Financial review

IFRS
We report in accordance with the International Financial Reporting Standards that have been accepted and declared applicable by the European Union (EU IFRS). Changes implemented in 2009 had no effect on the company's results. The changes made in the IFRS that have yet to be accepted by the EU are expected to have only a limited impact on the company’s financial reports.

Revenue
Net revenue in 2009 amounted to EUR 140.7 million, which was 10% lower than the revenue in 2008 (EUR 156.0 million). The organic diminution in revenue in comparison with 2008 was 11%. The revenue of the installation companies was reasonably evenly spread throughout the year but was still 8% lower on average than in 2008. The revenue of the trading companies was 13% lower on average than in the preceding year. 95% of the revenue was generated in the Netherlands (EUR 134.1 million) and 5% outside the Netherlands (EUR 6.6 million), the majority of this within the EU. The installation business accounted for about two thirds of the total revenue and the trading business for about one third.

Staff costs
Average wage costs per employee increased by 1.8% in 2009. This includes the 3% adjustment as of 1 February 2009 laid down in the collective labour agreement (CAO) for the Metal and Technology sector and the one-off CAO payment in November 2009. The number of employees fell slightly in comparison with 2008. Personnel costs (wages, social insurance charges and pension charges) as a percentage of revenue increased from 30% to 34%, mainly as a result of the lower revenue and less sub-contracting in 2009.

Other operating expenses
These costs include accommodation, selling and office expenses, travel and accommodation expenses, other staff costs and general overheads costs. In absolute terms, these costs were similar to those in 2008, but rose by one percentage point as a percentage of revenue, to 11.7%.

Depreciation
Despite the controlled investment pattern, the total depreciation charge increased from EUR 2 million in 2008 to EUR 2.2 million in 2009. The increase was primarily due to higher capital expenditure on ERP systems and machines in 2008, among other things, which were not yet fully recognised in that financial year.

Operating income
The operating income amounted to EUR 3.6 million (2008: EUR 7.3 million). A sum of EUR 0.8 million was recognised for severance costs in 2009 as a result of restructuring measures taken at various operating companies.

Financial income
At EUR 0.2 million, financial income in 2009 was higher than in 2008 (EUR 0.1 million). Cash assets rose gradually during the year, from EUR 5.4 million at the start of the year to EUR 16.1 million at year-end 2009. The operating cash flow was EUR 15.7 million (2008: EUR 5.1 million), EUR 10.3 million of which was due to lower stocks and receivables and higher liabilities at the year-end. The higher liability at the year-end includes the effect of the VAT, which was charged quarterly rather than monthly.

Corporation tax
The effective tax burden amounted to 19.7%, which was slightly higher than in the preceding year.

Net income and earnings per share
Net income amounted to EUR 3.1 million, which was 49% lower than in 2008 (EUR 6.0 million). Earnings per share turned out at EUR 1.27 (2008: EUR 2.50). The net return on revenue was 2.2% (2008: 3.9%).

Dividend
Taking account of the sound financial position, the Executive Board proposes to fix the dividend for the financial year at EUR 1.00 per ordinary share. The pay-out will then amount to 79% of the net income, compared with 48% in the preceding year. The dividend yields amount to 4.4% of the closing price of Batenburg Beheer N.V. shares at year-end. In compliance with Article 33 of the Articles of Association, a dividend of 5% is paid out for the priority shares, amounting to EUR 0.12 per share. If the General Meeting of Shareholders adopts the financial statements and the dividend proposal, the dividend on ordinary shares of  EUR 1.00 per share will be made payable on 11 May 2010. A sum of EUR 2.4 million will thus be paid out and EUR 0.7 million will be appropriated to the other reserves.

Equity
Until the proposed dividend has been approved by the General Meeting of Shareholders it will be included in the unappropriated result forming part of equity. At 2009 year-end, solvency thus amounted to 60%. In a balance sheet adjusted for capitalised goodwill, solvency would amount to 53%.

Working capital and capital invested
Total assets at 2009 year-end were slightly higher than at the 2008 year-end (EUR 75.2 million), at EUR 77.2 million. Net working capital including cash rose from EUR 22.2 million to EUR 23.0 million at the 2009 year-end. Trading receivables and stocks in particular fell sharply, to the benefit of cash assets. This was due to a lower level of activities and good working capital management. Work in progress at 2009 year-end fell from EUR 35.2 million at year-end 2008 to EUR 30.3 million, a diminution of almost 14%. Liabilities increased, partly as a result of quarterly VAT payments, instead of monthly payments. Capital invested rose fractionally in 2009 from EUR 47.5 million to EUR 47.7 million. The net return on average capital invested came to 6.4% (2008: 13.1%).

Cash flow, financing and capital expenditure
Cash flow (net income plus depreciation) amounted to EUR 5.3 million, compared with EUR 8.0 million in 2008. Cash flow from operating activities amounted to EUR 15.7 million (2008: EUR 5.1 million). Capital expenditure in 2009 was considerably lower than in 2008 (EUR 1.0 million, compared with EUR 1.9 million in 2008). An amount of EUR 1.0 million was invested in relation to acquisitions. A dividend of EUR 2.9 million was also paid out in 2009. Overall, cash and cash equivalents increased by EUR 10.7 million in 2009 compared to the year-end of 2008.

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