MSF Belgium Financial statements 2015

Transcription

1 MSF Belgium Financial statements 0

2 MSF Belgium Financial Statements MSF Belgium & OCB Finance department 1. Highlights on Profit and loss accounts Social mission expenses increasing In, MSF Belgium increased its expenses with +21 ( Mio ) compared to the budget and +25 (+65.8 Mio ) compared to This is mainly linked to an increase in the Social mission expenses reaching Mio in, so +22 (+56.9 Mio ) more than budgeted or +26 (+65.6 Mio ) more than in The main drivers of the social mission expenses increase were the Programme expenses on the field increasing with +16 (+35.8 Mio ) versus the budget or +18 (+40.7 Mio ) versus Programmes have been boosted by the migrants crisis (24,1 Mio ) and the continuation of the response to the Ebola Crisis (18,3 Mio ). It also includes the support to the Operational Centre Barcelona (OCBA) as the OCB funded in part of its program expenses for a total of 18 Mio (in accordance with the RSA3 1 negotiations). Headquarters Program Support increased by +23 (+4.2 Mio ) compared to the budget or +28 (+5 Mio ) compared to 2014 notably in order to sustain the growth of the Field operations with the set-up of a Refugees Task Force, the recruitment & HR administration needs on the field, and reinforcement of medical, logistics & financial support to operations. Exchange rate impact Program field expenses have also been impacted by the fluctuation of the exchange rates during the year compared to the rates taken into account for the budget. We can observe that 56 of those field expenses are paid in non-euro (or related) currencies. We evaluated the impact of exchange rates fluctuations to +9.8 Mio versus the budget of which 4 Mio linked to the USD. On the income side, the exchange rates fluctuation also influenced the MSF Belgium result, with a positive effect of +2.6 Mio. This is mainly linked to the US dollar (+4.6 Mio ) and the Hong Kong dollar (+5.1 Mio ) although counterbalanced by the weakness of Brazilian Real (-5.9 Mio ) and Norwegian Kroon (-2.2 Mio ). Exceptional accrual MSF Belgium took a provision of 2.3 Mio to cover the existing risk of not being able to resell an overstock still at MSF Supply from our Ebola operations. This has an impact on our result (booked under extraordinary expenses), but could be partially reversed in 2016 according to the volume sold. Private income still increasing thanks to more regular donors gained due to MSF involvement during Ebola crisis Total private income amounted to Mio in, so 23 (+58.2 Mio ) better than budgeted, and +6 (+16.4 Mio ) compared to 2014, whereas 2014 showed already an increase of 35 compared to The Ebola crisis response put MSF under the spotlight and obviously allowed most of the Fundraising teams to increase their base of regular donors, enabling a boost on the existing commitments and automatic donations without much extra fundraising investment. At budget time, in October 2014, the full effect of the Ebola crisis on our private income was still not totally predictable. So budgeted private income was underestimated at that time. The increase was however monitored through forecasting process during the year. Public Institutional Income on target In, MSF Belgium and its Partner sections collected 32.9 Mio from Public Institutions such as governments and EU funds. This is a increase +1 Mio compared to the budget but a decrease of -5.9 Mio versus 2014, following a decision to lower the coverage of our Program field expenses by Public Institutional income : a maximum target of 15 coverage was set for (17 in 2014). Final result: a surplus of 22.8 Mio As the incomes increased more than the expenses, MSF Belgium ended with a surplus of 22.8 Mio, +6.5 Mio above budget. 1 RSA3 : 3 rd Resources Sharing Agreement. See Annexe 2 1

3 The table below summarizes the results of MSF Belgium for in respect with the budget and the actuals of MSF Belgium (K ) variance var share share 2014 variance var Total Social Mission Total other expenses Total Expenses (K ) Public Institutional Income Private Income Total Other Income Total Incomes (K ) Net exchange gain (+) / loss (-) Results MSFB (K ) Expenditure MSF Belgium EXPENSES (K ) variance var share share 2014 variance var Programme expenses Headquarters program support Support other OC's Subsidies South Africa Brazil Expenses under MSFB Temoignage, Raising Awareness and CAME Other humanitarian activities Total Social Mission Fundraising Management, General & Administration Extraordinary expenses Total other expenses Total Expenses (K ) Total MSF Belgium expenditure in amounted to Mio 2, The expenses are divided over two main headings: the MSF social mission expenses and other expenses. The social mission expenses (314.7 Mio ) covers all operational expenditure in the various countries, i.e. Program expenses (261.1 Mio ) which are field missions costs. It includes as well the medical, logistical, human resources and operational services delivered by the head office in Brussels to support the activities on the field (i.e. Headquarters program support) amounting to 22.5 Mio. In, we had to respond to two major crisis: the continuation of the Ebola emergency and the Refugees & migrants crisis which conducted to the set-up of a task 2 This amount includes the Brazilian office expenses for a total of 8.4 Mio (versus 7.6 Mio in 2014 and 9.9 Mio in budget ). force at headquarters level in order to regroup necessary expertise and personnel to manage the operational and communication issues and workload. The social mission also consists of an annual subsidy for functioning expenses of the MSF South African section (1.9 Mio in ) and Brazilian offices expenses (8.4 Mio ). It also includes 2.7 Mio expenditure for other temoignage, raising awareness and information campaigns aimed at the Belgian public, and a share in the Access to Essential Medicines Campaign managed at international level (168 k already included in the 2.7 Mio ). Moreover, MSF Belgium, together with the other MSF sections, contributes to the Drugs for Neglected Diseases Initiative (152 k reported under Other Humanitarian Activities). Other expenses (16.7 Mio ) are showing a small increase of +0.2 Mio compared to 2014 and +0.7 Mio compared to the budget. It includes fundraising expenses 2

4 (5.5 Mio ) to raise private income in Belgium. MSF Belgium spent less than budgeted (-0.7 Mio ) as a decision to moderate FR investments in was taken by the Core ExCom for all sections. Other expenses cover also general HQ functioning costs (6.3 Mio ) decreasing with -1.4 Mio versus 2014 or -0.5 Mio versus the budget, mainly driven by less contribution to the International Office than foreseen, the move to the new HQ building being done and a shift to HQ Program support (0.8 Mio Logistics direction & resources management to be considered as HQ program support expenses to be consistent with the MSF Gaap rules at international level). Finally other expenses comprise extraordinary expenses (4.9 Mio ) which are in fact : - salaries expenses and related expenses re-invoiced to other OC s for Belgian expatriates not working for an OCB mission but for another MSF section or Operational Center (for which the compensating income is reported under Other income). - provisions made for risks on the field or any other specific item such as the provision of 2.3 Mio to cover the existing risk of not being able to resell an overstock still at MSF Supply from our Ebola operations. 3. Incomes MSF Belgium INCOMES (K ) variance var share share 2014 variance var Public Institutional Income Belgium OCB Partner sections non OCB sections Total Private Income Total Other Income Total Incomes (K ) Net exchange gain (+) / loss (-) Results MSFB (K ) Total incomes for MSF Belgium amounted to Mio, +22 (+63.7 Mio ) compared to the budget and +4 (+13.7 Mio ) compared to We distinguish 3 types of incomes : - Incomes from private donors and legacies. This is the largest source of incomes for MSF Belgium representing 88 of its total incomes in. MSF Belgium is consolidating full private income from the Belgian donors, net incomes from OCB partner sections (Italy, Sweden, Norway, Denmark, Luxemburg, Hong Kong, South Africa, Brazil) and grants from some non OCB sections incomes (USA, UK and Germany mainly). Total private income amounted to Mio in, so +23 (+58.3 Mio ) better than budgeted, and +6 (+16.4 Mio ) compared to 2014, whereas 2014 showed already an increase of 35 compared to The Ebola crisis put MSF under the spotlight and obviously allowed Fundraising to increase their base of regular donors, enabling a boost on the existing commitments and automatic donations without much extra fundraising investment. - Private income from the Belgian donors reached 42.3 Mio in. It is 4.7 Mio less income than in 2014 (as 2014 was exceptional because of the donor response to the Ebola crisis) but it is +5 Mio above budget. The difference with budget is due to legacies reaching 10 Mio in (+2 Mio in comparison with budget) and to 2.9 Mio Ebola incomes raised in 2014 by MSF Italy, MSF Sweden and MSF Belgium that have been deferred under MSF Belgium to cover Ebola expenses in. OCB partner sections generated Mio more private income than last year (+14), and Mio (+20) more than budgeted. The variances versus 2014 come from Sweden (+7.8 Mio ), Hong Kong (+6.4 Mio ), Brazil (+5 Mio ) and Italy (+3 Mio ). The increase compared to the budget is a little different : Sweden +9.8 Mio, Hong Kong +9.3 Mio and Norway +7.7 Mio. The exchange rates fluctuation had a positive effect of +2.6 Mio compared to the budget. This is mainly linked to the US dollar (+4.6 Mio ) and the Hong Kong dollar (+5.1 Mio ) although counterbalanced by the weakness of Brazilian Real (-5.9 Mio ) and Norvegian Kroon (-2.2 Mio ). 3

5 Private income from other sections ( non OCB sections heading) decreased with 1.6 Mio compared to 2014 but were Mio over the budget, of which Mio from MSF USA, +5.2 Mio from MSF UK/Ireland and 2.7 Mio from MSF Germany. It includes a positive exchange rate effect of 6.1 Mio (maily from USD and GBP). We could also count on earmarked incomes of 1.3 Mio from other sections like Greece, Spain, Czech Office, Canada, and Switzerland. Finally MSF Belgium accounts also have under their incomes part of program expenses in Afghanistan booked through our accounts but invoiced to Operational Center Paris (OCP) and Operational Center Amsterdam (OCA). - Incomes from public institutional donors, i.e. governments institutions funding part of OCB operations on the field. They represent 9 of MSF Belgium total incomes in (versus 11 in the budget and 10 in 2014). This is in accordance with the decision to lower the coverage of our Program field expenses by Public Institutional income, the effective coverage in is while it was 17 in The main institutional donors are the Belgian government & institutions (7.8 Mio ), the European Union (5 Mio ), Swedish Government (4.6 Mio ), Norwegian Government (4.4 Mio ). Our institutional incomes decreased with -5.4 Mio compared to 2014, mainly from the European Union -4.8 Mio (-50) and UK (DFID) -1.7 Mio. The high level of institutional funds in 2014 was mainly triggered by the OCB s response to the Ebola crisis. - The other income amounting to 9.3 Mio relates essentially to re-invoiced staff, expenses or supply from KSU to other MSF sections (7.7 Mio ), but also to the miscellaneous incomes from the HQ building (rental, cantine & parking), to subsidies (for the Haïti Tabare hospital construction mainly). The positive result amounts to 22.8 Mio at year-end, i.e Mio less than the prior year and +6.5 Mio more than budgeted. 4. Result allocation and balance sheet MSF Belgium centralizes most of the surpluses and deficits of the OCB group. The surpluses are allocated to the reserves and will be used to fund programs (either emergencies or Aids) and will therefore be spent entirely according to these purposes which are part of MSF Social Mission. The OCB board, which is constituted of representatives from the boards of all OCB partner-sections, approves any allocation of these funds to programs. MSF Belgium accounting reserves are presented as follows, with a total of 234 Mio accumulated surplus & equity capital as of December 31 st, : EQUITIES & ALLOCATED FUNDS (Mio ) I. EQUITY CAPITAL II. ACCUMULATED SURPLUS Accumulated Surplus/Deficit Surplus / Deficit of the year TOTAL RESERVES

6 Here is below the balance sheet of MSF Belgium as of December 31 st,. MSF Belgium - Balance sheet (k ) ASSETS 2014 variance LIABILITIES 2014 variance I. FIXED ASSETS I. EQUITY CAPITAL Intangible Tangible II. ACCUMULATED SURPLUS Leasing Accumulated Surplus/Deficit Financial Surplus II. LONG TERM RECEIVABLES Other receivables III. SUBSIDIES III. CURRENT ASSETS IV. PROVISIONS Stocks Debtors under 1 year V. CREDITORS Short term investments Over 1 year Liquid Assets Under 1 year & other Other Other TOTAL ASSETS TOTAL LIABILITIES The MSF Belgium balance sheet is composed by the following accounts : Assets - The fixed assets. This balance mainly represents the head office and its material, as well as the financial participation in MSF Supply, the cooperative which supplies most of the medical and logistic material to the field. In, MSF Belgium gave an additional loan to MSF Supply for 3.3 Mio. - The long term receivables. Since 2014, the institutional contracts signed before the 31 st December of the current year and related to the coming years are accounted for in the balance sheet. This means that institutional donors are engaged to provide 0.6 Mio of income in more than 1 year (as Unitaid will end at the end of 2016, that account decreased considerably compared to 2014). - The current assets include claims to be paid within the year by governmental donors and other MSF sections, as well as legacies to be received, HQ stocks, i.e. mainly books, and cash on bank accounts. On December 31 st,, MSF Belgium has 6.7 Mio more current assets than in 2014, with a shift between lines from debtors under 1 year towards deposits in banks and available as cash to finance projects (see Short term investments and Liquid assets = Mio ). This is a result of an improved follow up of cash flow and transfers of incomes from our sections and institutional donors. Liabilities - The equity capital (60 Mio ). - Including the surplus from of 22.8 Mio, the accumulated surplus amounts to 174 Mio. - Subsidies are back to 0 Mio, as it was related to the deferred earmarked funds raised from MSF-Italy and MSF-UK in 2011 for Haiti hospital construction in Tabarre allocated over the same period as the construction depreciation (over 5 years of which was the last year). - Provisions for risks (5.7 Mio ), includes as every year the provision for the holiday allowances for the staff in the missions (1.8 Mio for ). The provision to cover the risks to have bank accounts blocked in Ukraine (1 Mio ) was released, but MSF Belgium took a provision of 2.3 Mio to cover the existing risk of not being able to resell an overstock still at MSF-Supply from our Ebola operations (risk for not selling the extra Ebola stock). This has an impact on our result (booked under extraordinary expenses), but could be potentially reversed in 2016 depending on what will be eventually sold. - Creditors balance (40.4 Mio ) is mainly composed by debts towards other MSF sections and MSF Supply, as well as commercial debts and provisions for social security. Creditors over 1 year amount to 6.4 Mio, with a decrease of 7.4 Mio as a consequence of the ending of a 3 years contract with DGD and the reimbursement to MSF Luxemburg of 2 Mio. The Other creditors decrease by Mio is mainly explained by the Unitaid contract coming to an end in 2016 and for which our debt towards other OC s decreased. 5

7 5. OCB Results and indicators OCB profit and loss accounts should not be approved by the General Assembly and are provided for information only. They are similar on many points with MSF Belgium accounts. The main differences lie in the facts that: - HQ expenses of partner sections are included in the combined OCB accounts; - Private income raised from partner sections are shown as 100 under the incomes, whereas under MSF Belgium accounts it is only the net incomes (net incomes = partner section incomes less its expenses) - as defined and agreed within the Resources Sharing Agreement II at MSF movement level, Operational Center Amsterdam (OCA) received in 20 from Sweden s net income and 30 from Hong Kong s net income. This amount is mentioned under OCB social mission expenses as Support to other OC s & 3 rd parties, whereas in MSF Belgium accounts it does not appear; - as it is a consolidation view the inter-sections flows are eliminated, i.e. inter-sections re-invoicing, inter-sections grants (ex. South Africa subsidy); - it follows the MSF GAAP rules defined at MSF movement level. Presenting OCB group combined accounts enable to view the total incomes and the total costs of all OCB sections (not possible when we look at the MSF Belgium accounts only) and therefore enable to follow OCB s Social mission and London ratio s more accurately than at MSF Belgium level. 5.1 OCB Expenses (in K ) <> 2014 <> 2014 Programs - OCB Missions - Base Projec Programs - OCB Missions - Copro OCB Missions Expenses Total Programs - Support to other OC's & 3rd International fund HQ program support ** Other Temoignage ** Access to Essential Medicines Camp** Other Humanitarian Activities (DNDI) SOCIAL MISSION Total Fundraising ** Management, G&A ** Contribution to IO ** Extraordinary expenses OTHER EXPENSES Total EXPENSES Total for information : HQ Expenses ** IO Expenses (CAME/DNDI/Contribution/Int'al In, the total OCB expenses ended at Mio, with Mio (+16) compared to the budget, notably due to an increase of 33.8 Mio (+16) on OCB Missions expenses, an increase on the Program support to other OC s of Mio (+131) and a decrease of -5.6 Mio (-9) on non-social mission expenses, mainly in fundraising. The increase of the support to other OC s is explained on one hand by the support to Operational Center Barcelona (OCBA) program expenses (grant of 18 Mio ) according to the decision taken in March by the FullExcom to rebalance the level of the reserves between all Operational Centers (OC s). On the other hand, as the Hong Kong incomes were 10.7 Mio higher than budgeted (of which 5 Mio due to the exchange rate efffect), its support to OCA of 30 increased with +2.7 Mio compared to the budget. 6

8 OCB - Ratio's <> 2014 <> 2014 SOCIAL MISSION OTHER EXPENSES TOTAL EXPENSES Social Mission ratio 80,2 84,4 82,6 <> 2014 <> 2014 HQ Expenses Non HQ Expenses TOTAL EXPENSES London ratio 30,0 25,2 27,1 The Social Mission ratio and the London ratio help to monitor the cost structure. According to the international agreement, the Social Mission ratio should represent more than 80 of the total expenses. It consists of the social mission expenses compared to the total expenses. For, the Social mission ratio (or Chantilly ratio) reaches It is better than budgeted, and exceptionally high as the growth of our Operational expenses on the field and the grant to OCBA of 18 Mio inflated considerably the social mission expenses while HQ expenses decreased noticeably thanks to less investments in fundraising in all our sections. The London ratio calculates the weight of HQ expenses from all OCB partner sections on the total OCB expenses. The OCB Board requires that the London ratio remains below 30. In, OCB ended with 25.2, which again is better than foreseen in the budget. This is also a consequence of a lot more operational expenses on the field combined with less fundraising expenses than budgeted Operational Expenses in <> <> <> <> 2014 <> <> 2014 K Forecast Forecast Forecast Forecast Forecast Missions grams - OCB Base Missions Projects Programs - Base OCB Projects Missions Base Projects Missions grams - OCB CoproMissions Programs - Copro OCB Missions Copro B tal Missions Total OCB Missions Total The total operational expenses reached a total of Mio in or Mio versus the budget. The increase is mainly explained by the high level of emergencies in, despite the decrease of expenses related to Ebola projects. The increase compared to 2014 reaches Mio or +15. The growth of Programme expenses therefore reached again a very high level in after a significant growth already in Over the last two years the growth of Programme expenses reached Mio or The growth of Operational expenses between 2014 and is to be mainly explained by: The increase of expenses related to emergencies. The total expenses of programmes managed by the Emergency Pool and by Task Forces set up to manage emergencies reached in a total of 80.1 Mio or 33.9 of Programme expenses 3. In Mio 2014* * Var. Var. () Cells 143,1 155,9 12,8 8,9 Emergency Pool 53,8 80,1 26,3 48,9 Total 196,9 235,9 39,1 19,8 (*) Excluding transversal Programme expenses. 3 Excluding transversal Programme expenses (transversal Programme expenses account for 11 M in ) 7

9 Emergencies - main variances between 2014 and in Mio 4 Increases Lebanon / Syria 4,7 4,7 New emergencies Europe Migrants 23,6 Ukraine 12,4 Nepal 4,3 Madagascar 1,9 42,2 Decreases Ebola -18,2 Lybia -0,8-19,0 Closed in 2014 Philippine -4,8 A weaker Euro versus US Dollar and other local currencies: the exchange rate variation impact accounted for a growth of +8.9 Mio of Programme expenses (or 26 of the total growth between 2014 and ). Expenses of some regular missions also increased significantly Main emergencies in Regular mission - variances above 2 Mio between 2014 and (in Mio ) 5 Increases DRC 8,2 Haiti 3,0 CAR 2,6 South Africa 2,1 Although Ebola related programmes decreased by 18.2 Mio compared to 2014 (35.4 Mio ), they remained one of the main emergencies in the first half of. The intervention for migrants in Europe and in the Mediterranean Sea accounted for about 30 of the Emergency Pool / Task forces expenses in. Other significant emergency interventions comprised: Syria / Lebanon (17.6 Mio in, Mio compared to 2014 mainly due to the increase of donations programmes from Lebanon and Turkey to support medical structures in Syria) and Ukraine (12.4 Mio mainly consisting in donations of medical and logistic material and supplies as well as medical activities in the conflict area). Expenses in Mio Europe Migrants 24,1 24,1 Ebola Response 18,3 18,3 Syria / Lebanon 17,6 17,6 Ukraine 12,4 12,4 Pool d'urgences Congo (PUC) 8,8 8,8 Nepal 4,3 4,3 Madagascar 1,9 1,9 Election Violences Burundi 1,5 1,5 Lybia 1,2 1,2 Flood Sanjey Malawi 1,0 1,0 Cholera Mozambique 0,9 0,9 Tanzania 0,3 0, Programme expenses broken down by nature Programme expenses can be categorized by the nature of the costs as follow : - Expatriates costs include salaries, per diem, health and pension insurances; - National staff costs include the salaries and employer s taxes of MSF staff under local contract and well as the cost of national MOH staff partially paid by MSF; 4 Excluding exchange rate impact 5 Excluding exchange rate impact 8

10 - Medical purchases include purchase of drugs, vaccines, small medical supplies, laboratory supplies and equipment, medical equipment, etc.; - Logistics costs include purchase of all logistic equipment, material, supplies and services (purchase and rental of cars and other means of transportation, spare parts, fuel, non-food relief items and temporary shelters distributed to beneficiaries, construction material, equipment and subcontracted construction works, IT and communication equipment and costs, water and sanitation material & equipment, etc.; - Supply costs include international (air and sea) and local freight costs as well as local custom taxes and clearance costs; - Administration costs include rental and maintenance of premises (including accommodation for expatriates, rental of offices, warehouses and other facilities) including utilities, stationaries and small supplies, international and domestic travel costs, daily workers, local taxes, professional services. Please note: because of the implementation of the new international chart of accounts in, administration costs reported for the previous years are not fully comparable with. In spite of the increasing importance of emergencies over the last two years, the cost structure of Programme expenses seem to have remained fairly stable since The main noticeable trends over the period are: the slight decrease of the proportion of the staff cost (both national staff and expatriates), which moved down from 40.3 in 2012 to 35.8 in ; the slight increase of logistic purchases in the last two years. Cost structure of programme expenses 2012 to 6 Evolution of Programme expenses by nature from 2012 and (in Mio ) 7 6 Excluding transversal Programme expenses 7 Excluding transversal Programme expenses 9

11 Quality of Programme expenses budget & forecast Like in 2014, the overall quality of the forecast for Programme expenses can be considered as satisfactory as the budget overrun has been properly anticipated. As early as in June, projections enabled to forecast the overspending versus budget. Evolution of Programme expenses forecast (in Mio ) For programmes managed by Operational Cells, the quality of budgets has also increased in comparison with The historical tendency to overestimate resources needed to carry out planned activities in the project budgets was indeed not observed in. Actual expenses are indeed 8.1 Mio above budget for Cells, the variance being mainly related to the exchange rate impact. Forecast for those programmes was accurate already in June. Evolution of Programme expenses forecast Cells only (in Mio ) 10

12 Typology of OCB operations In OCB operations were run in more unstable contexts than in 2014: 21 in armed conflict countries, 6 in postarmed conflict countries and 29 in countries with internal instability, leading to a total of 56 of Programme expenses spent in unstable contexts. Due to the fact that in 2014 OCB put a very large part of its resources on the Ebola crisis the share in stable context reached 56. Whereas in, many programmes were set up to address the Refugees crisis (Greece, search and rescue at sea, Serbia, ), to give support to Syrian population through Lebanon and to intervene in other humanitarian crises such as in Ukraine, Central African Republic, South Sudan, Afghanistan, etc. In 2014, resources put on the Ebola crisis increased the percentage of our operational expenditures dedicated to populations affected by endemic/epidemics reaching 34. This share decreased to 19 in, since the Ebola epidemia crisis resorbed during the beginning and due to the evolution of the refugees crisis and the many more conflicts mentioned before where OCB implemented programmes. So 32 of our expenditures in were dedicated to populations in armed conflict. For the population affected by natural disaster it refers to OCB missions in Nepal, Niger, Madagascar, Malawi, Pakistan and the continuity of the mission in Haïti. 11

13 5.1.2 HQ expenses breakdown evolution (K ) 2014 <> <> 2014 HQ program support Other Temoignage Access to Essential Medicines Campaign Fundraising Management, G&A Contribution to IO Extraordinary expenses HQ Expenses Total OCB (K ) 2014 <> EUR <> 2014 Non FR Total OCB FR Total OCB HQ Expenses Total OCB OCB Missions Expenses Total The HQ Expenses reached in 96.2 Mio for the entire OCB group. This is lower than the initial budget (- 2.6 Mio ), mainly due to fundraising expenses (-6.4 Mio versus budget) and despite an increase in HQ program support expenses (+3.4 Mio - due to Refugees Task force and the need to reinforce the support to growing operations in the field: recruitment & HR administration for the field, plus medical, logistics, ICT and financial support to operations). The exceptional provision of 2.3 Mio to cover the overstock from Ebola overalls at MSF Supply also impacted the non-fundraising costs in (see extraordinary expenses). The contributions to the International Office in Geneva and to the Access Campaign to Essential Medicines amounted to 3.8 Mio for all OCB sections, which is Mio than budgeted but +1.2 Mio compared to Each section in the MSF movement is contributing to the funding of the International Office and the CAME in proportion of the private incomes the section raised during the previous year. Management & General Administration costs are lower than budgeted with -0.7Mio driven mainly by Italy and Belgium. Although the other temoignage and raising awareness costs increased compared to last year, it is below the budget by -0.4 Mio. Compared to the previous year, the HQ expenses increased with Mio (+12), partly in fundraising with +3.3 Mio (as foreseen in the budget ) and HQ program Support +4.4 Mio and again the extraordinary provision for the stock at MSF Supply. Although OCB HQ expenses increased compared to 2014, it is noticeable that OCB HQ Expenses decreased by 3 compared to the budget while in the same time OCB missions expenses were higher than the budget (+16). OCB HQ expenses evolution vs OCB Missions expenses evolution ( growth versus prior year) 12

14 The next chart represents the evolution over the last 10 years of OCB HQ expenditure breakdown per type of section (Operational section (MSF Belgium), OCB partner sections (6), South Africa and Brazil, and International Office (IO)). The percentage represents the London ratio, i.e. the proportion of these HQ costs compared to overall OCB expenses. The London ratio remains under control, i.e. under 30 over the years. In, we reached 25.2, better than the last years, linked to a higher increase of the OCB operational expenses than the HQ expenses. It is also noticeable that the HQ costs of our partner sections increased between 2006 and faster than MSF Belgium or Brazil and South Africa up to 44 Mio. This increase in HQ costs of OCB partner sections are essentially fuelled by fundraising investments, although lower than initially budgeted (see next chapter). 13

15 Evolution of Fundraising expenses by section OCB fundraising expenses split by section are presented below. Section 2014 <> budget LC exchange rate effect other effect <> 2014 LC Belgium Brazil South Africa Italy Luxembourg Hong Kong Singapore Taiwan Denmark Norway Sweden Fundraising Total OCB The fundraising expenses in are lower than budgeted (-6.4 Mio ), in almost all sections but Italy (due to a change in the allocation of overhead costs). The main variances are in Brazil (-2.1 Mio, representing -11 in local currency) of which more than the half of the decrease is due to an exchange rate effect, Sweden (-1.8 Mio, representing -22 in local currency) and Norway (-1.2 Mio, representing -11 in local currency). However compared to last year, the fundraising expenses increased with +3.3 Mio, mainly in Norway (launch of Artistgalla for recruitment of new regular donors) and Belgium (Funding unit costs allocated on fundraising and telemarketing activities put on hold in 2014 to reduce the fundraising investments). The graph below shows the evolution of the fundraising expenses between 2014 and by section. 14

16 Evolution of non-fundraising expenses by section OCB non-fundraising expenses (in K ) split by section are presented below.. Section 2014 <> LC exchange rate effect other effect <> 2014 LC Belgium Brazil South Africa Italy Luxembourg Hong Kong Singapore Taiwan Denmark Norway Sweden Non FR Total OCB OCB non-fundraising expenses in are higher than budgeted (+3.8 Mio ), mainly because of the exceptional provision for the stock at MSF Supply (Ebola personal protection equipment for 2.3 Mio ) and because of HQ Program Support costs in Belgium. The difference with budget in Italy (-0.66 Mio ) is due to the spread of their overhead costs based on FTE s (as all other sections do) combined with less Contribution to the International Office and less Other Temoignage costs than foreseen. In Brazil, the increase of the non-fundraising costs (+437K ) is counterbalanced by a positive effect of the Brazilian Real devaluation (-575K ) leading to a net effect of -138K. Hong Kong non-fundraising costs decreased with -234K coming from an effective decrease of their costs (-593 K ) but counterbalanced by a negative effect of the Hong Kong Dollar (+359K ). Compared to last year, non-fundraising expenses increased by +7.2 Mio (+15), mainly in Belgium (on HQ Program Support). Brazil, Norway and Hong Kong. The graph below shows each OCB partner section cost structure for non-fundraising expenses in. As the MSF Belgium section is an operational centre it is shown separately, because it is not comparable with the other sections. Non-fundraising expenses by OCB section in (K ) 15

17 5.2 OCB Incomes (in K ) 2014 <> budget EUR <> 2014 EUR Total OCB sections Total NON OCB sections Total Private Incomes OCB of Total Incomes 88,6 90,2 91,3 Institutional Incomes OCB Mission Expenses institutional funding 17,9 15,0 13,3 Total Income of Total Incomes 10,0 9,3 8,2 Other incomes Total OCB Incomes OCB total incomes reached 400 Mio in, which is 55.5 Mio (+16) above budget and 17.1 Mio (+4) more than in In, 91 of OCB incomes are from private donors amounting to Mio, of which OCB Partner sections raised all together Mio (+33.5 Mio or +13 versus budget), and non OCB partner sections 68.6 Mio (+21 Mio or +44 versus budget). This is again exceptionally higher than budgeted (+54.4 Mio or +18) as the total impact of new regular donors gained due to MSF exceptional visibility during the Ebola crisis was not known at the moment the budget was done (October 2014). Although 2014 was already exceptionally high, private income OCB are Mio higher than last year. The private income was in better monitored than in 2014 through improved forecasting process during the year with OCB sections. This process should be further facilitated with the implementation end of a common OCB fundraising tool for budgeting and forecasting private incomes. This is a learning process implying both fundraising and financial teams in all OCB sections from which OCB hopes to gain better visibility and predictability on private income. Institutional income for OCB in amounted to 32.9 Mio, so +1 Mio more than budgeted, but -5.4 Mio less than in Other income is almost in line with budget, and less than in 2014 where the selling of the former Belgian HQ building in Brussels (Jette) had brought an exceptional income. Looking at how operations field expenses were funded in, 13 is covered by Public Institutional funds, 28 is paid by non OCB sections private income (MSF USA, MSF UK and MSF Germany mainly ), 16 is funded by earmarked private income raised by OCB partner sections and the rest (43) comes from non-earmarked funds from OCB partner sections. 16

18 5.2.1 OCB private income contributors OCB Private income share by section OCB sections = M Non OCB = 68.6 M The 5 main OCB private income contributors in were Sweden with 57 Mio, followed by Italy with 52.3 Mio, Hong Kong with 45.1 Mio, Belgium with 44.2 Mio and USA with 40.4 Mio. The major increase compared to 2014 came from Hong Kong with Mio, including an exchange rate effect as in local currency it increased with +11 versus +33 in Euro. Sweden also increased with +6.3 Mio (+13), and Brazil with +4.2 Mio (+17) despite the weakness of the Brazilian Real. Norway increased with +2.7 Mio compared to 2014, which is less than it could have been if the Norwegian Kroon had not weakened (+24 in local currency versus +7 in Euro). The only decreases in incomes come from Luxemburg -0.8 Mio due to the fact that 2014 was exceptional with Ebola incomes, and South Africa with -0.5 Mio (South African Rand has been weak, and the fundraising market remains difficult). This is a detail of OCB private income by section, with the percentage variance expressed in Euro and in local currency (LC). (in K ) 2014 <> budget EUR LC exchange rate effect FR & other effect <> 2014 EUR LC Belgium Brazil South Africa Italy Luxembourg Hong Kong Taiwan Singapore Denmark Norway Sweden Total OCB sections USA UK Germany Non-OCB MSF-other Total NON OCB sections Total Private Incomes OCB As previously mentioned, the Ebola crisis increased considerably the private income raised in all sections in 2014 but it also allowed most of the Fundraising teams to increase the base of regular donors, enabling a boost on the existing commitments and automatic donations without much extra fundraising investment. At budget time, in October 2014, the full effect of the Ebola crisis on our private income was still not known. As a consequence budgeted private income was underestimated. This increase was monitored through quarterly forecasting process together with OCB partner sections. 17

19 5.2.2 Institutional donors in <> 2014 Institutional income OCB Missions expenses institutional funding 15,0 13,3 18,8 17,9 target of Total income 9,3 8,2 10,0 OCB institutional income in amounted to 32.9 Mio, so +1 Mio more than budgeted, but -5.4 Mio less than in 2014, as it was decided to decrease the Public Institutional income coverage in down to 15 of OCB missions expenses. This is reflected in the decreases on public institutional income from EU (ECHO), Sweden and UK (DFID). The chart below represents the distribution of the contributors of the OCB institutional income. The main contributors for are Belgium for 7.8 Mio, the European Union for 5 Mio, Sweden with 4.6 Mio and Norway with 4.4 Mio. Others comprises for Canada (2 Mio ) and Luxemburg (1.2 Mio ). 18

20 5.3 OCB Results (in K ) <> 2014 <> 2014 INCOMES Total SOCIAL MISSION Total OTHER EXPENSES Total EXPENSES Total Net exchange gains/losses (+ / -) NET RESULTS In, OCB results generated a surplus of 19.5 Mio, which is +4.2 Mio above budget. Compared to 2014, it is Mio less. OCB did increase its social mission expenses with Mio compared to the budget, and Mio versus prior year which was already exceptionally high with the Ebola emergency response. This increase is directly linked to the many humanitarian crisis for which MSF went to help the suffering populations (Nepal earthquake, the Syrian conflict and its displaced population, the Refugees crisis and the search and rescue at sea for migrants on boats, the conflict in Ukraine, Central African Republic, South Sudan, etc). While responding to so many crisis, OCB was still able to continue on most of its stable missions like in Congo, Afghanistan (despite the bomb attack on our Kunduz hospital), Zimbabwe, South Africa, Malawi, Kenya etc. But this was only possible thanks to all generous donors who enable OCB to raise at least enough incomes to cover those increasing expenses. And even more, as OCB raised 400 Mio which is more than its expenses but also the first time that the 400 Mio bar is reached. Donors continue to trust and support MSF work and are willing to give OCB the means to pursue its important social mission: provide assistance to population in distress, to victims of natural or man-made disasters and to victims of armed conflict. 19

21 5.4 OCB Initial budget 2016 Total incomes budget 2016 is fixed at Mio, which is 17.6 Mio (-4) lower than actuals Mio in the Private income, with some sections showing an increase compared to the actuals (mainly Sweden +6.6 Mio, Brazil +2.3 Mio, Hong Kong +0.7 Mio ) and others decreasing (Belgium -4.8Mio (mainly because includes 2.9 Mio deferred incomes and legacies higher by 2 Mio than the budget 2016); Norway -1.7 Mio (as the Haaken Legacy ended in ); Denmark -0.8 Mio ); Non OCB partner sections -7.9 Mio ); Mio in Public Institutional funds (coverage of 8 of the Field operation expenses); <> EUR Belgium Brazil South Africa Italy Luxembourg Hong Kong Taiwan Singapore Denmark Norway Sweden Total OCB sections USA UK Germany Non-OCB MSF-other Total NON OCB sections Total Private Incomes OCB of Total Incomes 91,3 94,2-0.4 Mio in other income. Institutional Incomes OCB Mission Expenses institutional funding 13,3 8,0 Total Income of Total Incomes 8,2 5,4 Other incomes Total OCB Incomes The budgeted total expenses for 2016 increase with +3.9 Mio (+1) compared to, with +2 Mio on the social mission expenses and +1.9 Mio on other expenses. HQ expenses increase with +4.8 Mio (+5) and International Office related expenses increase in the budget 2016 by +1.5 Mio compared to OCB budget presents a level of operations by 10.0 Mio higher than the actual Program field expenses, so increasing by 4. The decrease of the Support to other OC s is essentially due to the Support to OCBA of 18 Mio that occurred in and that is not budgeted in 2016, although we know at the moment of this report that we will support program expenses of OCP (Paris) through a grant of 9 Mio in 2016, as a consequence of the reserves balance mechanism. Also noticeable, OCB budget 2016 foresees an increase compared to the actuals in the HQ Program support with +1.2 Mio (mainly in Belgium), other temoignage with +1.5 Mio (mainly in Hong Kong +0.6 Mio, Belgium +0.4 Mio and Italy +0.2 Mio ) and fundraising expenses with +2.3 Mio. Fundraising increases are mainly in Hong Kong +0.9 Mio, Sweden +0.8 Mio, Denmark +0.6 Mio, Brazil +0.5 Mio and there is a decrease in Norway for -0.7 Mio. Also the contribution to the International Office increases with 1.3 Mio versus actuals. Finally, 2016 OCB consolidated budget presents a net deficit of -3.4 Mio. 20

22 (in K ) (in (in K ) K ) (in K ) <> <> 2016 <> <> Private incomeprivate income Private income Public institutional Public income institutional Public income institutional income Public institutional Public income institutional Public other income sections institutional other income sections other sections Other incomeother income Other income INCOMES Total INCOMES Total INCOMES Total Programs - OCB Programs Missions - OCB - Base Programs OCB Missions Projects - OCB - Base - Missions Projects Base Projects Programs - OCB Programs Missions - OCB - Copro Programs OCB Missions - OCB - Copro - Missions Copro OCB Missions OCB Expenses Missions Total OCB Expenses Missions Total Expenses Total Programs - Support Programs to other - Support - Programs OC's & to to 3rd other - Support parties OC's OC's to && 3rd other 3rd parties OC's & 3rd parties International fund International International fund fund HQ program support HQ HQ program support HQ program support ** ** ** ** Other Temoignage Other Temoignage Other Temoignage ** ** ** ** Access to Essential Access Medicines to to Essential Access Campaign Medicines to Essential ** Campaign Medicines Campaign ** ** ** Other Humanitarian Other Humanitarian Activities Other (DNDI) Humanitarian Activities (DNDI) Activities (DNDI) SOCIAL MISSION SOCIAL TotalMISSION SOCIAL Total MISSION Total Fundraising Fundraising Fundraising ** ** ** ** Management, Management, G&A Management, G&A G&A ** ** ** ** Contribution to Contribution IO Contribution to to IO IO to IO ** ** ** ** Extraordinary Extraordinary expenses Extraordinary expenses expenses OTHER EXPENSES OTHER Total EXPENSES OTHER Total EXPENSES Total EXPENSES Total EXPENSES Total EXPENSES Total Net exchange Net gains/losses Net exchange Net (+ gains/losses / exchange -) gains/losses (+ (+ / -) / -) (+ / -) NET RESULTS NET NET RESULTS NET RESULTS for information : for for information : for : information : HQ Expenses HQ HQ Expenses HQ ** Expenses ** ** ** IO Expenses (CAME/DNDI/Contribution/Int'al IO IO Expenses (CAME/DNDI/Contribution/Int'al IO Expenses (CAME/DNDI/Contribution/Int'al fund) fund) fund) As a consequence, the London ratio in 2016 is 26.2, a little higher than in but remaining far below the maximum target of 30. The Social Mission ratio reaches 84.1 in the budget 2016, again above the OCB minimum target of 80. OCB - Ratio's <> SOCIAL MISSION OTHER EXPENSES TOTAL EXPENSES Social Mission ratio 84,1 84, <> HQ Expenses Non HQ Expenses TOTAL EXPENSES London ratio 26,2 25, <> Institutional income OCB Missions expenses institutional funding 8,0 13,3 target 8 15 of Total income 5,4 8,2 Brussels, May

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