Half year results Ballast Nedam: Challenge to Improve pays off

“Maintaining a healthy company is an ongoing process. The health of a company more than ever lies in every aspect of the business: from people to technology, from employee to client, from process to practice. This is reflected in our ambition to improve the safety, sustainability and wellbeing of the world we live in. Luckily, we like a challenge”, states Cenk Düzyol, Chairman of the Board of Management of Ballast Nedam N.V. “We are continuously re-evaluating our processes, techniques and expertise to stay aligned with our clients’ needs and market demands. This requires an entrepreneurial mindset and the eagerness to learn, adapt and grow every day. This starts with the right people in the right place. Therefore, we recruit employees with the same mindset. Ownership, dedication and a focus on collaboration and relationships are extremely important. Because we continue to invest intensively in our people and our processes, a positive spiral is created. Because we are making progress, employees get even more enthusiastic and inspire others to follow in their footsteps to improve our company. As a result, we are in line with our business goals for 2021".

Financial summary

• Looking at the first half year of 2021, our financial results are in line with our 2021 business plan
• Our half-year revenue amounts to € 391.6 million (2020: € 396.5 million)
• Our EBITDA is € 14.7 million (2020: € 10.8 million)
• We continue to focus on a strong quality of the order intake which results in a solid order book of EUR € 1.4 billion (2020: € 1.4 billion)
• Overall, there is a strong performance throughout the business
• The construction market shows a high demand and we are still able to remain selective in tendering for new contracts. We can still fill in our capacity and grow our orderbook in the future
• The infrastructure market in the Netherlands is in general more challenging. With our current healthy order book, the impact for Ballast Nedam for the short and medium term is limited
• We fulfilled our new contract signature target for the half year and 75% of 2022’s expected revenue is already secured
• The increase in costs of commodities and materials causes pressure on some of the business cases from our clients. So far, its impact to our business has been limited

Ballast Nedam's order book for infrastructure for both large as well as smaller regional projects is stable and robust for the years to come. The newly acquired project 'Princess Amalia Harbour' will contribute to the growth of deep-sea quay walls of the port of Rotterdam. The A24 Blankenburg connection between the A20 and A15 motorways shows significant progress and is on schedule. Also, the maintenance phase of the PPP projects A9 Gaasperdammerweg and the A15 Maasvlakte - Vaanplein is being conducted according to the plan.

Due to -amongst others- the nitrogen problem, the necessary embraced demands for sustainability and circularity and the potential growing shortage of qualified people for the jobs, the infrastructure market in the Netherlands will be challenging and competitive for the coming years. Ballast Nedam however continues to carefully select large infrastructural works and develops its organization in line with these market developments. We have learned that a well-balanced approach of proper project management teams on the job and an open and transparent cooperation with clients and stakeholders decreases risks and increases effective working. An enlarged and more diversified portfolio will support our ambitions in the coming years.

Ronald de Geus, Managing Director of Ballast Nedam Infra Projects states: “We see that Rijkswaterstaat, provinces and municipalities are facing the biggest replacement and renewal task regarding infrastructure so far. The need for long term investments in maintenance of bridges from the seventies is high and urgent to avoid major obstruction in mobility and unnecessary high costs. This work brings together many of our expertise, which we are already using extensively in other Ballast Nedam projects. With this renovation task, we will make use of our knowledge of project management, concrete structures, the installation and repair of asphalt pavements and the replacement of electrical and mechanical systems. In doing so, we bundle our knowledge from Ballast Nedam Infra Projects, Ballast Nedam Park & ​​Connect, Ballast Nedam Foundation & Excavation Solutions and Ballast Nedam Road Specialties and deploy the knowledge of our Digital Transformation & Innovation team”.

Mr Düzyol adds: “We also see that renovation, sustainability and maintenance of residential housing will increase in the coming years. The transformation from offices to housing will also continue to develop in the coming years with a changing way of working towards working from home instead of from the office. We also see opportunities in the restoration and renovation of homes. In both markets, our regional business units Ballast Nedam Zuid and Laudy Bouw & Ontwikkeling are active. Furthermore, a large responsibility lies with all stakeholders involved to create a solution for the housing demand in the Netherlands. With an increasing demand for sustainable solutions across all markets, we continue to respond to trends and opportunities for sustainably upgrading and transforming existing residential real estate. Our regional business units are actively pursuing further growth in these markets and are working on innovative solutions by applying research and development to meet market demands. An example is the ‘PuurThuys’ concept, a prefab housing concept that responds to the need for the rapid construction of new houses.”

Ballast Nedam Development continues to be a frontrunner as an urban developer in the Dutch market. It sold and delivered all residential houses fossil free, energy neutral, climate adaptive and with elevated biodiversity standards across all projects. With the new project Horizons in Amsterdam, we are setting the new standard for sustainable residential development. Also, Tuinbuurt Vrijlandt in Rotterdam, Green Avenue in Maastricht, Cartesius Utrecht and Gezondheidspark Dordrecht all hit major milestones in terms of contracts, sales and delivery.

Our heavy industries division Ballast Nedam Industriebouw is growing steadily, with very good scores on safety and excellent performance. Also, our new Ballast Nedam International Projects assignment ‘Princess Juliana Airport’ at St. Maarten Airport is a very welcome addition to our global presence.

Project highlights

A selection of project highlights which took place in the past six months:

• Horizons | Ballast Nedam Development was awarded this new sustainability icon in Amsterdam, with 126 residential units - including office spaces, with a total of 11,000 square metres. This plan has two main emphases: circularity and energy consumption. With Horizons, we are setting the new standard for sustainable residential development.
• Princess Juliana Airport Maarten | Ballast Nedam International has been selected as the main contractor for this reconstruction project. After Hurricane Irma destroyed the airport, Ballast Nedam International will now contribute to its reconstruction. The terminal will be restored and modernised in order to fully meet the modern standards after completion.
• Princess Amalia Harbour | Ballast Nedam Infra Projects is one of the contractors to construct 2.4 kilometres of deep-sea quays and earth-retaining walls in the Princess Amalia Harbour. We use 'smart quay walls' with data-driven techniques to gain information which our client can use to further develop or expand the port of Rotterdam.
• Tower Ten WTC Amsterdam | During an interim BREEAM audit, it was confirmed that the Tower Ten WTC Amsterdam project is on the right track to achieve BREEAM Excellent in the implementation phase. The core of the building reached its highest point in May.
• A24 Blankenburgverbinding | We have started the construction of the two immersed tunnel elements of the Maasdeltatunnel within the Verolme dock. At the building site within the tunnel approach areas, we have reached the deepest point of excavation and have successfully poured the first reinforced underwater concrete. The complex phasing of these construction pits showcases the experience and ingenuity of our staff.
• Hemmathagama water treatment plant | In close cooperation with the local residents, we have laid the first pipes, after which we continued to work on the water treatment plant, which has a daily capacity of 21,000 M3. This project in Sri Lanka will provide 17,000 families in seven villages with clean drinking water.
• Westfield Mall of the Netherlands | The shopping centre officially opened its doors in March 2021. During this project, we joined forces with several co-contractors. It resulted in winning the BIM Award 2021 with the oval-shaped glass dome on the ceiling, executed by Vic Opdam Staal and commissioned by Ballast Nedam Building Projects.
• A9 Gaasperdammerweg | Four tunnel tubes are open for traffic and the realisation of the longest land tunnel in the Netherlands is now a fact. Ballast Nedam Infra Projects and its consortium partners are currently completing the realisation phase. At the moment, we are finishing the beautiful city park on top of the tunnel’s roof which connects the surrounding suburbs and increases healthy and enjoyable living conditions for local residents in the Amsterdam Zuidoost area.
• Airside Pier | Together with our joint venture partner TAV, we regret to inform that we have disagreements with Schiphol Group for the Airside Pier project. Unfortunately, these disagreements are having a very substantial time and cost impact for a large group of subcontractors, suppliers, ourselves and ultimately Schiphol Group and the end users. We hope that we can solve these issues together with Schiphol Group based on a mutual understanding.

Healthy growth is sustainable growth

Our main goal is to create solutions for a sustainable future for all of our stakeholders. We do this mostly by taking several sustainability initiatives, such as investing in a 100% Dutch green electricity contract based on Dutch wind energy for all our offices, production and construction locations, a contract for hydrotreated vegetable oil fuel, the ordering of 150 new electric lease cars, and the installation of 2405 solar panels on the roofs of Ballast Nedam Materieel buildings in Almere. Also, large investments were made to the purchase of zero emission equipment such as an emission free mobile site office, four pieces of new electric tower cranes, a new environmentally friendly EURO6 Asphalt emulsion truck fitted with a green energy package consisting of solar panels on rooftop and engine heat and a new 100% electric HAMM HW90 tridem roller compactor. All these measures contribute to the reduction of our CO₂ footprint.

Also, we continuously work on developing new sustainable techniques for asphalt and concrete and focus on circularity. In the context of Strategic Business Innovation Research (SBIR), 6 girders from Haitsma Beton were transferred from a viaduct of the A9 Gaasperdammerweg project in order to investigate to reuse them elsewhere. We believe we have to team up in the sector because the strive for a sustainable future is a joint effort. Another example is our active participation in the platform ENI (Emissieloos Netwerk Infra), a sector initiative to aim for a zero-emission construction site in 2026.

In our portfolio we have several LEED and BREEAM projects. By way of example, we work on the sustainable project Jonas, location IJburg Amsterdam, one of the first residential buildings to be delivered with a BREEAM Outstanding certificate. “By continuously challenging ourselves to improve, to inspire others and to team up, we create infrastructure and real estate projects for a future proof living environment”, states Bramske van Beijma, Director of Corporate Social Responsibility at Ballast Nedam.

Innovation and digitalisation

Our international excellence in Building Information Modeling is one of the methods that makes our sustainability goals possible. We are implementing 4D and 5D progress monitoring on our project Princess Amalia Harbour, making use of the lessons learned at A24 Blankenburgverbinding.

We are also investing in improving our operational excellence at the construction site by BIM2Field. With our surveying department we make large improvements in techniques such as drones, laser scanners and crane cameras in capturing the construction site. We are using this information for monitoring and guaranteeing high quality standards for our clients. We compare the captured ‘as is’ information with our BIM-models from the BIM2Design and BIM2Construct phase to make sure we do the right thing from the start. Also, we improved our robot plotter for marking lines and points on concrete floors. Other opportunities we are deploying are real time monitoring of machine equipment, robotic process automation and machine learning algorithms to improve our way of working.

Outlook: healthy growth will continue 

Mr Düzyol: “Flexibility and resilience are dominant in this sector and in this time frame. With our strong internal organisation and our focus on clients’ needs, supported by the network and economies of scale of our parent company Rönesans Holding, we expect to keep a healthy growth in line with our business plan. Challenge to Improve is leading in this; our mindset and actions are dedicated to continuous improvement of ourselves, the added value for the client and a safe and future-proof living environment.”