Highlights
- BESIX posted a third year of solid growth with consolidated revenues of EUR 2,542 million, up 9% as compared to last year.
- The consolidated net result amounts to EUR 95.3 million.
- The year was also marked by an extraordinary commercial momentum, with a record order book of EUR 4,763 million as at 31 December 2018, an increase of more than EUR 1,700 million as compared to the year before.
- The acquisition of Watpac Ltd, an Australian contractor, has been completed, contributing EUR 1 billion to the order book, and potentially EUR 800 million to its revenues in 2019.
- In the contracting business, 2018 results are mainly driven by robust performance in Belgium and strong results in the Middle East. Real Estate Development and Concessions & Assets are confirmed contributors to the Group bottom line.
- The annual performance reflects the Group's solidity and the success of its strategy, which focuses in particular on excellence, diversification and open innovation.
Statements of the Chief Executive Officer and the Chairman of the Board of Directors
Rik Vandenberghe, CEO of BESIX Group : "In 2018 we delivered another year of strong performance with an order book to its highest ever level and very healthy net cash position. Continuing to benefit from our clear strategy, we achieved a significant increase in gross revenues across all of our geographies. Clients continue to value BESIX companies as long-term partners, with the capacity and competences to take on complex projects, and proposing innovative, sustainable and added-value solutions. On behalf of our 15,000 staff members who come to work every day passionate about our purpose, we thank our clients and partners for continuing this journey with us."
Johan Beerlandt, Chairman of the Board of BESIX Group : "The Board of Directors is pleased to note the strength and consistency of the 2018 results. They are in line with our ambition to concentrate on clearly identified performance drivers (contracting, real estate, concessions & assets), while continuing the Group's diversification efforts in order to turn BESIX into a multi-service group that excels in creating sustainable solutions for its clients. In 2018 we have completed a significant number of acquisitions, which strengthen our position in a coherent way and lock in new revenue streams. This allows us to consider the year to come with confidence."
The good performance of the last two years is repeated in 2018
- The profitability of the Group’s contracting activities is driven by strong results in the Middle East – mainly in the United Arab Emirates and Bahrain. Europe’s results reflect a robust performance in Belgium, where the Regional and Specialized Contractors remain globally strong profit contributors. The International result was driven by marine works on the one hand, and the construction of large or high buildings on the other.
- BESIX Real Estate Development posted another record result thanks to an attractive portfolio of real estate projects.
- BESIX Concessions & Assets has once again been very profitable, with a robust and sustainable performance, including in the Middle East.
- BESIX Group’s consolidated net cash position, driven by the acquisition of Watpac, was EUR 135.7 million on 31 December 2018, an increase of more than 100 million compared to 2017. The solvency ratio stands at 24.4%, which is above the average standards for the sector.
1. BESIX Contracting
Financial results
BESIX Group's Contracting business, including the Regional & Specialized Contracting companies, generated revenues of EUR 2,395 million and a net result of EUR 14.1 million. This performance reflects geographically contrasting developments.
In the Middle East, with revenues of EUR 771.5 million and a net result of EUR 44.3 million, 2018 was a solid year with the realization of new and interesting projects in Oman and Bahrain and the continuation of large-scale projects in Dubai.
The European and International Contracting business lines, with revenues of EUR 562.6 million, realized a negative net result following a precautionary decision to book provisions and raise recoverable claims against third parties.
The Regional & Specialized Contracting companies, with revenues of EUR 1,060.9 million and a net result of EUR 13.5 million performed very well with the exception of Franki Foundations, where recoverable claims against third parties have also been raised preemptively.
This decision to book provisions and raise recoverable claims in a couple of projects with potentially challenging outcome reflects our proactive attitude to sound risk management to ensure a long term and healthy management of the company in the interest of all stakeholders.
Business results
Key milestones of 2018 in Belgium were:
Delivery of the Maintenance Centre for Belgian railway company NMBS/SNCB in Melle, of the Maintenance Centre for the Brussels public transport company STIB/MIVB in Haren, the new IJzerlaan cycle and pedestrian bridge and IJzerlaan canal in Antwerp.
Signature of the contracts for the construction of the De Persgroep headquarters in Antwerp, the renovation of the Leopold II tunnel in Brussels, the 3rd and 4th railway tracks between Aalter and Beernem, quay walls in the Hansadock in the port of Antwerp and a major logistics project for Brussels Airport.
The Regional & Specialized Contracting companies have signed their fair shares of new contracts in 2018, among them: the thorough renovation of the Canada bridges in Bruges, the construction of a BREEAM Excellent building for the Ministry of Environment in Luxembourg, the resurfacing and creation of a carpool lane on an 11-km stretch of the E411 between Arlon and Sterpenich, the laying of ca. 50km of cable (including a tunnel under the Albert Canal and the River Meuse) for the Elia connection between Belgium and Germany, the construction of a new court house in Eupen, the complete renewal of the sewer system and cycle paths on the N8 in Roosdaal, the renovation of the headquarters of the Financial Services and Markets Authority in Brussels, the foundations of the multi-modal bus station in Namur, the development of new small-scale, care-oriented housing forms in Sint-Katelijne-Waver, etc.
In Luxembourg work continued on the Casa Ferrero project and several new contracts were signed in 2018: earthworks for the new Jean Monet II building, industrial works for Dupont de Nemours and several water treatment projects.
In France BESIX delivered two hospitals in Melun (south of Paris) in June 2018. At the end of the year it was awarded two new projects: another hospital in Neuilly (Paris region) and a mixed-use (offices, hotel and housing) project in Nice, close to the airport.
In the Netherlands BESIX finalized several projects, including the Hogeschool Utrecht, dike reinforcement at Kinderdijk-Schoonhoven and the innovative bridge renovation (“Doen” project) in Nijkerk.
Important new contracts were signed during 2018: the Theemswegtracé (rail link) in Rotterdam, the massive PPP-project ‘De Groene Boog’ which expands the Rotterdam ringroad with a new 11km long highway, and the iconic Sluishuis waterfront housing project in Amsterdam.
In the Middle East, the following projects were delivered: the raft slab for the Dubai Creek Tower, completed two months ahead of schedule; the Warner Bros. World Abu Dhabi, an iconic theme park located on Yas Island in Abu Dhabi; and the Bahrain LNG Import Terminal, an important project for the kingdom’s energy infrastructure.
Major projects have been awarded to Six Construct in 2018, in consortium or joint venture with third parties, and also in collaboration with BESIX Contracting and BESIX Concessions & Assets.
A few examples:
- A prestigious Waste-to-Energy project for the Dubai Municipality;
- A Refuse-Derived Fuel facility for the Emirates of Ajman and Umm Al Quwain for the Ministry of Climate Change and Environment;
- A Sea Water Reverse Osmosis plant at Jebel Ali Power Station, Dubai. This new desalination project, using Reverse Osmosis technology, reaffirms BESIX as a partner of choice for the sustainable development ambitions of the United Arab Emirates;
- The Shindagha Infinity Bridge for the Dubai Roads and Transport Authority;
- A joint venture agreement with Shurooq to operate and maintain the Al Saja’a Sewage Treatment Plant in Sharjah, UAE.
Elsewhere in the world, the key projects delivered in 2018 were the Ain Shokna jetty in Egypt; the Chedi hotel and its marina in Montenegro, and the Radisson Blue hotel in Andermatt (Switzerland).
Important new contracts signed during 2018 outside of Europe and the Middle East were the Mohammed VI project in Morocco (Africa’s tallest tower), a hydropower plant in Cameroon, a drinking water treatment plant in Ivory Coast; and a loading facility project for the Baffinland company in Nunavut (Canada).
2. BESIX Real Estate Development
Financial results
BESIX Real Estate Development, the real estate entity within the Group, posted another a record year in 2018 with revenues at EUR 156.9 million resulting in a ROE of 21.7%.
BESIX RED’s expansion continued at a strong pace in 2018, thanks to its geographical and sectorial diversification backed by its focus on innovation and the synergies with the different entities of BESIX Group.
These assets, combined with a strong 30 years’ expertise in complex and large-scale projects, have helped BESIX RED build solid public and private partnerships and anticipate the market’s cycles and the clients’ needs in order to develop solutions that meet their highest expectations and match people’s changing needs for their living and working environments.
Business results
BESIX RED delivered a total of 100,000 sqm in Belgium, such as Dunant Gardens (Ghent), The Cosmopolitan (Brussels), Meadow Phase I (Herent) and Canal District (Brussels).
In addition, construction began om more than 30,000 sqm in Belgium (250 units in the Esprit Courbevoie Phase I, Louvain-la-Neuve; 84 in Meadow-Herent Phase II, Leuven); 22,600 smq in Luxembourg (Quatuor and Icône) and 39,500 sqm in The Netherlands (442 residential units in the Sluishuis project in Amsterdam, designed by Bjarke Ingels Group).
Permits were delivered in 2018 for the 18,800 sqm Icône office building in Luxembourg designed by Foster+Partners, and the 13,850 sqm So Stockel residential project in Brussels.
Acquisitions in 2018 included the mixed-use Cours Saint-Michel project in Brussels (76,000 sqm); the residential projects Meywaert in Ghent (17,000 sqm) and Matisse in Evere, Brussels (35,000 sqm); and the mixed-use project at Walferdange in Luxembourg (19,500 sqm).
3. BESIX Concessions & Assets
Financial results
With a net result of EUR 18.9 million, Concessions & Assets has once again been profitable, with a robust and sustainable performance in Europe and in the Middle East.
Business results
In Europe, BESIX Concessions & Assets further grew its highly successful portfolio of DBFM (Design, Build, Finance, Maintain) projects in the Netherlands. The A16 “De Groene Boog” project in Rotterdam was won and the commencement certificate for the works was obtained in December. In the meanwhile, construction progressed well on the A6 highway project north-east of Amsterdam and the Beatrix lock near Utrecht.
The year 2018 also saw the opening of two additional hotels, in Luštica Bay (Montenegro) and Andermatt (Switzerland), co-developed and co-owned by BESIX. In June, BESIX also acquired a 51% stake in BESIX Stay, which develops and operates short and mid-term stay concepts under the A-STAY commercial brand.
In the Middle East, where BESIX Concessions & Assets has traditionally been mainly active in municipal wastewater treatment projects, the focus moved to waste-to-energy projects. In Dubai, BESIX Group is, alongside Hitachi Zosen Innova, a key member of the consortium that was awarded the region’s largest-ever waste-to-energy project, with construction to start in 2019. Other key milestones of the past year are the launch of the Al Saja’a wastewater treatment concession in Sharjah, and the development of a Refuse-Derived Fuel project in Umm Al Quain.
4. BESIX Open Innovation
BESIX Group is well aware that innovation, especially open innovation, is a strategic issue. In 2018, the Group took new steps towards greater openness and diversification, both upstream and downstream of the traditional construction process.
Since the launch of its ‘Unleash’ internal innovation programme and the ideation process two years ago, more than 300 ideas have been generated internally. Ten among them are now at different levels of maturity. The 3D Concrete Printing Lab, opening in Dubai on 17 April 2019, is born out of this unleashed creativity.
Next to this, and to find new products and services with which to respond better to market demand, BESIX launched in 2018 its Start-Ups Accelerator. This Accelerator aims to make BESIX’s knowledge and experience available to mature start-ups, and provide them with practical assistance for testing or finalizing their concepts. In time, they could become reliable economic partners of the group. Today already 10 start-ups from the ‘Construction Technology’ (ConTech) and ‘Property Technology’ (PropTech) industries have been on-boarded into the Accelerator.
In 2018 BESIX Group also developed partnerships outside the construction environment. In 2018, BESIX Group and Proximus signed a partnership to co-create innovative solutions and deliver a superior end-user experience in the area of Smart Buildings. During the following months, BESIX designed and built a next-generation smart building that can be considered as a European reference in the field. Located in Dordrecht, the Netherlands, it features cutting-edge innovations, aimed at energy management and efficiency, sustainability, comfort and safety.
Finally, BESIX has taken shareholdings in various specialized companies that are bringing innovative solutions to the market, among them Neanex (which develops a BIM collaboration and integration software) and PropChain (an app that digitizes the paper trail in Real Estate and centralizes real estate documents for homeowners and stakeholders in a secure environment).
5. Diversification
The year 2018 was rich in acquisitions in line with BESIX’s strategic ambition to offer its clients integrated solutions.
At subsidiaries level:
- Vanhout acquired 100% of De Bie-Veba, specializing in placing and servicing technical installations in primarily residential projects.
- Entreprises Jacques Delens acquired the business, ongoing contracts and related assets and staff of Co.Re.Bat, a Brussels-based company doing conversion, renovation and extension work for private customers.
- Van den Berg acquired 100% of Uniconnect, specializing in cable and pipeline laying, the installation of optic fibre networks, and home connections.
- Lux TP, BESIX's Luxembourg subsidiary, acquired a shareholding in Mabilux, a specialist builder of metal structures for industrial and commercial buildings.
At BESIX Group level:
- BESIX Group acquired 51% of A-Star Group, which was renamed BESIX Stay. BESIX Stay operates accommodations, based on a concept of smart and urban housing, for business people, tourists and students.
- BESIX Group acquired 50% of the assets of the Flamant Group. With the take-over of this upmarket furniture and home decorations company, BESIX takes its first steps in the retail market, in line with the Group's strategy of Belgian roots and diversification.
- BESIX Group acquired 33% of Les News 24 (LN24), the first continuous news channel in French-speaking Belgium.
- In October 2018 BESIX made a take-over bid for the remaining of Australian construction company Watpac, in which it already had an 28.11 % shareholding, for a total cash consideration around AUD 123 million (EUR 78 million). At the closing of its unconditional takeover offer on 3 December 2018, BESIX held around 92% of all Watpac shares, allowing it under the Corporations Act 2001 (Australia) to compulsorily acquire of all remaining Watpac shares. On 18 January 2019, BESIX acquired the remaining shares, making it the sole shareholder of Watpac, which has been delisted.
2018 also included divestments, with BESIX Group selling its 75% stake in its BESIX Park subsidiary to INDIGO, world leader in parking service operations; and its 50% stake in Cofely BESIX Facility Management (CBFM) to energy transition group ENGIE.
6. People assets & certifications
- BESIX Group staff grew by close to 700 colleagues in 2018, from 14,494 to 15,190.
- In terms of Health and Safety, many sites celebrated several millions of LTI (lost time though injury)-free man-hours in 2018; more than 350 safety walk-abouts were done by Group executives around the globe and a large majority of projects were completed LTI-free.
- BESIX Group successfully obtained a multisite certification for OHSAS18001 and VCA**2008/5.1, ISO14001:2015 and ISO9001:2015.
- In 2018 and for the 6th year in a row, Six Construct received the CSR Label framework awarded by the Dubai Chamber in recognition of its outstanding efforts and commitment towards CSR & sustainability practices in the region.
7. Outlook 2019
With a record order book of EUR 4,763 million as at 31 December 2018, all BESIX Group units look to 2019 with optimism. This optimism is nevertheless tinged with caution. Global economic growth is projected to slowdown in some regions; hence 2019 may well turn out a challenging year for the construction market, with fewer contracts coming to market, heavier competition and ever-increasing levels of risk transferred by potential clients to contractors.
2019 has started favorably with the signature of several new projects, including the contracts to build the Belgian and French pavilions for the Universal Exposition in Dubai in 2020, the Grotius project in The Hague, comprising two residential towers, and the construction of the 339 meters, 78-storey Uptown Tower in Dubai.
2019 will also see major projects progressing or delivered: the Grand Egyptian Museum (Cairo, Egypt), the Roskilde bridge (Denmark), the port of Duqm (Oman), the De Persgroep headquarters (Antwerp), the opening of the first A-STAY housing project (Antwerp) and the inauguration of the BESIX 3D Concrete Printing Lab in Dubai.
More about BESIX Group
BESIX Group is a global player and the leading group in Belgium in the field of construction, concessions and real estate development. Active since 1909, the group is based in Brussels and operates in Europe, the Middle East, Africa, Canada and Australia. Its achievements include the Burj Khalifa in Dubai, the world's tallest tower, the buildings of the European Parliament in Brussels, and the Grand Egyptian Museum on the Giza pyramids plateau.
BESIX is an international reference in marine works, buildings, environment, sports and leisure facilities, industrial buildings, road, rail, and airport sectors. In the environmental field, BESIX took part in in the construction of the Carpe Diem tower in the Paris district of La Défense, the first high-rise building in the world to obtain both LEED Platinum and HQE certification. It also helped build the world's first energy-neutral tunnel in the Netherlands. In Western Europe, the group and its subsidiaries construct many technologically advanced buildings, including passive and ‘smart’ ones. In the Middle East, BESIX is also known for building, managing and operating leading infrastructures for waste recycling and water treatment.
Its in-house Engineering Department enables BESIX to realize unique, highly complex projects, particularly in terms of technical and environmental aspects. On each of its sites, BESIX pursues excellence in terms of quality and safety and in reducing its environmental footprint. Faithful to its purpose: Excelling in creating sustainable solutions for a better world.
For further information: www.besix.com