Net invested capital

The net invested capital amounted to €1,275.6 million at December 31, 2014, for an increase of €143.8 million compared with the end of the previous year. The main changes are primarily attributable to the factors mentioned below.

Property, plant and equipment, intangibles and non-current financial assets

Net property, plant and equipment, intangibles and non-current financial assets were up €133.9 million. The main changes that occurred in this item compared with the end of the previous year are reviewed below:

  • due to the sale of the controlling interest held in Fisia Babcock Environment the non-current assets decreased for a total amount of €12.9 million;
  • the amortization and depreciation for the period caused a further reduction of €177.5 million in the net value of these assets;
  • lastly, investments in property, plant and equipment and intangible assets for the period totaled €306.8 million and were mainly related to several recently acquired major projects in Qatar and Namibia as well as projects already launched in Ethiopia and Italia, with particular reference to the High Speed rail line;
  • lastly, the value of investments increased by €30.8 million; €14.5 million of this increase is mainly attributable to equity investments, primarily relating to the subscription of shares, for a consideration of €8.6 million, in the project company that will develop the concession contract for the Metro in Lima (Peru) and the acquisition by the subsidiary Todini of Co.Ge.Fin Srl for €5.8 million; €6.9 million of the increase is attributable to the valuation using the equity method of a number of investments in associates.

Non-current assets (liabilities) held for sale

Non-current assets (liabilities) held for sale amounted to €84.1 million at December 31, 2014. They include the net assets (liabilities) of the following units of the Group:

  • the business units of Todini Costruzioni Generali S.p.A. (net assets for sale), for a total of €73.7 million;
  • the net assets relating to SUW Campania Projects (net assets) for €5.7 million, unchanged compared with the end of the previous year; and
  • an asset owned by the subsidiary Co.Ge.Ma. S.p.A. worth €4.7 million, the sale of which took place at the end of the year and was finalized in the early days of 2015.

The change in this item compared with the previous year, largely reflects the recognition in 2014 of the restructured business units and residual assets of the Todini Group among continuing operations, in relation to several projects, as well as the impairment losses reported by the Todini Group in relation to several projects in the process of completion, relating to the portion classified as assets held for sale.

Provisions for risks

Provisions for risks amounted to €97.5 million, a decrease of €78.7 million. Specifically, the provisions for risks on equity investments decreased by €80.1 million mainly due to the receivable that the parent company claims is due from the associate Grupo Unidos por el Canal SA (Panama) being shown net of the provisions for risks on equity investments recognized in line with the assessment of the loss to complete the contract; in 2013, the net receivable had a negative value and was recognized in the item provisions for risks on equity investments for €76.6 million, while in 2014, following the increase in the receivables for loans granted during the year, it was positive and classified in the item equity investments. Other provisions increased by €1.4 million as a combined result of accruals to provisions totaling €11.7 million – including the €3.4 million provision on the Metro 6 contract in Chile – and use of provisions totaling €9.9 million, principally attributable to the disbursements made by the Group in relation to the final settlement of the tax disputes in Ethiopia (€4.8 million).

Post-employment benefits and employee benefits

This item amounted to €23.3 million, a decrease of €1.6 million compared with the previous year. This is mainly attributable to the ordinary operations of the Group during the year. In particular, provisions amounted to €14.9 million, payments and financing of reserves totaled €16.9 million, while the effects deriving from the valuation of the provision under IAS 19 totaled €3.6 million.

Net tax assets (liabilities)

This item amounted to €148.7 million at December 31, 2014. The change in net tax assets and liabilities compared to the previous year, which was positive and came to €7.1 million, mainly reflects the effects of the determination of the tax liability for the period at the consolidated level, taking also into account the different tax dynamics affecting foreign units and changes in the respective asset (liability) positions recognized in accordance with the tax laws of the countries where the units operate, as well as the amount of the tax payments on account made for the current year.

Working capital

Working capital increased by €77.2 million, from €254.1 million to €331.3 million.

The main changes in working capital related to developments in the group’s operating activities and the greater production on certain domestic and international contracts during the year. They are summarized below:

  • inventories totaled €262.7 million, up €38.3 million over the previous year due to the combined effect of increased procurement activity for the progress of foreign contracts, specifically concerning hydroelectric projects in Ethiopia, and the projects in Qatar and Afghanistan, offset only in part by the use of inventories for construction activities on some foreign contracts, including in particular the hydroelectric projects on the Sogamoso River.
  • Work in progress increased by €95.8 million, from €1,157.0 million to €1,252.8 million. This change – €38.1 million of which in Italy and €57.7 million abroad – reflects the effects of production gains, particularly with regard to High Speed - High Capacity railway and in projects in Denmark.
  • Advances on contract work in progress and "negative" contract work in progress (i.e.: invoiced advances greater than the cumulative value of the projects constructed) totaled €1,725.9 million for a decrease of €8.1 million. This change was mainly due to the effects of the following factors:
    • the net increase in contractual advance payments by €118.9 million, mainly attributable to the payment of the advance for the construction of Line 3 of the Riyadh Metro, partially offset by the absorption of disbursements recognized in previous years through the development of production activities;
    • the reduction – by €43.0 million – of "negative work in progress" attributable to the company Fisia Babcock Environment GmbH, definitively sold to third parties at the end of first quarter; and
    • the decrease in "negative work in progress" totaling approximately €84 million, mainly relating to Nigeria.
  • The current receivables and payables decreased, totaling €108.7 million and €163.2 million respectively. In addition to the ordinary effects depending on the trend of the industrial activities during the period and the ordinary relations with clients and suppliers related to those activities, this change reflects the adjustment to the values expressed in Venezuelan currency to the official exchange rate ("SICAD 2") adopted by the Group from June 30, 2014, which depreciated substantially compared to the prior official exchange rate ("CENCOEX", formerly known as "CADIVI"). As a result of this adoption, for which more details are provided in the Notes to the consolidated financial statements should be consulted for more information, the effective value of the receivables (net of payables) denominated in Venezuelan currency decreased by €47.8 million compared to December 31, 2013.
  • Other assets increased €248.1 million mainly due to advances to suppliers and insurance costs paid in advance with regard to the Group’s new projects. Other current liabilities increased by €41.2 million compared to December 31, 2013 and related in particular to payables for indemnifications and expropriations of new contracts.