Dear shareholders, Once again we are able to look back on a strong year for Boskalis. Despite the continued challenging conditions we succeeded in achieving a record revenue of EUR 3.5 billion and record proﬁt of EUR 366 million. And while we were helped in this by major contributions from exceptional items, it is still fair to say that this was a great achievement for the company. On top of this our acquisition of Dockwise enabled us to further expand the business towards the offshore energy sector and to keep the order book at a healthy EUR 4 billion.
2013 was another very turbulent year – in general, but for our company in particular. A year in which we took another major step in expanding our position in the Offshore Energy market with the acquisition of Dockwise, which was effectuated at the end of March – just four months after we announced our intention. In order to ﬁnance this acquisition we issued, amid great interest, around 10 per cent extra shares worth EUR 320 million in early 2013. We attracted even greater interest with the private placement in the United States of the required long-term loan – the US Private Placement. The targeted USD 325 million was more than six times oversubscribed. A clear sign that investors have conﬁdence in our company, its track record and its vision for the future. With the arrival of Dockwise we have raised the proﬁle of our company in the Offshore Energy market. It considerably broadens our ﬁeld of opportunities – together we create New Horizons.
At the end of March we made a vibrant start on the process of integrating Dockwise. The ﬁrst stage has now been completed and has resulted in the integration of the Dockwise activities in the Offshore Energy division. Just as with SMIT back in the day, the integration will only be completed with the physical move to Papendrecht, where building work has started on new ofﬁce premises that will accommodate 500 employees from the end of 2014.
Developments in the core activities
Expansion, broadening, integration – the company is undergoing many developments. In spite of this we have remained focused on the market, successfully executing projects and winning new contracts on all fronts.
At Dredging we took on a large number of projects, including a three-year maintenance contract on the Elbe river in Germany worth EUR 75 million, construction of the Bronka terminal and access channel in St. Petersburg, Russia (EUR 155 million), maintenance of Melbourne port (EUR 40 million), land reclamation in Incheon, South Korea (EUR 80 million), deepening the access channel to the port of Southampton (EUR 35 million) and port dredging work in Qatar (EUR 150 million), and in the Netherlands the reinforcement and maintenance of the Hondsbossche and Pettemer Sea Defense (EUR 140 million with a partner) and the construction of the Veessen-Wapenveld high-water channel as part of the Dutch government’s Room for the River project (EUR 40 million).
At Offshore Energy we also took on substantial works, including the Malampaya project in the Philippines worth USD 60 million – a great installation project that allows us to showcase what we are able to offer clients with the combination of our broad product offering offering (read more on pages 18 and 19). Substantial contracts were won in Brazil and Europe for our Taklift sheerlegs, including the lifting and installation of bridge segments in Cádiz, Spain and Izmit, Turkey. In Brazil we carried out complex installation work for Modec with the anchor installation of the OSX3 FPSO. Together with a partner we installed the foundations for 108 turbines for the West of Duddon Sands wind farm in the Irish Sea. Various cable-laying projects were undertaken in collaboration with VolkerWessels’ cable-laying company VSMC, with which we set up a 50/50 joint venture in November, and work started on the execution of the Subsea Services contract for Maersk Oil in the North Sea.
Towage & Salvage
With our harbour towage activities we experienced a busy year in Singapore in particular, supporting local shipyards that were operating at full steam, and in the United Kingdom we carried out specials for the installation of offshore wind farms. The Salvage division undertook a number of high-proﬁle salvage operations, including the salvage of the Arctic drilling rig Kulluk in Alaska, the removal of a US Navy vessel from a reef in the Philippines, the salvage of the capsized jack-up platform SEP Orion in Brazil and the salvage of the oil tanker Silver off the Moroccan coast. This required SMIT Salvage to remove the cargo of fuel oil from the ship in order to avert an environmental disaster.
Various attractive new contracts were also won at our latest addition Dockwise, including three long-term Heavy Marine Transport contracts for Hyundai Heavy Industries and a number of ﬂ oat-over contracts. An FPSO transport was booked for our new mega transport vessel, the Vanguard, and we won the prestigious contract for the removal of the Costa Concordia. And just before the end of the year the contract was signed for the logistic management and transport of the LNG modules for the Wheatstone project in Australia, worth USD 275 million: a record order amount for Dockwise. This is a great example of combination and cooperation within the group, with knowledge and expertise being contributed by both Dockwise and SMIT.
Composition of activities
We are not just expanding the company, we are also taking a critical look at how the existing portfolio of business activities is composed. It is in this context that we sold our 40% stake in Archirodon for USD 190 million, generating a book gain of EUR 51 million, sold Dockwise Yacht Transport for USD 40 million and transferred the SMIT harbour towage activities in Australia to Smit Lamnalco for USD 55 million.
Despite the whirlwind of acquisition, execution, integration and optimization we managed to achieve not only a good ﬁnancial result but also an excellent safety result. In 2013 we continued to roll out our safety program NINA (No Injuries No Accidents), which was embraced with great enthusiasm at the Offshore Energy division. And with the aid of NINA we once again achieved a further drop in our LTIF rate, from 0.26 injuries resulting in absence from work per 200,000 hours worked in 2012 to 0.11 in 2013 for the entire group. This is the achievement of 2013 that we take most pride in.
In good shape
We can safely say that we have started off 2014 in good shape: the order book is well ﬁlled and ﬁnancially we are also in good health. Supported by the strong result and the sale of some business activities over the year we brought the net debt back down from above two times EBITDA to 1.1 EBITDA. In that sense we can look to the future with conﬁdence.
In order to effectively structure that future we have been working hard on the new 2014-2016 Corporate Business Plan, the main points of which can be found in this annual report. All the business units have provided input for this by preparing their own three-year plans. In addition an in-depth market analysis has been made of the developments on the supply and demand side. The plan provides for further targeted expansion of the offshore energy activities in the area of Transport, Logistics and Installation. With the recent Fairmount acquisition we have strengthened our transport proposition through wet towage. Attention is also being paid to how the organization is currently functioning – after three large acquisitions in a row. The three-year plan expressly allows room for optimizing both the organization and the processes and systems.
On behalf of the Board of Management I want to thank all colleagues for the great effort they put in during 2013, as well as our clients, partners and shareholders for putting their trust in us.
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