Annual r eport 2002 Annual r eport 2002 - Boskalis

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Message to shareholders Message to shareholders Dear shareholders, Royal Boskalis Westminster nv booked altogether satisfactory results in 2002, despite increasingly difficult circumstances. The company is in good condition: it is a market leader with broad international operations and a strong financial position that is, on balance, debt-free. Despite predominantly favorable market prospects in the long-term, it became clear in the latter half of 2002 that the effects of a stagnating global economy, falling share markets and geopolitical uncertainties are also being felt in our dredging markets. For the time being, we are still assuming that the uncertain situation will continue in 2003. After years of strong growth, 2002 was a year in which activity flattened out. The volume of work done did not reach the record level of 2001. Nevertheless, increased turnover in completed contracts, plus the effect of the participation in Archirodon acquired in 2001, pushed earnings per share up by 5% to € 3.16. Despite the hesitant mood in most of our markets, € 1.1 billion in new orders was won in 2002 and the orderbook remained well-filled. Although current uncertainties about 2003 require a cautious approach, we are certainly not pessimistic. Nevertheless, the short-term emphasis for the market position will shift from growth to consolidation (and where possible strengthening). The optimization of operational efficiency will also be prioritized. There will be no let-up in our efforts to strengthen our enterprise for the future. This applies in particular to the following focus areas: • staff training and development; • investments in innovative equipment and new techniques; • development and implementation of all systems, and particularly ICT. Boskalis continues to invest in its future. Our ‘sow and reap’ policy is also important in less straightforward circumstances. Our ‘sowing’ activities will be more focused; even more determination and effort will go into ‘reaping’. Structural growth and development have been central in recent years. Our strategy continues to target this long-term objective. In the shorter-term, we will concentrate primarily on market position, competitive position, maintaining stable capital ratios and achieving the return target. As the only listed dredging company in the world, we will continue to seek the attention of the financial markets by means of an active investor relations policy. Against this background, the Boskalis share returned to the AMX index as at 1 March 2003. This will result in an increase in media interest in the Netherlands. We would like to be as clear as in previous years about our profit expectations. Unfortunately, prevailing conditions force us to be cautious. We propose increasing the dividend from the results for 2002 to € 1.26 per share (2001: € 1.20). 25 Royal Boskalis Westminster nv
Message to shareholders The tide turned in the second half of 2002 After a run of years with a highly favorable international business climate, the tide in the dredging industry turned in the second half of 2002. The short-term is uncertain There has been continuing economic stagnation in Europe, Japan and the United States. We have also seen, in general, an increase in international political tensions with respect to the Middle East in general. In particular, there has been a slowdown in the Dutch civil sector and problems with sand production in Indonesia for the purposes of the land reclamation mega-projects in Singapore. These factors have, for the time being, changed the look of the international dredging landscape. The short-term climate is uncertain. The prospects for the longerterm remain favorable Despite the current uncertainties, the longer-term prospects remain favorable. The demand for infrastructure on the waterline is directly linked to developments in the volume of world trade, the increase in the global population and the shortage of space in densely-populated coastal areas. There is also increasing demand for our services from the energy sector (offshore) and the tourist industry (land reclamation). Dredging is an industry with a future. Global spread and prominent position provide Boskalis with a firm base Thanks to its broad global spread and its prominent position, Boskalis has managed to perform well, even in more difficult market conditions. A series of fixed home market positions and regional alliances make for solid foundations, precisely in uncertain times. We expect competition to intensify in the market for one-off large international projects. Modern ships will push out older equipment in this segment. Operating margins in international projects will come under pressure In addition, operating margins will come under pressure here and there. Quality and innovation will continue to open up opportunities in specialist niche segments such as the energy sector and environmental activities. On balance, in the coming period, the market picture will involve uncertainty and hesitation but also, and especially for Boskalis, numerous opportunities. Archirodon alliance bears fruit For the first time last year, Boskalis was able to pluck the fruits of its alliance with Archirodon. In addition to good collaboration in the Middle East, a joint project was contracted for the drainage of waste water in Singapore and a large order was acquired recently in Kazakstan. Consolidation in Europe in final stages The consolidation process involving dredging companies in Western Europe (i.e. The Netherlands and Belgium) has gradually reached the final stages. 26 Annual Report 2002
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Page 3 and 4: Innovation: where professionalism a
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Page 17 and 18: Jelke Jan de With, director Boskali
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Page 21 and 22: Carel Stetter, head of the building
Page 23 and 24: Key figures Key figures (1) Annual
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Page 45 and 46: The trailing suction hopper dredger
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Page 59 and 60: Financial Statements 2002 The bonus
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Page 69 and 70: Ten years Boskalis Ten years Boskal
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Offices around the world Rock Fall
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Offices around the world Stuyvesant
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Glossary Glossary Acquired orders T
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Glossary The extended trailing suct
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The dredging work done by Boskalis
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