Annual report 1999 - Ballast · PDF fileBallast Nedam Annual report 1999. 3 Company Profile 5 Chairman’s Statement 6 Key Figures 7 Supervisory Board and Board of Management

Annual report 1999

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3 Company Profile5 Chairman’s Statement6 Key Figures7 Supervisory Board and Board of Management8 Report of the Supervisory Board

10 Personal particulars of the Supervisory Board13 Report of the Board of Management27 Operating Review34 Quality, working conditions and the environment36 Prospects

Annual Accounts 199938 Consolidated Balance Sheet in euro’s39 Consolidated Balance Sheet in guilders40 Consolidated Profit & Loss Account in euro’s41 Consolidated Profit & Loss Account in guilders42 Notes to the Consolidated Balance Sheet and Profit & Loss Account53 Consolidated Cash Flow Statement in euro’s54 Consolidated Cash Flow Statement in guilders55 Segmental information58 Balance Sheet and Profit & Loss Account of the Holding Company in euro’s59 Balance Sheet and Profit & Loss Account of the Holding Company in guilders60 Notes to the Balance Sheet and Profit & Loss Account of the Holding Company

Other Information63 Information for Shareholders64 Auditors’ Report66 Report Stichting Administratiekantoor Ballast Nedam67 Report N.V. Algemeen Trustkantoor ANT68 Five Year Summary in guilders70 Five Year Summary in euro’s

72 Commercial Organisation Chart74 Key Personnel

This publication is a translation of the official annual report, which was published in the Dutch language. In the event of discrepancies,

the version in Dutch shall prevail.

Cover picture: The 149-metre tall Millennium Tower is a new landmark for Rotterdam

Contents

jaarverslag 99_red_eng 01-05-2000 14:47 Pagina 1

Company profile

Changes in society are motivating us to find innovative town-planning ideas and solutions. Ballast Nedam hasexperience with all types of construction process and can build almost anything, underground or on land, in orunder water. From the conceptual phase and project financing through construction to maintenance andmanagement after completion: the intelligent, all-round construction company which delivers solutions. Not that this is new for us, for more than 120 years Ballast Nedam has been at the forefront of technologicalinnovation, logistics management, construction achievements and effective joint ventures.

The market now expects an approach which goes much further than just offering a product or service. It isincreasingly important to enter into joint ventures with parties from other disciplines. And to have anticipatorystrengths. In an ongoing innovative thought process. If governments alone no longer have the resources to carryout vital new works, improvements or expansions, other players must take the initiative. Thinking in terms ofpublic-private ventures and coming up with solutions.

The awareness that we must place environmental restrictions on developments makes us realise that solutions nolonger stand alone but have to be part of the overall picture. The development, infrastructure and nature must belooked at as a whole. This means enduring innovations and more efficient alternatives. Ballast Nedam has thecreativity and the social awareness to find them.

Nationally and internationally, Ballast Nedam is one of the larger construction companies.The company’s shares are quoted on the Amsterdam Stock Exchange. The United Kingdom, where operationsare carried out under the Ballast Wiltshier name, is the second home market.

The ‘technical heart’ of Ballast Nedam is its own engineering company, which specialises in design andengineering of architectural, civil engineering works. Our developers are experts in initiating and developingintegrated district plans, involving all construction disciplines.

The emphasis in general building is on offices and industrial buildings, shopping centres, courtrooms, prisons,car parks, hospitals and sports stadiums. Housing involves many new construction, renovation and maintenanceprojects. The new construction is carried out for housing associations, private individuals, investors and thecompany’s own development arm.The industry and supply sector is made up of companies which supply the construction industry with rawmaterials, services and products such as sand, gravel, ready-mixed concrete, pre-stressed systems,prefabricated concrete elements, sewer fittings and cast-iron and wood-fibre products.In the civil engineering sector, the company is involved in large-scale infrastructure works such as tunnels, jettiesand viaducts. The earthworks and roads sector offers a complete range of services for preparing andundertaking infrastructure projects.Ballast Nedam is a key player in the global dredging market, as shown by major beach replenishment, landreclamation and harbour projects in the Netherlands and abroad.

Ballast Nedam has over 7,300 employees and turnover is currently about NLG 4.4 billion.

Visit our homepage www.ballast-nedam.com for more information

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Chairman’s Statement

Ballast Nedam looks back on 1999 with mixed feelings. The net result fell from NLG 105 million to NLG 21 million, while turnover was stable at around NLG 4.4 billion. The fall can be attributed almost entirelyto a sharp decline in the international construction and dredging markets, particularly in Saudi-Arabia, SouthAmerica and Southeast Asia. Furthermore, a provision of NLG 50 million was formed for additional unpaidwork on a project in Berlin.

It is disappointing that these factors disguise the structural improvements at Ballast Nedam, in particular theimproved result in the construction sector in our two home markets, the Netherlands and the United Kingdom.The order book reflects our improved position, having grown by 15% from NLG 3.2 billion to NLG 3.7 billion.The meagre net result is, however, forcing us to improve our performance still further.

Ballast Nedam is a company with many qualities which we can make better use of. To this end, a strategicanalysis was carried out in early 2000 and a package of short-term improvements has been drawn up.We are sharpening up the company by means of a restructuring and reorganisation scheme. Our risks arebetter managed and, at the same time, we are strengthening the business in many areas, within a crediblegrowth target. Further details are given elsewhere in this report.

Thanks to these steps, Ballast Nedam will continue to live up to its reputation as a major internationalconstruction company, in which bottom-line performance will be structurally improved. We have everyconfidence in this!

The Board of Management would like to thank customers for the confidence they have shown in BallastNedam. In addition, we would like to thank our employees for the great efforts they have made once again thisyear for the company we are all proud of.

R.H.P.W. KottmanChairman of the Board of Management

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1998*1998* 19991999

4,402.2 4,556.2

40.1 131.5

23.5 114.1

20.7 105.2

0.5% 2.3%

3.4% 17.1%

587.8 626.3

32.7% 36.7%

3,705.0 3,225.0

87.6 111.4

22.0 30.1

98.4 91.4

119.1 196.6

25.0 50.0

7,674 8,545

2.07 10.5211.91 19.6658.78 62.632.50 5.00

1,997.7 2,067.5

18.2 59.7

10.6 51.8

9.4 47.7

0.5% 2.3%

3.4% 17.1%

266.7 284.2

32.7% 36.7%

1,681.4 1,463.4

39.8 50.6

10.0 13.7

44.7 41.5

54.1 89.2

11.3 22.7

7,674 8,545

0.94 4.775.41 8.92

26.67 28.421.13 2.27

Key Figures

(in millions, unless otherwise stated)

Turnover and result

Turnover

Operating profit

Profit before taxiation

Net profit

Net profitas a percentage of turnover

Net profitas a percentage of average shareholders’equity

Financial position

Shareholders’ equity

Shareholders’ equity includingequalisation account / total assets

General

Order book

Investments

Disposals

Depreciation

Cash flow

Dividend

Number of employees (average)

Per share of ƒ 12.50 nominal value● Net profit● Cash flow● Shareholders’ equity● Dividend

* restated for comparative purposes

in milions of guildersin milions of euro’s


Supervisory Board and Board of Management

Supervisory Board P.C. van den Hoek, chairman (61)

H.C. Broeksma (54)

C. Izeboud (54)

H-P. Keitel (52)

Mrs N. Kroes (58)

B.F-W.M. Peus (57)

R.B. Schermer (67)

Board of Management R.H.P.W. Kottman, chairman (as of 1 november 1999) (54)

Th. Mulder (51)

M.J.F. Weck (56)

G.N.G. Wirken (51)

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We hereby present you with the 1999 annual report including the annual accounts drawn up by the Board ofManagement and adopted by the Supervisory Board. The annual accounts have been audited by KPMGAccountants N.V., Amstelveen. The auditors’ report is included in the annual report.

We invite you to approve the annual accounts. Although the Articles of Association stipulate that approval ofthe annual accounts releases and discharges the members of the Board of Management and the members ofthe Supervisory Board from liability for the management conducted and the supervision exercised by them,respectively, in the year under review, insofar as that management and supervision are apparent from theannual accounts, the ‘discharge’ will be considered as a separate subject by the Annual General Meeting ofShareholders in accordance with the recommendations of the Dutch Corporate Governance Committee.The Board of Management, with the approval of the Supervisory Board, proposes to shareholders that adividend be paid of NLG 2.50 per share, charged in part to the distributable reserves.

In accordance with the retirement schedule, Messrs Izeboud and Peus stood down on 1 July 1999 asSupervisory Board members of the company and were reappointed. In accordance with the retirement schedule, Messrs van den Hoek and Keitel will stand down from theSupervisory Board of the company on 1 July 2000. The Supervisory Board proposes to reappoint them.Finally, we report that, in accordance with the retirement schedule, Mrs Kroes and Messrs Broeksma andSchermer will stand down as Supervisory Board members on 1 July 2001.

The Supervisory Board met with the Board of Management on eight occasions during the year under review,with all its members in attendance in nearly every case. Between those meetings we also received regularwritten progress reports. There were also informal discussions on an ad hoc basis as well as regular informalmeetings between the chairmen of the Supervisory Board and the Board of Management.

Discussions ranged over such issues as the general state of the company’s affairs, strategic policy, thefinancial results and forecasts, the annual report, the report of the external auditors, the twelve-month plan, the human resources policy, risk analyses of major projects and a number of acquisitions and projects.The company’s auditors were present during the discussion of the annual report and the half-year report.

Furthermore, the Supervisory Board met without the Board of Management to discuss its own performance,the relationship with the Board of Management and the composition and performance of the Board ofManagement, including the policy on succession and remuneration.

On 1 November 1999, Mr J.W. Ludwig retired as chairman of the company’s Board of Management havingreached the age limit. We are grateful to him for his work for Ballast Nedam in various capacities over manyyears. He was succeeded as chairman of the Board of Management by Mr R.H.P.W. Kottman.

Report of the Supervisory Board


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With effect from 15 March 2000, Mr M.J.F. Weck will stand down as member of the company’s Board ofManagement for personal reasons. He has been associated with Ballast Nedam for thirty-two years and weare grateful to him for his contribution to the company.

Delegations from the Supervisory Board attended consultative meetings with the Central Works Council onseveral occasions and had informal meetings with a delegation from the Central Works Council.

Finally, the Supervisory Board would like to express its appreciation for the commitment and dedication to thecompany shown by the workforce during the year.

Amstelveen, 10 March 2000

The Supervisory Board

P.C. van den HoekH.C. BroeksmaC. IzeboudH-P. KeitelMrs N. KroesB.F-W.M. PeusR.B. Schermer


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Personal particulars of the Supervisory Board

P.C. van den HoekMr. van den Hoek was born in 1939; he is a Dutch national.He is a lawyer in Amsterdam, partner in Stibbe Simont Monahan Duhot.He is a Supervisory Director of the following companies: ASMI N.V. (Chairman), Buhrmann N.V. (Chairman),Maxeres N.V. (Chairman), Robeco N.V., Rolinco N.V., Rorento N.V., Robeco Groep N.V., A.E.X. N.V. andFinancieele Dagblad Holding B.V. (Chairman). Mr. Van den Hoek was first appointed to the Supervisory Board of Ballast Nedam in 1988; his current term ofoffice ends on 1 July 2000.

H.C. BroeksmaMr. Broeksma was born in 1945; he is a Dutch national.Till Oktober 1999 he has been a member of the Group Executive of Koninklijke Wessanen N.V.He is a member of the Supervisory Board of Delta Lloyd Verzekeringsgroep N.V., Chairman of the Board ofStichting Preferente Aandelen Koninklijke Ahrend N.V. (Koninklijke Ahrend N.V. Preference Shares Foundation),and chairman and executive member of a number of social and cultural organisations (including HVO, theNational Museum Fund and Het Parool Foundation).Mr. Broeksma was first appointed to the Supervisory Board of Ballast Nedam in 1994; his current term of officeends on 1 July 2001.

C. IzeboudMr. Izeboud was born in 1946; he is a Dutch national.He is professor of Management Accounting at the Free University of Amsterdam.He is also treasurer of Dutch Relief and Rehabilitation Agency, member of the Supervisory Board of thehousing organisation MITROS WONEN, the TRIOS-DOEN Foundation and the Regionaal Opleidingscentrum(ROC) Amsterdam, Intereffekt Japanse Aandelen N.V. and Intereffekt Japanse Warrants N.V.Mr. Izeboud was first appointed to the Supervisory Board of Ballast Nedam on 16 January 1996 on thenomination of the Central Works Council; his current term of office ends on 15 July 2003.

H-P. KeitelMr. Keitel was born in 1947; he is a German national.He has a great deal of international experience as a consulting engineer and contractor.He has been member of the Board of Management of Hochtief AG since 1990 and has been chairman of theBoard of Management of Hochtief AG since 1992. He is member of the Supervisory Board of Tessag AG,Iveco AG, Vittera AG, Pilkington PLC and Leighton Holdings Ltd.Mr. Keitel was first appointed to the Supervisory Board of Ballast Nedam on 8 March 1994 on the nominationof Hochtief; his current term of office ends on 1 July 2000.

Mrs. N. KroesMrs. Kroes was born in 1941; she is a Dutch national.She has been President of Nijenrode University since 1991, before which she was State Secretary(1977 - 1981) and then Minister (1982 - 1989) of Transport, Public Works and Water Management.She is President of the Supervisory Board of NIB Capital N.V., and is a member of the Supervisory Board ofVIB N.V., Brambles Industries (Australia), Royal Nedlloyd N.V. and NCM Holding N.V., and further moreamongst others chairman of the Board of Management of Stichting Kunsthal, Advisor Pricewaterhouse-Coopers N.V. and member of the Competitiveness Advisory Group to the Chairman of the EuropeanCommission.Mrs. Kroes was first appointed to the Supervisory Board of Ballast Nedam in 1990; her current term of officeends on 1 July 2001.


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B.F-W.M. PeusMr. Peus was born in 1942; he is a German national.He has held various legal and commercial positions at Hochtief and is currently member of the Board ofManagement. He is Supervisory Director of a number of Hochtief participating interests.Mr. Peus was first appointed to the Supervisory Board of Ballast Nedam on 8 March 1994 on the nominationof Hochtief; his current term of office ends on 15 July 2003.

R.B. SchermerMr. Schermer was born in 1932; he is a Dutch national.In 1982 he was appointed a member of the Board of Management of Ballast Nedam; from 1993 until the endof 1996 he was Chairman of the Board of Management of Ballast Nedam.He is a member of the Supervisory Board of RoProperty Services B.V. and Royal G. Wijma & Zonen B.V.,Kampen (Chairman).Mr. Schermer was first appointed to the Supervisory Board of Ballast Nedam in 1997; his current term of officeends on 1 July 2001.

The members of the Supervisory Board together hold 11,639 depositary receipts for shares in Ballast Nedam;they have no options on shares in Ballast Nedam.


Turnover

Turnover reduced by 3.4% during the year under review from NLG 4,556 billion to NLG 4,402 billion.

In the home markets, the Netherlands and the United Kingdom, turnover grew strongly by 23% and 26%respectively and, in both cases, mainly from organic growth. The effect of currency translation on the increasein the United Kingdom was small (1%).

Growth in the Netherlands came from both the construction sector and the infrastructure sector, strengtheningan already sound position.

In the United Kingdom, the level of turnover in traditional activities was maintained; the growth in turnover ofNLG 260 million came mainly from Private Finance Initiative (‘PFI’) projects (for example, the Falkirk schoolsproject) and projects by the Special Projects Division, such as the major modernisation of the Newcastlestadium which is an example of a project where involvement from the initial phase can create added value forboth the customer and the construction company.

The turnover of Industry and Supply increased by 14% from NLG 344 million to NLG 392 million.The sector is well positioned in a number of niche markets. Part of the turnover growth came from the trendtowards industrialisation of the construction process.

Inasmuch as the expectations for Construction International early in the year were not high (the order bookwas only NLG 427 million), the turnover trend was disappointing in 1999. Not only were receipts of ordersparticularly poor in the first half of the year, but there were also delays in acquiring orders during the secondhalf. Turnover fell from NLG 1,153 billion to NLG 583 million and this reduction can be attributed almost entirelyto the decline in what has been an important market for us for many years in the Middle East.Good progress in the Caribbean area (turnover about NLG 200 million) tempered the decline in turnover inSoutheast Asia.

Turnover at Ballast Nedam Baggeren (Dredging) decreased during the year under review to NLG 280 millionfrom NLG 464 million in the peak year 1998 which had seen the highest level of production on the Öresundproject in Scandinavia and over NLG 100 million turnover in South America where turnover fell back sharply in1999 as a result of the so-called ‘samba’ crisis. Currently, however, prospects in this area are better.

The turnover from projects involving suction hopper dredgers showed healthy growth, particularly in SoutheastAsia.

Report of the Board of Management

United Kingdom (29%)

Other European countries (3%)

Middle East (6%)

South East Asia (3%)

Other parts of the world (6%)

The Netherlands (53%)

turnover 1999 by geographical region

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Operating profit

It has been decided to present more detailed segmental information in order to provide shareholders with abetter view of performance. The same breakdown is used in the annual report for turnover figures, workingcapital, other relevant equity figures and the order book.

The operating profit and margin per segment is set out below (figures between brackets are negative).

(in millions of guilders)

We regard the profit achieved in 1999 as very disappointing, all the more so because the trend in results ofmany business units was positive.

The very sharp fall in results for Construction International was caused in part because turnover, which almosthalved, was inadequate to cover general expenses and it was impossible to adjust expenses quickly enough.In addition, the margin on projects was not profitable enough and, furthermore, reorganisation costs were alsoincurred.

The margin at Construction Netherlands increased once again this year and we see opportunities for thismargin to grow further. Operating profit on construction activities in the United Kingdom grew, but shouldcertainly improve further in the coming years as a result of the repositioning which is now under way.

Turnover (1995-1999) by segment in millions of guilders (exclusive ‘Other’)

1999 1998

Operating profit Marge Operating profit Marge

Construction International (26.8) (4.6)% 48.2 4.2%Construction Netherlands 36.8 3.3% 29.2 3.1%Construction United Kingdom 7.7 0.6% 4.7 0.5%Industry and Supply 31.8 8.1% 27.1 7.9%Infrastructure Netherlands (2.0) (0.2)% (5.4) (0.8)%Dredging 26.3 9.4% 40.8 8.8%Other (33.7) (13.1)

40.1 0.9% 131.5 2.9%

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Once again, Industry and Supply made a good contribution to the result. Our policy continues to be tostrengthen this sector by means of further acquisitions. The criteria for acquisitions are continuity of competentmanagement, tangible synergy gains for our construction activities and a realistic acquisition price.

As in 1998, the infrastructure sector made a loss. High tendering fees for ‘design and construct’ projects suchas the High-Speed Rail Link, inadequate margins on work in progress and a substantial setback in a majorproject were the reasons for the loss in 1999.

Turnover from dredging fell sharply, as noted above, but the high quality of the work in progress resulted in themargin holding steady.

‘Other’ includes a number of items which require further explanation. A breakdown is given below:

In consultation with the client, an amount of additional work was performed on the Lehrter Bahnhof project.The negotiations with the client on the payment for this, which originally appeared to be heading for a positiveoutcome, became very difficult. As it is not certain what the final outcome will be, it has been decided to form a provision for the full amount indispute. The existing provision for risks on international projects of NLG 19 million was inadequate to meet thisand so we have decided to form a new risk provision of NLG 25 million. On the positive side, the Ballast Nedam Pension Fund distributed NLG 25 million from the excess reservesunder the current contract.

During the year, it was decided that all operating companies should have suitable accommodation in thecentre of the country. In that context, the office building in Amstelveen was redeveloped and a lease contractwas concluded with third parties on which a development agreement could be reached with the lessor.After deduction of provisions, the gain was NLG 20 million.

Net result

Net financial expense was NLG 16.6 million, almost the same as in 1998. The interest expense includes theexpense of financing the instalment arrears in Saudi Arabia.

In 1999, as a result of losses available for relief, still no corporation tax was payable in the Netherlands. Foreigntaxes on profit were modest because of the losses in the Construction International sector.

The net result was NLG 20.7 million (1998: NLG 105.2 million).

Provision for the Lehrter Bahnhof, Berlin (50.0)Less: release of provision for international projects 19.0

(31.0)

Distribution Stichting Pensioenfonds Ballast Nedam NV 25.0New general provision for risks (25.0)Profit on redevelopment of the Amstelveen office 20.0Other results (22.7)

(33.7)

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Investments

During the year, NLG 88 million was invested in fixed assets and a further NLG 7 million of fixed assets wereacquired as a result of acquisitions. The investments included modernisation of the equipment of the Industryand Supply companies, investments in the dredging fleet and further replacement of construction cranes forthe Dutch market.

Financing and liquidity

Net financing of working capital at year-end was NLG 252 million (1998: NLG 276 million). A significant element in this was the arrears of instalments due from the Saudi Arabian government amountingto NLG 278 million at balance sheet date. This debt arose from a completed project and is uncontested: thereis, therefore, no doubt about its validity although it should be noted that this item is having a disproportionateeffect on financial resources.

A new payment schedule was agreed in mid-1999 with the Surinam government as client for the constructionof two large bridges in that country. This became necessary after payment arrears had arisen which were notin accordance with the contract. Adequate collateral has been provided for the rescheduling and monthlypayments have been received promptly as agreed since the rescheduling.

At the end of the year under review, a small amount of the credit facilities available from banks had beendrawn down.

Dividend

Since flotation in 1994, approximately 50% of net profit has been distributed to shareholders as dividend.

In a departure from this policy, it is proposed to shareholders that a dividend be paid of NLG 2.50 per share,charged in part to distributable reserves.

This proposal underlines our confidence in our company’s fundamentally healthy developments and ourconviction that the problems which have arisen are under control.

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Order book

The order book grew during the year under review by 15% from NLG 3,225 billion to NLG 3,705 billion.

Movements by sector were as follows: (in millions of guilders)

Construction International’s order book was inadequate throughout the year. Some promising, large tenderswere outstanding at the end of the year and it is expected that they will result in an increase in the order bookin the near future. However, the lack of so-called mega-orders in Saudi Arabia means that an order book ofmore than NLG 1 billion, as was frequently the case in the recent past, is not expected to be achieved.

Construction Netherlands’ order book grew considerably due to the continuing favourable economicconditions for construction. An increasing share of the order book is being formed by the company’s owndevelopments although they are only included if contracts have been concluded with third parties.

Infrastructure Netherlands’ order book fell. It should be noted, however, that a number of promising, largetenders have been submitted for work on the High-Speed Rail Link.

The quantity and quality of dredging orders are excellent and, here too, there are promising opportunities forlarge new contracts.

Human Resources

The average number of employees fell by 10% during the year to 7,674 (1998: 8,545). The workforce in theNetherlands increased. Employee numbers fell sharply in the Middle East and Southeast Asia on thecompletion of projects in those areas.

Ballast Nedam enjoys a strong image and a good reputation and according to labour market surveys ofstudents is the most attractive employer in the construction industry. In relative terms therefore, Ballast Nedamhas less difficulty in recruiting new employees in a tight labour market but it is affected by shortages in certainsectors.

The rate of sick leave was 6% (1998: 5%). Ballast Nedam companies closely monitor sick leave and activelyimplement policies to control absenteeism and improve working conditions.

Once again, consultations with the Central Works Council were constructive. Since the Central Works Councilwas set up twenty-five years ago, these consultations have become a significant factor, with policy issuesincreasingly being a topic of discussion.

1999 1998

Construction International 474 427Construction Netherlands 1,017 667Construction United Kingdom 983 860Industry and Supply 110 112Infrastructure Netherlands 692 753Dredging 429 406

3,705 3.225

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Strategy

Ballast Nedam is a construction company and intends to remain so. Ballast Nedam is broadly-based and intendsto remain so. We offer services in every phase of the building process.

Our profile is therefore:an intelligent all-round construction company delivering solutions nationally and internationally. This means that we work from the very first moment towards a planning solution for the customer involving co-development, co-financing, consideration of the technical design, execution of the project, manufacture andsupply of our own building products, management and, if requested, operation.

Ballast Nedam has evolved from a pure construction company into a high value supplier of solutions forsometimes very complex problems. We will accelerate this process so that Ballast Nedam is also involved insegments offering higher added value. Our distinctive features (such as a high-value engineering company) put usamong the leaders in our market as we can solve environmental problems (large scale developments and mobilityfacilities) which only a few construction companies can take on.

Our international experience with new types of joint venture and contracts between governments and marketplayers (PPS) puts us in a good position for the future developments in this direction.We are also able to respond promptly to the increasing industrialisation of the construction process (prefab)through our strong Industry and Supply sector.

Strategic analysis of our portfolio shows that none of the current activities are out of place. While internationaldredging and parts of Industry and Supply have the least in common with our core business, they make a majorcontribution to the group’s profitability. In the dredging market scale is a strategic factor. We are therefore investigating in which way Ballast NedamDredging’s scale can be realised in the near future. To this end, we are open to joint ventures with other marketplayers.

Ballast Nedam will opt in due course for a European consortium of well-matched partners. The majority ofconstruction markets are still local and will continue to be so for the time being, but Ballast Nedam is preparingfor the necessity of future alliances in which skills, know-how, systems, purchasing and R&D strengths can bebetter exploited. We will be taking the step towards phased European (and even further reaching) co-operationfrom a position of strength in our home markets and, therefore, that is now our priority.

In the shorter term, we are opting to improve our performance by examining and streamlining our organisation,rationalising in some areas, strengthening the group management, improving the process management of largeprojects, reducing the risk profile of our international work, reinforcing and expanding our engineering company,making acquisitions in electrical and technical contracting, Industry and Supply, expansion in the United Kingdomand national coverage in residential and non-residential building.We are also looking for strategic partners for alliances in facilities management services.

Our relationship with Hochtief (48% shareholder) offers many opportunities for international synergy.Better use will be made of these in 2000.

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Construction International

Ballast Nedam InternationalBallast Nedam International is engaged in all phases of the construction process from project developmentthrough ‘design and construct’ to maintenance and management. It carries out civil engineering projects inports and constructs jetties and bridges, industrial buildings, houses, hotels and apartments.

Ballast Nedam is facing problems with arrears of payment on a large government project in Saudi Arabia.During the final quarter of the year under review the arrears were reduced by some 20% to about NLG 278million, but they still tie up a large amount of capital and are not in accordance with the contractual paymentterms.

During the year, the mega-cruise pier in Curaçao was handed over and progress was made in Sint Maarten onthe container terminal extension and the cruise-ship piers. Hand-over will be on the planned date, despite thedamage caused by hurricane Lenny which hit the Caribbean in November.

In Surinam, the bridge over the River Coppename was handed over and, in addition, good progress was madeon the construction of the bridge over the Surinam River which will be handed over in mid-May 2000. A planacceptable to both sides, customer and construction company, was agreed for the payment arrears whicharose in 1999 and it allows Ballast Nedam International to complete the project properly and on time.

The final points are currently being agreed on the development contracts for a winter holiday resort in BritishColumbia, Canada. In addition, there are good prospects of gaining orders for the development andconstruction of stadiums in Portugal.Efforts in the area of telecommunications recently resulted in an order for Ballast Nedam TelecomInfrastructure.

During the past year, the ‘financial engineering’ discipline again demonstrated that it was a valuable aide ingaining orders.Intensifying communications and information technology with the integrated ERP package makes it possible toaccess know-how around the world.

1999 was a difficult year for Ballast Nedam International. Turnover was less than forecast and a heavy loss wasincurred.The economic crisis in Southeast Asia and low oil prices until mid-1999 in the Middle East were reasons forlower than expected receipts of orders. During the final quarter, there was a turn-around which has created amarked revival in economic activity in Southeast Asia. This has resulted in an order for the construction of theSungai Prai bridge in Butterworth, Malaysia.

Construction Netherlands

Ballast Nedam Utiliteitsbouw (General building)In 1995, Ballast Nedam Utiliteitsbouw changed its name to Ballast Nedam IGB following the merger with IGB.The integration has been very successful. The name was changed back to Ballast Nedam Utiliteitsbouw on 1 December 1999 to give the company a clear profile in the future.

Much was achieved in stadium construction. In the year under review, the Sparta soccer stadium in Rotterdamand the De Graafschap stadium in Doetinchem were completely renovated and a start was made on theconstruction of a new stadium for Roda J.C. in Kerkrade. Recent developments are the plans for the extensivemodernisation of the Galgenwaard soccer stadium in Utrecht and a multi-functional stadium complex inGroningen, including retail units, offices and a leisure centre.The extension of five postal sorting offices, an order of NLG 75 million, was completed inside one year. InRotterdam, the modernised ‘Ahoy’ was officially re-opened. The prison in Nieuwegein and the Willem II judicial

Operating Review


21

complex in Tilburg received their first ‘residents’. Students at the Montessori College Oost in Amsterdam canalso enjoy a new building. This remarkable complex, designed by architect Herman Hertzberger, was handedover at the end of 1999.The area around the Amsterdam ArenA is currently the largest building site in the Netherlands whereconstruction projects worth about NLG 500 million such as the Pathé Mega-cinema, the Oval Tower, the VillaArena furniture mall, the Rainbow Offices and the Arena Arcade are under construction.

The innovative, weight-saving BubbleDeck floor system was used in the Millennium Tower in Rotterdam, whichwill be opened in the summer of 2000. A variant of this technology is also being used in the Oval Tower inAmsterdam Zuidoost.

Both turnover and result were well above forecast. The size and quality of the order book give confidence forthe future.

Ballast Nedam Woningbouw (Housing)Ballast Nedam Woningbouw undertakes new housing projects from its regional offices for its own projectdevelopment department and on behalf of housing associations, investors, property developers and privatecustomers. A strong development has been renovation, large-scale maintenance and housing services.

Policy is geared primarily to achieving a national presence through organic growth and acquisitions. Co-operation with other group companies and developing products such as a flexible housing concept whichmeets the increasingly individualised wishes for housing and developments in care homes and high-riseconstruction are being intensified.

B.V. Aannemingsbedrijf F.W.Onrust, Zaandam, was acquired at the end of 1999 and a branch office wasopened in The Hague to strengthen and expand the housing service and maintenance activities.

To enhance the co-operation between the group companies, the West region moved to Capelle aan den IJsselin early 1999 and the South region moved to Eindhoven during the third quarter. Co-operation with other Ballast Nedam companies took further shape in the development of plans and thepreparation and execution of projects including those in Rotterdam (Hoge Erasmus, high-rise offices andresidential units), Eindhoven (Blixembosch, car park, retail and residential units), Leidschenveen (52 residentialunits), Gorinchem (car park and 86 apartments), Tongelre (shopping centre and 1000 residential units) and inVeldhoven (roundabout construction).

In addition to handing over a large number of projects, including residential developments in Houten(Aquarelle), Arnhem and the Kop van Zuid in Rotterdam (Stadstuinen), BNW successfully sold several of itsown development plans during 1999 and has already started construction work on some of them. Noteworthyprojects include Veldhoven (Akkereind), Maarssen (Zogwetering), Amstelveen, Cuijk, Dordrecht (NoordendijkZuid), The Hague (Willemstaete) and Middelburg.

Turnover and results improved further during 1999. As the order book at the end of 1999 was qualitatively andquantitatively at a good level, 2000 can be faced with confidence; it is expected that turnover and result willgrow further.

Ballast Nedam Ontwikkelingsmaatschappij (Property development)As a developer, Ballast Nedam Ontwikkelingsmaatschappij is operating in a rapidly changing market.Prosperity in the Netherlands is putting ever higher demands on the quality of the environment and theauthorities are calling more often on market players to develop districts and infrastructure.

As a result, there is a change in orders from construction in expansion areas (greenfield sites) to theredevelopment of built-up areas (brownfield sites).


22

Ballast Nedam reacted to these developments as early as 1997 by combining the traditional projectdevelopment disciplines (housing, offices and retail) with the infrastructure, sport and leisure disciplinespossessed by Ballast Nedam Ontwikkelingsmaatschappij. The aim is to give priority to the development ofintegrated projects and districts from within the various disciplines. Activities are moving away from individualdevelopments towards district developments. In this, the infrastructure discipline is a significant organisationalelement but, on the other hand, a major market is beginning to develop for infrastructure projects constructedand operated by public and private players, including the utilities. Co-operation with other group companies gives Ballast Nedam Ontwikkelingsmaatschappij access totechnological and process know-how, allowing the company to develop complex plans.Ballast Nedam Engineering is closely involved in infrastructure development.

In the past year, Haagse Veste IV, part of a major office complex along the Utrechtse Baan in The Hague, washanded over. It is the new home of Unisource Business Networks. Further to the development of Haagse VesteII, III and IV, a start has now also been made on the sale and lease of the final element, Haagse Veste I.

The company is working with third parties and the municipality of Amsterdam in a public/private venturedeveloping offices, car parks and a large-scale retail complex around the Amsterdam ArenA.

The prestigious Liesbosch business park is in the final stage of redevelopment. A large number of offices willbe developed along the Merwedekanaal in the coming years.

The contract stage of the residential building development in Vleuten-De Meern has been completed. Thisdevelopment includes some 850 homes which will be built over a period of five years from 2001. Goodprogress is being made on the preparatory work and development of various other residential building projects,including those in Gorinchem, Leidschenveen, Maarssen and Nieuwerkerk aan den IJssel. The basis has alsobeen laid for various interesting, integrated district developments which will ensure a healthy future for thecompany.

In the infrastructure field, Ballast Nedam Ontwikkelingsmaatschappij has been closely involved in initiativessuch as the second Maasvlakte extension of the Port of Rotterdam, the Delft Spoorzone, RandstadRail, theTransrapid magnetic levitation train track and the Grensmaas/Zandmaas project in Limburg. The list alsoincludes infrastructure work for the utilities sector, including the forthcoming Harnaschpolder Delflandconcession/decontamination project, the first of its type in the Netherlands. The company is developinginitiatives for a number of smaller projects, such as the A4 and N11 motorways, often with third parties. Thereare good grounds to expect that a number of these initiatives will be brought to fruition during 2000.

Ballast Nedam Ontwikkelingsmaatschappij can look back on a good year and with the further strengthening ofthe professional organisation is looking forward to the coming years with confidence.

Construction United Kingdom

Ballast WiltshierSignificant further progress was achieved in our position in the United Kingdom. Turnover grew strongly andthis led to an improved result compared with 1998.

Ballast Wiltshier has further increased its activities under the Private Finance Initiative (PFI) and two newprojects were won in this sector in the past year, following the success of the schools project in Falkirk,Scotland, for which the company won the first PFI Education Award.

The PFI division was strengthened and it is involved in a number of projects at various stages.Interest in the PFI sector is part of the strategy to build up a wider range of activities and provide additionalservices to customers.


24

Facilities Management is a growth sector in the United Kingdom and offers long-term contracts which generatesteady income. Facilities Management is an extension of the core activity, construction.During the year under review, Ballast Wiltshier won its first Facilities Management contract, covering provisionof facilities for a school in Portsmouth with 1,000 pupils.

The position held in the stadium sector was strengthened by the establishment of a specialist division. The extension of St. James’ Park (Newcastle United FC) is going according to plan.This is Ballast Wiltshier’s seventh stadium project in the United Kingdom. Recently, Ballast Wiltshier succeededin becoming a preferred contractor for new stadiums for Leicester City, Blackpool, Bournemouth, Hamilton andShrewsbury.

The development division was also set up during the year. No significant contributions are expected in 2000,however, because of the long lead-times for this type of project.

In accordance with the strategy to be less dependent on orders in the very competitive traditional constructionmarket, the company succeeded once again in entering into long-term joint ventures with a number ofcustomers. The telecommunications agreement with Vodafone has been renewed until the end of 2000 andoffers prospects for further growth.

Ballast Wiltshier is benefiting more and more from working with other Ballast Nedam companies.The co-operation with Ballast Nedam Woningbouw (Housing) has been particularly productive through thedevelopment of proposals for batch construction of houses which offers Ballast Wiltshier good opportunities inthe growing market for social housing, where Ballast Nedam in the Netherlands enjoys a very good reputation.

The quality and size of the order book increased during the past year. Along with the expansion of the range ofactivities, the target for 2000 is to improve profitability.

Industry and Supply

Ballast Nedam Industrie en Toelevering (Industry and Supply)The sixteen companies that operate under Ballast Nedam Industrie en Toelevering concentrate on industrialextraction and the manufacture and supply of products and services chiefly for the construction industry.Activities have been considerably expanded and strengthened in the past five years. The wide variety incompanies and a policy focusing on an efficient and effective market approach were reasons for BallastNedam Industrie en Toelevering to organise its activities in four clusters: raw materials, semi-manufactures,end-products and specialised techniques.

The raw materials extraction and trade cluster enjoyed good results in Belgium and the Netherlands in 1999.The extraction of gravel in the Bichterweerd in the Meerheuvel concession made a particularly goodcontribution to the profit of the raw materials cluster. Algri is now expected to start gravel extraction in theMechelse Heide concession during 2000.

Ballast Nedam Bulk Grondstoffen v.o.f., a joint venture with Ballast Nedam Baggeren (dredging) and BallastNedam Grond en Wegen (earthmoving and roads), built up a strong market position during the year. A numberof new extraction sites have been acquired thus safeguarding the company's future.

In raw materials trading, Verkaik has developed from a sand and gravel trader into an all-round supplier of bulkconstruction materials, including purchasing and trading in infill sand, sea sand, rubble granulates, lytag,granite and quartzite.

The semi-manufactures cluster (including ready-mixed concrete) benefited considerably from the favourableconditions on the Dutch construction market in 1999, with sales showing an upward trend. Prospects for thecoming years are good as a result of a number of major infrastructure projects which have been lined up.


27

Transportbeton has strengthened its market leadership by a combination of high product quality, reliabledelivery times, service and a low cost level.

The same is true of the end-products cluster (concrete products, concrete construction elements, wood-fibreand cast-iron products). Market demand was robust in civil engineering, road construction and hydraulicengineering and in other sectors of the construction industry. Haitsma Beton and Hoco Beton benefited fromthis in particular and have proven themselves to be reliable, flexible prefab-specialists who work with theircustomers. The intensive co-operation between Hoco, Haitsma and Durisol is beginning to bear fruit (synergyeffects) and will be continued.

The major investments in the production lines at Waco-Liesbosch Beton and TBS Soest have ensured a fasterand better response to demand and due partly to this, a solid position has been created as an innovativesupplier of underground infrastructure fittings.

The specialised techniques cluster (pre-stressed systems, concrete renovation and mastic asphalt) wasstrengthened considerably by the acquisition of Nieuwenhuis Betonreparatie, an all-round concrete repair andspecialist maintenance company in Apeldoorn, which guarantees national coverage.

Ballast Nedam Industrie en Toelevering’s aims include increasing the co-operation between group companiesand/or third parties, ‘co-makership’, to achieve product and process innovation and to create and maintain alead over competitors.

Both turnover and results improved further in 1999. Given the healthy quality and volume of the order book atyear-end 1999, the prospects for 2000 are encouraging.

Infrastructure Netherlands

Ballast Nedam Beton en Waterbouw (Civil engineering)As part of the ongoing integration process, various projects have been initiated in co-operation with BallastNedam group companies. These projects, often public/private partnerships, cover the complete cycle fromdevelopment to implementation, including financing proposals. Other innovative types of contract have beenused in industrial construction with Ballast Nedam Beton en Waterbouw taking on the design andmanagement of integrated projects.

The bridge in Veghel is an innovative project combining a steel load-bearing construction with a concrete deckfor the first time in the Netherlands. Another example of an innovative project is the 60 bridges project in theLeidschenveen Vinex location which was awarded first prize in an international competition. The jury referred tothe very high quality production techniques and minimum material usage. Ballast Nedam Beton en Waterbouw is involved in the construction of two large bored tunnel projects. Afterinitial problems, the boring process in Botlektunnel is now progressing well.

Ballast Nedam is a member of the consortium constructing the tunnel in the centre of The Hague. There havebeen technical problems – beyond the responsibility of the consortium. The consortium has maderecommendations for solving them and new contract negotiations are now under way.

New equipment has been purchased for foundation work in anticipation of large infrastructure projects.

Tendering for major infrastructure projects, such as the southern section of the High-Speed Rail Link and theBetuwe freight-only railway line, required a great deal of effort during 1999 mainly because of the ‘design andconstruct’ type of contract. This trend will continue as the government withdraws from such projects and so itwill be very important for the public and private players to define clear roles in these types of contract and riskallocations in the near future.The simultaneous execution of a number of major infrastructure projects will require a huge effort from all


28

market players. Ballast Nedam’s national and international know-how and experience will be of greatimportance. Building up and developing new know-how and the necessary knowledge management willrequire much attention.

Turnover was below expectations in 1999, mainly because of the delays in major projects, but this was partlyoffset by higher turnover from the regional offices. The operating profit was less than forecast.A recovery is expected in 2000.

Ballast Nedam Grond en Wegen (Earthmoving and roads)Ballast Nedam Grond en Wegen strengthened its market position once again during the year. Working with Ballast Nedam Beton en Waterbouw, attention was focused on the preparations and pre-qualification for major projects including the High-Speed Rail Link and the Betuwe railway line. The number of orders for railway construction increased along with the sand-trading and slag-processingactivities.

In the course of the year BBL, a joint venture with Longo and Balfour Beatty, was recognised as a supplier tothe Dutch Railways and this was a further step in the development of railway activities.

Ballast Nedam Grond en Wegen is engaged in site preparation at the Velthuizen Vinex location in Vleuten-DeMeern. Other projects include the construction of noise barriers along the A12 near Utrecht, developing theconstruction site in Akkrum, construction of the Afrikahaven in the Port of Amsterdam and the Rail ServiceCentre on the Maasvlakte. The roadworks for the second Heinenoordtunnel and the flyovers on the Maasvlaktewere handed over. Ballast Nedam Grond en Wegen was also involved in the railway works at Oirschot-Best.The organisation was involved in environmental activities in decontaminating the waste tip at Diemerzeedijknear Amsterdam.

Internally, much attention was given to the development and implementation of a new ICT (informationcommunications and technology) system for working processes. In addition, the organisation was furtherstreamlined in a number of areas and steps were taken to further improve the efficiency of the organisation.

Financially, the year was positive and turnover slightly exceeded the forecast. The result met the positiveexpectations. In the light of the current strategy and the major projects which are expected to start in 2000,the expectations for the year are positive.

Dredging

Ballast Nedam Baggeren (Dredging)On the European market, Ballast Nedam Baggeren was involved in a range of projects in the Netherlands,Denmark, Germany and the Mediterranean region. Outside Europe, it worked on projects in Egypt, Brazil,Argentina, Singapore and Malaysia. Orders were received from India and Iran which will start during 2000.

The projects were highly diverse in nature and size and included constructing, deepening and maintainingports and waterways and infrastructure, large-scale land reclamation projects for urban expansion orconstruction of business parks. Various replenishment projects were carried out to protect beaches anddunes.An exceptional project completed during the period was the Ketelmeer project, a storage basin forcontaminated sediment. Now this work has been completed, a start can be made on the extensive clean-upof the River IJssel. Other activities included the ‘wet’ groundwork for laying pipelines and sinking traffic tunnels. The dredging market in the Netherlands is healthy, due in part to major infrastructure projects.

By joining forces with other Ballast Nedam operating companies, Ballast Nedam Baggeren is also able toundertake integrated projects from the development phase to completion and, if necessary, to manage them.


29

Market forecasts are very positive, especially in terms of larger land reclamation projects and particularly in theSoutheast Asia region. Ballast Nedam Baggeren is responding to these developments by investing in the fleet.A trailing suction hopper dredger was ordered in January 2000. Its capacity of 38,000 tonnes will make it thesecond largest in the world.

The financial crises in Southeast Asia and South America had a marked effect on turnover.Despite this, an acceptable result was achieved in line with forecast. Given the well-filled order book and highdemand, the future is viewed with confidence.

General

Ballast Nedam EngineeringBallast Nedam Engineering has a long tradition in the area of ‘design and construct’ projects for domestic andforeign markets. The customer’s intention with these is to reduce the overall project time. The time savings areachieved through an integrated production process which addresses design and construction at more or lessthe same time. The process management requires a special approach. Examples are the various tenders forthe High-Speed Rail Link for which significant design assistance was provided in the past year. Anotherexample is the design for two X-ray container scanners at Schiphol airport.

Abroad, Ballast Nedam Engineering was involved during 1999 in the design of jetties in Fujairah, Yanbu andTrinidad.Work on the Spata airfield in Athens and the bridges in Suriname is approaching completion.The conceptual architectural and technical designs for a number of stadiums in Portugal, including that ofSporting Lisbon, are also worthy of note.

As part of the ongoing integration, Ballast Nedam Engineering has been involved in a number of planningstudies for infrastructure projects such as RandstadRail, the expansion of the Maasvlakte, town-centredevelopments near the station in Delft and the Transrapid maglev train track.Engineering has also been working on the initial planning phases for integrated district developments in Almelo,Cuijk and Helmond.

As part of the research programme of the Underground Construction Centre, Ballast Nedam Engineering isworking on a revolutionary approach to three-dimensional city design (3D-City).

As the operating companies are searching for new positions in the context of the developing market, riskanalyses must be carried out with care. The risk-management consultancy activities were expanded this year.The process for incorporating computer systems in the design process (CAD, PDM) also had priority in thepast year.

Ballast Nedam Bouwmaterieel (Plant and Equipment)Ballast Nedam Bouwmaterieel provides materials consultancy, leases construction equipment and costs andsets up building sites including the electrical installations. Ballast Nedam Bouwmaterieel also costs, designsand constructs shuttering, formwork and scaffolding.

The phased replacement of older construction cranes which started in 1998 was completed in 1999. Therange of formwork and scaffolding was also optimised.

Ballast Nedam Bouwmaterieel achieved its targets for 1999 and made a profit and it is forecasting at least thesame level of results for 2000.


32

Ballast Nedam ServicesBallast Nedam Services manages and operates various company premises and offices for the Ballast Nedambusinesses and certain external tenants and carries out Facilities Management under market terms andconditions.

Its activities in the year under review expanded to include management and operation of regional BallastNedam offices in Eindhoven and Capelle aan den IJssel. A lease has been concluded with an external tenantfor the current head office in Amstelveen in connection with the proposed relocation of the head office toNieuwegein. This is linked with the comprehensive redevelopment of the building.

Ballast Nedam Services has issued an order for a new regional office in Arnhem which will be set up in 2000.A start will also be made on preparations for the move to Nieuwegein.


34

Continuing to meet the expectations of our customers on the basis of agreements and taking legislation andregulations into account involves an integrated approach to quality, working conditions (safety) and theenvironment. In this, Ballast Nedam focuses on continuous monitoring and systematic improvement of theorganisation.

KAM assurance is an integral part of the overall management of the company and is embedded by appropriatesystems in the operating companies. In checking compliance, the management uses a number ofstandardised tools, such as recording complaints, shortcomings and anomalies, identifying and analysingdangerous situations, reporting incidents, accidents and near-misses in the workplace, reporting and analysingsick leave, internal and external audits, workplace inspections at construction sites and on board our ships,and project evaluations.

The operating companies have appointed KAM co-ordinators to maintain the KAM system. They have asupport and encouragement role in drawing up the records.There are regular rotations to ensure objectivity and the system is also monitored by regular external auditswhose results are used to draw up improvement programmes.

Quality assuranceBallast Nedam strives to deliver products and services within the terms of the contract, to perform the workusing effective, efficient and co-ordinated methods and to measure the quality of the work and discuss itopenly with those involved. This objective of process improvement focuses on quality assurance and analysisof the cost of failure.

The basis for quality assurance is maintaining a system of external certification.All companies use a NEN ISO 9001 quality system (some use NEN ISO 9002) and are certified accordingly.The dredging company is also certified in Singapore and Hong Kong.

Working conditions policyThe health and safety of the employees is paramount. The policy, which focuses on the general welfare of ouremployees and preventing physical injury and damage to health, has been formulated and implemented inclose consultation with employee representatives. The Contractors’ Safety Checklist (Veiligheids ChecklistAannemers – VCA) is used and most of the companies are certified under it or an equivalent standard.

Our pro-active health and safety policy encompasses specific work instructions, proper tools, safe equipment,personal protective equipment and care for employees’ safety and health. Awareness of safe working practicesis addressed through consultation, instructions, publications and VCA courses. Safety instructions are issuedat each meeting, per team and per job and the necessary protective equipment is provided on all projects.Regular inspections are held by our own people and external safety experts. Their findings are a standard itemon the agendas of tool-box (work floor) meetings. Supervisors, qualified staff and sub-contractors are heldresponsible for safety on the site.The requirement to report unsafe work situations is repeated at the start of each project and also when each newemployee is introduced. Information is also provided on any rules and requirements imposed by the customer.

A detailed record is made of any accidents which happen despite these measures. The accident figures aredrawn up using the VCA method and compared systematically against the appropriate standards. There was only one case of a breach of the health and safety legislation by Ballast Nedam companies in 1999(although, in Ballast Nedam’s opinion, that is one too many). In addition, a formal report was made by thehealth and safety inspectorate of an accident on a dredging ship. Safety issues such as accident and near-miss figures, results of workplace inspections and reports of tool-box meetings are discussed at all levels ofconsultation at the operating companies. Feedback is used in an effort to make a structural improvement inworking conditions.

Quality, working conditions and the environment (KAM in Dutch)


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The Dutch trade union organisation, CNV, awarded the Kazerneplein project in Gorinchem (a project involvingvarious Ballast Nedam operating companies) its first ‘Arbo’ star in the Netherlands. The star is a symbol of asafe and healthy workplace. This project (car park, residential and retail units) was nominated because the sitemet stringent safety requirements as formulated in co-operation with the health and safety inspectorate.

Environmental protectionAreas of attention in environmental policy are the implementation of preventive measures to avoid pollution ofthe soil, water and air, limiting the damaging effects on the environment of the company’s activities, usingenvironmentally-friendly construction techniques including encouraging the use of sustainable materials, savingenergy and water, ensuring a proper indoor environment and limiting, segregating and reusing waste.

All employees are expected to know their own responsibilities with respect to the environment and to complywith the appropriate work instructions. Although direct checks on compliance with the regulations are one ofthe duties of the KAM co-ordinators, employees also make their own checks. During the inspections, there arespecial checks on the storage and treatment of hazardous materials and the availability of proper productinformation.

Much attention was paid in the housing sector during 1999 to the further development of the environmentally-friendly house (sustainable construction) with emphasis on limiting waste and saving energy and water. Thedevelopment of the ‘green-plus home’ is a specific example of care for the environment. Sustainable materialsare also used in non-residential building work, in particular in ‘design and construct’ projects.

The collection and sorting of construction and demolition waste and other residual materials at the companiesis the rule. The material service applies special preventive measures for the treatment of residual materials suchas the creation of sites for the separate collection of waste and other used materials, separate storage pointsfor fuels, oils and lubricants, batteries, paint and other chemicals, slurry booms and oil barriers at water runoffsand washing points and extractors to filter materials.For example, a new type of industrial extractor has been taken into use following a study into the adverseeffect on health of long-term exposure to dust and crystalline silica (quartz) and an impermeable floor has beeninstalled in the yard in Maarssen to prevent soil contamination.

In some places abroad where the legislation and regulations are less stringent than in the Netherlands, policiesapplied to operations are often more environmentally-friendly than the local norm.Sustainable construction is part of this.


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It is expected that turnover will grow slightly in 2000. Continuing growth is expected in ConstructionNetherlands. Orders expected by Infrastructure Netherlands for parts of the High-Speed Rail Link will generateonly modest turnover in 2000, since the time needed to prepare this complicated project is considerable.

Everything will be done to turn the loss-making position of Construction International into at least a break-evenposition in 2000.

Based on the order book, turnover at Dredging will increase strongly.

In early 2000, an order was placed for a second large trailing suction hopper dredger, which will enter servicein August 2001. There are very good prospects for the deployment of this dredger in Southeast Asia. Capital expenditure will exceed NLG 200 million, financed mainly by a loan. Acquisitions in the housing and non-residential construction sectors are being sought with the aim of achievingnational coverage in the Netherlands. We are also aiming to expand in Industry and Supply through acquisitions.

Everything will be done to collect the payment arrears from the Saudi Arabian government. Success here will significantly improve the liquidity position.

Barring unforeseen circumstances, the result before tax is expected to be some NLG 100 million, thusrepresenting a recovery in the direction of the result recorded for 1998 (NLG 114 million). However, since almost all the losses available for set off in the Netherlands have been used up and thecontribution to profit from international construction is marginal, allowance must be made for a normal taxburden.

In short, we see good opportunities for profitable growth in both the short term and the long term in thecontext of the new strategy.


Board of ManagementR.H.P.W. Kottman, chairmanTh. MulderM.J.F. WeckG.N.G. Wirken

Prospects


37

Annual Accounts

1999

jaarverslag 99_fin_eng 01-05-2000 14:46 Pagina 37

38

Consolidated balance sheet in thousands of euro’s

(before profit appropriation)

31 December 1999 31 December 1998*

Fixed assetsTangible fixed assets 256,760 266,207Financial fixed assets 33,494 31,596

290,254 297,803

Current assetsWork in progress (3,454) 52,510Stocks 37,125 33,512Debtors 519,946 405,620Cash 14,996 28,770

568,613 520,412

Current liabilitiesTrade creditors 256,403 198,332Taxation 8,731 9,629Bank loans 23,419 38,856Other liabilities 174,285 158,298

462,838 405,115

Net current assets 105,775 115,297

Total assets lesscurrent liabilities 396,029 413,100

Group EquityShareholders’ equity 266,717 284,214Minority interest - 295

266,717 284,509

Convertible bond 54,454 54,454

Equalisation account 14,440 16,256

Guaranteed Capital 335,611 355,219

Provisions 30,469 24,074

Long-term loans 29,949 33,807

396,029 413,100


1

2

3

4

5

6

7

8

9

10

11

12

13

14


39

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Consolidated balance sheet in thousands of guilders



Fixed assetsTangible fixed assets 565,823 586,643Financial fixed assets 73,811 69,628

639,634 656,271

Current assetsWork in progress (7,612) 115,717Stocks 81,814 73,849Debtors 1,145,811 893,869Cash 33,046 63,401

1,253,059 1,146,836

Current liabilitiesTrade creditors 565,038 437,068Taxation 19,240 21,218Bank loans 51,608 85,629Other liabilities 384,074 348,843

1,019,960 892,758


Total assets lesscurrent liabilities 872,733 910,349

Group EquityShareholders’ equity 587,767 626,324Minority interest - 651

587,767 626,975


Equalisation account 31,822 35,823




872,733 910,349



40

Consolidated Profit and Loss Account in thousands of euro’s

(...) = negative

1999 1998

Net turnover 1,997,650 2,067,494Other operating income 11,345 -

Total 2,008,995 2,067,494

Operating costsRaw materials, consumablesand other external charges (1,678,130) (1,711,912)Wages and salaries (211,998) (201,440)Social security costs (42,105) (39,944)Pension costs (13,915) (13,058)Depreciation of tangible fixedassets (44,660) (41,485)

(1,990,808) (2,007,839)

Operating profit 18,187 59,655

Financial income and expensesInterest income 2,106 1,974Interest charges (12,981) (11,850)Income from participating interests 3,333 2,003

(7,542) (7,873)

Profit on ordinary activitiesbefore taxation 10,645 51,782

Taxation (1,252) (4,048)

Net profit 9,393 47,734


Consolidated Profit and Loss Account in thousands of guilders

(...) = negative

1999 1998

Net turnover 4,402,242 4,556,157Other operating income 25,000 -

Total 4,427,242 4,556,157

Operating costsRaw materials, consumablesand other external costs (3,698,111) (3,772,558)Wages and salaries (467,182) (443,915)Social security costs (92,788) (88,024)Pension costs (30,664) (28,777)Depreciation of tangible fixedassets (98,417) (91,421)

(4,387,162) (4,424,695)

Operating profit 40,080 131,462

Financial income and expensesInterest income 4,640 4,350Interest charges (28,607) (26,114)Income from participating interests 7,345 4,415

(16,622) (17,349)

Profit on ordinary activitiesbefore taxation 23,458 114,113

Taxation (2,758) (8,922)

Net profit 20,700 105,191

41


Notes to the Consolidated Financial Statements

General

ActivitiesThe activities mainly cover the design, development and execution of building, civil engineering and dredging projects andthe supply to the building industry at home and abroad of associated products and services.

Basis of accountingThe accounts are prepared according to the historical cost convention.

Consolidation principlesThe consolidated accounts include all companies in which Ballast Nedam directly or indirectly has a controlling interest.General partnerships (vofs) etc., including construction consortiums, are consolidated on a proportional basis.

The results of participating interests are included in the consolidated financial statements from the effective date ofacquisition. Results of participating interests disposed of in the course of the year are accounted for until the date ofdisposal.Differences on acquisition between the purchase price of new participating interests and their net asset value computedon the basis of the valuation principles stated below are accounted for directly in shareholders’ equity.

Participating interests in consortiums which by their nature have the character of current assets are included in the item‘Work in progress’.In computing balance sheet values, results on intercompany deliveries are not taken into account unless they contain anelement of fixed asset investment.In preparing the accounts of Ballast Nedam, use was made of the exemption provided by Article 402, Title 9, Book 2, ofthe Civil Code.

Accounting policies

Change of accounting policyIn order to bring the financial statements more closely into line with international guidelines, with effect from 1999, thefigures will be prepared before appropriation of profit. The figures for 1998 have been restated for comparative purposes.

Tangible fixed assetsBuildings, land and company dwellings are stated at historical or manufactured cost less depreciation based thereon.Site improvements and gravel winning facilities are stated at historical cost less depreciation. Plant and equipment arestated at historical cost or manufactured cost less depreciation based thereon. In appropriate cases, interest during theperiod of construction or manufacture is capitalised.Depreciation periods:- buildings, between 10 and 25 years- dredging equipment, between 11 and 18 years- other equipment, between 5 and 12 years- other fixed assets, between 2 and 10 years.The influence of economic obsolescence is taken into account in determining the period over which plant and equipmentis depreciated and the method of calculating depreciation. Generally depreciation is calculated on a straight-line basis.

42


Financial fixed assetsThe non-consolidated participating interests are included on the basis of their net asset value as shown by their latestpublished balance sheet, calculated according to the proportional method. In determining the net asset value, thevaluation principles of Ballast Nedam are applied as far as possible. Other participating interests are stated at acquisitionprice.

Results are taken into account as from the effective date of acquisition, up to the date of disposal. Amounts owed byassociated companies are stated at face value less any necessary provisions.

Work in progressWork in progress with a contract period of more than one year, including share in joint ventures, is stated at cost plusallocated profit, less invoiced instalments. The profit is calculated at the end of the year on a pro rata basis according tothe progress of the contracts. Cost does not include interest or that portion of indirect costs which cannot practically beallocated. Profits made on contracts taking less than a year are recognised on completion.Provision is made for all losses incurred up to the accounting date, together with any further losses that are anticipated inbringing contracts to completion.Provisions and general risks for anticipated losses are deducted from the value of work in progress. Works undertakenoutside The Netherlands entail risk which cannot always be itemised. Provisions are made against risks which arise onforeign contracts from time to time. Profits made on contracts completed in previous years are accounted for in the yearof realisation.

StocksStocks of finished goods are stated at cost, excluding interest charges and that portion of the total indirect costs which isnot practical to allocate. Stocks of raw materials are valued at original purchase price.

Other assets and liabilitiesOther assets and liabilities are stated at face value less any provisions necessary.

ProvisionsThe maintenance provision is formed for periodical equipment maintenance in order to spread the costs evenly over theyears.

Equalisation accountThe equalisation account includes deferred income to be released in future years.

TurnoverTurnover is defined as the total value of production generated by the construction companies (including the relevant shareof production of joint ventures) and the total value of invoiced deliveries of trading companies in the financial year.

Foreign currency translationsAssets and liabilities, including assets and liabilities of foreign participating interests, are translated into Dutch guilders atthe rates of exchange prevailing at the balance sheet date. Turnover, costs and results are translated at the average rateof exchange prevailing during the year.Translation differences of the equity invested in foreign participating interests and the differences created by thetranslation of the results against the average exchange rate and the rate prevailing at the end of 1998, are booked directlyto the shareholders’ equity.Where forward transactions are entered into, the sums involved are translated at the relevant forward rates of exchange.Where a contract sum is denominated in a foreign currency, expenditure relating to the contract is as far as possibleincurred in the same currency.For that part of the expenditure which is not made in the same currency, forward transactions are entered into.Other exchange differences are taken to the profit and loss account.

43


Consolidated balance sheet in thousands of euro’s

Fixed assets

Tangible fixed assets

As at 1 January 1999Historical costAccumulated depreciation

Book value

Movements in book valueInvestmentsAcquisitionsDisposals / retirementsDepreciationTranslation differences

Balance

As at 31 December 1999Historical costAccumulated depreciation

Book value

The buildings comprises offices, factories and other industrial buildings used by the group. Land comprises storage sites,site improvements and the gravel winning facilities. The application of current cost accounting would produce nosignificant differences.

Investments

By sectorConstruction InternationalConstruction NetherlandsConstruction United KingdomIndustry and SupplyInfrastructure NetherlandsDredgingOther

Total

By geographical regionNetherlandsUnited KingdomOther European CountriesMiddle EastSoutheast AsiaOther parts of the world

Total

Landand

buildings

Dredgingequipment

Otherplant andequipment

Otherfixed assetsemployed

in the production

process

Total

94,944(26,013)

68,931

2,5841,820(4,569)(2,527)1,739

(953)

96,495(28,517)

67,978

250,997(137,243)

113,754

11,088-

(2,417)(14,692)

-

(6,021)

248,067(140,334)

107,733

163,960(95,100)

68,860

16,7021,160(2,187)

(20,800)294

(4,831)

171,795(107,766)

64,029

53,490(38,828)

14,662

9,387408(799)

(6,641)3

2,358

59,535(42,515)

17,020

563,391(297,184)

266,207

39,7613,388(9,972)

(44,660)2,036

(9,447)

575,892(319,132)

256,760

1

12,6565,0481,2458,189

12,64810,239

543

50,568

4,3555,3801,2126,7317,366

13,4781,239

39,761

1999 1998

in thousands of euro’s

35,4531,2451,2132,3903,9866,281

50,568

33,4301,249

7282,694

3681,292

39,761

44


Consolidated balance sheet in thousands of guilders

Fixed assets

Tangible fixed assets

As at 1 January 1999Historical costAccumulated depreciation

Book value

Movements in book valueInvestmentsAcquisitionsDisposals / retirementsDepreciationTranslation differences

Balance

As at 31 December 1999Historical costAccumulated depreciation

Book value

The buildings comprises offices, factories and other industrial buildings used by the group. Land comprises storage sites,site improvements and the gravel winning facilities. The application of current cost accounting would produce nosignificant differences.

Investments

By sectorConstruction InternationalConstruction NetherlandsConstruction United KingdomIndustry and SupplyInfrastructure NetherlandsDredgingOther

Total

By geographical regionNetherlandsUnited KingdomOther European CountriesMiddle EastSoutheast AsiaOther parts of the world

Total

Landand

buildings

Dredgingequipment

Otherplant andequipment

Otherfixed assetsemployed

in the production

process

Total

209,228(57,325)

151,903

5,6944,011

(10,068)(5,568)3,832

(2,099)

212,647(62,843)

149,804

553,125(302,443)

250,682

24,435-

(5,326)(32,377)

-

(13,268)

546,667(309,253)

237,414

361,321(209,573)

151,748

36,8072,556(4,820)

(45,838)647

(10,648)

378,588(237,488)

141,100

117,876(85,566)

32,310

20,686899

(1,761)(14,634)

5

5,195

131,198(93,693)

37,505

1,241,550(654,907)

586,643

87,6227,466

(21,975)(98,417)

4,484

(20,820)

1,269,100(703,277)

565,823

1

27,89011,1242,744

18,04627,87122,5641,197

111,436

9,59711,8572,671

14,83316,23329,7012,730

87,622

1999 1998

in thousands of guilders

78,1292,7442,6745,2678,785

13,837

111,436

73,6702,7521,6035,937

8102,850

87,622

45


46

TotalAmounts owedby anticipating

interests

Non-consolidatedparticipating

interests

Book value as at 1 January 1999

MovementsResultsInvestmentsDesinvestmentsDividends receivedOther movements

Balance

Book value as at 31 December 1999

Financial fixed assets

26,741

3,3331,878(1,269)(3,667)1,208

1,483

28,224

4,855

-399(121)(235)372

415

5,270

31.596

3,3332,277(1,390)(3,902)1,580

1,898

33,494

TotalAmounts owedby anticipating

interests

Non-consolidatedparticipating

interests


MovementsResultsInvestmentsDesinvestmentsDividends receivedOther movements

Balance



58,930

7,3454,139(2,796)(8,081)2,661

3,268

62,198

10,698

-880(266)(519)820

915

11,613

69,628

7,3455,019(3,062)(8,600)3,481

4,183

73,811

2

2

in thousands of euro’s

in thousands of guilders


47

Stocks

This item comprises:

Finished goodsRaw materials

Total

Participating interestsPursuant to the relevant statutory provisions, a list of participating interests will be deposited for inspection at the office ofthe Commercial Register in Amsterdam.The book value of the non-consolidated participating interests includes the interest in Stichting WerknemersparticipatieBallast Nedam (the employee shares trust).As at December 1999, Ballast Nedam still held approximately 86,500 of the total of 300,000 depository receipts in issue(77,500 in 1998). They are stated at acquisition price.The principal asset of Stichting Werknemersparticipatie Ballast Nedam is 300,000 ordinary shares of Ballast Nedam N.V.

Amounts owed by participating interestsThis item comprises loans to, and other amounts owed by participating interests which fall due after more than one year.

Current assets

Work in progress

This item comprises

Project costsInvoiced instalments

Share in consortium assets

Work in progress

1999 1998

4,157,598(4,168,358)

(10,760)

3,148

(7,612)

(4,814,101(4,700,363)

(113,738

(1,979

(115,717

Charged against the item project costs as at 31 December 1999 is a provision of ƒ 25 million for risks on internationalcontracts (31 December 1998: ƒ 19 million). In euro’s respectively 11.3 en 8.6 millions.

in thousands of euro’s in thousands of guilders

19981999

1,886,635(1,891,518)

(4,883)

1,429

(3,454)

2,184,544(2,132,932)

51,612

898

52,510

3

4

56,82117,028

73,849

49,04932,765

81,814

25,7847,728

33,512

22,25714,868

37,125

1999 19981999 1998



48

Debtors


Instalments due on contractsTrade debtorsOther debtorsPrepaid expenses

Total

Included in instalments due on contracts is an amount of ƒ 278 million (€ 126 million) regarding a major governmentproject in Saudi Arabia. The client is in arrears. ƒ 201 million (€ 91 million) of this amount relates to 1997. The most recentpayment for this project dates from December 1999. It has been agreed with the client that the project will be finalised in2000. In the event that the client does not make any further payments, the total amount receivable on the contract willincrease to ƒ 315 million (€ 143 million). The company and the client are in continuous discussions regarding the present situation. The backlog of paymentsresults from the budgetary situation of Saudi Arabia. As it concerns a government receivable and this receivable is not indispute the company assumes that the amount receivable will be paid in full. Therefore it is not considered necessary toprovide for this receivable. It is not certain whether payments for this project will be received during 2000.

Cash

Cash balances mainly comprise term deposits with banks for periods of less than one month.

594,286201,43170,82627,326

893,869

782,036310,08026,18927,506

1,145,811

269,67691,40532,13912,400

405,620

354,873140,70811,88412,481

519,946

5


1999 19981999 1998

6


49

Convertible bond

A ƒ 120 million (€ 54.45 million) subordinated convertible bond was issued in October 1997 at a price of 100% and with acoupon of 5%. The debentures may be converted into bearer depositary receipts issued by the trust office StichtingAdministratiekantoor van aandelen Ballast Nedam at ƒ 127 (€ 57.63) per depositary receipt on AEX-Effectenbeurs ofAmsterdam Exchanges.The debentures are redeemable on or around 9 October 2002 but, subject to certain conditions, may be fully redeemed atthe principal plus interest if Ballast Nedam so wishes.

Equalisation account

The equalisation account concerns financing gains on cross-border lease transactions relating to dredging equipment.The equalisation account will be released to the profit and loss account over not more than 12 years, an initial amountbeing recognised as income in 1997.

12

Current liabilities

Trade creditors

This item comprises invoices of suppliers.

Taxation

This item comprises foreign taxes payable on profits.

Bank loans

Short-term bank loans and other short-term bank debt, drawn in part to cover exchange rate risks on current assets.

Other liabilities


V.A.T., payroll tax and socialsecurity and pension contributionsCharges relating to workin progressCurrent part of long-term loanOther liabilities

Total


40,397

79,903

8,000220,543

348,843

57,786

95,284

8,000223,004

384,074

18,331

36,259

3,630100,078

158,298

26,222

43,238

3,630101,195

174,285

7

8

9

10


1999 1998*1999 1998*

11


50

Long-term loan

This relates to a floating interest loan contracted to finance the hopper suction dredger Amsterdam. Repayment isscheduled to take place in not more than 12 annual instalments.The instalment payable in 2000 is included in current liabilities.

Commitments and contingent liabilities- As at 31 December 1999 the net amount of bank guarantees, after deduction of counter-guarantees from

Nederlandsche Credietverzekering Maatschappij N.V. and bank guarantees provided by sub-contractors, totalled ƒ 941 million (€ 427 million). In 1998 ƒ 736 milion (€ 334 million).These principally relate to commitments arising fromthe execution of contracts and from advance payments received from clients.

- Commitments regarding the leases of a plot of land as well as offices with an average period of 3 years annual rental ofƒ 12.1 million (€ 5.5 million).

- Lease commitments in respect of Ballast Nedam’s head office with a term of 12 years and an annual cost related to thelevel of interest rates currently amount to ƒ 4 million (€ 1,8 million) per annum.

- Lease commitments in respect various fixed assets with an average term of 3 years and an annual rental of ƒ 16.8million (€ 7.6 million).

- Commitments arising from participating in non-consolidated companies do not exceed ƒ 473 million (€ 214.6 million).In 1998 ƒ 462 million (€ 209 million).

- No provision has been made for increments due in the future arising from back-service commitments which areincluded in the premiums charged by the Building Industry Pension Fund.This would have represented a provision amounting to approximately ƒ 2.1 million (€ 0.9 million) in 1999.

- Other commitments ƒ 13.2 million (€ 6.0 million).

Provisions

The provisions are detailed as follows:

MaintenanceReorganisationOther provisions

Total

The other provisions relate to such things as guarantee commitments in respect of completed projects.The provisions are generally of a long-term nature.

33,74111,56421,839

67,144

26,74210,73115,578

53,051

15,3115,2489,910

30,469

12,1354,8707,069

24,074


1999 19981999 1998

14

13


Consolidated profit and loss account

Net turnover

The geographical distribution of turnover is as follows:

The NetherlandsUnited KingdomOther European countriesMiddle EastSoutheast AsiaOther parts of the world

Total

The turnover by sector is as follows:

Construction InternationalConstruction NetherlandsConstruction United KingdomIndustry and SupplyInfrastructure NetherlandsDredgingOther

Total

Other operating incomeOther operating income concerns received payments from the Ballast Nedam Pension Fund under the currentcontract.

Operating result

The operating result by sector is as follows:


Total

In 1999 ‘Other’ includes an amount of ƒ 20 million (€ 9 million), after the formation of proper, provisions earned on theredevelopment of the office in Amstelveen. The redevelopment included leasing to third parties under a long-termcontract. This transaction concerns an associated party who owns the building.

1,152,606952,570995,759343,880714,801464,243(67,702)

4,556,157

48,20029,2304,673

27,068(5,363)

40,769(13,115)

131,462

1,902,013997,977200,101837,549278,791339,726

4,556,157

582,9841,108,4071,255,736

391,583810,408280,014(26,890)

4,402,242

(26,755)36,7677,709

31,835(2,002)

26,263(33,737)

40,080

2,339,0301,259,875

122,674268,512142,943269,208

4,402,242

523,030432,257451,856156,046324,363210,664(30,722)

2,067,494

21,87213,2642,121

12,283(2,434)

18,500(5,951)

59,655

863,096452,86290,802

380,063126,510154,161

2,067,494

264,547502,973569,828177,693367,747127,065(12,203)

1,997,650

(12,141)16,6843,498

14,446(908)

11,917(15,309)

18,187

1,061,406571,70655,667

121,84564,865

122,161

1,997,650

1999 19981999 1998

1999 19981999 1998


in thousands of guildersin thousands of euro’s

51


Operating costs

EmployeesThe number of employees averages 7,674 in 1999 (1998: 8,545).

Employed as follows:


Total

Employed oncontract basis

Permanentlyemployed

Board members

Emoluments and pensions paidto members and former membersof the Board of ManagementEmoluments paid to members ofthe Supervisory Board

Depreciation of tangible fixed assets

The item comprise:

Land and buildingsDredging equipmentOther plant and equipmentOther fixed assets

Total depreciation

Income from participating interestsThe amount shown under this heading is the share in the result after taxation on non-consolidated companies.

TaxationThis item relates to foreign taxes payable on profits and to taxes payable by Dutch companies that were not members ofthe tax group as at 31 December 1999. As a result of losses available for relief, no corporation tax is payable in theNetherlands in 1998 and in 1999.

3,187336

3,585340

1,446152

1,627154

7,09331,89039,63012,808

91,421

2121,5181,418

8361,338

404169

5,895

2451,4521,426

7411,360

414154

5,792

1,42486175876

1117

1,779

2,42061113988

1268

2,753

1999 19981999 1998

1999 19981999 1998

1999 19981999 1998

5,56832,37745,83814,634

98,417

3,21814,47117,9845,812

41,485

2,52714,69220,8006,641

44,660



52


Consolidated Cash Flow Statement in thousands of euro’s

(...) = applications of funds

31 December 1999 31 December 1998

Cash flow from operating activitiesOperating result 18,188 59,655Results from participating interests 3,333 2,003Interest income (charge) (10,876) (9,876)Taxation (1,252) (4,049)Minority interests (296) (68)Depreciation 44,660 41,485Non-consolidated participating interests 570 190Movements in provisions 6,395 1,381Movements in stock (3,614) (7,749)Movements in work in progress 55,964 31,661Movements in debtors (114,326) (135,433)Movements in current liabilities 71,155 13,295

Net cash flow fromoperating activities 69,901 (7,505)

Cash flow relating to investmentsInvestments in tangible fixed assets (39,761) (50,568)Investments in fixed assets ofcompanies taken over (3,388) (11,011)Disposals of tangible fixed assets 9,972 13,648Goodwill (5,320) (13,685)Investments in non-consolidatedcompanies (2,278) (5,546)Disposals of non-consolidatedcompanies - 3,122

Net cash flow relating to investments (40,775) (64,040)

Cash flow relating to financeactivitiesLong-term loan (3,857) (3,630)Dividend paid (22,689) (22,689)

Net cash flow relating tofinance activities (26,546) (26,319)

Exchange differences (917) (298)

Total 1,663 (98,162)

Cash positionTotal net cash flow 1,663 (98,162)Opening cash balanceas at 1 January (10,086) 88,076

Closing cash balanceas at 31 December (8,423) (10,086)

53


Consolidated Cash Flow Statement in thousands of guilders

(...) = applications of funds

31 December 1999 31 December 1998

Cash flow from operating activitiesOperating result 40,080 131,462Results from participating interests 7,345 4,415Interest income (charge) (23,967) (21,764)Taxation (2,758) (8,922)Minority interests (651) (150)Depreciation 98,417 91,421Non-consolidated participating interests 1,255 419Movements in provisions 14,093 3,043Movements in stock (7,965) (17,077)Movements in work in progress 123,329 69,772Movements in debtors (251,942) (298,455)Movements in current liabilities 156,803 29,299

Net cash flow fromoperating activities 154,039 (16,537)

Cash flow relating to investmentsInvestments in tangible fixed assets (87,622) (111,437)Investments in fixed assets ofcompanies taken over (7,466) (24,266)Disposals of tangible fixed assets 21,976 30,077Goodwill (11,723) (30,157)Investments in non-consolidatedcompanies (5,019) (12,222)Disposals of non-consolidatedcompanies - 6,880

Net cash flow relating to investments (89,854) (141,125)

Cash flow relating to financeactivitiesLong-term loan (8,500) (8,000)Dividend paid (50,000) (50,000)

Net cash flow relating tofinance activities (58,500) (58,000)

Exchange differences (2,019) (660)

Total 3,666 (216,322)

Cash positionTotal net cash flow 3,666 (216,322)Opening cash balanceas at 1 January (22,228) 194,094

Closing cash balanceas at 31 December (18,562) (22,228)

54


Computation of working capital, assets and liabilities

(for the segmental informationon pages 56, 57)

Working capitalFixed assetsCurrent assetsCash

Current liabilitiesBank loans

Equalisation accountProvisions

**

AssetsFixed assetsCurrent assets

**

LiabilitiesCurrent liabilitiesConvertible bondLong-term loans

**

Assets less current liabilitiesFixed assetsCurrent assetsCurrent liabilities

** see segmental information

Assets less current liabilities

By segmentConstruction InternationalConstruction NetherlandsConstruction United KingdomIndustry and SupplyInfrastructure NetherlandsDredgingOther

Total

By geographical regionNetherlandsUnited KingdomOther European countriesMiddle EastSoutheast AsiaOther parts of the world

Total

55

97,284147,217

(4,594)138,03643,985

333,488154,933

910,349

844,5463,891

40,379100,85410,101(89,422)

910,349

656,2711,146,836

(63,401)

(892,758)85,629

(35,823)(53,051)

843,703

656,2711,146,836

1,803,107

892,758120,00074,500

1,087,258

656,2711,146,836

(892,758)

910,349

100.743123,625

3,898134,93466,025

317,591125,917

872,733

775,84210,74340,78477,58414,961(47,181)

872,733

639,6341,253,059

(33,046)

(1,019,960)51,608

(31,822)(67,144)

792,329

639,6341,253,059

1,892,693

1,019,960120,00066,000

1,205,960

639,6341,253,059(1,019,960)

872,733

44,14666,804(2,085)

62,63819,960

151,33070,307

413,100

383,2381,766

18,32345,7664,584

(10,577)

413,100

297,803520,412(28,770)

(405,115)38,856

(16,256)(24,074)

382,856

297,803520,412

818,215

405,11654,45333,807

493,376

297,803520,412(405,115)

413,100

45,71556,0991,769

61,23029,961

144,11657,139

396,029

352,0624,875

18,50735,2066,789

(21,410)

396,029

290,254568,613(14,996)

(462,838)23,419

(14,440)(30,469)

359,543

290,254568,613

858,867

462,83854,45429,949

547,241

290,254568,613(462,838)

396,029

1999 19981999 1998


1999 19981999 1998



Segmental information 1999 in millions of euro’s

Turnover externIntercompany turnover

Operating profitFin. income and expensesIncome from participatinginterests

Profit before taxation

Margin

Order book

Assets

Non consolidatedcompanies

Liabilities

Working capital

Investments in fixed assets

Depreciation

Segmental information 1998 in millions of euro’s




Margin

Order book

Assets


Liabilities

Working capital


Depreciation

569.80.0

569.8

3.5

-

3.5

0.61%

162.215.5

177.7

14.4

0.1

14.5

8.23%

367.70.0

367.7

(0.9)

1.5

0.6

0.17%

127.10.0

127.1

11.9

-

11.9

9.38%

18.9(31.0)

(12.1)

(15.3)(10.9)

1.7

(24.5)

472.031.0

503.0

16.7

-

16.7

3.31%

DredgingInfrastructureIndustry and

SupplyConstruction

UKConstruction

NLConstructionInternational

264.50.0

264.5

(12.1)

-

(12.1)

-4.59%

215.1

67.0

0.1

21.8

155.3

4.4

8.6

461.7

187.1

5.4

187.2

(10.0)

5.4

3.6

446.3

181.3

3.8

197.8

(31.5)

1.2

1.0

49.7

101.9

2.2

51.0

71.8

6.7

6.9

314.0

91.8

6.4

85.5

47.7

7.4

6.0

194.6

176.2

0.7

62.0

89.5

13.5

17.8

TotalOther

0.0

53.6

14.9

(58.1)

36.8

1.2

0.8

1,982.215.5

1,997.7

18.2(10.9)

3.3

10.6

0.53%

1.681.4

858.9

33.5

547.2

359.6

39.8

44.7

451.90.0

451.9

2.1

-

2.1

0.47%

137.518.5

156.0

12.3

0.1

12.4

7.97%

324.40.0

324.4

(2.4)

0.4

(2.0)

-0.65%

210.70.0

210.7

18.5

-

18.5

8.78%

4.4(35.2)

(30.8)

(6.0)(9.9)1.5

(14.4)

397.135.2

432.3

13.3

-

13.3

3.07%


SupplyConstruction

UKConstruction


523.00.0

523.0

21.9

-

21.9

4.18%

193.7

96.9

2.7

52.7

176.2

12.7

8.8

302.8

156.2

2.0

169.0

(25.7)

5.0

3.4

390.1

158.3

0.9

176.2

(9.2)

1.2

0.7

50.6

98.9

2.3

49.7

72.4

8.2

6.2

341.9

114.6

5.3

113.5

47.5

12.7

5.8

184.3

194.6

5.2

81.8

90.2

10.3

15.9

TotalOther

0.0

(1.3)

13.2

(149.5)

31.5

0.5

0.7

2,049.018.5

2,067.5

59.7(9.9)2.0

51.8

2.50%

1,463.4

818.2

31.6

493.4

382.9

50.6

41.5

56


Segmental information 1999 in millions of guilders




Margin

Order book

Assets


Liabilities

Working capital


Depreciation

Segmental information 1998 in millions of guilders




Margin

Order book

Assets


Liabilities

Working capital


Depreciation

995.80.0

995.8

4.7

-

4.7

0.47%

303.140.8

343.9

27.1

0.3

27.4

7.97%

714.80.0

714.8

(5.4)

0.8

(4.6)

-0.65%

464.20.0

464.2

40.8

-

40.8

8.78%

9.9(77.5)

(67.6)

(13.1)(21.8)

3.3

(31.6)

875.077.5

952.5

29.2

-

29.2

3.07%


SupplyConstruction

UKConstruction


1,152.60.0

1,152.6

48.2

-

48.2

4.18%

426.9

213.5

5.9

116.1

388.4

27.9

19.4

667.3

344.2

4.4

372.4

(56.7)

11.1

7.5

859.8

348.8

2.0

388.2

(20.2)

2.7

1.6

111.5

218.0

5.0

109.6

159.5

18.0

13.7

753.5

252.6

11.6

250.2

104.6

27.9

12.7

406.0

428.8

11.4

180.4

198.7

22.6

35.1

TotalOther

0.0

(2.8)

29.3

(329.6)

69.4

1.2

1.4

4,515.440.8

4,556.2

131.5(21.8)

4.4

114.1

2.50%

3,225.0

1,803.1

69.6

1,087.3

843.7

111.4

91.4

1.255.70.0

1.255.7

7.7

-

7.7

0.61%

357.434.1

391.5

31.8

0.3

32.1

8.23%

810.40.0

810.4

(2.0)

3.4

1.4

0.17%

280.00.0

280.0

26.3

-

26.3

9.38%

41.4(68.2)

(26.8)

(33.7)(24.0)

3.7

(54.0)

1.040.268.2

1.108.4

36.8

-

36.8

3.31%


SupplyConstruction

UKConstruction


583.00.0

583.0

(26.8)

-

(26.8)

-4.59%

474.0

147.7

0.3

48.0

342.2

9.6

19.0

1,017.4

412.4

11.8

412.6

(22.0)

11.9

7.9

983.5

399.5

8.4

436.0

(69.5)

2.7

2.3

109.5

224.6

4.8

112.3

158.2

14.8

15.3

692.0

202.3

14.0

188.5

105.1

16.2

13.2

429.0

388.2

1.7

136.6

197.1

29.7

39.2

TotalOther

0.0

118.0

32.8

(128.0)

81.2

2.7

1.5

4.368.134.1

4.402.2

40.1(24.0)

7.4

23.5

0.53%

3,705.4

1,892.7

73.8

1,206.0

792.3

87.6

98.4

57


58

47,734

54,541(6,807)

9,393

1999 1998

(1,293)10,686


59

105.191

120.192(15.001)

20.700

1999 1998

(2.849)23.549

Balance sheet of the Holding Company in thousands of guilders



Fixed assetsFinancial fixed assets 654,805 642,143

654,805 642,143Current assetsOther receivables 31,659 16,544Intercompany debts 287,243 208,652

318,902 225,196

Current liabilitiesOther liabilities 4,440 10,687Bank loans 190,830 33,465

195,270 44,152


Total assets less current liabilities 778,437 823,187

EquityShare capital 125,000 125,000Share premium 127,372 127,372Other reserves 335,395 373,952

587,767 626,324





778,437 823,187


Profit and Loss Account of the Holding Company in thousands of guilders

(...) = negative

Results from participating interestsOther results

Net result


60

Notes to the Balance Sheet of the Holding Company in thousands of euro’s

(...) = negative



MovementsResultsInvestmentsDividends receivedGoodwillOther movements

Balance



Movements in shareholders’ equity were as follows:

As at 1 January 1999*

Profit for 1999

Goodwill

Translation differences

Dividend 1998

As at per 31 December 1999


The authorised share capital is € 113.4 million (ƒ 250 milion).The issued share capital comprises 10,000,000 ordinary shares of € 5.67 (ƒ 12.50) nominal.Out of the share premium account, an amount of € 27.6 (ƒ 60.8 miljoen) is distributable free of tax in the Netherlands.In order to bring the financial statements more closely into line with international guidelines with effect from 1999, thefigures will be prepared before appropriation of profit. The figures for 1998 have been restated for comparative purposes.Opening equity has consequently been increased by € 22,7 million (ƒ 50 million) and the dividend distribution for 1998has been shown as a movement in 1999 in equity.

Operatingcompanies

Sharepremium

reserves Total

Amountsowed byoperating

companies

Total

113,100

(1,293)61,680(6,611)(5,320)5,926

54,382

167,482

178,292

(48,636)

(48,636)

129,656

291,392

(1,293)61,680(6,611)(5,320)

(42,710)

5,746

297,138

57,799

57,799

56,723

56,723

169,692

9,393

(5,320)

1,119

(22,689)

152,195

284,214

9,393

(5,320)

1,119

(22,689)

266,717

Sharecapital

10


61

Notes to the Balance Sheet of the Holding Company in thousands of guilders

(...) = negative



MovementsResultsInvestmentsDividends receivedGoodwillOther movements

Balance



Movements in shareholders’ equity were as follows:

As at 1 January 1999*

Profit for 1999

Goodwill

Translation differences

Dividend 1998

As at per 31 December 1999


The authorised share capital is ƒ 250 milion (€ 113.4 million) .The issued share capital comprises 10,000,000 ordinary shares of ƒ 12.50 (€ 5.67) nominal value.Out of the share premium account, an amount of ƒ 60.8 miljoen (€ 27.6) is distributable free of tax in the Netherlands.In order to bring the financial statements more closely into line with international guidelines with effect from 1999, thefigures will be prepared before appropriation of profit. The figures for 1998 have been restated for comparative purposes.Opening equity has consequently been increased by ƒ 50 million (€ 22,7 million) and the dividend distribution for 1998has been shown as a movement in 1999 in equity.

Operatingcompanies

Sharepremium

reserves Total

Amountsowed byoperating

companies

Total

249,240

(2,849)135,923(14,568)(11,723)13,058

119,841

369,081

392,903

-

(107,179)

(107,179)

285,724

642,143

(2,849)135,923(14,568)(11,723)(94,121)

12,662

654,805

127,372

127,372

125,000

125,000

373,952

20,700

(11,723)

2,466

(50,000)

335,395

626,324

20,700

(11,723)

2,466

(50,000)

587,767

Sharecapital

10


Securities in Ballast Nedam held by the Board of Management

As at 31 December 1999, the Board of Management together held:

- 8,504 depositary receipts for shares- no convertible debentures- no traded options- 21,000 staff options (staff option scheme 1997)- 8,000 staff options (staff option scheme 1999)

In accordance with the conditions of the staff option scheme 1997 as described below, income tax payable by staff,including the Board of Management, in respect of options granted is pre-financed. The finance is provided in the form ofan interest-free loan repayable within three years. As at 31 December 1999, the balance of such loans granted to themembers of the Board of Management amounted to ƒ 31,172.58 (€ 14,145.50).The option scheme 1999 has not be pre-financed

Staff option scheme 1997All members of staff in permanent employment as at 1 December 1997 at a Ballast Nedam company registered in theNetherlands were given the opportunity to buy unlisted options.The main conditions are:- the options are granted in respect of depositary receipts for shares held by Stichting Werknemersparticipatie Ballast

Nedam (Ballast Nedam Employee Participation Foundation);- the exercise price is ƒ 100 (€ 45.38) being the 40-day average of the price quoted on the Amsterdam Stock Exchange

on the date that the exercise price was set.;- the options may be exercised until 1 December 2002;- depositary receipts obtained through the exercise of the options may not be sold within three years of the options being

granted- the number of options that may be subscribed to is related to each employee’s job grade;- the payroll tax payable in respect of the options granted is for the account of the employees concerned, in respect of

which Ballast Nedam has granted an interest-free loan repayable within three years at most;- as at 31 December 1998 386,460 options were granted under the 1997 staff option scheme.

Staff option scheme 1999All members of staff in permanent employment as at 1 April 1999 at a Ballast Nedam company registered in theNetherlands, the United Kingdom, Belgium or Germany were given the opportunity to buy unlisted options.The main conditions are:- the options are granted in respect of depositary receipts for shares held by Stichting Werknemersparticipatie Ballast

Nedam (Ballast Nedam Employee Participation Foundation);- the exercise price is € 33.15 (ƒ 72.90) being 126% of the closing price of the stock exchange listed depositary receipts

for shares in Ballast Nedam on 29 April 1999;- options may be exercised and depositary receipts obtained through the exercise of options may be sold as from 1 April

2002- the options may be exercised up to 2 May 2004;- the number of options that may be subscribed to is related to each employee’s job grade;- the payroll tax payable in respect of the options granted is for the account of the employees concerned;- as at 31 December 1999, 142,075 options were granted under the 1999 staff option scheme.

Commitments and contingent liabilities- As at 31 December 1999 the net amount of bank guarantees, after deduction of counter-guarantees from Nederlandse

Credietverzekering Maatschappij N.V. and bank guarantees provided by sub-contractors, totalled ƒ 941 million (€ 427 million). In 1998 ƒ 736 million (€ 343 million). Principally these relate to commitments arising from the executionof contracts and advance payments received from clients.

- Commitments arising from participations in non-consolidated companies do not exceed ƒ 473 million (€ 214.6 million).In 1998 ƒ 462 million (€ 209 million).


The Supervisory Board The Board of Management

P.C. van den Hoek, chairman R.H.P.W. Kottman, chairmanH.C. Broeksma Th. MulderC. Izeboud M.J.F. WeckH-P. Keitel G.N.G. WirkenMrs. N. KroesB.F-W.M. PeusR.B. Schermer

62


63

Shareholder information

General

The General Meeting of Shareholders will be held at the Ballast Nedam offices,Laan van Kronenburg 2 te Amstelveen, at 1.30 p.m. on 27 April 2000.

The dividend will be payable from Thursday 4 May 2000.

The half-year figures for 2000 will be published on 14 July 2000.

Ballast Nedam N.V. Shareholders:

Stichting Administratiekantoor van aandelen Ballast Nedam 41.5 %Hochtief AG 48.0 %Internationale Nederlanden Verzekeringen N.V. 5.5 %Stichting Werknemersparticipatie Ballast Nedam 3.0 %Stichting Pensioenfonds Ballast Nedam 2.0 %

Share price in 1999

Contacts

Investor Relations: telephone +31 20 5 45 21 72A.C. van Haeringen telefax +31 20 6 47 89 21

E-mail [email protected]

Public Relations: telephone +31 20 5 45 34 35Mrs. N. de Geus telefax +31 20 6 45 66 26

E-mail [email protected]

50

60

70

80

90

100

110

120

130

140

150

0 4 8 12 16 20 24 28 32 36 40 44 48 52

Ballast Nedam N.V.AEXConstruction index


64

Auditor’s Report and other information

Auditor’s ReportWe have audited the accompanying 1999 financial statements of Ballast Nedam N.V., Amstelveen. These financial statements are the responsibility of the management of Ballast Nedam N.V.Our responsibility is to express an opinion of these financial statements based on our audit.

ScopeWe conducted our audit in accordance with auditing standards generally accepted in the Netherlands. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material mis-statement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management of Ballast Nedam N.V., as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of the company as of 31 December 1999 and the result for the year then ended in accordance with accounting principles generallyaccepted in the Netherlands and comply with the financial report requirements included in Part 9, Book 2 of theNetherlands Civil Code.


KPMG Accountants N.V


65

Other information

Conversion of the cumulative preference shares by operation of law into ordinary shares

On 29 April 1999, the cumulative preference shares were converted by operation of law into ordinary shares.

The related amendment of the Articles of Association took effect on 29 April 1999.

Provisions of the articles of association concerning profit appropriation

The most relevant provisions of the articles of association concerning the appropriation of profits are contained inarticle 21. Article 21 reads as follows:

1. The Company may make distributions to the shareholders and to other persons entitled to the profits eligible fordistribution only up to a sum not exceeding the amount of the distributable reserves.

2. Profits shall be distributed after approval of the Annual Accounts showing such is allowed.

3. Of the profit gained according to the approved Annual Accounts the Board of Management shall, subject to theapproval of the Supervisory Board, determine which part shall be reserved.The remaining part of the profit shall be distributed as dividend on the shares.

4. In calculating the profit appropriation, the shares held by the Company in its own capital shall not count, unlessa usufruct has been created in these shares, or depositary receipts therefor have been issued with thecooperation of the Company.

5. Insofar as profit is available in the Company, the Board of Management may with the approval of theSupervisory Board resolve upon payment of an interim dividend on account of the dividend to be expected,provided always that the provisions laid down in paragraph 1 of this article have been satisfied, such to beshown by an interim capital statement as referred to in article 105 paragraph 4 of Book 2 of the Civil Code.

6. The resolutions to distribute (interim) dividends may entail that (interim) dividends will be wholly or partlydistributed in cash or in shares in the Company.

7. Upon a motion by the Board of Management with the approval of the Supervisory Board, the General Meetingmay resolve to make a distribution against the distributable reserves.The provision laid down in paragraph 6 shall apply mutatis mutandis in this respect.

8. The (interim) dividend shall be made payable on a day to be determined by the Board of Management, no laterthan 14 days after the determination of the (interim) dividend.

9. (Interim) dividends which have not been collected within five years after they became payable shall be forfeit tothe Company.

Profit appropriation

The Board of Management, with the approval of the Supervisory Board, proposes to shareholders that a dividendbe paid of ƒ 2.50 per share, charged in part to the distributable reserves.

The profit appropriation will be as follows:

Net profit ƒ 20,700,000.-Withdrawal from the distributable reserves ƒ 4,300,000.-

Dividend payable ƒ 25,000,000.-


66

Stichting Administratiekantoor van aandelen Ballast Nedam

Report

In compliance with the provisions of Article 15 of the Trust Conditions relating to the registeredconvertible cumulative preference shares of Ballast Nedam N.V., dated 15 May 1994, last amended on8 October 1997, we report as follows to the holders of depositary receipts:

The depositary receipts for cumulative participating preference shares convertible into ordinary shareswere converted bij action of law on 29 April 1999 into registered depositary receipts for ordinaryshares.

During 1999, the Stichting performed the customary activities for the administration of the sharesreferred to above;

As at 31 December 1999, registered shares had been accepted into administration in a nominal valueof ƒ 51,907,500.-, against which bearer depositary receipts for a like amount had been issued indenominations of 1 x ƒ 12.50, 10 x ƒ 12.50 en 100 x ƒ 12.50 in the form of CF-certificates.

The Executive Committee of the Stichting is made up of:M. Ververs (chairman)P. Bakker SchutP.C. van den Hoek;

The activities associated with the administration of the shares are performed by the administrator of theStichting: Administratiekantoor van het Algemeen Administratie- en Trustkantoor B.V., Amsterdam.

In addition to administering the shares, the Executive Committee met several members of the Board ofManagement on two occasions (following publication of the annual results and the half-year figures) tobe briefed on the company’s performance.

In the previous annual report we stated that we were considering amending the description of thecompany’s objects in the Articles of Association in the sense that safeguarding the interests ofdepositary receipt holders needed greater emphasis. For the time being, we have decided not tochange the description of the company’s objects in the Articles of Association, on the one handbecause, in our opinion, the Articles of Association already include the ability to give appropriateattention to the interests of the depositary receipt holders while, on the other hand, depositary receiptholders who do not share our opinion are free to move to conversion.

Amstelveen, 22 February 2000

Executive Committee


67

N.V. Algemeen Trustkantoor ANT

Report

ƒ 120,000,000 5% subordinated bonds (1997-2002) - issued by Ballast Nedam N.V. - convertible intodepository receipts for participating cumulative preference shares, these in turn being convertible intoordinary shares.

In compliance with the provisions of Article 11 of the trust deed executed before H.B.H. Kraak, civil-law notary practising in Amsterdam, on 8 October 1997, we report as follows.

The bonds may be converted at any time throughout the remaining period to maturity of the loan intodepositary receipts for shares in Ballast Nedam N.V. of ƒ 12.50 nominal value each at a conversion pricecurrently of ƒ 127 (€ 57.63)

No bonds were offered for conversion during 1999. As at 31 December 1999, the loan outstandingamounted to ƒ 120,000,000.

In compliance with the provisions of Article 4, paragraph 23, of the trust deed, a certificate of registrationhas been lodged in the name of the trustee in respect of as many cumulative preference, profit-sharingshares convertible into ordinary shares as are necessary to enable full conversion of all outstandingdebentures.

The debtor is authorised to redeem the loan at par as from 9 October 2000 on condition that the averageprice quoted on AEX-Effectenbeurs nv for depositary receipts for shares in Ballast Nedam N.V., aspublished in the Official List of Amsterdam Exchanges N.V., Amsterdam, during a period of 30 successive trading days ending on the 14th day prior to the day on which the notice of earlyredemption is served on debenture holders, is equal to at least 130% of the then applicable conversionprice.

The debtor is also authorised to redeem the loan at par throughout its entire term provided that at least85% of the debentures originally issued have been converted or repurchased

On the occurrence of an event referred to in Article 3, paragraph 2, of the deed of trust, the debtor isentitled to redeem the entire loan prematurely.

Amsterdam, 8 February 2000

N.V. Algemeen Nederlands Trustkantoor ANT

M.M. Dekker

L.J.J.M. Lutz


Five Year Summary in guilders

(in millions, unless otherwise stated before profit appropriation; figures in brackets are negative)

BALANCE SHEET

Fixed assetsTangible fixed assetsFinancial fixed assets

Current assetsWork in progressStocks and debtorsCash

Current liabilities

Net current assets

Total assets less current liabilities

Shareholders’ equityMinority interestsConvertible bondInvestment grant equalisation accountProvisionsLong-term loans

ORDER BOOK

TURNOVER

The NetherlandsInternational

Total


565.873.8

639.6

(7.6)1,227.6

33.0

1,253.01,019.9

233.1

872.7

587.8-

120.031.867.166.0

872.7

3,705.0

2,339.02,063.2

4,402.2

406.841.5

448.3

141.6606.248.5

796.3641.9

154.4

602.7

550.80.1

--

51.8-

602.7

2,700.0

1,673.91,331.3

3,005.2

574.364.7

639.0

185.5652.2194.1

1,031.8774.3

257.5

896.5

603.30.8

120.039.450.082.5

896.5

3,287.0

1,830.62,479.0

4,309.6

586.669.6

656.2

115.7967.763.4

1,146.8892.8

254.0

910.2

626.30.6

120.035.853.074.5

910.2

3,225.0

1,902.02,654.1

4,556.1

576.252.3

628.5

98.3596.3186.0

880.6766.3

114.3

742.8

562.10.9

-43.244.692.0

742.8

3,600.0

1,924.01,900.7

3,824.7

1995*1996*1997*1998*1999

68


RESULTS

Cash flowNet result

RATIOS:

Net profit as a percentage of averageshareholders’ equityNet profit as a percentage turnover

FIXED ASSETS

InvestmentsDisposalsDepreciation

EMPLOYEES

Number at year-endof which:permanently employedemployed on contract basis

FIGURES PER SHARE



1995*1996*1997*1998*1999

196.6105.2

17.12.3

111.430.191.4

8,141

5,851

2,290

10.5219.6662.635.00

119.120.7

3.40.5

87.622.098.4

7,335

5,885

1,450

2.0711.9158.782.50

155.192.1

16.43.1

77.221.963.0

7,648

5,339

2,309

9.2115.5155.084.50

161.691.5

16.42.4

248.321.470.1

8,314

5,121

3,193

9.1516.1656.214.50

187.1100.3

17.22.3

124.166.386.8

8,245

5,607

2,638

10.0318.7160.385.00

69


70

Five Year Summary in euro’s

(in millions, unless otherwise stated before profit appropriation; figures in brackets are negative)

BALANCE SHEET

Fixed assetsTangible fixed assetsFinancial fixed assets

Current assetsWork in progressStocks and debtorsCash

Current liabilities

Net current assets

Total assets less current liabilities

Shareholders’ equityMinority interestsConvertible bondInvestment grant equalisation accountProvisionsLong-term loans

ORDER BOOK

TURNOVER

The NetherlandsInternational

Total


184.618.8

203.4

64.3275.022.0

361.3291.3

70.0

273.4

249.9---

23.5-

273.4

1,225.2

759.6604.1

1,363.7

261.523.7

285.2

44.6270.684.4

399.6347.8

51.8

337.0

255.00.4

-19.620.241.8

337.0

1,633.6

873.1862.5

1,735.6

266.231.6

297.8

52.5439.128.8

520.4405.1

115.3

413.1

284.20.3

54.516.324.033.8

413.1

1,463.4

863.11,204.4

2,067.5

256.833.5

290.3

(3.5)557.115.0

568.6462.8

105.8

396.0

266.7-

54.514.430.529.9

396.0

1,681.4

1,061.4936.3

1,997.7

260.629.4

290.0

84.2295.988.1

468.2351.3

116.9

406.9

274.00.4

54.517.922.737.4

406.9

1,491.6

830.71,124.9

1,955.6

1995*1996*1997*1998*1999


RESULTS

Cash flowNet result

RATIOS:

Net profit as a percentage of averageshareholders’ equityNet profit as a percentage turnover

FIXED ASSETS

InvestmentsDisposalsDepreciation

EMPLOYEES

Number at year-endof which:permanently employedemployed on contract basis

FIGURES PER SHARE



1995*1996*1997*1998*1999

54.19.4

3.40.5

39.810.044.7

7,335

5,885

1,450

0.945.41

26.671.13

70.441.8

16.43.1

35.09.9

28.6

7,648

5,339

2,309

4.187.04

24.992.04

73.341.5

16.42.4

112.79.7

31.8

8,314

5,121

3,193

4.157.33

25.502.04

84.945.5

17.22.3

56.330.139.4

8,245

5,607

2,638

4.558.49

27.402.27

89.247.7

17.12.3

50.613.641.5

8,141

5,851

2,290

4.778.92

28.422.27

71


72

Commercial Organisation Chart 1 March 2000

Ballast Nedam International B.V.

● Ballast Nedam Groep N.V.

● British Aerospace-Ballast NedamInternational B.V.

● Ballast Saudi Arabië B.V.

● Ballast Nedam Equipment Services B.V.

● Ballast Nedam Equipment Services Pte Ltd. (Singapore)

● Ballast Nedam International (Malaysia)Sdn Bhd (Malaysia)

● PT Ballast Indonesia Construction (47.5%)

● PT Ballast Nedam South East Asia(Batam, Indonesia)

● Ballast Nedam Suriname N.V. (Surinam)

● Ballast Nedam Caribbean N.V. (St. Maarten)

● Lange-Ballast Contractors Ltd. (45 %)(Trinidad)

● Ballast Nedam Canada B.V

● Ballast Nedam Canada Ltd.(Canada)

● Golden Peaks Resort Inc. (Canada)

● Ballast Nedam Petrol Stations Europe B.V.

● Ballast Nedam Telecom Infrastructures B.V.

● Water Group Holland B.V. (14.3%)

Ballast Nedam Bouw B.V.

Ballast Nedam Utiliteitsbouw B.V.

● Bouwborg Aannemingsbedrijf B.V.

● Bouwborg Planontwikkeling B.V.

● Bouwborg West B.V.

● Bruil Bouw B.V.

● Bouwcombinatie ‘Blixembosch’ v.o.f.(50%)

● Bouwcombinatie ‘Hoge Erasmus’ v.o.f.(50%)

● Bouwcombinatie Weena Toren v.o.f. (50%)

● Bouwcombinatie Zuid-Oost v.o.f. (50%)

● V.o.f. Sorteercentra (66%)

Ballast Nedam Woningbouw B.V.

● Aannemingsbedrijf F.W. Onrust B.V.

● Bouwcombinatie Monnikenhuizen v.o.f. (33 1/3%)

● Zoetermeer Oosterheem v.o.f. (25%)

Ballast Nedam

Ontwikkelingsmaatschappij B.V.

● Ballast Nedam Project Stadshart Amstelveen

● Ballast Nedam Vleuterweide B.V.

● Haagse Veste Holding B.V. (50%)

● Ontwikkelingsmaatschappij Centrumgebied Amsterdam Zuidoost B.V. (33 1/3%)

Ballast Wiltshier PLC (United Kingdom)

● Wiltshier Facilities Management Ltd.

● Harmondsworth Investments Ltd.

● Wiltshier Estates Ltd.

● Falkirk Schools Partnership Ltd.

● Ballast Wiltshier Investments Ltd.

● Grannag Ltd. (20%)

● Serah Properties PLC (27.5%)

Ballast Nedam N.V.

Supervisory Board

GENERAL

Board of Management

Holding General

● Company Secretary

● Personnel & Organisation

● Communication and Services

● Strategic Planning & Investor Relations

Holding Finance and Legal Affairs

● Accounting & Control

● Treasury

● Legal Affairs

● Risk Control and Insurance

Ballast Nedam Bouwmaterieel B.V.

Ballast Nedam Engineering B.V.

Ballast Nedam Services B.V.

Ballast Nedam Participation International B.V.

CONSTRUCTION INTERNATIONAL CONSTRUCTION UNITED KINGDOMCONSTRUCTION NETHERLANDS


73

Ballast Nedam Industrie en Toelevering B.V.

● N.V. Algri (Belgium)

● Bruil Specialistische Bouwtechnieken B.V.

● Durisol Raalte B.V.

● Exploitatiemaatschappij Transportbeton B.V.

● Haitsma Beton B.V.

● Hoco Beton B.V.

● N.V. Immobiliën en Grindexploitatie-maatschappij Bichterweerd (Belgium)

● Ingenieursbureau voor Systemen enOctrooien Spanstaal B.V.

● Ivacon B.V.

● Nieuwenhuis Betonrenovatie B.V.

● Rademakers Gieterij B.V.

● Société d’Exploitation des Carrières d’Yvoir S.A. (Belgium)

● Spanvloer B.V.

● TBS Soest B.V.

● Waco-Liesbosch Beton B.V.

● Ballast Nedam Bulk Grondstoffen v.o.f. (33 1/3%)

● V.o.f. Vibouw/Van Happen (50%)

● Zand- en Grindhandel Verkaik v.o.f. (50%)

Ballast Nedam Beton en Waterbouw B.V.

● Ballast Nedam Industriebouw B.V.

● Ballast Nedam Funderingstechnieken B.V.

● Ballast Nedam VEPO B.V.

● Ballast Nedam Beton- und Wasserbau GmbH (Germany)

● BTC-Botlek v.o.f. (20%)

● Combinatie Beneluxlijn v.o.f. (14%)

● Combinatie Caland Tunnel v.o.f. (25%)

● Kombinatie Schiphol Zuid v.o.f. (33 1/3%)

● Tunnelcombinatie Heinenoord v.o.f. (25%)

Ballast Nedam Grond en Wegen B.V.

● Ballast Nedam Grond en Wegen Noord West B.V.

● Ballast Nedam Grond en Wegen Noord Oost B.V.

● Ballast Nedam Grond en Wegen Midden Oost B.V.

● Ballast Nedam Grond en Wegen Zuid Oost B.V.

● Ballast Nedam Grond en Wegen Zuid West B.V.

● Ballast Nedam Grond en Wegen Grondstoffen B.V.

● Recycling Maatschappij ‘Feniks’ B.V.

● Ballast Nedam Grond en Wegen Projecten B.V.

● Ballast Nedam Milieutechniek B.V.

● Ballast Nedam Grond en Wegen Specialiteiten B.V.

● Ballast Nedam Kabels en Leidingen B.V

● Transport- en Handelsmaatschappij vanDrooge B.V.

● Dibec B.V.

● Ballast Nedam Bulk Grondstoffen v.o.f. (33 1/3%)

● BBL Railinfra v.o.f. / Ballast Nedam Rail

● Cobeton B.V. (25%)

● Combinatie Heinenoord Tunnel (50%)

Ballast Nedam Baggeren B.V.

● Anglo-Dutch Dredging Co. Ltd. (United Kingdom)

● Ballast Muddrings A.B. (Sweden)

● Ballast Nedam Bau- und Bagger GmbH(Germany)

● Ballast Nedam Groep N.V. Malaysia Sdn Bhd (Malaysia)

● Broekhoven B.V.

● Condreco Pty., Ltd. (Australia)

● Tagus Dragagens Ltda (Portugal)

● Airport Platform Contractors J.v. (16.6%)(Hong Kong)

● Ballast Nedam Bulk Grondstoffen v.o.f.(33 1/3%)

● North American Trailing Company (25%)(U.S.A.)

● Percon-Ballast Sdn Bhd (49%) (Malaysia)

● Riovia S.A. (20%) (Argentina)

● Tanjung Pelepas Sdn Bhd (60%)

(Malaysia)

● Zeezand IJmuiden v.o.f. (50%)

INDUSTRY AND SUPPLY DREDGINGINFRASTRUCTURE NETHERLANDS


Key Personnel 1 March 2000

Ballast Nedam N.V.

Board of Management R.H.P.W. Kottman, ChairmanTh. MulderM.J.F. WeckG.N.G. Wirken

General

Company Secretary W.H. van de WalPersonnel & Organisation F.M. GerritsCommunication and Services J.W. BoltStrategic Planning/Investor Relations A.C. van Haeringen

Finance and Legal AffairsAccounting and Control G.M. Snellens, C.C. AmptTreasury/Project Finance R.B. KleynLegal Affairs W.H. van de WalRisk Control and Assurance P.Th.G. Kaatee

Construction InternationalBallast Nedam International B.V. A.H. Godri, D. Alkema, Ph. Dubbeling- Commerce R.J.M.V.L.J.B. Beck- Middle East D. Spinder- Caribbean G. van der Schaaf- Far East Ph. Dubbeling- U.S.A. M.J. Otto- Technical Services R.A. Bonting- Ballast Nedam Equipment Services B.V. J.W.J. Dieben- Ballast Nedam Petrol Stations Europe B.V. H. van Uitert

Construction NetherlandsBallast Nedam Bouw B.V. J.A. Holleman

Ballast Nedam Utiliteitsbouw B.V. P.M.A. Baaijens, F.P.A. de Canne, J.H. Seelen- Kantoren Amsterdam / Bouwborg West B.V. P.J. Cupido, J.E. Huizinga- Kantoor Utrecht / Speciale Projecten J.A.G. van Oostrum, A.R. van der Wal, F.G.C.M. Bouwmans- Kantoren Rotterdam en Breda J.B.C. Marijnissen, P.A. Reijnen, A.H.P. Lodewijks- Kantoor Groningen /

Bouwborg Aannemingsbedrijf B.V. B.M. Schouten, J. Nederhorst- Kantoor Arnhem / Bruil Bouw B.V. J.H.C. Vermaak- Ballast Nedam Parking J.H. Seelen

Ballast Nedam Woningbouw B.V. R.L.M. Jacobs, T.A.C.M. Bruijninckx, F.L. van Oorschot- Regio Midden R.J. Perk- Regio West R. Honig- Regio Zuid J. Waegemaekers- Aannemingsbedrijf F. Onrust B.V. P. Onrust

Ballast Nedam Ontwikkelingsmaatschappij B.V. J.P.A. van Bokhoven, B.P. van der Schans, S.B. de Vries,J.T.M. Schoonderbeek

Construction United KingdomBallast Wiltshier PLC M.J.F. Weck, R. Heathfield, D.A. Barrat, M.P. Snasdell, A.J. Snell,

R.T.A. van Steenvoorden- Scotland J.M. Middlemiss- North East Region W. Johnson- Northern Region S.J. Clarkson- North West Region N. Brook- South West Region B.G. Grimes- South East Region A. Gaskill- Developments Division R. Blythe- Special Projects Division P. Cooper- Stadia Division D.J. Watson

74


Industry and SupplyBallast Nedam Industrie en Toelevering B.V. P.J.G. Franssen, L.B. van Rietschoten- Bruil Specialistische Bouwtechnieken B.V. C. van Bree- Durisol B.V. W. Zandbergen, A.J. Veldhoen- Exploitatiemaatschappij Transportbeton B.V. J.A. Vriens- Haitsma Beton B.V. W. Zandbergen, H. Eckhart- Hoco Beton B.V. J.J.G. Holtackers- N.V. Immobiliën en Grindexploitatiemaatschappij

Bichterweerd H.P. van der Meer- Ingenieursbureau voor Systemen

en Octrooien Spanstaal B.V. W.B. Grundlehner, A.A. Smid- Ivacon B.V. N.P. van Lith- Nieuwenhuis Betonrenovaties B.V. J.G.J. Nieuwenhuis- Rademakers Gieterij B.V. A.A.G. Hartings- Société d’Exploitation des Carrières

d’Yvoir S.A. (Belgium) H.P. van der Meer, W. Savelkouls- TBS Soest B.V. W. Ent, R. de Haas- v.o.f. Vibouw-Van Happen G.J. Boer- Waco-Liesbosch Beton B.V. P.J.G. Franssen, B.U.J.M.van Roosmalen, J. van den Tol- Zand- en Grindhandel Verkaik v.o.f. H.M. Bronder

Infrastructure NetherlandsBallast Nedam Beton en Waterbouw B.V. (BNBW) R.P. Rombouts, R. van Schravendijk, A.S. Hoekstra, B.A. Post- BNBW Regio Noord-West R.P. de Keijser- BNBW Regio Noord-Oost K. Braam- BNBW Regio Zuid-West A.J. Elsevier van Griethuysen- Ballast Nedam Funderingstechnieken B.V. A. Kuiper, P.J.C. de Kort- Ballast Nedam Industriebouw B.V. A.S. Hoekstra- Ballast Nedam VEPO B.V. J.P.A. van Herwijnen

Ballast Nedam Grond en Wegen B.V. (BNGW) H.W. Postma, C.A.M. Loos, R. Malizia, A.B. Hettinga, J.M. de Koning

- BNGW Regio Noord West J.T. Folkerts- BNGW Regio Midden-Oost K.J. Meinardi- BNGW Regio Noord-Oost R. Philipse- BNGW Regio Zuid Oost K.J. Meinardi- BNGW Regio Zuid West H. Kuipers- BNGW Specialiteiten B.V. F.J.D. Touber- Ballast Nedam Grondstoffen B.V. J. van den Brink- Ballast Nedam Kabels en Leidingen R. Versluis- BNGW Projecten B.V. J.A. van Huijstee- Ballast Nedam Rail P.S. van der Bijl

DredgingBallast Nedam Baggeren B.V. R.J.W.M. van Rooden, C. van den Heuvel, A. Kok, J.C. Pronk- Area Managers S. Boon, F.A.J. Broekhoven, S.A. Gerlsma, H.B. Graswinckel,

M.B.A de Kok, R.K. Romijn, F.M. Taselaar- Head Equipment Management L.J.H. Brand- Head Personnel & Organisation J.P.T.M. Rooms- Head Project Services J. Preesman

GeneralBallast Nedam Bouwmaterieel B.V. L. Philippen

Ballast Nedam Engineering B.V. H. van Tongeren

Ballast Nedam Services B.V. J.W. Bolt

75


76

DesignHan Bohn

Production supervisionPublic Relations Department

ProductionReprografische Dienst Ballast Nedam Services

TranslationMac Bay Consultants

PhotographyAerophoto Eelde, Dirk A. de Buyzer, Fotostudio Honig, Hennie van Houten, Hans Koenekoop,Ab Koers, Images, Mies de Monchy, Rien van Rijthoven, Aeroview Dick Sellenraad, Studio SphinX, R.J. van Zuiden and others

Computer graphicsBallast Nedam Engineering CAD Department with AutoCAD

Colour separations and printingColour separations: bv Kunstdrukkerij Mercurius-WormerveerPrinting: bv Kunstdrukkerij Mercurius-WormerveerBinding: Binderij de Koningh, Rijswijk

Ballast Nedam N.V.P.O. Box 5001180 BE AmstelveenThe Netherlands

Telephone + 31 20 5 45 91 11Telefax + 31 20 6 47 30 00Internet www.ballast-nedam.comEmail [email protected]

Colophon


Annual report 1999 - Ballast · PDF fileBallast Nedam Annual report 1999. 3 Company Profile 5 Chairman’s Statement 6 Key Figures 7 Supervisory Board and Board of Management

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