VDL GROEP ANNUAL REPORT 2013

Transcription

1 VDL GROEP ANNUAL REPORT 2013

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3 VDL GROEP ANNUAL REPORT 2013 VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands Phone +31 (0) Fax +31 (0) info@vdlgroep.com

4 CONTENTS 3 Financial highlights 4 Profile 5 Group structure 7 Report of the Board of Directors 39 Report of Supervisory Board 40 Auditor s report 41 Subsidiaries 53 Financial report

5 FINANCIAL HIGHLIGHTS (x 1,000 euro) Combined turnover 1,812,313 1,756,354 1,718,724 1,472,373 1,162,233 Consolidated turnover 1,632,108 1,628,857 1,574,805 1,353,726 1,057,662 Gross profit 95,610 87,407 96, ,779 32,544 Profit before tax 98,027 75,679 83,377 97,447 25,432 Profit before tax / turnover 5.4% 4.3% 4.9% 6.6% 2.2% Net profit 88,582 56,755 66,014 76,762 18,047 Net profit / turnover 4.9% 3.2% 3.8% 5.2% 1.6% Depreciation of (in)tangible fixed assets 47,326 32,490 30,465 28,844 28,405 Cash flow 135,908 89,245 96, ,606 46,452 (Dis-)investments including acquisitions 82, ,072 52,100 29,445 20,292 Guarantee capital 854, , , , ,972 Total assets 1,382,879 1,403,669 1,062,228 1,017, ,798 Guarantee capital / total assets 61.8% 56.2% 54.4% 52.8% 50.3% Net profit / equity 10.4% 7.2% 11.5% 14.3% 3.9% Employees as at 31 December 9,216 8,757 7,135 7,126 6,113 3

6 PROFILE VDL GROEP VDL Groep is an international industrial company devoted to the development, production and sales of semi-finished products, buses & coaches and other finished products as well as the assembly of cars. From its head office in Eindhoven (the Netherlands) VDL supervises its subsidiaries, which have a high level of autonomy and responsibility for results. The establishment in 1953 of Metaalindustrie and Constructiewerkplaats P. van der Leegte laid the basis for what today is VDL Groep. Through targeted acquisition and autonomous growth, this family business has developed into a group encompassing 83 subsidiaries spread over 18 countries and a workforce of 9,216. In subcontracting, VDL is a leader in the fields of metalworking, mechatronic systems and system supply, plastics processing and surface treatment. The car assembly division includes the production of passenger cars for third parties. The bus & coach division consists of chassis, chassis modules, coaches, public transport buses, mini & midi buses, special projects and second-hand buses. The finished products division is extensive: suspension systems for the trailer and truck industry, heating, cooling and airtechnical systems, production automation systems, systems for the oil, gas and petrochemical industry, systems for the agricultural sector, sunbeds and roof boxes, container handling equipment, cigar-making and packaging machines, components for bulk handling and dust extraction installations, systems for explosion and fire protection. VDL Groep strives to achieve growth both through acquisitions and autonomous means. This entails a focus on making continuous improvements to its products and production processes. Such a vision imposes a number of preconditions: modern machinery, locations based on good logistics, a critical quality policy and a high level of expertise amongst its workforce. Investments made by VDL Groep enable the group to meet customer requirements. VDL Groep has a flat organisational structure with short policy lines. The company culture is characterised by the shared VDL philosophy of human added value. This forms the basis for close cooperation between companies within the group. 4

7 GROUP STRUCTURE VDL Groep VDL Nederland VDL Holding Belgium Subcontracting Car assembly Buses & coaches Finished products VD Leegte Metaal VDL Nedcar VDL Bus & Coach VDL Agrotech VDL Gereedschapmakerij VDL Bus Chassis VDL Industrial Products VDL TIM Hapert VDL Bus Modules VDL Steelweld VDS Technische Industrie VDL Bus Heerenveen VDL Steelweld UK VDL Laktechniek VDL Bus Venlo VDL Steelweld Deutschland VDL Belgium VDL Bus Roeselare VDL Steelweld Sweden VDL Technics VDL Bus Valkenswaard Hapro International VDL Kunststoffen VDL Bus & Coach Nederland VDL Klima Helmondse Metaal Industrie VDL Bus & Coach France Klima Warmtetechniek NSA Metaalindustrie VDL Bus & Coach Italia VDL Klima France NSA Apparatenbouw VDL Bus & Coach Belgium VDL KTI VDL MPC VDL Bus & Coach Polska VDL Delmas VDL Parree VDL Bus & Coach Deutschland VDL Containersystemen VDL Staalservice VDL Bus & Coach Suisse VDL Containersysteme VDL Lasindustrie VDL Bus & Coach Czech Republic VDL Weweler RPI Componenten VDL Bus & Coach South Africa (70%) Weweler-Colaert VDL Rotech VDL Bus & Coach Serbia VDL Weweler Parts VDL Systems VDL Bus & Coach Danmark Truck & Trailer Industry VDL Postma VDL Bus Center Nederland PMB-UVA International VDL Industrial Modules VDL Bus Center Deutschland VDL USA VDL Konings VDL Bus Center France VDL Middle East VDL Wientjes Roden VDL Busland VDL Wientjes Emmen VDL Bus & Coach Service FRY-ZHN VDL Services VDL Parts VDL Enabling Technologies Group APTS (70%) VDL ETG Eindhoven VDL ETG Research VDL ETG Projects VDL ETG T&D VDL ETG Almelo VDL ETG Singapore VDL ETG Suzhou VDL Network Supplies VDL Fibertech Industries 5

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9 REPORT OF THE BOARD OF DIRECTORS This has been a remarkable year for VDL Groep. At the start of 2013, prospects were still somewhat uncertain, but the situation improved each quarter, and by the end of the year, VDL exceeded expectations on all fronts; and that in the year in which we celebrated the 60 th year of our founding. Otherwise, 2013 was a relatively quiet year in which we succeeded in maintaining our position. There were no major takeovers and no severe crisis measures. At VDL Nedcar in Born (the Netherlands), we were hard at work converting the plant and installing new production lines will be the real thing. All 1,500 employees will return to work, and we will even need additional people. The VDL Nedcar plant will be officially reopened in July 2014, and the first MINI will roll off the production line. Financially, 2013 was a good year, certainly given the economic circumstances. Combined turnover rose by 3% from billion euro in 2012 to a record level of billion euro in Consolidated turnover amounted to billion euro, a marginal rise as compared to the billion euro in Net result, however, rose considerably from 57 million in 2012 to 89 million euro in The tax burden in 2013 was lower, based on the forecast fiscal loss at VDL Nedcar. The total turnover for 2013 was the second best in our history, and that is a performance we can be proud of. The number of employees also rose from 8,757 at year end 2012 to a record level of 9,216 at year end The majority of this 5% increase was achieved autonomously, in a period of increasing overall unemployment. Autonomous growth demonstrates that production in the Netherlands and Belgium still remains possible. Nonetheless, a sound industrial policy is essential. We continue to call for a level playing field in Europe. This is essential if we are to continue manufacturing here. A good lending climate, sound credit insurance and a flexible labour force with a structural system of part-time unemployment benefits and technical training programmes are of vital importance. We must continue in pursuit of a level playing field not only in Europe but throughout the world. Many countries around the globe impose import duties, while Europe continues to believe in a free trade zone. We must treat our trading partners in the world the same way as they treat us. Only then can employment opportunities in the European Union be maintained and we can form a strong block to uphold our position in the world economy. 7

10 CONSOLIDATED CONSOLIDATED TURNOVER TURNOVER NET PROFIT NET PROFIT (in million euro) (in million euro) (in million euro) (in million euro) Turnover Combined turnover for 2013 amounted to billion euro. Compared to the billion euro in 2012, this represents an increase of 3%. Internal deliveries increased million euro million euro Combined turnover 1,812 1,756 Internal deliveries Consolidated turnover 1,632 1,629 The balance between international and domestic turnover remained the same, but this is due to change in 2014 in favour of international turnover, given the start of production at VDL Nedcar for our client BMW Group in Germany million euro % million euro % International 1, , Domestic ,632 1,629 In 2013, we supplied products to 118 countries outside the Netherlands. International turnover, divided among the various continents, is as follows: Europe 867 million euro (43 countries), Asia 132 million euro (30 countries), North America 47 million euro (2 countries), South and Central America 34 million euro (19 countries), Africa 13 million euro (22 countries) en Oceania 3 million euro (2 countries). If turnover is broken down country by country, in addition to the Netherlands, we see that our largest markets are our neighbouring countries Germany, Great Britain and Belgium. 8

11 TURNOVER PER COUNTRY (in million euro) Netherlands 536 Germany 308 Great Britain 178 Belgium 79 Singapore 71 Sweden 66 France 60 USA 46 Jamaica 24 Israel 23 Switserland 21 Norway 20 Poland 19 Spain 18 Italy 16 Czech Republic 12 Finland 10 Others 125 Divisions If the combined turnover of VDL Groep is broken down according to the divisions subcontracting, car assembly, buses & coaches and finished products, we see that with the exception of buses & coaches, all divisions contributed to growth million euro % million euro % Subcontracting Car assembly Buses & coaches Finished products ,812 1,756 Subcontracting Turnover in the subcontracting division rose fractionally from 788 million euro in 2012 to 794 million euro in Starting in the second half of 2013, various markets began to show recovery, such as the semiconductor and truck industry, while the total order book expanded. At year end 2013 the order book amounted to 237 million euro as compared to 193 million euro at year end The subcontracting division showed a profit in Turnover in the subcontracting division rose by 11% in the first quarter of 2014, from 175 million euro in the first quarter of 2013 to 194 million euro. The order book in week 13 amounted to 250 million euro, which was significantly higher than in the same week last year (211 million euro). The semi-conductor market, and the automotive market, both important for this division, demonstrated stability, and expectations for 2014 are favourable. 9

12 SUBCONTRACTING Mechatronic systems 54% Metalworking 37% Plastics processing 8% Surface treatment 1% million euro % million euro % Mechatronic systems Metalworking Plastics processing Surface treatment Mechatronic systems and system supply For the mechatronic systems and system supply sector, 2013 was a stable year with a moderate rise in turnover from 421 million euro in 2012 to 432 million euro in The trends that had emerged in 2012 continued through The world market for production equipment for semi-conductors was 10% lower than in Nevertheless, we succeeded in retaining our market share by developing a broader product range for existing customers. We strengthened our position in the market for medical diagnostic systems, and demonstrated further growth in Expectations for 2014 are positive. For both production equipment for semi-conductors and for the LED market growth is expected, and the first positive signs have been noted for a cautious recovery in the market for production equipment for solar cells. To further improve its position in this innovative market, VDL has considerably expanded its research and development capacity with a view to further optimising our expertise as a manufacturing partner. The outcome will be further cooperation with customers in the field of research and development. Against that background, an initial MoU (Memorandum of Understanding) has been signed with our customer ASML. Given the improving order book, we expect turnover for the mechatronic systems and system supply sector in 2014 to exceed that of

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15 Metalworking Turnover in the metalworking sector remained virtually unchanged: 296 million euro in 2012 compared to 290 million euro in The fact that we have a presence in many industrial sectors proved particularly useful. As a metalworking player, VDL is active in the automotive industry, the food industry, the energy market, telecom and the waste processing industry. New markets are constantly being explored and new products developed that fit in with the current product range. Over the past year, we once again invested in advanced machinery and further automated and robotised production processes to maintain our international competitive position. Prices remain under tremendous pressure, and customers are demanding ever shorter delivery times, combined with quality and flexibility. The VDL companies serve increasingly as system supplier, with involvement in the entire process from design and production through to delivery and maintenance. Through collaboration with other group companies VDL demonstrates its added value. The order book in the metalworking sector is currently well-filled. Despite rising raw material prices and difficult recovery in some markets, prospects for 2014 can be described as broadly positive, and slight growth is expected. Plastics processing Turnover in the plastics processing sector rose by 3%, from 63 million euro in 2012 to 65 million euro in The automotive sector and medical industry were key markets over the past year. Due to increasing demand for complete and complex assemblies as well as larger products, we have again invested in new injection moulding machines, an advanced milling machine for the milling of large vacuum-moulded products and a variety of robots for further automation of the production process. The new techniques in mould labelling and in mould foil clearly proved their worth over the past year, and will continue to be included in new developments. By making good use of the knowledge of 3D design, mould flow analysis and FEM strength calculations, we can offer our customers tailored service in the development of new products. Automation combined with this high level of knowledge means that we can act as a system supplier in successfully tackling complex problems. In 2013, our position in the medical market was further strengthened with carbon and glass-reinforced plastic, and high-tech composite solutions were identified for new selling areas including the defence, automotive, semi-conductor and professional lighting sectors. We also invested in the largest RTM press in Europe. The order book for the total plastics processing sector is currently reasonably well-filled. Despite the considerable rise in raw material prices, prospects are fairly positive and we expect turnover in 2014 to be slightly higher than that in

16 Surface treatment As expected, turnover in the surface treatment sector fell slightly, from 8 million euro in 2012 to 7 million euro in Among the causes of the downturn was the launch of various new projects for Euro 6 trucks. As in previous years, in 2013, we once again invested in equipment and the rectifier for the cataphoresis line was replaced with a new computer-controlled model, with a larger capacity. Expectations for this year are positive, despite the fact that we have observed a slight downturn on the truck market. We nonetheless expect to be easily able to compensate for this fall by attracting new orders. The order book in the first quarter of 2014 is growing, and we expect to be able to achieve a slight rise in turnover in Car assembly The car assembly division (VDL Nedcar in Born) made a contribution to turnover of 120 million euro, in 2013, as compared to 70 million euro in The start-up costs for 2013 were compensated for by the provision established for that purpose. After the turbulent year 2012 in which VDL Groep assumed control of NedCar in Born, 2013 was a transition year for the independent car manufacturer. Starting in July 2014, the company will be manufacturing the new MINI on behalf of BMW Group. In preparation for this production start-up, more than 300 employees set to work at the start of 2013 on a raft of major technical alterations to the production facilities in and around the plant. During the course of 2013, this number rose to almost 800. At the latest by 1 January 2015, all 1,500 staff will have returned to work at VDL Nedcar. In the intervening period, many of them have been trained, externally seconded (nationally, locally and internationally) and kept fit for work. In January 2013, VDL Nedcar Servicecentrum was established to organise these activities. A variety of government and market parties have provided much-appreciated support. In the transition year 2013, VDL Nedcar manufactured zero cars. Turnover was above all generated from invoices for project work on behalf of BMW. This work related to preparations for the production of the MINI. VDL Nedcar also received income from the work by seconded personnel to other companies. Finally press work for third parties was continued on a limited scale. In the first quarter of 2014, VDL Nedcar generated turnover of 178 million euro as compared to 26 million euro in the first quarter of last year. So far everything is going according to plan, and the mood is positive. The plant and production lines are all but ready. We have every confidence that production will live up to expectations in the second half of this year, and we predict a positive year for VDL Nedcar million euro % million euro % Car assembly

17 Buses & coaches Turnover in the buses & coaches division fell from 431 million euro in 2012 to 391 million euro in The order book also shrank from 156 million euro to 128 million euro at year end. Enormous price pressure continues, due to the shrinking market in Europe and the import of vehicles from low wage countries. This factor, combined with high development costs for example for the switch to Euro 6 engines, continues to apply downward pressure on the result of this division. Once again, therefore, 2013 ended without profit. Delivery numbers of VDL products fell as compared to 2012, and as a result our market share shrank slightly. We can however cautiously suggest that the downturn on the Western European market appears to be coming to an end was one of the most difficult years ever for the bus and coach division, and we expect 2014 to be a year of recovery. Over the past year, a number of organisational changes have been implemented with a view to achieving a more efficient, more effective bus and coach division. All in all, we expect an improvement in results for 2014, partly as a result of completing a series of Euro 6 projects. Our complete range of vehicles for both public transport and coaches has been presented to the market, in a Euro 6 version. We also invested heavily in hybrid and electrical systems. For 2014, the focus will be on further intensifying efforts in both our domestic markets and the export markets. As a result, we expect a higher number of deliveries in 2014 than achieved in We will also continue to invest in developing a number of new models. During the first quarter of 2014, turnover fell as compared to the first quarter of 2013, from 112 million euro to 102 million euro. On the other hand, the order book has shown considerable growth: 138 million euro in week 13 of 2013 compared to 190 million euro this year. We seem to have reached a turning point, toward upward development. BUSES & COACHES Coaches 35% Public transport buses 26% Parts & services 15% Second-hand buses 11% Chassis & chassis modules 9% Mini & midi buses 3% High-quality Public Transport Systems 1% 15

18 million euro % million euro % Coaches Public transport buses Parts & services Second-hand buses Chassis & chassis modules Mini & midi buses High-quality Public Transport Systems Coaches In 2013, both turnover and numbers delivered rose in the coach sector. Turnover rose from 128 million euro to 136 million euro. Whereas 557 coaches were delivered in 2012, the total in 2013 was 561. The changing product mix had a positive influence on turnover. Our customers, the coach operators, are facing a difficult market, a situation reflected in their investment behaviour. Coach operators also remain cautious in respect of the new Euro 6 technology, as compared to the tried and tested Euro 5 technology. Partly for that reason, we saw a rise in orders for Euro 5 coaches in the fourth quarter of With the exception of France and Great Britain, total market volume for coaches in the majority of European countries remained unchanged or was lower in 2013 than in The total market share in the Western European coach market achieved by VDL Bus & Coach fell slightly from 6.9% to 6.7%. This was mainly due to disappointing sales numbers in France and Belgium. Our market share in fact rose in Great Britain and Switzerland. In 2013, VDL Bus & Coach added a new Futura model to the coach family, the Futura FMD2. This Futura has been presented to the market as a profitable all-rounder, a model suitable for the coach market and intercity operation. The core values of our product range, low vehicle weight, low fuel consumption and high passenger capacity, ample baggage space and low kilometre price make the Futura FMD2 a high-value investment for operators. The first large order has been placed, and will be delivered to Sweden in

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21 Public transport buses It was rather a poor year for the public transport bus sector, with a downturn in both turnover from 168 million euro to 102 million euro, and in the number of delivered buses. In 2013, we delivered 526 vehicles as compared to 730 in In a number of countries, limited numbers of public transport buses were purchased in response to government austerity measures. Competition has become more cutthroat, and it is proving difficult to maintain employment opportunities in this bus sector in the Netherlands and Flanders region of Belgium, due to increased price pressure combined with suppliers from low wage countries. A large number of deliveries were made to the German market, where many public transport companies have opted for VDL products. One example is the city of Düsseldorf where 60 vehicles of the type Citea LLE were sold and delivered in Several other cities have chosen VDL buses, particularly due to the high fuel economy and correspondingly lower operating costs and emissions. In the Netherlands itself, VDL also supplied more than 100 Citea LLE vehicles for the Twente concession. In the fourth quarter of 2013, we also won an attractive order for Amsterdam, where 23 Citea SLFA vehicles are due to be delivered in This articulated version of the Citea SLF was introduced by VDL in We also succeeded in further strengthening our presence in Scandinavia; for the second year running, in Finland, VDL was market leader for public transport buses. We were also active outside the European markets in We delivered a large part of the order for 230 buses to Jamaica, the remainder of which will be delivered in We have also received an undertaking for a follow-up order for 200 buses for that same country, and we are in discussion with a number of other distant export countries. The Citea range has now been completed with the introduction of a series of new models including the Citea SLFA mentioned above. During the UITP trade fair in Geneva (Switzerland), we introduced the VDL Citea Electric. The high degree of modularity in the Citea range means we can offer tailor-made products to our client operators. The Citea Electric is ideal for any specific local situation. Our essential core values such as lightweight contribution, optimum access and comfort for both passengers and drivers can be guaranteed as a result. Response from the market has been very positive, leading to a number of orders from large European cities. Parts & services 2013 was once again a positive year for the parts & services sector. Despite pressure on prices, we succeeded in raising turnover to 60 million euro in 2013 as compared to 57 million euro in An excellent performance given the massive upturn in competition on the bus market. VDL Parts is facing increasingly stiff competition from its own suppliers, the truck world, Internet companies and trading companies. The rise in turnover is mainly due to the fact that VDL Bus & Coach expanded their services by offering repair and maintenance contracts. In particular the public transport sector in the Netherlands and Scandinavia have demonstrated increased turnover in this field, a trend which we are now see spreading into other countries. 19

22 Exports of VDL Parts rose considerably, partly thanks to the expansion of our sales network. The objective for 2014 is to further refine and improve our performance and product portfolio, in combination with investigating how we intend to roll out the broader product range on the market. Alongside our specialist repair workshop VDL Busland, the repair workshops at the individual bus companies also performed well. Whereas in the past public transport operators carried out their own maintenance, this work is being increasingly outsourced to VDL service points. Four new workshops were opened in the Netherlands in This approach enables us to offer our customers even better service, closer to home. In addition, based on the knowledge and information we acquire through this activity, we are better able to further optimise our own products. Expectations for the parts & services sector overall are positive for Second-hand buses The stabilisation in turnover expected for 2013 has indeed continued resulting in fact in a slight increase from 39 million euro in 2012 to 41 million euro in The number of buses sold rose sharply from 606 to 802. Of this total, 417 were second-hand city buses and 385 coaches, minibuses and midibuses. To achieve this result, new sales markets were developed in close collaboration with VDL Bus & Coach and our professional local agents. Demand for Euro 5 vehicles has risen in response to ever tighter legislation and regulations. At the end of 2013, a large number of young, second-hand city buses were once again taken in inventory. The challenge for VDL Bus Center in 2014 will be to further expand the existing network, and to develop new markets. We expect turnover to remain at a similar level in Chassis & chassis modules On 15 October 2013, VDL Groep acquired 19% of the shares in VDL Bus Chassis from PACCAR. As a result, VDL Bus Chassis is now a 100% subsidiary of VDL Groep. External turnover for chassis and module builder VDL Bus Chassis rose from 23 million euro in 2012 to 36 million euro in This rise in turnover was due to deliveries of modules to bus and coach builders outside VDL, that rose from 251 chassis in 2012 to 586 in Sales generated by deliveries to sister companies within VDL Bus & Coach for the construction of complete vehicles fell in The total number of modules delivered therefore fell from 1,538 in 2012 to 1,333 modules in Engineering activities in 2013 were above all hallmarked by the further optimisation of the product range including modules with lower emission values. In close collaboration with the other companies within VDL Bus & Coach, further developments were implemented in respect of engine and driveline technology, based on the Euro 6 standards. As well as reducing user costs per kilometre and achieving lower emission values, the use of alternative fuels received considerable attention. As a result, the range was expanded to form a complete selection of models in line with the latest developments and environmental requirements from the market. Over the next few years, engineering activities will above all be focused on further reducing emission values and reducing the operating costs of the vehicle. Turnover in 2014 is expected to remain at a similar level to that achieved in

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25 Mini & midi buses Turnover in the mini & midi buses sector rose from 11 million euro in 2012 to 12 million euro in 2013 (including police vehicles and damage repair). The number of vehicles delivered fell from 162 in 2012 to 132 in The focus we have placed on the MidCity and international tenders in the public transport market over the past few years was continued. We were awarded a number of large orders, including one order for 41 MidCity vehicles for public transport in Belgium. This order will be delivered in one batch in 2014, but much of the production work was carried out in 2013, resulting in a fall in the number of vehicles delivered in As expected, our market share in Germany, Belgium and the Scandinavian countries grew, and we predict further growth in We are also seeing signs of recovery on the Dutch market. The number of police vehicles delivered was below expectation, but the upgrading and adaptation of existing vehicles had a positive influence on turnover. Turnover in the damage repair division rose slightly in 2013, and despite a shrinking market, we have a broadly positive vision for the future in this division. The order book for the entire mini & midi buses sector is reasonably well-filled, and we therefore expect further growth in the course of High-quality Public Transport Systems Turnover in the High-quality Public Transport Systems sector fell from 5 million euro in 2012 to 4 million euro in Fully emission-free fuel cell vehicles are already in service in Cologne and Amsterdam. The project in Haifa (Israel) for six hybrid Phileas vehicles was completed in In 2014, the first Phileas in a series of nine vehicles will be delivered to Rimini (Italy). Finished products Turnover in the finished products division rose by 9%, from 467 million in 2012 to 507 million euro in It was a particularly good year for the production automation systems sector for the passenger car industry, and suspension systems for trailers and trucks. The result for the finished products division was positive. The order book for this division grew, from 132 million euro at year end 2012 to 282 million euro at year end Prospects for the finished products division for 2014 are positive. Invoiced turnover in the first quarter of 2014 amounted to almost 111 million euro, a fall of 20% as compared to the figures for 2013 (138 million euro). This picture is distorted, however, by an advance invoice in the first quarter of 2013 from a large customer in the production automation systems sector. Without this advance invoice, turnover in the first quarter in fact rose by 8%. The order book is clearly up on last year, with 280 million euro at the end of the first quarter of this year, as compared to 136 million euro at the end of the first quarter in This is mainly due to fluctuations in the order intake for the production automation systems sector. Even if we do not take account of these fluctuations, there is still growth in the order book, and we predict a positive year for the finished products division. 23

26 FINISHED PRODUCTS Production automation systems 37% Suspension systems 26% Heat exchangers 17% Cigar-making and packaging machines 5% Sunbeds and roof boxes 5% Systems for the agricultural sector 4% Container handling equipment 4% Systems for the industrial sector 2% million euro % million euro % Production automation systems Suspension systems Heat exchangers Cigar-making and packaging machines Sunbeds and roof boxes Systems for the agricultural sector Container handling equipment Systems for the industrial sector Production automation systems 2013 was a very successful year for production automation system manufacturer VDL Steelweld. Turnover rose by 42% from 132 million euro in 2012 to 187 million euro in This record turnover was due to major orders to supply production lines to various automotive manufacturing plants for Jaguar, Land Rover, Volvo, Ford and VDL Nedcar. As a result, dozens of new jobs were created in Breda, Barford (Great Britain), Cologne (Germany) and Arad (Rumania). Successes were also achieved outside the automotive industry. Together with a number of other VDL companies, series production of the previously developed AGVs (Automatic Guided Vehicles) is fully up and running. The assembly line for series production of insulation panels for air handling units is also running well. The order book for 2014 is very well filled, and due to continuing demand for bodywork production lines, 2014 is expected to be an excellent year. In 2014, the main focus will be on further building the relationship with our customers and expanding the international organisation. With that in mind, an office was opened in Sweden, in We will of course continue to work on product innovations and the development and optimisation of production methods. 24

27 Suspension systems Total turnover in this sector rose by 9% from 118 million euro in 2012 to 129 million euro in Suspension systems manufacturer VDL Weweler holds almost 40% of the European market. Within Europe, Germany is the largest sales market for suspension systems. To reduce dependency on the European market, the company is highly active in North America, Brazil and Southeast Asia, where the market share is still limited. Air suspension is already the standard in North America, but in terms of construction this market differs entirely from the European air suspension systems. The newly developed modular systems from VDL Weweler would appear to be ideal for this market. To improve service efficiency to our customers in Southeast Asia, we have been locally active in Thailand, since March The Belgian company Weweler-Colaert once again saw a rise in the demand for replacement parts for trucks. In Western and Southern Europe, turnover rose by 10%. In Eastern Europe, too, the market share was further consolidated, and an active marketing policy also in collaboration with new distributors enabled us to once again strengthen sales in Asia. VDL Weweler Parts, supplier of truck and trailer replacement parts and workshop equipment can look back on a good year. In 2013, joint ventures were established for the Dutch market with external parties, for the supply of batteries, starters, alternators and electrical cable systems for trucks and trailers. Based on the growth achieved, the size of the parts store will be expanded in Our sales office in Norway, Truck & Trailer Industry, had a fairly good year, with a stabilisation of turnover. The fall in value of the Norwegian crown in relation to the euro did represent a problem. Further work was undertaken in 2013 on establishing a service network right across Norway, to improve customer service. The order book for the total suspension systems sector is well-filled and further growth is expected in Heat exchangers 2013 was a difficult year for the heat exchangers sector. Turnover fell from 105 million euro in 2012 to 87 million euro in Customers of VDL Klima experienced difficulty in financing new projects, and this situation is not expected to change in the near future. After several years of solid growth, we are now seeing a downturn in projects and orders for the market for (green) power generation, for example wind energy. It is expected to be quite some time before any recovery is achieved in this sector. In response to austerity measures, government stimulation programmes have been halted, making it difficult for the more expensive innovative green technologies to compete with conventional processes. The shipbuilding market, however, has shown slow recovery. The oil and gas market has developed strongly, and expectations are favourable. As expected, VDL Delmas in Berlin (Germany) and VDL KTI in Mol (Belgium) also broadly experienced a difficult year. VDL Delmas was faced with tough market conditions in the field of power generation, above all in the first six months of the year. This situation improved at the end of 2013, and the order book grew substantially. Things were better in petrochemical industry. At VDL KTI, demand for special heat exchangers lagged behind expectations, and delays in the production of high voltage masts grew even further. Recovery is expected on both markets in The order books for both companies are well filled. 25

28 As well as delivering to existing markets, products will also be delivered to China, Brazil, Venezuela and the United States. The market situation for the heat exchangers sector is improving slowly. We expect turnover in 2014 to match the level achieved in Cigar-making and packaging machines Although turnover at PMB-UVA International fell slightly, from 29 million euro in 2012 to 27 million euro in 2013, we are not dissatisfied with Once again, PMB-UVA International developed a series of innovative concepts, functions and machines resulting in new possibilities and low operating costs. By responding to global themes including food safety and hygiene, new product opportunities have been opened up. Proprietary features developed in-house are licenced to other OEM suppliers. This strategy, which has been in place for a number of years and was continued and expanded in 2013, has contributed to a rapid return on investments for the costs of development. The average series size of the machines being built has remained at the same level as in previous years. More focus has been placed on shortening the lead time of orders, to improve the response to customer requirements. PMB-UVA International s preferred supplier status for various multinationals in the packaging segment is a key element in creating new opportunities and challenges. For this segment, we broadened our market in 2013 into new disciplines, and delivered to more countries. A shift has occurred in the cigar market, towards more overhaul activities. Machine sales in this sector remained stable. Prospects for the entire cigar-making and packaging machines sector are positive. Sunbeds and roof boxes Turnover at Hapro International, manufacturer of sunbeds, roof boxes, bicycle carriers and skin improvement equipment, rose slightly from 25 million euro in 2012 to 26 million euro in This rise was above all achieved in the market for roof boxes. The market for professional and privately-owned sunbeds remained stable. This situation is expected to continue in Despite first signs of economic recovery, the retail trade is still suffering badly. This will affect turnover in roof boxes and bicycle carriers. The market for professional sunbeds is expected to remain stable. The market for privately-owned sunbeds is expected to improve slightly. All in all, in 2014, we expect to achieve practically the same level of turnover as in Systems for the agricultural sector VDL Agrotech has had a less positive year. Turnover fell from 31 million euro in 2012 to 22 million euro in The period within which the transition from battery hen cages to alternative housing systems had to be completed expired on 1 January As a consequence, less feed systems from VDL Agrotech were sold in Europe for these alternative systems, a fact which had a major influence on turnover. The project market also experienced difficulties, mainly in Eastern Europe. The Asian market is very price sensitive, and based on the euro exchange rate, turnover in this region only rose slightly. The additional sales efforts by VDL Agrotech in the Middle East are starting to bear fruit, but progress is precarious, due to the unstable political situation in many countries in the region. Expectations for 2014 are moderate. The project market is highly dependent on bank credit, and the political instability and currency fluctuations could have a major influence on investments in the agricultural sector. In 2014, focus will be shifted to product innovations and further broadening the geographical market spread. VDL Agrotech also plans to introduce a number of new developments in 2014, on the basis of which more competitive products can be supplied to existing markets. 26

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31 Container handling systems As compared to 2012, turnover at VDL Containersystemen rose slightly from 19 million euro in 2012 to 20 million euro in The truck-related turnover from existing products such as hook lift, skip loader and cable systems remained constant. The expected growth failed to materialise due to disappointing order intake from the construction and waste market. The turnover from spreaders did rise due to the completion of a number of national and international projects in which our delivered quality and delivery time often proved decisive. The introduction of our new product for the port sector, the AGV (Automatic Guided Vehicle) made a major contribution to the order book. One new large order recently received guarantees work for these projects until well into Partly thanks to this one order, the order book is well-filled, and we face the coming year with a positive attitude and expect a major rise in turnover. Systems for the industrial sector For VDL Industrial Products, 2013 was a positive year. Turnover rose from 8 million euro in 2012 to 9 million euro in In the course of the year, the company focused on a broader and more in-depth range of products, including the addition of vibration conveyors and flex conveyor systems for the process industry. These products have been manufactured by sister companies in the VDL Groep for several years, but only actively marketed in the solids handling by VDL Industrial Products, since There is no growth expected in the building-related sectors but there are opportunities for growth in export and other national markets such as the food and chemical industries. All in all we expect slight growth in New companies At the start of 2013, a new company was established, VDL Bus & Coach Service FRY-ZHN. This company carries out maintenance and repair work from four workshops in the Netherlands, in Leiden, Krimpen a/d IJssel, Sneek and Leeuwarden. The workshops were initially intended to provide maintenance and repair services for the concessions Zuid-Holland-Noord and Friesland, as part of the agreement for 275 public transport buses for Arriva Nederland. Activities have now been expanded to include maintenance and repair work on coaches, mini and midi buses and other vehicles. On 17 July 2013, the Technology & Development (T&D) department of VDL ETG Eindhoven was made independent. The new company, VDL ETG Technology & Development has a staff of around 130, involved in the design and development of solutions and products, specifically for the semi-conductor, medical, solar and LED industries. These solutions relate primarily to the transport and positioning of fragile substrates in a vacuum or atmospheric environment. VDL ETG Technology & Development brings together the development departments of the locations VDL ETG Eindhoven, VDL ETG Almelo, VDL ETG Research and VDL ETG Projects. The company operates from Eindhoven, Almelo, Delft and Fremont (USA). The establishment of VDL ETG Technology & Development is an important step in the process of change at VDL ETG aimed at developing from exclusively manufacturing into partner in the field of research & development, for its clients. 29

32 In August 2013, VDL Groep acquired the parts manufacturing activities of ASMI in Singapore, together with part of the assembly activities. The acquisition involves 75 employees. These activities have been fully integrated with VDL ETG Singapore. As a result, the overall technology services from VDL ETG Singapore have been broadened, in respect of the design and manufacture of complex, precision frames. Investments In 2013, VDL Groep invested 85 million euro, approximately one third in business premises and two thirds in machinery and other equipment. At VDL Nedcar in Born, together with BMW Group and a number of suppliers, much work was carried out in 2013 on adapting the plant to the requirements of BMW for the production of the new MINI. The work ranged from construction and logistic changes through to the installation of new production facilities. As a result, VDL Nedcar is now almost ready for the launch of production of the new MINI in the summer of At VD Leegte Metaal in Hapert, the existing premises were renovated and additionally insulated in This project was concluded in mid In April, the floor of one hall at VDL Steelweld in Breda was adapted for the AGV project. Here, too, the premises were reinsulated. Following a construction period of eighteen months, the new premises for VDL ETG in Singapore were opened in mid-november. Expansion was necessary based on the massive growth at the business over the past few years, and expected growth in the future. A start was made on construction of the new 20,000 m² plant in 2012, on the derelict site behind the existing plant. The new premises, built on three floors, comprise production space, assembly space, cleanrooms, storage warehouses and offices. The original factory (7,400 m²) is linked to the new plant, and will be renovated in VDL ETG Singapore now occupies a total space of 27,400 m². The new building for the suspension system manufacturer VDL Weweler in Apeldoorn was opened at the end of November. The new building, occupying some 22,000 m² consists of eight halls each of approximately 2,500 m². Four of these halls are intended for the production of suspension systems and axles. The remaining areas will be used for assembly, dispatch and offices. The floors in the dispatch halls will be heated by residual heat from the production process and a ground loop heat exchange system is responsible for heating and cooling the office space. The new building has also been fitted with a completely new production line developed and automated entirely in-house by VDL Weweler. In this new production line, a range of production processes have been combined, that in the past were carried out separately given the nature of the former location. At the end of 2013, work was started on the construction of a new factory for Klima Warmtetechniek in Hamont (Belgium), due to be handed over at the end of In total, the building will measure 12,500 m², of which 10,500 m² will be for production and 2,000 m² for offices and canteen. 30

33 The building of VDS Technische Industrie in Hapert is due to be renovated in three phases. Phase one, will involve demolition of part of the adjacent building and the building of a new facility for dispatch and container storage was completed in The start of phase two, encompassing demolition of the remaining part of the building and construction of a new production hall, canteen and measurement room is planned for the construction industry holiday period in Finally, the existing canteen and wash area will be converted into office space. The VDS Technische Industrie building will then measure a total of 23,000 m². Part of the hall at VDS will also be raised, to allow use of the building by VDL Gereedschapmakerij for the storage and maintenance of moulds. In total, VDL Groep owns more than 1,200,000 m² of commercial property. In 2014, premises at VDL ETG Almelo and VDL ETG Eindhoven were purchased. In 2015, the existing buildings will be renovated and extended with new building for additional capacity. For VDL Wientjes Roden, a new approximately 14,000 m² building has been purchased, on a 40,000 m² plot. In 2014, the company will be moving to this new location. Since April 2014, the head offices of VDL Bus & Coach have been housed in the premises of VDL Bus Valkenswaard. A large proportion of activities previously undertaken centrally have therefore been returned to the operating companies that make up VDL Bus & Coach. The staff of VDL Bus & Coach Nederland and VDL Busland have also been stationed in the VDL Bus Valkenswaard building since April. In Germany, preparations are currently underway for new premises for VDL Delmas in Berlin, construction of which will be started in VDL also invested heavily in machinery and other equipment in A range of CNC machining centres, laser pipe cutting machines and welding and laser robots have been installed. In 2014, we are going to invest around 90 million euro in new buildings, machines and optimisation of production processes. Employees The number of employees at VDL Groep has risen from 8,757 at year end 2012 to 9,216 at year end 2013, which is 5% more than at the end of The vast majority of these 459 new employees were achieved through autonomous growth. 75 employees entered the service of VDL ETG Singapore, following the takeover of the production activities of ASMI in Singapore. EMPLOYEES (as at 31 December, including temporary employees)

34 EMPLOYEES BY GEOGRAPHICAL AREA (as at 31 December 2013) Netherlands 7,392 (80%) Belgium 860 (9%) Rest of Europe 344 (4%) Rest of the world 620 (7%) Total number of employees 9,216 EMPLOYEES BY DIVISION (as at 31 December 2013) Subcontracting 4,142 (45%) Car assembly 1,653 (18%) Buses & coaches 1,777 (19%) Finished products 1,504 (16%) Head office in the Netherlands and Belgium 140 (2%) Total number of employees 9,216 Worker participation In 2013, we consulted with the Joint Works Council on numerous occasions. As in previous years, these consultations were open and positively critical. The first topic of discussion in 2013 was the prognosis report. This report represents the kick-off for the new year. Another regularly recurring subject of discussion in 2013 was progress at VDL Nedcar (renovation, service centre and training programmes). There was also discussion of the way in which practical trainees (vocational training pathway BBL) should account for their hours. The percentage indirect hours among BBL trainees is higher than for other employees, as a result of practical supervision and training. A uniform policy has now been adopted, to clearly identify when the employees in question are in fact trainees. A higher percentage of indirect hours may never be allowed to lead to less training provision. The number of employees subject to the Work and Income Act (WIA) and the resultant claim burden has developed favourably over the past few years. In connection with this continuing low rate of WIA entry, VDL Groep is still willing to pay for the employer s share (50%) of the differentiated Work and Income Act premium. Other discussion topics included shorter working days leave, the statutory excess payment in medical expenses insurance in the event of industrial accidents and the writing off of doctor s hours during work as part of employment therapy. The restructuring of the management of VDL Groep was also discussed, together with the introduction of family members in the management team. Social dialogue within the Belgian VDL companies was also conducted in a constructive manner in