In short:
- Second record year in a row for BESIX Group, demonstrating the success of the sector and geography-based diversification strategy.
- Consolidated revenues of € 2,337.0 million
- Consolidated net result of € 102.6 million.
- In 2017 BESIX pursued its diversification strategy, with the acquisition of all the main Belgian subsidiaries of Heijmans, of Martello Group via Franki Foundations, of Larabo via Van den Berg, of Enrobage Stockem and Witraloc via Socogetra, and of a stake in Energieconcepten via Vanhout. As a result of these take-overs, 1,000 new employees joined the group in 2017.
- Order book at end-2017: € 3.0 billion.
- 2018 got off to a solid start with the winning of large-scale projects like the Waste-to-Energy plant in Dubai (€ 700 million) and the awarding of several important projects in Belgium (headquarters of De Persgroep in Antwerp, the renovation of the Leopold II tunnel in Brussels, the construction of the Quatuor-Noordbuilding with Befimmo, the redevelopment of the ING office Cours Saint Michel with Immobel). Mid-February, BESIX initiated an offer on 50% of the shares not yet obtained by BESIX of Watpac, an Australian company noted on the Brisbane stock exchange. Finally, BESIX already showed its intention to keep following the group's sectoral diversification strategy in 2018 with the co-investment in BESIX A-Stay.
Comments by Rik Vandenberghe, CEO of BESIX Group:
"For the second consecutive year in its history[1], BESIX posted a very good performance, illustrated by a net result of more than € 100 million. I want to thank our customers and partners for their trust, and all of our employees for their commitment to serving our common purpose: to excel in creating sustainable solutions for a better world. "
[1] 2016 produced a record result, influenced by a reversal of provisions of € 30 million.
"These results are in line with our ambition to concentrate on clearly identified performance drivers (contracting, real estate, concessions & assets), while continuing the Group's sectoral and geography-based diversification efforts.
Comments by Johan Beerlandt, Chairman of the Board of BESIX Group:
"In line with our ambition to explore new ways to make the company grow, we have completed a significant number of acquisitions in 2017. These acquisitions allow us to strengthen our position in a coherent way and to lock in new revenue streams. In addition, as most of them took place in Belgium, they reinforce something that is very near to my heart: the Belgian DNA and identity of the Group. It clearly shows that the transition between Rik and myself at the head of the company was a success. "
In 2017, BESIX confirms its growth of 2016
The very good performance of 2016 was repeated in 2017.
- Contracting achieved revenues of € 2,218 million and a net result of € 58.7 million. The decline recorded by the Middle East and International Business Units was more than offset by the European regional entities, thanks mainly to the inclusion of the Belgian activities of the Heijmans group, acquired in April 2017 (see below).
- An excellent year also for our BESIX RED real estate development activities with revenues of € 144.4 million and a net result of € 17 million.
- The Concessions & Assets business, meanwhile, recorded a net result of € 24.7 million.
BESIX Group’s consolidated net cash position (excluding the impact of BESIX RED's debt) was € 145.6 million. The solvency ratio stands at 27.8%, which is above the minimum standards for the sector.
1. Contracting
Financial results
BESIX Group's Contracting business generated reveneus of € 2,218 million and a net result of € 58.7 million. This performance reflects geographically contrasting developments.
- In Europe, BESIX had a positive year, marked by the good performance of the activities by BESIX and the regional entities in Belgium. They generated nearly a billion euros of revenues in 2017. The integration of the Belgian activities of the Heijmans Group, which was finalized at the end of April 2017, went very well. Most of the acquired subsidiaries contributed to the good results as expected, with the exception of Belemco, where significant losses on past orders partially weighed on the result. The other European entities (the Netherlands, Luxembourg, France) also had a very good year.
- In the Middle East, Six Construct had an exceptional year 2017, with the realization of new and interesting projects in Oman and Bahrain and the continuation of large-scale projects in Dubai. Revenues from Qatar have logically been affected by the deterioration of the geopolitical context in the region since June 2017.
- The International cluster, meanwhile, had a less favourable year. This situation is mainly due to the significant costs incurred in the development and preparation for several projects, and also due to tenders for major projects for which the decision to invest by the client depends on the costs of raw materials (hydrocarbon or mineral) or the tenders for projects that depend on government decisions (mainly in Africa).
Commercial results
Major projects delivered to our clients last year include:
- Herstal road viaducts (Belgium): three successive viaducts on the E40/A3 motorway, at a strategic point connecting Wallonia to the Netherlands and Germany. This section is travelled on average by over 100,000 vehicles a day.
- Post X (Antwerp, Belgium): 5 office buildings with a total surface area of 50,000 m² and a two-level underground car park, on the site of the former Antwerp X postal sorting centre. In May 2017, the client commissioned a sixth building from BESIX.
- Stuifduin Crematorium (Lommel, Belgium): Three interconnected buildings, perfectly embedded in the surrounding nature. This project received one of the first BIM Awards for Benelux (see below )
- Lammermarkt car park (Leiden, Netherlands): The deepest underground car park in the Netherlands (-22.5 m), built in just two and a half years.
- SAFI (Ajman, United Arab Emirates): the UAE's leading water utility, which recycles water for industrial and commercial uses, recently inaugurated its first water supply site
- Bluewaters Bridge (Dubai, United Arab Emirates): 350 m pedestrian bridge connecting Bluewaters Island to the Dubai coast. Six Construct designed and built this structure, which preserves the coastal landscape.
- Ain Sukhna Product Hub (Egypt): 3 km F-shaped jetty in the Gulf of Suez, with three unloading platforms, including one dedicated LNG platform that has been pumping gas into the Egyptian network since late May 2017.
- Luštica Bay (Montenegro): delivery of the first part of a luxury seaside resort combining the Montenegrin heritage and nature with its environmentally friendly design.
The main projects signed in 2017 are:
- Manhattan (Brussels, Belgium): total renovation of the iconic building on Place Rogier, with the addition of 2 further floors, to give a total of 42,000m².
- De Persgroep (Antwerp, Belgium): construction of the new headquarters for De Persgroep at the heart of Antwerp.
- Terraced Tower (Rotterdam, Netherlands): 100 m tower along the River Maas.
- Marine Infrastructure for Tugboats at Port Hedland (Australia): Design and building of tugboat facilities including mooring pontoons, cyclone moorings, and access walkways.
- Port of Duqm (Oman): 1 km quay wall and two double berth jetties. These will strengthen the port's position as a key economic hub in Oman.
- Raft of The Tower (Dubai Creek Harbour, United Arab Emirates): Foundations for what will be the world's tallest tower.
- Hotel Chedi Luštica Bay Montenegro: the largest five-star hotel in the Kotor Bay region.
2. Real estate development: BESIX RED
Financial results
BESIX RED, the Group's real estate division, had an excellent year in 2017, with revenues of € 144.4 million. The Belgian residential housing market was buoyant in 2017. In 2017, BESIX RED had 750 apartments in construction and sold 300. Sales were strong despite a small rise in the average price (slightly above inflation), due to mortgage rates remaining at historically low interest levels. As in previous years, private investors and buyer-occupiers shared the market relatively equitably (60-40).
2017 also saw the continued clean-up of the office market with a decrease in rental vacancies. In Brussels this applies in particular to the Central Business District and the Leopold district. The consolidation of the Brussels periphery market comes mainly from the conversion of empty office buildings into dwellings. In Brussels, this phenomenon is more
marked in the city's outer municipalities where many luxury apartment buildings have replaced neglected offices.
In 2017, BESIX RED acquired new properties in Belgium and abroad, enabling it to reach a total of 247,000 m² for development in the coming years.
BESIX RED's net result was € 17.0 million, up 23.9% year-on-year.
Commercial results
In 2017, BESIX RED delivered several key projects, such as:
- Canal District (Brussels, Belgium): 205 apartments
- Kons (Luxembourg City): 14,600 m² of offices, 2,400 m² of shops and 32 apartments.
In 2017, BESIX RED signed the Cours Saint-Michel (Brussels, Belgium) project: sale with temporary lease (sale & leaseback) of the ING headquarters in Etterbeek, followed by the redevelopment of the site in partnership with Immobel.
3. Concessions & Assets
Financial results
The net result of Concessions & Assets was € 24.7 million, a slight drop compared to 2016, which included exceptional items.
Commercial results
2017 saw further construction works on the Limmel Lock PPP (completed 1Q 2018), Beatrix Lock PPP, and A6 Almere PPP project. Tendering efforts continued year-long and were rewarded in early 2018 with the awards of the Leopold II tunnel project (Brussels) and the A16 Motorway PPP project (Rotterdam). In the Middle East, the focus of tendering shifted from municipal wastewater treatment projects to desalination and waste-to-energy. Execution-wise, 2017 was the year of the full revamping of the water tankers filling area at the Safi micro filtration and reverse osmosis recycling plant.
4. Strategy and acquisitions
The year 2017 was rich in acquisitions, both at Group level and at its subsidiaries, in line with our strategic ambitions to offer our customers integrated solutions.
At the end of April, BESIX finalized the acquisition of the Belgian activities of the Dutch group Heijmans, the main subsidiaries of which are Van den Berg, Heijmans Infra (renamed BESIX Infra), Belasco and Heijmans Bouw (renamed Belemco). This transaction strengthens BESIX's position in its Belgian national market and further diversifies our product offering, particularly in road construction, complex infrastructure, networks and the infra market.
During the second semester of 2017, other acquisitions also took place:
- At the end of July, BESIX Group, via its subsidiary Franki Foundations, acquired UK-based Martello Group, including its Martello Holdings, Martello Piling & Highmead Developments subsidiaries. With 40 employees and revenues of around € 15 million, Martello will contribute significantly to the growth of Franki Foundations UK.
- At the beginning of August, BESIX Group, through its Belgian subsidiary Socogetra, finalized the acquisition of Enrobage Stockem and Witraloc , two companies operating in the road construction sector, and more specifically the manufacture and laying of asphalt mix, the supply of concrete, and the sale of road metalling from their various quarries.
- Again at the beginning of August, Vanhout acquired a 60% stake in Belgian company Energieconcepten, which specializes in renewable energy installations (heat pumps, solar panels, solar thermal collectors and biomass), but also offers conventional technologies.
- In mid-September, Van den Berg took over Larabo, specializing in high quality cable and pipe-laying for telecommunication operators and utilities in Flanders.
5. Position in society and awards
- November 2017: signing of a five-year sponsorship contract with the URBSFA/KBVB. This allows BESIX to support the Red Flames and the Red Devils in return for associating its brand with that of the country's football teams, with which it clearly shares both strong local roots and a remarkable international reach.
- December 2017: signing of an international framework agreement for the promotion and protection of fair labour standards, with Ambet Yuson, General Secretary of Building & Wood Workers' International (BWI) and Guy Winandy, President of the European Works Council (EWC) of BESIX Group. This agreement’s purpose is to promote and protect the well-being of all employees and workers employed by BESIX Group.
- December 2017: BIM level 2 certification. BESIX is the first Belgian construction company (and the second in Europe) and the first general contractor in Europe to receive BIM level 2 certification. This offers significant competitive advantages, including accelerating tendering processes and positive effects in terms of risk control, safety and productivity.
6. Outlook for 2018
The order book contained €3 billion at the end of December 2017.
The outlook for the different domains is great. 2018 has started with some excellent prospects in the form of many contract signings.
Some examples of new contracts:
- Leopold Tunnel II (Brussels, Belgium): renovation of the longest road tunnel in Brussels (2.5 km) + 25-year maintenance contract, in association.
- Quatuor (Brussels, Belgium): 60,000 m² of offices in the quadrangle formed by Boulevards Baudouin and Albert II, the Chaussée d'Anvers and Rue Orban in Brussels, where the Noordbuilding still stands today.
- A16 (Rotterdam, the Netherlands): design, construction, financing and maintenance of a new road, including a tunnel of 3 km, in the north-eastern periphery of Rotterdam, in consortium.
- Theemswegtracé (Rotterdam, the Netherlands): construction of a four kilometre raised railway viaduct, including the construction of two arched metal bridges, in consortium.
- Waste to Energy (Dubai, United Arab Emirates): construction, operation (during 30 years) and transfer of one of the world's largest thermal waste reclamation plants. A unique project which positions BESIX Group as a partner of choice in achieving the United Arab Emirate's environmental protection and sustainable development goals.
- Jebel Ali (Dubai, United Arab Emirates): construction of a reverse osmosis seawater desalination plant.
- Parque Oriente (Lisbon, Portugal): BESIX RED enters the Portuguese market by acquiring land to build 43,000 m² of offices and residential space for an internationally reputed client.
- Nunavut (Canada): design and buildability pre-contract with Baffinland for the expansion of a wharf infrastructure along the Mary River, beyond the Arctic Circle.
2018 will also be marked by the progression or achievement of several important projects, such as:
- Grand Egyptian Museum (Cairo, Egypt): construction, in partnership with Orascom, of a 'Pharaonic' building that will eventually house 100,000 objects and artefacts. A first wing, housing the famous statue of Ramses II, will be delivered in 2018.
- Limmel flood barrier (The Netherlands): design, construction, financing and maintenance of a flood barrier near Maastricht. This is an important link in the "Maas route" connecting Belgium, the Netherlands, Germany and France. It also offers protection against the risk of flooding.
- Marc Jacquet Hospital Centre (Melun, France): turnkey delivery of a 56,000m² state-of-the-art hospital.
- Sluishuis (Amsterdam, The Netherlands): prestigious complex of 380 apartments on the waters of Ijburg (BESIX RED).
- International headquarters of Ferrero (Luxembourg): 30,000 m² office space and 800 parking spaces (BESIX RED).
In conclusion, we expect new developments both for our main activities as for some of our innovative domains, which are the engines of diversification. For example:
On 12 February 2018, Vanhout announced the acquisition of De Bie-Veba, based in Aartselaar. It specializes in placing and servicing technical installations in primarily residential projects. The company also offers a 24-hour helpdesk.
At the end of February, BESIX announced its intention to acquire a further 35.95% of the issued capital of Watpac Ltd, an Australian construction, civil engineering works and mining services company, listed on the Australian Stock Exchange. Since acquiring an initial 15% stake in April 2013, BESIX has gradually increased its holding to 28.1%. BESIX's offer relates precisely to the additional acquisition of the 50% of Watpac’s issued shares that it does not yet hold. It will finance this acquisition through existing cash reserves, leaving it with comfortable headroom through its existing banking facilities. BESIX's offer must still be submitted to Watpac's shareholders at the end of May 2018. The Scheme of Arrangement will be implemented immediately afterwards.
On 13 March BESIX Group announced the signing of a 50/50 co-investment partnership with A-Star Group in A-Stay, a new urban housing concept for expatriates, young people, business travellers and tourists. A-Star and BESIX plan to jointly develop 7,000 studio apartments in 35 countries worldwide in the next five years. With this partnership, BESIX reinforces its diversification strategy and shows its intention to develop innovative projects. In addition, A-Stay plunges BESIX head first into the sector of smart building.
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