"Our 2022 half year financial results reflect a performance we are satisfied with”, says Kemal Sağlam, CEO of Ballast Nedam. "Our half year results are positive and in line with our business plan expectations. We are grateful to and proud of our dedicated colleagues who have enabled these results. However, the economic and geopolitical uncertainty in the market still remains high. We continue to transform our company to build solutions for climate change while the need for energy security accelerates investments within Europe. Our entrepreneurial mindset, as well as our flexibility and resilience, help us to navigate during these uncertain and ever-changing times.”
Key figures 2022
- Half year revenue amounts to € 605.9 million (2021: € 391.6 million) and revenue for the full year 2022 is expect to grow by more than 10%.
- EBITDA amounts to € 23.9 million (2021: € 14.7 million). We expect our financial performance to be in line with previous year.
- Strong quality of the order intake which has so far resulted in a solid order book of EUR € 1.7 billion (2021: € 1.7 billion).
Kemal Sağlam explains: “Uncertainty is the essence of the market conditions we are operating in. The geopolitical situation, global supply cost increases and time-delays in material deliveries certainly have an impact on our business. Also, we see that the shortage in the labour market is complicating the process of hiring qualified staff. In addition, cost fluctuations, as well as nitrogen policy, have a delaying effect on tenders, especially for large (infrastructure) projects. Our strategy of diversification in regions, clients and types of projects as well as investments in specialist activities pays off in these circumstances. A major concern is the pressure energy security is putting on sustainability. While investments in sustainable energy accelerate, new European investments on fossil fuels are also planned to secure energy for the coming years. The urgency and importance of sustainability is and will be on top of our agenda and we will develop our capabilities in this field even further.”
Ballast Nedam displays an expanded focus on international growth. This year, the company acquired some new international projects such as the construction of a new headquarter building of the European Investment Bank in Luxembourg (joint venture with Rizzani de Eccher) and the construction of five new bridges in Guinee. Ongoing projects are the water treatment plant in Sri Lanka and the terminal renewal of St Maarten airport.
Besides that, acquiring new companies continues to be of interest as a way to complement its ambitions for a healthy strategical growth. In March 2022, Mouwrik Waardenburg was added to the portfolio of Ballast Nedam Road Specialties. The portfolio is also being expanded towards the energy transition market, bio-based and nature-inclusive construction. An example is the wind energy market in which Ballast Nedam was actively involved in the past as well. Projects Windplanblauw and Maasvlakte II Windfarm are examples of this line of business. “What is remarkable about the challenging market conditions, is that this will also lead to new opportunities”, according to Sağlam.
Urban development and sustainability
The large demand for suitable housing is reflected in the excellent results of Ballast Nedam Development. New innovative concepts such as Natuurhuis where climate-positive and scalable terraced houses made of straw will be developed, as well as the fully demountable and sustainable Parking facility for TU Delft by Ballast Nedam Park & Connect challenge the markets as we know it and continue to express the urgency to take sustainability even more serious than ever before. Large challenges remain however in the availability of building space, especially in light of the proposed nitrogen measures.
Ballast Nedam shows large progress in sustainability. The CO2 emissions of the business activities decreased by 29% in the first half year compared to the same period last year. This net decrease with growth of turnover is mainly due to the reduction of CO2 emissions on projects by applying various CO2 reducing measures. For example, the Prinsess Amaliahaven runs entirely on HVO (Hydrotreated Vegetable Oil) and more and more electrical equipment is used. In July it became clear that an average CO₂ reduction of 69% was achieved on sold houses compared to the applicable laws and regulations.
With these strong results, Ballast Nedam is well on its way to becoming CO2 neutral by 2030. A very ambitious but extremely important objective.
In addition, substantial investments have been made in expanding our own energy generating capacity through solar energy. In total, during the first six months, 3629 solar panels were installed. The total capacity of the newly installed solar panels constitutes 1,423,665 Watt peak. Ballast Nedam's ambition is to generate all the energy we need sustainably, by 2040.
The company launched a new safety campaign which was branded ‘Take Care’ to increase improved safety awareness and supportive behavior. It is all about taking care of each other as the basis for positive change. “Taking care is the basis for how we work - in safety - but also concerning human resources in general”, explains Willem Turkenburg, director of Human Resources. “None of the company’s accomplishments would be possible without its skilled and dedicated people. The shortage of staff in the industry, motivates us to paying even more attention to our employees and to cherish them. Good compensation, strong focus on personal growth, diversity and individual care are success factors in maintaining a healthy, happy and qualified workforce”.
It is not always possible to create a positive outcome. Olav Padberg, board member of Ballast Nedam, states on behalf of the Board of Management and Joint Venture partner TAV: “Ballast Nedam and TAV are both experts in this line of work and in our long history, it never happened before that we were not allowed to finish a project. We regret deeply the consequences it has on all stakeholders involved. Ballast Nedam-TAV has tried everything to come up with solutions throughout the entire process and will continue to do so.”
Ballast Nedam is confident in a positive outlook. “We are in a good position and have a positive view on the long-term outlook for the (international) construction market, although caution should be exercised. Our international reputation is very strong and we will continue to explore opportunities outside the Netherlands. We foresee international potential mainly in infrastructure, and specifically in water related projects such as ports, bridges and tunnelling. Ballast Nedam is in an excellent position to support organic growth (inter)nationally and acquire companies and projects including investing in (real estate) developments
Within our industry, we must take up the challenge together to find solutions for the major challenges we face, especially when it comes to realizing a sustainable living environment in which nature and climate are protected as much as possible. Better and overarching cooperation between government and business can be the key to success. In our 145 years of existence, we have overcome many challenges which is why we confidently rely on our extensive experience and expertise. If we can continue to fill our order book and retain our qualified staff, we expect to continue to increase our turnover and profit. We are looking for new opportunities to further improve and to expand our horizon. Our craftmanship and entrepreneurial mindset will lead the way”, states Sağlam.