
1,243
795
5,040
20157
727
100
182
4,667
196
289
1,494
20148
883
231
276
4,508
234
349
1,973
Total 2015
3,251
300
654
49,367
2,126
1,192
7,523
Total 2014
3,952
475
1,065
42,631
2,103
1,456
9,051
Definitely allocated shares2 Number
CHF 1000
Social security expenses9
Total
CHF 1000
CHF 1000
gross
Anton Affentranger
Other members of the Group Executive Board
Former members of the Group Executive Board
1 Paid in subsequent year 2 Implenia Ltd. shares, security number 2386855, nominal value CHF 1.02 3 Amounts based on closing price when shares allocated on 30.6.2015 and at year-end 2015 4 Amounts based on closing price when shares allocated on 30.6.2014 5 Amounts based on closing price when shares allocated at year-end 2015 6 Amounts based on closing price when shares allocated at year-end 2014 7 Amounts based on closing price when shares allocated on 31.10.2015 and at year-end 2015 8 Amounts based on closing price when shares allocated on 6.8.2014 9 Including pension contributions 10 A nton Affentranger has irrevocably waived his right to variable remuneration of CHF 0,3 million (previous year: waiver of his right to 12,500 shares at a value of CHF 0,6 million).
174–175
The total of all remuneration paid to serving non-executive Members of the Board of Directors during the year under review is as follows: Non-executive Board of Directors Basic fees 2015
2014
CHF 1000
CHF 1000
Definitely allocated shares1 2015
Social security expenses
Total
2014
2015
2014
2015
2014
2015
2014
Number2 Number2
CHF 10003
CHF 10003
CHF 1000
CHF 1000
CHF 1000
CHF 1000
gross
gross
gross
gross
Hubert Achermann, Chairman
198
113
1,495
887
83
48
40
23
321
184
Hans-Beat Gürtler, Vice-Chairman
113
113
854
887
48
48
18
18
179
179
Chantal Balet Emery, Member
87
87
653
678
36
36
18
18
141
141
Calvin Grieder, Member
87
87
653
678
36
36
18
18
141
141
107
87
804
678
45
36
22
18
174
141
65
–
490
–
27
–
14
–
106
–
57
227
427 1,774
24
95
11
45
92
367
–
141
Patrick Hünerwadel, Member Henner Mahlstedt, Member (from 22.03.2015) Members of the Board of Directors who left – Markus Dennler, Chairman – Sarah Springman, Member Total
–
87
714
801
678
–
36
–
18
5,376 6,260
–
299
335
141
158
1 Implenia Ltd. shares, security number 2386855, nominal value CHF 1.02. 2 Calculation based on average rate for April of the year under review. 3 Amounts based on discounted fair market value
1,154 1,294
REMUNERATION REPORT
4.2 Remuneration for former company officers No payments were made to former Members of the Board of Directors or Group Executive Board. 4.3 Allocation of shares in the year under review In 2015, a total of 49,367 shares were allocated to Members of the Group Executive Board (prior year: 42,631).
In 2015, a total of 5376 shares were allocated to non-executive Members of the Board of Directors (prior year: 6260). 4.4 Options ÂImplenia Ltd has no stock-option remuneration scheme. Neither the Members of the Group Executive Board nor Members of the Board of Directors were given options. 4.5 Additional fees and severance payments Overall additional fees and remuneration invoiced by Members of the Group Executive Board or the Board of Directors, or related persons, in the 2015 financial year amounted to CHF 0 (prior year: CHF 0).
Members of the Group Executive Board and the Board of Directors, and related persons, did not receive any fees or other payments for additional services performed for IÂmplenia Ltd. or its group companies in the 2015 financial year. No contractual severance payments were paid to Members of the Group Executive Board or Members of the Board of Directors. 4.6 Highest total remuneration The Member of the Group Executive Board with the highest total remuneration is shown in the tables under 4.1.
176–177
5. Shareholdings and management loans 5.1 Shares held by Members of the Group Executive Board As at 31 December 2015, the number of shares held by persons who served as Members of the Group Executive Board during the year under review, as well as by related persons, was 359,494, or 1.9% of the share capital (prior year: 349,630 shares, or 1.9%). This figure includes any shares acquired in a private capacity. See also the notes to the statutory financial statements of Implenia Ltd. on page 286. Group Executive Board Number of shares, as at
Shares blocked until
31.12.2015
31.12.2014
2016
2017
2018
Anton Affentranger, CEO
263,840
233,840
10,334
12,500
25,000
Beat Fellmann, CFO and Head of Corporate Center
41,500
39,000
10,000
10,000
10,000
Christof Gämperle, Member and Business Unit Head of Construction German-speaking Switzerland
8,763
7,263
3,620
2,543
2,500
René Kotacka, Member and Business Unit Head of Infrastructure
5,314
2,643
305
655
2,671
André Métral, Member and Business Unit Head of Construction French-speaking Switzerland
7,382
4,882
2,545
2,337
2,500
Petter Vistnes, Member and Business Unit Head of Scandinavia
2,746
446
–
–
2,300
Members of the Group Executive Board who left Total
29,949
61,556
9,533
9,249
4,667
359,494
349,630
36,337
37,284
49,638
REMUNERATION REPORT
5.2 Shares held by Members of the Board of Directors As at 31 December 2015, the number of shares held by people serving as non-executive Members of the Board of Directors during the year under review, as well as by related persons, totalled 34,833, or 0.2% of the share capital (prior year: 37,792 shares or 0.2%). This figure includes any shares acquired in a private capacity. See also the notes t o the statutory financial statements of Implenia Ltd. on page 287. Non-executive Board of Directors Number of shares, as at
31.12.2015
31.12.2014
Shares blocked until
2016
2017
2018 1,495
11,031
9,536
859
887
Hans-Beat Gürtler, Vice-Chairman
6,485
5,631
1,145
887
854
Chantal Balet Emery, Member
2,088
1,435
657
678
653
Hubert Achermann, Chairman
Calvin Grieder, Member
1,988
1,335
657
678
653
Patrick Hünerwadel, Member
4,777
3,973
875
678
804
490
–
–
–
490
Henner Mahlstedt, Member Members of the Board of Directors who left Total
7,974
15,882
2,947
2,452
427
34,833
37,792
7,140
6,260
5,376
5.3 Loans to management bodies No loans have been granted to any Members of the Board of Directors, or any members of the Group Executive Board, or to related persons.
Implenia Ltd. and its group companies have not granted any collateral, loans, advances or credit facilities to the Members of the Board of Directors or the Group Executive Board, or to related persons.
6. Approval of the Remuneration Report This Remuneration Report provides full transparency for the 2015 financial year with regard to Implenia Ltd.’s remuneration arrangements and remuneration paid to the Group Executive Board and Board of Directors. The Board of Directors will submit the Remuneration Report to the Annual General Meeting of 22 March 2016 for consultative approval.
178–179
Report of the statutory auditor on the 2015 Remuneration Report
Statutory auditor’s report to the General Meeting of Shareholders on the 2015 Remuneration Report We have audited the attached Remuneration Report of Implenia Ltd. covering the year to 31 December 2015. The audit was limited to the information according to articles 14–16 of the Ordinance Against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) contained in the chapters 4 and 5.3. Board of Directors’ responsibility The Board of Directors is responsible for the preperation and overall fair presentation of the Remuneration Report in accordance with Swiss law and the Ordinance Against Excessive Compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages. Auditor’s responsibility Our responsibility is to express an opinion on the attached Remuneration Report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Remuneration Report complies with Swiss law and Art. 14 –16 of the Ordinance. An audit involves performing procedures to obtain audit evidence on the disclosures made in the Remuneration Report with regard to compensation, loans and credits in accordance with Art. 14 –16 of the Ordinance. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatements in the Remuneration Report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the Remuneration Report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the Remuneration Report of Implenia Ltd. for the financial year ending 31 December 2015 complies with Swiss law and Art. 14 to 16 of the Ordinance. PricewaterhouseCoopers Ltd.
Christian Kessler Audit Expert, Chief Auditor
Diego J. Alvarez Audit Expert
Zurich, 22 February 2016
CONSOLIDATED FINANCIAL KONZERNRECHNUNG DER ÂI MPLENIA STATEMENTS GRUPPE OF THE IMPLENIA GROUP
Financial Report
180–181
Consolidated financial statements of the Implenia Group — Consolidated income statements 182 — Consolidated statements of comprehensive income 183 — Consolidated balance sheets 184 — Consolidated statements of changes in equity 186 — Consolidated cash flow statements 188 — Notes to the consolidated financial statements of Implenia 190 — Report of the statutory auditor on the consolidated financial statements 276 — Statutory financial statements of Implenia Ltd. — Income statement 279 — Balance sheet 280 — Notes to the statutory financial statements 282 — Report of the statutory auditor on the financial statements 290
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Consolidated income statements
1.1. – 31.12.2015
1.1. – 31.12.2014
CHF 1,000
CHF 1,000
Notes
Consolidated revenue
5
3,288,200
2,919,760
Materials and subcontractors
6
(2,058,893)
(1,844,562)
Personnel expenses
7
(850,667)
(760,317)
Other operating expenses
9
(224,004)
(170,273)
(81,424)
(42,788)
Depreciation and amortisation 21
6,724
6,644
5
79,936
108,464
Financial expenses
10
(14,958)
(11,386)
Financial income
10
4,849
3,183
69,827
100,261
(17,809)
(27,255)
52,018
73,006
48,405
69,231
3,613
3,775
Income from associates Operating income
Profit before tax Tax
11
Consolidated profit Attributable to: Shareholders of Implenia Ltd. Non-controlling interests Earnings per share (CHF) Basic earnings per share
29
2.64
3.77
Diluted earnings per share
29
2.56
3.77
The accompanying notes form part of the consolidated financial statements.
182–183
Consolidated statements of comprehensive income
1.1. – 31.12.2015
1.1. – 31.12.2014
CHF 1,000
CHF 1,000
52,018
73,006
(38,037)
(21,604)
8,755
4,753
(29,282)
(16,851)
405
(164)
Notes
Consolidated profit Remeasurement of post-employment benefits
26
Income tax on remeasurement of post-employment benefits Total items that will not be reclassified to income statement Fair value adjustments on financial instruments
(2)
–
Foreign exchange differences
(12,644)
(5,385)
Total items that will be reclassified to income statement
(12,241)
(5,549)
Other comprehensive income
(41,523)
(22,400)
(40,974)
(22,040)
(549)
(360)
10,495
50,606
Shareholders of Implenia Ltd.
7,431
47,191
Non-controlling interests
3,064
3,415
Changes from cash flow hedges
Attributable to: Shareholders of Implenia Ltd. Non-controlling interests Total comprehensive income Attributable to:
The accompanying notes form part of the consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Consolidated balance sheets
31.12.2015
31.12.2014
Notes
CHF 1,000
CHF 1,000
12
877,108
731,534
ASSETS
Cash and cash equivalents
456
96
13
589,155
542,021
Marketable securities and derivative financial instruments Trade receivables
14
302,520
302,658
15.1
51,254
39,316
Other receivables
16
51,835
46,514
Raw materials and supplies
17
45,090
25,039
Real estate transactions
18
196,087
229,777
Work in progress Joint ventures (equity method)
Accrued income and prepaid expenses Total current assets
27,971
27,005
2,141,476
1,943,960
Property, plant and equipment
19
296,293
245,611
Investment property
20
15,084
16,434
Investments in associates
21
60,736
48,788
Other financial assets
22
9,915
8,897
Pension assets
26
133
5,698
Intangible assets
23
195,247
87,847
Deferred tax assets
27
Total non-current assets Total assets
6,593
424
584,001
413,699
2,725,477
2,357,659
184–185
31.12.2015
31.12.2014
Notes
CHF 1,000
CHF 1,000
122
–
24
203,450
3,306
393,782
368,702
14
754,826
678,381
15.1
EQUITY AND LIABILITIES
Derivative financial instruments Financial liabilities Trade payables Work in progress
48,437
41,562
Other liabilities
80,835
75,108
Tax liabilities
38,609
42,180
128,713
105,391
Joint ventures (equity method)
Prepaid income and accrued expenses Provisions
25
Total current liabilities Financial liabilities
24
Other liabilities
11,017
6,425
1,659,791
1,321,055
285,552
326,751
1,900
1,900 54,142
Deferred tax liabilities
27
86,609
Pension liabilities
26
37,994
1,927
Provisions
25
29,855
22,095
441,910
406,815
Total non-current liabilities Share capital
28
18,841
18,841
Treasury shares
28
(8,833)
(8,405)
547,048
536,124
Reserves Consolidated profit attributable to shareholders Equity attributable to shareholders Non-controlling interests Total equity Total equity and liabilities The accompanying notes form part of the consolidated financial statements.
48,405
69,231
605,461
615,791
18,315
13,998
623,776
629,789
2,725,477
2,357,659
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Consolidated statements of changes in equity
Equity as at 1.1.2015
Share capital
Treasury shares
CHF 1,000
CHF 1,000
18,841
(8,405)
Consolidated profit
–
–
Other comprehensive income
–
–
Total comprehensive income
–
–
Dividends
–
–
Change in treasury shares
–
(428)
Share-based payments
–
–
Change in non-controlling interests
–
–
Equity component of convertible bond
–
–
Total other changes in equity
–
(428)
Total equity as at 31.12.2015
18,841
(8,833)
Equity as at 1.1.2014
35,097
(5,149)
Consolidated profit
–
–
Other comprehensive income
–
–
Total comprehensive income
–
–
Dividends
–
–
(16,256)
102
Change in treasury shares
–
(3,358)
Share-based payments
–
–
Change in non-controlling interests
–
–
Total other changes in equity
(16,256)
(3,256)
Total equity as at 31.12.2014
18,841
(8,405)
Par value repayment
The accompanying notes form part of the consolidated financial statements.
186–187
Reserves
Capital reserves
Foreign exchange differences
Cash flow hedge reserves
Retained earnings
Total shareholders’ equity
Non-controlling interests
Total equity
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
77,546
(23,870)
–
551,679
615,791
13,998
629,789
–
–
–
48,405
48,405
3,613
52,018
–
(12,095)
(2)
(28,877)
(40,974)
(549)
(41,523)
–
(12,095)
(2)
19,528
7,431
3,064
10,495
–
–
–
(32,948)
(32,948)
(575)
(33,523)
219
–
–
(2,831)
(3,040)
–
(3,040)
–
–
–
2,831
2,831
–
2,831
(168)
158
–
228
218
1,828
2,046
15,178
–
–
–
15,178
–
15,178
15,229
158
–
(32,720)
(17,761)
1,253
(16,508)
92,775
(35,807)
(2)
538,487
605,461
18,315
623,776
90,301
(19,016)
–
501,613
602,845
25,843
628,688
–
–
–
69,231
69,231
3,775
73,006
–
(5,025)
–
(17,015)
(22,040)
(360)
(22,400)
–
(5,025)
–
52,216
47,191
3,415
50,606
(13,224)
–
–
–
(13,224)
(894)
(14,118)
–
–
–
–
(16,154)
–
(16,154)
469
–
–
(2,848)
(5,737)
–
(5,737)
–
–
–
2,848
2,848
–
2,848
–
171
–
(2,150)
(1,979)
(14,366)
(16,345)
(12,755)
171
–
(2,150)
(34,246)
(15,260)
(49,506)
77,546
(23,870)
–
551,679
615,791
13,998
629,789
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Consolidated cash flow statements
1.1. – 31.12.2015
1.1. – 31.12.2014
Notes
CHF 1,000
CHF 1,000
52,018
73,006
Tax
11
17,809
27,255
Financial result
10
Consolidated profit
Depreciation and amortisation
10,109
8,203
81,424
42,788
(648)
(3,521)
Income and distribution from associates
(2,615)
(3,065)
Change in provisions
(1,465)
(2,452)
Change in pension assets and liabilities
(4,168)
(13,191)
13,004
(34,525)
Result from sale of non-current assets
Change in net working capital Change in trade and other receivables Change in work in progress (net), raw materials and supplies Change in real estate transactions Change in trade payables and other liabilities Change in accruals and joint ventures (equity method) Interest paid Interest received Tax paid
(13,534)
80,405
33,276
(12,376)
(11,191)
3,491
6,724
(16,114)
(10,803)
(8,108)
735
2,332
(25,481)
(27,227)
Cash flow from operating activities
145,194
116,901
Investments in property, plant and equipment
(55,554)
(49,151)
Disposals of property, plant and equipment Investments in other financial assets and associates Disposals of other financial assets and associates Investments in intangible assets Proceeds from sale of intangible assets Acquisition of subsidiaries Cash flow from investing activities
2.3
13,326
8,248
(501)
(1,078)
2,853
1,778
(1,757)
(1,157)
–
–
(87,383)
(8,373)
(129,016)
(49,733)
188–189
1.1. – 31.12.2015
1.1. – 31.12.2014
CHF 1,000
CHF 1,000
Notes
157,308
126,757
Repayment of financial liabilities
(2,635)
(7,818)
Equity raised through convertible bond
15,178
–
(209)
(2,889)
(32,948)
(29,378)
Increase in financial liabilities
Change in treasury shares Dividends Cash flow with non-controlling interests Cash flow from financing activities Foreign exchange differences on cash and cash equivalents Change in cash and cash equivalents
(575)
(894)
136,119
85,778
(6,723)
(3,993)
145,574
148,953
Cash and cash equivalents at the beginning of the period
12
731,534
582,581
Cash and cash equivalents at the end of the period
12
877,108
731,534
The accompanying notes form part of the consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
1
General information
Implenia Ltd. is a Swiss public limited company incorporated in Dietlikon, Zurich. The shares of Implenia Ltd. are listed on the SIX Swiss Exchange (ISIN CH002 386 8554, IMPN). The German version of the financial statements is the authoritative version. The English and French versions are non-binding translations. Implenia’s business activities are described in notes 2.4. The Consolidated Financial Statements as at 31 December 2015 were approved by the Board of Directors of Implenia Ltd. on 22 February 2016, for submission to the General Meeting. In accordance with Art. 698 of the Swiss Code of Obligations, the General Meeting must approve the consolidated financial statements. The consolidated financial statements were audited by the statutory auditor PricewaterhouseCoopers AG, Zurich. Unless otherwise stated, the figures in the financial report are given in thousands of Swiss francs.
2
Summary of significant accounting policies
The consolidated financial statements of Implenia have been prepared in accordance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB). With the exception of balance sheet items measured at fair value, the consolidated financial statements are based on historical cost. Management estimates and judgements for the purposes of financial reporting affect the values of reported assets and liabilities, contingent liabilities and assets on the balance sheet date, and expenses and income during the reporting period. Actual values may differ from these estimates.
190–191
2.1 Changes to accounting policies The accounting policies applied to the 2015 consolidated financial statements are identical to those applied to and described in the financial report 2014. The International Accounting Standards Board (IASB) published the following new standards as well as amendments and interpretations to standards that are not compulsory for the 2015 financial year. We did not opt for early application of these standards. – – – – – –
IAS 28 Investments in associates and joint ventures (revision) IFRS 5 Non-current assets held for sale and discontinued operations (amendment) IFRS 9 Financial instruments IFRS 10 Consolidated financial statements (amendment) IFRS 15 Revenue from contracts with customers IFRS 16 Leases
The application of the new and revised standards and interpretations did not have any material impact on these consolidated financial statements. The effects of IFRS 15 and IFRS 16 are currently being analysed.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.2 Principles of consolidation The consolidated financial statements of Implenia include the financial statements of Swiss-domiciled Implenia Ltd. and its subsidiaries. Subsidiaries are companies controlled by Implenia Ltd. Control is given when Implenia Ltd. is exposed to a fluctuating return on its investment in the subsidiary or has a right to this yield and can affect it through its ability to control the subsidiary. This is usually the case where Implenia Ltd. directly or indirectly controls more than 50 percent of the company’s voting rights or the potential voting rights that can be exercised at any given time and thereby controls the relevant activities. Subsidiaries are consolidated from the date on which Implenia Ltd. obtains control over the company and deconsolidated from the date on which Implenia Ltd. loses control. Receivables, liabilities, transactions and unrealised gains between Group companies are completely eliminated from the consolidated accounts. Changes in ownership interests in subsidiaries that do not result in a change in control are recognised as a transaction in equity. Business combinations in which the Group assumes control over another company are accounted for under the acquisition method. The purchase price is calculated as the sum of the fair values of the assets transferred to the seller and the liabilities incurred or assumed at the time of the transaction. IFRS requires agreed adjustments in acquisition-related costs dependent on future events to be recognised in the purchase price and any interests already held in an acquired business to be remeasured at fair value and recognised in the income statement. Transaction costs are recognised as an expense in the period in which they are incurred. Identifiable assets, liabilities and contingent liabilities acquired are recognised in the balance sheet at their acquisition-date fair value, irrespective of the size of the non-controlling interests. Any difference between the historical cost and the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill. For joint operations, assets, liabilities, income and expenses are recognised in the consolidated statements proportionately to the share-ownership ratio. Joint operation is given if decisions about the relevant activities require the unanimous consent of the parties sharing control and if the parties have a right to the assets and an obligation for the liabilities of the joint operation. The consolidation principles for subsidiaries also apply to joint operations. Investments in associates and joint ventures are accounted for under the equity method. Associates are companies in which Implenia holds 20 to 50 percent of the voting rights or over which Implenia can otherwise exercise significant influence. With joint ventures, structured through a separate vehicle in accordance with local legislation, the parties have a right to the net assets of the joint arrangement.
192–193
2.3 Changes in the scope of consolidation As at 2 March 2015, the Implenia Group acquired 100% of the shares in Bilfinger Construction GmbH, based in Wiesbaden, Germany. Bilfinger Construction GmbH and its subsidiaries are an expert in infrastructure construction, foundation engineering, civil engineering and tunnelling. In addition, these companies offer specialised services in areas such as civil works, road construction, engineering and formwork construction. The companies have a strong regional presence in their target markets of Germany, Austria, Norway and Sweden. They offer a high degree of technical know-how and an attractive project and service portfolio. The businesses acquired are fully consolidated as from the acquisition date. The acquisition is an important step for Implenia in establishing itself internationally and strengthens its technical expertise. The Implenia Group is geographically diversifying its business and expanding its regional presence. The purchase price amounts to CHF 144.9 million (EUR 135.9 million) and includes the acquisition of cash and cash equivalents of CHF 55.5 million (EUR 52.0 million). The acquisition is shown in the consolidated cash flow statement at the transaction price. The purchase price does not include any variable components. Based on the provisional purchase price allocation, the identifiable net assets amount to CHF 57.0 million. The goodwill from the transaction amounts to CHF 87.9 million and reflects assets acquired that cannot be capitalised such as market entry, customer relationships under public law, the expertise of the workforce and anticipated synergy effects. The goodwill acquired is not expected to be tax-deductible. The CHF 4.1 million in costs associated with the acquisition have been reported under other operating expenses in the income statement. Bilfinger Construction GmbH achieved an operating result of CHF – 5.7 million and revenue of CHF 559.8 million in the 2015 financial year. For the period from acquisition to 31 December 2015, Bilfinger Construction GmbH reported an operating result of CHF 3.9 million and revenue of CHF 487.9 million. There is also depreciation and amortisation in the amount of CHF 22.7 million resulting from redetermining fair values. The following overview shows the fair values provisionally recorded for the assets and liabilities acquired as well as for the goodwill.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.3.2015 CHF 1,000
Cash and cash equivalents
55,455
Trade receivables
63,628
Other current assets
66,108
Property, plant and equipment
67,283
Intangible assets
40,546
Other non-current assets Trade payables Current and non-current provisions Other current liabilities Other non-current liabilities Fair value identifiable net assets Non-controlling interests
13,000 (30,983) (13,852) (154,057) (49,989) 57,139 (96)
Fair value net assets acquired – share IÂmplenia
57,043
Goodwill
87,852
Purchase price
144,895
Cash and cash equivalents acquired
(55,455)
Outstanding purchase price payment
(2,057)
Net cash outflow
87,383
There were no changes in the scope of consolidation in the previous year that have a material impact on these consolidated financial statements.
194–195
2.4 Segment reporting The Group’s business segments are based on the organisational units, for which the Group Executive Board (GEBO) and the Group Board of Directors are presented a report. The Board of Directors takes on the role of chief operating decision maker. It receives regular internal reports in order to assess the Group’s performance and resource allocation. The acquisition of Bilfinger Construction GmbH prompted a reorganisation within the Implenia Group. The new internal and reporting structure has given rise to the following business segments: – Development – Switzerland – Infrastructure – International – Miscellaneous / Holding The segments undertake the following activities:
Development In the Development Segment, Implenia brings together its expertise in project development, from initial idea to completed building. As a partner for private and institutional property developers, Implenia develops and realises sustainable property and sites in Switzerland, and can utilise its own land bank. It concentrates especially on housing, health and the ageing population, and has a geographically broad project portfolio with a focus on the strong growth regions of Zurich and Lake Geneva.
Switzerland The Switzerland Segment includes Implenia’s services for modernising residential and commercial properties, general and total contracting, building construction, road building and civil works. The segment also includes the surfacing and gravel works in Switzerland and wooden construction. Modernisation brings together the segment’s capabilities in conversion and renovation, from consultancy to implementation. As general and total contractor Implenia offers comprehensive services from a single source.
Infrastructure The Infrastructure Segment focuses on tunnel construction and foundation engineering in Europe. The segment brings together Implenia’s tunnelling, foundation engineering, large-scale project and design / planning capabilities. These services are offered in the home markets of Switzerland, Germany, Austria, Sweden and Norway. In addition, the Global Projects sub-unit bids for large, complex infrastructure projects outside our home markets and also takes on project management.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
International The International Segment includes Implenia’s activities in its home markets of Germany, Austria, Norway and Sweden, as well as the foreign gravel plants. Implenia Germany & Austria is the provider for regional customers in German-speaking countries outside Switzerland that need services for civil works, general civil engineering, maintenance and repair, and selective building construction. Implenia Scandinavia offers comprehensive services for complex infrastructure projects including conventional tunnelling. It also provides niche services for road and rail. The International Segment’s goal is to further expand its market position.
Miscellaneous / Holding Miscellaneous / Holding contains all the costs of Implenia that cannot be allocated to a segment. The newly acquired Machinery & Electrotechnology (MET) and Formwork Construction (BBS) activities as well as the Central Laboratory have been integrated into this segment for the time being. The segment also includes Group companies with no activities, holding company overheads, the material investment properties, deferred taxes recognised at Group level, and pension assets and liabilities. Certain headquarter functions are disclosed under Miscellaneous / Holding. These include procurement, corporate controlling, investor relations, business development, investment management, marketing / communications, treasury, legal services, insurance, human resources, IT, health & safety, sustainability and other Technical Center services. The relationship between the current segments and the previous ones as per the 2014 financial statements is illustrated below: Current segments Previous segments
Development
Switzerland
x
Consulting
Modernisation Development Buildings Tunnelling & Civil Engineering Construction Switzerland
Norge
Infrastructure
International
x x Civil Engineering and Reprojet
Bau Südbaden x Gravel Processing International
x Special Foundation and Large-Scale Projects
x
The activities acquired together with Bilfinger Construction GmbH are allocated to the Infrastructure and International segments plus, to a limited extent, to the Miscellaneous / Holding segment. The previous year’s segment reporting figures have been restated accordingly.
196–197
2.5 Related parties These comprise joint ventures, accounted for under the equity method, associates and other related parties. Please refer to the relevant sections for information on joint ventures and associates. Other related parties mainly comprise officers and directors of Implenia (key management personnel), their related parties and the companies at which these persons exercise a senior management function. Significant influence exists in particular where a person exercises a senior management function at another company (member of the Board of Directors or the Executive Committee) and explicitly, i.e. as part of his contractual duties, represents the interests of Implenia or acts as a representative of Implenia. Significant influence is otherwise assumed if one or more senior managers at Implenia can use their (senior) management position at the other company to exert a direct influence on the conditions applying to actual transactions with Implenia (e.g. contractual terms, prices, etc.). This is the case, for example, if Implenia or the senior management member also has a significant equity interest in the other company or if the other company conducts significant transactions with Implenia. Other types of arrangements may also lead to significant influence being exercised. The officers and directors of Implenia comprise the members of the Board of Directors and the members of the Group Executive Board of Implenia.
2.6 Foreign currencies The consolidated financial statements of Implenia are denominated in Swiss francs (CHF). The functional currencies of the Group companies abroad are the respective local currencies. In the subsidiaries, foreign currency transactions are measured at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing on the balance sheet date. All foreign exchange differences are recognised in the income statements of the respective companies. Income, expenses and cash flows of the consolidated companies are translated to CHF at the average rate for the reporting period. Balance sheet items are translated at the closing rate. Exchange differences relating to equity positions and non-current intra-Group financing transactions in connection with net investments in foreign subsidiaries are recognised directly within the exchange differences in other comprehensive income. These cumulative amounts of currency gains and losses recognised in equity are reclassified to the income statement upon loss of control.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.7 Revenue Consolidated revenue includes all income from the different activities of Implenia. In General Contracting and Construction Works, customer contracts are recognised in accordance with the percentage-of-completion method. Revenue, including share of profits, is recognised on the basis of the proportion of the total service to be performed that is actually performed in the financial year. Future expected losses from contracts are taken into consideration when measuring the value of contracts and provided for immediately. Price overruns, additional services and share of profit are recognised in proportion to the stage of completion. For joint venture (equity method) contracts, only the service actually performed by Implenia in the joint venture and its share of the profits of the joint venture are recognised as revenue. Revenue from services is calculated on the basis of the proportion of the service actually provided to the customer up to the balance sheet date. IFRIC 15 provides guidance for determining whether an agreement for the construction of real estate falls within the scope of IAS 11 Construction Contracts or of IAS 18 Revenue and, therefore, when revenues from construction work should be recognised. An agreement for the construction of real estate is deemed to be a construction contract falling within the scope of IAS 11 only if the buyer is able to specify the major elements of the design prior to the start of construction work and / or amend the major elements after construction work has started (irrespective of whether the buyer exercises that ability). If the purchaser has this ability, IAS 11 must be applied, otherwise IAS 18 has to be applied. For the Development segment, revenue includes income from the sale of real estate and total contracting work, as well as temporary rental income (in expectation of the sale of the property). Income from the sale is recognised when the risks and rewards are transferred, i.e. at the time title is transferred, which is normally upon entry in the official land register. Reductions in income, such as rebates or discounts directly related to the services charged, are deducted from revenue.
198–199
2.8 Pension plans Pension arrangements are shown as defined contribution plans if the Group pays fixed contributions to a separate fund or external financial institution and has no legal or constructive obligations to make any further contributions. In the case of defined contribution pension plans, the employer contributions are recognised directly in profit and loss on an accrual basis. All other pension arrangements are treated as defined benefit plans, even if the Group’s potential obligations are small or the probability of occurrence is low. Consequently, most pension arrangements in Switzerland are classified as defined benefit plans, since there are corresponding legal or constructive obligations. Pension liabilities under defined benefit plans are calculated annually by independent actuaries using the projected unit credit method. They correspond to the present value of future expected payments arising from current and past periods of service. The plan assets are measured at fair value. The resulting net amounts are recognised in the balance sheet as pension assets or pension liabilities. The total pension cost comprises the service cost, net interest income and remeasurement of pension liabilities. The service cost includes the current and past service cost as well as settlement and curtailment gains and losses. The net interest income is calculated by applying the discount rate to the net defined benefit liabilities at the beginning of the year and to the net assets. The service cost and net interest income form part of the personnel expenses. Actuarial gains and losses are immediately recognised in other comprehensive income as remeasurement of pension liabilities. This item also comprises the return on plan assets, excluding amounts accounted for in net interest on the net defined benefit / liability (asset), and any change in the effect of the asset ceiling, excluding amounts accounted for in net interest on the net defined benefit / liability (asset).
2.9 Share-based payments / Employee participation programme The payments under share-based compensation are reported as personnel expenses. Costs in relation to shares that are not distributed until the following year are recognised fully in the year in which service is rendered. All employees, with the exception of members of the Group Executive Board, benefit from an employee share participation scheme as defined in the regulations. Under this plan, employees are able to acquire a set number of Implenia Ltd. shares twice a year, normally in the amount of one-half of their monthly salary, at a preferential rate. The arrangements of the employee participation programme are agreed periodically by the Board of Directors.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.10 Taxes Income taxes are recognised in the same period as the income and expenses to which they relate. Deferred taxes are recognised in accordance with the balance sheet liability method. The computation is therefore based on the temporary differences between the tax base and the carrying amount relevant for consolidation of an asset or a liability, unless the temporary difference relates to investments in Group companies where the timing of the reversal of the difference can be controlled and it is probable that this will not take place in the foreseeable future. In addition, where no provision has been made for distributions of profits, withholding taxes and other taxes on potential later distributions are not recognised, as profits are normally reinvested. Deferred tax assets and deferred tax liabilities of the Group, computed on the basis of the local tax rates expected to apply at the time of taxation, are recognised under non-current assets and non-current liabilities. Changes in deferred tax assets and deferred tax liabilities are recognised in the income statement or in the statement of comprehensive income if they relate to items that are recognised in the statement of comprehensive income. Deferred tax assets are recognised for all unused tax loss carryforwards to the extent that it is probable that these can be offset against future taxable profits. Several Swiss cantons levy a separate tax on the sale of land and real estate from business assets that is usually deductible from the ordinary cantonal taxes on profits. The taxable gains on the sale of property are calculated in accordance with the applicable cantonal laws. The applicable tax rate on the sale of property is dependent on the length of ownership and the amount of the taxable gain on the sale of the property. The immovable property gains tax is calculated as at the date of sale.
2.11 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at banks and other financial institutions. Positions are recognised as cash only if they are readily convertible to known amounts of cash, if they are not subject to a significant risk of change in value and if they have an original maturity of no more than three months. This definition of cash and cash equivalents is also applied for the purpose of the consolidated cash flow statement.
200–201
2.12 Trade receivables Trade receivables are recognised at fair value, that is, at the amounts invoiced less allowances for estimated shortfalls in receipts, e.g. due to rebates, refunds and discounts. Allowances for doubtful receivables are computed on the basis of the difference between the recognised value of the receivable and its estimated collectible net amount. Any expected loss is charged to the income statement. If a receivable is uncollectible, it is written off.
2.13 Work in progress Customer contracts relating to construction sites are accounted for using the percentage-of-completion method. The percentage of completion is ascertained on the basis of the work completed under the respective contracts. Work in progress includes accruals for services provided but not yet invoiced, including inventories on construction sites, advance payments from customers and to suppliers for services invoiced not yet provided, deferrals for outstanding invoices from suppliers and sub-contractors, and provisions for losses on the order backlog and work in progress. The customer contracts are reported in the balance sheet as net assets or net liabilities from work in progress. If the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the e xtent of the contract costs incurred that will probably be recoverable, while the contract costs incurred are also recognised as an expense in the same period. This is equivalent to measurement at cost of production. If it is probable that the total contract costs will exceed the total contract revenues, the expected loss is recognised immediately as an expense.
2.14 Joint ventures Joint ventures are established to implement short-term projects with other construction companies. Work is assumed when a joint agreement has been concluded with the contractual partners. Joint ventures are organised as simple partnerships; the partnership agreements govern the relationships between the members. Joint ventures that meet the criteria for control are fully consolidated like subsidiaries. A joint venture with joint control is accounted for differently taking account of the actual rights and obligations in the respective country. Here, a distinction is made between joint operations and joint ventures. For joint operations, assets, liabilities, income and expenses are recognised in the consolidated statements proportionately to the share-ownership ratio. Joint operation is given if decisions about the relevant activities require the unanimous consent of all the parties, or a group of parties, that collectively control the arrangement. If the shareholders manage the joint venture jointly and, according to local legislation, only have rights to net assets, it is classified as a joint venture and recognised according to the equity method. If Implenia exercises significant influence over the joint venture, the company is also accounted for under the equity method pursuant to IAS 28 (investments in associates and joint ventures). Significant influence is presumed if Implenia directly or indirectly holds 20 percent or more
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
of the voting rights in a joint venture or if Implenia is represented on the building commission or an equivalent governing body of the joint venture. Under the equity method, on initial recognition the investment in a joint venture is recognised at cost. In the following years, the carrying amount increases or decreases in line with Implenia’s share of the profit or loss of the joint venture. Liquidity contributions and disbursements increase or reduce the carrying amount without affecting profit or loss. The resulting asset or liability is recognised in the balance sheet. The receivables and payables of Implenia in respect of joint ventures are disclosed separately in the corresponding receivables and payables items. Income from joint ventures is reported within consolidated revenue as the execution of customer orders qualifies as an operating activity and because profit or loss of the joint venture excludes the results of the internal service charge. In case the joint ventures accounted for under the equity method are not applying IFRS, their results are adjusted accordingly. If there is no current financial data available when Implenia’s consolidated financial statements are prepared, the net profit and Implenia’s share of the profit are based on estimates by management. Any deviations between the actual results and these estimates are corrected in the consolidated financial statements for the following year.
2.15 Investments in associates Associates are companies over which the Group exercises significant influence but does not have control. As a rule, these are companies in which Implenia holds a stake of between 20 percent and 50 percent. These companies are accounted for under the equity method and are reported separately in the consolidated balance sheet. If the Group’s associates are not applying IFRS, their results are adjusted accordingly. If there is no current financial data available when Implenia’s consolidated financial statements are prepared, the net profit and Implenia’s share of the profit are based on estimates by management. Any deviations between the actual results and these estimates are corrected in the consolidated financial statements for the following year. Goodwill may arise from the acquisition of an investment in an associate. The goodwill equals the difference between the cost of the investment and the fair value of the identifiable net assets. The goodwill is included in the carrying amount of investments in associates. The long-term joint ventures for the operation of facilities producing concrete and asphalt in which Implenia has interests of 20 percent and more are recognised and measured separately from other joint ventures, which are also recognised in the balance sheet and measured as associates in accordance with IAS 28 (investments in associates and joint ventures). Income from associates is reported in a separate financial statement line item within operating income as the execution of customer orders qualifies as an operating activity.
202–203
2.16 Raw materials and supplies Raw materials and supplies are measured at cost. The valuation of inventory and charges to material costs are stated at historical cost in accordance with the average cost principle. Inventories that can only be sold with difficulty or at lower market prices must be written down. Inventories at a market price below the costs recognised by IÂmplenia are written down if the finished product no longer covers the costs. If it is foreseeable that written-down inventories can be used again, the write-downs are reversed by increasing the value of the inventory to the lower of net realisable value or historical cost. Unsellable inventories are written off in full.
2.17 Real estate transactions Real estate reported under this item is classified as held for sale and is measured in accordance with IAS 2 Inventories. Completed properties not yet sold may temporarily generate rental income; however, they are still reported under this item as they are held for sale. These properties are measured separately. Each property is measured at the lower of cost, including work by the company, or the net sale value. Costs include financing costs paid to third parties until the property is ready for use. Write-downs arising from impairments determined on the basis of the above measurement principles are charged directly to this item. Sales proceeds from real estate transactions are reported as revenue. Changes to the portfolio and movements in write-downs on real estate transactions are recognised as expenses. Certain real estate transactions are conducted jointly with one or more partners.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.18 Property, plant and equipment Property, plant and equipment are measured at cost and depreciated over their estimated useful life on a straight line basis, with the expense charged to the income statement: – – – – – –
Property Plants Machinery and vehicles Furniture IT Investment property
25 – 50 years 15 – 20 years 6 – 15 years 5 – 10 years 3 – 5 years 25 – 50 years
Additional costs, which extend the economic useful lives of property, plant and equipment, are capitalised separately. Pro-rated financing costs for property, plant and equipment under construction are capitalised. The value of property, plant and equipment is reviewed whenever events or changes in circumstances indicate that the carrying amount may be impaired.
2.18.1 Investment property Land and property held for the purposes of generating rental income or whose intended use has not yet been defined are recognised separately as investment property in accordance with IAS 40. All land is classified as investment property if no intention to develop or sell the land has been indicated. Recognition and measurement are carried out in accordance with the cost model (IAS 16). Investment property is recognised at cost and depreciated on a straight line basis (in the case of real estate). If the present value of future net cash inflows is lower than the carrying amount, the asset is written down to the lower recoverable value in accordance with IAS 36. The fair value of this real estate is shown separately, and is determined in accordance with recognised methods, for example, by using the current market price of comparable real estate as a basis or by applying the discounted cash flow method.
2.18.2 Finance leases Leased property, plant and equipment for which Implenia bears substantially all the risks and rewards associated with ownership are capitalised at the lower of the fair value of the leased property or the present value of the minimum lease payments at the inception of the lease and depreciated over the shorter of the lease term or the estimated useful life.
2.18.3 Operating leases Leases are classified as operating leases if a substantial proportion of the risks and rewards associated with ownership are retained by the lessor. They are generally depreciated on a straight line basis over the term of the lease, with the expense charged to the income statement.
204–205
2.19 Intangible assets 2.19.1 Goodwill Business combinations are accounted for using the purchase method as described under note 2.2. Goodwill is the excess of the costs of acquisition over the Group’s interest in the fair value of the net assets acquired. The non-controlling interests are recognised in proportion to their share of the fair value of the net assets acquired. Goodwill is not amortised, but is tested for impairment at each balance sheet date instead. When testing goodwill for impairment, the realisable value is computed on the basis of the cash generating unit to which the goodwill is allocated. Realisable value is the higher of fair value less cost to sell and value in use. If the carrying amount exceeds the realisable value, the difference is recorded as an impairment. The estimates of future discounted cash flows, the corresponding discount rates and the growth rates are largely based on management estimates and assumptions. The actual cash flows and values generated may deviate significantly from the expected future cash flows and the related amounts determined using discounting methodology.
2.19.2 Other intangible assets Additions of licences, software, IT development costs, brands and customer relationships are recognised at cost. Intangible assets are amortised in equal instalments over their economic life from the initial date on which the Group can use them. The estimated economic life of intangible assets is regularly reviewed. All identifiable intangible assets (such as brands and customer relationships) acquired in the course of a business combination are initially recognised at fair value. Other intangible assets are measured at cost and amortised over their estimated useful life on a straight line basis, with the expense charged to the income statement: – Licences and software – Brands – Customer relationships
3 – 5 years 3 – 5 years 10 – 15 years
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.20 Financial assets and derivative financial instruments Financial assets are categorised as follows: “at fair value through profit or loss”, “available for sale”, “held to maturity” and “loans and receivables”. Financial instruments classified as “at fair value through profit or loss” are either “held for trading” or are designated as such on initial recognition. “Held for trading” financial assets are acquired principally with the objective of generating a profit from short-term fluctuations in price. Financial assets are designated as “at fair value through profit or loss” if this eliminates a measurement or recognition inconsistency and results in more relevant information. Financial assets “held to maturity” are securities with a fixed maturity that Implenia has the positive intention and ability to hold until maturity. “Loans and receivables” are financial assets that are issued by Implenia or acquired from the issuer on a primary market. These are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. All other financial assets are classified as “available-for-sale”. All financial assets are initially recognised at their fair value including transaction costs, with the exception of financial assets classified as “at fair value through profit or loss”, where the transaction costs are not included. All purchases and sales are recognised on the transaction date. After initial recognition, financial assets “at fair value through profit or loss” are measured at their fair value and all changes in fair value are reported in financial income or expense in the period to which they relate. After initial recognition, “held to maturity” financial assets and “loans and receivables” are measured at amortised cost using the effective interest method. After initial recognition, “available for sale” financial assets are stated at fair value and all unrealised changes are recognised in other comprehensive income, with the exception of interest which is calculated on the basis of the effective interest method, and foreign exchange fluctuations. In the event of sale, impairment or disposal of “available for sale” financial assets, cumulative gains or losses recognised in equity since the date of acquisition are reported as financial income or expense for the current reporting period. Implenia concludes currency derivatives to hedge foreign currency risks. In principle, currency derivatives are measured at fair value through profit or loss. Currency derivatives may be designated as cash flow hedges for major foreign currency risks on cash flows that are highly likely to occur. The conclusion of new currency derivatives is subject to a formal decision-making process and is based on cash flow planning as well as an analysis of the currency risks. The objective of the hedging transaction, the strategy and its effectiveness are documented. The effectiveness of open derivative financial instruments is reviewed on an ongoing basis. Hedging transactions are accounted for at fair value. The effective part of the result from measurement is recognised in other comprehensive income. As soon as the hedged underlying transaction is posted in the income statement, the profits and losses recognised in equity are reclassified into the income statement. The ineffective part of the result is recognised directly in profit and loss. Financial assets are tested for impairment on each balance sheet date. If there are objective indications of impairment such as insolvency, default or other major financial difficulties experienced by the issuer, an impairment is charged to the consolidated profit. Financial assets are derecognised if the contractual interests in cash flows from the assets expire or the Group transfers the right to receive the cash flows from the financial assets in a transaction where all the significant risks and rewards of ownership of the financial asset are transferred.
206–207
The value of financial assets measured at amortised cost or at cost must be reviewed in the case of an indication of impairment. An impairment trigger exists, for example, if the fair value of the assets deteriorates to the extent that it must be assumed that this decrease is permanent. Neither assets and liabilities nor income and expenses are offset against each other if this is not required or permitted by a Standard or an Interpretation. Offsetting detracts from the ability of users to understand transactions, other events or conditions and to assess the future cash flows of a company unless it reflects the economic substance of a transaction, or other event. Measuring assets net of valuation allowances – for example, obsolescence allowances on inventories and doubtful debt allowances on receivables – is not offsetting. In accordance with IAS 18, revenue must be measured at the fair value of the consideration received or receivable, taking into account the amount of any trade discounts granted by the company. In the course of its ordinary business activities, the Implenia Group also conducts transactions that do not in themselves generate revenue but are incidental to the main revenue-generating activities. The results of such transactions are to be presented, if such presentation reflects the substance of the transaction or event, by netting any income with the related expenses arising from the same transaction: a) gains and losses on the disposal of non-current assets, including financial investments and operating assets, are recognised by deducting the carrying amount of the asset and related selling expenses from the proceeds on disposal; and b) expenditure related to a provision that is recognised in accordance with IAS 37 (provisions, contingent liabilities and contingent assets) and reimbursed under a contractual arrangement with a third party (e.g. a supplier’s warranty agreement) may be netted against the related reimbursement. In addition, gains and losses arising from a group of similar transactions, for example, foreign exchange gains or losses or gains and losses arising from financial instruments “at fair value through profit or loss” are reported on a net basis. However, these gains or losses are reported separately if they are material.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
2.21 Financial liabilities Financial liabilities are initially recognised at fair value and then at amortised cost. Any difference between the net proceeds received and the net amount repayable at maturity is amortised over the term of the instrument and charged to financial income or expense. Transaction costs paid to capital providers (generally banks) are amortised over the term of the underlying financial instrument using the amortised cost method.
2.22 Provisions Provisions are recognised if a legal or constructive obligation exists that makes it probable that an outflow of resources will be required to settle this obligation and a reliable estimate of the amount of the obligation can be made. Restructuring provisions are made if IÂmplenia has a detailed formal plan for restructuring that it has either already started to implement or that it has announced to those affected by it. The provisions recognised are the best estimate of the final obligation. No provisions are made for future operating losses. Where there are a number of similar obligations, IÂmplenia determines the probability that an outflow will be required by considering the class of obligations as a whole. Possible obligations whose occurrence cannot be assessed on the balance sheet date or obligations whose amount cannot be reliably estimated are disclosed as contingent liabilities. Where the effect of the time value of money is material, the present value of the expected expenditure is recognised.
208–209
2.23 Equity Equity represents the nominal value of the issued shares of IÂmplenia Ltd. Treasury shares represent shares of IÂmplenia Ltd. that have been reacquired on the market. They are deducted from equity. The foreign exchange differences arise from the measurement of the foreign subsidiaries. If these companies should cease to fall within the scope of consolidation, the corresponding share of the foreign exchange differences will be recycled through the income statement. The cash flow hedge reserves contain unrealised gains and losses from derivative financial instruments, which do fulfil the criteria for hedge accounting. They are reclassified to the income statement as soon as the underlying transaction is recognised in profit and loss. Retained earnings represent the accumulated profits of the Group, most of which are freely available. Non-controlling interests represent the interests held by third-party shareholders in the equity of subsidiaries as well as the partner shares of fully consolidated joint ventures. Dividends and par value repayments are reported in the consolidated financial statements in the periods in which they were agreed by the General Meeting of Shareholders.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
3
Risk assessment
A Group-wide risk assessment, which facilitates the early identification and evaluation of risks, as well as the implementation of appropriate risk-reduction measures, is carried out every quarter and focuses mainly on project risks and financial risks. Using a bottom-up process based on risk maps for each project and unit, the results of all the individual risk and opportunity assessments are consolidated. As part of the accounting and control process, Group Risk Management reports twice a year to the Group Executive Board, the Audit ÂCommittee and the Board of Directors.
3.1 Financial risk management The principles used for financial risk management are defined at Group level and apply to all Group entities. They include rules about holding and investing cash and cash equivalents, taking on debt, and hedging against foreign currency, price and interest rate risks. Compliance with the rules is monitored centrally on a continuous basis. Overall, the Group follows a conservative, risk-averse approach. The Group’s main financial instruments are cash and cash equivalents, trade receivables, financial and other receivables, current and non-current financial liabilities and trade payables. Trade receivables and payables are generated in the course of normal business activities. Financial liabilities are used exclusively to finance Âoperating activities. Financial investments serve mainly to finance associates (loans). Derivative financial instruments may only be used to hedge operating activities. The main risks for the Group resulting from financial instruments are credit risk, liquidity risk and market risk.
210–211
3.2 Credit risk The credit risk consists mainly of the risk of default on trade receivables and cash and cash equivalents.
3.2.1 Trade receivables Agreements with customers generally stipulate payment terms between 30 and 90 days. The creditworthiness of customers is verified prior to any contract being signed. Revenue is generated mainly through transactions with public-sector bodies and high-quality debtors (banks, insurance companies, pension funds, etc.). As a rule, no collateral is requested. However, in the case of services relating to real estate, it is legally possible to have a lien on the real estate (right of lien of tradesmen and building contractors). Notice of payments outstanding is given as part of a standardised reminder procedure. Regular reports are made monitoring the progress of receivables, particularly those that are overdue. Irrecoverable debts are negligible in relation to Group revenue. The three largest counterparty exposures under trade receivables amount to CHF 48.8 million (previous year: CHF 97.8 million). This is equivalent to 8.3 percent of the carrying amount of all trade receivables (previous year: 18.0%).
3.2.2 Cash and cash equivalents and other financial assets The credit risk relating to cash and cash equivalents and other financial assets resides in the non-payment of receivables due to debtor insolvency. Debtors are subject to regular creditworthiness checks by means of a review of their financial situation. In the case of cash and cash equivalents, the counterparty must also have a minimum rating under consideration of the current market situation (S&P BBB+) or a state guarantee. A number of Swiss cantonal banks continue to benefit from a full state guarantee. This means that, in the event of the bank’s insolvency, the canton (the state) – as owner of the bank – guarantees all outstanding liabilities remaining after all the assets have been realised. Creditors therefore have complete security. This rule does not apply to subordinated bonds or participation capital (a specific component of equity). Because of the state guarantee, disclosure by class of financial asset is irrelevant as the credit balances are backed either by the bank’s own funds or, on a secondary basis, by the state. In the case of these exposures, the exposure per counterparty is limited to a maximum amount. Creditworthiness is monitored regularly using market-based information (e.g. CDS spreads), and appropriate measures are taken if necessary. The three largest counterparty exposures under cash and cash equivalents amount to CHF 548.9 million (previous year: CHF 457.0 million). This is equivalent to 62.6 percent of the carrying amount of the total cash and cash equivalents (previous year: 62.5%). The maximum credit risk corresponds to the amount of individual receivables in the event of default. Age structure of trade receivables: see note 13.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
The following table shows the receivables from the most important counterparties on the balance sheet date: Rating2
Balance CHF 1,000
As at 31.12.2015 Counterparty1 Trade receivables
48,839
Public sector and its operations
n.a.
25,198
Other
n.a.
11,908
Other
n.a.
Cash and other financial assets
11,733 548,860
Financial institution
BBB+
289,498
Financial institution
A
179,633
Financial institution
AAA
79,729
As at 31.12.2014 Counterparty1 Trade receivables
97,764
Public sector and its operations
n.a.
38,336
Public sector and its operations
n.a.
30,177
Public sector and its operations
n.a.
Cash and other financial assets
29,251 456,978
Financial institution
A
207,080
Financial institution
A –
142,940
Financial institution
AAA
106,958
1 Counterparties are broken down by the following classifications: – Financial institutions (banks, insurance companies, pension funds) – Public sector and its operations – Other 2 Moody’s / Standard & Poor’s rating
212–213
3.3 Liquidity risk The liquidity risk derives mainly from the eventuality that liabilities cannot be honoured on the due date. Future liquidity is forecast based on a variety of rolling planning horizons. The Group endeavours at all times to have sufficient lines of credit to cover its planned funding requirements. As at 31 December 2015, the Group had cash and cash equivalents of CHF 877.1 million (previous year: CHF 731.5 million) and unused credit lines of CHF 256.7 million (previous year: CHF 173.6 million). The Group seeks to maintain appropriate minimum liquidity (consisting of cash and cash equivalents and confirmed unused credit lines). Short-term
Long-term
0 – 3 mths
4 – 12 mths
2 – 5 years
over 5 years
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
(431,108)
(43,634)
(1,900)
–
(2,146)
(1,494)
(2,972)
–
Bond issues
–
(208,281)
(10,156)
(131,094)
Subordinated convertible bond
–
(875)
(4,375)
(175,875)
As at 31.12.2015 Trade payables and other liabilities Financial liabilities
As at 31.12.2014 Trade payables and other liabilities Financial liabilities Bond issue
(443,046)
(764)
(1,900)
–
(1,901)
(1,543)
(2,401)
–
–
(8,281)
(210,402)
(134,648)
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
3.4 Market risk / interest rate risk The Group has very few non-current interest-bearing assets. Consequently, the Group’s interest rate risk results from the structure and volume of its financing. Because the Group has financed its operations with fixed-rate bond issues and a convertible bond and reduced its bank funding accordingly, the risk associated with changes in interest rates is minimal; the risk of fluctuations in fair value is negligible. Interest rate increases generally have no negative impact on consolidated profit. Debt is usually taken on in the functional currency of the financed entity and is therefore mainly in CHF. The maturity structure of interest-bearing financial instruments as at 31 December 2015 is as follows: Up to 1 year
2 – 5 years
Over 5 years
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
877,108
Variable rate Cash and cash equivalents Loans and other financial assets Financial liabilities Total
877,108
–
–
453
–
4,927
5,380
(3,567)
(2,971)
–
(6,538)
873,994
(2,971)
4,927
875,950
Fixed rate –
50
4,060
4,110
Financial liabilities
(199,883)
–
(282,581)
(482,464)
Total
(199,883)
50
(278,521)
(478,354)
674,111
(2,921)
(273,594)
397,596
Loans and other financial assets
Overall total
214–215
Maturity structure as at 31 December 2014: Up to 1 year
2 – 5 years
Over 5 years
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
731,534
Variable rate Cash and cash equivalents Loans and other financial assets Financial liabilities Total
731,534
–
–
–
–
3,288
3,288
(3,220)
(2,215)
–
(5,435)
728,314
(2,215)
3,288
729,387
Fixed rate Loans and other financial assets
–
–
5,466
5,466
Financial liabilities
–
(199,398)
(125,000)
(324,398)
Total
–
(199,398)
(119,534)
(318,932)
728,314
(201,613)
(116,246)
410,455
Overall total
If the interest rates on the average total assets in 2015 were 0.5 percentage points higher or lower, the pre-tax profit, provided that all other variables remained constant, would have been CHF 2.6 million (previous year: CHF 1.9 million) higher or lower. This would have been largely due to higher or lower interest income on the cash and cash equivalents.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
3.5 Foreign currency and other risks Currency risks arise at Implenia Group from the Group’s international orientation, from investments in foreign subsidiaries or from the setting up of foreign operations (translation risk). There are also currency risks from future business transactions or assets and liabilities recognised in the balance sheet in currencies other than the functional currency of the company in question. Implenia Group is mainly exposed to risks from the euro and Norwegian krone. If the Swiss franc had been 15 percent stronger against the euro on 31 December 2015, the consolidated profit would have been CHF 1.5 million higher (previous year: CHF 0.9 million less) and equity would have been CHF 58.8 million less (previous year: CHF 10.5 million). The same sensitivity analysis for the Norwegian krone would have resulted in a consolidated profit that was higher by CHF 0.2 million (previous year: CHF 1.0 million less) and equity would have been less by CHF 3.2 million (previous year: CHF 3.7 million). As the Group only holds a small amount of securities, the price risk is not significant.
216–217
3.6 Hedge accounting Major projects at Implenia may lead to foreign currency positions in the Group company performing the work, if a portion of the cash flows does not accrue in the functional currency of the respective company. Material risks are hedged using currency derivatives based on cash flow planning figures. The hedged cash flows will occur between 2016 and 2019 and will be recognised in profit and loss. An unrealised loss of CHF 0.0 million (previous year: CHF 0.0 million) before deferred taxes of CHF 0.0 million (previous year: CHF 0.0 million) was posted in other comprehensive income in the reporting period. As in the previous year, no amounts were reclassified into the income statement from equity in the 2015 financial year. Foreign currency hedges with a negative replacement value of CHF 0.0 million were accounted for as hedge accounting transactions under derivative financial instruments on the record date (previous year: CHF 0.0 million).
3.7 Policy regarding capital structure and indebtedness The Group targets an equity ratio of around 30 percent. As at the reporting date, the equity ratio was 22.9 percent (previous year: 26.7%). Taking account of the liability component of the newly placed subordinated convertible bond, the equity ratio was 28.7 percent. The aim is for current assets to be financed through current debt. Non-current assets should be financed through non-current liabilities and equity. Ordinary capital expenditures are to be financed through ongoing cash flows wherever possible. Economic capital matches the value carried in the consolidated balance sheet. The syndicated loan has various financial covenants attached to it. The financial position and performance are monitored monthly, based on consolidated values. The latest actual figures, projections and budgets are used to monitor compliance with the financial covenants. There were no defaults on financial liabilities during the financial year (previous year: none). As in the previous year, the financial covenants stipulated in financing agreements were kept.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
3.8 Fair value measurement Carrying amounts Level
31.12.2015
Fair values
31.12.2014 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
122
–
122
–
Financial assets Financial assets measured at fair value through profit or loss Currency derivatives
2
Available for sale financial assets Marketable securities
2
334
96
334
96
Unlisted participations
3
6,992
6,586
6,992
6,586
Loans and receivables Trade receivables
*
589,155
542,021
589,155
542,021
Other receivables
*
51,835
46,514
51,835
46,514
Other financial assets
*
2,923
2,311
2,923
2,311
2
122
–
122
–
Financial liabilities Financial liabilities measured at fair value through profit or loss Currency derivatives Other financial liabilities Trade payables
*
393,782
368,702
393,782
368,702
Bonds
1
324,810
324,369
332,225
335,938
Convertible bond
2
157,581
–
161,162
–
Other liabilities
*
82,735
77,008
82,735
77,008
Other financial liabilities
*
6,611
5,688
6,611
5,688
* The carrying amounts of these financial roughly correspond to the fair value.
Fair value estimates for non-financial items are provided in the relevant notes.
218–219
Fair value hierarchy: Level 1 – The inputs used are unadjusted listed prices on active markets for identical assets and liabilities as at the reporting date. The fair value of bonds recognised at amortised cost reflects the closing price on the SIX Swiss Exchange. Level 2 – The measurement is based on inputs (other than the listed prices included in level 1) that are either directly or indirectly observable for the asset or liability. The fair values of currency derivatives (forward contracts) are determined on the basis of the difference between contractually fixed forward prices and the current forward prices applicable on the balance sheet date. The convertible bond issued on 30 June 2015 has a carrying amount of CHF 157.6 million reported under liabilities and CHF 15.2 million reported under equity. The fair value of the liability component is calculated from the contractually agreed interest and amortisation payments discounted at market interest rates. Level 3 – The inputs are not based on observable market data. They reflect the Group’s best estimate of the criteria that market participants would use to determine the price of the asset or liability on the reporting date. Allowance is made for the inherent risks in the valuation procedure and the model inputs. Assets in this category are generally securities not traded on active markets. The Group owns a portfolio of unlisted domestic interests. No not listed investments were sold in the reporting year (previous year: none). The annual remea surement based on the financial statements of individual unlisted companies led to the recognition of a profit of CHF 0.4 million (previous year: loss of CHF 0.2 million) in comprehensive income. Additional purchases in the reporting year amount to CHF 0.0 million (previous year: CHF 0.3 million). There were no reclassifications into or out of any of the three levels. Losses related to receivables and liabilities in the amount of CHF 0.7 million were recorded in the income statement (previous year: CHF 0.2 million). The Group had no held-to-maturity financial instruments during the reporting year or the previous year.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
4
Key management decisions and estimates
4.1 Management decisions used when applying accounting policies 4.1.1 Revenue recognition The nature of the Group’s business is such that many sales transactions have a complex structure. Sales agreements may comprise many elements which occur at different times. Revenue is only recognised when, in the assessment by management, the significant risks and rewards concerned have been transferred to the buyer, the Group is no longer involved in managing further business activities nor exercises de facto control over the goods sold, and the obligations have been met. Consequently, for some transactions, the payments received or the work performed are accrued in the balance sheet and taken to the income statement in future accounting periods when the contractual conditions have been met.
4.1.2 Fully consolidated companies, associates and joint ventures The Group engages in transactions that can lead to control, joint control or significant influence over the Âoperations or the company. These transactions include the acquisition of all or part of the share capital of other companies, the purchase of certain assets and the assumption of certain liabilities or contingent liabilities. In all these cases, management makes an assessment as to whether the Group has control, joint control or significant influence over the operations of the company. Based on this assessment, the company is either fully consolidated, proportionately consolidated or accounted for under the equity method. This assessment is based on the underlying economic substance of the transaction as well as the respective rights and obligations in the respective country and not only on the contractual terms.
4.1.3 Leasing In the case of leasing agreements, ÂImplenia takes on the role of lessee. The treatment of leasing transactions in the consolidated financial statements is primarily dependent on whether the lease is classified as an operating lease or a finance lease. In making this assessment, management looks at both the type and the legal form of the lease and comes to a decision on whether substantially all the risks and rewards of the leased asset are transferred to the lessee. Agreements that do not take the legal form of a lease but nevertheless confer the right to use an asset are also an integral part of such assessments.
220–221
4.2 Key assumptions and sources of estimation uncertainty When preparing the consolidated financial statements in accordance with IFRS, management is required to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and related disclosures. The estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. These are used as the basis for measuring those assets and liabilities whose carrying amounts are not readily apparent from other sources. Actual values may differ from these estimates. Estimates and assumptions are reviewed on an ongoing basis. Changes to estimates may be necessary if the circumstances on which they were based have changed or new information or additional insights have become available. Such changes are recognised in the reporting period in which the estimate was revised. The key assumptions about the future and the key sources of estimation uncertainty which may require material adjustments to the carrying amounts of assets and liabilities within the next twelve months are listed below.
4.2.1 Property, plant and equipment, intangible assets The Group has property, plant and equipment for a carrying amount of CHF 296.3 million (previous year: CHF 245.6 million), goodwill with a carrying amount of CHF 170.4 million (previous year: CHF 83.4 million) and other intangibles with a carrying amount of CHF 24.8 million (previous year: CHF 4.4 million). Goodwill and intangible assets with indefinite useful life are reviewed annually for impairment. To decide whether any impairment exists, estimates are made of future cash flows expected to arise from the use of these assets and their eventual disposal. Actual cash flows may differ significantly from the future discounted cash flows based on these estimates. Factors such as changes in the planned use of buildings, machinery and equipment, technical obsolescence or sales lower than forecast may result in a shortened useful life or impairment. Changes in discount rates, gross margins and growth rates used may also result in impairments.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
4.2.2 Employee benefit schemes Group employees are members of employee benefit schemes which are treated as defined benefit or defined contribution plans under IAS 19. The calculation of the recognised assets and liabilities from these plans is based on statistical and actuarial calculations performed by actuaries. The present value of defined benefit liabilities in particular is heavily dependent on assumptions such as the discount rate used to calculate the present value of future pension liabilities, future salary increases and increases in employee benefits. In addition, the Group’s independent actuaries use statistical data such as probability of withdrawals of members from the plan and life expectancy in their assumptions. Implenia’s assumptions may differ substantially from actual results owing to changes in market conditions and the economic environment, higher or lower withdrawal rates, longer or shorter lifespans among members and other estimated factors. These differences may affect the values of the assets and liabilities from employee benefit schemes recognised in the balance sheet in future reporting periods.
222–223
4.2.3 Litigation Implenia is confronted with litigation in the context of project assessment. Implenia relies on the professional expertise of internal and external lawyers to assess existing legal risks. Judicial rulings may lead to deviations from management estimates. The assessment of financial repercussions may therefore change in the following year depending on the future development of ongoing legal proceedings, which may lead under certain circumstances to a restatement of provisions.
Letzigrund case Implenia constructed the Letzigrund Stadium in the years 2006 and 2007. Various changes or adjustments demanded by the City of Zurich generated additional costs. I mplenia brought the financial impact to the attention of the city authorities at regular intervals. This impact eventually totalled CHF 22.9 million. Implenia’s final bill was for CHF 119.5 million. Of this figure, a consideration of CHF 22.9 million is still outstanding from the city authorities. Implenia has taken legal action with the competent district court in Zurich to obtain full payment of the outstanding debts of CHF 22.9 million. The Zurich District Court has rejected the action on the basis of a decision of principle regarding the planning risk and a stringent formal examination of the addenda. Implenia has lodged an appeal against the District Court’s ruling with the upper court in the amount of some CHF 20 million. The City of Zurich has called in the guarantee provided when carrying out the Letzigrund stadium project, obliging Implenia to make a payment of CHF 12 million, which is being reclaimed and is therefore shown under Receivables from utilised guarantees. Implenia has taken legal action to obtain full payment of the utilised guarantees.
Investigation by the Competition Commission Together with many other construction companies in the regional market for road construction and civil engineering in the cantons of Grisons and St. Gallen, Implenia is currently involved in investigations by the Swiss Competition Commission (see media releases of 15 November 2012 for Grisons and 16 April 2013 for St. Gallen). Implenia is cooperating with the Competition Commission’s investigation, which has not yet been completed. As management felt that it was impossible to make a reliable estimate of the outcome or amount of any penalties when the balance sheet was drawn up, no provisions were raised.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
5
Segment reporting
Segment reporting as submitted to the Board of Directors as at 31 December 2015:
Development
Switzerland
CHF 1,000
CHF 1,000
IFRS revenue unconsolidated
173,068
2,391,575
Intra-Group revenue
(49,821)
(315,861)
Consolidated revenue
123,247
2,075,714
36,303
38,770
98
20,058
Operating income Investments in property, plant and equipment and intangible assets Current assets excl. cash and cash equivalents
236,714
614,776
18,487
266,837
Less debt capital (excl. financial and pension liabilities)
(93,408)
(879,046)
Total invested capital
161,793
2,567
Non-current assets (excl. pension assets)
1 Including eliminations
224–225
Infrastructure
International
Total of Business Units
Miscellaneous / Holding1
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
3,741,464
418,915
708,997
3,692,555
48,909
(64,505)
(31,329)
(461,516)
8,252
(453,264)
354,410
677,668
3,231,039
57,161
3,288,200
8,099
3,001
86,173
(6,237)
79,936
12,990
17,587
50,733
9,867
60,600
125,066
280,492
1,257,048
7,320
1,264,368
119,051
134,621
538,996
44,872
583,868
(192,139)
(348,245)
(1,512,838)
(61,867)
(1,574,705)
51,978
66,868
283,206
(9,675)
273,531
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Segment reporting as submitted to the Board of Directors as at 31 December 2014 (restated as disclosed in note 2.4):
Development
Switzerland
CHF 1,000
CHF 1,000
IFRS revenue unconsolidated
141,139
2,583,492
Intra-Group revenue
(41,229)
(347,061)
Consolidated revenue
99,910
2,236,431
Operating income
35,705
38,392
491
24,406
Investments in property, plant and equipment and intangible assets Current assets excl. cash and cash equivalents
240,290
661,343
19,094
270,739
Less debt capital (excl. financial and pension liabilities)
(88,442)
(928,290)
Total invested capital
170,942
3,792
Non-current assets (excl. pension assets)
1 Including eliminations
226–227
Infrastructure
International
Total of Business Units
Miscellaneous / Holding1
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
3,343,701
179,961
415,513
3,320,105
23,596
(10,857)
(4,486)
(403,633)
(20,308)
(423,941)
169,104
411,027
2,916,472
3,288
2,919,760
13,019
16,291
103,407
5,057
108,464
8,090
15,985
48,972
1,336
50,308
69,316
199,259
1,170,208
42,218
1,212,426
51,954
48,854
390,641
17,360
408,001
(98,158)
(169,539)
(1,284,429)
(111,457)
(1,395,886)
23,112
78,574
276,420
(51,879)
224,541
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Reconciliation of invested capital: 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
Total assets
2,725,477
2,357,659
Minus cash and cash equivalents
(877,108)
(731,534)
(133)
(5,698)
Assets of invested capital
1,848,236
1,620,427
Total equity and liabilities
2,725,477
2,357,659
Minus equity
(623,776)
(629,789)
Minus financial liabilities
(489,002)
(330,057)
Minus pension liabilities
(37,994)
(1,927)
1,574,705
1,395,886
273,531
224,541
Minus pension assets
Liabilities of invested capital Total invested capital Operating income from Miscellaneous / Holding includes:
2015
2014
CHF 1,000
CHF 1,000
Operating result from support and other services (ex-Bilfinger Constr.)
(1,464)
–
Depreciation and amortisation
(3,839)
(2,780)
Depreciations of investment property
(360)
(93)
Income from defined benefit pension plans
5,883
13,191
Integration and acquisition expenses
(4,405)
(2,339)
Other expenses net
(2,052)
(2,922)
Total operating income Miscellaneous / Holding
(6,237)
5,057
Implenia Ltd. is domiciled in Switzerland. Revenues from third parties in Switzerland amounted to CHF 2,382 million (previous year: CHF 2,461 million). Revenues generated abroad came to CHF 906 million (previous year: CHF 459 million). Non-current assets located in Switzerland (excluding financial assets, pension assets and deferred tax assets) as at 31 December 2015 stood at CHF 275 million (31 December 2014: CHF 288 million). Non-current assets located abroad (excluding financial assets, pension assets and deferred tax assets) stood at CHF 232 million (31 December 2014: CHF 62 million), which includes goodwill from the acquisition of Bilfinger Construction GmbH of CHF 87 million.
228–229
6
Materials and subcontractors 2015
2014
CHF 1,000
CHF 1,000
Material expenses
516,060
427,276
Thirdparty services
1,542,833
1,417,286
Total
2,058,893
1,844,562
7
Personnel expenses 2015
2014
CHF 1,000
CHF 1,000
620,696
556,993
Social security contributions
87,065
68,242
Pension expenses
35,048
27,258
Expenses for the foundation for flexible retirement
10,006
13,213
Temporary staff
61,536
67,792
Other personnel expenses
36,316
26,819
850,667
760,317
Wages, salaries and fees
Total
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
8
Profit sharing schemes and remuneration
8.1 Staff scheme Based on the regulations on staff profit sharing dated 15 February 2012, in each calendar year qualifying persons may subscribe for Implenia Ltd. shares normally in the amount of one-half of the gross monthly salary. The annual subscription right may be divided between the March and September purchase periods. For the March 2015 purchase period, the difference between the average market price of CHF 55.40 per share and the preferential price of CHF 38.75 per share was charged to the income statement and for the September 2015 purchase period, the difference between the average market price of CHF 57.05 per share and the preferential price of CHF 39.95 per share was charged to the income statement.
Number of shares subscribed Amount recognised in the income statement
2015
2014
Number
24,316
22,305
CHF 1,000
406
409
The shares cannot be traded for a period of three years. During this time, employees are entitled to dividends and may exercise their voting rights. Upon expiry of the retention period, the shares may be freely traded by employees. The Group Executive Board and the Board of Directors are excluded from the staff scheme.
8.2 Share-based compensation for the Group Executive Board The members of the Group Executive Board receive part of their compensation in the form of a fixed number of shares of Implenia Ltd. The amount is expensed entirely in the current financial year. The amount charged to the Group is calculated on the basis of the fair value of the shares at the time of allocation. The Group may either buy shares on the market or draw from its treasury shares. In 2015, the shares were allocated at an average price of CHF 43.07 per share (previous year: CHF 49.33 per share).
Shares definitely allocated Amount recognised in the income statement
2015
2014
Number
49,367
42,631
CHF 1,000
2,126
2,103
230–231
8.3 Shares for members of the Board of Directors Members of the Board of Directors are remunerated annually, with two-thirds of their remuneration being paid in cash and one-third in shares. The average price of the shares of Implenia AG in the month of April of the year of office is decisive for calculating the number of shares. The amount is expensed entirely in the current financial year. The Group may either buy shares on the market or draw from its treasury shares.
Shares definitely allocated Amount recognised in the income statement
2015
2014
Number
5,376
6,260
CHF 1,000
299
336
8.4 Compensation paid to key persons Members of the Board of Directors of Implenia Ltd. receive annual compensation for their activities according to their function. The Group pays social security contributions on these compensations. Members of the Group Executive Board of Implenia Ltd. receive compensation comprising a fixed annual salary, variable remuneration and reimbursement of expenses. The Group pays social security contributions associated therewith as well as pension fund contributions. The following table shows the compensation paid to key persons recognised as expenditure in the reporting period since they were appointed to their current position.
Short-term benefits
2015
2014
CHF 1,000
CHF 1,000
5,666
7,212
587
695
Share-based payments
2,425
2,439
Total1
8,678
10,346
Post-employment benefits
1 Anton Affentranger has irrevocably waived his right to variable remuneration of CHF 0,3 million (previous year: waiver of his right to 12,500 shares at a value of CHF 0,6 million).
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
9
Other operating expenses 2015
2014
CHF 1,000
CHF 1,000
Rental expenses
84,138
48,649
Infrastructure expenses
18,980
19,483
Maintenance and repairs
42,762
36,530
8,232
4,075
Administration and consultants
19,653
14,018
Office, IT and communication costs
31,474
20,876
Insurance
Taxes and fees Marketing, advertising and other administration expenses Total
8,356
7,151
10,409
19,491
224,004
170,273
232–233
10
Financial expenses and income 2015
2014
CHF 1,000
CHF 1,000
Financial expenses Interest expenses Bond and convertible bond interest Bank charges
706
990
10,403
7,084
575
610
Fixed costs of financial guarantees
1,014
914
Other financial expenses
1,695
1,631
565
157
14,958
11,386
Interest income
753
1,377
Income from investments
429
396
21
379
Currency gains
3,646
1,031
Total
4,849
3,183
(10,109)
(8,203)
Currency losses Total Financial income
Other financial income
Financial result
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
11 Taxes 2015
2014
CHF 1,000
CHF 1,000
84,144
90,974
Profit before tax Switzerland Abroad Total profit before tax
(14,317)
9,287
69,827
100,261
21,443
21,560
Current and deferred tax Switzerland
3,153
3,002
Total current tax
24,596
24,562
Switzerland
(1,233)
1,809
Abroad
(5,554)
884
Total deferred tax
(6,787)
2,693
Total tax
17,809
27,255
Abroad
234–235
Analysis of tax rate The following elements explain most of the differences between the expected Group tax rate (the weighted average tax rate, based on the pre-tax profit of each Group company) and the effective tax rate. 2015
2014
%
%
Expected tax rate
24.0
23.3
Effect of non-taxable items
(1.1)
(0.6)
Effect of non-deductible items
0.2
0.1
Effect of non-capitalised tax losses incurred in the year
3.7
0.8
Effect of changes in the applicable tax rates
(0.4)
0.0
Effect of the use of non-capitalised tax loss carryforwards
(0.1)
(0.3)
Prior years’ taxes
1.1
3.6
Income components with different tax rates
0.9
0.7
Other effects
(2.8)
(0.4)
Effective tax rate
25.5
27.2
The change in the expected tax rate relates mainly to the changed composition of the profits of the Group companies in the respective Swiss cantons and foreign countries.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
12
Cash and cash equivalents 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
346
331
Banks
876,762
731,203
Total
877,108
731,534
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
529,150
447,849
38,869
50,932
4,012
2,855
Cash
13
Trade receivables
Third parties Joint ventures (equity method) Associates Related parties Guarantee retentions
156
1,280
57,997
47,494
Allowance for doubtful receivables
(41,029)
(8,389)
Total
589,155
542,021
236–237
Allowance is made for receivables that are in arrears on the basis of current experience. Valuation allowances are only disclosed separately for trade receivables. For all other financial instruments, value adjustments are offset directly. The increase in allowances for doubtful trade receivables is mainly due to the acquisition of Bilfinger Construction GmbH. In Germany, the client is usually invoiced for claims, which have not yet been approved but are expected, with the final invoice. An immediate allowance is made for claims that have not yet been approved. Allowance for doubtful receivables: 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
As at 1.1.
8,389
10,696
Increase
6,696
1,017
Used
(1,365)
(16)
Reversed
(5,205)
(3,284)
298
(24)
Foreign exchange differences Increase / Decrease due to changes in the scope of consolidation
32,216
–
Total as at 31.12.
41,029
8,389
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Due within Total
Third parties Joint ventures (equity method) Associates Related parties Sub-total Guarantee retentions
31.12.2015
Not due
1 – 30 days
31 – 60 days
61 – 90 days
> 90 days
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
529,150
269,479
46,886
28,359
6,006
178,420
38,869
21,527
6,750
331
2,982
7,279
4,012
1,687
220
57
–
2,048
156
–
–
156
–
–
572,187
292,693
53,856
28,903
8,988
187,747
57,997
Allowance for doubtful receivables
(41,029)
Total
589,155
As at 31 December 2015, total due receivables amounted to CHF 279.5 million (previous year: CHF 215.3 million). With regard to the trade receivables that were neither impaired nor in arrears, there were no indications at the balance sheet date that the customers would not be able to meet their financial obligations. As in the previous year, no guarantees were held at the balance sheet date.
238–239
Due within Total
Third parties Joint ventures (equity method)
31.12.2014
Not due
1 – 30 days
31 – 60 days
61 – 90 days
> 90 days
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
447,849
253,053
59,295
21,585
12,376
101,540
50,932
31,115
617
2,930
1,959
14,311
Associates
2,855
2,142
76
–
28
609
Related parties
1,280
1,280
–
–
–
–
502,916
287,590
59,988
24,515
14,363
116,460
Sub-total Guarantee retentions Allowance for doubtful receivables Total
47,494 (8,389) 542,021
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
14
Work in progress 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
377,776
395,763
(402,545)
(385,787)
Valuation adjustment on contract costs
(44,531)
(7,689)
Contract costs in relation to future services by suppliers and subcontractors
Work in progress, assets (services provided but not yet invoiced) Work in progress, liabilities (services invoiced but not yet provided)
112,668
73,477
Contract costs in relation to past services by suppliers and subcontractors
(495,674)
(451,487)
Work in progress, net
(452,306)
(375,723)
of which work in progress, assets of which work in progress, liabilities
302,520
302,658
(754,826)
(678,381)
The following is a statement of contract revenues on current projects since the start of project:
Contract revenues since start of project Contract revenues recognised in the period Advance payments received Guarantee retentions
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
13,556,125
11,553,808
2,834,234
2,625,794
166,903
93,317
57,997
47,494
240–241
15
Joint ventures
15.1 Joint ventures accounted for under the equity method 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
As at 1.1.
(2,246)
(9,515)
Share of results
39,214
31,996
(32,306)
(24,727)
(1,868)
–
Other changes Change in scope of consolidation Foreign exchange differences Total as at 31.12. of which net asset of which net liability
23
–
2,817
(2,246)
51,254
39,316
(48,437)
(41,562)
Carrying amount of total receivables (payables) from joint ventures accounted for under the equity method:
Joint ventures, assets Joint ventures, liabilities Services invoiced to joint ventures but not yet collected Services invoiced by joint ventures but not yet paid Total
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
51,254
39,316
(48,437)
(41,562)
38,869
50,932
(413)
(2,203)
41,273
46,483
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Implenia’s share of the balance sheets and income statements of the joint ventures is:
Total assets Total liabilities Net assets
Net revenue Expenses Income from joint ventures
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
469,279
228,848
(392,906)
(180,723)
76,373
48,125
2015
2014
CHF 1,000
CHF 1,000
227,476
203,291
(188,262)
(171,295)
39,214
31,996
Services invoiced to joint ventures (included in Implenia’s revenue) are disclosed in note 32. There are no joint ventures accounted for under the equity method that on their own are material to the consolidated financial statements. Selected joint ventures are listed in note 38.
242–243
15.2 Proportionally recognised and fully consolidated joint ventures The proportionately and fully consolidated joint ventures have the following effect on the consolidated balance sheet and income statement: 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
Total assets
101,841
123,444
Total liabilities
(91,206)
(120,860)
10,635
2,584
Net assets
2015
2014
CHF 1,000
CHF 1,000
Revenue
154,940
124,070
Expenses
(150,880)
(120,476)
4,060
3,594
Operating income
The “non-controlling interests” in equity are amended for completed fully consolidated joint ventures by CHF 2.1 million (previous year: CHF –13.1 million). Selected proportionately recognised and fully consolidated joint ventures are listed in note 38.
15.3 Joint and several liability Unless agreed otherwise, the partners to joint ventures are jointly and severally liable for the joint ventures’ debts.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
16
Other receivables 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
146
519
Other taxes and duties
8,544
1,612
Social insurances
2,726
6,031
WIR cheques
2,329
650
Receivables from utilised guarantees
21,177
18,967
Other receivables
16,913
18,735
Total
51,835
46,514
Withholding tax
The guarantee in the amount of CHF 12 million utilised by the City of Zurich as part of the completion of the Letzigrund Stadium is reported in the item for “Receivables from utilised guarantees”. Implenia has taken legal action to obtain full repayment of the utilised guarantee.
17
Raw materials and supplies
Raw materials and supplies Value adjustment Total
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
45,090
25,039
–
–
45,090
25,039
In 2015, the cost of raw materials and supplies taken to income in the consolidated financial statements amounted to CHF 469 million (previous year: CHF 393 million). The value adjustment for the current year is CHF 0 million (previous year: CHF 0 million). As in the previous year, no value adjustments were reversed.
244–245
18
Real estate transactions
Acquisition costs as at 1.1.
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
238,114
232,223
Additions
65,381
54,974
Disposals
(99,344)
(49,011)
Foreign exchange differences Cumulative acquisition costs at 31.12. Cumulative value adjustments as at 1.1.
(423)
(72)
203,728
238,114
(8,337)
(14,750)
Additions
–
–
Disposals
696
6,413
(7,641)
(8,337)
196,087
229,777
Cumulative value adjustments at 31.12. Net carrying amount The gain on sale of real estate during the period is as follows:
2015
2014
CHF 1,000
CHF 1,000
Sale proceeds
141,618
84,383
Carrying amount of assets sold
(98,648)
(42,598)
42,970
41,785
Gain on real estate1 1 Excluding other expenses and income of the segment Development.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
19
Property, plant and equipment Business premises
Production facilities
Machinery, furniture, IT
Assets under construction
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
478,469
31.12.2015 128,793
54,902
284,215
10,559
Additions
Acquisition costs as at 1.1.2015
1,356
5,465
39,506
12,516
58,843
Disposals
(127)
(594)
(94,903)
–
(95,624)
Reclassifications
9,058
2,904
2,553
(14,515)
–
–
5,337
249,881
2,051
257,269
Change in scope of consolidation
(282)
(504)
(4,770)
(141)
(5,697)
Cumulative acquisition costs as at 31.12.2015
138,798
67,510
476,482
10,470
693,260
Cumulative amortisations as at 1.1.2015
Foreign exchange differences
(50,753)
(35,010)
(147,095)
–
(232,858)
Additions
(3,672)
(3,324)
(52,415)
–
(59,411)
Disposals
90
594
82,265
–
82,949
–
(1,375)
(188,479)
–
(189,854)
144
349
1,714
–
2,207
(54,191)
(38,766)
(304,010)
–
(396,967)
Net carrying amount as at 31.12.2015
84,607
28,744
172,472
10,470
296,293
of which finance leases
–
–
4,870
–
4,870
3,445
–
–
–
3,445
Change in scope of consolidation Foreign exchange differences Cumulative depreciations as at 31.12.2015
of which pledged
The inventory of fixed assets was adjusted extraordinary in the reporting year. Several assets that had been written down completely and scrapped were derecognised. The simplification had no impact on the result for the period.
246–247
Business premises
Production facilities
Machinery, furniture, IT
Assets under construction
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
464,896
31.12.2014 125,722
52,194
278,830
8,150
Additions
Acquisition costs as at 1.1.2014
4,427
3,319
37,530
3,875
49,151
Disposals
(2,835)
(322)
(19,457)
–
(22,614)
1,547
(170)
(8,724)
(1,447)
(8,794)
–
–
–
–
–
(68)
(119)
(3,964)
(19)
(4,170)
Cumulative acquisition costs as at 31.12.2014
128,793
54,902
284,215
10,559
478,469
Cumulative amortisations as at 1.1.2014
Reclassifications Change in scope of consolidation Foreign exchange differences
(47,961)
(32,788)
(138,856)
–
(219,605)
Additions
(3,866)
(2,785)
(33,517)
–
(40,168)
Disposals
1,139
322
14,665
–
16,126
Reclassifications
(100)
170
8,724
–
8,794
–
–
–
–
–
35
71
1,889
–
1,995
(50,753)
(35,010)
(147,095)
–
(232,858)
Net carrying amount as at 31.12.2014
78,040
19,892
137,120
10,559
245,611
of which finance leases
–
–
4,314
–
4,314
4,745
–
–
–
4,745
Change in scope of consolidation Foreign exchange differences Cumulative depreciations as at 31.12.2014
of which pledged
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Finance leases, where the Group is lessee: Net present value of minimum lease payment
Future minimum lease payment
31.12.2015
31.12.2014
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
Less than 1 year
1,985
2,125
1,797
1,983
Between 2 and 5 years
3,305
2,315
2,901
2,215
Total
5,290
4,440
4,698
4,198
Operating leases, where the group is lessee: Future minimum lease payment
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
Less than 1 year
25,775
24,140
Between 2 and 5 years
48,116
58,946
Over 5 years
20,207
18,418
Total
94,098
101,504
The subsidiaries have entered into numerous operating leases, mainly for the short-term rental of construction machinery and real estate. The expense for operating leases (including the property-related expenses) was CHF 84.1 million (previous year: CHF 48.6 million).
248–249
20
Investment property 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
26,643
32,681
Additions
–
–
Disposals
–
–
Reclassifications
–
(5,702)
Acquisition costs as at 1.1.
Foreign exchange differences
(1,754)
(336)
Cumulative acquisition costs as at 31.12.
24,889
26,643
(10,209)
(15,965)
Additions
(360)
(93)
Disposals
–
–
Reclassifications
–
5,702
Cumulative depreciations as at 1.1.
764
147
Cumulative depreciations as at 31.12.
(9,805)
(10,209)
Net carrying amount
15,084
16,434
Foreign exchange differences
Investment property includes real estate and agricultural land. The agricultural land is recognised in the balance sheet with a net carrying amount of CHF 4.1 million (previous year: CHF 4.1 million). The real estate measured in accordance with the cost model has been assigned to fair value level 3, while the agricultural land has been assigned to fair value level 2. The fair value of the real estate is determined in accordance with the discounted cash flow method. The most probable incoming and outgoing payments for rent are discounted using a risk-adjusted interest rate that also takes into account the highest and best use of the real estate. The fair value of the agricultural land is checked and adjusted if any of the market factors that were used have changed materially (such as land prices). The current valuations show that the fair value of investment property differs only marginally from the carrying amount.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
21
Investments in associates 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
As at 1.1.
48,788
46,268
Additions
255
761
Disposals
(2,942)
(1,298)
6,724
6,644
Dividends received
(4,109)
(3,579)
Change in scope of consolidation
11,901
–
119
(8)
60,736
48,788
Share of results
Foreign exchange differences Total as at 31.12.
There are no investments in associates that on their own are material to the consolidated financial statements. Selected associates are listed in note 37.
22
Other financial assets 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
As at 1.1.
8,897
8,833
Additions
246
300
Disposals
(27)
(72)
Fair value adjustment
405
(164)
Change in scope of consolidation
388
–
6
–
9,915
8,897
Unlisted participations
6,992
6,586
Loans
2,515
2,293
Foreign exchange differences Total as at 31.12. Breakdown
Other financial assets Total as at 31.12.
408
18
9,915
8,897
250–251
23
Intangible assets Licences and software / IT
Brands
Customer relationships and order book
Goodwill
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
31.12.2015 15,984
1,883
17,184
83,377
118,428
Additions
1,451
–
306
–
1,757
Disposals
–
–
–
–
–
3,262
1,120
37,149
88,050
129,581
55
14
(321)
(995)
(1,247)
20,752
3,017
54,318
170,432
248,519
(12,227)
(1,883)
(16,471)
–
(30,581)
(2,334)
(95)
(19,224)
–
(21,653)
Acquisition costs as at 1.1.2015
Change in scope of consolidation Foreign exchange differences Cumulative acquisition costs as at 31.12.2015 Cumulative amortisations as at 1.1.2015 Additions Disposals Change in scope of consolidation Foreign exchange differences Cumulative amortisations as at 31.12.2015 Net carrying amount as at 31.12.2015
–
–
–
–
–
(1,726)
–
–
–
(1,726)
(26)
(1)
715
–
688
(16,313)
(1,979)
(34,980)
–
(53,272)
4,439
1,038
19,338
170,432
195,247
of which with unlimited useful life
–
–
–
170,432
170,432
Residual life (years)
2
11
2
n.a.
–
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Licences and software / IT
Brands
Customer relationship and order book
Goodwill
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
31.12.2014 14,413
1,883
17,712
84,733
118,741
Additions
1,157
–
–
–
1,157
Disposals
–
–
–
–
–
414
–
–
–
414
–
–
(528)
(1,356)
(1,884)
15,984
1,883
17,184
83,377
118,428
Cumulative amortisations as at 1.1.2014
(9,735)
(1,883)
(16,423)
–
(28,041)
Additions
(2,078)
–
(449)
–
(2,527)
Disposals
–
–
–
–
–
(414)
–
–
–
(414)
–
–
401
–
401
(12,227)
(1,883)
(16,471)
–
(30,581)
Acquisition costs as at 1.1.2014
Reclassifications Foreign exchange differences Cumulative acquisition costs as at 31.12.2014
Reclassifications Foreign exchange differences Cumulative amortisations as at 31.12.2014 Net carrying amount as at 31.12.2014
3,757
–
713
83,377
87,847
of which with unlimited useful life
–
–
–
83,377
83,377
Residual life (years)
2
–
2
n.a.
–
Goodwill is allocated to the Group’s relevant cash generating units (CGUs), which correspond to the amended business segments. The recoverable amount of a CGU is determined by calculating its value in use by means of the discounted cash flow method. This calculation is based on the 2016 budget and the projected cash flows derived from the 2016 to 2018 business plan approved by management. Subsequent years’ cash flows are estimated based on the growth rates shown below.
252–253
Goodwill is distributed between the CGUs as follows: 31.12.2015
Change
31.12.2014
CHF 1,000
CHF 1,000
CHF 1,000
Switzerland
50,334
–
50,334
Infrastructure
50,433
31,642
18,791
International
69,665
55,413
14,252
170,432
87,055
83,377
Total
Goodwill from the former CGUs Modernisation, Buildings and Construction Switzerland is contained in the CGU Switzerland. Goodwill from the former CGU Norge is reported in the CGU International. The goodwill in the new CGU Infrastructure contains that of the former CGU Tunnelling & Civil Engineering. The increase in goodwill in the CGUs Infrastructure and International corresponds to the allocation of goodwill from the acquisition of Bilfinger Construction GmbH as well as foreign currency translation differences of CHF 0.4 million and CHF –1.4 million respectively. Assumptions for the calculation of value in use: Switzerland
Infrastructure
International
%
%
%
Gross margin
5,8
9,6
10,9
Discount rate, pre-tax
9,2
10,2
11,8
Post-business plan growth rate
1,2
2,0
2,5
Management has defined the budgeted gross margin based on historical trends and expectations of future market development. Discount rates applied are pre-tax and reflect the specific risks faced by the CGUs concerned. The weighted average growth rates are in line with those for the respective construction industry in the respective geographical area taking account of Implenia’s plans for expansion. In addition, the goodwill positions were verified by sensitivity analysis. The carrying amounts of the goodwill items are also covered in case of lower growth or a higher discount rate. The impairment tests for goodwill did not lead to any need for impairment.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
24
Current and non-current financial liabilities 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
As at 1.1.
330,057
211,512
Additions
161,818
126,757
Disposals
(2,635)
(7,818)
470
–
(708)
(394)
489,002
330,057
Bond issues
324,810
324,369
Subordinated convertible bond
157,581
–
Liabilities to banks and other financial institutions
1,652
1,320
Finance lease liabilities
4,698
4,198
Change in scope of consolidation Foreign exchange differences Total as at 31.12. Breakdown
Other financial liabilities Total as at 31.12.
261
170
489,002
330,057
Maturity 203,450
3,306
2,971
201,723
Over 5 years
282,581
125,028
Total as at 31.12.
489,002
330,057
Less than 1 year Between 2 and 5 years
254–255
Under a syndicated loan agreement concluded on 5 August 2015, Implenia now has a cash credit line of CHF 200 million and a guarantee limit of CHF 450 million. The agreement runs until 30 September 2020 and includes two options for one-year extensions. The old agreement was transferred to the new agreement. Implenia also has bilateral loan agreements with various banks for the amount of CHF 63 million (previous year: CHF 31 million). Financial liabilities contain two bonds and a subordinated convertible bond: – CHF 200 million Payment under subscription 12 May 2010, interest rate (affecting liquidity) 3.125%, term 2010 – 2016, redemption 12 May 2016, issue price 100.269%, ISIN CH011 219 3518, effective interest rate 3.356% – CHF 125 million Payment under subscription 15 October 2014, interest rate (affecting liquidity) 1.625%, term 2014 – 2024, issue price 101.063%, ISIN CH025 359 2767, effective interest rate 1.624% – CHF 175 million Payment under subscription 30 June 2015, subordinated convertible bond, interest rate (affecting liquidity) 0.500%, term 2015 – 2022, issue price 100.000%, ISIN CH028 550 9359, conversion premium 32.5%, conversion price CHF 75.06, effective interest rate 2.158%
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
25
Current and non-current provisions Litigation
Restoration and remediation
Others
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
3,582
3,416
19,977
1,545
28,520
78
1,863
1,311
1,271
4,523
(260)
(334)
(1,995)
(1,611)
(4,200)
Service guaratees CHF 1,000
31.12.2015 As at 1.1.2015 Increase Used Reversed Change in scope of consolidation Foreign exchange differences Total as at 31.12.2015 of which current
(1,119)
(347)
–
(252)
(1,718)
5,877
4,397
–
3,608
13,882
11
(84)
–
(62)
(135)
8,169
8,911
19,293
4,499
40,872
30
5,207
4,498
1,282
11,017
3,545
3,812
20,225
3,814
31,396
80
–
261
391
732
–
(297)
(509)
(281)
(1,087) (2,370)
31.12.2014 As at 1.1.2014 Increase Used Reversed
(13)
–
–
(2,357)
Foreign exchange differences
(30)
(99)
–
(22)
(151)
3,582
3,416
19,977
1,545
28,520
80
1,060
5,131
154
6,425
Total as at 31.12.2014 of which current
Service guarantees concern completed projects. Related costs tend to be payable within two to five years. The provisions for litigations mainly relate to inactive companies. There are also various court cases resulting from completed projects from the acquisition of Bilfinger Construction GmbH. The provisions for restoration and the rehabilitation of contaminated sites primarily relate to future real estate restoration costs.
256–257
26
Pension plans
Swiss pension system In Switzerland, the company insures its employees against the financial consequences of old age, disability and death with the independent Implenia Pension Fund. It also manages a Welfare Fund (employer-funded foundation). The board of trustees of the Implenia Pension Fund consists of an equal number of employer and employee representatives. Under IAS 19, the Pension Fund is classified as a defined benefit pension plan. The employer and employee contributions are defined as a percentage of the pensionable salary. The retirement pension is derived from the accrued retirement assets at the time of retirement, multiplied by the conversion rates pursuant to the regulations. Employees can also withdraw their retirement benefits as a one-off lump sum. Disability and surviving spouse’s pensions are defined as a percentage of the projected retirement pension from the Implenia Pension Fund. The assets are managed by the Implenia Pension Fund itself. The Implenia Pension Fund can change its financing system (contributions and future benefits). If the Pension Fund is underfunded and other measures do not achieve the desired purpose, the foundation can levy restructuring contributions from the employer. The Implenia Pension Fund bears its own actuarial and investment risks. The board of trustees as the Pension Fund’s governing body is responsible for the investment of the assets. The investment strategy has been defined to ensure that all benefits can be paid when they fall due.
German pension system As a rule, as part of their pension plans, employees of the subsidiaries in Germany are entitled to payment of an annual contribution, which depends on their wage or salary group or individual contractual arrangements, to an individual pension account based on the company agreement applicable in each case. Interest is paid on the employee’s respective credit balance each year depending on the return achieved on the plan assets. The company guarantees minimum interest of two percent per year in any case. Depending on the amount of benefits to which the employee is entitled, benefits are paid as a single payment, as an annual instalment over a limited period or as a lifelong pension. Payment can occur as soon as the e mployee reaches his 60th or 62nd birthday (for employees who joined in 2012 or subsequently) and his employment relationship with the company ends. It may not be paid before this date. Employees’ rights are partly secured against insolvency via a Contractual Trust Agreement (CTA).
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Information on defined benefit pension plan
As at 1.1.2015 Current service cost
Defined benefit obligations
Market value of plan assets
Adjustment to asset ceiling
Pension asset / (Pension liabilities)
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
(1,329,126)
1,332,897
–
3,771 (30,386)
(30,386)
–
–
342
–
–
342
(Interest expense) / Interest income
(18,679)
18,849
–
170
Administration cost (excl. cost for managing plan assets)
(664)
–
–
(664)
(49,387)
18,849
–
(30,538)
Past service (cost) / gain
Expenses recognised in the income statement Return on plan assets (excl. interest income)
–
23,395
–
23,395
Gain / (loss) araising from changes in financial assumptions
(56,129)
–
–
(56,129)
Gain / (loss) araising from changes in demographical assumptions
–
–
–
–
Gain / (loss) araising from experience adjustments
(5,303)
–
–
(5,303)
Change in effect of asset ceiling
–
–
–
–
Expenses recognised in other comprehensive income
(61,432)
23,395
–
(38,037)
Employer contributions
–
35,974
–
35,974
Employee contributions
(30,976)
30,976
–
–
97,078
(97,078)
–
–
(27,283)
18,025
–
(9,258)
Benefits deposited / (paid) Change in scope of consolidation Foreign exchange differences Contributions and other effects As at 31.12.2015
(645)
872
–
227
38,174
(11,231)
–
26,943
(1,401,771)
1,363,910
–
(37,861)
258–259
As at 1.1.2014 Current service cost
Defined benefit obligations
Market value of plan assets
Adjustment to asset ceiling
Pension asset / (Pension liabilities)
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
(1,226,122)
1,292,740
(60,434)
6,184 (23,220)
(23,220)
–
–
–
–
–
–
(Interest expense) / Interest income
(26,327)
28,006
(1,330)
349
Administration cost (excl. cost for managing plan assets)
(613)
–
–
(613)
(50,160)
28,006
(1,330)
(23,484)
Past service (cost) / gain
Expenses recognised in the income statement Return on plan assets (excl. interest income)
–
51,563
–
51,563
Gain / (loss) araising from changes in financial assumptions
(122,117)
–
–
(122,117)
Gain / (loss) araising from changes in demographical assumptions
–
–
–
–
Gain / (loss) araising from experience adjustments
(12,814)
–
–
(12,814)
Change in effect of asset ceiling
–
–
61,764
61,764
Expenses recognised in other comprehensive income
(134,931)
51,563
61,764
(21,604)
Employer contributions
–
42,675
–
42,675
Employee contributions
(31,685)
31,685
–
–
Benefits deposited / (paid)
113,772
(113,772)
–
–
Change in scope of consolidation
–
–
–
–
Foreign exchange differences
–
–
–
–
82,087
(39,412)
–
42,675
(1,329,126)
1,332,897
–
3,771
Contributions and other effects As at 31.12.2014
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Composition of plan assets 31.12.2015 CHF 1,000
31.12.2014 %
CHF 1,000
%
48,765
3.6
74,371
5.6
–
0.0
514
0.0
589,031
43.2
596,371
44.8
–
0.0
9,697
0.7
401,188
29.4
392,993
29.5
22,301
1.6
31,125
2.3
Quoted Cash and cash equivalents Equity instruments Debt instruments Real estate Investment funds Other Unquoted Cash and cash equivalents
1,947
0.1
2,335
0.2
Debt instruments
6,660
0.5
6,359
0.5 15.8
265,389
19.5
210,730
Other
28,629
2.1
8,402
0.6
Total
1,363,910
100.0
1,332,897
100.0
Real estate
of which debt instruments of Implenia Ltd. of which real estate used by Implenia
4,936
0.4
4,957
0.4
31,915
2.3
31,840
2.4
The actual return on plan assets for the 2015 financial year was CHF 42.2 million (previous year: CHF 79.6 million). The employer contributions in 2016 are estimated at CHF 36.2 million (previous year: CHF 36.8 million). The weighted average duration of the obligation is 13.2 years (previous year: 12.7 years).
Actuarial assumptions Switzerland
Germany
31.12.2015
31.12.2014
31.12.2015
31.12.2014
Discount rate
1.00%
1.40%
2.20%
–
Expected salary increase
1.25%
1.25%
2.75%
–
Future pension increase
0,00%
0,00%
1.50%
–
BVG 2010 Heubeck 2005
–
Mortality table
BVG 2010
260–261
Sensitivity analysis The following sensitivity analyses were prepared for the key assumptions underlying the defined benefit obligations calculations. The discount factor and assumption regarding the expected salary increase were increased / reduced by a fixed percentage. The mortality sensitivity was calculated by reducing / increasing mortality by an all-in factor, so that life expectancy was increased / reduced by around one year for most age brackets. The following table shows the effects of an increase or a reduction in the respective input parameter on the amount of the defined benefit obligation. Increase
Discount rate (0.25% adjustment) Salary progression (0.25% adjustment) Life expectancy (1 year adjustment)
Reduction
31.12.2015
31.12.2014
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
(44,739)
(40,891)
47,836
43,654
4,934
4,422
(4,888)
(4,298)
37,779
33,681
(38,456)
(34,353)
The Foundation for Flexible Retirement (FAR) Implenia’s industrial staff covered by the collective employment agreement may voluntary take early retirement from the age of 60. Bridging benefits are paid between the date of early retirement and normal retirement age by the Foundation for Flexible Retirement in the Construction Industry (FAR), which was established especially for this purpose. FAR, which was created by the SIB and SYNA trade unions and also the Société Suisse des Entrepreneurs, is funded by contributions from employers and employees. FAR benefits are funded through a pay-as-you-go system, so do not qualify for treatment as a defined benefit plan under IAS 19. Consequently, FAR is treated as a multi-employer defined contribution scheme. FAR prepares its accounts in accordance with Swiss pension legislation. On this basis, as at 30 June 2015, FAR had a funding ratio of 105.1 percent (June 2014: 114.8%). Implenia does not anticipate any payment obligations beyond the contributions initially planned. In 2015, Implenia paid FAR contributions of CHF 10.0 million (previous year: CHF 10.7 million).
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
27
Deferred tax assets and liabilities Receivables and work in progress
Raw materials and supplies and real estate transactions
Property, plant and equipment
CHF 1,000
CHF 1,000
CHF 1,000
31.12.2015 Deferred tax assets as at 1.1.2015
–
–
–
Deferred tax liabilities as at 1.1.2015
(21,898)
(8,966)
(7,043)
Net deferred tax as at 1.1.2015
(21,898)
(8,966)
(7,043)
6,075
1,666
1,253
–
–
–
(17,310)
–
(3,855)
Credited / (debited) to the income statement Credited / (debited) directly to other comprehensive income Change in scope of consolidation Foreign exchange differences Net deferred tax as at 31.12.2015 Deferred tax assets as at 31.12.2015 Deferred tax liabilities as at 31.12.2015
138
–
(8)
(32,995)
(7,300)
(9,653)
–
–
–
(32,995)
(7,300)
(9,653)
Receivables and work in progress
Raw materials and supplies and real estate transactions
Property, plant and equipment
CHF 1,000
CHF 1,000
CHF 1,000
31.12.2014 Deferred tax assets as at 1.1.2014
–
–
–
Deferred tax liabilities as at 1.1.2014
(21,315)
(11,413)
(6,920)
Net deferred tax as at 1.1.2014
(21,315)
(11,413)
(6,920)
(733)
2,447
(123)
Credited / (debited) directly to other comprehensive income
–
–
–
Foreign exchange differences
150
–
–
(21,898)
(8,966)
(7,043)
Credited / (debited) to the income statement
Net deferred tax as at 31.12.2014 Deferred tax assets as at 31.12.2014 Deferred tax liabilities as at 31.12.2014
–
–
–
(21,898)
(8,966)
(7,043)
262–263
Intangible assets
Pension
Provisions
Other items
Tax loss carryforwards
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
–
424
–
–
–
424
(45)
(1,256)
(14,128)
(4,822)
4,016
(54,142)
(45)
(832)
(14,128)
(4,822)
4,016
(53,718)
5,721
(1,404)
(2,635)
(2,087)
(1,802)
6,787
–
8,755
–
–
–
8,755
(12,265)
1,475
3,445
(13,377)
–
(41,887)
(11)
2
2
(27)
(49)
47
(6,600)
7,996
(13,316)
(20,313)
2,165
(80,016)
–
6,593
–
–
–
6,593
(6,600)
1,403
(13,316)
(20,313)
2,165
(86,609)
Intangible assets
Pension
Provisions
Other items
Tax loss carryforwards
Total
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
CHF 1,000
–
–
–
31
–
31
(54)
(1,363)
(12,295)
(9,363)
6,413
(56,309)
(54)
(1,363)
(12,295)
(9,332)
6,413
(56,279)
9
(4,222)
(1,931)
4,480
(2,620)
(2,693)
–
4,753
–
–
–
4,753
–
–
98
30
223
501
(45)
(832)
(14,128)
(4,822)
4,016
(53,718)
–
424
–
–
–
424
(45)
(1,256)
(14,128)
(4,822)
4,016
(54,142)
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Temporary differences for which no deferred taxes have been recognised: 31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
Investments
260,575
232,251
Goodwill
170,432
83,377
Unused tax loss carryforwards by maturity: Not capitalised
Capitalised
Total Not capitalised
Capitalised
31.12.2015 CHF 1,000
CHF 1,000
CHF 1,000
Total
31.12.2014 CHF 1,000
CHF 1,000
CHF 1,000
1 year
–
–
–
–
–
–
2 years
–
–
–
–
–
–
3 years
–
–
–
–
–
–
4 years
–
–
–
–
–
–
–
–
–
–
–
–
More than 5 years
139,147
8,665
147,812
122,282
14,872
137,154
Total
139,147
8,665
147,812
122,282
14,872
137,154
5 years
Tax loss carryforwards are capitalised when it is likely that taxable profits will be earned in future. The non-capitalised tax loss carryforwards mainly affect subsidiaries outside Switzerland which no longer carry out any operational activities.
264–265
28 Equity 28.1 Changes in equity The 2015 General Meeting approved a distribution of dividends of CHF 1.80 per share, resulting in a total payment of CHF 32.9 million (previous year: distribution of reserves from capital contributions of CHF 0.72 per share plus a par value repayment of CHF 0.88 per share resulting in a payment of CHF 29.4 million).
28.2 Sale and use of treasury shares During the course of 2015, in total, 101 609 shares with a carrying amount of CHF 5.5 million (previous year: 91 835 shares with a carrying amount of CHF 5.0 million) were sold or used for profit sharing schemes. The resulting gain of CHF 0.2 million (previous year: CHF 0.5 million) was taken directly to capital reserves.
28.3 Outstanding shares Changes
Total shares of Implenia Ltd.
Changes
31.12.2013
2014
31.12.2014
2015
31.12.2015
No. of shares
No. of shares
No. of shares
No. of shares
No. of shares
18,472,000
18,472,000
–
18,472,000
–
Unreserved treasury shares
102,316
52,985
155,301
7,804
163,105
Total shares outstanding
18,369,684
(52,985)
18,316,699
(7,804)
18,308,895
All shares are subscribed and fully paid up. As at 31 December 2015, all shares have voting rights and qualify for dividends, with the exception of 163,105 treasury shares (previous year: 155,301 treasury shares).
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
Changes
Share capital
2014
31.12.2014
2015
31.12.2015
Par value of shares CHF 1,000
Par value of shares CHF 1,000
Par value of shares CHF 1,000
Par value of shares CHF 1,000
Par value of shares CHF 1,000
35,097
(16,256)
18,841
–
18,841
(195)
37
(158)
(8)
(166)
34,902
(16,219)
18,683
(8)
18,675
Treasury shares Total share capital outstanding
Changes
31.12.2013
The par value of a share is CHF 1.02 (previous year: CHF 1.02).
29
Earnings per share 2015
2014
48,405
69,231
1,344
–
49,749
69,231
18,302,464
18,345,437
Data for calculating earnings per share: Consolidated profit attributable to shareholders of Implenia Ltd. Adjustment to result due to convertible bond issue Consolidated profit attributable to shareholders of Implenia Ltd. after adjustment Weighted average number of shares outstanding
1,165,735
–
19,468,199
18,345,437
Basic earnings per share in CHF
2.64
3.77
Diluted earnings per share in CHF
2.56
3.77
Adjustment due to diluting effect of convertible bond Weighted average for calculating diluted earnings per share
Undiluted earnings per share (EPS) are calculated by dividing the net income attributable to shareholders of Implenia Ltd. by the weighted average number of shares outstanding during the period. The average number of treasury shares held and acquired by the Group is deducted from the number of shares outstanding. Diluted earnings per share (EPS) are calculated by adjusting the consolidated profit attributable to shareholders of Implenia Ltd. to take account of the effect of the convertible bond after taxes. This figure is divided by the weighted number of outstanding shares plus the weighted average of all dilutive potential shares that would be converted into shares in case of exercising all conversion rights.
266–267
30 Distribution of dividends For the 2014 financial year a dividend of CHF 1.80 per share was distributed. For the 2015 financial year, the Board of Directors will propose an ordinary dividend of CHF 1.80 per share plus an anniversary dividend of CHF 0.10 per share to the General Meeting to be held on 22 March 2016. The balance sheet presented as at 31 December 2015 does not reflect the proposed distribution for 2015.
31
Contingent liabilities 31.12.2015
31.12.2014
CHFm
CHFm
As at 1.1.
102.9
124.7
Change
(26.3)
(21.8)
Change in scope of consolidation
118.9
–
Total as at 31.12.
195.5
102.9
Implenia’s contingent liabilities primarily relate to outstanding guarantees (tender guarantees, warranties and performance bonds) for projects in joint ventures, parent guarantees for ongoing projects for own account and tax disputes / litigation. Contractual investment obligations:
Real estate transactions Property, plant and equipment Total
31.12.2015
31.12.2014
CHFm
CHFm
76.7
40.6
1.2
2.3
77.9
42.9
As management felt that it was impossible to make a reliable estimate of the outcome or amount of any penalties resulting from the investigation by the Competition Commission described in note “4.2.3 Litigation” when the balance sheet was drawn up, no provisions were raised.
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
32
Related party disclosures
Shareholders holding more than 3 percent of the share capital as at 31 December: 31.12.2015
31.12.2014
%
%
16.1
16.1
Chase Nominees Ltd.
7.8
6.4
Rudolf Maag
5.4
5.4
n.a.
3.4
Parmino Holding AG / Max Rössler
Vontobel Fund Services Ltd
The following transactions took place between the Group and associates / joint ventures accounted for under the equity method / staff pension plans and other related parties: 2015
2014
CHF 1,000
CHF 1,000
Joint ventures (equity method)
62,023
71,315
Associates
17,121
18,368
1,231
7,244
Sales to related parties
Other related parties1 Purchases from related parties Joint ventures (equity method) Associates Other related parties
1,419
8,180
29,961
35,455
3,017
3,537
1 Including condominiums bought by members of the Group Executive Board from Implenia at market value.
268–269
31.12.2015
31.12.2014
CHF 1,000
CHF 1,000
38,869
50,932
Receivables / accruals from related parties Joint ventures (equity method) Associates Other related parties
4,012
2,855
317
1,280
Payables to related parties Joint ventures (equity method) Associates Other related parties
413
2,203
9,112
9,036
119
234
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
33
Free cash flow
Implenia defines free cash flow as cash flow from operating activities, less acquisitions or disposals of non-current assets. The following table provides an overview of free cash flow: 2015
2014
CHF 1,000
CHF 1,000
Free cash flow Cash flow from operating activities
145,194
116,901
Investments in non-current assets
(57,812)
(51,386)
16,179
10,026
Disposal of non-current assets Free cash flow before acquisition of subsidiaries
103,561
75,541
Acquisition of subsidiaries and deferred purchase price payments
(87,383)
(8,373)
16,178
67,168
Free cash flow after acquisition of subsidiaries
Free cash flow is not a financial indicator defined under IFRS and should not be interpreted as such. Free cash flow is not equivalent to cash flow from operating activities as defined under IFRS.
34
Events after the balance sheet date
Approval of the consolidated financial statements by the Board of Directors and proposal for the appropriation of the profit The Board of Directors of Implenia Ltd. approved these consolidated financial statements on 22 February 2016. On 22 February 2016, the Board of Directors proposed an ordinary dividend of CHF 1.80 per share plus an anniversary dividend of CHF 0.10 per share, which will be submitted to the General Meeting taking place on 22 March 2016 for approval. If the resolution is approved, the total amount of the distribution will be CHF 34.8 million.
Increase in the ownership interest in Implenia Norge AS to 100 percent On 15 January 2016, Implenia Switzerland Ltd. submitted a purchase offer totalling CHF 5.2 million to the minority shareholders in Implenia Norge AS for the remaining 12.2 percent of the shares. All the minority shareholders accepted the offer. The minority shareholders will be paid by the end of February 2016. Following completion, Implenia Switzerland Ltd. will hold 100 percent of Implenia Norge AS.
270–271
35
Foreign exchange rates Average rate
2015
Closing rate
2014
31.12.2015
31.12.2014
European Union
1 EUR
CHF 1.07
CHF 1.21
CHF 1.08
CHF 1.20
Ivory Coast / Mali
100 XOF
CHF 0.16
CHF 0.19
CHF 0.17
CHF 0.18
Norway
100 NOK
CHF 11.96
CHF 14.55
CHF 11.28
CHF 13.31
Sweden
100 SEK
CHF 11.42
CHF 13.36
CHF 11.79
CHF 12.69
1 USD
CHF 0.96
CHF 0.92
CHF 0.99
CHF 0.99
USA
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
36
Selected fully consolidated companies
Name
Shareholding Registered office
Country Currency
BBV Systems GmbH Implenia Baugesellschaft mbH Implenia Constructii SRL Implenia Construction GmbH Implenia Construction Odenplan AB Implenia Funderingstechnieken B.V. Implenia Instandsetzung GmbH Implenia Regiobau GmbH Implenia Schalungsbau GmbH Implenia Spezialtiefbau GmbH Développements transfrontaliers SA Implenia Gesellschaft für Bau- und Prüftechnik mbH Gravière de La Claie-aux-Moines SA Implenia Bau GmbH Implenia France SA Implenia Holding GmbH Implenia Real Estate Ltd.1 Implenia Miljø AS Implenia Norge AS Implenia Österreich GmbH Implenia Switzerland Ltd. Implenia Sverige AB Midtnorsk Betongsprøyting AS Norbridge AS Tüchler Ausbau GmbH Reprojet AG SAPA, Société Anonyme de Produits Asphaltiques Sisag SA Socarco Bénin Sàrl Socarco Burkina Sàrl Socarco Mali Sàrl
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 66,7% 100% 100% 100% 100% 100% 87,8% 100% 100% 100% 100% 51% 90% 100% 75% 100% 100% 100% 100%
D A RO D S NL D D D D F D CH D F D CH N N A CH S N N A CH CH CI BJ BF RMM
Bobenheim-Roxheim Vienna Voluntari Wiesbaden Stockholm Maastricht München Freiburg Bobenheim-Roxheim Frankfurt Lyon Mannheim Savigny Rümmingen Lyon Rümmingen Dietlikon Oslo Oslo Vienna Dietlikon Grebbestad Orkanger Stjørdal Vienna Zurich Satigny Abidjan Cotonou Ouagadougou Bamako
1 Implenia Real Estate Ltd.: Merged as per 1.1.2014 with Implenia Development Ltd.
EUR EUR RON EUR SEK EUR EUR EUR EUR EUR EUR EUR CHF EUR EUR EUR CHF NOK NOK EUR CHF SEK NOK NOK EUR CHF CHF XOF XOF XOF XOF
272–273
Capital Segment
520,000 1,530,000 2,250,100 10,100,000 100,000 18,000 260,000 1,500,000 520,000 1,000,000 14,663,800 178,952 1,500,000 2,556,459 914,694 18,067,751 30,600,000 3,144,000 4,095,432 35,000 40,000,000 100,000 100,000 3,000,000 364,000 100,000 500,000 492,000,000 1,000,000 10,000,000 100,000,000
International Several Segments International Several Segments Several Segments Infrastructure International International Miscellaneous / Holding Infrastructure Miscellaneous / Holding Miscellaneous / Holding Switzerland International Miscellaneous / Holding International Development International International Infrastructure Several Segments International International International International Switzerland Switzerland International International International International
Held by
Implenia Construction GmbH Implenia Construction GmbH Implenia Baugesellschaft mbH Implenia Holding GmbH Implenia Construction GmbH Implenia Spezialtiefbau GmbH Implenia Construction GmbH Implenia Construction GmbH Implenia Construction GmbH Implenia Construction GmbH Implenia Immobilien Ltd. Implenia Construction GmbH Implenia Ltd. Implenia Holding GmbH Implenia Switzerland Ltd. Implenia Switzerland Ltd. Implenia Ltd. Implenia Norge AS Implenia Switzerland Ltd. Implenia Ltd. Implenia Ltd. Implenia Norge AS Implenia Norge AS Implenia Norge AS Implenia Holding GmbH Implenia Ltd. Implenia Ltd. Implenia Ltd. Sisag SA Sisag SA Sisag SA
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Notes to the consolidated financial statements of Implenia
37
Selected associates
Name
Shareholding Registered office
Country Currency
ARGE Deponie Schwanental
37,0% Eglisau
CH
CHF
–
Argo Mineral AG
50,0% Aarau
CH
CHF
300,000
Argobit AG
40,0% Schafisheim
CH
CHF
1,200,000
BEWO Belagslieferwerk Oberwallis (sp)
25,0% Niedergesteln
CH
CHF
1,500,000
Catram AG
24,0% Chur
CH
CHF
1,000,000
GU Kies AG
33,3% Schaffhausen
CH
CHF
450,000
Holcim Betondrance SA
46,0% Martigny
CH
CHF
300,000
Kieswerk Oldis AG
26,4% Haldenstein
CH
CHF
1,200,000
Miphalt AG
25,1% Niederbipp
CH
CHF
1,758,000
MOAG Baustoffe Holding AG
14,3% Mörschwil
CH
CHF
300,000
Mobival (sp)
26,0% Massongex
CH
CHF
–
Parking Port d’Ouchy SA
24,0% Lausanne
CH
CHF
5,649,000
Reproad AG
33,3% Bremgarten
CH
CHF
1,500,000
Société Coopérative Les Terrasses
45,1% Versoix
CH
CHF
757,500
Tapidrance (sp)
60,0% Martigny
CH
CHF
1,000,000
Urner Belagszentrum (UBZ) (sp)
50,0% Flüelen
CH
CHF
1,000,000
ABW Abbruch, Boden- und Wasserreinigung GmbH
40,2% Vienna
A
EUR
218,019
Altlastensanierung und Abraumdeponie Langes Feld GmbH
23,8% Vienna
A
EUR
363,364
Valbéton (sp)
50,6% Sion
CH
CHF
100,000
Valver (sp)
27,9% Martigny
CH
CHF
1,729,936
wsb AG
50,0% Rafz
CH
CHF
500,000
Capital
(sp) simple partnership
Associates are recognised according to the equity method (see note 2.15). Although the stakes held in some companies are higher than 50%, these companies are accounted for as associates and the equity method is applied as Implenia does not have control over these companies. The composition of the executive boards of the companies named does not allow Implenia to control these companies. By contrast, some companies in which Implenia holds a stake of less than 20% are recognised as associates because Implenia exercises significant influence over them.
274–275
38
Selected joint ventures
Name
Recognition in consolidated Shareholding Country financial statements
ARGE AS Rheinhafen
60,0% CH
FC
ARGE Bypass Los 1
30,0% CH
EM
ARGE EquiTec Gotthard
50,0% CH
PC
ARGE Forch-Burgwies
55,0% CH
FC
ARGE Gate Oerlikon
80,5% CH
FC
ARGE KiRu
25,0% CH
EM
ARGE Midnightspeed
50,0% CH
EM
ARGE Silberberg
40,0% D
EM
ARGE StaBe
50,0% CH
EM
ARGE Transco Gottardo Sedrun
40,0% CH
EM
ARGE Tunnel Fröschnitzgraben
50,0% AT
PC
ARGE Tunnel Granitztal
50,0% AT
PC
ARGE WIGA
50,0% CH
PC
ARGE WKW Hagneck
30,0% CH
EM
Cons. IW 111
60,0% CH
FC
Cons. Tunnel Pinchat
31,0% CH
EM
Consortium IGR
40,0% CH
EM
Consortium IITS
60,0% CH
FC
Consorzio TAT Tunnel Alp Transit Ticino
25,0% CH
EM
Groupement Marti-Implenia (Nant de Drance, Emosson)
50,0% CH
EM
FC = fully consolidated; PC = proportionately consolidated; EM = equity method
CONSOLIDATED FINANCIAL STATEMENTS OF THE IMPLENIA GROUP
Report of the statutory auditor on the consolidated financial statements
Report of the statutory auditor to the Annual General Meeting of Implenia Ltd., Dietlikon As statutory auditor, we have audited the consolidated financial statements of Implenia Ltd., which comprise the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes (pages 182 – 275), for the year ended 31 December 2015.
Board of Directors’ responsibility The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing standards as well as the International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Audit opinion In our opinion, the consolidated financial statements for the year ended 31 December 2015 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
276–277
Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 SCO and article 11 AOA) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 SCO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors. We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers Ltd.
Christian Kessler Audit expert Auditor in charge
Zurich, 22 February 2016
Diego J. Alvarez Audit expert
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
278–279
Income statement
Notes
Income from investments Income from sale of investments
1.1. – 31.12.2015
1.1. – 31.12.2014
CHF 1000
CHF 1000
38,501
39,712
1,802
469 52,156
Release of value adjustments and provisions
3
1,616
Other income
3
38,425
36,965
80,344
129,302
(18,356)
(20,626)
Total operating income Staff costs Increase of value adjustments and provisions Other operational costs Depreciation and valuation adjustments on fixed asset items Operating earnings before interest and taxes Financial income Financial expenses Extraordinary, non-recurring or prior-period income Operating earnings before taxes Direct taxes Profit for the year
–
(3,499)
(22,790)
(16,770)
(875)
(818)
38,323
87,589
13,132
5,980
(15,909)
(14,010)
–
11
35,546
79,570
(393)
(4,266)
35,153
75,304
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Balance sheet
31.12.2015
31.12.2014
Notes
CHF 1000
CHF 1000
3
448,460
336,199
ASSETS Cash and cash equivalents and current assets with a stock exchange price Trade receivables from third parties Trade receivables from Group companies Other current receivables from third parties Other current receivables from Group companies Accrued income and prepaid expenses Total current assets
18
289
12,149
34,178
685
696
171,504
127,175
18,354
2,129
651,170
500,666
Financial assets from third parties
3
692
926
Financial assets from Group companies
3
167,758
6,213
318,282
317,544
Investments in Group companies Property, plant and equipment Intangible assets Total non-current assets Total assets
20
28
1,345
2,148
488,097
326,859
1,139,267
827,525
280–281
Notes
31.12.2015
31.12.2014
CHF 1000
CHF 1000
1,874
1,575
876
812
EQUITY AND LIABILITIES Trade payables to third parties Trade payables to Group companies Current interest-bearing liabilities to third parties
5
Current interest-bearing liabilities to Group companies Other current liabilities to third parties Deferred income and accrued expenses Total current liabilities Long-term interest-bearing liabilities to third parties
5
Total non-current liabilities Share capital
3
200,000
–
284,037
147,569
402
1,525
12,804
13,547
499,993
165,028
300,000
325,000
300,000
325,000
18,841
18,841
Statutory capital reserves – Reserves from capital contributions Statutory retained earnings Profit carried forward Profit for the year Treasury shares Total equity Total equity and liabilities
3
132
132
16,185
16,185
277,796
235,440
35,153
75,304
(8,833)
(8,405)
339,274
337,497
1,139,267
827,525
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Notes to the Statutory Financial Statements
1
General information
IÂmplenia Ltd. is a Swiss public limited company incorporated in Dietlikon, Zurich. The average number of fulltime employees employed by the company in the reporting year numbered 53 (previous year: 50 full-time employees).
2
Significant accounting policies
The present annual financial statements have been prepared in accordance with the provisions covering commercial accounting in the Swiss Code of Obligations. To ensure comparability, the previous year’s figures in the annual financial statements were amended to reflect the new classification criteria. No revaluations were required as part of the conversion. The key valuation principles applied, which are not prescribed by law, are described below.
Trade receivables and other current receivables Trade receivables and other current receivables are accounted for at their nominal values. Specific valuation allowances are applied on an individual basis. A flat rate valuation allowance is applied to the remainder.
Shareholdings Shares in the capital of another company held long-term are regarded as a stake in a Group company once more than 50 percent of the voting rights are held. They are initially recognised in the balance sheet at cost. If there are concrete indications that the stake is overvalued, an impairment loss will be recognised. Shareholdings are measured separately.
Intangible assets Intangible assets are mainly licences. They are amortised over their estimated useful life (over four years as a rule) on a straight line basis. Intangible assets, which are amortised on a scheduled basis, are only tested for impairment when the carrying amount no longer seems recoverable. Impairment charges are recognised via the income statement.
Current and non-current interest-bearing liabilities Bonds and convertible bonds are recognised under interest-bearing liabilities at their nominal value. Issuance costs are capitalised as deferred items and depreciated over the maturity. If the bond matures within a year, the item is reported as a current interest-bearing liability.
282–283
Liabilities from lease obligations Lease and tenancy agreements are accounted for in accordance with legal ownership. Accordingly, expenses as lessee or tenant are recognised as expenditure on an accrual basis. However, the leased or rented items themselves are not accounted for.
3
Breakdowns and explanations of items in the income statement and the balance sheet
Reversal of valuation allowances and provisions The reversal of bad debts (CHF 0.9 million) and the reversal of valuation allowances on shareholdings (CHF 0.7 million) were posted under this item in the reporting year. The revaluation in the value of shareholdings in the amount of CHF 52.2 million was reported in the previous year.
Other operating income In essence, other operating income contains expenses charged to Group companies.
Cash and cash equivalents and current assets with a stock exchange price Cash and cash equivalents solely comprise bank deposits at sight. On the balance sheet date, Implenia Ltd. has no current assets with a stock exchange price (previous year: none).
Financial assets Securities without a stock exchange price held long-term are reported in the balance sheet item for financial assets from third parties. Financial assets from Group companies contain long-term loans.
Liabilities from lease obligations Liabilities from lease obligations, which do not expire or cannot be terminated within 12 months amount to CHF 97,950 in the reporting year (previous year: CHF 35,535).
Share capital As at 31 December 2015, the share capital of I mplenia Ltd. amounts to CHF 18,841,440 divided into 18,472,000 registered shares with a nominal value of CHF 1.02 each. The shares are fully paid up. Implenia Ltd. also has conditional capital of CHF 3,768,288 and authorised capital of CHF 3,768,288 on the balance sheet date. On the basis of the conditional and authorised capital, the share capital may be increased to CHF 4,710,360 in total in accordance with the conditions laid down in article 3a and 3b of the Articles of Association dated 24 March 2015. At the current date, no shares have been issued from the conditional or authorised share capital.
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Notes to the Statutory Financial Statements
Shareholders holding more than 3 percent of the share capital as at 31 December: Share capital participation
31.12.2015
31.12.2014
%
%
16.1
16.1
Chase Nominees Ltd.
7.8
6.4
Rudolf Maag
5.4
5.4
n.a.
3.4
Parmino Holding AG / Max Rössler
Vontobel Fund Services Ltd. The following shares were allocated in the reporting year:
Amount recognised in the income statement
Shares definitely allocated
2015 Board of Directors Group Executive Board
2014
2015
2014
5,376
6,260
299
336
49,367
42,631
2,126
2,103
Managers
11,160
17,057
601
1,109
Total
65,903
65,948
3,026
3,548
Treasury shares (as a minus item) 2015
2015
2014
2014
Number
CHF 1000
Number
CHF 1000
As at 1.1
155,301
8,405
102,316
5,149
Purchase
109,413
5,938
144,820
8,312
(101,609)
(5,510)
(91,835)
(4,955)
–
–
–
(102)
163,105
8,833
155,301
8,405
Sale and use for employees and Board of Directors Par value repayment As at 31.12
284–285
4
Contingent liabilities
Guarantees and contingent liabilities Security for joint liability regarding the levying of VAT for the Implenia-VAT-group
31.12.2015
31.12.2014
CHF 1000
CHF 1000
42,201
23,831
p.m.
p.m.
As part of a syndicated loan agreement signed on 5 August 2015, Implenia Ltd. issued a guarantee in the amount of CHF 715 million in favour of the bank consortium for the liabilities of Group companies.
5
Bonds and convertible bonds
Implenia AG floated the following two bonds and a convertible bond: – CHF 200 million Payment under subscription 12 May 2010, interest rate (affecting liquidity) 3.125%, term 2010 – 2016, redemption 12 May 2016, issue price 100.269%, ISIN CH011 219 3518, effective interest rate 3.356% – CHF 125 million Payment under subscription 15 October 2014, interest rate (affecting liquidity) 1.625%, term 2014 – 2024, issue price 101.063%, ISIN CH025 359 2767, effective interest rate 1.624% – CHF 175 million Payment under subscription 30 June 2015, subordinated convertible bond, interest rate (affecting liquidity) 0.500%, term 2015 – 2022, issue price 100.000%, ISIN CH028 550 9359, conversion premium 32.5%, conversion price CHF 75.06, effective interest rate 2.158%
6
Significant release of hidden reserves
The net release of hidden reserves amounts to CHF 3.5 million in the reporting year (previous year: CHF 52.2 million).
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Notes to the Statutory Financial Statements
7 Shares owned by members of the Board of Directors and members of the Group Executive Board As at 31 December 2015, the number of shares held by the Group Executive Board and related persons was 359,494 or 1.9 percent of the share capital (previous year in former constitution: 349,630 shares or 1.9%). This figure includes any shares acquired in a private capacity.
Group Executive Board Number of shares, as at
Shares blocked until
31.12.2015
31.12.2014
2016
2017
2018
Anton Affentranger, CEO
263,840
233,840
10,334
12,500
25,000
Beat Fellmann, CFO and Head of Corporate Center
41,500
39,000
10,000
10,000
10,000
Christof Gämperle, Member and Business Unit Head of Construction German-speaking Switzerland
8,763
7,263
3,620
2,543
2,500
René Kotacka, Member and Business Unit Head of Infrastructure
5,314
2,643
305
655
2,671
André Métral, Member and Business Unit Head of Construction French-speaking Switzerland
7,382
4,882
2,545
2,337
2,500
Petter Vistnes, Member and Business Unit Head of Scandinavia
2,746
446
–
–
2,300
Members of the Group Executive Board who left Total
29,949
61,556
9,533
9,249
4,667
359,494
349,630
36,337
37,284
49,638
286–287
As at 31 December 2015, the number of shares held by non-executive members of the Board of Directors and related persons was 34,833 or 0.2 percent of the shares (previous year in former constitution: 37,792 or 0.2%). This figure includes any shares acquired in a private capacity.
Non-executive Board of Directors Number of shares, as at
31.12.2015
Shares blocked until
31.12.2014
2016
2017
2018 1,495
11,031
9,536
859
887
Hans-Beat Gürtler, Vice-Chairman
6,485
5,631
1,145
887
854
Chantal Balet Emery, Member
2,088
1,435
657
678
653
Hubert Achermann, Chairman
Calvin Grieder, Member
1,988
1,335
657
678
653
Patrick Hünerwadel, Member
4,777
3,973
875
678
804
490
–
–
–
490
Henner Mahlstedt, Member Members of the Board of Directors who left Total
7,974
15,882
2,947
2,452
427
34,833
37,792
7,140
6,260
5,376
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Notes to the Statutory Financial Statements
8
Direct shareholdings and significant indirect shareholdings
Name
Gebr. Ulmer GmbH Gravière de La Claie-aux-Moines SA Implenia (Ticino) SA Implenia Construction GmbH Implenia Cyprus Ltd. Implenia Global Solutions AG Implenia Holding GmbH Implenia Norge AS Implenia Österreich GmbH Implenia Real Estate Ltd.1 Implenia Spezialtiefbau GmbH Implenia Switzerland Ltd. Reprojet AG SAPA, Société Anonyme de Produits Asphaltiques Sisag SA Swiss Overseas Engineering Company Tetrag Automation Ltd. Zschokke Holding Deutschland GmbH
Registered office
Shareholding Currency
Capital
Bruchsal (D) Savigny Bioggio Wiesbaden (D) Nicosia (CY) Dietlikon Rümmingen (D) Oslo (NO) Vienna (A) Dietlikon Frankfurt (D) Dietlikon Zurich
100% 66,7% 100% 100% 100% 100% 100% 87,8% 100% 100% 100% 100% 100%
EUR CHF CHF EUR EUR CHF EUR NOK EUR CHF EUR CHF CHF
25,565 1,500,000 150,000 10,100,000 3,001 100,000 18,067,751 4,095,432 35,000 30,600,000 1,000,000 40,000,000 100,000
Satigny Abidjan (CI) Geneva Dietlikon Berlin (D)
75% 100% 100% 100% 100%
CHF XOF CHF CHF EUR
500,000 492,000,000 200,000 100,000 3,067,751
1 Implenia Real Estate Ltd.: Merged as per 1.1.2014 with Implenia Development Ltd.
288–289
Proposal of the Board of Directors
Proposal of the Board of Directors regarding the appropriation of available earnings 2015 CHF 1000
Profit carried forward Profit for the year
277,796 35,153 312,949
The Board of Directors proposes to the General Meeting the following appropriation of available earnings and reserves: Distribution of a dividend of To be carried forward
35,097 277,852 312,949
The Board of Directors will submit a proposal to the General Meeting of 22 March 2016 to pay an ordinary dividend of CHF 1.80 per share plus an anniversary dividend of CHF 0.10 per share. As at 31 December 2015, the assumed dividend totalled around CHF 34.8 million. The final amount will equal the dividend multiplied by the number of outstanding shares entitled to a dividend payment on the dividend record date (29 March 2016). The number of shares can change until the dividend record date.
STATUTORY FINANCIAL STATEMENTS OF IMPLENIA LTD.
Report of the statutory auditor on the financial statements
Report of the statutory auditor to the Annual General Meeting of Implenia Ltd., Dietlikon As statutory auditor, we have audited the financial statements of Implenia Ltd., which comprise the income statement, balance sheet and notes (pages 278 to 289), for the year ended 31 December 2015.
Board of Directors’ responsibility The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of association. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Audit opinion In our opinion, the financial statements for the year ended 31 December 2015 comply with Swiss law and the company’s articles of incorporation.
290–291
Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 SCO and article 11 AOA) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 SCO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of association. We recommend that the financial statements submitted to you be approved.
PricewaterhouseCoopers Ltd.
Christian Kessler Audit expert Auditor in charge
Zurich, 22 February 2016
Diego J. Alvarez Audit expert
LOCATIONS
With its headquarters in Dietlikon near Zurich, Implenia has an extensive network of branches in its core markets of Switzerland (see below), Germany, Austria, Norway and Sweden (see p. 293). Implenia also has a presence in the Netherlands, France, Italy, Poland, Romania, Thailand and Hong Kong, as well in Mali and the Ivory Coast. For location details see the maps or visit our website at www.implenia.com.
GERMANY
Schaffhausen Diessenhofen Basel
Rafz Augst
Baden
FRANCE
Kreuzlingen
Frauenfeld
Kradolf/Schönenberg a.d.T. Goldach Bischofszell St. Margrethen Wil St. Gallen Niederstetten Widnau Rümlang Teufen Dietlikon/ Aarau/Buchs Balgach Zürich/Oerlikon Wallisellen Herisau Delémont Altstätten Oberentfelden Affoltern a.A. Ebnat-Kappel Appenzell AUSTRIA Olten Jona Uznach Freienbach Gams Reiden Solothurn Zug/Cham Pfäffikon Tavannes Siebnen Gisikon Grabs Rothenthurm LIECHTENSTEIN Inwil Küssnacht Studen Glarus Mels Luzern Schwyz Meggen La Chaux-de-Fonds Lyss Horw Marin-Epagnier Neuchâtel Hergiswil Bern Birsfelden
Alpnach
Münsingen Fribourg
Winterthur
Engelberg
Wattenwil
Altdorf Schattdorf
Chur Laax
Davos
Spiez
Echandens
Genève/Onex
Andermatt
SWITZERLAND St. Moritz
Monthey Satigny
Interlaken
Zweisimmen
Crissier Renens
Vétroz Martigny
Gampel Visp
Sierre Sion Saas-Fee
Bioggio Lugano-Breganzona
ITALY
Scuol Zernez
Meiringen
292–293
Brønnøysund
Stjørdal Orkdal
Ålesund
SWEDEN
NORWAY
Bergen Oslo Stockholm
Göteborg
Hamburg Berlin
GERMANY
Erfurt
Voerde Essen Köln Frankfurt Mainz
Wiesbaden Bobenheim-Roxheim Karlsruhe Freiburg i.Br.
Leipzig
Arnstadt Nürnberg
Mannheim Stuttgart
Rümmingen
München
Wien Salzburg AUSTRIA
Himberg
CONTACTS, DATES AND IMPRESSUM
Contacts
Impressum
Contact for investors Serge Rotzer Head of Investor Relations T +41 58 474 07 34 F +41 58 474 95 29 serge.rotzer@implenia.com
Publisher Implenia Ltd., Dietlikon Concept and design schneitermeier AG, Zurich; Neidhart + Schön AG, Zurich Photos Implenia Ltd., Dietlikon; Gerry Amstutz and Franz Rindlisbacher, Zurich (In conversation, reportage, management photo, Board of Directors); Sue Bär for Baukader Schweiz, Olten; Alessandro Della Bella, Zurich; Jean-Luc Grossman for Zurich Zoo, Zurich; Ralph Meiling, Berlin; Bernd Schumacher, Freiburg im Breisgau; Stefan Wullschleger, Burgdorf Text Implenia Ltd., Dietlikon; Dynamics Group AG, Zurich Translation James Knight Ltd., Warwickshire, England Printing Linkgroup, Zurich
Contact for the media Philipp Bircher Head of Communications Group T +41 58 474 74 77 F +41 58 474 95 03 philipp.bircher@implenia.com
Dates Media and analysts’ conference on the 2016 first-half results 23 August 2016 Media and analysts’ conference on the 2016 full-year results 23 February 2017