2013 /2014 annual report integrated thermal waste ... zosen inova ag | 20132 2014 annual report 7...
TRANSCRIPT
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Content | Key Figures
Waste is our Energy.
Engineering is our Business.
Sustainable Solutions are our Mission.
Hitachi Zosen Inova AG (HZI) is a global leader in
energy from waste (EfW), operating as part of the
Hitachi Zosen Corporation Group. We act as an
engineering, procurement and construction (EPC)
contractor delivering complete turnkey plants and
system solutions for energy recovery from waste.
Hitachi Zosen Inova AG
(in CHF thousand) 2012 2014*
Order intake 456,346 534,295
Order backlog 474,665 582,540
Net revenue 285,505 421,437
EBITDA 9,298 8,618
EBIT 7,959 6,098
Net income 2,636 1,818
Share capital 40,000 40,000
Net assets 35,553 45,197
Total assets 203,922 205,711
Equity ratio 17 22
Headcounts 378 391
* January 1, 2013 – March 31, 2014
04 | Hitachi Zosen Inova AG
Insight & Outlook
05 | Organization
07 | Project-Highlights
08 | System Units
09 | Hitachi Zosen Corporation
10 | Hitachi Zosen Corporation
Financial Highlights
12 | Hitachi Zosen Inova AG
Financial Statements
Cover: Hitachi Zosen Inova AG
EfW plant in Vaasa, FI
3Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Ladies and Gentlemen
Trust, openness and transparency formed the basis of Hitachi Zosen Inova's
AG ongoing development in 2013, and were central to its dealings with
clients and staff alike. In a dynamic market environment we delivered a solid
performance in the past financial year, with order intake of CHF 534,3 million
and revenues of CHF 421,4 million allowing us to further strengthen our
position as a global player in the EfW market.
Thanks to the efforts of our highly motivated team and best in class project
organization, we were able to conclude the extension of the energy-from-
waste plant in Cleveland last year, to the client’s complete satisfaction.
We also took an important step into Eastern Europe, submitting the permit
documentation in Poznan, Poland, in record time.
The start of the two major projects in Buckinghamshire and Severnside
were important milestones in 2013 and so was the return of Franz-Josef
Mengede to Hitachi Zosen Inova. He had previously worked for Von Roll
Inova from 2005 to 2008 as COO and latterly as CEO, and then headed the
Global Business Unit Power Generation at ABB. His network of worldwide
contacts and experience in managing turnkey EPC business make him ideally
suited to lead Hitachi Zosen Inova.
We streamlined our organization in 2013, while continuing to invest in our
employees. As a result, we are well positioned in terms of our current and
upcoming projects in the UK, and will be able to put the experience we
gain there to good use in the markets we are targeting for the future in the
Middle and Far East, and North and South America.
The future promises to be exciting, and we look forward to tackling the
challenges that lie ahead together with you, our clients, shareholders,
and staff.
Sincerely yours
Minoru Furukawa Franz-Josef Mengede
Chairman & CEO CEO
Hitachi Zosen Corporation Hitachi Zosen Inova AG
4
Hitachi Zosen Inova AGInsight & Outlook
Over the past year we focused more closely on bolstering our project or-
ganization. We have anchored health & safety, compliance, and integrity
even more deeply in our corporate culture to address the demands we
have to meet worldwide.
Market leader Hitachi Zosen Inova AG (HZI) delivers system solutions for
energy recovery from waste. Thanks to our corporate structure and our
outstanding expertise in all disciplines, we can ensure efficient execution
of services, ranging from EPC sections through to turnkey plants, includ-
ing construction. Our project-based organization puts the success of the
project and client satisfaction at the fore, enabling us to meet our commit-
ment to delivering plants safely, on time, and to high standards of quality.
Our System Units guarantee the best possible technology for the thermal
process, flue gas treatment, and state-of-the-art energy recovery.
Our Service unit constantly incorporates the experience gained from new
and optimized solutions in the installed base to enhance the yield, availabil-
ity, and environmental friendliness of our plants.
New anti-bribery directive
Having appointed a compliance officer and carried out a compliance risk
assessment in 2012, we took appropriate measures to verify that HZI’s
policies and procedures were adequate. The code of conduct for the
company and its suppliers were adjusted in line with the company’s policy
to ensure integrity in the way we act. As part of this, the Executive Board
issued an anti-bribery directive containing guidelines on how to manage
agents, representatives, and partners (including sub-contractors and
sub-suppliers), and rules on gifts and entertainment.
Safe and successful projects
We are in a construction-oriented industry subject to many inherent risks.
Our culture revolves around the knowledge that we can find a safe way of
carrying out any aspect of our works. In 2013, we started work on various
initiatives to raise the profile of health & safety matters, not only within our
organization but among our suppliers. In selecting suppliers, we consider
their health & safety performance and culture as well as their technical
capabilities. We look forward to introducing new initiatives in the coming
months, both on our construction sites and at head office, that will ensure
we can all keep our focus on delivering our projects safely and successfully.
As part of our commitment to continual improvement, we also intend to
take some of the best initiatives from our construction sites and introduce
them into our core processes as best practice.
5Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Quality & Process
Management
Health & Safety
Hitachi Zosen Inova
U.S.A. LLC*
Hitachi Zosen Inova
UK Limited*
Hitachi Zosen
KRB AG*
Executive Board
Communication
HR & Infrastructure
Risk Management Shared Services
Marketing &
Sales
Project
Execution
CSP FGT Service R&D
* Hitachi Zosen Inova U.S.A. LLC is a subsidiary of the Hitachi Zosen Corporation and is operationally attributed to Hitachi Zosen Inova AG.
Hitachi Zosen KRB AG and Hitachi Zosen Inova UK Limited are subsidiaries of Hitachi Zosen Inova AG and operationally attributed to
Hitachi Zosen Inova AG.
Organization
6
Koichiro Anzai
Chairman of the
Supervisory Board of HZI
Franz-Josef Mengede
CEO
Member of the Executive
and Supervisory Board
of HZI
Seiji Shimoda
CTO*
Member of the Executive
and Supervisory Board
of HZI
* 2011–2014
Katsuhisa Tsuji
CTO
Member of the Executive
and Supervisory Board
of HZI
Michi Kuwahara
Member of the
Supervisory Board of HZI
Axel Greschitz
CFO
Member of the
Executive Board of HZI
The many years of experience amassed by our em-
ployees is the most valuable asset we have. This is
equally true of our Executive Board. The appointment
of Franz-Josef Mengede as CEO in August 2013 not
only brought the board back up to full strength, but
added his impressive range of expertise.
Seiji Shimoda, who had led the company prudently as
ad interim CEO since November 2012, continued to
support Hitachi Zosen Inova AG (HZI) in his original
role as CTO until March 2014, before returning to
Japan. Katsuhisa Tsuji, who has more than 30 years
experience in the EfW business, took over as CTO.
The Executive Board is completed by CFO Axel
Greschitz, who has been with the company since
2009, and the two long-standing Supervisory Board
members Michi Kuwahara and Koichiro Anzai.
7Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Project-Highlights
Poznan (PL)
Client Sita Zielona Energia SP.ZO.O
Start of construction 10.04.2013
Start of operation 01.01.2015
Waste capacity 210,000 t/a (2 x 13,5 t/h)
Fuel Municipal solid waste
Net calorific value 7,6 MJ/kg
Severnside (UK)
Client SITA West London Ltd.
Start of construction 2013
Start of operation 2015
Waste capacity 388,000 t/a (2 x 24,2 t/h)
Fuel Municipal and commercial waste
Net calorific value 9,3 MJ/kg
Buckinghamshire (UK)
Client FCC Buckinghamshire Ltd.
Start of construction 2013
Start of operation 2015
Waste capacity 300,000 t/a (1 x 37,5 t/h)
Fuel Municipal and industrial waste
Net calorific value 9,8 MJ/kg
8
System Units
System Unit Marketing & Sales
The global trend of urbanization, the need to curb
greenhouse gas emissions, and the world’s hunger
for renewable energy are encouraging more and
more countries to build energy-from-waste plants.
The M&S team promotes EfW globally, develops
opportunities from the initial idea through to the
feasibility study and leads the tender activities until
the contract is closed.
System Unit Project Execution
They were able to further strengthen their position in
2013. Seven turnkey projects, with a total of 13 lines in
operation or under construction and a throughput of
327 t/h, confirmed their successful market presence in
the UK. They also notched up a success in Eastern Eu-
rope, as their first turnkey project in Poland was start-
ed with the engineering for the permit application.
System Unit CSP
Quality and on-time delivery – these are the two key
priorities for the 60 members of the CSP team in the
execution phase of a project. Prior to that, they work
together closely with Sales in the proposal phase to
define the ideal solution for each client on the basis
of HZI’s core technologies: combustion, boiler sys-
tems, and the water-steam cycle. In the past year, the
Cleveland 4+5 & Ferrybridge projects benefited from
their customized solutions.
System Unit Flue Gas Treatment
While HZI Semi Dry is being successfully implement-
ed in all current turnkey projects, product placement
for next HZI Semi Dry generation has already begun.
FGT is assisting their Indian partner in the execu-
tion of the first EfW project in Essel Jabalpur, and is
supporting their System Unit Service in the concept
design of wet scrubbing retrofits.
System Unit Service
With its dedicated employees and keen focus on
client needs, the System Unit Service specializes in
servicing and maintaining plants, and conducting
modernization aimed at improving throughput and
efficiency, and prolonging the life of existing facilities.
Service had a very successful year in 2013, increasing
both order intake and revenues by more than 15%.
System Unit R&D
Their R&D department is responsible for the on-
going development of their technologies, making
sure they have the expertise to optimally serve the
needs of their various markets and clients. One such
example is their rapping monitoring system. This
has impressed the plant operators in Vaasa, with the
boiler remaining very clean after more than a year in
operation.
9Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Hitachi Zosen Corporation
Securing profitable business in overseas markets,
accelerating the speed of new product develop-
ment and commercialization, and realizing synergy
effects with acquired subsidiaries – these were the
major challenges for Hitachi Zosen Corporation
(HZC) in 2013.
After the introduction of unprecedentedly easy
monetary policy to supply liquidity to the market and
various other economic measures by the Japanese
government and the Bank of Japan, the JPY reversed
its trend and weakened against the US and major Eu-
ropean currencies. This triggered a sharp appreciation
of the Japanese stock market, and Japan’s economy
has since shown signs of recovery.
On track for No. 1 position
Within the HZC Group, Hitachi Zosen Inova AG (HZI)
obtained two major EfW projects (Buckinghamshire
and Severnside) totaling JPY 51 billion (CHF 475
million), while HZC secured order intake of JPY 150
billion (CHF 1.4 billion) in the form of the Kyoto South
Clean Center EfW project, the modernization of
existing facility and O&M contract for Kurashiki City,
and the project relating to waste and debris from the
Great East Japan Earthquake for Kawauchi Village,
and other EPC and O&M projects. As of March 2014
the consolidated sales of HZC came to JPY 333 billion
(CHF 3.1 billion) with 9,171 employees at the head
office and 79 consolidated subsidiaries.
The new medium-term management plan “Hitz
Vision II” was cited in this May, which entails a net
sales target of JPY 320 billion (CHF 3.0 billion) on a
consolidated basis in FY 2014 including JPY 196 billion
(CHF 1.8 billion) sales in the segment of Environmen-
tal Systems & Industrial Plant. By achieving these
targets, we will seek to firmly secure the position as
global No. 1 in EfW.
Asian sales activities
The Zurich and Tokyo sales teams regularly exchanged
sales and market information with a view to strength-
ening joint sales activities.
Last year, the HZC sales team pushed sales activities
in Asia, the target markets being India, Vietnam,
Thailand, Malaysia, Singapore, Indonesia, China, and
Korea. Hitachi Zosen India Private Limited (HZIND)
Hyderabad Branch sourced more than ten potential
projects jointly with local developers. At the begin-
ning of 2014, HZIND signed the first EfW project in
Jabalpur with an Indian conglomerate.
10
Financial Highlights FY 2013 Hitachi Zosen Corporation and consolidated subsidiaries
April 1 – March 31
(in JPY million)
2012 2013
Operating results
Order intake 382,848 328,433
Order backlog 450,711 445,711
Revenues 296,792 333,433
Operating income 11,362 7,879
Net income 7,411 3,720
Cash flows
Cash flows from operating activities 9,649 300
Cash flows from investing activities (13,488) (8,697)
Cash flows from financing activities (7,818) (514)
Cash and cash equivalents as of fiscal year end 56,413 49,961
Financial position
Net assets 115,126 117,565
Total assets 366,347 379,414
Investments in property, plant and equipment
and intangible assets (account balance)
130,455 129,318
Financial indicators
Shareholder’s equity ratio (%) 26.9 26.4
Debt-equity ratio (times) 1.0 1.0
Workforce as at fiscal year end 9,039 9,171
11Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
20132010 2011 2012
246
290
383
328
20132010 2011 2012
3.8
2.4
3.8
4.7
13
11 11
8
20132010 2011 2012
12.2 11.79.4
23.8
10
9
7
4
2010 2011 2012 2013
22.9
26.425.4
26.9
380 376 366379
357 344
451 446
20132010 2011 2012 20132010 2011 2012
17.3
24.9 24.2
34.8
287303 297
333
Order intake (JPY billion) Order backlog (JPY billion) Revenue (JPY billion)Export ratio (%)
Total assets (JPY billion)Shareholder’s equity ratio (%)
Net income (JPY billion)*Net income per share (JPY)
Operating income (JPY billion)Operating margin (%)
Revenue by regionRevenue by segment
Others 1.1 %
Japan 65.2 % Europe 17.1 %
Asia 8.9 %
Middle East 2.1 %
North America 5.6 % Others 2.5 %
Environmental systems & plant
61.9 % Machinery 15.6 %
Process equipment 4.8 %
Infrastructure 8.4 %
Precision machinery 6.8 %
* HZC consolidated common stocks of the company with a ratio of five shares to one share on Ocotober 1, 2013.
12
December 31, 2012
March 31, 2014
(in CHF thousand)
Assets
2012
(12 months)
2013 / 14
(15 months)
Cash and cash equivalents 87,215 107,861
Other financial assets 6,174 18,296
Trade and other receivables 18,914 11,503
Construction contracts
in progress
43,360 38,081
Inventory 3,046 2,952
Prepayments and accruals 4,097 2,880
Current assets 162,806 181,573
Employee benefits* 6,939
Other financial assets 24,172 3,840
Property,
plant and equipment
9,477 8,550
Intangible assets 3,492 3,042
Deferred tax assets* 3,975 1,767
Non-current assets 41,116 24,138
Total assets 203,922 205,711
Financial Statements 2012 and 2013 /2014 Hitachi Zosen Inova AG Consolidated statement of financial position
* Restatement of prior year figures due to retrospective adaption of IAS 19 revised.
The consolidated figures stated herein refer to Hitachi Zosen Inova AG according to IFRS standards and were audited as such by KPMG AG.
December 31, 2012
March 31, 2014
(in CHF thousand)
Liabilities
2012
(12 months)
2013 / 14
(15 months)
Trade payables 99,070 110,333
Other payables 3,904 4,679
Deferred income/revenue 35,425 26,862
Other financial liabilities 382 567
Employee benefits 5,130 5,914
Provisions 11,744 4,039
Current income tax payable 830 614
Current liabilities 156,485 153,008
Other financial liabilities 983 672
Employee benefits* 2,787 1,381
Provisions 7,780 5,123
Deferred tax liabilities* 334 330
Non-current liabilities 11,884 7,506
Total liabilities 168,369 160,514
Equity
Share capital 40,000 40,000
Hedging reserves (214) (131)
Retained earnings* (4,233) 5,328
Total equity attributable
to the shareholder of the
company
35,553 45,197
Total liabilities and equity 203,922 205,711
13Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Consolidated statement of profit or loss and other comprehensive income
January 1, 2013 – March 31, 2014
(in CHF thousand)
2012
(12 months)
2013 / 2014
(15 months)
Net revenue 285,505 421,437
Cost of materials and services purchased (203,893) (315,603)
Personnel expenses* (54,187) (67,928)
Other operating expenses (28,456) (30,945)
Other operating income 10,329 1,657
Operating profit before depreciation and amortization (EBITDA) 9,298 8,618
Depreciation and amortization (1,339) (2,520)
Operating profit (EBIT) 7,959 6,098
Finance income 645 1,273
Finance costs (5,206) (4,998)
Profit before income tax 3,398 2,373
Income tax* (762) (555)
Profit for the period attributable to the shareholder of the Company 2,636 1,818
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges (638) (751)
Net change in fair value of cash flow hedges reclassified
to profit and loss
(2,408) 856
Foreign currency translation difference (2) 7
Income tax 638 (22)
Items that are or may be reclassified to profit or loss (2,410) 90
Remeasurements of defined benefit liability (asset)* (3,295) 9,787
Income tax* 693 (2,051)
Items that will never be reclassified to profit or loss (2,602) 7,736
Other comprehensive income for the period, net of tax (5,012) 7,826
Total comprehensive income for the period attributable
to the shareholder of the Company
(2,376) 9,644
14
Consolidated statement of changes in equity
(in CHF thousand) Share
capital
Hedging
reserve
Retained
earnings
Equity
Balance at January 1, 2012 (as prev. reported) 40,000 2,194 (5,172) 37,022
Restatement due to IAS 19 revised* 907 907
Balance at January 1, 2012 (restated) 40,000 2,194 (4,265) 37,929
Profit for the year 2,636 2,636
Other comprehensive income
Effective portion of changes in fair value
of cash flow hedges
(638) (638)
Net change in fair value of cash flow hedges
reclassified to profit and loss
(2,408) (2,408)
Remeasurements of defined benefit liability (asset) (3,295) (3,295)
Foreign currency translation difference (2) (2)
Income tax on other comprehensive income 638 693 1,331
Total other comprehensive income (2,408) (2,604) (5,012)
Total comprehensive income for the year (rest.) (2,408) 32 (2,376)
Balance at December 31, 2012 (restated) 40,000 (214) (4,233) 35,553
Profit for the period 1,818 1,818
Other comprehensive income
Effective portion of changes in fair value
of cash flow hedges
(751) (751)
Net change in fair value of cash flow hedges
reclassified to profit and loss
856 856
Remeasurements of defined benefit liability (asset) 9,787 9,787
Foreign currency translation difference 7 7
Income tax on other comprehensive income (22) (2,051) (2,073)
Total other comprehensive income 83 7,743 7,826
Total comprehensive income for the period 83 9,561 9,644
Balance at March 31, 2014 40,000 (131) 5,328 45,197
* Restatement of prior year figures due to retrospective adaption of IAS 19 revised.
15Hitachi Zosen Inova AG | 2013 / 2014 Annual Report
Consolidated statement of cash flows
January 1, 2013 – March 31, 2014
(in CHF thousand)
2012
(12 months)
2013 / 2014
(15 months)
Profit before tax 3,398 2,373
Adjustment for net finance (income) costs (449) (287)
Adjustment for depreciation and amortization 1,339 2,520
Adjustment for non-cash items* (3,246) (2,525)
Adjustment for exchange differences 373 (238)
Changes in inventories (305) 94
Changes in trade/other accounts receivables 11,881 12,732
Changes in trade/other accounts payables (8,930) 3,475
Changes in employee benefits* 2,739 2,226
Changes in provisions 1,139 (10,362)
Interest received 500 374
Interest paid (35) (83)
Income taxes paid (105) (640)
Cash flows from operating activities 8,299 9,659
Acquisition of property, plant and equipment (701) (391)
Acquisition of intangible assets (549) (307)
Repayment of loans 6,003
Repayment of cash collaterals 320 12,059
Purchase of term money (6,097)
Cash flows from investing activities (930) 11,267
Finance lease (33) (405)
Cash flows from financing activities (33) (405)
Net increase in cash and cash equivalents 7,336 20,521
Cash and cash equivalents at the beginning of the period 80,083 87,215
Changes in cash and cash equivalents 7,336 20,521
Effects of changes in foreign exchange rates on cash held (204) 125
Cash and cash equivalents at the end of the period 87,215 107,861
| Concept and layout
agentur-perform.ch, Switzerland
| Photos
Patrick Hofmann, Switzerland
Hitachi Zosen Inova AG | Hardturmstr. 127 | P.O. Box 680 | 8037 Zurich | Switzerland
T +41 44 277 11 11 | F +41 44 277 13 13 | [email protected] | www.hz-inova.com