Royal Imtech and Risk Management Paul van Gelder, member BoM Royal Imtech N.V.
Facts & figures >475 Local offices worldwide 35 Countries
Facts & figures Present along all the major international shipping routes
Facts & figures 7 divisions
Facts & figures 23,000 employees
Facts & figures 4 billion euro annual revenue (approx.)
Facts & figures Thousands of customers
Facts & figures Technology since 1860 `
Our locations Home regions Additional regions
Our locations Home regions Additional regions Global Imtech Marine network
Share price 2011-2013 25 4Feb 13 20 15 18Jun 13 10 5 27Feb 13 18Jul 13 0 3-10-11 3-01-12 3-04-12 3-07-12 3-10-12 3-01-13 3-04-13 3-07-13
Key investigation findings Poland Fraudulent behavior Inflated (old) debtor positions Restatement of work in progress Significant forensic work had to be performed Germany Dual accounting practice Restatement of work in progress Inflated (old) receivables positions Moving around project losses Irregularities in dealing with X Group The Netherlands Improper intercompany invoices Overstated prior period results General Need to improve Imtech s governance, risk and compliance framework Tone from the top too much focused on good news 12
Corrective actions (1) Management changes Management changes in Germany and Poland Operational focus and extension Board of Management Governance, risk and compliance framework Appointment of Director Governance, Risk & Compliance New governance rules Board of Management New authorisation schedule Tender Review Board Internal audit department Dual reporting lines for key financial and legal management Culture Mandatory business ethics training Remuneration policies in line with new targets 13
Personnel training Anti Bribery and Corruption Code of Conduct Authorisation Schedule 14
Corrective actions (2) Strategic geographic review and choices Divest businesses in certain regions (Turkish business) Reduce high risk projects in certain regions for local customers (Russia, Poland) Implementation of Enterprise Risk Management Mid 2014, part of budget 2015 process and business plan 2016-2017 Sponsored by member BoM, discussed during budget meetings Annual discussion on Enterprise Risk Management with Supervisory Board Corruption, bribery, fraud, etc. included in Risk Matrix Push for maximum transparency Report to shareholders Documents and information on website (e.g. Authorisation Schedule, Code of Conduct, Remuneration) 15
Corrective actions (3) Catastrophic 5 1 1 TOP 10 Identified Risks 1 Reputational risk Operational Risk Matrix (example) 5 2 2 Talent & skills shortage Severity Light Minor Moderate Grave 4 3 2 1 4 6 7 9 10 3 8 2 3 4 5 6 7 8 3 Project management skills & quality 4 Salesforce quality & strength 5 Financial management, accounting & reporting 6 Tender management & cost projections 7 Missing out on technological/product developments 8 Unsufficient client orientation 9 9 Unsufficient competitiveness (price versus added value) 10 1 2 3 4 5 10 Complexity of the market versus company profile Rare Unlikely Moderate Likely Almost certain Likelyhood 16
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Priorities past 18 months Organic growth Fraud Operational Financial excellence situation Operational performance Corrective actions taken Adequate procedures in place Open communication Significant debt reduction Flexibility for recovery programme Amended terms financiers Initiated change >70% new senior management Clearly defined plans Headcount reduced with 3,000 FTE Working capital under control Significant work to be done Addressed Addressed Work in progress 18
Priorities going forward; operational performance Order intake Project execution Overhead Working capital In line with revenue Precalculated margin at > 4% Monitoring through tender process Design, engineering and planning Project management Scope change management Procurement Standardisation and centralisation Prudent spending Real estate rationalisation Reduce external support Reduce to 0% to -/- 3% Focus on work in progress and trade payables Divisions execute improvement plans such as Neue Imtech (GEE), Back to the top (Marine), One Imtech (NL) 19
Core value proposition intact Integrated & multidisciplinary technical services Design Engineering Implementation Consultancy Maintenance management Maintenance services 23,000 dedicated, highly skilled employees Leading market positions Buildings Industrial Traffic & Infra Marine Energy Water 20
Thank you Royal Imtech N.V. Kampenringweg 45a P.O. Box 399 2800 AJ Gouda The Netherlands Tel. +31 182 54 35 43 Fax +31 182 54 35 00 www.imtech.com