Annual report 2011

Transcription

Annual report 2011

Activity Report 2011
Belron
D’Ieteren Auto
Unparalleled
efficiency and service:
the best answer to a
challenging market
Enhanced leadership
in a record-breaking year
2011.dieteren.com
2011.dieteren.com
www.dieteren.com
D’Ieteren
Activity
report
2011
Imagining
tomorrow
Fin a n cia l ca len da r
contents
Interim management statement (after market)
10 May 2012
General Meeting
31 May 2012
Ex date
4 June 2012
Payment date
7 June 2012
2012 Half-year results (after market)
28 August 2012
Analyst meeting & press conference HY 2012
29 August 2012
8 November 2012
PRESS AND IN VESTOR RELATI O N S
D’ IETEREN GROUP
Vincent Joye
s.a. D’Ieteren n.v.
rue du Mail, 50
B-1050 Brussels - Belgium
Tel.: + 32 2 536 54 39 - Fax: + 32 2 536 91 39
E-mail: fi[email protected]
Website: www.dieteren.com
8
VAT BE 0403.448.140 - Brussels RPM
Information about the group (press releases, annual reports, financial calendar, share price,
statistical information, social documents…) is available, mostly in three languages (French,
Dutch and English), on its website www.dieteren.com or on request.
Ce rapport est également disponible en français. Dit verslag is ook beschikbaar in het
Nederlands.
Design a n d production : Co m f i ( w w w. c o m f i. b e )
D’Ieteren at a glance
Message to Shareholders
Key figures
Questions to the CEO 2011 Key events
1
2
4
8
12
Corporate social
responsibility
D’Ieteren Auto
Belron
Brad, Bernard, Christos, Damien, Denis, Fabrice, Francisco,
Greet, Jean-Marc, Jessica, Kieran, Marc, Noémie, Olivier,
Pantelis, Paul-Olivier and Simon.
Special thanks to Romane, who inspired us and whose pictures are this
annual report’s red thread.
Pictures:
David Plas, Studio Dann, and Volkswagen, Audi, Škoda, Seat, Bentley,
Lamborghini, Porsche, Yamaha, Belron and GettyImages picture libraries.
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19
23
24
Prin tin g: dereume prin t in g
The major trading brands of the Belron® Group: Belron®, the Belron® Device, Autoglass®,
Carglass®, Glass Medic®, Lebeau Vitres d’autos®, Duro®, Speedy Glass®, Apple Auto Glass®,
Safelite® Auto Glass, O’Brien® and Smith&Smith® are trademarks or registered trademarks
of Belron S.A. and its affiliated companies.
belron
Belron in 2011
CEO statement
Key figures
28
D’Ieteren auto
D’Ieteren Auto in 2011
CEO statement
Key figures
New models
16
The Group
The making of this report would not have been possible without the
testimonials of D’Ieteren’s people and other contributors. Many thanks to
28
31
35
Forwa rd- loo kin g state m e n ts
36
38
43
36
This Annual Report contains forward-looking information that involves risks and
uncertainties, including statements about D’Ieteren’s plans, objectives, expectations
and intentions. Readers are cautioned that forward-looking statements include known
and unknown risks and are subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the control of D’Ieteren.
Should one or more of these risks, uncertainties or contingencies materialize, or should any
underlying assumptions prove incorrect, actual results could vary materially from those
anticipated, expected, estimated or projected. As a result, D’Ieteren does not assume any
responsibility for the accuracy of these forward-looking statements.
D’Ieteren
p. 1
D’IETEREN AT A GLANCE
A family-controlled, publicly listed
company…
Free float
Euronext
Brussels
D’Ieteren
family
34.6%1
60.7%1
Cobepa
Belgian private
equity co.
3.5%1
Own shares
1.2%1, 2
100%
92.7%
Minority
shareholders
7.3%
1
2
In voting rights
At December 31, 2011
…with an international presence
D’Ieteren is a group of services to
the motorist founded in 1805,
serving over 13 million corporate
and end customers in 33 countries
in two areas:
D’IETEREN AUTO distributes Volkswagen, Audi, Seat,
Škoda, Bentley, Lamborghini, Bugatti, Porsche and Yamaha
vehicles across Belgium. It is the country’s number one car
distributor, with a market share of around 22% and more than
one million vehicles of the distributed makes on the road.
Sales in 2011: 3.2 billion euro.
BELRON (92.7% owned) is the worldwide leader
in vehicle glass repair and replacement. 2,000 branches
and 9,200 mobile vans, trading under more than
ten major brands including Carglass, Autoglass and
Safelite AutoGlass, serve customers in 33 countries.
Sales in 2011: 2.8 billion euro.
D’Ieteren
p. 2
MESSAGE TO SHAREHOLDERS
2011: A PIVOTAL
YEAR
In 2011, our teams once again demonstrated
their enthusiasm, adaptability and ambition
to provide unparalleled service to motorists.
They, and their senior leadership, must be
congratulated as it is thanks to them and
their daily commitment that the year ended
on a current consolidated result before tax,
group’s share, up 10.7% to 305.8 million EUR.
The group’s highest result ever.
In automobile distribution, the D’Ieteren Auto teams took advantage of an exceptionally high Belgian market, up 4.5% vs a
record 2010, thanks to the CO2 incentives and the announcement of their withdrawal at year-end. D’Ieteren Auto’s share in
new car registrations was up to 21.89%, compared with 20.13%
in 2010. This growth primarily reflects the outstanding performance of Volkswagen and Škoda.
In our vehicle glass repair and replacement activity, Belron was
faced for the first time with the combined negative effects of
weather conditions and a recessionary economy. However, our
teams succeeded in limiting their impact thanks to segment
share gains and efficiency improvements.
2011 was also a pivotal year in the group’s life, changing our
profile significantly. We sold Avis Europe, our short term car
rental activity, to Avis Budget Group at attractive terms. We
also created a joint venture – Volkswagen D’Ieteren Finance
– with the Volkswagen group, our historical partner, to offer
Belgian customers a full line of automotive financial services.
As a result of these transactions, our net financial debt was reduced by more than 1.2 billion EUR compared with 2010 and
we increased our equity.
Given this new configuration and the fact that our two core
activities can finance their operational and growth-related
investments on their own, the Board of Directors has reviewed our dividend policy and decided to propose to the
Annual General Meeting a significantly enhanced dividend of
0.80 EUR, vs 0.425 EUR in 2010. Absent major unforeseen
events, the company will maintain its policy of providing a stable or, results permitting, a steadily growing dividend.
In line with the entrepreneurial spirit which has continually
characterized D’Ieteren, the Board of Directors also wishes
that the freed-up funds be redeployed, by acquisition, in an
activity with a qualified leadership team and a proven business model, with a view to further develop the activity, notably
internationally, in concert with its management. Such activity
should allow the group to play an active ownership role. This
search has no time constraints and it will be carried out rigorously in order to foster a long term development of the group
in the best interests of all its stakeholders.
Under such circumstances, although the results for 2012
should decline after two exceptional years, we are convinced
that the group’s long-term outlook is excellent. We can count
on outstanding teams as well as on our customers, partners
and shareholders, whom we would like to thank for their loyalty and trust.
Jean-Pierre Bizet
Chief Executive Officer
Roland D’Ieteren
Chairman
D’Ieteren
p. 3
D’Ieteren
p. 4
KEY
INDICATORS
2011
20109
2009
2008
2007
20061
20052
2004
Sales3,4
5,977.3
5,533.8
6,269.7
6,501.2
5,967.1
5,253.7
4,757.3
4,459.8
Current operating result3,5
377.2
348.2
384.7
375.1
361.7
291.6
255.7
274.4
- before tax3,5
305.8
276.2
214.2
191.7
194.3
149.3
118.6
124.0
- after tax5
312.0
234.2
182.8
159.0
166.3
134.3
97.6
94.0
Group’s share in the result for the period6
312.6
218.8
158.5
32.2
127.7
97.9
76.2
43.2
CONSOLIDATED RESULTS (EUR MILLION)
Current result, group’s share:
FINANCIAL STRUCTURE (EUR MILLION)
Equity of which:
1,532.1
1,464.7
1,154.6
1,030.8
1,140.2
1,019.2
945.5
990.8
- Capital and reserves attributable to equity holders
1,530.5
1,250.6
1,028.5
896.1
917.7
789.1
709.9
687.1
- Minority interest
1.6
214.1
126.1
134.7
222.5
230.1
235.6
303.7
Net debt
850.2
1,823.0
1,770.2
2,209.7
2,089.6
1,875.8
1,893.1
1,748.1
DATA PER SHARE7 (EUR)
Current result after tax5,8, group’s share
5.65
4.26
3.33
2.89
3.02
2.43
1.77
1.70
Group’s share in the result for the period6,8
5.66
3.97
2.89
0.59
2.32
1.77
1.38
0.78
Gross dividend per ordinary share
0.800
0.425
0.325
0.300
0.300
0.264
0.240
0.231
Capital and reserves attributable to equity holders
27.67
22.61
18.60
16.20
16.59
14.27
13.01
12.58
Highest share price
49.85
47.20
29.92
24.80
34.38
27.25
23.99
18.91
Lowest share price
32.73
28.84
7.56
7.22
23.67
21.85
13.85
13.51
Share price as at 31/12
34.07
47.20
27.91
7.51
24.60
26.97
23.25
13.65
SHARE INFORMATION7,8 (EUR)
Average share price
43.20
36.57
17.43
17.53
29.75
25.09
18.53
16.15
Average daily volume (in number of shares)
78,403
75,178
72,140
80,240
77,130
62,070
49,200
47,230
1,884.2
2.610.3
1,543.5
415.3
1,360.4
1,491.5
1,285.8
754.9
Market capitalisation as at 31/12 (EUR million)
Total number of shares issued
Average workforce (average full time equivalents)
1
55,302,620 55,302,620 55,302,620 55,302,620 55,302,620 55,302,620 55,302,620 55,302,600
26,884
26,374
29,283
28,450
26,004
20,578
18,690
As restated in 2006 following the malpractice identified in Portugal.
As restated following application of IAS 21 revised.
3
Excluding in 2006 and 2007 the discontinued operation in Greece (application of IFRS 5).
4
Following the amendment to IAS 16 (see note 2.1. of the Consolidated Financial Statements 2009), sales include in 2008 and 2009 the disposal
proceeds of non-repurchase vehicles.
5
Before unusual items and re-measurements.
6
Result attributable to equity holders of D’Ieteren, as defined by IAS 1.
7
Restated following the 10-to-1 share split in 2010.
8
Calculated in accordance with IAS 33.
9
Restated following the sale of Avis Europe.
2
17,453
D’Ieteren
p. 5
2011
2010 *
2009
2008
2007
2006
2005
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2004
EUR million
Sales since 2004
(EUR million)
* Restated following the
sale of Avis Europe
Group’s share in the result for
the period since 2004
(EUR million)
Current result before tax,
group’s share since 2004
350
(EUR million)
300
300
250
EUR million
200
150
100
200
150
100
50
50
2011
2010
2009
2008
2007
2006
2004
2011
2009
2008
2007
2006
2005
2004
2010 *
0
0
2005
EUR million
250
* Restated following the
sale of Avis Europe
D’Ieteren share price since 2004 (EUR)
50
40
20
10/2011
07/2011
04/2011
01/2011
10/2010
07/2010
04/2010
01/2010
10/2009
07/2009
04/2009
01/2009
10/2008
07/2008
04/2008
01/2008
10/2007
07/2007
04/2007
01/2007
10/2006
07/2006
04/2006
01/2006
10/2005
07/2005
04/2005
01/2005
10/2004
07/2004
0
04/2004
10
01/2004
EUR
30
D’Ieteren
p. 6
KEY
FIGURES
BY
ACTIVITY
External sales (EUR million)
2011
2010
Change
D'Ieteren Auto
3,208.3
2,732.9
17.4%
Belron
2,769.0
2,800.9
-1.1%
5,977.3
5,533.8
8.0%
Belron
46%
D’Ieteren
Auto
54%
Current result before tax1,2, group’s share
2011
2010
D’Ieteren Auto
36%
32%
Belron
64%
68%
100%
100%
Belron
64%
D’Ieteren
Auto
36%
1 Before unusual items and re-measurements.
2 Before allocation of pro forma financial charges (26.5 million EUR) to
the Automobile Distribution & Corporate segment, resulting from the
net investment in the Car Rental and Vehicle Glass segments.
D’Ieteren
p. 7
Current operating result1 (EUR million)
2011
2010
Change
D’Ieteren Auto
114.9
92.6
Belron
262.3
255.6
24.1%
2.6%
377.2
348.2
8.3%
Belron
70%
D’Ieteren Auto
30%
Average workforce
(average full time equivalents)
2011
2010
Change
D’Ieteren Auto
1,685
1,584
Belron
25,199
24,790
1.6%
26,884
26,374
1.9%
Belron
94%
D’Ieteren
Auto
6%
6.4%
D’Ieteren
p. 8
QUESTIONS TO
JEAN-PIERRE
BIZET,
CHIEF EXECUTIVE
OFFICER
1. Following the excellent results in
2011, what are your priorities for the
group’s two activities in 2012?
The Belgian market will probably be significantly
down, but we still aim to increase our market share at
D’Ieteren Auto, having achieved almost 22% in 2011.
To do this, we can count on our outstanding teams, high
quality products and increased attention to customer
satisfaction. Belron’s objective is to continue to grow
in the countries where it operates and to expand into
new markets. The exceptional quality of our customer
service and the partnerships with insurers and fleet
managers are the cornerstone of this ambition, as is the
international sharing of best practices.
In 2011, D’Ieteren recorded a
10.7% increase in its current
result before tax, group’s share,
which enabled it to exceed the
record results for 2010. All
eyes are now on the future.
Jean-Pierre Bizet answers our
questions.
2. In 2011, you greatly exceeded your
own and the analysts’ forecasts. Are
you not too conservative in your
guidance?
We exceeded our November guidance only because of
an unforeseen and exceptional December month in
automobile distribution. Following the announcement,
in early December by the newly-appointed Belgian
federal government, of the withdrawal of the CO2
incentives by January 1st, 2012, dealerships were
crowded with customers during December buying
low-emission cars in stock. In that single month, about
20,000 additional registrations occurred compared to
December 2010. Since we held our market share this
boosted our results. Nobody could have predicted that
mid-November.
D’Ieteren
p. 9
3. The dividend has almost doubled
compared to last year. Why have you
changed your dividend policy?
Since reaching 92.7% of Belron’s equity capital and
since the sale of Avis Europe, a highly capital-intensive
activity, D’Ieteren’s future financing needs – except
for new acquisitions – now primarily consist in
operational and growth-related investments at Belron
and D’Ieteren Auto, which can be financed by these
entities without additional funding from the group.
Hence, the Board of Directors has reviewed our
dividend policy. The Board will propose a dividend of
0.80 EUR per share to the AGM, up 88%. The Board
also confirms that it intends to maintain its ongoing
policy of providing the largest possible self-financing,
which has supported the group’s development, with a
view to grow its equity capital and to maintain quality
financial ratios. Absent major unforeseen events, the
company will ensure a stable or, results permitting, a
steadily growing dividend.
4. Why did you decide to sell your
interest in Avis Europe, even though it
had been making a turnaround in the
last few years? ?
The short-term car rental sector has gone through
rough times in the last 10 years and our priority was to
turn-around Avis Europe. Given the recent results, this
objective has been achieved. Avis Budget Group made
us an offer at the right time. The transaction is a threeway win. Avis Europe is now part of a combined entity
dedicated to operating its brands globally, Avis Budget
Group has become truly global in a consolidating
industry, and D’Ieteren has become less cyclical
and less capital intensive. We have also successfully
monetised our interest. This transaction is attractive
both strategically and financially for D’Ieteren.
D’Ieteren
QUESTIONS TO JEAN-PIERRE BIZET
p. 10
D’IETEREN AUTO
5. D’Ieteren Auto has achieved a historic record
with about 22% market share. Do you think this
business still has potential for growth?
Definitely. There are several factors which should help us gain market
share:
- A range of products which is entering new segments, as was the case
last year, for example, with the Volkswagen Amarok in the pick-up
segment and the Audi Q3 in the compact SUV segment. In 2012, we
are entering the “city car” segment with Volkswagen’s up!, Škoda’s
Citigo and Seat’s Mii.
- A regular revamp of the model range, which is an important factor,
as evidenced by the recent revamp of Volkswagen’s mid-range
models.
- A service strategy that will enable us to make our brands even more
competitive. In this area, we can rely on the competitive benefits
we gain from Volkswagen D’Ieteren Finance, our new joint venture
with Volkswagen for car financing and long-term lease.
- Product benefits, particularly in terms of CO2 emissions. The
Volkswagen, Audi, Škoda and Seat models are very attractive at
this level in their respective segments.
6. You have appointed Denis Gorteman, an
internal candidate who has spent his entire
career at D’Ieteren, to take over from Thierry
van Kan as head of D’Ieteren Auto. Did you
consider any external candidates?
A group such as D’Ieteren must have the ability to grow a pool of
talent in order to have a first-rate successor for each significant
position. This is the case about Denis Gorteman. There was no need
to look outside.
D’Ieteren
p. 11
BELRON
8. Belron was considered to be growing steadily
regardless of the economic situation, however
the results for 2011 and the outlook for 2012
seem to show that the company is sensitive to
economic conditions. How do you see Belron’s
evolution in the future? Should we expect it to be
more sensitive to the economy ?
The slight organic sales slowdown at Belron in 2011 is due to a very
high 2010 comparative wheather-wise and to a reduction in miles
driven as a result of the recessionary economy in our key markets.
We had never observed such a combination of external events. These
adverse trends have, however, been almost fully compensated by
market share, mix and price gains. This is evidence of the continued
robustness of Belron’s value proposition to its customers. 2012 has
started again with a very soft weather and economies have not yet
seen a recovery.
Reinvestment strategy
9. You have significant resources
to make one or more acquisitions
following the sale of Avis Europe.
Which sectors are you particularly
interested in? And what are your main
criteria ?
7. Insurance companies seem more attentive to
the cost of claims in the glass breakage segment.
Does Belron see this as a threat ?
The exact opposite. To reduce the cost of claims, insurance companies
can rely on Belron, which promotes repairs, thus avoiding many
replacements costing four or five times as much. Furthermore, the
quality of our service thanks to sufficient stock and availability
24 hours a day, seven days a week, create a very high level of customer
satisfaction and loyalty by the insured motorist to their insurance
company.
If we acquire a company, it should be active in an area
in which we can provide real added value as an active
shareholder. It should therefore preferably be related to
our core institutional competencies. It should have a
qualified leadership team and a proven business model,
with a view to further develop the activity, notably
internationally, in concert with its management. We
also want to avoid cyclical or very capital-intensive
businesses.
D’Ieteren
p. 12
KEY
EVENTS
APRIL
Belron in Russia
Following the acquisition of the Mobiscar
fitting operations in 2010, Belron acquired
the Mobiscar wholesale business in 2011.
Belron now owns the full operations of the
former Mobiscar business which has a presence in four major cities including Moscow
and Saint Petersburg.
2011
JANUARY
th
89 Light Commercial Vehicles,
Recreational Vehicles and
Motorcycles Show
JANUARY
Enhanced repair solution
Belron launched a new exclusive repair solution, integrating a superior resin and primer.
Independent tests carried out on the exclusive resin developed by Belron have shown
that it stays stronger for longer than any
other resin on the market. The Netherlands
was the first business unit to implement the
new product and it has now been rolled out
across all Belron business units.
Carglass branch, Oktyabrskaya
(Saint Petersburg, Russia)
MAY
Canadian acquisitions
With more than 380,000 visitors, attendance was the best ever, beating the previous
record of 2007 (350,000 visitors). Among
a hundred Belgian premieres, Volkswagen
presented the new Caddy, Amarok and
Sharan, Audi the A6 Saloon and Škoda the
2nd generation of its GreenLine range. The
high number of orders passed during the
Show marked the beginning of an exceptional year for Volkswagen’s commercial
vehicles, which ended with a record market
share of 11.07%.
Delivering an outstanding
service to the motorists for
more than 200 years.
Between May and December 2011, Belron
Canada completed the purchase of a number of former franchisees operating under
the Apple and Duro brands.
Duro branch, Canada
1805
1897
Jean-Joseph D’Ieteren sets up his
own business as a wheelwright.
D’Ieteren produces automobile
bodyworks.
D’Ieteren
p. 13
JULY
A new CEO
for D’Ieteren Auto
OCTOBER
Volkswagen D’Ieteren Finance
JULY
Belron carries on its expansion
in China
Denis Gorteman
On July 1st, 2011, D’Ieteren announced that
Denis Gorteman would succeed Thierry van
Kan as CEO of D’Ieteren Auto. After 22 years
at D’Ieteren Auto, Thierry van Kan decided
to step down as its CEO, but remains active in
the automobile industry as chairman of the
Belgian Automotive Industry Association
(FEBIAC). Denis Gorteman has spent his
entire professional career at D’Ieteren (first
at D’Ieteren Lease of which he was general
manager until 2008, then at Belron’s Global
Operations Team, where he launched, led
and supervised the implementation of
several international joint development
projects aimed at flexibility, productivity
and customer satisfaction) and is a seasoned
customer-oriented general manager (see
interview page 22).
The transition was effective on January 1st,
2012
Belron acquired a vehicle glass repair
and replacement business operating in
Changsha City, the capital of Hunan
Province in Central China. Changsha is the
economic centre for this area of China and
has a population of over 7,000,000. This is
the second Chinese acquisition in 2011, as
Belron acquired a business in Shenzhen in
March. Shenzhen is a major city in Southern
China which is situated in one of the most
advanced economic areas of the country.
Carglass branch, Changsha (China)
D’Ieteren and Volkswagen Financial
Services (a subsidiary of the Volkswagen
group) have reached an agreement to create
a joint venture, Volkswagen D’Ieteren
Finance (VDFin), intended to develop a
comprehensive, coherent and competitive
range of car financing services to individual
customers, professionals and dealers.
Offering advantageous financing is an
efficient promotional and loyalty tool in the
individual customer segment. Enlarging the
range of financial services and having these
actively promoted by a dedicated entity
will therefore better exploit this potential
and strengthen the position of the makes
distributed by D’Ieteren Auto on the retail
market. D’Ieteren Auto’s leasing activities,
notably through D’Ieteren Lease, are now
provided by the new entity and their
development will be facilitated by an easier
access to capital.
Operational since early 2012, Volkswagen
D’Ieteren Finance was created by the
contribution of D’Ieteren Lease, the
D’Ieteren subsidiary active in operational
leasing, and of the Volkswagen Bank
Belgium operations. The joint venture is
50% owned (minus one share) by D’Ieteren
and 50% owned (plus one share) by
Volkswagen Financial Services. Its Board
of Directors and management are equally
made up of representatives from D’Ieteren
and Volkswagen Financial Services.
1929
1948
1956
1989
First listing on the Brussels’
stock exchange.
Signature of the import
contract with the Volkswagen
group.
Launch of “Dit’Rent-a-Car”,
D’Ieteren’s first step into shortterm car rental.
Acquisition of Avis Europe, a
leader in short-term car rental.
D’Ieteren
p. 14
KE Y E V E NT S 20 1 1
JUNE: a page
in D’Ieteren’s
history is turned
DECEMBER
Record month in a record year
All the debt financing of the new joint
venture is provided by the Volkswagen group
under the terms applied to its subsidiaries.
On a financial level, D’Ieteren Lease’s
contribution to the new entity and its
accounting using the equity method will lead
to a reduction in D’Ieteren’s consolidated
net financial debt of 283 million EUR and
to a consolidated capital gain of around
40 million EUR in 2012.
While the Belgian car market was already
buoyant, the Belgian government announced in November that the CO2 incentives for purchasing less polluting vehicles
would be withdrawn as from January 1st,
2012. Consequently, the dealerships were
crowded with customers who wanted to
benefit from the incentives before the end
of the year. In that single month, about
20,000 additional registrations occurred
compared to December 2011. This enabled
the Belgian car market to reach its historical
high of 572,211 new car registrations.
This partnership strengthens the strong
link that has existed between D’Ieteren and
Volkswagen for over sixty years.
OCTOBER
14 June 2011 is, without a doubt, a
historic date for D’Ieteren. That day,
the Boards of Avis Budget Group and
Avis Europe announced that they had
reached an agreement on the terms of
a recommended cash acquisition of the
entire share capital of Avis Europe by
Avis Budget Group through a Scheme
of arrangement between Avis Europe
and its shareholders. D’Ieteren, which
held a 59.6% interest in Avis Europe,
had irrevocably voted in favour of the
Scheme.
The acquisition
Avis Budget Group offered 3.15 GBP
in cash for each Avis Europe share,
which valued the entire share capital
of Avis Europe at approximately
719 million EUR (at that date) and
D’Ieteren’s share of Avis Europe at
approximately 409 million EUR (taking
into account the net effect of foreign
exchange hedging and transaction
costs). This cash consideration
represented a premium of:
- 60.2% over the 1.966 GBP closing
price of Avis Europe shares on 13 June
2011;
- 63.3% over the average closing price
of 1.929 GBP of Avis Europe shares for
the three months prior to the date of the
release.
1-Tek
The 1-Tek is a new lifting assistance device
which helps the technician install even large
windscreens on their own while protecting
their back from injury, and allowing controlled positioning for right first time quality
installations. It is the first lifting assistance
device produced independently by Belron.
The disposal of Avis Europe took effect
on 3 October 2011 and the proceeds of
the sale were received mid-October.
1999
2011
Acquisition of Belron, the vehicle
glass repair and replacement
specialist.
Sale of D’Ieteren’s interest in Avis
Europe to Avis Budget Group.
The transaction is a three-way win:
Avis Europe has found an ideal home
in a combined entity with a seamless
organization, Avis Budget Group
is more global in a consolidating
industry, and D’Ieteren has emerged
less cyclical, less capital intensive, and
D’Ieteren
p. 15
Europe, Africa, the Middle East and Asia
for fifty years (until 2036).
has successfully monetised its interest in
Avis Europe.
This transaction is strategically and
financially compelling for the D’Ieteren
group which can contemplate new
development opportunities in the near
future.
For 2011, Avis Europe’s net contribution
to D’Ieteren’s result for the period, group’s
share, amounts to 69.7 million EUR.
Moreover, 18.2 million EUR were
recognized in the group’s consolidated
reserves. As for D’Ieteren’s consolidated net
financial debt, it has decreased by around
1 billion EUR thanks to the combined
effect of the receipt of the proceeds of
the sale and the deconsolidation of Avis
Europe’s net debt.
The end of a partnership that
spans over five decades
D’Ieteren acquired an interest in Avis
Europe in 1987 and became its controlling
shareholder two years later, when the
company was delisted. But the relationship
between both companies actually dates
back to 1958, when Dit’Rent-a-Car,
D’Ieteren’s short-term car rental activity,
became an Avis licensee on the occasion
of the Brussels Worldwide Exhibition.
In 1971, D’Ieteren established the joint
venture Locadif with Avis Inc. Locadif
quickly became the leading company for
short- and long-term truck and car rentals
in Belgium.
The worldwide Avis Inc. was split in
1986 as a result of a leveraged buyout.
Avis Europe was then listed and received
a license to operate the Avis brand in
The partnership between D’Ieteren and
Avis took a new turn when the former took
control over Avis Europe in 1989. From a
Belgian company, D’Ieteren then became
an international group, while remaining
close to its core business: the service to the
motorist. Though the partnership between
D’Ieteren and Avis Europe lasted for
another twenty years, in the last decade the
short term car rental sector was impacted
by geopolitical events and economic
downturns, rising fleet and financing
costs, and stagnant or declining rental
revenue per day in most years. However,
a successful turnaround of the company
occurred recently, under the leadership of
CEO Pascal Bazin who was appointed in
2008, and translated into improved profits
and return on capital employed. D’Ieteren
supported the turnaround by participating
for its full 59.6% share in two rights issues,
in 2005 and 2010.
D’Ieteren
p. 16
AU TOMOB I L E D I S T R IBU T IO N
D’IETEREN
AUTO
AN
EXCEPTIONAL
YEAR
Boasting a more than 60-year relationship with
the Volkswagen group, D’Ieteren Auto imports and
distributes the vehicles of Volkswagen, Audi,
Seat, Škoda, Bentley, Lamborghini, Bugatti and
Porsche across Belgium, along with spare parts
and accessories. It is the country’s number one car
distributor, with a market share of around 22% and
more than one million vehicles of the distributed
makes on the road. D’Ieteren Auto manages a
network of some 300 independent as well as
17 corporately-owned dealers of the Volkswagen,
Audi, Seat, Škoda and Porsche makes in Brussels
and its outskirts. It also sells used vehicles
through two My Way centres on the outskirts of
Brussels and 125 dealerships affiliated to the
My Way Authorized Distributors network. In
addition, D’Ieteren Auto provides car financing
and long-term car rental services through a joint
venture with Volkswagen Financial Services.
Finally, it distributes Yamaha products in Belgium
and the Grand Duchy of Luxembourg through
D’Ieteren Sport.
2010 was a record year.
But 2011 was even better.
On all fronts.
BELGIAN MARKET:
A “GRAND CRU”!
Just as in the previous year, in 2011 the new car registrations
market in Belgium was supported by federal incentives
granted to individuals to purchase low CO2 emission vehicles.
These incentives amounted to 3% of the purchase price for
vehicles emitting between 105 and 115g CO2/km and 15% for
those emitting less than 105g CO2/km. These incentives were
maintained throughout the year. However, in November 2011 the
Belgian government decided to withdraw these incentives from
January 1st, 2012. This announcement gave a final boost to the car
market, which was already very strong. In December 2011, nearly
49,000 cars were registered, about 20,000 more than the previous
year. This is an absolute record.
Over the entire year 572,211 new cars were registered in Belgium,
up 4.54% compared with the 547,347 registered in 2010, and
up 20.16% compared with 2009, the last year when the Light
Commercial Vehicles, Recreational Vehicles and Motorcycles
Show was held. 2011 also saw strong growth in registrations
of light commercial vehicles (less than 3.5 tonnes), totalling
61,428 units, up 16.99% year-on-year. 27,024 motorcycles were
registered, an increase of 2.21%. However, this conceals a wide
disparity between scooters, which showed strong growth, and
motorcycles, which were sharply down.
D’Ieteren
p. 17
The majority of the makes distributed by
D’Ieteren Auto succeeded in improving
their market share in 2011.
D’Ieteren
p. 18
D ’I E T E RE N AUTO
Belgian market among the
strongest in Europe
Unlike the Belgian market for new car registrations, the
European market recorded a decline of 1.7% on average in
2011, to about 13 million registrations. This decline conceals
significant regional differences, however. In the top 10
European countries in terms of registrations, the Netherlands
showed the strongest growth year-on-year (+15.2%) while
the largest fall was in Spain (-17.7%). The Volkswagen group
remains the largest automobile group in the European Union
with more than 3 million new car registrations of its makes
(which equals the size of the French and Spanish markets
combined!) and a market share of 23.2%, up 2 points year-onyear.
ALMOST 22% MARKET SHARE
The advantages, and especially the ecological advantages offered
by the distributed makes, the strength of the network and the
motivation of the teams are key elements that explain D’Ieteren
Auto’s performance over the year. In total, 125,247 cars of the
makes distributed by D’Ieteren Auto were registered in 2011,
a market share of 21.89%, up 1.76 point year-on-year. This
remarkable performance in a particularly favourable context
once again demonstrates the ability of the teams to adapt to every
situation. It is they who have enabled D’Ieteren Auto to achieve this
historic new record market share, by far exceeding the previous
record of 20.48%, dating from 1997…
The environmentally friendly performance of the vehicles was
a determining factor in motorists’ purchasing decisions during
2011. And the Volkswagen group makes further improved their
score in this field. Volkswagen, Audi, Seat and Škoda vehicles
had reduced their average CO2 emissions compared with 2010
and continue to post lower average emission rates than those of
their direct competitors in their segment. The environmental
performance of the Volkswagen group makes has been better
than the market average since 2002. 45.5% of the vehicles of these
four makes registered in 2011 posted an emission rate of less than
116g CO2/km, against 39.5% for the market as a whole.
CHANGE IN THE NUMBER OF NEW CARS REGISTERED IN THE
10 MAIN EUROPEAN MARKETS
2011
2010
Change
1
Germany
3,173,634
2,916,260
+8.8%
2
France
2,204,229
2,251,669
-2.1%
3
United Kingdom
1,941,253
2,030,846
-4.4%
4
Italy
1,748,143
1,961,579
-10.9%
5
Spain
808,059
982,015
-17.7%
6
Belgium
572,211
547,347
+4.5%
7
Netherlands
556,123
482,544
+15.2%
8
Austria
356,145
328,563
+8.4%
9
Switzerland
318,958
294,239
+8.4%
10
Sweden
304,984
289,684
+5.3%
European Union
13,111,209
13,343,302
-1.7%
Make
Average CO2
emission per km
Change 2002-2011
Volkswagen
121g
-22%
Audi
131g
-19%
-24%
Seat
111g
Škoda
118g
-20%
Total market
128g
-17%
Source: Jato/Febiac
STRONG MAKES
The majority of the makes distributed by D’Ieteren Auto succeeded
in improving their market share in 2011.
Volkswagen gained more than one market share point,
continuing to benefit from the recovery plan implemented in 2009
which made provision for a stronger network, price adjustments
and, above all, a revamped range. The new Tiguan and several
models revamped in 2010 (Passat, Touran and Sharan) were very
successful last year, as was the entire BlueMotion range, which
benefited from the continuing CO2 incentives.
D’Ieteren
p. 19
Volkswagen:
also number one
on Facebook
Volkswagen is the leading make in terms
of the number of
registrations
in
Belgium; it is also
number one in
terms of fans on
Facebook. “The
Volkswagen Belgium page was created in 2010 and already
has over 54,000 fans. This
makes us the leading page in
the Belgian automobile sector, and by a long way!”, says
Damien Vanderhulst, Web Manager at Volkswagen Import. What is the objective of this page? “To enable fans
to learn all about the world of Volkswagen. In particular,
this means putting photos of the new models online and
providing previously unpublished new material in order
to get their reactions. For example, the new Beetle and the
up! have generated a lot of excitement. The Facebook page
also enables us to promote a whole series of events in which
we are partners and to give our fans the chance of winning
places to take part in them. Lastly, it is also the ideal place
to promote the Volkswagen tradition by posting old photos
and inviting fans to share their experiences…” This community of fans of the make will doubtless grow even larger
in 2012. Following Volkswagen, Audi also created its Facebook page (Audi Belgium) in 2011 and already has more
than 8,000 fans.
Volkswagen Belgium’s Facebook
page in 2011:
>
>
>
23,000 new fans (more than 63 per day)
33,000 comments (more than 90 per day)
8 million reads (more than 22,400 per day)
www.facebook.com/VolkswagenBelgium
At Audi, the success of the A1 and the new A7, launched at the
end of 2010, was confirmed in 2011. The Q3, which marks the
entry of the make in the compact SUV segment, also had its first
registrations in 2011. Lastly, the make was able to take advantage
of an increase in deliveries, which enabled to reduce delivery times
from the second half and to respond quickly to the strong demand.
Audi A1
Denis Gorteman,
CEO of D’Ieteren Auto
“2011 has been a milestone for D’Ieteren Auto. Buoyed
by good fleet sales, registrations were boosted at the
end of the year by the announcement of the withdrawal
of the CO2 incentives. In this strongly growing market,
our makes have demonstrated how responsive and dynamic they are, enabling us to achieve several record
numbers of sales volumes. D’Ieteren Auto’s overall
market share rose to 21.89% and Volkswagen is once
again the number one make in Belgium. I would like to
congratulate the teams for their tremendous effort and
enthusiasm, which has made it possible for us to achieve
these results, and to thank Thierry van Kan for achieving a smooth and efficient transition.
This further strengthens my
confidence in the ability of D’Ieteren Auto
to meet any challenges.”
D’Ieteren
p. 20
Škoda continued its success
story, despite the lack of new
models. According to Bernard Salhadin, Business Unit Manager Škoda
at D’Ieteren Retail, this
success can be explained
by “a range that has a lot of
‘green’ engines with low CO2
emissions. The CO2 incentives
and the announcement of the
withdrawal of these incentives at the
end of 2011 have greatly benefitted Škoda.
Furthermore, the financial crisis has attracted many motorists
to cars with an excellent quality-price-equipment ratio.” Which
models are popular with customers? “In 2011 the make benefitted from strong demand for the environmentally friendly versions
(99g CO2/km) of the Fabia and the Octavia saloon. The Yeti also
contributed to Škoda’s excellent performance in 2011. Business customers also think highly of the Octavia and the Superb.”
Seat continued to maintain its market share, despite the lack of
new models. The make was able to make up for a slight downturn
at the beginning of the year due to strong demand for the Ibiza and
the Leon, which benefitted from the announcement of the end of
the incentives in December. New models – including the Mii in the
city car segment – are expected from this year.
Porsche has had an outstanding year thanks to the great success
of the Cayenne, a great favourite in its diesel version, registrations
of which have almost doubled compared with 2010.
SHARE IN NEW CAR REGISTRATIONS
2011
2010
Number of new cars registered in Belgium
572,211
547,347
Yearly change
4.5%
14.9%
D’Ieteren Auto’s total market share
21.89%
20.13%
Volkswagen
10.82%
9.78%
Audi
5.54%
5.38%
Seat
1.82%
1.85%
Škoda
3.43%
2.87%
Bentley/Lamborghini
0.01%
0.01%
Porsche
0.27%
0.24%
Light commercial vehicles
11.07%
9.33%
Volkswagen Caddy Maxi
The performance of Volkswagen’s light commercial
vehicles was also outstanding in 2011, with a market share of
11.07%. Two major items played a part in this: “Smaller cc and
more energy-efficient engines were introduced throughout the range,
as well as the BlueMotion label. In a market up 17%, we have been
able to take advantage of the trend towards purchasing greener, more
economical and better equipped vehicles; for example the Electronic
Stability Program (ESP) as standard”, says Marc Donner,
Marketing & Media Operations Manager at CVI (Commercial
Vehicles Import). But quality products are not everything, we
need to be able to convince customers. And “selling a commercial
vehicle is significantly different from selling a car. We recently set
up an ambitious specialisation programme for our commercial
vehicles salespeople. We are providing
certain salespeople with specific
training and coaching, which
has enabled us to respond
even more professionally to
customers’ requirements.”
Looking at the figures
– an increase of 30% in
sales –, this strategy has
paid off.
RESULTS
D’Ieteren Auto’s sales in 2011 rose by 17.4% year-on-year to
3.2 billion EUR. This change is the result of the continued growth
of the Belgian market and the increase in market share made by
D’Ieteren Auto. During this period, D’Ieteren Auto delivered
136,199 new vehicles, including light commercial vehicles, up
15.5%, achieving sales of 2.6 billion EUR, up 20.2%. Except for
D’Ieteren Sport (distribution of Yahama motorcycles, scooters
and quads), which suffered from a declining market and whose
sales fell by 9.8% to 32.3 million EUR, all the other activities of
D’Ieteren
p. 21
D’Ieteren Auto showed an increase in sales. Sales of used vehicles
increased 11.0% to 115.3 million EUR, while those of spare parts and
accessories rose 6.2 % to 178.0 million EUR and those of the D’Ieteren
Car Centers after-sales service by 4.9% to 57.4 million EUR. D’Ieteren
Lease sales rose by 3.7% to 146.6 million EUR.
The current operating result rose 24.1% to 114.9 million EUR.
The current result before tax, group’s share, increased by 42.8% to
92.7 million EUR.
OUTLOOK
There will be many changes in 2012, in both the tax environment
and at D’Ieteren Auto. The market no longer enjoys CO2 incentives, which will probably have a short-term effect on registrations
since part of the registrations for 2012 were taken into account in
2011, particularly in December. Company cars will in turn be affected by the new legislation defining the calculation of the taxable
fringe benefits. Until the end of last year, the taxable fringe benefits
of an employee who had a company car were calculated based on
the following two factors: the home-workplace distance and the
CO2 emission rate of the vehicle. The new legislation takes into
account the CO2 emission rate of the vehicle and its price, the latter
being the more important. As the Febiac (Belgian Automobile and
Motorcycle Federation) points out, it is likely that this new tax will
not affect business market sales to a large extent but it reinforces
the trend towards downsizing. In other words, we will probably sell
as many cars but their average price will decrease.
Given the changes in taxation, some of whose effects are difficult
to estimate, and the uncertain macroeconomic environment, the
market is likely to be more difficult this year with an estimated
495,000 new car registrations.
D’Ieteren Auto will make every effort to further increase its market
share. Denis Gorteman, its new CEO, has already announced his
intention to focus on service and after-sales quality to achieve this.
D’Ieteren Auto can also count on a stronger partnership with Volkswagen Financial Services for car financing. “Volkswagen D’Ieteren
Finance, a joint venture between D’Ieteren and Volkswagen Financial Services, offers a comprehensive, coherent and competitive range
of car financing services to individual customers, professionals and
dealers,” says Olivier le Fevere, Sales & Marketing Manager at
D’Ieteren Lease, now fully integrated into this joint venture. “This
operation enables us to offer our customers solutions to all their
needs, whatever their profile, whether individual customers or professionals, as regards the method by which they acquire a vehicle.
As for our dealers, from now on they will
only have a single point of contact
for satisfying their customer
needs or for financing their
stock. That will make life
much simpler for them.”
D’Ieteren
p. 22
TWO
QUESTIONS
TO
DENIS
GORTEMAN,
CEO OF
D’IETEREN
AUTO
(as from January 1st, 2012)
1. How do you feel on becoming D’Ieteren Auto’s
CEO?
I’m full of energy and very enthusiastic, but I also feel a sense of
modesty. I know how professional D’Ieteren Auto’s teams are. I’ve
worked with them for twenty years. Our past results show how
adaptable the company is to market fluctuations and how it can
seize every opportunity that presents itself. I’m very fortunate to be
able to build D’Ieteren Auto’s future with such a skilled staff. Thierry
van Kan and his team have given me their full support and helped
me to achieve a smooth transition, and this has enabled me to look
ahead with confidence. I am aware of the expectations my arrival
has created and I am ready to meet this challenge for the future of the
company. D’Ieteren is a company with a family majority shareholding
that has the ability to take the long term view and remain true to its
strategy. I fully subscribe to this approach.
2. What are your priorities for D’Ieteren Auto?
My three priorities are to increase the volume of sales, to improve
customer service and to develop our staff. D’Ieteren Auto has always
pursued a policy of growth, with the aim of increasing the number of
vehicles of its distributed makes in Belgium. This is an opportunity
that we must make the most of, and is dependent on us improving
our service quality in order to increase customer loyalty in sales
and after-sales. We must have the best tools and ever more efficient
processes if we are to achieve this goal of loyalty. But I want to go even
further and turn every customer into an ambassador of our makes.
To do this, it is essential for us to create a customer relationship that
is really different. We must therefore strive to develop our skills and
our attitude in order to ensure a ‘customer delight’ at all times. This
is an exciting and ambitious journey and I am undertaking it full of
confidence and optimism.
D’Ieteren
p. 23
KEY FIGURES
D’IETEREN AUTO
KEY FIGURES
(EUR MILLION)
2011
2010
2009
2008
2007
2006
2005
2004
New vehicles delivered (in units)
136,199
External sales
3,208.3
117,951
99,241
119,967
120,774
112,944
103,239
99,587
2,732.9
2,453.8
2,679.4
2,642.4
2,491.4
2,227.2
2,088.6
114.9
92.6
65.8
88.5
98.7
81.9
56.1
64.1
Current operating margin
3.6%
3.4%
2.7%
3.3%
3.7%
3.3%
2.5%
3.1%
before tax1
92.7
64.9
42.9
60.6
74.7
59.5
36.1
48.7
after tax1
98.0
62.0
41.9
59.3
65.2
57.0
35.2
39.3
1,685
1,584
1,565
1,650
1,601
1,571
1,505
1,493
Current result, group’s share
Before unusual items and re-measurements.
The Automobile Distribution segment includes all costs related to the corporate activities, including (concerning current result), finance costs
resulting from the net investment in the Car Rental and Vehicle Glass segments.
2011
2010
2009
2008
2007
2006
2005
2004
• Market share (%)
0
0
2011
40
0
5
100
2010
60
500
10
200
2009
1.000
15
300
2008
1.500
20
400
2007
80
500
2006
2.000
25
2005
100
2.500
600
2004
• External sales
3.000
New car registrations in
Belgium and market share
of D’Ieteren Auto
2003
120
3.500
• Current operating result
Evolution of sales and
current operating result
since 2004
(EUR million)
2002
2
• Car registrations (in thousands)
1
Sales breakdown by activity
1%
4%
1%
2011
2010
Change
SALES EVOLUTION BY ACTIVITY (EUR MILLION)
2%
5%
4%
83%
• New vehicles
2,649.8
2,204.4
20.2%
• Used vehicles
115.3
103.9
11.0%
• Spare parts and accessories
178.0
167.6
6.2%
• D’Ieteren Car Centers (after-sales)
57.4
54.7
4.9%
• D’Ieteren Sport
32.3
35.8
-9.8%
• D’Ieteren Lease
146.6
141.4
3.7%
• Other
28.9
25.1
15.1%
D’IETEREN AUTO
3,208.3
2,732.9
17.4%
D’Ieteren
p. 24
NEW
MODELS
VOLKSWAGEN
UP!
Sporty and efficient, youthful and communicative,
emotional and individual. A new member of the
successful A1 family, also “Made in Belgium”, has
been launched in early 2012 – the premium five-door
Audi A1 Sportback. One technical highlight of the new
model is the 1.4 TFSI that uses cylinder on demand
technology to combine powerful performance with low
fuel consumption.
Volkswagen’s first compact city car offers
maximum comfort in a minimum space.
The up! is born to move smoothly on the
roads from the towns and cities around the
world. It is also the first city car with an
automatic emergency braking function in
town.
AUDI
A1 SPORTBACK
D’Ieteren
p. 25
ŠKODA CITIGO
With the Mii, Seat is presenting the perfect
automobile for the urban lifestyle of today.
The Mii makes life easier – with compelling
utility, exceptional driving fun, high
efficiency and innovative technology. The
Mii combines Seat’s sporty Mediterranean
design with the very best craftsmanship
and enormous scope for individualization.
Škoda is continuing its product offensive
with a seventh model range: the Citigo. With
this model the manufacturer is expanding
its range to the small car segment. In a
minimum area the Citigo offers a maximum
of space for four persons. It will be offered
both in a three-door and five-door version.
SEAT Mii
D’Ieteren
p. 26
BENTLEY
NE W M O D E LS
NEW CONTINENTAL GTC
This new extreme top model in the Gallardoseries is based on the successful race car
from the Lamborghini Blancpain Super Trofeo,
the fastest championship with cars of the
same make in the world. The Lamborghini
Gallardo LP 570-4 Super Trofeo Stradale will
be produced in a limited series of 150 copies.
While the first Continental GTC had an elegant
and discreet appearance, the new model, thanks
to more pronounced lines and an aggressive look,
comes more modern and powerful for the day. Its
daring contemporary design and its powerful motor
which provides exhilarating performances give a
unique and sportier look to the new Bentley, which
benefits from the sophistication of a Coupé and
unparalleled comfort.
LAMBORGHINI
GALLARDO
LP 570-4
SUPER TROFEO
STRADALE
D’Ieteren
p. 27
PORSCHE 911
Launched in 2001, the Yamaha
TMAX revolutionised the
scooter scene with its new
sporty maxiscooter. 11 years
later, Yamaha proudly presents
the ultimate evolution of this
phenomenal model: the TMAX 530!
Maxiscooter driving at its very best.
The new Porsche 911 (991)
represents the 7th generation
in a long line. It combines
performance, energy efficiency,
sportiness and compatibility with
the everyday use that has always
characterized the Porsche 911.
YAMAHA
TMAX 530
D’Ieteren
p. 28
VEH ICL E G L A SS R E PAIR AND R E P L AC E M ENT
BELRON
PROGRESS IN
CHALLENGING
TIMES
Belron is the worldwide leader in vehicle glass
repair and replacement. With more than ten
major brands – including Carglass, Autoglass
and Safelite AutoGlass – and a network of
subsidiaries and franchisees in 33 countries on
five continents, the company covers about 75% of
the world’s total vehicle park. 2,027 branches and
9,200 mobile units, available 24/7, enable its
glass repair and replacement service teams to
meet customer demand anywhere, any time. This
focus on service quality generates a very high
level of customer satisfaction. Belron has also
forged long-term partnerships with the largest
insurance companies and fleet managers, enabling
it to handle claim events from start to finish and
greatly simplifying the administration process.
2011
2010
Mobile units
9,200
9,400
Branches
2,027
1,945
Following a good year is never
easy, following two good years
is even harder.
The Belron results in 2009 and 2010 benefitted from unusually
favourable winter weather conditions in both years which led
to higher sales volumes. In contrast, weather conditions in 2011
were milder, especially in Europe, which led to a decline in the
overall ‘vehicle glass repair and replacement’ (VGRR) market.
In addition, the continued weakness in the economic environment
led to further market declines in all developed economies through
various factors notably a reduction in miles driven. As a result,
2011 sales were down by 1.1% compared to 2010, however there
was an increase in the current operating result of 2.6% as cost
reductions have offset the impact on margin of the slight organic
sales decline. The tough trading environment hasn’t stopped
Belron from moving forward strategically, centered on its goal of
delivering an outstanding service to all of its customers in both its
existing and emerging markets.
GOOD RESULTS DESPITE THE
TOUGH ENVIRONMENT
In 2011, sales decreased by 1.1% to 2.769.0 billion EUR consisting
of an organic decline in sales of 0.9% and an adverse currency
impact of 1.0% partially offset by 0.8% from acquisitions. The
organic sales decline reflected a decline in the overall VGRR market
as a result of milder weather in Europe compared to 2010 as well as
weaker general economic conditions, offset, in most geographies,
by segment share gains and mix improvement. Total repair and
replacement jobs decreased by 3% to 11.3 million. The translation
®
D’Ieteren
p. 29
A vehicle glass repair or
replacement job is completed
every 3 seconds
D’Ieteren
p. 30
impact was primarily due to a weaker US dollar. The acquired
growth was mainly achieved in Russia, Canada and France.
European sales declined by 3.7% which included a reduction in
organic sales of 4.6% partially offset by acquisition growth of 0.9%,
predominantly due to acquisitions in France during the first half of
2010 and in Russia.
BE LRO N
Outside of Europe, sales increased by 2.2%, comprising organic
sales growth of 4.0% despite overall market declines, an impact from
acquisitions of 0.8%, due primarily to acquisitions in Canada, offset
by an adverse currency impact of 2.6% due to a weaker US dollar.
The operating result was 234.8 million EUR, down 0.3%. Excluding
unusual items and re-measurements, the current operating result
was up 2.6% to 262.3 million EUR. The impact of sales volume
declines was offset by cost savings plans implemented during
the first half of the year but which did not impact the result
until the second half. In addition there were lower long term
incentive costs reflecting the lower operating profit. Current
result before tax, group’s share, rose by 0.9% to 213.1 million EUR
(2010: 211.3 million EUR).
WORLD FAMOUS FOR
CUSTOMER SERVICE
In 2008 Belron introduced the Net Promoter Score (NPS) as
its standard measurement of customer delight across all of its
On average, 9,200 windscreens are
repaired each day
businesses. NPS is a measure of customer loyalty and is calculated
using the answers to one simple question: “How likely are you to
recommend Belron to a colleague or friend?”.
As well as the rating, customers also provide the reasons why
they have given their score. It is an invaluable tool which offers
consistency, simplicity and accuracy in measuring customer
delight and also provides the customers’ comments which give a
deeper insight to the business. All 2,027 Belron branches receive
results from interviews carried out on a weekly basis which are
used to improve customer service. This is driving engagement at
all levels of the business.
“Every Monday I receive a
report showing the weekly
NPS performance for the
branch. I share the results
with my team on the branch
information board and also
organise a short team meeting
every week where we listen to
specific
customer
comments
then analyse and discuss all the information available.
We aim to delight all of our customers and therefore put
great emphasis on the detailed comments that they make.
We believe that if we are able to spot what delights them,
we can then put more in place to improve our customer
service. We are constantly reviewing our performance and
ensuring that any best practice that we identify becomes
the standard for our branch.”
Christos Ahiropoulos, Branch Manager, Carglass
Greece
D’Ieteren
p. 31
“2011 proved to be a very challenging year for Belron
due to the impact of wider economic factors and
mild winter weather on our markets. In light of these
conditions it is pleasing to report good progress on many
strategic priorities. In particular I am delighted by the
record levels of service delivered to our customers, the
increase in our brand awareness and our expansion
into emerging markets. The financial results reflect the
challenging market conditions plus the cost reduction
and restructuring initiatives undertaken to enable the
business to face expected future economic challenges.
The continued success of the business reflects the hard
work and dedication of our people across the world for
which I am once again extremely grateful.”
REPAIR FIRST
Belron continues to offer world class service to its customers by
offering to repair a customer’s windscreen as an alternative to
replacement whenever possible. Here we find out from technician
Francisco Jarquin from Canada about why Belron places so
much importance on its repair first strategy:
“It is a cost-effective solution providing customers
with the best value for their money. When we
are able to offer customers a cost-efficient
solution, it shows them that we care
about them and their financial needs.
Time is important to customers and, as a
repair is faster than a replacement, they
are happy when the job is done quickly.
The customer prefers the repair to the
GARY
LUBNER,
CEO OF
BELRON
replacement also for environmental reasons since a repair has less
impact on the environment.”
At the beginning of 2011 Belron launched a new enhanced repair
solution which integrates a superior resin and primer. This solution
which has been rolled out across the business is now available to all
its customers around the world.
“When we use the new primer, we can see it going into the impacted
area and can determine immediately when it has properly filled it.
The new primer removes contamination from the damaged glass and
allows the resin to adhere better to it. Independent tests on the resin
have shown that it stays stronger for longer than any other resin on
the market. Customers are happy with the final result since many
of them can only see minimal traces of the original impact after the
repair is done.”
D’Ieteren
p. 32
BELRON ONLINE
The innovation was a move by Autoglass to develop its digital
customer communications this year and followed the launch of its
Twitter and Facebook presence and development of a new mobile
phone website and iPhone app.
BE LRO N
SUPPLY CHAIN
Autoglass Facebook page
Many of the Belron businesses achieved record customer service
levels during the year due to the implementation of various
improvement initiatives. The customer booking experience
was improved and made more convenient by rolling out mobile
optimised versions of websites together with iPhone and
Android applications. In May, the Apple iTunes Store staff even
nominated the Autoglass iPhone application as one of their ‘staff
favourites’. Autoglass also launched its new Facebook app to help
customers assess vehicle glass damage and book appointments.
Further investment in the supply chain has enabled Belron to
respond faster and more efficiently to its customers’ needs. A
new distribution centre was opened in Milan and there were
upgrades to other facilities throughout the group which reduced
the mileage travelled and improved energy efficiency. New
Warehouse Management software with voice picking technology
was introduced in Canada which increased productivity and pick
accuracy whilst significantly reducing glass damage.
ORGANIC AND EXTERNAL
GROWTH
Belron continued to work closely with its insurance and fleet
partners by focussing on the total value delivered to these
partners through the combination of service and cost. In the
D’Ieteren
p. 33
Expansion in China
In what locations across the country can we expect
to find Carglass China?
SL: Since the first acquisition in September 2009 in Qingdao,
Carglass China has expanded rapidly through various
acquisitions and by opening new branches, mainly in the coastal
cities and more developed areas of China. Carglass China now
has 21 branches in 9 cities, including the four key cities – Beijing,
Shanghai, Guangzhou and Shenzhen.
2011: Presence in 9 cities
Beijing
Qingdao
Simon Li, General Manager of Carglass China
CHINA
China is one of the world’s fastest growing economies and
one of the new markets into which Belron has entered as it
looks to grow its global business. Here we chat to Simon Li,
General Manager Carglass China, about the decision to enter
the market and what progress Belron has made.
What makes China such an appealing opportunity
for Belron?
Simon Li: China has a large and rapidly growing vehicle
population whilst at the same time a repair and replacement
market which is highly fragmented. Together these provide
excellent opportunities for future growth.
Partnership with insurance companies has always
played an important role for the Belron business –
what is the situation in China?
SL: This is a key area for future growth and Carglass China has
already started the process of building relationships with the
leading insurers.
USA an agreement was signed in July with the Allstate Insurance
Company to provide the administration of its vehicle glass repair
and replacement claims in the USA commencing 1 January 2012.
The future impact of this agreement will depend on the number
of claims processed and how many of the Allstate policy holders
choose to use Safelite AutoGlass as their vehicle repair and
replacement service provider.
Jinan
Shanghai
Changsha
Hangzhou
Guangzhou
Shenzhen
Dongguan
So with such an impressive track-record, what can
we expect to see from Carglass China in 2012?
SL: Carglass China aims to double its business in the country
during 2012 by further increasing its coverage, strengthening
cooperation with local insurers and providing a highly
professional service to customers. Together with further
improvements in customer service and with the development of
the Chinese management team, Carglass China aims to become
the “natural choice” for Chinese drivers and the leading player in
the vehicle glass repair and replacement industry.
Belron also continued to pursue its goal of targeted geographic
expansion notably in China with acquisitions in Shenzhen and
Changsha and greenfield sites being opened in Shanghai and
Beijing. There has also been good progress in consolidating the
previously acquired Chinese operations (see box). In Russia,
Belron acquired the Mobiscar wholesale business in the first half of
2011 after acquiring its fitting business in the second half of 2010.
D’Ieteren
p. 34
Employee engagement
BE LRO N
Keeping employees engaged and motivated is fundamental to
every Belron business, not only because they believe it is the
right thing to do but because it makes business sense. Engaged
employees promote the brands, acting as ambassadors both
internally and externally.
“Achieving superior levels of employee engagement really matters to us”, says Paul-Olivier Raynaud-Lacroze, Human
Resources Director Carglass France. “Engagement is reviewed
and discussed regularly at executive meetings and prompt action taken to address any emerging issues. Providing first class
support for all our people is an essential
part of our strategy and we were very
proud to be recognised as the 5th
best workplace in France during a
recent ‘Best Place to Work ‘survey.”
initiatives in the areas of corporate responsibility and communications – all areas of activity which have a major impact on
engagement levels across the business.
“Employee Engagement is a key priority and focus in everything I do in my
job,” says Brad Edwards, Safelite’s Northwest Division Manager.
“I concentrate on providing a constant chain of communication to
keep my people up-to-date on what is
going on through conference calls, webcasts and regular visits to the 8 markets in
my division. We discuss our business strategy and their role in it.
We listen to and act upon their ideas on how we can achieve our
goals. And we recognize and reward the behaviours that deliver
desired results. This helps our associates feel like business owners
instead of “renters”; like they have skin in the game – and they
do. We also benefit from great ideas that are generated by the
people who make it happen.”
In 2011 Belron continued to invest heavily in people and leadership development together with new
Elsewhere Belron completed several fill in acquisitions and signed
a franchise agreement in Croatia. The business terminated its
franchise agreement in Poland. In Canada, the business initiated
a major transformation project which included the acquisition of
a number of former franchisees. Negotiations are on-going with
a number of other franchisees with a view to further acquisitions
during 2012.
AN EYE ON THE FUTURE
The good results, given the circumstances, achieved in 2011 would
not have been possible without the hard work and dedication of
the Belron people throughout the world. Belron will continue to
invest in the training, development and engagement of their people
at all levels with an overriding focus on providing outstanding
leadership throughout.
On average, 17,200 mobile jobs are
completed every day
The outlook for 2012 is for flat to moderate organic sales growth.
Belron remains committed to delivering an outstanding service to
its customers, its insurance and fleet partners, and improving its
operational efficiency.
D’Ieteren
p. 35
KEY FIGURES
BELRON
KEY FIGURES
(EUR million)
2011
2010
2009
2008
2007
2006
2005
2004
Total jobs (in million units)
11.3
11.7
10.7
9.4
8.4
6.1
5.3
4.9
External sales
2,769.0
2,800.9
2,423.2
2,156.1
2,000.0
1,507.3
1,253.7
1,118.4
262.3
255.6
215.5
173.9
156.5
119.9
99.2
96.1
Current operating margin
9.5%
9.1%
8.9%
8.1%
7.8%
8.0%
7.9%
8.6%
before tax1
213.1
211.3
150.4
108.6
97.6
72
59.8
44.2
after tax1
162.3
155.5
126.1
86.7
83.4
62.7
45.8
31.4
25,199
24,790
22,399
20,833
18,281
12,731
10,932
9,794
Current result, group’s share
1 Before unusual items and re-measurements.
2 Including, from 2005 on, a charge associated with the long-term incentive plan for management.
Sales evolution by region (EUR million)
Europe
55%
300
3,000
2,500
250
2,000
200
1,500
150
1,000
100
2011
2010
2009
2008
2007
2006
2005
0
2004
500
• Current operating result
• External sales
Evolution of sales
and current operating result
since 2004 (EUR million)
50
Jobs breakdown by type (in million units)
Replacement
70%
Repair
30%
2011
2010
Rest of the
World
45%
2011
2010
Change
Europe
1,516.3
1,575.4
Rest of the world
1,252.7
1,225.5
-3.7%
2.2%
TOTAL
2,769.0
2,800.9
-1.1%
Jobs breakdown by type (in million units)
Nonmobile
45%
Mobile
55%
Change
2011
2010
Change
Replacement
7.9
8.2
-2.4%
Mobile
6.3
6.3
0.0%
Repair
3.4
3.5
-4.3%
Non-mobile
5.0
5.4
-6.4%
TOTAL
11.3
11.7
-3.0%
TOTAL
11.3
11.7
-3.0%
D’Ieteren
p. 36
CORP OR AT E SOC I AL R E S P O NS IBIL IT Y
CONDUCTING
OUR BUSINESS
IN A COMMITTED AND
SUPPORTIVE WAY
The decisive role of the automobile in society and in our economy
is self-evident. With 27,000 employees serving some 13 million
motorists worldwide, the D’Ieteren group occupies a significant
place in this sector. This entails the responsibility to conduct our
business in an ethical and professional manner, while at the same
time paying close attention to social and environmental challenges.
For this reason, D’Ieteren takes care to ensure that it reduces the
impact of its activities on the environment, plays an active role in
the development of local communities and maintains long-lasting
relationships with all its customers, staff, partners and investors.
Each business organises its own corporate responsibility policy
independently so as to best meet the specific challenges it faces,
while at the same time complying with the rules and values of
the group.
I am pleased to report that 2011 was another year of quantifiable
progress in all the key areas of corporate responsibility in which
the two group entities are involved. The following pages show the
efforts that were made last year in terms of the environment, ethics,
enhancing staff skills and supporting the local communities. Be
sure, however, that this is only part of a long journey that will result
in our business being run in an ever more responsible way.
Jean-Pierre Bizet
Chief Executive Officer
D’Ieteren complies with the reporting standard of the Global Reporting
Initiative (GRI) on sustainable development – see page 104 of our financial
and Directors’ Report.
D’Ieteren
p. 37
2011 was another year of quantifiable progress in all the key areas of
corporate responsibility in which the two group entities are involved.
D’Ieteren
CO RP O RAT E S O CI A L R ESP ON SIB ILITY
p. 38
D’IETEREN
AUTO:
IMPROVED,
ORGANISED
RESPONSIBILITY
In 2011 D’Ieteren Auto,
keen to meet all its
corporate challenges
and to incorporate
them in its day-today management,
started developing
a comprehensive
corporate responsibility
policy that would
motivate its staff.
Two areas of corporate responsibility were defined:
- to be a key player with regard to mobility in Belgium;
- to enhance the skills of our staff and encourage their professional
development.
Various measures were taken during 2011 in both these areas and
are described below.
D’Ieteren Auto has also continued with the social and environmental actions undertaken in previous years. These relate primarily to
managing the environmental and energy aspects of its buildings as
well as the volunteer “Give & Gain” days.
1. TO BE A KEY MOBILITY
PLAYER
D’Ieteren Auto’s key commitment, one which is at the heart of
its business, is to promote more fluid, safer and environmentally
friendly mobility. To achieve this, the company’s range of
products and services is continuilly adapted to changing customer
behaviour. This is in response to urban congestion, parking, fuel
price, taxation and environmental consciousness.
Customers expect to be heard and to be given advice in order to
improve their mobility. D’Ieteren Auto aims to be their partner of
choice in this respect.
D’Ieteren
p. 39
Eco-efficient vehicles
The makes distributed by D’Ieteren Auto offer vehicles whose
environmentally friendly performance is constantly improving.
Volkswagen, Audi, Seat and Škoda have average emission rates
lower than those of their direct competitors in their segment.
Their range of models with very low CO2 emissions is increasing.
Today, Volkswagen’s BlueMotion, Škoda’s GreenLine and Seat’s
Ecomotive; tomorrow, Audi’s “e” models and Volkswagen’s electric
models (e-up!). Vehicles are also increasingly equipped with
intelligent systems that promote safety and mobility, as well as
being environmentally friendly.
My Move
D’Ieteren Auto tested a new mobility solution in 2011, My Move.
This is a vehicle fleet sharing and management system primarily
targeted at corporate customers. The project has a comprehensive
system of reservation and route planning, and aims to promote
sustainable mobility in a shared fleet of cars of various models.
My Move can be accessed by computer or smartphone and enables
increased use of a limited number of vehicles by a specific group
of users. Marketing of My Move at companies seeking innovative
mobility solutions for their staff will begin in 2012
Travelling less but more efficiently
With the aim of being consistent in its corporate responsibility,
D’Ieteren Auto is also improving its internal processes to encourage
staff to adopt a more flexible and environmentally friendly
approach to mobility. In addition to greater choice in the fleet of
vehicles available to staff and participating in the My Move project
internally, D’Ieteren Auto is encouraging its staff to rely increasingly
on a range of multimodal solutions such as a combination of public
transport and company cars, bicycles or carpools. D’Ieteren Auto
also encourages video conferencing and teleworking.
Think Blue for
sustainable mobility
By creating its Think Blue
label, Volkswagen is
taking its commitment to the environment one stage
further. What sets
it apart is getting
customers involved!
“A vision and an action
that are shared with our
customers are the essential
elements in relation to respect for the environment
and safe driving behaviour. In addition to the
BlueMotion vehicles, Think Blue includes the actions
and programmes that form part of this approach, such
as courses on safe driving behaviour that reduce road
accidents in the long term and fuel consumption up
to 15%”, Jean-Marc Ponteville, Press Relations
Manager at Volkswagen Import.
2. ENHANCING SKILLS AND
ENCOURAGING PROFESSIONAL
DEVELOPMENT
Enhancing skills is an important objective for D’Ieteren Auto
because it helps to make staff motivated and committed, and
increases the company’s ability to recruit and retain staff from
diverse backgrounds. This is particularly relevant because certain
technical and specialist jobs in the motor industry are difficult to
fill, primarily because technical colleges are too slow to adapt to
the technological changes in vehicles.
D’Ieteren Auto is undertaking various actions to address the
problem of the shortage of qualified staff and to help young people
D’Ieteren
p. 40
become better integrated in the workplace, such as providing
schools with tools and suitable places for training, or participating
in the Dream project, which arranges meetings between
professionals and young people at the end of their schooling to
help them build their future careers.
interviews that they undertake during the year. Conversely,
assessments are also made of all managers and senior managers
with a view to developing their leadership for the benefit of a good
working environment and the well-being of the staff.
DÍeteren Auto was awarded «Top Employer» status in 2011 based
on independent research carried out by the CRF1.
Internally, D’Ieteren Auto is improving its procedures for taking on
and integrating new staff to give them every chance of succeeding
in their new roles and quickly developing their skills. D’Ieteren
Auto provided 5,391 days of training in 2011, mainly through
D’Ieteren Campus (its training programme for employees) and the
Technical Training Center (its training centre for technicians of the
dealerships it works with). At least 77% of its staff has been trained,
with an average of more than four days’ training per employee.
The personal and professional development of employees is
also discussed with managers during the appraisal and coaching
1
The Corporate Research Foundation (CRF) is the result of a joint
initiative of lecturers in human resources, journalists, associations,
researchers and international publishers. The CRF’s mission is to
provide independent analysis and information about the policies,
programmes and human resource practices of certified companies.
Audi Contact Center
The new Audi Contact Center opened in March 2011. This facility was built with minimum
energy consumption as an objective. “Ever since the start of the project, we have tried to find
the optimum balance between the comfort of the ‘users’, the environmental impact and the
economic feasibility of the project. Advanced insulation techniques are used, the glass surfaces
are limited – which is uncommon in a commercial facility with a showroom – and the
ventilation takes account of the specific needs of the building. The outcome: the Audi Contact
Center has an energy balance which easily meets the strict standards of the Flemish Region.”
Greet Mertens, Architect at D’Ieteren Auto
Energy datasheet1:
E68
Energy
consumption I
level (E-peil) 0
I
10
I
20
I
30
I
40
I
50
I
60
I
70
I
80
I
90
I
100
MAX
I
110
I
120
I
130
I
140
I
150
I
160
I
170
I
180
I
190
I
200
168.99
2
KWh/m
I
0
1
I
50
I
100
I
150
I
200
I
250
I
300
The data only relates to the office areas of the Audi Contact Center.
I
350
I
400
I
450
I
500
I
550
I
600
I
650
I
700
D’Ieteren
p. 41
Ecocharter
for dealers
The Audi Contact Center, at Erps-Kwerps
3. MAINTAINING OUR EFFORTS
TO HELP THE ENVIRONMENT
An integral part of D’Ieteren Auto’s responsibility is to reduce
its carbon footprint. This has been an objective since 2006 and
consists primarily in optimising the energy consumption of its
buildings and of waste.
Building energy management measures cover all D’Ieteren Auto’s
offices and garages, i.e. 13 sites. They are focused on three areas:
measurement of consumption, integration of alternative energy
sources and rational use of energy.
Two objectives have been set for 2015 (compared to 2006):
• To reduce energy consumption by 20%;
• To self-produce 25% of the electricity consumed annually by the
buildings.
In 2011, D’Ieteren Auto consumed 36,539 megawatts, or 17.4% less
than in 2006, and self-produced electricity accounting for 25.4% of
the buildings’ needs.
The objectives for 2015 should be achieved as a result of the
investments made since 2006, including conducting site energy
audits, installing cogeneration plants at three sites and the use of
gas as an alternative through the acquisition of seven new boilers,
installing 6,500 m² of photovoltaic panels on two sites and the
development of area-based lighting and heating systems. D’Ieteren
Auto is also making every effort to reduce energy consumption
as much as possible in any building development or construction,
such as the Audi Contact Center (see page 40).
Regarding waste management, the company promotes selective
sorting and collection of office and garage waste and the safe
storage of hazardous products. End-of-life vehicles also constitute
By developing the Ecocharter, D’Ieteren Auto
wishes to enable its independent dealer network
to benefit from its expertise and help them reduce
their environmental footprint. From a baseline
audit, the dealer can check that he is compliant with
environmental legislation and have a list of actions
to be taken to improve the energy performance and
waste management of his buildings. This audit is
largely funded by D’Ieteren Auto on condition that
the dealer invests a specified amount in the proposed
measures.
The Mazuin dealership
in Sambreville, which
was one of the 10
dealerships to have
tested the charter in
2011, is convinced of
the usefulness of this
approach. “The audit
covers all aspects related
to the activities of the
garage and is very extensive…
for example it goes as far as checking the tightness of
the compressor pipes. Thus, from one day to the next
we can take a series of measures that will quickly
have a favourable impact on both the environment
and our costs. This type of diagnosis also enables us
to anticipate any potential risks of pollution and
to make the right investments at the right time. In
addition, we like the idea of bringing our customers
into an environmentally friendly space”, says Fabrice
Mazuin, managing director.
Other dealers will come on board in 2012 and
will draw on the best practices contained in the
Ecocharter in order to improve their environmental
effectiveness.
D’Ieteren
p. 42
Give & Gain
The “Ferme du Parc Maximilien”
– an educational establishment
in the centre of Brussels designed to educate children
and adults about environmental protection – was one
of the associations involved in
the “Give & Gain Days 2011”.
“The outcome was very positive, way
beyond our expectations. It would not
have been possible to achieve what we did without the help
of the volunteers from D’Ieteren Auto. As well as providing an
additional motivated and useful workforce for the day, people
found the experience really rewarding from a personal point
of view”, said Noémie Cluytens Sion, Coordinator of
the Ferme du Parc Maximilien.
As far as D’Ieteren Auto is concerned, the initiative has
been very positive too. This initiative is a good way for staff
to get to know each other and form a tight-knit team. “It’s
a great experience and it enables you to see your colleagues
in a different light. Most important of all, it’s a unique
a considerable tonnage of composite waste. D’Ieteren Auto is
working with Febelauto1 which is currently able to recycle about
90% of the weight of these vehicles in an approved and inspected
recycling system, placing Belgium among the leaders in Europe.
4. CORPORATE VOLUNTEERING
For the last two years, D’Ieteren Auto has organised the volunteer
“Give & Gain” days, giving its staff the opportunity to spend
a working day helping various associations, particularly those
in which some of its members are active. In 2011, more than
330 employees across all levels in the company helped some
twenty associations active in social catering, caring for the disabled,
renovation and redecorating, and cleaning and maintenance of
1
One of the “Give & Gain” teams in 2011
chance to mix with people involved
in various associations and a true
life lesson! What we have given,
and also what we have gained,
is much greater than just what
was accomplished on this one
day.” Denis Michel, VCS
Driver at D’Ieteren Auto.
natural areas. In 2010, 265 employees had given hands-on support
to 17 associations.
As a result of its “Give & Gain” initiative, D’Ieteren Auto was
awarded a “Best Practices Award” in 2011 by the Red Cross. This
award recognises innovative corporate responsibility projects that
deserve to be highlighted and to act as an inspiration to other
companies.
D’Ieteren Auto supports various social projects and charities.
Among the organisations supported in 2011 are the Red Cross,
Cap 48 (fundraising for associations for the disabled), Child Focus
(Foundation for Missing and Sexually Exploited Children) and
ThinkPink (fight against breast cancer).
Febelauto was created in 1999 to organise and monitor management of end-of-life vehicles, in accordance with the European Directive in force.
D’Ieteren
p. 43
BELRON:
PROUD OF
OUR FUTURE
BY DOING THE
RIGHT THING
EVERY DAY
The determination of Belron
to be the best it can be has
always given the company
strength in the past.
Belron uses it now to take
actions that will make it
proud of its future. Therefore
the company will continue
to develop its reputation for
being a trusted and respected
company in the eyes of
its people, customers and
partners.
Over the past few years Belron businesses around the world have
formalised this approach into four strong corporate responsibility
commitments that guide all of their day-to-day operations:
Ethics: all employees understand the responsible way of working
at Belron;
Environment: Belron works hard to manage and reduce its
impact on the environment and will take meaningful steps to
continuously improve it in the long term;
People: Belron creates a great work environment, by recognising
talent and encouraging development within an open and honest
organisational culture;
Giving back: Belron supports every business unit to become
involved in giving back to their local community – and goes
beyond this by supporting causes as a global group.
The dedication to these commitments drives every part of the
Belron business. Its ambition is to do the right thing every day and
ensure that all employees behave with integrity in everything they
do. Corporate responsibility isn’t an initiative within Belron – it
is what the company believes in and aspires to. It is essential to
becoming the world’s natural choice for vehicle glass repair and
replacement. 2011 saw corporate responsibility becoming ever
more part of the way Belron operates.
1. ETHICS – OUR WAY
OF WORKING
Doing the right thing and behaving ethically is the foundation for
Belron as a business wherever its operates in the world. In 2010,
Belron developed its code of ethics called “Our Way of Working”.
D’Ieteren
p. 44
How Belron created
“Our Way of Working”
Belron first set the standard for “Our Way of Working” at
the corporate level. By consulting its businesses on the purpose of the code of ethics and using existing best practices
Belron developed an approach that recognises and reflects
regional requirements and local values and customs. To
meet these specific needs, each of the businesses received
a regional version of “Our Way of Working” in their local
language and strict quality control ensured that each regional version did not compromise the code’s integrity. This
method allowed each country to own a bespoke document
that addresses issues most relevant to their market.
Jessica Abercrombie, Personal Assistant at Belron,
recently took part in the “Our Way of Working” awareness
session: “I found it interesting and informative and I have now
a reasonable level of understanding of the code. The session
reinforced the importance that is placed on the Belron core
principles of integrity, respect and trust. I feel now completely
The code makes the standards for ethical behaviour clear for all
employees and helps the company communicate its approach to
business to its customers, partners and suppliers.
To guide employees through the code and its importance Belron
developed an awareness training session which was used in every
business unit. This session encouraged all employees to consider
how the decisions they make may affect their performance or that
of the business. By the end of 2011 97% of all employees in the
group were trained in “Our Way of Working” and in June, the
programme was launched in the franchisee markets. Furthermore,
Belron continued its commitment to working ethically with its
suppliers by auditing its own manufacturing plant in the US. Apart
from very minor issues, the independent audit rated them as a
world class facility in ethical practice.
confident that I would know
what to do if I needed to
raise a concern about a
possible violation of the
law, regulations or the Our
Way of Working code. It
is reassuring to know that
I work for a company that
has high standards and takes its
code of ethics seriously. From all the
companies I have worked for Belron is the only one to have
such an established policy in place.”
Belron has also established an independent Speak Up Line,
a global, confidential resource for any employee to use to
raise their concerns. When the Speak Up Line is used, a report is created and all issues addressed. Depending on the
nature of the complaint, a formal investigation may be initiated. An escalation process ensures that serious complaints
are reviewed at board level. In 2011, there were 20 calls to
the Speak Up line, nine of which were valid issues that have
been fully investigated and resolved.
2. ENVIRONMENT:
OUR WAY OF MANAGING
OUR IMPACT
The Belron approach to managing its environmental impacts is
based on three key areas: data collection reliability to monitor
and measure impacts, reduction of carbon emissions and waste
management.
The key goal is to reduce the carbon emissions of its business by
30% by 2015, against a 2010 baseline. As part of this ambitious
journey to achieving that reduction, Belron has set three global
targets which all of business units are expected to meet:
• 100% of business units to present an Environment Action Plan
by 2012;
• 100% of business units to incorporate alternative fuel vehicles in
fleet by 2015;
• 0% glass waste to landfill by end of 2015.
D’Ieteren
p. 45
Exploring glass repair and
replacement lifecycle
Belron has completed life cycle assessments for its two core
services, repair and replacement, in its two largest markets (Europe
and North America). This in-depth understanding of its broader
impacts allows Belron to manage its business more effectively in
order to influence environmental practices in areas beyond its
operational control. Understanding the life cycle also gives Belron
confidence in its repair first strategy. By encouraging motorists to
repair their chips rather than waiting for the windscreen to crack,
Belron can have a direct influence on the environment by saving
emissions and reducing waste.
Managing carbon
For Belron, the biggest sources of emissions are its vehicles, the
energy consumed in its buildings, and its logistics, both its own
The Greek
example
Over the past two years
Carglass Greece has been
working on a strategy to make
the company as environmentally friendly as possible. Recently, they achieved one of their key targets: adding solar tubes to their distribution centre.
The solar tubes, which replace electric lights during the
daytime, are powered by sunlight and are made from
cheaper and more durable materials than conventional
electric lighting. Because the internal electric lighting is
no longer used during daylight hours the distribution
centre is reducing its impact on the environment and
lowering electricity costs by up to 40%.
Pantelis Alexiou, Warehouse Manager of the
Greece Distribution Centre: “The solar tubes increased
the quality and quantity of the light in the workspace,
allowing workers better visibility to complete their
job functions and also improving the general working
environment. Apart from that, a major factor was
reducing the operating costs through energy savings.
Finally, when people come to see what we did and how
it works, the results speak for themselves’’.
and third-party. The foundation of the goal to cut carbon emissions
is collecting accurate and meaningful data about the emissions.
Belron’s data collection system is already helping its business
units to monitor and measure their emissions. The system allows
them to identify key opportunities and risks and also increases the
frequency and accuracy of internal reporting.
In 2011, Belron made real progress in understanding the
improvements that can be made to its buildings in order to drive
out energy and carbon savings. The company reviewed existing
technologies available and has developed a short list of low cost
solutions that can easily be incorporated into its existing branches.
Throughout 2012 Belron will be piloting the use of these energy
efficient technologies in branches across the globe.
Electric vehicles
Electric vehicles were trialed in the US, Belgium and the UK to
determine the role they can play in the CO2 emissions reduction
strategy. In 2011 Belron tested electric passenger cars for the repair
technicians in the USA and Belgium and light commercial vehicles
(LCVs) for the repair and replacement technicians in the UK and
the Netherlands. Each test had its own challenges and successes.
Belron also reviewed driver training aids as a way of reducing its
CO2 and found them to have a significant operational potential.
Initial tests of these products indicated per vehicle reductions in
fuel consumption ranging from 5% to 20% with corresponding
reductions in CO2 emissions.
Managing waste
At Belron the biggest waste product is glass. Its goal is to recycle
100% by 2015. In most markets business units recycle their glass,
but in some countries facilities for recycling vehicle glass don’t
yet exist. Therefore Belron is actively establishing partnerships
with recyclers to develop solutions and infrastructure for the
VGRR industry.
D’Ieteren
p. 46
Belron team at the London Triathlon to raise money for Afrika Tikkun
In the US Belron signed a contract with a new glass recycling
supplier. The first facility will be operational in 2012. When glass
recycling reaches full capacity in the US, the glass recycling rate
for Belron will move up substantially from around 60% to 90%
by 2014.
The Belron business units also need to use specialised chemicals
during their repair and fitting processes. They make sure that all
hazardous waste is disposed of safely and work with specialist
chemicals suppliers to develop less hazardous formulations, while
maintaining product quality and integrity.
The Safelite AutoGlass distribution centre in Braselton, Georgia,
officially received “Leadership in Energy and Environmental
Design” (LEED) certification. It is the only LEED-certified glass
distribution centre in the United States and the first LEED-certified
building for Safelite.
Many eco-friendly efforts were employed during the construction
of the Braselton facility and include:
• Reduced storm water pollution by vehicle fluid leaks and
mechanical equipment wastes;
• Increased water efficiency reducing consumption by 44% and
reduced burden on municipal water supply;
• Energy conservation with occupancy sensors on more than 75%
of lighting.
approaches to leadership, talent management, and engagement,
which ensure Belron can continue to attract, retain and develop
the best people. The group places significant focus on all aspects
of recruitment practices and ensuring that everyone is well
equipped to do what’s expected of them. Belron places significant
investment in training and building capability as well as leadership
development, and is committed to seeking opportunities for career
development within the group.
Recognition
In 2009 Belron created the Exceptional Customer Service Award
(BECSA) to recognise Belron people who are providing exceptional
service to their customers – the Every Day Heroes. This award lets
Belron celebrate its success and share its stories.
During 2011, Belron recognised 8 individuals and 4 teams from
around the world including China where the Hangzhou branch
won a team award for outstanding progress in customer service and
operational improvements following their acquisition by the group.
Since the introduction of the Belron Exceptional Customer Service
Award, Belron has recognised 46 Every Day Heroes from around
the group.
3. OUR PEOPLE
4. OUR WAY OF
GIVING BACK
Belron has the reputation of being a great employer in every
country where it operates. The company has been building a global
approach to its people strategy, looking at developing inspirational
Belron encourages every business unit to give back to their
local community. Many of them have a volunteering policy and
the group is actively encouraging and assisting those who don’t.
D’Ieteren
p. 47
Autoglass UK:
Pledging for
Comic Relief
In March 2011 the Autoglass call centre was one of
the designated call centres during a telethon event for
Comic Relief. Based in the UK, Comic Relief is a charity
which strives to create a just world free from poverty by
raising funds through “Red Nose Day” and “Sport Relief ”.
Over 120 Autoglass volunteers including technicians,
customer contact centre agents and senior managers came
forward to take donation calls during the event answering
3,300 donation pledge calls totaling £120,000. In November
the Autoglass employees again gave up their time to be one
of the call centres for the Children in Need telethon event
answering 2,562 calls.
Interview with Kieran Young – Internal Communications
Manager, Autoglass UK
How did
you get the volunteers?
We held a massive recruitment
campaign and educated our
people on the value that they
would add for the cause by
getting involved. We also made
sure that there was plenty of fun
happening on the night to make it as
appealing as possible. We had Bingo for all our volunteers
where random prizes were given out, sweets, food and drink
and a variety of competitions on offer.
What did you enjoy most
about these two events?
I think first and foremost the sense of community, events like
these generate is invaluable. It’s a brilliant opportunity to
mix employees from a range of departments and roles within
the business. Everyone is united under a common goal and
everyone’s actions are devoid of agenda. We give our employees
the chance to feel great about giving back coupled with a
chance to laugh, cry and unite for an amazing cause.
The broad and flexible approach to volunteering ranges from
individuals volunteering at a charity of their choice, to groups of
employees from a business unit coming together to plant trees,
decorate buildings or work in gardens as part of a team event. Over
150 charities have been supported by Belron around the world.
term. Funding from Belron has enabled AfrikaTikkun to build
community centres in these townships and provide a wide range
of programmes for children and their families. These range from
home based care, feeding programmes, pre-schools, after-school
activities to life skills training and emergency relief.
Belron recognises the impact that it can have as a global business by
working together to raise money. In addition to its local initiatives
Belron comes together as a global business every year as the largest
corporate entry in the London Triathlon to raise money for South
African based charity, Afrika Tikkun.
2011 marked the 10th year Belron has participated in the London
Triathlon, achieving its challenge to get 1,000 participants and to
raise 1,000,000 EUR.
Since 2003, Belron through Afrika Tikkun has been supporting
people in three large township communities outside Johannesburg:
Orange Farm, Diepsloot and Alexandra. More than 800,000 families
live in these communities which are plagued with poverty, a
high rate of unemployment, violence and lack of infrastructure.
Afrika Tikkun’s approach is to get right to the heart of these
destitute communities, helping them to develop the infrastructure
and build the skills necessary to secure their well being in the long
In 2010 Belron set up the World Conference Foundation which is
an independent charitable foundation with its own trustees. The
Foundation principally gives funding to causes and organisations
which have significance for the members of the Belron Leadership
Group worldwide, with a focus on supporting young children.
The Foundation widened its remit in 2011 and made grants to
support employees and charities in the Belron businesses in Brazil,
New Zealand and Australia following the natural disasters there.
In addition grants were made to Oxfam and A Glimmer of Hope
Foundation in support of the East African crisis.
NOTES
Fin a n cia l ca len da r
contents
10 May 2012
General Meeting
31 May 2012
Ex date
4 June 2012
Payment date
7 June 2012
28 August 2012
29 August 2012
8 November 2012
PRESS AND IN VESTOR RELATI O N S
D’ IETEREN GROUP
Vincent Joye
rue du Mail, 50
Tel.: + 32 2 536 54 39 - Fax: + 32 2 536 91 39
8
Information about the group (press releases, annual reports, financial calendar, share price,
statistical information, social documents…) is available, mostly in three languages (French,
Dutch and English), on its website www.dieteren.com or on request.
Ce rapport est également disponible en français. Dit verslag is ook beschikbaar in het
Nederlands.
Design a n d production : Co m f i ( w w w. c o m f i. b e )
D’Ieteren at a glance
Message to Shareholders
Key figures
Questions to the CEO 2011 Key events
1
2
4
8
12
Corporate social
responsibility
D’Ieteren Auto
Belron
Brad, Bernard, Christos, Damien, Denis, Fabrice, Francisco,
Greet, Jean-Marc, Jessica, Kieran, Marc, Noémie, Olivier,
Pantelis, Paul-Olivier and Simon.
Special thanks to Romane, who inspired us and whose pictures are this
annual report’s red thread.
Pictures:
David Plas, Studio Dann, and Volkswagen, Audi, Škoda, Seat, Bentley,
Lamborghini, Porsche, Yamaha, Belron and GettyImages picture libraries.
16
19
23
24
Prin tin g: dereume prin t in g
Safelite® Auto Glass, O’Brien® and Smith&Smith® are trademarks or registered trademarks
of Belron S.A. and its affiliated companies.
belron
Belron in 2011
CEO statement
Key figures
28
D’Ieteren auto
D’Ieteren Auto in 2011
CEO statement
Key figures
New models
16
The Group
The making of this report would not have been possible without the
testimonials of D’Ieteren’s people and other contributors. Many thanks to
28
31
35
Forwa rd- loo kin g state m e n ts
36
38
43
36
This Annual Report contains forward-looking information that involves risks and
uncertainties, including statements about D’Ieteren’s plans, objectives, expectations
and intentions. Readers are cautioned that forward-looking statements include known
and unknown risks and are subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the control of D’Ieteren.
Should one or more of these risks, uncertainties or contingencies materialize, or should any
underlying assumptions prove incorrect, actual results could vary materially from those
anticipated, expected, estimated or projected. As a result, D’Ieteren does not assume any
responsibility for the accuracy of these forward-looking statements.
Belron
D’Ieteren Auto
Unparalleled
efficiency and service:
the best answer to a
challenging market
Enhanced leadership
in a record-breaking year
2011.dieteren.com
2011.dieteren.com
www.dieteren.com
D’Ieteren
Activity
report
2011
Imagining
tomorrow
Financial and Directors’ Report 2011
REPORT 2011
2011.dieteren.com
2011.dieteren.com
D’Ieteren
www.dieteren.com
FINANCIAL AND
DIRECTORS’
FIN A N CIA L CA LEN DA R
10 May 2012
General Meeting
31 May 2012
Ex date
4 June 2012
Payment date
7 June 2012
28 August 2012
CONTENTS
1
7
8
9
10
11
12
14
82
88
88
92
96
100
102
104
2011 Full-Year results
Consolidated financial statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Abridged statutory financial statements 2011
Corporate governance statement
Composition and operation of the Board, executive
management and control bodies
Remuneration report
Internal controls and risk management systems
Capital information
Share information
Corporate Social Responsibility indicators
29 August 2012
8 November 2012
PRESS A N D IN VESTOR RELATIO N S
D’ IETEREN GROUP
Vincent Joye
rue du Mail, 50
Tel. : + 32 2 536 54 39 - Fax : + 32 2 536 91 39
Information about the Group (press releases, annual reports, financial calendar,
share price, statistical information, social documents…) is available, mostly in
three languages (French, Dutch and English), on www.dieteren.com or on request.
www.dieteren.com ou sur simple demande.
CONTENTS OF THE CONSOLIDATED DIRECTORS’ REPORT*
1
88
88
88
92
69,92
96
100
100
100
59
70
80
Evolution of the situation, activities and results of the company
• Composition and operation of the Board and its committees
• Designation of the corporate governance code
• Exception to the corporate governance code
• Remuneration report
• Internal controls and risk management systems
• Capital information
- Disclosure of significant shareholdings
- Elements that can have an influence in case of a takeover bid
- Repurchase of own shares
Financial risk management
Subsequent events
*The topics of Article 96 of the Company Code, defining the content of the management report, that are not applicable for D’Ieteren,
have not been included in this summary.
Ce rapport est également disponible en français. Dit jaarverslag is ook beschikbaar in het
Nederlands.
DESIGN A N D PRODUCTION :
COMFI (WWW. COMFI. B E)
PRIN TIN G: DEREUME PRIN T IN G
Safelite® Auto Glass, O’Brien® and Smith&Smith® are trademarks or registered trademarks of
Belron S.A. and its affiliated companies.
FORWA RD- LOOKIN G STATEM E N TS
This Annual Report contains forward-looking information that involves risks and uncertainties, including statements about D’Ieteren’s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown
risks and are subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the control of D’Ieteren. Should one or more of
these risks, uncertainties or contingencies materialize, or should any underlying assumptions
prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, D’Ieteren does not assume any responsibility for the accuracy
of these forward-looking statements.
D’Ieteren
Financial and
Directors’ Report 2011
p. 1
2011 Full-Year Results
D’Ieteren’s financial statements present Avis Europe as a “discontinued operation” following the sale of this
activity, effective since 3 October 2011 (see page 5). Consequently, unless otherwise stated, this text concerns
“continuing operations” only.
ABOUT 2011, JEAN-PIERRE BIZET, CEO, COMMENTS:
“2011 will have been a pivotal year in the life of the group and an exceptional one in several respects. We have sold our short term car
rental activities to Avis Budget Group Inc. at attractive terms. We have created a joint venture with the Volkswagen Group, our historical
partner, to offer Belgian customers a full line of automotive financial services. Our automobile distribution teams have taken the best
advantage of an exceptionally high Belgian market, also managing to gain market share. And our Belron teams, who for the first time
have been faced with the combined negative effects of weather conditions and an economic recession, have succeeded in limiting
their impact. We have lowered our debt by more than 1 billion EUR and have strengthened our equity. Given the new configuration of
the group, the Board of Directors has decided to propose to the AGM a significantly enhanced dividend. We have also defined criteria
to search for a new activity. This search has no time constraints and it will be carried out rigorously in order to foster a long term
development of the group in the best interests of all its stakeholders”.
SUMMARY
•
Sales up 8.0% year-on-year at 6.0 billion EUR.
•
Result before tax up 8.4% at 297.4 million EUR.
-
-
Excluding unusual items and re-measurements, result before tax up 10.6% at 322.0 million EUR. This result breaks down as
follows:
›
D’Ieteren Auto and Corporate activities: 92.1 million EUR, up 42.6% due to the growth of the market share of the distributed
makes at a record level of 21.89% (20.13% in 2010) in a new car market up 4.5% vs a record 2010, thanks to the CO2
incentives and the announcement of their withdrawal at year-end.
›
Belron: 229.9 million EUR, up 1.5% compared to a very good 2010 thanks to higher shares in markets affected by adverse
weather conditions and an unfavourable economic environment, and to cost reductions.
Unusual items and re-measurements: -24.6 million EUR (2010 : -16,8 million EUR), notably including, at Belron, restructuring
costs, the impairment of certain intangible IT assets and acquisition costs, partially offset by a one-off gain relating to a change
in the UK government index for pension revaluations.
•
Current consolidated result before tax, group’s share, of 305.8 million EUR, up 10.7%.
•
Group’s share in the result for the period of 312.6 million EUR, including 69.7 million EUR related to discontinued operations.
•
Group’s net consolidated financial debt1 of 850.2 million EUR, down 53.4% mainly due to the deconsolidation of the net financial
debt and the receipt of the proceeds of the sale of Avis Europe.
•
Proposition of the Board of Directors to increase the dividend for 2011 to 0.80 EUR per share (2010: 0.425 EUR).
•
Current consolidated result before tax, group’s share2, expected to be down around 25% following an exceptional 2011.
D’Ieteren
Financial and
p. 2
1. AUTOMOBILE DISTRIBUTION (D’IETEREN AUTO) AND CORPORATE ACTIVITIES
• Belgian market up 4.5% to a record 572,211 new car registrations.
2011 F ULL-Y E AR R ESU LTS
• D’Ieteren Auto’s share in new car registrations up to 21.89% compared with 20.13% in 2010. This increase is primarily due to the
outstanding performance of Volkswagen and Škoda.
• New vehicle sales up 20.2% to 2.6 billion EUR, due to increased volumes. Total sales up 17.4% to 3.2 billion EUR.
• Operating result up 26.0% to 116.7 million EUR thanks to the effect of increased sales, partially offset by increased marketing
investments and higher costs related to the sales increase. Excluding unusual items and re-measurements: up 24.1%
to 114.9 million EUR.
• Current result before tax, group’s share, up 42.8% to 92.7 million EUR.
• 2012 Belgian market forecast of circa 495,000 new car registrations.
1.1. Activities and results
D’Ieteren Auto’s sales reached 3,208.3 million EUR, i.e. a year-on-year growth of 17.4%. This increase is the result of the Belgian
market’s continued growth, exceeding the record of 2010, and the increase in market share of the makes distributed by D’Ieteren Auto.
New vehicles
2011 new car registrations in Belgium totalled 572,211 units, up 4.5% on the previous year and up 20.2% compared with 2009, the last
year where the Light Commercial Vehicles, Recreational Vehicles and Motorcycles Show was held. The market was supported by the
CO2 incentives, maintained throughout the year. Moreover, the announcement by the Belgian government that these incentives would
be withdrawn as from January 1st, 2012, generated some 20,000 extra registrations in December 2011 compared with the previous year.
The makes distributed by D’Ieteren Auto reached a historically high market share of 21.89% in 2011, vs. 20.13% in 2010. This growth
mainly reflects the high market share of Volkswagen, which still benefited from the recovery plan put in place in 2009, from the success
of its new models and from a sufficient inventory of BlueMotion vehicles, which were very successful at the end of the year when the
withdrawal of the CO2 incentives was announced. Volkswagen reported the strongest growth amongst the main car makes and was
therefore the number one make in the Belgian car market in 2011. Audi maintained its leadership in the premium segment, mainly
thanks to faster deliveries in the second half and to the success of the A1 and A7 models. Despite the absence of new models, Škoda
ended up the year with a record market share, notably thanks to a strong demand for its environmentally-friendly models. Seat’s
market share remained stable.
Registrations of new light commercial vehicles increased by 16.5% to 62,158 units. D’Ieteren Auto’s share grew from 9.33% in 2010 to
11.07% in 2011. This exceptional performance in a buoyant market is mainly due to the success of the new, more economical models
and to a particularly dynamic commercial strategy.
Total new vehicles, including light commercial vehicles, delivered by D’Ieteren Auto in 2011 reached 136,199 units, up 15.5% year-onyear. Both this increase in volumes and the mix improvement led to a 20.2% increase in new vehicles sales to 2,649.8 million EUR.
Other activities
Used vehicles sales, mainly defleeting at D’Ieteren Lease, were up 11.0% to 115.3 million EUR.
Sales of spare parts and accessories rose by 6.2% to 178.0 million EUR. This increase is due to the combined effect of a strongly
growing new vehicles market and commercial initiatives.
After-sales activities by the D’Ieteren Car Centers grew by 4.9% to 57.4 million EUR.
Sales by D’Ieteren Lease, active in the long-term car rental of the D’Ieteren Auto makes, amounted to 146.6 million EUR, up 3.7%.
Sales by D’Ieteren Sport, mainly Yamaha motorbikes, quads and scooters, decreased by 9.8% to 32.3 million EUR, due to an unfavourable
motorcycle market.
D’Ieteren
Financial and
p. 3
Results
The operating result stood at 116.7 million EUR, up 26.0% year-on-year. Excluding unusual items and re-measurements, the current
operating result reached 114.9 million EUR, up 24.1%. This increase is mainly due to the increase in new vehicles sales, partially offset
by increased marketing investments and higher costs related to the sales increase.
Total net financial costs were 21.6 million EUR, compared with 24.7 million EUR the previous year. Excluding re-measurements of
financial instruments (mainly interest rate swaps and the revaluation of puts granted to the family holding company of Belron’s CEO)
at fair value, current net financial costs were 22.8 million EUR, down 5.2 million EUR compared with 2010. This decrease reflects the
reduction in the average net debt resulting notably from the receipt of the proceeds of the sale of Avis Europe and of Belron’s dividend.
The current result before tax, group’s share, of the Automobile distribution & Corporate segment stood at 92.7 million EUR,
up 42.8% year-on-year.
1.2. Key developments
A series of new models was successfully launched or revamped in 2011. At Volkswagen, the Amarok made a remarkable entry into the
pick-up segment and the Beetle and Tiguan were launched in the second half. At Audi the A5, A6 and Q3 were launched, whilst Porsche
introduced the new 911.
In October 2011, D’Ieteren and Volkswagen Financial Services (a subsidiary of the Volkswagen group) reached an agreement to create a
joint venture, Volkswagen D’Ieteren Finance, intended to provide a full range of financial services related to the sale of the Volkswagen
group vehicles on the Belgian market. This partnership strengthens the strong link that has existed between D’Ieteren and Volkswagen
for over sixty years.
Volkswagen D’Ieteren Finance is operational since February 2012 and has been created by the contribution of D’Ieteren Lease, the
D’Ieteren subsidiary active in operational leasing, and of the Volkswagen Bank Belgium operations. Volkswagen D’Ieteren Finance is
50% owned (minus one share) by D’Ieteren and 50% owned (plus one share) by Volkswagen Financial Services. Its Board of Directors
and management are equally made up of representatives from D’Ieteren and Volkswagen Financial Services.
Volkswagen D’Ieteren Finance aims at developing a comprehensive, coherent and competitive range of car financing services to
individual customers, professionals and dealers. Offering advantageous financing is an efficient promotional and loyalty tool in the
individual customer segment. Enlarging the range of financial services and having these actively promoted by a dedicated entity will
therefore better exploit this potential and strengthen the position of the makes distributed by D’Ieteren Auto on the retail market.
D’Ieteren Auto’s leasing services, notably through D’Ieteren lease, are now provided by the new entity and their development will be
facilitated by an easier access to capital.
All the debt financing of the new joint venture is provided by the Volkswagen group under the terms applied to its subsidiaries.
D’Ieteren Lease’s contribution to the new entity and its accounting using the equity method will lead to a reduction in D’Ieteren’s
consolidated net financial debt of 283 million EUR and to a consolidated capital gain of around 40 million EUR.
On January 1, 2012, Denis Gorteman succeeded Thierry van Kan as CEO of D’Ieteren Auto.
1.3. Activity outlook 2012
Considering the withdrawal of the CO2 incentives (on January 1st, 2012) and the resulting anticipated purchase of around 20,000 new
vehicles in December 2011, as well as new tax rules for company cars and the current economic environment, the Belgian car market
is expected to decrease by 13.5% to 495,000 new car registrations in 2012. On this basis, D’Ieteren Auto pursues its objective of annual
market share growth. This year will see a number of models launched or revamped: the up! at Volkswagen, the A8 at Audi, the Citigo
at Škoda, the Mii at Seat and the Boxster at Porsche.
D’Ieteren
Financial and
p. 4
2. VEHICLE GLASS REPAIR AND REPLACEMENT (VGRR) – BELRON
•
External sales down 1.1% to 2.8 billion EUR comprising a 0.9% organic decline, due to milder weather compared to an
exceptional 2010 and a weaker economic environment, partially offset by segment share gains, a 1.0% adverse currency
translation effect and a 0.8% increase due to acquisitions.
•
Operating result down 0.3% to 234.8 million EUR
-
Excluding unusual items and re-measurements, current operating result up 2.6% to 262.3 million EUR due to cost
reductions offsetting the impact on margin of the slight sales decline.
-
Unusual items and re-measurements: -27.5 million EUR (-20.2 million EUR in 2010) mainly due to restructuring costs,
impairment of certain intangible IT assets and acquisition costs, partially offset by a one-off gain relating to a change in the
UK government index for pension revaluations.
•
Current result before tax, group’s share, up 0.9% to 213.1 million EUR.
•
Moderate organic sales growth expected in 2012 given the anticipated economic trends.
2.1. Activities and results
Sales decreased by 1.1% to 2,769.0 million EUR consisting of an organic decline in sales of 0.9% and an adverse currency impact
of 1.0% partially offset by 0.8% from acquisitions. The organic sales decline reflected a decline in the overall ‘vehicle glass repair
and replacement’ market as a result of milder weather in Europe compared to 2010 as well as weaker general economic conditions,
offset, in most geographies, by segment share gains and mix improvement. Total repair and replacement jobs decreased by 3% to
11.3 million. The translation impact was primarily due to a weaker US dollar. The acquired growth was mainly achieved in Russia,
Canada, and France.
European sales declined by 3.7% which included a reduction in organic sales of 4.6% partially offset by acquisition growth of 0.9%,
predominantly due to acquisitions in France during the first half of 2010 and in Russia, where Belron acquired the Mobiscar fitting
business in the second half of 2010 and the wholesale business during the first half of 2011. Organic sales decline reflects a weaker
overall market due to mild weather conditions and unfavourable economic climate. In most European countries, this was partially
offset by segment share gains.
Outside of Europe, sales increased by 2.2%, comprising organic sales growth of 4.0% despite overall market declines, an impact from
acquisitions of 0.8%, due primarily to acquisitions in Canada, offset by an adverse currency impact of 2.6% due to a weaker US dollar.
The operating result was 234.8 million EUR, down 0.3%. Excluding unusual items and re-measurements, the current operating result
was up 2.6% to 262.3 million EUR. The impact of sales volume declines was offset by cost savings plans implemented during the
first half of the year but which did not impact the result until the second half. In addition there were lower long term incentive costs
reflecting the lower operating profit.
Unusual costs before tax were 16.2 million EUR and mainly relate to the impairment of certain intangible IT assets following a change
in strategy to leverage new technology, acquisition and re-branding costs in Canada, restructuring of the glass repair and replacement
operations related to commercial vehicles and coaches in the UK and France, partially offset by a one-off gain relating to a change in the
UK government index for pension revaluations from the retail price index to the consumer price index. Re-measurements amounted to
11.4 million EUR and include the amortization of intangibles resulting from acquisitions and changes in the fair value of derivatives.
Net finance costs were 32.5 million EUR (2010: 28.9 million EUR). Before re-measurements resulting from the changes in the fair value
of derivatives, current net finance costs increased from 29.0 million EUR to
32.4 million EUR due to higher average borrowings with interest rates remaining largely stable.
Current result before tax, group’s share, rose by 0.9% to 213.1 million EUR (2010: 211.3 million EUR).
During the second quarter of 2011, Belron paid dividends relating to 2010 profits of 100 million EUR to its shareholders, of which
D’Ieteren’s share was 92.7 million EUR.
D’Ieteren
Financial and
p. 5
2.2. Key developments
Belron pursued its central goal of delivering an outstanding service to all of its customers during 2011. Many of the Belron businesses
achieved record customer service levels during the year due to the implementation of various improvement initiatives. The customer
booking experience was improved and made more convenient by rolling out mobile optimised versions of websites together with
iPhone and Android applications. The development and roll out of new tools and processes further enhanced the customer experience
by ensuring work was performed more efficiently and to the highest safety levels. This included the launch of a new exclusive repair
solution integrating a superior resin and primer which has now been rolled out to the majority of countries.
Further investment in the supply chain has also enabled Belron to respond faster and more efficiently to its customer needs. A new
distribution centre was opened in Milan and there were upgrades to other facilities throughout the group which reduced the mileage
travelled and improved energy efficiency. New Warehouse Management software with voice picking technology was introduced in
Canada which increased productivity and pick accuracy whilst significantly reducing glass damage. Further, the business continued to
develop the awareness of its brands, primarily through television advertising and online activities.
In addition to focussing on delivering an outstanding service to its customers, Belron continued to work closely with its insurance and
fleet partners by focussing on the total value delivered to these partners through the combination of service and cost. In the USA an
agreement was signed with the Allstate Insurance Company, to provide the administration of its vehicle glass repair and replacement
claims in the USA commencing 1 January 2012.
Belron also continued to pursue its goal of targeted geographic expansion notably in China with acquisitions in Shenzhen and Changsha
and greenfield sites being opened in Shanghai and Beijing. There has also been good progress in consolidating the previously acquired
Chinese operations. Elsewhere Belron completed several fill in acquisitions and signed a franchise agreement in Croatia. The business
terminated its franchise agreement in Poland. In Canada, the business initiated a major transformation project which included the
acquisition of a number of former franchisees. Negotiations are on-going with a number of other franchisees with a view to further
acquisitions during 2012.
2.3. Activity outlook 2012
The outlook for 2012 is for flat to moderate organic sales growth due to the anticipated economic trends. Belron remains committed to
delivering an outstanding service to its customers, its insurance and fleet partners, and improving its operational efficiency.
3. SHORT-TERM CAR RENTAL – AVIS EUROPE
Avis Europe’s latest press release regarding its half-year results was published on 4 August 2011 and is available in English on its
website www.avis-europe.com.
On 14 June 2011, Avis Budget Group offered 3.15 GBP in cash, by way of a Scheme of Arrangement, for each Avis Europe share, which
valued the entire share capital of Avis Europe at approximately 636 GBP million (719 million EUR at that date) and D’Ieteren’s 59.6%
share of Avis Europe at approximately 367 GBP million (409 million EUR taking into account the net effect of foreign exchange hedging
and transaction costs). This cash consideration of 3.15 GBP per share represented a premium of:
•
60.2% over the 1.966 GBP closing price of Avis Europe shares on 13 June 2011, i.e. the last trading day before the issue of the
release; and
•
63.3% over the average closing price of 1.929 GBP of Avis Europe shares for the three months prior to the date of the release.
The disposal of Avis Europe has taken effect on 3 October 2011 and the proceeds of the sale received mid-October.
Following this offer, Avis Europe is presented as discontinued operation in D’Ieteren’s 2011 consolidated financial statements. Avis
Europe’s net contribution to D’Ieteren’s result for the period, group’s share, amounts to 69.7 million EUR. Moreover, 18.2 million EUR
were recognized in the group’s consolidated reserves.
D’Ieteren
Financial and
p. 6
FINANCING OF THE ACTIVITIES
The activities of the D’Ieteren group are financed autonomously and independently of each other.
Net financial debt1 of the D’Ieteren Auto/Corporate segment decreased by 555.1 million EUR to 71.6 million EUR, notably thanks to the
receipt of the proceeds of the sale of Avis Europe in October 2011.
Belron’s net financial debt1 increased from 736.8 million EUR to 778.6 million EUR. In 2011, Belron refinanced 250 million USD by a new
loan agreement with US institutional investors (maturing in 2018, 2021 and 2023) and at the end of the year agreed a new credit facility
over 5 years of 450 million EUR.
D’Ieteren’s consolidated net financial debt1 decreased from 1,823.0 million EUR to 850.2 million EUR.
REINVESTMENT STRATEGY AND DIVIDEND POLICY
Since reaching 92.7% of Belron’s equity capital and since the sale of Avis Europe, a highly capital-consuming activity, D’Ieteren’s future
financing needs – except for new acquisitions – now primarily consist in operational and growth-related investments at Belron and
D’Ieteren Auto, which can be financed by these entities without additional funding from the group.
Under such circumstances, and in line with the entrepreneurial spirit which has continually characterized D’Ieteren, the Board of
Directors wishes that the freed-up funds be redeployed, by acquisition, in an activity with a qualified leadership team and a proven
business model, with a view to further develop the activity, notably internationally, in concert with its management. Such activity should
allow the group to play an active ownership role.
The Board of Directors of D'Ieteren has also reviewed its dividend policy.
The Board confirms that it intends to pursue its existing self-financing policy, which has supported the group’s development, with a
view to strengthen its equity capital and to maintain quality financial ratios. Absent major unforeseen events, the company will ensure
a stable or, results permitting, a steadily growing dividend.
The Board of Directors will propose to the AGM a 2011 dividend of EUR 0,80 per share (2010: 0.425 EUR), representing a 18.2% payout
of the 2011 consolidated net result group’s share of continued activities.
OUTLOOK FOR FY 2012 CURRENT CONSOLIDATED RESULT BEFORE TAX, GROUP’S SHARE2
Following the creation of Volkswagen D’Ieteren Finance (see page 3) the perimeter of D’Ieteren’s current consolidated result before
tax, group’s share, is slightly changed: until 2011 it reflected 100% of result of D’Ieteren Lease’s long-term lease activity; from 2012
onwards, it will reflect 50% of the result of the combined Volkswagen D’Ieteren Finance entity. For 2012, this change leads to an
estimated decrease in the current consolidated result before tax, group’s share, of ca. 2%.
Including this change and given the current outlook of its activities as well as the uncertain economic environment, D'Ieteren expects
its 2012 current consolidated result before tax, group’s share, to decline by around 25% compared with an exceptional 2011.
The financial report of the annual results 2011 is available on D’Ieteren’s website (www.dieteren.com) or can be obtained on request.
Notes
1
Net debt is defined as the sum of the borrowings minus cash, cash equivalents and investments in non-current and current assets.
2
Following the creation of Volkswagen D’Ieteren Finance, whose results will be accounted for using the equity method, and in order to reflect all the
group’s activities, the current result before tax, group’s share, will from now on include the group’s share in the current result before tax of the entities
accounted for using the equity method.
D’Ieteren
Financial and
p. 7
Consolidated Financial
Statements 2011
CONTENTS
8
9
10
11
12
14
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
14
Note 1: General Information
14
Note 2: Accounting Policies
22
Note 3: Segment Information
29
Note 4: Sales
30
Note 5: Operating Result
31
Note 6: Net Finance Costs
32
Note 7: Entities Accounted for Using the Equity
Method
33
Note 8: Tax Expense
34
Note 9: Unusual Items and Re-Measurements
36
Note 10: Earnings per Share
38
Note 11: Goodwill
40
Note 12: Business Combinations
42
Note 13: Other Intangible Assets
43
Note 14: Vehicles
45
Note 15: Other Property, Plant and Equipment
46
Note 16: Investment Property
46
Note 17: Available-for-Sale Financial Assets
47
Note 18: Derivative Hedging Instruments
49
Note 19: Derivatives Held for Trading
50
Note 20: Long-Term Employee Benefit Assets
and Obligations
54
Note 21: Deferred Taxes
55
55
82
Note 22: Other Non-Current Receivables
Note 23: Non-Current Assets Classified as Held
for Sale
57
Note 24: Inventories
57
Note 25: Other Financial Assets
57
Note 26: Current Tax Assets and Liabilities
58
Note 27: Trade and Other Receivables
59
Note 28: Cash and Cash Equivalents
59
Note 29: Equity
61
Note 30: Provisions
62
Note 31: Borrowings
66
Note 32: Net Debt
67
Note 33: Put Options Granted to Non-Controlling
Shareholders
67
Note 34: Other Non-Current Payables
67
Note 35: Trade and Other Current Payables
68
Note 36: Employee Benefit Expense
69
Note 37: Share-Based Payments
70
Note 38: Financial Risk Management
74
Note 39: Contingencies and Commitments
75
Note 40: Related Party Transactions
75
Note 41: Discontinued operations
79
Note 42: List of Subsidiaries, Associates
and Joint Ventures
80
Note 43: Exchange Rates
80
Note 44: Subsequent Events
81
Note 45: Auditor’s report
ABRIDGED STATUTORY FINANCIAL
STATEMENTS 2011
Statement from the responsible persons
We certify that, to the best of our knowledge, the consolidated financial statements as of 31 December 2011, prepared in accordance
with the International Financial Reporting Standards (IFRS) as adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and result of s.a. D’Ieteren n.v. and the undertakings included in the consolidation taken as a whole, and
that the management report includes a fair review of the development and performance of the business and of the position of s.a.
D’Ieteren n.v. and the undertakings included in the consolidation taken as a whole, as well as a description of the principal risks and
uncertainties that they face.
On behalf of the Board of Directors,
Jean-Pierre Bizet
Managing Director
Roland D’Ieteren
Chairman
D’Ieteren
Financial and
CO NS O LI DAT E D F I NA N CIA L STATEM EN TS
p. 8
Consolidated Income Statement
Year ended 31 December
EUR million
Notes
2010 (1)
2011
Total
Of which
Current
items (2)
Sales
4
Cost of sales
Gross margin
Commercial and administrative expenses
Other operating income
Other operating expenses
Total
Unusual
items and
re-measurements (2)
Of which
Current
items (2)
Unusual
items and
re-measurements (2)
5,977.3
5,977.3
-
5,533.8
5,533.8
-
-4,246.3
-4,246.4
0.1
-3,833.0
-3,834.2
1.2
1,731.0
1,730.9
0.1
1,700.8
1,699.6
1.2
-1,369.3
-1,357.6
-11.7
-1,363.6
-1,348.6
-15.0
2.2
2.2
-
0.6
0.6
-
-12.4
1.7
-14.1
-9.8
-3.4
-6.4
-20.2
Operating result
5
351.5
377.2
-25.7
328.0
348.2
Net finance costs
6
-54.1
-55.2
1.1
-53.6
-57.0
3.4
Result before tax
9
297.4
322.0
-24.6
274.4
291.2
-16.8
Share of result of entities accounted for using the equity
method
7
-0.1
-0.1
-
0.5
0.5
-
Tax expense
8
Result from continuing operations
Discontinued operations
41
RESULT FOR THE PERIOD
-43.7
-49.5
5.8
-58.1
-63.2
5.1
253.6
272.4
-18.8
216.8
228.5
-11.7
122.4
86.1
36.3
19.4
27.9
-8.5
376.0
358.5
17.5
236.2
256.4
-20.2
312.6
312.0
0.6
218.8
234.2
-15.4
63.4
46.5
16.9
17.4
22.2
-4.8
Result attributable to:
Equity holders of the Parent
9
Non-controlling interest
Earnings per share for result for the period attributable to
equity holders of the Parent
Basic (EUR)
10
5.66
5.65
0.01
3.97
4.26
-0.29
Diluted (EUR)
10
5.63
5.62
0.01
3.95
4.23
-0.28
Basic (EUR)
10
4.40
4.71
-0.31
3.76
3.95
-0.19
Diluted (EUR)
10
4.37
4.68
-0.31
3.73
3.93
-0.20
Earnings per share for result from continuing operations
attributable to equity holders of the Parent
1
2
As restated (see note 2.1).
See summary of significant accounting policies in note 2 and unusual items and re-measurements in note 9.
D’Ieteren
Financial and
p. 9
Consolidated Statement of Comprehensive
Income
EUR million
Notes
Result for the period
2011
2010
376.0
236.2
Other comprehensive income
Actuarial gains (losses) on employee benefit obligations
20
Translation differences
Translation differences: recycling to income statement
-57.0
22.6
1.0
10.7
7.3
-
Fair value of available-for-sale financial instruments
-0.1
0.1
Cash flow hedges: fair value gains (losses) in equity
17.8
-9.4
Cash flow hedges: transferred to income statement
2.2
10.0
Cash flow hedges: recycling to income statement
41
6.3
-
Tax relating to actuarial gains (losses) on employee benefit obligations
15.8
-8.6
Tax relating to translation differences
-0.4
3.3
Tax relating to cash flow hedges
-4.9
-0.8
41
-12.0
27.9
Total comprehensive income for the period
364.0
264.1
being:
301.1
238.7
215.3
216.0
85.8
22.7
62.9
25.4
Subtotal
Attributable to equity holders of the Parent
Continuing operations
Attributable to non-controlling interest
41
D’Ieteren
Financial and
p. 10
Consolidated Statement of Financial Position
At 31 December
EUR million
Goodwill
Other intangible assets
Vehicles
Other property, plant and equipment
Investment property
Equity accounted investments
Available-for-sale financial assets
Derivative hedging instruments
Derivatives held for trading
Long-term employee benefit assets
Deferred tax assets
Other receivables
Notes
2011
2010
11
13
14
15
16
7
17
18
19
20
21
22
1,026.0
428.4
436.3
5.6
3.8
0.5
15.7
30.5
54.3
3.0
1,004.6
792.2
658.3
475.4
5.8
20.3
1.2
4.8
2.2
39.2
92.3
4.0
2,004.1
3,100.3
347.7
626.9
1.1
12.3
1.1
7.7
399.4
250.0
1,646.2
3,650.3
1.7
551.4
0.1
19.7
25.9
5.9
1,384.9
267.2
2,256.8
5,357.1
1,250.6
214.1
1,464.7
110.1
Non-current assets
Non-current assets classified as held for sale
Inventories
Other financial assets
Current tax assets
Trade and other receivables
Cash and cash equivalents
Current assets
TOTAL ASSETS
23
24
18
19
25
26
27
28
Equity
Long-term employee benefit obligations
20
1,530.5
1.6
1,532.1
59.1
Other provisions
30
68.6
96.1
18
-
17.3
1,738.6
31/32
788.2
19
1.1
0.1
Put options granted to non-controlling shareholders
33
154.0
163.0
Other payables
34
7.7
13.3
Deferred tax liabilities
Non-current liabilities
Liabilities associated with non-current assets held for sale
21
23
45.6
1,124.3
333.2
156.6
2,295.1
-
Provisions
30
8.9
25.3
18
-
12.9
31/32
53.1
356.2
24.6
Borrowings
Borrowings
19
7.6
Current tax liabilities
26
33.4
60.7
Trade and other payables
35
557.7
1,117.6
993.9
3,650.3
1,597.3
5,357.1
Current liabilities
TOTAL EQUITY AND LIABILITIES
D’Ieteren
Financial and
p. 11
Consolidated Statement of Changes in Equity
EUR million
At 1 January 2010
Share
capital
Share
premium
Treasury
shares
Sharebased
payment
reserve
Fair
value
reserve
Hedging
reserve
Retained
earnings
Actuarial
gains
and
losses
Taxes
Cumulative
translation
differences
Total
Group’s
share
Noncontrolling
interest
Equity
1,154.6
160.0
24.4
-20.2
2.6
0.1
-3.1
931.3
-57.0
20.5
-30.1
1,028.5
126.1
Treasury shares
-
-
4.6
-
-
-
-
-
-
-
4.6
-
4.6
Dividend 2009 paid in
2010
-
-
-
-
-
-
-17.9
-
-
-
-17.9
-6.3
-24.2
Put options treatment Movement of the
period
-
-
-
-
-
-
-2.6
-
-
-
-2.6
-3.8
-6.4
Other movements
-
-
-
1.9
-
-
-3.3
-
0.7
-
-0.7
72.7
72.0
Total comprehensive
income
-
-
-
-
-
-0.2
218.8
18.6
-5.3
6.8
238.7
25.4
264.1
1,464.7
160.0
24.4
-15.6
4.5
0.1
-3.3
1,126.3
-38.4
15.9
-23.3
1,250.6
214.1
Treasury shares
-
-
-
-
-
-
-
-
-
-
-
-0.7
-0.7
Dividend 2010 paid in
2011
-
-
-
-
-
-
-23.5
-
-
-
-23.5
-7.3
-30.8
Put options treatment Movement of the
period
-
-
-
-
-
-
-
-
-
-
-
-1.6
-1.6
Scope exit (see note 41)
-
-
-
-
-
-
-
-
-
-
-
-265.2
-265.2
Other movements
-
-
-
2.5
-
-
-0.2
-
-
-
2.3
-0.6
1.7
Total comprehensive
income
-
-
-
-
-0.1
24.2
312.6
-51.0
8.8
6.6
301.1
62.9
364.0
160.0
24.4
-15.6
7.0
-
20.9
1,415.2
-89.4
24.7
-16.7
1,530.5
1.6
1,532.1
At 31 December 2010
At 31 December 2011
D’Ieteren
Financial and
p. 12
Consolidated Statement of Cash Flows
EUR million
Notes
2011
2010 (1)
Cash flows from operating activities - Continuing
351.5
328.0
Depreciation of vehicles for operating lease activities
5
62.6
61.5
Depreciation of other items
5
83.0
80.2
Amortisation of other intangible assets
5
24.2
26.5
Impairment losses on goodwill and other non-current assets
9
13.7
-
Other non-cash items
9
4.1
-159.9
Operating profit from continuing operations
Retirement benefit obligations
Purchase of vehicles for operating lease activities (2)
Sale of vehicles for operating lease activities (2)
-25.7
-14.0
-183.7
-150.2
106.4
95.7
-106.6
-56.8
Cash generated from operations
329.5
211.0
Tax paid
-40.2
-53.3
Net cash from operating activities
289.3
157.7
-119.9
-137.9
Change in net working capital
Cash flows from investing activities - Continuing
Purchase of fixed assets (excl. vehicles)
Sale of fixed assets (excl. vehicles)
Net capital expenditure
Acquisition of non-controlling interest
Acquisition of subsidiaries (net of cash acquired)
Disposal of non-controlling interest
Disposal of subsidiaries (net of cash disposed of)
Net investment in other financial assets
Net cash from investing activities
1
2
Excluding vehicles held under buy-back agreements.
7.4
2.7
-112.5
-135.2
9
-13.1
-0.3
9/12
-27.7
-29.8
16.6
9
0.2
9/41
302.3
-
25
2.5
-5.2
151.7
-153.9
D’Ieteren
Financial and
p. 13
Consolidated Statement of Cash Flows (continued)
EUR million
Notes
2011
2010 (1)
9
-
-111.3
Cash flows from financing activities - Continuing
Net proceeds from rights issue
Net disposal (acquisition) of treasury shares
Net capital element of finance lease payments
Net change in other borrowings
Net interest paid
Dividends paid by Parent
29
Dividends received from/(paid by) subsidiaries
Net cash from financing activities
Cash flows from continuing activities
Cash flows from discontinued operations
41
TOTAL CASH FLOW FOR THE PERIOD
-
4.7
-23.7
-24.1
-227.7
-43.1
-53.5
-57.8
-23.5
-17.9
-7.3
-6.0
-335.7
-255.5
105.3
-251.7
-122.2
170.6
-16.9
-81.1
Reconciliation with statement of financial position
Cash at beginning of period
28
127.8
91.5
Cash equivalents at beginning of period
28
139.4
256.7
Cash and cash equivalents at beginning of period
28
267.2
348.2
-16.9
-81.1
Total cash flow for the period
Cash and cash equivalents at end of period
1
-0.2
0.1
250.1
267.2
Included within "Cash and cash equivalents"
28
250.0
267.2
Included within "Non-current assets classified as held for sale"
23
0.1
-
D’Ieteren
Financial and
p. 14
Notes to the Consolidated Financial Statements
NOTE 1: GENERAL INFORMATION
s.a. D’Ieteren n.v. (the Company or the Parent) is a public company incorporated and domiciled in Belgium, whose controlling
shareholders are listed in note 29. The address of the Company’s registered office is:
Rue du Mail 50
B-1050 Brussels
The Company and its subsidiaries (together the Group) form an international group, active in sectors of services to the motorist:
- Automobile distribution in Belgium of Volkswagen, Audi, Seat, Skoda, Bentley, Lamborghini, Bugatti, Porsche, and Yamaha;
- Vehicle glass repair and replacement in Europe, North and South America, Australia and New Zealand through Belron s.a. and
notably its CARGLASS®, AUTOGLASS® and SAFELITE® AUTO GLASS brands.
The Group is present in 33 countries serving over 13 million customers.
The Company is listed on Euronext Brussels.
These consolidated financial statements have been approved for issue by the Board of Directors on 28 February 2012.
NOTE 2: ACCOUNTING POLICIES
Note 2.1: Basis of Preparation
These 2011 consolidated financial statements are for the 12 months ended 31 December 2011. They have been prepared in accordance
with the International Financial Reporting Standards (“IFRS”) and the related International Financial Reporting Interpretations
Committee (“IFRIC”) interpretations issued and effective, as adopted by the European Union (“EU”).
These consolidated financial statements have been prepared under the historical cost convention, except for available-for-sale financial
assets, money market assets classified within cash and cash equivalents and financial assets and financial liabilities (including
derivative instruments) that have been measured at fair value.
These consolidated financial statements are prepared on the assumption that the Group is a going concern and will continue in
operation for the foreseeable future.
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the
reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements. If in the future such estimates and assumptions, which are based on management’s best judgement at the
date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as
appropriate in the period in which the circumstances change. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the consolidated financial statements, are disclosed in the relevant notes.
Significant transactions
In June 2011 the Boards of Avis Budget Group, Inc. and Avis Europe plc announced that they had reached agreement on the terms
of a recommended cash acquisition of the entire share capital of Avis Europe plc by Avis Budget Group by way of a Court-sanctioned
Scheme of arrangement between Avis Europe plc and the Avis Europe shareholders under Part 26 of the UK Companies Act. The Board
of Directors of the Parent undertook irrevocably to vote in favour of this Scheme, which was effective on 3 October 2011. The Board of
Directors of the Parent considered that the Group had lost control at this effective date and has therefore de-consolidated Avis Europe
plc and its subsidiaries (Car Rental segment) as from 1 October 2011. The Board of Directors of the Parent also considered that the
recognition criteria as defined in IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations” were met and has therefore
decided to present the 9 months results of the Car Rental segment as a discontinued operation. The consolidated income statement,
consolidated statement of comprehensive income and consolidated statement of cash flows for the year ended 31 December 2010 have
been restated accordingly. See note 41 of these consolidated financial statements for more information and adequate disclosures.
On 10 October 2011 the Parent and Volkswagen Financial Services (a subsidiary of the Volkswagen group) announced that they had
reached an agreement to create a joint venture, Volkswagen D’Ieteren Finance (VDFin), intended to provide a full range of financial
services related to the sale of the Volkswagen group vehicles on the Belgian market. VDFin will be operational in early 2012 and will
be created by the contribution of D’Ieteren Lease s.a., the Group subsidiary active in operating leases, and of the Volkswagen Bank
Belgium operations. VDFin will be 50% owned (minus one share) by the Group and 50% owned (plus one share) by Volkswagen Financial
Services. Both parties signed the shareholders’ agreement on 23 December 2011. The Board of Directors of the Parent has considered
that the Parent is committed to a sale plan of D’Ieteren Lease which will involve loss of control of its subsidiary, and has therefore
classified in the consolidated statement of financial position as at 31 December 2011 all the assets and liabilities of its subsidiary as
held for sale; the recognition criteria defined in IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations” being satisfied.
See note 23 of these consolidated financial statements for more information and adequate disclosures.
D’Ieteren
Financial and
p. 15
NOTE 2: ACCOUNTING POLICIES (CONTINUED)
Note 2.2: Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
The estimates of amounts reported in the interim financial reporting have not been changed significantly during the final interim period
of the financial year.
The following new standards, amendments to standards and interpretations are mandatory for the first time for the Group’s accounting
period beginning 1 January 2011:
- Amendment to IAS 24 “Related Party Disclosures” (effective 1 January 2011);
- Amendment to IAS 32 “Financial Instruments: Presentation – Classification of Rights Issues” (effective 1 February 2010);
- Amendment to IFRIC 14 “Prepayments of a Minimum Funding Requirement” (effective 1 January 2011);
- IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” (effective 1 July 2010);
- Improvements to IFRSs amending IAS 1, IAS 27, IAS 34, IFRS 1, IFRS 3, IFRS 7 and IFRIC 13 (issued by the IASB in May 2010 – effective 1 January 2011).
These new amendments and interpretations have no significant impact on the Group’s consolidated financial statements.
The standards, amendments and interpretations to existing standards that have been published by the IASB and are mandatory for
the Group’s accounting periods beginning on or after 1 January 2012 or later periods but which the Group has not early adopted, are:
- Amendment to IFRS 7 “Financial Instruments: Disclosures” (effective 1 July 2011 – subject to endorsement by the EU);
- Amendment to IAS12 “Income Taxes – Deferred Taxes” (effective 1 January 2012 – subject to endorsement by the EU);
- Amendment to IAS 1 “Presentation of Financial Statements: Other Comprehensive Income” (effective 1 July 2012 – subject to
endorsement by the EU);
- Amendment to IAS 19 “Employee Benefits” (effective 1 January 2013 – subject to endorsement by the EU);
- Amendment to IAS 27 Revised “Separate Financial Statements” (effective 1 January 2013 – subject to endorsement by the EU);
- Amendment to IAS 28 Revised “Investments in Associates and Joint Ventures” (effective 1 January 2013 – subject to endorsement
by the EU);
- IFRS 9 “Financial Instruments” (effective 1 January 2015 – subject to endorsement by the EU);
- IFRS 10 “Consolidated Financial Statements” (effective 1 January 2013 – subject to endorsement by the EU);
- IFRS 11 “Joint Arrangements” (effective 1 January 2013 – subject to endorsement by the EU);
- IFRS 12 “Disclosure of Interests in Other Entities” (effective 1 January 2013 – subject to endorsement by the EU);
- IFRS 13 “Fair Value Measurement” (effective 1 January 2013 – subject to endorsement by the EU).
The Group is currently assessing the impact of the new standards, interpretations and amendments listed above.
Principles of Consolidation
Subsidiary undertakings
Subsidiary undertakings, which are those entities in which the Group has, directly or indirectly, an interest of more than half of the
voting rights or otherwise has the power to govern the financial and operating policies are consolidated. Subsidiaries are consolidated
from the date that control is transferred to the Group, and are no longer consolidated from the date that control ceases. All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated upon consolidation.
Transactions with non-controlling interest that do not result in loss of control are accounted for as equity transactions. The difference
between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interest (that do not result in loss of control) are also recorded in
equity.
When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date where control is
lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
D’Ieteren
Financial and
p. 16
Associated undertakings
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method. The investment is
initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of
the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.
The Group’s share of profit from the associate represents the Group’s share of the associate’s profit after tax. Profits and losses
resulting from transactions between the Group and its associate are eliminated to the extent of the Group’s interest in the associate.
Unrealised gains on transactions between the Group and its associate are also eliminated based on the same principle; unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Equity accounting is discontinued when the carrying amount of the investment in an associate reaches zero, unless the Group has
incurred obligations or guaranteed obligations in respect of the associate.
Interests in joint ventures
Interests in jointly controlled entities are recognised using the equity method. The above principles regarding associated undertakings
are also applicable to joint ventures.
Impairment of associates and joint ventures
The Group determines at each reporting date whether there is any objective evidence that the investment in the equity accounted
investment is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate or joint venture and its carrying value and recognises the amount adjacent to “share of profit/(loss) of an
associate/joint venture” in the income statement.
Foreign Currency Translation
The Group consolidation is prepared in euro. Income statements of foreign operations are translated into euro at the weighted average
exchange rates for the period and statements of financial positions are translated into euro at the exchange rate ruling on the statement
of financial position date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as local currency
assets and liabilities of the foreign entity and are translated at the closing rate.
Foreign currency transactions are accounted for at the exchange rate prevailing at the date of the transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies
are recognised within the income statement. Exchange movements arising from the retranslation at closing rates of the Group’s net
investment in subsidiaries, joint ventures and associates are taken to the translation reserve component in other comprehensive
income. The Group’s net investment includes the Group’s share of net assets of subsidiaries, joint ventures and associates, and certain
inter-company loans.
The net investment definition includes loans between “sister” companies and certain inter-company items denominated in any
currency. Other exchange movements are taken to the income statement.
Where the Group hedges net investments in foreign operations, the gains and losses relating to the effective portion of the hedging
instrument are recognised in the translation reserve in other comprehensive income. The gain or loss relating to any ineffective portion
is recognised in the income statement. Gains and losses accumulated in other comprehensive income are included in the income
statement when the foreign operation is disposed of.
Goodwill
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is
transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from
its activities.
The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and
the amount of any non-controlling interest and previously held interest in the acquiree. For each business combination, the Group
measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net
assets. The excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the
net recognised amount (generally at fair value) of the identifiable assets acquired and liabilities assumed constitutes goodwill, and is
recognised as an asset. In case this excess is negative, it is recognised immediately in the income statement. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within
equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. Acquisitionrelated costs incurred are expensed.
D’Ieteren
Financial and
p. 17
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGU’s or groups of
CGU’s, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated
represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is
monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value
less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.
Intangible Assets
An item of intangible assets is valued at its cost less any accumulated amortisation and any accumulated impairment losses. Customer
contracts and brands acquired in a business combination are recognised at fair value at the acquisition date.
Generally, costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
However, costs that are directly associated with identifiable and unique software products controlled by the Group which have probable
economic benefits exceeding the cost beyond one year, are recognised as intangible assets.
Intangible assets with a finite useful life are amortised over their useful life in accordance with the following methods:
- Computer software programmes: straight-line method over 2 to 7 years;
- Safelite’s customer contracts: straight-line method over 10 years (as from March 2007);
- Cindy Rowe’s customer contracts: straight-line method over 7 years (as from January 2009);
- Diamond’s customer contracts: straight-line method over 7 years (as from July 2008);
- IGD’s customer contracts: straight-line method over 7 years (as from October 2009);
- Car et Bus customer contracts: straight-line method over 4 years (as from March 2010);
- Canada’s customer contracts: straight-line method between 1 and 6 years;
- AUTO GLASS SPECIALISTS® and ELITE AUTO GLASS™ brands: straight-line method over 2.5 years (as from 1 July 2008);
- DIAMOND TRIUMPH GLASS™ brand: straight-line method over 24 months (as from 1 July 2008);
- CINDY ROWE AUTO GLASS™ brand: straight-line method over 3 years (as from 1 January 2009);
- Auto Glass Center Inc and Alliance Claims Solutions brands (IGD acquisition): straight-line method over 3 years (as from 1 October
2009);
- Car et Bus® brand: straight-line method over 2 years (as from 1 January 2010);
- Apple and Autostock brand: straight-line method over 2 years (as from the beginning of 2011).
Amortisation periods are reassessed annually. When brands are expected to generate net cash inflows during a limited period, they are
amortised over their remaining useful lives.
The brands CARGLASS® and AUTOGLASS®, acquired in 1999, as well as GLASPRO™, SPEEDY GLASS®, APPLE AUTO GLASS® and
WINDSHIELD PROS™ acquired in 2005, as well as SAFELITE® AUTO GLASS acquired in 2007, have indefinite useful lives, since, thanks
to the marketing spend and advertising made, there is no foreseeable limit to the period over which these assets are expected to
generate net cash inflows for the Group. They are therefore not amortised but tested for impairment annually.
For any intangible asset with a finite or indefinite useful life, where an indication of impairment exists, its carrying amount is assessed
and written down immediately to its recoverable amount.
Research and Development
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of
the following are demonstrated:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(b) the Group has the intention to complete the intangible asset and use or sell it;
(c) the Group has ability to use or sell the intangible asset;
(d) how the intangible asset will generate probable future economic benefits;
(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset;
(f) the Group has the ability to measure reliably the expenditure attributable to the intangible asset during its development.
D’Ieteren
Financial and
p. 18
Property, Plant and Equipment
An item of property, plant and equipment is initially measured at cost. This cost comprises its purchase price (including import duties
and non-refundable purchase taxes, after deducting trade discounts and rebates), plus any costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating. If applicable, the initial estimate of the cost of dismantling
and removing the item and restoring the site is also included in the cost of the item. After initial recognition, the item is carried at its
cost less any accumulated depreciation and any accumulated impairment losses. The depreciable amount of the item is allocated
according to the straight-line method over its useful life.
The main depreciation periods are the following:
- Buildings: 40 to 50 years;
- Plant and equipment: 3 to 15 years;
- IT equipment: 2 to 7 years;
- Leased assets: depending on the length of the lease;
- Straight-line depreciation on the vehicle fleet is based on the acquisition costs of the vehicles, estimates of their future residual
values, and expected holding periods.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its
recoverable amount.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the items will flow to the group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during
the financial period in which they are incurred.
Leases
Operating leases for which the Group is the lessor
Assets leased out under operating leases in which a significant portion of the risks and rewards of ownership are retained by the lessor
(other than vehicles sold under buy-back agreements) are included in property, plant and equipment in the statement of financial
position. They are depreciated over their expected useful lives. Rental income is recognised on a straight-line basis over the lease term.
Operating leases for which the Group is the lessee
Lease payments under operating leases are recognised as expenses in the income statement on a straight-line basis over the lease
term.
Finance leases for which the Group is the lessee
Leases of property, plant and equipment where the Group has transferred substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased
property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and the finance
charge so as to achieve a constant rate of return on the finance balance outstanding. The corresponding rental obligations, net of
finance charges, are included in borrowings. The interest element of the finance cost is charged to the income statement over the lease
period. The leased assets are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and
equipment. If there is no reasonable certainty that ownership will be acquired by the end of the lease term, the asset is depreciated over
the shorter of the lease term and its useful life.
Vehicles sold under buy-back agreements
Vehicles sold under buy-back agreements are accounted for as operating leases (lessor accounting), and are presented in the
statement of financial position under inventories. The difference between the sale price and the repurchase price (buy-back obligation)
is considered as deferred income, while buy-back obligations are recognised in trade payables. The deferred income is recognised as
revenue on a straight line basis over the relevant vehicle holding period.
Vehicles purchased under buy-back agreements
Vehicles purchased under buy-back agreements are not recognised as assets since these arrangements are accounted for as operating
leases (lessee accounting). The difference between the purchase price and the resale price (buy-back obligation of the supplier) is
considered as deferred expense, while a trade receivable is recognised for the resale price. The deferred expense is recognised within
cost of sale on a straight line basis over the relevant vehicle holding period.
Investment Properties
Investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.
D’Ieteren
Financial and
p. 19
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and condition. Items that are not interchangeable,
like new vehicles and second-hand vehicles, are valued using specific identification of their individual costs. Other items are valued using
the first in, first out or weighted average cost formula. When inventories are used, the carrying amount of those inventories are recognised
as an expense in the period in which the related revenue is recognised. Losses and write-downs of inventories are recognised in the period
in which they occur. Reversal of a write-down is recognised as a credit to cost of sales in the period in which the reversal occurs.
Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term (maximum 3 months), highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effect(s).
Where the Company (or its subsidiaries) reacquires its own equity instruments, those instruments are deducted from equity as treasury
shares. Where such equity instruments are subsequently sold, any consideration received is recognised in equity.
Dividends to holders of equity instruments proposed or declared after the balance sheet date are not recognised as a liability at the
balance sheet date; it is presented in equity.
Provisions
A provision is recognised when:
- there is a present obligation (legal or constructive) as a result of a past event;
- it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision is recognised.
Post-employment Employee Benefits
The Group has various defined benefit pension plans and defined contribution pension plans. Most of these plans are funded schemes,
i.e. they are financed through a pension fund or an external insurance policy. The minimum funding level of these schemes is defined
by national rules.
Payments to defined contribution pension plans are charged as an expense as they fall due.
The Group’s commitments under defined benefit pension plans, and the related costs, are valued using the “projected unit credit
method”, with independent actuaries carrying out the valuations at least on a yearly basis. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that
are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the
related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are
used. Actuarial gains and losses are recognised in full in the period in which they occur. They are recognised in other comprehensive
income. Past service cost is recognised immediately to the extent that the benefits have already vested, and otherwise is amortised on
a straight-line basis over the average period until the benefits become vested.
The long-term employee benefit obligation recognised in the statement of financial position represents the present value of the defined
benefit obligations as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service
cost, plus the present value of any refunds and reductions in future contributions to the plan.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee
accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits as it is demonstrably committed to
a termination when the entity has a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Other long-term incentives
The group recognises a provision for long-term incentives where they are contractually obliged or where there is a past practice that
has created a constructive obligation.
D’Ieteren
Financial and
p. 20
Financial Instruments Excluding Derivatives
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and
available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines
the classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless
they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months;
otherwise, they are classified as non-current.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period.
These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’, ‘cash and
cash equivalents’ and ‘other financial assets’ in the statement of financial position.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it
within 12 months of the end of the reporting period.
Measurement of financial instruments:
(a) Available-for-sale financial assets are measured at fair value through other comprehensive income. Impairment losses are recorded in the income statement.
(b) The cost of treasury shares is deducted from equity.
(c) Trade and other receivables are measured at their amortised cost using the effective interest rate method, as reduced by appropriate allowances for irrecoverable amounts.
(d) Financial assets held for trading are measured at fair value.
(e) Trade and other payables, as well as borrowings, are measured at amortised cost using the effective interest rate method.
Financial Instruments – Derivatives
Derivatives are used as hedges in the financing and financial risk management of the Group.
The Group’s activities expose it to the financial risks of changes in foreign currency exchange rates and interest rates. The Group uses
foreign exchange forward contracts, interest rate swaps, cross currency interest rate swaps, and options to hedge these exposures.
The Group does not use derivatives for speculative purposes. However, certain financial derivative transactions, while constituting
effective economic hedges, do not qualify for hedge accounting under the specific rules in IAS 39.
Derivatives are recorded initially at fair value. Unless accounted for as hedges, they are classified as held for trading and are
subsequently measured at fair value.
Changes in fair value of derivatives that do not qualify for hedge accounting are recognised in the income statement as they arise.
Cash flow hedge
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are
recognised directly in other comprehensive income and any ineffective portion is recognised immediately in the income statement. If
the cash flow hedge is a firm commitment or the forecasted transaction results in the recognition of an asset or a liability, then, at the
time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in other
comprehensive income are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition
of an asset or a liability, amounts deferred in other comprehensive income are recognised in the income statement in the same period
in which the hedged item affects net profit or loss.
Fair value hedge
For an effective hedge of an exposure to changes in the fair value, the hedged item is adjusted for changes in fair value attributable
to the risk being hedged with a corresponding entry in profit or loss. Gains or losses from re-measuring the derivative, or for nonderivatives the foreign currency component of its carrying amount, are recognised in profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for
hedge accounting. At that time, any cumulative gain or loss recognised in other comprehensive income is transferred to profit or loss.
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of the host contracts, and the host contracts are not carried at fair value with unrealised
gains or losses reported in income statement.
D’Ieteren
Financial and
p. 21
Put Options Granted to Non-Controlling Shareholders
The Group is committed to acquiring the non-controlling shareholdings owned by third parties in Belron, should these third parties
wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected as a financial
liability in the consolidated statement of financial position. For put options granted to non-controlling interest prior to 1 January 2010,
the goodwill is adjusted at period end to reflect the change in the exercise price of the options and the carrying value of non-controlling
interest to which they relate.
For put options granted to non-controlling interest as from 1 January 2010, at inception, the difference between the consideration
received and the exercise price of the options granted is recognised against the group’s share of equity. At each period end, the remeasurement of the financial liability resulting from these options will be recognised in the consolidated income statement as a remeasurement item in net finance costs.
Non-Current Assets (or Disposal Groups) Held for Sale and Discontinued Operations
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally
through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less
costs to sell.
A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and is disclosed
as a single line item in the income statement.
Revenue Recognition
Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
(a) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
(b) the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold;
(c) the amount of revenue can be measured reliably;
(d) it is probable that the economic benefits associated with the transaction will flow to the Group; and
(e) the cost incurred or to be incurred in respect of transaction can be measured reliably.
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction
is recognised by reference to the stage of completion of the transaction at the balance sheet date.
The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:
(a) the amount of revenue can be measured reliably;
(b) it is probable that the economic benefits associated with the transaction will flow to the Group;
(c) the stage of completion of the transaction at the balance sheet date can be measured reliably; and
(d) the cost incurred for the transaction and the costs to complete the transaction can be measured reliably.
Interest is recognised on a time proportion basis that takes into account the effective yield on the asset. Royalties are recognised on
an accrual basis in accordance with the substance of the relevant agreement. Dividends are recognised when the shareholder’s right
to receive payment has been established.
In the income statement, sales of goods, rendering of services and royalties are presented under the heading “sales”. Interest income
is presented under the heading “net finance costs”.
Share-Based Payments
Share-based payments are exclusively made in connection with employee stock option plans (“ESOP”).
Equity-settled ESOP granted after 7 November 2002 are accounted for in accordance with IFRS 2, such that their cost is recognised in
the income statement over the related performance period.
All cash-settled ESOP (i.e. granted before, on, or after 7 November 2002) are recognised as liabilities, and their cost is recognised in
the income statement over the related vesting period.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the
cost of that asset.
D’Ieteren
Financial and
p. 22
Government Grants
Government grants related to assets are presented in liabilities as deferred income, and amortised over the useful life of the related
assets.
Income Taxes
Current taxes relating to current and prior periods are, to the extent unpaid, recognised as a liability. If the amount already paid in
respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. The benefit relating
to a tax loss that can be carried back to recover current tax of a previous period is recognised as an asset. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred taxes are provided in full using the balance sheet liability method, on temporary differences between the carrying amount of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not calculated
on the following temporary differences: (i) the initial recognition of goodwill and (ii) the initial recognition of assets and liabilities that
affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
unused tax losses and credits can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax benefit will be realised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the
balance on a net basis.
Unusual Items and Re-measurements
Each line of the income statement, and each subtotal of the segment income statement, is broken down in order to provide information
on the current result and on unusual items and re-measurements. Unusual items and re-measurements comprise the following items:
(a) Recognised fair value gains and losses on financial instruments, excluding the accrued cash flows that occur under the Group’s
hedging arrangements, where hedge accounting is unable to be applied under IAS 39;
(b) Exchange gains and losses arising upon the translation of foreign currency borrowings at the closing rate;
(c) Re-measurement of financial liabilities resulting from put options granted to non-controlling interest as from 1 January 2010;
(d) Impairment of goodwill and other non-current assets;
(e) Amortisation of intangible assets with finite useful lives recognised in the framework of the allocation as defined by IFRS 3 of the
cost of a business combination;
(f) Other unusual items. They are material items that derive from events or transactions that fall within the ordinary activities of the
Group, and which individually or, if of a similar type, in aggregate, are separately disclosed by virtue of their size or incidence.
All other items are recognised as part of the current result.
NOTE 3: SEGMENT INFORMATION
Note 3.1: Basis of Segmentation
The Group’s reportable operating segments are Automobile Distribution and Vehicle Glass.
The Automobile Distribution segment includes the automobile distribution activities (see note 1) as well as corporate activities. The
Vehicle Glass segment comprises Belron s.a. and its subsidiaries (see note 1).
These operating segments are consistent with the Group’s organisational and internal reporting structure.
D’Ieteren
Financial and
p. 23
NOTE 3: SEGMENT INFORMATION (CONTINUED)
Note 3.2: Segment Income Statement - Operating Segments (Year ended 31 December)
EUR million
External sales
Notes
4
Inter-segment sales
Segment sales
2010 (1)
2011
Elimina-
Automobile
Distribution
Vehicle
Glass
3,208.3
2,769.0
8.5
2.1
-10.6
3,216.8
2,771.1
-10.6
116.7
Automobile
Distribution
Vehicle
Glass
5,977.3
2,732.9
2,800.9
-
8.2
3.7
-11.9
-
5,977.3
2,741.1
2,804.6
-11.9
5,533.8
234.8
351.5
92.6
235.4
328.0
tions
Group
5,533.8
Operating result (being
segment result)
5
of which: current items
5
114.9
262.3
377.2
92.6
255.6
348.2
5
1.8
-27.5
-25.7
-
-20.2
-20.2
Net finance costs
6
-21.6
-32.5
-54.1
-24.7
-28.9
-53.6
Result before taxes
9
95.1
202.3
297.4
67.9
206.5
274.4
9
92.1
229.9
322.0
64.6
226.6
291.2
9
3.0
-27.6
-24.6
3.3
-20.1
-16.8
Share of result of entities
accounted for using the equity
method
7
-0.1
-
-0.1
0.5
-
0.5
Tax expense
8
unusual items and
re-measurements
unusual items and
re-measurements
2.7
-46.4
-43.7
-4.0
-54.1
-58.1
Result from continuing
operations
97.7
155.9
253.6
64.4
152.4
216.8
97.4
175.0
272.4
61.7
166.8
228.5
0.3
-19.1
-18.8
2.7
-14.4
-11.7
unusual items and
re-measurements
41
Attributable to :
Equity holders of the Parent
unusual items and
re-measurements
1
Elimina-
Group
tions
9
122.4
19.4
376.0
236.2
Automobile
Distribution
Vehicle
Glass
Discontinued
operations
Group
Automobile
Distribution
Vehicle
Glass
Discontinued
operations
Group
98.3
144.6
69.7
312.6
64.7
142.1
12.0
218.8
98.0
162.3
51.7
312.0
62.0
155.5
16.7
234.2
0.3
-17.7
18.0
0.6
2.7
-13.4
-4.7
-15.4
-0.6
11.3
52.7
63.4
-0.3
10.3
7.4
17.4
97.7
155.9
122.4
376.0
64.4
152.4
19.4
236.2
D’Ieteren
Financial and
p. 24
Note 3.3: Segment Statement of Financial Position - Operating Segments (At 31 December) - Assets
EUR million
Notes
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
Group
Goodwill
11
6.2
1,019.8
1,026.0
2.6
0.2
1,001.8
1,004.6
13
1.8
426.6
428.4
1.2
363.9
427.1
792.2
Vehicles
14
-
-
-
304.8
353.5
-
658.3
15
143.2
293.1
436.3
139.1
58.8
277.5
475.4
Investment property
16
5.6
-
5.6
5.8
-
-
5.8
7
3.8
-
3.8
4.0
16.3
-
20.3
17
0.5
-
0.5
0.5
0.5
0.2
1.2
18
-
15.7
15.7
-
4.8
-
4.8
19
-
-
-
-
2.2
-
2.2
20
-
30.5
30.5
-
-
39.2
39.2
Deferred tax assets
21
0.1
54.2
54.3
1.2
41.4
49.7
92.3
Other receivables
22
0.9
2.1
3.0
1.4
-
2.6
4.0
162.1
1,842.0
2,004.1
460.6
841.6
1,798.1
3,100.3
23
347.7
-
347.7
1.7
-
-
1.7
551.4
Non-current assets
Non-current assets classified as held for
sale
Inventories
24
370.6
256.3
626.9
310.4
7.1
233.9
18
-
1.1
1.1
-
-
0.1
0.1
19
12.0
0.3
12.3
14.8
2.7
2.2
19.7
25
-
1.1
1.1
8.9
-
17.0
25.9
Current tax assets
26
0.1
7.6
7.7
0.1
1.6
4.2
5.9
27
145.8
253.6
399.4
120.8
1,026.1
238.0
1,384.9
28
213.5
36.5
250.0
2.1
231.7
33.4
267.2
Current assets
1,089.7
556.5
1,646.2
458.8
1,269.2
528.8
2,256.8
TOTAL ASSETS
1,251.8
2,398.5
3,650.3
919.4
2,110.8
2,326.9
5,357.1
D’Ieteren
Financial and
p. 25
Note 3.3: Segment Statement of Financial Position - Operating Segments (At 31 December) - Equity and liabilities
EUR million
Notes
Capital and reserves attributable to equity
holders
Equity
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
Group
1,530.5
-
1,530.5
1,250.6
-
-
1,250.6
0.5
1.1
1.6
1.1
212.2
0.8
214.1
1,531.0
1.1
1,532.1
1,251.7
212.2
0.8
1,464.7
20
5.4
53.7
59.1
5.6
68.0
36.5
110.1
Other provisions
30
31.8
36.8
68.6
31.7
27.4
37.0
96.1
18
-
-
-
-
17.3
-
17.3
31/32
251.3
536.9
788.2
537.5
460.5
740.6
1,738.6
19
-
1.1
1.1
-
-
0.1
0.1
33
154.0
-
154.0
163.0
-
-
163.0
Borrowings
Put options granted to non-controlling
shareholders
Other payables
34
-
7.7
7.7
-
-
13.3
13.3
21
16.3
29.3
45.6
20.8
118.6
17.2
156.6
Liabilities associated with non-current
assets held for sale
Provisions
Borrowings
458.8
665.5
1,124.3
758.6
691.8
844.7
2,295.1
23
333.2
-
333.2
-
-
-
-
30
-
8.9
8.9
-
20.9
4.4
25.3
18
-
-
-
-
10.1
2.8
12.9
31/32
12.0
41.1
53.1
29.1
297.5
29.6
356.2
Inter-segment financing
31
-240.0
240.0
-
-
-
-
-
19
7.2
0.4
7.6
14.3
8.9
1.4
24.6
26
0.2
33.2
33.4
0.3
20.3
40.1
60.7
35
189.7
368.0
557.7
199.1
528.3
390.2
1,117.6
Current liabilities
302.3
691.6
993.9
242.8
886.0
468.5
1,597.3
2,292.1
1,358.2
3,650.3
2,253.1
1,790.0
1,314.0
5,357.1
D’Ieteren
Financial and
p. 26
Note 3.4: Segment Statement of Cash Flows - Operating Segments (Year ended 31 December)
EUR million
Notes
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
328.0
Cash flows from operating activities - Continuing
116.7
234.8
351.5
92.6
235.4
Depreciation of vehicles for operating lease activities
5
62.6
-
62.6
61.5
-
61.5
Depreciation of other items
5
12.0
71.0
83.0
12.2
68.0
80.2
Operating profit from continuing operations
Amortisation of other intangible assets
5
0.8
23.4
24.2
1.0
25.5
26.5
Impairment losses on goodwill and other non-current
assets
9
-
13.7
13.7
-
-
-
Other non-cash items
9
-159.9
Retirement benefit obligations
Purchase of vehicles for operating lease activities (2)
2.0
2.1
4.1
-0.2
-159.7
-0.3
-25.4
-25.7
-0.4
-13.6
-14.0
-183.7
-
-183.7
-150.2
-
-150.2
Sale of vehicles for operating lease activities (2)
106.4
-
106.4
95.7
-
95.7
Change in net working capital
-53.0
-53.6
-106.6
-33.9
-22.9
-56.8
211.0
Cash generated from operations
63.5
266.0
329.5
78.3
132.7
Tax paid
-2.5
-37.7
-40.2
-0.2
-53.1
-53.3
Net cash from operating activities
61.0
228.3
289.3
78.1
79.6
157.7
-16.9
-103.0
-119.9
-18.2
-119.7
-137.9
2.9
4.5
7.4
0.1
2.6
2.7
-14.0
-98.5
-112.5
-18.1
-117.1
-135.2
Cash flows from investing activities - Continuing
Purchase of fixed assets (excl. vehicles)
Sale of fixed assets (excl. vehicles)
Net capital expenditure
Acquisition of non-controlling interest
Acquisition of subsidiaries (net of cash acquired)
Disposal of non-controlling interest
Disposal of subsidiaries (net of cash disposed of)
Net investment in other financial assets
1
2
Excluding vehicles held under buy-back agreements.
9
-13.1
-
-13.1
-0.3
-
-0.3
9/12
-3.3
-24.4
-27.7
-
-29.8
-29.8
16.6
9
-
0.2
0.2
16.6
-
9/41
302.3
-
302.3
-
-
-
25
1.2
1.3
2.5
0.6
-5.8
-5.2
273.1
-121.4
151.7
-1.2
-152.7
-153.9
D’Ieteren
Financial and
p. 27
Note 3.4: Segment Statement of Cash Flows - Operating Segments (Year ended 31 December) - Continued
EUR million
Notes
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
-111.3
Cash flows from financing activities - Continuing
-
-
-
-111.3
-
Net disposal/(acquisition) of treasury shares
9
-
-
-
4.7
-
4.7
Net capital element of finance lease payments
-
-23.7
-23.7
-
-24.1
-24.1
-276.3
48.6
-227.7
-274.0
230.9
-43.1
-25.0
-28.5
-53.5
-29.8
-28.0
-57.8
-23.5
-
-23.5
-17.9
-
-17.9
92.7
-100.0
-7.3
94.0
-100.0
-6.0
-232.1
-103.6
-335.7
-334.3
78.8
-255.5
102.0
3.3
105.3
-257.4
5.7
-251.7
Net proceeds from rights issue
Net change in other borrowings
Net interest paid
29
Dividends paid by Parent
Dividends received from/(paid by) subsidiaries
Cash flows from continuing operations
41
Cash flows from discontinued operations
TOTAL CASH FLOW FOR THE PERIOD
EUR million
Notes
-122.2
170.6
-16.9
-81.1
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Discontinued
operations
2.1
33.4
2.1
Group
Automobile
Distribution
Vehicle
Glass
Discontinued
operations
Group
92.3
127.8
24.7
28.1
38.7
91.5
-
139.4
139.4
234.8
-
21.9
256.7
33.4
231.7
267.2
259.5
28.1
60.6
348.2
Reconciliation with statement
of financial position
Cash at beginning of period
28
Cash equivalents at beginning
of period
28
Cash and cash equivalents at
beginning of period
28
Total cash flow for the period
Cash and cash equivalents at
end of period
1
Of which "Cash and cash
equivalents - Automobile
Distribution"
28
equivalents - Car Rental"
28
equivalents - Vehicle Glass"
28
Of which "Cash classified
as held for sale - Autom.
Distribution"
23
-16.9
-81.1
-0.2
0.1
250.1
267.2
213.5
2.1
-
231.7
36.5
33.4
0.1
-
D’Ieteren
Financial and
p. 28
Note 3.5: Other Segment Information - Operating Segments (Year ended 31 December)
EUR million
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
205.3
147.1
352.4
168.4
177.2
345.6
Capital additions (2)
(1) As restated (see note 2.1).
(2) Capital additions include both additions and acquisitions through business combinations including goodwill.
Besides depreciation and amortisation of segment assets (which are provided in note 5), the charge arising from the long-term
management incentive schemes is the other significant non-cash expense deducted in measuring segment result.
Note 3.6: Geographical Segment Information (Year ended 31 December)
The Group’s two operating segments operate in three main geographical areas, being Belgium (main market for the Automobile
Distribution segment), the rest of Europe and the rest of world.
EUR million
Belgium
Segment sales from external customers (1 - 2)
1
2010 (2)
2011
Rest of
Europe
Rest of
world
Group
Belgium
Rest of
Europe
Rest of
world
Group
3,098.0
1,609.2
1,270.1
5,977.3
2,702.7
1,594.2
1,236.9
5,533.8
Non-current assets (3)
171.2
1,164.9
563.2
1,899.3
469.9
1,909.7
560.7
2,940.3
Capital additions (2 - 4)
211.9
49.7
90.8
352.4
174.9
76.1
94.6
345.6
Based on the geographical location of the customers.
Non-current assets, as defined by IFRS 8, consists of goodwill, other intangible assets, vehicles, other property, plant and equipment, investment
property and non-current other receivables.
4
Capital additions include both additions and acquisitions through business combinations including goodwill.
2
3
D’Ieteren
Financial and
p. 29
NOTE 4: SALES
EUR million
2010 (1)
2,649.8
2,204.4
Used cars
115.3
103.9
Spare parts and accessories
178.0
167.6
After-sales activities by D’Ieteren Car Centers
57.4
54.7
D’Ieteren Sport
32.3
35.8
D’Ieteren Lease
146.6
141.4
New vehicles
4.5
2.7
24.4
22.4
Subtotal Automobile Distribution
3,208.3
2,732.9
Vehicle Glass
2,769.0
2,800.9
SALES (EXTERNAL)
5,977.3
5,533.8
of which: sales of goods
3,158.1
2,692.4
2,818.4
2,840.7
0.8
0.7
Rental income under buy-back agreements
Other sales
rendering of services
royalties
1
2011
Interest income and dividend income (if any) are presented among net finance costs (see note 6).
D’Ieteren
Financial and
p. 30
NOTE 5: OPERATING RESULT
Operating result is stated after charging:
EUR million
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
-2,960.8
Current items:
-2,700.8
-660.5
-3,361.3
-2,286.8
-674.0
Depreciation of vehicles
-64.4
-
-64.4
-61.5
-
-61.5
Depreciation of other items (excl. investment property)
-11.6
-71.0
-82.6
-11.7
-68.0
-79.7
Purchases and changes in inventories
-0.8
-13.8
-14.6
-1.0
-10.5
-11.5
-
-142.9
-142.9
-
-139.2
-139.2
Write-down on inventories
-1.2
0.3
-0.9
-1.0
-2.1
-3.1
Net gain (loss) on vehicles
4.8
-
4.8
4.5
-
4.5
-142.0
-998.9
-1,140.9
-130.0
-1,022.7
-1,152.7
Amortisation (excl. re-measurements - see note 9)
Other operating lease rentals (2)
Employee benefit expenses (see note 36)
-
-1.2
-1.2
-
-3.2
-3.2
-177.9
-622.1
-800.0
-153.5
-622.1
-775.6
-
3.0
3.0
0.3
-2.8
-2.5
Depreciation
-0.5
-
-0.5
-0.5
-
-0.5
Operating expenses (3)
-0.1
-
-0.1
-0.1
-
-0.1
Sundry
-0.1
-0.6
-0.7
0.4
-0.7
-0.3
Subtotal other operating expenses
-0.7
2.4
1.7
0.1
-3.5
-3.4
Gain on property, plant and equipment
0.1
1.0
1.1
-
-
-
Rental income from investment property (4)
0.6
-
0.6
0.6
-
0.6
Sundry
0.5
-
0.5
-
-
-
Subtotal other operating income
1.2
1.0
2.2
0.6
-
0.6
-3,093.4
-2,506.7
-5,600.1
-2,640.3
-2,545.3
-5,185.6
1.8
-27.5
-25.7
-
-20.2
-20.2
-3,091.6
-2,534.2
-5,625.8
-2,640.3
-2,565.5
-5,205.8
Research and development expenditure
Sundry
Other operating expenses:
Bad and doubtful debts
Investment property expenses:
Other operating income:
Subtotal current items
Unusual items and re-measurements (see note 9)
NET OPERATING EXPENSES
1
Primarily hire of vehicles and other plant and equipment in relation with the business activity.
3
The full amount is related to investment property that generated rental income.
4
Does not include any contingent rent.
2
D’Ieteren
Financial and
p. 31
NOTE 6: NET FINANCE COSTS
Net finance costs are broken down as follows:
EUR million
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
-23.5
-35.2
-58.7
-25.2
-28.3
-53.5
-0.9
1.4
0.5
-3.8
-2.0
-5.8
-24.4
-33.8
-58.2
-29.0
-30.3
-59.3
Current items:
Finance costs:
Interest expense
Transfer from re-measurements
Current interest expense
Other financial charges
-0.3
-
-0.3
-0.4
-
-0.4
Subtotal finance costs
-24.7
-33.8
-58.5
-29.4
-30.3
-59.7
Finance income
Current net finance costs
1.9
1.4
3.3
1.4
1.3
2.7
-22.8
-32.4
-55.2
-28.0
-29.0
-57.0
-0.6
-
-0.6
-1.4
-
-1.4
Unusual items and re-measurements (see note 9):
Re-measurements of put options granted to non-controlling interest
Re-measurements of financial instruments:
Gains (Losses) on “dirty” fair value of derivatives (2)
0.9
1.3
2.2
0.9
-1.9
-1.0
Transfer to current items
0.9
-1.4
-0.5
3.8
2.0
5.8
Subtotal gains (losses) on “clean” fair value of derivatives (2)
1.8
-0.1
1.7
4.7
0.1
4.8
1.2
-0.1
1.1
3.3
0.1
3.4
-21.6
-32.5
-54.1
-24.7
-28.9
-53.6
Unusual items and re-measurements
NET FINANCE COSTS
1
2
Change in “dirty” fair value of derivatives corresponds to the change of value of the derivatives between the beginning and the end of the period. Change
in “clean” fair value of derivatives corresponds to the change of “dirty” fair value excluding the accrued cash flows of the derivatives that occurred
during the period.
D’Ieteren
Financial and
p. 32
NOTE 7: ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD
In 2011, four group entities are accounted for using the equity method.
D’Ieteren Vehicle Trading s.a. is a 49%-owned associate which provides finance lease services to customers of the Automobile
Distribution segment. In 2010, the Automobile Distribution segment acquired 33% of the company S.M.A.R.T & Clean Automotive
Services S.A. and of its subsidiary Riankar, both acting in smart repairs on vehicles.
At year end, the Automobile Distribution’s interest in these three associates comprised:
EUR million
Share of gross assets (incl. goodwill)
Share of gross liabilities
2011
2010
45.5
36.8
-41.8
-32.8
3.7
4.0
Share of sales
13.8
12.2
Share of profit (loss)
-0.1
0.5
Share of net assets
In November 2011, the Parent and Volkswagen Financial Services (a subsidiary of the Volkswagen group) incorporated a joint venture,
Volkswagen D’Ieteren Finance (VDFin), intended to provide a full range of financial services related to the sale of the Volkswagen group
vehicles on the Belgian market. VDFin is 50% owned (minus one share) by the Group and 50% owned (plus one share) by Volkswagen
Financial Services. VDFin will be operational in early 2012 with the contribution of D’Ieteren Lease s.a., the Group subsidiary active in
operating leases, and of the Volkswagen Bank Belgium operations.
At 2011 year end, the Automobile Distribution’s interest in this joint venture comprised its share in the cash subscription (EUR 0.1
million) at incorporation of the joint venture.
In 2010, Mercury Car Rentals Ltd was a 33%-owned associate of Avis Europe plc which provided short-term car rental services in India
under the Avis brand. At 2010 year end, the Car Rental’s interest in this associate comprised:
EUR million
2011
2010
Share of gross assets (incl. goodwill)
-
3.0
Share of gross liabilities
-
-2.5
Share of net assets
-
0.5
Share of sales
-
4.1
-
-0.2
In 2010, Anji Car Rental and Leasing Company Ltd and OKIGO were 50%-owned joint ventures of Avis Europe plc which provided, under
the Avis brand, short-term car rental services in China and France respectively. The Car Rental’s interest comprised:
EUR million
2011
2010
Share of non-current assets (incl. goodwill)
-
38.8
Share of current assets
-
9.7
Share of current liabilities
-
-32.7
Share of net assets
-
15.8
Share of sales
-
26.1
-
2.5
D’Ieteren
Financial and
p. 33
NOTE 8: TAX EXPENSE
Tax expense is broken down as follows:
EUR million
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
-1.9
-31.5
-33.4
-0.5
-40.2
-40.7
-
0.9
0.9
-
-1.2
-1.2
Movement in deferred taxes
4.6
-15.8
-11.2
-3.5
-12.7
-16.2
Tax expense
2.7
-46.4
-43.7
-4.0
-54.1
-58.1
5.4
-54.9
-49.5
-3.4
-59.8
-63.2
-2.7
8.5
5.8
-0.6
5.7
5.1
Current year income tax
Prior year income tax
unusual items and re-measurements (see note 9)
1
2010 (1)
2011
The relationship between tax expense and accounting profit is explained below:
EUR million
Result before taxes
Tax at the Belgian corporation tax rate of 33.99%
Reconciling items (sum of items marked (a) and (b) below)
Actual tax on result before taxes
1
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
95.1
202.3
297.4
67.9
206.5
274.4
-32.3
-68.8
-101.1
-23.1
-70.2
-93.3
35.0
22.4
57.4
19.1
16.1
35.2
2.7
-46.4
-43.7
-4.0
-54.1
-58.1
D’Ieteren
Financial and
p. 34
NOTE 8: TAX EXPENSE (CONTINUED)
The reconciling items are provided below:
EUR million
Automobile
Distribution
Vehicle
Glass
Current PBT
Group
Automobile
Distribution
Vehicle
Glass
Group
92.1
229.9
322.0
64.6
226.6
291.2
-31.3
-78.1
-109.4
-22.0
-77.0
-99.0
Rate differential
(a)
-
-2.2
-2.2
-
1.5
1.5
Permanent differences
(a)
21.1
30.8
51.9
14.7
14.3
29.0
Utilisation of tax losses
(a)
14.2
0.3
14.5
4.7
0.7
5.4
Adjustments in respect of prior years
(a)
6.1
-0.7
5.4
-
-4.7
-4.7
Deferred tax assets not recognised
(a)
-3.5
-5.0
-8.5
-2.6
-6.7
-9.3
Recognition of previously unrecognised deferred tax assets
(a)
1.5
-
1.5
3.3
12.1
15.4
-1.5
Impact of dividends
(a)
-2.2
-
-2.2
-1.5
-
Other
(a)
-0.5
-
-0.5
-
-
-
5.4
-54.9
-49.5
-3.4
-59.8
-63.2
-6%
24%
15%
5%
26%
22%
-16.8
Actual tax on current PBT
Actual tax rate on current PBT
Unusual items and re-measurements in PBT
Rate differential
(b)
Deferred tax assets not recognised
(b)
Actual tax on unusual items and re-measurements in PBT
1
2010 (1)
2011
3.0
-27.6
-24.6
3.3
-20.1
-1.0
9.4
8.4
-1.1
6.8
5.7
-
-0.9
-0.9
-
-1.1
-1.1
-1.7
-
-1.7
0.5
-
0.5
-2.7
8.5
5.8
-0.6
5.7
5.1
NOTE 9: UNUSUAL ITEMS AND RE-MEASUREMENTS
Result for the Period
Current result after tax (“current PAT”) consists of the reported result from continuing operations (or the result for the period when
no discontinued operation is reported), excluding unusual items and re-measurements as defined in note 2, and excluding their tax
impact.
Current result before tax (“current PBT”) consists of the reported result before tax excluding unusual items and re-measurements as
defined in note 2.
Current PAT, Group’s share, and current PBT, Group’s share, exclude the share of non-controlling shareholders in current PAT and
current PBT.
Current result is a non-GAAP measure, i.e. its definition is not addressed by IFRS. The Group does not represent current result as
an alternative to financial measures determined in accordance with IFRS. Current result as reported by the Group may differ from
similarly titled measures by other companies. The Group uses the concept of current result to reflect its underlying performance.
D’Ieteren
Financial and
p. 35
NOTE 9: UNUSUAL ITEMS AND RE-MEASUREMENTS (CONTINUED)
EUR million
2010 (1)
2011
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
297.4
67.9
Vehicle
Glass
Group
From reported PBT to current PBT,
Group’s share:
Reported PBT
95.1
202.3
206.5
274.4
Less: Unusual items and re-measurements in PBT:
Re-measurements of financial instruments
Re-measurement of put options granted to non-controlling
interest
-1.8 (a)
1.8 (d)
0.6 (b)
-
-
-4.7 (a)
-1.3 (d)
-6.0
0.6
1.4 (b)
-
1.4
Amortisation of customer contracts
-
6.3 (e)
6.3
-
6.3 (e)
6.3
Amortisation of brands with finite useful life
-
3.3 (f)
3.3
-
8.7 (f)
8.7
Other unusual items
Current PBT
-1.8 (c)
92.1
16.2 (g)
229.9
14.4
-
322.0
64.6
6.4 (g)
226.6
6.4
291.2
0.6
-16.8
-16.2
0.3
-15.3
-15.0
92.7
213.1
305.8
64.9
211.3
276.2
Current PBT, Group’s share
92.7
213.1
305.8
64.9
211.3
276.2
Share of the group in current result of equity accounted entities
-0.1
-
-0.1
0.5
-
0.5
5.4
-50.8
-45.4
-3.4
-55.8
-59.2
98.0
162.3
260.3
62.0
155.5
217.5
Share of non-controlling interest in current PBT
Current PBT, Group’s share
From current PBT, Group’s share, to current PAT,
Group’s share:
Tax on current PBT, Group’s share
Current PAT, Group’s share
From current PAT, Group’s share, to current result for the period
attributable to equity holders of the Parent:
Current PAT, Group’s share
Share of the group in current discontinued operations
Current result for the period attributable
to equity holders of the Parent
1
260.3
217.5
51.7
16.7
312.0
234.2
Automobile Distribution
(a) Net finance costs include re-measurements of financial instruments amounting to EUR 1.8 million (2010: EUR 4.7 million) arising
from changes in the “clean” fair value of derivatives.
(b) Net finance costs include re-measurements of put options granted to certain non-controlling interest (family holding company of
Belron’s CEO) amounting to EUR -0.6 million (2010: EUR -1.4 million). See note 33 of these Consolidated Financial Statements for
more information.
(c) At year-end, cost of sales includes an unusual adjustment on depreciation of vehicles (EUR 1.8 million) in relation with the future
disposal of D’Ieteren Lease s.a. See notes 2.1. and 23 for more information.
Vehicle Glass
(d) Net finance costs and cost of sales include re-measurements of financial instruments amounting to respectively EUR -0.1 million
(2010: EUR 0.1 million) and EUR -1.7 million (2010: EUR 1.2 million) arising from changes in the “clean” fair value of derivatives.
(e) In the framework of recent US, French and Canadian acquisitions, customer contracts were recognised as an intangible asset with
a finite useful life. The 2011 amortisation (in commercial and administrative expenses) amounted to EUR 6.3 million (2010: EUR 6.3
million).
(f) Commercial and administrative expenses include the amortisation of US, French and Canadian brands with finite useful lives
amounting to EUR 3.3 million (2010: EUR 8.7 million).
D’Ieteren
Financial and
p. 36
NOTE 9: UNUSUAL ITEMS AND RE-MEASUREMENTS (CONTINUED)
(g) Other unusual items (in commercial and administrative expenses and other operating expenses) of the Vehicle Glass segment
comprise impairment of certain intangible IT assets (EUR 13.7 million) and associated costs (EUR 1.0 million) following a change
in strategy to leverage new technology, acquisition and integration costs in Canada (EUR 5.3 million), other reorganisation costs
predominantly in France (EUR 7.9 million) offset by an unusual pension gain following the UK Government’s change to the index
used for increasing deferred state pensions (EUR 11.7 million). In 2010, restructuring costs of EUR 6.4 million (in other operating
expenses) were incurred in relation to the integration of the US (IGD) and French acquisitions.
Car Rental
Unusual items and re-measurements of the Car Rental segment are detailled in note 41 of these consolidated financial statements.
Comments related to the cash flow statement
In 2010, the line “Other non-cash items” included, among other amounts, the utilisation of the provision previously set-up to cover the
settlement of the long-term management incentive scheme of the Vehicle Glass segment.
In the period, the line “Acquisition of non-controlling interest” comprised the cash outflow arising from the price adjustment paid to
Cobepa in relation to the put options they exercised in September 2009. In 2010, the line included the non-controlling interest acquired
by the Automobile Distribution segment in two associates active in smart repairs (see note 7).
The line “Acquisition of subsidiaries” for the year ended 31 December 2011 included, among other transactions, the business
combinations disclosed in note 12.
In 2010, the line “Disposal of non-controlling interest” included the sale in May 2010 of one percent of Belron’s equity to the family
holding company of Belron’s CEO.
In the period, the line “Disposal of subsidiaries” included the proceeds of the sale of Avis Europe shares previously held by the Group
(EUR 411.8 million after taking into account foreign exchange economic hedging), net of Avis Europe’s cash disposed of (EUR 109.5
million).
In July 2010, Avis Europe plc raised EUR 179.2 million, net of expenses, through a 9 for 8 Rights Issue at an issue price of 15 pence per
new share. D’Ieteren subscribed its share of the capital increase, i.e. EUR 111.3 million.
NOTE 10: EARNINGS PER SHARE
Earnings per share (“EPS”) and earnings per share for continuing operations (“Continuing EPS”) are shown above, on the face of the
consolidated income statement. Basic and diluted EPS are based on the result for the period attributable to equity holders of the Parent
(based on the result from continuing operations attributable to equity holders of the Parent for the continuing EPS), after adjustment
for participating shares (each participating share confers one voting right and gives right to a dividend equal to one eighth of the
dividend of an ordinary share). Current EPS and current continuing EPS, which do not include unusual items and re-measurements as
defined in note 9, are presented to highlight underlying trading performance.
The weighted average number of ordinary shares in issue for the period is shown in the table below.
The Group has granted options to employees over ordinary shares of the Parent (and of Avis Europe plc in 2010). Such shares constitute
the only category of potentially dilutive ordinary shares.
In 2010, the options over ordinary shares of Avis Europe plc increased the weighted average number of shares of Avis Europe plc as
certain related performance conditions were fully satisfied and the prevailing market price was in excess of the option exercise price.
The options over ordinary shares of the Parent increased the weighted average number of shares of the Parent in 2010 and 2011 as
some option exercise prices were below the market share price. These options are dilutive.
D’Ieteren
Financial and
p. 37
NOTE 10: EARNINGS PER SHARE (CONTINUED)
The computation of basic and diluted EPS is set out as follows:
Result for the period attributable to equity holders
Adjustment for participating shares
Numerator for EPS (EUR million)
(a)
Current result for the period attributable to equity holders
2011
2010 (1)
312.6
218.8
-3.5
-2.5
309.1
216.3
312.0
234.2
-3.6
-2.6
308.4
231.6
253.6
216.8
Share of non-controlling interest in result from continuing operations
-10.7
-10.0
Result from continuing operations attributable to equity holders
242.9
206.8
Numerator for current EPS (EUR million)
(b)
-2.8
-2.4
240.1
204.4
Current result from continuing operations
272.4
228.5
Share of non-controlling interest in current result from continuing operations
-12.1
-11.0
Current result from continuing operations attributable to equity holders
(“Current PAT, Group’s share” as defined in note 9)
260.3
217.5
Numerator for continuing EPS (EUR million)
(c)
-3.0
-2.5
Numerator for current continuing EPS (EUR million)
(d)
257.3
215.0
Weighted average number of ordinary shares outstanding during the period
(e)
54,581,442
54,427,166
Adjustment for stock option plans
Weighted average number of ordinary shares taken into account for diluted EPS
(f)
339,500
344,461
54,920,942
54,771,627
Result for the period attributable to equity holders
Basic EPS (EUR)
(a)/(e)
5.66
3.97
Diluted EPS (EUR)
(a)/(f)
5.63
3.95
Basic current EPS (EUR)
(b)/(e)
5.65
4.26
Diluted current EPS (EUR)
(b)/(f)
5.62
4.23
Basic continuing EPS (EUR)
(c)/(e)
4.40
3.76
Diluted continuing EPS (EUR)
(c)/(f)
4.37
3.73
Basic current continuing EPS (EUR)
(d)/(e)
4.71
3.95
Diluted current continuing EPS (EUR)
(d)/(f)
4.68
3.93
Result from continuing operations attributable to equity holders
1
D’Ieteren
Financial and
p. 38
NOTE 11: GOODWILL
EUR million
2011
2010
1,004.6
939.8
21.7
26.5
Increase arising from put options granted to non-controlling shareholders (see note 33)
1.6
25.8
Adjustments
0.6
-6.3
Carrying amount at 1 January
Additions
Scope exit
-0.9
-
-1.6
18.8
1,026.0
1,004.6
Carrying amount at 31 December
The additions arising from business combinations that occurred in the period are detailed in note 12.
The increase arising from put options comprises the additional goodwill recognised at year end to reflect the change in the exercise
price of the remaining options granted to non-controlling shareholders and the carrying value of non-controlling interest to which they
relate (see note 33).
The adjustments result from subsequent changes in the fair value of the net assets in relation to the acquisitions performed in 2010
by the Vehicle Glass segment.
The scope exit is related to the de-consolidation of Avis Europe plc following its disposal in October 2011.
In accordance with the requirements of IAS 36 “Impairment of Assets”, the Group completed a review of the carrying value of goodwill
and of the other intangible assets with indefinite useful lives (see note 13) as at each year end. The impairment review, undertaken
by calculating value in use, was carried out to ensure that the carrying value of the Group’s assets are stated at no more than their
recoverable amount, being the higher of fair value less costs to sell and value in use.
In determining the value in use, the Group calculated the present value of the estimated future cash flows expected to arise from the
continuing use of the assets using a pre-tax discount rate of 9,1% (in 2010 : in the range from 8% to 9%). The discount rate applied
is based upon the weighted average cost of capital of each segment with appropriate adjustment for the relevant risks associated
with the businesses. Estimated future cash flows are based on long-term plans (i.e. over 3 years) for each cash-generating unit, with
extrapolation thereafter based on long-term average growth rates for the individual cash-generating units. This growth rate is set at
2% (2010: in the range from 2% to 4%) for most of the units, including the ones that carry the most significant goodwill and intangible
assets with indefinite useful lives.
Key assumptions in supporting the value of goodwill and intangible assets with indefinite useful lives include revenue growth rates,
gross margin, operating expenses, discount rate and long-term growth rates. Gross margins are based on historical values achieved by
the respective cash-generating units and global market trends. Operating expenses are based on historical levels suitably adjusted for
increases in activity levels over the term of the cash projections. The cash flows assumptions of these cash-generating units form part
of the latest financial projections as reviewed by the Board of Directors. The discount rate is based upon the weighted average cost of
capital of each segment. Long-term growth rates are based upon industry analysis and are consistent with historical trends.
Future cash flows are estimates that may be revised in future periods as underlying assumptions change. Should the assumptions vary
adversely in the future, the value in use of goodwill and intangible assets with indefinite useful lives may reduce below their carrying
amounts. Based on current valuations, headroom appears to be sufficient to absorb a normal variation in the underlying assumptions.
For information, an increase in discount rate of one percentage point and a decrease in long-term growth rate of one percentage point
would not result in an impairment charge on goodwill and on other intangible assets with indefinite useful lives.
D’Ieteren
Financial and
p. 39
NOTE 11: GOODWILL (CONTINUED)
The allocation of goodwill to cash-generating units is set out below (the allocation of other intangible assets with indefinite useful lives
is set out in note 13):
EUR million
2011
2010
6.2
2.6
Car Rental
France
-
0.2
Subtotal Car Rental
-
0.2
United Kingdom
97.2
97.1
France
70.7
70.7
Italy
54.2
54.2
Germany
47.8
47.8
Canada
51.3
40.3
Holland
29.1
29.1
Belgium
27.1
27.1
Australia
27.3
24.8
124.3
123.5
Vehicle Glass
United States
19.7
17.9
Norway
7.0
7.0
New Zealand
6.4
6.4
Greece
3.8
3.8
Sweden
4.9
4.5
Switzerland
2.1
2.1
Portugal
1.2
1.2
Denmark
5.2
5.2
Brazil
24.6
26.6
China
4.7
2.9
Russia
8.6
8.4
Turkey
4.8
4.8
397.8
396.4
Subtotal Vehicle Glass
1,019.8
1,001.8
GROUP
1,026.0
1,004.6
Spain
Unallocated
The unallocated amount in the Vehicle Glass segment comes from the acquisition of Belron by the Group in 1999, from the transactions
entered into with the non-controlling shareholders of Belron since 1999, and from the recognition of the put options granted to noncontrolling shareholders of Belron following the introduction of IAS 32 from 1 January 2005 onwards (see note 33).
D’Ieteren
Financial and
p. 40
NOTE 12: BUSINESS COMBINATIONS
The Group applies the revised version of IFRS 3 “Business Combinations” as from 1 January 2010.
During the period, the Group made the following acquisitions:
-
On 1 January 2011, Belron acquired the assets of Jinan Xin Mei Ka Glass Ltd, a fitting and wholesale business in China.
On 4 February 2011, Avis Europe acquired the remaining 50% of its French joint venture OKIGO.
On 1 March 2011, Belron acquired the assets of Shenzhen Minky Automobile Glass Co. Ltd, a fitting business in China.
On 7 March 2011, Belron acquired the assets of Bilglas Express, a fitting business with one branch in Sweden.
On 1 April 2011, Belron acquired the assets of KST-Glass LLC, a wholesale business in Russia.
On 4 April 2011, Belron acquired the assets of Tyresö Biglasa, a fitting business with one branch in Sweden.
On 16 May 2011, Belron acquired the assets of Comercial Kuramoto de Autovidros Ltda, a fitting business in Brazil.
On 27 May 2011, Belron acquired the assets of Capital Glass Pty Ltd, a flat glass replacement business in Australia.
On 1 July 2011, Belron acquired the assets of Changsha Fuyao Vehicle Glass Parts Co. Ltd and Changzha Yinxi Glass Sales Co Ltd,
a fitting business in China.
In July 2011, the Parent acquired a 100% interest in Penders s.a. which operates a garage distributing the make Porsche in Belgium.
On 4 July 2011, Belron acquired the assets of MN Comercio de Vidros Automotivos e Espamentos Ltds ME, a fitting business in Brazil.
On 4 August 2011, Belron acquired the assets of Allglas i Orebro, a fitting business in Sweden.
On 14 November 2011, Belron acquired the assets of Struder Autoglas GmbH & Co. KG, a fitting business in Austria.
On 1 December 2011, Belron
On 1 December 2011, Belron acquired the assets of EFK Glass BVBA, a fitting business in Belgium.
During the year, Belron acquired 27 branches in Canada. These were all independently owned former Apple® or Duro® franchisees.
The goodwill recognised above reflects the expected synergies and other benefits resulting from the combination of the acquired
activities with those of the Automobile Distribution and Vehicle Glass segments.
The fair value of the trade and other receivables amounts to EUR 6.4 million and it is expected that the full amount can be collected.
Acquisition-related costs of EUR 5.7 million are included in the consolidated income statement.
The goodwill on the 2010 acquisitions was increased by EUR 0.6 million reflecting fair value adjustments made to the initial valuations
disclosed in note 12 of the 2010 Consolidated Financial Statements. This increase mainly reflects changes in the fair value of the net
assets acquired.
D’Ieteren
Financial and
p. 41
NOTE 12: BUSINESS COMBINATIONS (CONTINUED)
The additional sales arising subsequent to these acquisitions amount approximately to EUR 25 million (approximately EUR 48 million if
they had occurred on the first day of the period). The results arising subsequent to these acquisitions (even if they had occurred on the
first day of the period) are not considered material to the Group and accordingly are not disclosed separately.
The details of the net assets acquired, goodwill and consideration of the acquisitions are set out below:
EUR million
Provisional
fair value (1)
Other intangibles
2.1
Other property, plant & equipment
1.8
Inventories
4.5
6.4
1.4
Non-current borrowings
-0.2
Current borrowings
-2.5
-0.4
-8.7
Net assets acquired
4.4
Goodwill (see note 11)
21.7
CONSIDERATION
26.1
Consideration satisfied by:
Cash payment
22.6
Fair-value of previously held investment
-0.1
Estimation of fair value of the deferred consideration payable in the future
3.6
26.1
1
The fair values are provisional since the integration process of the acquired entities and businesses is still ongoing.
D’Ieteren
Financial and
p. 42
NOTE 13: OTHER INTANGIBLE ASSETS
Goodwill is analysed in note 11. All other intangible assets have finite useful lives, unless otherwise specified.
EUR million
Gross amount at 1 January 2011
Accumulated amortisation and impairment losses at 1
January 2011
Carrying amount at 1 January 2011
Avis
licence
rights
Other
licenses
and
similar
rights
Brands
(with
finite and
indefinite
useful
lives)
Customer
contracts
Computer
software
Other
Total
711.5
0.4
349.2
59.2
165.4
0.3
1,286.0
-358.9
-0.4
-16.6
-22.7
-94.9
-0.3
-493.8
352.6
-
332.6
36.5
70.5
-
792.2
37.0
Additions:
Items separately acquired
Disposals
Amortisation
Impairment losses (see note 9)
Reversal of impairment losses (see note 41)
Items acquired through business combinations
Scope exit
-
-
-
-
37.0
-
-
-
-
-
-0.2
-
-0.2
-6.2
-
-3.3
-6.3
-17.1
-
-32.9
-
-
-
-
-13.7
-
-13.7
96.2
-
-
-
-
-
96.2
-
-
-
2.1
-
-
2.1
-442.6
-
-
-
-10.8
-
-453.4
-
-
0.3
-
0.8
-
1.1
Carrying amount at 31 December 2011
-
-
329.6
32.3
66.5
-
428.4
of which: gross amount
-
0.4
349.8
61.9
145.7
0.3
558.1
-
-0.4
-20.2
-29.6
-79.2
-0.3
-129.7
711.5
0.4
336.1
50.9
123.3
0.3
1,222.5
-345.2
-0.4
-7.7
-14.8
-77.9
-0.3
-446.3
366.3
-
328.4
36.1
45.4
-
776.2
Internal development
-
-
-
-
1.0
-
1.0
Items separately acquired
-
-
-
-
32.3
-
32.3
accumulated amortisation and impairment
losses
Accumulated amortisation and impairment losses at 1
January 2010
Additions:
-
-
-
-
-0.1
-
-0.1
-13.7
-
-8.7
-6.3
-16.6
-
-45.3
Transfer from (to) another caption
-
-
2.3
2.5
5.7
-
10.5
-
-
1.1
0.4
-
-
1.5
-
-
9.5
3.8
2.8
-
16.1
Disposals
Amortisation
352.6
-
332.6
36.5
70.5
-
792.2
711.5
0.4
349.2
59.2
165.4
0.3
1,286.0
-358.9
-0.4
-16.6
-22.7
-94.9
-0.3
-493.8
accumulated amortisation and impairment
losses
Prior to the de-consolidation of the Car Rental segment, all the assets and liabilities were re-measured to the lower of carrying amount
and fair value less costs to sell at the date of disposal.
D’Ieteren
Financial and
p. 43
NOTE 13: OTHER INTANGIBLE ASSETS (CONTINUED)
The Board of Directors of the Parent has considered that the consideration offered for the acquisition of the Avis shares (see note 41) is
an indication that the impairment recognised in 2008 on the Avis licence rights has decreased. As a result and in accordance with the
requirements of IAS 36, a reversal of impairment charge has been recognised to bring the carrying amount of the Car Rental segment
to its fair value less costs to sell at the date of disposal. The resulting reversal of impairment charge (gross amount of EUR 96.2 million)
was fully allocated to the value of the Avis licence rights. This reversal of impairment has also led to an increase of EUR 28.8 million in
the deferred tax liability arising on the recognition of the Avis licence rights.
The nature of the brands with indefinite useful lives is provided in the summary of significant accounting policies in note 2. The increase
in customer contracts reflects the businesses acquired in the period (see note 12) by the Vehicle Glass segment. The brands with finite
useful lives are amortised on their remaining useful life on a straight-line basis since there is a limit to the period over which these
assets are expected to generate cash inflows. The 2011 amortisation amounted to EUR 3.3 million (2010: EUR 8.7 million). The carrying
value of the brands with a finite useful life at 31 December 2011 amounted to EUR 3.0 million (2010: EUR 2.3 million), whilst the carrying
amount of brands with indefinite useful life amounted to EUR 326.6 million (2010: EUR 330.3 million).
The allocation of brands (with indefinite useful lives) to cash-generating units in the Vehicle Glass segment is set out below:
EUR million
2011
2010
United Kingdom
67.9
67.9
France
61.9
61.9
Germany
34.8
34.8
Holland
24.2
24.2
Belgium
18.1
18.1
Canada
15.3
15.3
United States
92.1
95.8
Spain
9.1
9.1
Portugal
2.9
2.9
Italy
0.3
0.3
326.6
330.3
Carrying amount of brands
The other disclosures required by IAS 36 for intangible assets with indefinite useful lives are provided in note 11. Based on current
valuations (see note 11), headroom appears to be sufficient to absorb a normal variation in the underlying assumptions. For information,
an increase in discount rate of one percentage point and a decrease in long-term growth rate of one percentage point would not result
in an impairment charge on goodwill and on other intangible assets with indefinite useful lives.
NOTE 14: VEHICLES
EUR million
2011
2010
865.4
910.5
-207.1
-238.6
658.3
671.9
Additions
649.8
571.5
Disposals
-101.6
-
Depreciation charge
-110.5
-166.8
Transfer to inventories
-227.9
-456.1
6.2
31.8
Transfer to non-current assets held for sale (see note 23)
-324.3
-
Scope exit
-549.5
-
-0.5
6.0
-
658.3
accumulated depreciation
-
865.4
-207.1
Gross amount at 1 January
Accumulated depreciation at 1 January
Transfer from (to) current assets
D’Ieteren
Financial and
p. 44
NOTE 14: VEHICLES (CONTINUED)
In 2010, vehicles held under finance leases included in the above (in the Car Rental segment only) amounted to EUR 40 million.
The Automobile Distribution’s fleet is rented out in Belgium by s.a. D’Ieteren Lease n.v. (“D’Ieteren Lease”), a wholly-owned subsidiary
of the Group. All rentals are operating leases. On average, the rentals are 44 months long (2010: 44 months). The average size of the
fleet in 2011 is 20,827 vehicles (2010: 20,712 vehicles).
At year-end, the Group is committed to a sale plan of D’Ieteren Lease which will involve loss of control of its subsidiary, with the
contribution planned in early 2012 to a newly joint venture (Volkswagen D’Ieteren Finance) created by the Group and Volkswagen
Financial Services (a subsidiary of the Volkswagen group). The fleet assets have therefore been classified as held for sale in accordance
with IFRS 5. See notes 2.1 and 23 for more information.
In 2011 and 2010, the financing of the D’Ieteren Lease fleet was provided by a securitisation programme. This programme initially
launched in 2006 had been renewed in June 2009 up to EUR 310 million for another three year period, and had been extended in 2010
until December 2011 at improved conditions. This securitisation operation consists of the issue of bonds to professional investors.
That securitisation programme has no impact on the net debt of the Group (this programme being a substitute to other external
sources of financing). The carrying amount of the bonds changes as new lease contracts are concluded and as old ones expire. The
reimbursement of the bonds and the payment of interest are covered by customers’ lease payments and the resale of the vehicles.
The programme enables the carrying amount of the bonds to follow the evolution of the carrying amount of the fleet until the third
anniversary of the renewal (or eighteen months after the renewal, absent extension of the financing of the programme). It then starts
to amortise, in line with the maturation of the underlying lease contracts.
The securitisation programme does not result in the derecognition of any item from the statement of financial position. Other
disclosures regarding the securitisation programme are provided in notes 19, 25, 31 and 39.
This programme will be fully reimbursed in early 2012 at the occasion of the contribution of D’Ieteren Lease to Volkswagen D’Ieteren
Finance, the financing of the fleet being provided by Volkswagen Financial Services.
The line “Scope exit” is related to the de-consolidation of the Car Rental’s fleet (see note 2.1). Before the disposal of Avis Europe shares,
the Car Rental’s fleet was rented out by Avis Europe plc and its subsidiaries in Europe. All rentals were operating leases. In accordance
with IFRS 5, the Group decided not to depreciate the Car Rental’s fleet as from the date of its classification as held for sale (30 June
2011). The impact in the consolidated income statement is EUR 32.0 million.
D’Ieteren
Financial and
p. 45
NOTE 15: OTHER PROPERTY, PLANT AND EQUIPMENT
EUR million
Accumulated depreciation and impairment losses at
1 January 2011
Property
Plant and
equipment
Assets under
construction
Total
434.2
592.6
8.8
1,035.6
-193.1
-367.1
-
-560.2
241.1
225.5
8.8
475.4
Additions
22.8
86.1
5.6
114.5
Disposals
-0.3
-9.5
-
-9.8
-21.7
-66.4
-0.3
-88.4
4.8
0.3
-5.1
-
0.7
1.1
-
1.8
-47.9
-10.2
-0.4
-58.5
0.2
1.1
-
1.3
199.7
228.0
8.6
436.3
377.9
595.3
8.6
981.8
-178.2
-367.3
-
-545.5
Depreciation
Scope exit
accumulated depreciation and impairment
losses
Accumulated depreciation at 1 January 2010
399.9
498.0
3.2
901.1
-172.4
-309.6
-
-482.0
227.5
188.4
3.2
419.1
Additions
32.0
103.1
7.9
143.0
Disposals
-0.7
-2.7
-
-3.4
-23.5
-69.4
-
-92.9
0.4
-6.2
-2.3
-8.1
-
1.3
-
1.3
5.4
11.0
-
16.4
241.1
225.5
8.8
475.4
434.2
592.6
8.8
1,035.6
-193.1
-367.1
-
-560.2
Depreciation
accumulated depreciation and impairment
losses
At 31 December 2011, assets under construction include property under construction in the Automobile Distribution segment
(EUR 8.6 million). The line “Scope exit” relates to the de-consolidation of the Car Rental segment (see note 2.1).
Assets held under finance leases are included in the above at the following amounts:
Property
Plant and
equipment
Assets under
construction
Total
31 December 2011
-
46.2
-
46.2
31 December 2010
-
54.2
-
54.2
EUR million
D’Ieteren
Financial and
p. 46
NOTE 16: INVESTMENT PROPERTY
EUR million
2011
2010
Gross amount at 1 January
12.5
12.5
Accumulated depreciation at 1 January
-6.7
-6.2
5.8
6.3
Additions
0.3
-
-0.5
-0.5
Depreciation
accumulated depreciation
Fair value
5.6
5.8
12.8
12.5
-7.2
-6.7
9.1
9.2
The fair value is supported by market evidence, and is based on a valuation by an independent valuer who holds a recognised and
relevant professional qualification, and who has recent experience in the location and category of the investment property held by the
Group. The latest valuations were performed in March 2010.
All items of investment property are located in Belgium and are held by the Automobile Distribution segment.
See also notes 5 and 39 for other disclosures on investment property.
NOTE 17: AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets are those non-derivative financial assets that are designated as available for sale or are not classified
as (i) loans and receivables, (ii) held-to-maturity investments or (iii) financial assets held for trading.
EUR million
2011
Carrying amount
2010
Fair value
Carrying amount
Fair value
Sundry
0.5
0.5
1.2
1.2
Total available-for-sale financial assets
0.5
0.5
1.2
1.2
In 2011, available-for-sale financial assets comprise non-controlling interests in non-listed companies (measured at cost less
accumulated impairment losses if any, being an approximation of their fair value) held by the Automobile Distribution segment. The
decrease during the period is due to the de-consolidation of available-for-sale financial assets held by the Car Rental segment and to
the sale of the non-controlling interest previously held by the Vehicle Glass segment in a listed company. They are considered as noncurrent assets, and are not expected to be realised within 12 months. However, some or all of them could be disposed of in the near
future, depending on opportunities.
D’Ieteren
Financial and
p. 47
NOTE 18: DERIVATIVE HEDGING INSTRUMENTS
Derivative hedging instruments are derivatives that meet the strict criteria of IAS 39 for application of hedge accounting. They provide
economic hedges against risks faced by the Group (see note 38).
Derivative hedging instruments are classified in the statement of financial position as follows:
EUR million
Non-current assets
Current assets
Current liabilities
Net derivative hedging instruments
2011
2010
15.7
4.8
1.1
0.1
-
-17.3
-
-12.9
16.8
-25.3
2011
2010
Derivative hedging instruments are analysed as follows:
EUR million
Cross currency interest rate swaps (debt derivatives)
Interest rate swaps (debt derivatives)
Forward foreign exchange contracts (non-debt derivatives)
Non-deliverable forward exchange contracts
Net derivative hedging instruments
15.7
-9.0
-
-12.4
1.1
-3.2
-
-0.7
16.8
-25.3
In 2011, all derivative hedging instruments are recognised in the Vehicle Glass segment (in 2010, in the Car Rental and Vehicle Glass
segments).
In the Vehicle Glass segment:
- Forward foreign exchange contracts were used to hedge the cost of future purchases of raw materials where those purchases are
denominated in a currency other than the functional currency of the purchasing entity. The hedging instruments are primarily used
to hedge material purchases in Australian Dollars, US Dollars and Canadian Dollars. These contracts qualify for hedge accounting
and are classified as cash flow hedges. These will occur within one year of the date of the consolidated statement of financial
position and are expected to impact the consolidated income statement during the same year. The total notional amount of these
contracts is EUR 26.3 million equivalent (2010: EUR 45.7 million) and the total fair value recognised within other comprehensive
income is an asset of EUR 1.1 million (2010: a liability of EUR 2.0 million).
- Forward foreign exchange contracts were also used to hedge future interest costs, where the underlying loan was denominated in a
currency other than the functional currency of the paying entity. Certain of those contracts qualified for hedge accounting whereas
others did not. Those that qualified for hedge accounting were classified as cash flow hedges. These will occur within one year of
the date of the consolidated statement of financial position and are expected to impact the consolidated income statement during
the same year. The total notional amount of these contracts is nil (2010: EUR 0.8 million) and the net position recognised within
other comprehensive income amounts to nil in 2011 and 2010.
- Cross currency interest rate swaps were used to hedge future US Dollar denominated cash flows of US Private Placement debt
where that debt is not used to hedge either net investments or short term intercompany loans. These contracts qualify for hedge
accounting. The total notional amount of outstanding cross currency interest swaps contracts (to receive US Dollars for EUR) is
EUR 73.6 million (2010: nil) and the fair value is an asset of EUR 15.7 million (2010: nil). The gain on cross currency interest swaps
during the period was EUR 14.7 million and represented the fair value less accrued interest recognised in the consolidated income
statement.
- Non-deliverable forward exchange contracts were used to hedge a proportion of the net assets of the Brazilian business. These
contracts qualifying for hedge accounting were used to hedge exchange movements on EUR denominated loans held in Brazil. The
total notional amount of these contracts is nil (2010: EUR 10.1 million) and the fair value is nil (2010: liability of EUR 0.7 million).
- As part of its net investment hedge policy, the Vehicle Glass segment also used currency denominated borrowings to hedge the
exposure of a proportion of its non-EUR denominated net assets against changes in value due to changes in foreign exchange rates.
The fair value of these borrowings is EUR 349.5 million (2010: EUR 347.2 million).
D’Ieteren
Financial and
p. 48
NOTE 18: DERIVATIVE HEDGING INSTRUMENTS (CONTINUED)
In the prior year, in the Car Rental segment, cross currency interest rate swaps of aggregate notional principal amounts of USD 240
million were used to hedge the Avis Europe’s USD denominated loan notes. Fair value hedge adjustments of EUR -1.8 million arised
from the hedging of the principal value of the exposures to euro denominated liabilities. Cash flow hedges of EUR 0.1 million arised
from the conversion of the regular semi-annual USD denominated interest payments to euro denominated interest payments. Interest
rate swaps of aggregate notional principal amounts of EUR 200.0 million with average fixed interest payable of 4.03% were also used to
hedge variable quarterly interest payments arising under the Senior Floating Rate Notes due 2013 issued by Avis Europe in 2006. The
aim of the hedge relationship was to transform the variable interest borrowing into a fixed interest borrowing and resulted in cash flow
hedges of EUR 11.4 million. Credit risks do not form part of the hedge. There was no material ineffectiveness of these hedges recorded
as at the prior year balance sheet date. Forward foreign exchange contracts were used to hedge expected foreign currency income and
expected foreign currency payments. Movements in the fair value of these forward foreign exchange contracts were recognised as cash
flow hedges in the hedging reserve within equity. There was no material ineffectiveness of these hedges recorded as at the prior year
balance sheet date.
The non-current portion of the derivative hedging instruments is expected to be settled after more than 12 months; the current portion
within 12 months.
The fair values are determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are
based on market conditions at the balance sheet date. The fair value of cross currency interest rate swaps and interest rate swaps is
calculated as the present value of future estimated cash flows. The fair value of interest rate caps and collars is valued using option
valuation techniques. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance
sheet date.
The notional principal amounts of the outstanding derivative hedging instruments are as follows:
EUR million
Cross currency interest rate swaps (debt derivatives)
Interest rate swaps (debt derivatives)
Forward foreign exchange contracts (non-debt derivatives)
2011
2010
73.6
183.0
-
200.0
26.3
80.6
D’Ieteren
Financial and
p. 49
NOTE 19: DERIVATIVES HELD FOR TRADING
Derivatives held for trading are derivatives that do not meet the strict criteria of IAS 39 for application of hedge accounting. They
however provide economic hedges against risks faced by the Group (see note 38).
Derivatives held for trading are classified in the statement of financial position as follows:
EUR million
2011
2010
Non-current assets
Debt derivatives
Embedded derivatives
Subtotal
-
2.2
-
2.2
10.3
10.8
1.7
4.2
-
0.2
Current assets
Debt derivatives
Interest rate swaps excluding securitisation swaps
Interest rate securitisation swaps (1)
Interest rate caps
Non-debt derivatives
Forward foreign exchange contracts
Fuel hedge instruments
Subtotal
-
2.3
0.3
2.2
12.3
19.7
Debt derivatives
Subtotal
-1.1
-0.1
-1.1
-0.1
Current liabilities
Debt derivatives
-7.6
-18.4
-
-4.4
Interest rate caps
-
-0.6
-
-0.7
Non-debt derivatives
Subtotal
NET DERIVATIVES HELD FOR TRADING
1
-
-0.5
-7.6
-24.6
3.6
-2.8
Other disclosures regarding the securitisation programme are provided in notes 14, 25, 31 and 39.
In the Vehicle Glass segment, a combination of options, collars and swaps (collectively “fuel hedge instruments”) was used to hedge
the price of fuel purchases. The fair value of fuel hedge instruments is determined using market valuations prepared by the respective
banks that executed the initial transactions at the statement of financial position date based on the present value of the monthly futures
forward curve for gasoline given the volume hedged and the contract period.
In the prior year, the EUR 250.0 million Senior Floating Rate Notes due 2013 issued by Avis Europe in 2006 included a call option
permitting Avis Europe to repay the notes with effect from 31 July 2008. Under the option, the notes may be redeemed at par with
effect from 31 July 2010. In accordance with IAS 39, this option was separately recognised from the underlying notes as an embedded
derivative. This embedded derivative was classified as non-current asset consistent with the maturity of the borrowing in which it is
embedded.
The fair values of forward rate agreements are calculated as the present value of future estimated cash flows. The fair values of
interest rate swaps and interest rate caps are valued using option valuation techniques. See note 18 for details on the other valuation
techniques used.
D’Ieteren
Financial and
p. 50
NOTE 19: DERIVATIVES HELD FOR TRADING (CONTINUED)
The notional principal amounts of the outstanding derivatives held for trading are as follows:
EUR million
2011
2010
1,151.0
1,118.8
402.0
402.0
Interest rate caps and collars
10.0
40.0
Interest rate floors and collars
10.0
15.0
2.6
18.9
16.7
12.1
Forward foreign exchange contracts and options
"Fuel hedge instruments"
1
Other disclosures regarding the securitisation programme are provided in notes 14, 25, 31 and 39.
NOTE 20: LONG-TERM EMPLOYEE BENEFIT ASSETS AND OBLIGATIONS
Long-term employee benefits include post-employment employee benefits and other long-term employee benefits. Post-employment
employee benefits are analysed below. Other long-term employee benefits are presented among non-current provisions or non-current
other payables, and, if material, separately disclosed in the relevant note.
Post-employment benefits are limited to retirement benefit schemes. Where applicable, Group entities contribute to the relevant state
pension schemes. Certain Group entities operate schemes which provide retirement benefits, including those of the defined benefit
type, which are in most cases funded by investments held outside the Group. The disclosures related to defined contribution schemes
are provided in note 36.
The Group operates defined benefit schemes for qualifying employees in the following countries:
Automobile Distribution:
Funded and unfunded schemes:
Belgium
Car Rental (in 2010 only):
Funded schemes:
Austria
France
Spain
United Kingdom
Unfunded schemes:
Germany
Italy
Vehicle Glass:
Funded schemes:
Canada
France
Ireland
Holland
United Kingdom
United States
The valuations used have been based on the most recent actuarial valuations, updated by the scheme actuaries to assess the liabilities
of the scheme and the market value of the scheme assets at each of the balance sheet dates.
D’Ieteren
Financial and
p. 51
NOTE 20: LONG-TERM EMPLOYEE BENEFIT ASSETS AND OBLIGATIONS (CONTINUED)
The main actuarial assumptions are as follows (ranges are provided given the plurality of schemes throughout the Group :
Funded schemes
2011
Unfunded schemes
2010
2011
2010
Min.
Max.
Min.
Max.
Min.
Max.
Min.
Max.
Inflation rate
1.9%
3.1%
1.9%
3.6%
2.0%
2.0%
2.0%
2.0%
Discount rate
2.6%
4.7%
3.6%
5.4%
0.6%
4.1%
1.5%
5.4%
Equities
5.8%
8.0%
7.0%
8.4%
-
-
-
-
Bonds
2.8%
5.0%
3.0%
5.3%
-
-
-
-
Other
4.1%
7.0%
0.4%
7.3%
-
-
-
-
Rate of salary increases
1.0%
5.0%
1.0%
5.4%
2.6%
2.6%
-0.3%
2.5%
Rate of pension increases
1.0%
3.1%
1.0%
3.6%
2.3%
2.3%
1.3%
2.0%
Expected return on scheme assets:
The expected rates of return on scheme assets are based on market expectations at the beginning of each year, for returns over the
entire life of the related obligation. The expected return on bonds is based on long-term bond yields. The expected return on equities is
based on a wide range of qualitative and quantitative market analysis including consideration of market equity risk premiums.
The actual return on scheme assets is analysed as follows:
EUR million
Expected return on scheme assets
Actual return less expected return on scheme assets
Actual return on scheme assets
2011
2010 (1)
20.9
18.3
-21.5
29.5
-0.6
47.8
2011
2010
(1) As restated (see note 2.1).
The amounts recognised in the statement of financial position are summarised as follows:
EUR million
30.5
39.2
-59.1
-110.1
Recognised net deficit (-) / surplus (+) in the schemes
-28.6
-70.9
of which: amount expected to be settled within 12 months
amount expected to be settled in more than 12 months
-0.8
-0.9
-27.8
-70.0
D’Ieteren
Financial and
p. 52
The amounts recognised in the statement of financial position are analysed as follows:
EUR million
2011
2010
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
-388.8
-3.4
-392.2
-534.0
-43.7
-577.7
Fair value of scheme assets
363.6
-
363.6
506.8
-
506.8
Net deficit (-) / surplus (+) in the schemes
-25.2
-3.4
-28.6
-27.2
-43.7
-70.9
Present value of defined benefit obligations
The amounts recognised in the statement of financial position for the years 2009 and 2008 were analysed as follows:
EUR million
2009
2008
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
-385.4
-466.2
-39.1
-505.3
-347.3
-38.1
392.3
-
392.3
279.0
-
279.0
Net deficit (-) / surplus (+) in the schemes
-73.9
-39.1
-113.0
-68.3
-38.1
-106.4
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
Equity instruments
215.4
-
215.4
306.3
-
306.3
Debt instruments
112.5
-
112.5
143.5
-
143.5
35.7
-
35.7
57.0
-
57.0
363.6
-
363.6
506.8
-
506.8
Present value of defined benefit obligations
The fair value of scheme assets includes the following items:
EUR million
Other assets
2011
2010
The fair value of scheme assets did not comprise any property or other assets used by the Group, nor any financial instruments of the Group.
The movements in the recognised net deficit are as follows:
EUR million
Net deficit (-) / surplus (+) at 1 January
Contributions paid by the Group
Benefits paid by the Group
Expense recognised in the income statement - continuing
Expense recognised in the income statement - discontinued
Actuarial gains (+) / losses (-)
Scope exit
Other benefits paid
Transfer from another caption
Net deficit (-) / surplus (+) at 31 December
2011
2010
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
-27.2
18.5
-43.7
-70.9
-73.9
-39.1
-113.0
-
18.5
38.1
-
38.1
-
0.8
0.8
-
2.2
2.2
6.7
-0.4
6.3
-6.3
-0.5
-6.8
-1.8
-
-1.8
-4.9
-2.5
-7.4
-57.0
-
-57.0
26.4
-3.8
22.6
35.7
39.9
75.6
-
-
-
-
-
-
0.2
-
0.2
-2.3
-
-
-
-2.3
-
-0.1
-
-0.1
-4.5
-
-4.5
-25.2
-3.4
-28.6
-27.2
-43.7
-70.9
D’Ieteren
Financial and
p. 53
The amounts recognised in the income statement are as follows:
EUR million
2011
2010
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
Current service cost
-8.7
Past service cost
11.7
-0.3
-9.0
-10.7
-0.9
-11.6
-
11.7
-0.1
-
-0.1
-17.6
-0.1
-17.7
-27.7
-2.1
-29.8
Effect of curtailment or settlement
0.4
-
0.4
0.2
-
0.2
Expected return on scheme assets
20.9
-
20.9
27.1
-
27.1
Interest cost
6.7
-0.4
6.3
-11.2
-3.0
-14.2
of which: commercial and administrative expenses
(current items)
Expense recognised in the income statement
-5.0
-0.4
-5.4
-11.2
-3.0
-14.2
commercial and administrative expenses
(unusual items - see note 9)
11.7
-
11.7
-
-
-
In 2011, the past service cost of EUR 11.7 million is due to the change by the UK Government of the index used for increasing deferred
state pensions (see note 9).
The amounts recognised through the statement of comprehensive income are as follows:
EUR million
Actual return less expected return on scheme assets
Experience gain (+) / loss (-) on liabilities
Gain (+) / Loss (-) on change of assumptions (1)
Actuarial gains (+) / losses (-)
1
2011
2010
Funded
schemes
Unfunded
schemes
Total
Funded
schemes
Unfunded
schemes
Total
-21.5
-
-21.5
11.5
-
11.5
29.5
-
29.5
1.4
-
-41.2
-
-41.2
1.4
-15.7
-
-15.7
-5.8
-
-5.8
11.2
-3.8
7.4
-57.0
-
-57.0
26.4
-3.8
22.6
Financial and/or demographic assumptions.
The best estimate of the contributions expected to be paid to the schemes during the 2012 annual period is EUR 16.3 million.
The obligation of defined benefit schemes is calculated on the basis of a set of actuarial assumptions (including among others:
mortality, discount rate of future payments, salary increases, personnel turnover, etc.). Should these assumptions change in the
future, the obligation may increase. The defined benefit scheme assets are invested in a diversified portfolio, with a return that is likely
to experience volatility in the future. Should the return of these assets be insufficient, the deficit might increase.
D’Ieteren
Financial and
p. 54
NOTE 21: DEFERRED TAXES
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred income taxes relate to the same fiscal authority.
The movement in deferred tax assets and liabilities during the period and the prior period is as follows:
EUR million
Revaluations
Depreciation
amortisation writedowns
Provisions
-127.5
-25.2
4.3
4.7
Dividends
Tax
losses
available
for offset
Financial
instruments
Other
Total
10.0
-1.0
5.2
-1.6
-7.4
-147.5
-8.8
-0.2
5.9
-0.1
-7.0
-1.2
Deferred tax liabilities (negative
amounts)
At 1 January 2010
Credited (charged) to income
statement
Credited (charged) to equity
-
-
-5.2
-
-
0.2
-
-5.0
Exchange differences
-
-2.4
-0.2
-
-
-
-0.3
-2.9
-123.2
-22.9
-4.2
-1.2
11.1
-1.5
-14.7
-156.6
-27.0
3.1
-13.0
-0.3
-6.1
-3.0
8.3
-38.0
At 31 December 2010
statement
Scope exit
At 31 December 2011
-
-
7.1
-
-
-3.7
-
3.4
138.5
5.2
4.3
-
-5.7
-0.3
8.4
150.4
0.1
-3.2
0.2
-
-2.0
-
0.1
-4.8
-11.6
-17.8
-5.6
-1.5
-2.7
-8.5
2.1
-45.6
5.4
98.1
Deferred tax assets (positive amounts)
At 1 January 2010
-
-16.2
62.6
-
40.4
5.9
statement
-
-11.9
-17.2
-
13.6
-0.9
3.3
-13.1
-
-
-
-
-
-1.0
-2.2
-3.2
Transfer to current tax
-
0.1
-
-
-
-
1.7
1.8
-
-0.5
4.4
-
3.5
-0.1
1.4
8.7
At 31 December 2010
-
-28.5
49.8
-
57.5
3.9
9.6
92.3
statement
-
8.1
-3.4
-
6.2
-0.1
-
10.8
-
-
4.6
-
-
-0.4
2.9
7.1
Scope exit
-
-30.2
-9.1
-
-1.5
-3.4
-6.8
-51.0
Transfer to non-current assets held
for sale
-
-1.0
-
-
-
-
-
-1.0
At 31 December 2011
-
-0.2
-4.1
-
0.4
-
-
-3.9
-
-51.8
37.8
-
62.6
-
5.7
54.3
Net deferred tax assets (liabilities) after
offsetting recognised in the consolidated
statement of financial position:
31 December 2010
-123.2
-51.4
45.6
-1.2
68.6
2.4
-5.1
-64.3
31 December 2011
-11.6
-69.6
32.2
-1.5
59.9
-8.5
7.8
8.7
D’Ieteren
Financial and
p. 55
NOTE 21: DEFERRED TAXES (CONTINUED)
In the prior year, the revaluation column mainly included the deferred tax liability (EUR 111.8 million) arising on the recognition of
the Avis licence rights. The movement during the year is explained by the deferred tax impact on the amortisation and on the reversal
of impairment on the Avis licence rights, as well as the de-consolidation of the net position of this deferred tax liability at the end of
September 2011.
The net deferred tax balance includes net deferred tax assets amounting to EUR 11.1 million (2010: EUR 13.7 million) that are expected
to be reversed in the following year. However, given the low predictability of deferred tax movements, this net amount might not be
reversed as originally foreseen.
At the balance sheet date, the Group has unused tax losses and credits of EUR 240.2 million (2010: EUR 480.3 million) available for
offset against future profits, for which no deferred tax asset has been recognised, due to the unpredictability of future profit streams.
This includes unused tax losses of EUR 3.3 million (2010: EUR 2.4 million) that will expire in the period 2015-2027 (2010: 2015-2027)
and unused tax credits of EUR 41.1 million (2010: EUR 105.8 million) that will expire in the period 2012-2018 (2010: 2011-2017). Other
losses may be carried forward indefinitely.
Deferred tax has not been recognised in respect of other deductible temporary differences amounting to EUR 10.0 million (2010: EUR
22.8 million) due to the unpredictability of future profit streams.
At the balance sheet date the aggregate amount of temporary differences associated with the investments in subsidiaries, branches,
associates and interests in joint ventures (being mainly the accumulated positive consolidated reserves of these entities) for which
deferred tax liabilities have not been recognised is EUR 831.8 million (2010: EUR 809.6 million). No deferred tax liability has been
recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary
differences and it is probable that such differences will not reverse in the foreseeable future. It should also be noted that the reversal
of these temporary differences, for example by way of distribution of dividends by the subsidiaries to the Parent, would generate no (or
a marginal) current tax effect.
Deferred tax assets include, among other items:
- EUR 0.2 million (2010: EUR 3.8 million) of which the utilisation is dependent on future taxable profits in excess of the profit arising
from the reversal of existing taxable temporary differences;
- EUR 4.6 million (2010: EUR 0.5 million) related to entities that suffered a loss in either the current or preceding period in a tax
jurisdiction to which the deferred tax assets relate.
The recognition of these deferred tax assets is supported by profit expectations in the foreseeable future.
Deferred tax assets are recognised provided that there is a sufficient probability that they will be recovered in the foreseeable future.
Recoverability has been conservatively assessed. However, should the conditions for this recovery not be met in the future, the current
carrying amount of the deferred tax assets may be reduced.
NOTE 22: OTHER NON-CURRENT RECEIVABLES
The other non-current receivables are comprised of guarantee deposits and of non-current receivables from entities accounted for
using the equity method. Their carrying amount approximates their fair value, and they generally generate no interest income. They are
expected to be recovered after more than 12 months.
NOTE 23: NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Framework
On 10 October 2011, the Parent and Volkswagen Financial Services (a subsidiary of the Volkswagen group) announced that they reached
an agreement to create a joint venture, Volkswagen D’Ieteren Finance (VDFin), intended to provide a full range of financial services
related to the sale of the Volkswagen group vehicles on the Belgian market. VDFin will be operational in early 2012 and will be created
by the contribution in early 2012 of D’Ieteren Lease sa, the Group subsidiary active in operating leases, and of the Volkswagen Bank
Belgium operations. VDFin will be 50% owned (minus one share) by the Group and 50% owned (plus one share) by Volkswagen Financial
Services. Both parties signed the shareholders’ agreement on 23 December 2011.
Classification as held for sale
The Board of Directors of the Parent considered that the Parent is committed to a sale plan of D’Ieteren Lease which will involve the
loss of control of its subsidiary, and has therefore classified in the consolidated statement of financial position as at 31 December 2011
all the assets and liabilities of its subsidiary as held for sale; the recognition criteria defined in IFRS 5 “Non-Current Assets Held for
Sale and Discontinued Operations” being satisfied. These assets and liabilities were re-measured to the lower of carrying amount and
fair value less costs to sell at the date of the classification as held for sale (31 December 2011).
D’Ieteren
Financial and
p. 56
NOTE 23: NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE (CONTINUED)
Assets and liabilities (Automobile Distribution segment)
EUR million
2011
Vehicles
324.3
Deferred tax assets
1.1
Other non-current receivables
0.6
Other financial assets - Securitisation cash reserves
7.7
0.6
Current tax assets
13.3
0.1
Non-current assets classified as held for sale
347.7
In the prior year, non-current assets held for sale comprised buildings previously used for Automobile Distribution activities, for which
the management was commited to disposal. The disposal occurred in the second half of 2011.
EUR million
Notes
4.0
Other non-current provisions
181.4
Current bonds under securitisation programme
Current intra-segment subordinated loan
Current derivatives held for trading - Interest rate securitisation programme
Liabilities associated with non-current assets held for sale
Net assets group's share
2011
31
89.0
2.0
56.8
333.2
14.5
Net debt
EUR million
2011
Current bonds under securitisation programme
181.4
Current intra-segment subordinated loan
89.0
Less: Other financial assets - Securitisation cash reserves
-7.7
Less: Cash and cash equivalents
Total net debt
-0.1
262.6
D’Ieteren
Financial and
p. 57
NOTE 24: INVENTORIES
EUR million
2011
2010
339.6
283.2
29.5
26.3
Vehicles
1.5
0.9
370.6
310.4
Vehicles
-
0.7
Fuel
-
5.9
-
0.5
Subtotal
-
7.1
Other
Subtotal
Car Rental
Vehicle Glass
Glass and related product
256.3
233.9
Subtotal
256.3
233.9
GROUP
626.9
551.4
88.0
82.0
of which: items carried at fair value less costs to sell
In the prior year, in the Car Rental segment, vehicles comprised ex-rental vehicles where management was commited to the disposal
of the vehicles. The disposal occurred in early 2011.
The items carried out at fair value less costs to sell are mainly the vehicles sold under buy-back agreements (this kind of agreement
being accounted for as operating lease) that are kept on statement of financial position until their subsequent resale.
The inventories are expected to be recovered within 12 months.
NOTE 25: OTHER FINANCIAL ASSETS
The other financial assets are analysed as follows:
EUR million
2011
2010
Automobile Distribution - Securitisation cash reserves
-
8.9
Vehicle Glass - Restricted cash related to acquisitions
1.1
17.0
1.1
25.9
The securitisation cash reserves (see note 23 for amounts classified as held for sale as at 31 December 2011) are pledged by D’Ieteren
Lease and are held on its own bank accounts. Other disclosures regarding the securitisation programme are provided in notes 14, 19,
31 and 39.
The other financial assets are expected to be recovered within 12 months. Their carrying amount is equal to their fair value.
NOTE 26: CURRENT TAX ASSETS AND LIABILITIES
Current tax assets (liabilities) are largely expected to be recovered (settled) within 12 months.
D’Ieteren
Financial and
p. 58
NOTE 27: TRADE AND OTHER RECEIVABLES
Trade and other receivables are analysed as follows:
EUR million
Trade receivables - net
Vehicle related receivables
Receivables from entities accounted for using the equity
method
Other receivables
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
137.2
186.1
323.3
-
-
-
107.5
147.7
192.2
447.4
-
758.4
-
758.4
1.3
-
1.3
0.5
-
-
0.5
Group
7.3
67.5
74.8
12.8
120.0
45.8
178.6
145.8
253.6
399.4
120.8
1,026.1
238.0
1,384.9
The trade and other receivables are expected to be recovered within 12 months. Their carrying amount approximates to their fair value,
and they generate no interest income.
The Group is exposed to credit risk arising from its operating activities. Such risks are mitigated by selecting clients and other business
partners on the basis of their credit quality and by avoiding as far as possible concentration on a few large counterparties. Credit quality
of large counterparties is assessed systematically and credit limits are put in place prior to taking exposure. Payment terms are on
average less than one month except where local practices are otherwise. Receivables from sales involving credit are closely tracked
and collected mostly centrally in the Automobile Distribution segment, and at the country level in the Vehicle Glass segment.
In the Automobile Distribution segment, concentration on top ten customers is 23% (2010: 20%) and no customer is above 7% (2010:
6%). Certain receivables are also credit insured.
In the Vehicle Glass segment, concentrations of risk with respect to receivables are limited due to the diversity of the Belron’s customer
base.
In the prior year, in the Car Rental segment, vehicle related receivables included receivables related to vehicles purchased under buyback agreements, prepaid vehicle operating lease charges, amount due from leasing companies and other vehicle receivables.
Statement of financial position amounts are stated net of provisions for doubtful debts, and accordingly, the maximum credit risk
exposure is the carrying amount of the receivables in the statement of financial position. As at 31 December 2011, the provisions for
bad and doubtful debt amounted to EUR 22.8 million (2010: EUR 53.4 million).
The ageing analysis of trade and other receivables past due but not impaired is as follows:
EUR million
2011
2010
Up to three months past due
95.1
153.8
Three to six months past due
10.2
11.7
Over six months past due
Total
6.5
9.8
111.8
175.3
The decrease of the provisions for bad and doubtful debts is explained by the de-consolidation of the Car Rental segment’s receivables
and by the decrease of EUR 3.0 million as disclosed in note 5.
D’Ieteren
Financial and
p. 59
NOTE 28: CASH AND CASH EQUIVALENTS
Cash and cash equivalents are analysed below:
EUR million
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
Group
Cash at bank and in hand
74.5
36.5
111.0
2.1
92.3
33.4
127.8
Short-term deposits
20.0
-
20.0
-
139.4
-
139.4
Money Market Assets
119.0
-
119.0
-
-
-
-
213.5
36.5
250.0
2.1
231.7
33.4
267.2
Cash and cash equivalents are mainly floating rate assets which earn interest at various rates set with reference to the prevailing
EONIA, LIBID or equivalent. Their carrying amount is equal to their fair value.
In 2011, in the Automobile Distribution segment, cash and cash equivalents have been building up, notably with the proceeds of the sale
in October 2011 of the Avis Europe shares previously held by the Group.
In the Vehicle Glass segment, due to legal restrictions, cash balances held in Brazil, amounting to EUR 3.7 million (2010: EUR 5.2
million), are not available for general use by the Parent or other subsidiaries.
Short-term deposits mature within 1 month (5 months in the prior period in the Car Rental segment).
NOTE 29: EQUITY
The change in ordinary share capital is set out below:
EUR million, except number of shares stated in units
At 1 January 2010
Ten for one share split
At 31 December 2010
Change
At 31 December 2011
Number of
ordinary shares
Ordinary
share capital
5,530,262
160.0
-
-
55,302,620
160.0
-
-
55,302,620
160.0
On 20 December 2010, the Extraordinary General Meeting of Shareholders approved the proposal of the Board of Directors to divide by
ten the ordinary shares and the participating shares, by way of exchange. After this split (which was effective 27 December 2010), the
number of ordinary shares and participating shares issued by the Parent amounts respectively to 55,302,620 and 5,000,000.
All ordinary shares issued are fully paid. Ordinary shares have no face value. The same Extraordinary General Meeting of Shareholders
approved the dematerialization of bearer shares. The bearer ordinary shares are therefore to be converted into either registered or
dematerialized shares prior to the exercise of any rights attached to them. Each ordinary share confers one voting right.
The 5,000,000 nominative participating shares do not represent share capital. Each participating share confers one voting right and
gives the right to a dividend equal to one eighth of the dividend of an ordinary share.
D’Ieteren
Financial and
p. 60
NOTE 29: EQUITY (CONTINUED)
Treasury shares are held by the Parent and by subsidiaries as set out below:
EUR million, except number of shares stated in units
Treasury shares held by the Parent
Treasury shares held by subsidiaries
Treasury shares held
31 December 2011
31 December 2010
Number
Amount
Number
Amount
744,423
15.8
779,860
15.8
-
-
-
-
744,423
15.8
779,860
15.8
Treasury shares are held to cover the stock option plans set up by the Parent since 1999 (see note 37).
On 28 May 2009, the Extraordinary General Meeting of Shareholders renewed the authorisation to the Board of Directors to increase the
share capital on one or more occasions, during a renewable period of five years, up to a maximum of EUR 60 million by contributions
in cash or in kind or by incorporation of available or non-available reserves or share premium account, with or without creation of
new shares, either preference or other shares, with or without voting rights, with or without subscription rights, with the possibility
of limiting or withdrawing preferential subscription rights including in favour of one or more specified persons. The same Meeting
authorised the Board of Directors to purchase own shares, during a period of five years, up to a maximum of ten percent of the ordinary
shares issued.
Registered shares not fully paid-up may not be transferred except by virtue of a special authorisation from the Board of Directors for
each assignment and in favour of an assignee appointed by the Board (art. 7 of the Articles). Participating shares may not be transferred
except by the agreement of a majority of members of the Board of Directors, in which case they must be transferred to an assignee
appointed by said members (art. 8 of the Articles).
The Group’s objectives when managing capital are to safeguard each of its activities ability to continue as a going concern and to
maintain an optimal capital structure to reduce the cost of capital. The Group monitors the capital adequacy at the level of each of its
activities through a set of ratios relevant to their specific business. In order to maintain or adjust the capital structure, each activity may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt,
taking into account the existence of non-controlling shareholders.
Disclosure of company shareholders
(according to the declarations of major shareholdings dated
02/11/2011)
Capital shares
Participating shares
Total voting rights
Number
%
Number
%
Number
%
17.12%
10,322,060
18.66%
-
-
10,322,060
Reptid Commercial Corporation, Dover, Delaware
2,025,320
3.66%
-
-
2,025,320
3.36%
Mrs Catheline Périer-D’Ieteren
1,529,900
2.77%
1,250,000
25.00%
2,779,900
4.61%
s.a. de Participations et de Gestion, Brussels
Mr Olivier Périer
The four abovementioned persons (collectively “SPDG Group”)
are associated and act in concert with Cobepa s.a.
Nayarit Participations s.c.a., Brussels
10,000
0.02%
-
-
10,000
0.02%
13,887,280
25.11%
1,250,000
25.00%
15,137,280
25.10%
17,217,830
31.13%
-
-
17,217,830
28.55%
Mr Roland D’Ieteren
466,190
0.84%
3,750,000
75.00%
4,216,190
6.99%
Mr Nicolas D’Ieteren
10,000
0.02%
-
-
10,000
0.02%
17,694,020
31.99%
3,750,000
75.00%
21,444,020
35.56%
2,126,210
3.84%
-
-
2,126,210
3.53%
The three abovementioned persons (collectively “Nayarit
Group”) are associated and act in concert with Cobepa s.a.
The persons referred to as SPDG Group and Nayarit Group act
in concert.
Cobepa s.a., Brussels
Cobepa s.a. acts in concert on the one hand with Nayarit Group
and on the other hand with SPDG Group.
The Board of Directors proposed the distribution of a gross dividend amounting to EUR 0.80 per share (2010: EUR 0.425 per share), or
EUR 44.1 million in aggregate (2010: EUR 23.5 million).
D’Ieteren
Financial and
p. 61
NOTE 30: PROVISIONS
Provisions for post-retirement benefit schemes are analysed in note 20. The other provisions, either current or non-current, are
analysed below.
The major classes of provisions are the following ones:
EUR million
2011
Automobile
Distribution
2010
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
Group
19.2
-
19.2
15.5
5.0
-
5.0
5.0
-
-
15.5
-
-
-
-
-
2.7
18.4
5.0
-
21.1
Non-current provisions
Dealer-related
Warranty
Insurance and covers
Other non-current items
Subtotal
7.6
36.8
44.4
8.5
9.0
37.0
54.5
31.8
36.8
68.6
31.7
27.4
37.0
96.1
Current provisions
Insurance and covers
-
-
-
-
13.9
-
13.9
Other current items
-
8.9
8.9
-
7.0
4.4
11.4
Subtotal
Total provisions
-
8.9
8.9
-
20.9
4.4
25.3
31.8
45.7
77.5
31.7
48.3
41.4
121.4
The changes in provisions are set out below for the year ended 31 December 2011:
EUR million
At 1 January 2011
Dealerrelated
Warranty
Insurance
and covers
Other
noncurrent
items
Other
current
items
Total
121.4
15.5
5.0
35.0
54.5
11.4
Charged in the year
6.8
0.9
9.6
2.6
14.1
34.0
Utilised in the year
-3.0
-0.2
-2.7
-2.2
-9.6
-17.7
Reversed in the year
-0.1
-0.7
-
-0.2
-
-1.0
Transferred during the year
-
-
-8.2
-0.5
5.7
-3.0
Transferred to liabilities associated with non-current assets held
for sale (see note 23)
-
-
-2.9
-1.1
-
-4.0
Scope exit
-
-
-30.8
-8.7
-12.7
-52.2
19.2
5.0
-
44.4
8.9
77.5
At 31 December 2011
The timing of the outflows being largely uncertain, most of the provisions are considered as non-current items. Current provisions are
expected to be settled within 12 months.
The dealer-related provisions arise from the ongoing improvement of the distribution networks.
In the Automobile Distribution segment, warranty provisions relate to the cost of services offered to new vehicle customers, like mobility.
Provisions are also set up for incurred material damage (registered or not) at D’Ieteren Lease. At year-end, these are classified within
liabilities associated with non-current assets held for sale (see note 23).
Other current and non-current provisions primarily comprise:
- Reorganisation and employee termination provisions that are expected to crystallise within the next few years;
- Dilapidation and environmental provisions to cover the costs of the remediation of certain properties held under operating leases;
- Provisions for vacant properties;
- Provision against legal claims that arise in the normal course of business, that are expected to crystallise in the next couple of years.
After taking appropriate legal advice, the outcome of these legal claims should not give rise to any significant loss beyond amounts
provided at 31 December 2011;
- Provisions for long-term management incentive schemes in the Vehicle Glass segment. The scheme set up in 2005 was settled in the
first half of 2010. The settlement of the new scheme commenced in 2010 is expected to occur between 2013 and 2015.
D’Ieteren
Financial and
p. 62
NOTE 31: BORROWINGS
Borrowings are analysed as follows:
EUR million
Notes
2011
Automobile
Distribution
2010
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
249.7
-
249.7
349.6
-
-
349.6
-
-
-
186.4
-
-
186.4
Group
Bonds
Bonds under securitisation programme
-
25.9
25.9
-
0.1
30.3
30.4
1.6
46.6
48.2
1.5
-
439.3
440.8
Loan notes
-
464.4
464.4
-
435.6
271.0
706.6
Deferred consideration
-
-
-
-
24.8
-
24.8
251.3
536.9
788.2
537.5
460.5
740.6
1,738.6
100.0
-
100.0
-
-
-
-
-
20.3
20.3
-
184.3
21.2
205.5
Obligations under finance leases
Bank and other loans
Subtotal non-current borrowings
Current borrowings
Bonds
1.0
20.8
21.8
3.6
20.3
8.4
32.3
Loan notes
-
-
-
-
91.6
-
91.6
Commercial paper
-
-
-
25.5
1.0
-
26.5
-
-
-
-
0.3
-
0.3
-89.0
-
-89.0
-
-
-
-
-240.0
240.0
-
-
-
-
-
Subtotal current borrowings
-228.0
281.1
53.1
29.1
297.5
29.6
356.2
23.3
818.0
841.3
566.6
758.0
770.2
2,094.8
Bank and other loans
23
Intra-segment subordinated loan
TOTAL BORROWINGS
The Group issues bonds both through the Parent and its wholly-owned subsidiary D’Ieteren Trading b.v. The bonds outstanding at 31
December are as follows (only in the Automobile Distribution segment):
2011
Issued
Maturing
Fixed rate
July 2004
100.0
2012
5.25%
July 2004
100.0
2012
5.25%
July 2005
100.0
2015
4.25%
July 2005
100.0
2015
4.25%
150.0
2014
5.50%
December 2009
150.0
2014
5.50%
December 2009
Total
2010
Principal
(EUR million)
350.0
Issued
Principal
(EUR million)
Maturing
Fixed rate
350.0
The weighted average cost of bonds in 2011 was 5.1% (2010: 5.1%).
The Group issues bonds under a securitisation programme, through its wholly-owned subsidiary s.a. D’Ieteren Lease n.v. (“D’Ieteren
Lease”). The programme is set out in note 14. The weighted average cost of this programme, including the amortisation of the
initial set-up and renewal costs over a two successive three-year periods, was 3.4% (2010: 3.5%). Pledged accounts related to this
securitisation programme are recorded under the heading “other financial assets” (see notes 23 and 25). Other disclosures regarding
the securitisation programme are also provided in notes 19 and 39.
At year-end, in accordance with the requirements of IFRS 5 (see notes 2.1 and 23), bonds under securitisation programme have been
classified within liabilities associated with non-current assets held for sale. The programme will be fully repaid in early 2012 at the
occasion of the contribution of D’Ieteren Lease to Volkswagen D’Ieteren Finance, the financing of the fleet being guaranteed throughout
this new joint venture created by the Group and Volkswagen Financial Services (a subsidiary of the Volkswagen group).
D’Ieteren
Financial and
p. 63
NOTE 31: BORROWINGS (CONTINUED)
Obligations under finance leases are analysed below:
EUR million
2011
2010
Minimum
lease
payments
Present value
of minimum
lease payments
Minimum
lease
payments
Present value
of minimum
lease payments
Within one year
20.8
20.3
211.6
205.5
Between one and five years
27.5
25.3
32.4
29.6
0.8
0.7
1.0
0.8
49.1
46.3
245.0
235.9
More than five years
Subtotal
Less: future finance charges
-2.9
-9.1
Present value of finance lease obligations
46.2
235.9
At year-end, obligations under finance leases are only located in the Vehicle Glass segment. Finance leases were also previously used
in the Car Rental segment (until its disposal in 2011) which leased certain of its vehicles (including some vehicles held under buy-back
agreements) and plant and equipment under finance leases. The Group’s obligations under finance leases are secured by the lessors
having legal title over the leased assets.
Bank and other loans mainly represent non syndicated bank loans (in the Automobile Distribution segment) and syndicated
arrangements (in Vehicle Glass segment), as well as overdrafts. Depending on the currency of the bank borrowings and the segment
concerned, the weighted average cost ranged from 1.9% to 20.6% in 2011 (2010: 1.3% to 16.9%).
In the Vehicle Glass segment, loan notes represent the following outstanding balances, due by Belron Finance Limited, a wholly-owned
subsidiary of Belron:
2011
Principal
(in million)
2010
Maturing
Principal
(in million)
Maturing
Interest rate
Currency
Series A (April 2007)
5.68%
USD
200.0
2014
200.0
2014
Series B (April 2007)
5.80%
USD
125.0
2017
125.0
2017
Series C (April 2007)
5.94%
GBP
20.0
2017
20.0
2017
Series A (March 2011)
4.51%
USD
50.0
2018
n/a
n/a
Series B (March 2011)
5.13%
USD
100.0
2021
n/a
n/a
Series C (March 2011)
5.25%
USD
100.0
2023
n/a
n/a
In the prior year, in the Car Rental segment, loan notes represented the following balances, due by Avis Finance Company plc (“AFC”),
an indirect wholly-owned subsidiary of Avis Europe plc:
2011
2010
Principal
(in million)
Maturing
Principal
(in million)
Issued
Currency
June 2002
EUR
-
-
26.8
2012
June 2004
USD
-
-
240.0
2011,2012,2014
June 2004
EUR
-
-
65.0
2012
July 2006
EUR
-
-
250.0
2013
Maturing
D’Ieteren
Financial and
p. 64
The Group runs one commercial paper programme in Belgium throughout s.a. D’Ieteren Treasury n.v., a wholly-owned subsidiary of the
Parent (EUR 300.0 million; in 2010: EUR 300.0 million). This programme is guaranteed by the Parent. The weighted average cost over
2011 was nil (2010: 0.6%). Medium term notes can also be drawn from this programme.
In the prior year, in the Car Rental segment, deferred consideration represented amounts still due arising on the acquisition of Avis
Europe Investment Holdings Limited (a wholly-owned subsidiary of Avis Europe plc) from Avis Inc. in 1997, and payable in annual
instalments of GBP 1.9 million including interest. The deferred consideration was denominated in GBP and beared an interest rate of
8.0% fixed for 27 years.
Inter-segment financing items are amounts lent by the Automobile Distribution segment to the Vehicle Glass segment, at arm’s length
conditions.
The intra-segment subordinated loan represents an amount lent by s.a. D’Ieteren Services n.v., a wholly-owned subsidiary of the
Parent, to D’Ieteren Lease at arm’s length conditions. This inter-company loan is eliminated upon consolidation but is separately
presented in notes 23 and 31 due to the classification of D’Ieteren Lease’s assets and liabilities as held for sale. This subordinated loan
will be repaid at the occasion of the contribution of D’Ieteren Lease to Volkswagen D’Ieteren Finance.
Non-current borrowings are due for settlement after more than one year, in accordance with the maturity profile set out below:
EUR million
2011
2010
475.6
1,591.5
After more than five years
312.6
147.1
788.2
1,738.6
The exposure of the Group’s borrowings to interest rate changes and the repricing dates (before the effect of the debt derivatives) at
the balance sheet date is as follows:
EUR million
Less than one year
2011
2010
53.1
982.7
475.6
968.1
After more than five years
312.6
144.0
Borrowings
841.3
2,094.8
The interest rate and currency profiles of borrowings are as follows (including the value of the adjustment for hedged borrowings
disclosed in note 32):
EUR million
Currency
2011
2010
Fixed
rate
Floating
rate
Total
Fixed
rate
Floating
rate
Total
1,489.8
EUR
355.4
304.6
660.0
446.6
1,043.2
GBP
24.0
5.0
29.0
48.7
0.1
48.8
USD
397.9
14.2
412.1
477.4
77.4
554.8
Other
5.3
2.4
7.7
4.8
1.4
6.2
Total
782.6
326.2
1,108.8
977.5
1,122.1
2,099.6
D’Ieteren
Financial and
p. 65
When the effects of debt derivatives are taken into account, the interest rate and currency profiles of borrowings are as follows:
EUR million
Currency
2011
2010
Fixed
rate
Floating
rate
Total
Fixed
rate
Floating
rate
Total
1,583.9
EUR
763.8
-180.4
583.4
1,531.6
52.3
GBP
24.0
5.0
29.0
48.7
101.1
149.8
USD
474.5
14.2
488.7
366.0
1.3
367.3
Other
5.3
2.4
7.7
4.8
-6.2
-1.4
Total
1,267.6
-158.8
1,108.8
1,951.1
148.5
2,099.6
The floating rate borrowings bear interest at various rates set with reference to the prevailing EURIBOR or equivalent. The range of
interest rates applicable for fixed rate borrowings outstanding is as follows:
2011
2010
Min.
Max.
Min.
Max.
EUR
1.9%
6.6%
2.0%
6.8%
GBP
3.0%
5.9%
4.0%
5.9%
USD
2.0%
7.0%
2.0%
7.0%
Other
2.9%
20.6%
3.7%
16.9%
Currency
The fair value of current borrowings approximates to their carrying amount. The fair value of non-current borrowings is set out below:
EUR million
Bonds
Bank loans, loan notes and other loans
2011
2010
Fair
value
Carrying
amount
Fair
value
Carrying
amount
255.3
249.7
359.4
349.6
-
-
186.4
186.4
25.9
25.9
30.4
30.4
509.3
512.6
1,139.2
1,147.4
-
-
23.0
24.8
790.5
788.2
1,738.4
1,738.6
The fair value of the bonds is determined based on their market prices. The fair value of the bonds under securitisation programme is
equal to their carrying amount. The fair value of the other borrowings is based on either tradable market values, or where such market
values are not readily available is estimated by discounting the future contractual cash flows at the current market interest rate that is
available to the Group for similar financial instruments.
Certain of the borrowings in the Group have covenants attached.
D’Ieteren
Financial and
p. 66
NOTE 32: NET DEBT
Net debt is a non-GAAP measure, i.e. its definition is not addressed by IFRS. The Group does not represent net debt as an alternative to
financial measures determined in accordance with IFRS. The Group uses the concept of net debt to reflect its indebtedness. Net debt is
based on borrowings less cash, cash equivalents and non-current and current asset investments. It excludes the fair value of derivative
debt instruments. The hedged borrowings (i.e. those that are accounted for in accordance with the hedge accounting rules of IAS 39)
are translated at the contractual foreign exchange rates of the related cross currency swaps. The other borrowings are translated at
closing foreign exchange rates.
EUR million
Current borrowings
Adjustment for hedged borrowings
Gross debt
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Car
Rental
Vehicle
Glass
Group
251.3
536.9
788.2
12.0
41.1
53.1
537.5
-
740.6
1,278.1
29.1
-
29.6
-240.0
240.0
58.7
-
-
-
-
-
-
-2.9
-2.9
-
-
-
-
23.3
815.1
838.4
566.6
-
770.2
1,336.8
-213.5
-36.5
-250.0
-2.1
-
-33.4
-35.5
Less: Current financial assets
-0.3
-
-0.3
-8.9
-
-
-8.9
Less: Other non-current receivables
-0.5
-
-0.5
-0.5
-
-
-0.5
-191.0
778.6
587.6
555.1
-
736.8
1,291.9
262.6
-
262.6
-
-
-
-
Less: Cash and cash equivalents
Net debt from continuing activities
excluding assets and liabilities classified
as held for sale
Net debt in assets and liabilities classified
as held for sale
Net debt from discontinued operations
Total net debt
-
-
-
-
531.1
-
531.1
71.6
778.6
850.2
555.1
531.1
736.8
1,823.0
D’Ieteren
Financial and
p. 67
NOTE 33: PUT OPTIONS GRANTED TO NON-CONTROLLING SHAREHOLDERS
The Group is committed to acquiring the non-controlling shareholdings owned by third parties in Belron, should these third parties
wish to exercise their put options. The exercise price of such options granted to non-controlling interest is reflected as a financial
liability in the consolidated statement of financial position.
For put options granted to non-controlling shareholders prior to 1 January 2010, the goodwill is adjusted at period end to reflect the
change in the exercise price of the options and the carrying value of non-controlling interest to which they relate. This treatment
reflects the economic substance of the transaction, and has no impact on the result attributable to equity holders of the Parent.
For put options granted to non-controlling shareholders as from 1 January 2010, at inception, the difference between the consideration
received and the exercise price of the options granted is recognised against the group’s share of equity. At each period end, the
re-measurement of the financial liability resulting from these options is recognised in the consolidated income statement as a remeasurement item in net finance costs.
At 31 December 2011, the exercise price of all options granted to non-controlling shareholders amounts to EUR 154.0 million (put
options with related call options, exercisable until 2024). At 31 December 2010, the exercise price of all options granted to noncontrolling shareholders amounted to EUR 163.0 million and comprised EUR 149.8 million of put options with related call options,
exercisable until 2024 and EUR 13.2 million of expected price adjustment on put options exercised in September 2009 by Cobepa
(settled in 2011 - see note 9).
For put options granted to non-controlling shareholders prior to 1 January 2010, the difference between the exercise price of the
options and the carrying value of the non-controlling interest (EUR 40.3 million at 31 December 2011) is presented as additional
goodwill (EUR 92.5 million at 31 December 2011).
For put options granted to non-controlling shareholders as from 1 January 2010, the re-measurement at year-end of the financial
liability resulting from these options amounts to EUR 0.6 million and is recognised in the consolidated income statement as a remeasurement charge in net finance costs (see note 9).
The exercise price of the put options takes into account estimates of the future profitability of Belron. Should the underlying estimates
change, the value of the put options recognised in the statement of financial position would be impacted, with impacts on the related
goodwill and net finance costs.
NOTE 34: OTHER NON-CURRENT PAYABLES
Other non-current payables are non interest-bearing deferred consideration on acquisitions, payable after more than 12 months. The
carrying value of other non-current payables approximates to their fair value.
NOTE 35: TRADE AND OTHER CURRENT PAYABLES
Trade and other payables are analysed below:
EUR million
2011
2010
Automobile
Distribution
Vehicle
Glass
Group
Trade payables
99.4
98.3
197.7
Accrued charges and deferred income
37.1
5.7
42.8
6.4
15.8
22.2
-
6.9
6.9
46.8
241.3
189.7
368.0
Non-income taxes
Deferred consideration on acquisitions
Other creditors
Automobile
Distribution
Car
Rental
Vehicle
Glass
86.4
207.8
95.4
389.6
51.9
212.7
2.6
267.2
4.0
42.7
12.4
59.1
-
-
5.7
5.7
288.1
56.8
65.1
274.1
396.0
557.7
199.1
528.3
390.2
1,117.6
Group
Trade and other current payables are expected to be settled within 12 months. The carrying value of trade and other current payables
approximates to their fair value.
D’Ieteren
Financial and
p. 68
NOTE 36: EMPLOYEE BENEFIT EXPENSE
The employee benefit expense is analysed below:
EUR million
Automobile
Distribution
Vehicle
Glass
Group
Automobile
Distribution
Vehicle
Glass
Group
Retirement benefit charges under defined contribution schemes
-5.2
-13.3
-18.5
-4.9
-12.1
-17.0
Retirement benefit charges under defined benefit schemes
(see note 20)
-0.7
7.0
6.3
-0.8
-6.1
-6.9
Total retirement benefit charge
Wages, salaries and social security costs
-5.9
-6.3
-12.2
-5.7
-18.2
-23.9
-135.1
-980.9
-1,116.0
-123.7
-1,004.5
-1,128.2
-1.0
-
-1.0
-0.6
-
-0.6
Total employee benefit expense
-142.0
-987.2
-1,129.2
-130.0
-1,022.7
-1,152.7
-142.0
-998.9
-1,140.9
-130.0
-1,022.7
-1,152.7
-
11.7
11.7
-
-
-
Share-based payments: equity-settled
unusual items (defined benefit schemes - see notes 9 and 20)
1
2010 (1)
2011
The above expense includes the amounts charged in 2011 and in 2010 in respect of the long-term management incentive schemes
mentioned in note 30.
The staff numbers are set out below (average full time equivalents):
EUR million
2010 (1)
1,685
1,584
Vehicle Glass
25,199
24,790
Group
26,884
26,374
1
2011
D’Ieteren
Financial and
p. 69
NOTE 37: SHARE-BASED PAYMENTS
There is in the Group an equity-settled share-based payment scheme. Since 1999, share option schemes have been granted to officers
and managers of the Automobile Distribution segment, in the framework of the Belgian law of 26 March 1999. The underlying share
is the ordinary share of s.a. D’Ieteren n.v.
Options outstanding are as follows:
Date of grant
Number of options
(in units)
2011
Exercise
price (EUR)
2010
Exercise
period
From
To
22/12/2021
2011
217,814
-
35.00
1/01/2015
2010
81,350
81,350
39.60
1/01/2014
3/10/2020
2009
107,850
107,850
24.00
1/01/2013
27/10/2019
2008
121,530
121,230
12.10
1/01/2012
5/11/2018
2007
72,910
97,130
26.40
1/01/2011
2/12/2022
2006
40,300
44,850
26.60
1/01/2010
27/11/2021
2005
45,250
58,550
20.90
1/01/2009
6/11/2020
2004
28,950
37,350
14.20
1/01/2008
28/11/2019
2003
27,200
41,200
16.34
1/01/2007
16/11/2018
2002
31,200
37,600
11.60
1/01/2006
13/10/2015
2001
14,250
26,250
13.30
1/01/2005
25/10/2014
2000
25,000
37,350
26.70
1/01/2004
25/09/2013
1999
32,525
57,380
37.50
1/01/2003
17/10/2012
Total
846,129
748,090
A high proportion of outstanding options are covered by treasury shares (see note 29).
A reconciliation of the movements in the number of outstanding options during the year is as follows:
Number
(in units)
Weighted average
exercise price (EUR)
2011
2010
2011
2010
Outstanding options at the beginning of the period
748,090
1,019,510
23.30
22.02
Granted during the period
217,814
81,350
35.00
39.60
-
-3,600
-
18.50
-120,075
-349,170
24.00
23.50
300
-
12.00
-
Outstanding options at the end of the period
846,129
748,090
26.20
23.30
of which: exercisable at the end of the period
439,115
437,660
16.50
17.30
Forfeited during the period
Exercised during the period
Other movements during the period
In 2011, a large part of the options were exercised during the first quarter of the period. The average share price during the period was
EUR 43.20 (2010: EUR 36.57).
For share options outstanding at the end of the period, the weighted average remaining contractual life is as follows:
Number
of years
31 December 2011
8.0
31 December 2010
8.1
D’Ieteren
Financial and
p. 70
NOTE 37: SHARE-BASED PAYMENTS (CONTINUED)
IFRS 2 “Share-Based Payment” requires that the fair value of all share options issued after 7 November 2002 is charged to the income
statement. The fair value of the options must be assessed on the date of each issue. The assumptions for the 2011 and 2010 issues
were as follows:
2011
2010
Number of employees
223
106
Spot share price (EUR)
34.34
39.58
Option exercise price (EUR)
35.00
39.60
Vesting period (in years)
3.0
3.0
Expected life (in years)
7.0
6.8
27%
32%
2.19%
2.67%
0.425
0.350
Expected volatility (in %)
Risk free rate of return (in %)
Expected dividend (EUR)
Probability of ceasing employment before vesting (in %)
Weighted average fair value per option (EUR)
0%
0%
11.04
15.07
Expected volatility and expected dividends were provided by an independent expert. The risk free rate of return is based upon EUR zerocoupon rates with an equivalent term to the options granted.
NOTE 38: FINANCIAL RISK MANAGEMENT
Treasury policies aim to ensure permanent access to sufficient liquidity, and to monitor and limit interest and currency exchange risks.
These are summarised below:
Liquidity Risk
Each business unit of the Group seeks to ensure that it has sufficient committed funding in place to cover its requirements - as
estimated on the basis of its long-term financial projections - in full for at least the next 12 months. Long-term funding is managed
at the level of each business unit. This funding is complemented by various sources of uncommitted liquidity (short-term banking
facilities, commercial paper).
The long-term funding mainly consists of:
- In the Vehicle Glass segment: syndicated loan facilities, and private and public bonds;
- In the Automobile Distribution segment: public retail bonds and bi-lateral bank facilities.
The securitisation programme of the leasing activities has been fully repaid in early 2012 at the occasion of the contribution of D’Ieteren
Lease to Volkswagen D’Ieteren Finance, a joint venture created by the Group and Volkswagen Financial Services (a subsidiary of the
Volkswagen group). Debt finance will be provided by the latter going forward. At year-end, the bonds issued throughout this programme
are therefore considered as due within one year.
Repayment dates are spread as evenly as possible and funding sources are diversified in order to mitigate refinancing risk (timing,
markets) and its associated costs (credit spread risk).
Cash pooling schemes are sought and implemented each time when appropriate (in the Automobile Distribution and the Vehicle Glass
segments) in order to minimise gross financing needs and costs of liquidity.
D’Ieteren
Financial and
p. 71
NOTE 38: FINANCIAL RISK MANAGEMENT (CONTINUED)
The following is an analysis of the contractual undiscounted cash flows payable under financial liabilities together with derivative
financial instrument assets and liabilities at balance sheet date:
Due within
one year
EUR million
Due between
one and five years
Due after
five years
Total
Capital
Interest
Capital
Interest
Capital
Interest
Capital
Interest
Bonds
100.0
17.8
249.7
29.3
-
-
349.7
47.1
181.4
1.0
-
-
-
-
181.4
1.0
20.3
0.5
25.3
2.3
0.7
0.1
46.3
2.9
At 31 December 2011
Borrowings
22.6
28.6
203.6
78.3
312.3
46.4
538.5
153.3
324.3
47.9
478.6
109.9
313.0
46.5
1,115.9
204.3
557.7
-
-
-
-
-
557.7
-
-26.3
-21.0
-
-34.7
-76.6
-20.1
-102.9
-75.8
25.4
18.9
-
23.0
73.6
9.8
99.0
51.7
881.1
45.8
478.6
98.2
310.0
36.2
1,669.7
180.2
Bonds
-
17.8
349.6
47.0
-
-
349.6
64.8
-
5.5
183.4
11.2
3.0
0.1
186.4
16.8
Other borrowings
Total
Derivative financial assets and liabilities
Derivative contracts - receipts
Derivative contracts - payments
Total
At 31 December 2010
Borrowings
205.5
6.1
29.6
2.8
0.8
0.2
235.9
9.1
Other borrowings
151.2
37.4
1,025.7
64.3
119.9
9.4
1,296.8
111.1
Total
0.3
-
1.4
-
23.4
-
25.1
-
357.0
66.8
1,589.7
125.3
147.1
9.7
2,093.8
201.8
1,117.3
-
-
-
-
-
1,117.3
-
-286.8
-17.4
-82.2
-27.6
-
-
-369.0
-45.0
293.7
20.2
76.9
25.8
-
-
370.6
46.0
1,481.2
69.6
1,584.4
123.5
147.1
9.7
3,212.7
202.8
Derivative financial assets and liabilities
Derivative contracts - receipts
Derivative contracts - payments
Total
Interest Rate Risk
The Group seeks to cap the impact of adverse interest rates movements on its current financial results, particularly in relation to the
next 12 months. To manage its interest rate exposures, the Group primarily uses forward rate agreements, interest rate swaps, caps
and floors. Each business unit determines its own minimum hedge percentages, which, for the period up to 12 months, are comprised
between 50% and 100%, and thereafter gradually lower over time.
The hedge horizon overall is typically 3 years. Hedges, or fixed rate indebtedness, beyond 5 years are unusual.
More specifically, the Automobile Distribution segment seeks to protect the margins forthcoming from its long-term (operational)
leasing activity (D’Ieteren Lease). Here, hedging is driven by lease contracts duration (estimated length of contracts, amortisation
profiles). As explained in note 2.1, D’Ieteren Lease has been contributed in early 2012 to Volkswagen D’Ieteren Finance, a new joint
venture created by the Group and Volkswagen Financial Services (a subsidiary of the Volkswagen group).
D’Ieteren
Financial and
p. 72
A change of 100 basis point in interest rate at the reporting date would have increased/decreased equity and result from continuing
operations by the amounts shown below. This analysis assumes that all other variables remain constant.
EUR million
31 December 2011
31 December 2010 (1)
1
Cash flow hedge reserve
1% increase
1% decrease
1% increase
1% decrease
2.9
-2.9
-
-
-0.5
0.4
-20.4
20.4
Currency Risk
The Group’s objective is to protect its cash flows and investments from the potentially high volatility of the foreign exchange markets by
hedging any material net foreign currency exposure. Material means in excess of one million euros. Transaction exposures are limited
and generally not material. When material, they are reduced or cancelled as soon as they are identified.
Investments outside the Eurozone generate translation exposures. These are minimised mainly through the creating of liabilities (debt)
denominated in the same currency as the cash flows generated by the corresponding assets. To complement these natural hedges, the
Group uses instruments such as forwards, swaps, plain-vanilla foreign exchange options and, when appropriate, cross currency swaps.
The hedging levels are reviewed periodically, in light of the market conditions and each time a material asset is added or removed.
A 10 percent strenghtening/weakening of the euro against the following currencies at 31 December would have increased/decreased
equity and result from continuing operations by the amounts shown below. This analysis assumes that all other variables remain
constant:
EUR million
Equity
10% strenghtening
10% weakening
10% strenghtening
10% weakening
EUR vs GBP
0.1
-0.1
-5.9
7.2
EUR vs USD
1.0
-1.2
-0.2
0.2
EUR vs GBP
0.1
-0.1
-17.9
20.1
EUR vs USD
0.1
-0.1
-0.3
0.3
EUR vs CHF
-
-
-3.1
3.1
31 December 2011
31 December 2010 (1)
1
Counterparty Risk
Exposure limits to financial counterparties in respect of both amount and duration are set in respect of derivatives and cash deposits.
Such transactions are effected with a limited number of pre-designated banks on the basis of their publicly available credit ratings,
which are checked at least once a year. The required minimum rating is A- (Standard and Poor’s). Limits on length of exposure per
category of transaction are in place to protect liquidity and mitigate counterparty default risks. The instruments and their documentation
must be authorized before entering the contemplated transactions.
There is no meaningful price risk other than those mentioned above.
Within this framework, considerable autonomy is granted to each of the businesses.
D’Ieteren
Financial and
p. 73
Measurement of financial instruments by category
IFRS 7 requires disclosure of how the fair value measurements fit within the fair value measurement hierarchy. The following table
presents the Group's financial assets and liabilities measured at fair value within the hierarchy:
2011
Level 1
Level 2
2010
Level 3
Total
Level 1
Level 2
Level 3
Total
Non-current and current assets:
-
-
-
-
0.2
-
-
0.2
-
16.8
-
16.8
-
4.9
-
4.9
-
12.3
-
12.3
-
19.7
2.2
21.9
Total assets
-
29.1
-
29.1
0.2
24.6
2.2
27.0
30.2
Non-current and current liabilities:
-
-
-
-
-
30.2
-
-
10.7
-
10.7
-
24.7
-
24.7
Total liabilities
-
10.7
-
10.7
-
54.9
-
54.9
Level 1 comprises those financial instruments measured at fair value where the valuation is based on quoted prices (unadjusted)
in active markets for identifiable assets or liabilities. As at 31 December 2010, in the Vehicle Glass segment, the available-for-sale
financial assets comprise a non-controlling interest in a listed company.
Level 2 comprises those financial instruments measured at fair value where the valuation is based on inputs other than quoted prices
included in level 1 that are observable for the asset or liability, either directly (this is, as prices) or indirectly (that is, derived from
prices). The fair values of all the Group’s derivative hedging instruments and derivatives held for trading are determined using valuation
techniques. These valuations techniques maximise the use of observable market data where it is available, and rely as little as possible
on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in level 2. The fair value of the Group’s derivative hedging instruments and derivatives held for trading (other than the embedded
derivative as at 31 December 2010 in the Car Rental segment – see note 19) are calculated as the present value of the estimated future
cash flows based on observable yield curves, and are therefore included in level 2.
Level 3 comprises those financial instruments measured at fair value where the valuation is based on inputs for the asset or liability
that are not based on observable data. In 2010, the fair value of the embedded derivative contract (in the Car Rental segment - see note
19) was determined using option valuation techniques which were based on both observable market rates, but also assumptions with
respect to estimates of exercise probabilities. The embedded derivative was therefore included in level 3.
D’Ieteren
Financial and
p. 74
NOTE 39: CONTINGENCIES AND COMMITMENTS
EUR million
Commitments to acquisition of non-current assets
2011
2010
26.3
60.2
40.4
40.4
3.5
2.8
Other important commitments:
Commitments given
Commitments received
In 2011, the commitments to acquisition of non-current assets mainly concern the vehicle fleet in the Automobile segment and other
property, plant and equipment in the Vehicle Glass segment.
The Group is a lessee in a number of operating leases (mainly buildings, non-fleet vehicles and items of property, plant and equipment).
The related future minimum lease payments under non-cancellable operating leases, per maturity, are as follows:
EUR million
2011
2010
Within one year
109.7
196.2
Later than one year and less than five years
302.1
395.9
After five years
113.0
138.2
Total
524.8
730.3
The Group also acts as a lessor in a number of operating leases, mainly through its wholly-owned subsidiary s.a. D’Ieteren Lease n.v.
The related future minimum lease payments under non-cancellable operating leases, per maturity, are as follows:
EUR million
2011
Investment
property
2010
Vehicles
Other
property,
plant and
equipment
Total
Investment
property
Vehicles
Other
property,
plant and
equipment
Total
Within one year
0.7
88.0
-
88.7
0.8
86.0
-
86.8
Later than one year and less than five years
2.8
129.9
-
132.7
1.6
122.5
-
124.1
After five years
0.3
0.2
-
0.5
0.2
0.2
-
0.4
Total
3.8
218.1
-
221.9
2.6
208.7
-
211.3
At each year end, the Group also had prepaid various other operating lease commitments in relation to vehicles sold under buy-back
agreements, included in deferred income in note 35.
The revenue, expenses, rights and obligations arising from leasing arrangements regarding investment property are not considered
material to the Group, and accordingly a general description of these leasing arrangements is not disclosed.
Under the securitisation programme (see notes 14, 19, 25, 31), D’Ieteren Lease granted a floating charge on its business to the
bondholders to secure its obligations. The floating charge was granted for up to the following amounts:
- in respect of principal: EUR 309.0 million;
- three years of interest calculated at the rate of 5%, or such other rate as may be agreed between the parties.
D’Ieteren
Financial and
p. 75
NOTE 40: RELATED PARTY TRANSACTIONS
EUR million
2011
2010
With entities with joint control or significant influence over the Group:
Amount of the transactions entered into during the period
Outstanding creditor balance at 31 December
0.7
0.8
10.4
15.0
With associates:
Sales
11.6
8.1
Purchases
-0.6
-0.3
1.0
0.5
Sales
-
1.7
Trade receivables outstanding at 31 December
-
0.6
Short-term employee benefits
5.4
4.4
Post-employment benefits
0.2
0.5
Total compensation
5.6
4.9
Amount of the other transactions entered into during the period
n/a
n/a
n/a
n/a
Amount of the transactions entered into during the period
0.2
0.2
0.5
-
Trade receivables outstanding at 31 December
With joint ventures in which the Group is a venturer:
With key management personnel:
Compensation:
With other related parties:
NOTE 41: DISCONTINUED OPERATIONS
Framework and discontinued operation
In June 2011 the Boards of Avis Budget Group, Inc. and Avis Europe plc announced that they had reached agreement on the terms of
a recommended cash acquisition (315 pence in cash for each Avis Europe share) of the entire share capital of Avis Europe plc by Avis
Budget Group by way of a Court-sanctioned Scheme of arrangement between Avis Europe plc and the Avis Europe shareholders under
Part 26 of the UK Companies Act. The Board of Directors of the Parent undertook irrevocably to vote in favour of this Scheme, which was
effective on 3 October 2011. The Board of Directors of the Parent considered that the Group had lost control at this effective date and
has therefore de-consolidated Avis Europe plc and its subsidiaries (Car Rental segment) as from 1 October 2011. The disposal proceeds
(EUR 411.8 million after taking into account foreign exchange economic hedging) was received in October 2011.
The Board of Directors of the Parent also considered that the recognition criteria as defined in IFRS 5 “Non-Current Assets Held for
Sale and Discontinued Operations” were met and has therefore decided to present the 9 months results of the Car Rental segment
as a discontinued operation. The consolidated income statement, consolidated statement of comprehensive income and consolidated
statement of cash flows for the year ended 31 December 2010 have been restated accordingly.
Measurement of the disposal group
The assets and liabilities of the Car Rental segment were re-measured to the lower of carrying amount and fair value less costs to sell
at the date of its classification as held for sale.
The Board of Directors of the Parent has considered that the consideration offered for the acquisition of the shares was an indication
that the impairment recognised in 2008 on the Avis licence rights has decreased. As a result and in accordance with the requirements
of IAS 36, a reversal of impairment charge has been recognised to bring the carrying amount of the Car Rental segment to its fair value
less costs to sell at the date of disposal. The resulting reversal of impairment charge (gross amount of EUR 96.2 million) has been
fully allocated to the value of the Avis licence rights. This reversal of impairment has also led to an increase of EUR 28.8 million in the
deferred tax liability arising on the recognition of the Avis licence rights.
D’Ieteren
Financial and
p. 76
NOTE 41: DISCONTINUED OPERATIONS (CONTINUED)
Income statement
EUR million
Total
Current
items (1)
31 December 2010
Unusual
items and
re-measur-ements (1)
Total
Current
items (1)
Unusual
items and
re-measurements (1)
1,161.2
1,161.2
-
1,519.8
1,519.8
-
Operating result
136.4
157.7
-21.3
92.0
108.2
-16.2
Net finance costs
-39.1
-36.7
-2.4
-58.3
-59.5
1.2
Result before tax
97.3
121.0
-23.7
33.7
48.7
-15.0
Sales
0.6
0.6
-
2.3
2.3
-
-29.3
-35.5
6.2
-16.6
-23.1
6.5
Result after tax of discontinued operations
68.6
86.1
-17.5
19.4
27.9
-8.5
Result before tax recognised on the re-measurement of assets disposed of
96.2
-
96.2
-
-
-
Recycling of other comprehensive income reserves
-13.6
-
-13.6
-
-
-
Tax expense
-28.8
-
-28.8
-
-
-
Result after tax from discontinued operations
122.4
86.1
36.3
19.4
27.9
-8.5
Share of result of entities accounted for using the equity method
Tax expense
1
30 September 2011
See summary of significant accounting policies in note 2.
In accordance with the requirements of IFRS 5, the Group has decided not to depreciate the Car Rental’s non-current assets (including
fleet vehicles) as from the date of its classification as held for sale (30 June 2011). The impact in the consolidated income statement is
EUR 36.4 million.
Unusual items and re-measurements
EUR million
Operating result
30 September 2011
31 December 2010
-21.3
-16.2
-0.1
-2.8
Amortisation of Avis licence rights
-6.2
-13.7
Other unusual items
Net finance costs
-15.0
0.3
-2.4
1.2
0.8
-4.6
Foreign exchange
0.3
-2.0
-3.5
7.8
Other unusual items
Result before tax recognised on the re-measurement of assets disposed of
Reversal of impairment of Avis licence rights
Recycling of other comprehensive income reserves
96.2
-
96.2
-
-13.6
-
Recycling of cash flow hedges
-6.3
-
Recycling of translation differences
-7.3
-
-22.6
6.5
36.3
-8.5
Tax expense
Total unusual items and re-measurements
In the period, other unusual items presented in operating result are costs relating to the acquisition of Avis Europe by Avis Budget
Group Inc. (national insurance costs associated with share options and professional, legal and consultancy costs recognised by Avis
Europe).
D’Ieteren
Financial and
p. 77
Assets and liabilities
EUR million
30 September 2011
0.9
Goodwill
453.4
Vehicles
549.5
58.5
17.5
0.1
Deferred tax assets
51.0
Non-current assets
1,130.9
Inventories
9.7
Derivatives instruments
1.3
1.2
Current tax assets
1,356.6
109.5
Current assets
1,478.3
TOTAL ASSETS
2,609.2
265.2
75.6
Other provisions
26.8
24.2
Borrowings
150.4
277.0
25.4
Provisions
22.4
Derivatives instruments
906.4
Borrowings
43.4
660.6
Current liabilities
1,658.2
2,200.4
Earnings per share for result from discontinued operations attributable to equity holders of the Parent
EUR
1
30 September 2011
31 December 2010
Total
Current
items (1)
Unusual
items and
re-measurements (1)
Basic
1.26
0.94
Diluted
1.26
0.94
See summary of significant accounting policies in note 2.
Total
Current
items (1)
Unusual
items and
re-measurements (1)
0.32
0.21
0.31
-0.10
0.32
0.22
0.30
-0.08
D’Ieteren
Financial and
p. 78
Total comprehensive income
EUR million
30 September 2011
31 December 2010
122.4
19.4
Total comprehensive income
Actuarial gains (losses) on employee benefit obligations
-5.8
7.4
4.8
9.4
Cash flow hedges: fair value gains (losses) in equity
-
-7.4
Cash flow hedges: transferred to income statement
2.2
10.0
Tax relating to items recognised in other comprehensive income
2.9
-1.1
Recycling to income statement of translation differences
7.3
-
Recycling to income statement of cash flow hedges
6.3
-
140.1
37.7
30 September 2011
31 December 2010
Total
Cash flows
EUR million
-104.7
177.0
-4.6
-6.3
-12.9
-0.1
-122.2
170.6
Net cash generated from operating activities
Effect on cash flows
D’Ieteren
Financial and
p. 79
NOTE 42: LIST OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
The full list of companies concerned by articles 114 and 165 of the Royal Decree of 30 January 2001 implementing the Company Code
will be lodged with the Central Balance Sheet department of the National Bank of Belgium. It is also available on request from the
Parent head office (see note 1).
The main fully consolidated subsidiaries of the Parent are listed below:
Country of
incorporation
% of share
capital owned
at 31 Dec. 2011
% of share
capital owned
at 31 Dec. 2010
100%
s.a. D’Ieteren Lease n.v.
Belgium
100%
s.a. D’Ieteren Sport n.v.
Belgium
75%
75%
Power To Wheels s.a.
Belgium
100%
100%
s.a. D’Ieteren Services n.v.
Belgium
100%
100%
s.a. D’Ieteren Treasury n.v.
Belgium
100%
100%
D’Ieteren Trading b.v.
The Netherlands
100%
100%
D’Ieteren Car Rental s.a.
Luxemburg
-
100%
D’Ieteren Vehicle Glass s.a.
Luxemburg
100%
100%
Dicobel s.a.
Belgium
100%
100%
Verellen s.a.
Belgium
100%
100%
Kronos Automobiles s.a.
Belgium
100%
100%
Penders s.a.
Belgium
100%
-
-
59.59%
92.73%
92.73%
Car Rental
Avis Europe plc
United Kingdom
Vehicle Glass
Belron s.a.
Luxemburg
Taking into account the treasury shares held by Avis Europe, the percentages used for the consolidation of Avis Europe are higher than
the proportion held in Avis Europe’s share capital shown above:
Average percentage
Year-end percentage
2011
2010
60.13%
60.06%
-
60.05%
In 2010, taking into account the impact of the sale of one percent of Belron’s equity to the family holding company of Belron’s CEO, the
average percentage used in 2010 for the consolidation of Belron was different than the year-end percentage.
2011
2010
Average percentage
92.73%
93.24%
Year-end percentage
92.73%
92.73%
D’Ieteren
Financial and
p. 80
NOTE 43: EXCHANGE RATES
Monthly income statements of foreign operations are translated at the relevant rate of exchange for that month. Except for the statement
of financial position which is translated at the closing rate, each line item in these consolidated financial statements represents a
weighted average rate.
The main exchange rates used for the translations were as follows:
Number of euros for one unit of foreign currency
2011
2010
AUD
0.78
0.76
BRL
0.41
0.45
CAD
0.75
0.75
GBP
1.20
1.18
USD
0.77
0.76
AUD
0.74
0.70
BRL
0.42
0.43
CAD
0.73
0.74
GBP
1.16
1.18
USD
0.72
0.76
Closing rate
Average rate (1)
1
Effective average rate for the profit or loss attributable to equity holders.
NOTE 44: SUBSEQUENT EVENTS
The contribution of D’Ieteren Lease s.a., the Group subsidiary active in operating leases, to Volkswagen D’Ieteren Finance (joint venture
owned 50% minus one share by the Group and 50% plus one share by Volkswagen Financial Services, a subsidiary of the Volkswagen
group) occurred in February 2012. The net gain group’s share related to the contribution of all D’Ieteren Lease shares amounts to ca.
EUR 40 million (after taking into account the settlement of various swaps related to the securitisation programme).
D’Ieteren
Financial and
p. 81
NOTE 45: AUDITOR’S REPORT
Statutory Auditor’s report to the General Meeting of Shareholders of D’Ieteren s.a. on the consolidated financial statements for the
year ended December 31, 2011
In accordance with the legal requirements, we report to you on the performance of the engagement of Statutory Auditor which has
been entrusted to us. This report contains our opinion on the true and fair view of the consolidated financial statements as well as the
required additional statements.
Unqualified audit opinion on the consolidated financial statements
We have audited the consolidated financial statements for the year ended December 31, 2011, prepared in accordance with International
Financial Information Standards as adopted by the European Union, which show a balance sheet total of EUR 3,650.3 million and of
which the profit and loss account closes with a profit for the year attributable to equity holders for an amount of EUR 312.6 million.
These consolidated financial statements include subsidiaries, which have been audited by other auditors. Within the framework of our
assignment on the consolidated financial statements, we obtained their clearance on the accounts of the related subsidiaries.
Management is responsible for the preparation and the fair presentation of these consolidated financial statements. This responsibility
includes: designing, implementing and maintening internal control relevant to the preparation and fair presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate
accounting principles and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with the legal requirements and the auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors
(Institut des Reviseurs d’Entreprises / Instituut der Bedrijfsrevisoren). Those standards require that we plan and perform the audit to obtain
reasonable assurance whether the consolidated financial statements are free from material misstatements, whether due to fraud or error.
In accordance with the above-mentioned auditing standards, we have carried out procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The selection of these procedures is a matter for our judgment, as is the assessment
of the risk that the consolidated financial statements contain material misstatements, whether due to fraud or error. In making those risk
assessments, we have considered the company’s internal control relating to the preparation and fair presentation of the consolidated
financial statements, in order to design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company’s internal control. We have also assessed the appropriateness of the accounting principles
and consolidation principles, the reasonableness of accounting estimates made by management, as well as the overall presentation of the
consolidated financial statements. Finally, we have obtained from management and the company’s officials the explanations and information
necessary for our audit. We believe that the audit evidence we have obtained provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements for the year ended December 31, 2011 give a true and fair view of the group’s
assets and liabilities, its financial situation, the results of its operations and cash flows in accordance with International Financial
Reporting Standards as adopted by the European Union.
Additional statements
The preparation of the consolidated Directors’ report and its content are the responsability of management.
Our responsibility is to supplement our report with the following additionnal statement, which does not modify our audit opinion on the
consolidated financial statements:
- the consolidated Directors’ report includes the information required by law and is consistent with the consolidated financial statements. We are, however, unable to comment on the description of the principal risks and uncertainties which the consolidated
group is facing, and of its financial situation, its foreseeable evolution or the significant influence of certain facts on its future development. We can nevertheless confirm that the matters disclosed do not present any obvious inconsistencies with the information
that we became aware of during the performance of our engagement.
Lasne, March 26, 2012
BDO Réviseurs d’entreprises SOC. CIV. SCRL
Statutory Auditor
Represented by
Félix FANK
Registered Auditor
Hugues FRONVILLE
Registered Auditor
D’Ieteren
Financial and
ABRI D G E D S TAT UTOR Y F IN A N CIA L STATEM EN TS
p. 82
Abridged Statutory
Financial Statements 2011
CONTENTS
83
84
85
85
86
ABRIDGED BALANCE SHEET
ABRIDGED INCOME STATEMENT
ABRIDGED APPROPRIATION
ABRIDGED NOTE
SUMMARY OF ACCOUNTING POLICIES
The statutory financial statements of s.a. D’Ieteren n.v. are summarised below in accordance with article 105 of the Company Code. The
unabridged version of the statutory financial statements of s.a. D’Ieteren n.v., the related management report and Statutory Auditor’s
report shall be deposited at the National Bank of Belgium within the legal deadline and may be obtained free of charge from the
internet site www.dieteren.com or on request from:
Rue du Mail 50
B-1050 Brussels
The Statutory Auditor has issued an unqualified opinion on the statutory financial statements of s.a. D’Ieteren n.v.
D’Ieteren
Financial and
p. 83
Abridged Balance Sheet
At 31 December
EUR million
2011
2010
2,428.2
2,419.0
ASSETS
Fixed assets
II.
Intangible assets
III.
Tangible assets
IV.
Financial assets
Current assets
1.8
1.2
96.5
95.5
2,329.9
2,322.3
401.1
350.3
-
0.1
354.5
299.1
Amounts receivable within one year
19.2
23.7
Investments
17.7
17.8
Cash at bank and in hand
1.8
1.4
Deferred charges and accrued income
7.9
8.2
2,829.3
2,769.3
2011
2010
Capital and reserves
920.4
833.1
I.A.
Issued capital
160.0
160.0
II.
Share premium account
IV.
Reserves
V.
Accumulated profits
V.
Non-current receivables
VI.
Stocks
VII.
VIII.
IX.
X.
TOTAL ASSETS
EUR million
LIABILITIES
24.4
24.4
666.0
608.7
70.0
40.0
35.6
31.6
Creditors
1,873.3
1,904.6
VIII.
Amounts payable after one year
1,306.1
1,363.4
IX.
Amounts payable within one year
507.4
489.4
X.
Accrued charges and deferred income
Provisions and deferred taxes
TOTAL LIABILITIES
59.8
51.8
2,829.3
2,769.3
D’Ieteren
Financial and
p. 84
Abridged Income Statement
EUR million
1
2011
2010
I.
Operating income
3,118.9
2,640.4
II.
Operating charges
3,035.5
2,579.0
III.
Operating profit
83.4
61.4
IV.
Financial income
113.5
84.7
V.
Financial charges
65.1
54.7
VI.
Result on ordinary activities before income taxes
131.8
91.4
VII.
Extraordinary income
-
9.4
VIII.
Extraordinary charges
-
-
IX.
Result for the period before taxes
131.8
100.8
IXbis.
Deferred taxes
-0.5
-
X.
Income taxes
XI.
XII.
Variation of untaxed reserves (1)
XIII.
Result for the period available for appropriation
Transfers from untaxed reserves (+) / Transfers to untaxed reserves (-).
-
-
131.3
100.8
-0.7
-
130.6
100.8
D’Ieteren
Financial and
p. 85
Abridged Appropriation
EUR million
2011
2010
170.6
130.8
130.6
100.8
40.0
30.0
0.3
0.3
APPROPRIATION ACCOUNT
Profit (loss) to be appropriated
Gain (loss) of the period available for appropriation
Profit (loss) brought forward
Withdrawals from capital and reserves
from reserves
0.3
0.3
Transfer to capital and reserves
56.8
67.6
to other reserves
56.8
67.6
Profit (loss) to be carried forward
70.0
40.0
Profit to be distributed
44.1
23.5
44.1
23.5
Dividends
This proposed appropriation is subject to approval by the Annual General Meeting of 31 May 2012.
Abridged Note
Auditor’s Remuneration
The Statutory Auditor is BDO Réviseurs d’entreprises Soc. Civ. SCRL (“BDO”). Auditor’s remuneration, including the fees charged by
entities related to the Statutory Auditor as defined by article 134 of the Company Law, is analysed as follows:
EUR
2011
2010
191,500
160,000
126,077
27,104
Audit
s.a. D’Ieteren n.v. (charged by BDO)
Non-audit
Other assurance services
s.a. D’Ieteren n.v. (charged by BDO)
Tax advisory services (charged by SC BDO, Conseils fiscaux - Belastingsconsulenten– former Socofidex)
TOTAL
19,852
14,213
337,429
201,317
D’Ieteren
Financial and
p. 86
Summary of Accounting Policies
The capitalised costs for the development of information technology projects (intangible assets) are amortised on a straight-line basis
over their useful life. The amortisation period cannot be less than 2 years nor higher than 7 years.
Tangible Fixed Assets are recognised at their acquisition value; this value does not include borrowing costs. Assets held by virtue
of long-term leases (“emphytéose”), finance leases or similar rights are entered at their capital reconstitution cost. The rates of
depreciation for fixed assets depend on the probable economic lifetime for the assets concerned. As from the 1st of January 2003,
tangible fixed assets acquired or constructed after this date shall be depreciated pro rata temporis and the ancillary costs shall be
depreciated at the same rate as the tangible fixed assets to which they relate.
The main depreciation rates are the following:
Rate
Method
5%
L/D
Building improvements
10%
L/D
Warehouse and garage
15%
L/D
Network identification equipment
20%
L/D
Furniture
10%
L/D
Office equipment
20%
L/D
Rolling stock
25%
L
Heating system
10%
L/D
20%-33%
L/D
Buildings
EDP hardware
L: straight line.
D: declining balance (at a rate twice as high as the equivalent straight line rate).
D’Ieteren
Financial and
p. 87
Summary of Accounting Policies (continued)
Tangible fixed assets are revalued if they represent a definite, long-term capital gain. Depreciation of any revaluation surplus is
calculated linearly over the remaining lifetime in terms of the depreciation period of the asset concerned.
Financial Fixed Assets are entered either at their acquisition price, after deduction of the uncalled amounts (in the case of shareholdings),
or at their nominal value (amounts receivable). They can be revalued, and are written down if they suffer a capital loss or a justifiable
long-term loss in value. The ancillary costs are charged to the income statement during the financial year.
Amounts Receivable within one year and those receivable after one year are recorded at their nominal value. Write-downs are applied
if repayment by the due date is uncertain or compromised in whole or in part, or if the repayment value at the closing date is less than
the book value.
Stocks of new vehicles are valued at their individual acquisition price. Other categories of stocks are valued at their acquisition price
according to the fifo method, the weighted average price or the individual acquisition price. Write-downs are applied as appropriate,
according to the selling price or the market value.
Treasury Investments and Cash at Bank and in Hand are recorded at their acquisition value. They are written down if their realisation
value on the closing date of the financial year is less than their acquisition value.
When these treasury investments consist of own shares held for hedging share options, additional write-downs are applied if the
exercise price is less than the book value resulting from the above paragraph.
Provisions for Liabilities and Charges are subject to individual valuation, taking into account any foreseeable risks. They are written
back by the appropriate amount at the end of the financial year if they exceed the current assessment of the risks which they were set
aside to cover.
Amounts Payable are recorded at their nominal value.
Valuation of assets and liabilities in foreign currencies
Financial fixed assets are valued in accordance with recommendation 152/4 by the Accounting Standards Commission. Stocks are
valued at their historical cost. However, the market value (as defined by the average rate on the closing date of the balance sheet) is
applied if this is less than the historical cost. Monetary items and commitments are valued at the official rate on the closing date, or at
the contractual rate in the case of specific hedging operations. Only negative differences for each currency are entered in the income
statement.
D’Ieteren
Financial and
p. 88
The Company adheres to the corporate governance principles set out in the Belgian Code of Corporate Governance 2009 published on
the website www.corporategovernancecommittee.be. It has published since 1 January 2006 its Corporate Governance Charter on its
website (www.dieteren.com). However, the implementation of these principles takes into consideration the particular structure of the
Company’s share capital, with family shareholders owning the majority and having ensured the continuity of the Company since 1805.
Exceptions to the principles are set out in this corporate governance statement (see p.92).
1. COMPOSITION AND OPERATION OF THE BOARD, EXECUTIVE MANAGEMENT AND CONTROL BODIES
1.1. BOARD OF DIRECTORS
1.1.1. Composition
The Board of Directors consists of:
- six non-executive directors, appointed on the proposal of the family shareholders;
- one non-executive director, appointed on the proposal of Cobepa;
- five non-executive directors, three of whom being independent, chosen on the basis of their experience;
- the managing director (CEO).
The Chairman and Deputy Chairman of the Board are selected among the Directors appointed on the proposal of the family shareholders.
The introduction in 2011 of a second female director enhanced the diversity of the Board’s composition.
1.1.2. Roles and activities
Without prejudice to its legal and statutory attributions and those of the General Meeting, the roles of the Board of Directors are to:
- determine the Company’s strategy and values;
- approve its plans and budgets;
- decide on major financial transactions, acquisitions and divestments;
- ensure that appropriate organization structures, processes and controls are in place to achieve the Company’s objectives and properly manage its risks;
- appoint the Directors proposed by the Company for the Boards of Directors of its main subsidiaries;
- appoint and revoke the CEO and, based on a proposal by the latter, the managers who are attached to him and determine their
remuneration;
- monitor and review day-to-day management performance;
- supervise communications with the Company’s shareholders and the other interested parties;
- set the dividend. In that framework, the Board of Directors intends to maintain its ongoing policy of providing the largest possible
self-financing, which has supported the group’s development, with a view to strengthen its equity capital and to maintain quality
financial ratios. Absent major unforeseen events, the Board will ensure a stable or, results permitting, a steadily growing dividend.
Composition
Audit Committee1
Nomination Committee
Remuneration Committee1
Chairman
Pascal Minne
Roland D’Ieteren
Roland D’Ieteren
Members
Axel Miller 2
Christine Blondel 2
Christine Blondel 2
Gilbert van Marcke de Lummen
Axel Miller 2
Axel Miller 2
Christian Varin
Pascal Minne
Alain Philippson
Maurice Périer
1
Given their respective training and management experience in industrial and financial companies, the members of the Audit Committee, on the one
hand, and of the Remuneration Committee, on the other, have the expertise in accounting and audit required by law for the former, and in remuneration
policy for the latter.
2
Independent Director.
D’Ieteren
Financial and
p. 89
Composition of the Board of Directors (as at 31 December 2011)
1
2
3
Joined the
Board in
End of
term
Roland D’Ieteren (69) 1
Chairman of the Board
Graduate of Solvay Business School, MBA (INSEAD). Chairman and managing director of
D’Ieteren from 1975 to 2005. Chairman of the Board of Directors of D’Ieteren since 2005.
Director of Belron.
1973
May 2014
Maurice Périer (73) 1
Deputy Chairman of the Board
Bachelor Civil Engineer and Bachelor Commercial Engineer, Solvay Business School (ULB). Career
at ELECTROBEL (1971-1987): management controller; CEO of an electro-acoustical equipment
subsidiary; research department; company secretary of ELECTROBEL Engineering Int’l. Director of
D’Ieteren since 1978. Deputy Chairman of the Board of Directors since 1993. Director of Belron.
1978
May 2015
Jean-Pierre Bizet (63)
Managing director
Graduate of Solvay Business School, MBA (Harvard), PhD in Applied Economics (ULB).
Consultant, partner and director at McKinsey (1980-1994). Managing director of GIB Group
(1999-2002). Joined D’Ieteren in 2002, managing director since 2005. Chairman of the Board of
Directors of Belron.
2005
May 2015
Nicolas D’Ieteren (36) 1
Non-executive Director
BSc Finance & Management (University of London); Asia Int’l Executive Program and Human
Resources Management in Asia Program (INSEAD). Led projects at Bentley Germany and Porsche
Austria. From 2003 to 2005, finance director of a division of Total UK. Since 2005, managing director
of a Private Equity fund investing in young companies.
2005
May 2015
Olivier Périer (40) 1
Degree in architecture and urban planning (ULB); Executive Program for the Automotive
Industry (Solvay Business School); International Executive Program (INSEAD). Since 2000,
founding partner of architectural firm Urban Platform. Managing director of SPDG since
August 2010.
2005
May 2015
s.a. de Participations
et de Gestion (SPDG) 1
Non-executive Director – Permanent representative: Michel Allé (60)
Civil engineer and economist (ULB). Joined Cobepa in 1987, member of the its Executive Committee (1995-2000). Finance Director of Brussels Airport (2001-2005). Finance Director of SNCB
Holding since 2005. Director of Telenet and Zetes Industries. Represents SPDG at the Board of
Directors of D’Ieteren. Professor at ULB.
2001
May 2014
Nayarit Participations
s.c.a. 1
Non-executive Director – Permanent representative: Gilbert van Marcke de Lummen (74) 2
Civil Engineer (ULB). Member (1968-1992), then Deputy Chairman (1992-2002), of the
Executive Committee of D’Ieteren. Former Director of Avis Europe (1987-2007) and Belron
(1999-2007). Director and Chairman of the Audit Committee, Cofinimmo.
2001
May 2014
Christine Blondel (53)
Independent non-executive Director
Ecole Polytechnique (France), MBA (INSEAD). Held executive positions at Procter & Gamble and
led the Wendel Centre for Family Businesses at INSEAD. Adjunct professor of Family Companies
(INSEAD); consultant in family company corporate governance; director, INSEAD Foundation.
2009
May 2013
Axel Miller (46)
Law degree (ULB). Partner at Stibbe Simont, then at Clifford Chance (1996-2001). After holding
several executive positions at Dexia Bank and within the Dexia Group, became managing
director in 2006. Partner at Petercam since 2009. Directorships, Carmeuse (Chairman);
Spadel, Duvel Moortgat, IPM (Chairman).
2010
May 2014
Pascal Minne (61)
Law degree (ULB), Masters in Economics (Oxford). Partner and Chairman of PricewaterhouseCoopers Belgium (until 2001). Partner and Director of Petercam since 2001. Various directorships. Professor of tax law at ULB.
2001
May 2014
Alain Philippson (72)
Graduate of Solvay Business School. Joined Banque Degroof in 1972, currently director and
honorary Chairman. Chairman of the Board of Directors of Banque Degroof Luxembourg and
Degroof Banque Privée Genève. Chairman of the advisory committee of SBSEM (ULB) and of
several foundations.
2001
May 2014
Michèle Sioen (51)
Degree in economics. CEO of Sioen Industries. Chairman of Fedustria until 2010. Deputy
Chairman of the FEB. Director at Belgacom and ING Belgium, amongst others. Member of the
Corporate Governance Committee.
2011
May 2015
Christian Varin (64) 3
Institut d’Etudes Politiques (Paris), MBA (Wharton), PhD in management (Université de Paris).
BNP Paribas (until 2004). Chairman of the Board of Directors of Cobepa. Directorships (ISOS,
Helse, Sapec, BeCapital, Gingko, Yareal, Cie Financière Rothschild).
2001
May 2014
Appointed on the proposal of family shareholders.
Until the General Meeting of 26 May 2011, the permanent representative of Nayarit Participations s.c.a was Mr Etienne Heilporn.
Appointed on the proposal of Cobepa.
D’Ieteren
Financial and
CO RP O RAT E G OV E R N A N CE STATEM EN T
p. 90
The Board of Directors meets at least six times a year. Additional meetings are held as necessary. The Board of Director’s decisions are
taken by a majority of the votes, the Chairman having a casting vote in case of a tie. In 2011, the Board met 13 times. All of the directors
attended all of the meetings, except for:
- Mrs Michèle Sioen and Messrs Pascal Minne, Olivier Périer and Alain Philippson, each excused for one meeting
- Mr Michel Allé, excused for two meetings
- Mr Axel Miller, excused for three meetings
1.1.3. Tenures of Directors
The Ordinary General Meeting held on 26 May 2011 appointed Mrs Michèle Sioen as independent Director for a four-year term
and noted the replacement of Mr Etienne Heilporn by Mr Gilbert van Marcke de Lummen as permanent representative of
Nayarit Participations s.c.a.. The directorships of Messrs Jean-Pierre Bizet, Nicolas D’Ieteren, Maurice Périer and Olivier Périer have
been renewed for a four-year term.
1.1.4. Committees of the Board of Directors
- the Audit Committee, which met 4 times in 2011, twice in the presence of the Auditor. All of the directors attended all of the meetings;
- the Nomination Committee, which met 6 times in 2011. All of the directors attended all of the meetings;
- the Remuneration Committee, which met 3 times in 2011. All of the directors attended all of the meetings.
Each committee has reported on its activities to the Board.
Operation of the Committees
Audit Committee
The Audit Committee comprises four non-executive Directors, with at least one independent Director; the Chairman, who can be
represented by the Deputy Chairman, is invited to its meetings. The Audit Committee’s terms of reference primarily include the
monitoring of the Company’s financial statements and the supervision of the risk management and internal controls systems. The
Committee will review auditor’s reports on half-year and year-end financial statements of the subsidiaries which are consolidated
into the Company’s accounts. The Audit Committee meets at least four times a year, including at least once every six months in the
presence of the Auditor, and reports on its activities to the Board of Directors. A specific meeting is also dedicated to the supervision
of the risk management and internal controls systems. The Committee’s charter adopted by the Board is set out in Appendix I of the
Charter published on the Company’s website.
Nomination Committee
The Nomination Committee comprises six non-executive Directors, including the Chairman of the Board, who chairs it, with at least one
independent Director. The Committee makes proposals to the Board concerning appointments of non-executive Directors, the CEO, and
based on a proposal by the latter, the managers reporting to him, and ensures that the Company has official, rigorous and transparent
procedures to support these decisions. The Committee meets at least twice a year and reports on its work to the Board of Directors.
The Committee’s Charter, adopted by the Board, is reproduced in Appendix II a to the Company Governance Charter available on the
Company’s website.
Remuneration Committee
The Remuneration Committee comprises three non-executive Directors, including the Chairman of the Board, who chairs it, and two
independent Directors. The Committee makes proposals to the Board regarding the remuneration of the non-executive Directors, the
CEO, and, based on a proposal by the latter, the managers reporting to him, and ensures that the Company has official, rigorous and
transparent procedures to support these decisions. The Committee also prepares the remuneration report and comments it during
the General Meeting. The Committee meets at least twice a year and reports on its work to the Board of Directors. The Committee’s
Charter adopted by the Board is reproduced in Appendix II b of the Corporate Governance Charter available on the Company’s website.
Consultation Committee
The Chairman and Deputy Chairman meet once a month with the managing director, as a Consultation Committee, an advisory body, to
monitor Company performance, review progress on major projects and prepare meetings of the Board of Directors.
Policy for transactions and other contractual relationships not covered by the legal provisions on conflicts of interest
Directors and managers are not authorised to provide paid services or to purchase or sell goods directly or indirectly to or from the
Company or to its Group’s companies within the framework of transactions not covered by their mandates or duties, without the
specific consent of the Board of Directors, except for transactions realised in the normal course of business.
D’Ieteren
Financial and
p. 91
They are to consult the Chairman or managing director, who shall decide whether an application for derogation can be submitted to the
Board of Directors; if so, they will notify the details of the transaction to the Company secretary, who will ensure that the related legal
matters are applied. Such transactions shall only be authorised if carried out at market conditions.
Evaluation of the Board and its Committees
The Board and its Committees assess on a regular basis, and at least once every three years, their size, composition, procedures,
performance and their relationships with the managers as bodies of the Company, as well as the individual contribution of each
Director to overall functioning, in order to constantly improve the effectiveness of their actions and the contribution of said actions to
the group’s proper governance.
This self-assessment is carried out using a detailed questionnaire sent to each Director and covering various aforementioned
assessment criteria, a summary of the responses of which is presented to the Board of Directors and, if applicable, to the relevant
Committee. The Board’s next triennial self-assessment will be carried out in 2012.
In 2010, the Audit Committee carried out a self-assessment. The conclusions of this assessment were communicated to the Board of
Directors in February 2011.
The Nomination Committee and the Remuneration Committee will assess their performance following the same procedure in 2013.
1.2. GROUP EXECUTIVE MANAGEMENT
The Group executive management is comprised of the CEO, the CFO, the CLO – also responsible for the Board’s secretariat – and the
Treasurer. The managing director-CEO is responsible for day-to-day management. He is assisted by the group’s executive management,
which is responsible at the Group level for finance, financial communications, investor relations, account consolidation, treasury, legal
and tax functions.
1.3. EXECUTIVE MANAGEMENT OF THE TWO ACTIVITIES
The activities of the D’Ieteren Group were organised into three sectors until the sale of Avis Europe to Avis Budget Group on 3 October
2011.
The Automobile Distribution sector – D’Ieteren Auto, an operational department of s.a. D’Ieteren n.v. without separate legal status – is
managed by the CEO of D’Ieteren Auto, reporting to the Group’s managing director. The CEO of D’Ieteren Auto chairs a management
committee comprising six other members responsible for D’Ieteren Car Centers, Finance and IT, Group Service, Marketing, Makes and
Human Resources and Real Estate.
The Vehicle Glass sector is comprised of Belron, of which D’Ieteren owned 92.73% at 31 December 2011, and its subsidiaries.
On 31 December 2011, Belron is governed by a Board of Directors consisting of 11 members, 6 of whom being appointed on the proposal
of D’Ieteren, 1 Director appointed on the proposal of the founding shareholders, 2 executive Directors and 2 non-executive Directors.
D’Ieteren’s managing director is Chairman of the Board. The Board of Directors of Belron has 2 committees: the Audit Committee and
the Remuneration Committee, each of which is chaired by a Director appointed on the proposal of D’Ieteren.
1.4. EXTERNAL AUDIT
The external audit is conducted by BDO Réviseurs d’entreprises, Soc. Civ. SCRL, represented by Hugues Fronville et Félix Fank since
the General Meeting of May 2011. The fees charged by the Statutory Auditor and linked companies for the work carried out in 2011
on behalf of S.A. D’Ieteren amounted to 191,500 EUR, excluding VAT, for the statutory auditing of the annual and of the consolidated
financial statements, and to 145,929 EUR for non-audit work, including 126,077 EUR for other certification work and 19,852 EUR for
tax advice.
D’Ieteren
Financial and
p. 92
DEROGATIONS TO THE 2009 BELGIAN CORPORATE GOVERNANCE CODE
The Company derogates from the Code on the following principles:
> Derogation to principle 2.2.
The group of Directors appointed on the proposal of the family shareholders is in a position to dominate decisions. In companies
where family shareholders hold a majority of the share capital, the family shareholders do not have, as do other shareholders, the
opportunity to sell their shares if they do not agree with the orientations defined by the Board. Their joint or majority representation
on the Board enables them to influence these orientations, thereby ensuring the shareholding stability necessary to the profitable
and sustainable growth of the Company. The potential risks for corporate governance resulting from the existence of a high degree
of control by the majority shareholder on the working of the Board can be mitigated, on the one hand, by appropriate use of this
power by the Directors concerned in respect of the legitimate interests of the Company and of its minority shareholders and, on
the other hand, by the long-term presence of several non-executive Directors not representative of the family shareholding, which
ensures genuine dialogue on the Board.
> Derogation to principles 5.2./4 and 5.3./1
The composition of the Audit Committee and of the Nomination Committee, each of which includes at least one independent Director,
derogates from the Belgian Corporate Governance Code, which recommends the presence of a majority of independent Directors.
This is because the Board believes that an in-depth knowledge of the Company is at least as important as independent status.
2. REMUNERATION REPORT
2.1. Determination of the remuneration policy for the managers and of the individual amounts
The remuneration policy for the non-executive Directors and executive management of s.a. D’Ieteren n.v. and the individual remuneration
amounts are determined by the Board of Directors based on the recommendations of the Remuneration Committee. Belron s.a., who
has minority shareholders, has its own Board of Directors and Remuneration Committee, who determine the remuneration of its nonexecutive Directors and executive managers.
D’Ieteren’s Remuneration Committee considers the following elements at the end of each year and submits them to the Board for
approval, based on the recommendations of the CEO when his direct reports are concerned:
- the remuneration of the non-executive Directors for the following year;
- the variable remuneration of the executive managers for the past year, taking into account any annual or multi-annual criteria
related to the performance of the Company and/or of the beneficiaries to which its granting is submitted;
- any changes to the fixed remuneration of executive managers and their target variable remuneration for the following year, and
associated performance criteria.
The Board intends to maintain this procedure for the next two years.
2.2. Remuneration of the non-executive Directors
The Company implements a remuneration policy designed to attract and retain on the Board a group of non-executive Directors with
a wide variety of expertise in the various areas necessary to the profitable growth of the Company’s activities. These Directors receive
an identical fixed annual remuneration, independent of their presence at Board meetings. Some Directors are also entitled to a fixed
remuneration for rendering specific services as Chairman or Deputy Chairman of the Board, or for participating to one or more Board
committees. Some Directors also receive a fixed annual remuneration from Belron s.a. (as well as from Avis Europe plc until its sale on
03/10/2011) for the exercise of a directorship. The non-executive Directors do not receive any remuneration related to the Company’s
performance. The CEO does not receive any specific remuneration for his participation on the Board of Directors.
For the year ended 31 December 2011, a total of 1,642,337 EUR has been paid to the non-executive Directors by the Company and by
the Group’s subsidiaries, broken down as follows. No other benefit or remuneration, loan or guarantee has been granted to them by
D’Ieteren or its subsidiaries.
D’Ieteren
Financial and
p. 93
Base
remuneration
(EUR)
Directorships in
group subsidiaries
Total
D'Ieteren Roland
428,769
62,943
491,712
Périer Maurice
179,874
35,000
214,874
2011
Blondel Christine
90,000
D'Ieteren Nicolas
72,751
90,000
72,751
Miller Axel
103,000
103,000
Minne Pascal
160,000
160,000
Nayarit Participations (Heilporn Etienne until May 2011)
29,000
29,000
Nayarit Participations (van Marcke Gilbert since June 2011)
41,000
41,000
Périer Olivier
70,000
70,000
Philippson Alain
80,000
80,000
Sioen Michèle
41,000
41,000
SPDG (Allé Michel)
70,000
70,000
van Marcke de Lummen Gilbert
69,000
69,000
110,000
110,000
Varin Christian
Total
1,544,394
97,943
1,642,337
2.3. Remuneration of the executive managers
General principles
The executive managers are Jean-Pierre Bizet, CEO, Marc-Henri Decrop, Treasurer, Anne del Marmol, Chief Legal Officer, and Benoit
Ghiot, Chief Financial Officer. The group has its own remuneration policy for attracting and retaining managers with the appropriate
background and motivating them by means of appropriate incentives. This policy is based on external fairness criteria, measured in
terms of comparable positions outside the group, and on internal fairness criteria among colleagues within the Company.
The policy is to position executive managers’ total individual remuneration, as a minimum, at the median of remuneration for positions
of similar responsibility in comparable Belgian companies, as determined through benchmarking undertaken by an independent
expert. The last benchmarking was carried out in October 2011.
Description of the various components
The executive management’s remuneration comprises:
A. a fixed remuneration, consisting of a base remuneration, employer contributions to pension schemes, private medical and life insurance, company car fringe benefits, and, as the case may be, a remuneration for the exercise of directorships in group subsidiaries.
The executive managers’ defined contribution pension scheme comprises:
- a base plan into which the employer pays an indexed fixed premium for retirement (possible from the age of 60), invested at a
guaranteed rate with an insurer (who may add any participating bonuses). In the event of death before retirement, the employer
will fund with the same insurer a lump sum equal to a multiple of the annual gross salary plus a multiple of the portion of this
salary exceeding the maximum legal pension plan amount;
- a supplementary plan into which the employer pays a premium equal to a percentage of the gross revenues for the previous
year, variable according to the age of the beneficiary, which is capitalized with the insurer at the same guaranteed rate
(to which he may add any participating bonuses) until retirement or death of the beneficiary.
B. a variable remuneration comprising:
- an annual variable remuneration, whose target is between 40% and 45% of the fixed short term remuneration
- and a long-term incentive plan in the form of share options.
D’Ieteren
Financial and
p. 94
As regards the phasing of the payment of the components of this variable remuneration over time, the Company complies with the
legal requirements in terms of relative proportions relating to:
− the target annual variable remuneration, which shall not exceed 50% of the total variable remuneration and the amount of
which, adjusted according to whether performance criteria have been achieved, is paid at the beginning of the year following
the services provided;
− the long-term variable remuneration in the form of share options, which can be exercised at the earliest from the fourth year
following the year in which they were allocated.
The allocation of the variable remuneration depends on the achievement of individual and collective quantitative and qualitative
performance criteria. The individual criteria are directly related to the description of the responsibilities of the interested parties.
In 2011, the collective criteria consisted of achieving the consolidated budget and implementing strategies approved by the Board
of Directors.
From 2012, the following collective criteria will be applied:
- quantitative: year-on-year improvement of the results; creation of market value as measured by the total shareholders’ return
(dividend + share price); creation of intrinsic value as measured by a formula; achievement of the consolidated budget approved
by the Board of Directors;
- qualitative: design and implementation of the group strategy; dialogue with the management of the activities; senior leadership
development; financing continuity; group corporate social responsibility.
An assessment of the performance of the interested parties is carried out at the start of the year following the one to which the
remuneration in question is allocated, by the CEO for his direct reports and by the Board for the CEO, on the recommendation of
the Remuneration Committee and in accordance with the aforementioned performance criteria.
Based on the performance noted, the actual annual variable remuneration may vary between 0% and 150% of the target, without
prejudice to the Board deviating from this range in exceptional circumstances.
The executive managers’ long-term incentive plan takes the form of D’Ieteren stock options. The value of the options granted,
which determines their amount, is based on the recommendation of the Remuneration Committee set out at the time of granting, using a Black & Scholes-type formula and including valuation elements from independent third parties. The actual exercise
depends upon the evolution of the share price allowing for option exercises after the 3-year vesting period.
The features of the D’Ieteren share option schemes were approved by the Ordinary General Meeting of 26 May 2005. These options
can be exercised from the 1st January of the fourth year following the launch date of the offer until the end of the tenth year thereafter, except during periods of 1.5 months preceding the announcement of the annual and half-yearly financial results, entitling
holders to acquire existing shares of the Company at a price which is, for each scheme, either the average price during the 30 working days prior to the offer date or the closing price of the immediately preceding working day. Further details of the share option
plans are provided in note 37 of the consolidated financial statements.
109,114 D’Ieteren share options were granted to the executive managers for 2011 at an exercise price per share of 35 EUR, allocated as follows.
2011
Options granted
Options exercised
Options expired
Chief Executive Officer
57,766
0
0
Chief Financial Officer
21,823
0
0
Treasurer
19,255
0
0
Chief Legal Officer
10,270
0
0
D’Ieteren
Financial and
p. 95
Summary table
The following table summarises the various categories of remuneration of the CEO and the other executive managers of the group
allocated for 2010 and 2011.
Other
executive managers
CEO
2011
2010
2011
2010
Base salary
931,771
973,345
525,803
508,387
Directorships in group companies
103,784
128,262
87,943
97,888
22,440
22,440
17,945
19,622
1,057,995
1,124,047
631,691
625,897
69,005
88,652
148,506
121,419
1,127,000
1,212,699
780,197
747,316
Annual variable remuneration1
720,000
617,994
460,207
420,414
Share options2
450,000
200,000
400,000
250,000
Fixed remuneration
Other benefits
Total short-term fixed
Long-term fixed remuneration
Group insurance
Total fixed remuneration1
Variable remuneration3
200,000
Long-term cash remuneration
250,000
Total variable remuneration
1,170,000
1,017,994
860,207
920,414
Total remuneration
2,297,000
2,230,693
1,640,404
1,667,730
1
Gross amounts, excluding employer’s Social Security contributions.
Publication of option pricing for the first time by applying a Black & Scholes-type formula.
3
For the phasing of the variable remuneration, see “Description of the variable remuneration components”, section B.
2
Main contractual conditions concerning the departure of members of the executive management and right to claim reimbursement
of all or part of the variable remuneration
The employment contracts of the managing director and the other members of the executive management do not provide for severance
pay in the event of termination of contract. Should such a situation arise, the parties will negotiate in good faith to determine the
terms and conditions applicable to such termination. In the event of a disagreement, the dispute will be resolved by courts applying
Belgian law. They do not contain claw back clauses applicable if the variable remuneration has been allocated on the basis of incorrect
information.
D’Ieteren
Financial and
p. 96
3. INTERNAL CONTROLS AND RISK MANAGEMENT SYSTEMS
The Board of Directors performs its control duties on D’Ieteren’s entities by (i) ensuring that these entities’ bodies correctly perform
their own control duties and that committees entrusted with special survey and control tasks (such as an Audit Committee and a
Remuneration Committee) are put in place and function properly and (ii) ensuring that reporting procedures are implemented to allow
the Board to follow up at regular intervals the entities’ businesses, notably regarding the risks they are facing.
The Board of Directors is assisted by the Audit Committee in the exercise of its control responsibilities on the Company’s entities, in
particular as regards the financial information distributed to shareholders and to third parties and in monitoring the mechanisms for
risk management and internal control.
Against this background, the effectiveness of D’Ieteren’s system of controls, including operational and compliance controls, risk
management and the company’s internal control arrangements, has been reviewed. Such a system is designed to manage, rather
than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable, and not absolute, assurance against
material misstatement or loss.
These reviews have included an assessment of both financial and operational internal controls by the internal audit of each entity and
reports from the external auditor on matters identified in the course of its statutory audit work.
3.1. INTERNAL CONTROL ENVIRONMENT
3.1.1. The system of internal control includes but is not limited to:
-
clear definition of the organization structure and the appropriate delegation of authorities to management;
maintenance of appropriate separation of duties together with other procedural controls;
strategic planning and the related annual budgeting and regular review process;
monthly reporting and review of financial results and key performance statistics;
adoption of accounting policies to help ensure the consistency, integrity and accuracy of the company’s financial records;
specific treasury policies and the regular reporting and review of all significant treasury transactions and financing activities;
procedures for the authorisation of capital expenditure;
internal audit reviews;
policies and business standards;
3.1.2. The effectiveness of the system of internal control has been reviewed through the following processes:
-
review of internal and external audit plans;
review of any significant reported unsatisfactory control matters;
review of any control issues that arise from internal and external audits together with any additional matters brought to the attention of the Audit Committee;
review of any significant risks identified by the company’s risk management process;
discussions with management on any significant new risk areas identified by management and the internal and external audit
processes.
D’Ieteren’s Audit Committee receives a regular report on the work carried out by the Audit Committee of each entity and makes in turn
its own reporting to the Board.
D’Ieteren
Financial and
p. 97
3.2. ASSESSMENT OF BUSINESS RISK
3.2.1. D’Ieteren ensures that business risks, whether strategic, operational, reputational, financial, legal or environmental, are both
understood and visible as far as practicable. D’Ieteren’s policy is to ensure that risk is taken on an informed rather than unintentional
basis.
3.2.2. Each entity conducts an annual risk review and updates its risk register with each risk’s impact, probability and mitigation actions.
This approach forms the cornerstone of the risk management activities of D’Ieteren, the aim of which is to provide the assurance that
the major risks the company faces have been identified and assessed, and that there are controls either in place or planned to manage
these risks.
A summary of the main risks the company faces is provided hereafter.
3.3. INTERNAL AUDIT
3.3.1. Each entity has its own internal audit and risk management function, which is independent of its external auditors and which may
work in partnership with an outsourced provider, where specialist skills are required. A periodic review ensures that these functions
are appropriately staffed, that their scope of work is adequate in the light of the key identified risks the entity faces and that the annual
internal audit plan is properly approved.
3.3.2. The Audit Committee of each entity ratifies the appointment and dismissal of its internal audit manager and assesses his
independence and objectivity and helps ensure that he has unfettered access to management and to the Audit Committee.
3.3.3. The role of internal audit of each entity is to:
-
assess the design and operating effectiveness of controls governing key operational processes and business risks;
provide with an assessment, independent of management, as to the adequacy of the entity’s internal operating and financial
controls, systems and practices;
provide advisory services to management in order to enhance the control environment and improve business performance.
3.4. KEY RISKS
3.4.1. Business risks
3.4.1.1. Industry risk
The automobile distribution business may be impacted by several factors relating to the car industry and the volume of cars sold on
the Belgian market. Overall demand and mix may be affected by factors including general economic conditions, availability of credit
to potential buyers, the tax treatment of company cars or CO2 emissions. Specific demand for the distributed makes depends on the
success of models developed by their automotive suppliers (VW, Porsche, Yamaha, etc.) and their adequate pricing on the Belgian
market.
In the vehicle glass repair and replacement business, mild weather conditions, a reduction in the number of miles driven (e.g. as a
result of an increase in fuel prices) or reduction of average speed on roads as a result of speed limit enforcements are unfavourable
factors as they tend to reduce the frequency of glass breakage. Changes in insurance policies regarding glass breakage, such as
increase of deductibles may reduce demand or increase price pressure.
Disruptions in the recent used car market as a result of economic conditions or intense price competition in the new car market may
affect residual values on buyback cars repurchased from car rental companies at D’Ieteren Auto.
These developments are actively monitored by each entity and fed in a planning process including strategic planning, long term
financial planning, budgets and monthly reporting. This process allows a good anticipation of these trends or quick reaction to sudden
events and provide management with a base for decisions regarding the range of products and services offered, their pricing and the
sizing of the organisation.
Where business is by essence subject to rapid changes in demand, structures have been adapted to provide the maximum flexibility.
D’Ieteren
Financial and
p. 98
3.4.1.2. Sourcing risk
D’Ieteren Auto imports and distributes new cars and spare parts of the makes of the Volkswagen group. The relationship with
Volkswagen has been built over the last 60 years and is formalized in wholesale agreements with each of the makes with no specified
end dates. Any adverse changes to the terms of the agreements, any deterioration in the relationship with the Volkswagen group or
any significant change in policy towards independent importers is likely to have an adverse effect on the financial condition and the
results of the entity.
The key defense against this risk resides in the company’s ability to demonstrate to the Volkswagen group its added value through the
management of the Belgian network of distributors. The company is strictly aligned to the commercial, marketing and services policies
of the Volkswagen group.
VGRR business is critically dependent on the supply of vehicle glass, polyurethane and repair resin. In order to avoid that the loss of a
key supplier in any of these areas significantly disrupts its operations, purchasing teams have developed a strategy to diversify sourcing
and actively allocate volumes.
3.4.1.3. Key account risk
In both entities of D’Ieteren, a significant part of the business is transacted with large key accounts such as businesses, fleet leasing
companies or insurers. Any loss of one or several major key account(s) could have an adverse effect on the financial condition and the
results of D’Ieteren.
Each entity undertakes many activities to ensure that its relationship with key accounts remains strong. Every major account will have
a clear owner who will develop a key account plan with clear objectives on how to develop the relationship further. Each entity ensures
that its customer portfolio remains sufficiently balanced.
3.4.1.4. Product/service failure risk
Vehicles or spare parts distributed by D’Ieteren Auto may be subject to a major default. In this case, all the technical and PR response
to such failure would be organised by the Volkswagen group.
In the vehicle glass repair and replacement business, as the windscreen is an important part of the safety of a vehicle, any badly fitted
windscreen could adversely impact the safety of the vehicle and have a legal, financial and reputational impact.
In order to minimise this risk, Belron develops clear fitting standards, rolls them out throughout the organisation, and regularly
monitors compliance through technical teams in every business unit. In addition, events such as the “Best of Belron”, a worldwide
competition to elect the best fitter of the group, based on compliance with standards and quality of execution, reinforce the importance
of the highest fitting standards.
3.4.1.5. Loss of key Personnel
Continuity of the business may be impaired by the loss of personnel responsible for key business processes, for physical reasons or as
a result of their decision to leave the organisation.
Personnel retention is managed through the offering of a competitive compensation, regularly benchmarked against market practice,
good career perspectives, regular feedback and employee satisfaction surveys. Succession plan of key personnel is regularly reviewed
by the top management of each entity.
3.4.2. Finance and IT risks
3.4.2.1. Catastrophic loss risk
D’Ieteren’s entities are heavily dependant on key resources such as IT systems, call centers and distribution centers. Major disaster
affecting these resources may result in the inability of the entity to provide essential products or services either locally or globally.
Absent mitigating actions, operating costs resulting from the occurrence of a disaster could be significant.
Management regularly reviews the underlying potential causes of loss and implements protective measures. In addition, Business
Continuity Plans are designed to ensure continuity of the entities should a disaster occur. More specifically for IT systems, duplication
of key data and systems mitigate the impact of a potential major system failure. Residual risk may be covered by appropriate insurance
policies.
D’Ieteren
Financial and
p. 99
3.4.2.2. Liquidity risk
A substantial proportion of D’Ieteren’s entities is financed by loans, whose availability depends on access to credit markets. Lack of
availability of funds or a breach of financial covenant could result in the inability of all or part of the company to operate or may lead to
a significant increase of the cost of funding.
Each entity seeks to ensure that it has a core level of long-term committed funding in place with maturities spread over a number of
years.
This core funding is supplemented with shorter-term committed and uncommitted facilities particularly to cover seasonal debt
requirements. All funding is arranged with a wide range of providers, on both a public and private basis. Each entity maintains a regular
dialogue with debt providers and keeps them updated on the general situation of the company.
Following the sale of Avis Europe, liquidity risk has been considerably reduced.
3.4.2.3. Interest rate and currency risk
D’Ieteren’s international operations expose it to foreign currency and interest rate risks. The majority of the business carried out by the
company is transacted in euro, pounds and US dollars. In each country where D’Ieteren has a subsidiary, revenue generated and costs
incurred are primarily denominated in the relevant local currency, thereby providing a natural currency hedge. In the vehicle glass
repair and replacement activity, the policy is, whenever possible, to hedge the value of foreign currency denominated investment with
an equivalent amount of debt in the same currency to protect their value in euro.
Interest rate risk arises from the borrowings, which, after foreign currency risk hedging, principally arise in euro and Sterling.
Borrowings issued at variable rates expose the company to cash flow interest rate risk whereas borrowings issued at fixed rates expose
the company to fair value interest rate risk.
To manage these risks, D’Ieteren is financed through a combination of both fixed and floating rate facilities possibly assorted with
derivatives-based hedges. As present debt facilities mature, D’Ieteren is exposed to higher credit spreads on its borrowings.
3.4.3. Other risks
3.4.3.1. Compliance risk
In geographies where D’Ieteren’s businesses have significant market shares and/or are governed by vertical agreements falling in the
scope of Block Exemption regulations, the key legislative risk relates to Competition Law. Any competition law breach could result in
significant fines. In addition to this, there has recently been significant development in Data Protection legislation with substantial fines
for violations.
In order to mitigate these risks, clear policies and legal monitoring have been put in place and widely communicated. Their application
is audited on a regular basis.
3.4.3.2. Integrity risk
D’Ieteren’s reputation or assets may be affected if unethical or fraudulent activities were perpetrated by employees, customers,
suppliers or agents against the D’Ieteren for personal gains, or if D’Ieteren was considered jointly responsible for such acts perpetrated
by third parties.
The company is putting in place a series of measures in order to avoid these risks to the maximum extent possible, including established
policies and procedures, ethics policy or code of conduct applicable to all staff, appropriate training of the staff, delegation of authority
in place with separation of duties, management information, internal audit and financial controls.
D’Ieteren
Financial and
p. 100
4. CAPITAL INFORMATION
Denominator
At 31 December 2011
Ordinary shares*
Participating shares*
Number
Related voting rights
55,302,620
55,302,620
5,000,000
5,000,000
Total
60,302,620
* Each of the shares and participating shares grants one voting right.
Shareholding structure
Public
34.58 %
At 31 December 2011 (in voting rights)
Nayarit Group
35.56%
SPDG Group
25.10%
Cobepa
Treasury shares
Public
Nayarit Group
35.56 %
Treasury shares
1.23 %
3.53%
1.23%
34.58%
Cobepa
3.53 %
SPDG Group
25.10 %
Disclosure of significant shareholdings (Transparency law)
Following the Nayarit Group’s acquisition of shares representing respectively 3.99% (on 4 April 2011) and 1.44% (on 27 October 2011)
of the voting rights attached to the Company’s shares, the latter has received a disclosure of significant shareholding on 6 April and
2 November 2011 respectively.
In compliance with Article 14 paragraph 4 of the law of 2 May 2007 on the disclosure of significant shareholdings, the shareholding
structure such as it results from the notifications received by the Company is presented in Note 29 (see page 59).
The Company is not aware of any subsequent notification modifying the information presented in this Note.
Law on takeover bids
In accordance with Article 74 § 7 of the Law of 1 April 2007 on takeover bids, s.a. D’Ieteren n.v. received on 20 February 2008 a
notification from the Nayarit group (whose members are listed in Note 29 of the Consolided Financial Statements), which includes
all legally required statements and in particular mentions that, either separately or acting in concert with other people, on 30 September
2007 it held more than 30% of the voting shares issued by the Company.
Elements that can have an influence in case of a takeover bid on the shares of the Company
The Extraordinary General Meeting of 28 May 2009 has renewed the authorisation to the Board to increase the share capital in one or
several times by a maximum of 60 million EUR. The capital increases to be decided upon in the framework of the authorised capital can
be made either in cash or in kind within the limits set up by the Company Code, or by incorporation of available as well as non-available
reserves or a share premium account, with or without creation of new shares, either preference or other shares, with or without
voting rights and with or without subscription rights. The Board of Directors may limit or waive, in the Company’s best interest and in
accordance with the conditions determined by the law, the preferential subscription right for the capital increases it decides, including
in favour of one or more determined persons.
D’Ieteren
Financial and
p. 101
The Board of Directors is also entitled to decide, in the framework of the authorised capital, on the issuance of convertible bonds,
subscription rights or financial instruments which may in term give right to Company shares, under the conditions set up by the
Company Code, up to a maximum, such that the amount of the capital increases which could result from the exercise of the above
mentioned rights and financial instruments does not exceed the limit of the remaining capital authorised as the case may be, without
the preferential subscription right of bondholders.
Without prejudice to the authorisation given to the Board of Directors according to the previous paragraphs, the Extraordinary General
Meeting of 26 May 2011 has explicitly authorized the Board of Directors, for a renewable 3-year period, to proceed – in the event of
takeover bids on the Company’s shares and provided the required notification has been made by the FSMA within a 3-year period – to
capital increases by contribution in kind or in cash, as the case may be, without the preferential subscription right of shareholders.
By decision of the same Meeting, the Board of Directors has been authorised to purchase own shares, without prior approval of the
Assembly, in order to prevent the Company from suffering a severe and imminent damage, for a renewable 3-year period, starting from
the date of publication of the decisions taken to amend the articles of association in the appendixes of the Belgian Official Gazette.
The Board is also authorized, in order to prevent the Company from suffering a severe and imminent damage, to sell own shares on
the stock exchange or through a sale offer made under the same conditions to all shareholders in accordance with the law. These
authorisations also apply, under the same conditions, to the purchase and sale of the Company’s shares by subsidiaries in accordance
with clauses 627, 628 and 631 of the Company Code.
Finally, the Extraordinary General Meeting of 28 May 2009 granted the Board a 5-year authorisation to purchase own shares under the
legal conditions, notably to cover stock option plans for managers of the Company.
The rules governing the appointment and replacement of Board members and the amendment of the articles of association are those
provided for by the Company Code.
The change of control clauses included in the credit agreements concluded with financial institutions and in the prospectus for the
public bond offering of 23 December 2009 was approved by the General Meeting of shareholders of 27 May 2010, in accordance with
article 556 of the Company Code.
D’Ieteren
Financial and
p. 102
Share information
D’Ieteren share
Financial year from 1 January to 31 December
Minimum lot
ISIN code
Reuters code
1 share
BE0974259880
IETB.BR
Bloomberg code
DIE.BB
Stock market indices
On 19 March 2012, the D’Ieteren share has returned in the BEL20 index with a weight of 1.50% at that date. The D’Ieteren share also
forms part of the Next 150 and Belgian All Shares (BAS) indexes of Euronext with respective weighting of 1.13% and 0.80% at the same
date. Finally, it also forms part of sector indexes published by Dow Jones, Eurostoxx and Bloomberg.
Evolution of the share price and traded volumes in 2011
EUR
2011
50
45
40
35
Annualised performance
-27.8%
Total shareholder return
-26.9%
Average price (EUR)
43.22
Maximum price (EUR)
49.85
14/06/11
Minimum price (EUR)
32.73
19/12/11
Average volume (in units)
30
25
01/11 02/11 03/11 04/11 05/11 06/11 07/11 08/11 09/11 10/11 11/11 12/11
78,403
Maximum volume (in units)
390,481
1/03/11
Minimum volume (in units)
11,086
30/12/11
D’Ieteren
Financial and
p. 103
Evolution of the share price over 10 years
EUR
2002-2011 (ten years)
50
40
Annualised performance
6.3%
Total shareholder return
(annualised)
7.4%
Average price (EUR)
23.53
Maximum price (EUR)
49.85
14/06/11
Minimum price (EUR)
7.22
29/12/08
30
20
10
Average volume (in units)
0
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
69,121
Maximum volume (in units)
1,007,880
5/11/03
Minimum volume (in units)
1,930
28/05/07
01/11
Detailed and historic information on the share price and the traded volumes are available on the website of D’Ieteren (www.dieteren.
com).
Dividend
If the allocation of results proposed on note 29 of this report is approved by the Ordinary General Meeting of 31 May 2012, a gross
dividend for the year 2011 of 0.800 EUR per share will be distributed.
The dividend will be paid starting on 7 June 2012.
Evolution of the gross dividend per share over ten years (EUR)
EUR
1,0
0,9
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0,0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
D’Ieteren
Financial and
p. 104
Global Reporting Initiative –
Disclosure on sustainable development
• D’Ieteren’s self-assessment puts it at level C. 13 GRI indicators are reported, of which 11 relate to environment;
• The scope of this report covers D’Ieteren’s two activities: D’Ieteren Auto and Belron;
• D’Ieteren continues to develop its CSR strategy and initiatives notably by engaging with stakeholders and responding appropriately to their CR concerns.
STRATEGY AND ANALYSIS
§
GRI Content
Reference/Comment
1.1
CEO statement
See Activity Report 2011 – page 36
ORGANISATIONAL PROFILE
2.1
Name
2.2
Brands, products and services
Distribution in Belgium of Volkswagen, Audi, Seat,
Škoda, Bentley, Lamborghini, Bugatti, Porsche
and Yamaha vehicles;
Vehicle Glass Repair and Replacement (VGRR)
across the world through more than ten major
brands including Carglass, Autoglass and
Safelite AutoGlass;
For further information, please refer to the
corporate website www.dieteren.com.
2.3
Operational structure
See page 1 of the Activity Report
2.4
Location of headquarters
Rue du Mail, 50 - 1050 Brussels, Belgium
2.5
Number of countries
33 countries on 5 continents
(see map on page 1 of the Activity Report)
2.6
Nature of ownership and legal form
Public company established and domiciled in
Belgium, whose controlling shareholders are
listed in note 29 of the Consolidated Financial
Statements 2011 (see page 59)
2.7
Markets served
See map on page 1 of the Activity Report
2.8
Scale
See the Consolidated Financial Statements 2011
2.9
Significant changes regarding size, structure or ownership
See note 2 (Significant transactions) of the
Consolidated Financial Statements 2011
(see page 14)
D’Ieteren
Financial and
p. 105
REPORT PARAMETERS
§
GRI Content
Reference/Comment
3.1
Reporting period
January 1, 2011 to December 31, 2011
3.2
Date of most previous report
December 2010 - This is the second year that
D’Ieteren reports following the GRI reporting
guidelines
3.3
Reporting cycle
Yearly
3.4
Contact point for questions
Financial indicators: Vincent Joye,
[email protected],
tel: +322 536 54 39
Environmental and Social indicators:
Catherine Vandepopeliere,
[email protected],
tel: +322 536 91 91
3.5
Process for defining report content
Materiality of CR stakes directly related
to the two core activities of the Group
has been the main selection criteria;
The selection of content and indicators
has been reviewed and validated by a
representative team of D’Ieteren.
3.6
Boundaries
Belron has activities in 33 countries.
D’Ieteren Auto has activities on13 sites in Belgium
– offices and garages: Audi Center Zaventem,
Seat Woluwe, Bentley, D’Ieteren Centre, D’Ieteren
Drogenbos, National distribution centre in ErpsKwerps, D’Ieteren Expo, D’Ieteren Mail, D’Ieteren
Meiser, D’Ieteren Anderlecht, D’Ieteren Fort Jaco,
D’Ieteren Stokkel and D’Ieteren Vilvoorde
3.7
Limitations on the scope
The activities of the independent dealers of
D’Ieteren Auto are not covered by this report
3.8
Basis for reporting
Same as Consolidated Financial Statements 2011
3.10
Effects of re-statement of information provided in earlier reports
No restatement of information
provided in earlier reports
3.11
Significant changes in scope, boundary or measurement methods
No significant changes from previous reports
3.12
GRI content index
See Table page 107
D’Ieteren
Financial and
p. 106
GOVERNANCE, COMMITMENT AND ENGAGEMENT
GRI Content
Reference/Comment
4.1
Governance
4.2
Indicate whether the Chair of the highest governance body is also an
executive officer
4.3
Number of members of the highest governance body that are independent and/or non-executive members
D’Ieteren adheres to the corporate governance
principles set out in the Belgian Code of Corporate
Governance 2009 published on the website
www.corporategovernancecommittee.be.
However, the implementation of these principles
takes into consideration the particular structure
of the Company’s share capital, with family
shareholders owning the majority and having
ensured the continuity of the Company since 1805.
G RI I ND I CATO RS
§
The Board of Directors consists of:
• six non-executive directors, appointed on the
proposal of the family shareholders;
• one non-executive director, appointed on the
proposal of Cobepa;
• five non-executive directors, three of whom
being independent, chosen on the basis of their
experience;
• the managing director (CEO).
Information relative to the D’Ieteren Corporate
Governance Charter is available http://www.
dieteren.com/publications/legal-publications/
corporate-governance-charter
Contact point for questions:
Financial indicators: Vincent Joye,
[email protected]
Environmental and Social indicators:
Catherine Vandepopeliere,
[email protected]
4.4
Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body
4.14
List of stakeholder groups engaged by the organization
4.15
Basis for identification and selection of stakeholders with whom to
engage
First discussions with external stakeholders
have been initiated and will be further structured
in 2012.They are involved on the basis of their
interest in, impact on, and knowledge of the main
challenges of D’Ieteren’s core activities.
Examples include green mobility, professional
training in automobile skills, sustainable buying
and selling practices.
D’Ieteren
Financial and
p. 107
D’Ieteren Auto
Belron
Units
2009
2010
2011
2009
2010
2011
EC1
EUR million
2,453,.8
2,732.9
3,208.3
2,423.2
2,800.9
2,769.0
EN3
ECONOMIC PERFORMANCE
Generated and distributed direct economic value
ENERGY CONSUMPTION
Direct
Heating fuel
MWh/yr
4,220
1,881
970
4,125
5,533
4,614
Natural gas
MWh/yr
20,550
28,372
25,031
119,401
116,003
113,531
Other (Coal, biofuel, ethanol,
hydrogen)
MWh/yr
-
-
-
-
-
-
liters
1,774,381
1,721,940
Belron Environmental
Reporting system
introduced in 2011
46,948,603
EN4
MWh/yr
13,786
11,909
EN16
Company owned vehicles
fuel consumption
Indirect
Electricity consumption
1,752,899
11,304
100,510
110,257
143,078
GHG EMISSIONS
Direct
Indirect
Heating fuel
tCO2e/yr
1,140
508
262
993
1,326
1,085
Natural gas consumption
tCO2e/yr
3,813
5,264
4,695
23,913
22,364
22,066
Gases for cooling systems
tCO2e/yr
202
219
233
4,465
6,647
3,916
Company owned vehicles
tCO2e/yr
5,026
4,512
4,965
93,779
114,717
113,421
Company controlled logistics
tCO2e/yr
NA
NA
NA
25,649
24,152
30,029
Fork Lift Trucks
tCO2e/yr
NA
NA
NA
1,026
690
1,508
tCO2e/yr
2,821
2,354
1878
43,063
45,460
53,256
tCO2e/yr
16,232
16,386
16,293
230,193
262,373
271,821
Electricity consumption
EN17
Total GHG (Scope 1 & 2 only)
INITIATIVES TO REDUCE ENERGY CONSUMPTION AND TO MITIGATE ENVIRONMENTAL IMPACT
Energy saved due to
conservation and efficiency
improvements
Initiatives to reduce energy
use and improve energy
efficiency
EN5
Initiatives to provide
energy-efficient products
and services
EN6
tCO2e/yr
See CSR section
of the activity report
See CSR section
of the activity
report /
See additional
information
on D'Ieteren
Auto below
EMS/ISO 14001
EN7
Initiatives to reduce indirect
energy consumption
Initiatives to reduce
greenhouse gas emissions
EN18
Initiatives to mitigate
environmental impacts of
products & services
EN26
ISO 14001: UK , Germany,
Netherlands, Italy
Belron
Environmental
Reporting system
introduced in
2011
See CSR section of the activity report
WASTE
Recycling flows
tons/yr
756
818
1,061
Incinerators
tons/yr
408
389
484
Landfill
tons/yr
-
-
-
Hazardous
tons/yr
348
210
282
tCO2e/yr
391
297
571
14,298
19,280
23,865
CO2 emissions of logistics:
corporately owned vehicles
tCO2e/yr
-
-
-
25,649
24,152
30,029
Outsourced Logistics
tCO2e/yr
1,850
2,199
2,521
23,007
29,100
22,676
Average
FTE
1,539
1,578
1,633
22,399
24,790
25,199
%
3,5%
3,7%
3,6%
NA
NA
NA
EN22
Belron Environmental
Reporting system
introduced in 2011 - see
additional information on
Belron below
69,488
4,231
89,965
314
TRANSPORT
Environmental impacts of
transportation of products
Business travel
(air, road, rail)
EN29
LABOR PRACTICES & DECENT WORK
Total workforce by
employment type, employment contract, and region
Total workforce
% of total employees who
are part time
LA1
Additional information: D'Ieteren Auto - D'Ieteren Auto has developped its own monitoring system for its environmental performance. Yearly audits are performed at the corporately-owned
sites. The company reports on energy and water consumption, as well as waste level, twice a year. Belron - The GHG emissions of the business-units are reported twice a year and followed by
a central team of the Belron Environmental Reporting System (BERS), allowing close monitoring of the emissions. Waste: so far Belron has focussed on reducing the impact of its operational
waste. These efforts were focused on reducing packaging volumes and increasing glass recycling rates.
FIN A N CIA L CA LEN DA R
10 May 2012
General Meeting
31 May 2012
Ex date
4 June 2012
Payment date
7 June 2012
28 August 2012
CONTENTS
1
7
8
9
10
11
12
14
82
88
88
92
96
100
102
104
2011 Full-Year results
Consolidated financial statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Abridged statutory financial statements 2011
Composition and operation of the Board, executive
management and control bodies
Remuneration report
Internal controls and risk management systems
Capital information
Share information
Corporate Social Responsibility indicators
29 August 2012
8 November 2012
PRESS A N D IN VESTOR RELATIO N S
D’ IETEREN GROUP
Vincent Joye
rue du Mail, 50
Tel. : + 32 2 536 54 39 - Fax : + 32 2 536 91 39
Information about the Group (press releases, annual reports, financial calendar,
share price, statistical information, social documents…) is available, mostly in
three languages (French, Dutch and English), on www.dieteren.com or on request.
www.dieteren.com ou sur simple demande.
CONTENTS OF THE CONSOLIDATED DIRECTORS’ REPORT*
1
88
88
88
92
69,92
96
100
100
100
59
70
80
Evolution of the situation, activities and results of the company
• Composition and operation of the Board and its committees
• Designation of the corporate governance code
• Exception to the corporate governance code
• Remuneration report
• Internal controls and risk management systems
• Capital information
- Disclosure of significant shareholdings
- Elements that can have an influence in case of a takeover bid
- Repurchase of own shares
Financial risk management
Subsequent events
*The topics of Article 96 of the Company Code, defining the content of the management report, that are not applicable for D’Ieteren,
have not been included in this summary.
Ce rapport est également disponible en français. Dit jaarverslag is ook beschikbaar in het
Nederlands.
DESIGN A N D PRODUCTION :
COMFI (WWW. COMFI. B E)
PRIN TIN G: DEREUME PRIN T IN G
Safelite® Auto Glass, O’Brien® and Smith&Smith® are trademarks or registered trademarks of
Belron S.A. and its affiliated companies.
FORWA RD- LOOKIN G STATEM E N TS
This Annual Report contains forward-looking information that involves risks and uncertainties, including statements about D’Ieteren’s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown
risks and are subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the control of D’Ieteren. Should one or more of
these risks, uncertainties or contingencies materialize, or should any underlying assumptions
prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, D’Ieteren does not assume any responsibility for the accuracy
of these forward-looking statements.
REPORT 2011
2011.dieteren.com
2011.dieteren.com
D’Ieteren
www.dieteren.com
FINANCIAL AND
DIRECTORS’

Annual report 2011

Transcription

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