BESIX Group: results of the financial year 2021

Highlights

• For 2021, BESIX Group presents a turnover of 2.96 billion euros, one of the highest of the last 20 years. This confirms some recovery after a complicated year 2020, marked in particular by the Covid-19 pandemic.
• The group closes the year with a historical record order book of 4.88 billion euros (vs. 4.2 billion in 2020), with a healthy geographical spread including Europe (57.5%), Australia (16%), the Middle East (15%) and the rest of the world, mainly Africa (11.5%).
• In contracting, in each of its markets, BESIX Group signed world-class contracts in 2021, including, among others, the largest of the Guggenheim museums in Abu Dhabi (Department of Culture and Tourism), the Tour Triangle in Paris (Unibail-Rodamco-Westfield), the Right Bank infrastructure of the Oosterweel link in Antwerp (Lantis), one of the world's largest hybrid-timber office buildings with DPG Media in Amsterdam, the POST Rotterdam building (Omnam Group), Africa's tallest skyscraper with the F Tower in Abidjan (PFO Africa), the Barangaroo Metro infrastructure (Sydney Metro), the Kangaroo Point Green Bridge (Brisbane City Council), and New Zealand's Te Kaha Stadium (Christchurch City Council).
• The Concessions & Assets segment continues to realise a growing contribution to the Group's revenues through public-private partnerships that are delivering above-target results. The highlight of 2021 is the financial close of the Dubai Waste-to-Energy project, a 1.2-billion-dollar public–private partnership covering one of the largest plants of its kind in the world.
• BESIX RED, the real estate development arm of the group, once again reported a positive year, well above target, with significant achievements and developments in each of its markets across Europe.
• A number of BESIX Group's regional and specialised subsidiaries in the Benelux countries are showing excellent results, in particular BESIX Unitec (ex-Van den Berg), Socogetra, and Lux TP, which is having a record year in the Grand Duchy of Luxembourg.
• The group's balance sheet is healthy, with a solvency ratio of 21.2%, above the industry average. The net cash position stands at 218 million euros (excluding non-recourse debt and IFRS-16 debt).
• Notwithstanding the ongoing negative influence of the pandemic, BESIX Group generated an EBITDA of 102 million euros, a progress of 82% vs. the 2020 results. The group net result, after exceptional write-offs and goodwill depreciation, amounts to 27.1 million euros.
• The outlook for 2022 is good, with the launch of major projects and the delivery of several emblematic projects, but the challenges of inflation and the rising prices of materials and energy, already present following the Covid-19 pandemic and amplified by the Russian invasion of Ukraine, have a macroeconomic impact and therefore, ultimately, on construction. The introduction of clear and transparent price revision systems in line with inflation in new contracts is inevitable.

Statements of the Executive Chairman and Deputy CEO

Pierre Sironval, Deputy CEO: “2021 has been a year of challenges, but also of recovery. In this tumultuous year, we have supported the economic recovery in the regions where we are present, by participating in major projects, winning new contracts, and delivering iconic projects. Our diversification strategy again proved its relevance: our private-public partnerships in water and waste in the Middle East, our infrastructure and utilities entities in Western Europe and our real estate development subsidiary have all performed very well. Going forward, faced with the current economic and geopolitical challenges we know, we will have to remain vigilant as we steer through 2022: pursuing quality projects, growing our recurring income business, and inevitably introducing fair price revision mechanisms in new contracts.”

Johan Beerlandt, Executive Chairman: “Our record order book of quality projects is cementing our path back to normalized performance. With a strong balance sheet and a sound cash position, we are equipped to continue to serve our clients in the best possible way. Our strategy going forward remains clear: to strengthen our position as a diversified group, where contracting takes the lion share of our activity, and where parallel activities positively enhance our revenues. On behalf of the Board of Directors, I would like to express my sincere thanks to the members of the executive team for their stewardship of the group, and to reiterate the sincere confidence we have in our many employees, wherever they are in the world.”

Group Management

The year 2021 was marked by important organisational changes within BESIX Group. Pierre Sironval was appointed Deputy CEO in May 2021, replacing Rik Vandenberghe. In April 2022, the Board of Directors of BESIX Group confirmed the appointment of Pierre Sironval as CEO and Hans Beerlandt as CFO as of 1 January 2023. To ensure seamless stewardship of the company, Johan Beerlandt will remain in charge until 1 January 2023, while working hand in hand with Pierre and Hans, with whom he has developed a strong and efficient collaboration characterized by trust over the years. After this date, Johan Beerlandt will continue to act in an advisory capacity.

Jean-Pol Bouharmont, former CEO of BESIX Watpac, has been appointed Executive Chairman of this Australian subsidiary and Managing Director of Six Construct in the Middle East. He has also joined the Executive Committee of BESIX Group. He is succeeded by Mark Baker as CEO of BESIX Watpac.

Contracting

Contracting, which remains BESIX Group's leading activity, was marked by the delivery of magnificent projects in each of its markets. The construction activities of BESIX NV/SA, Six Construct and BESIX Watpac contributed 1.726 billion euros, or 58%, to the group’s revenues.

• Europe
  In 2021, BESIX teams delivered first-class projects, including the Stationspostgebouw (LIFE NL, SENS Real Estate) in The Hague, the Terraced Tower (Provast) and the 4 km long Theemswegtracé railway viaduct in Rotterdam (Havenbedrijf Rotterdam), the Quatuor real estate development (Befimmo) and the BNP Paribas Fortis head office in Brussels.
  
• Australia
  BESIX Watpac's teams have once again demonstrated operational excellence, as evidenced by the Adelaide Airport, Jubilee Place (JGL Properties), and major awards recognising the quality of work on the Herston Quarter (Australian Unity) and Roma hospitals (Queensland Health), the Ideas Lab (James Cook University), Brisbane Airport, the Qantas Museum and national defence projects.
  
• Middle East
  In 2021, Six Construct delivered some magnificent projects, particularly in Dubai with the Infinity Bridge (Road & Transport Authority), the Deep Storm Water Tunnel which drains 40% of the rainwater and groundwater of the Dubai urban area (Dubai Municipality), and the Belgian and French pavilions for the World Expo.
  
• International
  The International Business Unit is responsible for all BESIX Group projects outside Western Europe, the Middle East, and Australia-New Zealand. In 2021, in Ivory Coast, BESIX completed its work for the La Mé plant (PFO Africa), one of the largest drinking water production plants in West Africa. In Egypt, BESIX and Orascom have started progressive deliveries at the Grand Egyptian Museum (Ministry of State for Antiquities). With the transport of the Khufu Solar Boat, the oldest intact ship in the world, the group's teams have once again demonstrated BESIX's ability to carry out operations of extraordinary complexity.

Regional & Specialised Contractors

BESIX Group's regional and specialised subsidiaries, active in Western Europe, contribute around one billion euros, or 34%, to the Group's revenues.

The year 2021 was marked by several acquisitions:

• BESIX Infra completed the acquisition of the road construction activities of STRABAG BV in the Netherlands.
• BESIX Unitec (ex-Van den Berg) acquired Lucan BV, specialised in gas and electricity connections, and Agidens Infra Automation, a market leader in automation, remote control, interconnection, and intelligent energy management for infrastructure.
• Vanhout took a 40% stake in BuildUp, which develops innovative and sustainable solutions in the field of modular construction.

On the financial side, BESIX Unitec (ex-Van den Berg), Socogetra, BESIX Infra and Lux TP remain on the good trajectory of recent years, and the entities that were underperforming in previous years are showing clear signs of recovery.

Real Estate Development (BESIX RED)

BESIX RED closes the year 2021 with a turnover of 161.6 million euros and a net result of 22.6 million euros, a significant evolution compared to previous years. The developer records a solid return on equity of 22.3%. In line with its pan-European diversification strategy, BESIX RED now has a portfolio of 36 projects under development in 19 European cities in 5 countries, with a future sales value of more than 1.8 billion euros.

The end of 2021 and beginning of 2022, in particular, were marked by significant developments and achievements across Europe.

• In Belgium, BESIX RED sold to PATRIZIA 100% of the shares of Evenepoel Properties SA, owner of Viridis, a 17,500 m² development in Brussels. In Louvain-la-Neuve, BESIX RED finalised the sale of the Esprit Courbevoie’s office building to Befimmo.
• In Luxembourg, BESIX RED signed a 15-year lease with Société Générale Luxembourg for the occupation of the entire ICÔNE building in Belval; then finalised the signature of the contract for the acquisition by AG Real Estate of 100% of the shares of the company B-9 S.A., owning ICÔNE.
• BESIX RED has strengthened its presence in the Netherlands with the acquisition of a second site in Amsterdam in partnership with ICN Development, with the ambition to develop a mixed-project comprising 37,500 m² of residential and 4,500 m² of offices and retail.
• In France, BESIX RED has signed a project for 8,000 m² of offices in the Lille metropolitan area.
• In Portugal, BESIX RED successfully launched the commercialisation of DUUO Phase I in May, its first residential project in the country. The company also increased its stake to 75% in Campus Oriente S.A., which owns Parque Oriente, a mixed-use project of approximately 38,800 m² in Lisbon.

Concessions & Assets

BESIX Group's Concessions & Assets department is once again closing the year 2021 with results above target.

In Europe, BESIX Group and its partners were selected as preferred bidder for the R4WO ring road project in Ghent. Following the first PPP for a building with POST X LPA in Antwerp in 2020, the group is also developing promising new types of PPPs, especially in the environmental field.

In the Middle East, the success story of the year was the complex financial closing of the Dubai Waste to Energy plant, a 1.2-billion-dollar project. Together with its industrial partner HZI, BESIX Group worked for almost 4 years to conceptualise the plant, design it, draw up the concession contract with the client (Dubai Municipality), set up and participate in the financing, and now build it. The two companies will then co-manage its operations and maintenance for 35 years.

This type of project, which guarantees the group's long-term presence in the region and generates recurrent income for several decades, is at the heart of BESIX Group's strategy in the Middle East. It is also in line with the strategy of local governments, which are increasingly inclined to opt for this type of model, not only for environmental projects but also for infrastructure and public services.

Finally, despite the difficult circumstances following the Covid-19 pandemic, the activities of the hotels in which BESIX Group is a shareholder are performing better than expected to end the year 2021 positively.

People

The year 2021 marks BESIX Group's best safety record in 6 years in terms of the number of work-related incidents. This is the result of the efforts made by all the group's teams, which keep safety at work their number one priority.

In the same spirit, BESIX Group has officially joined the Building and Woodworkers' International (BWI) and several Belgian trade unions (CSC-ACV and FGTB-ABVV) in calling on the International Labour Organization (ILO) to recognize health and safety at work as a fundamental right of workers.

BESIX Group was also particularly proud to hear or read representatives of BWI, trade unions and Amnesty Belgium mention the group in the media as the example to follow in the Middle East in terms of respecting and promoting the rights of migrant workers. Similarly, Australian clients and officials have repeatedly cited BESIX Watpac as an example of respect and consideration for First Nations’ cultures, in particular the inclusion of Aboriginal and Torres Strait Islander businesses and workers.

In the Middle East, Six Construct also received the CSR label in Dubai for the ninth time in a row and is the only construction company in the United Arab Emirates to achieve this feat.

For the second year running, BESIX Group was designated as a Top Employer in Belgium, while the worldwide 2021 engagement survey of BESIX Group employees shows that 85% of them are satisfied to very satisfied to work in the group.

As of 31 December, BESIX Group employed 11,000 people worldwide.

Sustainability & Innovation

BESIX Group is committed to reducing its environmental footprint through its 'Sustainability Forward' programme. As a first step, the CO2 performance ladder, which is already applied in the Netherlands, is a key element of this policy. This has, for example, led BESIX Nederland to reduce its emissions by 2% per year since 2014. As a first step, the CO2 performance ladder will be extended by mid-2022 to all BESIX Europe activities, as well as the subsidiaries BESIX Infra, Franki Foundations and BESIX Unitec.

In 2021, Proximus and BESIX Group acquired shares in i.Leco to jointly create aug∙e, offering the most advanced smart building solutions on the market to improve the energy performance of buildings, facilitate their long-term maintenance and increase user comfort.

In its Engineering office and on many construction sites, BESIX Group and its subsidiaries regularly use pioneering solutions in the field of sustainability and circularity, new and recycled materials, robotics, and digitalization.

Looking Ahead

The diversity and quality of the BESIX Group’s order book in 2022 are promising for the years to come.

However, the consequence of the war in Ukraine, the rise in commodity prices and the inflationist trends cast a long shadow over the entire globe. The group will therefore remain vigilant throughout 2022 and remain focused on its strategy: consolidating its position as a diversified group, where contracting is central, and where parallel activities such as concessions and public-private partnerships, and real estate development positively strengthen its revenue streams.

Pursuing quality projects, growing its recurring income business, and inevitably introducing fair price revision mechanisms in new contracts will be the keys to steady performance going forward.