Enable. Enhance. Simplify.
Annual report
2017
Sustainability
report 2017
With big internal changes and many
exciting sustainability initiatives happening
around the world, never before have we seen
so many great opportunities to shape the
maritime industry.
I am pleased with our achievements in 2017,
and our direction going forwards. We are
committed to address all aspects of our
business and footprint and I am confident
that we will continue to do the right things
the right way.
Significant changes
since last report
In April 2017, the Wallenius Wilhelmsen
Logistics ASA (WWL ASA) merger was
completed and listed on the Oslo stock
exchange. Wilhelmsen holds a 37.8%
shareholding in the new entity with a seat
on the board and a representative in the
nomination committee. Because of this
change, the shipping and logistics activities
resulting from WWL ASA operations are
no longer included in the boundary of our
reporting. Further information on WWL ASA
sustainability can be found on
walleniuswilhelmsen.com.
Thomas Wilhelmsen, group CEO
Materiality matrix
HIGH
l
s
r
e
d
o
h
e
k
a
t
s
l
a
n
r
e
t
x
e
o
t
e
c
n
a
t
r
o
p
m
I
• Business ethics and anti-corruption
• Working conditions, labour
standards, health and safety
• Emissions to air, sea and soil
• Employee competence and
development
• Local communities
• Diversity and inclusion
• Sustainable supplier management
• Labour relations
• Tax transparency
• Ship recycling
• Energy use
• Innovation
• Waste
• Lobbying
LOW
Importance to us
HIGH
Highlights
2017
Targets
for 2018
TAKE 5 program
implemented
in Ships Agency
Implemented
digital trainee
program
Three start-ups
utilised the Maritime
Innovation Lab
Ship Management
screened more than
300 new suppliers
Vessel LTIF rate
within target not
to exceed 0.55
14 628 employees
5 168 onshore
9 460 seafarers
Ship Service achieved
global certification
according to the OHSAS
18001 standard
99% of employees
assigned for competition
law training completed
the course
Vessel LTIF rate
not to exceed
0.50
%
1
-
Ship Management
to reduce fuel
consumption in the
managed fleet by
1% compared with
the established
baseline every year
Females represent 36% of
the onshore population,
and 1% of the seafarer
population
Employee engagement
score was a high 72
points, up three since the
last survey in 2015
Conduct a new
materiality
assessment
%
5
8
85% employees
complete
performance
review
Wilhelmsen Chemicals
will install new factory
heating systems
to reduce the
environmental impact
File binding corporate
rules (BCR) application
with data protection
authorities and ensure
follow up of identified
loopholes
Sustainability work in 2017
The Wilhelmsen group consists of a diverse portfolio of
maritime related companies operating on six continents.
We have the world’s largest maritime network with 262
offices in 69 countries on call 24/7, and deliver products and
services to more than 50% of the merchant fleet. To enable
sustainable global trade, we are committed to deliver safe
and sustainable solutions to the maritime industry. We
continuously work to improve our environmental footprint,
our efforts on compliance, to increase our employees’
health and safety, and contribute to the communities in
which we operate. In 2017, we revised our sustainability
policy and requirements. The requirements are to be
implemented in our strategies and business goals,
advocated when representing Wilhelmsen on boards and
used as requirements in mergers and acquisitions, and
investment decisions. In 2018, we will continue to build
internal competence and robust reporting systems based
on this policy.
Environment
As a global company with thousands of people spread across the world, we have an
opportunity to continuously work towards reducing our environmental footprint
and set a healthy standard in the maritime industry. In 2017, we saw a shift from our
environmental focus on vessels to our primary operations, which are the maritime
service industry. With this shift, we have started the work to map and build a system
to better understand our global footprint in our locations around the world. We are
no longer reporting on emissions from previously owned ships, but rather reporting
on the environmental footprint of where we have people delivering our products
and services across the globe.
Governance
We have clear policies on ethics and anti-corruption. We do not tolerate any form
of corruption, and we expect all employees to live up to the high ethical standards
we lay down in our governing documents and Code of Conduct. Business standards
work is ongoing and constant, and our various stakeholders depend on us being a
transparent and compliant partner. In 2017, we worked on our new personal data
protection policy which will be rolled out in 2018, we conducted competition law
training, and conducted business standard audits to name a few initiatives.
Employees
We are 14 628 employees of 82 nationalities, with Norway, Malaysia and India
representing the top three populations in size onshore. Females represent 36%
of the onshore population, 1% of the seafarer population, and 17% of senior
management positions. In 2017, our employee engagement survey score was
up three points, to a high 72, in a period of significant organisational changes,
and 92% of our employees responded. For both on vessel and onshore
operations, the lost time injury frequency rate and total recordable frequency
rate were within target. Regrettably, there was one work related fatality on
board a vessel during cargo operations.
find more on wilhelmsen.com/sustainability2017
Securing a position
to win the future
A swift look in the mirror
I had an ambition for 2017. Personally and as
a group, I wanted us to engage in potentially
game-changing technologies and business
models, and ensure we actively addressed how
we can create future value for our customers.
innovative and by disrupting ourselves. We
will acquire companies and competencies to
bolster our existing businesses, but also to
support our need to develop new solutions
and business models, which will deliver value
in the years to come.
How did we do? Our knowledge of modern
technologies and how they can be applied
in our industry has absolutely increased.
We have also been engaged in new types of
dialogues with business partners on how we
can cooperate to create future solutions. Some
of these have materialised. Others will be
public in 2018 and the years to come.
Our toolbox has expanded and we have
seen how we can develop new solutions
fast and in closer cooperation with our
customers. I have also witnessed that we
have gone from talking about 3D printing,
sensors, drones and artificial intelligence to
piloting these technologies live around the
world. In addition, and to be able to foster
this innovative and agile culture, we have
continued to invest in building tomorrow’s
leaders.
Honestly, I’m quite amazed by what we have
delivered in 2017, not least since we also
have gone through radical changes. Most
of our companies have had challenges in
their markets and seen a need to restructure
and right size. In addition, with the merger
that led to Wallenius Wilhelmsen Logistics
being a separately listed entity, we don’t own
any vessels for the first time in 156 years.
Combined, substantial, but necessary changes
to ensure we are fit for future growth.
What next?
Our existing offers and business models will
continue to be challenged by multiple factors,
including rapid technology development,
changing customer- and supplier behaviour,
new competitors and a changing workforce.
This creates a vast number of opportunities,
which we will capture by being agile,
Our strategic ambition is to develop a
balanced group of companies across shipping,
maritime services, logistics operations and
infrastructure. We will create profitable
and sustainable operations through active
ownership and develop businesses that grow
at or above the market. To be successful,
we will continue to take advantage of our
network and competence, brand, and culture,
and retain, attract and develop the people
necessary to take us into the future.
Taking action on ocean sustainability
90% of goods are carried by ships. Living
off the ocean, we are committed to ensuring
the oceans are managed in a healthy and
sustainable way for future generations.
We are inspired by our responsibility to
contribute to the UN sustainable development
goals set for 2030. In 2018, we have already
launched two new initiatives supporting these
ambitions – one related to wind, the other
to autonomous vessels. And we expect new
innovations to merge in 2018 and the years to
come.
My promise
I have 14 627 colleagues in the wide Wilhelmsen
group*. We are inspired by a drive to shape
the maritime industry. We will make this
happen by ensuring our customers succeed
and continue to stay at the forefront. Through
powerful curiosity and imagination, we will
explore new ways of creating value and be
inspired to change our business models and
solutions.
Why? Simply because it is more fun to be in
in the forefront of developing the maritime
industry, than to be someone who adopts what
everyone else is already doing.
*See note 6 on page 58
for definition.
6
Wilh. Wilhelmsen Holding ASA Annual Report 2017GroupGroup CEO statement “It is more fun and satisfying to be in the forefront of
developing the maritime industry, than to be someone
who just adopts what everyone else is doing.”
Thomas Wilhelmsen, group CEO
7
Wilh. Wilhelmsen Holding ASA Annual Report 2017GroupGroup CEO statement Drones
Jessica Chen
Business coordinator
Wilhelmsen Ships Service, Ships Agency
If you could reduce cost, reduce safety risk, reduce negative environment
impact and increase efficiency, would you be interested? What if you
could work dramatically faster, still interested? With drones in a maritime
environment, we can give our customers clear benefits on cargo hold
inspections, deliveries and more services to come. The best part is that
the technology we use is only getting better. Jessica Chen is part of the
team working on our drone projects. By adopting a well-known concept
of drones, but putting them into a challenging maritime environment,
Wilhelmsen is shaping the maritime industry.
Content
10
12
14
16
17
19
22
24
26
27
27
30
30
32
34
34
34
35
36
37
38
44
Key figures
Key figures consolidated accounts
Directors’ report
Main development and strategic direction
Financial summary – the group financial accounts
Performance of the group and business segments
Maritime services
Supply services
Holding and investments
Risk review
Health, working environment and safety
Organisation and people development
Corporate governance
Sustainability
Allocation of profit, dividend and buy-back
Prospects
Accounts and notes
Wilh. Wilhelmsen Holding ASA group
Income statement
Comprehensive income
Balance sheet
Cash flow statement
Equity
Accounting policies
Notes
88
90
90
91
92
93
109
115
Wilh. Wilhelmsen Holding ASA parent company
Income statement
Comprehensive income
Balance sheet
Cash flow statement
Notes
Auditor’s report
Responsibility statement
116
118
Corporate governance
Corporate governance report
130
132
132
133
134
Corporate structure
Wilhelmsen group main structure
Holding and investments segment
Supply services segment
Maritime services segment
9
Wilh. Wilhelmsen Holding ASA Annual Report 2017GroupContent K
e
y
fi
g
u
r
e
s
Bots
Sachin Gupta
Business manager oil
Wilhelmsen Ships Service, Marine Products
Imagine a customer journey that means immediate response
to your product queries and constant access to our product
catalogues. Imagine having everything you need at your
fingertips, while the people behind the products and services
you need can focus even more on giving you the best
customer experience. At Wilhelmsen, we are developing
BOTS to serve your needs, because we are simplifying your
business. Sachin is part of the team working on our BOT
technology. Interacting with Wilhelmsen is only getting easier.
Key figures
Consolidated accounts
INCOME STATEMENT
Total income *
Operating profit before amortisation and impairment (EBITDA)*
Operating profit *
Profit before tax *
Net profit *
Net profit after non-controlling interests *
BALANCE SHEET
Non current assets
Current assets
Equity
Interest-bearing debt
Total assets
KEY FINANCIAL FIGURES
Cash flow from operation (1)
Liquid funds at 31 December (2)
Liquidy ratio (3)
Equity ratio (4)
YIELD
Return on equity (5)
2017
2016
2015
2014
2013
USD mill
USD mill
USD mill
USD mill
USD mill
USD mill
USD mill
USD mill
USD mill
USD mill
793
198
176
253
(2)
(64)
2 637
651
2 188
601
930
116
94
151
251
201
3 781
914
2 492
1 533
3 173
3 693
3 683
398
165
48
57
54
3 566
1 120
2 206
1 660
566
381
273
292
241
3 687
1 152
2 329
1 693
542
363
374
340
260
3 728
1 218
2 286
1 851
USD mill
3 288
4 695
4 686
4 839
4 946
USD mill
USD mill
%
139
268
1.4
67%
420
580
1.9
53%
258
638
1.7
47%
241
688
2.1
48%
243
734
1.7
46%
%
0%
11%
2%
13%
16%
KEY FIGURES PER SHARE
Earnings per share (6)
Operating profit before amortisation and impairment (EBITDA) per share (7)*
Average number of shares outstanding
Dividend per share
USD
USD
Thousand
NOK
(1.38)
4.26
46 404
5.00
4.34
2.51
46 404
5.00
1.16
8.55
46 404
5.00
5.20
12.18
46 404
5.00
5.59
11.66
46 404
5.50
Definition
(1) Net cash flow from operating activities
(2) Cash, bank deposits and short term financial investments
(3) Current assets divided by current liabilities
(4) Equity in percent of total assets
(5) Profit after tax divided by average equity
(6) Profit for the period after non-controlling interests, divided by average number of shares
Earnings per share taking into consideration the number of shares reduced for own shares
(7) Operating profit for the period adjusted for depreciation and impairments of assets, divided by average number of shares outstanding
* Figures for 2016 are restated with Wilh. Wilhelmsen ASA reported as discontinued operation.
Figures for 2015, 2014 and 2013 are according to the proportinate method.
12
Wilh. Wilhelmsen Holding ASA Annual Report 2017GroupKey figures
Highlights for 2017
Wallenius Wilhelmsen Logistics ASA
merger completed, creating one
of the largest listed shipping and
logistics companies globally
Continued development of group
service offering, including digital
solutions, bolt-on acquisitions
and infrastructure investments
67%
Ships service delivers
products and solutions
to more than 50% of
the merchant fleet
75 000
75 000 port calls handled
by ships service port
agents per year
Increased ownership
in NorSea Group from
40% to 74.1%
Ship management serves
approximately 390 vessels globally,
35% on full technical management
9 460
Ship management employs
approximately 9 460
seafarers
Book equity ratio
increased to 67%
Paid dividend of
NOK 5.00 per share
Ships service has around 210 000
product deliveries per year. A delivery
every three minutes 24/7/365
Positive development
in Wilhelmsen
(WWI) share price
1 000 000
1 000 000 tonnes of
equipment handled for
offshore installations by
NorSea Group
Signed agreement to buy Drew Marine,
subject to regulatory approval
Wallenius Wilhelmsen Logistics ASA share
price was up 75% during the year
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
Boiler water
Rune Nygaard
Business manager water
Wilhelmsen Ships Service, Marine Products
The boiler is one of a vessel’s key components, but if not
properly maintained can become its most volatile piece of
equipment. Today, boiler water maintenance is performed
onboard by overstretched crews that have more and more
tasks to take care of. Our solution combines automatic
dosing capability with real time data feedback and analysis
both on board and onshore, thereby reducing this burden.
Currently installed on eight test vessels, this is just the
beginning. As our dosing and monitoring units can include
other water streams on the vessel, we can deliver asset
protection in multiple places with a standardized solution that
is communicated and viewable via a single cloud platform.
Directors’ report
for 2017
Wilh. Wilhelmsen Holding ASA
Main development and strategic direction
The Wilh. Wilhelmsen Holding group
(Wilhelmsen or group) is an industrial holding
company within the maritime and logistics
industry. The group activities are carried out
through fully and partly owned entities, most
of which are among the market leaders within
their segments. Wilhelmsen’s ambition is to
develop companies within maritime services,
shipping, logistics or infrastructure to grow at
or above the market through active ownership.
In 2017, Wilhelmsen completed several
structural changes of the group initiated the
previous year. This has created significant
shareholder value, a more transparent
governance and corporate structure, and laid
the foundation for better services and product
offerings to customers.
On 4 April, the merger of Wilh. Wilhelmsen
ASA and Wallroll AB was formally completed,
and the following day, Wallenius Wilhelmsen
Logistics ASA started trading on the Oslo
Stock Exchange. Wilhelmsen owns 160 million
shares in Wallenius Wilhelmsen Logistics
ASA, representing an ownership share of
37.8%.
The creation of Wallenius Wilhelmsen
Logistics ASA opens up for a more effective
management, operational and financial
structure. Significant synergies have
already been achieved, and together with
increased share liquidity and a positive
market sentiment amongst others, this
has contributed to a significant uplift in
shareholder value.
On 26 September, Wilhelmsen secured
majority control in NorSea Group. Ownership
was increased to 74.1 % by the end of the year,
with further increases taking place early 2018.
NorSea Group has since 2015 cooperated with
WilNor Governmental Services (owned 51%
by Wilhelmsen and 49% by NorSea Group) on
providing services to the armed forces. Early
2018, NorSea Group and Wilhelmsen Ship
Management secured a five year agreement
with TenneT, establishing the two as leading
suppliers to the offshore-wind industry.
Maritime services activities started the year
with a new, slimmer platform, following
previous year sale of non-core activities.
During the year, new digital product offerings
and bolt-on acquisitions laid the foundation
for future growth. On 1 April, Wilhelmsen
acquired Kemetyl’s sales and marketing
activities for consumer products in Norway,
and on 27 April, Wilhelmsen signed an
agreement to acquire the technical solutions
business from Drew Marine. The latter is
subject to regulatory approval, with approval
process still ongoing.
The corporate transactions and changes in
the financial structure of the group had a
strong bearing also on the financial accounts.
This applies to both the income statement
and the balance sheet. Under its review of
group performance, the board balances
the focus on operational performance and
measures effecting the net asset value of group
companies and investments.
In 2017, development in underlying results
for the group companies were mixed. For
both maritime services and supply services,
operating margin adjusted for one-offs were at
a level below long-term average. While main
markets remained challenging, the general
sentiment improved during the second half of
the year. For investment activities, underlying
results improved supported by a general
uptick in world economy and trade.
Market value of investments increased
significantly during the year, supported by
an uplift in Wallenius Wilhelmsen Logistics
ASA share price and a general positive
16
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 development in world equity markets.
The reported results for the year included
significant non-recurring items. Change in
measurement of Treasure ASA’s shares in
Hyundai Glovis resulted in a USD 195 million
accounting gain, while change of measurement
of NorSea Group resulted in a USD 40 million
accounting loss. The Wallenius Wilhelmsen
Logistics ASA merger implied a reclassification
of the previous shareholding in Wilh.
Wilhelmsen ASA as discontinued operations.
This had a USD 239 million negative effect
on reported net result. In addition, Wallenius
Wilhelmsen Logistics ASA’s accounts for 2017
included significant merger related cost, which
impacted Wilhelmsen’s net result through
reduced share of profit from associates.
Total assets for the group were down in
2017, following the reclassification of Wilh.
Wilhelmsen ASA as discontinued operations.
With its large capital base and investments,
Wilh. Wilhelmsen ASA has historically
represented more than half the group’s total
assets.
The structural changes had a positive effect
on the ratio and capital base. At the end of the
year, the group equity ratio was 67%, up from
53% one year earlier. Total equity to holders
of the parent was stable. Liquid assets totalled
USD 268 million by end of 2017, increasing
to USD 1 069 million if including available-
for-sale financial assets. The debt repayment
profile for the group remains of a long-term
nature.
and create value over time for shareholders
and other stakeholders. The board further
acknowledges that sustainability is a vital
prerequisite for Wilhelmsen being a profitable
and responsible player in the industry and
society.
Dividend
NOK 5
per share
In 2017, anti-corruption, competition law,
fraud and theft as well as whistleblowing
received particular attention. Substantial
efforts were put into combating cyber risk,
were appropriate risk reduction methods
and tools were implemented. In addition, the
group has started the adoption to the new EU
General Data Protection Regulation that will
come into force in May 2018.
Financial results
Income statement
In 2017, Wilhelmsen changed the reporting
sequence in the income statement. Share of
profit from joint ventures and associates has
been moved from operating activities to be part
of investing and financial activities. This has
an impact on reported total income, EBITDA
and operating profit, but has no impact on
reported net result.
Total income for Wilhelmsen was USD 793
million in the year 2017, a reduction of 15%
from the previous year. The income reflected
reduced operating revenue within maritime
services, a material gain from change in
measurement of assets, and income from the
new supply service segment in the fourth
quarter.
The WWI/WWIB share price developed
positively during the year, following a strong
rebound starting early 2016. Total return
(including dividends reinvested on ex-dates)
was 27.5% for the WWI share and 28.8% for
the WWIB share, both substantially above
the 19.1% increase in the Oslo Stock Exchange
Benchmark index (source Oslo Stock
Exchange Annual statistics).
Group EBITDA came in at USD 198 million
for the year, up 70%. A USD 155 million net
accounting gain in 2017 from change in
measurement of assets was the main driver
behind the increase, while 2016 results
included USD 44 million in net sales gain and
related transaction and restructuring costs.
Excluding these non-recurring items, EBITDA
was down 41% for the year.
A total dividend of NOK 5.00 per share was
paid in 2017. A first dividend of NOK 3.50 was
paid 11 May, followed by a second dividend of
NOK 1.50 paid 23 November. This represented
a dividend yield of 2.5% based on the average
WWI/WWIB share price by the end of 2016.
For maritime services, a continued weak
shipping and offshore market and reduced
activities following previous year sale of
business units had a negative impact on
EBITDA. The year also includes significant
corporate cost, mainly related to M&A activities.
In 2017, Wilhelmsen created a new visual
identity, covering all fully owned entities.
The board believes sound corporate
governance is the foundation for profitable
growth and a healthy company culture.
Good governance contributes to reduced risk
The new supply services segment contributed
with a positive EBITDA, following consolidation
of NorSea Group from end of third quarter.
EBITDA for the holding and investments
segment was also positive for the year, with
accounting gain from change in measurement
17
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 of Treasure ASA’s investment in Hyundai
Glovis offsetting net corporate cost.
Share of profit from joint ventures and
associates was USD 55 million for the year,
down 33%. A strong second half for Wallenius
Wilhelmsen Logistics ASA made a positive
contribution, while second quarter merger
and restructuring cost dragged down.
Other financials was a net income of USD
22 million in 2017, lifted by a net currency
gain and gain from sale of available-for-sale
financial assets. Investment management and
interest income contributed positively with a
total of USD 10 million while interest expenses
were USD 14 million.
Tax was included with an expense of
USD 16 million.
Discontinued operation related to previous
ownership in Wilh. Wilhelmsen ASA was
included with a loss of USD 239 million in
2017. This mainly reflected difference between
carrying value of net assets and market value
at time of the Wallenius Wilhelmsen merger.
This compares with a USD 113 million gain
in 2016, following a restatement of Wilh.
Wilhelmsen ASA. See note 3, discontinued
operations, for more information.
Net profit after tax and non-controlling
interests was a loss of USD 64 million in 2017
compared with a USD 201 million gain in 2016.
Comprehensive income
Other comprehensive income for the year
was a gain of USD 77 million, compared with
a gain of USD 65 million in the previous year.
This mainly reflected currency translation
differences on non-USD assets and liabilities
when converting into USD. Part of the
translation differences was accounting effect
from reclassification of Wilh. Wilhelmsen ASA
as discontinued operations.
Total comprehensive income for 2017 was USD
75 million, of which a profit of USD 14 million
was attributable to owners of the parent.
The corresponding figures for 2016 was USD
315 million and USD 264 million respectively.
Cash flow, liquidity and debt
The group had a net decrease in cash and cash
equivalents of USD 130 million for the year,
compared with a decrease of USD 16 million
in the previous year.
2016. The reduced cash flow was mainly a
result of reclassification of Wilh. Wilhelmsen
ASA as discontinued operation. Cash flow
from maritime services activities was down
on the back of reduced operation, while the
new supply services segment contributed
positively.
Cash flow from investing activities was
negative with USD 156 million, compared
with negative USD 136 million in 2016. The
group made net investments in fixed assets
and subsidiaries of USD 41 million 2017, while
reclassification of Wilh. Wilhelmsen ASA as
discontinued operations had a USD 121 million
negative effect.
Cash flow from financing activities was
negative with USD 114 million, evenly spread
between dividend to shareholders, ordinary
interest payments for group companies and
net debt repayment.
Cash and cash equivalents were USD 167 million
by end of the year, down from USD 296 million
one year earlier.
The parent company carries out active
financial asset management of part of the
group’s liquidity, with investments in
various asset classes including Nordic shares
and investment grade bonds. The value of
the investment portfolio amounted to
USD 101 million at the end of 2017. One year
earlier, the group investment portfolio was
USD 285 million, of which USD 83 million were
in the parent company and the balance were
in Wilh. Wilhelmsen ASA.
Available-for-sale financial assets totalled USD
801 million by the end of the year, up from
USD 209 million at the end of 2016. The largest
investments were the ~12% shareholding in
Hyundai Glovis (held through Treasure ASA),
the ~4% shareholding in Qube and the ~20%
shareholding in Survitec.
Liquid assets (USD million)
2017
2016
Cash and cash equivalent
167
296
Current financial investments
101
285
Available-for-sale financial assets
801
209
Total
1 069
790
Cash flow from operating activities was USD
139 million, down from USD 420 million in
The main group companies fund their
investments and operations on a standalone
18
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Maritime
services
• Wilhelmsen Ships Service
• Wilhelmsen Ship
Management
• Wilhelmsen Insurance
Services
• Survitec Group
(owned ~20%)
basis, with no recourse to the parent company.
The primary funding source is the commercial
bank loan market.
As of 31 December 2017, the group’s total
interest-bearing debt was USD 601 million,
compared with USD 1 533 million by end 2016.
Interest bearing debt (USD million)
2017
2016
Maritime services
196
179
Supply services
369
Holding and investments
54
34
Wilh. Wilhelmsen ASA
1 320
Eliminations
(18)
Total
601
1 533
Going concern assumption
Pursuant to section 4, sub-section 5, confer
section 3, sub-section 3a of the Norwegian
Accounting Act, it is confirmed that the
annual accounts have been prepared under
the assumption that the enterprise is a going
concern and that the conditions are present.
compared with an expense of USD 28 million
in 2016. 2017 financial items were positively
impacted by a USD 12 million net gain on
currency and financial instruments and a USD
3 million revaluation gain related to available-
for-sale financial assets.
Tax expense was USD 15 million in 2017, the
same as previous year. A high level of non-
deductible expenses primarily related to M&A
activities had a bearing on tax expense for the
year.
Net profit after tax and non-controlling
interests was USD 29 million in 2017 compared
with USD 64 million in the previous year.
Ships service
Wilhelmsen Ships Service is a global provider
of standardised product brands and service
solutions to the maritime industry, focusing on
marine products, marine chemicals, maritime
logistics and ships agency. Ships service is fully
owned by Wilhelmsen.
Total income from ships service was USD
534 million in 2017. This was a 12% reduction
from the previous year, mainly due to loss of
revenue from activities sold in 2016. Sale of
marine products was stable, while sale of non-
marine products increased supported by an
acquisition.
Maritime services
The maritime services segment includes ships
service, ship management and other maritime
services activities.
EBITDA and operating margin were relatively
stable when adjusting for effect of 2016 sale of
safety activities.
Total income for maritime services was
USD 580 million in 2017, down 37% when
compared with the previous year. The reduction
was due to loss of operating revenue from
entities sold in 2016.
EBITDA for the year was USD 51 million
compared with USD 126 million in 2016.
While 2017 included substantial corporate cost
mainly related to ongoing M&A activities, the
previous year includes a substantial sales gain.
When adjusting for the above items, EBITDA
was down 9% from 2016.
The maritime services operating margin was
6.2% in 2017, which was below both historic
average and the long-term target. The margin
reflected a still weak maritime service market,
while a relatively strong USD continued to lift
the margin. When adjusting for M&A and other
corporate cost, the operating margin was 10.3%.
Financial items for maritime services
amounted to an income of USD 6 million
On 1 April, Wilhelmsen Chemicals took over
Kemetyl’s sales and marketing activities for
consumer products in Norway.
On 27 April 2017, Wilhelmsen signed an
agreement to acquire the technical solutions
business from Drew Marine, subject regulatory
approval. The approval process is still
ongoing.
Ship management
Wilhelmsen Ship Management provides full
technical management, crewing and related
services for all major vessel types. Ship
management is fully owned by Wilhelmsen.
Total income for ship management was
USD 45 million in 2017, a reduction of 4%.
Average number of vessels on full technical
management was stable during the year. By
the end of the year, ship management served
approximately 390 ships worldwide, of which
35% were on full technical management and
19
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 10% were on layup management. The remaining
contracts were related to crewing services.
EBITDA was down for the year, reflecting
reduced operating income and margin.
Early 2018, ship management announced
relocation of its global head office from Kuala
Lumpur, Malaysia, to Singapore.
Survitec Group
Survitec Group holds market-leading positions
worldwide in marine, offshore, defence and
aerospace survival technology. The company is
majority owned by Onex Corporation, a private
equity firm. Wilhelmsen owns ~20% of the
company, which is reported as an available-for-
sale financial asset.
The investment in Survitec, denominated in
GBP, was valued at USD 83 million by the end
of 2017. This is up from USD 79 million one
year earlier. A revaluation has been made of
the investment, with a net USD 3 million gain
reported as financial income. This gain mainly
relates to currency effect from converting the
investment from GBP to USD.
Wilhelmsen Insurance Services
Wilhelmsen Insurance Services provides
marine and non-marine insurance solutions
for internal and external clients. Insurance
services is fully owned by Wilhelmsen.
Total income for insurance services was
USD 2 million in 2017, a 3% reduction from the
previous year due to currency. EBITDA was
down for the year.
In May, Wilhelmsen Insurance Services was
appointed sole broker to handle marine, land-
based and company related insurances on
behalf of Wallenius Wilhelmsen Logistics ASA
following a tendering process.
Technical services activities
The technical services activities were sold
in 2016. The business area had no activity in
2017, while total income and EBITDA for 2016
reflected operation until completion of the
sale and a sales gain.
Supply services
The supply services segment includes NorSea
Group, WilNor Governmental Services and
other supply services activities. This is a new
segment in the Wilhelmsen group accounts and
reporting, and follows the increased ownership
and consolidation of NorSea Group from
26 September 2017.
Total income from supply services was
USD 57 million in 2017. This included income
in NorSea Group for the fourth quarter, and
full year income from operating activities
transferred from holding and investments
segment to the new supply services segment.
EBITDA came in at USD 9 million, while share
of profit from associates was USD 1 million.
Reduced financial expenses and a tax income
had a positive impact on the results.
Net profit after non-controlling interests was
USD 3 million.
NorSea Group AS
NorSea Group provides supply bases and
integrated logistics solution to the offshore
industry. Wilhelmsen owns ~74,6% of the
company (40% ownership until 26 September
and ~74,1% as per 31 December 2017). NorSea
Group is fully consolidated in Wilhelmsen’s
accounts from end of third quarter 2017.
Total income for NorSea Group, including
sales gain but excluding share of profits
from associates and joint ventures, was
NOK 1,85 billion in 2017. This was a
15% reduction from the previous year.
The reduction followed reduced income
from supply base activities in Norway and
Denmark, and a 2016 net sales gain. Activity
level in Barents Sea increased.
EBITDA was down, following the reduction in
operating income.
Share of profit from associates and
joint ventures was also down, with 2016
contribution increased by a material net sales
gain. Development in net financial income/
expenses and tax were positive.
Wilhelmsen’s share of net profit in NorSea
Group for the period up to 26 September
was USD 5 million in 2017, down from
USD 12 million for the full year 2016. From
26 September 2017, NorSea Group was fully
consolidated in Wilhelmsen’s accounts.
On 26 September, Wilhelmsen increased
ownership in NorSea Group from 40% to
~72%. Total consideration was USD 70 million.
Ownership was increased to ~74.1 % by the
end of 2017, and has early 2018 been further
increased to ~74.6%.
WilNor Governmental Services
WilNor Governmental Services provides
military logistics services in Norway and
internationally. Wilhelmsen ownes 51% of the
Supply
services
• NorSea Group
(owned ~74.6%)
• WilNor Governmental
Services
20
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Holding and
investments
• Wallenius Wilhelmsen
Logistics ASA
(owned ~37.8%)
• Treasure ASA
(owned ~72.7%)
• Qube Holdings Limited
(owned ~4.0%)
• Financial investment
portfolio
company directly, with the remaining 49%
owned through NorSea Group.
Total income for WilNor Governmental
Services was USD 5 million in 2017. This was
47% down from previous year, which included
services related to a NATO exercise. EBITDA
was stable.
Holding and investments
The holding and investments segment includes
investments in Wallenius Wilhelmsen Logistics
ASA and Treasure ASA, financial investments,
and other holding and investments activities.
The investments in NorSea Group was reported
as part of the segment up until 26 September 2017.
Total income for the holding and investments
segment was USD 171 million in 2017,
compared with USD 29 million in 2016.
The increase was due to a USD 195 million
accounting gain from change in measurement
of Treasure ASA’s ownership in Hyundai
Glovis from associates to available-for-sale
financial asset, partly reduced by a USD 40
million accounting loss due to fair valuing the
equity investment when NorSea Group was
reclassified from associate to subsidiary.
EBITDA was USD 138 million in 2017,
compared with a loss of USD 10 million in
the previous year. The increase followed
development in total income.
Share of profit from associates was USD
49 million, compared with USD 77 million
one year earlier. While contribution from
Wallenius Wilhelmsen Logistics ASA was the
main source of income in 2017, share of net
result in Treasure ASA’s holding in Hyundai
Glovis was the main contributor in 2016.
Net financials was an income of USD 16 million,
up from USD 4 million in 2016. The increase
was mainly due to gain from sale of available-
for-sale financial assets.
Net profit/(loss) after tax and non-controlling
interests was a net profit of USD 150 million
compared with a profit of USD 56 million in
the previous year.
Wallenius Wilhelmsen Logistics ASA
Wallenius Wilhelmsen Logistics ASA is a global
provider of shipping and logistics services
towards car and ro-ro customers, and is listed
on the Oslo Stock Exchange. Wilhelmsen owns
~37,8% of the company, which is reported as an
associate in Wilhelmsen group’s accounts, with
share of net result reported as share of profit
from associates
In 2016, Wilhelmsen and Wallenius Lines
AB signed an agreement leading to a new
ownership structure for their jointly owned
investments in Wallenius Wilhelmsen
Logistics, EUKOR Car Carriers and American
Roll on Roll off Carrier.
On 4 April 2017, the merger of Wilh.
Wilhelmsen ASA and Wallroll AB was formally
completed. The following day, Wallenius
Wilhelmsen Logistics ASA started trading
on the Oslo Stock Exchange under the new
ticker, WWL. Following the merger, Wallenius
Wilhelmsen Logistics ASA is reported as an
associate in the Wilhelmsen accounts.
As part of the agreement, Wallenius Lines AB
sold on 20 April part of its newly acquired
shares in the company. Following the share
sale, both Wilhelmsen and Wallenius Lines
AB owns 160 million shares in Wallenius
Wilhelmsen Logistics ASA, representing an
ownership share of approximately 37.8% each.
Total income for Wallenius Wilhelmsen
Logistics ASA was USD 3 800 million for
the year 2017, when including pro forma
figures for the period up to the merger. This
was an increase of 6% compared with the
corresponding pro forma total income for
2016.
Pro forma EBITDA ended at USD 614 million
for 2017, up 4% from the previous year.
However, 2017 included negative non-
recurring items related to a merger accounting
loss and organisational restructuring costs.
EBITDA adjusted for these items was
USD 706 million, an underlying improvement
of 19% compared to 2016. The improvement
was primarily driven by an increase in ocean
volumes, improved cargo mix, realisation of
synergies, and improved results for the land-
based segment.
Pro forma net result for the full year of 2017
was USD 154 million. Wilhelmsen’s share of
net result for the period from 4 April was
USD 44 million.
The Wallenius Wilhelmsen Logistics ASA
(previous Wilh. Wilhelmsen ASA) share
price was up 75% during the year, closing at
NOK 59.25. Measured in USD, the share price
was up 84%. As of 31 December 2017, the
market value of Wilhelmsen’s investment was
USD 1 155 million, while the book value of
the shareholding was USD 831 million.
Wallenius Wilhelmsen Logistics ASA did not
pay any dividends in 2017.
21
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Treasure ASA
Treasure ASA owns 12.04% of the shares in
Hyundai Glovis Co Ltd., a global transportation
and logistics provider based in Seoul, Korea.
Wilhelmsen owns ~72.7% of Treasure ASA,
which is listed on the Oslo Stock Exchange.
Hyundai Glovis is from 4 April 2017 reported
as an available-for-sale financial asset in
Wilhelmsen’s accounts.
Treasure ASA’s fundamental objective is to
generate significant total shareholder returns
from investments within the maritime
and logistics industries. The company can
generate shareholder returns by growth in the
market value of its shares, through dividends
or other distributions to shareholders.
Whereas the primary focus is on managing the
shareholding in Hyundai Glovis, the financial
capabilities of the group are strong.
The value of Treasure ASA’s investment
in Hyundai Glovis was USD 575 million by
the end of 2017. This was a decrease of USD
5 million for the year. The ~72.7% investment
value attributable to owners of Wilhelmsen
was USD 418 million, a decrease of USD
3 million for the year.
The Treasure ASA share price was down 14%
for the year, closing at NOK 14.40. Measured
in USD, the share price was down 9%. This
represented a discount of 33% compared
with net asset value of the company. As
of 31 December 2017, the market value of
Wilhelmsen’s shareholding in Treasure ASA
was USD 281 million.
In 2017, Treasure ASA paid total dividend of
NOK 0.95 per share. Total cash proceeds to
Wilhelmsen was USD 18 million.
Qube Holdings Limited
Qube Holdings is an Australian based diversified
logistics and infrastructure company, and is
listed on the Australian Securities Exchange.
Wilhelmsen owns ~4.0% of the company, which
is reported as available-for-sale financial asset.
Early 2017, Qube received formal approval to
develop the 243 hectare Moorebank Logistics
Park in Sydney. This will become the largest
intermodal freight precinct in Australia
when fully developed. As part funding of
the project, Wilhelmsen participating in the
subsequent Qube equity raising. Following
a later sell down, the group held 65 million
shares in Qube by the end of 2017. The value
of Wilhelmsen’s investment in Qube was
USD 132 million by the end of the year, up
from USD 123 million one year earlier.
In 2017, Qube paid dividend of AUD 0.055 per
share. Total proceeds to Wilhelmsen of USD
3 million were reported as financial income.
Financial investment portfolio
The financial investment portfolio includes
investments in equities, bonds and other
financial assets available-for-sale and
managed as part of an investment portfolio.
The financial investment portfolio held by the
holding company was USD 101 million by the
end of the year, compared with USD 83 million
one year earlier. The portfolio primarily
included Nordic equities and investment-
grade bonds. Net income from investment
management was an income of USD 6 million
in 2017, up from USD 2 million in 2016.
Risk review
The Wilhelmsen group consists of operating
companies and investments exposed to the
global economy and world merchandised trade.
From an operating perspective, maritime
services and its exposure mainly towards the
global merchant fleet is the most significant
activity. Exposure to the offshore industry has
increased following a larger shareholding in
NorSea Group.
From an investment perspective, Wallenius
Wilhelmsen Logistics ASA is the largest
exposure, supported by a strong value
appreciation during the year. Through its
capital intensity and cyclical nature, shipping
has historically represented a relatively
high degree of volatility and financial risk.
Treasure ASA, and indirectly its shareholding
in Hyundai Glovis, also remains a significant
investment.
The restructuring of Wilh. Wilhelmsen ASA,
completed in 2017, has had a positive effect on
the group’s risk. While the new shareholding
in Wallenius Wilhelmsen Logistics ASA
remains the largest investment of the group,
an integrated business model and a larger
shareholder base reduce the Wilhelmsen
ownership risk.
Internal control and risk management
The group is committed to manage risks in
a sound manner related to its businesses
and operations. To accomplish this, the
governing concept of conscious strategy and
controllable procedures for risk mitigation
ultimately provides a positive impact to
profitability. The responsibility of governing
boards, management and all employees is
to be aware of the current environment in
22
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 which they operate, implement measures to
mitigate risks, prepare to act upon unusual
observations, threats or incidents, and
respond to risks to mitigate consequences.
The group has put in place a risk monitor
process based on identification of risks for
each business unit, with a consolidated report
presented to the board on a quarterly basis for
review and necessary actions.
Market risk
Demand for the group’s service offerings are,
to various degree, correlated with the general
global economic activity and in particular
trade in commodities and manufactured
goods. Projections for 2018 provided by the
International Monetary Fund and other
institutions indicates that global economic
activity continues to firm up. Risks to the
global growth forecast appear broadly
balanced in the near term, but remain skewed
to the downside over the medium term.
Maritime services’ exposure is to the general
shipping market, which remains weak.
While the overall market improved during
second half of 2017, differences in sentiment
between different market segments remains.
Wilhelmsen’s exposure to the newbuilding
market has been substantially reduced,
following sale of business units in 2016.
Supply services’ exposure is mainly to the
North Sea offshore sector. This sector has
seen a downturn during the last few years,
but market sentiment has recently been
improving.
Wallenius Wilhelmsen Logistics ASA is
primarily exposed to the automotive and
high and heavy logistics markets. Global
automotive sales continues to grow broadly in
line with global GDP. High and heavy markets
have seen several years of declining volumes,
but market sentiment is now improving.
Of main investments, Hyundai Glovis (owned
through Treasure ASA) remains exposed to
Korea, the Hyundai group and in particular
Hyundai and Kia car volumes. Qube Holdings
has a similar exposure to the Australian and
New Zealand economies, and in particular
export of commodities and merchandised
imports.
Operational risk
The various operating entities of the group
are exposed to and manage risk specific to the
markets in which they operate. The general
risk picture broadly remains unchanged from
previous years.
Through its global reach and broad product
spectre, maritime services operations are
exposed to a wide range of operational risk
factors. These are, however, mainly related to
local markets and specific product offerings.
While any such incident will normally have
limited global consequences, a major accident,
turbulence within a key geographical market,
product quality issues, disruption of IT systems
or loss of main customers may affect the wider
financial and operational performance.
Supply services operations will have a similar
risk exposure as maritime services, though
mainly related to the offshore industry and the
northern European region.
The group has established a range of measure
in order to avoid and, potentially, mitigate the
consequences of operational risk incidents.
Financial risk
Wilhelmsen remains exposed to a wide range
of financial risk, either on a general basis or
related to specific group companies. In the
currency markets, the USD weakened against
a range of currencies during 2017. Many
commodity prices moved in the opposite
direction, with oil price touching USD 70 per
barrel towards the end of the year. Most equity
markets followed a steady upward trend in
2017, but have since experienced increased
volatility. Interest rates remains at historic low
levels in most markets, but with an upward
trend lead by the US.
The group’s exposure to and management of
financial risk are further described in Note 17 of
the 2017 group accounts. This includes foreign
exchange rate risk, interest rate risk, investment
portfolio risk, credit risk and liquidity risk.
All group companies were in compliance with
their loan covenant requirements in 2017.
Two Wallenius Wilhelmsen Logistics ASA
subsidiaries have been part of anti-trust
investigations in several jurisdictions since
2012. This process is now drawing towards
an end with outstanding jurisdictions likely
to reach their conclusion in 2018. Wallenius
Wilhelmsen Logistics ASA’s provision at year
end was USD 440 million.
The group has substantial investments
exposed to external market pricing, including
shares in Wallenius Wilhelmsen Logistics
ASA, Treasure ASA (with underlying exposure
to shares in Hyundai Glovis) and Qube. While
majority of investments are of a long-term
industrial nature, any fluctuations in values
23
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 will have impact on the net asset value
and solidity of the group and may affect
profitability. During 2017, the Wallenius
Wilhelmsen Logistics ASA share price
appreciated strongly, while the share price of
Treasure ASA was down. Value in USD was
also impacted by currency movements against
NOK, AUD, GBP and, indirectly, KRW.
Health, working environment and safety
Working environment and occupational health
By living the company values (empowerment,
stewardship, customer centred, teaming
and collaboration, learning and innovation),
Wilhelmsen focuses on developing an
engaging and safe working environment
at sea and onshore. The group conducts its
business with respect for human rights and
labour standards, including conventions
and guidelines related to the prevention of
child or forced labour, minimum wage and
salary, working conditions and freedom
of association. Employees and external
stakeholders are encouraged to report on
non-compliant behaviour through the group’s
global whistleblowing system.
A healthy working environment leads to
more efficient, sustainable and profitable
business. The group’s governing elements
and policies describe the requirements for
ensuring this.
Five metrics related to health and safety are
measured on a quarterly basis, including
sickness absence, occupational disease, lost
time injury frequency, total recordable case
frequency, and safety observations.
Exposure hours
In 2017, there were around 38.8 million
exposure hours (work hours) in the group.
Vessel based operations accounted for 78% of
total exposure hours and onshore operations
accounted for 22%.
Sickness absence rate
The sickness absence rate for onshore
operations was 1.56%, in line with base year
2015 result of 1.67%.
The group has implemented a variety of
initiatives to maintain a healthy work
environment, for example focusing on
monitoring and reporting absence cases,
health and wellness awareness events,
annual health checks, employee assistance
programme, adapted working hours, social
activities, employee engagement surveys and
opportunities for personal development.
In 2016, reporting of occupational disease
cases was introduced. The 2017 result of 0.07 is
in line with the 2016 base year result of 0.29.
Turnover
The turnover rate for employees in the parent
company and subsidiaries was 4.32 % in 2017,
decreasing from 8.45% in 2016. The turnover
rate varies from segment to segment. As an
example, the turnover rate is higher in the
warehouse environment than in the office
environment.
Lost time injuries and total recordable cases
Regrettably, there was an incident in 2017 that
lead to one work related fatality on board a
vessel during cargo operations. This further
emphasized the need to continuously improve
measures that secure a safe work environment
and a robust safety culture in the group.
A number of safety campaigns aimed at
creating safer and healthier working conditions
on board the vessels were conducted during
the year with focus on analysing results and
measuring the effectiveness of the action taken.
There was a positive improvement in lost-time
injuries and total recordable cases. The lost-
time injury frequency rate was 0.49, within the
target not to exceed 0.55. The total recordable
case frequency rate was 2.27 within the target
not to exceed 2.8.
For onshore operations, there was also a
reduction in overall injuries. The lost-time
injury frequency rate was 0.20 and within
target not to exceed 0.5. The total recordable
case frequency rate result of 0.34 was within
target not to exceed 1.5.
In 2017, ships service implemented a new
organisational structure and re-allocated
persons and responsibilities in health, safety
and environment closer to the operations.
Ships service also achieved global certification
according to the OHSAS 18001 standard and
introduced a new risk management process
called TAKE5.
The awareness, identification, monitoring and
reporting of cases in all locations will continue
to be a key focus area into 2018.
All reported incidents were investigated to
avoid similar incidents in the future, improve
necessary training and awareness measures.
Near miss incidents and safety observations
For vessel based and onshore operations, there
continued to be room for improvement in near
miss incident and safety observation reporting.
Employee
turnover
Turnover
rate 4.32%
24
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 All reported near misses were investigated to
avoid similar incidents in the future, improve
necessary training and awareness measures,
and improve control measures.
Safety observation reporting on vessel
operations decreased in 2017 with 8 064 cases
reported compared to 9 580 in 2016. Reporting
and utilization of analytics to identify key
potential improvement areas continues to be
in focus. Safety observation reporting onshore
improved in 2017 with a total of 224 versus
185 in 2016. Manual observation reporting
will continue to impact the completeness of
reporting on this metric.
Working committee and executive committee
The management cooperates closely with
employees through several bodies, including
the joint working committee and the executive
committee for industrial democracy in foreign
trade shipping. The bodies give valuable
input to solve company related issues in a
constructive way.
The joint working committee discusses issues
related to health, work environment and
safety. The executive committee for industrial
democracy in foreign trade shipping consider
drafts of the accounts and budget, as well as
matters of major financial significance for
the company or of special importance for
the workforce. In 2017, both committees held
official meetings according to plan.
Organisation and people development
Workforce
The group’s head office is located in Norway,
and the group has 262 offices in 69 countries
within its controlled structure.
The group employs approximately 5 168 onshore
employees and 9 460 seafarers. In addition,
WWL ASA has approximately 7 500 employees.
Equal opportunities
Wilhelmsen has a clear policy stating that
males and females have the right to equal
opportunities. Harassment and discrimination
based on race, gender or similar grounds,
or other behaviour that may be perceived as
threatening or degrading, is not acceptable.
The industry’s unequal recruitment base
makes it difficult to achieve an equal mix of
gender in the company.
Females represent 36% of the land-based
population, and 1% of the seafarer population.
Two of the five directors on the board of
directors of Wilhelmsen are female, and one
of the five members of the company’s global
management team.
Driving performance
Wilhelmsen strives to create a performance
culture where engaged employees deliver
desired results and are rewarded accordingly.
Employee performance is measured through
annual engagement surveys, performance
appraisals and annual activity plans.
The performance appraisal is a formal
dialogue between manager and employee.
In 2017, 87% of the population completed the
performance appraisal, above our target of 80%.
In the fourth quarter of 2017, Wilhelmsen
conducted an employee engagement survey
to measure the group’s ability to provide an
engaging and safe work environment where
employees are motivated to work and achieve
their full potential.
The survey results were positive in a period
of significant organisational changes. The
overall engagement score was 72 points, up
three since the last survey in 2015. There also
was an all-time high survey completion rate
of 92%.
Compensation and benefits
The purpose of Wilhelmsen’s compensation
and benefit framework is to drive performance
and to attract and retain the right employees.
These are considered to be people with the
right experience and knowledge deemed
necessary to achieve the company’s strategic
ambitions. The framework takes local
regulations and competition into account, as
well as the responsibility and complexity of
the position.
The bonus scheme is one of several
instruments focusing attention on driving
performance. Bonus is paid if set bonus
targets are reached. Compensation to
executives is described in the notes 6 and 2 to
the group and parent accounts respectively.
Wilhelmsen also issues a declaration on
the determination of employee benefits
for senior executives, note 16 to the parent
company accounts.
Investing in competence
“Learning and innovation” is one of the
group’s core values, and Wilhelmsen
pays particular attention to competence
and knowledge development. A learning
organisation with motivated employees
contributes to efficient operations and has a
positive impact on revenue and earnings.
Vessel LTIF
result 0.49
Onshore LTIF
result 0.20
25
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Personal development plans are integrated in
the performance appraisal and review process.
In 2017, 3 766 classroom internal training
sessions were conducted and 13 593 e-learning
sessions were completed. The average hours
of training recorded per employee was eight
hours.
Developing leaders for the future
The world is becoming more complex. To
meet challenging and changing environments,
Wilhelmsen is dependent on highly qualified
leaders.
In 2017, Wilhelmsen introduced a new
programme for developing a pool of
potential leaders ready to take on the future.
24 candidates, nine women and 15 men,
representing 11 different nationalities from
around the world, participated in the four
module program held in Oslo, Singapore and
Dubai. In addition to leadership training, the
candidates focused on design thinking and
innovation.
Digital trainees
To increase the digital competence in the
group and challenge existing mind-sets in
the organisation, Wilhelmsen recruited four
digital trainees (one female and three male)
in 2017. The trainees are assigned to digital
projects in the group companies over an
18-month period.
Maritime trainees
As part of an ongoing commitment to
developing maritime competence, ship
management recruited two maritime trainees
(one female and one male) in 2016 to embark
on an 18-month maritime trainee programme.
The trainees completed their programme in
2017 and the company will recruit two more
trainees in 2018 to continue building this
competence in the industry.
Corporate governance
The board believes sound corporate
governance is a foundation for profitable
growth and that it provides a healthy company
culture. Good governance contributes to
reducing risk and creating long-term value for
shareholders and other stakeholder.
Wilhelmsen observes the Norwegian Code of
Practice for corporate governance, in addition
to requirements as specified in the Norwegian
Public Companies Act and the Norwegian
Accounting Act. The board’s corporate
governance report for 2017 can be found on
page 118 and on www.wilhelmsen.com. It is
the board’s view that the company has an
appropriate governance structure and that it is
managed in a satisfactory way. The corporate
governance report is to be reviewed by the
annual general meeting on 26 April 2018.
Sustainability
Wilhelmsen assesses environmental, social
and corporate governance issues in its
investment analysis, business decisions,
ownership practises and financial reporting.
The company has a sustainability policy that
includes human rights, labour standards
and a commitment to promote greater
environmental responsibility.
Sustainability governance
The board acknowledges that sustainability
is a vital prerequisite for Wilhelmsen to be
a profitable and responsible player in the
industry and society at large. With an aim to
increase transparency, the board therefore
issues a sustainability report following the
guidelines set forward in the Global Reporting
Initiative (GRI) standards. The report
describes how Wilhelmsen combines long-
term profitability with emphasis on ethical
business conduct, sustainable solutions
and with respect for human beings, the
environment and society.
Materiality assessment
In 2016, the company conducted an extensive
materiality assessment supported by DNVGL
to ensure attention is on material aspects
of the group’s business. The assessment
concluded that the following topics are of
most importance:
• Business ethics and anti-corruption
• Working conditions, labour standards, health
and safety
• Emissions to air, sea and soil
• Employee competence and development
• Sustainable supplier management
The summary of the status on each aspect
is available in the sustainability section of
the 2017 Annual Report. The full report,
which will be reviewed by the annual general
meeting on 26 April 2018, is available on
www.wilhelmsen.com.
Significant changes to sustainability reporting
boundary in 2017
In 2017, there was a change to the Wilhelmsen
group ownership structure affecting the
reporting boundary for 2017.
In April, the previously reported Wallenius
Wilhelmsen Logistics ASA (WWL) merger
was completed. As a result of this change,
the shipping and logistics activities resulting
Gender mix
(onshore population in wholly
owned subsidiaries)
36%
64%
Men
Women
26
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 from WWL’s operations are no longer included
in the boundary of the Wilhelmsen group
reporting. Further information on WWL’s
sustainability progress can be found on
walleniuswilhelmsen.com.
Focus areas and achievements in 2017
In 2017, the following areas received particular
attention:
• Anti-corruption, competition law, fraud
and theft as well as whistleblowing
• Cyber security
• EU General Data Protection Regulation (GDPR)
• Health and safety culture
• Talent management
The company’s achievements included:
• Appropriate risk reduction methods and
tools implemented for cyber security.
• Started adoption to the new EU General Data
Protection Regulation (GDPR) that comes
into force in May 2018.
• Ships service achieved OHSAS 18001
certification
• 87% completed performance appraisals
• 92% participation rate in employee
engagement survey and three-point increase
in employee engagement score.
• 24 leadership potentials identified and
trained
For further details on the progress on the
focus areas, please view the full report on
wilhelmsen.com.
Ambitions for 2018
A new materiality assessment will
be conducted in 2018 to continue to
prioritise, refine and streamline the group’s
sustainability work and reporting. The
assessment will also reflect the recent
structural changes in the group.
Through clearly expressed expectations to
employees as well as companies in which
Wilhelmsen is a shareholder, the group will
contribute to promote human rights, sound
working standards, reduce its environmental
impact, and work towards eliminating
corruption in own operations, as well as the
operations of suppliers and business partners.
In 2018, Wilhelmsen will continue to improve
guidelines and standards as well as data
quality and reporting routines to follow up
on issues defined as material for the group’s
sustainability ambitions.
Further, Wilhelmsen’s emphasis on zero
tolerance for facilitation payments and
corruption will continue.
Stakeholder engagement
In 2017, Wilhelmsen was engaged in
dialogues with governments, investors,
non-governmental organisations and other
stakeholders discussing topics related to
the group or industry at large. The main
questions were related to financial and
environmental issues, but there were also
forums specifically addressing sustainability
at large. Wilhelmsen or companies within
the Wilhelmsen group are engaged in,
amongst others, the International Maritime
Organisation, BIMCO, Transparency
International, TRACE, the Norwegian
Shipowners’ Association and the Maritime
Anti-Corruption Network.
Allocation of profit, dividend and buy back
The board’s proposal for allocation of the net
profit for the year is as follows:
Parent company accounts (NOK thousand)
Profit for the year
To equity
Proposed dividend
Interim dividend paid
Total allocations
262 982
30 813
162 413
69 756
262 982
Wilhelmsen has a tradition of paying dividend
twice a year. The board is proposing a NOK 3.50
dividend per share payable during the second
quarter of 2018, representing a total payment
of NOK 162.4 million. The board also proposes
that the annual general meeting gives the board
authority to approve further dividend of up to
NOK 2.50 per share for a period limited in time
up to the annual general meeting in 2019, but
no longer than to 30 June 2019.
The board is granted an authorisation to,
on behalf of the company, acquire up to
10% of the company’s own issued shares.
The authorisation is valid until the annual
general meeting in 2018, but no longer than
to 30 June 2018.
Prospects
Group business drivers
Wilhelmsen is a global provider of maritime
related services, transportation and logistics
solutions. The prospects for the group and
its business segments are, to various degree,
correlated with general development in world
economy and trade.
27
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 28
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 The board of
Wilh. Wilhelmsen
Holding ASA
From left:
Carl Erik Steen
Irene Waage Basili
Diderik Schnitler (chair)
Cathrine Løvenskiold Wilhelmsen
Odd Rune Austgulen
29
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Projections for 2018 provided by the
International Monetary Fund and other
institutions indicates that global economic
activity continues to firm up. Risks to the
global growth forecast appear broadly
balanced in the near term, but remain skewed
to the downside over the medium term.
Outlook for maritime services
Increased global growth and low newbuilding
activity support a gradually recovery in the
general shipping market. While momentum is
positive, a volatile start of 2018 is a reminder
that uncertainty persists.
Following sale of business activities in 2016,
Wilhelmsen has focused on building leading
positions within marine products, ships
agency and ship management globally. This
will continue, with outcome of the Drew
Marine transaction transaction, see note 24
in the group accounts. A more streamlined
business organisation will support a more
cost efficient operation. On this, the full
potential has not yet been achieved. Focus
on improvement in the operating margin,
strengthening the profitability and growing
the business will remain.
The ~20% ownership stake in Survitec Group is
not expected to generate any revenue or cash
contribution in the short to medium term, but
has substantial long term value upside.
Outlook for supply services
NorSea Group, where Wilhelmsen has a ~74,6%
shareholding, is exposed to the Norwegian
and Danish oil and gas industry. Oil prices has
continued to recover from lows experienced
early 2016. This support an uplift in activity
level, though from a low level. Income
from supply base real estate properties will
continue to be an important contributor, while
activity within offshore wind is expected to
gradually increase.
For governmental services, a significant
increase in income is expected in 2018 in
connection with the NATO exercise Trident
Juncture.
Outlook for other activities
Wallenius Wilhelmsen Logistics ASA, where
Wilhelmsen has a ~37.8% shareholding, has a
balanced view on prospects. Positive volume
development and synergies will positively
effect the results. However, reduced volumes
and rates from Hyundai Motor Group will
weight down.
Treasure ASA, where Wilhelmsen has a ~72.7%
shareholding, remains sensitive to development
of Hyundai Glovis and, indirectly, Hyundai
Motor Group and Kia Motor Group. Treasure
ASA expects the value of the company’s main
asset to fluctuate in line with the general
equity indexes of the Korean Stock Exchange.
30
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017 Qube, where Wilhelmsen has a ~4.0% equity
stake, remains exposed to the general Australian
economy and trade. Long-term value creation
is also sensitive to successful development of
Qube’s logistics infrastructure. Outlook for the
Australian economy remains positive.
Outlook for the Wilhelmsen group
In 2017, the group successfully completed
several structural changes creating value
for shareholders. Markets are challenging,
but Wilhelmsen continues to hold leading
positions in main business segments. Through
the structural changes, group is positioned for
future growth.
The board believes the underlying sentiments
for the group’s businesses are positive, and
expects the group to take advantage of the
optimistic outlook and generate organic
growth.
Further, the board will continue its focus
on operational excellence, improving cash
flow and further strengthening financial
robustness. By doing so, the board expects
the group to be able to capitalise on emerging
opportunities.
Combining organic growth and development
through mergers and acquisitions with the
group’s network, competence, brand, and
culture, and by retaining, attracting and
developing the people necessary to take the
group into the future, the board is confident
that the group will be a key shaper in the
maritime industry going forward.
Lysaker, 22 March 2018
The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler
chair
Odd Rune Austgulen
Carl Erik Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Thomas Wilhelmsen
group CEO
31
GroupDirectors’ reportWilh. Wilhelmsen Holding ASA Annual Report 2017
A
c
c
o
u
n
t
s
a
n
d
n
o
t
e
s
–
g
r
o
u
p
3D-printing
Nakul Malhotra
Vice president technical solutions and marketing
Wilhelmsen Ships Service, Marine Products
In 2017, ordering a spare part to your vessel could take up
to a few weeks to arrive. In 2018, the same spare part could
be in your hands in a matter of hours. 3D-printing allows
you to basically have access to a micro factory in your next
port. By adopting a well-known technology and putting it
to the test of serving the maritime industry, Wilhelmsen is
enabling its customers to be more efficient. Nakul is part of
the team working in our 3D-printing initiative. The old slogan
of Wilhelmsen was “Speed and Service”, we might bring that
back in play.
Income statement Wilh. Wilhelmsen Holding group
USD mill
Operating revenue
Other income
Gain/(loss) on sale of assets
Total income
Operating expenses
Cost of goods and change in inventory
Employee benefits
Other expenses
Depreciation
Total operating expenses
Operating profit
Share of profits from joint ventures and associates
Financial income
Financial expenses
Financial income/(expenses)
Profit before tax
Tax income/(expenses)
Profit from continued operations
Discontinued operations
Net profit/(loss) from discontinued operations (net after tax)
Profit/(loss) for the period
Of which:
Profit attributable to non-controlling interests continued operations
Profit attributable to non-controlling interests discontinued operations
Profit/(loss) attributable to owners of the parent
Basic / diluted earnings per share (USD)
Note
1/20
1/19
13
6
1/20
7
4
1
1
8
3
9
2017
632
161
793
(194)
(252)
(150)
(22)
(617)
176
55
36
(14)
77
253
(16)
236
(239)
(2)
55
7
(64)
(1.38)
Comprehensive income Wilh. Wilhelmsen Holding group
Note
2017
USD mill
Profit/(loss) for the year
Items that may be reclassified to the income statement
Revaluation mark to market value available-for-sale financial assets
Comprehensive income from associates
Currency translation differences
Currency translation differences recycled to income statement as part of loss of sale of assets
Comprehensive income discontinued operations
Items that will not be reclassified to the income statement
Remeasurement postemployment benefits, net of tax
Other comprehensive income, net of tax
Total comprehensive income for the year
12
19
10
Total comprehensive income attributable to:
Owners of the parent continued operations
Owners of the parent discontinued operations
Non-controlling interests
Total comprehensive income for the year
Notes 1 to 24 on the next pages are an integral part of these consolidated financial statements.
34
(2)
3
(1)
47
28
(1)
77
75
253
(239)
62
75
2016
867
62
930
(377)
(279)
(157)
(23)
(836)
94
82
11
(35)
58
151
(14)
138
113
251
19
31
201
4.34
2016
251
8
46
10
65
315
172
91
52
315
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Balance sheet Wilh. Wilhelmsen Holding group
USD mill
Note
31.12.2017
31.12.2016
ASSETS
Non current assets
Deferred tax asset
Goodwill and other intangible assets
Vessel, property and other tangible assets
Investments in joint ventures and associates
Available-for-sale financial assets
Other non current assets
Total non current assets
Current assets
Inventories
Current financial investments
Other current assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Paid-in capital
Retained earnings and other reserves
Attributable to equity holders of the parent
Non-controlling interests
Total equity
Non current liabilities
Pension liabilities
Deferred tax
Non current interest-bearing debt
Other non current liabilities
Total non current liabilities
Current liabilities
Current income tax
Public duties payable
Current interest-bearing debt
Other current liabilities
Total current liabilities
Total equity and liabilities
8
7
7
4
12/17
11
13
14/17
11/15
15
10
8
16/17
11
8
16/17
11
18
171
590
1 019
801
37
2 637
81
101
302
167
651
3 288
122
1 853
1 975
212
2 188
23
6
493
112
634
11
7
108
341
466
3 288
Lysaker, 22 March 2018
The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler
chair
Odd Rune Austgulen
Carl Erik Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Thomas Wilhelmsen
group CEO
Notes 1 to 24 on the next pages are an integral part of these consolidated financial statements.
75
145
2 047
1 259
209
47
3 781
65
285
268
296
914
4 695
122
1 868
1 990
502
2 492
63
12
1 418
233
1 727
15
7
115
340
477
4 695
35
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cash flow statement Wilh. Wilhelmsen Holding group
USD mill
Note
2017
2016
Cash flow from operating activities
Profit before tax (included discontinued operations and before non-controlling interests)
Financial (income)/expenses
Financial derivatives unrealised
Depreciation/impairment
Loss/(gain) on sale of fixed assets
Gain from sale of subsidiaries, joint ventures and associates
Change in net pension asset/liability
Change in inventory
Change in working capital
Tax paid (company income tax, withholding tax)
Net cash provided by operating activities
Cash flow from investing activities
Share of (profit)/loss from joint ventures and associates
Dividend received from joint ventures and associates
Proceeds from sale of fixed assets
Investments in tangible and intangible assets
Net proceeds from sale of subsidiaries
Cash discontinued operations
Investments in subsidiaries
Loans granted to joint ventures and associates
Proceeds from sale of financial investments
Current financial investments
Interest received
Net cash flow from investing activities
Cash flow from financing activities
Net proceeds from issue of debt after debt expenses
Repayment of debt
Interest paid including interest derivatives
Realised financial derivatives
Dividend to shareholders
Net cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at 31.12
1
1
7
1
3/4
4
4
7
3
19
1
16
16
1
1
14
(6)
(8)
42
(11)
107
(5)
(21)
38
(11)
139
(69)
18
63
(29)
14
(121)
(89)
111
(58)
5
(156)
230
(271)
(37)
(36)
(114)
(130)
296
167
286
66
(25)
104
(3)
(56)
(4)
19
44
(11)
420
(187)
72
44
(205)
107
(7)
168
(131)
4
(136)
291
(432)
(84)
(45)
(30)
(299)
(16)
312
296
The group is located and operating world wide and every entity has several bank accounts in different currencies. The cash flow effect from revaluation of cash and
cash equivalents is included in net cash flow provided by operating activities.
Notes 1 to 24 on the next pages are an integral part of these consolidated financial statements.
36
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Equity Wilh. Wilhelmsen Holding group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
USD mill
Balance 31.12.2016
Comprehensive income for the period:
Profit/(loss) for the period
Other comprehensive income*
Incoming non controlling interests
Outgoing non-controlling interests
Total comprehensive income for the period
0
Transactions with owners:
Dividends
Balance 31.12.2017
USD mill
Balance 31.12.2015
122
Share
capital
122
Share
capital
122
Own
shares
Retained
earnings
Total
Non-
controlling
interests
Total
equity
1 868
1 990
502
2 492
(64)
77
(64)
77
11
11
(28)
1 853
(28)
1 975
0
0
62
(1)
56
(398)
(278)
(8)
212
Own
shares
Retained
earnings
Total
Non-
controlling
interests
(2)
77
56
(398)
(267)
(36)
2 188
Total
equity
1 632
1 754
452
2 206
Comprehensive income for the period:
Profit for the period
Other comprehensive income*
Total comprehensive income for the period
0
Transactions with owners:
Dividends
Balance 31.12.2016
122
201
62
264
201
62
264
(28)
1 868
(28)
1 990
0
0
49
2
52
(2)
502
251
65
315
(30)
2 492
*Other comprehensive income in statement of equity is not restated in
discontinued and continued operations.
The proposed dividend for fiscal year 2017 is NOK 3.50 per share, payable in
the second quarter of 2018.
Own shares represented 0.22% of the share capital in nominal value at
31 December 2017 (analogous for 31 December 2016).
Dividend for fiscal year 2016 was NOK 5.00 per share, where NOK 3.50 per share
was paid in May 2017 and NOK 1.50 per share was paid in November 2017.
Dividend for fiscal year 2015 was NOK 5.00 per share, where NOK 3.00 per
share was paid in May 2016 and NOK 2.00 per share was paid in November 2016.
A decision on this proposal will be taken by the annual general meeting
on 26 April 2018. The proposed dividend is not accrued in the year-end
balance sheet. The dividend will have effect on retained earnings in second
quarter of 2018.
Notes 1 to 24 on the next pages are an integral part of these consolidated financial statements.
37
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
GENERAL INFORMATION
Wilh. Wilhelmsen Holding ASA (referred to as the parent company) is domiciled
in Norway. The parent company’s consolidated accounts for fiscal year 2017
include the parent company and its subsidiaries (referred to collectively as the
group) and the group’s share of joint ventures and associated companies.
On 4 April 2017, the subsidiary WWASA was merged with Wall Roll AB. After
the merger the group own 37.8% of WWL ASA. The profit in WWASA previous
periods is presented as discontinued operations, see note 3 i the group
accounts. The assets and liabilities from WWASA segment are included in the
group balance sheet at 31.12.2016.
The annual accounts for the group and the parent company were adopted by
the board of directors on 22 March 2018.
The parent company is a public limited liability company, listed on the Oslo
Stock Exchange.
BASIC POLICIES
The consolidated accounts have been prepared in accordance with the
International Financial Reporting Standards (IFRS), as endorsed by the
European Union. The financial statements for the parent company have
been prepared and presented in accordance with simplified IFRS approved
by Ministry of Finance 3 November 2014. The parent company has elected
to apply the exception from IFRS for dividends and group contributions.
Otherwise, the explanations of the accounting policy for the group also apply to
the parent company, and the notes to the consolidated financial statements will
in some cases cover the parent company.
The accounts for the group and the parent company are referred to collectively
as the accounts.
The group accounts are presented in US dollars (USD), rounded off to the
nearest whole million.
Entities in Maritime Services and Holding and Investments are measured using
currency of primary economic location in which the entity operates. The
exceptions are investments activity in Malta, where AUD is the functional
currency and the parent company Wilhelmsen Maritime Services (WMS AS)
has USD.
The parent company is presented in its functional currency NOK.
The income statements and balance sheets for group companies with a
functional currency which differs from the presentation currency (USD) are
translated as follows:
• the balance sheet is translated at the closing exchange rate on the balance
sheet date
• income and expense items are translated at a rate that is representative as
an average exchange rate for the period, unless the exchange rates fluctuate
significantly for that period, in which case the exchange rates at the dates of
transaction are used
• the translation difference is recognised in other comprehensive income and
split between controlling and non-controlling interests
Goodwill and the fair value of assets and liabilities related to the acquisition
of entities which have a functional currency other than USD are attributed in
the acquired entity’s functional currency and translated at the exchange rate
prevailing on the balance sheet date.
The accounts have been prepared under the historical cost convention as
modified by the revaluation of financial assets and liabilities (including financial
derivatives) at fair value through the income statement.
Preparing financial statements in conformity with IFRS and simplified IFRS
requires the management to make use of estimates and assumptions which
affect the application of the accounting policies and the reported amounts of
assets and liabilities, revenues and expenses.
Estimates and associated assumptions are based on historical experience
and other factors regarded as reasonable under the circumstances. The actual
result may vary from these estimates.
The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the consolidated financial
statements are described in more detail in the section on critical accounting
estimates and assumptions.
The accounting policies outlined have been applied consistently for all the
periods presented in the accounts.
Standards, amendments and interpretations
Apart from the new disclosure requirement for financial liabilities in IAS 7, there
has been no significant changes in standards or amendments with effect for
the group from 1 January 2017 or later.
New standards, amendments and interpretations to existing standards that are
not yet effective and have not been early adopted by the group;
• IFRS 9, The complete version of IFRS 9 was issued in July 2014. It replaces
the guidance in IAS 39 that relates to the classification and measurement
of financial instruments. IFRS 9 retains but simplifies the mixed measurement
model and establishes three primary measurement categories for financial
assets: amortised cost, fair value through OCI and fair value through P&L.
The basis of classification depends on the entity’s business model and the
contractual cash flow characteristics of the financial asset. Investments in
equity instruments are required to be measured at fair value through profit or
loss with the irrevocable option at inception to present changes in fair value
in OCI not recycling. There is now a new expected credit losses model that
replaces the incurred loss impairment model used in IAS 39. For financial
liabilities there were no changes to classification and measurement except
for the recognition of changes in own credit risk in other comprehensive
income, for liabilities designated at fair value through profit or loss. IFRS
9 relaxes the requirements for hedge effectiveness by replacing the bright
line hedge effectiveness tests. It requires an economic relationship between
the hedged item and hedging instrument and for the ‘hedged ratio’ to be the
same as the one management actually use for risk management purposes.
Contemporaneous documentation is still required but is different to that
currently prepared under IAS 39. The standard is effective for accounting
periods beginning on or after 1 January 2018. Early adoption is permitted.
The group has assessed the impact of IFRS 9 and has concluded that no
material financial effect is expected from the implementation of the standard.
See note 12 regarding the accounting of Available-for-sale assets under the
new standard.
• IFRS 15, ‘Revenue from contracts with customers’ deals with revenue
recognition and establishes principles for reporting useful information to
users of financial statements about the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity’s contracts with
customers. Revenue is recognised when a customer obtains control of
a good or service and thus has the ability to direct the use and obtain the
benefits from the good or service. The standard replaces IAS 18 ‘Revenue’
and IAS 11 ‘Construction contracts’ and related interpretations. The standard
is effective for annual periods beginning on or after 1 January 2018 and
earlier application is permitted. The group has assessed the potential impact
of IFRS 15 on the groups revenue streams. Summarized the group is not
expecting any material changes to the current recognition of revenue arising
from the implementation of IFRS 15. Expected date of adoption by the group
is 1 January 2018.
• IFRS 16, ’Leases’, issued in January 2016 and effective from 1 January
2019 covers the recognition of leases and related disclosure in the financial
statements, and will replace IAS 17 Leases. In the financial statement of
lessees, the new standard requires recognition of all contracts that qualify
under its definition of a lease as right-of-use assets and lease liabilities in the
balance sheet, while lease payments should be split in interest expense and
reduction of lease liabilities. The right-of-use assets are to be depreciated
in accordance with IAS 16 “Property, Plant and Equipment” over the shorter
of each contract’s term and the assets useful life. The standard consequently
implies a significant change in lessees’ accounting for leases currently
38
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
defined as operating leases under IAS 17. While this definition is similar to
that of IAS 17, it would have required further evaluation of each contract to
determine whether all lease contracts in the group currently not defined
as financial lease, would qualify as leases under new standard. Expected
date of adoption by the group is 1 January 2019. The group has evaluated
the impact of IFRS 16. The current material lease contracts are related to
land and properties. At effective date 01.01.2019 IFRS 16 is expected to
have material effect on the balance sheet.
There are no other IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the group and the parent company.
COMPARATIVE FIGURES
When items are reclassified in the segment reporting, the comparative figures
are included from the beginning of the earliest comparative period.
CHANGE OF PRESENTATION
Share of profit from joint ventures and associates
As part of the restructuring of the group, the share of profit from joint ventures
and associates has been moved from operating activities to be a part of
investing and financial activities in the groups income statement for 2017.
The presentation as part of investing and financial activities is considered
to better reflect the group’s operations going forward. On 4 April 2017 the
previously held subsidiary WW ASA was merged with Wall Roll AB creating
WWL ASA. The merger resulted in consolidation of material joint ventures
in WWL ASA, previously being reported based on the groups choice of
presenting share of profit as part of operations.
SHARES IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
(PARENT COMPANY)
Shares in subsidiaries, joint ventures and associates are presented according
to the cost method. Group relief received is included in dividends from
subsidiaries. Group contributions and dividends from subsidiaries are
recognised in the year for which they are proposed by the subsidiary to the
extent the parent company can control the decision of the subsidiary through
its share holdings. Shares in subsidiaries, joint ventures and associates are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may exceed the recoverable amount of
the investment. An impairment loss is reversed if the impairment situation is
deemed to no longer exist.
CONSOLIDATION POLICIES
Subsidiaries
Subsidiaries are all entities over which the group has the power to govern the
financial and operating policies, generally accompanying a shareholding of
more than half of the voting rights. Subsidiaries are consolidated from the date
on which control is transferred to the group. They are deconsolidated from the
date that control ceases.
Intercompany transactions, balances and unrealised gains and losses on
transactions between group companies are eliminated.
Business combination
The acquisition method of accounting is used to account for all business
combinations, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
• fair value of the asset transferred
• liabilities incurred to the former owners of the acquired business
• equity interests issued by the group
• fair value of any assets or liability resulting from a contingent consideration
arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are, with limited exceptions, measured initially at their
fair values at the acquisition date. The group recognises any non-controlling
interests in the acquired entity on an acquisition-by-acquisition basis either at
fair value or at non-controlling interest’s proportionate share of the acquired
entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the
• consideration transferred,
• amount of any non-controlling interests in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired
entity over the fair value of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the business acquired, the difference is recognised directly in profit
and loss as a bargain purchase.
Contingent consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently remeasured to fair
value with changes in fair value recognised in profit and loss.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer’s previously held equity interest in the acquiree
is remeasured to fair value at the acquisition date. Any gain or loss arising from
such remeasurement are recognised in profit and loss.
Joint arrangements and associates
Joint arrangements and associates are entities over which the group or parent
company has joint control or significant influence respectively but does not
control alone.
Investments in joint arrangements are classified as either joint operations or
joint ventures depending on the contractual rights and obligations to each
investor. The group has assessed the nature of its joint arrangements and
determined them to be joint ventures. Joint ventures are accounted for using
the equity method.
Significant influence generally accompanies investments where the group or
the parent company has 20-50% of the voting rights. The group’s investments
in joint ventures and associates are accounted for by the equity method. Such
investments are recognised at the date of acquisition at acquisition cost,
including excess values and possible goodwill.
The group’s share of profit after tax from joint ventures and associates, are
recognised in the income statement as an investing and financial activity.
The share of profit after tax from joint ventures and associates is added to
the capitalised value of the investments together with its share of equity
movements not recognised in the income statement. Sale and dilution of the
share of associate companies is recognised in the income statement when
the transactions occur for the group. Unrealised gains on transactions are
eliminated.
When an investment ceases to be an associate, the difference between (1) the
fair value of any retained investment and proceeds from disposing of the part
interest in the associate and (2) the carrying amount of the investment at the
date when significant influence is lost, is recognised in the income statement.
If the ownership interest in a joint venture or an associate is reduced, but the
investment continues to be a joint venture or an associate, a gain or loss is
recognised in the income statement corresponding to the difference between
the proportionate book value of the investment sold and the proceeds from
disposing of the part interest in the joint venture or associate.
Non-controlling interests
The group treats transactions with non-controlling interests as transactions
with equity owners of the group.
For purchases from non-controlling interests, the difference between any
consideration paid and relevant share acquired of the carrying value of net
assets of the subsidiary is recorded in equity.
Gains or losses on disposals to non-controlling interests are also recorded in equity.
Discontinued operations
A discontinued operation is a component of the entity that has been disposed
of or is classified as held for sale and that represents a separate major line of
business or geographical area or operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a
39
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
subsidiary acquired exclusively with a view to resale. The result of discontinued
operations is presented separately in the statement of profit and loss.
risk and control has been transferred to the customer. This will normally be
when the goods are delivered to the customer. Revenue is recognised at the
transaction value on the time of the transaction.
SEGMENT REPORTING
The operating segments are reported in a manner consistent with the internal
financial reporting provided to the chief operating decision-maker.
Comparative figures have been reclassified in the segments figures from the
beginning of earliest comparative period.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the board and Group Management Team, consisting of the group
chief executive officer (group CEO) and four executive managers.
Revenue from sale of services is recognised when it is earned, i.e. when
demand for payment rises. Revenue is recognised with the transaction value at
the time of the transaction.
INVENTORIES
Inventories of purchased goods and work in progress are valued at cost in
accordance with the weighted average cost method. Impairment losses are
recognised if the net realisable value is lower than the cost price. Sales costs
include all remaining sales, administrative and storage costs.
RELATED PARTIES TRANSACTIONS
The group and the parent company have transactions with joint ventures and
associated companies. These contracts are based on commercial market terms.
CASH-SETTLED PAYMENTS TRANSACTIONS
Cash–settled payments / bonus plans
For cash-settled payments, a liability equal to the portion services received is
recognised at the current fair value determined at each balance sheet date.
See note 11 and 20 to the group accounts for transactions with joint ventures
and associates, and note 6 and 14 to the parent company accounts.
See note 6 to the group accounts and note 2 and 16 to the parent accounts
concerning remuneration of senior executives
See note 6 to the group accounts concerning remuneration of senior executives
in the group, and note 2 to the parent company accounts for information
concerning loans and guarantees for employees in the parent company.
TANGIBLE ASSETS
Vessel, property and other tangible assets acquired by group companies are
stated at historical cost. Depreciation is calculated on a straight-line basis.
FOREIGN CURRENCY TRANSACTION AND TRANSLATION
Transactions
Individual companies’ transactions in foreign currencies are initially recorded in
the functional currency by applying the rate of exchange as of the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are translated into the respective functional currency at the rate of the exchange
at the balance sheet date. The realised and unrealised currency gains or losses
are included in financial income or expense. Changes in the currency position
related to qualified cash flow hedging derivatives, qualifying net investment
hedges, gains and losses are recognised in comprehensive income.
Translations
In the consolidated financial statements, the assets and liabilities of non USD
functional currency subsidiaries, joint ventures and associates, including the
related goodwill, are translated into USD using the rate of exchange as of the
balance sheet date. The results and cash flow of non USD functional currency
subsidiaries, joint ventures and associates are translated into USD using
average exchange rate for the period reported (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at
the rate on the dates of the transactions). Exchange adjustments arising when
the opening net assets and the net income for the year retained by non USD
operation are translated into USD are recognised in other comprehensive
income. On disposals of a non USD functional currency subsidiary, joint
ventures or associates, the deferred cumulative amount recognised in equity
relating to that particular entity is recognised in the income statement.
REVENUE RECOGNITION
Revenue is recognised when it is probable that a transaction will generate a
future economic benefit that will accrue to the entity and the size of the amount
can be reliably estimated. Revenues are recognised at fair value and presented
net of value added tax and discounts.
Maritime services
Revenue from the sale of goods and services is recognised at fair value, net
of VAT, returns and discounts. Revenue from the sale of goods is recognised
when ownership passes to the customers. Generally, this is when products
are delivered. Rebates and incentive allowance are deferred and recognised in
income upon the realisation or the closing of the rebate period. Services are
recognised as they are rendered.
Sales of goods and services are recognised in the accounting period in which
the services are rendered or goods sold.
Supply Services
Recognition of revenue is recorded when it is earned, i.e. when the main
The carrying value of tangible assets equals the historical cost less
accumulated depreciation and any impairment charges.
The group’s borrowing costs are recognised in the income statement when
they arise. Borrowing costs are capitalised to the extent that they are directly
related to the acquisition of the asset.
Land is not depreciated. Other tangible assets are depreciated over the
following expected useful lives:
Property
Other tangible assets
10-50 years
3-10 years
Each component of a tangible asset which is significant for the total cost of the
item will be depreciated separately. Components with similar useful lives will be
included in a single component.
The estimated residual value and expected useful life of long-lived assets are
reviewed at each balance sheet date, and where they differ significantly from
previous estimates, depreciation charges will be changed accordingly.
GOODWILL AND OTHER INTANGIBLE ASSETS
Amortisation of intangible fixed assets is based on the following expected
useful lives:
Goodwill
Software and licenses
Other intangible assets
Indefinite life
3-5 years
5-10 years
Goodwill
Goodwill represents the excess of the consideration transferred, the amount
of any non-controlling interests in the acquiree and the acquisition date fair
value of any previous equity interests in the acquiree over the fair value of the
group’s share of the identifiable net assets of the acquired subsidiary, joint
venture or associate. Goodwill arising from the acquisition of subsidiaries is
classified as an intangible asset. Goodwill arising from the acquisition of an
interest in an associated company is included under investment in associated
companies, and tested for impairment as part of the carried amount of the
investment annually.
Goodwill from acquisition of subsidiaries is tested annually for impairment and
carried at cost less impairment losses. Impairment losses on goodwill are not
reversed. Gain or loss on the sale of a business includes the carried amount of
goodwill related to the sold business.
Goodwill is allocated to relevant cash-generating units (“CGU”). The allocation
is made to those CGU or groups of CGU which are expected to benefit from
the acquisition.
40
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
Details concerning the accounting treatment of goodwill are provided in the
section on consolidation policies above.
Other intangible assets
Costs 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 or sell it;
• 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.
Trademark, technology/licenses and customer relationship have a finite life and
are recognised at historical cost less accumulated amortisation. Amortisation
is calculated using the straight-line method to allocate the cost of trademarks
and licenses over their estimated useful life.
Capitalised expenses related to other intangible assets are amortised over the
expected useful lives in accordance with the straight-line method.
IMPAIRMENT OF GOODWILL AND OTHER NON FINANCIAL ASSETS
Non financial assets
At each reporting date the accounts are assessed whether there is an indication
that an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, estimates of the asset’s recoverable
amount are done. The recoverable amount is the highest of the fair market value
of the asset, less cost to sell, and the net present value (NPV) of future estimated
cash flow from the employment of the asset (“value in use”). The NPV is based
on a discount rate according to a weighted average cost of capital (“WACC”)
reflecting the company’s required rate of return. The WACC is calculated based
on the company’s long-term borrowing rate and a risk free rate plus a risk
premium for the equity. If the recoverable amount is lower than the book value,
impairment has occurred and the asset shall be revalued. Impairment losses are
recognised in the profit and loss statement. Assets are grouped at the lowest
level where there are separately identifiable independent cash flows.
Goodwill
Goodwill acquired through business combinations has been allocated to the
relevant CGU. An assessment is made as to whether the carrying amount of
the goodwill can be justified by future earnings from the CGU to which the
goodwill relates. Future earnings are based on next year’s expectations with a
1% growth rate. If the ”value in use” of the CGU is less than the carrying amount
of the CGU, including goodwill, goodwill will be written down first. Thereafter the
carrying amount of the CGU will be written down. Impairment losses related to
goodwill cannot be reversed.
LEASES
Leases for property and equipment where the group carries substantially all the
risks and rewards of ownership are classified as financial leases.
Financial leases are capitalised at the inception of the lease at the lower of
fair value of the leased item or the present value of agreed lease payments.
Each lease payment is allocated between liability and finance charges. The
corresponding rental obligations are included in other non current liabilities.
The associated interest element is charged to the income statement over
the lease period so as to produce a periodic rate of interest on the remaining
balance of the liability for each period.
Financial leases are depreciated over the shorter of the useful life of the asset
or the lease term.
FINANCIAL ASSETS
The group and the parent company classify financial assets in the following
categories: trading financial assets at fair value through the income statement,
loans and receivables, and available-for-sale financial assets. The classification
depends on the purpose of the asset.
Management determines the classification of financial assets at their initial
recognition.
Financial assets carried at fair value through the income statement are initially
recognised at fair value, and transaction costs are expensed in the income
statement.
Short term investments
This category consists of financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of profit from
short term price gains. Short term investments are measured at fair value.
The resulting unrealised gains and losses are included in financial income and
expense. Derivatives are also placed in this category unless designated as
hedges. Assets in this category are classified as current.
Loans and receivables
Loans and receivables are non derivative financial assets with fixed or
determinable payments, which are not traded in an active market. They are
included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non current assets. Loans and
receivable are classified as other current assets or other non current assets in
the balance sheet.
Loans and receivables are recognised initially at their fair value plus transaction
costs. Financial assets are derecognised when the contractual rights to the
cash flows from the financial assets expire or are transferred, and the group has
transferred by and large all risk and return from the financial asset.
Realised gains and losses are recognised in the income statement in the
period they arise.
Available-for-sale financial assets
Available-for-sale financial assets are non derivatives that are either designated
in this category or not classified in any of the other categories. After initial
recognition, available-for-sale financial assets are measured at fair value with
gains or losses recognised as a separate component in other comprehensive
income until the investments is derecognised, at which time the cumulative
gain or loss previously reported in equity is included in the income statement.
The fair value of the investments that are actively traded in organised financial
markets is determined by reference to quoted market bid price at the close of
business on the balance sheet date. For investments where there is no active
market fair value are determined applying acknowledged valuation techniques.
Available-for-sale financial assets are included in non current assets unless the
investment matures or management intends to dispose of it within 12 months
of the end of the reporting period.
FINANCIAL DERIVATIVES
Derivatives are included in current assets or current liabilities, except for
maturities greater than 12 months after the balance sheet date. These are
classified as non current assets or other non current liabilities as they form part
of the group’s long term economic hedging strategy and are not classified as
held for trading.
Derivatives are recognised at fair value on the date a derivative contract is
entered into and are revalued on a continuous basis at their fair value.
Derivatives which do not qualify for hedge accounting
Most derivative instruments do not qualify for hedge accounting. Changes in the
fair value of any derivative instruments which do not qualify for hedge accounting
are recognised in the income statement as financial income/expense.
Leases where a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under
operating leases, net of any financial incentives from the lessor, are charged to
the income statement on a straight-line basis over the period of the lease.
Derivatives which do qualify for hedge accounting
The group designates certain derivatives as hedges of highly probable forecast
transactions (cash flow hedges).
41
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
At the date of the hedging transaction, the group documents the relationship
between hedging instruments and hedged items, as well as the objective of its
risk management and the strategy underlying the various hedge transactions.
The group also documents the extent to which the applied derivatives are
effective in smoothing changes in fair value or cash flow associated with the
hedge items. Such assessments are documented both initially and on an
ongoing basis.
The fair value of derivatives used for hedging is shown in note 17 to the group
accounts. Changes in the valuation of qualified hedges are recognised directly
in other comprehensive income until the hedged transactions are realised.
The fair value of financial derivatives traded in active markets is based on
quoted market prices at the balance sheet date. The fair value of financial
derivatives not traded in an active market is determined using valuation
methodology, such as the discounted value of future cash flows.
Independent experts verify the value determination for instruments which
are considered material.
Cash flow hedge
The effective portion of changes in the fair value of derivatives designated
as cash flow hedges are recognised in comprehensive income together with
the deferred tax effect. Gain and loss on the ineffective portion is recognised
in the income statement. Amounts recognised in comprehensive income are
recognised as income or expense in the income statement in the period when
the hedged liability or planned transaction will affect the income statement.
Net investment hedge
Gains and losses arising from the hedging instruments relating to the effective
portions of the net investment hedges are recognised in comprehensive
income. These translation reserves are reclassified to the income statement
upon disposal of the hedged net investments, offsetting the translation
differences from these net investments. Any ineffective portion is recognised
immediately in the income statement as net financial income/(expenses).
Gains and losses accumulated in equity are included in the income statement
when the foreign operation is partially disposed of, sold or change of
functional currency.
DEFERRED TAX / DEFERRED TAX ASSET
Deferred tax is calculated using the liability method on all temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. Deferred income
tax is determined using tax rates and laws which have been enacted by the
balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability settled.
Deferred income tax assets are recognised to the extent that it is probable that
future taxable profit will be available, and that the temporary differences can be
deducted from this profit.
Deferred income tax is calculated on temporary differences arising on
investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the group.
PENSION OBLIGATIONS
Group companies have various pension schemes, and the employees are
covered by pension plans which comply with local laws and regulations. These
schemes are generally funded through payments to insurance companies or
pension funds on the basis of periodic actuarial calculations. The group and
the parent company have both defined contribution and defined benefit plans
up to 31 December 2017.
The group has “Ekstrapensjon”, a contribution plan for all Norwegian
employees with salaries exceeding 12 times the Norwegian National Insurance
base amount (G). The contribution plan replaced the group obligations mainly
financed from operation. However, the group still has obligations for some
employees’ related to salaries exceeding 12 times the Norwegian National
Insurance base amount (G) mainly financed from operations.
the parent company have no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all employees
the benefits relating to employee service in the current and prior periods.
A defined benefit plan is one which is not a defined contribution plan. This type
of plan typically defines an amount of pension benefit an employee will receive
on retirement, normally dependent on one or more factors such as age, years
of service and pay.
The liability recognised in the balance sheet in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the end
of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using the projected
unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest
rates of high-quality corporate bonds that are denominated in the currency in
which the benefits will be paid, and that have terms to maturity approximating
to the terms of the related pension obligation.
The pension obligation is calculated annually by independent actuaries
using a straight-line earnings method. Actuarial gains and losses arising from
experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they
arise. Past-service costs are recognised immediately in the income statement.
RECEIVABLES
Account receivables and other receivables, that have fixed or determinable
payments that are not quoted in an active market are classified as receivables.
Receivables are recognised at face value less any impairment. Provision for
impairment is made to specified receivable items when there is objective
evidence that, as a result of one or more events that occurred after the
initial recognition of the receivable, the estimated future cash flows of the
investments have been affected.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, deposits held at call with
banks and other liquid investments with maturities of three months or less.
Bank overdrafts are presented under borrowings in current liabilities on the
balance sheet.
SHARE CAPITAL AND TREASURY SHARES
When the parent company purchases its own shares (treasury shares),
the consideration paid, including any attributable transaction costs net of
income tax, is deducted from the equity attributable to the parent company’s
shareholders until the shares are cancelled or sold. Should such shares
subsequently be sold or reissued, any consideration received is included in
share capital.
DIVIDEND IN THE GROUP ACCOUNTS
Dividend payments to the parent company’s shareholders are recognised as a
liability in the group’s financial statements from the date when the dividend is
approved by the general meeting.
DIVIDEND AND GROUP CONTRIBUTION IN PARENT ACCOUNTS
Proposed dividend for the parent company’s shareholders is shown in the
parent company account as a liability at 31 December current year. Group
contribution to the parent company is recognised as a financial income and
current asset in the financial statement at 31 December current year.
LOANS
Loans are recognised at fair value when the proceeds are received, net of
transaction costs. In subsequent periods, loans are stated at amortised cost
using the effective yield method. Any difference between proceeds (net of
transaction costs) and the redemption value is recognised in the income
statement over the term of the loan. Loans are classified as current liabilities
unless the group or the parent company has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
A defined contribution plan is one under which the group and the parent
company pay fixed contributions to a separate legal entity. The group and
PROVISIONS
The group and the parent company make provisions for legal claims when a
legal or constructive obligation exists as a result of past events, it is more likely
42
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
Accounting policies
Wilh. Wilhelmsen Holding group and Wilh. Wilhelmsen Holding ASA
than not that an outflow of resources will be required to settle the obligation,
and the amount can be estimated with a sufficient degree of reliability.
Provisions are not made for future operating losses.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
When preparing the financial statements, the group and the parent company
must make assumptions and estimates. These estimates are based on the
actual underlying business, its present and forecast profitability over time,
and expectations about external factors such as interest rates, foreign
exchange rates and oil prices which are outside the group’s and parent
company’s control. This presents a substantial risk that actual conditions will
vary from the estimates.
Impairment of goodwill
Assets that have an indefinite useful life, for example goodwill, are not subject
to amortisation and are tested annually for impairment.
Assets that are subject to amortisation or depreciation are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Non financial assets other than goodwill that
suffered impairment are reviewed for possible reversal of the impairment
at each reporting date. The group has financial models which calculate and
determine the value in use through a combination of actual and expected cash
flow generation discounted to present value. The expected future cash flow
generation and models are based on assumptions and estimate.
See note 7 in the group accounts for additional information.
The main risks are:
• Growth
• Net profit
• Cash flow
43
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 1 Combined items, income statement
USD mill
OPERATING REVENUE
Ships service revenue
Technical solutions revenue
Ship management and crewing revenue
Other revenue
Total operating revenue
GAIN ON SALE OF ASSETS
Gain on sale of assets
Gain on sale of subsidiaries
Disposal of associate (step up loss)
Gain from change in measurement of Hyundai Glovis
Total gain on sale of assets
OTHER EXPENSES
Loss on sale of assets
Office expenses
Communication and IT expenses
External services
Travel and meeting expenses
Marketing expenses
Other operating expenses
Total other expenses
FINANCIAL INCOME AND EXPENSES
Financial items
Investment management
Interest income
Other financial items
Net financial items
Financial – interest expenses
Interest expenses
Net financial – interest expenses
Financial currency
Net currency gain/(loss) – non financial currency
Net currency gain/(loss) – financial currency
Derivatives for hedging of cash flow risk – realised
Derivatives for hedging of cash flow risk – unrealised
Net financial currency
Financial income/(expenses)
Spesification of financial income and expenses
Net financial items
Net financial currency
Financial income
Net financial – interest expenses
Net financial currency
Financial expenses
Note
2017
2016
20
19
19
12
20
525
43
63
632
6
(40)
195
161
(1)
(39)
(30)
(35)
(8)
(4)
(32)
(150)
5
5
12
22
(14)
(14)
7
(2)
9
14
22
22
14
36
(14)
(14)
586
223
43
15
867
3
59
62
(1)
(37)
(34)
(34)
(12)
(5)
(35)
(157)
2
3
6
11
(14)
(14)
(14)
(6)
(21)
(24)
11
11
(14)
(21)
(35)
See note 17 on financial risk and the section of the accounting policies concerning financial derivatives.
44
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 2 Segment reporting
SEGMENTS
The chief operating decision-maker monitors the business by combining
entities with similar operational characteristics such as product services,
market and underlying asset base, into operating segments.
The Maritime Services segment offers marine products, ship agency services
and logistics to the merchant fleet and ship management including manning for
all major vessel types through a worldwide network.
The Supply Services segment is mainly related to the operation of supply
bases for the oil industry in Norway, as well as real estate development and
operation of properties both on and off the supply bases. In addition to the
activity in Norway, the segment offers its services in both Denmark and in
the UK. The international activity consists of both operation of supply bases,
maintenance of rigs and handling of logistics related to international pipeline
projects and windmill parks.
The Holding and Investments segment includes the parent company, Wilh.
Wilhelmsen Holding ASA, Treasure ASA group, Wilh. Wilhelmsen Holding Invest
AS group and other internal focused activities (WilService AS, Wilhelmsen
Accounting Services AS, Wilh Wilhelmsen HK and corporate group activities
like operational management, tax, legal, finance, portfolio management,
communication and human relations) which fail to meet the definition for other
core activities. The groups investment in WWL ASA is presented as part of
Holding and Investments as an investment in associates.
Discontinued operations (previously WWASA group) covers shipping and
logistics activities in the group. The shipping activity is engaged in ocean
transport of cars, roll-on roll-off cargo and project cargo. Its main customers
are global car manufacturers and manufacturers of agriculture and other high
and heavy equipment. The customer’s cargo is carried in a worldwide transport
network. This was the group’s most capital-intensive activity.
The logistics activity has basically the same customer groups as shipping.
Customers operating globally are offered sophisticated logistics services.
The activity’s primary assets are human capital (expertise and systems) and
customer contacts reflected in long-term relationships.
Eliminations are between the group’s three segments mentioned above.
The segment income statement are measured in the same way as in the
financial statements.
The segment information provided to the chief operating decision-maker for
the reportable segments for the year ended 31 December 2017 is as follows:
USD mill
Maritime Services
Supply Services
Holding
and Investments
Eliminations/
discontinued
operations*
Total
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
INCOME STATEMENT
Operating revenue
Gain on disposals of assets
Total income
Cost of goods and change in inventory
Employee benefits
Other expenses
Depreciation and impairments
Total operating expenses
Operating profit/(loss)
Share of profit from associates
Net financial income / expenses
Profit/(loss) before tax
Tax income/(expense)
Profit/(loss)
Result of discontinued operations
Non-controlling interests
Profit/(loss) to the owners of parent
*Discontinued operations, see note 3.
574
6
580
(182)
(214)
(133)
(15)
(544)
36
4
6
46
(15)
30
1
29
862
62
924
(376)
(263)
(158)
(22)
(820)
104
4
(28)
80
(15)
65
1
64
57
57
(10)
(20)
(18)
(6)
(54)
2
1
(1)
3
1
4
1
3
16
155
171
(1)
(19)
(13)
(34)
138
49
16
204
(2)
202
52
150
0
0
0
0
0
0
29
(14)
(23)
29
(14)
(23)
(1)
(17)
(21)
(39)
(10)
77
4
72
2
73
18
56
14
14
(0)
(0)
(0)
(239)
7
(246)
1
22
23
(0)
(0)
0
113
31
82
632
161
793
(194)
(252)
(150)
(22)
(617)
176
55
22
253
(16)
236
(239)
62
(64)
867
62
930
(377)
(279)
(157)
(23)
(836)
94
82
(24)
151
(14)
138
113
49
201
45
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 2 Segment reporting
The amounts provided to the chief operating decision-maker with respect to total assets, liabilities and equity are measured in the same way as in the financial statements.
WWASA group
(discontinued
operations)*
Maritme Services
Supply Services
Holding and
Investments
Eliminations
Total
31.12.17 31.12.16 31.12.17 31.12.16 31.12.17 31.12.16 31.12.17 31.12.16 31.12.17 31.12.16 31.12.17 31.12.16
55
6
1 879
768
1
202
22
81
3 013
11
163
187
12
83
29
320
144
949
79
29
307
161
908
15
138
166
4
8
401
2
2
5
2
18
171
590
75
145
2 047
13
176
832
479
1 019
1 259
5
62
8
664
150
55
369
18
71
664
718
22
101
38
15
130
17
83
7
54
(19)
(37)
(2)
801
37
101
383
167
209
47
285
333
296
0
1 730
776
(56)
(2)
3 288
4 695
1 497
158
616
112
54
9
14
34
7
7
0
1 730
776
(18)
(1)
(37)
(56)
(2)
(2)
1 975
1 990
212
6
601
135
358
502
12
1 533
296
362
3 288
4 695
26
50
USD mill
BALANCE SHEET
Assets
Deferred tax asset
Intangible assets
Tangible assets
Investments in joint ventures
and associates
Investments in available-
for-sale financial assets
Other non current assets
Current financial investments
Other current assets
Cash and cash equivalents
Total assets
Equity and liabilities
Equity majority
1 044
329
330
Equity non controlling interests
391
Deferred tax
Interest-bearing debt
Other non current liabilities
Other current liabilities
Total equity and liabilities
1 320
169
89
3 013
(1)
6
196
109
310
949
(1)
12
179
120
267
908
Investments in tangible assets
21
50
4
*Discontinued operations, see note 3.
46
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 2 Segment reporting
The amounts provided to the chief operating decision-maker with respect to cash flows are measured in a manner consistent with that of the balance sheet.
USD mill
CASH FLOW
Profit/(loss) before tax
Net financial (income)/expenses
Depreciation/impairment
Change in working capital
Net gain from sale of associate
Net cash provided by operating activities
Share of (profit)/loss from joint ventures and associates
Dividend received from joint ventures and associates
Net sale/(investments) in fixed assets
Net sale/(investments) in entities and segments
Net investments in financial investments
Net cash flow from investing activities
Net change of debt
Net change in other financial items
Net dividend from other segments/ to shareholders
Net cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of period
GEOGRAPHICAL AREAS
Maritime Services
Supply Services
Holding and Investments
2017
2016
2017
2016
2017
2016
46
(6)
15
(10)
(3)
42
(4)
5
(15)
(21)
1
(34)
20
(12)
(34)
(25)
(17)
161
144
80
25
22
28
(62)
94
(4)
7
(25)
107
2
86
(128)
(13)
(59)
(200)
(20)
181
161
3
1
6
6
15
(1)
(5)
3
(4)
(6)
(4)
(10)
2
6
7
204
(16)
9
(155)
41
(49)
13
(54)
(90)
19
(2)
(7)
10
(39)
54
15
71
(4)
(9)
58
(77)
13
(1)
(8)
(3)
(76)
(2)
(2)
53
49
31
22
54
USD mill
Europe
Americas
Asia & Africa
Oceania
Other
Total
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Total income
Total assets*
429
455
2 914
1 455
Investment in tangible assets*
16
33
63
36
1
86
70
2
271
287
9
359
292
14
30
51
30
50
1
793
930
2 828
3 288
4 695
149
26
199
*In 2016, 2 506 million of total assets and 149 millon of investments in tangible assets were related to discontiued operations. See note 3.
Russia is defined as Europe.
Total income
Area income is based on the geographical location of the company and
includes sales gains.
Total assets
Area assets are based on the geographical location of the assets.
Investments in tangible assets
Area capital expenditure is based on the geographical location of the assets.
47
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 3 Discontinued operations
On 4. April 2017, the subsidiary WWASA was merged with Wall Roll AB. After
the merger the group own 37.8% of the WWL ASA. The profit in WWASA
previous periods is presented as discontinued operations in WWH. The assets
and liabilities from WWASA segment are included in the group balance sheet at
31.12.2016. Financial information (income statement and net assets) relating to the
discontinued operations for each period to the date of disposal is set out below.
Prior to the merger, WWH held 160 000 000 shares in WWASA (renamed
to WWL ASA). Number of shares remains unchanged after the merger.
The financial performance and cash flow information presented are for the
Q1 2017 and the year ended 31 December 2016.
USD mill
Operating revenue
Other income
Share of profits from associates
Gain/(loss) on sale of assets
Total income
Operating expenses
Vessel expenses
Employee benefits
Other expenses
Depreciation and impairments
Total operating expenses
Operating profit
Financial income/(expenses)
Profit before tax
Tax income/(expense)
Profit from discontinued operations
Non controlling interests
Changes in fair value cash flow hedge
Exchange differences on translation of discontinued operations
Remeasurement pension liabilities, net of tax
Other comprehensive income from discontinued operations
Cash flow from discontinued operations
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net increase in cash generated by the discontinued operations
Details of the merger between WWASA and Wall Roll AB
Cash received
Shares in WWL ASA (market value)
Total disposals consideration
Carrying amount of net assets disposal
Currency translation differences in WWASA group
Accounting loss (discontinued operations) majority (Q2 2017)
Net profit before non-controlling interests Q1 2017
Profit/(loss) from discontinued operations
48
Q1 2017
2016
59
257
14
9
82
(15)
(11)
(3)
(20)
(49)
33
(8)
25
1
26
7
2
1
7
107
(74)
40
106
363
(61)
(51)
(18)
(81)
(212)
151
(17)
134
(22)
113
31
12
(2)
1
10
211
(95)
(143)
(27)
2017
14
789
804
1 062
(5)
(264)
26
(239)
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 3 Discontinued operations
The carry amounts of assets and liabilities at the date of the merger 4 April 2017 were:
USD mill
Deferred tax asset
Intangible assets
Tangible assets
Investments in joint ventures and associates
Other non current assets
Current financial investments
Other current assets
Cash and cash equivalents
Total assets
Deferred tax
Interest-bearing debt
Other non current liabilities
Other current liabilities
Non controlling interests
Liabilities and non-controlling interests
Net assets for controlling shareholders
04.04.2017
56
6
1 822
775
1
150
16
121
2 946
1 267
164
55
398
1 884
1 062
Assets and liabilities of disposed group
The following assets and liabilities are related to the discontinued operations at 31 December 2016:
USD mill
31.12.2016
Assets and liabilities related to discontinued operations
Deferred tax asset
Intangible assets
Tangible assets
Investments in joint ventures and associates
Other non current assets
Current financial investments
Other current assets
Cash and cash equivalents
Total assets
Interest-bearing debt
Other non current liabilities
Other current liabilities
Total liabilities
55
6
1 879
768
1
202
22
81
3 013
1 320
169
89
1 578
49
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 4 Investments in associates
Holding and Investments
Wallenius Wilhelmsen Logistics ASA
Wilhelmsen Ferd Offshore AS
Hyundai Glovis Co Ltd
Maritime Services – companies with significant shares of profits
Almoayed Wilhelmsen Ltd
Wilhelmsen Huayang Ships Services (Shanghai) Co Ltd
Wilhelmsen Huayang Ships Services (Beijing) Co Ltd
Diana Wilhelmsen Management Limited
Barwil Arabia Shipping Agencies SAE
Wilhelmsen Ships Service Georgia Ltd
Barwil Georgia Ltd.
Barklav (Hong Kong) Ltd
BWW LPG Limited
Alghanim Barwil Shipping Co-Kutayba Yusuf Ahmed & Partner WLL
Wilhelmsen Ships Service Lebanon S.A.L.
BWW LPG Sdn. Bhd.
Wilhelmsen Ships Service (Private) Limited
Wilhelmsen-Smith Bell Shipping Inc
Wilhelmsen-Smith Bell (Subic) Inc.
Wilhelmsen-Smith Bell Manning, Inc.
Perez Torres – Portugal Lda
Wilhelmsen Hyopwoon Ships Services Ltd
Haeyoung Maritime Services Co Ltd
Barklav S.R.L.
Binzagr Barwil Maritime Transport Co Ltd
Nagliyat Al Saudia Company Ltd
Krew-Barwil (Pty) Ltd
Wilhelmsen Meridian Navigation Ltd, Sri Lanka
Baasher Barwil Agencies Ltd
Triangle Shipping Agencies LLC
Wilhelmsen Ships Service LLC
Barwil Abu Dhabi Ruwais LLC
Barwil Dubai LLC
Denholm Wilhelmsen Ltd
Wilhelmsen Sunnytrans Co Ltd
Supply Services – companies with significant shares of profits
Bring Polarbase AS
Hammerfest Næringsinvest AS
Strandparken Holding AS
Risavika Havnering 14 AS
Eldøyane Næringspark AS
Risavika Havn AS
Risavika Eiendom AS
Smart Management AS
Business office/country
Lysaker, Norway
Oslo, Norway
Seoul, Republic of Korea
Bahrain
China
China
Cyprus
Egypt
Georgia
Georgia
Hong Kong
Hong Kong
Kuwait
Lebanon
Malayisia
Pakistan
Philippines
Philippines
Philippines
Portugal
Republic of Korea
Republic of Korea
Romania
Saudi Arabia
Saudi Arabia
South Africa
Sri Lanka
Sudan
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Kingdom
Vietnam
Hammerfest, Norway
Hammerfest, Norway
Hammerfest, Norway
Stavanger, Norway
Stord, Noway
Tananger, Norway
Tananger, Norway
Tananger, Norway
2017
2016
Voting share/Ownership
37.8%
50.0%
12.0%
50.0%
50.0%
50.0%
50.0%
35.0%
50.0%
50.0%
50.0%
49.0%
49.0%
49.0%
49.0%
50.0%
49.0%
50.0%
50.0%
50.0%
50.0%
20.0%
50.0%
50.0%
50.0%
49.0%
40.0%
50.0%
50.0%
43.0%
50.0%
50.0%
40.0%
50.0%
41.0%
32.3%
33.1%
33.3%
37.9%
42.8%
42.0%
40.0%
37.8%
50.0%
12.0%
50.0%
50.0%
50.0%
50.0%
35.0%
50.0%
50.0%
50.0%
49.0%
49.0%
49.0%
49.0%
50.0%
49.0%
50.0%
50.0%
50.0%
50.0%
20.0%
50.0%
50.0%
50.0%
49.0%
40.0%
50.0%
50.0%
43.0%
50.0%
50.0%
40.0%
50.0%
41.0%
32.3%
33.1%
33.3%
37.9%
42.8%
42.0%
40.0%
*The investment in NorSea Group AS is collateral. See note 16.
An overview of actual equity holdings can be found in the presentation of
company structure on page 132.
With effect from 1 April 2017, the group changed the classification for Hyundai
Glovis from Investment in associate to Available-for-sale financial assets.
See note 12.
On 4 April 2017, the subsidiary WWASA was merged with Wall Roll AB creating
WWL ASA. After the merger the group own 37.8% of WWL ASA. See note 3 for
further information.
WWL ASA is an operating company within both shipping segment and
logistics segment. The company provides global transportation services for
the automotive, agricultural, mining and construction equipment industries
and its services consist of supply chain management, ocean transportation,
terminal services, inland distribution and technical services. WWL ASA is the
contracting party in customer contracts with industrial manufacturers for cars,
agricultural machinery etc.
With effect from 26 September 2017, the group increased its shareholding in
NorSea Group from 40% to 72%. Following the transaction, the group further
acquired a minor portion of management controlled shares of 2.11% bringing
the total shareholding to 74.11%. See note 19 for further information.
50
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 4 Investments in associates
USD mill
Share of profit from associates
Hyundai Glovis Co Ltd
NorSea Group AS
WWL ASA
Other associates Maritime Services
Share of profit from associates
Book value of material associates
Hyundai Glovis Co Ltd
NorSea Group AS
WWL ASA
Specification of share of equity and profit/loss:
Share of equity 01.01
Share of profit for the year
Merger WWL ASA
Business combination NorSea Group
Associates in Supply Services
Transfer to Available-for-sale Hyundai Glovis
Dividend
Other comprehensive income
Share of equity 31.12
2017
2016
5
44
4
54
831
491
54
790
(100)
60
(378)
(18)
1
900
65
12
4
82
390
88
428
82
(20)
2
491
There are no contingent liabilities relating to the group’s interest in the associates.
Set out below are the summarised financial information for, based on 100%,
for WWL ASA group, which, in the opinion of the directors, is the material
associates to the group.
with increased ownership effective from this date with figures for associates in
NorSea Group included in ”Other” with from 27.09.2017 to 31.12.2017.
Hyundai Glovis figures presented from 01.01.2017–31.03.2017 in accordance
with transfer to Available-for-sale with effect from 01.04.17.
NorSea Group figures presented from 01.01.17 to 26.09.2017 in accordance
Associates not considered to be material is defined under ”other” (based on 100%).
Hyundai Glovis is presented a quarter in arrears and figures correspond to
periods consolidated into the Holding and Investments segment.
USD mill
WWL ASA
Hyundai Glovis Co Ltd.
NorSea Group AS
Other
2017
2016
2017*
2016*
2017
2016
2017
2016
SUMMARISED STATEMENT
OF COMPREHENSIVE INCOME
Total income
Operating expenses
Net operating profit
Finance income & expenses
Other financial expenses
Profit before tax
Tax
Profit/(loss) after minority interest
Other comprehensive income
Total comprehensive (expense)/income
2 992
(2 739)
253
(105)
1
148
(3)
134
(3)
132
WWH share of dividend from associates
12
12
*Corresponding to Hyundai Glovis’ accounting period respectively 01.10.2016 through 31.12.2016 and 01.10.2015 through 30.09.2016.
3 454
13 056
166
286
91
93
(3 288)
(12 402)
167
7
89
262
(48)
214
(39)
175
654
(33)
126
748
(206)
542
542
(143)
23
(242)
45
(9)
14
14
14
2
(11)
33
(3)
31
2
32
2
(78)
13
12
(2)
10
10
5
(84)
9
2
11
(1)
9
9
7
51
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 4 Investments in associates
USD mill
WWL ASA
Hyundai Glovis Co Ltd.
NorSea Group AS
Other
31.12.2017
31.12.2016
31.12.2017 31.12.2016**
31.12.2017
31.12.2016
31.12.2017
31.12.2016
SUMMARISED BALANCE SHEET
Non current assets
Other current assets
Cash and cash equivalents
Total assets
Non current financial liabilities
Other non current liabilities
Current financial liabilities
Other current liabilities
Total liabilities
Net assets
6 272
690
797
7 759
3 103
389
661
810
4 963
2 796
3 300
2 622
514
6 436
808
632
370
1 765
3 574
2 862
0
0
0
572
97
20
689
358
2
25
84
469
186
56
79
321
72
6
6
108
193
221
128
0
0
0
13
41
36
90
5
60
65
25
The information above reflects the 100% amount presented in the financial statements of the associates, adjusted for differences in accounting policies
between the group and the associates.
**Corresponding to Hyundai Glovis’ accounting period ending respectively 30.09.2016.
USD mill
WWL ASA
Hyundai Glovis Co Ltd.
NorSea Group AS
Other
31.12.2017
31.12.2016
31.03.2017
31.12.2016
26.09.2017
31.12.2016
31.12.2017
31.12.2016
RECONCILIATION OF SUMMARISED
FINANCIAL INFORMATION
Net asset 01.01
Increased capital
Profit for the period
Other comprehensive income***
Currency translation differences
Dividend
Transfer to Available-for-sale/busi-
ness combination
Net assets 31.12
WWH share
Goodwill
Currency
Fair value adjustment vessel
and goodwill
Carrying value 31.12
2 664
134
(3)
2 796
1 057
(226)
831
***Including currency translation differences on net assets 01.01.
Reconciliations of the group's income statement and balance sheet
USD mill
Share of profit/(loss) from joint ventures
Share of profit from associates
Share of profit/(loss) from joint ventures and associates
Share of equity from joint ventures
Share of equity from associates
Share of equity from joint ventures and associates
2 862
2 654
221
189
214
(39)
(98)
542
14
(236)
(2 939)
0
(98)
2 862
(235)
0
31
5
(4)
221
25
105
12
(2)
(11)
129
343
18
29
88
69
32
9
(1)
(16)
25
13
0
390
0
88
69
13
2017
2016
1
54
55
119
900
106
82
187
768
491
1 019
1 259
The group’s share of profit/(loss), after tax from joint ventures and associates is recognised in the income statement as an operating income. The investments
in joint ventures and associates are related to the group’s operating activities and therefore classified as part of the operating activity. All joint ventures and
associates are equity consolidated.
52
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 4 Investments in joint ventures
NorSea Group
Coast Center Base AS (CCB)
KS Coast Center Base (CCB)
Vikan Næringspark AS
SørSea AS
Polar Lift AS
Business office, country
Fjell, Norway
Fjell, Norway
Kristiansund, Norway
Tananger, Norway
Hammerfest, Norway
2017
2016
Voting share/ownership
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
Coast Center Base AS is a joint venture between NorSea Group and Bernh.
Larsen Holding AS and was established in 1998. It delivers services related to
logistics, quay, project and maintenance to the oil & gas industry in addition to
maritime industry.
SørSea AS is a joint venture between NorSea Group and Røsi AS/Stangeland
Gruppen AS. It owns land in Risavika in Norway.
Polar Lift AS is a joint venture between NorSea Group and Havator AS. It rents
out cranes and other equipment and is located in Hammerfest in Norway.
KS Coast Center Base AS is a joint venture between NorSea Group and
Bernh. Larsen Holding AS and was established in 1973. It is mainly a property
company owning infrastructure rented out to Coast Center Base AS.
All companies are private companies and there are no quoted market price
available for the shares.
Vikan Næringspark AS is a joint venture between NorSea Group and
Kristiansund Baseselskap AS. It owns property that is rented out to Vestbase
AS, a subsidiary of NorSea Group, in Kristiansund.
There are no other contingent liabilities relating to the group’s interest in the
joint ventures.
53
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 4 Investments in joint ventures
USD mill
Summarised financial information – according to the group's ownership
Share of total income
Share of operating expenses
Share of depreciation
Share of net financial items
Share of tax expense
Share of profit/(loss) for the year
Share of equity (equity method)
Book value
Excess value (goodwill)
USD mill
Joint ventures' assets, equity and liabilities (group's share of investments)
Share of non current assets
Share of cash and cash equivalents
Share of current assets
Total share of assets
Share of equity 26.09
Share of profit/(loss) for the period
Currency translation differences
Share of equity 31.12
Share of non current financial liabilities
Share of other non current liabilities
Share of current financial liabilities
Share of other current liabilities
Total share of liabilities
Total share of equity and liabilities
*Discontinued operations.
2017
2016*
21
(17)
(1)
(1)
1
69
50
2017
2016*
169
19
13
201
70
1
(2)
69
104
3
25
132
201
Set out below are the summarised financial information, based on 100%, for Cost Center Base AS (CCB), which, in the opinion of the directors, is a material joint
venture to the group.
Joint venture not considered to be material, is defined under ”other” (based on 100%).
USD mill
SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
CCB
Other
2017
2016
2017
2016
Total income
Operating expenses
Depreciation / amortisation
Net operating profit/(loss)
Financial income/(expenses)
Profit/(loss) before tax
Tax income/(expense)
Profit/(loss) after minority interest
Other comprehensive income
Total comprehensive income
WWH share of dividend from joint ventures
54
38
(33)
(2)
4
(2)
2
2
2
4
(1)
(1)
2
(1)
1
0
0
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 4 Investments in joint ventures
USD mill
SUMMARISED BALANCE SHEET
Non current assets
Other current assets
Cash and cash equivalents
Total assets
Non current financial liabilities
Other non current liabilities
Current financial liabilities
Other current liabilities
Total liabilities
Net assets
CCB
Other
31.12.2017
31.12.2016
31.12.2017
31.12.2016
200
37
22
260
119
3
45
167
93
138
4
142
89
3
5
97
45
The information above reflects the 100% amount presented in the financial statements of the joint ventures, adjusted for differences in accounting policies
between the group and the joint ventures.
USD mill
RECONCILIATION OF SUMMARISED FINANCIAL INFORMATION
CCB
Other
2017
2016
2017
2016
Opening net asset 26.09
Profit for the period
Other comprehensive income
– Currency translation differences
Closing net assets 31.12
WWH share
Goodwill
Carrying value 31.12
93
2
(3)
93
47
56
102
46
(1)
45
22
(5)
17
55
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 4 Investments in joint ventures
Discontinued joint ventures
USD mill
SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
Total income
Operating expenses
Depreciation / amortisation
Net operating profit/(loss)
Financial income/(expenses)
Profit/(loss) before tax
Tax income/(expense)
Profit/(loss) after minority interest
Other comprehensive income
Total comprehensive income
WWH share of dividend from joint ventures
USD mill
SUMMARISED BALANCE SHEET
Non current assets
Other current assets
Cash and cash equivalents
Total assets
Non current financial liabilities
Other non current liabilities
Current financial liabilities
Other current liabilities
Total liabilities
Net assets
USD mill
RECONCILIATION OF SUMMARISED FINANCIAL INFORMATION
Opening net asset 01.01
Profit/(loss) for the period
Other comprehensive income
– Cash flow hedges, net of tax
– Remeasurement postemployment benefits, net of tax
– Dividend to shareholder
– Reclassification
Closing net assets 31.12
WWH share
Goodwill
Carrying value 31.12
56
EUKOR Car Carriers Inc
Other
2017
2016
2017
2016
1 381
(1 168)
(105)
108
(43)
65
(2)
63
30
93
40
2 311
(2 023)
(49)
238
(5)
234
(33)
193
(3)
190
12
EUKOR Car Carriers Inc
Other
31.12.2017
31.12.2016
31.12.2017
31.12.2016
2 704
136
189
3 029
1 290
5
167
238
1 700
1 329
787
387
211
1 385
303
231
53
344
931
454
EUKOR Car Carriers Inc
Other
2017
2016
2017
2016
1 336
63
29
1
(100)
1 329
532
11
542
289
193
(2)
(1)
(24)
454
221
6
226
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 5 Principal subsidiaries
Maritime Services
Business office/country
Nature of business
Proportion of ordinary
shares directly held by
parent (%)
Proportion of ordinary
shares held by the
group (%)
Wilhelmsen Maritime Services AS
Wilhelmsen Ships Service AS
Lysaker, Norway
Lysaker, Norway
Maritime products and services
Maritime products and services
100%
Wilhelmsen Ship Management Ltd
Hong Kong
Ship management
Supply Services
NorSea Group AS
Holding and Investments
Tananger, Norway
Supply Services
Wilh. Wilhelmsen Holding Invest AS
Lysaker, Norway
Treasure ASA
Lysaker, Norway
Wilh. Wilhelmsen Holding Invest Malta Ltd
Valletta, Malta
Investment
Investment
Investment
100%
72.73%
100%
100%
100%
74.11%
100%
72.73%
100%
The group’s principal subsidiaries at 31 December 2017 are set out above. Unless otherwise stated, they have share capital consisting solely of ordinary shares
that are held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation or
registration is also their principal place of business.
57
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 6 Employee benefits
USD mill
Pay
Payroll tax
Pension cost
Other remuneration
Total employee benefits
Number of employees:
Group companies in Norway
Group companies abroad
Seagoing personnel Ship Management
Total employees
Average number of employees
*Including discontinued operations.
**Including Supply Services.
REMUNERATION OF SENIOR EXECUTIVES
USD thousand
2017
Group CEO
Group CFO
President and CEO Wilhelmsen Maritime Services AS**
President Wilhelmsen Ships Service
President Wilhelmsen Ship Management
CEO NorSea Group
2016
Group CEO
Group CFO until April 2016
Group CFO from April 2016
President and CEO Wilh. Wilhelmsen ASA
President and CEO Wilhelmsen Maritime Services AS
Note
2017
2016
10
193
26
10
22
252
193
36
14
36
279
2017**
2016*
1 053
4 115
9 460
497
4 087
9 176
14 628
13 760
14 194
15 117
Pay
Bonus
Pension
premium
*Other
remuneration
Total
Total in NOK
thousand
575
398
204
360
252
257
552
203
254
405
389
841
329
395
39
49
63
92
60
181
29
215
46
153
102
35
9
189
7
33
498
410
205
1 837
15 186
51
53
23
54
21
182
27
32
412
381
825
805
524
390
350
1 016
297
319
1 495
1 207
6 818
6 656
4 333
3 228
2 896
8 529
2 493
2 677
12 559
10 140
Remuneration is paid in NOK, which means that the USD amounts are not comparable from year to year. Rates of remuneration can be compared by taking account
of changes in the USD exchange rate.
*Mainly related to gross up pension expenses and company car.
**Until 30.06.2017.
58
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 6 Employee benefits
Remuneration of the board of directors
USD thousand
Diderik Schnitler (chair)
Helen Juell
Odd Rune Austgulen
Carl E. Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Bettina Banoun
2017
2016
79
45
45
45
45
0
0
77*
45
45
45
0
0
45
*2016 excluded board of directors fee and consulting agreement from discontinued operations, totalled USD 63 thousand.
The board’s remuneration for fiscal year 2017 will be approved by the general meeting 26 April 2018.
Remuneration of the nomination committee, for both Wilh. Wilhelmsen Holding ASA and Treasure ASA, totalled USD 21 thousand for 2017 (2016: USD 20 thousand
for Wilh. Wilhelmsen Holding ASA and Wilh. Wilhelmsen ASA).
Senior executives
Thomas Wilhelmsen – group CEO
Christian Berg – group CFO
Dag Schjerven – president and CEO Wilhelmsen Maritime Services AS until end June 2017
Bjoerge Grimholt – president Wilhelmsen Ships Service
Carl Schou – president Wilhelmsen Ship Management
John Stangeland – CEO NorSea Group
See note 2 Employee benefits in the parent company accounts, and note 19 Related party transaction.
LONG-TERM INCENTIVE SCHEME
The long-term incentive scheme (LTI) was introduced in 2015. Participants
are members of the group management team and the presidents for
Wilhelmsen Ships Service and Wilhelmsen Ship Management. For the group
CEO, maximum annual payment is 100% of base salary. For the remaining
participants, the maximum annual payment is 6–9 months of base salary.
The LTI focuses on long term shareholder value creation and is based on
positive development of the Wilhelmsen group’s value adjusted equity. The
ambitions set for the programme are to increase alignment with value creation
for shareholders, to attract, retain and motivate participants and drive long-
term group performance.
Settlement is based on return on value adjusted equity the last four years
leading up to the settlement. The value adjusted equity is determined by using
a “sum-of-the-parts” principle. For listed companies, value adjusted equity is
based on market price, while earnings multiples or net asset value are used for
non-listed entities.
The board sets value adjusted equity targets at the beginning of each four year
measurement period. Without consultation or agreement with the individual,
the board has the right to change or terminate the incentive programme after
each year.
Per 31 December 2017, a provision has been made equivalent to 34% of
maximum annual payment, covering provisions for 2017 related to the LTI
programme expiring on 31 December 2018. The provision has been calculated
based on value adjusted equity per 31 December 2017, risk free return and
standard deviation of historic annual value creation. No provision has been
made for the LTI programme expiring on 31 December 2020.
EXPENSED AUDIT FEE
USD mill
Statutory audit
Other assurance services
Tax advisory fee
Other assistance
Total expensed audit fee
The fees above cover the group expenses to all external auditors and tax advisors.
2017
2016
2.2
0.3
0.5
0.3
3.3
2.3
0.1
1.9
0.9
5.3
59
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 7 Property, vessels and other tangible assets
USD mill
TANGIBLE ASSETS
2017
Cost price 1.1
Acquisition
Business combination
Discontinued operations
Reclass/disposal
Currency translation differences
Cost price 31.12
Accumulated depreciation and impairment losses 1.1
Depreciation/amortisation
Depreciation discontinued operations
Business combination
Discontinued operations
Reclass/disposal
Currency translation differences
Accumulated depreciation and impairment losses 31.12
Carrying amounts 31.12
2016*
Cost price 1.1
Acquisition
Reclass/disposal
Currency translation differences
Cost price 31.12
Accumulated depreciation and impairment losses 1.1
Depreciation/amortisation
Reclass/disposal
Currency translation differences
Accumulated depreciation and impairment losses 31.12
Carrying amounts 31.12
Economic lifetime
Depreciation schedule
*Including discontinued operations.
Property
Vessels
Other
tangible assets
Total
tangible assets
90
4
479
13
(11)
575
(38)
(6)
(100)
(15)
1
(159)
416
92
1
(3)
90
(37)
(3)
1
(38)
51
2 457
38
(2 404)
(54)
(1)
36
(579)
(20)
(17)
582
17
1
(17)
19
2 439
11
7
2 457
(646)
(81)
148
(579)
189
21
57
(2)
(8)
12
269
(72)
(9)
(37)
1
5
(3)
(114)
155
215
49
(72)
(4)
189
(86)
(11)
24
1
(72)
2 736
26
574
(2 405)
(49)
(1)
880
(689)
(16)
(20)
(155)
584
7
(1)
(290)
590
2 746
61
(67)
(4)
2 736
(768)
(95)
173
1
(689)
1 878
117
2 047
10-50 years
Straight-line
30 years
Straight-line
3-10 years
Straight-line
60
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 7 Goodwill and other intangible assets
USD mill
INTANGIBLE ASSETS
2017
Cost price 01.01
Acquisition
Business combination
Discontinued operations
Reclass/disposal
Currency translation differences
Cost price 31.12
Accumulated amortisation and impairment losses 01.01
Amortisation/impairment
Amortisation/impairment discontinued operations
Business combination
Discontinued operations
Reclass/disposal
Currency translation differences
Accumulated amortisation and impairment losses 31.12
Carrying amounts 31.12
2016*
Cost price 01.01
Acquisition
Reclass/disposal
Currency translation differences
Cost price 31.12
Accumulated amortisation and impairment losses 01.01
Amortisation/impairment
Disposals
Currency translation differences
Accumulated amortisation and impairment losses 31.12
Carrying amounts 31.12
*Including discontinued operations.
Segment-level summary of the goodwill allocation:
Maritime Services
Discontinued operations
Total goodwill allocation
Goodwill
Other
intangible assets
Software
and licences
Total
intangible assets
118
14
(6)
6
133
(2)
(2)
131
194
14
(90)
118
(52)
49
1
(2)
116
16
16
(7)
(7)
9
23
(23)
0
(6)
6
0
0
91
3
(1)
(1)
4
95
(62)
1
(2)
(63)
32
109
6
(27)
2
91
(64)
(9)
11
(1)
(62)
28
2017
131
131
209
3
30
(7)
(1)
10
244
(64)
(7)
1
(2)
(72)
171
327
20
(140)
2
209
(122)
(9)
66
(64)
145
2016
110
6
116
In 2017, the group increased its ownership in NorSea Group from 40% to 74.11%. The purchase did not generate goodwill.
In 2017, Wilhelmsen Chemical (Maritime Services segment) aquired Kemetyl Konsument AS. The excess value of USD 19 million (nominated in NOK) was split into
intangible assets of USD 5 million and goodwill of USD 14 million.
In 2016, the group conducted no material aquisitions.
61
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 7 Goodwill and other intangible assets
Impairment testing of goodwill
In the Maritime Services segment, USD 131 million relate to business area
Ships Service mainly to the acquisition of Unitor ASA and Kemetyl. The
goodwill figures are originally calculated in NOK and USD (2016: NOK and USD).
No impairment was conducted in 2017 (Analogous for 2016). During 2016,
Callenberg was disposed of, and the goodwill originally in GBP from acquistion
of IES Callenberg Ltd was offset against the loss.
In connection with the disposal of Safety activities in 2016, USD 22
million (including currency effect) was offset against the gain, representing
approximately 20% of the original goodwill from the aquisition of Unitor ASA.
For the purpose of impairment testing, goodwill is allocated to the respective
cash generating unit which are Ships Service.
Value in use was determined by discounting the future cash flows generated
from the continuing operation of the units.
Cash flows were projected based on actual operating results and next year’s
forecast. Cash flows is based on a 5-year strategy plan period with terminal
value (terminal growth rate 1%) were extrapolated using the following key
assumptions:
USD/NOK
Discount rate
Growth rate
Increase in material cost
Increase in pay and other remuneration
Increase in other expenses
2017
7.80
9.0%
1-4%
1-4%
1-4%
1-4%
2016
8.30
9.0%
1-5%
3-3.5%
3-3.5%
1-3%
The values assigned to the key assumptions represent management’s
assessment of future trends in the maritime industry and are based on both
external sources and internal sources.
Had the WACC been 0.5 percentage point higher, the estimated value would be
reduced by USD 5 million for WSS net value. Had the WACC been 0.5 percentage
point lower, the estimated value would be increased by USD 5 million for WSS.
No reasonably possible change in any of the key assumptions on which
management has based its determination of the recoverable amount would
cause the carrying amount to exceed its recoverable amount.
Had the multiple, enterprise value / EBITDA been 1 point lower, the estimated
value would be reduced by USD 45 million for WSS net value. Had the multiple,
enterprise value / EBITDA been 1 point higher, the estimated value would be
increased by USD 45 million for WSS.
62
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 8 Tax
Ordinary taxation
The ordinary rate of corporation tax in Norway is 24% of net profit for 2017
(2016: 25%). Norwegian limited liability companies are encompassed by the
participation exemption method for share income. Thus, share dividends
and gains are tax free for the receiving company. Corresponding losses on
shares are not deductible. The participation exemption method does not
apply to share income from companies considered low taxed and that are
located outside the European Economic Area (EEA), and on share income from
companies owned by less than 10% resident outside the EEA.
For group companies located in the same country and within the same tax
regime, taxable profits in one company can be offset against tax losses and tax
loss carry forwards in other group companies. Deferred tax/deferred tax asset
has been calculated on temporary differences to the extent that it is likely that
these can be utilised in each country and for Norwegian entities the group has
applied a rate of 23% (2016: 24%).
The effective tax rate for the group will, from period to period, change
dependent on the group gains and losses from investments inside the
exemption method and tax exempt revenues from tonnage tax regimes.
Foreign taxes
Companies domiciled outside Norway will be subject to local taxation, either
on ordinary terms or under special tonnage tax rules. When dividends are paid,
local withholding taxes may be applicable. This generally applies to dividends
paid by companies domiciled outside the EEA.
USD mill
2017
2016
Allocation of tax income/(expense) for the year
Payable tax in Norway
Payable tax foreign
Change in deferred tax
Total tax income/(expense)
Reconciliation of actual tax cost against expected tax cost in accordance with the ordinary Norwegian income tax rate of 24%
Profit before tax
24% tax (2016: 25%)
Tax effect from:
Permanent differences
Non-taxable income
Share of profits from joint ventures and associates
Change in difference tax rate and currency translation
Withholding tax and payable tax previous year
Calculated tax (income)/expense for the group
(4)
(16)
4
(16)
253
61
16
(50)
(17)
5
2
16
(2)
(8)
(3)
(14)
151
38
1
(8)
(16)
1
1
14
Effective tax rate for the group
6.4%
9.5%
63
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 8 Tax
USD mill
Net deferred tax assets/(liabilities) at 01.01
Decrease due to discontinued operations
Increase due to business combinations
Currency translation differences
Tax charged to equity / acquisition
Income statement charge
Net deferred tax assets at 31.12
Deferred tax assets in balance sheet
Deferred tax liabilities in balance sheet
Net deferred tax assets at 31.12
2017
2016
63
(55)
2
(2)
4
12
18
(6)
12
72
3
5
(16)
63
75
(12)
63
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax
jurisdiction, is as follows:
USD mill
Deferred tax liabilities
At 31.12.2016*
Through income statement
Discontinued operations
Business combination
Deferred tax liabilities at 31.12.2017
At 31.12.2015
Through income statement
Currency translations
Deferred tax liabilities at 31.12.2016*
*Including tax liabilities related to discontinued operations of USD 50 mill.
Fixed assets
Tonnage
tax regime
Other
Total
(52)
(1)
37
(16)
(54)
(4)
4
(52)
(15)
15
0
(19)
12
4
(15)
(2)
3
(2)
(2)
(1)
(19)
(3)
7
(2)
(71)
3
50
(2)
(19)
(93)
6
14
(71)
64
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 8 Tax
USD mill
Deferred tax assets
At 31.12.2016**
Through income statement
Discontinued operations
Business combination
Currency translations
Deferred tax assets at 31.12.2017
At 31.12.2015
Through income statement
Charged directly to equity
Currency translations
Deferred tax assets at 31.12.2016**
Non current
assets and
liabilities
Current
assets and
liabilities
Tax losses carried
forward
Total
60
7
(57)
3
(1)
14
90
(24)
(2)
(3)
60
2
(4)
1
1
(1)
(7)
14
(5)
2
68
(3)
(51)
1
(1)
14
79
(18)
4
3
68
134
(106)
4
(2)
31
165
(28)
3
(6)
134
**Including tax assets related to discontinued operations of USD 106 mill.
Temporary differences related to joint ventures and associates are USD 0 for
the group, since all the units are regarded as located within the area in which the
exemption method applies, and no plans exist to sell any of these companies.
The Maritime Services segment will have shares in subsidiaries not subject to the
exemption method which could give rise to a tax charge in the event of a sale,
where no provision has been made for deferred tax associated with a possible
sale or dividend. No plans exist at present to dispose of such companies.
Note 9 Earnings per shares
Earnings per share taking into consideration the number of outstanding shares
in the period. The group acquired 100 000 own A shares during August 2011.
Basic / diluted earnings per share is calculated by dividing profit for the period
after minority interests, by average number of total outstanding shares.
Earnings per share is calculated based on 46 403 824 shares for 2016 and 2017.
65
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 10 Pension
The group’s defined contribution pension schemes for Norwegian employees
are with financial institutions providing solutions based on investment funds.
Subsidiaries outside Norway have separate schemes for their employees in
accordance with local rules, and the pension schemes are for the material part
defined contribution plans.
The group has “Ekstrapensjon”, a contribution plan for all Norwegian
employees with salaries exceeding 12 times the Norwegian National Insurance
base amount (G). The contribution plan replaced the group obligations, mainly
financed from operation. However, the group still has obligations for some
employees’ related to salaries exceeding 12 times the Norwegian National
Insurance base amount (G) mainly financed from operations.
Pension costs and obligations include payroll taxes. No provision has been
made for payroll tax in pension plans where the plan assets exceed the plan
obligations.
The liability recognised in the balance sheet in respect of the remaining defined
benefit pension plans is the present value of the defined benefit obligation at
the end of the reporting period less the fair value of plan assets. The defined
benefit obligations are calculated annually by independent actuaries using
the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows
using interest rates of corporate bonds that are denominated in the currency in
which the benefits will be paid, and that have terms to maturity approximating
to the terms of the related pension obligation.
In addition, the group has agreements on early retirement. These obligations
are mainly financed from operations.
In a few countries without deep markets in such bonds, the market rates on
government bonds are used.
The group has obligations towards some employees in the group’s senior
executive management. These obligations are mainly covered via group
annuity policies in Storebrand.
Actuarial gains and losses arising from experience adjustments and changes
in actuarial assumptions are charged or credited to equity in other
comprehensive income in the period in which they arise.
Number of people covered by pension schemes at 31.12*
2017
2016
2017
2016
Funded
Unfunded
In employment
On retirement (inclusive disability pensions)
Total number of people covered by pension schemes
23
139
162
4
12
16
4
27
31
3
699
702
*2016 both funded and unfunded consists of 2 in employment related to discontinued operations and 687 on retirement related to discontinued operations.
Financial assumptions for the pension calculations:
2017
2016
31.12.2017
31.12.2016
Expenses
Commitments
Discount rate
Anticipated pay regulation
Anticipated increase in National Insurance base amount (G)
Anticipated regulation of pensions
2.40%
2.25%
2.25%
0.40%
2.50%
2.25%
2.25%
0.60%
2.30%
2.00%
2.00%
0.10%
2.30%
2.00%
2.00%
0.10%
66
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 10 Pension
USD mill
Pension expenses
2017
2016*
Funded
Unfunded
Total
Funded
Unfunded
Total
Service cost
Termination gain defined benefit plan
Cost of defined contribution plan
Net pension expenses
*Excluding discontinued operations
(4)
13
10
1
1
1
(4)
13
10
14
14
1
1
1
14
14
USD mill
Remeasurements – Other comprehensive income
2017
2016
Total remeasurements included in OCI
(0)
0
USD mill
Pension obligations
Defined benefit obligation at end of prior year
Decrease due to discontinued operations
Increase due to business combination
Effect of changes in foreign exchange rates
Service cost
Termination gain defined benefit plan
Interest expense
Benefit payments from plan
Benefit payments from employer
Remeasurements – change in assumptions
Pension obligations 31.12
Fair value of plan assets
Fair value of plan assets at end of prior year
Decrease due to discontinued operations
Increase due to business combination
Effect of changes in foreign exchange rates
Interest income
Employer contributions
Benefit payments from plan
Gross pension assets 31.12
2017
2016
71
(43)
19
2
1
(4)
1
(1)
45
7
(3)
16
1
1
(1)
22
73
2
2
(3)
(2)
71
6
1
1
7
67
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 10 Pension
USD mill
2017
2016**
Total pension obligations
Funded
Unfunded
Total
Funded
Unfunded
Total
Service cost
Total pension obligation
Fair value of plan assets
Net liability (asset)
1
25
22
3
2
19
19
3
45
22
22
1
11
7
4
2
60
60
3
71
7
63
Premium payments in 2018 are expected to be USD 0.5 million (2017: USD 5.0 million).
Payments from operations are estimated at USD 1.0 million (2017: USD 4.1 million).
USD mill
Historical developments
31.12.2017
31.12.2016**
31.12.2015
31.12.2014
31.12.2013
31.12.2012
Gross pension obligations, including payroll tax
Gross pension assets
Net recorded pension obligations
(45)
22
(23)
(71)
7
(63)
(73)
6
(67)
(109)
17
(92)
(213)
105
(108)
(206)
107
(99)
**Net liability at 31.12.2016 and years before includes discontinued operations.
Note 11 Combined items, balance sheet
USD mill
OTHER NON CURRENT ASSETS*
Non current share investments
Related party non current assets
Other non current assets**
Total other non current assets
OTHER CURRENT ASSETS*
Account receivables
Financial derivatives
Restricted cash
Other current assets
Total other current assets
OTHER NON CURRENT LIABILITIES*
Financial derivatives
Other non current liabilities***
Total other non current liabilities
OTHER CURRENT LIABILITIES*
Account payables
Financial derivatives
Other current liabilities
Total other current liabilities
Note
17
17/20
17
20
17
15
17
17
20
17
2017
2016
3
34
37
217
2
1
81
302
112
112
206
13
122
341
17
29
47
163
10
1
94
268
128
105
233
164
35
140
340
*Current assets and current liabilities are due within 12 months. Non current
assets and non current liabilities are due in more than 12 months.
**As part of the settlement of the sale of Callenberg group, Maritime Services
agreed a vendor note and an earn out of USD 16.5 million and USD 6 million,
respectively. The vendor note and the earn out is accounted for as long term
receivable. See note 19.
***Maritime Services has 609 623 (2016: 586 000) cylinders booked as other
tangible asset in the balance sheet, see note 7. The cylinders are valued at USD
107 million (2016: USD 95 million). These cylinders are partly in the group’s own
possession and partly on board customers vessels. Most customers have paid
a deposit for the cylinders they have onboard their vessels. The total deposit
liability booked is USD 86 million (2016: USD 97 million).
If cylinders are not returned within 48 months statistics show that the cylinders
will not be returned and the net between deposit value and booked value is
booked to the income statement.
68
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 11 Combined items, balance sheet
ACCOUNT RECEIVABLES
At 31 December 2017, USD 15 million (2016: USD 17 million) in account receivables had fallen due but not been subject to impairment. These receivables are
related to a number of separate customers. Historically, the percentage of bad debts has been low and the group expects the customers to settle outstanding
receivables. Receivables fallen due but not subject to impairment have the following age composition:
USD mill
2017
2016
Aging of account receivables past due but not impaired
Up to 90 days
90-180 days
Over 180 days
Movements in group provision for impairment of account receivables are as follows
Balance at 01.01
Net provision for receivables impairment
Balance 31.12
Account receivables per segment
Maritime Services
Supply services
Discontinued operations
Total account receivables
See note 17 on credit risk.
9
6
8
(2)
6
170
47
217
8
9
6
2
8
159
4
163
ACCOUNT PAYABLES
At 31 December 2017, USD 17 million (2016: USD 10 million) in account payables had fallen due. These payables refer to a number of separate suppliers and are
related to general business. The group expects to settle outstanding payables. Payables fallen due have the following age composition:
USD mill
Account payables per segment
Maritime Services
Supply services
Holding and Investments
Discontinued operations
Total account payables
See note 17 on credit risk.
2017
2016
183
22
1
206
161
1
2
164
69
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 12 Available-for-sale assets
USD mill
Available-for-sale financial assets
At 01.01
Acquistion
Sale during the year
Transfer from equity method measurement – Hyundai Glovis
Mark to market valuation
Currency translation adjustment
Total available-for-sale financial assets
Available-for-sale financial assets
Qube Holdings Limited
Kaplan Equity Limited (KEL)
Survitec UK Ltd.
Hyundai Glovis
Total Available-for-sale financial assets
2017
2016
209
12
(11)
573
18
801
132
11
83
575
801
122
91
(7)
4
(2)
209
123
6
79
209
Qube Holdings Limited is a diversified Australian based logistics and
infrastructure company providing logistics services for clients in both import
and export cargo supply chains. Qube is listed on the Australian Securities
Exchange (ASX). As per 31 December 2017, Wilhelmsen held 65 million shares
in Qube (approximately 4% of total), of which 35 million were mortgaged. See
note 16.
Survitec group holds market-leading positions worldwide in marine, offshore,
defence and aerospace survival technology. The company is majority owned
by Onex Corporation, a private equity firm. Changes in fair value of the
investment in Survitec has been recognised through the income statement.
Hyundai Glovis Co., Ltd., is a global Korean based general logistics and
distribution company, providing business service such as logistics, marine
transportation, KD, used cars and trading. Glovis is listed on the Korean Stock
Exchange. As per 31 December 2017, Treasure ASA held 4.5 million shares in
Glovis (12.04% of total). Treasure ASA is listed on the Oslo Stock Exchange. As
per 31 December 2017, Wilh. Wilhelmsen Holding ASA owned 72.7% of Treasure
ASA. The change in measurement of the shares in Hyundai Glovis from equity
method to available-for-sale financial asset is due to loss of significant influance
following the discontinued operation related to previous ownership in Wilh.
Wilhelmsen ASA.
Available-for-sale financial assets are held in subsidiaries with different
reporting currency and thereby creating translation adjustments.
Effective from 01.01.2018 all available-for-sale assets held 31.12.2017 will be
measured at fair value throuh the income statement in accordance with IFRS 9.
Related fair value gains of USD 2.8 mill will have to be transferred from the
available-for-sale financial assets reserve to retained earnings on 1 January 2018.
Note 13 Inventories
USD mill
Inventories
Raw materials
Goods/projects in process
Finished goods/products for onward sale
Luboil
Total inventories
Obsolescence allowance, deducted above
Note 14 Current financial investments
USD mill
Market value current financial investments
Equities
Bonds
Total current financial investments
2017
2016
8
1
72
81
2
6
1
56
3
65
2
2017
2016
53
48
101
100
185
285
The fair value of all equity securities, bonds and other financial assets is based on their closing prices in an active market.
The net unrealised gain/(loss) at 31.12
15
2
The parent company’s portfolio of financial investments USD 101 million is held as collateral within a securities’ finance facility. See note 16.
70
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 15 Cash, restricted bank deposits and undrawn credit facilities
USD mill
Payroll tax withholding account
2017
2016
1
1
Companies that do not have payroll tax withholding account use bank guarantees. As per 31.12.2017 total guarantees amounted to USD 6.8 million (2016: USD 3.1
million).
Undrawn credit facilities
600
374
Undrawn credit facilities are key part of the liquidity reserve, amounting to USD 600 million at 31 December 2017 (2016: USD 374 million – adjusted for
discontinued operations).
Cash and cash equivalents
Banks
Deposit banks 3 months
Total cash and cash equivalents
167
167
278
17
296
Note 16 Interest-bearing debt
USD mill
Interest-bearing debt
Bank loan
Interest-bearing debt discontinued operations
Total interest-bearing debt
Book value of collateral, mortgaged and leased assets:
Available-for-sale-financial assets, current financial investments
Investment in NorSea Group AS
Assets NorSea Group AS
Discontinued operations (vessels)
Total book value of collateral, mortgaged and leased assets
Note
2017
2016
17
14
601
601
171
112
693
976
213
1 320
1 533
144
98
1 814
2 056
The bank debt which partly finances the investment in NorSea Group AS utilizes the investment itself together with financial assets available-for-sale as collateral.
The parent company’s portfolio of financial investments is held as collateral within a securities’ finance facility.
Repayment schedule for interest-bearing debt
Due in year 1
Due in year 2
Due in year 3
Due in year 4
Due in year 5 and later
Interest-bearing debt discontinued operations
Total interest-bearing debt
108
25
22
22
425
601
34
180
1 320
1 533
17
The overview above shows the actual maturity structure, with the amount due
in year one as the first year’s instalment classified under other current liabilities.
Loan agreements entered into by the group contain financial covenants
relating to liquidity, leverage and value-adjusted equity. The group was in
compliance with all covenants at 31 December 2017.
71
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 16 Interest-bearing debt
USD mill
The group net interest-bearing debt
Non current interest-bearing debt
Current interest-bearing debt
Interest-bearing debt discontinued operations
Total interest-bearing debt
Cash and cash equivalents
Current financial investments
Cash and cash equivalents and current financial investments discontinued operations
Net interest-bearing debt
Net interest-bearing debt in joint ventures
Non current interest-bearing debt
Interest-bearing debt discontinued operations
Total interest-bearing debt in joint ventures
Cash and cash equivalents
Cash and cash equivalents discontinued operations
Net interest-bearing debt in joint ventures
USD mill
Guarantee commitments
Guarantees for group companies
Discontinued operations
Total
The carrying amounts of the group’s borrowings are denominated in the following currencies
USD
NOK
DKK
Discontinued operations
Total
See otherwise note 17 for information on financial derivatives (currency hedges) relating to interest-bearing debt.
Note
2017
2016
14
4
4
493
108
601
167
101
333
104
104
19
85
213
1 320
1 533
215
83
283
953
761
761
181
580
2017
2016
70
70
196
372
33
601
72
1 132
1 204
180
34
1 320
1 533
72
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 16 Interest-bearing debt
USD mill
Net debt
Cash and cash equivalents
Liquid investments*
Borrowings – repayable within one year
Borrowings – repayable after one year
Discontinued operations
Net debt
Cash and cash equivalents and liquid investments
Gross debt – fixed interest rates
Gross debt – variable interest rates
Discontinued operations
Net debt
Note
2017
2016
167
101
(108)
(493)
(333)
215
83
(213)
(1 037)
(953)
268
297
(601)
(333)
(213)
(1 037)
(953)
*Liquid investments comprise current investments that are traded in an acive market, being the group’s financial assets held at fair value through the income
statement.
USD mill
Net debt 01.01.2017
Decrease by discontinued operations
Increase by business combination NorSea Group
Reclass
Cash flows
Foreign exchange adjustments
Net debt 31.12.2017
Other assets
Liabilites from financing activities
Liquid
invest-
ments
83
Cash/
bank
overdrafts
497
(121)
5
(215)
18
Finance
leases
due within
1 year
Finance
leases
due after
1 year
Borrow.
due
within
1 year
Borrow.
due
after
1 year
(2)
(11)
2
(115)
112
(106)
3
(1 418)
1 155
(341)
106
16
(1)
167
101
(2)
(9)
(106)
(483)
Total
(953)
1 146
(347)
(178)
(1)
(333)
73
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 17 Financial risk
The group has exposure to the following financial risks from its ordinary
operations:
• Market risk
- Foreign exchange rate risk
- Interest rate risk
- Equity market risk
• Credit risk
• Liquidity risk
MARKET RISK
The group has established hedging strategies to mitigate risks on material
exposures originating from movements in currencies and interest rates. This is
compliant with the financial strategy approved by the board of directors.
Changes in the market value of financial derivatives are recognised through the
income statement with the exception of the Supply Services segment, where
derivatives are recognised in other comprehensive income.
Associates hedge their own exposures. The group records the effects of
realised and unrealised changes in financial derivatives held in these entities in
accordance with the equity method under “share of profit from joint ventures
and associates”. The material joint ventures and associates are Coast Center
Base in Supply Services segment and WWL ASA group in Holding and
Investments segment.
Foreign exchange rate risk
The group is exposed to currency risk on revenues and costs in non-functional
currencies, mainly USD (transaction risk) and balance sheet items denominated
in currencies other than non-functional currencies, mainly USD (translation
risk). The group’s largest individual foreign exchange exposure is NOK against
USD. Other currency exposures include EUR, SGD and KRW.
Transaction risk hedging (cash flow)
The group’s operating segments are responsible for hedging their own material
transaction risk. Within Maritime Services, USDNOK and EURUSD exposures
are subject to a systematic 3-year rolling hedge program. Hedge programs
utilize a portfolio of currency options and currency forwards. Remaining
exposures are non-material and not hedged.
Translation risk hedging (balance sheet)
The group’s policy for mitigating translation risk is to match the denomination
currency of assets and liabilities to as large extent as possible.
FX sensitivites (translation risk)
The group monitors the net exposure and calculate sensitivities on a regular
basis, based on average market volatility per currency cross. Sensitivities
showing a potential accounting effect below USD 5 million on group level are
considered non-material.
Through income statement
Net currency gain/(loss) – Operating currency
Net currency gain/(loss) – Financial currency
Currency derivatives – realised
Currency derivatives – unrealised
Net financial currency
Through other comprehensive income
Currency translation differences through other comprehensive income
Total net currency effect
Note
2017
2016
1
7
(2)
9
14
47
61
(14)
(6)
(21)
51
30
74
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 17 Financial risk
For Maritime Services, Supply Services and Holding and Investments, the
material translation risk are booked to other comprehensive income due to
the functional currency for the majority of the entities being different from the
reporting currency USD.
The group’s segments perform sensitivity analyses on the unhedged part of
the transaction risk on a regular basis.
The portfolio of derivatives used to hedge the group’s transaction risk
(described above), exhibit the following income statement sensitivity:
USD mill
Sensitivity
Income statement sensitivities of economic hedge program
Transaction risk
USD/NOK spot rate
Income statement effect (post tax)
EUR/USD spot rate
Income statement effect (post tax)
(Tax rate used is 24% that equals the Norwegian tax rate)
(20%)
(10%)
0%
10%
20%
6.97
16
1.08
(3)
7.44
8
1.14
(1)
8.60
0
1.20
0
9.46
(6)
1.26
2
10.32
(13)
1.32
4
Interest rate risk
The group’s strategy is to hedge material parts of the interest-bearing debt
against rising interest rates. The group’s segments have their own policies on
hedging of interest rate risk, hence hedge ratios will fluctuate as the capital
intensity varies.
Wthin Holding and Investments and Maritime Services respectively, no interest
rate hedging is implemented due to low net interest-bearing debt (NIBD), whereas
Supply Services has hedged about 50% of its NIBD as of 31 December 2017.
USD mill
Maturity schedule interest rate hedges (nominal amounts)
Due in year 1
Due in year 2
Due in year 3
Due in year 4
Due in year 5 and later*
Total interest rate hedges
*Per 31.12.2016, 760 million was related to discontinued operations
2017
2016
25
13
25
81
144
100
150
230
50
230
760
The Supply Services segment has entered swaption contracts with a notional
value of about USD 16 million, with expiry date in 2022.
The average remaining term of the existing total debt portfolio is approximately
5 years. The hedges in place for a portion of the debt has an average remaining
term of approximately 6 years.
Depending on interest rate levels on the expiry date, exercising the swaptions
by the counterparties will extend the maturity of expiring swaps until 2032, but
will not increase the notional value of the existing swap portfolio.
75
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 17 Financial risk
Interest rate sensitivity
The group’s interest rate risk originates from differences in duration between
assets and liabilities. On the asset side, bank deposits and investments in
interest-bearing instruments are subject to risk from changes in the general
level of interest rates, primarily in USD. On the liability side, the mix of debt
with attached fixed or floating interest rates – in combination with financial
derivatives on interest rates (plain vanilla interest rates swaps and swaptions)
– are exposed to changes in the level and curvature of interest rates.
The group use the weighted average duration of interest-bearing assets,
liabilities and financial interest rate derivatives to compute the group’s
sensitivity towards changes in interest rates. This methodology differs from
the accounting principles, as only the changes in market value of interest rate
derivatives are recognised as a financial item through the income statement (or
for Supply Services against “Other comprehensive income”). Outstanding debt
is booked at the respective outstanding nominal value.
Sensitivities resulting in a potential accounting effect below USD 5 million on
group level are considered non-material. On 31 December 2017, the group has
no material exposure subject to interest rate risk.
USD mill
Interest rate derivatives
Maritime Services
Supply Services
Holding and Investments
Total interest rate derivatives
Currency derivatives
Maritime Services
Supply Services
Holding and Investments
Total currency derivatives
Total market value of financial derivatives
Book value equals market value.
2017
2016
Assets
Liabilities
Assets
Liabilities
11
11
1
1
1
13
0
2
2
2
0
1
1
2
2
0
9
1
10
10
76
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 17 Financial risk
Equity market risk
The group holds several assets listed on equity markets as well as a defined
portfolio of financial assets for a proportion of the group’s short-term liquidity.
Below table summarizes the equity market sensitivity towards the market value
of listed equities:
USD mill
Change in equity prices
Change in market value
Income statement effect
(Tax rate used is 24% that equals the Norwegian tax rate)
(20%)
(91)
(10%)
(46)
0%
0
10%
46
20%
91
CREDIT RISK
Credit risk is the risk of financial loss to the group if a customer or counterparty
to a financial derivative fails to meet its contractual obligations. The risk
originates primarily from the group’s customer receivables, financial
derivatives used to hedge interest rate risk or foreign exchange risk, as well as
investments, including bank deposits.
Other credit exposures
The disposal of Technical Services and Callenberg in 2016 generated a
settlement consideration including subordinated debt certificates, vendor note
and earn-out note with credit exposure towards the buyers of these entities.
On 31 December 2017 these credit risks are considered non-material and
supportive of the accounting value in the general ledger.
Loans and receivables
Trade receivables
The group’s exposure to credit risk on its receivables varies across segments
and subsidiaries.
Within the Maritime Services and Supply Services, the global customer
base provides a certain level of diversification with respect to credit risk on
receivables. The segment monitors and manages its credit risk on a regular
basis. Reference is made to note 11.
Given the negative market sentiment in several shipping and offshore
segments, some customers are currently facing increased financial difficulties
relative to previous years, implying that the group’s credit risk has increased
somewhat, but is still regarded as moderate.
Bank deposits and financial derivatives
The group maintains cash management operations and trades financial
derivatives with a selection of financially solid banks (as determined by their
official credit ratings), limiting the corresponding credit risk.
No material loans or receivables were past due or impaired at 31 December
2017 (analogous for 2016).
Guarantees
The group’s policy is that no financial guarantees are provided by the parent
company. However, financial guarantees are provided within Maritime Services
and Supply Services. See note 16 for further details.
Credit risk exposure
The carrying amount of financial assets represents the maximum credit
exposure.
The maximum exposure to credit risk at the reporting date was:
USD mill
Exposure to credit risk
Financial derivatives
Account receivables
Financial investments
Other non current assets
Other current assets
Cash and bank deposits
Total exposure to credit risk
Note
2017
2016
11
11
14
11
11
15
2
217
48
37
81
167
552
10
163
185
47
94
296
793
77
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 17 Financial risk
LIQUIDITY RISK
The group’s approach to managing liquidity is to secure sufficient liquidity to
meet its liabilities, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the group’s reputation.
The group’s liquidity risk is low in that it holds significant liquid assets in
addition to credit facilities with the banks.
At 31 December 2017, the group had excess of USD 268 million (2016: USD
297 million) in liquid assets, in addition to USD 600 million (2016: USD 374
million) in undrawn credit facilities. Figures for 2016 have been adjusted for
discontinued operations.
USD mill
Undiscounted cash flows financial liabilities 2017
Mortgages
Finance lease liabilities
Bank loan
Financial derivatives
Total undiscounted cash flow financial liabilities
Current liabilities (excluding next year's instalment on interest-bearing debt)
Total gross undiscounted cash flows financial liabilities 31.12.2017
Undiscounted cash flows financial liabilities 2016
Mortgages
Finance lease liabilities
Bonds
Bank loan
Financial derivatives
Total undiscounted cash flow financial liabilities
Current liabilities (excluding next year's instalment on interest-bearing debt)
Total gross undiscounted cash flows financial liabilities 31.12.2016
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years
Later than
5 years
43
11
54
13
121
274
395
156
13
5
66
240
331
571
25
43
25
25
229
13
87
34
57
421
421
43
43
365
39
105
179
42
731
731
229
196
425
425
348
185
13
2
548
548
78
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 17 Financial risk
COVENANTS
The group’s bank and lease financing is subject to financial or non-financial
covenant clauses related to one or several of the following:
• Limitation on the ability to pledge assets
• Change of control
• Minimum liquidity
• NIBD / EBITDA or equivalent Debt-Service Coverage-Ratios
• Loan-to-Value (Real Estate, Financial Assets)
The group was in compliance with all loan covenants at 31 December 2017.
CAPITAL RISK MANAGEMENT
The group’s overall policy is to maintain a strong capital base to maintain
investor, creditor and market confidence and to sustain future business
development. The board of directors monitors various return metrics, where
Return on Equity and dividend levels are predominant.
The group seeks to maintain a balance between the potential higher returns
stemming from higher levels of financial gearing and the advantages of a
strong balance sheet. The financial strategy and setting of thresholds for
capital structure, return requirements and risk (and corresponding metrics)
will be revised by the board of directors during 2018, following the significant
structural changes taking place in 2017.
FAIR VALUE ESTIMATION
The fair value of financial instruments traded in an active market is based on
quoted market prices at the balance sheet date. The fair value of financial
instruments not traded in an active market (over-the-counter contracts) is
based on third party quotes. These quotes use observable market rates for
price discovery. Specific valuation techniques used by financial counterparties
(banks) to value financial derivatives include:
• Quoted market prices or dealer quotes for similar derivatives
• The fair value of interest rate swaps is calculated as the net present value of
the estimated future cash flows based on observable yield curves
• The fair value of interest rate swap option (swaption) contracts is determined
using observable volatility, yield curve and time-to-maturity parameters at
the balance sheet date, resulting in a swaption premium. Options are typically
valued by applying the Black-Scholes model
• The fair value of forward foreign exchange contracts is determined using
forward exchange rates at the balance sheet date, with the resulting value
discounted back to net present value
• The fair value of foreign exchange option contracts is determined using
observable forward exchange rates, volatility, yield curves and time-to-
maturity parameters at the balance sheet date, resulting in an option premium.
Options are typically valued by applying the Black-Scholes model.
The carrying value less impairment provision of receivables and payables are
assumed to approximate their fair values. The group estimates the fair value of
financial liabilities for disclosure purposes by discounting the future contractual
cash flows at current market interest rates available to the group for similar
financial derivatives.
USD mill
Interest-bearing debt
Mortgages
Finance lease liabilities
Bank loan
Note
Fair value
Book value
340
11
254
605
882
238
193
213
340
11
250
601
886
239
196
213
Total interest-bearing debt 31.12.2017
16
Mortgages
Finance lease liabilities
Bonds
Bank loan
Total interest-bearing debt 31.12.2016
16
1 525
1 533
79
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 17 Financial risk
The fair value is based on cash flows discounted using a rate based on market rates including margins and are within level 2 of the fair value hierarchy.
USD mill
Financial assets at fair value
Equities
Bonds
Financial derivatives
Available-for-sale financial assets
Total financial assets 31.12.2017
Financial liabilities at fair value
Financial derivatives
Total financial liabilities 31.12.2017
Financial assets at fair value
Equities
Bonds
Financial derivatives
Available-for-sale financial assets
Total financial assets 31.12.2016
Financial liabilities at fair value
Financial derivatives
Total financial liabilities 31.12.2016
USD mill
Changes in level 3 instruments
Opening balance 01.01
Acquisition
Transfer to level 3
Gain and loss recognised through other comprehensive income
Gain and loss recognised through income statement
Closing balance 31.12
Level 1
Level 2
Level 3
Total
52
48
707
807
0
100
185
123
408
0
2
2
13
13
10
10
163
163
1
93
94
0
86
86
0
52
48
2
801
904
13
13
100
185
10
209
504
163
163
2017
2016
86
4
1
3
94
80
6
86
The fair value of financial instruments traded in active markets is based on
quoted market prices at the balance sheet date. A market is regarded as active
if quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm’s
length basis.
The fair value of financial instruments not traded in an active market
(over-the-counter contracts) are based on third party quotes (Mark-to-Market).
These quotes use observable market rates for price discovery. The different
techniques typically applied by financial counterparties (banks) have been
described above. These instruments – FX and IR derivatives – are included in
level 2.
The quoted market price used for financial assets held by the group is the
current close price. These instruments are included in level 1. Instruments
included in level 1 at the end of 2017 are liquid investment grade bonds and
listed equities (analogous for 2016).
If one or more of the significant inputs are not based on observable market
data, the derivatives are in level 3.
80
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 17 Financial risk
Financial instruments by category
USD mill
Assets
Other non current assets
Available-for-sale financial assets
Current financial investments
Current financial derivatives
Other current assets
Cash and cash equivalent
Assets at 31.12.2017
Liabilities
Non current interest-bearing debt
Current interest bearing liabilities
Non current financial derivatives
Current financial derivatives
Other non current liabilities
Other current liabilities
Liabilities 31.12.2017
Assets
Other non current assets
Available-for-sale financial assets
Current financial investments
Current financial derviatives
Other current assets
Cash and cash equivalent
Assets at 31.12.2016
Liabilities
Non current interest-bearing debt
Current interest bearing liabilities
Non current financial derivatives
Current financial derivatives
Other non current liabilities
Other current liabilities
Liabilities 31.12.2016
Note
Loans and
receivables
Assets at fair
value through
the income
statement
Available-
for-sale
financial asset
Other
Total
11
12
14
11
11
15
Note
16
16
11
11
11
11
23
298
167
488
3
101
2
801
106
801
15
1
16
Liabilites at fair
value through
the income
statement
Other financial
liabilites at
amortised cost
493
108
328
929
13
112
125
40
801
101
2
300
167
1 410
Total
493
108
13
112
328
1 054
Note
Loans and
receivables
Assets at fair
value through
the income
statement
Available-
for-sale
financial asset
Other
Total
11
12
14
11
11
15
Note
16
16
11
11
11
11
40
256
296
592
209
285
10
295
209
7
1
8
Liabilites at fair
value through
the income
statement
Other financial
liabilites at
amortised cost
1 418
115
305
1 838
128
35
105
268
47
209
285
10
258
296
1 104
Total
1 418
115
128
35
105
305
2 106
81
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 18 Operating lease commitments
The business combination increasing the ownership in NorSea Group (see note
19) included lease agreements for variuos properties on operating leases. The
rental agreements are subject to varying lifespan with the longest agreement
ending on 1 July 2064.
In addition the group has:
Sale and leaseback agreement for the office building, Strandveien 20 for 15 years
from 1 October 2009, with an option to extend for additional 5 years + 5 years.
The commitment related to this is as set out below (nominal amounts):
USD mill
Due in year 1
Due in year 2
Due in year 3
Due in year 4
Due in year 5 and later
Nominal amount of operating lease commitments
*Per 31.12.2016, 111 million was related to discontinued operations.
Lease agreement for the office building (including storage and parking)
Strandveien 12. The lease run over 10 years from 1 June 2006, with an option
to extend for additional 5 years. The option to extend was exercised in 2016,
with the new 5 years the lease agreement runs until 2021.
2017
2016*
22
22
23
22
124
214
29
29
29
29
44
159
In connection to the daily operation the group has additional lease agreements for office rental, office equipment and other fixed assets.
The additional lease agreements are not material for the group.
82
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 19 Business combinations
With effect from 26 September 2017, the group increased its shareholding in
NorSea Group from 40% to approximately 72%. Eidesvik Eiendomsinvest AS
and Simon Møkster Eiendom AS will hold approximately 12% each, while
management in NorSea Group controls the remaining 4%. In the end of the
year, Wilhelmsen additionally acquired a small portion of management control-
led shares, 2.11%, bringing the total Wilhelmsen shareholding to 74.11%.
The acquistion balance from NorSea Group is consolidated at the end of Sep-
tember 2017 and a part of the segment ”Supply Services”. With effect from the
fourth quarter 2017, NorSea Group will be reported as a subsidiary in the group
accounts. Total income, cost and balance sheet items of NorSea Group will
then be consolidated on a 100% basis, with non-controlling interests deducted
on a net basis.
Total consideration for the Wilhelmsen’s additional 32% investment in NorSea
Group is NOK 545 million (USD 70 million). The acquistion from management
increased the total consideration with USD 4 million.
NorSea Group has previously been reported as associate in the group
accounts. Accounting loss of the disposal of associate is USD 40 million,
mainly due to change in NOK/USD from 2012 to 2017.
The investment is financed through existing liquidity and funding reserves. The
group originally acquired 35.4% of the shares in NorSea Group in July 2012,
and increased to 40% ownership in April 2014. In addition, the group has USD
18 million in shareholder loans to NorSea Group.
The purchase price allocation is preliminary due to final valuation of fair value
of assets.
Details of net assets acquired and goodwill are as follows:
USD mill
Cash
Option fair value*
Non-controlling interests
Fair value of previously held equity interest
Total purchase consideration
Fair value of net identifiable assets acquired (see below)
Goodwill
*The option is related to remaining part of the shares, currently held by non controlling interests.
The preliminary purchase price allocation are as follows:
USD mill
Intangible assets
Property, fixtures and vessels
Other long-term assets/ associate and joint arrangements
Other current assets
Cash and cash equivalents
Non current interest-bearing debt
Other non-current liabilities
Other current liabilities
Net identifiable assets acquired
74
2
56
80
211
211
0
Fair value
10
417
185
67
5
(352)
(4)
(118)
211
Summary of acquisition
The group recognises non-controlling interests in an acquired entity at fair value This decision is made on an acquisition-by-acquisition basis. For the non-controlling
interests in NorSea Group, the group elected to recognise the non-controlling interests in at its proportionate share of the acquired net identifiable assets.
83
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 19 Business combinations
Revenue and profit contribution
The acquired business contributed revenues of USD 53 million and net profit
before non-controlling interests of USD 3.9 million to the group for the period
from 26 September to 31 December 2017.
If the acquisition had occurred on 1 January 2017, consolidated pro-forma
revenue and profit before non-controlling interests for the period from 1 January
to 26 September 2017 would have been USD 186 million and USD 12 million
respectively.
Purchase consideration – cash outflow
Cash consideration September 2017
Less balance acquired
– Cash
– Net
Net outflow of cash => investing activities
74
5
5
(69)
Acquisition-related costs
Acquisition-related costs of USD 1 million that were not directly attributable to the issue of shares are included in other expenses in income statement and in
operating cash flows in the statement of cash flows.
Reported net profit from NorSea Group as an associate in 2016 and up to conolidation 26 September 2017 are:
USD mill
Net profit from NorSea Group as an associate a part of segment Holding and Investments
Loss upon consolidation of the former NorSea Group
26.09.2017
31.12.2016
5
(40)
12
Sale of Wilhelmsen safety activities
On 23 June 2016, Wilhelmsen Maritime Service agreed the transfer of all of
its safety activities (100% of shares in Wilhelmsen Technical Solution AS and
safety division in Wilhelmsen Ships Service group) to Survitec group Ltd. The
sale was completed on 30 November 2016 resulting in WMS holding a 20%
stake in Survitec UK through shares and shareholder loans value of USD 79
million. In addition to the shares and loans, WMS received USD 108 million
in cash at closing. The net gain was USD 71 million.
The recycling of net urealised currency loss of USD 42 million (Callenberg
group and Wilhelmsen Safety activities) was included in the gain and presented
as part of the other comprehensive income in 2016.
The total revenue in 2016 for Callenberg group and Wilhelmsen safety activity
were approximately USD 315 million.
Kemetyl Konsument Norge AS
On 1 April 2017 the group acquired Kemetyl Konsument Norge AS. The
investment cost was approximately USD 20 mill.
There were no material acquisitions in the group in 2016.
SIGNIFICANT DISPOSALS
Demerger Treasure ASA
Treasure ASA and the subsidiary Den Norske Amerikalinje AS, was demerged
from WWASA and the company was listed at 8 June 2016. Treasure ASA hold
12.04% ownership in the listed company Hyundai Glovis. Treasure ASA group is
a part of Holding and Investment segment.
Merger WWASA
On 4 April 2017, the subsidiary Wilh. Wilhelmsen ASA (WWASA) was merged
with Wall Roll AB. After the merger the group own 37.8% of the Wallenius
Wilhelmsen Logistics ASA. The profit in WWASA previous periods is presented
as discontinued operations in WWH, see note 3.
Sale of Callenberg group
On 11 August 2016, Wilhelmsen Maritime Services agreed the sale of
Callenberg Technology group to Trident Maritime Systems. The transaction
was finalised on 3 October 2016. WMS received a net sale price of
approximately USD 65 million, of which USD 10 mill received in dividend before
closing, USD 32 million was in cash at closing, and a seller-financing package
of USD 23 million consisting of a vendor note of USD 16.5 million and an earn
out of USD 6 million. The net loss was USD 15 million.
84
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 20 Related party transaction
The ultimate owner of the group is Tallyman AS, which controls about 60%
of voting shares of the group. The beneficial owners of Tallyman AS are the
Wilhelmsen family and Mr Wilhelm Wilhelmsen controls Tallyman AS.
Remuneration to Mr Wilhelm Wilhelmsen for 2017 totalled USD 323 thousand
(2016: USD 315 thousand) whereof USD 93 thousand (2016: USD 89 thousand)
was consulting fee, USD 8 thousand (2016: USD 8 thousand) in nomination
committee for Wilh. Wilhelmsen Holding ASA and Treasure ASA and USD
221 thousand (2016: USD 218 thousand) in ordinary paid pension and other
remuneration.
See note 6 regarding fees to board of directors, and note 2 and note 9 in the
parent company regarding ownership.
The group has undertaken several agreements and transactions with related
parties in WWL ASA group, Maritime Services, Supply Services and Holding
and Investments segment in 2017 and 2016. All transactions are in the market
terms.
The services are:
• Ship management including crewing, technical and management services
• Agency services
• Freight and liner services
• Marine products
• Shared services
Generally, Shared Services are priced using a cost plus 5% margin calculation,
in accordance with the principles set out in the OECD Transfer Pricing Guidelines
and are delivered according to agreements that are renewed annually.
Material related parties in the group are:
Business office, country
Ownership
Wallenius Wilhelmsen Logistics ASA
Coast Center Base AS
Risavika Havn AS
Lysaker, Norway
Fjell, Norway
Tanager, Norway
37.80%
50.00%
42.82%
WWL ASA is a result of the merger between WWASA and Wall Roll AB on
4 April 2017. The company brings together the jointly owned shipping activities
and relevant assets of Wilh. Wilhelmsen ASA and Wallenius Lines. It unites their
ownership of the shipping and logistics businesses of EUKOR Car Carriers,
WWL ASA and American RoRo Carriers.
Cost Center Base AS and Risavika Havn AS in the Supply Services segment
delivers IT project, administration and handling services and the transactions
are based on market terms.
USD mill
Note
2017
2016
OPERATING REVENUE FROM RELATED PARTY
Sale of goods and services to joint ventures and associates from:
WWL ASA group
Maritime Services
Supply Services
Holding and Investments
Operating revenue from related party
OPERATING EXPENSES FROM RELATED PARTY
Purchase of goods and services from joint ventures and associates to:
Maritime Services
Supply Services
Operating expenses to related party
ACCOUNT RECEIVABLES FROM RELATED PARTY
Maritime Services
Discontinued operations
Account receivables from related party
ACCOUNT PAYABLES TO RELATED PARTY
Maritime Services
Supply Services
Discontinued operations
Account payables to related party
NON CURRENT ASSETS TO RELATED PARTY
Holding and Investments
Non current assets to related party
1
7
1
9
7
7
19
19
5
7
11
0
10
2
12
1
1
3
3
6
1
1
17
17
85
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 21 Operating lease revenue
Per 31.12.2017 the group has no vessels chartered out as the previously controlled fleet is part of discontiued operations.
Note 22 Subsidiaries with material non-controlling interests
NorSea Group AS
Treasure ASA
Business office/country
Voting/control share
2017
Tananger, Norway
Lysaker, Norway
74.11%
72.73%
Set out below is the summarised financial information for the subsidiary that has non-controlling interests (NCI) material to the group. The amounts disclosed are
100% and before inter-company eliminations.
USD mill
Summarised balance sheet
Non current assets
Current assets
Total assets
Non current liabilities
Current liabilities
Total liabilities
Net assets
Summarised income statement/OCI
Total income
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Profit allocated to NCIs
Dividends paid to NCIs
Summarised cash flows
Net cash flow provided by/(used in) operating activities
Net cash flow provided by/(used in) investing activities
Net cash flow provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
USD mill
Total allocation to NCIs
Profit for the period to material NCIs
Profit to discontiued operations NCI
Profit to NCI in Treasure ASA related to change of investment from equity asset to Available-for-sale
Profit for the period to NCIs
86
NorSea Group AS
Treasure ASA
2017
2017
594
66
660
333
123
456
204
53
1
1
15
(4)
(10)
2
576
2
578
0
578
12
(128)
134
6
2
7
11
(25)
(14)
2017
2
7
53
62
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 23 Contingencies
The size and global activities of the group dictate that companies in the group will be involved from time to time in disputes and legal actions.
The group is not aware of any financial risk associated with disputes and legal actions which are not largely covered through insurance arrangements. Nevertheless,
any such disputes/actions which might exist are of such a nature that they will not significantly affect the group’s financial position.
Note 24 Events after the balance sheet date
In 2017, Wilhelmsen signed an agreement to acquire the technical solutions
business from Drew Marine, subject to regulatory approval. 23 February 2018,
the United States’ Federal Trade Commission (FTC) announced that they will
file a complaint opposing the Wilhelmsen group’s planned acquisition. This
is standard procedure in cases where the FTC considers that a proposed
transaction will substantially lessen competition. Wilhelmsen disagrees with
the FTC’s evaluation and will continue to work towards a positive outcome.
No other material events occurred between the balance sheet date and the
date when the accounts were presented which provide new information about
conditions prevailing on the balance sheet date.
87
GroupAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 A
c
c
o
u
n
t
s
a
n
d
n
o
t
e
s
–
p
a
r
e
n
t
c
o
m
p
a
n
y
Smart ropes
Veronika Aspelund
Product marketing manager
Wilhelmsen Ships Service, Marine Products
Ropes as a concept is older than the wheel, it’s even older
than beer. Still, more than 30 000 years after the first record
of the rope, never has anyone attempted to smarten up
the ropes. Until now. What if your mooring ropes could
communicate with you, what if you knew how your ropes felt?
Instead of banging on your ropes with a hammer, with the
inaccuracy and not to mention risk that includes, the ropes
would talk to a software system and let you know exactly
their current state. Veronika is part of the team creating
smart ropes at Wilhelmsen. After thousands of years, it is fair
to say that we are shaping the maritime industry and even the
concept of ropes.
Income statement Wilh. Wilhelmsen Holding ASA
NOK thousand
Operating income
Operating expenses
Employee benefits
Operating expenses
Depreciation
Total operating expenses
Operating profit/(loss)
Financial income/(expenses)
Net financial income
Net financial expenses
Financial income/(expenses)
Profit before tax
Tax income/(expense)
Profit for the year
Transfers and allocations
To equity
Proposed dividend
Interim dividend paid
Total transfers and allocations
Note
2017
2016
1
2
1
3
1
1
4
9
9
9
66 971
89 389
(130 537)
(110 208)
(65 533)
(2 190)
(46 826)
(1 961)
(198 260)
(158 995)
(131 289)
(69 606)
397 395
(10 147)
387 248
540 561
(41 166)
499 395
255 960
429 788
7 023
262 982
(23 184)
406 604
30 813
162 413
69 756
262 982
151 383
162 413
92 808
406 604
Comprehensive income Wilh. Wilhelmsen Holding ASA
NOK thousand
Profit for the year
Items that will not be reclassified to the income statement
Remeasurement postemployment benefits, net of tax
Total comprehensive income
Note
2017
2016
262 982
406 604
9/10
1 156
264 138
(1 667)
404 937
Notes 1 to 16 on the next pages are an integral part of these financial statements.
90
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Balance sheet Wilh. Wilhelmsen Holding ASA
NOK thousand
ASSETS
Non current assets
Deferred tax asset
Intangible assets
Tangible assets
Investments in subsidiaries
Other non current assets
Total non current assets
Current assets
Current financial investments
Trade and other receivables
Other current assets
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Paid-in capital
Own shares
Retained earnings
Total equity
Non current liabilities
Pension liabilities
Other non current liabilities
Total non current liabilities
Current liabilities
Public duties payable
Trade and other payables
Other current liabilities
Total current liabilities
Total equity and liabilities
Note
31.12.2017
31.12.2016
4
3
3
5
6
7/8
6
6/8/13
8
9
9
9
10
6
6
6/11/13
2 653
3 764
11 693
1 488
4 066
12 671
4 872 004
4 365 977
7 613
8 613
4 897 727
4 392 815
824 661
16 171
265 206
78 624
711 518
17 824
523 887
274 244
1 184 663
1 527 473
6 082 390
5 920 289
930 076
(2 000)
930 076
(2 000)
4 692 238
4 660 268
5 620 314
5 588 344
44 948
42 671
87 619
7 105
10 017
357 334
374 456
47 744
43 922
91 666
8 125
5 411
226 743
240 279
6 082 390
5 920 289
Lysaker, 22 March 2018
The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler
chair
Odd Rune Austgulen
Carl Erik Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Thomas Wilhelmsen
group CEO
Notes 1 to 16 on the next pages are an integral part of these financial statements.
91
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cash flow statement Wilh. Wilhelmsen Holding ASA
NOK thousand
Note
2017
2016
Cash flow from operating activities
Profit before tax
Financial (income)/expenses
Depreciation
Gain on sale of fixed assets
Change in net pension liability
Change in other current assets
Change in working capital
Net cash provided by operating activities
Cash flow from investing activities
Proceeds from sale of fixed assets
Investments in fixed assets
Investments in subsidiaries
Loan repayments received from subsidiaries
Loans granted to subsidiaries
Proceeds from sale of financial investments
Current financial investments
Group Contribution
Dividend received
Paid witholding tax on dividend portfolio management
Interest received
Cash from financial derivatives
Net cash flow from investing activities
Cash flow from financing activities
Proceeds from issue of debt
Repayment of debt
Interest paid
Dividend to shareholders
Net cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, at the beginning of the period
Cash and cash equivalents at 31.12
3
3
3
1
11
9
255 960
(402 710)
429 788
(475 295)
2 190
(233)
(3 587)
1 996
1 137
1 961
(1 108)
753
(4 311)
(39)
(145 247)
(48 250)
1 132
(1 871)
(506 027)
3 500
(2 500)
265 255
(336 166)
477 000
12 769
(2 005)
1 573
119 657
32 316
150 000
(520)
(232 169)
(82 689)
(195 620)
274 244
78 624
1 630
(3 484)
(5 000)
(4 050)
207 796
(208 694)
500 000
12 746
(454)
1 752
2 243
(100 000)
(628)
(232 019)
167 353
121 348
152 896
274 244
The company has several bank accounts in different currencies. Unrealised currency effects are included in net cash provided by operating activities.
Notes 1 to 16 on the next pages are an integral part of these financial statements.
92
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 1 Combined items, income statement
NOK thousand
OPERATING INCOME
Other income
Income from group companies
Gain on sale of assets
Total operating income
OTHER OPERATING EXPENSES
Expenses to group companies
Communication and IT expenses
External services
Travel and meeting expenses
Marketing expenses
Other administration expenses
Total other operating expenses
FINANCIAL INCOME/(EXPENSES)
Financial income
Investment management
Interest income
Dividend/group contribution from subsidiaries
Other financial income
Net currency gain
Net financial income
Financial expenses
Interest expenses
Other financial items
Net currency loss
Net financial expenses
Net financial income
Note
2017
2016
14
14
2
7
14
14
3 976
62 762
233
66 971
(23 044)
(4 382)
(11 769)
(6 354)
(6 141)
(13 842)
(65 533)
21 840
1 573
227 000
119 657
27 326
397 395
(8 271)
(1 876)
(10 147)
1 314
86 967
1 108
89 389
(20 420)
(4 788)
(3 433)
(4 843)
(1 918)
(11 424)
(46 826)
38 808
1 752
500 000
540 561
(6 320)
(1 532)
(33 314)
(41 166)
387 248
499 395
93
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 2 Employee benefits
NOK thousand
Pay
Payroll tax
Pension cost
Other remuneration
Total employee benefits
Average number of employees
REMUNERATION OF SENIOR EXECUTIVES
NOK thousand
2017
Group CEO
Group CFO
2016
Group CEO
Group CFO until April 2016
Group CFO from April 2016
*Mainly related to gross up pension expenses and company car.
2017
2016
99 156
14 107
9 025
8 250
77 384
12 431
10 740
9 652
130 537
110 208
45
52
Pay
Bonus
Pension
premium
*Other
remuneration
4 753
3 293
4 640
1 707
2 134
6 957
2 717
773
506
1 779
383
1 585
55
273
1 696
425
1 532
225
270
Total
15 186
6 818
8 529
2 493
2 677
Board of directors
Remuneration of the five directors totalled NOK 2 150 for 2017 (2016: NOK
2 150). The board’s remuneration for the fiscal year 2017 will be approved by
the general assembly 26 April 2018.
Remuneration of the nomination committee totalled NOK 85 for 2017 (2016:
NOK 85).
Senior executives
Thomas Wilhelmsen – group CEO
Christian Berg – group CFO
The group CEO has a severance pay guarantee under which he has the right
to receive up to 100% of his annual salary for 24 months after leaving the
company as a result of mergers, substantial changes in ownership, or a
decision by the board of directors. Possible income during the period is
deducted up to 50%, which comes into force after six months notice period.
The group CFO is following the company pension policy for salary below and
above 12G (defined contribution plan). His retirement age is 65.
Loans and guarantees employees
There were no loan or guarantees to employees per 31.12.2017.
94
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 2 Employee benefits
SHARES OWNED OR CONTROLLED BY REPRESENTATIVES OF WILH. WILHELMSEN HOLDING ASA AT 31 DECEMBER 2017
Name
Board of directors
Diderik Schnitler (chair)
Odd Rune Austgulen
Carl E. Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Senior executives
Thomas Wilhelmsen – group CEO
Christian Berg – group CFO
Nomination committee
Wilhelm Wilhelmsen*
Gunnar Fredrik Selvaag
Jan Gunnar Hartvig
A shares
B shares
Total
Part of
total shares
Part of
voting stock
2 000
136
8 000
25 000
40 000
27 000
40 136
8 000
22 100
105
750
22 850
105
97 384
21 000
118 384
0.06%
0.09%
0.02%
0.00%
0.00%
0.05%
0.00%
0.25%
0.00%
0.00%
0.01%
0.00%
0.02%
0.00%
0.00%
0.06%
0.00%
0.28%
0.00%
0.00%
*For an overview of the total shares controlled by the Family Wilhelm Wilhelmsen, see note 14.
OPTION PROGRAM FOR EMPLOYEES AT A SPECIFIED LEVEL OF
MANAGEMENT
Long-term incentive scheme
The long-term incentive scheme (LTI) was introduced in 2015. Participants are
members of the group management team and the presidents for Wilhelmsen
Ships Service and Wilhelmsen Ship Management. For the group CEO, maximum
annual payment is 100% of base salary. For the remaining participants, the
maximum annual payment is 6-9 months of base salary.
The LTI focuses on long term shareholder value creation and is based on
positive development of the Wilhelmsen group’s value adjusted equity. The
ambitions set for the programme are to increase alignment with value creation
for shareholders, to attract, retain and motivate participants and drive long-term
group performance.
Settlement is based on return on value adjusted equity the last four years
leading up to the settlement. The value adjusted equity is determined by using
a “sum-of-the-parts” principle. For listed companies, value adjusted equity is
based on market price, while earnings multiples or net asset value are used for
non-listed entities.
The board sets value adjusted equity targets at the beginning of each four year
measurement period. Without consultation or agreement with the individual,
the board has the right to change or terminate the incentive programme after
each year.
Per 31 December 2017, a provision has been made equivalent to 34% of
maximum annual payment, covering provisions for 2017 related to the LTI
programme expiring on 31 December 2018. The provision has been calculated
based on value adjusted equity per 31 December 2017, risk free return and
standard deviation of historic annual value creation. No provision has been
made for the LTI programme expiring on 31 December 2020.
EXPENSED AUDIT FEE (excluding VAT)
NOK thousand
Statutory audit
Other service fees
Total expensed audit fee
2017
540
708
1 248
2016
482
482
95
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 3 Intangible and tangible assets
NOK thousand
2017
Cost 01.01
Additions
Disposals
Cost 31.12
Accumulated depreciation 01.01
Depreciation/amortisation
Disposals
Accumulated depreciation 31.12
Intangible
assets
Buildings
Other tangible
assets
Total
5 309
871
10 582
6 180
10 582
(1 242)
(1 173)
(2 174)
(423)
(2 415)
(2 597)
9 842
1 000
(2 027)
8 815
(5 579)
(594)
1 066
(5 107)
25 733
1 871
(2 027)
25 577
(8 995)
(2 190)
1 066
(10 119)
Carrying amounts 31.12
3 764
7 985
3 708
15 458
2016
Cost 01.01
Additions
Disposals
Cost 31.12
Accumulated depreciation 01.01
Depreciation/amortisation
Disposals
Accumulated depreciation 31.12
2 156
3 153
10 582
5 309
10 582
(626)
(616)
(1 751)
(423)
(1 242)
(2 174)
12 688
330
(3 177)
9 842
(7 311)
(922)
2 654
(5 579)
25 426
3 484
(3 177)
25 733
(9 688)
(1 961)
2 654
(8 995)
Carrying amounts 31.12
4 066
8 408
4 263
16 737
Useful life
Amortisation/depreciation schedule
Up to 3 years
Up to 25 years
3-10 years
Straight-line
Straight-line
Straight-line
96
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 4 Tax
NOK thousand
Allocation of tax income
Payable tax/withholding tax
Change in deferred tax
Total tax income/(expense)
Basis for tax computation
Profit before tax
24% tax
Tax effect from
Permanent differences
Withholding tax
Change in different tax rate
Adjustment group contribution
Current year calculated tax
Effective tax rate
Deferred tax asset/(liability)
Tax effect of temporary differences
Fixtures
Current assets and liabilities
Non current liabilities and provisions for liabilities
Tax losses carried forward
Deferred tax asset/(liability)
Deferred tax asset/(liability) 01.01
Charge to equity (tax of OCI)
Change of deferred tax through income statement
Tax effect of group contribution
Deferred tax asset/(liability) 31.12
2017
2016
(2 005)
9 028
7 023
(454)
(22 730)
(23 184)
255 960
61 430
429 788
103 149
(62 830)
2 005
284
(7 913)
(7 023)
(80 361)
454
(58)
23 184
(2.7%)
5.4%
643
(6 221)
8 230
2 653
1 488
(365)
9 028
(7 500)
2 653
634
(2 039)
2 557
335
1 488
16 163
556
(22 730)
7 500
1 488
Note 5 Investments in subsidiaries
Investments in subsidiaries are recorded at cost. Where a reduction in the value of shares in subsidiaries is considered to be permanent and significant,
a impairment to net realisable value is recorded.
NOK thousand
Business office country
Voting share/
ownership share
2017
Book value
2016
Book value
Wilh. Wilhelmsen ASA*
Wallenius Wilhelmsen Logistics ASA*
Treasure ASA
Wilhelmsen Maritime Services AS
Wilh. Wilhelmsen (Hong Kong) Ltd**
WilService AS
Wilh. Wilhelmsen Holding Invest AS***
Wilhelmsen Accounting Services AS
WilNor Governmental Services AS
Lysaker, Norway
Lysaker, Norway
Lysaker, Norway
Lysaker, Norway
Hong Kong
Lysaker, Norway
Lysaker, Norway
Lysaker, Norway
Lysaker, Norway
Wilhelmsen GRC Sdn Bhd****
Kuala Lumpur, Malaysia
Total investments in subsidiaries
73%
38%
73%
100%
100%
100%
100%
100%
51%
100%
1 130 964
1 130 964
1 043 967
1 043 967
1 264 440
1 264 440
900
17 550
898 095
3 622
6 439
17 550
1 405 014
3 622
6 439
8
4 872 004
4 365 977
*Wallenius Wilhelmsen Logistics ASA is a result of the merger between Wilh. Wilhelmsen ASA and Wall Roll AB on 4th April 2017.
After the merger the the company own 37.8% of the WWL ASA.
**Liquidated in 2017.
***Increased investment through cash contribution of NOK 500 000 000 and through group contribution of NOK 6 918 498.
****Established in 2017.
97
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 6 Combined items, balance sheet
NOK thousand
Note
2017
2016
OTHER NON CURRENT ASSETS
Non current loan group companies (subsidiary and associates)
Total other non current assets
Of which non current debitors falling due for payment later than one year:
Loans to subsidiary and associates
Total other non current assets due after one year
OTHER CURRENT ASSETS
Group Contribution
Other current assets
Total other current assets
OTHER NON CURRENT LIABILITIES
Allocation of commitment
Total other non current liabilities
13/14
13/14
14
13
7 613
7 613
7 613
7 613
8 613
8 613
8 613
8 613
250 000
15 206
265 206
500 000
23 887
523 887
42 671
42 671
43 922
43 922
Allocation of commitment relates to a sale leaseback contract for house rental, including both deferred revenue and provision for loss contract. Net change of NOK
910 thousand (current and non current liability) has been reversed through income statment in 2017.
Per 31 December 2017 NOK 3 275 thousand was reclassed to short term liability (2016: NOK 2 935 thousand).
OTHER CURRENT LIABILITIES
Next year's instalment on interest-bearing debt
Proposed dividend
Other current liabilities
Total other current liabilities
11/13
9
13
150 000
162 413
44 920
357 334
162 413
64 329
226 743
The fair value of current receivables and payables is virtually the same as the carried amount, since the effect of discounting is insignificant.
Lending is at floating rates of interest. Fair value is virtually identical with the carried amount. See note 13.
Note 7 Current financial investments
NOK thousand
Market value asset management portfolio
Equities
Bonds
Other financial derivatives
Total current financial investments
2017
2016
430 114
394 183
(5 961)
818 336
356 120
357 845
(2 446)
711 518
The fair value of all equity securities, bonds and other financial assets is based on their closing prices in an active market.
The net unrealised gain at 31.12
123 915
112 780
The portfolio of financial investments is held as collateral within a securities’ finance facility. See note 11.
98
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 8 Restricted bank deposits and undrawn committed drawing rights
NOK thousand
Restricted bank deposits
Payroll tax withholding account
NOK thousand
Undrawn committed drawing rights
2017
3 781
2016
4 828
2017
2016
Undrawn committed drawing rights for 31 December
1 019 630
1 060 420
NOK thousand
Cash and cash equivalents
Banks
Deposit banks 3 months
Total Cash and cash equivalents
Note 9 Equity
NOK thousand
Current year's change in equity
Equity 31.12.2016
Interim dividend paid
Proposed dividend
Profit for the year
Comprehensive income for the year
Equity 31.12.2017
NOK thousand
2016 change in equity
Equity 31.12.2015
Interim dividend paid
Proposed dividend
Profit for the year
Comprehensive income for the year
Equity 31.12.2016
2017
78 624
78 624
2016
124 244
150 000
274 244
Share capital
Own shares
Retained earnings
Total
930 076
(2 000)
930 076
(2 000)
4 660 268
(69 756)
(162 413)
262 982
1 156
4 692 238
5 588 344
(69 756)
(162 413)
262 982
1 156
5 620 314
Share capital
Own shares
Retained earnings
Total
930 076
(2 000)
930 076
(2 000)
4 510 551
(92 808)
(162 413)
406 604
(1 667)
4 660 268
5 438 628
(92 808)
(162 413)
406 604
(1 667)
5 588 344
At 31 December 2017 the company’s share capital comprises 34 637 092
Class A shares and 11 866 732 Class B shares, totalling 46 503 824 shares
with a nominal value of NOK 20 each. Class B shares do not carry a vote at
the general meeting. Otherwise, each share confers the same rights in the
company.
At 31 December 2017 Wilh. Wilhelmsen Holding ASA had own shares of 100 000
Class A shares. The total purchase price of these shares was NOK 12.7 million.
Dividend
The proposed dividend for fiscal year 2017 is NOK 3.50 per share, payable
in the second quarter 2018. A decision on this proposal will be taken by the
annual general meeting on 26 April 2018.
Dividend for fiscal year 2016 was NOK 5.00 per share, where NOK 3.50 per share
was paid in May 2017 and NOK 1.50 per share was paid in November 2017.
Dividend for fiscal year 2015 was NOK 5.00 per share, where NOK 3.00 per share
was paid in May 2016 and NOK 2.00 per share was paid in November 2016.
99
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 9 Equity
The largest shareholders at 31 December 2017
Shareholders
Tallyman AS
Folketrygdfondet
VPF Nordea Norge Verdi
Pareto Aksje Norge
Citibank, NA
J. P. Morgan Bank Luxembourg S.A.
UBS Switzerland AG
Stiftelsen Tom Wilhelmsen
Nordea Nordic Small Cap Fund
Skagen Vekst
J. P. Morgan Chase Bank, N.A., London
State Street Bank and Trust Comp.
Forsvarets Personellservice
Pareto AS
MP Pensjon PK
Deutsche Bank International Ltd.
Oslo Pensjonsforsikring AS PM
Nordnet Bank AB
VPF Nordea Kapital
Eika Norge
Other
Total number of shares
A shares
B shares
Total number
of shares
% of
total shares
% of
voting stock
20 784 730
2 281 044
23 065 774
49.60%
60.01%
1 231 880
247 695
874 161
494 167
638 658
607 657
370 400
126 875
512 647
351 022
430 084
375 400
270 000
79 965
248 597
126 443
119 230
1 058 832
1 484 612
583 789
494 973
5 700
236 000
415 630
125 000
101 000
276 636
100 000
345 086
214 197
194 222
287 325
2 290 712
1 732 307
1 457 950
989 140
638 658
613 357
606 400
542 505
512 647
476 022
430 084
375 400
371 000
356 601
348 597
345 086
340 640
313 452
287 325
4.93%
3.73%
3.14%
2.13%
1.37%
1.32%
1.30%
1.17%
1.10%
1.02%
0.92%
0.81%
0.80%
0.77%
0.75%
0.74%
0.73%
0.67%
0.62%
3.56%
0.72%
2.52%
1.43%
1.84%
1.75%
1.07%
0.37%
1.48%
1.01%
1.24%
1.08%
0.78%
0.23%
0.72%
0.00%
0.37%
0.34%
0.00%
6 747 481
3 662 686
10 410 167
34 637 092
11 866 732
46 503 824
22.39%
100.00%
19.48%
100.00%
Shares on foreigners hands
At 31. December 2017 – 5 200 373 (15.01%) A shares and 2 448 814 (20.64%) B shares.
Corresponding figures at 31. December 2016 – 4 906 128 (14.16%) A shares and 2 233 706 (18.82%) B shares.
100
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 10 Pension
Description of the pension scheme
The company’s defined contribution pension schemes for Norwegian employees
are with financial institute, similar solutions with different investment funds.
The company has “Ekstrapensjon”, a contribution plan for all Norwegian
employees with salaries exceeding12 times the Norwegian National Insurance
base amount (G). The contribution plan replaced the company obligations,
mainly financed from operation.
In addition the company has agreements on early retirement. This obligations
are mainly financed from operations.
The company has obligations towards some employees in the company’s
senior executive management. These obligations are mainly covered via group
annuity policies in Storebrand.
Pension costs and obligations includes payroll taxes. No provision has been
made for payroll tax in pension plans where the plan assets exceed the plan
obligations.
The liability recognised in the balance sheet in respect of the remaining defined
benefit pension plans is the present value of the defined benefit obligation at
the end of the reporting period less the fair value of plan assets. The defined
benefit obligations are calculated annually by independent actuaries using
the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows
using interest rates of high-quality corporate bonds that are denominated in
the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are charged or credited to equity in other comprehensive
income in the period in which they arise.
Number of people covered by pension schemes at 31.12
2017
2016
2017
2016
Funded
Unfunded
In employment
On retirement (inclusive disability pensions)
Total number of people covered by pension schemes
1
2
3
2
1
3
4
4
5
5
Financial assumptions for the pension calculations:
2017
2016
31.12.2017
31.12.2016
Expenses
Commitments
Discount rate
Anticipated pay regulation
Anticipated increase in National Insurance base amount (G)
Anticipated regulation of pensions
2.40%
2.25%
2.25%
0.40%
2.50%
2.25%
2.25%
0.60%
2.30%
2.00%
2.00%
0.10%
2.30%
2.00%
2.00%
0.10%
Anticipated pay regulation are business sector specific, influenced by
composition of employees under the plans. Anticipated increase in G is tied
up to the anticipated pay regulations. Anticipated regulation of pensions is
determined by the difference between return on assets and the hurdle rate.
Actuarial assumptions: all calculations are calculated on the basis of the K2013
mortality tariff. The disability tariff is based on the KU table.
101
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 10 Pension
NOK thousand
Pension expenses
Service cost
Net interest cost
Cost of defined contribution plan
Net pension expenses
2017
2016
Funded
Unfunded
Total
Funded
Unfunded
Total
2 440
162
5 597
8 199
52
774
826
2 492
936
5 597
9 025
3 748
204
5 945
9 897
52
791
3 800
995
5 945
843
10 740
Remeasurements – Other comprehensive income
2017
2016
(171)
(1 350)
(1 521)
(365)
(1 156)
27
3 061
(866)
2 222
556
1 667
2017
2016
91 344
2 492
1 988
(3 955)
(171)
91 698
85 572
3 800
2 002
(3 118)
3 088
91 344
43 600
37 470
1 052
3 274
(2 526)
(597)
1 947
1 007
5 281
(1 024)
(473)
1 339
46 750
43 600
Effect of changes in financial assumptions
Effect of experience adjustments
(Return) on plan assets (excluding interest income)
Gross remeasurement (gain) loss included in OCI
Tax effect
Remeasurement (gain) loss recognised in OCI – net of tax
NOK thousand
Pension obligations
Defined benefit obligation at end of prior year
Service cost
Interest expense
Benefit payments from plan
Effect of experience adjustments
Pension obligations 31.12
Fair value of plan assets
Fair value of plan assets at end of prior year
Interest income
Employer contributions
Benefit payments from plan
Administrative expenses paid from plan assets
Return on plan assets (excluding interest income)
Gross pension assets 31.12
102
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 10 Pension
NOK thousand
2017
2016
Specification of funded and unfunded obligation
Funded
Unfunded
Total
Funded
Unfunded
Total
Service cost
Defined benefit obligation
Fair value of plan assets
Net liability (asset)
2 440
54 187
46 750
52
37 511
7 437
37 511
2 492
91 698
46 750
44 948
3 748
53 286
43 600
52
38 058
9 686
38 058
3 800
91 344
43 600
47 744
Premium payments in 2018 are expected to be NOK 4.9 million (2017: NOK 4.7 million). Payments from operations are estimated at NOK 2.3 million (2017: NOK 2.4 million)
NOK thousand
Historical developments
Gross pension obligations, including payroll tax
Gross pension assets
Net recorded pension obligations
Note 11 Interest-bearing debt
NOK thousand
Interest-bearing debt
Bank loan
Total interest-bearing debt
Repayment schedule for interest-bearing debt
Due in year 1
Total interest-bearing debt
Held as collateral within a securities’ finance facility
The portfolio of financial investments
31.12.2017
31.12.2016
91 698
46 750
44 948
91 344
43 600
47 744
2017
2016
150 000
150 000
150 000
150 000
0
0
824 297
711 518
The parent company had in addition undrawn revolving facilities at 31
December 2017. The parent company’s financing arrangement provides for
customary financial covenants related to minimum liquidity, and minimum value
adjusted equity ratio. The company was in compliance with these covenants at
31 December 2017 (analougue for 31 December 2016).
FINANCIAL RISK
See note 13 to the parent accounts and note 17 to the group accounts for
further information on financial risk, and note 16 to the group accounts
concerning the fair value of interest-bearing debt.
Note 12 Operating lease commitments
The company has a sale and leaseback agreement for the office building, Strandveien 20. The lease run over 15 years from 1 October 2009, with an option to
extend for additional 5 years + 5 years.
The company also has a lease agreement for the office building (including storage and parking) Strandveien 12. The lease run over 10 years from 1 June 2006,
with an option to extend for additional 5 years. In 2016 the lease agreement was extended with 5 years and runs until 2021.
NOK thousand
Due in year 1
Due in year 2
Due in year 3
Due in year 4
Due in year 5 and later
Total expense related to operating leasing commitments
2017
51 365
52 392
53 440
49 131
141 377
347 705
2016
50 770
52 039
53 340
54 673
204 442
415 264
103
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 13 Financial risk
CREDIT RISK
Guarantees
The group’s policy is that the parent company will not provide any financial
guarantees.
Cash and bank deposits
The parent’s exposure to credit risk on cash and bank deposits is considered
to be very limited as the parent maintain banking relationships with a selection
of solid banks.
LIQUIDITY RISK
The parent’s approach to managing liquidity is to ensure sufficient liquidity to
meet its liabilities, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the parent and group’s reputation.
The parent’s liquidity risk is considered to be low in the sense that it holds
significant liquid assets in addition to undrawn credit facilities.
FAIR VALUE ESTIMATION
The fair value of financial instruments traded in an active market is based on
quoted market prices on the balance sheet date. The fair value of financial
instruments not traded in an active market (over-the-counter contracts) are
based on third party quotes. Specific valuation techniques used to value
financial instruments include:
Quoted market prices or dealer quotes for similar instruments.
The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows based on observable yield curves.
The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows based on observable yield curves.
The fair value of interest rate swap option (swaption) contracts is determined
using observable yield curve, volatility and time-to-maturity parameters at the
balance sheet date, resulting in a swaption premium.
The fair value of forward foreign exchange contracts is determined using
forward exchange rates at the balance sheet date, with the resulting value
discounted back to present value.
The fair value of foreign exchange option contracts is determined using
observable forward exchange rates, volatility, yield curves and time-to-maturity
parameters at the balance sheet date, resulting in an option premium.
The carrying value less impairment provision of receivables and payables are
assumed to approximate their fair values. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the company for
similar financial instruments.
NOK thousand
2017
Interest-bearing debt
Bank loan
Total interest-bearing debt 31.12
2016
Interest-bearing debt
Bank loan
Total interest-bearing debt 31.12
Fair value
Carrying amount
150 000
150 000
150 000
150 000
0
0
The fair value of financial instruments traded in active markets is based on
closing prices at the balance sheet date. A market is regarded as active if
quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm’s
length basis.
The price used for valuation of financial assets held by the group is the closing
price. These instruments are included in level 1. Instruments included in level 1
at the end of 2017 and 2016 are investment grade bonds, equities and listed
financial derivatives.
The fair value of financial instruments not traded in an active market is
determined by using valuation techniques. These valuation techniques use
observable market data where available and rely as little as possible on entity
specific estimates. These instruments are included in level 2. Instruments
included in level 2 are FX and IR derivatives.
If one or more of significant valuation inputs is not based on observable market
data, the instruments are in level 3.
Total financial instruments and short term financial investments
NOK thousand
Level 1
Level 2
Level 3
Total balance
Financial assets at fair value through income statement 2017
– Bonds
– Equities
– Financial derivatives
Total assets 31.12
Financial liabilities fair value through income statement 2017
– Financial derivatives
Total liabilities 31.12
104
394 183
423 522
817 705
1 828
1 828
6 593
6 593
394 183
430 114
1 828
826 125
(270)
(270)
(7 519)
(7 519)
0
(7 789)
(7 789)
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. note 13 Financial risk
NOK thousand
Level 1
Level 2
Level 3
Total balance
Financial assets at fair value through income statement 2016
– Bonds
– Equities
– Financial derivatives
Total assets 31.12
Financial liabilities fair value through income statement 2016
– Financial derivatives
Total liabilities 31.12
357 845
356 120
713 965
(2 407)
(2 407)
Financial instruments by category
Assets
Other non current assets
Current financial investments
Financial derivatives
Other current assets
Cash and cash equivalent
Assets at 31.12.2017
Liabilities
Financial derivatives
Current interest-bearing debt
Other current liabilities
Liabilities 31.12.2017
Assets
Other non current assets
Current financial investments
Financial derivatives
Other current assets
Cash and cash equivalent
Assets at 31.12.2016
Liabilities
Financial derivatives
Current interest-bearing debt
Other current liabilities
Liabilities 31.12.2016
Note
6
7
6
6
Note
6
6
6
Note
6
7
6
6
Note
6
6
6
See note 17 to the group financial statement for further information about the group risk factors.
1 345
1 345
(860)
(860)
0
0
Loans and
receivables
Assets at fair
value through the
income statement
7 613
279 549
78 624
365 786
824 297
1 828
Other financial
liabilities at
amortised cost
Assets at fair
value through the
income statement
150 000
209 562
359 562
7 789
7 789
Loans and
receivables
Assets at fair
value through the
income statement
8 613
535 011
274 244
817 867
711 518
6 700
357 845
356 120
1 345
715 310
(3 267)
(3 267)
Total
7 613
824 297
1 828
279 549
78 624
Total
7 789
150 000
209 562
367 351
Total
8 613
711 518
6 700
535 011
274 244
826 125
1 191 911
718 219
1 536 086
Other financial
liabilities at
amortised cost
Assets at fair
value through the
income statement
Total
6 196
6 196
63 544
63 544
6 196
63 544
69 741
105
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Note 14 Related party transaction
The ultimate owner of the group Wilh.Wilhelmsen Holding ASA is Tallyman AS,
which control about 60% of voting shares of the group. The ulimate owners of
Tallyman AS are the Wilhelmsen family and Mr Wilhelm Wilhelmsen controls
Tallyman AS.
Shares owned or controlled by related party of Wilh. Wilhelmsen Holding ASA at 31 December 2017
Name
A shares
B shares
Total
Part of
total shares
Part of
voting stock
Family Wilhelm Wilhelmsen
20 882 114
2 302 444
23 184 558
49.86%
60.29%
Wilhelm Wilhelmsen has in 2017 received remuneration of NOK 768 thousand
(2016: NOK 750 thousand) in consulting fee, NOK 70 thousand (2016: NOK
70 thousand) in nomination committee for Wilh. Wilhelmsen Holding ASA and
Treasure ASA (2016 for Wilh. Wilhelmsen Holding ASA and Wilh. Wilhelmsen
ASA) and NOK 1 830 thousand (2016: NOK 1 829 thousand) in ordinary paid
pension and other remunerations.
WWH ASA delivers services to other group companies in Holding and Investment,
WWL ASA group and Maritime Services, these include primarily human resources,
tax, communication, treasury and legal services (“Shared Services”).
In accordance with service level agreements, WilService AS delivers in-house
services such as canteen, post, switchboard and rent of office facilities.
Wilhelmsen Accounting Services delivers accounting services and Maritime
Services delivers IT services and group consolidation services to WWH.
Generally, Shared Services are priced using a cost plus 5% margin calculation,
in accordance with the principles set out in the OECD Transfer Pricing Guidelines
and are delivered according to agreements that are renewed annually.
NOK thousand
Note
2017
2016
OPERATING REVENUE FROM GROUP COMPANIES
Discontinued operations
WWL ASA group
Maritime Services
Holding and Investments
Operating revenue from group companies
OPERATING EXPENSES TO GROUP COMPANIES
Maritime Services
Holding and Investments
Operating expenses to group companies
FINANCIAL INCOME FROM GROUP COMPANIES
Maritime Services
Holding and Investments
Financial income from group companies
ACCOUNT RECEIVABLES AND ACCOUNT PAYABLES WITH GROUP COMPANIES
Account receivables
Discontinued operations
Maritime Services
Holding and Investments
Account receivables from group companies
Account payables
Discontinued operations
Maritime Services
Holding and Investments
Account payables to group companies
106
4 130
54 312
4 320
62 762
(5 801)
(17 243)
(23 044)
227 279
227 279
264 346
922
265 269
(1 455)
(1 012)
(2 467)
4 221
65 953
16 792
86 967
(6 354)
(14 066)
(20 420)
500 000
298
500 298
5 224
510 869
1 173
517 265
(35)
(190)
(30 254)
(30 479)
1
1
1
6
6
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. note 14 Related party transaction
NOK thousand
Note
2017
2016
NON CURRENT LOAN TO GROUP COMPANIES
Holding and Investments*
Non current loan to group companies
6
7 613
7 613
8 613
8 613
*Loan to WilService (Holding and Investments segment) was provided at commercially reasonable market terms (average margins 3%). Interest rates are based on
floating LIBOR-rates.
CURRENT LOAN TO GROUP COMPANIES
Holding and Investments
Current loan to group companies
6
0
1
1
Note 15 Events after the balance sheet date
No material events occurred between the balance sheet date and the date when the accounts were presented which provide new information about conditions
prevailing on the balance sheet date.
107
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 Note 16 Statement on the remuneration for senior executives
The statement on senior executives’ remuneration has been prepared in
accordance with the Norwegian Public Limited Companies Act, the Norwegian
Accounting Act and the Norwegian Code of Practice and is adopted by the
board of directors.
derived from the group’s strategic goals. The variable pay scheme takes into
consideration both key financial targets and individual targets (derived from the
agreed targets related to the long-term strategy). Maximum opportunities for
annual payments are capped at four to six months’ salary, depending on role.
For the purpose of this statement, company employees referred to as senior
executives are: Thomas Wilhelmsen (group CEO), Christian Berg (group CFO),
Jan Eyvin Wang (senior vice president industrial investments), Erik Nyheim
(senior vice president industrial investments), Benedicte Teigen Gude (senior
vice president HR and communications), Bjørge Grimholt (president WSS), Carl
Schou (president WSM), and John Stangeland (CEO of NorSea Group).
Long-term variable remuneration
The senior executives also participate in a long term incentive scheme running
over a four-year period, based on positive development of the group’s value
adjusted equity. The scheme aims to increase alignment with the shareholders’
interests and how senior executives executes strategy and develop value for
the group and its shareholders.
The following guidelines are applicable for 2018.
General principles for the remuneration of senior executives
The remuneration of the group CEO is determined by the board of directors,
whereas remuneration of other senior executives is determined
administratively on the basis of frameworks specified by the board.
The remuneration level shall reflect the complexity and responsibilities of each
role and shall take into account the group’s breadth of international operations.
With the majority of the positions based in Norway, the board primarily looks
to other Norwegian companies operating in an international environment to
ensure that remuneration levels are competitive.
Remuneration shall be at a competitive level in the relevant labour market(s).
It should be a tool for the board to retain and attract required leadership and
motivational for the individual executive. The total remuneration package shall
therefore consist of fixed remuneration (basic salary and benefits in kind) and
variable, performance based remuneration (short- and long term incentives).
The remuneration system should be flexible and understandable.
Fixed salary
The main element of the remuneration package shall be the annual base salary.
This is normally evaluated once a year based on individual performance, market
competitiveness and local labour market trends.
Benefits in kind
The senior executives receive benefits in kind that are common for comparable
positions. These include newspapers, telecommunication, broadband,
insurance and car salary.
Short-term variable remuneration
As a key component of the total remuneration package, the annual variable
pay scheme emphasises the link between performance and pay, and aims
to be motivational. It aligns the senior executives with relevant, clear targets
For group CEO, maximum annual payment is 100% of base salary. For the
remaining, the maximum payment is six to nine months of base salary. The CEO
of NorSea Group is not part of the long-term scheme. For additional details,
see note 6 page 59 or note 2 page 95.
Pension scheme
Pension benefits for senior executives include coverage for old age, disability,
spouse and children, and supplement payments by the Norwegian National
Insurance system. Pension obligations related to salaries in excess of 12G and
the option to take early retirement are insured in the case of group CEO and
group CFO.
The presidents for Ships Service and Ship Management have a defined benefit
plan for salary exceeding 12G financed through operations.
The remaining executives have a defined contribution plan for salary above
12G. For salary below 12G, they are all a part of the collective agreement.
Severance package scheme
The group CEO has a severance pay guarantee under which he has the
right to receive up to 100% of his annual salary for 24 months after leaving
the company as a result of mergers, substantial changes in ownership, or a
decision by the board. After six months’ notice period, possible income during
the severance pay period will be deducted by up to 50%.
The other senior executives also have arrangements for severance payment
beyond redundancy period following departure from the group.
Statement on senior executive remuneration in the previous fiscal year
Remuneration policy and development for the senior executives in the previous
fiscal year built upon the same policies as those described above. For further
details regarding the individual remuneration elements, see note 2 concerning
pay and other remuneration for senior executives of the parent company and
note 6 of the group accounts concerning senior executives of the group.
108
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Auditor’s report
To the Annual Shareholders’Meeting of Wilh. Wilhelmsen Holding ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Wilh. Wilhelmsen Holding ASA. The financial statements
comprise:
The financial statements of the parent company, which comprise the balance sheet as at 31
December 2017, and income statement, comprehensive income, cash flow statement for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and
The financial statements of the group, which comprise the balance sheet as at 31 December
2017, and income statement, comprehensive income, statement of changes in equity, cash flow
statement for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies.
In our opinion:
• The financial statements are prepared in accordance with the law and regulations.
• The accompanying financial statements present fairly, in all material respects, the financial
position of the parent company as at 31 December 2017, and its financial performance and its
cash flows for the year then ended in accordance with simplified application of international
accounting standards according to § 3-9 of the Norwegian Accounting Act.
• The accompanying financial statements present fairly, in all material respects, the financial
position of the group as at 31 December 2017, and its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards as
adopted by the EU.
Basis for Opinion
We conducted our audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
109
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Auditor’s report
Independent Auditor's Report - Wilh. Wilhelmsen Holding ASA
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
During 2017, Wilh. Wilhelmsen Holding ASA completed a discontinuing of the operations in the
shipping and logistics segment and completed a material business combination reported in the supply
services segment. These transactions was a focus area for our audit in 2017. A consequence of the
transaction that discontinued the operations in the shipping and logistics segment was that the two
Key Audit Matter’s reported in our 2016 Audit Report related to anti-trust provisions and impairment
considerations related to vessels no longer are relevant to Wilh. Wilhelmsen Holding ASA.
Key Audit Matter
How our audit addressed the Key Audit Matter
Discontinuing operations and business
combinations
We refer to note 3 Discontinued
operations, note 4 Investments in
associates and note 19 Business
combinations.
In April Wallenius Wilhelmsen Logistics
ASA (WWL) merged with Wallroll AB. The
transaction diluted Wilh. Wilhelmsen
Holding ASA’s ownership interest in
WWL. The consequence for the financial
statements was that the shipping and
logistics segment described in note 3 no
longer was consolidated, but accounted for
as an investment in associates reported in
the holding and investments segment.
The carrying amount of discontinued net
assets was USD 1,062 million. The
transaction caused an accounting loss of
USD 264 million reported as discontinued
operations. In arriving at the total
accounting loss, management were
required to exercise judgment to identify
the relevant elements in other
comprehensive income, and Non-
Controlling Interests (NCI).
We assessed managements’ accounting policy against
relevant IFRSs, in particular IFRS 3 – Business
Combinations, IFRS 10 – Consolidated Financial
Statements and IAS 28 – Investments in Associates and
Joint Ventures. Further, we obtained explanations from
management as to how the specific requirements of the
standards were met.
We evaluated and challenged managements’ assessment
and conclusion to report the shipping and logistics
segment, a major line of business, as discontinued
operations. In addition, we assessed and discussed with
management the identification of discontinued assets,
liabilities including NCI and elements in Other
Comprehensive Income, which determined the
accounting loss identified. We found management’s
assessment to be appropriate.
We discussed with management their assessment to
account for the retained ownership interest in WWL as
an associate and corroborated management
documentation to information such as the shareholder
agreement between Wilh. Wilhelmsen Holding ASA and
Wallenius Lines AB. We found that we agreed with
management’s assessment that WWH have a significant
influence through their ownership interest and presence
at the Board of Directors.
In September, Wilh. Wilhelmsen Holding
ASA obtained control in NorSea Group AS
(NSG), thereby increasing the ownership
from 40 % to ca 74 %. As a result, Wilh.
The fair value of the remaining investment in WWL of
USD 790 million, was determined by reference to quoted
market bid price at the close of business expressed in
USD. In order to assess each of the assumptions in
(2)
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Independent Auditor's Report - Wilh. Wilhelmsen Holding ASA
Wilhelmsen Holding ASA now owns a
controlling interest in NSG. The
consequence for the financial statements
was that the investment is no longer
presented using the equity method, but is
fully consolidated.
Due to the size of the transactions, the
complex accounting policy assessments
made by management and the significant
judgment required by management in
determining the purchase price allocation
(PPA) for the retained investment in WWL
and business combination of NSG, this has
been an area of focus for our audit.
managements’ purchase price allocation, we discussed
with management and challenged their assessments. In
particular we discussed the identification of assets and
liabilities, and the assumptions underpinning the fair
value used in the PPA. In addition, we assessed the
allocation of the purchase consideration, which
contributed to determining the elimination adjustments
to goodwill and vessels in the transaction.
We further discussed with and instructed the component
auditor in WWL related to their procedures for certain
key assumptions. This includes, procedures related to
reasonableness of cash flows used by management,
assumptions used to build the discount rate and the use
of broker valuation certificates to support valuations of
the vessels. We concluded that management’s
assumptions were reasonable.
The total purchase consideration for NSG was USD 211
million. To assess the assumptions in the purchase price
allocations for the investment in NSG, we discussed with
management and challenged their assessments. In
particular, we focused on the valuation of property,
vessel, investment in associates and joint ventures and
the liabilities, debt and derivatives assumed. In addition,
we assessed the allocation of purchase consideration and
verified the mathematical accuracy of the model.
We reviewed managements’ budgets and
forecasting and where possible compared these
to current and historical data to corroborate the
reasonableness of cash flows and normalized
EBITDAs used by management. In addition, we
verified the mathematical accuracy of the model.
We found that the cash flows and normalized
EBITDAs were reasonable.
We used our internal valuation specialists and
external market data to assess the assumptions
used to build the yield and discount rate. We
considered that the assessment made by
management was within a reasonable range.
We evaluated the appropriateness of the related
disclosures in note 3, 4 and 19 to the financial statements
for the Group to the requirements of the applicable
financial reporting framework, IFRS. We found that the
disclosure appropriately explained the transactions.
(3)
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Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Auditor’s report
Independent Auditor's Report - Wilh. Wilhelmsen Holding ASA
Other information
Management is responsible for the other information. The other information comprises the Board of
Directors’ report, the statements on Corporate Governance and Corporate Social Responsibility, but
does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Chief Executive Officer for the
Financial Statements
The Board of Directors and the Chief Executive Officer (management) are responsible for the
preparation in accordance with law and regulations, including fair presentation of the financial
statements of the parent company in accordance with simplified application of international
accounting standards according to the Norwegian Accounting Act section 3-9, and for the preparation
and fair presentation of the financial statements of the group in accordance with International
Financial Reporting Standards as adopted by the EU, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
(4)
112
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Auditor’s report
Independent Auditor's Report - Wilh. Wilhelmsen Holding ASA
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit 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 and the Group's internal control.
•
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company or the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company or the Group to cease to continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
(5)
113
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Auditor’s report
Independent Auditor's Report - Wilh. Wilhelmsen Holding ASA
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report
Based on our audit of the financial statements as described above, it is our opinion that the
information presented in the Board of Directors’ report and in the reports on Corporate Governance
and Sustainability concerning the financial statements, the going concern assumption, and the
proposal for the allocation of the profit is consistent with the financial statements and complies with
the law and regulations.
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have
considered necessary in accordance with the International Standard on Assurance Engagements
(ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial
Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly
set out registration and documentation of the Company and the Group’s accounting information in
accordance with the law and bookkeeping standards and practices generally accepted in Norway.
Oslo, 22 March 2018
PricewaterhouseCoopers AS
Thomas Fraurud
State Authorised Public Accountant
114
(6)
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017
Responsibility statement
We confirm, to the best of our knowledge, that the financial statements for the
period 1 January to 31 December 2017 have been prepared in accordance
with current applicable accounting standards, and give a true and fair view of
the assets, liabilities, financial position and profit for the entity and the group
taken as a whole.
We also confirm that the Board of Directors’ Report includes a true and fair
review of the development and performance of the business and the position
of the entity and the group, together with a description of the principal risks and
uncertainties facing the entity and the group.
Lysaker, 22 March 2018
The board of directors of Wilh. Wilhelmsen Holding ASA
Diderik Schnitler
chair
Odd Rune Austgulen
Carl Erik Steen
Irene Waage Basili
Cathrine Løvenskiold Wilhelmsen
Thomas Wilhelmsen
group CEO
115
Parent companyAccount and notesWilh. Wilhelmsen Holding ASA Annual Report 2017 C
o
r
p
o
r
a
t
e
g
o
v
e
r
n
a
n
c
e
Sustainability
Melanie Moore
Head of sustainability
Wilh. Wilhelmsen Holding, HR and Communications
The conditions for systematically addressing sustainability challenges
are better now than before, where concepts can more rapidly become
realities that make a real difference for bottom lines and society. That’s a
pretty exciting development and means we get to look at our value chain
and impacts of our operations with a fresh set of eyes. Melanie is part
of our sustainability team, overseeing our sustainability direction in the
group and challenging our own ways to always improve. As an enabler of
sustainable global trade, we have a responsibility and we stand by it.
Corporate governance
A summary of the corporate governance report for 2017
Corporate governance comply or explain overview
Principle
Deviations
Reference in this report
1.
Implementation and reporting on
corporate governance
2. The business
3. Equity and dividends
None
None
None
4. Equal treatment of shareholders and
transactions with close associates
The company has two share classes. The B shares do not carry voting rights at
the general meeting. Apart from this, each B share carries the same rights in the
company and holders of the respective classes are treated equally. Converting to a
single share class is not regarded as appropriate in the present circumstances.
5.
Freely negotiable shares
None
6. General meetings
7. Nomination committee
The chair of the board also acts as chair of the general meeting as stated in the
company’s Articles of Association.
The nomination committee is not described in the Articles of Association and the
company has not developed a formal way for shareholders to submit proposals for
candidates to the committee.
8. Corporate assembly and board of dire-
ctors: composition and independence
Executive committee for industrial democracy in foreign trade shipping instead of
corporate assembly. General meeting elects the board.
9. The work of the board of directors
The whole board acts as remuneration and audit committee. Without a corporate
assembly, the board elects its own chair.
10. Risk management and internal control
None
11. Remuneration of the board of directors
None
12. Remuneration of the executive per-
None
sonnel
13.
Information and communications
None
14. Take-overs
15. Auditor
No policy developed. However, intention is described in the report.
None
On page 119
On page 119
On page 119
On page 120
On page 121
On page 121
On page 122
On page 122
On page 126
On page 126
On page 127
On page 127
On page 127
On page 128
On page 128
Reducing risk
and improving
accountability
The board is responsible for ensuring that
the company is directed and controlled in an
appropriate and satisfactory manner according
to existing laws and regulations.
• ensures easy access to timely, accurate and
relevant information about the company’s
business
• strengthens the confidence in the company
and increases the company’s attractiveness.
This report is, amongst others, based on the
requirements covered in the Norwegian Code
of Practice for Corporate Governance.
For the board, a sound corporate governance
model is important because it:
• reduces risk
• contributes to the greatest possible value
creation over time in the best interests of the
company’s shareholders, employees and
other stakeholders
• ensures fair treatment of all our stakeholders
• strengthens confidence in the company
The board assesses the company’s corporate
governance performance to be of high
standard, and discussed and approved this
report 22 March 2018. All the directors were
present at the meeting.
Diderik Schnitler, Chair of the board
Lysaker 22 March 2018
118
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 The board’s
corporate
governance
report for
2017
1. Implementation and reporting on corporate
governance
Wilh. Wilhelmsen Holding ASA (Wilhelmsen)
is a public limited company organised
under Norwegian law. Listed on the Oslo
Stock Exchange, the company is subject to
Norwegian securities legislation and
stock exchange regulations.
This report is based on the requirements
covered in the Norwegian Code of Practice for
Corporate Governance (“the code”, dated 30
October 2014), the Public Limited Companies
Act and the Norwegian Accounting Act,
approved by the board and published as part
of the company’s annual report. The report is
also available on the company’s webpage.
Comply or explain principle
In addition to provisions and guidance that in
part elaborate on company, accounting, stock
exchange and securities legislations, as well
as the Stock Exchange Rules (dated 1 October
2014), the code also covers areas not addressed
by legislation. Build on a “comply or explain”
principle, the code requires the company to
justify deviations from its 15 provisions and
to describe alternative solutions where and
if applicable. A summary of Wilhelmsen’s
adherence to the code can be found on page
118 in this report.
Sustainable business model
A responsible business model is necessary
to be sustainable. Acknowledging that the
company’s activities affect its surroundings,
the company issues a sustainability report
based on the requirements stated in the GRI
(Global Reporting Initiative) standards. The
report describes how Wilhelmsen combines
long-term profitability with emphasis on
ethical business conduct including respect for
human rights, the natural environment and
the societies in which the company operates.
The report includes how the company
addresses employee rights and working
environment, human rights, health and
safety issues, the environment, prevention of
corruption and how the company contributes
to communities in which it operates.
Governing elements
Employees and others working for and
on behalf of the group should carry out
their business in a sustainable, ethical and
responsible manner and in accordance
withcurrent legislation and the company’s
standards.
To ensure the right results are achieved
the right way, the company has a set of
governing elements including its vision
“shaping the maritime industry”, values,
leadership expectations, and code of
conduct. A sustainability policy is part of
the group’s policy framework. As the core of
the company’s governance framework, the
governing elements guide the employees in
making the right decisions and navigating
safely in a dynamic global environment.
A summary of the governing elements is
available electronically on the group’s intranet,
as written documentation, as e-learning
and on the company’s webpages. In 2017,
anti-corruption, competition law, fraud and
theft as well as whistleblowing received
particular attention. Substantial efforts
were put into combating cyber risk where
appropriate risk reduction methods and tools
were implemented. In addition, Wilhelmsen
started adoption to the new EU General Data
Protection Regulation (GDPR) that comes into
force in May 2018 and the group will continue
this work in 2018.
Deviations from the code: None
2. The business
Articles of Association
The company’s business activities are
specified in its Articles of Association. In
brief, the company’s objective is to engage
in shipping, maritime services, aviation,
industry, commerce, finance business,
brokerage, agencies and forwarding, to own
or manage real estate, and to run business
related thereto or associated therewith. The
full articles of association are presented on the
company’s webpages.
Strategy
The company’s main strategy is to create value
by developing a diversified business portfolio.
The company will leverage its market
positions, global network and collective
competence to continue to grow a sustainable
and profitable business.
The present strategic direction of the company
is outlined in the directors report on page 16.
For a further presentation of the business
segments, see the company’s webpages.
Deviations from the code: None
3. Equity and dividends
Equity
The parent company has a sound level of
equity tailored to its objectives, strategy
and risk profile. As of 31 December 2017, the
119
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 Number of
shareholders
total equity amounted to NOK 5 620 million,
corresponding to 92% of the total capital
(parent account).
9
5
2
3
9
6
2
3
250
242
8
3
0
3
268
3009
3027
2770
Dividend policy
A dividend policy approved by the board
states that the company’s goal is to provide
shareholders with a high return over time
through a combination of value creation
for the company’s shares and payment of
dividend. The objective is to have consistent
yearly dividend paid twice annually.
2015
2016
2017
Foreign shareholders
Norwegian shareholders
Dividend paid in 2017
In 2017, the company paid NOK 5.00 in
dividend per share, totalling approximately
USD 28 million. The payable dividend was in
line with the company’s dividend policy and
based on approved annual accounts.
Proposed dividend
The board has proposed that the annual general
meeting (AGM), to be held 26 April 2018,
approves an ordinary dividend for the fiscal
year 2017 amounting to NOK 3.50 per share.
The board has further proposed that the AGM
authorise the board to distribute additional
dividend of up to NOK 2.50 per share for a
period limited in time up to the next AGM,
but not later than 30 June 2019.
Own shares
As of 31 December 2017, the company held
100 000 own shares. On behalf of Wilhelmsen,
Dividend payout 2013-2018 (NOK per share)
*2018 proposed payout pending AGM approval
8
7
6
5
4
3
2
1
0
120
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
the board is authorised by the AGM to acquire
up to 10% of the current share capital. The
minutes from the AGM held 27 April 2017
describes the authorisation, expiring 30 June
2018, in more detail. The board has proposed to
the AGM that the share capital be reduced from
NOK 930 076 480 by NOK 200 000 to NOK
929 876 480 by liquidation of the 100 000 own
A shares denominated NOK 20,– per share.
It is further proposed to the AGM that the
board be granted a new authorization to
acquire shares in the company with a nominal
value of up to NOK 92 987 648, equivalent to
10% of the current share capital, valid until the
company’s annual general meeting in 2019,
but no longer than until 30 June 2019.
Increase of the share capital
The AGM has not granted the board any
mandate to increase the company’s share
capital.
Deviations from the code: None
4. Equal treatment of shareholders and
transactions with close associates
Shareholders
As of 31 December 2017, the company had
3 038 registered shareholders, a reduction of
7% from one year earlier. The company had
268 foreign shareholders (domiciled abroad)
and the remaining were Norwegian (domiciled
in Norway). The Norwegian shareholders
counted for 91% of the company’s shareholder
base and held 84% of the total number of
shares as of 31 December 2017.
Two share classes
The company has two share classes,
comprising 34 637 092 A shares and 11 866
732 B shares. According to the company’s
Articles of Association, the B shares do not
carry voting rights at general meetings. Apart
from this, each B share carries the same rights
in the company and holders of the respective
classes are treated equally. Converting
to a single share class is not regarded as
appropriate in the present circumstances.
Share capital
Where the board resolves to carry out an
increase in share capital and waive the pre-
emption rights of existing shareholders on
the basis of a mandate granted to the board,
the justification should be publicly disclosed
in a stock exchange announcement issued in
connection with the increase in share capital.
Transactions with close associates
Any transactions the company carries out
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 % of shares
owned by
Norwegian
and foreign
shareholders
12%
15%
16%
88%
85%
84%
2015
2016
2017
Foreign shareholders
Norwegian shareholders
in its own shares are carried out through
the stock exchange and at prevailing stock
exchange prices. Any transactions taking
place between a principal shareholder or
close associates and the company will be
conducted on arm’s length terms. A similar
principle will be used for certain transactions
between companies with in the group.
In the event of material transactions, the
company will seek independent valuation.
Relevant transactions will be publicly
disclosed to seek transparency. Pursuant to
the instructions issued by and for the board,
directors are required to inform the board if
they have interests and/or relations, directly
or indirectly, with the Wilhelmsen group
(including subsidiaries).
Overview of insiders
A list of primary insiders can be found on the
Oslo Stock Exchange under the company’s
ticker.
Deviations from the code: The code
recommends only one share class. The company
has two share classes. The B shares do not carry
voting rights at general meetings. Apart from
this, each B share carries the same rights in the
company and holders of the respective classes
are treated equally. Converting to a single share
class is not regarded as appropriate in the
present circumstances.
tickers “WWI” and “WWIB” for the A and
B share respectively, both shares are freely
negotiable. There are no restrictions on
negotiability in the company’s Articles of
Associations.
Deviations from the code: None
6.–9. Governing bodies
The company’s governing bodies consist of
the general meeting, the executive committee
for industrial democracy, the board of
directors, the group chief executive and the
group management team.
General meeting
The general meetings deal with and decide
on the following matters:
• Adoption of the annual report and accounts
including the consolidated accounts and
the distribution of dividend Adoption of the
auditor’s remuneration
• Determination of the remuneration for board
and committee members
• Election of members to the board and
election of the auditors
• Any other matter that belongs under the
annual general meeting by law or according
to the Articles of Association.
The annual general meeting is normally held
April or early May.
5. Freely negotiable shares
Listed on the Oslo Stock Exchange with the
Shareholders with known address are
notified by mail no later than 21 days prior
Governing bodies
Executive committee for
industrial democracy
General
meeting
Board of directors
(audit and remuneration
committee)
Group
CEO
Nomination
committee
Group
management team
121
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 to the meeting and all relevant documents
are published on Wilhelmsen’s website
no later than 21 days prior to the meeting.
Shareholders may, upon request, receive hard
copies of the material.
board. None of the committee members are
executives in the company.
In 2017, the nomination committee held two
meetings.
Shareholders wishing to attend the general
meeting must notify the company at least
two working days before the meeting takes
place. Shareholders may participate at the
meeting without being present in person,
and can vote in advance through electronic
communication. Guidelines for voting are
included in the notice to the meeting Last, but
not least, the shareholders can appoint a proxy
to vote for their shares. Shareholders with
known address receives a proxy appointment
form. The form is downloadable from the
company’s web pages.
The chair, auditor and representatives from
the company are present at the general
meeting, which is organised in a way that
facilitates dialogue between shareholders and
representatives from the company.
The chair opens and directs the general
meeting, as described in the Articles of
Association.
The minutes from the AGM are available
on the company’s website immediately
after the meeting and may be inspected by
shareholders at the company’s office.
Nomination committee
The general meeting appoints the nomination
committee and has approved guidelines
for the committee’s work. The committee
nominates candidates to the board and
proposes board members’ remuneration. As
part of its nomination process, the committee
will have contact with major shareholders, the
board and the company’s executives to ensure
the process takes the board’s and company’s
needs into consideration. A justification
for a candidate will include information on
each candidate’s competence, capacity and
independence.
The nomination committee currently consists
of Wilhelm Wilhelmsen (chair), Gunnar
Frederik Selvaag and Jan Gunnar Hartvig.
Elected at the general meeting in April 2016
for a period of two years, the committee
members are up for election in 2018.
Board of directors – composition and
independence
The company does not have a corporate
assembly (see executive committee), and
therefore the general meeting elects the
board. The board comprises five directors,
of which minimum two are women, elected
for minimum two years at a time. Four of the
directors are independent of the majority
owner and the executive management. The
board does not include executive personnel.
However, the group CEO and group CFO are
always present at the board meetings as is
other executives depending on agenda and
issues to be discussed.
Information on the background and experience
of the directors is available on the company’s
web pages, which also lists the number of
shares in the company held by each director.
All the board members have or are planning
to attend a seminar hosted by the Oslo Stock
Exchange. The objective of the course was
to provide information on legislation, rules,
regulations and best practice that are relevant
for board members of listed companies.
Board member
Elected
Period Elected to
Diderik Schnitler
April 2017
2 years
2019
Cathrine L. Wilhelmsen April 2017
2 years
2019
Irene W. Basili
April 2016
2 years
2018
Carl Erik Steen
April 2017
2 years
2019
Odd Rune Austgulen
April 2016
2 years
2018
Board responsibility and work
The instruction for the board includes rules on
the work of the board and its administrative
procedures determining what matters should
be considered by the board. The board has the
ultimate responsibility for the management of
the company and that the business is run in a
sustainable and responsible way.
The majority of the committee is independent
of the board and executives in the company.
Mr Wilhelmsen meets in the executive
committee and acts as an advisor for the
The board head the company’s strategic
planning and makes decisions that form the
basis for the administrations execution of the
agreed strategy.
122
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 The chair of the board has an extended duty to
ensure the board operates well and carries out
its duties.
The board establishes an annual plan for
its work. In 2017, the company hosted nine
board meeting, including one full day strategy
meeting. Two of the directors had lawful
excuse for non-appearance at two separate
board meetings.
In addition to the board meetings, the board
visits business related locations to ensure they
have a solid understanding of the business,
market and outlook for the maritime
industry. The company keeps the board
regularly updated on development in the
group through a variety of communication
channels, including a board portal containing
timely and relevant information.
Audit committee
The whole board serves as the company’s
audit committee, as the board only comprises
five members.
In 2017, the audit committee have had
particular attention on anti-corruption, theft
and fraud, whistleblowing and competition
law and the roll-out of an awareness
programmes related to these topics.
Remuneration committee
The board has not deemed it as relevant to
have a separate remuneration committee, and
therefore acts collectively as the remuneration
committee. The board sets guidelines for
remuneration for the executive personnel,
including long- and short-term bonus
schemes and pension plans. The also decide
the general remuneration principles for other
employees in the company.
Executive committee
An executive committee for industrial
democracy in foreign trade shipping, chaired
by the group CEO Thomas Wilhelmsen,
ensures the interest of the employees. The
committee comprises six members, four
appointed from the management and two
elected by the workforce. It meets regularly
through the year. Issues submitted for
consideration by the committee include a
draft of the accounts and budget as well as
matters of major financial significance for
the company or of special importance for the
workforce. The executive committee members
were elected in 2014 for a three-year period.
Group management team
The group management structure was
reshaped during the first half of 2017.
The group management team (GMT) in
Wilhelmsen consists of the group chief
executive officer (group CEO) and five
executive managers:
• group chief financial officer (group CFO)
• group VP corporate communications
• group VP human resources and
organisational development
• group SVP industrial investments
• group SVP industrial investments
In January 2018, the corporate communications
and human resources and organisational
development roles will be merged into one role
named group SVP HR and communications.
This will bring the executive members reporting
to the group CEO from five down to four in 2018.
GMT discusses and coordinates all main
business and management issues relevant for
the group of companies. It also makes benefit
of the group’s total expertise and knowledge
when executing strategies and goals set by the
board. An overview of the background and
expertise of the GMT member is available on
the company’s website.
Group CEO
The board’s instruction to the group CEO
includes a statement of duties, responsibilities
and delegated authorities. The group CEO has
the overall responsibility for the company’s
results and for conducting the businesses and
affairs of the company and its subsidiaries in a
proper and efficient manner, in the company’s
and its shareholders best interest.
The group CEO has a particular responsibility
to ensure that the board receives accurate,
relevant and timely information that is
sufficient to allow it to carry out its duties.
Group’s operations, financial results,
projections, financial status or other topics
specified by the board, is regularly shared with
the board between board meetings.
The group CEO has delegated the
responsibility of the different professions and
subsidiaries to other members of the GMT.
Group CFO
The group CFO heads finance and strategy
for Wilh. Wilhelmsen Holding ASA and the
consolidated Wilhelmsen group. The group
CFO is responsible for providing group CEO
and the board with reliable, relevant and
sufficient financial information related to
the WWH group’s business activities, and
assuring that such information is based on
requirements for listed companies.
123
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017
Group
mangement
team
From left:
Erik Nyheim
(senior vice president
industrial investments)
Benedicte Teigen Gude
(senior vice president
HR and communications)
Thomas Wilhelmsen
(group CEO)
Jan Eyvin Wang
(senior vice president
industrial investments)
Christian Berg
(group CFO)
124
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 125
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 Governance of subsidiaries
The Wilhelmsen group consists of several legal
entities (for a full overview, please see page
132). Each entity has its own board responsible
for issues related to the specific entity.
The board reviews the company’s risk matrix
at least four times a year and the internal
control arrangements at least once a year,
preferably together with the company’s
auditor.
Wilhelmsen’s ambition is to be a demanding
and reliable owner, taking the long-term
interests of the companies and the total
group into consideration when developing
its future strategy, including how ownership
will be exercised, financial prospects as well
as expectation towards code of conduct,
environmental and sustainable standards and
aspirations.
Control and management of all entities are
based on the same governance principles
applicable to Wilhelmsen.
In the case of partly owned subsidiary,
the same principle applies concerning
control and management of the business.
Wilhelmsen’s is represented on the board
of partly owned subsidiaries. Wilhelmsen’s
ownership in the subsidiaries is formally
exercised through the respective companies’
general meetings.
Deviations from the code: The chair of
the board also acts as chair of the general
meeting as stated in the company’s Articles
of Association. Further, the company has an
executive committee for industrial democracy
in foreign trade shipping instead of a corporate
assembly. Without a corporate assembly, the
board elects its own chair. Given the size of
the board and the fact that the board jointly
is responsible for its decisions, separate
committees is not valued as necessary. The
whole board therefore acts as remuneration
and audit committee. Last, the Articles of
Association does not include a reference to the
nomination committee and the company has
not developed a formal way for shareholders
to submit proposals for candidates to the
committee.
10. Risk management and internal control
Board responsibility
The board is responsible for the company’s
internal control and risk management, and
believes that the company’s systems are
sound and appropriate given the extent and
nature of the company’s activities. The system
contributes to sound control characterised
by integrity and ethical attitudes throughout
the organisation. It is based on the company’s
governing elements including the guidelines
for business standard and corporate social
responsibility.
About the system
Governing documents, code of conduct,
policies (including sustainability) and policy
descriptions, and procedures are documented
and electronically available to the company’s
employees through the company’s global
integrated management system. Various
internal control activities give management
assurance that the internal control of financial
systems is working adequately and according
to segment management’s expectations.
The company’s internal control is a process
designed to provide reasonable assurance of:
• Effective and efficient operations
• Sound risk management
• Reliable financial reporting
• Compliance with laws and regulations
• Necessary resources provided and used in
cost efficient ways.
Internal control includes:
• Activities established to evaluate and
confirm the quality of internal control
regarding financial reporting (per segment)
• Procedure for year-end financial statement
and the board’s responsibility
statement semi-annually and annually
• Enterprise risk assessment – including
reporting of the segment’s internal control
• Quarterly reporting on risk assessment to the
board
• Risk factors are described and made public
to the market in the company’s second
quarter and annual reports
The group’s finance and strategy division
has the responsibility for updating internal
control procedures on a group level,
including:
• Wilhelmsen group financial mandate
• Wilhelmsen group accounting policies and
guidelines
• Wilhelmsen (parent) accounting policies and
guidelines
• Wilhelmsen group enterprise risk
management policy and guidelines
The group financial strategy is approved
by the board and covers all main elements
related to financial management of the group,
including:
• Responsibility
• Key ratios
• Equity and dividend
126
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017
• Investor relation
• Financing and debt management
• Financial investment management
• Currency management
• Contingent liabilities
• Merger and acquisitions
• Accounting and financial reporting
• Internal control and risk management
• Reporting to WWH board
Main group companies have implemented
similar governing documents approved by the
respective boards and in line with the group
strategy.
External reassurance
Confirmation from external auditors and
internal procedures i.e. business reviews
(financial, operational and quality) give the
management and board confidence that the
group complies with external and internal
rules and regulations.
The company’s auditors conduct audit in
accordance with the laws, regulations and
auditing standards and practices generally
accepted in Norway and give reasonable
assurance as to whether the consolidated
financial statements are free from material
misstatements and whether internal control
over financial reporting were appropriate
in the circumstances relevant to the audit.
The audit includes examining on test basis
evidence supporting the amounts and
disclosures in the financial statements. It also
includes assessing the accounting policies
used and the reasonableness of accounting
estimates made by management as well as
evaluation of the overall financial statement
presentation including the disclosures.
Whistleblowing
The group has a global whistleblowing system
including procedures and channels for
giving notice to the company about potential
non-compliance, e.g. corruption, theft,
fraud, sexual harassment or other breaches
to the company’s business standards. The
whistleblowing channel is available for both
internal and external parties. Strengthening
transparency and safeguarding that the
business standards are applied the way they
are intended, the procedures also ensure that
the group has a professional way of handling
potential breaches to laws and regulations,
self-imposed business standards or other
serious irregularities. The procedures also
include guidelines to safeguard the whistle-
blower.
Deviations from the code: None
11. Remuneration of the board of directors
Remuneration of directors is determined
by the annual general meeting and is not
dependent upon the company’s results. The
fee reflects the responsibilities of the board,
its expertise, the amount of time devoted to
its work and the complexity of the company’s
businesses. No director holds share options in
the company.
None of the directors performs assignments
for the company other than serving on the
board of the company or one or more of
its subsidiaries, except for board member
Diderik Schnitler’s company, Løkta AS, which
performed certain consultancy work for Wilh.
Wilhelmsen ASA (WWASA) up to the end of
the second quarter of 2017. Amongst others,
Mr Schnitler represented WWASA on the
joint WWASA/Wallenius steering committee
governing the joint ventures Wallenius
Wilhelmsen Logistics, EUKOR Car Carriers
and American Shipping and Logistics. The
board had approved the assignment including
remuneration.
An overview of the directors’ remuneration
is specified in note 6 to Wilhelmsen group
accounts and note 2 to the parent company
accounts, of which the latter includes an
overview of shares in company held by the
individual director.
Deviations from the code: None
12. Remuneration of executive personnel
Remuneration policy
An overview of Wilhelmsen’s remuneration
policy, employee benefits, including salary
and other components of the chief executive’s
and group senior executives’ remuneration
packages, is detailed in note 6 to the group
accounts and note 2 and 16 to the parent
company accounts. The board’s statement
of executive personnel is also a separate
appendix to the agenda for the annual general
meeting, which approves the remuneration as
part of the annual report.
Deviations from the code: None
13. Information and communication
Communication principles and standards
Transparency, accountability and timeliness
guides the group’s communication activities.
The company follow the guidelines set out by
the Oslo Stock Exchange and The Norwegian
Investor Relations Association and their
opinion of best practice related to financial
reporting and Investor Relations information.
127
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 Communication channels and activities
The interim and annual results are presented
to the financial markets and business
journalists. At least two of these presentations
are transmitted directly by webcast. Results
are also posted on the group’s investor
relations pages. Further, the company strives
to host an annual capital markets day, to give
the stakeholders more in-depth knowledge
about the group’s activities and strategies.
The market is regularly informed about the
group’s activities and results through stock
exchange notices, annual and interim reports,
press releases and updates on the group’s web
site.
Extensive information about the activities
of the group is provided on the group’s web
pages. A separate section named “Investors
relations” includes relevant information
to shareholders, including reports and
presentations, financial calendar, analysts,
share information, corporate governance, IR
contact and news and media. The company
has a dedicated Investor relations team, and
main point of contact is Mr Åge S Holm.
The group is present on social media, but have
strict rules on who can utilise social media for
company purposes and has clear guidelines
stating that stock sensitive information must
be published through the stock exchange
before it is made available on social media.
Silent period
Two weeks before the planned release of
quarterly financial reports – the silent period
– the company will not comment on matters
related to the general financial results or
expectations, and contact with external
analysts, investors and journalists will be
minimised. This is done to reduce the risk of
information leakages and that the market has
access to different information.
Deviations from the code: None
14. Takeovers
The board has not established a policy for
its response to possible takeover bids. The
board and management will seek to treat any
takeover bids for the company’s activities or
shares in a professional way and in the best
interest of the company’s shareholders. If
such circumstances arise, the board and the
company’s management will seek to treat all
shareholders equally and take action to secure
that shareholders receive sufficient and timely
information to consider the offer.
Deviations from the code: No policy developed,
but intention described above.
15. Auditor
The company’s auditor – Pricewaterhouse-
Coopers AS (PwC) – attends board meetings
as required and is always present when the
annual accounts are approved.
To ensure the board has solid understanding
of the accounts and any changes in the
accounting principles, the auditor discuss
changes in IFRS relevant for the group’s
accounting principles or other law
requirements relevant for the company with
the board. The auditor also runs through
the main features of the audits carried out.
There were no disagreements between the
management and PwC during 2017.
It is of importance to the board that the
auditor is independent of management. The
board therefore has at least one meeting
with PwC without senior management being
present. If used for other services than
accounting, the parties will follow guidelines
as described in the Auditing and Auditors’
Act. The auditor provides the board with a
confirmation of independence in relation to
non-audit services provided.
In 2017, PwC has audited accounts, notes,
the director’s report and read through
and commented on the board’s report on
corporate governance and the company’s
sustainability report.
The fee to external auditors, broken down by
statutory work, other assurance services, tax
services and other assistance, is specified in
note 6 to the Wilhelmsen group accounts
and note 2 to the parent company accounts.
For the financial year 2017, Thomas Fraurud
has been the company’s engagement partner
from PwC.
Deviations from the code: None
128
GroupCorporate governanceWilh. Wilhelmsen Holding ASA Annual Report 2017 Augmented
reality
Cara Wong
Marketing Manager
Wilhelmsen Ships Service, Marine Products
Constantly working to enhance the total offer for our solutions on board
the rigs and vessels we serve, Cara is part of the team driving the use of
Augmented Reality and interactive 3D experiences. This makes it easier
for customers on board and in the offices to quickly understand the
application areas, product features and key usage information, increasing
effectiveness and efficiency. We see a tremendous training potential here
as well. This is just the start as we have an ambition to bring to life more
solutions for more vessel types in the near future.
C
o
r
p
o
r
a
t
e
s
t
r
u
c
t
u
r
e
Autonomous
ships
Haakon Lenz
Regional vice president Americas and Europe
Wilhelmsen Ship Management, Management Team
What if we could remove trucks and big vehicles from the
roads, what if we could lessen the strain on society by
making roads safer, cleaner, and decrease wear and tear? By
reducing costs dramatically for anyone wishing to transport
their goods via shortsea logistics, we might have something
interesting to offer. Vessels running on cleaner energy and
being fully autonomous will create a perfect way to utilize
waterways around the globe. Instead of having thousands
of trucks driving around the bay, have a low emission
autonomous vessel carry your goods straight across. It saves
you time, money, risk, and the society at large will benefit
simultaneously. Haakon works on the team creating the first
ever company, building and operating fully autonomous
vessels. Wilhelmsen is enabling sustainable global trade,
even shaping the future of logistics by the sound of it.
Corporate structure
As of 31 December 2017
Wilhelmsen group
Wilh. Wilhelmsen Holding ASA, Norway
Wallenius Wilhelmsen
Logistics ASA,
Norway 37.82%
Treasure ASA,
Norway
72.73%
Wilhelmsen Maritime
Services AS,
Norway
Wilh. Wilhelmsen
Holding Invest AS,
Norway
WilService AS,
Norway
Wilhelmsen Accounting
Services AS,
Norway
Wilh. Wilhelmsen
(Hong Kong) Ltd,
Hong Kong
WilNor Governmental
Services AS,
Norway 51%
Holding and investments segment
Wilh. Wilhelmsen Holding ASA, Norway
Wallenius Wilhelmsen
Logistics ASA
37.82%
Treasure ASA
72.73%
Wilh. Wilhelmsen
Holding Invest AS
Wilh. Wilhelmsen
(Hong Kong) Ltd,
Hong Kong
WilService AS,
Norway
Wilhelmsen
Accounting
Services AS, Norway
Den Norske
Amerikalinje AS
Hyundai Glovis Ltd
12.04%
Wilh. Wilhelmsen
Holding Invest
Malta Ltd
Wilhelmsen Ferd
Offshore AS
50%
Unless otherwise stated, the company is wholly-owned.
132
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017 Supply services segment
Wilh. Wilhelmsen Holding ASA, Norway
WilNor Governmental
Services AS
51%
Wilh. Wilhelmsen
Holding Invest AS
NorSea Group AS
74.11%
For group company list sorted
by business areas see below list.
Supply services segment
Company name
Norsea Group AS
Companies owned by NorSea Group AS
NorSea Group Property AS
NorSea Group Operations AS
NorSea Group DENMARK A/S
NorSea Group UK Ltd
NorSea Group Australia PTY Ltd
Wilnor Governmental Services AS
Companies owned through subsidiaries
Vestbase AS
Vestbase Eiendom AS
Omagata 124 AS
Averøy Eiendom AS
Orvikan Eiendom AS
Stordbase AS
NorSea AS
Maritime Logistic Services AS
Viking Fighter AS
NorSea Eiendom Dusavik AS
NorSea Eiendom Tananger AS
NorSea Tananger 107 AS
NorSea Ekofiskvegen AS
Tananger Eiendom AS
Nsg Wind A/S
Nsg Digital As
Øer Energy Ltd
Øer GMBH
Country
Business office
Share
Norway
Norway
Denmark
Scotland
Australia
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Denmark
Norway
Germany
Tananger
Tananger
Esbjerg
Aberdeen
Perth
Lysaker
Kristiansund
Kristiansund
Kristiansund
Kristiansund
Kristiansund
Stord
Stavanger
Stavanger
Tananger
Stavanger
Tananger
Tananger
Tananger
Tananger
Esbjerg
Stavanger
UK
Germany
100.00%
100.00%
100.00%
100.00%
100.00%
49.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
133
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017 Share
100.00%
100.00%
95.62%
94.96%
75.00%
75.00%
75.00%
73.00%
50.10%
50.00%
50.00%
50.00%
50.00%
50.00%
49.75%
42.82%
42.00%
41.00%
40.00%
37.91%
33.33%
33.07%
32.26%
Cont. Supply services segment
Company name
Companies owned through subsidiaries
Country
Business office
Øer A/S
Øer BV
Polarbase Eiendom AS
Polarbase AS
Maritime Waste Management AS *
Norbase AS
Mid-Nor Yard Service AS ***
NSG Maritime AS
Dusavik Utvikling AS *****
Coast Center Base AS
Vikan Næringspark Invest AS
SørSea AS
Polarlift AS
Artic Base Supply AS
KS Coast Center Base
Risavika Havn AS **
Risavika Eiendom AS
Bring Polarbase AS
Smart Management AS
Eldøyane Næringspark AS
Risavika Havnering 14 AS
Strandparken Holding AS ***
Hammerfest Næringsinvest AS
Denmark
Netherland
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Greenland
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Norway
Denmark
Netherland
Hammerfest
Hammerfest
Kristiansund
Harstad
Kristiansund
Stavanger
Stavanger
Fjell
Kristiansund
Tananger
Hammerfest
Greenland
Fjell
Tananger
Tananger
Hammerfest
Tananger
Stord
Stavanger
Hammerfest
Hammerfest
* NorSea Group Operations AS owns 50 % of Maritime Waste Management AS, remaining 50 % is owned by Coast Center Base AS. NorSea Group Operations AS
owns 50 % of Coast Center Base AS. Total direct and indirect NorSea Group AS owns 75 % of Maritime Waste Management AS.
** NorSea Eiendom Tananger AS owns 34 % of Risavika Havn AS. NorSea Eiendom Tananger AS owns 42 % of Risavika Eiendom AS which owns 21 %
of Risavika Havn AS. Total direct and indirect NorSea Group AS owns 42,82 % of Risavika Havn AS.
*** Polarbase Eiendom AS owns 25 % of Strandparken Holding AS. Polarbase Eiendom AS owns 32,26 % of Hammerfest Næringsinvest AS.
Hammerfest Næringsinvest AS owns 25 % of Strandparken Holding AS. Total direct and indirect NorSea Group AS owns 33,07 % of Strandparken Holding AS.”
**** Vestbase Eiendom AS owns 50 % of Mid-Nor Yard Services AS, remaining 50 % is owned by Coast Center Base AS. NorSea Group Operations owns 50% of
Coast Center Base AS. Total direct and indirect NorSea Group AS owns 75 % of Mid-Nor Yard Services AS.
***** NSG own 40% of Dusavik Utvikling AS. K2 owns 60% of Dusavik Utvikling. NorSea Eiendom dusavik owns 16,83% of K2.
Investments in subsidiaries and associates are measured according to cost method in the financial statements.
In the consolidated accounts associated companies are measured according to the equity method.
Maritime services segment
Wilhelmsen Maritime Services AS, Norway
Wilhelmsen
Ships Service
Wilhelmsen Ships
Service AS,
Norway
Wilhelmsen Ship
Management
Wilhelmsen Ship
Management
Holding Ltd, Hong Kong
For group company list sorted by business areas see following list.
Wilhelmsen Insurance Services AS
Business area
Legal entity
Unless otherwise stated, the company is wholly-owned.
134
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017
Cont. Maritime services segment
Company name
Wilhelmsen Maritime Services
Wilhelmsen Insurance Services AS
Wilhelmsen Ship Management
Unicorn Shipping Services Ltd
Wilhelmsen Ship Management Serviços Marítimos do Brasil Ltda
Wilhelmsen Marine Personnel d.o.o.
BWW LPG Limited (formerly known as Aurora Wilhelmsen Management Limited)
Barklav (Hong Kong) Limited
Wilhelmsen Marine Personnel (Hong Kong) Ltd
Wilhelmsen Ship Management Holding Limited
Wilhelmsen Ship Management Limited
WSM Global Services Limited
Wilhelmsen Ship Management (India) Private Limited
BWW LPG Sdn Bhd (formerly known as Aurora Wilhelmsen Management Limited)
Wilhelmsen Ship Management Sdn Bhd
Wilhelmsen Ship Management Services Sdn Bhd
WSM Offshore Services Sdn Bhd
Diana Wilhelmsen Management Limited
Unicorn Shipping Services Limited
Barber Moss Ship Management AS
Wilhelmsen Marine Personnel (Norway) AS
Wilhelmsen Ship Management (Norway) AS
OOPS (Panama) SA
Wilhelmsen-Smith Bell Manning Inc
Wilhelmsen Marine Personnel Sp z.o.o.
Haeyoung Maritime Services Co Ltd
Wilhelmsen Ship Management Korea Ltd
Barklav SRL
Wilhelmsen Marine Personnel Novorossiysk Ltd
Wilhelmsen Ship Management Singapore Pte Ltd
Wilhelmsen Marine Personnel (Ukraine) Ltd
Wilhelmsen Ship Management (USA) Inc
Wilhelmsen Ships Service
Wilhelmsen Ships Service Algeria SPA
Wilhelmsen Ships Service Argentina SA
New Wave Maritime Services Pty Ltd
Wilhelmsen Ships Service Pty Limited
WLB Shipping Pty Ltd
WWHI Property Australia Pty Ltd
Almoayed Wilhelmsen Ltd
Wilhelmsen Ships Service NV
Wilhelmsen Ships Service do Brasil Ltda
Wilhelmsen Ships Service Ltd
Wilhelmsen Ships Service Inc
Wilhelmsen Ships Service Agencia Maritima SA
Wilhelmsen Ships Service (Chile) S.A.
Wilhelmsen Huayang Ships Service (Beijing) Co Ltd
Wilhelmsen Huayang Ships Service (Shanghai) Co Ltd
Wilhelmsen Ships Service Co Ltd
Wilhelmsen Ships Service Colombia SAS
Wilhelmsen Ships Service Cote d'Ivoire SARL
Wilhelmsen Ships Service Cyprus Ltd
Wilhelmsen Ships Service A/S
Wilhelmsen Ships Service Ecuador SA
Barwil Arabia Shipping Agencies SAE
Barwil Egytrans Shipping Agencies SAE
Country
Norway
Bangladesh
Brazil
Croatia
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
India
Malaysia
Malaysia
Malaysia
Malaysia
Marshall Islands
Mauritius
Norway
Norway
Norway
Panama
Philippines
Poland
Republic of Korea
Republic of Korea
Romania
Russia
Singapore
Ukraine
United States
Algeria
Argentina
Australia
Australia
Australia
Australia
Bahrain
Belgium
Brazil
Bulgaria
Canada
Chile
Chile
China
China
China
Colombia
Cote d'Ivoire
Cyprus
Denmark
Ecuador
Egypt
Egypt
Ownership %
100.00%
51.00%
100.00%
100.00%
49.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
49.00%
100.00%
100.00%
100.00%
50.00%
51.00%
100.00%
100.00%
100.00%
100.00%
25.00% *
100.00%
20.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
49.00% *
100.00%
100.00%
100.00%
100.00%
100.00%
40.00% *
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
49.00% *
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
35.00%
49.00% *
135
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. Maritime services segment
Company name
Wilhelmsen Ships Service
Scan Arabia Shipping Agencies SAE
Wilhelmsen Ships Service Oy Ab
Auxiliaire Maritime SAS
Wilhelmsen Ships Service France SAS
Barwil Georgia Ltd
Wilhelmsen Ships Service Georgia Ltd
Barwil Agencies GmbH
Wilhelmsen Ships Service GmbH
Wilhelmsen Ships Service (Gibraltar) Limited
Wiltrans (Gilbraltar) Limited
Barwil Hellas Ltd
Uniref SA
Wilhelmsen Ships Service Hellas SA
Wilhelmsen Ships Service Limited
Wilhelmsen Maritime Services Private Limited
Barwil For Maritime Services Co Ltd
Iraqi-Norwegian Company For Marine Navigation and Maritime Services Ltd
Wilhelmsen Ships Service SpA
Wilhelmsen Ships Service (Japan) Pte Ltd – Legal Branch
Wilhelmsen Ships Service Co Ltd
Wilhelmsen Ships Service Ltd
Alghanim Barwil Shipping Co-Kutayba Yusuf Ahmed & Partners WLL
Wilhelmsen Ships Service Lebanon SAL
Wilhelmsen Freight & Logistics Sdn Bhd
Wilhelmsen IT Services Sdn Bhd
Wilhelmsen Ships Service Holdings Sdn Bhd
Wilhelmsen Ships Service Malaysia Sdn Bhd
Wilhelmsen Ships Service Trading Sdn Bhd
WSS Global Business Services Sdn Bhd
Wilhelmsen Ships Service Malta Limited
Unitor de Mexico, SA de CV
Wilhelmsen Ships Service (Mozambique), Limitada
Wilhelmsen Ships Service (Myanmar) Limited
Wilhelmsen Ships Service BV
Unitor Ships Service NV Netherland Anthilles
Wilh. Wilhelmsen (New Zealand) Limited
Wilhelmsen Ships Service Limited
Barwil Agencies AS
Kemetyl Norge Konsument AS
Wilhelmsen Chemicals AS
Wilhelmsen IT Services AS
Wilhelmsen Ships Service AS
Wilhelmsen Towell Co LLC
Wilhelmsen Ships Service (Private) Limited
Barwil Agencies SA
Intertransport Air Logistics SA
Lowill SA
Scan Cargo Services SA
Transcanal Agency SA
Wilhelmsen Ships Service SA
Wilhelmsen Ships Service Peru SA
Wilhelmsen-Smith Bell (Subic) Inc
Wilhelmsen-Smith Bell Shipping Inc
Wilhelmsen Ships Service Philippines Inc
Wilhelmsen Ships Service Polska Sp z.o.o.
Argomar-Navegcao e Transportes SA
Wilhelmsen Ships Service Portugal, S.A
136
Country
Egypt
Finland
France
France
Georgia
Georgia
Germany
Germany
Gibraltar
Gibraltar
Greece
Greece
Greece
Hong Kong
India
Iraq
Iraq
Italy
Japan
Japan
Kenya
Kuwait
Lebanon
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malta
Mexico
Mozambique
Myanmar
Netherlands
Netherlands Antilles
New Zealand
New Zealand
Norway
Norway
Norway
Norway
Norway
Oman
Pakistan
Panama
Panama
Panama
Panama
Panama
Panama
Peru
Philippines
Philippines
Philippines
Poland
Portugal
Portugal
Ownership %
49.00% *
100.00%
100.00%
100.00%
50.00%
50.00%
100.00%
100.00%
100.00%
100.00%
60.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
49.00%
49.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
60.00%
49.00% *
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
40.00% *
100.00%
100.00%
100.00%
100.00%
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017 Cont. Maritime services segment
Company name
Wilhelmsen Ships Service
Perez Torres Portugal Lda
Wilhelmsen Ship Services Qatar Ltd
Wilhelmsen Hyopwoon Ships Service Ltd
Wilhelmsen Ship Services Co Ltd
Barwil Star Agencies SRL
Wilhelmsen Ships Service OOO
Barwil Agencies Ltd For Shipping
Binzagr Barwil Maritime Transport Co Ltd
Nagliyat Al-Saudia Co Ltd
Wilhelmsen Ships Service Senegal SUARL
Unitor Cylinder Pte Ltd
Wilhelmsen Ships Service (Japan) Pte Ltd
Wilhelmsen Ships Service (S) Pte Ltd
Timm Slovakia s.r.o
Barwil (South Africa) Pty Ltd
Krew-Barwil (Pty) Ltd
Wilhelmsen Ships Services (Pty) Ltd
Wilhelmsen Ships Services South Africa (Pty) Ltd
Wilhelmsen Ships Service Canarias SA
Wilhelmsen Ships Service Spain SAU
Wilhelmsen Meridian Navigation Ltd
Baasher Barwil Agencies Ltd
Alarbab For Shipping Co. Ltd
Wilhelmsen Ships Service AB
Wilhelmsen Ships Service Inc
Wilhelmsen Ship Services Ltd
Wilhelmsen Ships Service (Thailand) Ltd
Wilhelmsen Denizcilik Hizmetleri Ltd Sirketi
Wilhelmsen Lojistick Hizmetleri Ltd Sirketi
Wilhelmsen Ships Service Ukraine Ltd
Barwil Abu Dhabi Ruwais LLC
Barwil Dubai LLC
Wilhelmsen Ship Services LLC
Triangle Shipping Agencies LLC
Wilhelmsen Ships Service AS (Dubai Branch)
Wilhelmsen Maritime Services JAFZA
Wilhelmsen Ships Service (LLC)
Denholm Wilhelmsen Ltd
Wilhelmsen Ships Service Limited
Wilhelmsen Ships Service Inc
Wilhelmsen Sunnytrans Co Ltd (formerly known as Barwil-Sunnytrans Co Ltd)
International Shipping Co Ltd
* Additional profit share agreement
Country
Portugal
Qatar
Republic of Korea
Republic of Korea
Romania
Russia
Saudi Arabia
Saudi Arabia
Saudi Arabia
Senegal
Singapore
Singapore
Singapore
Slovakia
South Africa
South Africa
South Africa
South Africa
Spain
Spain
Sri Lanka
Sudan
Sudan
Sweden
Taiwan
Tanzania
Thailand
Turkey
Turkey
Ukraine
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Kingdom
United Kingdom
United States
Vietnam
Yemen
Ownership %
50.00%
0.00% *
50.00%
100.00%
100.00%
100.00%
70.00%
50.00%
0.00% *
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
49.00%
100.00%
70.00%
100.00%
100.00%
40.00%
50.00%
0.00% *
100.00%
100.00%
100.00%
49.00% *
100.00%
100.00%
100.00%
0.00% *
49.00% *
42.50%
49.00% *
100.00%
100.00%
49.00% *
40.00%
100.00%
100.00%
49.00% *
0.00% *
137
GroupCorporate structureWilh. Wilhelmsen Holding ASA Annual Report 2017 Learning
Emilie Maria Waagsaether
Learning manager
Wilh. Wilhelmsen Holding, HR and communications
It is a cliché to say it, but people are your most important
asset. Nevertheless, that is no joke – it is what you do with
your people that really defines if you take care of them. At
Wilhelmsen we train our people to lift Wilhelmsen into the
next generation of maritime companies, it is that simple.
To shape new mindsets and make sure we are fit for fight,
teaching our people how to work at their very best and think
bigger than the task at hand becomes our number one
priority. We retain and attract people that are in it to make a
difference. Emilie is part of our learning team, making sure
that everyone from our highly valued trainees to the group
CEO are fully equipped to shape the maritime industry.
wilhelmsen.com
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Wilh. Wilhelmsen Holding ASA
Phone: (+47) 67 58 40 00
Fax: (+47) 67 58 40 80
Postal Address:
PO Box 33, NO-1324
Lysaker, Norway
Visiting Address:
Strandveien 20, NO-1366
Lysaker, Norway
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