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Annual Report 2008, strategy DHV Group

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  • Consultancy and Engineering

    Annual Report 2008 DHV Group

    dhv.com

    Gateway to solutions

  • 16 Jan NACO acquires large airport contract in Taiwan

    28 Jan DHV and Delcan conduct feasibility study for an integrated Traffic Management System in Bulgaria

    4 Feb SSI and Delcan win Intelligent Transportation Systems project in Johannesburg, South Africa

    29 Feb Terminal 3 of Beijing Capital International Aiport opens, a NACO, Foster+Partners, and ARUP project

    4 March DHV and building consultant Infocus (the Netherlands) join forces

    14 March DHV Group and mining consultant Turgis (South Africa) join forces

    27 March TAQA Energy awards DHV contract for Permitting and EIA for underground gas storage, the Netherlands

    31 March DHV and the Dutch municipality of Nijmegen sign large Asset Management contract

    13 April DHV is main sponsor of a weekend school for underprivileged youth in Amersfoort, the Netherlands

    14 April Delcan and DHV work together on flood protection for the Canadian city of Surrey

    21 April DHV wins high profile design competition for a new coastal city in Caofeidian, China

    19 May DHV Group strengthens position in the Polish market with water consultant Hydroprojekt

    28 May DHV Group signs Dutch Charter Talent to the Top to increase the number of women at top level

    29 May ICT rollout completed for Europe and Asia offices

    11 June CR Report 2007: DHV Group is the first engineering consultancy to comply with GRI+ standard

    23 June DHV wins contract to design new solar cell plant for Photovoltech in Belgium

    16 July Polish Undersecretary Rapciak opens Expressway S7 Bialobrzegi-Jedlinsk, designed by DHV

    1 Aug DHV Group joins the United Nations Global Compact

    6 Aug SSI wins the Engineering Excellence Award for its Biovac Institute clean room project in South Africa

    2 Sep NACO and SSI to supervise the major upgrade of Maun Airport in Botswana

    11 Sep DHV becomes preferred supplier to Rabobank Nederland

    7 Oct Launch of the DHV Group Share Plan for employees: more than 200,000 depositary receipts purchased

    8 Oct Russian Prime Minister Putin inaugurates the St. Petersburg Flood Protection Barriers shipping canal

    29 Oct Dutch Prime Minister Balkenende visits DSM's green China Campus, designed by DHV

    1 Nov The Group strengthens its North American aviation profile with InterVISTAS

    17 Nov Delcan receives the Best of ITS Award for its Lake County Passage Project in Illinois, USA

    28 Nov Dutch Tunnel Rodenrijsevaart wins European Concrete Award

    11 Dec DHV delivers the designs for 14 new fishing harbors in Ghana

    18 Dec President Mubarak of Egypt inaugurates terminal 3 in Cairo airport, designed by NACO and ECG

    For more information on the projects illustrated on the cover please refer to the Projects section on pages 27-37.

    Highlights 2008

    2008 was a remarkable year for the DHV Group. In the first six months an overheated market pushed the limits of growth, whereas in the second half of the year economies shrank. We were nevertheless able to continue to grow and meet goals in the areas of internationalization, innovation, and corporate responsibility. We grew to over 5,000 staff members and are proud of the more than 10,000 projects and assignments executed.

    28-1 Sofia TMS

    29-10 DSM Campus

    29-2 Beijing Airport

    21-4 Eco-city China

    8-10 St. Petersburg

    28-11 Rodenrijseweg

  • Key Figures 2

    Profile 4

    Report of the Supervisory Board 6

    Report of the Executive Board 8 Strategy and Policy 9

    Main Developments of 2008 12

    Financial Performance 2008 16

    Prospects for 2009 17

    Developments in our Global Network 19

    Projects; Connect & Deliver 27 Transportation 28

    Spatial Planning and Environment 30

    Water 32

    Building and Industry 34

    Aviation 36

    Financial Statements 2008 38 Consolidated Balance Sheet 38

    Consolidated Profit and Loss Account 39

    Consolidated Statement of Changes in Equity 40

    Consolidated Cash Flow Statement 41

    Summary of Significant Accounting Policies 42

    Notes to the Consolidated Financial Statements 46

    Company Balance Sheet 58

    Company Profit and Loss Account 58

    Notes to the Company Financial Statements 59

    Other Information 64

    Risks and Risk Management 67

    Shareholding Structure 70

    Structure and Management DHV Group 71

    Addresses 72

    Colophon 73

    Corporate GovernanceThe DHV Group is guided by the Dutch Corporate Governance Code, inasmuch as it applies to DHV Holding B.V. as a private, unlisted company. Exceptions to the Codes principles and best practice provisions are listed in our Corporate Governance Report. The Report and further information concerning the DHV Groups Code of Conduct, whistle-blower scheme, and regulations for the Executive Board, Supervisory Board, and Audit Committee can be found at www.dhv.com/corporategovernance

    Contents

  • 2 Key Figures

    0

    10

    20

    30

    40

    50

    60

    70

    2004 2005 2006 2007 2008

    2004 2005 2006 2007 20080

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    2004 2005 2006 2007 20080

    100

    200

    300

    400

    500

    2004 2005 2006 2007 2008

    Workforce

    0

    1,000

    2,000

    3,000

    4,000

    5,000

    6,000

    42

    31

    18

    9

    2323

    5

    26

    53

    18

    12

    12

    5

    23

    229.0

    269.4 274.8

    325.3

    229.1

    50.8

    58.3 59.963.2

    49.3

    3.7

    7.3

    6.0

    9.4

    4.1

    2,171

    1,883

    2,055

    2,298

    2,196

    2,534

    3,030

    2,290

    2,275

    1,878

    4,0544,353

    4,730

    5,320

    4,153

    300.6

    351.6

    395.0

    467.7

    294.1

    Shareholders equity( millions)

    Net profit( millions)

    Net turnover and Added value( millions)

    Net turnover

    Added value

    The Netherlands

    Outside the Netherlands

    Turnover by client group Turnover by market Turnover by region

    The Netherlands

    Africa

    Europe (excl. the Netherlands)

    Asia

    North America

    Water

    Transportation

    Spatial Planning and Environment

    Building and Industry

    Aviation

    Government

    Industry

    Public utilities

    International Development Agencies

    (%) (%) (%)

  • 3Key Figures

    Key Figures

    Net turnover

    Added value

    Results

    Operating profit before profit sharing and goodwill

    Profit sharing

    Operating profit before goodwill

    Net profit

    Return on average shareholders equity (%)

    Operating margin before goodwill (%)

    Earnings per share (e)

    Dividend per issued class B share (e)

    Capital employed

    Total assets

    Long term capital

    Shareholders equity

    Group equity

    Group equity as a percentage of total assets (%)

    Financial position

    Net working capital

    Cash flow

    Change in net cash

    Workforce

    Staff costs

    Number of staff (ultimo)

    ( millions, unless otherwise stated)

    294.1

    229.1

    11.4

    1.9

    9.5

    4.1

    8.5

    4.1

    0.76

    0.30

    144.0

    81.1

    49.3

    50.0

    34.7

    23.2

    12.2

    -1.8

    153.4

    4,153

    300.6

    229.0

    7.7

    1.4

    6.3

    3.7

    7.3

    2.7

    0.68

    0.25

    137.4

    83.7

    50.8

    51.3

    37.4

    26.7

    10.6

    0.3

    160.1

    4,054

    351.6

    269.4

    17.0

    3.8

    13.2

    7.3

    13.4

    4.9

    1.39

    0.50

    163.4

    90.7

    58.3

    59.7

    36.5

    20.1

    14.8

    15.0

    180.1

    4,353

    395.0

    274.8

    18.9

    5.9

    13.0

    6.0

    10.2

    4.7

    1.24

    0.45

    191.7

    96.4

    59.9

    61.7

    32.2

    19.9

    12.8

    -9.6

    186.5

    4,730

    467.7

    325.3

    27.6

    6.8

    20.8

    9.4

    15.3

    6.4

    1.97

    0.70

    231.9

    99.8

    63.2

    65.3

    28.2

    26.2

    19.0

    -23.6

    209.8

    5,320

    DefinitionsAdded value Operating income less cost of work subcontracted and other external cost

    Operating margin Operating profit / Added value

    Earnings per share Net profit / Number of ordinary shares issued

    Net working capital Current assets less current liabilities (excluding cash and cash equivalents less amounts owed to credit institutions)

    Cash flow Net profit plus amortization and depreciation

    Change in net cash Movement in cash and cash equivalents less amounts due to credit institutions

    * The 2006 figures include 18 months' results of the Africa region.

    200420052006*20072008

  • Profile

    4

    The DHV Group is a global provider of consultancy and engineering services in the following markets: Transportation, including Aviation Water Building and Industry Spatial Planning and Environment

    Mission Our mission is to provide multidisciplinary services for the sustainable development of our living environment, in a close relationship with clients, employees, and partners, based on mutual loyalty, while providing a solid return to our shareholders.

    VisionWe aim to be a leading international engineering consultancy firm, active in both public and private sectors, open to partnerships based on shared values.

    ClientsOur major clients are: Governments Public Sector and Semi-Government Industry, Commercial Services, Contractors, and

    Developers International Development Agencies

    Key valuesOur key values are integrity, respect and freedom. We act with a deep commitment to social responsibility, integrity and accountability. Our activities are characterized by respect for others and the environment. We promote empowerment, coupled with strong personal and professional responsibility. We welcome different perspectives and support freedom of thought and action. We are an independent company and signatory to the United Nations Global Compact and the Partners Against Corruption Initiative (PACI) of the World Economic Forum.

    Added valueClients call on us to achieve their ambitions through projects and partnerships. We provide our services with passion and pride, adding value through: Reliable quality performance, delivered on time and within

    budget. An understanding of the clients needs and respect for their

    stakeholders. State of the art expertise and innovative solutions. Local delivery of world-class solutions.

  • 5Profile

    ServicesWe develop innovative concepts in consultancy and engineering. Services cover the entire project cycle and include: Business and Policy Consultancy Technical Advice Planning Design and Engineering Program, Project, and Construction Management Project Development and Turnkey Delivery Operations Management Asset Management

    Expertise PositionsLooking to client needs, we focus on: Airports Highways, Bridges, and Tunnels Intelligent Transport Systems Mass Transit and Rail Urban and Regional Planning Environmental Management Buildings Marine, Ports and Waterways Water Management Water Treatment

    We are active worldwide through a network of local offices in Europe, Asia, Africa, and North America. Operations in the following home countries account for the greater part of our total turnover: Europe: The Netherlands, Poland, and Portugal Asia: China, India, and Indonesia Africa: South Africa North America: Canada and the United States of America

    Key Figures 2008Net turnover 468 millionNet profit 9.4 million

    Staff and Offices by RegionEurope 2,899 in 19 offices

    Asia 815 in 10 offices

    Africa 1,015 in 25 offices

    North America 591 in 19 offices

    Total 5,320in73offices

  • Report of the Supervisory Board

    Recommendations to the Annual Shareholders Meeting

    We have pleasure in presenting the DHV Group Annual Report for 2008. The annual accounts were prepared by the Executive Board and audited by PricewaterhouseCoopers Accountants of the Netherlands. The annual accounts were signed following discussion with the Executive Board and the external accountants. We support the proposal of the Executive Board to distribute a cash dividend of 0.70 (2007: 0.45) per depositary receipt of issued B shares from the 2008 profits. We recommend that the annual accounts for 2008 be approved as well as the incorporated dividend proposal. Lastly, we call on you to discharge the Executive Board from liability for its management, and the Supervisory Board for its supervision during the 2008 financial year.

    A.B.M. van der PlasSeen van der Plas (b. 1938, Dutch) joined the DHV Group Supervisory Board in 1998. His current term of office will expire in 2010. Mr Van der Plas is chairman of the Supervisory Board of the Netherlands Research School on Transport, Infrastructure and Logistics TRAIL (a collaborative initiative of five Dutch universities), board member of the Next Generation Infrastructures Foundation (a large international consortium of knowledge institutions, market players and governmental bodies), and member of the Supervisory Board of the Rotterdam Philharmonic Orchestra.

    W. van VonnoWim van Vonno (b. 1941, Dutch) joined the DHV Group Supervisory Board in 2006. He has been Chairman since 2007. His current term of office will expire in 2010. Mr Van Vonno is Chairman of the Supervisory Boards of Convest, and Van Nieuwpoort, and a member of the Supervisory Boards of Van Oord, Optimix Investment Funds, Van Boldrik Group, AM, Royal BAM Group, SADC, Bank for the Construction Industry, and Mammoet Holding. He is also a member of the Investment Committee of NPM Capital, member of the Boards of ING Continuity Foundation, Foundation Protection TNT, and OPG Preferential Stock Foundations. Furthermore he is Arbitrator at the Stichting Raad van Arbitrage voor Metaalnijverheid en -Handel, member of the Executive Board of NEN, President of the Advisory Council of AKD Prinsen van Wijmen, and President of the Nomination Committee Dockwise.

    J.H.M. LindenberghHessel Lindenbergh (b. 1943, Dutch) joined the DHV Group Supervisory Board in 2003. His current term of office will expire in 2011. Mr Lindenbergh is chairman of the Supervisory Boards of Fortis Bank Nederland, NIBC, Agendia, and the Bank for the Construction Industry. He is also member of the Supervisory Boards of the University of Amsterdam in the Netherlands, Gamma Holding, Ortec International, Doctors Pension Funds Services, and Zeeman Group. He is also member of the Boards of Stichting Vopak, Foundation Protection TNT, and Wolters Kluwer Preference Shares Foundation.

    A.P.M. van der PoelArthur van der Poel (b. 1948, Dutch) joined the DHV Group Supervisory Board in 2004. His current term of office will expire in 2012. Mr Van der Poel is chairman of the Supervisory Board of semiconductor equipment manufacturer ASML, member of the Board of smartcard company Gemalto, and member of the Supervisory Board of Dutch soccer club PSV.

    S.M. DekkerSybilla Dekker (b. 1942, Dutch) joined the DHV Group Supervisory Board in 2007. Her current term of office will expire in 2011. Mrs Dekker is former Netherlands Minister of Housing, Spatial Planning and the Environment. She is a member of the Supervisory Boards of the Bank Nederlandse Gemeenten (a bank of and for local authorities and public sector institutions), AKZO Nobel Nederland, Kristal, and DNC. She chairs the Strategic Advisory Council of TNO Built Environment and Geosciences and the Supervisory Councils of the Antillean Co-Financing Organization and the Dutch Diabetes Fund. She is also member of the Supervisory Council of the Knowledge for Climate Research Program, and President of the Dutch Taskforce Talent to the Top and the Committee Fundamental Exploration Building.

    6

  • Report for 2008Supervisory Board Meetings During 2008, the Supervisory Board met with the Executive Board and the Director of Finance & Control on six occasions the external accountants also attended when the first half year and annual figures were discussed. All board members had a good record of attendance. Ongoing matters were also regularly discussed by the Chairmen of the Supervisory and the Executive Boards outside the context of these meetings.

    The DHV Groups strategy for the longer term was considered at several meetings. Discussions were based on the Corporate Policy Paper, which sets out the corporate objectives and attendant risks. In 2008, the Supervisory Board gave particular attention to the strategic positioning of the DHV Group, the roll-out of the ICT network and the replacement of the business information system. The financing policy of the Group and risk management policy were reviewed. As in previous years, the Supervisory Board conducted an assessment of the suitability for senior management positions of internal candidates.The Board approved the acquisitions of Turgis in South Africa, InterVISTAS in Canada, Hydroprojekt in Poland, and Infocus in the Netherlands.

    Audit Committee Meetings The Audit Committee, consisting of Mr Lindenbergh and Mr Van der Plas, met on four occasions. The first meeting dealt with the annual accounts for 2007 and the budget for 2008, the second with the first half year figures and the share price for the first trading round under the new share plan. The third meeting considered the accountants Audit Service Plan and the ICT report. The fourth meeting was dedicated to the budget for 2009. In addition, the Committee reviewed progress reports on the outsourced ICT, the replacement of the business information system, and the Internal Audit annual report.

    Internal Deliberations The board members met twice to discuss their Boards own performance and the contribution of each member, and to assess the Boards composition. They also discussed the performance, composition, and remuneration of the Executive Board. The supervisory directors concluded that the Supervisory Board is properly constituted and that its members possess the desired competencies. All the supervisory directors are independent as provided in best

    practice provision III.2.2 of the Dutch Corporate Governance Code. Mr Lindenbergh is financial expert as provided in best practice provision III.3.2 of the code; and Mr Van der Plas is Deputy Chairman of the Supervisory Board. In the judgment of the Supervisory Board, the Executive Board both as a group and in terms of its individual members possess the requisite competencies and functions appropriately.

    Corporate Governance DHV Groups Corporate Governance Report and further information concerning the remuneration policy, the Code of Conduct, whistle-blower scheme, and regulations for the Executive Board, Supervisory Board, and Audit Committee can be found at www.dhv.com/corporategovernance. The remuneration of the Supervisory Board is reported on page 53.

    Composition of the Supervisory Board There were no changes in the composition of the Supervisory Board in 2008. On the occasion of the 2009 Annual Share-holders Meeting, there will be no scheduled vacancies on the Supervisory Board.

    Consultations with the Works Council The general course of events of the Group was discussed with the Works Council of DHV B.V. on two occasions.

    The year 2008 shows steady growth and a firm improvement in the financial results and business control, thanks to the efforts of the staff. The Supervisory Board wishes to express its appreciation to all staff for their contribution in 2008.

    Amersfoort, the Netherlands,3 March 2009

    W. van Vonno (Chairman)S.M. DekkerJ.H.M. LindenberghA.B.M. van der Plas (Deputy Chairman)A.P.M. van der Poel

    7Report of the Supervisory Board

  • Report of the Executive Board

    Bertrand M. van Ee(b. 1957, Dutch) was appointed to the Executive Board in 2004, becoming its President on 1 January 2007.External appointments include: Member of the GWW (groundwork, road and hydraulic engineering)

    working group of the Dutch Construction Supervisory Council Member of the Innovation Council Platform (Dutch Ministry of

    Transport, Public Works and Water Management) Member of the Board of the Henry Hudson 400 Foundation Member of the Supervisory Board of the Water-Right Foundation

    Piet W. Besselink(b. 1958, Dutch) joined DHV in 1989. He was appointed to the Executive Board in 2006 and became its Vice President on 1 January 2007.External appointments include: Member of the Advisory Board of Deltares, the Dutch institute for

    Delta Technology Member of the Board of the Netherlands Institute of Applied

    Geoscience, TNO-NITG Member of the Board of Railforum (a Dutch platform for the

    exchange of knowledge and perspectives in the field of rail transport)

    The Executive Board of the DHV Group: President Bertrand van Ee and Vice President Piet Besselink.

    8

  • Strategy and Policy

    Ambition, Goals and Objectives

    The DHV Group aspires to a prominent position among the worlds leading engineering consultancies. In order to achieve this ambition, we focus on four main goals:

    Growth and ProfitabilityGrowth is essential to our continuity. The size and complexity of challenges that clients face require significant depth and breadth of expertise, for which large firms are better positioned. Growth provides more opportunity for our companies and people. Therefore we want to achieve annual growth in turnover averaging at least 10%, of which half will be organic and half through mergers and acquisitions.

    We are employee-owned, directly through a share plan and indirectly through our foundation. Sound financial performance enables us to invest in our future and reward employees for their contribution. Our objective remains an operating margin of 7% on added value. As of 2008 we have set an additional tar-get of 15% average return on sharehold-ers equity.

    InternationalizationFurther internationalization is impor-tant to continuity and risk distribution. Our international network not only helps to provide better service regionally, but also insights for future innovation. We have chosen to concentrate our operations on a limited number of home markets: Canada, China, India, Indonesia, the Netherlands, Poland, Portugal, South Africa, and the United States. These have been selected based on the business environment, our market position, resource base, and opportunity for growth. This focus will enable us to best serve those markets, understand the risks and opportunities, build relation-ships, and attract talent. We aim to be recognized in these markets as a top player in our fields of expertise. Home markets will account for at least 90% of the Groups turnover.

    InnovationIn order to fulfill our promise to deliver sustainable and state-of-the-art knowledge, we must continuously improve our skills and expertise. Innova-tive solutions are constantly created for

    projects, but we also invest in R&D and aim to leverage strategic innovations. Our objectives are to shorten time-to-market, increase the number of patents held each year, and continue to earn rec-ognition for innovation through awards.

    Corporate ResponsibilityThe DHV Group is a company for people from people. We recognize the inter-connectivity of the triple bottom line (people, planet and profit) for sustain-able development. Our long-term goal is to achieve Corporate Responsibility in-side. We have identified four key areas: integrity, sustainability in our projects, the impact of our own operations, and people development. Transparency is a key to conducting business responsi-bly. Our objective is to maintain a top quartile ranking in the (2009) Transpar-ency Benchmark for CR reporting of the Dutch Ministry of Economic Affairs. This methodology aligns with the Dow Jones Sustainability Indexes. We will set a tar-get for the reduction of our CO2 footprint in 2009. Our community involvement emphasizes building futures through education and capacity building.

    Corporate Strategy

    Our business model of Local delivery of world-class solutions rests on three pil-lars: Differentiation, Home Markets, and One-Company Concept. These are based on an analysis of strengths and weak-nesses in our operations and opportuni-ties and threats in the market. Together these three pillars form our strategy and provide a path to achieving our goals.

    Our strengths include a full range of services and an in-depth understanding of private as well as government client needs. We are open to partnerships and alliances. Our people are expertise-driven, innovative and committed to

    sustainability. Strong local presence is leveraged with our international network and supported by a global ICT platform. We provide an engaging work environment and are an independent, employee-owned company with a solid financial position. Among our weaknesses, we see insufficient responsiveness and speed in parts of the organization. We still have a tendency to go beyond our scope, which results in lower profitability. Our high project focus can result in less than optimal knowledge sharing, and we must further improve the efficiency of our internal operations.

    We see many opportunities. Over the next decades, the demand for energy and water will grow exponentially to meet the growth in population. Furthermore, climate change is a fact and sea levels continue to rise. The reduction of CO2 and other emissions will be high on the worlds agenda. At the local level, complexities increase with congestion around cities, safety concerns, and changing demographics. In the short term, the economic slowdown drives both public and private sectors to outsource services and optimize use of existing facilities. There is a renewed focus on infrastructure in

    9Report of the Executive Board

  • the right people. Our company culture and ownership structure encourage individual development and engagement. This is reflected in our policies, development programs and compensation.Business basics: the economic slowdown and the increasing complexity and size of projects result in a more competitive and higher risk environment. We will apply stricter risk and project manage-ment. Furthermore the internal organi-zational efficiency must be optimized in order to remain competitive. Economies of scale of our growing organization of-fer opportunities to improve efficiency. The market pressure is accelerating the necessary improvements, which are supported by a new business informa-tion system using the ICT platform. Our company values are embedded in a Global Code of Business Principles and a Business Integrity Management System, which provide the basis for addressing business integrity issues. Selective growth: in order to compete

    government stimulation packages. The trend to tender large projects to a single party requires size, financial strength and a multidisciplinary capability. Threats due to the global economic slowdown include decreased demands, volatile currencies, protectionism, and political and social instability. The speed of global developments is ever increasing. Mid-sized competitors are consolidating and the labor markets remain tight. Business integrity issues in certain markets require constant vigilance.

    ChallengesThe challenges below explain how we use our strengths and address weaknesses to take advantage of opportunities and minimize threats. Expertise focus: our expertise positions and commitment to sustainability put us in an excellent position to address the issues of climate change, urbanization, and congestion. We focus on expanding this strength through organic growth and new members. Our innovation agenda is primarily aimed at increasing sustainability and creating synergies. We work together with partners on innovation and use our international network to leverage results.Responsiveness: the high speed of global developments and the impact of the economic slowdown on our clients require that we are able to respond quickly. We will address this challenge by a strong local presence close to our clients, decentralized decision-making and flexibility in our spread of services. Knowledge sharing and speed within the company will be enhanced by capitalizing further on expertise networks via the ICT platform.Preferred employer: attracting and retaining top professionals with passion for their work require a large effort in a tight labor market. The reputation of the Group with signature projects, technical innovation, and commitment to sustainability is key to attracting

    and meet the resource needs for large projects, we are increasing our scale in selected fields of expertise and forming alliances and partnerships. Growth will be concentrated on our home markets where we have excellent positions to further increase the depth and breadth of service. Our strong balance sheet and independent position provide a good base from which to grow and have proven to be attractive to potential partners.

    Delivering our strategyThe three pillars Differentiation, Home Markets, and One-Company Concept form our strategy for addressing these challenges. They tie together actions that support achieving our goals.

    DifferentiationClients recognize us in well-defined areas of expertise and service, where we bring a strong combination of consultancy and engineering with an emphasis on innovative and sustainable

    The International Policy Board of the DHV Group. From left to right top row: Roel Overakker, Piet Besselink, Jan Cees Overbosch, Bertrand van Ee, Piet van Helvoort. Middle row: Eugene Grter, Jim Kerr, Vic Prins, Johan van Manen. Front row: Chris Engelsman, Arnold Galavazi, Marga Donehoo, Naren Bhojaram.

    10

  • Business Groups: Environment and Transportation, Water, Building and Industry, Aviation

    Regions: Europe, Asia, Africa, North America

    The Group provides its services through a

    family of brands: DHV, Delcan, SSI, and NACO.

    These brands are leading players in their

    respective fields and actively collaborate to

    meet specific client needs, e.g. NACO-SSI for

    airports on the African continent and Delcan-

    DHV for international ITS solutions.

    The DHV Group has a decentralized

    organizational structure in order to stay close

    to selected markets. The four business groups

    focus on market specific consulting and

    engineering expertise. Regional operations

    maintain client relationships and tailor the

    Groups expertise to local circumstances,

    language, and culture.

    solutions. Frequently operating at a high level in our clients organization, we strive to deliver the best available expertise through our own network and through strategic partnerships with global and local players. By working closely with universities and knowledge institutions, we stay abreast of new developments. These factors also differentiate us in the quest for talent, by providing an environment that is creative, challenging and able to positively impact the world around us.

    Home Markets Close interaction and cooperation with our clients require strong local presence. The Group applies ongoing portfolio evaluation. Scale and opportunity for growth are critical factors, as well as compatibility with business integrity principles and a favorable climate for investment. Our focus is to build operations in all our home markets to a top position in selected segments and to maintain our leading positions in the Netherlands and South Africa.By staying close to our clients in home markets, with a full service offering and sufficient scale, we can be responsive to local needs, execute significant projects and attract local talent.

    One-Company Concept The One-Company Concept supports scale-up, efficiency, and business basics. It comprises Group-wide policies and services such as: business integrity management, knowledge sharing, finance & control, risk management, account management, information technology, communications, and human resource management. This concept plays an essential role in integrating member companies and improves responsiveness through better connectivity and leveraging. It unites us and supports a common culture.

    Strategy monitoring and evaluationOur corporate strategy is defined in a Corporate Policy Paper. It is discussed by our International Policy Board, approved by the Supervisory Board and monitored on an annual basis. In 2008 we updated our goals, based on the progress which was made and market developments. In addition, we conducted a Leadership Team Survey among the top 100 management staff of the DHV Group. This survey measures the extent to which the DHV Group as a whole is aligned with the corporate strategy and identifies areas for further development. The survey indicated that the strongest progress had been made in growth, profitability, and alignment

    to strategy. Areas for improvement included engaging deeper within our organization on strategic initiatives in order to realize more synergies and embed best practices.

    Our strategy evaluation indicates that the DHV Group is indeed well on track in achieving its goals. Over the past few years we have shown solid growth and improved profitability, and a number of excellent firms have joined the Group. We are in a strong financial position and our performance gives us the expectation that our updated long-term goals are achievable.

    The International Management Meeting.

    11Report of the Executive Board

  • Beijing Capital International AirportCyclorama by CycloMedia

    For the DHV Group, 2008 was a good year. It was a dynamic year with two different speeds. In the first six months an overheated market pushed the limits of growth, whereas in the second half of the year many economies shrank towards recession. Although we experienced a slowdown in parts of the buildings market, the Groups performance remained strong up to and including the last quarter of the year. Our total staff increased by 600 and we made good progress on our four goals.

    Growth and Profitability

    The DHV Group continued to grow for the third consecutive year. Net turnover grew with an unprecedented 18% to 468 million, of which 75% was through organic growth. The operating margin was 6.4%, coming from 4.7% in 2007 and moving closer to our target of 7%.

    The strongest performers this year were Africa, North America, and Water. In addition to the increased turnover and portfolio improvements, a noticeable difference to the bottom line was made by cost control and stronger risk management. Exchange rate differences had a large negative effect on our financial performance. The actual return on our shareholder equity is 15% which is at the targeted average level.

    Internationalization

    We expanded through organic growth and by a number of high profile companies joining the DHV Group. Our home markets now account for 89% of our total turnover close to our objective of 90%. We became the leader in the Polish water market and maintained our top 3 position in the Netherlands and South Africa. Internationalization was also enhanced with the addition of two global consultancies. Turgis Consulting, based in South Africa, adds highly

    specialized mining expertise. Aviation consultant InterVISTAS, headquartered in Canada, brings top level expertise in front end consulting and project development.

    Signature projects that generated con-siderable attention included the flood protection barrier near St. Petersburg and Terminal 3 at Beijing Capital Inter-national Airport before the Olympics. Both were opened by their respective heads of state.

    Mergers & Acquisitions, alliances, and divestments DHV increased its shareholding in SSI from 65% to 70%. SSI is active in the water,

    transportation, building and industry, environmental, and power markets in Africa.

    SSI increased its shareholding in Bohlweki from 65% to 100%. Bohlweki is an environmental

    consultancy active in the transportation and mining markets in South Africa.

    Intelligent Devices (IDI), an established transportation technology firm active in the Unites

    States and globally, joined Delcan.

    Infocus, a project management and consultancy company active in the real estate and

    infrastructure markets in the Netherlands, joined DHV.

    DHV and imaging provider CycloMedia entered into a strategic alliance combining

    CycloMedias strength in 360 panoramic photographs (cycloramas) and aerial photography

    with DHVs expertise in technical management, maintenance, and design.

    Turgis, a leading independent provider of specialist mining, mechanical, electrical, logistics,

    and environmental consulting services to the mining industry in Africa and globally, joined the

    Group.

    Hydroprojekt, a Polish consultancy and engineering company active in the field of flood

    protection, hydraulic structures, water supply, sewage treatment, and hydropower, joined the

    Group.

    InterVISTAS, a consultancy company active in the aviation market in North America and

    globally, joined the Group through NACO and Delcan.

    The DHV Group sold its 36% interest in DHV Hsiung Ling Engineering in Taiwan.

    DHV Sudamrica in Bolivia was closed.

    Main Developments of 2008

    12

  • Lake County Passage System

    Tunnel Rodenrijseweg

    Afsluitdijk (Closure Dike)

    CESA Engineering Excellence Award

    Innovation

    Many projects were recognized for their progressiveness, such as Delcans Lake County Passage System project in Illinois and SSIs clean room project for the Biovac Institute in Cape Town. Good progress was made in commercial-izing key product innovations. DHVs award-winning wastewater treatment technology Nereda was applied on pilot and demonstration projects in the Netherlands, South Africa, and Portugal. Delcans NETworks communication platform for transportation systems

    Awards In 2008 we received prestigious awards, which underscore our expertise positions and drive for

    sustainability. Among others:

    The Tunnel Rodenrijseweg of the expressway N470 in the Netherlands won the European

    Concrete Award (ESCN) in the category Civil Engineering. The tunnel has a daring design and

    was constructed using sustainable materials (architect: Marius van den Wildenberg).

    DHV was part of the team that won the Future Search 2008 (NLPB), a Dutch competition for

    the best, most innovative idea for building management.

    Delcan: Best of ITS Award in the Best New Innovative Practices Category for the Lake County

    Passage System Project from the Intelligent Transportation Society of America (ITSA).

    Delcan: Canadian Consulting Engineering Award of Excellence for the Kicking Horse Canyon

    Bridge Phase II Project from the Association of Consulting Engineers of Canada.

    SSI: Engineering Excellence Award from the Consulting Engineers South Africa (CESA) for the

    Clean Room Project for the Biovac Institute in Cape Town, South Africa.

    SSI: Best Community-Based Project of 2008 by the Pietermaritzburg branch of the South

    African Institution of Civil Engineering for the construction of a bridge over the Black Mfolozi

    River for two communities in the remote Mahlabathini district of KwaZulu-Natal.

    Corporate Responsibility

    The pursuit of sustainable development is firmly anchored in the mission of the DHV Group. Our commitment to transparency led us to have our Corporate Responsibility Report externally audited according to GRI standards. We became signatory to the UN Global Compact and increased support of initiatives in education and capability building.

    increased its client base significantly in the United States, and was successfully introduced in South Africa and Europe. Patents were awarded for new concepts, and registrations were extended to new countries. Project teams are in-creasingly aware of the importance of registering intellectual property. Long-term relationships with universities and research institutions continued, and DHV became one of the founding sponsors of ExSer, a center for service innovation in Almere, the Netherlands.

    Examples of sustainability in our projects include the LEED Gold-certified DSM China Campus in Shanghai, the concept for enhancing the Afsluitdijk (Dutch Closure Dike) in the Netherlands, and an Environmental Impact Assessment in Poland to reduce the negative impact of the Via Baltica expressway on wildlife in the Augustw Primeval Forest, a Natura 2000 site.

    13Report of the Executive Board

  • Home Markets

    We achieved good growth and profitability in our home markets. Europe performed well, with growth in the Netherlands, Poland and the Czech

    Republic. The joining of Hydroprojekt gave us a number one position in the Polish water market. Portugal stayed behind due to reduced government

    One-Company Concept

    Knowledge Broker Network UIC Highspeed World CongressPark4All

    Finance & Control and Risk ManagementWe have taken steps to strengthen busi-ness basics, including a better focus on risk and internal project management. Internal and external audits have confirmed that risk management has improved, which we are pleased to

    The business groups expanded their capabilities in a number of areas. In addition to mergers and acquisitions, expertise positions were sharpened

    Strategic actions for 2008 Water: strengthen our positions in water

    treatment and water management.

    Transportation (including Aviation): possible

    niche acquisitions to strengthen our profile.

    Environmental: possible niche acquisitions

    to strengthen our profile.

    Development of mining expertise.

    Strengthen sustainable building expertise.

    Results in 2008 Increased Design & Build and EPC portfolio

    in water treatment. Expanded delta

    development activity in Asia.

    Airport consultancy InterVISTAS joined.

    Increased Bohlweki interest to 100%.

    Strengthened environmental profile

    through organic growth and Group-wide

    synergies. Furthered Environmental

    Management profile.

    Mining consultant Turgis joined.

    Established Green Building Team.

    Differentiation

    through international workshops on spatial planning, asset management, urban development, and mass transit and rail. A joint approach was estab-

    lished for bridges worldwide. We par-ticipated in key conferences including the World Congress on High Speed Rail (Amsterdam), Aquatech (Amsterdam), the World Congress on Intelligent Transport Systems (New York), The Green Building Festival (Toronto), and the National Sustainability Congress (Amsterdam). Publications in trade journals and mainstream media helped further raise our profile. For example, the Caofeidian ecological coastal city in China generated significant media attention and showed DHV as an inno-vative solutions provider with interest-ing international opportunities. For further information on develop-ments within our business groups, please refer to pages 19 to 22.

    spending. China, Indonesia and India enhanced profitability. Africa was the strongest performing region in the Group, with excellent results from both SSI and Turgis. In North America, Delcan showed solid organic growth and we were pleased to welcome InterVISTAS to the DHV Group. In line with our home country strategy, we divested operations due to lack of critical mass in Bolivia and Taiwan. For further information on developments within our global regions, please refer to pages 23 to 26.

    also see reflected in the bottom line. We have selected and progressed with the configuration of the new business information system, which will provide better and more immediate information. The new system will be rolled out in 2009.

    Knowledge Sharing & ICTActing on the theme of connect and deliver, we undertook a number of initiatives to help find connections in the company. A Group-wide Knowledge Broker Network was established, which makes our expertise quickly available to

    Strategic actions for 2008 Focused growth in Central Europe.

    Improved profitability in Asia.

    Expand position in North America.

    Results in 2008 Number 1 in Polish Water Market

    Profitability improved through focus on

    selectivity, integrity, and local management.

    Solid organic growth by Delcan and Innova.

    InterVISTAS joined the Group to expand

    consultancy capability.

    In 2008 we took several steps in line with the three strategic pillars of Differentiation, Home Markets and the One-Company Concept.

  • Charter Talent to the Top Caofeidian ecological coastal city

    any employee who asks. We increased interaction between our locations through joint projects, held expertise position conferences and hosted events such as the Young DHV European conference in Poland. Our global ICT platform was extended to European and Asian offices. African offices will be connected in the first quarter of 2009. This platform not only improves the ability to contact each other, but also supports a growing number of communities of practice.

    Human ResourcesThe DHV Group aims to be a preferred employer in a competitive market where the quest for talent is a constant factor. One of the spearheads for 2008 was to refresh our approach to compensation and secondary conditions. A Group-wide compensation policy has been established, forming the basis for country-specific implementation. We have started to move to more flexible, performance-based remuneration in Asia, South Africa, and the Netherlands. In order to offer greater opportunity for ownership, we launched a new Employee Share Plan. A total of 280 colleagues joined in the first round and purchased 4% ownership in our Group.

    New training and development initia-tives included an Early Career Develop-ment program, Project Management training, and staff exchange. Additional development needs were identified through a survey of our Leadership Team of 100 top managers across the com-

    pany. More frequent staff exchanges, cross-business assignments and train-ing for middle management were three recommendations to be addressed in the coming years. In support of enhancing diversity, DHV signed the Charter Talent to the Top, together with forty other companies, organizations and government ministries. This is a commitment to increase the percentage of women in senior management and professional positions. We aim to go from the current 10% to 20% in 5 years. The progress will be monitored exter-nally on an annual basis.

    Corporate ResponsibilityAligning to international standards, the DHV Group became signatory to the UN Global Compact and began reporting per the Global Reporting Initiative (GRI) for our global operations. We are the first consultancy and engineering firm in the world to have its Corporate Re-sponsibility Report externally audited to this standard and have been recognized as best in class by the Dutch Ministry of Economic Affairs. Furthermore, NACO has been selected as technical advisor to GRI for green airport development.

    We updated our Global Code of Business Principles which provides the standards to which the DHV Group holds itself around the world. In addition, we con-ducted a review of our Business Integrity Management System and enhanced it with a Project Integrity Risk Indicator and standard wording for client and partner integrity clauses. Arrangements

    have been made for external anony-mous whistleblower reporting. External auditing of the compliance program will begin in 2009. In 2008 seven integrity incidents were reported and duly investigated. All were closed. We did not find a violation in five of the cases. In each of the other two cases an employee was dismissed for acting in breach of our business prin-ciples. The open case from 2007 was closed, having found no violation.

    We strive to reduce the carbon footprint of our own operations and in 2008 took steps to adapt our mobility and procure-ment policies. Plans for upgrading our head office building include significant improvement in energy savings. Our concepts for sustainable innovations are being realized through projects. Examples include Park4All (a mobile multi-storey car park) and several green gas projects in the Netherlands, where local buses use biogas from sludge and organic waste as fuel.

    We continued with our commitment to community development. In the Netherlands, DHV employees again assisted in the BiD Challenge, an international competition for business plans to reduce poverty by helping es-tablish profitable enterprises. In South Africa, SSI expanded its Saturday School Initiative and now runs four Saturday schools where SSI engineers teach disad-vantaged pupils in the fields of maths, science, and technology. In Canada and the United States, Delcan is active in a wide variety of community activities including the United Way. We are very proud of the individual and company initiatives to help others.

    More information can be found in our Corporate

    Responsibility Summary. Detailed reporting is

    available on www.dhv.com/cr-report

    Strategic actions for 2008 Prepare for the rollout of the new business

    information system. Complete ICT transfer towards the new

    global platform. Integrating and evaluating GRI reporting as

    part of the regular reporting cycle.

    Publication of an overall framework for CR.

    Results in 2008 New system configured, rollout planned for

    2009. Europe and Asia transferred to new global

    platform. GRI reporting part of cycle. 2007 Report was

    world premier for GRI+ compliance in our sector.

    Overall framework communicated through 2007 Report and internal publications. CR programs launched in SSI and Delcan.

    15

  • Financial Performance 2008

    Key Figures ( million, unless otherwise stated) 2008 2007 change

    Net Turnover 467.7 395.0 +18%

    Added Value 325.3 274.8 +18%

    Operating Profit before Goodwill (EBITA) 20.8 13.0 +60%

    Operating Margin on Added Value (%) 6.4 4.7

    Turnover In 2008 the Groups turnover increased with 73 million to 468 million. Organic growth contributed 50 mil-lion. Top performers were the region Africa and business groups Building and Industry, Water, and Environment and Transportation. Mergers and acquisitions in South Africa, Canada, the Netherlands and Poland contributed 23 million. The growth rate of 18% exceeded the long-term growth target of 10%. These figures include a negative currency impact of 18 million, due to a decline of the South African Rand, the Canadian Dollar and the Polish Zloty.

    Added ValueAdded value (revenue produced by the Groups own staff) grew with 50 million (+18%) to 325 million despite negative currency rate differences of 11 million. Organic growth contributed with 36 million and mergers and acquisitions with 14 million.

    Operating ProfitEBITA increased by 60% to 20.8 million and the EBITA margin came to 6.4% (2007: 4.7%). This is in line with our objective to achieve an operating margin of 7% on added value.Acquisitions contributed 1.8 million to the EBITA increase. Currency rate differences influenced the result negatively with 1.4 million. The balance of the growth came from the strong performance of region Africa and improved results of the business groups Water and Building and Industry. The organic increase of costs was 15%, somewhat lower than the growth in added value.

    GoodwillThe Group amortizes paid goodwill over a 20-year period unless there is an indication of impairment in which case an additional component of good-will is amortized. In 2008 an amount of 1.5 million was amortized without any impairment.

    Net Interest ExpenseThe total net interest expense amounted to 3.5 million, an increase of 1.3 million against 2007. The increase is mainly related to acquisitions. An amount of 1.8 million relates to interest on long-term loans. In 2008 no losses or gains were incurred on financial hedging instruments. Compared to 2007, the average interest rate increased from 4.6% to 5.1%.

    TaxationThe effective tax rate increased from 31.9% to 35.5%. The increase is mostly a result of larger operating losses incurred in countries where we do not recognize tax losses as deferred taxation assets. Also, the increase of non-deductible expenses such as the amortization of goodwill resulted in higher effective tax rates.

    Balance SheetThe total balance sheet rose to 232 million at 31 December 2008 (2007: 192 million). This increase comprises organic growth ( 14 million) as well as acquisitions ( 21 million) and is partly offset by exchange rate differences ( 5 million).

    Net working capital increased with 6 million to 26 million. As a percentage of turnover, net working capital increased from 5.0% in 2007 to 5.6% in 2008.Net debt (cash and cash equivalents minus bank overdrafts and long-term interest bearing debts) increased from 21 million to 45 million. This increase is primarily for acquisitions.The equity ratio as of 31 December 2008 is 28.2% which is slightly below the long-term target of 30-35%. Shareholders equity at 31 December 2008 amounts to 63 million, against 60 million at the end of 2007. The equity was negatively affected by 5 million due to exchange rate differences and 0.8 million of dividend payments. The dividend included an interim payment to the employee shareholders related to the termination of the previous shareplan.

    Cash FlowThe cash flow generated by business operations amounted to 18.3 million (2007: 15.7 million). The total cash flow before financing activities was strongly influenced by the investment in acquisitions. The total cash flow came to a negative amount of 23.6 million, compared with a cash outflow of 9.6 million in 2007.

    16

  • The year 2009 will be one of large uncer-tainties and worldwide economic tur-bulence, with related social and political churn. Longer-term challenges such as climate change, energy needs, and sustainable economic development for a fast growing population remain. What we can expect in our markets is a duality of purpose. On one hand, there will be a strong call for short-term solutions and on the other, an increased drive for long-term sustainable change as the events in 2008 are seen as a wake-up call.

    The DHV Group is taking a sober, yet confident approach to the economic storm. We expect that all our business groups and regions will be affected, each with a different impact and timing. The first signs were visible in 2008 and this is expected to continue throughout 2010. We have a solid financial base, a strong backlog and believe that our worldwide scope of activities and the markets we serve will also generate op-portunities. The public sector, our major client group, is preparing to accelerate investment programs which fit well in our portfolio. Private clients require ef-ficient and reliable partners in order to respond to an often radically changing business environment. Our main chal-lenge will be to rapidly identify these op-portunities, and be agile in our response. In addition, operational efficiency and cash management will be key for the coming period. We will adopt a selective investment policy and expect no major investments in 2009, except the renova-tion of our head office building.

    Whereas the past two years have strongly emphasized growth, we will concentrate in 2009 on consolidating in terms of turnover and staff, and on implementing synergies with the (new) members of the Group. By doing so, we expect to be able to gain market share in an overall declining market. On the longer term we will keep to our overall growth target of 10%. We still see oppor-

    Prospects for 2009

    tunities to further improve our operat-ing margin towards our target of 7%. Our strategy of Local delivery of world-class solutions continues to be based on the three pillars: Differentiation, Home Markets, and One-Company Concept. For 2009 the focus and outlook per pillar are as follows:

    Differentiation

    Technological developments in the world will continue to accelerate and this requires critical mass. Competition will sharpen and the ability to differentiate and provide resources is crucial. Our investments will be focused on strengthening our expertise positions which are in line with the market developments. Many of the public investment programs will have a focus on the intelligent use of infrastructure, water and energy. As a general trend, there is greater emphasis on improving efficiencies and we see growing opportunity in high-end consultancy and asset management.

    Safety and sustainability are the stron-gest drivers in our water business. In these areas, we see good opportunity for combining our strength in technology with local expertise. We will therefore continue to improve and leverage our water technologies and delta expertise. The need for increased and sustainable energy continues to grow. We have realized success on a smaller scale by combining our technology, ecology and process capabilities, such as with green gas (Sustaenergy), but need to formu-late our overall approach.

    Strategic actions for 2009 Strengthen water and transportation

    profile.

    Scale-up and commercialize technology

    innovations.

    Develop strategy for energy and

    resources.

    Sustaenergy

    Richmond Olympic Oval, Canada

    Nereda at Gansbaai, South Africa

    A2 at Utrecht, the Netherlands

    17Report of the Executive Board

  • Home Markets

    Our home markets have all experienced sound economic growth during the last years, but they will each respond differently to the economic downturn. Local presence is therefore more important than ever. Our decentralized organization will be crucial to responding effectively to the country and market specific developments. Our strategy remains to strengthen presence in the existing home markets and provide leverage through the Groups expertise positions.

    New companies will be brought in the position to benefit from the Group-wide synergies. Vice versa, the other companies of the Group will also start to experience cross-selling opportunities. EU legislations such as the Water Frame-work Directive and Natura 2000 are good examples of market opportunities in which to leverage environmental management and water expertise across countries. Large events in 2010 such as the FIFA World Cup in South Africa, the Van-couver Winter Olympics, and the World Expo in Shanghai, as well as the UEFA Euro 2012 in Poland and Ukraine, will continue to drive a high level of invest-ment. In our Asian home markets we are facing the challenge to increase our private client base during declining economic growth.

    Strategic actions for 2009 Leverage international network. Increase

    agility to address national investment

    plans and regional dynamics.

    Deliver synergies with new member

    companies.

    Review portfolio of countries versus

    meeting the goals of the Group, which

    may result in adjustments, investment,

    and divestment.

    One-Company Concept

    There are ample opportunities to enhance internal efficiency and flexibility with better connectivity and more accurate finance and control information. In 2009, we will roll out the new business information system. We will also make greater use of the investments made in ICT and knowledge exchange. The African region will be connected to the Group-wide ICT infrastructure and the new internet and intranet system will increase the connectivity of the Group. We will continue to invest in our employees through training and career development. This is essential not only in the quest for talent, but also to achieve the high professional service level that we deliver to clients. Group-wide programs will be closely aligned with business needs such as project management and professional development. There will be continuous attention to career development, diversity and succession planning.We will roll out our refreshed Global Code of Business Principles and continue

    to seek more open dialogue with stake-holders. Integrity and transparency are receiving increased scrutiny worldwide. Our Business Integrity Management System will be externally audited starting in 2009. Our stance on business integrity is proving more and more to be a differentiator. The overall focus on sustainable development, our goal of achieving Corporate Responsibility Inside and use of GRI methodology have been used as a basis to develop region specific programs in Africa and North America. We will share best practices and continue to develop Group-wide attention to CR via centralized reporting and communications. Specific initiatives for 2009 include better measurement and reduction of our CO2 emissions.

    Strategic actions for 2009 Roll-out business information system.

    Conduct Group-wide professional and

    management development programs.

    Improve measurement of CO2 emissions

    and focus on reduction.

    Concluding remarks

    The sense of urgency is real. Our clients will call upon us to show greater flexibility and responsiveness. We will have to deliver distinct short-term value without losing the long-term perspective. The creativity and passion for finding solutions of our 5,300 colleagues will undoubtedly rise to this challenge. The Groups independent position and philosophy of being a company for people from people provide a strong foundation on which to build. We are proud of our company and owe all our colleagues much for the solid performance in 2008. We are confident that we can count on their commitment and flexibility in 2009.

    Amersfoort, the Netherlands, 3 March 2009

    Bertrand M. van Ee (President)Piet W. Besselink (Vice President)

    18

  • 19Developments in our Global Network

    The Environment and Transportation business group philosophy is to be close to our client by regional presence, applying expertise to complex problems. We work for government, industry, and the private sector including financial institutions, contractors, and developers. We are organized along the business lines of Transportation, Urban and Regional Development, Environment and Sustainability, Consultancy, and Asset Management. Our services include consulting, public policy development, legal and financial advice, infrastructure master planning, project and program management, design and engineering.

    In 2008, strong demand generated a rapid growth in turnover. We look back on a year of accomplishments such as jointly winning the European Concrete Award for the Dutch Rodenrijseweg Tunnel project, and participating in high-profile Dutch road and rail expansion projects. More-over, we continue to advise major government clients on the financial structuring of large Public Partnership deals for new infrastructure projects. We are renowned for expertise in Intelligent Transport Systems (ITS), highways (incl. bridges and tunnels), mass transit and rail, urban planning, and en-vironmental management. Openness and partnering give an extra impulse to innovation. The partnership with CycloMedia has enhanced capabilities in asset management through

    Environment and Transportation

    Close to our client

    Objectives for 2008Further sharpen the business line profiles to the markets.

    Strengthen Environment and Transportations branding and positioning.

    Dare to Share: exchange knowledge (locally and internationally).

    Objectives for 2009Align services to the market.

    Improve portfolio management.

    Manage business basics well.

    Results in 2008Established fully-functioning Asset Management unit; sharpened transfer & rail, and soil rehabilitation profiles; further developed Consultancy; opened new Rotterdam office.

    Reviewed main clients accounts; participated in important conferences on high-speed rail, ITS, Dutch local authorities, urban development, etc.; issued new profile brochure.

    Shared expertise knowledge for projects in Asia, Africa, Europe, and North America; held international workshops on rail, bridges, ITS, urban development, environment, and asset management.

    Actions for 2009Align services of Dutch regional offices to business lines of transportation, environment, and urban development; focus on account management throughout the Netherlands; align services and expertise positions with other DHV Group companies.

    Strengthen rail service offering; consolidate data management services for asset management; expand transportation planning activities; integrate Czech business.

    Maintain financial performance and operating margin; improve workforce utilization; reduce indirect costs during uncertain economic times.

    UIC Highspeed Congress, the Netherlands IJsselsprong Area Development, the Netherlands

    the use of cycloramas to record conditions. We co-founded ExSer, center for service innovation in the Dutch city of Almere, developed a Quality Scan for industrial areas and co-organized the National Sustainability Congress in Amsterdam.

    In 2009 we will further consolidate our position in the Dutch market and support the activities in the home countries. We will concentrate more on our expertise positions, taking an interna-tional lead in these where possible. In this we will welcome the expertise in rail and station development of new member NPC, joining us in March 2009. Specific attention will go towards en-vironmental, climate and industrial issues, as well as intelligent traffic management solutions. We expect strong demand from our public clients, thanks to both the nature of the programs in which we are involved (big multi-year rail and road invest-ments), and to the urgency felt by governments to bring these projects to realization in the current economic climate. In the urban planning market, we expect to see a change in client focus, from bigger new developments to more strategic and social related issues. Overall, economic uncertainty isexpected to be greater in 2009 than in 2008. We are therefore sober in our approach to expansion in 2009 and will focus on our expertise positions and integration of NPC.

    Vic Prins

  • 20

    Objectives for 2008Take a leading market position in the Netherlands in the implementation of the Water Framework Directive.

    Growth in turnover based on innovative products such as Nereda and MBR.

    Development of the international position in water management, ports, waterways, and coastal development.

    Expand our position in the international contracting market for water treatment based on a balanced portfolio.

    Objectives for 2009Maintain and build our strong profile as an innovative and sustainable company in the water market.

    Increase turnover based on innovative products such as Nereda and MBR.

    Further develop our international position in water management, ports, waterways, and coastal development.

    Achieve selective growth in the international contracting market for water treatment based on a balanced portfolio.

    Results in 2008Executed a large number of projects related to the Water Framework Directive.

    Increased turnover thanks to Nereda projects in cooperation with Water Boards, STOWA, and Delft University of Technology.

    Strengthened position with a master plan for Port Said East Port, and a prestigious coastal and urban planning project in China.

    Increased turnover significantly due to projects in Serbia, France, and Vietnam as well as design & deliver contracts for process water.

    Actions for 2009Maintain position in the market related to the implementation of the Water Framework Directive; be involved in striking projects related to the Dutch Delta Plan.

    Commence construction of the first full-scale municipal Nereda plant.

    Intensify cooperation within the DHV Group to build our international position in coastal development and water management; take extra initiatives in the ports and waterways market.

    Expand our position in the French market; participate in the first tender round of the new Dutch ORIO program in Vietnam.

    The DHV way is to deliver through cooperation. Working closely with our clients and partners, such as top technological institutes, we create unique expertise and technological lead-ership in the areas of water treatment, water management, coastal development, and ports and waterways. Specifically, our services include: consultancy, design & engineering, delivery of products, design & build, and operate & maintain. Our clients are in both the public and private sectors, and include local and national governments, international financiers, multinationals, and engineering contractors. Traditionally, water treatment has been a major component of DHVs international activities. In 2008 we successfully expanded our water management business for example, through coastal development in China and North America, and dredging in Indonesia. Another 2008 highlight was the incorporation of Hydroprojekt (Poland) into the DHV Group. This contributes extensive experience in flood protection and hydropower, which will stimulate the development of our water and energy business.

    Sustainability has become a key priority all over the world it even tops the economic development agenda. DHV is excellently positioned to participate in this effort and meet the sustainability challenge. We are recognized in the water market for our ability to deliver innovative solutions; solutions

    Water

    Delivery through cooperation

    Nereda pilot Epe, the NetherlandsJakarta Dredging, Indonesia Naardermeer Natura 2000, the Netherlands

    that have sustainability at their core. Take for example our wastewater treatment technologies: Nautilus MBR is char-acterized by its low chemical use and Nereda by its small footprint and low energy use. Water management and coastal development are also areas where our sustainable solutions are well known. In Chinas Tianjin region, we are involved in the Delta Diamonds ocean city development project in coop-eration with the Architect Cie. of Amsterdam, we developed the concept and master plan based on sustainable planning principles. In 2008 we made major progress in further develop-ing Nereda. Together with Dutch Water Boards, STOWA, and Delft University of Technology and our DHV Group partners SSI in South Africa and DHV in Portugal we have reached a milestone; we are ready to start applying Nereda to full-scale municipal water treatment. Our market outlook for 2009 is favorable. Even if the general economic outlook is unpredictable, the global challenges for both water treatment and water management remain enormous: water safety, climate, water-quality legislation, the Millennium Development Goals for drinking water, are only a few of these. Our activities in 2009 will be marked by ongoing and intense innovation effort and the pursuit of selective growth.

    Piet van Helvoort

  • 21Developments in our Global Network

    The Building and Industry business group is active in buildings and industrial processes. Guided by the motto Building Inspiration. Together!, we deliver optimum value to our clients in the form of demonstrably better buildings and industrial processes.

    In the industrial market, we have extensive experience with integral building design. Using the wishes and requirements of the client as a basis, we involve all relevant disciplines (architectural, building technology, structural physics, build-ing services) at the start of the design process. We include our maintenance specialists to optimize maintainability and life cycle cost. This integral approach increases the efficiency of building processes and has resulted in more sustainable solutions. The objective at all times is, as a minimum, to realize the clients desired result.

    In the public and property development market, trends in urban development and the growing demand for sustain-ability are making building processes increasingly more com-plex, both from an organizational and technical perspective. Our proven experience with the integral building approach and extensive knowledge in all the relevant disciplines, make us ideally suited to help clients to meet these challenges.

    The main market developments in 2008 included the eco-nomic crisis, a stronger client focus on their core activities, and a greater demand for flexibility, sustainability, and more efficient building-processes. We acquired the first maintenance contract for the entire building stock of a large municipality in the Netherlands (Nijmegen); and strengthened our position in the design of photovoltaic plants. Infocus, a leading Dutch project management and consultancy firm joined the Group. Our ambition for further organic growth was limited by the ongoing tight labor market. Nevertheless, we succeeded in meeting our business targets through better operational efficiency and above all by delivering more value to our clients.

    Because organizations are increasingly focusing on their core activities, they seek quality partners to outsource the management and maintenance of their non-core assets. Our response is to offer clients proven flexibility and optimum price/quality ratios. In 2009 we will further strengthen our business profile and portfolio focus, sharpen our organiza-tional efficiency, and do our utmost to support our clients in realizing their objectives.

    Eugene Grter

    Building and Industry Building inspiration. Together!

    Objectives for 2008Achieve growth and increase profitability through efficiency.

    Attract qualified staff.

    Improve position as a reliable, sustainable, and professional partner for our clients.

    Objectives for 2009Sharpen profile; focus on market demand.

    Attain qualitative growth.

    Strengthen position in asset management.

    Adapt to changing market conditions.

    Results in 2008Realized organic growth and by Infocus merger; increased profitability.

    Improved staff expertise, but did not achieve growth targets.

    Improved overall position confirmed by the Dutch Building Business Reputation Monitor.

    Actions for 2009Focus activities and transform available knowledge into specific value propositions for clients.

    Invest in employees and innovation.

    Exploit our in-depth knowledge of asset management.

    Further improve efficiency of organization and make use of flexibility.

    Asset Management Nijmegen Photovoltech, BelgiumDutch Provada Real Estate Fair

  • Objectives for 2008Increase market share in North America.

    Build up position in Central Europe, Russia, and India.

    Innovate in Green Airports.

    Increase turnover by 10%.

    Objectives for 2009Integrate InterVISTAS.

    Increase turnover by a minimum of 30%.

    Develop reputation as the designer of green airports.

    Maintain a position in the top 10 of the worldwide airport engineering and planning companies.

    Results in 2008Strengthened North American position through InterVISTAS.

    NACO acquired several projects in Central Europe and Russia; NACO, together with DHV India, developed a business plan for India.

    Developed tool box. Global Reporting Initiative (GRI) appointed NACO to coordinate the airport annex.

    Increased turnover growth by 13%.

    Actions for 2009Introduce InterVISTAS to NACO clients; cooperate in international projects.

    Increase hit rate; acquire projects in North America.

    Acquire projects for green airports; develop the GRI criteria for sustainable airports.

    Increase engineering and aviation consultancy activities by at least 30%.

    Clients of the Aviation business group are looking for planning excellence in view of capacity shortages and the need for airport facility upgrading. We work for airport authorities and operators, governments, airlines, and private investors in Europe, Asia, Middle East, Africa, North America, and the Caribbean.The international aviation market has experienced a major decline due to high oil prices and the economic crisis. Many airlines have been facing financial problems and new invest-ments are becoming problematic. In spite of the worldwide recession, the Middle Eastern countries continued to imple-ment major airport expansion programs. Due to our strong reputation we were able to secure high-profile contracts for major airport investments in the region. The Russian aviation market, where air traffic continued to grow steadily, faces capacity shortfalls and dated airport infrastructure. Our presence and reputation led to assignments for the St. Petersburg and Vladivostok airports. In Africa, the NACO-SSI joint venture was successful with projects in South Africa (a.o. preparations for the World Cup 2010), Kenya, and Botswana. Our efforts in India have resulted in a wide range of contacts and multiple proposals which are pending. But these potential opportunities have yet to be realized, since unsure market conditions have led to temporized investments. The need for airport upgrading and modernization is very evident, and we

    expect to generate business once the market recovers. The Chinese market is growing despite the economic crisis. Due to our local presence and excellent reputation a result of our involvement in the Terminal 3 design for Beijing we won several new assignments.Our participation with Innova Aviation Consulting LLC in the United States is developing steadily, and new Group member Canadian aviation consultancy InterVISTAS has strengthened our North American position even further. Both companies have strong international networks and are active in very specialized expertise areas, such as privatizations, air service development, border security, and tourism.

    Our goal is to strengthen our market position through focused business development activities, and at the level of clients and regions. By realizing the synergies with InterVISTAS, we expect to establish a firm position in North America, and also to pro-vide a broadened spectrum of high-end consultancy services.Last but not least, in cooperation with other business groups, we will continue to address the growing demand for climate-neutral solutions. By joining the Global Reporting Initiative we took an important step towards becoming a recognized Green Airport consultant.

    Roel Overakker

    Aviation

    Planning excellence for airports

    Amsterdam Airport Schiphol GRI - Sustainable Airports Passenger Terminal Expo, the Netherlands

    22

  • 23Developments in our Global Network

    Objectives for 2008Strengthen market position in Poland and the Czech Republic.

    Acquire signature projects based on DHVs expertise positions.

    Make full use of the one-company concept in Portugal; increase services to private sector in Portugal.

    Objectives for 2009Central Europe: increase market share in ITS.

    Poland: grow positions in water management, sewerage and drainage, and highways. Strengthen position in airport, rail, wastewater treatment, and industrial markets.

    Czech Republic: become the leading city and regional planning consultancy with a sustainability focus.

    Portugal: continue growth of existing services in water and transportation. Develop new services in the environmental field and sustainable development.

    Results in 2008Poland: increased growth of Polish transportation and infrastructure business; Hydroprojekt joined our Group; increased project management and engineering services to industrial clients. Czech Republic: grew steadily; acquired new staff, exceeded forecasts.

    Won Starachowice WWTP, Dorbzn hydropower rehabilitation, S7 Express-way, and Pulawy bridge projects in Poland. Signature projects in Germany, France, and Bulgaria.

    Implemented one-company concept and new technologies, such as Nere-da and energy savings; effectively increased the private client portfolio.

    Actions for 2009Expand expertise-driven business via existing positions, partnerships, and offices.

    Offer new services and solutions; operationally integrate Polish companies. Make full use of the one-company concept.

    Broaden the integrated services capacity.

    Build capacity; strengthen client focus; reinforce market presence with new solutions. Introduce new tools in the energy efficiency field.

    Sofia, BulgariaKazimierz, PolandDzhankoy, Ukraine

    In Europe we are active in the fields of water, transportation, aviation, building and industry, spatial planning, and environment. Our clients, who include governments, industry, contractors, and developers, increasingly demand efficient solutions to lower their capital investment, and operating and maintenance costs. There is a growing awareness of the importance of sustainable solutions. Our European home markets in addition to the Netherlands are Poland and Portugal. Our Czech operations are growing and we work in other European countries on a project-by-project basis.

    In 2008 investments in the Polish transportation infrastruc-ture remained at a high level, while the demand for intelligent transport systems is growing to increase the efficiency of use. The commitment in the water management field has increased. Through the joining of Hydroprojekt with DHV Polska and Prokom the business almost doubled. The three companies will benefit from cost savings and business synergies, while clients will benefit from the broader expertise and better access to our international expertise. In the Czech market the main drivers have been the new build-ing code, sustainability, assessments in land-use planning, and the EU structural and cohesion funds. The current down-turn in investments in the building, industrial, and mining sectors is expected to continue in 2009. However, our business

    turnaround in 2008 exceeded expectations: we recorded 25% organic growth, proved to be an attractive employer and were very successful in acquiring new projects. The Portuguese economic situation represents a constraint, but also an opportunity for us to assist clients with technical and financial studies, assessing the feasibility and risks of invest-ments. Our activities in Portugal will continue to concentrate on two business areas: (a) studies, design and consultancy, and (b) project management, supervision and operations. We focus on clients that are active in the following markets: waterfront and coastal zone development, dams and hydropower, ports and railways, and the environment. The latter includes new areas such as soil decontamination, emission reduction, carbon free projects, air quality and sustainability.In Germany, France, the UK, and other European countries, we were commissioned to lead high-profile projects in airports, wastewater treatment, solar-power panel plants, intelligent transportation systems, and mining.

    With the heightened economic uncertainty, we will focus on supporting clients in their changing needs and concentrate on increasing our organizational flexibility to be able to respond adequately to market developments.

    Chris Engelsman, Dick Bleyerveld

    Europe

    Benefiting from business synergies

  • 24

    Objectives for 2008Continue growth of our local operations in China.

    Continue growth of our local operations in India.

    Expand private sector activities in Indonesia.

    Build on the one-company concept.

    Objectives for 2009Extend local operations in China.

    Extend local operations in India.

    Continue expansion of private sector activities in Indonesia.

    Results in 2008Expanded water activities in volume and products; added Integrated Urban Planning services.

    Added Transportation services; started up Building & Industry services; entered Public Private Partnership market.

    Increased number of private sector projects.

    Connected country organizations and global expertise to Knowledge Broker Network through the global ICT platform.

    Actions for 2009Sell Crystalactor technology for industrial water treatment in addition to Carrousel; focus on coastal development and sustainable buildings.

    Develop capabilities in PPP projects, airport design, bridge design, asset management, and water technology.

    Select market opportunities based on expertise.

    DSM China Campus Expedition to the Yellow River, ChinaJava Settlement Reconstruction, Indonesia

    Asia is important to us not only because of the immense op-portunity it offers for our expertise, but also for the special challenge it presents to adapt knowledge to local conditions and accelerate further development. Urbanization, environ-mental impacts, water scarcity, transport infrastructure needs, are among the drivers behind clients growing demand for world-class solutions to their local requirements. Our activities in Asia concentrate on our home markets of China, India, and Indonesia, though we also have important projects in Taiwan and Vietnam. Overall, we are encountering a growing demand for sustainable solutions for the complex challenges that ac-company the rapid development of Asia.Our water treatment activities in China developed well in 2008, with an increase in our market share in the pulp and paper industry. In this context, we would like to thank Frans van Gunsteren for his important contribution as chairman of the China Advisory Committee Gilles Hondius will take on this role as of 2009. In India we successfully entered the Public Private Partnership market. In Indonesia we effectively contributed to the national sanitation policy and to the reconstruction and sea defense of tsunami affected areas. Work for international development agencies has been successfully managed from within the region. Our project selection criteria have included risk assessment, a harmony between the clients values and our own, and our ability to

    Asia

    Sustainable solutions for rapid development

    add value. In 2008, DHVs companies in our three Asian home countries were connected to our global ICT platform and thus gained better access to the Groups knowledge. Also, with a few exceptions, we succeeded in retaining the talent in our companies. Less satisfactory, however, was the experience of our urban development joint venture with the Modern Group: in view of the slowdown in Chinas real estate market we decided to end the joint ventures activities. The economic downturn is having an impact on China and India, Asias largest developing economies. However, even with the forecasted drop in growth rates they will still be among the highest in the world. Other developments include an anticipated tightening of environmental requirements, greater regulatory enforcement, and increased interest in sustainable building. China will stimulate its economy by accelerating investments in infrastructure projects thus creating new opportunities for airports. India will do the same, although on a smaller scale, as the country allocates a bigger role to the private sector in public infrastructure development. In the year ahead, we will continue to be challenged to come up with innovative services to help our clients attain their objec-tives for sustainability, climate change, corporate responsibility, and cost efficiency.

    Arnold Galavazi

  • 25Developments in our Global Network

    Objectives for 2008Commence with the mining sector.

    Recruit, develop, and retain staff.

    Focus on Corporate Responsibility.

    Develop project management as project service line.

    Objectives for 2009Diversify product chain.

    Increase turnover outside South Africa.

    Further implement the one-company concept.

    Grow our business for mining clients through Turgis.

    Results in 2008Global mining consultant T