Notes to the consolidated profit and loss account
21. Net revenue
As of the financial year 2018, the company now applies the IFRS 15 standard ‘Revenue from contracts with customers’. For more information on the implementation and application of this standard, please refer to the sections ‘Basis of preparation’ and ‘Accounting policies’.
Segmentation of net revenues
Gasunie’s net revenues are divided into two categories. The first is revenue from regulated transport and related services. This revenue is determined every 5 years by the regulator in the Netherlands and Germany. The second segment is non-regulated services, the revenues of which are determined by tariffs and volumes resulting from market mechanism.
The revenue from regulated services is generated by the Gasunie Transport Services and Gasunie Deutschland segments. The revenue from other services is generated by the Participations segment. Inter-segment service revenues are eliminated from the consolidation and presented separately to ensure consistency of segment information. For details, refer to note 29.
The following table shows the revenues in both categories:
In millions of euros | 2018 | 2017 |
---|---|---|
Revenu streams | ||
Regulated services | 1152.1 | 1,153.1 |
Other services | 133.8 | 122.5 |
Inter-segment | ‑38.6 | ‑34.4 |
Total | 1,247.3 | 1,241.2 |
Contract liabilities
At year-end 2018, Gasunie's contract liabilities amounted to € 50.3 million. These commitments are related to customer prepayments for transport and storage services to be delivered. The following table shows the change in these contract liabilities.
In millions of euros | 2018 | 2017 |
---|---|---|
Balance as at 1 January | 50.9 | 52.3 |
Recognised in profit and loss | ‑2.5 | ‑3.3 |
Accrued interest | 1.9 | 1.9 |
Balance as at 31 December | 50.3 | 50.9 |
At year-end 2018, € 3.8 million of the contract liabilities had a term shorter than one year (year-end 2017: € 3.8 million). The remainder of the liabilities has a term of more than 5 years.
22. Staff costs
In millions of euros | 2018 | 2017 |
---|---|---|
Salaries | 237.4 | 159.1 |
Social security expenses | 17.8 | 17.3 |
Pension costs | 32.1 | 29.7 |
Total staff costs | 287.3 | 206.1 |
The salary costs include the costs for the restructuring provision of € 43.3 million and the costs of buying out the employee benefit schemes of € 39.3 million.
The ‘pension costs’ of defined contribution pension plans total € 24.0 million (2017: € 25.0 million).
Remuneration for members of the Executive Board and Supervisory Board
I. Members of the Executive Board
In € | Salary | Variable remuneration | Fixed & variable remuneration | Deferred remuneration | Social security expenses | Other benefits | Total |
---|---|---|---|---|---|---|---|
2018 | |||||||
Executive Board | |||||||
J.J. Fennema, chair | 310,291 | 31,029 | 341,320 | 72,843 | 9,492 | 22,939 | 446,594 |
I.M. Oudejans | 286,333 | 28,633 | 314,966 | 67,356 | 9,492 | 21,398 | 413,212 |
U. Vermeulen | 248,223 | 24,822 | 273,045 | 58,629 | 9,492 | 12,566 | 353,732 |
B.J. Hoevers | 225,281 | 22,528 | 247,809 | 53,376 | 9,492 | 2,991 | 313,668 |
Total | 1,070,128 | 107,012 | 1,177,140 | 252,204 | 37,968 | 59,894 | 1,527,206 |
The variable remuneration shown in the table above is based on the realisation of agreed targets during the financial year. The agreed targets comprise both collective Gasunie targets and long-term strategic targets, as described in the section entitled Remuneration policy for the Executive Board. The collective Gasunie targets relate to achieving agreed financial and operational results over 2018.
As of 1 July 2013, the pension scheme of employees of N.V. Nederlandse Gasunie was changed. The new pension scheme is a defined contribution plan, which means that the company is committed to paying a fixed, predetermined contribution. This contribution is based on a conditional average-salary scheme. As of 1 July 2013, this new pension scheme also applies to members of the Executive Board.
In € | Salary | Variable remuneration | Fixed & variable remuneration | Deferred remuneration | Social security expenses | Other benefits | Total |
---|---|---|---|---|---|---|---|
2017 | |||||||
Executive Board | |||||||
J.J. Fennema, chair | 303,018 | 42,423 | 345,441 | 64,288 | 9,059 | 22,404 | 441,192 |
I.M. Oudejans | 279,621 | 39,147 | 318,768 | 59,492 | 9,059 | 20,900 | 408,219 |
A.J. Krist 1) | 60,601 | 10,017 | 70,618 | 12,966 | 2,265 | 8,179 | 94,028 |
U. Vermeulen | 242,405 | 33,937 | 276,342 | 51,863 | 9,059 | 16,426 | 353,690 |
B.J. Hoevers 2) | 66,667 | 9,333 | 76,000 | 14,390 | 3,020 | 1,550 | 94,960 |
Total | 952,312 | 134,857 | 1,087,169 | 202,999 | 32,462 | 69,459 | 1,392,089 |
1) Until 1 April 2017, 2) From 1 September 2017
II. Members of the Supervisory Board
The remuneration for members of the Supervisory Board (SB) is determined by, amongst other things, their participation in the various committees: the Audit Committee (AC) and the Remuneration, Selection and Appointment Committee (RAC). In addition, the premium paid with regard to the Health Insurance Act (HIA) is included in the remuneration.
In € | SB | AC | RAC | HIA premium | Total |
---|---|---|---|---|---|
2018 | |||||
R. de Jong RA, chair | 31,652 | 3,957 | 2,116 | 37,725 | |
Drs. D.J. van den Berg | 23,216 | 2,116 | 1,748 | 27,080 | |
Mr. M.M. Jonk | 21,104 | 2,116 | 23,220 | ||
Drs. M.J. Poots-Bijl RC | 21,104 | 5,276 | 1,820 | 28,200 | |
Dr. W.J.A.H. Schoeber | 21,104 | 5,276 | 26,380 | ||
Ir. A.S. Visser 1) | 10,552 | 2,638 | 13,190 | ||
Ir. J.P.H.J. Vermeire 2) | 6,669 | 1,667 | 8,336 | ||
Total | 135,401 | 18,814 | 6,348 | 3,568 | 164,131 |
1) Untill 1 July 2018, 2) From 24 April 2018
In € | SB | AC | RAC | HIA premium | Total |
---|---|---|---|---|---|
2017 | |||||
R. de Jong RA, chair | 30,908 | 2,064 | 32,972 | ||
Drs. D.J. van den Berg | 22,668 | 2,064 | 1,645 | 26,377 | |
Mr. M.M. Jonk | 20,608 | 2,064 | 22,672 | ||
Drs. M.J. Poots-Bijl RC | 20,608 | 5,152 | 1,713 | 27,473 | |
Dr. W.J.A.H. Schoeber | 20,608 | 5,152 | 1,713 | 27,473 | |
Ir. J.P.H.J. Vermeire | 20,608 | 5,152 | 1,713 | 27,473 | |
Total | 136,008 | 15,456 | 6,192 | 6,784 | 164,440 |
23. Other operating expenses
In millions of euros | 2018 | 2017 |
---|---|---|
Costs of subcontracted work and other external costs | 201.3 | 218.4 |
Cost of network management | 131.8 | 110.2 |
Other operating expenses | 48.6 | 45.6 |
Total other operating expenses | 381.7 | 374.2 |
The additions to and release of the provision for abandonment costs and redevelopment totalling € 1.0 million (2017: € 1.1 million) and the additions to the provision for obsolescent inventories amounting to € 3.1 million (2017: € 2.7 million) are included in ‘Other operating expenses’.
24. Finance income
In millions of euros | 2018 | 2017 |
---|---|---|
Interest income | 2.9 | 7.8 |
Foreign exchange results | 0.2 | 0.1 |
Total finance income | 3.1 | 7.9 |
Interest income relates to loans granted and receivables.
25. Finance expenses
In millions of euros | 2018 | 2017 |
---|---|---|
Interest expenses | 75.5 | 84.5 |
Foreign exchange results | - | 0.5 |
Other finance expenses | 1.4 | 2.3 |
Total finance expenses | 76.9 | 87.3 |
The interest expenses on financing liabilities stated at amortised cost amount to € 75.5 million (2017: € 82.3 million). Interest income relating to current financing liabilities amounts to € 1.3 million (2017: € 1.0 million). Of the interest expenses, a total of € 3.8 million (2017: € 3.1 million) was capitalised in 2018, based on a weighted average interest rate of 2.4 % (2017: 2.6%).
26. Taxes
The taxes on the result in the consolidated profit and loss account comprise the following components:
In millions of euros | 2018 | 2017 |
---|---|---|
Corporate income tax payable for the financial year | ‑3.7 | 56.8 |
Corporate income tax payable for the previous financial years | 0.2 | ‑7.9 |
Movement in deferred taxation | ‑3.3 | ‑7.4 |
Total tax charge | ‑6.8 | 41.5 |
The movement in deferred taxation is specifically related to the change in the Dutch corporate income tax rate, effective from 2020.
The reconciliation between the effective tax rate and the applicable tax rate for the consolidated financial statements is as follows:
In percentages | 2018 | 2017 |
---|---|---|
Profit and loss account | ||
Applicable tax rate, the Netherlands | 25.0 | 25.0 |
Effect of tax rates in other countries | ‑0.1 | ‑1.9 |
Prior-year adjustments | 0.2 | ‑5.1 |
Effect of tax rate change on deferred taxation | ‑23.4 | 0.5 |
Effect of innovation box | ‑0.7 | ‑1.1 |
Other differences | ‑3.1 | ‑3.6 |
Effective rate | ‑2.1 | 13.8 |
Deferred taxation | ||
Applicable rate (for subsequent financial years) | 25,0 - 20,5* | 25.0 |
Effective rate (for subsequent financial years) | 25,0 - 20,5* | 25.0 |
* From 2019 to 2021, this rate will decrease in increments from 25% to 20.5%
The other differences relate to non-taxable amounts as a result of the application of the participation exemption.
27. Number of employees
The average number of employees in full-time equivalents in 2018 totalled 1,742 (2017: 1,772). At year-end 2018, the company employed 1,722 (2017: 1,763) full-time equivalents.
28. Dividend paid and proposed
The Executive Board proposes that € 97.2 million of the profit for 2018 be added to the other reserve and € 228.0 million be distributed to the shareholder. The dividend per share is € 150.7 thousand.
This dividend proposal has not yet been recorded in the balance sheet as at 31 December 2018 or in the notes. The profit for 2017 amounted to € 259.5 million (under IFRS 15, this amounted to € 257.2 million), of which € 258.8 million was paid out as dividend in 2018.
29. Information about reportable segments
The information is segmented in line with the Group’s activities. The operating segments reflect the management structure of the Group. The following segments are distinguished:
- Gasunie Transport Services
This segment covers network management in the Netherlands and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market mechanisme. This segment comprises the entity Gasunie Transport Services B.V. - Gasunie Deutschland
This segment covers network management in Germany and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market mechanisme. - Participations
This segment focuses on facilitating access to the new gas flows for north-western Europe using an LNG connection and long-distance pipelines, and on utilising the geological infrastructure for the purpose of storing natural gas. Participation in national and international projects relating to the natural gas infrastructure in the Netherlands and Germany is another activity of this segment. This segment also includes joint ventures relating to pipelines that connect the Gasunie transport network with foreign markets, such as the BBL pipeline to the United Kingdom.
The accounting policies used for these segments are the same as those applied to the consolidated and company financial statements.
The assets, liabilities, revenues and results of a segment comprise both items directly related to the segments and items that can reasonably be attributed to the segments. Transaction prices for inter-segment transactions are determined at arm’s length.
Allocated assets are tangible fixed assets, intangible fixed assets, investments in joint ventures, investments in associates and other equity interests. Unallocated assets relate to deferred tax assets and current assets.
In millions of euros | Assets | |
---|---|---|
31 Dec. 2018 | 31 Dec. 2017* | |
Segments | ||
- Gasunie Transport Services | 6,530.7 | 6,572.4 |
- Gasunie Deutschland | 1,403.8 | 1,292.4 |
- Participations | 1,336.3 | 1,334.7 |
Segments total | 9,270.8 | 9,199.5 |
Unallocated assets | 625.4 | 650.2 |
Total consolidated assets | 9,896.2 | 9,849.7 |
* Adjusted for application of IFRS 15
I. Information on revenues and result
In millions of euros | Revenu | Segment result | |||
---|---|---|---|---|---|
2018 | 2017 | 2018 | 2017* | ||
Segments | |||||
- Gasunie Transport Services | 931.6 | 928.9 | 195.5 | 296.7 | |
- Gasunie Deutschland | 220.5 | 224.2 | 96.0 | ‑20.4 | |
- Participations | 133.8 | 122.5 | 39.8 | 54.7 | |
Inter-segment | ‑38.6 | ‑34.4 | |||
Segments total | 1,247.3 | 1,241.2 | 331.3 | 331.0 | |
Unallocated financial income and expenses | ‑12.9 | ‑32.3 | |||
Result before taxation | 318.4 | 298.7 | |||
Taxes | 6.8 | ‑41.5 | |||
Revenues and result after taxation for the year | 1,247.3 | 1,241.2 | 325.2 | 257.2 |
* Adjusted for application of IFRS 15
During 2018, the Gasunie Transport Services segment provided inter-segment services of € 11.4 million (2017: € 7.3 million), the Gasunie Deutschland segment provided inter-segment services of € 0.3 million (2017: € 0.5 million) and the Participations segment provided inter-segment services of € 26.9 million (2017: € 26.5 million).
II. Other segment information
The reported fixed assets comprise tangible fixed assets, intangible fixed assets, investments in joint ventures, investments in associates and other equity interests.
In millions of euros | Investments in fixed assets | |
---|---|---|
2018 | 2017 | |
Segments | ||
- Gasunie Transport Services | 208.8 | 207.3 |
- Gasunie Deutschland | 147.4 | 42.8 |
- Participations | 22.8 | 8.0 |
Segments total | 379.0 | 258.1 |
In millions of euros | Depreciation | Tangible non-monetary items other than depreciation | |||
---|---|---|---|---|---|
2018 | 2017* | 2018 | 2017 | ||
Segments | |||||
- Gasunie Transport Services | ‑246.4 | ‑244.0 | 57.2 | ‑9.0 | |
- Gasunie Deutschland | ‑31.9 | ‑34.4 | 4.6 | ‑112.2 | |
- Participations | ‑34.9 | ‑26.0 | 3.3 | - | |
Segments total | ‑313.2 | ‑304.4 | 65.1 | ‑121.2 |
* Adjusted for application of IFRS 15
In millions of euros | Investments in joint ventures and associates | Share in equity of joint ventures and associates | |||
---|---|---|---|---|---|
2018 | 2017 | 31 Dec. 2018 | 31 Dec. 2017 | ||
Segments | |||||
- Gasunie Transport Services | - | - | - | - | |
- Gasunie Deutschland | - | - | 100.4 | 104.3 | |
- Participations | 2.4 | 2.9 | 98.1 | 86.5 | |
Segments total | 2.4 | 2.9 | 198.5 | 190.8 |
In millions of euros | Investments in joint ventures and associates | Share in equity of joint ventures and associates | |||
---|---|---|---|---|---|
2018 | 2017 | 2018 | 2017 | ||
Segments | |||||
- Gasunie Transport Services | - | - | - | - | |
- Gasunie Deutschland | - | - | 6.3 | ‑18.5 | |
- Participations | - | - | 24.5 | 23.1 | |
Segments total | - | - | 30.8 | 4.6 |
30. Information on products and services
In millions of euros | Revenues from third parties | |
---|---|---|
2018 | 2017* | |
Gas transport | 1,162.8 | 1,158.6 |
Other activities | 84.5 | 82.6 |
Total | 1,247.3 | 1,241.2 |
* Adjusted for application of IFRS 15
31. Geographical information
Revenues from third parties and fixed assets by geographical area are determined primarily on the basis of the area where the activities take place. N.V. Nederlandse Gasunie operates in two geographical areas: the Netherlands and outside the Netherlands.
In millions of euros | Revenues from third parties | Fixed assets | |||
---|---|---|---|---|---|
2018 | 2017* | 31 Dec. 2018 | 31 Dec. 2017* | ||
The Netherlands | 982.6 | 980.6 | 7,155.2 | 7,184.9 | |
Outside the Netherlands | 264.7 | 260.6 | 2,115.6 | 1,996.4 | |
Total | 1,247.3 | 1,241.2 | 9,270.8 | 9,181.3 |
* Adjusted for application of IFRS 15
The above fixed assets comprise tangible fixed assets, intangible fixed assets, investments in joint ventures, investments in associates and other equity interests.
32. Major customers
In 2018 and 2017, the company generated at least 10% of its external revenues from gas transport for one single external customer.
33. Related parties
Services between N.V. Nederlandse Gasunie and its related parties are provided at arm’s length.
GasTerra B.V. is considered a related party because the Dutch State has significant influence, both directly and indirectly. The subsidiary Gasunie Transport Services B.V. provides gas transport services to GasTerra B.V. These services are performed in compliance with the Dutch Gas Act, which stipulates that Gasunie Transport Services B.V. is obliged to act in a non-discriminatory manner and to conduct business as requested. The tariffs charged have been determined by the Dutch regulator ACM, an independent body with no involvement from the Dutch State. GasTerra B.V. qualifies as a major customer.
Services between N.V. Nederlandse Gasunie and its joint ventures and associates are not material.
The Executive Board also qualifies as a related party. For the remuneration of the members of the Executive Board, refer to note 22 to the consolidated financial statements.
34. External auditor’s fees
The following fees relating to the work carried out by the audit firm responsible for auditing these financial statements were charged to the legal entity in the year under review. Included are the fees charged to the consolidated subsidiaries.
In millions of euros | Total PricewaterhouseCoopers | Of which PricewaterhouseCoopers Accountants N.V. | |||
---|---|---|---|---|---|
2018 | 2017 | 2018 | 2017 | ||
Audit of the financial statements | 0.5 | 0.7 | 0.4 | 0.5 | |
Other audit engagements | 0.2 | 0.2 | 0.2 | 0.2 | |
Tax consultancy | - | - | - | - | |
Other non-audit services | - | - | - | - | |
Total external auditor’s fees | 0.7 | 0.9 | 0.6 | 0.7 |
Summary of the services provided by the auditor in addition to the audit of the financial statements
In addition to the statutory audit of the financial statements, PwC NL provided the following services to the company and its audited entities for the period to which the statutory audit relates:
Other audit engagements due to legal or regulatory requirements | |
---|---|
Audit of financial statements on behalf of a Regulatory Authority | 0.1 |
0.1 | |
Other audit engagements | |
Audit of Government grants | < 0,1 |
Assurance report on CSR-report | 0.1 |
Comfort Letter | < 0,1 |
Review on the statutory financial statements of a subsidiary | < 0,1 |
0.1 | |
Total other audit engagements | 0.2 |
Advisory services related to taxes | |
Not applicable | - |
- | |
Other non-audit services | |
Agreed upon procedures on financial statements for a third-party | < 0,1 |
Audit of the financial statements
The fee for the statutory audits of subsidiaries’ financial statements amounted to € 0.1 million and is included in the total of € 0.4 million.
Gasunie’s financial statements are prepared in millions of euros; if an amount rounds down to zero, this is presented as < € 0.1 million.
35. Subsequent events
On 24 July 2018, the Dutch Trade and Industry Appeals Tribunal (CBb) rescinded the method decision regarding GTS. On 24 January 2019, the ACM published an amended method decision regarding GTS for the period of 2017-2021. The main amendment is the lowering of the target for the general productivity improvement. The management expects the impact of the adjusted permitted return (WACC) to be limited. Stakeholders such as network operators and GTS customers can appeal the decision.