Amounts in million euros (rounded)
2006 2005
Continuing Discontinued Total Continuing Discontinued Total
Total revenue 492 51 543 376 65 441
Third-party project expenses 118 41 159 97 51 148
Net revenue 374 10 384 279 14 293
Operating expenses 351 13 364 259 17 276
Operating result 23 - 3 20 20 - 3 17
Share of result of associates
and joint ventures 8 0 8 2 1 3
Result before interest and income tax 31 - 3 28 22 - 2 20
Financial income and expenses - 4 - - 4 - 1 - 1 - 2
Income tax - 5 1 - 4 - 7 2 - 5
Result on sale of discontinued operations
(after income tax) - 2 2 - - -
Result after income tax 22 0 22 14 - 1 13
Amounts in million euros (rounded) 31 December 31 December 31 December 31 December
2006 2005 2006 2005
Non-current assets 245 56 Equity 139 97
Current assets 223 167 Non-current liabilities 168 80
Current liabilities 200 126
Assets held for sale 66 128 Liabilities held for sale 27 48
534 351 534 351
Compared to the previous year, there is a material impact on the balance sheet as per 31 December 2006 as a consequence of the acquisition of Carl Bro.
The impact on the balance sheet of the acquisition of Carl Bro is amongst others on the non-current assets, especially on intangible assets and goodwill.
Due to difference between fair value, purchase price and book value of Carl Bro, € 53 million intangible assets, and € 99 million goodwill is recognised. The intangible assets will be amortised. The cost of amortisation for 2006 (four months) are € 2.5 million.
We expect that the costs of amortisation for 2007 will be approximately € 6 million. The goodwill is subject to impairment testing.
The increase in the equity to € 139 million as per 31 December 2006 (31 December 2005: € 97 million) is caused by the result after income tax of 2006 (€ 22 million), the paid dividend of 2006 (€ 8 million) and also the issuing of 400,000 shares (€ 28 million).
The 400,000 shares issued were part of the total purchase price of Carl Bro and at year-end still held by the former shareholders of Carl Bro.
The increase of the non-current and current liabilities is related to the loans to finance the acquisition of Carl Bro. After realising a redemption of € 50 million in 2006, according to the conditions of the loan agreements, the remaining amount of the two loans is € 90 million in total. The redemption for 2007, € 25 million, is posted in the current liabilities.
Related to the positive cash flow of the company and the cash position as per 31 December 2006 of € 47 million, the balance sheet can be considered as strong.
S E G M E N T A T I O N O F A C T I V I T I E S
In evaluating the company’s result a very clear distinction must be made between the core activity (consultancy and engineering) and the capital-intensive activities related primarily to real estate in the Netherlands and other countries.
In 2004 the decision was made to dispose of the capital-intensive business units related to mineral extraction, real estate development and waste management. In the analysis of the result, it was decided on the basis of IFRS guidelines that a distinction would be made between continuing operations and discontinued operations available for sale.
As at 31 December 2006 the continuing activities comprised consultancy and engineering and a limited part of the capital-intensive activities, namely those unlikely to be sold to third parties in 2007. All of the activities classified as discontinued operations available for sale are capital-intensive. The reduction of the book value of the ‘discontinued operations held for sale’ is as follows.
At year-end 2003, Grontmij had already sold its interest in Q-Park (incoming cashflow: € 27 million). 0 25 50 75 100 125 31 December 2004
31 December 2003 * 31 December 2005 31 December 2006
number x 1,000.000
Executive Board Report
* Estimate
GRONTMIJ | ANNUAL REPORT 2006 C O N T I N U I N G O P E R A T I O N S
The results of the continuing operations, including a limited number of the activities that are not or not yet held for sale, can be summarised as follows.
* For the purpose of analysing the results, a split is made between former Grontmij and former
Carl Bro companies and the Holdings. One has to take into account that the former Carl Bro companies were only contributing to the total result in the last four months of 2006.
Compared to 2005, the revenue and result after income tax of the former Grontmij companies improved in 2006. The net revenue increased to € 293 million (2005: € 286 million).
The increase is influenced by a decrease of fte’s in the applicable companies. Due to the nature of the business the operating result of € 21.0 million (2005: € 20.2 million) has to be considered in combination with the share of profit of associations and joint ventures of € 7.1 million (2005: € 2.5 million). As a consequence, the result before interest and income tax improved to € 28.0 million (2005: € 22.7 million), which is an increase of 23.3%.
The former Carl Bro companies have contributed to the total result as from the moment of acquisition. Related to the result of Carl Bro in 2005 (€ 10.5 million) and the normalised result for Carl Bro for the whole book year 2006 (€ 12.9 million), it can be considered as quite satisfactory. Evaluating the result of Carl Bro over the last four months of 2006 (result: € 6.7 million) one has to take the seasonal pattern in mind.
The result after income tax of the Holdings, including eliminations amounted to - € 5.1 million (2005: - € 0.3 million). Reason for this decrease is related to amortisation cost of intangible assets (€ 2.5 million) and interest related to the acquisition loans (€ 2.2 million) in 2006.
Executive Board Report
Amounts in million euros (rounded)
2006 * 2005
Former Grontmij
Former Carl Bro
Holdings Total Grontmij Holdings Total
Total revenue 386 113 - 7 492 386 - 10 376
Third-party project expenses 93 23 2 118 100 - 3 97
Net revenue 293 90 - 9 374 286 - 7 279
Operating expenses 271 80 0 351 266 - 7 259
Operating result 22 10 - 9 23 20 - 0 20
Share of profit of associates
and joint ventures 6 0 2 8 2 - 0 2
Result before interest and income tax 28 10 - 7 31 22 - 0 22
Financial income and expenses 0 0 - 4 - 4 - 2 1 - 1
Income tax - 7 - 3 5 - 5 - 6 - 1 - 7
Result after income tax 21 7 - 6 22 14 0 14
EBIT 28 10 - 7 31 22 - 22
EBIT (%) 7.3 8.9 - 6.3 5.9 - 5.9
EBITA - - - 34 - - 22
EBITA (%) - - - 6.9 - - 5.9