Ballast Nedam half-year figures show continued stability

Key figures for the first half of 2024:

• Revenue: €485.3 million (2023: €514.7 million)
• EBITDA: €34.0 million (2023: €26.4 million)
• Order book: €2.1 billion (2023: €1.4 billion)

CEO Kemal Sağlam commented on the results: “We reflect on a stable first half of 2024, during which Ballast Nedam achieved an EBITDA margin of 7% (2023: 5.1%). Revenue reached €485.3 million, meeting the targets set in our business plan. For all of 2024, we foresee revenue and EBITDA growth compared to 2023 (revenue 2023: €1.1 billion and EBITDA 2023: €57 million).

Our sharp focus on tenders and strengthening of our teams has contributed to this stability. We pursue a selective tender policy with a strong emphasis on risk assessment and risk management, ensuring sustainable relations with our clients with the right teams selected from the tender phase. Our focus on operational effectiveness with strict commitment to our objectives has translated into stable results.

Ballast Nedam continues to prioritize projects characterized by well-developed construction methods and partnership procurement models such as the 2-phase-model, allowing us to apply our expertise and manage risks effectively. The selective tender policy we implemented earlier is paying off. Our order book increased from €1.4 billion in 2023 to €2.1 billion. Additionally, the integration of Rönesans Endüstri Tesisleri at the beginning of this year has strengthened our financial position. We remain focused on maintaining a healthy business with predictable results.”

Infrastructure

The first half of the year for the Infrastructure division was marked by project completions and various renovation and maintenance activities. Key focuses included finishing works of the A24 Blankenburg connection towards technical availability (planned tunnel opening in December 2024), as well as testing the tunnel installations of the Holland Tunnel and the Maas Delta Tunnel, both part of this extensive project in which all infrastructure disciplines come together. Initial maintenance work on the A27 as part of the Everdingen-Hooipolder improvement project also commenced.

Housing market

We observe a stabilization in market conditions concerning inflation and interest rate increases. Our work stock is increasing healthily, and we are well-positioned to contract and realize projects. However, delays in procedures (partly due to objection periods) and the ongoing nitrogen crisis are causing long project lead times. The increasing scarcity of labor also remains a concern.

International ambitions

As part of our ambition to grow internationally, Ballast Nedam integrated the international activities of Rönesans Endüstri Tesisleri in the first half of the year, expanding our geographical presence and product offering. We believe that bundling these activities will provide even more value to our stakeholders and customers. In addition to our traditional export products in construction and infrastructure, we can now offer large-scale design-build-finance projects in sectors including industrial plants, (wind) energy and data centers. Our international projects are performing well, including the reconstruction of St. Maarten airport expected to be completed later this year.

Domestic projects

Some of the milestones achieved by Ballast Nedam in the Netherlands in the first half of the year:

• The A27 Everdingen-Hooipolder road widening project officially started on January 31. In Raamsdonksveer outgoing minister Mark Harbers symbolically put the first shovel in the ground: the starting moment for tackling traffic jams on the A27 between Houten and Hooipolder.
• Earlier this year, Ballast Nedam signed a letter of intent with Sif Group to dismantle obsolete offshore wind farms, aiming to take a significant step towards a sustainable and circular wind energy sector by reusing steel.
• On the Rijnkade project in Arnhem, a large part of the retaining walls was successfully installed in the first months of the year. The Rijnkade is being reinforced to meet future high-water scenarios. The work is being carried out virtually emission-free.
• At 28 meters below sea level, the closure joint in the Maas Delta tunnel in early March was completed, witnessed by outgoing minister Mark Harbers. The Blankenburg connection will officially open to vehicular traffic in December.
• Project Jonas (Amsterdam IJburg) was granted a SEAL Award in May in the Sustainable Product category. Ballast Nedam West realized this sustainable project in 2023 with three BREEAM Outstanding certificates.
• Project Cartesius Utrecht, an inner-city area development inspired by the Blue Zones, is progressing on schedule. Construction on the monumental CAB (264 rental units) has started in February and in May phase 2 kicked off with the construction of Okinawa (165 social rental units).
• Block F of Oostzijderpark urban district in Zaandam was completed in June. This modular construction project, carried out by Heddes Bouw & Ontwikkeling, comprises 73 social housing units including 22 'rooms-with-chances' for young people coming out of problematic situations.
• The NH Bouwstroom partnership aims to accelerate the housing shortage in North Holland. In the first half year, the projects De Tramhalte in Schagen (44 social rental apartments), De Lus in Oudesluis (96 apartments for labor migrants) and Noorderveenweg in Assendelft (72 flex homes) were successfully completed. Thanks to modular construction by Heddes Bouw & Ontwikkeling, these projects were completed in a very short time.
• As part of the series of Avenue2 projects, Laudy Bouw is building energy-neutral townhouses and urban villas in Maastricht. This spring, the first 55 homes of sub-phase 5 were delivered to the full satisfaction of the buyers. This project started in 2023 as a pilot under the Building Quality Assurance Act (Wkb).
• In Maastricht, Laudy Bouw delivered phase 1 of the restoration of one of the oldest city walls. The collapsed city wall will be rebuilt brick by brick: using QR coding, each block of natural stone will be returned to its exact original position. The reconstruction of this heritage will be completed in early 2025.

Safety, sustainability, and digitalisation

Two years after the introduction of our safety philosophy ‘Take Care’, its principles have become an integral part of our identity and actions. Thanks to the efforts of all our colleagues, we have substantially reduced absenteeism incidents. As a next step, Ballast Nedam is focusing on the mental health and well-being of employees, recognizing their crucial role in the organization’s resilience, employee satisfaction, and workplace safety. Together, we strive to create a workplace where safety is not just a priority but a shared promise lived by every member of our organization. Safety as a true value, supported by a culture of care. Take Care!

Ballast Nedam is also actively working on sustainability with a clear goal: to be carbon neutral in our operations in the Netherlands by 2030. This includes carbon neutral construction sites, exemplified by the zero-emission Rijnkade Arnhem project that we are currently carrying out with our partners.

As Ballast Nedam, we are investing in green energy, in emission-free equipment, in an emission-free fleet of vehicles with charging facilities and in battery storage. This year, we decided that all new lease cars should be exclusively electric. We are also focusing on reducing our waste as much as possible and on increasing the level of circularity, committing to the use of bio-based materials and incorporating biodiversity into our projects.

Reflecting on the first half of the year, we have reduced the carbon footprint of our offices and vehicle fleet. However, the footprint of our construction sites has increased due to the rise in international sites where sustainable measures are not yet always obvious or feasible.

We are advancing the digitalisation of construction sites and optimizing work processes. AI workshops and training sessions are accelerating our digital transformation by automating routine tasks and promoting standardization for better predictability and performance. Robotic Process Automation (RPA) is streamlining administrative and repetitive tasks, reducing workload and operational costs. Additionally, we use sensor technology to monitor equipment data such as emissions and running hours, thereby improving efficiency, maintenance planning, and safety.

Outlook

Within our growth scenario, the priority is to expand our current areas of expertise. We are focusing on further expansion within industrial construction, urban development and construction, tunnels, and energy transition. Our international presence is also being further expanded, with Rönesans Endüstri Tesisleri making an important contribution. Additionally, we continue to seek strategic acquisitions that support our growth and enhance the stability of our organization.