VDL GROEP ANNUAL REPORT 2014

Transcription

1 VDL GROEP ANNUAL REPORT 2014

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3 VDL GROEP ANNUAL REPORT 2014 VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands Phone +31 (0) Fax +31 (0) [email protected]

4 CONTENTS 3 Financial highlights 4 Profile 5 Group structure 7 Report of the Board of Management 43 Report of Supervisory Board 44 Auditor s report 45 Subsidiaries 57 Financial report Principles for valuation and determining the result 2

5 FINANCIAL HIGHLIGHTS (x 1,000 euro) Combined turnover 2,545,519 1,812,313 1,756,354 1,718,724 1,472,373 Consolidated turnover 2,342,041 1,632,108 1,628,857 1,574,805 1,353,726 Gross profit 117,988 95,610 87,407 96, ,779 Profit before tax 120,209 98,027 75,679 83,377 97,447 Profit before tax / turnover 4.7% 5.4% 4.3% 4.9% 6.6% Net profit 104,247 88,582 56,755 66,014 76,762 Net profit / turnover 4.1% 4.9% 3.2% 3.8% 5.2% Depreciation of (in)tangible fixed assets 46,300 47,326 32,490 30,465 28,844 Cash flow 150, ,908 89,245 96, ,606 (Dis-)investments including acquisitions 114,459 82, ,072 52,100 29,445 Equity 924, , , , ,679 Total assets 1,660,407 1,382,879 1,403,669 1,062,228 1,017,657 Equity / total assets 55.7% 61.8% 56.2% 54.4% 52.8% Net profit / equity 11.3% 10.4% 7.2% 11.5% 14.3% Employees as at 31 December 10,303 9,216 8,757 7,135 7,126 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 85 subsidiaries spread over 19 countries and a workforce of approximately 10,300. 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, waste collection systems, cigar-making and packaging machines, components for bulk handling and dust extraction installations, and 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 VDL 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 VDL HMI VDL Bus & Coach France VDL Klima Belgium VDL NSA Metaal VDL Bus & Coach Italia VDL Klima France VDL 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 Translift VDL RPI Metaal VDL Bus & Coach South Africa (70%) VDL Weweler VDL Rotech VDL Bus & Coach Serbia VDL Weweler Parts VDL Systems VDL Bus & Coach Danmark Weweler-Colaert VDL Postma VDL Bus Center Nederland Truck & Trailer Industry VDL Industrial Modules VDL Bus Center Deutschland PMB-UVA International VDL Konings VDL Busland VDL USA VDL Wientjes Roden VDL Bus & Coach Service FRY-ZHN VDL Middle East VDL Wientjes Emmen VDL Bus & Coach Service Brabant VDL Services VDL Parts VDL Enabling Technologies Group 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 VDL Fibertech Belgium VDL GL Precision (as of 3 March 2015) 5

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9 REPORT OF THE BOARD OF MANAGEMENT This has been a remarkable year for VDL Groep, with the reopening of VDL Nedcar by King Willem- Alexander and the launch of MINI production in the Netherlands, on 17 July Another milestone in our history was the arrival of the 10,000th employee in August, at VDL Steelweld in Breda. From a financial point of view, 2014 was a stable and favourable year for VDL Groep, with four solid quarters. In every respect, 2014 became a record year. Naturally, the start of production at VDL Nedcar had a positive influence on results, but even without this contribution, we can look back on a year of growth. Combined turnover rose from billion euro in 2013 to billion euro in Consolidated turnover amounted to billion euro as compared to billion euro in Net result rose from 88.6 million euro in 2013 to million euro in The tax burden in the first half of 2014 was lower, based on the forecast fiscal loss at VDL Nedcar. Total turnover for 2014 was the best in our history and that is a performance we can be proud of. This fact offers further room for investments in The balance sheet position remains unabatedly strong, with a solvency of 56%. The number of employees rose from 9,216 at year end 2013 to 10,303 at year end 2014 (of which 81% employed in the Netherlands). 94% of this 1,087 person increase was achieved autonomously. The other employees entered the service of our business following the takeover of Translift (Dronten). This autonomous growth demonstrates that production in the Netherlands and Belgium still remains possible. Nonetheless, a sound industrial policy is vital. 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 benefit and flexible employment schemes for the over 55s and technical training programmes are of key 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 they treat us. Only then can employment opportunities in Europe 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 2014 amounted to billion euro. As compared to the billion euro in 2013, this represents an increase of 41%. Internal deliveries also increased, but fell as a percentage of total turnover million euro million euro Combined turnover 2,546 1,812 Internal deliveries Consolidated turnover 2,342 1,632 The balance between international and domestic turnover clearly changed in The share of international turnover rose by 10% in 2014, as compared to This is mainly due to the start of production at VDL Nedcar for our client BMW Group in Germany million euro % million euro % International 1, , Domestic ,342 1,632 In 2014, we supplied products worldwide to 111 countries outside the Netherlands. International turnover, divided among the various continents, is as follows: Europe billion euro (41 countries), Asia 137 million euro (30 countries), North America 48 million euro (2 countries), South and Central America 28 million euro (15 countries), Africa 11 million euro (20 countries) and Oceania 4 million euro (3 countries). If turnover is broken down country by country, we see that Germany has become our largest market, even overtaking the Netherlands. In addition, Sweden and Great Britain were important markets. 8

11 TURNOVER PER COUNTRY (in million euro) Germany 970 Netherlands 543 Sweden 108 Great Britain 106 Singapore 92 Belgium 84 Spain 53 France 51 USA 47 Finland 32 Switzerland 26 Poland 25 Italy 25 Jamaica 25 Norway 20 Czech Republic 12 Denmark 12 Others 111 Divisions If the combined turnover of VDL Groep is broken down according to the divisions subcontracting, car assembly, buses and coaches and finished products, we see that all divisions contributed to grow, whereby car assembly made the greatest contribution million euro % million euro % Subcontracting Car assembly Buses and coaches Finished products ,546 1,812 Subcontracting Turnover in the subcontracting division rose fractionally from 794 million euro in 2013 to 795 million euro in The semiconductor and automotive market, both important to this division, showed a slight downturn in the second six months. At year end 2014, the order book amounted to 250 million euro, as compared to 237 million euro at year end The subcontracting division showed a profit in 2014, although the result was less than last year. In 2014, VDL invested heavily in research and development capacity with a view to further optimising our expertise as a high-tech subcontractor. The outcome was open cooperation with customers in the field of research and development. Collaboration with ASML was for example intensified, whereby VDL adopted full responsibility for the design and fabrication of the wafer handler at ASML. Turnover in the subcontracting division rose by more than 10% in the first quarter of 2015, from 194 million euro in the first quarter of 2014 to 214 million euro. The order book in week 13 amounted to 261 million euro, which was higher than in the same week last year (250 million euro). The semiconductor and automotive market, both important for this division, appear to be showing some recovery, and expectations for 2015 are reasonably good. 9

12 SUBCONTRACTING Mechatronic systems 53% Metalworking 37% Plastics processing 9% Surface treatment 1% million euro % million euro % Mechatronic systems Metalworking Plastics processing Surface treatment Mechatronic systems and system supply Turnover in the mechatronic systems and system supply sector fell from 432 million euro in 2013 to 422 million euro in This was mainly due to the temporary delay in the definitive breakthrough by EUV, the next generation of lithographic systems for the semiconductor industry. This delay meant a fall in demand for those technologies in which VDL has traditionally occupied a solid position such as lithography and metrology. To meet growing market demand for other semiconductor technologies deposition and etching, VDL further expanded its presence in Silicon Valley (United States). This is the leading region where there is a concentration of businesses specialising in those fields. This made it possible to respond better to the ever continuing clustering of businesses operating worldwide in the sector of production equipment for semiconductors. The markets for production equipment for LED and solar cells developed as expected during the course of last year. Alongside these markets, in 2014, VDL also focused considerable attention on the market for equipment for scientific and technological applications. Important steps were for example taken in cooperation with institutes including CERN and PSI, in the field of linear accelerators, and with ESO in relation to the development of the world s largest telescope in Chile. We expect moderate growth in 2015, fuelled by an upturn in previous generation products for our customers in the semiconductor industry. As a consequence of the ever broader use of semiconductors, this generation of products can once again be deployed competitively. The order book remains stable, and we predict a positive year, in particular now the figure for VDL GL Precision in Eindhoven will be included in this sector. This company, with a staff of 150, was taken over in March 2015 from Gerard van der Leegte, the brother of Wim van der Leegte. 10

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15 The activities of VDL GL Precision, in particular in the field of high-end processing technologies, tie in well with the existing activities of the mechatronic systems and system supply sector. The company specialises in the manufacturing of very complex fine-mechanical components and assemblies for among others the semiconductor industry, the aerospace industry and the optical industry. The core activities of the business also include a number of specific processes including microlaser welding, representing an important addition for VDL Groep. Metalworking Turnover in the metalworking sector grew from 290 million euro in 2013 to 294 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, construction and infrastructure, and the waste processing industry. New markets are constantly being explored, and new products are being developed that fit in with the current product range. Over the past year, we once again invested in advanced machinery and further automated production processes to maintain our international competitive position. For example, on 1 January 2014, VD Leegte Metaal in Hapert obtained the international NEN-EN 1090 welding certificate in the highest execution class 4. This means that the metalworking company is authorised to weld construction parts in the heaviest category. In particular for orders from the construction and infrastructure market, this new standard is of key importance. VDL has numerous customers in this sector. To meet the needs of our customers in the automotive industry, in particular at VDL VDS Technische Industrie in Hapert, we considerably expanded the machine fleet with a series of new machines, a 3D laser cutting machine, two flanging machines, a CNC spot welding robot and an automated welding cell. Increasingly, VDL companies are required to supply ever more complete products, products manufactured using follow on-bending-butting tools, followed by a variety of fastening techniques such as robot welding, spot welding and/or a whole range of assembly activities. Using these machines we can easily fulfil these requirements. The prices in this sector remain under pressure due to the availability of products from low wage countries, and customers demand 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 2015 can be described as broadly positive, and slight growth is expected. 13

16 Plastics processing Turnover in the plastics processing sector rose by 11%, from 65 million euro in 2013 to 72 million euro in The automotive sector and medical industry were once again key markets over the past year. VDL Wientjes Roden moved to a new location with cleanroom facilities. Investments at this company also included a lathe and a cutting machine. Together with VDL Parree, a 3D photographic measurement system was purchased; a very precise system that is also suitable for reverse engineering (product improvement) and that has already been deployed on several occasions, at specific customer request. At VDL Parree in Sevenum, investments were also made in three new injection moulding machines (80, 140 and 500 tonnes) and a CNC processing machine for tool making. This makes it possible to deploy a variety of new techniques during the injection moulding process, such as Mucell (for weight saving and shape retention in the product) and prägen (to reduce internal tensions in the product). VDL Kunststoffen saw deliveries to the logistic sector rise considerably in These deliveries focused mainly on components and assemblies for internal transport systems for distribution centres for consumer articles sold online. VDL Fibertech Industries strengthened its position for composite (carbon and glass fibre-reinforced) plastics in 2014 with the takeover of the activities of Acrosoma in Belgium. This has added to the range of possibilities a promising technique of stitched and pultruded sandwich panels (drawn through a mould). Possible applications have been expanded to include aerospace and transport. These investments in the latest machines, techniques and automation, combined with our high level of knowledge in the field of plastics mean that we can increasingly act as a system supplier in successfully tackling the complex problems posed by our customers. The order book for the total plastics processing sector is currently reasonably well-filled. Despite the considerable rise in raw material prices, prospects for 2015 are fairly positive, and we expect turnover to be slightly higher than in Surface treatment Turnover in the surface treatment sector remained practically unchanged (7 million euro). In 2014, VDL Laktechniek stood out as a logistic partner for Volvo. From Eindhoven, the parts painted by us are transported directly to the various production locations in Europe. To meet this customer requirement, we equipped a new warehouse. Our competitive position has been strengthened, and despite price pressure from the automotive sector, the forecast for 2015 is that turnover will rise slightly, as compared to

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18 Car assembly The car assembly division made a contribution to turnover of 775 million euro in 2014, as compared to 120 million euro in This turnover was not only achieved from the production of cars on behalf of BMW Group, but also from the work by seconded personnel to other companies, the supply of press work to third parties, and engineering and installation work. The start-up costs for the first six months of 2014 were compensated for by the provisions established for that purpose. VDL Nedcar contributed to the result in 2014, with a slightly positive result million euro % million euro % Car assembly The first six months of 2014 were hallmarked by completion of the technical alterations to the production facilities in and around the plant. At the same time the first trial series of the new vehicles were built, and the production facilities tested. More than 800 new employees were recruited and trained. At the latest by 1 January 2015, all 1,500 original staff were to have returned to work at VDL Nedcar, but this target had already been achieved by mid-2014, and the number of employees actually rose to almost 2,500 at year end. 17 July 2014 was the big day: VDL Nedcar in Born was officially reopened by King Willem-Alexander. On this occasion, the starting signal was also given for MINI production in the Netherlands. The King s grand mother and mother preceded him by opening the car plant in 1968 and the refurbished production halls in We can look back on a memorable day that we were able to celebrate together with our employees, customers and business relations. Since last summer, VDL Nedcar has been producing the 3-door MINI Hatch, on behalf of BMW Group. The start of production went according to plan. Quality and delivery reliability easily meet the requirements imposed. In 2014, VDL Nedcar produced a total of 29,196 vehicles, all of the type MINI Hatch. In 2014, VDL Nedcar also focused on expanding its strategy of developing into a fully independent vehicle manufacturer, producing on behalf of third parties. An active policy of acquisition is in place, for attracting new customers. Together with the relevant government bodies, we are investigating the possibilities of equipping the space and infrastructure efficiently and sustainably for future growth. Finally, work is actively underway on increasing utilisation of the production capacity in the press hall. 16

19 Production volumes are expected to rise considerably as compared to 2014, and for the longer term prospects for growth in production numbers and employment are favourable. A number of investments are planned: premises were recently purchased adjacent to the VDL Nedcar site. We will also be focusing on strengthening and expanding our competences and on the acquisition of new orders. Clear attention will also be paid to spatial planning. As an independent car manufacturer, VDL Nedcar will continue to adopt a flexible attitude in respect of its clients. During the first quarter of 2015, VDL Nedcar generated turnover of 224 million euro as compared to 178 million euro in the first quarter of last year. The order book is well-filled, both now and for the long term. Production is in line with planning and prospects for 2015 are positive. Buses & coaches Turnover in the buses & coaches division rose from 391 million euro in 2013 to 417 million euro in The order book also grew from 128 million euro to 197 million euro at year end. Following a very slight upturn in 2013, the bus and coach market in Europe continued to shrink. Competition from vehicles from low wage countries continues to grow. Nonetheless, the buses & coaches division succeeded in substantially improving the result, although remaining slightly loss-making. This is partly due to high development costs for new products and production processes in The number of buses and coaches sold in 2014 was 42% higher than in 2013 (1,490 as compared to 1,046), thereby increasing our market share. Our complete range of vehicles, both for public transport and coaches, has now been successfully placed on the market, in a Euro 6 version. Heavy investments were also made in hybrid and electrical drive systems which for the first time made a considerable contribution to the order book, in Over the past year, the effects of a number of organisational changes became more visible. Efficiency and effectiveness in the buses & coaches division have been further increased. For 2015, the focus will be on further intensifying efforts in our domestic markets for both coaches and public transport buses. We will also be focusing further on our export markets. As a result, we expect a higher number of deliveries in 2015 than achieved in During the first quarter of 2015, turnover remained almost unchanged from the first quarter of 2014: 102 million euro. The order book grew as compared to last year from 139 million euro in week 13 of 2014 compared to 186 million euro this year. VDL expects a reasonable year for the buses & coaches division. 17

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21 BUSES & COACHES Coaches 37% Public transport buses 31% Parts & services 16% Second-hand buses 10% Mini & midi buses 4% Chassis & chassis modules 1% High-quality Public Transport Systems 1% million euro % million euro % Coaches Public transport buses Parts & services Second-hand buses Mini & midi buses Chassis & chassis modules High-quality Public Transport systems Coaches In 2014, turnover in the coaches sector rose from 136 million euro to 154 million euro. However, the number of coaches delivered fell from 561 in 2013 to 544 in The changing product mix and the higher price for Euro 6 vehicles had a positive influence on the turnover. Our customers, the coach operators, have been facing a difficult market for years; a situation reflected in their investment behaviour. The introduction of the new Euro 6 technology may have resulted in a better and more environmentally-aware industry, but costs continue to rise and these increases are difficult for coach operators to pass on to their end customers. This is also the reason why during the first six months, many Euro 5 coaches deliberately produced for stock were sold. From the summer of 2014 onwards, these vehicles were sold out, and the complete switch was made to Euro 6 vehicles. Also in 2014, VDL Bus & Coach delivered the first Futura FMDs (Futura Medium Deck). The FMD is a new, lower variant within the Futura family. It is a profitable all-rounder, that can be deployed for both the touring and higher end intercity market. The core values of our production range, low vehicle weight, low fuel consumption, high passenger capacity, ample baggage space and low kilometre price make the Futura FMD a high-value investment for operators. In 2014, 65 of these new FMDs were sold. 19

22 The total market volume for coaches in 2014 was just under 3% larger than in This slight growth was primarily achieved in Germany, Spain, Great Britain and Ireland. Italy and France saw a slight fall as compared to The total market share in the Western European coach market achieved by VDL Bus & Coach rose slightly from 6.7% to 6.8%. The greatest progress was achieved in Sweden, where the FMD2 was sold in large numbers. We expect the coach market to remain under considerable pressure over the next few years, but to show slight recovery in the countries of Southern Europe. The first indications of an upturn are already visible in Spain and in Portugal, although it is too early to talk of a trend. We continue to focus on further developing the Futura family, and we will be adding a new double-decker model in Public transport buses The public transport bus sector has completed a good year, with an upturn in both turnover from 102 million euro to 129 million euro, and in the number of delivered buses. In 2014, we delivered 637 vehicles, as compared to 561 vehicles in In a number of countries, limited numbers of public transport buses were purchased in response to government austerity measures, but this was easily compensated for by higher numbers purchased in Scandinavia, Germany, the Netherlands and Belgium. Competition has become more cut-throat, but we have succeeded in maintaining employment opportunities in the bus sector in the Netherlands and the Flanders region of Belgium, despite increased price pressure combined with suppliers from low wage countries. The rise in the number of deliveries was mainly due to the Scandinavian market, where once again many public transport companies have opted for VDL products. In Finland, for the third successive year, VDL is again market leader thanks to the complete acceptance of the light-weight concept employed in the Citea Light Low Entry (LLE). This represents huge advantages as compared to all other competitors, in particular thanks to the low emission level as a result of favourable fuel consumption and lower operating costs. More and more cities in Germany have also discovered the Citea LLE, including Düsseldorf and Berlin. Following intensive testing, Berlin opted for the LLE in 2014, as its 12-metre city bus for the coming year. In total, 236 LLEs were purchased by Berlin, to be supplied by VDL between 2015 and In the Netherlands itself, VDL also supplied 164 Citea LLE vehicles, for use in the Province of North Brabant. In addition to a number of electrical projects, including a pilot involving 15 Citea Electrics for the Province of North Brabant, a large order for 120 hybrid buses was awarded for De Lijn, in Belgium. These vehicles are to be delivered in Total market volume for public transport buses in Western Europe fell by 4% as compared to This fall was mainly caused by a major downturn in France, Italy and Great Britain. Despite this fall, VDL Bus & Coach increased its market share in the Western European public transport market, by almost one percent, from 5.50% in 2013 to 6.45% in

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25 We expect a stable or slight downturn in the market for In particular in VDL s key public transport markets, few deliveries are expected, due to an overall fall in the number of tenders for deliveries in However, the situation is expected to turn around, in VDL will be further investigating the possible applications of hydrogen, and will be focusing more intensively on E-Mobility. The VDL Citea Electric has already been introduced, whereby the high degree of modularity in the Citea 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 light-weight construction, optimum access and comfort for both passengers and drivers can be guaranteed, as a result. There are already projects in Finland, Sweden, Germany and the Netherlands, whereby during the course of 2015, 12 and 18-metre articulated versions of the electrical buses will be delivered. The 18-metre buses for the German city of Cologne will be given a new BRT (Bus Rapid Transit) design. In Belgium, the 120 Citea SLF hybrid buses are due to go into operation. The Citea SLF Hybrid is based on the Citea Electric and uses the same modular construction. Parts & services Despite increased competition, 2014 was a good year for parts & services, with growth in turnover of 15% (from 60 to 69 million euro). For parts & services, the bus and coach market is in a considerable state of flux, with prices for parts and repair & maintenance conditions under huge pressure. This is partly due to ever growing numbers of suppliers from China, Brazil and India, who are attempting to acquire a greater market share in Europe. Central Service (previously a division within VDL Bus & Coach) was physically and organisationally integrated with VDL Parts in January As a result, all VDL Bus & Coach after sales activities have been centralised at a single location at VDL Parts in Veldhoven. In 2014, VDL Parts achieved growth in England, the United Arab Emirates, Scandinavia and Germany. Turnover growth was also achieved in the Benelux countries. Due to the absence of tenders in a number of other export countries, sales in those countries actually fell, for example in South Africa, Jamaica, and Ghana. VDL Parts achieved its first Bus Related Parts success in Over the next two years, we will be supplying parts for non-vdl buses to a large public transport operator in Germany. This year, Bus Related Parts is on the agenda to become an ever larger proportion of our turnover, but that will require further intensifying the relationship with our sales network and end customers. In 2014, VDL Busland moved from Eindhoven to Valkenswaard, where it now shares premises at the VDL Bus Valkenswaard location, together with VDL Bus & Coach Nederland. The aim of this move is to improve service to our customers for maintenance, repair, and damage repair. In the domestic market in the Netherlands, VDL Busland once again achieved considerable advances, in Alongside the already existing workshops, new workshops were opened in Den Bosch and Tilburg at the end of 2014, raising the number of VDL Bus & Coach workshops in the Netherlands to seven. 23

26 Prospects for 2015 are positive. We will continue to invest in strengthening our commercial activities, above all with a view to expanding our VDL Bus & Coach after sales activities. Second-hand buses The stabilisation in turnover expected for 2014 did indeed continue, so that turnover at VDL Bus Center remained the same, at 41 million euro. The total number of buses sold fell from 802 to 479, but the proportion of young second-hand buses sold was higher than in The number of second-hand public transport buses sold fell from 417 to 113. This fall was due to the postponement of purchase decisions to 2015 and uncertain political situations in a number of important sales markets. The number of coaches and mini & midibuses sold fell from 385 to 366. However, sales of coaches to new European Member States rose, and VDL Bus Center expects further growth on this market in This growth is due to more intensive collaboration with the existing sales network, on which much energy was spent over the past few years. These efforts will be further expanded in In 2015, our focus will be on cooperation with new local professional agents for export outside Europe, and these efforts are expected to start to bear fruit over the coming year. The activities of VDL Bus Center France were fully integrated in the VDL Bus & Coach France sales organisation, in December This move will have a positive impact on the figures for VDL Bus Center in We expect turnover to remain at a similar level, in Mini & midi buses Turnover in the mini & midi buses sector (including police vehicles and damage repair) rose from 12 million euro in 2013 to 16 million euro in The number of vehicles delivered rose from 132 in 2013 to 172 in The focus we have placed on the MidCity and international tenders in the public transport market over the past few years was continued. The order for MidCitys for public transport in Belgium was fully delivered in 2014, and was followed by a further major series order. As expected our market share in Germany, Belgium and the Scandinavian countries rose further in 2014, and we predict further slight growth in In particular prospects are positive in Germany, and in Italy we are gaining ground. We are seeing signs of recovery in the Netherlands, and we above all supplied more VIP vehicles and luxury buses for airport transport and hotel shuttles. The demand for new police vehicles was below expectations, but the upgrading and alteration of existing vehicles influenced turnover positively, as was the case in In 2015, we expect to once again deliver more new vehicles, and to achieve higher turnover in the special (electrically-powered) vehicles and projects. Turnover in the damage repair division fell slightly in Despite a shrinking market and major changes among our clients, we have a broadly positive view for the future in this division. The order book for the entire mini & midi buses sector is well-filled and we therefore expect further growth for

27 Chassis & chassis modules External turnover for chassis and module builder VDL Bus Chassis fell from 36 million euro in 2013 to 6 million euro in This fall in turnover was due to delivery of modules to bus and coach builders outside VDL, that fell from 586 chassis in 2013 to 278 in Sales generated by deliveries to sister companies within VDL Bus & Coach for the construction of complete vehicles, on the other hand, rose considerably from 747 to 1,094 modules. The total number of modules delivered therefore rose from 1,333 in 2013 to 1,372 modules in In 2014, VDL Bus Chassis successfully transformed its chassis configurations for the European market to the Euro 6 standard. Euro 3 and Euro 5 chassis remain available for delivery, but only for the export market outside Europe. Engineering activities in 2014 were above all hallmarked by the further optimisation of the product range, with lower weight and improved emission values. The core competence in the field of driveline technology was further extended over the year just ended. In the field of innovation, VDL Bus Chassis above all achieved progress with the development of hybrid and fully electrical bus systems. In 2015, this development will be added to the core competences. In production, continuous improvements are being achieved in the logistic process and assembly process, in turn leading to higher quality and lower costs. The principles of lean manufacturing are the basis for further production optimisation. The final changes were made to the assembly line, last year. In 2015, a start will be made on further automating the welding process. Partly thanks to stabilisation of the market, total external turnover in 2015 is expected to remain at a level similar to that achieved in High-quality Public Transport Systems Turnover in the High-quality Public Transport Systems sector fell from 4 million euro in 2013 to 2 million euro in APTS (Advanced Public Transport Systems) in Helmond, a company in which VDL Groep held 70% of the shares, was unfortunately forced to cease activities in November Over the past few years, the company has been faced with loss-making projects in France and in Italy. Part of the payments for these projects remained uncollected and there were numerous technical/commercial points of discussion. Because there was no sign of improvement in this situation in the short to medium term, the shareholders alongside VDL Groep also Simac (18%) and BOM (12%) recognised the need to halt these activities. APTS employed a staff of 15. All employees were offered alternative employment at VDL Bus & Coach. The Phileas vehicles operating in Eindhoven, Istanbul, Haifa, Cologne and Douai are not to be removed from the road, and VDL Bus & Coach will continue to carry out maintenance. 25

28 Finished products Turnover in the finished products division rose by 10% from 507 million euro in 2013 to 559 million euro in 2014, with a positive result. All sectors in this division had an excellent year. Although the order book shrank from 282 million euro at year end 2013 to 189 million euro at year end 2014, this was above all due to the fact that the sector production automation systems had an extremely well-filled order book at year end VDL Steelweld has now completed a large number of projects, so the total order book for the finished products division has fallen to a normal but still good level (187 million euro at the end of week ). Turnover in the first quarter of 2015 amounted to 105 million euro, which although 5% lower than in 2014 (111 million euro) in no way changes the fact that prospects for 2015 are favourable. FINISHED PRODUCTS Production automation systems 36% Suspension systems 24% Heat exchangers 17% Container handling equipment 8% Cigar-making and packaging machines 5% Sunbeds and roof boxes 4% Systems for the agricultural sector 4% Systems for the industrial sector 2% million euro % million euro % Production automation systems Suspension systems Heat exchangers Container handling equipment Cigar-making and packaging machines Sunbeds and roof boxes Systems for the agricultural sector Systems for the industrial sector Production automation systems 2014 was a good year for production automation system manufacturer VDL Steelweld in Breda. Turnover rose by 7% from 187 million euro in 2013 to 201 million euro in 2014, breaking through the 200 million euro barrier for the first time. 26

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31 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 (the Netherlands), Barford (Great Britain), Cologne (Germany) and Arad (Romania). At the start of 2014, a new plant was also opened in Torslanda, Göteborg (Sweden). Successes were also achieved outside the automotive industry. Together with a number of other VDL companies, series production of the previously developed AGV (Automatic Guided Vehicle) is fully up and running. Also in 2014, a start was made on the development and construction of two prototype AGVs for the port of Singapore. These activities are due to be further expanded in The order book was very well-filled at the start of 2015 and 2015 is expected to be an excellent year. As well as maintaining the market position in Europe, the focus in 2015 will above all be on the further internationalisation of activities. A VDL Steelweld entity is due to be established in China, and a joint venture will be established in India, to support both VDL Steelweld and other VDL companies (in particular in the buses & coaches division) in the first instance in relation to engineering and design. VDL Steelweld will also be tackling the American market. We will of course continue to work on a range of product innovations, and the development and optimisation of production methods. Suspension systems Total turnover in this sector rose by 3% from 129 million euro in 2013 to 133 million euro in Suspension systems manufacturer VDL Weweler holds almost 40% of the European market. Worldwide, the share in the sale of air suspension systems for trucks and trailers is approximately 20%. Now the construction of a new production company in Apeldoorn has been completed, the focus is on new markets outside Europe. For customers, quality is becoming ever more decisive as compared to where in the world the suspension systems are produced. This offers opportunities for VDL Weweler, since the quality of its products is very high, thanks to the high level of automation. The infrastructure in China is constantly improving, leading to steady growth in the demand for air suspension systems for trailers in that country. For that reason, a new trading office will be established in China in 2015, VDL Weweler Asia, to improve the level of service to the market in Southeast Asia. VDL Weweler Parts, supplier of truck and trailer replacement parts and workshop equipment, continued the growth experienced over the past few years, through The warehouse in Apeldoorn has moved to a larger location, and now serves as the central distribution centre for the other locations in Best, Hoogezand, Moordrecht and Kapelle. In Kapelle, where space is rented from sister company Hapro International, warehouse space was doubled in 2014, and sales offices were built. These investments were necessary to enable us to further expand our product range and service provision, in 2015 and beyond. Following a successful first six months, turnover figures of the Belgian company Weweler-Colaert developed less steadily in the second six months of 2014, due to the political crisis in Eastern Europe. In terms of turnover, Weweler-Colaert closed the year at a level similar to that achieved in The company, market leader for the replacement market in Europe, also succeeded in further strengthening its position in Asia, in the year just ended. 29

32 Our sales office in Norway, Truck & Trailer Industry, had a good year, with a slight rise in turnover. Above all the first three quarters were excellent. Towards the end of the year, sales of suspension systems and spare parts stagnated, due to the low oil price and the fall in the value of the Norwegian krone, as compared to the euro. This was compensated for by sales activities at the various Truck & Trailer Industry service points. The order book for the total suspension systems sector is well-filled and further growth is expected in Heat exchangers 2014 was a good year for the heat exchanger sector, despite continuing difficult market conditions. Turnover rose by 8% from 87 million euro in 2013 to 94 million euro in VDL Klima saw slow growth in the shipbuilding market. The number of investments in the oil and gas market improved. The market for wind energy also performed well, in particular in France. At the end of 2014, new premises were opened for the production plant in Hamont-Achel (Belgium) with state-of-theart machinery for the production of heat exchangers. The major fall in the oil price is expected to have a negative effect on current and new investments in the oil and gas markets. As a result, investments in green energy are also likely to stagnate. The huge fall in the value of the euro as compared to the dollar is expected to have a positive influence on exports. For VDL KTI in Mol (Belgium), 2014 was a year of recovery as compared to 2013, for both heat exchangers and high-voltage masts. At the start of 2014, VDL KTI received a major order for high-pressure heat exchangers for the Chinese market. Production was also started on a series of high-voltage masts for the Dutch market. Alongside these standard products, major orders were also received for barrels intended for the Dutch petrochemical industry, and orders for the production of scrubbers. These scrubbers will be used for cleaning exhaust gases from ships. Based on current legislation, we have positive expectations for this product. In 2015, VDL KTI expects this positive trend that started in 2014 to continue. At VDL Delmas in Berlin (Germany), growth was also achieved, but given the current market situation, it is proving difficult to maintain turnover at this level. Above all on the energy market, the situation remains difficult because of political unrest and inconsistent energy policy by various governments. The result is considerable uncertainty among investors. To retain the positive line, more focus is being placed on exports, for example to India, Brazil and America. The same level of turnover is expected in 2015 as that achieved in The prospects for the total heat exchangers sector are cautiously positive. We expect turnover in 2015 to match the level achieved in Container handling equipment Turnover in the container handling equipment sector rose considerably from 20 million euro in 2013 to 48 million euro in

33 VDL Containersystemen can look back on a very good year. Truck-related turnover from existing products such as hook lift, skip loader and cable systems rose. Both large fleet owners and small owner drivers are slowly starting to once again invest. Turnover from spreaders also rose again due to the completion of a number of projects, including a project in Turkey where 15 electrical spreaders were supplied, with an option for a further 7 spreaders. In a number of comparative tests, the spreaders from VDL emerged as excellent in terms of reliability and speed of maintenance. The introduction of our new product for the port sector, the AGV (Automatic Guided Vehicle), made a major contribution to the growth of VDL Containersystemen. In 2014, a start was made on the development and construction of two prototype AGVs for a customer in Singapore. In collaboration with VDL Steelweld, the AGV segment (both for the port sector and beyond) will be further expanded in We have also launched a series of other projects, including unwinding equipment and snow compressors that will enable us to employ our expertise in the field of heavy constructions in combination with hydraulics and complex control systems. In October 2014, the company Translift in Dronten was acquired by VDL Groep. This company, specialising in waste collection systems, side loaders and underground containers, also contributed to the turnover in the container handling systems sector. The production of these systems involves intensive cooperation with other VDL companies. According to expectations, the number of waste collection systems sold will start to rise in the second half of The total order book for the container handling systems sector is very well-filled, and we expect further growth in turnover, in Cigar-making and packaging machines For PMB-UVA International, 2014 was a stable year with turnover amounting to 26 million euro as compared to 27 million euro generated in The patent position was further strengthened, enabling PMB-UVA International to once again offer a number of unique solutions to its customers. Because these innovations are based on actual requests from customers, the time to market is short. Such global themes as food safety and hygiene were also the driving forces behind further product development in In 2014, PMB-UVA International also achieved a great deal in the continuous improvement of its internal processes, with a view to achieving shorter delivery times and even higher product quality. This involved investment in a new ERP and PDM (Product Data Management) system, and upgrading the ICT infrastructure. The manufacturing facilities at PMB-UVA International have been renewed and expanded, in order to achieve shorter response times to customer-specific product developments. This manufacturing capacity will also be deployed to shorten delivery times for specific spare parts for both customers in the packaging industry and in the tobacco industry. In the cigar market, turnover in terms of machines and spare parts once again remained stable. The portfolio of PMB Tobacco includes a number of unique products, so prospects for this market are positive. A slight upturn in turnover is expected in The prospects at UVA Packaging, where vertical packaging machines are developed and constructed, are also positive for

34 Sunbeds and roof boxes Turnover at Hapro International, manufacturer of sunbeds, roof boxes, bicycle carriers and skin improvement equipment, fell slightly from 26 million euro in 2013 to 25 million euro in Turnover in the sunbed sector remains under pressure as a consequence of fluctuating reports about this group of products. The turnover in roof boxes rose steadily. The rise in the number of hybrid vehicles with less luggage space is one of the main causes. Constructive discussions are currently underway with automotive manufacturers for the supply of roof boxes, which offer excellent prospects for the future. Asia and Oceania are important growth markets for roof boxes and skin improvement products. In 2015, we expect to achieve the same level of turnover as in Systems for the agricultural sector VDL Agrotech has enjoyed a reasonable year. In a shrinking market for housing systems for intensive livestock farming, turnover remained practically unchanged (22 million euro). A number of new markets, based around countries like Kazakhstan and Uzbekistan in the Middle East and Central Asia made this possible, alongside the introduction of a new pan feed system. The lower euro exchange rate also had a positive influence on sales to countries with dollar-related currencies. The project market is highly dependent on bank credits, and certainly in Eastern Europe, this represents a difficulty. The political instability in the Middle East still makes export to a number of countries in this region difficult. In Central Asia, turnover is expected to grow thanks to a further rise in regular sales via the dealer network. Expectations for 2015 are positive. Systems for the industrial sector For VDL Industrial Products, 2014 was a good year. Turnover rose from 9 million euro in 2013 to 10 million euro in In the course of 2014, the company focused on a broader and more in-depth range of products, based on product development. The selection of rotary valves was expanded with the addition of a new range (known as the Medium Duty range). These devices are intended specifically for production processes where higher demands are placed on machines and processes such as the food industry and the chemical sector. As well as developing products for solid handling, the first steps have been taken to come up with a number of new developments for fire and explosion protection. VDL Industrial Products commissioned a complete newly-built test installation, in This makes it possible to thoroughly test both customer specific and standard solutions, before they are delivered to the customer. Expectations for 2015 are positive. As well as expanding the product range, we will also be developing new activities in terms of service. All in all, we expect slight growth in New companies In January 2014, the company VDL Steelweld AB was established in Torslanda, Göteborg (Sweden). This company offers support for turnkey projects in the field of robot production automation systems for the automotive industry in Sweden, including projects for our customer Volvo. VDL Steelweld in Sweden employs approximately 25 people. 32

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37 In mid-may 2014, the activities of the Belgian company Acrosoma were taken over by VDL Groep. This company, established in Lokeren, specialises in the production of composite sandwich panels that are for example used for further weight reduction in the aerospace industry, buses and container systems. This technology ties in well with the current activities at VDL Fibertech Industries in Best. The R&D activities in Belgium have been integrated with the R&D activities of VDL Fibertech Industries. The plant with 5 employees was renamed VDL Fibertech Belgium. On 13 October 2014, VDL Groep acquired Translift based in Dronten (the Netherlands). The company, with 63 employees, will continue to operate under the name VDL Translift. VDL Translift is active in the development, production, assembly, sale and service of waste collection systems. VDL Translift also has its own range of innovative side loader systems for the collection of aboveground and underground waste containers. The activities of VDL Translift tie in well with the other activities of VDL Groep in respect of container handling, logistic transport systems and waste processing. In November 2014, the company VDL Bus & Coach Service Brabant was established. This company, with 20 employees, carries out maintenance and repair work for coaches, buses and other transport systems from workshops in Den Bosch and Tilburg. These workshops are intended to carry out all maintenance and repair work for the North Brabant concession, as part of the agreement for the supply of 164 public transport buses for Arriva. A collaborative venture was also entered into with an external party for the maintenance of the VDL buses in the other towns and cities of Brabant. Investments In 2014, VDL Groep invested 115 million euro, approximately one-third in business premises and two-thirds in machinery and other equipment. At VDL VDS Technische Industrie in Hapert, the first three phases of the renovation of the building were completed in A fourth phase is still to be implemented, in connection with the purchase of an 800-tonnes press. For this investment a production hall with a surface area of 1,350 m² will be raised to a height of 10 metres. The project will be completed by mid Due to lack of space, VDL Wientjes Roden has been renting commercial premises at three different locations for a considerable time. To solve this situation, new premises were purchased in 2013, occupying approximately 14,000 m² on a 40,000 m² plot. In 2014, these buildings were prepared for the production of plastic products. At this new location, VDL Wientjes Roden has once again brought all the processes under one roof and there is space for expansion. The staff of VDL Wientjes Roden relocated at the start of The construction of the new plant for VDL Klima Belgium, previously Klima Warmtetechniek, in Hamont- Achel (Belgium) was completed at the end of The new premises cover a total area of 12,500 m², of which 10,500 m² for the production hall and 2,000 m² for offices. In 2014, the rented premises at VDL ETG Eindhoven and VDL ETG Almelo were purchased. A start will be made in 2015 on the first phase of renovating and expanding the current buildings. In Eindhoven, VDL ETG Eindhoven and VDL ETG T&D will be provided with 5,000 m² of additional office space. A link between the two buildings will also be completed, measuring 1,900 m² housing offices and washing and 35

38 changing rooms. The production halls will be expanded by 14,000 m², of which 8,200 m² cleanroom and 5,800 m² warehousing. In Almelo, VDL ETG will be building an additional 4,000 m² office space and 8,600 m² production hall, of which 4,200 m² cleanroom and 4,400 m² warehouse. This project will be carried out in three phases, the first of which will be completed at the start of In Germany, we are currently making preparations for new premises for VDL Delmas in Berlin, where construction work is set to start in The project will be completed in Preparations for the construction of new premises for VDL Fibertech Industries on the Kempisch Bedrijvenpark in Hapert are now fully underway. Construction work is set to start at the end of In 2014, premises were purchased in Eindhoven close to the head office, and adjacent to existing VDL premises. The offices in this new building will be fully renovated and expanded, and the plant will be redesigned, so that PMB-UVA International can take possession, at the end of As a result, the office and production areas of PMB-UVA International will be in the same location again. At the end of last year, at VDL Nedcar in Born, an adjacent plot of land measuring 72,000 m 2 was purchased, housing premises occupying 27,000 m 2, for future activities. In total, at year end 2014, VDL Groep owned approximately 1,200,000 m 2 of commercial space. VDL also once again invested heavily in machinery and other equipment in A series of presses, folding machines, laser cutting machines and welding robots have been installed. Investments were also made in measuring equipment and software. In 2015, we are going to invest around 72 million euro in new buildings, machinery and the optimisation of production processes. Employees The number of employees at VDL Groep has risen from 9,216 at year end 2013 to 10,303 at year end 2014, a rise of 12%. 94% of these 1,087 new employees were achieved through autonomous growth. The remaining employees entered the service of VDL following the takeover of Translift in Dronten. We would like to express our huge appreciation for the dedication and involvement of our employees over the past year. Partly thanks to their excellent cooperation, we achieved the highest turnover in the history of VDL Groep, in EMPLOYEES (as at 31 December, including temporary employees)

39 EMPLOYEES BY GEOGRAPHICAL AREA (as at 31 December 2014) Netherlands 8,320 (81%) Belgium 909 (9%) Rest of Europe 442 (4%) Rest of the world 632 (6%) Total number of employees 10,303 EMPLOYEES BY DIVISION (as at 31 December 2014) Subcontracting 4,158 (41%) Car assembly 2,495 (24%) Buses & coaches 1,871 (18%) Finished products 1,646 (16%) Head office in the Netherlands and Belgium 133 (1%) Total number of employees 10,303 Worker participation Within the Netherlands and Belgium, employees of the majority of VDL companies are represented by their own Works Council. At group level, there is a worker participation structure, based around the Joint Works Council (JWC). The JWC consists of representatives of the various Dutch VDL companies. The JWC met with a member of the Board of Management on five occasions in 2014, including an annual meeting with representatives from the Supervisory Board. In November 2014, the new JWC was installed, consisting of 23 members. Consultation with the JWC is best described as open and positively critical. Regular themes at JWC meetings are financing and market development for each division, and the accompanying sectors. The following subjects were also discussed: intensive cooperation between VDL companies and the HRM department (with special attention for the Employment and Security Act, the Bezava Act, the Participation Act, changes to pension schemes and legislation and the Old Age Pensions Act), incapacity for work, job classification and assessment, sickness absenteeism, accidents and the employment expenses scheme. Consultation on social issues within the Belgian VDL companies was also constructive, in Within the Works Councils, socio-economic issues remain an important topic of discussion. Just as in the Netherlands, over the next few years, a whole raft of changes are set to take place in Belgium in relation to wage costs, pensions, part-time employment and incapacity for work. Among the targets set by the new government are to fully eradicate the wage costs handicap within just a few years, while retirement age will be raised to 67, in the longer term. The possibilities for taking early retirement will be considerably reduced, and part-time working will be made less attractive, in order to keep people longer employed. Above all 37

40 changes to the pension schemes and the prospects of having to work longer were regular subjects of discussion within the social consultation. The overall conclusion is that more and more responsibility is being placed with employers, while government (both in the Netherlands and in Belgium) continues to withdraw ever further. In itself this is a perfectly acceptable development on condition that government offers employers sufficient authority, and encourages preventive measures, that remain in line with these developments. Corporate social responsibility VDL Groep views corporate social responsibility as an integral part of its overall business policy. As a family business, VDL Groep had traditionally maintained strong ties with its living and working environment. For us it is no more than logical that we intend to contribute to the sustainable development of our society. We demonstrate our social responsibility in various ways, for example through close cooperation with educational institutions and government, and by sponsoring a range of sporting, cultural and social events and associations. In 2014, the VDL Foundation was established on the occasion of the reopening of VDL Nedcar in Born. This foundation supports social care and welfare projects in the Province of Limburg. In 2014, the Cancer Research Fund Limburg / Maastricht University Medical Centre+ was the first beneficiary of the VDL Foundation. VDL Groep also contributes to Ondernemend Oranje Kapitaal (Orange Entrepreneurial Capital), an organisation that aims to assist promising Dutch SME businesses to achieve their (growth) plans. Technology and technical education VDL Groep supports a range of initiatives to promote the technical sector and technical education, including the Ir. Noordhofprijs (our employee Patrick Claassen at VDL ETG Eindhoven was one of the winners of this prize in 2014) and the Dutch Technology Week. This support is provided with the aim of encouraging people to become interested in the technical sector, and to underline the importance of craftsmanship. For regular education, we supply both financial and material support in the form of providing machines and robots, and offering guest lectures and tours. We also offer internship and graduation placements at all levels, and operate in-house training courses. In 2014, PMB-UVA International was nominated for the title Best Learning Establishment Southern Netherlands. Alongside the already existing internal training programme for assembly work, in the autumn of 2014 we launched our own BBL (Working Learning Pathway) training programme for the qualification operator production technology in plastics. This study programme was developed in combination with the Summa College and the Mikrocentrum. In-house training programmes have proven extremely effective in matching supply and demand from practice. 38

41 Employees VDL is closely involved with its employees. Employee wellbeing is a high priority at VDL. We have our own disability case managers who strive to establish a plan for each employee s reintegration from day one, with special emphasis placed on a personal approach. We also focus continuous attention on creating a safe workplace. We also offer workplaces for employees with restricted capacities. In November 2014, VDL VDS Technische Industrie in Hapert won the Bronzen Venster award, which is presented once every two years to companies who have made particular efforts in encouraging the employment of individuals with restricted capabilities. From a social and financial point of view, we recognise the importance of ensuring that these people also have an opportunity to participate in society. The environment In respect of the environment, VDL operates a sustainable policy. Energy saving and waste prevention plans and the recycling of raw materials are constant areas of attention. We build company premises under our own management, and the people who supervise this work from within VDL closely monitor the latest developments in the field of sustainable building. Our focus is on less material use, lower energy consumption and reduced environmental burdens. This is achieved for example by using sustainable materials, the introduction of geothermal heating, and the use of residual heat from the production process, for heating business premises; for example reusing the heat generated during welding. Another example of renewed energy use was the installation of solar panels covering the entire roof area of the factory halls at VDL Steelweld in Breda in May These panels generate 50% of the company s energy requirements. Sustainable living environment Despite the fact that the contribution from VDL to a variety of products due to our subcontracting activities is often less than apparent, we do supply essential components for products that make a contribution to improving the living environment. One example is a production line for producing sustainable construction material such as façade panels from plant residues. Recharging columns for electrical cars, systems for the medical sector and machines for the production of flexible solar cells and LED lighting are other examples. In the development and manufacture of our own products, such as the VDL Citea Electric and the VDL AGV, a hybrid-powered port vehicle, corporate social responsibility is an integral part of the process. All in all, VDL strives to produce innovative products that are manufactured very smartly from a cost point of view, while at the same time contributing to a sustainable living environment. Innovation Our overall policy is focused on innovation in connection with products and production methods. We continuously seek the best techniques and invest in the most advanced machinery. Every day, we are involved in the latest developments to strengthen our competitive position on the world market. We view technical innovation as an integral part of innovative entrepreneurship. Creativity, daring and craftsmanship are the key elements. 39

42 The head office of VDL Groep is based in Eindhoven, and subsidiary companies are concentrated in Southeast Brabant. This top technology region, Brainport Eindhoven, is an excellent homebase for our company. Here, we are able to realise high-tech products and projects in collaboration with educational institutions, government and other companies. From this location, we have succeeded in establishing unique collaborative ventures with various customers in which we, as an authoritative supplier, provide highly innovative technical solutions, developed through open innovation. In 2014, we spent 83 million euro on research & development, and a total of 874 employees were involved in R&D-related activities across all VDL companies. Those facts place VDL Groep in 7th place in the Technisch Weekblad index (top 30 business R&D April 2015) making us one of the most innovative companies in the Netherlands. Once again in 2015 we will be investing heavily in innovations, with a view to further strengthening our position. Strategy VDL Groep aims at controlled development, in which the control of the organisation and the maintenance of the financial position are the main considerations. The policy of VDL Groep is aimed at continuous improvement of its competitive position. An essential aspect of this is the analysis and control of costs. VDL Groep also endeavours to maintain the highest level of quality within all its subsidiaries. The investments are therefore geared towards the renewal, improvement and expansion of the product range and the production facilities. In addition, a priority in our personnel policy is to ensure internal promotion possibilities for employees. VDL Groep believes strongly in the importance of continued manufacture in the Netherlands and the Flanders region of Belgium, in a competitive manner. Through our investment in solid professional skills, as well as in robotisation and automation, we aim to continuously improve our competitive position in the international market. In addition, our industrial activities in Eastern Europe and Asia enable us to respond to the specific wishes of our customers in terms of production in those regions. As a result of our sales branches in various countries and our extensive network of importers and agencies, we are able to sell our products worldwide. Despite the size of VDL Groep and the increasingly international character of the company, VDL is and will remain a 100% family business. Act on Management and Supervision VDL Groep is subject to the Act on Management and Supervision (Wet bestuur en toezicht), which regulates the structure of management supervision in public and private limited liability companies. In accordance with this Act, the company must attempt to ensure that at least 30% of the Supervisory Board and Board of Management consists of women. In the past, VDL Groep has had two female members in the Supervisory Board. In 2014, the Supervisory Board at VDL Groep consisted of 4 people, all men. In the next appointment, we will certainly take account of a balanced distribution within the Supervisory Board. 40

43 In 2014, the Board of Management at VDL Groep consisted of six people, all men. Of these six people, four are due to step down in the next three years. VDL Groep intends to appoint one woman to the Board of Management in Policy at VDL Groep is to encourage the internal transfer of employees, and strives to establish long-term relationships with its employees, with a view to retaining the company s culture. We consider the capacity of the individual, with the aim of placing the right person in the right place, irrespective of gender, age, nationality or background. In the future, we will of course attempt to take account of a balanced distribution of Supervisory Board and Board of Management, since we share the opinion that diversity in the broadest sense of the word is good for the organisation. Prospects The fact that for VDL Groep 2014 was a stable year in many respects offers a sound basis for further growth in Turnover in the first quarter of 2015 rose from 585 million euro in 2014 to 646 million euro in The order book (excluding VDL Nedcar) is slightly less well-filled at 634 million euro at the end of week 13 of this year as compared to 669 million euro last year, but has remained practically unchanged compared with the end of 2014 (636 million euro). All in all, we are on the right track and expect turnover, profit and the number of employees to be slightly higher in 2015 than in We have every confidence in the dedication, knowledge and expertise of our employees, and are convinced that this will once again be a successful year. Eindhoven, 13 April 2015 The Board of Management, Wim van der Leegte (Chairman) Jan Karssen Wim Maathuis Jan Mooren Theo Toussaint Rini Vermeulen 41

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45 We are delighted to present to the shareholders for adoption the annual report for 2014 drawn up under the authority of the Board of Management. The annual accounts contained in the report were audited by Govers Accountants in Eindhoven, and an approved statement was issued. We subsequently approved the annual accounts. REPORT OF THE SUPERVISORY BOARD We propose that the shareholders adopt the annual accounts and discharge the Board of Management and the Supervisory Board for the policy implemented and the supervision maintained in the financial year In 2014, the Supervisory Board convened five times in the presence of the Board of Management. Members of the Board met regularly face to face with members of the Board of Management and the president. The Supervisory Board convened once in the absence of the Board of Management with a view to discussing the performance of the Supervisory Board itself, its individual members and the Board of Management. The normal annual consultation took place with the external accountant, during which the opportunity was taken to discuss the summary of the audit findings, the accountant s report, the accounting systems and the financial administrative organisation of the group. Members of the Supervisory Board each year attend a meeting of the Joint Works Council. The Supervisory Board currently consists of four members. Within the Supervisory Board, no special commissions have been appointed. During all meetings, the operation and financial state of affairs as compared to the budgets and other targets for all individual companies and of the divisions to which those companies belong were discussed in detail. The discussions included the outline of strategic policy, the investment and acquisition policy, the operating result, the internal management and control system of the company, social policy, the organisation and development of human resources and management development. During all meetings, intensive discussions were also held with the Board of Management concerning the integration of VDL Nedcar, and the further expansion of the relationship with BMW Group. Developments within the buses & coaches division were also regularly discussed. Once again in 2014, despite continuing difficult market conditions, VDL Groep achieved an excellent result. Both turnover and employee numbers rose to record levels. Further explanatory notes are provided to the development of turnover and results. Lastly, we would like to express our appreciation to the Board of Management, the Joint Works Council and all the employees for the achieved result and for their efforts in Eindhoven, 13 April 2015 The Supervisory Board, Louis Deterink (Chairman) Theo van Deursen Arie Kraaijeveld Lau Pas 43

46 AUDITOR S REPORT Statement concerning the abbreviated annual accounts The accompanying abbreviated annual accounts, consisting of the consolidated balance sheet as at 31 December 2014, the consolidated profit and loss account 2014, the statement of source and application of funds for 2014 and the principles for valuation and determination of result were derived from the consolidated annual accounts for 2014 of VDL Groep B.V. We have issued an approved opinion together with the annual accounts in our auditor s report, dated 13 April The abbreviated annual accounts do not contain all explanatory notes as required in accordance with Book 9 of the Dutch Civil Code 2. Inspection of the abbreviated annual accounts can therefore not take the place of inspection of the audited annual accounts of VDL Groep B.V. Responsibility of the Board The Board is responsible for compiling a summary of the audited annual accounts in accordance with the principles as explained in the explanatory notes. Responsibility of the accountant Our responsibility is to issue an opinion on the abbreviated annual accounts on the basis of our work, undertaken in accordance with Dutch law, including Dutch Standard 810, Assignments to report on abbreviated financial summaries. Opinion In our opinion, the abbreviated annual accounts, in all materially-relevant aspects, are consisted with the audited annual accounts of VDL Groep B.V. for 2014 and comply with the principles as described in the explanatory notes. Eindhoven, 13 April 2015 Govers Accountants / Adviseurs Paul van Vroonhoven RA 44

47 VDL GROEP SUBSIDIARIES 45

48 SUBSIDIARIES VDL Groep bv Board of Management: Wim van der Leegte (Chairman) Jan Karssen Wim Maathuis Jan Mooren Theo Toussaint Rini Vermeulen Vice Presidents: Wim van Bakel Simon Bambach Joost Govaarts Rémi Henkemans Henri Koolen Bas van der Leegte Jennifer van der Leegte Pieter van der Leegte Willem van der Leegte Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] VDL International bv Managing Director: VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Holding company for foreign operating companies. VD Leegte Beheer bv Managing Director: VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Holding company for Dutch operating companies. VDL Bus Beheer bv Managing Director: VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Holding company for bus and coach companies. VDL Vastgoed bv Managing Director: Pieter van der Leegte Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Real estate company for VDL commercial real estate. VDL Participatie bv Managing Director: Godfried de Jongh Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Participation company with various minority participations. VDL Car Beheer bv Managing Director: VDL Groep bv Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) Holding company for car assembly. VDL Nederland bv Managing Director: Jan Karssen Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Supports all group companies as regards financial affairs, ICT, social affairs, environment & safety, communications, subsidies and legal affairs. VDL Holding Belgium nv Managing Director: Leen Van de Voorde Antwerpsesteenweg Aartselaar, Belgium T: +32 (0) F: +32 (0) [email protected] Support of all Belgian and French group companies in the field of accounting and personnel matters. 46

49 SUBCONTRACTING VD Leegte Metaal bv Managing Director: Jos Bax Handelsweg AL Hapert, the Netherlands T: +31 (0) F: +31 (0) Specialty: heavy construction work and complex welding assemblies (20 welding robots). Automated metalworking, such as cutting, setting, punching, deep-drawing and laser cutting. In-house tool shop and assembly department. VDL Gereedschapmakerij bv Managing Director: Jos van Meijl Industrieweg AJ Hapert, the Netherlands T: +31 (0) F: +31 (0) Tools ranging from simple to high grade and complex. Complex follow-on cutting and bending tools and dies. Series production of precision components. CNC-5 spindle milling, sawing, CNC grinding, turning, wire sparking and co-drilling. Processes are carried out in 2D and 3D CAD/CAM. VDL TIM Hapert bv Managing Director: Piet Spooren Energieweg AH Hapert, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialised in mechanical processing of cast and forging work and welding assemblies by means of CNC lathes and (robotised) CNC processing machines. Assembly work. VDL VDS Technische Industrie bv Managing Director: Jos van Meijl Industrieweg AJ Hapert, the Netherlands T: +31 (0) F: +31 (0) [email protected] Mechanical and hydraulic punching, bending and drawing possible up to 800 tonnes, with integrated finishing. Medium-sized and large series from simple to complex metal parts with minimum tolerances. Material thickness mm. (Robotic) welding, (CNC) spot welding, riveting, 3D laser cutting, automated assembly and (sub)assembly. VDL Laktechniek bv Managing Director: Ad Pasmans Meerenakkerweg AV Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Grit blasting, zinc phosphate coating, cataphoresis painting, powder coating, wet painting, assembly and warehousing. Fully-automated cataphoresis and powder coating line including pre-treatment and zinc phosphating. VDL Belgium nv Managing Director: Marco van Tongeren Industrielaan 15 Industriezone III - Erembodegem 9320 Aalst, Belgium T: +32 (0) F: +32 (0) [email protected] Metal processing including cutting, stamping, setting, (robotic) welding, spot welding. Specialty: CNC tube bending up to 150 mm diameter. Production of insulated tubes. Tool shop, ultrasonic cleaning and own wet-paint spray line. VDL Technics bv Managing Director: Hans Sanders Korenmolen PB Boxtel, the Netherlands T: +31 (0) F: +31 (0) [email protected] Laser cutting 4 and 6 KW with Stopa warehouse, CNC punching, cutting, profiling and squaring. Specialisation in construction work and robotic welding with offline programming. Mechanical finishing up to 14 metres of (complex) welded assemblies. Stamping work up to 200 tonnes with hydraulic and fully-automatic eccentric presses. Engineering, project management and assembly. VDL Kunststoffen bv Managing Director: Rick van Haren Industrieweg JL Heeze, the Netherlands T: +31 (0) F: +31 (0) [email protected] High-grade technical plastic injection moulded components, 2K injection moulding, insert and outsert moulding. Engineering, product development and project support to customers during the development processes. Assembly and finishing of components and finished products. Own tool shop. VDL HMI bv Managing Director: Hans van Raak Kleibeemd DP Helmond, the Netherlands T: +31 (0) F: +31 (0) [email protected] Metalworking such as cutting, sawing, stamping, setting, pipe bending, CNC punching, CNC plate cutting and 3D pipe laser cutting, (robotic) welding and soldering. Sheet-metal work, construction work and assembly work. 47

50 SUBCONTRACTING VDL NSA Metaal Managing Director: Bart Spackler De Run LL Veldhoven, the Netherlands T: +31 (0) F: +31 (0) All aspects of sheet-metal working. Development, prototyping, tooling, production and composition of sheet metal parts in, for example, stainless steel, aluminium and steel, from single items to mediumsized series. Highly advanced machinery. VDL Apparatenbouw bv Managing Director: Pieter Aarts Sigarenmaker DJ Eersel, the Netherlands T: +31 (0) F: +31 (0) [email protected] System supplier in the area of (complex) medical, optical and mechatronic modules for OEM and consumer markets. Development, manufacture, testing and provision of service, overall logistics and project management, as well as the design and manufacture of filter and tank installations for the agricultural and chemical industry. VDL MPC bv Managing Director: Leo Spaan Terminalweg AJ Amersfoort, the Netherlands T: +31 (0) F: +31 (0) [email protected] Production, assembly and prototyping of complex sheet-metal parts, mechatronic components and assemblies. Specialised in machine building, (cleanroom) assembly of high-grade mechanical components and modules. All common sheet-metal working techniques such as laser cutting, punching, welding, bending, turning, milling, spark machining and degreasing of metal products. VDL Parree bv Managing Director: Ger Stappers Spoorstraat RK Sevenum, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialist in the field of high-quality technical plastic injection moulded parts, metal parts, assemblies and metal and plastic combinations. 2K techniques, gas injection, in-mould labelling, insert and outsert moulding, prägen and Mucell extrusion. Co-design function, product innovations, product optimisation and engineering. In-house tool shop and assembly department. VDL Staalservice bv Managing Director: Paul Hermans Celsiusstraat DG Weert, the Netherlands T: +31 (0) F: +31 (0) [email protected] The manufacture of customer-specific welded assemblies, laser, plasma and autogenic cut, bevelled and mechanically finished products. Metalworking such as CNC laser cutting, CNC flame cutting and CNC plasma cutting. Punching, cutting, CNC squaring, welding (MIG/MAG/TIG), machining and water jet cutting. VDL Lasindustrie bv Managing Director: Piet Sterrenburg Wekkerstraat AN Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] From engineering and prototyping through to production of small and large series. Specialised in sheet-metal and construction work. Cutting, sawing, CNC punching, CNC laser cutting, CNC setting, drilling, tapping, milling and all welding activities such as robotic welding, welding (MIG/MAG/TIG), spot welding and stud welding. VDL RPI Metaal bv Managing Director: Hans de Bresser Nijverheidsweg LJ Hendrik-Ido-Ambacht, the Netherlands T: +31 (0) F: +31 (0) [email protected] Sheet-metal working: from 0.5 mm in steel, stainless steel and aluminium, specialised in desks and frame building for complicated assemblies. All welding processes including robotic welding, stud welding and spot welding. Machined sheet-metal processes, punching, laser cutting, squaring and cutting. Machining: turning, milling and drilling. Mounting and mechanical assembly. VDL Rotech SRL Managing Director: Silviu Nitulescu Zona industriala NV str. 1 nr Arad, Romania T: +40 (0) F: +40 (0) [email protected] Metalworking, specialised in CNC machining as milling and turning. Production of welded constructions and assembly work. Thin sheet-metal work: cutting, stamping, and spot welding. VDL Systems bv Managing Director: Edwin Willems Erfstraat BE Uden, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development, production and installation of machines and internal transport systems for OEMs who produce Food Processing Equipment. Specialised in the processing of stainless steel and aluminium. VDL Postma bv Managing Director: Johan Zwarts Leeuwarderstraatweg 121d 8441 PK Heerenveen, the Netherlands T: +31 (0) F: +31 (0) [email protected] Sheet-metal processing: laser cutting, CNC punch nibbling, cutting, and squaring. Pipe processing: CNC bending, rolling, (robotic) welding and machining. Powder coating including chemical pre-treatment by means of separated immersion baths for steel and aluminium. 48

51 SUBCONTRACTING VDL Industrial Modules bv Managing Director: Jeroen van den Hurk Brandevoortse Dreef DG Helmond, the Netherlands T: +31 (0) F: +31 (0) [email protected] System supplier for the OEM market. Development, prototyping, precision sheet-metal processing, (cleanroom) assembly and testing of high-quality modules and systems. With a strong focus on integral cost-price-control, logistics and minimising financial risks in the supply chain. Design and production of dynamic and static road signs. VDL Konings bv Managing Director: Sjoerd van de Velde Bosstraat XT Swalmen, the Netherlands T: +31 (0) F: +31 (0) [email protected] Design, engineering, prototyping, production, assembly and installation of customer-specific mechanisation work, machines and installations for the film, foil, foam and paper industry. Development, production and supply chain management of modules and systems for OEMs for example in the medical sector. Certified welding and large-format mechanical processing including turning, milling, boring and drilling. VDL Wientjes Roden bv Managing Director: Chris Mulder Ceintuurbaan Noord NZ Roden, the Netherlands T: +31 (0) F: +31 (0) [email protected] Engineering, design and production of high-quality plastic products. Various processing techniques, including vacuum forming, CNC machining, laser cutting, welding, gluing and assembly. VDL Wientjes Emmen bv Managing Director: Hans Meuleman Phileas Foggstraat AK Emmen, the Netherlands T: +31 (0) F: +31 (0) [email protected] Engineering, design and production of high-quality plastic products. Production techniques: injection moulding of (fibre-reinforced) thermoplastics, gas injection, 2-components and in-mould labelling. Hot-pressing of thermoharders (polyester) and assembly. Producer of sheet moulding compound (SMC), a glass fibre-reinforced polymer semimanufacture. VDL Services bv Managing Director: Rob Diepstraten Handelsweg AL Hapert, the Netherlands T: +31 (0) F: +31 (0) [email protected] Repair, maintenance and installation of a range of (VDL) products supported by a 24/7 service organisation with a network of service engineers throughout the Netherlands. Also project supervision and implementation, worldwide. VDL Enabling Technologies Group bv General Managing Director: Simon Bambach Technical Managing Director: Guustaaf Savenije Achtseweg Noord GG Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] VDL Enabling Technologies Group is aimed at system integration and logistic/supply chain management for mechatronic (sub)systems on behalf of OEMs for high-tech capital goods. The general management of the seven VDL ETG branches in Eindhoven, Almelo, Singapore and Suzhou (China) is located in Eindhoven. In addition, new business development and key account management, technology, engineering and purchasing are organised centrally. VDL ETG Eindhoven bv Managing Director: Wil-jan Schutte Achtseweg Noord GG Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Operates in the business of system integration of mechatronic (sub)systems and modules for OEMs in the high-tech capital equipment industry and in the area of production mechanisation. System supplier from (co-)engineering through parts production to assembly and testing. VDL ETG Research bv Managing Director: Jadranko Dovic High Tech Campus AE Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Is the starting point for R&D departments with development and hardware questions. Provides support for the realisation of new products, in field of mechanics, mechatronics and electronics, from first prototype via transfer to volume production. In-house workshops guarantee the speed and makeability while maintaining extreme precision. Development departments and start-ups are assisted with the further development of the product or production and testing equipment. VDL ETG Projects bv Managing Director: Arie van Kraaij Hurksestraat AH Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Develops, produces, assembles and installs (mass) fabrication equipment worldwide for a wide range of markets varying from food and medical through to solar and semicon, in the form of both one-offs and roll-outs. Also makes and assembles highquality technical prototypes for mechanical components and complete assemblies with very short lead times. 49

52 SUBCONTRACTING VDL ETG Technology & Development bv Managing Director: Geert Jakobs Achtseweg Noord GG Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development organisation responsible for the development of high-tech mechatronic (sub)systems and the further optimisation of production processes within VDL ETG to ensure the provision of optimum solutions to meet customer needs. VDL ETG Almelo bv Managing Director: Sander Verschoor Bornsestraat PB Almelo, the Netherlands T: +31 (0) [email protected] Operates in the business of system integration of mechatronic (sub)systems and modules for OEMs in the high-tech capital equipment industry and in the area of production mechanisation. System supplier from (co-)engineering through parts production to assembly and testing. VDL Enabling Technologies Group (Singapore) Pte Ltd Managing Director: Wu Yong Lin 259 Jalan Ahmad Ibrahim Singapore , Singapore T: F: [email protected] Operates in the business of system integration of mechatronic (sub)systems and modules for OEMs in the high-tech capital equipment industry and in the area of production mechanisation. System supplier from (co-)engineering through parts production to assembly and testing. VDL Enabling Technologies Group of Suzhou Ltd Managing Director: Ton de Haan 288 Su Hong Xi Road Suzhou Industrial Park, Jiangsu P.R.C , China T: F: [email protected] Operates in the business of system integration of mechatronic (sub)systems and modules for OEMs in the high-tech capital equipment industry and in the area of production mechanisation. System supplier from (co-)engineering through parts production to assembly and testing. VDL Network Supplies bv Managing Director: William van Hout Handelsweg AL Hapert, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialised in the production of semi-finished, finished products and related services for the construction, housing and extension of large and national networks such as mobile phone, telecom, energy and railway networks. VDL Fibertech Industries bv Managing Director: Michiel Wassink Hallenweg CT Best, the Netherlands T: +31 (0) F: +31 (0) [email protected] Develops and produces high-tech composite and polyurethane products, for the markets healthcare, defence, semiconductor, transportation and aerospace. Using RTM, Hot Pressing, (R) RIM and Acrosoma Sandwich technologies. VDL Fibertech Belgium Managing Director: Michiel Wassink Wolfsakker Lokeren, Belgium T: +31 (0) F: +31 (0) [email protected] Develops and produces high-tech composite and polyurethane products, for the markets healthcare, defence, semiconductor, transportation and aerospace. Using RTM, Hot Pressing, (R) RIM and Acrosoma Sandwich technologies. VDL GL Precision bv Managing Director: Herman Rusch Hurksestraat AH Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Fabricates extremely close tolerance precision mechanical components and modules for the semiconductor, optical, machine building and aerospace industries. Performs all required processes in-house, including machining, microlaser processing and cleanroom activities. 50

53 CAR ASSEMBLY VDL Nedcar bv General Managing Director: Joost Govaarts Technical Managing Director: Karel Bouckaert Dr. Hub van Doorneweg RD Born, the Netherlands T: +31 (0) F: +31 (0) [email protected] Independent contract manufacturer of vehicles, with the primary activity being the series production of cars. Also makes pressed parts for various customers. VDL Nedcar is the only major automotive plant in the Netherlands, with production capacity for some 200,000 vehicles a year, based on a two-shift system. 51

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55 BUSES & COACHES VDL Bus & Coach bv Managing Director: Rémi Henkemans De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] VDL Bus & Coach offers an extensive product range: chassis and chassis modules, coaches, public transport buses, mini & midi buses, special vehicles and second-hand buses. VDL Bus & Coach has an extensive, international network of offices, agents and importers offering sales and after sales support. VDL Bus Chassis bv Managing Director: Jan-Cees Santema Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development and assembly of complete chassis, chassis modules and CKD packages for public transport buses and coaches. VDL Bus Modules bv Managing Director: Frank Van Geel De Vest XP Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Production of modules for luxury coaches, doubledeckers, VIP coaches, regional buses and special projects. VDL Bus Heerenveen bv Managing Director: Dennis van Opzeeland Wetterwille GC Heerenveen, the Netherlands T: +31 (0) F: +31 (0) [email protected] Production of buses for public transport, such as city and regional buses. VDL Bus Venlo bv Managing Director: Mark Bakermans Huiskensstraat PN Venlo, the Netherlands T: +31 (0) F: +31 (0) [email protected] Production of mini & midi buses for coach and public transport, police vehicles, taxi buses, airport transport and special transport (such as disabled persons and VIP) in all possible types. Also body repair of cars and commercial vehicles under the trade name VDL Kusters as part of ABS Autoherstel. ( / T: +31 (0) ) VDL Bus Roeselare nv Managing Director: Peter Wouters Schoolstraat Roeselare, Belgium T: +32 (0) F: +32 (0) [email protected] Production of buses for public transport, luxury coaches, VIP coaches and carrying out special projects. VDL Bus Valkenswaard bv Managing Director: Marc van Doorn De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development and assembly of luxury coaches, VIP coaches and carrying out special projects. VDL Bus & Coach Nederland bv Managing Director: Ard Romers De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Sales and after sales for all VDL Bus & Coach products in the Netherlands. VDL Bus & Coach France sarl Managing Director: Manon Raynal 5, rue du Pont de la Brèche Z.A.E. Les Grandes Vignes Goussainville Cedex, France T: +33 (0) F: +33 (0) [email protected] Sales, after sales and parts for all VDL Bus & Coach products in France. VDL Bus & Coach Italia s.r.l. a socio unico Managing Director: Anno Dirksen Piazza dei Beccadori, Spilamberto (MO), Italy T: F: [email protected] Sales, after sales and parts for all VDL Bus & Coach products in Italy. VDL Bus & Coach Belgium Managing Director: Willem van der Leegte Schoolstraat Roeselare, Belgium T: +32 (0) F: +32 (0) [email protected] Sales, after sales and parts for all VDL Bus & Coach products in Belgium and Luxembourg. VDL Bus & Coach Polska Sp. z o.o. Managing Director: Bolesław Piekorz Straszków Kościelec, Poland T: +48 (0) F: +48 (0) [email protected] Sales, after sales and parts for all VDL Bus & Coach products in Poland. VDL Bus & Coach Deutschland GmbH Managing Director: Silke Tödter Oberer Westring 1 Industriegebiet West Büren, Germany T: +49 (0) F: +49 (0) [email protected] Sales, after sales and parts for all VDL Bus & Coach products in Germany. 53

56 BUSES & COACHES VDL Bus & Coach (Suisse) GmbH Managing Director: Bernard Donzé Erlenstrasse 29 Postfach 2555 Brügg, Switzerland T: +41 (0) F: +41 (0) Sales, after sales and parts for all VDL Bus & Coach products in Switzerland. VDL Bus & Coach Czech Republic s.r.o. Managing Director: Pavel Schlosser Haštalská 6/ Prague, Czech Republic T: F: Sales, after sales and parts for all VDL Bus & Coach products in the Czech Republic and Slovakia. VDL Bus & Coach South Africa (Pty) Ltd Managing Director: Jan-Cees Santema Isando Business Park Unit H1 Cnr Gewel & Hulley Street 1600 Isando, South Africa T: +27 (0) F: +27 (0) Sales, after sales and parts for all VDL Bus & Coach products in South Africa. VDL Bus & Coach Serbia d.o.o. Beograd Managing Director: Branislav Radovanović Gandijeva 99d Belgrade, Serbia T: +381 (0) F: +381 (0) Sales, after sales and parts for all VDL Bus & Coach products in Serbia. VDL Bus & Coach Danmark A/S Managing Director: Anita Palm Laursen Naverland Glostrup, Denmark T: F: Sales, after sales and parts for all VDL Bus & Coach products in Denmark. VDL Bus Center bv Managing Director: Rémi Henkemans De Run LL Veldhoven, the Netherlands T: +31 (0) F: +31 (0) Purchase and sales of used buses and coaches of all makes and models. VDL Bus Center GmbH Managing Director: Burkhard Gieffers Oberer Westring 2 Industriegebiet West Büren, Germany T: +49 (0) F: +49 (0) [email protected] Purchase and sales of used buses and coaches of all makes and models. VDL Busland bv Managing Director: Ton Behr De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialised workshop for the maintenance, repair and damage repair of all makes of coaches and buses. VDL Bus & Coach Service FRY-ZHN bv Managing Director: Ton Behr De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialist workshop for maintenance, repair and damage repair of coaches, buses and other means of transport, with units in Leiden, Krimpen aan den IJssel, Leeuwarden and Sneek. VDL Bus & Coach Service Brabant bv Managing Director: Ton Behr De Vest XL Valkenswaard, the Netherlands T: +31 (0) F: +31 (0) [email protected] Specialist workshop for maintenance, repair and damage repair of coaches, buses and other means of transport, with units in Den Bosch and Tilburg. VDL Parts bv Managing Director: Peter Schellens De Run DE Veldhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Worldwide purchase and sales, logistics and information provision for all original VDL Bus & Coach spare parts and related accessories. 54

57 FINISHED PRODUCTS VDL Agrotech bv Managing Director: Brian van Hooff Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Equipment for intensive livestock keeping, including engineering and erection of complete turnkey projects. Manure drying tunnel. VDL Industrial Products bv Managing Director: Carlos Ooijen Hoevenweg AW Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Sales and service of components for dust extraction installations and bulk material handling such as modular tube systems, rotary valves, fans, cyclones, diverter and butterfly valves and vibrating conveyors. Also sales and service of complete systems for explosion and fire-protection of industrial processes. VDL Steelweld bv Managing Director: Peter de Vos Terheijdenseweg BJ Breda, the Netherlands T: +31 (0) F: +31 (0) [email protected] Design, production, installation and service of robotised production automation systems with a wide range of handling, assembly and connection joining techniques for industrial applications including for the automotive industry. Also active in product development, prototype manufacture and production of special machines and series production of mechatronic modules and systems for applications in industrial vehicle technology such as automatic guided vehicles (AGVs) and agricultural vehicles. VDL Steelweld UK Managing Director: Darren Dowsett / Peter de Vos Unit 3, The Barford Exchange Wellesbourne Road, Barford, Warwickshire, CV35 8AQ, Great Britain T: +44 (0) [email protected] Design, production, installation and service of robotised production automation systems with a wide range of handling, assembly and connection joining techniques for industrial applications including for the automotive industry. Also active in product development, prototype manufacture and production of special machines and series production of mechatronic modules and systems for applications in industrial vehicle technology such as automatic guided vehicles (AGVs) and agricultural vehicles. VDL Steelweld Deutschland GmbH Managing Director: Peter de Vos Max Planck Straße Cologne, Germany T: +49 (0) F: +49 (0) [email protected] Design, production, installation and service of robotised production automation systems with a wide range of handling, assembly and connection joining techniques for industrial applications including for the automotive industry. Also active in product development, prototype manufacture and production of special machines and series production of mechatronic modules and systems for applications in industrial vehicle technology such as automatic guided vehicles (AGVs) and agricultural vehicles. VDL Steelweld Sweden AB Managing Director: Peter de Vos Flygfältsgatan 16A Torslanda, Göteborg, Sweden T: + 46 (0) [email protected] Design, production, installation and service of robotised production automation systems with a wide range of handling, assembly and connection joining techniques for industrial applications including for the automotive industry. Also active in product development, prototype manufacture and production of special machines and series production of mechatronic modules and systems for applications in industrial vehicle technology such as automatic guided vehicles (AGVs) and agricultural vehicles. Hapro International bv Managing Director: Dick van de Linde Fleerbosseweg RR Kapelle, the Netherlands T: +31 (0) F: +31 (0) [email protected] Develops, produces, assembles and distributes sunbeds for both the consumer market and professional tanning studios. Sales of accessories for the tanning market. Development, production and assembly of car roof boxes and bicycle carriers. VDL Klima bv Managing Director: Wim Jenniskens Meerenakkerweg AV Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development and production of heat exchangers (incl. air/air coolers, air/water coolers, box coolers, and shell and tube heat exchangers) and ventilation systems for various applications (such as electrical) propulsion systems, power generators, and transformers. VDL Klima Belgium nv Managing Director: Wim Jenniskens Industriestraat Hamont-Achel, Belgium T: +32 (0) F: +32 (0) [email protected] Production company of VDL Klima products. VDL Klima France sarl Managing Director: Pascal Pécuchet Business Park Bat H 87 Rue du Molinel Marcq en Baroeul, France T: +33 (0) F: +33 (0) [email protected] Development and sales of heat exchangers and cooling units for the electromechanical industry and other industrial applications. 55

58 FINISHED PRODUCTS VDL KTI nv Managing Director: William van Hout Nijverheidsstraat 10 Industrial Area II 2400 Mol, Belgium T: +32 (0) F: +32 (0) Development and production of parts for industrial furnaces (convection/radiation), as well as complete furnace modules, pressure vessels, heat exchangers, skids and separation modules for the chemical, petrochemical, oil and gas industry. Production of high-voltage masts. VDL Delmas GmbH Managing Director: Jörg Nelius Breitenbachstraße Berlin, Germany T: +49 (0) F: +49 (0) Development, production and delivery of heat exchangers, cooling units and related aggregates for industrial applications. VDL Containersystemen bv Managing Director: Frans van Dommelen Industrieweg AJ Hapert, the Netherlands T: +31 (0) F: +31 (0) Development, production, sales, repair and installation of hydraulic container handling equipment (hooklift systems, skip loaders and cable systems), container trailers and containers. Development, production, sales and repair of spreaders and automatic guided vehicles (AGVs) for handling 20, 40 and 45 feet ISO containers. VDL Containersysteme GmbH Managing Director: Frans van Dommelen Oberer Westring Büren, Germany T: +31 (0) F: +31 (0) [email protected] Sales and after sales of container handling equipment and trailers in Germany. VDL Translift bv Managing Director: Rolf-Jan Zweep Staalwijk JP Dronten, the Netherlands T: +31 (0) [email protected] Development, production, assembly, sales and services of waste collection systems. VDL Translift has its own line of innovative side-loader systems for optimisation of collection from aboveground and underground refuse containers. VDL Weweler bv Managing Director: Dick Aalderink Ecofactorij WC Apeldoorn, the Netherlands T: +31 (0) [email protected] Development, production and sales of air spring and axle lift systems for manufacturers of axles, trailers, trucks, buses and coaches. VDL Weweler Parts bv Managing Director: Danny Orgers Kanaal Zuid BD Apeldoorn, the Netherlands T: +31 (0) F: +31 (0) [email protected] Distribution of high-quality technical components for trucks, trailers, semi-trailers and buses. Weweler-Colaert nv Managing Director: Jacques Colaert Beneluxlaan Poperinge, Belgium T: +32 (0) F: +32 (0) [email protected] Development, production and sales of leaf and parabolic springs for the automotive industry. Distribution of high-quality technical components for trucks, trailers, semi-trailers and buses. Truck & Trailer Industry AS Managing Director: Øyvind Stenersen Persveien Oslo, Norway T: +47 (0) F: +47 (0) [email protected] Sales from four offices in Norway of VDL Weweler suspension systems and spare parts for trucks, trailers and buses. PMB-UVA International bv Managing Director: Marius Ponten Meerenakkerweg AV Eindhoven, the Netherlands T: +31 (0) F: +31 (0) [email protected] Development, production, sales and service for the packaging and tobacco industries. Vertical film packaging machines for among others food, animal feed and detergent sectors. Machines for production and packaging of cigars. VDL USA Inc Managing Director: George van Bergen 8111 Virginia Pine Ct. Richmond VA 23237, USA T: F: [email protected] Sales and service of VDL products in North America. VDL Middle East fzco Managing Director: Rémi Henkemans 5WA (West Ring) Dubai Airport Free Zone, United Arab Emirates Sales, after sales and service of VDL products in the Middle East. 56

59 VDL GROEP FINANCIAL REPORT

60 CONSOLIDATED BALANCE (x 1,000 euro) Assets 31 December December 2013 Fixed assets Intangible fixed assets Goodwill Tangible fixed assets Buildings and land 478, ,728 Machinery and installations 124,981 82,287 Other fixed assets 46,041 36, , ,388 Financial fixed assets Participations 48,984 41,827 Other financial fixed assets 6,955 3,493 55,939 45,320 Current assets Stocks Raw materials and consumables 131,823 96,961 Work in progress 182, ,083 Finished products and commodities 90, , , ,408 Projects in progress 0 19,822 Accounts receivables Trade debtors 397, ,007 Taxes 0 10,297 Other receivables and accrued income 12,939 9, , ,620 Cash at bank and in hand 138,985 95,923 1,660,407 1,382,879 58

61 Liabilities 31 December December 2013 Group capital Shareholders equity 924, ,350 Provisions Pension provisions 1,424 1,545 Warranty provisions 26,477 28,892 Taxation provisions 13,012 36,585 Other provisions 19,638 81,011 60, ,033 Long-term liabilities Debts to credit banks 58,260 77,632 Current liabilities Debts to credit banks 14,261 12,200 Projects in progress 129,529 0 Debt to suppliers 207, ,948 Taxes and social security contributions 80,177 26,286 Other debts and deferred liabilities 184,944 89, , ,864 1,660,407 1,382,879 59

62 CONSOLIDATED PROFIT AND LOSS ACCOUNT (x 1,000 euro) Invoiced turnover 2,342,041 1,632,108 Changes to projects in progress -176, ,591 Inter-company trading 818 1,019 Other operating income 53,549 95,678 Total operating income 2,220,088 1,861,396 Costs of raw materials and consumables 1,152, ,168 Subcontracted work and other external costs 328, ,455 Salaries and wages 453, ,654 Social security contributions and other personnel costs 113, ,141 Depreciation of (in)tangible fixed assets 46,300 47,326 Other operating costs 6,657 19,042 Total operating costs 2,102,100 1,765,786 Operating profit 117,988 95,610 Financial expenses -5,459-5,349 Profit on ordinary activities 112,529 90,261 Profit on non-consolidated shareholdings 7,680 7,766 Profit before tax 120,209 98,027 Tax -15,962-7,341 Third party interests 0-2,104 Net profit after tax 104,247 88,582 60

63 STATEMENT OF SOURCE AND APPLICATION OF FUNDS (x 1,000 euro) Source of funds Profit appropriation 104,247 88,582 Depreciation (in)tangible fixed assets 46,299 47,326 Changes to consolidated participations 4, Changes to other financial fixed assets , ,833 Application of funds Third party interests Investments minus desinvestments 114,459 82,457 Changes to other financial fixed assets 3,436 - Repayment on long-term loans 19,372 66,014 Changes in provisions 87,509 67,290 Changes to non-consolidated participations 7,156 6,796 Other changes in equity 38,374 22, , ,368 Changes in working capital -115, ,535 61

64 GENERAL EXPLANATORY NOTES PRINCIPLES FOR VALUATION AND Activities DETERMINING The activities of VDL Groep B.V. and its subsidiaries consist of: THE RESULT Subcontracting division: metalworking, mechatronic systems and system supply, plastics processing and surface treatment; Car assembly division: the production of passenger cars for third parties; Buses & coaches division: chassis & chassis modules, coaches, public transport buses, mini & midi buses, special vehicles and second-hand buses; Finished products division: suspension systems for the trailer and truck industry, heating, cooling and airtechnical systems, production automation systems, installations for the oil, gas and petrochemical industry, systems for the agricultural sector, sunbeds, roof boxes, container handling equipment, waste collection systems, cigar-making and packaging machines, components for bulk handling and extraction installations and systems for explosion and fire protection. Sales are made in the Netherlands and abroad, whereby the countries of the European Union represent the most important sales market. Estimates To make it possible to apply the principles and rules for drawing up the annual accounts, it is necessary that the management of VDL Groep B.V. prepares a judgement on various issues, and that the management makes estimates that could prove essential for the amounts contained in the annual accounts. If necessary for the degree of insight required in article 2:362 paragraph 1 of the Netherlands Civil Code, the nature of these judgements and estimates, including the accompanying assumptions, is contained in the explanatory notes to the relevant items in the annual accounts. Consolidation In the consolidated annual accounts of VDL Groep B.V. the financial details are accounted for the group companies and other legal entities over which predominant control can be exercised or over which central management is undertaken. Group companies are legal entities over which VDL Groep B.V. can directly or indirectly exercise predominant control, since it holds the majority of the voting rights or in any other way can control the financial and operational activities. This also takes into account potential voting rights that can be exercised directly on the balance sheet date. The group companies and other legal entities over which predominant control can be exercised or over which central management is undertaken are 100% accounted for in the consolidation. The third party share of group equity and in the group result is listed separately. Intercompany transactions, intercompany profits and mutual receivables and liabilities between group companies and other legal entities contained in the consolidation are eliminated, in as much as the results are not realised by transactions with third parties outside the group. Unrealised losses on intercompany transactions are also eliminated, except in the case of extraordinary downward value adjustment. Principles 62

65 of valuation of group companies and other legal entities contained in the consolidation have where necessary been adjusted to comply with the applicable valuation principles for the group. Applicability of article 2:402 of the Netherlands Civil Code Because the profit and loss account for 2014 of VDL Groep B.V. is accounted for in the consolidated annual accounts, in accordance with article 2:402 of the Netherlands Civil Code, reproduction of an abbreviated profit and loss account is considered sufficient, in the single annual accounts. Related parties All legal entities over which predominant control, shared control or significant influence can be exercised are identified as related parties. Legal persons capable of exercising predominant control are also identified as related parties. The members of the Board under the Articles of Association, other key officers in the management of VDL Groep B.V. and the parent company of VDL Groep B.V. and close relatives are related parties. Significant transactions with related parties are explained in as much as not entered into in accordance with the normal market conditions. Of these transactions, the nature and scale of the transaction and other information necessary for providing sufficient insight is provided. Acquisitions and disposal of group companies From the date of takeover, the results and identifiable assets and liabilities of the acquired company are accounted for in the consolidated annual accounts. The date of takeover is the moment at which predominant control can be exercised over the company in question. The acquisition price consists of the monetary amount or equivalent agreed for acquisition of the acquired company plus any directly attributable costs. If the acquisition price is higher than the net amount of the fair value of the identifiable assets and liabilities, the excess (as goodwill) will be capitalised as intangible fixed assets. If the acquisition price is lower than the net amount of the fair value of the identifiable assets and liabilities, the difference (negative goodwill) will be accounted for under equity capital. The companies involved in the consolidation will continue to be accounted for in the consolidation up to the moment at which they are sold; deconsolidation will take place at the moment the predominant control is transferred, or the participations no longer fulfil the criteria of group companies. GENERAL PRINCIPLES General The consolidated annual accounts were prepared in accordance with the statutory provisions in Part 9 Book 2 of the Netherlands Civil Code and the clear statements from the Guidelines for annual accounting, issued by the Dutch Accounting Standards Board. Assets and liabilities are generally valued at acquisition price or manufacturing cost or current value. If no specific valuation principle is stated, valuation is made according to acquisition price. 63

66 Comparison with previous year The principles of valuation and determination of result remain unaltered as compared with the previous year. Foreign currencies Items in the annual accounts of the group companies are valued taking account of the currency of the economic environment in which the group company primarily undertakes its business activities (the functional currency). The consolidated annual accounts are prepared in euros; this is both the functional and presentation currency of VDL Groep B.V. Transactions in foreign currencies during the reporting period are reflected in the annual accounts at the exchange rate on the balance sheet date. Monetary and non-monetary assets and liabilities in foreign currencies are converted into the functional currency at the exchange rate on the balance sheet date. Any exchange rate differences arising from the settlement and conversion are credited or charged to the shareholders equity. Conversion differences on long-term intragroup loans that effectively represent an expansion or reduction of the net investment of foreign participations are credited or charged directly to the shareholders equity. Assets and liabilities, and income and expenditure for group companies contained in the consolidation with a functional currency other than the presentation currency, are converted at the exchange rate on the balance sheet date. Goodwill and the adjustments to fair value of identifiable assets and liabilities are viewed as a component of these group companies and are also converted at the balance sheet date at the exchange rate on the balance sheet date. The resultant exchange rate differences are credited or charged directly to the shareholders equity. Operational leasing Lease contracts may exist within the company, whereby a large proportion of the advantages and disadvantages relating to ownership do not lie with the company. These lease contracts are accounted for as operational leasing. Obligations arising from operational leasing are accounted for on a straight-line basis in the profit and loss account over the term of the contract, taking account of payments received from the lessor. Financial instruments The group companies listed under financial fixed assets, in as much as relating to the trading portfolio or equity capital instruments outside the trading portfolio, and derivatives with an underlying stock exchange quoted value are valued at fair value. All other financial instruments contained in the balance sheet are valued at (amortised) cost price. Fair value is the amount for which an asset can be traded or a liability can be settled between parties well informed on the issue, who are willing to make a transaction and who are independent of one another. If a reliable fair value cannot immediately be identified, the fair value is approached by deriving this value from the fair value of the individual component or of a similar financial instrument, or using valuation models and valuation techniques. 64

67 Upon first inclusion in the balance sheet, derivatives are valued at fair value. Any subsequent valuation of derived financial instruments (derivatives) will depend on whether the underlying basis for the derivative is stock exchange quoted or not. If the underlying basis is stock exchange quoted, the derivative will be included at fair value. If the underlying basis is not stock exchange quoted, the derivate will be accounted for at cost price or market value, whichever is lower. The method of accounting for value changes of the derived financial instrument will depend on whether hedge accounting is applied to the derived financial instrument or not. VDL Groep B.V. applies hedge accounting. At the moment of entering into a hedge relationship, this is documented by the company. By means of a test, the company periodically assesses the effectiveness of the hedge relationship. This may be achieved by comparing the critical characteristics of the hedge instrument with those of the covered position or by comparing the change in fair value of the hedge instrument and the covered position. VALUATION PRINCIPLES FOR THE BALANCE SHEET Fixed assets Intangible fixed assets The intangible fixed assets are valued at acquisition price less depreciation. Account is taken of extraordinary downward value adjustments; this is the case if the book value of the asset (or of the cash flow generating unit to which the asset belongs) is higher than the realisable value of the asset. To determine whether there is an extraordinary downward value adjustment for the intangible fixed asset, reference is made to the paragraph concerning extraordinary downward value adjustments for fixed assets. Goodwill arising from acquisitions and calculated in accordance with the paragraph on depreciations on intangible and tangible fixed assets will be activated less straight-line depreciation during the estimated future useful life. Tangible fixed assets Buildings and land used for business purposes are valued at current value on the basis of assessments based on private sales value for continued use with costs for the purchaser s account, less straight-line depreciation, taking account of the estimated useful life of the assets in question. There is no depreciation on land. The buildings and land used for business purposes were reassessed in 2014, at assessment values for December of that year. Assessment was undertaken by an independent expert using the income capitalisation method. In the case of reassessment of buildings, account was taken of deferred taxation of 15%. Account was taken of the extraordinary downward value adjustment expected on the balance sheet date. To determine whether a tangible fixed asset is subject to extraordinary downward value adjustment, reference is made to the paragraph on extraordinary downward value adjustments on fixed assets. 65

68 The other tangible fixed assets are valued at purchase price or manufacturing price, including directly attributable costs, less straight-line depreciation, taking account of the estimated useful life and extraordinary downward value adjustments. The manufacturing price consists of the purchase costs for raw materials and consumables and costs directly attributable to the manufacture, including installation costs. Grants on investments are deducted from the acquisition price or manufacturing costs for the asset to which the grants relate. For obligations for recovery following the end of use of the asset (dismantling costs), a provision is established for the expected amount at the moment of capitalisation. The estimated useful life per category is: Buildings : years Installations and facilities : 5 20 years Machines and installations : 5 10 years Other fixed business assets : 5 7 years Financial fixed assets Participations over which decisive influence can be exercised are valued according to the change in assets method (net asset value). Decisive influence is assumed wherever 20% or more of the voting rights can be cast. The net asset value is calculated according to the principles applicable for these annual accounts; for participations about which insufficient details are available for application of these principles, the valuation principles for the participation in question are assumed. If the valuation of a participation according to the net asset value is negative, this participation will be valued at zero. If and in as much as VDL Groep B.V. in this situation fully or partially secures the debts of the participation, or has the clear intention to enable the participation to pay its debts, a provision will be made for this purpose. The first valuation for purchased participations is based on the fair value of the identifiable assets and liabilities at the moment of acquisition. For subsequent valuation, the principles are applied that apply to these annual accounts, assuming the value at first valuation. Participations over which no decisive influence can be exercised are valued at purchase price. In the event of extraordinary downward value adjustment, valuation will take place at realisable value. Downward value adjustment is charged to the profit and loss account. Receivables included in the financial fixed assets are initially valued at fair value less any provisions considered necessary. Subsequently, these receivables are valued at amortised cost price. Deferred tax receivables are established for offsettable fiscal losses or for offsettable temporary discrepancies between the value of the assets and liabilities according to fiscal regulations on the one hand 66

69 and the valuation principles employed in these annual accounts on the other, on the understanding that deferred tax receivables are only established in as much as it is probable that there will be future fiscal profit, against which temporary discrepancies can be set off and losses can be compensated. The calculation of deferred tax receivables will take place according to the tax rates applicable at the end of the reporting year or according to rates applicable in coming years, in as much as already laid down in law. Deferred tax receivables are valued at nominal value. Extraordinary downward value adjustment of fixed assets On each balance sheet date, the company determines whether there are indications that a fixed asset may be subject to an extraordinary downward value adjustment. If such indications are present, the realisable value of the asset is determined. If it is not possible to determine the realisable value for the individual asset, the realisable value will be determined for the cash flow-generating unit to which the asset belongs. An extraordinary downward value adjustment occurs if the book value of an asset is higher than the realisable value; the realisable value is the higher of the market value and the operating value. If it is determined that an extraordinary downward value adjustment that was accounted for in the past no longer exists or has fallen in size, the increased book value for the asset in question will not be set higher than the book value that would have been determined if no extraordinary downward value adjustment had been accounted for, for the asset in question. Also for financial instruments, the company will determine on each balance sheet date whether there are objective indications for extraordinary downward value adjustment of a financial asset or a group of financial assets. If such objective indications are present, the company will determine the scale of the loss from the extraordinary downward value adjustments, and will immediately account for that loss in the profit and loss account. In the case of financial assets valued at amortised cost price, the scale of the extraordinary downward value adjustment will be determined as the difference between the book value of the asset and the best possible estimate of the future cash flows, capitalised at the effective interest rate of the financial asset as determined upon the first accounting of the instrument. The downward value adjustment loss that was taken up must be taken back if the fall in the downward value adjustment relates to an objective event following deduction. The take-back will be restricted to not more than the amount necessary for valuing the asset at the amortised cost price at the moment of take-back, if there had been no extraordinary downward value adjustment. The taken-back loss is accounted for in the profit and loss account. In the case of an investment in equity capital instruments valued at cost price the size of the extraordinary downward value adjustment is determined as the difference between the book value of the financial asset and the best possible estimate of the future cash flows, capitalised at the current asset cost rate for a similar financial asset. The extraordinary downward value adjustment loss will only be taken back if there are indications that a loss accounted for in the annual accounts in previous years is no longer present or has changed as a consequence of downward value adjustment. 67

70 Current assets Stocks The stocks of raw materials and consumables are valued at fixed settlement prices, based on the last known purchase price plus various additional amounts. The stocks of work in progress (including semi-manufactured goods) and finished products are valued at manufacturing cost or realisable value, if lower. The manufacturing costs consist of all costs relating to acquisition or manufacture, and costs incurred for bringing the stock to their current location or their current condition. Manufacturing costs include direct salary costs and bonuses for indirect fixed and variable costs related to production. The realisable value is the estimated sales price less directly attributable sales costs. In determining the realisable value, account is taken of the unsaleability of the stocks. Projects in progress The item projects in progress on behalf of third parties consists of the balance of realised project costs, allocated profit and if applicable accounted losses and already declared instalments. Projects in progress are presented individually in the balance sheet under current assets. If the item shows a credit balance, it will be presented under current liabilities. Receivables Receivables including tax and prepayments and accrued income, are initially measured at fair value and subsequently at amortised cost price. The fair value and amortised cost price are equal to the nominal value. Any provisions considered necessary for bad debt risk shall be deducted. These provisions are determined on the basis of an individual assessment of the receivables. Liquid assets Liquid assets consist of cash at bank and in hand. Current account debts to banks are listed under debts to credit institutions under current liabilities. Liquid assets are entered at nominal value. Shareholders equity Revaluation reserve If revaluations have been included in the revaluation reserve less relevant (deferred) tax obligations, the realised revaluations are immediately included in the shareholders equity. The corresponding release of (deferred) tax obligations is credited to the results under the item tax on results from ordinary business operations. 68

71 Provisions General Provisions are established for legally-enforceable or actual obligations existing on the balance sheet date, whereby an outflow of resources is probably necessary, the scale of which can be reliably estimated. The provisions are valued at the best estimate for the amounts necessary for settling the obligations as at the balance sheet date. The provisions are valued at nominal value of the expenditure expected to be necessary for settling the obligations, unless otherwise stated. If a third party is expected to reimburse these obligations, and if it is likely that this payment will be received upon settlement of the obligation, this payment will be deducted from the provisions. Provisions for pensions The pension provisions are valued on the basis of the best estimate. Under these provisions, the obligation is valued at cash value of the expenditure expected to be necessary for settling the obligation. If the period over which the expenditure is capitalised is not longer than one year, the obligation is not accounted for at cash value. Additions to and release of pension provisions are credited or charged to the profit and loss account. Deferred taxation obligations The provision for deferred taxation relates to future tax obligations arising from differences between the valuation of the buildings according to these annual accounts and the fiscal valuation of the relevant items. Deferred tax obligations are calculated according to the current rate of corporation tax and as concerns the reassessment of buildings, at a rate of 15%. The majority of the provision can be characterised as long-term. Other provisions Provisions relate primarily to provisions arising from warranty obligations, transition and anniversary payments. Provisions are listed at nominal value of the estimated obligations. The provisions can be characterised broadly as long-term. Other assets and liabilities Liabilities are initially valued at fair value. Transaction costs immediately attributable to the acquisition of liabilities are included in the valuation and initial measurement. Following initial measurement, liabilities are valued at amortised cost, namely the amount received taking account of the share premium or discount less transaction costs. The fair value and amortised costs are practically equal to the nominal value. 69

72 PRINCIPLES FOR DETERMINATION OF THE RESULT General The result is determined as the difference between the realisable value of goods and services provided and costs and other expenditures over the year. Income from transactions is reported in the year in which it was realised. Revenue recognition Sale of goods Income from the sale of goods is included as soon as all essential rights and risks relating to ownership of the goods have been transferred to the purchaser. Project income and project costs For projects in progress, the result of which can be reliably foreseen, the project income and project costs are accounted for as net turnover and costs in the profit and loss account proportionally to the performance provided as at the balance sheet date (the Percentage of Completion method or PoC method). The progress of the performance provided is determined on the basis of the project costs incurred up to the balance sheet date in relation to the estimated total project costs. If a result cannot (yet) be reliably estimated, the income is accounted for as net turnover in the profit and loss account, up to the amount of incurred project costs that can probably be recovered; the project costs are then accounted for in the profit and loss account in the period in which they are incurred. As soon as the result can be reliably determined, revenue recognition is carried out according to the PoC method, proportionally to the performance as at balance sheet date. The result is determined as the difference between the project income and project costs. Project income relates to the contractually-agreed income and income from additional and less work, claims and payments if and in as much as it is probable these will be realised and can be reliably predicted. Project costs are the costs relating directly to the project, that can generally be allocated to project activities and allocated to the project and other costs contractually attributable to the client. If it is probable that the total project costs exceed total project income, expected losses are immediately accounted for in the profit and loss account. This loss is reported in the cost price of turnover. The provision for the loss is part of the item projects in progress. Net turnover Net turnover comprises the income from the delivery of goods and realised project income from projects in progress less discounts, etc. and any tax levied on turnover, and following elimination of transactions within the group. 70

73 Employee benefits Periodically-payable benefits Wages, salaries and social security contributions are accounted for in the profit and loss account, on the basis of the employment conditions, in as much as payable to employees. Pensions VDL Groep B.V. has accounted for all pension schemes according to the obligations approach. The premium payable on the year under review is also accounted for as an expense. Miscellaneous Depreciation on intangible and tangible fixed assets Intangible and tangible fixed assets are depreciated during the expected useful life of the asset from the moment of commissioning. There is no depreciation on land. If a change is made to the estimated future useful life, future depreciation will be adjusted. Book profits and losses from the incidental sale of tangible fixed assets are included under other operating income or costs. Government grants Operating grants are accounted for as income in the profit and loss account in the year in which the granted costs were incurred or income was lost or if a grant operating shortfall occurred. The income is accounted for when it is likely that it will be received. Grants relating to investments in tangible fixed assets are deducted from the asset in question, and accounted for as part of depreciation in the profit and loss account. Interest income and interest expenses Interest income and interest expenses are accounted for in proportion to time, taking account of the effective interest rate for the assets and liabilities in question. In accounting for the interest expenses, account is taken of the reported transaction costs on the loans received. Tax on the result from ordinary business operations The tax on the result is calculated on the result before tax in the profit and loss account, taking account of any available losses eligible for fiscal compensation from previous financial years (in as much as not included in deferred tax receivables) and exempted profit components, and following addition of nondeductible costs. Account is also taken of changes occurring in the deferred tax receivables and deferred tax liabilities as a result of changes to tax rates imposed. 71

74 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Market risk VDL Groep B.V. operates worldwide but the majority of positions and transactions are in euros meaning that the currency risks are minimal. VDL Groep B.V. runs no noteworthy price risks. VDL Groep B.V. runs interest risk on the interest-bearing receivables (in particular under current assets and liquid assets) and interest-bearing current liabilities. For receivables and liabilities with variable interest agreements, VDL Groep B.V. runs risks in respect of future cash flows; as concerns fixed-interest receivables and liabilities, VDL Groep B.V. runs risks on the fair value as a consequence of changes to the market rate. As concerns receivables, no financial derivatives are contracted in respect of interest risk. Credit risk VDL Groep B.V. has no significant concentrations of credit risk. Sales are made to customers that meet the creditworthiness assessment of VDL Groep B.V. Any liquid assets are with banks with at least an A-rating. Liquidity risk VDL Groep B.V. has no liquidity risk since the company has sufficient liquid assets. 72

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76 VDL GROEP ANNUAL REPORT 2014