annual report 2014 - Foundationsbridge for the municipality of Odense .62 Supplemeting these large scale projects are a number of smaller and mid-size projects across Bladt Industries’

Bladt Industries A/S | 2014

1

annual report

2014


2Foundations, Anholt Offshore Wind Farm, DenmarkTyra SE Platform, Maersk Oil, Denmark

Contents

50 years with steel and still flexible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Management Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Financial highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Challenging conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Outlook and Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Projects in Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Foundations for Offshore Wind Turbines . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Geographic loacation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Offshore Wind Substations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Oil & Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Governance, Board of Directors and Management . . . . . . . . . . . . . . . . . . . 18 Internal Controls and Presentation of Accounts

and Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Organization and Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Corporate Social Responsibility and Human Resources . . . . . . . . . . . . . . 20 Quality, Health, Safety and Environment (QHSE) . . . . . . . . . . . . . . . . . . . . 22

Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Commercial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Financial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Insurance risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Board of Directors, Executive Board and Group Management . . . . . 26 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Executive Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Group Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Statement by the Board of Directors and the Executive Board . . . . . . . . . . . . 27

Independent auditors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Group Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56


4

Take the

lead

Our clients are the most important source to our success . We aim to interact with our clients for the benefit of them and to strengthen our businesses even further . We will go new ways to fulfil that target . Every year, we experience new tasks or challenges which have to be considered and solved .

We create solutions for our clients within our three business areas: wind and renewable energy, the oil and gas industry and infrastructure .

Wind and renewable energy has for the last decade been the largest division of our three business areas . We have been part of the offshore wind turbine industry since its very beginning, and we are the market

leader within project management and production of foundations and substations for offshore wind farms .

The oil and gas industry is where our whole offshore experience took off . 40 years of unique insight and experience makes us capable of meeting the needs, special demands and challenges that our clients’ face . Our experience covers steel structures such as modules, topsides, jackets and suction anchors. The infrastructure division is where Bladt Industries has its roots . Bladt Industries is still a strong player in this area and additional efforts are put in place to strengthen the business even further . Our infrastructure division delivers various

steel related projects– from bridges, steel tanks and buildings to harbour and marine facilities .

50 years of experience built on a combination of our experience, our employees’ solid qualifications and our open mind to take on new and challenging tasks and find new soultions, is the best way to describe Bladt Industries .

Bladt Industries covers a wide range of steel structures – from large international projects within the offshore industry to less extensive repair projects on the domestic and neighboring markets .

flexible

Work on site in Aalborg

50 years with steel and still


5

Our employees are an important asset to us . Each employee contributes with key skills to the many projects in which Bladt Industries is involved .

Our facilities with direct access to seaways are also important assets to Bladt Industries . In 2015, Bladt Industries and our long-term partner EEW SPC have invested in UK facilities to further strengthen our position in the market .

Today, with several facilities across Europe, we are capable of fulfilling almost every demand from our clients .

Our clients are our source to success, and we will endavour to meet their demands. – Only ONE thing is not up for discussion – we never compromise on safety and quality.

Notthsea Ost Substation


6

Management

ReviewFinancial highlights

DKKm 2014 2013 2012 2011 2010

Key figures

Revenue 3,201 .3 2,967 .6 2,270 .4 1,708 .0 727 .0

Gross profit 19 .8 268 .5 239 .7 182 .6 120 .5

Earnings before interest, tax, depreciation, and amortization (EBITDA)

23 .9 269 .6 238 .3 180 .7 112 .0

Earnings before interest and tax (EBIT) -8 .5 243 .7 217 .2 163 .7 103 .1

Profit for the year -6 .7 186 .2 162 .9 123 .1 77 .0

Non-current assets 168 .8 154 .4 137 .8 107 .7 97 .2

Current assets 1,292 .0 875 .3 539 .3 555 .2 188 .2

Total assets 1,460 .8 1,029 .7 677 .1 662 .9 285 .4

Equity 388 .3 445 .1 310 .9 228 .0 103 .4

Non-current liabilities 42 .6 58 .9 55 .2 73 .5 32 .4

Current liabilities 1 .029 .9 525 .7 311 .0 361 .4 149 .6

Net cash (net of interest bearing debt) 137 .8 157 .1 161 .4 100 .6 83 .1

Investment in property, plant, and equipment 44 .0 42 .6 51 .8 26 .2 68 .4

Cash flows from operating activities 77 .6 90 .1 192 .0 43 .4 129 .6

Net cash flows to investing activities -46 .9 -42 .4 -51 .2 -26 .0 -68 .0

Free cash flows 30 .7 47 .7 140 .8 17 .4 61 .6

Financial ratios

Operating margin -0 .3 8 .2 9 .6 9 .6 14 .2

Solvency ratio 26 .6 43 .2 45 .9 34 .4 36 .6

Return on equity -2 .0 64 .5 80 .6 98 .8 89 .8

Average number of employees 628 587 461 403 293

The financial ratios have been prepared in accordance with the Danish Society of Financial Analysts’ guidelines on the calculation of financial ratios “Recommendations and Financial Ratios 2010” . We refer to the definition of financial ratios on page 55, note 30 .


7

Management Review

Challenging conditionsIn 2014 the activity level of Bladt Industries peaked with the highest revenues ever recorded and with Bladt Industries executing the largest ever project portfolio . Growing from an already record level in 2013, revenues increased by 8 % to DKK 3,201 million in 2014 (2013: 2,968 million) .

While revenues continued to grow in 2014, earnings before interest and tax decreased to DKK -8 million (2013: 244 million) which is not satisfactory . While the majority of Bladt Industries’ projects within offshore wind and infrastructure in 2014 were executed with satisfactory earnings, a few specific offshore wind and one oil and gas project were the main cause of the lower earnings in 2014 . Some of these projects were impacted negatively by adverse conditions beyond Bladt Industries’ control such as delayed design releases and certifications as well as a more commercially aggressive behaviour from a few customers also leading to ongoing disputes .

The large project portfolio executed in 2014 included the finalization of the production of the offshore wind turbine foundations for the Borkum Riffgrund 1, the Baltic 2, the Westermost Rough and the Butendiek offshore wind farms as well as the finalization of the substation for the Nordsee Ost offshore wind farm and an offshore wellhead platform and foundation for the Tyra Southeast oil and gas field . Additionally, significant projects continue to be ongoing also beyond 2014 including the offshore wind turbine foundations for the Gode Wind 1 and 2 and the Sandbank offshore wind farms, the substations for the Nordsee One and Sandbank offshore wind farms and a path bridge for the municipality of Odense . Supplemeting these large scale projects are a number of smaller and mid-size projects across Bladt Industries’ target segments .

0

25

50

100

125

150

175

2014

31

2010

62

2011

17

2012

141

2013

48

0

500

1,000

1,500

2,000

2,500

3.000

2014

3,283

2010

727

2011

1,708

2012

2,270

2013

2,968

Revenue (DKKm)

Free cash flows (from operations and investments) (DKKm)

0

50

100

150

200

250

2010

103

2011

164

2012

217

2013

244

2014

-8

-50

EBIT (DKKm)


8

Management Review

Godewind, Germany

During 2014, Bladt Industries also continued to invest in strengthening the organization and business systems as well in the production facilities in Aalborg and Lindø . This included the appointment of Jan Kjærsgaard as the new CEO of Bladt Industries with the former CEO, Peter Rindebæk, continuing as COO and deputy CEO . Also, in 2014, Bladt Industries prepared for the establishment of a joint venture production facility in the UK which will become operational in 2015 .

Handling the deeper watersAs a market leader within fabrication of foundations for offshore wind turbines and substations for offshore wind farms, Bladt Industries is well prepared and positioned to handle the demands of offshore wind farms as they move into deeper waters and employ larger wind turbines . During 2014, Bladt Industries completed the fabrication of 41 jacket foundations for the Baltic 2 offshore wind farm . This production was executed at Bladt Industries’ facility at Lindoe Industrial Park which was established in 2013 . Jacket foundations are particularly well suited for offshore wind farms in deeper waters and with large turbines . Following the Baltic 2 offshore wind farm, Bladt Industries will continue the serial production of 41 jacket foundations at the facility at Lindoe as the production of jacket foundations for the Wikinger offshore wind farm will commence during spring of 2015 .

In 2014, Bladt Industries also initiated the construction of the first ever order

for so-called XL monopiles designed for deeper waters and larger turbines . The project consists of the construction of 97 foundations for the Gode Wind I and Gode Wind II offshore wind farms . The construction of these foundations progressed during 2014 and will be completed in 2015 .

Bladt Industries also engages in the longer term development of the offshore wind industry . As an example, Bladt Industries constructed a prototype wind turbine foundation for DONG Energy in 2014 – the suction bucket jacket foundation which has been installed at the Borkum Riffgrund offshore wind farm in Germany .

Market developmentsAs expected at the end of 2013, the market for offshore wind was roughly flat in 2014 compared to 2013 after a number of years with solid growth . The offshore wind market activity in 2015 is expected to remain at the level of 2014 . Longer term growth is again expected in the market – among other things due to a reduction in the uncertainties surrounding the longer term tariff frameworks in Germany and the UK .

The North Sea offshore oil and gas market was also at a similar level in 2014 compared to 2013 . With the declining oil prices in early 2015, activity related to new offshore oil and gas fields is expected to decrease for a period of time while activity related to maintenance and upgrades of existing fields may continue to be solid . The market for infrastructure projects in Denmark and the rest of Scandinavia

is largely dependent on the general economic activity in the area and some market growth is expected in 2015 .

Preparing for the futureDuring 2014, Bladt Industries continued to strengthen the foundation for future success by investing in existing production facilities, preparing for new production facilities, and developing the organization and business system . This is also done to meet increasing customer demands and to minimize the adverse impact of a few specific projects with lower than expected earnings such as experienced in 2014

Bladt Industries aims to maintain the market leadership within offshore wind foundations and substations, and in 2014 the upgrade and expansion of the facilities in Aalborg and Lindoe continued in order to meet this objective and to ensure Bladt Industries’ strong position in the serial production of monopile and jacket offshore wind foundations . To this end, Bladt Industries invested DKK 47 million in 2014 . Such investments included, among other, various state-of-the-art welding and production equipment and storage facilities .

To prepare for an expected strong development in the UK offshore wind market, including the upcoming round 3 projects, Bladt Industries together with the German company EEW Special Pipe Constructions GmbH (EEW SPC) will during 2015 jointly establish a facility for the production of offshore steel structures – particularly offshore wind turbine foundations –


9

Management Review

based at the River Tees in the United Kingdom . This marks an important milestone of the offshore wind industry where experienced European based manufacturers invest in developing the UK offshore wind industry .

The new joint company, Offshore Structures (Britain) Limited, will become a key part of the European manufacturing base of EEW SPC and Bladt Industries . In February 2015, upon approval from the relevant authorities, this UK company acquired the assets of Tees Alliance Group Corporate (TAG) enabling a rapid ramp up as a significant part of the facilities is already in place . Offshore Structures (Britain) will have at its disposal 17 ha (42 acre) of land, more than 13,000 square meters of steel manufacturing facilities under roof and 2,000 square meters of blasting and painting facilities . During 2015, Bladt Industries and EEW SPC will invest in preparing the site for production of the monopile-transition piece type of offshore wind turbine foundations and the site will become fully operational during 2015 . The advantages of a local UK manufacturing site coupled with the significant offshore wind foundation experience of Bladt Industries and EEW SPC will secure Offshore Structures (Britain) a strong position in the future UK offshore wind market . The speed of the investments and development of the capacity at the UK site will depend on the development of the offshore wind market in Great Britain and elsewhere in Europe and on the number and timing of contracts awarded .

While Bladt Industries are developing the production facilities in Aalborg, Lindoe and in the UK, a decision to mothball the smaller scale production facility in Lubmin, Germany was announced towards the end of 2014 and executed in the first part of 2015 . This decision was based on the less positive outlook in the German offshore wind market for the near future and on the evaluation that sufficient production capacity is available elsewhere .

To supplement the strong positions within offshore wind and oil and gas, Bladt Industries is strengthening project management and execution resources to further improve the market position within infrastructure projects with a certain complexity and steel content .

To realize the strategy of Bladt Industries and to further strengthen the organizational setup and business systems needed for further growth, Bladt Industries continued to strengthen the employee base and skill set in 2014 .

As part of this, Bladt Industries expanded its management team by bringing in Jan Kjærsgaard as new CEO from November 2014 . His predecessor as CEO since 2005, Peter Rindebæk, continues as COO and deputy CEO focusing on operations . Jan Kjærsgaard will further develop Bladt Industries in line with the requirements of customers and other stakeholders as well as focus on the continued development of Bladt Industries’ systems and processes . As the offshore wind industry is moving into a new phase with ‘cost of energy’ and standardisation becoming key focus areas, these changes will better prepare Bladt Industries for this development .

Jan Kjærsgaard was previously CEO of Siemens Wind Power A/S . In the prior 13 years, he was part of the management team of Bonus Energi A/S and Siemens Wind Power, among other things as responsible for all of Siemens’s wind activities in Europe, the Middle East and Africa . Prior to this, he was CEO of DS Stålkonstuktion A/S and part of the management team at Aalborg Industries A/S, and hence has vast knowledge of and experience with project-driven companies as well as the offshore wind industry .

Moreover, Bladt Industries recruited key employees within areas such as project management, QHSE, finance management as well as legal and contract management – a development that will also continue in 2015, the year

in which Bladt Industries celebrates its 50th anniversary .


10

Financial ReviewIn 2014, Bladt Industries obtained revenues of DKK 3,201 million (2013: 2,968 million) which is an increase of 8 % nominally and organically . This development was driven by a strong project portfolio within offshore wind foundations and substations .

Gross profit amounted to DKK 20 million (2013: 268 million) and was positively impacted by the high activity level and strong execution of the majority of Bladt Industries’ projects within offshore wind and infrastructure . On the other hand, gross profit in 2014 was adversely affected by significantly lower than expected earnings on a few specific offshore wind and a single oil and gas project . Some of these projects were impacted negatively by adverse conditions beyond Bladt Industries’ control such as delayed design releases and certifications as well as a more commercially aggressive behaviour from a few customers .

Also, on some of these projects, Bladt Industries undertook significant additional expenses to speed up production and delivery to mitigate the delays . These and other factors have also caused disagreements regarding the settlement of variation orders and claims between Bladt Industries and its customers in a small number of these projects . These projects may become the subject of legal proceedings and preparation hereof is ongoing . There is uncertainty as to the result of any such proceedings and thus significant uncertainty as to the final financial outcome of these projects, which can have a positive or negative financial effect .

Capacity costs for project management, production facilities, QHSE systems, infrastructure, and for administration have increased with the growing activity level and in order to strengthen Bladt Industries’ platform for future growth . Operating

profits (EBIT) decreased to DKK -8 million (2013: 244 million) . The operating margin of -0 .3% represents a decline from 8 .2% in 2013 and is impacted negatively by the lower earnings on a few specific projects .

Tax on profit for the year, consisting of current tax of DKK 12 million and changes in deferred tax of a tax income of DKK 16 million, amounted to a tax income of DKK 4 million (2013: tax expense of 58 million) corresponding to a tax rate of 37 .5 % (2013: 23 .7%) . Profit for the year after tax amounted to DKK -7 million in 2014 (2013: 186 million) which is not satisfactory and below the expectations at the start of the year .

At the end of 2014, total assets amounted to 1,461 million (2013: 1,030 million) and total equity amounted to DKK 388 million (2013: 445 million) . During the year only group internal dividends were paid, no dividends were distributed to shareholders

Management Review

Work on site, Aalborg, Denmark


11

outside the Bladt Group . The Board of Directors recommends to the annual general meeting that no dividends be declared in respect of the 2014 financial year .

Bladt Industries realized a cash flow from operations of DKK 78 million (2013: 90 million) . The cash flow is positively impacted by earnings from the majority of projects; however, it is negatively impacted by lower earnings on certain specific projects and the associated increase in working capital due to the disagreements and possible legal proceedings regarding variation orders and associated claims on a few of these specific projects . Net cash flows from investments were DKK -47 million (2013: -42 million) driven by the upgrade and expansion of production facilities in Aalborg and at Lindø Industrial Park .

Total cash flows from operations and investments amounted to DKK

31 million (2013: 48 million) . Net cash flows after financing activities amounted to DKK –19 million (2013: –4 million) .

No events of significant importance to the financial statements and annual report for 2014 have occurred after the end of the financial year,

Management Review

Jacket foundations, Baltic 2, Germany

Outlook and ExpectationsWith markets that are expected to be on a similar level in 2015 as in 2014, revenues are expected to remain at an approximately similar level in 2015 as in 2014 . Earnings are expected to be significantly higher in 2015 than in 2014 based on the expected project execution . The outlook is underpinned by a high number of firm and ongoing contracts, such as for instance offshore wind turbine foundations for the Gode Wind, Sandbank, Wikinger wind farms and offshore substations for the Sandbank and Nordsee One wind farms as well as a good pipeline of infrastructure projects . Further, it is underpinned by a strong project pipeline where an additional number of significant offshore wind projects have been firmly or conditionally contracted in the early part of 2015 .


12

Projects in

FocusGodewind Offshore Foundations

Foundations for Offshore Wind Turbines

Gode Wind 1 and 2Towards the end of 2013, Bladt Industries announced a new order with new dimensions: 97 XL monopiles and transition pieces with an even larger diameter than previous projects . The Gode Wind transition pieces have a diameter of 6 meters and an average weight of 350 tonnes while the monopiles have a diameter of up to 7 .5 meters and a weight of up to 940 tons . The XL foundations will be utilized at DONG Energy’s wind farm in the German North Sea .

Bladt Industries is assisted by long-term partner EEW SPC on this project .The fabrication started up as planned in the third quarter of 2014 . The fabrication of the foundations will be finalized in the second half of 2015 and the wind farm is expected to be fully commissioned in the fall of 2016 .

EnBW Baltic 2 - JacketsIn 2014, Bladt Industries finalized the production of 41 jacket foundations for the Baltic 2 Offshore Wind Farm . The order for the 41 jackets was our first order for serial production of this type of foundation . The jacket foundations have a height of 65 meters and an average weight of 750 tonnes . Besides the 41 jacket structures, Bladt Industries also delivered 39 transition pieces for the wind farm’s monopile foundations . The Baltic 2 Offshore Wind Farm is situated in the German Baltic Sea, and the developer is the German utility EnBW . Our client is the contractor Arge Baltic 2 Foundations (Hochtief Solutions, Geosea, Nordsee Naßbagger) .


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Projects in Focus

Suction bucket foundationsInnovation was also part of Bladt Industries’ production in 2014 . With DONG Energy as the client, Bladt Industries fabricated the 900 tonnes and 56 meters high suction bucket foundation, which is a part of the Borkum Riffgrund Offshore Wind Farm .

Bladt Industries has previously taken part in manufacturing other innovative constructions for the offshore wind industry and we are pleased to be part of the continued development of the industry .

Westermost RoughThe project consists of 35 monopiles and transition pieces for a large 6 MW turbine . The client is DONG Energy and their Westermost Rough Offshore Wind Farm is located off the east coast of the UK . The last foundation was delivered in the spring of 2014 .

SandbankTowards the end of 2014, Bladt Industries initiated the production of 72 transition pieces for the monopile foundations of Vattenfall’s German Sandbank Offshore Wind Farm . Our direct client is EEW Special Pipe Constructions GmbH . The fabrication will be finalized in the second half of 2015 .

Projects in Focus

Baltic 2 Jacket Foundation


14

Geographic locations of Bladt Industries’ offshore wind foundation and substation projects

Projects in Focus


15

Nordsee OstBladt Industries entered into a contract with the German utility company RWE in 2013 . The substation was the 13th substation Bladt Industries has fabricated . The contract covered the design, procurement and fabrication (EPC contract) of the 1,850 tonnes offshore substation for the German Nordsee Ost Offshore Wind Farm . The substation was finalized in the beginning of the third quarter in 2014 .

SandbankBladt Industries was chosen by Vattenfall and Stadtwerke München to fabricate the substation for the

Sandbank Offshore Wind Farm in the German North Sea . The contract is an EPCI contract and consists of both the topside and a four-legged jacket . The design phase started in August 2014 and the sail away is expected in the second quarter of 2016 .The total weight of the jacket is approximately 2,200 tons and the topside is expected to weigh about 1,700 tons . In this turnkey project, Bladt Industries will be assisted by long-term partners Semco Maritime and ISC .

Nordsee OneDuring 2014, the design and planning phase of the EPCI (engineering,

procurement, construction and installation) contract for RWE’s Nordsee One offshore wind farm began . Besides the substation topside, the contract also includes the foundation for the substation which is a jacket structure . Construction will be initiated in 2015 . The sail away is expected in the third quarter of 2016 . The total weight will be approximately 1,400 tons for the jacket structure and 2,150 tons for the topside . This will be the 15th substation delivered by Bladt Industries . Also in this project, Bladt Industries will be assisted by long-term partners Semco Maritime and ISC .

Offshore Wind Substations

Northsea Ost Offshore Substation

Projects in Focus


16

Tyra South East Extension In the third quarter of 2014, the 1,100 tons wellhead platform, a four-legged jacket structure, piles and linking bridge were sailed away from Bladt Industries’ site in Aalborg . All in all, the total project weight was approximately 5,200 tons . The structures were for the Tyra South East Field in the North Sea and Bladt Industries’ client was Maersk Oil & Gas .

The Tyra South East Extension was an EPCI contract .

Lille ThorupFor several years, Bladt Industries has been working periodically on various work on the Lille Thorup Natural gas pipeline . In 2014 maintenance and rehabilitation of the natural gas pipeline was carried out .

Oil & Gas

Projects in Focus

Tyra SE, Maersk Oil


17

Odense Path Bridge In March 2014, Bladt Industries signed a contract for the turnkey delivery of a new path bridge . The bridge has a unique double curved design and is to connect the city of Odense with the harbour by crossing the train tracks . The project was started up just after signing the contract and Bladt Industries’ client is the municipality of Odense .

The project is a significant infrastructure project with a total length of 135 meters and approximately 400 tonnes of steel, unique conic pylons of stainless steel and concrete .

The bridge will be finalized in the third quarter of 2015 .

Skansen Bru, Tronheim, NorwayThe contract was signed in the fall of 2013 and in the fall of 2014, Bladt Industries delivered the steel, machinery and hydraulics for a 45 meters long swing bridge . The bridge is the first swing bridge built in Norway in the last 60 years .

Tanks Building and renovation of tanks still plays an important role for Bladt Industries and has done so since the company was established in 1965 . In 2014, Bladt Industries took part

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Projects in Focus

Swing Bridge, Trhonheim, Norway

in various renovation projects in Denmark for Inter Terminals and Koppers Denmark .

Harbour & MarineBladt Industries has completed various minor harbour and marine projects during 2014 . These include, among others, the renovation of a gangway bridge and the commissioning of a staircase, lift and escalator tower for Frederikshavn Harbour and the shipping company Stena Line in Frederikshavn as well as access ramps for the upper and lower deck for MolsLine’s terminal in Aarhus Harbour .


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Corporate GovernanceGovernance, Board of Directors and ManagementBladt Industries A/S is fully owned by Bladt Holding A/S via the company Bladt Industries Holding A/S . Nordic Capital Fund VII is the ultimate majority shareholder in Bladt Holding A/S, and a number of executives and board members also hold shares and warrants in Bladt Holding A/S . By virtue of its ownership, the group is subject to the “Guidelines for responsible ownership and corporate governance” laid out by the Danish Venture Capital and Private Equity Association (DVCA) . It is the intention of Bladt Industries to comply with the guidelines and to substantiate any non-conformity . Further information regarding the guidelines is available at DVCA’s website www .dvca .dk .

The basis for the organization of the tasks of the Board of Directors and the Executive Board is, among other, the Danish Public Companies Act, the Danish Financial Statements Act, the articles of association of the company and the rules of procedures for the Board of Directors of the company . The Board of Directors and the Executive Board apply these requirements and procedures according to good practices in comparable companies . Additionally, Bladt Industries intends to comply with DVCA’s “Guidelines for responsible ownership and corporate governance” as described above .

The Board of Directors consists of six members . Two members are representatives of the ultimate majority shareholder (Partner Lars Terney and Principal Kim Gulstad of NC Advisory A/S), two are elected at the annual general meeting and are

independent of the ultimate majority shareholder (Jens Due Olsen and Jørgen Huno Rasmussen), and two are elected by the employees of Bladt Industries every four years according to the Danish Public Companies Act .

The Board of Directors has adopted rules of procedures for the Board of Directors and additionally employs the following sub-committees to the board: Executive (Chairman’s) Committee, Audit Committee and Remuneration Committee . The following board members are represented in the individual committees:

· Executive (Chairman’s) Committee: Lars Terney (Chairman), Jens Due Olsen

· Audit Committee: Jens Due Olsen (Chairman), Kim Gulstad

· Remuneration Committee: Lars Terney (Chairman), Jørgen Huno Rasmussen

Four to seven ordinary board meetings are held per year . Among other things, the Board of Directors determines the strategy of the company, decides the composition of the Executive Board, monitors Executive Board compliance with the strategy and the procedures of the company, and is an active sparring partner to the management of the company . Additionally, six to ten Executive (Chairman’s) Committee meetings are held per year with the Executive Board to further monitor the direction and operations of the company between board meetings . The Executive Board and management of the company prepare a monthly report to the Board of Directors detailing the company’s operational and financial performance as well as capital resources .

The Audit Committee operates according to its charter approved by the Board of Directors and refers to the Board of Directors . The tasks of the Audit Committee as specified in its charter include, among other things, monitoring the company’s presentation of financial statements, the adequacy and application of accounting policies and of significant accounting estimates, the company’s systems of internal controls, the external audit of the company’s accounts, the independence of the external auditor, the company’s risk management practices, and recommending the appointment of external auditors to the Board of Directors . Four Audit Committee meetings are held per year . The Audit Committee has organized its tasks in an annual wheel .

Board of Directors and diversityIt is the objective of Bladt Industries to promote diversity, including obtaining a reasonable representation of the under-represented gender in the Board of Directors, in order to strengthen the breadth of the company’s outlook and competences and to further improve decision processes . It is also the objective of the Board of Directors to ensure that its members supplement each other in the best possible way with regard to e .g . competences, age, background, gender, and nationality as relevant to the needs of the company . The recommendation of candidates for the Board of Directors will thus always be based on an assessment of the competences and experience of the individual candidate, how they match the needs of the company, and of the contribution to the overall efficiency and skill set of the Board of Directors .


19

Corporate Governance

At present, all board members and members of the Executive Board and of Group Management are male . The objectives for the period until and including 2017 are:

· Ensure a representation of women in the Board of Directors, in the Executive Board and in Group Management at least equal to the representation of women in the employee base of the company . Given the current level of representation of women in the employee base of the company (approximately 5%), the realization of this objective will likely have to be evaluated over a longer time period starting in 2017 .

· Ensure that employees view the company as having a modus operandi and culture in which individual employees have equal career opportunities regardless of gender, nationality, race, religious beliefs etc .

Capital structureBladt Industries’ has one share class . Management, the Audit Committee and the full Board of Directors regularly evaluate the sufficiency of the company’s capital structure and whether the capital structure

is aligned with the interests of the company and its stakeholders . The overall objective is to ensure a capital structure that facilitates profitable long term growth and value creation .

Internal Controls and Presentation of Accounts and Annual Financial StatementsThe group’s internal controls and risk management regarding presentation of the accounts and the annual financial statements are organized with a view to significantly reduce the risk of significant errors, omissions and/or imperfections in the presentation of the accounts . To ensure this, management establishes relevant policies, procedures and control mechanisms . The Board of Directors – both directly and via the Audit Committee – and management evaluate significant risks and internal controls in regard to the group’s presentation of accounts on an ongoing basis .

On behalf of the Board of Directors, the Audit Committee supervises the

presentation of accounts and annual financial statements as well as the sufficiency and efficiency of the internal controls, including financial reporting standards, accounting principles, and significant accounting estimates and judgments on an ongoing basis . These and other issues are being reported to the Board of Directors by the Audit Committee prior to the approval of the annual financial statements and throughout the year when relevant .

In addition to the audited annual financial statements, Bladt Industries’ Executive Board and management prepare an unaudited monthly report to the Board of Directors detailing the company’s performance including the financial position and development, performance against budget, capital resources as well the health, safety and quality performance . These reports are reviewed at Board meetings, Audit Committee meetings and Executive (Chairman’s) Committee meetings .

Corporate Governance

Northwind Substation, Belgium


20

Organization and SocietyCorporate Social Responsibility and Human ResourcesBladt Industries believes that conducting its business according to the highest standards of integrity is key to ensuring the further development and sustainable growth . Bladt Industries strives to adhere to the principles of United Nations’ Global Compact initiative in the areas of human rights, labour, environment and anti-corruption .

A significant part of Bladt Industries’ business is within offshore wind energy, and thus Bladt Industries continuously works towards providing this clean energy source at cost levels making the expansion of offshore wind energy even more feasible .

Bladt Industries’ code of ethics specify the determination to act with integrity in an honest and law-abiding way, to respect fundamental human rights,

not to give or receive any gifts or other benefits which may be perceived as influencing the impartiality or business behaviour, not to use confidential information for personal benefit and to only use subcontractors that share the ethical values . To further ensure compliance with the code of ethics, Bladt Industries plans to launch an independent whistle-blower system in the coming years .

An important initiative is the training and education of apprentices . At the end of 2014, Bladt Industries was training and educating 28 apprentices primarily within welding . Of these 28 apprentices, 12 were adult apprentices . Training apprentices is an investment ensuring both a qualified employee base for Bladt Industries’ future growth as well as a contribution to the important task of educating skilled professionals for the local community . To further optimize the intake and training of apprentices, Bladt Industries now employs a full-time apprentice coordinator . Also,

employees over the age of 60 at Bladt Industries have the opportunity for a “senior employee agreement” with e .g . reduced time or less demanding tasks in order to prolong their time as active on the labour market .

The employees are crucial to the success and development of Bladt Industries . Therefore management focuses on the recruitment of the best talents and a continuous development of the employees’ qualifications . As part of this effort, Bladt Industries sets targets for the training of employees and in 2014 these targets were exceeded as all employees – whether salaried or hourly-paid – received an average of 2 .8 training days (target of average 2 .5 training days per employee) .

At the beginning of 2014, Bladt Industries employed at a record 775 employees after continued growth for a number of years . The employee growth was significant in 2013 as the new large production site at Lindoe


21

Industrial Park was opened . The growth continued in the first half of 2014 as the production capacity at the Lindoe site was expanded to ensure production of the jacket foundations for the Baltic 2 offshore wind farm .

At the end of the year, the production of these foundations were completed and production for the jacket foundation project for the Wikinger offshore wind farm will take off in the spring of 2015 . Therefore, the number of employees at the Lindoe production site was temporarily reduced at the end of 2014 compared to the peak level, but will grow to the previous level again during 2015 .

In 2014, Bladt Industries continued the further strengthening of the skill sets within areas such as project and production management, QHSE management, legal expertise and as such recruited specialists within these areas to supplement Bladt Industries’ existing staff .

All in all, the number of employees at Bladt Industries A/S in Denmark decreased to 564 at the end of 2014 (2013: 720) .

The number is, as described, expected to grow in 2015 . Internationally, at the subsidiaries in Germany and Poland, the number of employees decreased from 55 at the end of 2013 to 49 at the end of 2014 as the production facility in Germany was gradually to be winded down towards the end of the year in preparation of closure in 2015 .

Organization and Society

Denmark International Total

Employees, year end 2013 720 55 775

Employees, year end 2014 564 49 613

Denmark 2014 2013 2012 2011 2010

Ratio of absence due to illness

3 .6% 3 .7% 2 .9% 2 .7% 2 .5%

Number of lost man hours due to illness x 100

Total man hours

Ratio of absence due to illness (%):

The ratio of absence due to illness compared to total man hours improved marginally during 2014 – from

3.7% in 2013 to 3.6% in 2014. However, it still falls short of the objective of Bladt Industries of a ratio of

absence due to illness below 3% p.a. and continues to be a focus area for improvement.


22

Quality, Health, Safety and Environment (QHSE)At Bladt Industries, the quality of the products delivered to clients, the health and safety of employees and subcontractors as well as the environmental soundness of surroundings are of outmost importance . Therefore, Bladt Industries operates comprehensive quality management, occupational health and safety management as well as environmental management systems . The quality management system is certified according to DS/ EN ISO 9001:2008 and according to ISO 3834-2:2005 and EN 1090-2:2008 for welding . The occupational health and safety management system is certified according to DS/OHSAS 18001:2008 . All these certifications have recently been renewed successfully for another 3-year period and thus are valid until 2017 .The environmental management system complies with ISO 14001 .

The quality management system determines the basis and general principles of the quality system to ensure that the company’s products obtain the planned quality by means of a rational and controlled effort . It is Bladt Industries’ objective to meet or exceed clients’ expectations regarding the quality of the products delivered to them . In addition to own internal audits as well as audits of the quality management system by the relevant external certifying bodies, the quality management system and quality control programs are also frequently reviewed and audited by a number of customers .

Quality control and material traceability are integrated parts of the production and project management at Bladt Industries . Depending on the nature and demands of each individual project, quality control programs can consist of a number of different control actions – including for instance measurement of size dimensions within narrow tolerances and non-destructive testing of welds in a variety of different ways .

The purposes of the occupational health and safety (OH&S) management system are to minimize, and where possible eliminate, risk to employees and others who may be exposed to OH&S risks associated with the company’s activities as well as to maintain and continuously improve the OH&S management system and practices . As in previous years, Bladt Industries has undertaken significant costs and efforts in 2014 in order to improve the occupational health and safety standards and conditions . One focus area in 2014 has been to identify and eliminate risk factors that could potentially cause minor health and safety incidents – the number of minor incidents was reduced by 40% in 2014 compared to 2013 .

Lost Time Injury Frequency (LTIF) is a key indicator for Bladt Industries’ occupational health and safety performance . The table below displays the development in this indicator during the previous years . The LTIF performance of Bladt Industries has improved steadily in the recent years and in 2014 reached 0 .8 which is a relatively low the context of

Organization and SocietyOrganization and Society


23

the industries that Bladt Industries operates in . Nonetheless, the overall long term objective of Bladt Industries is a LTIF performance of 0 . An additional performance indicator for Bladt Industries in the health and safety area is the number of working hours lost due to OH&S related incidents relative to the total number of working hours (“incident frequency”) . As can be seen from the table below, this performance indicator has also improved both in 2013 and 2014 .

Bladt Industries’ environmental management system is based on and operated according to the principles of ISO 14001, however, it is not certified by a certifying body . Within the guidelines of the environmental management system, Bladt Industries continually strive towards minimum environmental impact of the company’s activities in consideration of the financial and technological conditions, including for example to reduce the consumption of materials, energy, water and waste . Internal audits of the environmental management system are completed at least twice per year in order to ensure

2014 2013 2012 2011 2010

Lost time injury frequency (LTIF)

0 .8 1 .7 3 .3 2 .5 3 .7

Incident frequency

0 .7 ‰ 0 .8 ‰ 2 .4 ‰ 2 .2 ‰ 1 .8 ‰

* Injuries causing absence: Injury or illness resulting in the return to work the day following the day of injury.

Number of injuries causing absence* x 1,000,000

Total man hours

LTIF:

Number of lost man hours due to injuries x 1,000

Total man hours

Incident frequency:

the efficiency of the system . Longer term, the environmental management system may become externally certified according to e .g . ISO 14001 .

In 2014, Bladt Industries reduced its environmental footprint via a number of actions and investments – including for instance replacing

older compressors with energy efficient compressors and reducing energy consumption by instituting periodic checks for possible leaks of compressed air throughout the production site .

Organization and Society


24

At Bladt Industries, risk management is an essential and integrated element of the execution of the project portfolio, the realization of the objectives of Bladt Industries, and the further development of the business system . The following section includes a non-exhaustive description of risks related to Bladt Industries’ activities and the management of these risks .

Commercial RisksThe main commercial risks of Bladt Industries are related to (a) the execution of current projects, (b) ensuring a pipeline of future projects, and (c) adapting the capabilities and scale of operations to the changing demands in the marketplace .

To execute projects, Bladt Industries relies both on the competences of employees as well as selected suppliers . Bladt Industries employs a highly skilled work force across a large range of disciplines such as project management, welding, transportation, production and material management, quality control, HSE, contract management, tender management, finance and administration . This qualified work force is the cornerstone of successful project execution . Bladt Industries’ project managers master a variety of proven project management tools that are continuously developed and adapted to the specific project at hand . Physical production of very large structures may be impacted by adverse weather conditions . To mitigate such impact, Bladt Industries calculates with standard periods of adverse weather when planning projects as well as ensuring flexibility in production facilities to quickly adapt to the impact of weather changes .

A strong cooperation with selected suppliers that Bladt Industries works closely with on the individual projects further ensures a successful project execution . Such cooperation improves competitiveness, enhances capacity and mitigates risks by having projects completed at independent sites thereby reducing reliance on any single site . Significant suppliers are evaluated and monitored closely before and during the project so that potential issues are dealt with prior to the project and any issues that may arise during the project are mitigated in a timely manner . Furthermore, major suppliers are incentivized to avoid inadequate performance on their part via targeted contractual milestones, bonuses and penalties .

Prior to contracting a potential project, the contract and calculations are reviewed in accordance with defined procedures for tendering . During the project execution phase, projects are reviewed frequently by project management, division management, finance management and executive management . Such reviews focus on financial performance, project progress, execution issues as well as actual and potential risks . During 2014, Bladt Industries strengthened the organizational competence base within contract management including substantially developing the legal department in order to identify, avoid and mitigate unwanted contractual risks .

To ensure the longer term profitable growth of Bladt Industries and securing a pipeline of potential future projects, winning new projects and adapting capacity and capabilities to the future needs of the marketplace

are of paramount importance . Thus, management regularly tracks and reviews developments in the potential project pipeline within its various target segments and based on this adapts the in-house and sourced capacities and capabilities to the project pipeline . The level of demand is primarily dependent on the developments in the Northern European markets for offshore wind and offshore oil and gas and secondarily in the global offshore wind and offshore oil and gas markets as well as the Scandinavian market for infrastructure projects with a certain steel content .

Also, in order to ensure the continued competitiveness and strong market position, Bladt Industries closely monitor ongoing and potential developments in relevant technologies regarding end products – for instance in innovative offshore wind foundation and substation designs – as well as regarding fabrication, assembly and transportation processes . As an example, Bladt Industries constructed the innovative “suction bucket jacket” wind turbine foundation for DONG Energy’s Borkum Riffgrund 1 offshore wind farm in 2014 – the first such foundation ever constructed for a wind turbine .

Execution of major projects and developments in the business pipeline are also regularly reviewed as an integrated part of all board meetings .

Financial RisksBladt Industries’ financial risks are described in note 25 to the consolidated financial statements .

ManagementRisk


25

Insurance RisksBladt Industries takes out statutory insurances as well as the insurances which are deemed to be relevant in order to mitigate or eliminate unwanted risks . At regular intervals, Bladt Industries conducts a review of the insurances in cooperation with an insurance specialist . Additionally, Bladt Industries may take out project specific insurance depending on the requirements of the individual projects .


26

Board of Directors, Executive Board and Group Management

Board of Directors

Lars Terney, Chairman· Chairman Executive Committee and Chairman Remuneration Committee of

Bladt Industries A/S

· Partner, NC Advisory A/S, advisor to Nordic Capital Funds

· Member of the Board of NC Advisory A/S, Sport Nordic (Sport-Master),

Unifeeder A/S

Jens Due Olsen, Deputy Chairman· Chairman Audit Committee and Member Executive Committee of Bladt

Industries A/S

· Professional board member in a number of companies . Previously CFO and

Deputy CEO GN Store Nord A/S, CFO FLSmidth & Co . A/S, CFO Aston

Group and various roles in AP Møller-Maersk

· Chairman of the Board of NKT Holding A/S, Auriga A/S, Amrop A/S,

Pierre .dk Autolakering A/S, Atchik Realtime Holding A/S, Auris II

Luxembourg S .A .

· Member of the Board of Royal Unibrew A/S, Gyldendal A/S, Cryptomathic

A/S, PFA Holding A/S, Heptagon Advanced Micro Optics Inc .

· Member of the Investment Committee of LD Equity 2 K/S

Jørgen Huno Rasmussen, Member· Member Remuneration Committee of Bladt Industries A/S

· Professional board member in a number of companies . Previously CEO

FLSmidth & Co . A/S, Veidekke ASA and Hoffmann A/S

· Chairman of the Board of Lundbeckfonden, Lundbeckfond Invest A/S,

TryghedsGruppen smba, Tryg A/S, Tryg Forsikring A/S

· Member of the Board of Rambøll Gruppen A/S, Haldor Topsøe A/S,

Terma A/S

Kim Gulstad, Member· Member Audit Committee of Bladt Industries A/S

· Principal, NC Advisory A/S, advisor to Nordic Capital Funds

· Member of the Board of Unifeeder A/S, Master Marine A/S

Kristian Kærsgaard, Member (elected by employees)· Department Manager, Gratings

Ole Springby, Member (elected by employees)· Blacksmith

Executive Board

Jan Kjærsgaard, CEO

Peter Rindebæk, Deputy CEO and COO· Member of the Board of Lindø Steel A/S, Offshoreenergy .dk,

Dansk Industri – DI

· Chairman of the Board of Gardin-Nyt Randers ApS

Managerial posts in subsidiaries of Bladt Industries A/S have not been included in the above lists .

Group Management

Kim Bringsjord, Head of Division, Infrastructure

Mikael Kristensen, Chief Financial Officer

Troels G . Jensen, Head of Division, Oil & Gas

Morten Axel Petersen, Group Chief Finance & Strategy Officer


27

Statements

Statement by the Board of Directors and the Executive Board

The Board of Directors and the Executive Board have today discussed and approved the annual report of Bladt Industries A/S for the financial year 2014 .

The annual report has been prepared in accordance with International Financial Reporting Standardsas adopted by EU and additional disclosure requirements in the Danish Financial Statements Act .

It is our opinion that the financial statements give a true and fair viewof the Company’s financial position at31 December 2014 and of the resultsof the Company’s operations and cash flows for the financial year 1 January -31 December 2014 .

In our opinion, the Management commentary includes a fair review of the development in the Company’s operations and financial conditions, the results for the year, cash flows

and financial position as well as a description of the most significant risks and uncertainty factors that the company faces .

We recommend that the annual report to be approved at the annual general meeting .

Aalborg, 31 May 2015

Executive Board

Peter Rindebæk Deputy CEO and COO

Board of Directors

Jørgen Huno RasmussenLars Terney Chairman

Jens Due Olsen Deputy Chariman

Kristian KærsgaardOle SpringbyKim Gulstad

Jan Kjærsgaard CEO


28

Independent Auditors’ Report

To the shareholders of BladtIndustries A/S

Independent auditors’ report on the financial statements.We have audited the financial statements of Bladt Industries A/S for the financial year 1 January – 31 December 2014 . The financial statements comprise income statement, statement of comprehensive income, statement of financial position, statementof changes in equity, cash flow statement and notes, including a summary of significant accounting policies . The financial statements are prepared in accordance with International Financial Reporting Standards as adopted by EU andadditional disclosure requirements in the Danish Financial Statements Act .

Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by EU and additional disclosure requirements in the Danish Financial Statements Act and for such internal control thatManagement determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraudor error .

Auditors’ responsibilityOur responsibility is to express an opinion on the financial statements based on our audit . We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation . This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement .

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements . The procedures selected depend onthe auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error . In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financialstatements .

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion . Our audit has not resulted in any qualification .

OpinionIn our opinion, the financial statements give a true and fair viewof the Company’s financial position at31 December 2014 and of the resultsof the Company’s operations and cash flows for the financial year 1 January– 31 December 2014 in accordance with International Financial Reporting Standards as adopted by EU and additional disclosure requirements in the Danish Financial Statements Act .

Statement on the Management commentaryPursuant to the Danish Financial Statements Act, we have read the Management commentary . We have not performed any further procedures in addition to the audit of the financial statements . On this basis, it is our opinion that the information provided in the Management commentaryis consistent with the financial statements .

Aalborg, 31 May 2015

PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab

Claus Lindholm Jacobsen

State Authorised, Public Accountant

Thyge Belter

State Authorised, Public Accountant

Statements


29

Financial statements for the period 1 January - 31 December 2014

Income statement

DKK’000 Note 2014 2013

Revenue 3 3,201,321 2,967,575

Production costs 4,5 -3,181,537 -2,699,081

Gross profit 19,784 268,494

Distribution costs 4,5 -7,355 -6,541

Administrative expenses 4,5,6 -20,917 -18,231

Earnings before interest and tax (EBIT) -8,488 243,722

Financial income 7 1,140 1,584

Financial expenses 8 -3,443 -1,221

Profit before tax -10,791 244,085

Tax on profit for the year 9 4,047 -57,927

Profit for the year -6,744 186,158

Statement of comprehensive income

DKK’000 Note 2014 2013

Profit for the year -6,744 186,158

TOTAL COMPREHENSIvE INCOME -6,744 186,158

Income statement and statement of comprehensive income


30

Balance sheet

DKK’000 Note 2014 2013

ASSETS

Non-current assets

Intangible assets 10 3,214 0

Other intangible assets 3,214 0

Property, plant and equipment

Plant and machinery 11 161,030 147,957

Fixtures and fittings, other plant and equipment 2,672 2,351

Property, plant and equipment under construction 191 2,331

163,893 152,639

Other non-current assets

Investments in subsidiaries 12 1,731 1,731

Investments in associates 13 0 0

1,731 1,731

Total non-current assets 168,838 154,370

Current assets

Inventories 14 4,355 3,341

Receivables 15 989,127 432,914

Construction contracts 16 127,882 252,117

Prepaid costs 17 28,411 29,922

Coorporation tax 21 4,451 0

Cash at bank and in hand 137,756 157,072

Total current assets 1,291,982 875,366

TOTAL ASSETS 1,460,820 1,029,736

Financial Statements


31

Balance sheet

DKK’000 Note 2014 2013

EQUITY AND LIABILITIES

Equity 18

Share capital 44,000 44,000

Retained earnings 344,308 401,052

Total equity 388,308 445,052

Liabilities

Non-current liabilities

Deferred tax 19 42,425 58,665

Provisions 20 200 200

Total non-current liabilities 42,625 58,865

Current liabilities


Trade payables 653,273 253,024

Corporation tax payable 21 0 54,252

Other liabilities 22 217,624 126,663

Total current liabilities 1,029,887 525,819

Total liabilities 1,072,512 584,684

TOTAL EQUITY AND LIABILITIES 1,460,820 1,029,736

Cash flow statement


Balance sheet

DKK’000 Note 2014 2013

ASSETS

Non-current assets

Intangible assets 10 3,214 0

Other intangible assets 3,214 0


Plant and machinery 11 161,030 147,957

Fixtures and fittings, other plant and equipment 2,672 2,351

Property, plant and equipment under construction 191 2,331

163,893 152,639

Other non-current assets

Investments in subsidiaries 12 1,731 1,731

Investments in associates 13 0 0

1,731 1,731

Total non-current assets 168,838 154,370

Current assets

Inventories 14 4,355 3,341

Receivables 15 989,127 432,914


Prepaid costs 17 28,411 29,922

Coorporation tax 21 4,451 0

Cash at bank and in hand 137,756 157,072

Total current assets 1,291,982 875,366

TOTAL ASSETS 1,460,820 1,029,736


32

Cash flow statement

DKK’000 Note 2014 2013

Profit for the year before tax -10,791 244,085

Adjustment for non-cash operating items etc .:

Depreciation, amortisation and impairment 5 32,690 26,040

Other non-cash operating items, net -268 -189

Financial income 7 -1,140 -1,584

Financial expenses 8 3,443 1,221

Cash generated from operations (operating activities) before changes in working capital

23,934 269,573

Changes in working capital 24 126,839 -179,836

Cash generated from operations (operating activities) 150,773 89,737

Interest received 7 1,140 1,584

Interest paid 8 -3,443 -1,221

Corporation tax paid 21 -70,896 0

Cash flows from operating activities 77,574 90,100

Acquisition of property, plant and equipment 10, 11 -47,383 -42,631

Disposal of property, plant and equipment 11 493 194

Net cash flows from investing activities -46,890 -42,437

Free cash flows 30,684 47,663

Shareholders:

Dividends distributed -50,000 -52,000

Cash flows from financing activities -50,000 -52,000

Net cash flows from operating, investing and financing activities -19,316 -4,337

Cash and cash equivalents at 1 January 157,072 161,409

Cash and cash equivalents at 31 December 137,756 157,072



33


For more information, see note 18 .

Statement of changes in equity

DKK’000Share

capitalTransferred

results Total equity

Equity 1 January 2014 44,000 401,052 445,052

Comprehensive income in 2014

Profit for the year 0 -6,744 -6,744

Total comprehensive income for the period 0 -6,744 -6,744

Transactions with shareholders

Distributed interim dividends 0 -50,000 -50,000

Total transactions with shareholders 0 -50,000 -50,000

Equity 31 December 2014 44,000 344,308 388,308

Equity 1 January 2013 44,000 266,894 310,894

Comprehensive income in 2013

Profit for the year 0 186,158 186,158

Total comprehensive income for the period 0 186,158 186,158

Transactions with shareholders

Distributed interim dividends 0 -52,000 -52,000

Total transactions with shareholders 0 -52,000 -52,000

Equity 31 December 2013 44,000 401,052 445,052


34

Notes to the financial statements

Note 1 Accounting policies2 Accounting estimates and judgements3 Revenue4 Staff costs5 Depreciation, amortisation and impairment6 Fees paid to auditors appointed at the annual

general meeting7 Financial income8 Financial expenses9 Tax on profit for the year10 Other Intangible assets11 Property, plant and equipment12 Investments in subsidiaries13 Investments in associates14 Inventories15 Receivables16 Construction contracts17 Prepaid costs18 Equity19 Deferred tax20 Provisions21 Corporation tax payable22 Other liabilities 23 Contingent liabilities and collateral24 Changes in working capital25 Financial risks and financial instruments26 Operating leases27 Related parties28 Events after the balance sheet date29 New accounting regulations30 Definitions of financial ratios


35

Accounting policies

Bladt Industries A/S is a limited company domiciled in Denmark . The financialstatements section of the annual report for the period 1 January –31 December 2014 comprises theCompany’s financial statements .Bladt Industries A/S has not prepared consolidated financial statementsfor 2014, as the Company and its subsidiaries are incorporated in the consolidated financial statements of Bladt Holding A/S, CVR no . 34 07 34 30 . The financial statements of Bladt Industries A/S for 2014 have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional disclosure requirementsin the Danish Financial Statements Act . This annual report is the first annual report presented according to IFRS . On 31 May 2015, the Boardof Directors and the Executive Board discussed and approved the annual report of Bladt Industries A/S for the financial year 2014 . The annual report will be presented to the shareholders of Bladt Industries A/S for approvalat the annual general meeting on 31May 2015 .

Basis of preparationThe consolidated financial statements have been presented in Danish kroner, rounded to the nearest thousand .The consolidated financial statements have been prepared on the historical cost basis . The accounting policies set out below have been used consistently in respect of the financial year and the comparative figures .

Description of accounting policies

Foreign currency translation On initial recognition, foreign currency transactions are translated to the functional currency at the exchange rates at the transaction date . Foreign exchange differences arising between the transaction date and the date of payment are recognised in profit or loss as finance income or finance costs .

Receivables and payables and other monetary items denominated in foreign currencies are translated to the functional currency at the exchange rates at the end of the reporting period . The difference between the exchange rates at the end of the reporting period and at the date at which the receivable or payable arose or was recognised in the latest annual report is recognised in profit or loss as finance income or finance costs .

Derivative financial instrumentsDerivative financial instruments are recognised at the date a derivative contract is entered into and measured in the statement of financial position at fair value . Positive and negative fair values of derivative financial instruments are included in other receivables and payables, respectively . Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as a fair value hedge of recognised assets and liabilities are recognised in the income statement together with changes in the value of the hedged asset or liability as far as the hedged portion is concerned . Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as a hedge of future assets and liabilities are recognised in other receivables or other payables and in equity . For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are recognised in profit or loss as finance income or finance costs .

Income statement

RevenueConstruction contracts for delivery of constructions etc . involving a high degree of customisation are recognised as revenue by reference to the stage of completion . Accordingly, revenue corresponds to the fair value of work performed during the year (the percentage of completion method) . Revenue is recognised when the total income and expenses on the construction contract and the stage of completion at the balance sheet date can be measured reliably and

it is probable that future economic benefits, including payments, will flow to the Company . When the income from a construction contract cannot be determined reliably, revenue is recognised only as the costs incurred that are likely to be recovered . Revenue is measured at the fair value of the agreed consideration ex . VAT and taxes charged on behalf of third parties . All discounts granted are recognised in revenue .

Production costsProduction costs comprise costs incurred in generating the revenue for the year . Such costs include direct and indirect production costs for raw materials and consumables, wages and salaries, rent and leases, and depreciation, amortisation and impairment write-down of production plant and development projects .

Distribution costsCosts relating to sales staff, advertising, exhibitions as well as depreciation and impairment losses are recognised as distribution costs .

Administrative expenses Administrative expenses comprise expenses incurred during the year for management and administration, including expenses for administrative staff, office premises and office expenses, and depreciation and impairment losses . Included in this item are write-downs for bad debt losses .

Financial income and expenses Financial income and expenses comprise interest income and expense, gains and losses on payables and transactions denominated in foreign currencies, amortisation of financial assets and liabilities as well as surcharges and refunds under theon-account tax scheme, etc . Borrowing costs from specific or general borrowings, which are directly attributable to the acquisition, construction or development of a qualifying asset, are included in the cost of that asset when the acquisition, construction or development of the asset is initiated

Notes


36

after the transition to IFRS .

Tax on profit/loss for the year Bladt Industries A/S is jointly taxed with the parent company Bladt Holding A/S and Danish group enterprises . The current Danish corporation tax is allocated between the jointly taxed companies in proportion to their taxable income . The jointly taxed companies are taxed under the tax prepayment scheme . Tax for the year, comprising current tax and changes in deferred tax for the year, is recognised in profit or loss, in other comprehensive income or directly in equity .

Statement of financial position

Other Intangible assetsCosts associated with maintaining computer software programmes are recognised as an expense as incurred . Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met:

- it is technically feasible to complete the software product so that it will be available for use;

- management intends to complete the software product and use it;

- there is an ability to use or sell the software product;

- it can be demonstrated how the software product will generate probable future economic benefits;

- adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and

- the expenditure attributable to the software product during its development can be reliably measured .

Directly attributable costs that are capitalised as part of the software

product include the software development employee costs and an appropriate portion of relevant overheads .

Other development expenditures that do not meet these criteria are recognised as an expense as incurred . Development costs previously recognised as an expense are not recognised as an asset in a subsequent period . Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed three years .

Property, plant and equipment Plant and machinery and fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses . Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the asset is available for use . The cost of self-constructed assets comprises direct and indirect costs of materials, components, subsuppliers, wages and salaries as well as borrowing costs relating to specific and general borrowing directly attributable to the construction of the individual asset . Further, the cost includes the present value of the initial estimate of the cost to dismantle and remove the asset and restore the site on which the asset is located .

Subsequent costs, e .g . in connection with replacement of components of property, plant and equipment, are recognised in the carrying amount of the asset if it is probable that the costs will result in future economic benefits for the Group . The replaced components are derecognised in the statement of financial position and recognised as an expense in profit or loss . All costs incurred for ordinary repairs and maintenance are recognised in profit or loss as incurred . Where individual components of an item of property, plant and equipment have different useful lives, such components are depreciated separately . Depreciation is provided

on a straight-line basis over the expected useful lives of the assets/ components . The expected useful lives are as follows:

Plant and machinery . . . . 3 - 20 yearsFixtures and fittings, other plant andequipment . . . . . . . . . . . . . . 3 - 5 years

Depreciation is calculated on the basis of the residual value and impairment losses, if any . The useful life and residual value are determined at the acquisition date and are reassessed annually . If the residual value exceeds the carrying amount, depreciation is discontinued .

When changing the depreciation period or the residual value, the effect on depreciation is recognised prospectively as a change in accounting estimates .

Depreciation is recognised in the income statement as cost of sales, distribution costs and administrative expenses .

Gains and losses on the disposal of property, plant and equipment are determined as the difference between the selling price less disposal costs and the carrying amount at the date of disposal . Gains and losses are recognised in the income statement as depreciation .

Investments in subsidiaries and associatesInvestments in subsidiaries and associates are measured at cost in the financial statements .

Dividend payments of earnings in subsidiaries and associates are recognised as income in the income statement of the parent company in the financial year in which they are declared . If dividends exceed the comprehensive income of the subsidiary, an impairment test is conducted .

Notes


37

Impairment testing of non-current assetsThe carrying amount of non-current assets is tested annually for indicators of impairment . When there is an indication that assets may be impaired, the recoverable amount of the asset is determined . The recoverable amount is the higher of an asset’s fair value less expected costs to sell and its value in use . Value in use is the present value of the future cash flows expected to be derived from the asset or the cash-generating unit to which the asset belongs . An impairment loss is recognised if the carrying amount of an asset or a cash-generating unit, respectively, exceeds the recoverable amount of the asset or the cash-generating unit . The impairment loss is recognised in the income statement .

InventoriesInventories are measured at the lower of cost in accordance with the FIFO method and the net realisable value . Goods for resale and raw materials and consumables are measured at cost, comprising purchase price plus delivery costs .

The net realisable value of inventories is calculated as the sales amount less costs of completion and costs necessary to make the sale and is determined taking into account marketability, obsolescence and development in expected selling price .

Construction contracts Construction contracts are measured at the selling price of the work performed less progress billings and anticipated losses . Construction contracts entail a significant degree of design customisation of produced goods . Moreover, before the work is commenced, a binding agreement must have been entered into to the effect that penalties covering at least costs incurred will be enforced if the contract is subsequently terminated . The selling price is measured by reference to the percentage of completion at the end of the reporting period and total expected income from the contract . The percentage

of completion is determined on the basis of an assessment of the work performed, which is usually measured as the proportion of specific costdrivers costs incurred for work performed to date relative to the total estimated contract costs .

When it is probable that the total contract costs will exceed the total contract revenue, the anticipated loss on the contract is recognised as an expense and a provision immediately . When income and expenses on a construction contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable . Where the selling price of work performed exceeds progress billings on construction contracts and anticipated losses, the excess is recognised under receivables . If progress billings and anticipated losses exceed the selling price of a construction contract, the deficit is recognised under liabilities . Prepayments from customers are recognised under liabilities . Selling costs and costs incurred in securing contracts are recognised in profit or loss as incurred .

ReceivablesReceivables are measured at amortised cost . Write-down is made for bad debt losses where there is an objective indication that an individual receivable or a portfolio of receivables has been impaired . Write-down is made at an individual level . Impairment losses are calculated as the difference between the carrying amount of the receivable and the present value of the expected cash flows, including the realisable value of any collateral received .

Prepaid expensesPrepaid expenses are measured at cost .

Equity

DividendsProposed dividends are recognised as a liability at the date when they are adopted at the annual general meeting (declaration date) . Proposed dividend payment for the year is disclosed as a separate item under equity .

Corporation tax and deferred taxCurrent tax payable and receivable is recognised in the statement of financial position as tax computed on the taxable income for the year, adjusted for tax on the taxable income of prior years and for tax paid on account .

Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax value of assets and liabilities . However, deferred tax is not recognised on temporary differences relating to items where temporary differences arise at the date of acquisition without affecting either profit/loss for the year or taxable income . Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on the planned use of the asset or settlement of the liability, respectively .

Deferred tax assets, including the tax value of tax loss carryforwards, are recognised under other non-current assets at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity and jurisdiction . Deferred tax assets are subject to annual impairment tests and are recognised only to the extent that it is probable that the assets will be utilised . Deferred tax assets and liabilities are offset if the Company has a legally enforceable right to set off current tax liabilities and tax assets or intends either to settle current tax liabilities and tax assets on a net basis or to realise the assets and settle the liabilities simultaneously .

Notes


38

Deferred tax is measured according to the tax rules and at the tax rates applicable at the end of the reporting period when the deferred tax is expected to crystallise as current tax . Changes in deferred tax due to changes in the tax rate are recognised in comprehensive income for the year .

ProvisionsProvisions are recognised when, as a result of past events, the Company has a legal or a constructive obligation and it is probable that there will be an outflow of resources embodying economic benefits to settle the obligation .

The amount recognised as a provision is Management’s best estimate of the expenses required to settle the obligation .

Financial liabilitiesAmounts owed to mortgage credit institutions, etc ., are recognised atthe date of borrowing at fair value less transaction costs paid . In subsequent periods, the financial liabilities are measured at amortised cost using the effective interest method . Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement as finance costs over the term of the loan . Other financial liabilities are measured at amortised cost .

Cash flow statementThe cash flow statement shows the cash flows from operating, investing and financing activities for the year, the year’s changes in cash and cash equivalents as well as cash and cash equivalents at the beginning and end of the year .

Cash flows from operating activities are reported using the indirect method whereby the profit/loss after tax is adjusted for non-cash operating items, changes in working capital, interest, payments, dividends and income taxes paid .

Cash flows from investing activities comprise payments in connection with acquisitions and disposals of businesses and of intangible assets, property, plant and equipment and other non-current assets .

Cash flows from financing activities comprise changes in the share capital and related costs as well as the raising of loans, repayment of interest- bearing debt, acquisition and disposal of treasury shares and payment of dividends to shareholders . Cash and cash equivalents comprise cash and short-term marketable securities with a term of three months or less at the acquisition date which are subject to an insignificant risk of changes in value .

Cash flows in other currencies than the functional currency are translated using average exchange rates unless these deviate significantly from the rate at the transaction date .

Financial ratiosFinancial ratios are calculated in accordance with the Danish Society of Financial Analysts’ guidelines on the calculation of financial ratios “Recommendations and Financial Ratios 2010” .

Definitions of financial ratios are shown on page 55 .

Accounting estimates and judgements

Estimation uncertainty Determination of the carrying amount of certain assets and liabilities requires judgements, estimates and assumptions concerning future events .

The estimates and assumptions are based on historical experience and other factors which Management assesses to be reliable in the circumstances, but which by their nature are associated with uncertainty and unpredictability, as unexpected

events or circumstances may occur . Furthermore, the Company is exposed to risks that may lead to actual results differing from these estimates . Specific risks for Bladt Industries A/S are discussed on pages 24-25 .

Estimates of particular importance to the financial reporting relate primarily to constructions contracts including recognition and measurement of contract variations . See description below .

Construction contractsAn important precondition for applying the percentage of completion method when recognising revenue is that income and expenses from the individual construction contracts can be measured reliably . Expected income and expenses on the construction contracts may, however, change during the project period . Similarly, changes may be made during the construction phase in the contractual basis, and assumptions etc . may not be fulfilled .

The selling price of construction contracts is measured by reference to the stage of completion at the balance sheet date and total expected income from the individual contract . The stage of completion is determined on the basis of an assessment of the work performed and will normally be subject to accounting estimates made by Management .

Variation orders related to instructions from customers on changes in scope, specifications, de-signs or duration of the contract are included in revenue, when it is probable, that the customer will pay and revenue can be reliably measured . Assumptions made by management in this area involves estimation uncertainty .

Significant amounts of variation orders are recognised in the annual accounts as of 31 December 2014 in accordance with applied accounting policies . It is reasonably possible, on the basis of existing knowledge, that outcomes

Notes


39

within the next financial year that are different from the assumptions made, could require a positive or negative material adjustment to the carrying amount of the asset affected .

The business procedures etc . of Bladt Industries A/S combined with the knowledge and experience of the project manager contribute to reliable accounting treatment of construction contracts in accordance with the accounting policies .

Notes

RevenueDKK'000 2014 2013

Selling price of production for the year on construction contracts 3,201,321 2,967,575

Revenue specified geographically:

Denmark 1,502,735 1,274,400

Other EU countries 1,683,240 1,691,060

Norway 15,346 2,115

3,201,321 2,967,575


40

Staff costsDKK'000 2014 2013

Wages and salaries 288,767 272,401

Defined contribution plans 23,619 21,554

Other social security costs 7,732 5,665

Total staff costs 320,118 299,620

Total average number of employees 628 587

Staff costs are recognised as follows in the income statement:

Production costs 299,347 281,460

Distribution costs 5,309 4,910

Administrative expenses 15,462 13,250

320,118 299,620

Total remuneration of Board of Directors and Executive Board:

Wages and salaries 3,568 3,941

Pension contributions 203 227

3,771 4,168

Management’s remuneration has been stated in accordance with the Danish Financial Statements Act, §98b, 3 . The Executive Board and other senior executives are covered by annual performance-related bonus schemes .

Depreciation of property, plant and equipmentDKK'000 2014 2013

Depreciation of property, plant and equipment, see note 11 32,551 26,040

Depreciation of other intangible assets, see note 10 139 0

Profit from sale of property, plant and equipment -268 -189

32,422 25,851

Depreciation is recognised as follows in the income statement:

Production costs 32,134 25,624

Distribution costs 0 4

Administrative expenses 288 223

32,422 25,851

Notes


41

Fees paid to auditors appointed at the annual general meetingDKK'000 2014 2013

Total fee for PwC/KPMG is specified as follows:

Statutory audit 365 330

Other assurance engagements 0 5

Tax and VAT assistance 149 49

Other assistance 198 171

712 555

Financial incomeDKK'000 2014 2013

Interest, cash and cash equivalents 1,140 714

Interest, group enterprises 0 870

1,140 1,584

Interest on financial assets measured at amortised costs 1,140 1,584

Financial expensesDKK’000 2014 2013

Interest, banks, etc . 2,883 1,215

Interest, group enterprises 560 6

3,443 1,221

Interest on financial liabilities measured at amortised costs 3,443 1,221

Notes


42

Tax on profit for the yearDKK'000 2014 2013

Tax on profit for the year is specified as follows:

Current tax 12,193 54,252

Deferred tax -16,240 3,675

-4,047 57,927

Tax on profit/loss for the year is specified as follows:

24 .5% tax on profit for the year before tax -2,643 61,021

The tax effect of:

Non-taxable income -832 -878

Non-deductible costs 771 75

Impact of change in the Danish tax rate -1,343 -2,291

-4,047 57,927

Effective tax rate 37.5 % 23.7 %

Other Intangible assetsDKK’000 Other

Intangible assets

Cost at 1 January 2014 0

Additions 3,353

Cost at 31 December 2014 3,353

Depreciation and impairments at 1 January 2014Depreciation

0

139

Depreciation and impairments at 31 December 2014 139

Carrying amount at 31 December 2014 3,214

Notes


43


DKK'000Plant and

machinery

Fixtures and fittings, tools and

equipmentAssets under construction Total

Cost at 1 January 2014 296,014 14,217 2,331 312,562

Additions 42,490 1,349 191 44,030

Transferred 2,331 0 -2,331 0

Disposals -578 -684 0 -1,262

Cost at 31 December 2014 340,257 14,882 191 355,330

Depreciation and impairment at 1 January 2014 148,057 11,866 0 159,923

Depreciation 31,542 1,009 0 32,551

Disposals -372 -665 0 -1,037

Depreciation and impairment at 31 December 2014

179,227 12,210 0 191,437

Carrying amount at 31 December 2014 161,030 2,672 191 163,893

DKK'000Plant and

machinery

Fixtures and fittings, tools and

equipmentAssets under construction Total

Cost at 1 January 2013 255,101 12,769 3,420 271,290

Additions 38,762 1,538 2,331 42,631

Transferred 3,420 0 -3,420 0

Disposals -1,269 -90 0 -1,359

Cost at 31 December 2013 296,014 14,217 2,331 312,562

Depreciation and impairment at 1 January 2013 124,203 11,034 0 135,237

Depreciation 25,118 922 0 26,040

Disposals -1,264 -90 0 -1,355

Depreciation and impairment at 31 December 2013

148,057 11,866 0 159,922

Carrying amount at 31 December 2013 147,957 2,351 2,331 152,639

Notes


44

Investments in subsidiariesDKK’000 2014 2013

Cost at 1 January 1,731 1,731

Cost at 31 December 1,731 1,731

Carrying amount at 31 December 1,731 1,731

Investments in subsidiaries are measured at cost in connection with the Company’s transition to financial reporting according to IFRS . The carrying amount of the investments is used as new cost price calculated according to the previous accounting policies at 1 January 2011 .

DKK’000Name

Registered office

Equilty 2014 2013

Profit for the year2014 2013

Ownership 2014

Ownership 2013

Bladt Industries Offshore Wind Germany GmbH

Germany 2,174 1,014 1,163 535 100 % 100 %

Bladt Industries Polska Sp . z o .o .

Poland 8,505 7,876 2,018 2,696 70 % 70 %

Investments in associatesThe Company participates in Bladt/EEW Offshore Wind Foundation Group I/S and Bladt//EEW Offshore Wind FoundationGroup, Gwynt y Môr I/S, Bladt EEW Offshore Wind Foundation Group, Baltic 2 GbR and Bladt/EEW Offshore Foundation Group Baltic 2 I/S

2014 DKK'000

Bladt Industries A/S’ share

NameRegistered

officeOwner-

ship Revenue

Profit for the

year AssetsLiabi-lities Equity

Profit for the

year

Bladt/EEW Offshore Wind Foundation Group I/S

Denmark 50 % 0 0 0 0 0 0

Bladt/EEW Offshore Wind Foundation Group,Gwynt y Môr I/S

Denmark 50 % 0 0 3,231 3,231 0 0

Bladt/EEW Offshore Wind Foundation Group, Baltic 2 GbR

Germany 50 % 323,837 0 3 3 0 0

Bladt/EEW Offshore Wind Foundation Group, Baltic 2 I/S

Germany 50 % 0 0 0 0 0 0

Notes


45

Investments in associates (continued)

2013 DKK'000

Bladt Industries A/S’ share

NameRegistered

officeOwner-

ship Revenue

Profit for the

year AssetsLiabi-lities Equity

Profit for the

year

Bladt/EEW Offshore WindFoundation Group I/S

Denmark 50 % 0 0 0 0 0 0

Bladt/EEW Offshore Wind Foundation Group, Gwynt y Môr I/S

Denmark 50 % 313,988 0 9,918 9,918 0 0

Bladt/EEW Offshore WindFoundation Group, Baltic 2 GbR

Germany 50 % 259,672 0 49,865 49,865 0 0

Bladt/EEW Offshore WindFoundation Group, Baltic 2 I/S

Germany 50 % 0 0 0 0 0 0

InventoriesDKK’000 2014 2013

Raw materials and consumables 4,145 3,114

Finished goods and goods for resale 210 227

4,355 3,341

The carrying amount of inventories is recognised at fair value 0 0

ReceivablesDKK’000 2014 2013

Trade receivables 987 .019 420,640

Other receivables 2,108 12,274

989,127 432,914

Notes


46

Construction contracts DKK'000 2014 2013

Selling price of construction contracts 1,377,927 3,847,413

Total progress billing -1,409,035 -3,687,176

Net value of construction contracts -31,108 160,237

Specified as follows:

Construction contracts (asset) 127,882 252,117

Prepayments received from customers (liability) -158,990 -91,880

-31,108 160,237

Prepaid costsDKK'000 2014 2013

Rent 26,468 29,114

Other adjustments 1,943 808

28,411 29,922

Notes


47

Equity

Capital managementThe Company assesses the need for adjusting its capital structure regularly to balance the required higher return on equity against the higher degree of uncertainty of external financing . The Company focuses on having a high equity ratio and ample cash resources to ensure as much scope for financial action as possible .

Share capitalThe share capital amounts to DKK 44,000 thousand (2013: DKK 44,000 thousand) broken down on shares with a face value of DKK 500 each or multiples thereof . There are no restictions on voting rights .

DividendThe 19 June 2014 Bladt Industries A/S paid DKK 50,000 thousand in dividend to Bladt Industries Holding A/S . The 20 December 2013 Bladt Industries A/S paid DKK 52,000 thousand in dividend to Bladt Industries Holding A/S .The paid dividends to the shareholders has no tax consequences to Bladt Industries A/S .

Deferred tax

DKK’000 2014 2013

Deferred tax at 1 January 58,665 54,990

Deferred tax for the year is recognised in profit for the year -16,240 3,675

Deferred tax at 31 December 42,425 58,665

Deferred tax is recognised in the balance sheet as follows:

Deferred tax (liability) 42,425 58,665

Net deferred tax at 31 December 42,425 58,665

Deferred tax relates to:

Property, plant and equipment 11,755 9,827

Construction contracts 30,670 48,838

42,425 58,665

There are unrecognized tax loss carry forwards of DKK 1,286 thousand at 31 December 2014 (DKK 1,837 thousand at 31 December 2013) relating to depreciation for tax purposes of certain operating equipment . Of the deferred tax DKK 30,670 thousand (2013: DKK 48,838 thousand) are expected to be current tax within 1 year .

Notes


48

ProvisionsOther provisions comprise anticipated warranty costs . Provisions are determined based on past experience with warranty work .

Corporation tax DKK’000 2014 2013

Corporation tax payable at 1 January 54,252 0

Current tax for the year 12,193 54,252

Corporation tax paid during the year -70,896 0

Corporation tax payable at 31 December -4,451 54,252

Other liabilitiesDKK’000 2014 2013

Amounts owed to group enterprises 29,594 17,184

Other payables 188,030 109,479

217,624 126,663

Contingent liabilities and collateral

Contingent liabilities

DKK'000 2014 2013

Guarantees relating to performance, payment, advance payment and suppliers 965,100 1,032,432

Deposit guarantee 54,163 23,239

The Company participates in Bladt/EEW Offshore Wind Foundation Group I/S by 50% and is liable in this connection for performance guarantees amounting to DKK 36,589 thousand (50% of DKK 73,177 thousand) .The Company also participates in Bladt/EEW Offshore Wind Foundation Group Gwynt y Môr I/S by 50%, Bladt/EEW OffshoreWind Foundation Group Baltic 2 GbR by 50% and Bladt/EEW Offshore Wind Foundation Group Baltic 2 I/S by 50% .

CollateralSubject to standard reservations for legal restrictions, the company is a guarantor of loan agreements in other group companies .

Notes


49

Changes in working capitalDKK’000 Note 2014 2013

Net change in construction contracts 16 191,345 -109,635

Change in inventories -1,014 20

Changes in receivables 15,17 -554,702 -206,953

Changes in trade and other payables 491,210 136,732

126,839 -179,836

Financial risks and financial instruments

The Company's risk management policyDue to its operating, investment and financing activities Bladt Industries A/S is only subject to limited exposure to financial risks, including market risks (currency risks, interest risks and raw material risks), credit risks and liquidity risks .The Company’s financial risk management is centralised . Management monitors the company’s risk concentration on monthly basis within areas such as customers, geographical areas, currencies, etc .

The Company’s policy is not to engage in active speculation in financial risks . The Company’s risk management aims solely at managing and reducing the financial risks arising directly from the Company’s operations, investments and financing .In 2014 and 2013, the Company did not make use of derivative financial instruments as part of its risk management .

Market risks

Currency risksThe Company’s sale abroad is primarily made in the currency of the customer, which is mainly EUR . The Company’s suppliers are paid in EUR and DKK primarily which means that fluctuations in other currencies will generally not affect the profit of the Company . The Company uses natural hedges for its currency exposure considering projected future cash flows and projected future exchange rate movements . Currency transactions are not made for speculation purposes .

Notes


50

Financial risks and financial instruments (continued)The hypothetical effect on profit for the year and equity based on reasonably probable changes in foreign exchange rates:

2014

Nominal position Sensitivity

DKK'000Cash and

receivables

Financial liabilities

(non-derivative)

Derivative financial

instruments hedging

future cash flows Total

Probable changes

in foreign exchange

rates

The hypothetical

effect on profit for the

year

The hypothetical

effect on equity

EUR/DKK 834,456 523,075 0 311,381 0 % 0 0

PLN/DKK 1,751 17,773 0 -16,022 5 % 597 597

NOK/DKK 0 779 0 -779 10 % 58 58

GBP /DKK 492 69 0 423 10 % 42 42

SEK/DKK 0 12 0 -12 10 % 1 1

836,699 541,708 0 294,991

2013

Nominal position Sensitivity

DKK'000Cash and

receivables

Financial liabilities

(non-derivative)

Derivative financial

instruments hedging

future cash flows Total

Probable changes

in foreign exchange

rates

The hypothetical

effect on profit for the

year

The hypothetical

effect on equity

EUR/DKK 450,728 -152,736 0 297,992 0 % 0 0

PLN/DKK 1,553 -15,891 0 -14,338 5 % 537 537

NOK/DKK 2,186 -1,781 0 405 10 % 30 30

GBP /DKK 2 0 0 2 5 % 0 0

454,469 -170,408 0 284,061

Negative changes in foreign exchange rates will have a similar negative impact on profit for the year and equity .

Interest rate risks

Financing activitiesThe Company is not subject to any significant accunting exposure to interest level changes as the Company does not have any interest-bearing external debt .

Notes


51

Financial risks and financial instruments (continued)Investing activitiesThe Company's cash funds are placed as demand deposits .

Raw material risks The Company uses raw materials in the form of steel when producing the Company’s products .In relation to significant purchases, the price risk is hedged by making binding agreements about purchases when entering into sales contracts .

Liquidity risksFor raising of loans it is company policy to ensure as much flexibility as possible . The Company’s cash reserves consist of cash and cash equivalents of DKK 137 .8 million as of 31 December 2014 (2013: DKK 157,1 million) and unused committed credit facilities of DKK 299 million (2013: DKK 61 .7 million) .

With the credit facilities and liquidity available, in the management’s opinion, is adequate according to the budget for 2015 .

The Company does not have any interest-bearing liabilities in 2014 and 2013 . Short-term liabilities appear from the balance sheet and fall due for payment within one year . Liabilities under operating leases are disclosed in note 26 .Based on the Company’s expectations for its future operations and the Company’s current cash resources, no significant liquidity risks have been identified .

Credit risksEfforts are made to minimise risks related to giving credit by effective credit management and by establishing alternative collateral in the event of large receivables .

Bank depositsCredit risks on bank deposits arise when it is uncertain whether the counterparty will be able to meet its obligations when due . The company policy for credit risk management means that the Company’s financial cooperation partners’ credit ratings are monitored continuously . The Company only places bank deposits with large reputable banks .

Trade receivablesThe Company’s policy for undertaking credit risks means that all major customers are credit rated before contracts are entered and then on a regular basis . If satisfactory certainty is not achieved at the credit rating of the customer, separate collateral is required for the sale .

Bladt Industries A/S regularly receives milestones payments as the construction contracts are carried out, which reduces the credit risk .

The Company does not have any significant risks relating to individual customers or cooperation partners and historically theCompany has not experienced any significant losses on trade receivables .

The maturity of trade receivables is specified as follows:

DKK’000 2014 2013

Receivables not due 670,924 367,004

Maturity period:

Up to 30 days 24,382 22,511

Between 30 and 90 days 149,139 9,683

More than 90 days 142,574 21,442

987,019 420,640

None of the trade receivables were impaired at 31 December 2014 or 31 December 2013 . Losses have not been realised in2014 or 2013 on trade receivables nor have they been written down .

Notes


52

Financial risks and financial instruments (continued)

Categories of financial instruments

DKK’000 Note 2014 2013

Carrying amount Fair value

Carrying amount Fair value

Trade receivables 15 987,019 987,019 420,640 420,640

Other receivables 15 2,108 2,108 12,274 12,274

Cash at bank and in hand 137,756 137,756 157,072 157,072

Loans granted and receivables 1,126,883 1,126,883 589,986 589,986

Trade payables 653,273 653,273 253,024 253,024

Amounts owed to group enterprises 22 29,594 29,594 17,184 17,184

Other payables 22 188,030 188,030 109,479 109,479

Financial liabilities measured at amortised cost

870,897 870,897 379,687 379,687

The Company does not have any financial instruments measured at fair value .Receivables and payables with short credit periods are assessed to have a fair value equivalent to the carrying amount .

Operating leasesThe Company leases properties and operating equipment under operating leases . None of the leases includes conditional rent . Interminable operating leases relate primarily to rent obligations and fall due as follows:

DKK'000 2014 2013

0-1 year 17,468 27,730

1-5 years 53,375 57,500

> 5 years 66,719 80,062

137,562 165,292

For 2014, DKK 27,730 thousand (2013: DKK 15,213 thousand) were recognized regarding operating leases .

Notes


53

Related partiesBladt Industries A/S has registered the following shareholders holding 5% or more of the share capital:

Bladt Industries Holding A/S, Aalborg

The parent company, Bladt Industries Holding A/S and the ultimate parent company Nordic Capital Fund VII Ltd ., Jersey, has control .

Apart from distribution of dividends of DKK 50,000 thousand (2013: DKK 52,000 thousand), there have been no transactions with these related parties .

Senior executivesBladt Industries A/S’ related parties with significant influence include the Company’s Board of Directors, Executive Boardand senior executives and their close families . Related parties also include companies in which such persons have significant interests .

Management's remuneration is mentioned in note 4 .

Subsidiaries Transactions with subsidiaries, see note 13, have been as follows:

DKK'000 2014 2013

Purchase of services 129,711 130,174

Amounts owed by and to subsidiaries are shown in notes 15 and 22, and interest on these is disclosed in note 7 and 8 .

Associates Moreover, related parties include associates, see note 13, in which Bladt Industries A/S has a significant influence .Transactions with associates have been as follows:

DKK'000 2014 2013

Sale of services 126,534 284,092

Events after the balance sheet dateNo significant events have occurred after 31 December 2014 .

Notes


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New accounting regulationsBladt Industries has adopted all new or amended accounting standards and interpretations (IFRSs) issued by the IASB and endorsed by the European Union effective for 2014 .

• IFRS 10 ”Consolidated financial statements”• IFRS 11 ”Joint arrangements”• IFRS 12 ”Disclosure of interest in other companies”• Changes to IAS 36 ”Impairment of assets” . The change includes a reversal of the 2013 adjustment regarding disclosure

of the recoverable amount of assets or cash generating units• Changes to IAS 32 ”Finansial instruments – presentation” . The change provides further guidance on offsetting financial

assets and liabilities

The new IFRS standards and interpretations with effect from 1 January 2014 are either not relevant for Bladt Industries or only have a limited impact on the consolidated financial statements for the Company .

The IASB has issued the following new or amended standards and interpretations that have been adopted by the European Union but not implemented by the Company:

• Changes to IAS 19, ”Employee benefits”• Annual improvements 2010-2012 . Adjustments to IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 1, IAS 7, IAS 12, IAS 16, IAS 24

and IAS 36• Annual improvements 2011-2013 . Adjustments to IAS 1, IFRS 1, IFRS 13 and IAS 40

In addition, the following new standards of relevance to the Company have been issued but not yet adopted by the European Union:

• IFRS 9 “Financial Instruments” reducing the number of asset classes for financial assets to two: amortized cost and fair value . The standard incorporates new requirements for accounting for financial liabilities . It has not yet been decided when the standard will be effective

• Changes to IFRS 11, ”Joint arrangements”• IFRS 14 ”Regulatory Deferral Accounts” . A new standard on the accounting for certain balances that arise from rate-

regulated activities• IFRS 15 “Revenue Recognition” clarifying the principles for recognizing revenue from contracts with customers . The

standard is effective for financial years beginning on or after 1 January 2017• Changes to IAS 1, IAS 16, IAS 27, IAS 28, IAS 38, IFRS 10, IFRS 12• Annual improvements 2012-2014 . Clarifications and minor adjustments to IFRS 5, IFRS 7, IAS 19 and IAS 34 .

None of the new or amended standards are expected to have a material effect on the Company’s reporting . The Company expects to adopt the standards and interpretations when they become mandatory .


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Definitions of financial ratiosThe financial ratios stated in the annual report have been calculated as follows:

Operating margin Operating profit x 100

Revenue

Solvency ratio Equity at year end x 100

Total equity and liabilities at year end

Return on equity Operating profit x 100

Average equity


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Group Structure

Bladt Holding A/S

Bladt Industries Holding A/S

Bladt Industries A/S

Bladt/EEW Offshore Wind

Foundation Group I/S


Foundation Group Baltic 2

GbR

Bladt Industries Offshore

Wind Germany

GmbH


Foundation Group, Gwynt

y Mõr I/S


Foundation Group Baltic 2

I/S

Bladt Industries

Polska Sp. z o.o.

100%

100%

50% 70% 100%50%50%50%


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www.bladt.dk

Bladt Industries, Aalborg, Denmark

Lindø Industrial Park, Denmark


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Bladt Industries A/SNørredybet 1DK-9220 Aalborg ØstDenmarkPhone +45 96 35 37 00Fax +45 96 35 37 [email protected]

Registration No.: 14 81 84 80Established: 27 November 1990Registered office: Aalborg

Documents

annual report 2014 - Foundationsbridge for the municipality of Odense .62 Supplemeting these large scale projects are a number of smaller and mid-size projects across Bladt Industries’