Budimex S A Shs

Good morning to all of you. I would like to welcome you to the 2021 summary of the financial results of the Budimex Group. On my left is Marcin Wygłowski, a member of the Board of Directors of the Budimex Company. Mr. President Artur Pielech, president of the FB Service company and on my right Mr. Jacek Lech, president of the Mostostal Kraków company. Ladies and gentlemen, we would like to start with a short video on which you will be able to see and look at what our main events look like and what happened in 2021 in the entire Budimex Group. Welcome. you Thank you. Three, two, one. Ladies and gentlemen, it was a very good year for the entire Budimex Group, a year full of changes, a year full of challenges, a year when we entered new markets outside of Poland, a year when both organic development and the purchase of companies took place. but also the year in which we showed our clients that we can make investments and give them back in time in very good quality. First of all, according to our agenda, I would like us to discuss macroeconomic data. I would like to ask the financial director, Mr. Węgłowski, to discuss these results. Marcin, I give you the floor.

A very brief introduction from the point of view of the construction company, of course, how our macroeconomic environment looks like. However, maybe after today's morning, the world looks a little different. Nevertheless, going back to the indicators that are ahead of us, i.e. the GDP forecast for 2022-2023, which is, of course, an increase of more than 4.5% in 2023, There was a very large increase in the GDP in 2021, which of course was also due to the fact that there was such a rebound after this part, during this COVID, where we had a decline of 2.5% in 2022. Unfortunately, as you know, inflation is quite high. It is due to the aid funds that were in the Covid period. The average inflation level in 2021 was 5.7% and above 9% from December to December 2021. The world of inflation is probably waiting for us in 2022. 7% of the planned average annual inflation, with a much larger indicator probably in the first half of the year and it will be cooled, let's hope, in the following years. When it comes to construction and assembly production, a large increase in 2021, 7.9%, very good dynamics, In terms of infrastructure, more than 10%, as well as in general construction, 5%. This shows the dynamics very well, that this year's construction was also very good. When it comes to the change in the construction and installation production in permanent prices, because here we begin to show this indicator, taking into account, of course, inflation, which is starting to influence the exchange rates more and more, but here there is also additional dynamics of 3.4%. When it comes to division, it is not even, i.e. there have been losses in the construction of buildings, while in the construction of specialized robots, this increase is in permanent prices of 9.3%. Below you can see a slide of the market in the construction sector, divided into three groups of companies, 10-49 employees, between 50-249 and over 250. Of course, Budimek is located where it is above 50%. And these companies, which are larger companies, begin to improve their profitability. On the other hand, smaller companies, which employ from 40% to 49%, the dynamics decrease, but this is, one might say, the situation is becoming more normal, as it should be. Generally speaking, the performer earns about 5% in EBIT. Our sub-performers around 7-8%, so the profitability that was in 2018 for our subcontractors, where it was almost 12%, was rather extraordinary. So the situation is fairly stable and there will be a balance between our subcontractors and general contractors.

To sum up all the 21 main events on the construction market, I think the key elements that we have developed as a industry with the main customers are definitely the issue of valuation. Here I would like to thank our customers, both the General Directorate of Railways and Autostrad, as well as PKP PLK. because we are still conducting a broad dialogue on cooperation, which allows us to mediate the risks for both parties. As you know, by 2021 we had a valuation limit of 5% on contracts. At the moment, the bids that have been announced since the beginning of January 2021 have a valuation of 8%. The general direction's announcement is that the future bids that will be announced will already have a valuation limit of 10%, so it will greatly limit the risk for both parties, because of course the valuation works both for the benefit of the contractor and also for the benefit of the customer. When the price of the material starts to fall or the price of the workmanship, then of course we partially return these funds to the customer. As for the key customers, this is the third year in a row with a very high, stable contract in the general management. As far as the railway segment is concerned, it was a very difficult year, the year 2021, due to the fact that the number of transition years in EU funds, i.e. the number of railway contracts, was very limited, but this year 2022 is very promising, but we will talk about this in the next slides. What we notice is, of course, the growing pressure on the part of material prices and uncertainty related to EU funds. There is no way not to relate to the fact that some kind of fear, of course, was associated with our investments. These are EU funds. But we also see very ambitious investment plans in the energy segment. and the fact that the first fairs related to the CPK project have already begun to be announced, and we all know how big this investment is. As for the right-to-left part of the slide, i.e. the announced fairs on the PKP.pl market, In 2021, it was PLN 2.2 billion. A large part of it was won and acquired by our company Budimex. Almost PLN 800 million was part of the portfolio acquired in the 21st in the railway segment. The year 2022 is very promising. Here, at the moment, PLN 6 billion, but the forecast is that what has appeared at the moment in the tenders is over PLN 10 billion. If we go to the prices of selected raw materials, because it is always very interesting for you and us, we see global price stabilization on the market and it applies to all assortments, from concrete to steel. because these are key elements where this price, of course, the promises of cement producers are such that they see the need for an increase, but it will not be drastic and we expect this increase at a few percent level, but not exceeding the two-digit number. When it comes to steel, we have noticed that the price of steel has stabilized, and even from quarter to quarter it has dropped by 11%. The price of asphalt. We are very worried about the price of asphalt and of course the price of oil. Because what Mr. Węgłowski said at the beginning, what happened today will certainly have an effect on the price of oil, and of course the price of oil is immediately transferred to the price of asphalt. Today, as we can see, the price was fairly stabilized, but the predictions are that asphalt prices will probably increase. And the price of oil is also starting to rise in the last period. If we look at the main customers, the key customers on the Polish market, i.e. the General Directorate and PKP PLK. The General Directorate is the next in line, as we have said, a very stable portfolio, over 13.5 billion announced bids. We have presented to you a rather long review, because when it comes to EU funds, as I mentioned, we have completed the EU prospects for 2014-2021. To sum up this seven-year breakthrough, In the general direction, it was PLN 95 billion, a very large amount of investment. If we look at such a five-year breakthrough in PKP PLK, PLN 45 billion, what I said, a momentary stagnation in 2021. However, how does it translate into our company? Participation in the Budimex market in the years 2014-21, when we look at such a long perspective, we achieved a level of 19% in general and management. Our participation in the market is 19%, so actually every 5 km built in Poland is built and implemented by our company. If we look at PKP PLK, it is 18%, so a very comparable portfolio. I keep saying that this is our PKP PLK, a young child, because we have been in the rail market for only 6 years, but we are already a leader and we already have almost 20% of market share. Moving on to the second point, i.e. the financial results of the Budimex Group. We present these key results when it comes to the Budimex company with the exclusion of the real estate Budimex. We have informed all of you that in the month of May there was a transaction of the sale of the real estate Budimex, so the company's income and the company's results are no longer included in our portfolio, We present to you the summary of 2021 and also what will happen in 2022 with the exclusion of Budimex Nieruchomości. Comparing the revenues, they are practically at a fairly close level to 2020. However, we have raised these revenues by 2.6%, which I consider to be a great success, given that the first quarter I must mention that the first quarter was a very difficult period for us. It was a period of very bad atmospheric conditions, where we could not carry out work, where in the first quarter we had problems with obtaining a decision from RIT due to the ongoing procedures in the offices due to COVID, so the remaining quarters allowed us to overtake this production, especially the last quarter showed that we even overtook the quarter from 2020. The gross margin from the level of PLN 700 million, we raised this margin to PLN 834 million, so this is an increase of over 18.8% to the level of 10.5% profitability, so a very good level. EBIT increased by 31% to the level of 587 and the profitability of 7.4%. And finally, of course, net profit increased by more than 50%, 5.7%. If we look at revenues and at individual segments, especially the construction segment and the service segment. We can see that the first two quarters were very difficult for us due to the weather and due to the ongoing procedures of obtaining ZRID or construction permits, because we can evaluate it differently. The fourth quarter allowed us to make up for this sale and production, which significantly improved our results. And in the end, we achieved over PLN 7.282 billion. The service segment is a very good part of our company and this is what we would like to develop. Here, President Artur Pielech will present the details of this later, a very large increase in sales. more than 27%. We have set the goal of reaching PLN 1 billion in 2026. I believe that we will be able to achieve it much faster. At the moment, after 2021, we see that the sales of the FB Service company has reached almost PLN 800 million. When it comes to the gross sales margin according to segments. The individual quarters actually show that it is stable, it is not some quarter to quarter, that we have some success in some quarter. Rather, these quarters, this margin, both in the construction segment and in the service segment, is stable for us. At the end of 2021, in the construction segment, we achieved over 8.8%. This is over PLN 643 million. In the service segment, PLN 140 million. The level of profitability is also at a very close level, because it is 18% in 2020, 17.9% in 2021. In fact, very close and comparable. What I think is also important in the March and the effect of the improvement that we have noticed is above all that we have completed some contracts that were difficult contracts, difficult and long-term contracts, and I'm talking about the power plant in Turów, a six-year contract without the possibility of valuation, so part of the contracts, a contract in Wilno, industrial gas station, contracts that were not valued and that burdened us heavily on the margin level. The cash position is also close to 2020, 2.6 billion, a very high level of cash position. The difference to 2020 is mainly due to the dividend paid in 2020. I can also say that this will greatly improve our results, but it also gives a level of certainty and a good chance for development through organic investments, but also through the possibility of buying companies from various segments. The history of dividends in the Budimex Group from 13 years is 13 years in a row, where we pay dividends. As you can see, it's already 138 PLN for a particular share. Increasingly, we have paid over 3.5 billion dividends. The year 2021 was a historic year when it comes to payments, because it's over 800 million PLN, 31 PLN for one piece of dividend. Our portfolio will order. Ladies and gentlemen, at the end of 2021 we also achieved a historic portfolio of over PLN 13 billion. What I would like to draw your attention to is that it is very diversified. As you can see, both the road and hydrotechnical industry is the leader in this portfolio, 5.8 billion. We do not have this column divided into road and hydrotechnical contracts, but hydrotechnics is also a large range when it comes to the part of the industry of the first road and hydrotechnical industry. We join it together, one division in our company does it. 3.3 billion, 3.1 billion in general construction, a very large and significant part. And industrial construction, over PLN 800 million. This diversification provides us very strongly with and guarantees such stable development, which we are very happy about. There are over 203 contracts diversified from Szczecin to Rzeszów and from Turów to Suwałki. In fact, when it comes to Poland, we exist in every industry, in every city, so it allows us to function smoothly. Signed contracts, year 2021, a slightly weaker result of PLN 7 billion, but we also know from what it comes from. It was a year when we saw that the perspective of the EU was ending at PLN 14.21. In 2021, we expected that it would be a difficult year and a slightly smaller number of tenders. and the possibility of making offers. That's why in 2020 we focused on the offer. It was a historic year for us then. We got PLN 9 billion. I can't help but mention that in 2021 we also won the signature or our offers were rated at the highest level of PLN 2 billion. Here at the end of the chart you can see this amount. They were not signed because very often the bidding procedure It will be extended due to protests, due to the explanation of certain issues. We are convinced that we will probably sign these 2 billion. They will, however, be included by 2022, but the truth is that they have been compiled and compiled in 2021. The 7 billion is also very well diversified. We followed the market trend, 3.5 billion is the general management, 500 million is from PKP PLK, but here the hydrotechnical part is also included. We won one contract, which is combined by Wody Polskie and PKP PLK, Regalica in Szczecin, plus the overall construction of 2.4 billion and industrial construction of 500 million zlotys. What is important when it comes to signed contracts and contracts and our backlog in general is that the company and the Budimex Group have been provided with work until 2023, so we, our employees and shareholders can be calm that even if anything happens, we have a full portfolio provided until 2023. on the implementation of contracts and here we can sleep peacefully, because we will implement the things that we have, contracts included, signed and they should be implemented. A moment of summary after our last meeting, after the third quarter, we told you that of course we are going outside of Poland, we are going to the eastern markets and I understand that everyone would like to say that I am checking what we have done over these six months. Six months is of course not a very long period, so we are looking at it in the long term, in the long term, we are not looking at it in the short term. I would like to summarize where we are after this half-year period. We established companies on all markets, on the German, Czech and Slovak markets. This was a key element so that it was possible to start making offers. On the German market, we have already won the first offer, although of low value, but at the last meeting we said that we have the most profitable offer, but there were a lot of questions from the orderers, because we are We are the first contact on the German market, so we had a lot of discussions with the orderers. We signed, we signed this contract, it is of low value, but we wanted to start with less risky contracts. It is the reconstruction of the bridge facility for 10 million euros. The Czech market, we have made offers worth over 2 billion zlotys. Just like in Poland, the Czech market was very similar in 2021. There was also a shift, the end of the EU perspective, so this market also showed the situation very strongly, that there was a very limited number of market progress. We do not act aggressively, we have a very good portfolio, We also want to operate in a stable manner and not on the basis of obtaining a contract, where we will later lose the margin. On the Slovak market, we also made offers. What is worth emphasizing is that we are trying to get the REI Baltica contract. This is a very large contract connecting Poland with Lithuania, Latvia and Estonia. We are very focused on this contract, it is of enormous value, it is a contract of over 8 billion euros. We have a consortium on this contract, we look at it more long-term, because this is a contract that will be implemented at the turn of the next eight years, so it will allow us to diversify the activity on the Polish market. We also told you at our last meeting that our company is not only a construction company, but we take a lot of attention, we devote a lot of attention and we take a lot of funds to get into green energy. And we also told you that we will focus on it. After the first half of the year, we would like to present to you what happened. And here I will ask Marcin to tell us a little about this green energy.

As the President said, we promised to enter seriously into renewable energy sources. We are also working on such a comprehensive strategy to find its place in energy changes in the country. Nevertheless, we took the first step. We bought a wind farm, but it is not ready yet, it is yet to be built. In addition to the purchase, it is necessary to build a CAPEX. 55 million PLN. As I said, this is the first step. This is a wind farm with a capacity of 7 MW, 2 times 3.5 MW. The average wind power is 7 m per second, the productivity is 25 GW per year. We have also secured the energy rebound on this project, i.e. we have already signed a PPA agreement with a reliable partner, so we will want to finance it as well as our future investments. rather through project finance, i.e. 75% we hope that we will finance it from external sources with our own 25% contribution. I also want to say that we are also analyzing other projects, we are in their course, both in wind and photovoltaics, so I hope that in the next half year or at least in 2022 we will be able to boast about the next investments in this area.

Thank you very much, Marcin. I would like to move on to the third point, discussing the financial results of our two companies, the FB Service Group and Mostostal Kraków. Artur, let me give you the floor.

I welcome you. The results of the EFB Service. President Popko has already said a lot, so I will only allow myself to elaborate. In fact, last year, as you can see on these book-growing columns year after year, it was very successful for us. Income managed to increase by practically 28%. Artur has already talked about it. After this increase EBITDA and EBITDA increased happily. Especially when it comes to interest rates. You can see here that EBITDA and EBITDA interest rates were slightly lowered. However, it is still a very high interest rate at the level of EBITDA almost 11% and EBITDA at the level of almost 17%. Last year we invested mainly in projects that we will probably see their impact on our results in a few years, because they were mainly greenfield projects in the field of waste management, but we were also interested in issues such as the purchase of new companies, which I will tell you about in a moment. However, it is important for you to be aware that since our main business is the waste management, which last year was responsible for almost 70% of revenues, and almost the entire profit of the company is our strategy, which we presented to the Board and the Supervisory Board last year. It imposes development along the entire chain of creating the value of the economy with waste, but not dangerous waste. We mainly operate in the area of municipal waste, waste collection, where we are already present in the Wrocław, Poznań, Łódź, Rzeszów and Mazowsze regions, as well as pre-processing, where we already have four mechanical and biological plants for the processing of municipal waste. production of alternative fuel, the so-called RDF, where we have a plant in Kamieńsk with a capacity of over 80,000 tons per year. Additionally, biogasification plants and raw material recovery plants, so-called MRFs, which are plants that will process waste collected selectively. These are the plants that we want to build and most of them, because there are not many of these plants in Poland, we will probably build them on the basis of greenfield investments, on plots and areas that we either gain or have. However, the next stage is the processing of target waste, i.e. it includes the components, of which we have two, as well as we do not exclude our involvement in the greenhouse. Yesterday Budimex announced that we have signed an intentional list with the city of Inowrocław, our partners, the chemical company CECH and the German EW, when it comes to the development of a very large installation of almost 300,000 tons in the city of Inowrocław. Our interest is also visible here and we have been operating here for almost two years, so these are specific projects that are happening. And finally, the future of this business, i.e. recycling. It is practically about waste losing its status and being converted into a new product. The main thing is that we want to be present in composting, i.e. green waste, as well as in glass recycling plants, where we will probably attempt to build our own plant, as well as artificial waste recycling plants. Ladies and gentlemen, something that I would like to say for the first time today is that the support, in addition to the greenfield projects that I mentioned, the implementation of this strategy is also to continue the purchase of existing companies. On February 18, i.e. last Friday, we signed a pre-purchase contract for the purchase of 100% shares of the waste company. It is a company operating in the north-east of Poland. Let me remind you that we have not been there yet, so this is a completely new area and area of geographical activity for us. It is a company that operates in the field of biological stabilization, as well as has an alternative fuel producer RDF, which is 100% in line with the strategy that I presented to you a moment ago. The scale of the company's activity is about PLN 30 million per year. The profitability is typical for this business, i.e. high. This is a preliminary agreement. We estimate that after a few more conditions are met, we will be able to effectively take over the company and close it in the second quarter of this year, which we will inform you about. And at the very end, before I hand over the floor, I would like to make a statement. We will probably inform you in the middle of the year about the update of the strategy for the second segment of our activity, i.e. the maintenance of roads, buildings and the modernization of lighting. It seems that following what my predecessors, Mr. President Popko and President Węgłowski, were saying about the investments aimed at producing energy from renewable sources, we will probably also want to consider in what form we would also like to enter the topic of electromobility. As Budimex, we would like to take part in the revolution that is currently taking place in our eyes and that will practically change in the next few decades, in terms of how we move, what vehicles we use, how we power ourselves. I think you can expect that this year there will be a lot happening in this area as well and we will be informing you about our plans. I give the floor to the gentlemen.

Artur, thank you very much. The next company is Mostostal Kraków. President Cyklech.

Good morning, I warmly welcome everyone. Ladies and gentlemen, a few words about Mostostal. 2021 was a very difficult year for our company. We struggled with the cost pressure throughout the year, especially when it comes to the costs associated with the purchase of steel. Earlier, I informed you that steel was almost 100% more expensive last year. We use about 20,000-25,000 tons of steel per year, so we have devoted the whole year to the company to feel the effect of the price increase of steel as little as possible. Moving on to the numbers, I would like to say that despite the macroeconomic conditions that I mentioned, the company's results are very good, both in the opinion of the Mostostalo Board and our owner. We have achieved revenues of PLN 323 million. In the company's history, this is the largest revenue so far. Despite the situation on the steel prices, we achieved quite a decent EBITDA at 4.2%, which gave us a value of PLN 14 million. When it comes to the future, we look with great optimism. Last year we signed contracts worth PLN 407 million. This is also a historic contract that Mostostal achieved. Just like Budimex, we have several offers that have the best price and we are convinced that we will sign in the first quarter. This gave us a very safe portfolio of orders. At the end of 2021, we had an order portfolio of 450 million and this number was also a historical number. Ladies and gentlemen, apart from the numbers, a few words about what happened in Mostostal. In December last year, the Mostostal Board proposed a strategy that was discussed and discussed at the Board of Wodimex was accepted. Therefore, in the years 2022-2024 we want to focus on organic development, on the development of the company in various areas. We have defined five main directions in which we want to develop. We want to increase the scale of activities in the national markets. We have found several areas in which we want to exist. We want to increase our product portfolio. For this purpose, we have also signed many agreements with our technological partners. I could mention the strategic partnership with Hyundai. on the Polish market, which I hope will result in joint achievements in the future, or at least we recently informed about the signing of a strategic partnership with Westinghouse, with the joint implementation of the nuclear project, I hope. Another direction we want to take is energy transformation. For your information, I would like to say that Mostostal has historically participated in the construction of all coal-fired power plants. There are no plans for the construction of this type of power plant in the future. Therefore, we want to participate in the construction of all power plants powered by gas or other sources, including OZE. We also want to participate in the construction of various types of incinerators. Today we are at three construction sites. We are building three incinerators, two in Poland and one in Germany. As for the next area, we want to develop our services in the industry. We want to focus on three main markets. It is the cement market, refinery and farm. There we want to expand our services in the context of more complex performance. These are the expectations of our customers and we want to deliver such services to our customers in the coming years, in order to meet the expectations of our customers. The development of the scale of activity in foreign markets. President Popko mentioned the eastern markets. Just for your information, I would like to present that Mostostal exports between 40 and 50% of annual production. We export our steel constructions to almost all continents, including South America. Where we want to develop, we want to deliver and mount steel constructions on the wall market. We have signed the first contracts, we are implementing them for our technological partner, a fuel plant on the German market. We signed the contract in the middle of last year and we are successfully implementing it. Another direction of development is to increase the production potential of Mostostal. As you know, we have two factories, one in Kleszczów, the other in Kraków. We want to invest in Park Maszyn, we want to increase our production potential in this way. but we also want to increase this potential while at the same time increasing the efficiency of production. This is supposed to give us the potential to increase the production of steel bridge in an organic way. Nevertheless, we are looking at the market, if there is an opportunity to acquire an object in the field of construction production, we would also like to take advantage of such an opportunity. What is the strategy for 2022-2024? We want to diversify the income structure, increase the portfolio of products and customers. We hope that in this way we will diversify the income structure. Of course, today we are the leader in terms of installation and construction. We want to remain this leader. This is our goal. We have also determined the level that we want to achieve when it comes to revenue. The strategy says or imposes a revenue increase of over PLN 500 million. We plan to achieve this in 2024. Perhaps we will be able to achieve this level already next year. I mentioned active activities on the foreign market. We want to intensify our work, especially on the German market, in terms of delivery and assembly of constructions, but we also want to follow our owner, i.e. most of the offers that President Popko makes, if the objects have steel construction, we make them together with Budimex. Of course, everything we do, we also work to protect the natural environment. Our strategy also concerns the ESG area. We want to eliminate carbon footprint in our production process. We invest in our own energy supply sources. At the turn of the year, in one and the other factory, We invested in photovoltaics. Already today, 12% of energy used in Mostostal comes from our sources. We want to continue to develop in this direction and invest in these areas.

Thank you very much. Thank you very much, Jacek. The last point we have in our agenda, apart from questions, of course, are market prospects. As we can see, the market is in the near future, so it will be the next few years, but I would like to focus here on the year 2022, which is ahead of us and what we know about in the near future. And the plans submitted by our clients. The General Directorate of Land and Motorways, A huge investment program for the year 2033. You can see that it is over PLN 290 billion. At the moment, PLN 100 billion is the stage where the implementation is underway. But after this stage, PLN 186 billion is planned as new projects. It is very important for us because it gives a level of stabilization for our company, because you have seen that 30% of our portfolio is the orderer, so we approach it stably, we can invest equipment, invest in people. We know that it gives us a certain level of stabilization and the forecast for 2022 is over 22 billion. Usually our efficiency in this segment is, as we have shown, almost 20%, so it allows us for such a certain stabilization. And why am I also mentioning it? We know about the EU funds and some of the developments or holdings of these funds for the domestic market, for Poland. What is important, we showed it in this scheme on the right side, in this circle chart, 86% of this budget is from Polish funds, from the Polish budget, so we are quite calm that 86% will be allocated from the Polish budget, so it will be a bit independent of the EU funds. As for the PKP PLK, at the moment, the phase of the national railway program is almost complete. This yellow color is Basically, the phase of contracts that are made, part of them, I mean, during the implementation, but they are quite heavily advanced, 20% of contracts are made at all. And this is where we look with great optimism and with great hope, because this is also our second main orderer. This is, of course, the years 2022-2023. Here, the value of expenses in PKP PLK in 2022 is 15 billion. 20 or 14 billion, but the contract, because this is what we are very interested in for the coming years, is over 12 billion. At the moment, trade fairs with values of almost 10 billion have been announced, so we are focusing on preparing offers for PKP PLK. And now the EU funds. On the left you can see the old POIŚ and the current Phoenix program. It is very close to the year 2014-2020, so to this perspective and the share of this budget for Poland in 2021-2027. It is really close to the level of PLN 115 billion. On the right side, we have a tool connecting Europe and CEF. These are funds for the entire European Union, which have been recognized on the basis of competitions. And this is also a very important perspective for us, because these new bids announced by PKP.pl will mainly be financed by CEF, which is not stopped. So if they are positively evaluated, and we believe in it and we know that we are all heading for green energy, We want to reduce CO2, so this is our goal, I would say the whole world, so we will invest. I also believe that Europe will invest a lot and put a lot of pressure on the development of rail lines. So we also believe that PKP PLK will get this funding from these rail funds, which will enable smooth implementation and, of course, offerings in the rail segment. We cannot ignore the hydrotechnical market, where we are also a leader. The hydrotechnical market at the moment is, of course, port investments. If we look at 2019, the government adopted the Port Development Program until 2030. The total value of these investments is between PLN 20 and PLN 25 billion. This is the estimated value. We should also add a port that will serve to expand wind farms in the sea. This is also a huge investment that will be made in the near future, because only thanks to this investment it will be possible to build these farms in the sea. So we believe that we will participate in this. In addition, there are international investments, i.e. the expansion and expansion of international roads. Here we can boast that we are already participating in these investments, both in the construction of a section connecting Mierzeje Wiślane and Elbląg on Mierzeje Wiślane and Elbląg is carried out by our company. Also a contract of over PLN 300 million, but also four contracts made in Odra and here in the water section between Kostrzyn and Szczecin. This is the construction of dams, the regulation of the river and Odra, in order to obtain the smoothness and possibility of transport along this road. So the hydro-technical market is also very promising and fits in Fit for 55 because we will want to jointly limit CO2 emissions. But another important element, because of course we are not talking about smaller contracts, is of course the construction of CPK. Here we see a lot of activity and with the CPK contract, CPK investors are currently They carry out, above all, bidding procedures, permit procedures and environmental decisions in order to start these buildings as soon as possible. However, it is worth emphasizing that the first bidding procedures on preparatory works have already begun. We took part in this procedure, out of 19 companies, 8 were selected, our company was qualified for these jobs. Of course, there will be verification and further stages of making these offers, but I believe that we will participate in the realization of such a huge investment. And here it is worth saying that the whole airport, the airport itself is worth between 30 and 35 billion zlotys. This part of the railway, 100 billion zloty, is a fast line, I would say a fast railway, and the road is 25 billion zloty, so it is really a very large investment element that will allow us to develop. Our new child, our newest girl, because as you know our company, we can't stay in peace on one assortment. We are constantly looking for diversification, we are looking for opportunities for the development of our company, opportunities to enter new segments. We started our new program Startup Challenge. I would like to ask Artur, who runs this program, to tell us a few words about it. We have a short video, before we answer you, we will tell you about what our goal is and what happened during this first Startup Challenge program. It will be continued, but Artur will provide a little more information. I invite you to the film.

Behind us is the first edition of the Budimex Startup Challenge. We had 10 candidates to win. In the end, it turned out that the companies that we awarded or distinguished correspond to the basic needs of the group. Congratulations to the winners.

Let this be the beginning of our common path to achieve the goals that we set before us, i.e. improving energy efficiency, security, and managing waste in a responsible and socially responsible way.

From the point of view of the group, the business goals of organizing this entire competition have been 100% fulfilled. We hope that at the beginning of the year we will be able to meet all these five companies and we will want to talk about very specific investment projects, so that we can also help the development of these companies.

Our goal is to eliminate accidents and ensure that workplaces are safer. And what we want to achieve is to scale sales, look for more and more implementation cases and develop our artificial intelligence and our machine vision for new functionalities and possibilities.

The competition is an interesting opportunity for us to enter the next industry. So far, we have been tested in two large enterprises with companies from various industries. Now we are entering the construction industry. We think that after this victory, we will talk about testing our products in Budimex projects.

The award in the competition is for us, above all, a chance to cooperate with such a large partner as Budimex and a chance to promote our solution in the world.

As The Heart, every day we support corporations in the construction of new business environments and implementation of innovations based on new technological technologies. We are glad that we had the opportunity to be a meritorious partner of the first edition of the BUDYMAX Startup Challenge.

Ladies and gentlemen, Budimex Startup Challenge, the last point of our presentation. I would just like to remind you that Budimex has quite a good tradition of developing start-ups. The company I run, i.e. to make the service a start-up, we have been developing it from scratch. Marcin Węgłowski, who is sitting here next to me, is one of the fathers of the co-founders of this company from the very beginning in the supervisory council. So this idea to actually get interested in startups already has traditions and these are good traditions in the group. Why did we do it? First of all, because we want to take advantage of the creativity and the good energy that is in start-ups to develop the basic business. The start-ups that were qualified as finalists, let me remind you, 10 entities, who took part in the final presentations. These were the majority of start-ups that we could have used right away in the development of the basic business, whether it was construction or service. I would like to remind you that at the very end we had five laureates. Surveilly has won. As the name suggests, it has something to do with supervision, but in this case it is very high, because the company, using modern technology connected to industrial television, helps to supervise and eliminate all dangerous situations that could lead to accidents. Why did this company win? Because for us, as a group, the issues of public health, security, construction and contracts are absolutely crucial. We believe that this technology could help us to deal with this challenge even better. The second place goes to Syntoil, a company that has an innovative technology for tire recycling and getting seed from these tires. Something that we think fits perfectly into our waste management strategy. That is why we would like to talk to this company about cooperation and investment. The third one was Resolution, which deals with energy management systems in buildings. We also had two distinguished graduates. Born Electric, a company that develops energy storage technology. which in the era of renewable energy and electromobility production is an absolutely key element of this future system. And Optimo Light, which has very innovative lighting decorations for buildings, which not only save energy, but are also able to create thermal maps and, depending on the intensity of use of rooms, control all media, such as air conditioning, and not only lighting. In each of these start-ups today we are considering how to invest financial resources, but also our attention. and how to offer them, by entering our group, a completely different scale of business and adding some added value to our basic business. We will certainly inform you about what to do with these five distinguished startups and, as the President said, we intend to continue the Budimic Startup Challenge also in the future. Thank you very much.

Artur, thank you very much. As you can see, this is not just a PR program, where we would like to show that we are dealing with startups. No, we focused on companies and startups. which we can develop very quickly, both these companies, but also our diversification by investing in these companies. So we are looking for something similar, where we could establish synergies of activities carried out by us and through the scale very quickly, I would say, expand and also expand both for these companies and owners of these companies, as well as for our activities. A short summary of this year, ladies and gentlemen, as I mentioned at the beginning, it was a very good year for the Budimex Group. both in terms of results and in terms of achieved goals. I can say with full awareness and conviction and assure you that we have even exceeded our goals. We have done much more than we planned in our strategy. We went outside of Poland, so what we said we did. But it was also a year full of challenges, because I have to admit that we had a lot of challenges related to people, prices, material prices, the implementation of these contracts. What we have managed to do, although we don't always do it in the company, is that we have invested in both equipment and organic development. We have also invested in the purchase and work on the possibility of purchasing and obtaining other companies. We have made very important agreements that will concern the future. Agreements with the main companies that deal with industry and also energy, as President Jacek Lech said. We have made historical agreements, as you have noticed, we have given this information to the press, with Hyundai, which is one of the main manufacturers for Orlen and Polic. There we also carry out these works, both for Budimex and for the FB Service Group and the Kraków Steel Bridge, but we also have agreements on future nuclear power plants, but we also have a consortium for contracts that will be announced or also implemented outside the Polish borders. This is probably the main message from our side. Thank you very much for this part of our meeting. I invite you to ask questions. We will try to answer all the questions that we receive from you. If we do not do it in this time frame, then of course I declare that for all the questions that you send to us, we will provide you with a written answer and it will be sent to each participant of our meeting. Thank you very much.

Good morning. My name is Michał Wrzosek, press secretary at Budimex. I will have the pleasure of moderating this part of questions and answers. We will answer the questions that appear one after another. If any questions are repeated, we will also group them together. We have a lot of time for this session, so I encourage you to ask questions. We will start with questions. Mr. Adam Roguski, Gazeta Giełdy Parkiet. The question is as follows. If I count correctly, the operational margin of the construction part in the fourth quarter is 9%. Where does this result come from?

Marcin, would you like to say something about the market? I mean, maybe I won't focus on the figures, but the result, when it comes to the construction segment, was significantly improved due to a few factors. First of all, we completed very difficult contracts, which were long-term contracts, which were heavily burdening on the margins from previous years. And here it is mainly about the construction of a power plant in Turów, the construction of a combustion chamber in Wilno and a few contracts that were signed in previous years. where we were not involved in valuation contracts, and the price of materials weighed heavily on the contracts made. The second element that also improved the margin was that the materials that we were able to hedge or sign long-term contracts were included, so they also influenced the improvement and profitability of the entire Bulimex Group. An important element here is our company FB Service, which improved its sales by over 30% while maintaining a very good profitability of 18%. Thank you very much.

Thank you very much. The next question is from Mr. Marcin Świder, BNP Paribas. Could we ask you to refer to the increase in the reserve level for losses in construction contracts in 2021 from the amount of PLN 310,000,000 at the end of 2020 to PLN 560,000,000 at the end of September 2021? Are the reserves created in relation to the budgeted level of profitability of these contracts? Do these reserves allow the revaluation of contracts according to revaluation clauses? How many contracts and at what stage do the currently related reserves apply? How many contracts are currently at risk of losing?

When it comes to construction contracts, practically all the difficult issues that we had have been resolved. Also, the reserves that actually appear in our balance sheet concern contracts and budgets of these contracts as a whole. We also take into account that the margin realized on contracts during the life of a given contract, it fluctuates. Sometimes it is bigger, sometimes it is smaller. However, our duty is to show this profitability in individual contracts, as if it was relatively constant, during a given year, so that there is not too much margin in one year and losses in the next year, i.e. this margin is flattened a bit. Therefore, part of this is the effect of rationalizing this margin, bringing it to the same levels between the years, but we also look at our contracts in a responsible way, i.e. we try at each revision, especially at the end of the year, Showing the margin on our contracts in such a way that it is possible to deliver this margin at the end of the contract. We have to consider the increase in the price of building materials. As you know, there is quite a large inflation, it is about 10%. So, taking into account the risks that are on the market, which we do not yet know, but we expect, we take into account and these reserves are created. So, taking this into account, we see that our backlog, which is currently in Budimex, and we assume that if inflation does not go down, it will not be at the level of 7.5%, but it will be lower, i.e. there is a chance of some improvement of this profitability on contracts and maybe some of these reserves will be released if the risk does not go down.

Thank you very much. A question from Mrs. Sara Borys, Polska Agencja Prasowa. Grupa poprawiła rentowność w 2021 roku z 5,5% do 7%. Jakie są cele i możliwości w zakresie rentowności w 2022 roku? Czy jest potencjał do dalszej poprawy?

It is a very good profitability, which also shows the data of GUS and other companies. I would not like to speak at the moment, I can't even, for the whole year 2022, because at the moment Every year we have reviewed each contract and of course everything will depend on the situation we have on the market. However, we will try to maintain a very close profitability in 2022 to the current one from 2021. Thank you.

Thank you very much. A question from Mr. Krzysztof Pado. When do you expect the selection of performers at the PKP PLK fairs announced in the first quarter of 2022? What will the competition look like at these largest fairs of over PLN 1 billion? for the PKP PLK fairs in the near future. Will there be three or four offers or do we expect more?

Due to the limited number of fairs in 2021, I believe that there will be a lot of competition in the progress of the PKP PLK fairs. As for the choice and the date of choice, it is difficult for me to specify, because some of the contracts, as the editor noticed, is of very high value, so there are a lot of questions and inquiries about the trading procedures. This will lengthen the trading procedure a bit, so I think that I would expect to sign these contracts in the second half of this year. And as I mentioned, in terms of the amount of competition, I think it will be at a high level, because the expectations of the industry are very high and there are also quite a lot of companies on the market.

Thank you. Thank you. Mr. Krzysztof Padło has asked a question about asphalt. What is the percentage of asphalt currently provided for use and is it protected? What is the hedging policy in terms of asphalt? Does the company protect the price of asphalt for specific contracts or rather for the entire portfolio?

We are hedging asphalt and we are protecting the price of asphalt for specific contracts. From year to year it is between 70% and 80%, usually it is 75%. due to the fact that we do not guarantee 100% of the asphalt value, because we are calculated with the Orlen Group or LOTOS quarterly and not taking into account the potential of the asphalt supply in a given quarter causes the calculation of a very high value of the car. Of course, as a construction company, we are very dependent on weather conditions. We had periods when, due to rain or unfavorable weather conditions, we were not able to collect certain amounts of asphalt. This caused some penalties. This 75% is a safe buffer for us. We leave this 25% for unpredictability in terms of atmospheric conditions, but also 75% provides us with such stabilization when it comes to financial support and financial protection against the possible increase in the price of asphalt.

Thank you very much. Tomasz Haberko, ISP News. Two questions. First, what can the foreign order portfolio of Budimex look like at the end of 2022? The second question, on which the answer was given earlier, but I will read it. How do you assess what has recently been released on the PKP PLK market? Does it give a breath to the market? Is it a lot or a little? How can a contract be formed in 2022, year to year, assuming that we have the end of the pandemic and blocking of funds for rail investments?

As for PKP PLK's announced trades, the 10 billion PLK is a big value, but I think that the expectations of the industry are much higher and the potential and possibility of the industry on the Polish market is much higher. So, if there was a chance for PKP PLK to announce a larger number of trades, we would find potential and it would be much more beneficial for the Polish market, for the construction industry in the Polish market. However, it is still a very high value when it comes to our predictions and expectations for contracts signed outside Poland. I think that the year 2022 will not be the year where we will notice a lot of value. As we mentioned, we are looking at this segment and this diversification and the exit outside Poland in the long term. We are not looking at the short term. We would like to enter these markets very carefully. And it will also be conditioned by competition and price pressure on other markets. We have already made more than 10 offers on the Czech market and we see that there is a very high price pressure on Czech manufacturers. And we do not want to participate in this price war. We are in the second or third place, so we are actually standing on the podium. But in the construction industry, you have to take the first place to sign a contract, so it's not that easy. I would not expect to end this year with some big contracts. Rather, we will aim for smaller contracts that will allow us to learn about this market and get to know the market and get to know the customers. As for the total value of our portfolio at the end of 2022, we would like to grow and develop the company. This is our goal. I think it will certainly not be lower than 2021 and we will do everything to increase this portfolio.

Thank you. The next question, Ms. Elżbieta Pałys, infrastructure market. This question concerns FB Service. What role does FB Service play in maintaining roads? How does it look compared to the previous year? Can you ask for more information on planned development in terms of electromobility? Are water technologies also in the area of interest?

Good question. As far as the profitability of the non-waste segment is concerned, in 2021 it was PLN 220 million out of PLN 780 million. However, when it comes to the result, at the EBITDA level, we had a highly negative result. This negative result, I don't have a precise result in my head at the moment, but on the very lighting contracts in the south of Poland, we set a reserve of PLN 19 million in the fourth quarter for warranty costs and possible costs of completing these contracts in 2022. So the impact of this business on the overall profitability of the company was negative in 2021. And this is also what you see, especially in the results of the fourth quarter, which did not follow the first three quarters. However, first of all, when it comes to roads, the result of the road maintenance business last year was at the level of minus 8 or 9 million zlotys, so it contributed negatively. This result was formed in the first quarter during a rather intense winter. And now the key answer to the question that came up. What about this year? This year the situation will be so different that, first of all, when it comes to road business, its profitability is largely formed in the first quarter. This first quarter will end in March. It is much, much better than the year 2021. There was no significant, dangerous winter. In addition, in our portfolio, when it comes to maintaining roads, contracts that we have paid for interventions during the winter have already begun to appear and have begun to weigh in properly, according to what is happening due to the weather conditions. and last year we had almost only ryczałt contracts, i.e. the entire risk of severe winter and the need for trips was borne by us as the contractor, not the orderer. Now we have, for example, a contract won at POMORZ and we are implementing it this year in the orderly formula with the general management. At POMORZ we have always had the biggest losses when it comes to winter. this year we are making money in winter. We have made the best offers in several other fairs in this formula. They will be distributed in the second quarter and will slowly replace the default contracts. From this point of view, I expect a positive trend, an improvement in profitability. I would estimate such a target profitability in roads at about 5% EBIT. The lighting issues, which were unprofitable last year, have been 100% reserved and there will be no impact of these contracts on this year's results. and the building maintenance business is traditionally a profitable business. So, in the end, I expect high profitability in the waste business, but a much better and positive contribution of non-waste business to the company's results this year. So, in the end, we would certainly have to expect that the results of the FB Service this year could be even better. And also e-mobility, you are right. As for e-mobility, I think we should wait for a while, because the topic is exceptionally complex and our possible attention and decisions in which direction to develop can go in very different directions, so I would probably ask you to stop with the answer to this question, probably not earlier than the third quarter. For now, we know that we are investing in renewable energy. This is a part of electromobility. It is not, but it indicates that our attention is going in this direction. So let's give ourselves half a year and we will come back to you with a greater number of specifics.

Thank you for the answer. A question from Mr. Marcin Deręgowski. He asks for a broader comment on the lower, in the fourth quarter of 2021, gross sales margin in service activity. Is this a seasonal effect or rather the level of profitability that will be observed in the following quarters?

I think I answered most of the previous question on this issue. If it turns out that there are some more detailed needs, then maybe I will ask you about the task of the question and we will try to return to this topic.

A question from Mr. Dawid Szarma. What are the trends in terms of the contract? It's about Budimex. SA sees the board. In the context of the investment hole in the railway segment, Budimex can increase its exposure to the kubatur segment. What kind of contract does the board expect this year in billions of zlotys?

I would not like to declare specific figures, but I believe that the year 2022 will be at a very close level to the contract from the year 2021, due to quite a lot of price pressure from our competitors. The year 2021 was a very difficult year in the construction segment. We, having this knowledge a year earlier, have gained the historical value of the portfolio, which I mentioned, 9 billion zlotys. And here we rather do not want to take part in the price war, so we approach, I would say, so selectively to contracts that appear and to bids that appear on the market with a lot of responsibility. So I would rather expect that it will be such a division between 7 and 9 billion zlotys.

Thank you for the answer. Another question is also from Ms. Editor Elżbieta Pała from the infrastructure sector. Are we expecting an impact on both contracts and the labor market of the situation in Ukraine? Do we expect, for example, an impact on employees from Ukraine, even in terms of military mobilization in Ukraine? or on the contrary, the influx of a large number of Ukrainian citizens, i.e. potential employees.

This is a very difficult question and I think that the situation is so difficult and so dynamic that I would not like to relate to it today, because it will certainly have an impact and shift to the labor market in Poland, and how big it is, I think that at the next meeting we will be able to answer this question, but today it is very difficult to precisely specify how it will affect the coming months, the coming period.

And these both scenarios are possible. Yes, it is. And the impact, as well as the inflow. So we just don't know.

Thank you very much. A question from the editor-in-chief Katarzyna Kapczynska, Puls Biznesu. Are rising fuel prices and the risk of rising asphalt prices due to the conflict in Ukraine means the need to increase the level of reserve for possible losses?

Yes, as we mentioned earlier, when it comes to asphalt, we are secured at a level of 75%. We secure the price of asphalt for three years in advance, so we feel quite comfortable here. As for the value of the oil, through the very good activities of the government and through the activities of the main orderers, we have introduced valuation on contracts. And here, to a large extent, it limits or also reduces our risk associated with the price of fuel on contracts. And here, a lot of added value is that these future contracts and the future trade fairs are expected to value 10% of the contract prices. I believe that this will largely help us cover the possible increases caused by the oil price in the world. But also looking at what is happening today and in the coming months, we will be able to specify in the future whether these 10% will definitely cover us, because until recently, We were very satisfied with this 5% and we thought that this 5% covers this situation. However, these two factors, which were, I would say, such extraordinary circumstances, and I mean inflation, which reached almost 10%, plus all the costs associated with salaries, and the increase in the price of materials caused that these 5% were not enough to cover the price increase during the contracts. It was raised to 10%. I hope that these 10% will be enough for the amount that we will see on the market. But we will find out about it in a quarter, when we will discuss the next quarter.

Thank you very much for the answer. Another question from Mr. Dawid Szarma, this time about renewable energy sources and investments in this area. At what pace does the Budimex Group plan to build its order portfolio in renewable energy sources? Does the company plan to buy and then commercialize projects, or rather, due to the high prices of electricity, leaving projects on their balance and making income from energy sales.

When it comes to dynamics, it all depends on how we will be effective in our acquisitions. We are currently analyzing projects that are so-called ready-to-build, that is, they have a building permit, they have a connection permit. And depending on how we manage to finalize these transactions, we will build our portfolio so quickly. I hope it will be fast, but I don't want to declare it now, The competition on the part of buyers is relatively large. As far as the operating model is concerned, we are trying to secure this part by acquiring new sources of electricity, i.e. being a producer. to not remain in an open position of sales. However, I do not rule out that some part of our portfolio in the future will be such a mix, i.e. over 75% of electricity will be secured by revenue, as well as maybe some part with some open part. If we would go further as an electric energy seller and take responsibility for balancing this electric energy, then we should have some part but rather we are trying to have a model where sales risk is ensured, i.e. signing an agreement for long-term supply of electricity with partners who have good financial standing. Thanks to this, we will be able to increase the scale, financing not only our funds, i.e. financing these purchases, as well as the construction of these power plants in renewable energy sources with a bank leverage of at least 75%, i.e. this income part should rather be secured.

But also to complement the statement of the president, that we are also entering projects that are greenfield projects, i.e. projects that we are already developing at the moment from, I would say, from preparing and obtaining a place, obtaining a building permit and then investing.

If you allow me, I have a comment from my side. Remember that we, as a group, also have our own plants, and we, FB Service, and some colleagues from Mostostal, we are thinking about powering these plants in some important part with energy, why not produced from our own resources. Thank you very much.

Thank you very much for these answers. Mr. Dawid Szarma asks for a comment on the sale of the offer for the construction of a tram to Wilanów. Is it possible to get this contract in the end?

It is difficult for me to specify or answer whether it is possible that we will get this contract. We will try and do everything to get this contract. In fact, the selection procedure of our company was approved by KIO, because it was considered that one of the people, because the procedure was dependent on 95% The price of the offer was dependent on the value of the offer, 5% was dependent on the experience of the staff we presented. There were some doubts between us and the performers. Of course, we discussed whether we had a fight with KIO, which represents a specific contract manager. Hence, the Commission ordered the resumption of the tender procedure, the return to the auction. This auction will be in the near future, probably at the turn of the month, so we'll see. We will do everything to get this contract back.

Thank you. A question from Marek Buczka about C asphalt hedging. What is the level of C asphalt hedging for 2022 and 2023?

We have already shared this answer twice.

Yes, indeed, that is the question we answered earlier. The question also concerns the situation in Ukraine. Mr. Marcin, could we briefly discuss our exposure to the Russian and Ukrainian market, both the direct and indirect one, for example, important suppliers or subcontractors?

We don't have any exhibition on the Russian or Ukrainian market. We don't carry out any activities there and for several years we haven't bought any materials from the Russian market. So, when it comes to this exhibition, it is completely zero for the Budimex Group.

Jedyna rzecz, tak jak już powiedzieliśmy, to jest ten efekt pracy ludzkiej, który jakby nie jest tylko w budownictwie dla całej gospodarki, czy to spowoduje odpływ czy napływ dodatkowych pracowników do pracy w Polsce, we wszystkich branżach tak naprawdę.

To prawda.

Thank you very much. At the moment, we do not have any new issues on the list. Therefore, I will return to the questions submitted earlier by analysts. There is a question that was not asked live in this session. The issue of potential annexes to already included contracts that increase the value of the contract. What does it look like? I guess this is also a question related to the use of valuation notes.

A significant part of our contracts with orderers are ryczałt contracts, so here the possibility of orders is limited. Of course, we sign a lot of orders, mainly in the private sector, where the order value increases or the project changes. So I can't exactly specify the exact value or the amount of signed annexes, but I don't think it's of great value when it comes to the entire scale of our activities.

Thank you very much. From the questions submitted earlier, there is a question about the situation on the railway. How high is the risk that the Budimex margin will fall in 2023, although I don't know if it should be 2022, due to the lack of high-margin contracts on the railway?

I would rather look at it on a broader scale, I would not focus, when it comes to Budimex, only on the railway industry, because as you can see, we have a very diversified portfolio and it is not based solely on the railway segment, so I would rather base it on the segment of both kubatur and road, and the segment of our independent companies, so we look at it all as a whole. So I'm not afraid that the company's margin will start to fall. Our goal is to improve the margin and also improve profitability and sales, because the margin is of course related to profitability, but also to improve sales. So we will do everything to get even better profitability in the coming years. Of course, this will be conditioned by the macro scale of what is happening in the world, by the price of materials, because that is what we are conditioned by. However, I see it in very positive effects, because looking at the scale of 200 contracts that we are currently implementing, these contracts are of a healthy structure, these are contracts already signed with the element of valorization, so I would not predict, I do not see such a threat that we will worsen the march.

In addition, as Mr. President said in the materials, our backlog at the end of the year is 3.3 billion PLN in a row. And, as a matter of fact, we have signed these contracts in 2021 not too much. However, the perspective of what will be signed in 2022, i.e. over 10 billion PLN and with our participation in the market of about 20%, gives us a chance to maintain this backlog at a fairly good level, along with its profitability.

Thank you very much. The question about cash. Drawing scenarios in this regard for 2022. How much can the company allocate for dividends, acquisitions and turnover? How much can the level of cash fall in 2022?

As for the level of cash at the end of 2022, we do not expect any major changes here. As for the turnover, it has achieved some kind of optimum, i.e. on the one hand we have quick payments from our subcontractors, but we also have to pay faster from our investors, but we also have to pay quickly from our subcontractors, so there will be no major changes here. The cash position is, as you can see, at a high level, we have good profitability, so we do not see any contraindications that the dividend could not be paid, however, I would like to point out that no decision, I am talking here about the recommendation of the Board, did not take place and we will probably be in the next few months before Walny approving our report recommending the level of the possible dividend payment. for the year 2021. Of course, we are talking about the part that has not been paid. However, you must take into account that we have very high investment ambitions. That is, if there were to be a drop in the cash position, it would only be due to the fact that we would allocate money for investments that in the future will give us even more cash and even more savings, of course.

Thank you very much. Questions that have appeared now live from new questions. Ms. Katarzyna Smoczyńska, BNP Paribas. Why was the sale of real estate buildings carried out, which generated good profitability for the Group? Was it caused, for example, by a negative assessment of the prospects of the development market in Poland? Or was this disinvestment dictated by other reasons?

It was a well-thought-out decision when it comes to the sale of real estate buildings. We see better segments where we can get even more profitability, we can develop our activity. And here I mean, of course, our FB Service company, so we see a lot of good profitability when it comes to this company, where we get even better profitability than in the developer segment, but also entering new markets. and entering new markets where we have to invest cash, as President Węgłowski said before, we needed funds for this, of course, hence the decision to sell real estate buildings.

Thank you very much. Another question from Mr. Dawid Szarmy. At what level can investment investments be formed this year related to the FB Service, renewable energy sources and also according to the ESSA Budimex?

I will admit that I would not like to declare. I mean, when it comes to FBService, Artur will probably mention it, we are talking here like rather small, in quotation marks, when it comes to investment values. However, depending on whether we will be able to obtain renewable energy sources and on what scale, whether it will be 10 megawatts or 100 megawatts, we must even talk about such expansions, we are talking about large values. But you also have to know that we are also thinking about We are also looking at foreign markets in terms of whether to develop organically or not looking for the acceleration of this development through acquisitions. So today I do not want to declare a specific amount or level. In my opinion, it is a bit too early, unless Artur wants to say something about the same BSR.

I would like to add something to that. First of all, we invest similar levels of KAPEX in the FFB Service each year, such as maintenance or development KAPEX in our plants. This is the level, ladies and gentlemen, or even for the launch of new contracts, mainly in roads. This is the level, ladies and gentlemen, in the area of PLN 50 million. However, as Marcin said, all other investments related to the purchase of further companies are difficult to issue today. Nevertheless, the entities we are interested in should not exceed the possibility of financing such transactions by the company on their own. We also had a very good cash position at the end of the year, almost PLN 180 million. We are maintaining this high cash position, so we will be able to finance all the investments that we have planned with our own funds. Thank you.

Thank you very much. A question from Maciej Wiewiórski, Bank Ochrony Środowiska. What amount did Budimex receive in 2021 as part of the contract indexation? What about the indexation of self-governmental contracts? Is it already there or not? Do we have any valuations clauses in terms of contracts with private investors?

I'm sorry, I'm not prepared to tell you exactly what value we received when it comes to the exact value we received in terms of the valuation of the contracts. However, I can tell you that some of the contracts have already reached the 5% valuation limit. and some of them are currently in the phase where we reach these 5%. But as for the exact amount, I am not able to present this figure today. We will be able to answer this question. As for the real estate investments, here we see a slightly worse situation when it comes to real estate investors, because these valuations are on a much lower level, or they are also limited or limited by certain conditions relating to the sale of products or other factors and to a considerable extent limit the possibility of valuing the contract. But I hope that, of course, just like those main orderers, the General Directorate and PKP PLK came to the conclusion that it should be valued, I believe that the local governments will also value these contracts on their investments.

This question also concerns contracts with private investors. Are there any valuations or are they predicted?

Private investors are mainly in the cubature industry. Private investors practically do not have valuations, but because they are short-term contracts. Most of these contracts are contracts that last within a period of about 12 months, so here this valuation does not matter so much, but it does not mean that we do not sit down with a private investor and do not reach an agreement in terms of valuation of the contract, because we have such cases where, through conversation and dialogue, private investors, of course, pay us for the contracts already made on the basis of the increase in material prices.

Thank you very much. The question is also one of the previously reported, as far as the media is concerned, regarding revenue in eBeservice. Is the goal of PLN 1 billion in revenue in eBeservice in 2026 is to be achieved faster?

President Popko has already expressed such hope. I could only sign it. 2026 is really a lot of time. Not only do we want to achieve it, but we also have a plan how to do it. A lot will depend on it. how much we are also able to consume, for example, further acquisitions of companies, because, as I said before, I think that we do not have a problem with the fact that we do not know how this billion would be composed. I think that it will actually look somewhere in the vicinity between 650-700 million z gospodarki odpadami i jakieś 300 milionów, może trochę więcej z pozostałej działalności, przy czym gospodarka odpadami to jest or greenfields, and unfortunately they will only generate an important increase in the scale of activity in the vicinity of 2025. On the other hand, we can take over the companies and either rebuild the existing ones. What are we doing? and this effect would certainly be visible faster. I do not expect, however, that we would want to invest in some huge, large and also very expensive entities. Rather, I see myself further in the role of market consolidator. However, remember that we are already far away. We have achieved almost 800 million, 200 million. We also have an idea of how organically grow in waste. We want to get a lot more industrial and commercial clients, i.e. non-communal. I expect even about PLN 100 million only from this organic growth within two years. So let's be good and think that this is possible before 2026. And this is the most important thing when maintaining high profitability. We do not want to compromise in any way when it comes to a drop in profitability. We believe that the place in the Budimex Group Service Group is such that it should always be relatively more profitable activity. Thank you.

Thank you very much. The last question is also reported here earlier by analysts. The margin of contracts recently signed. We often hear that the contracts won are below the investor's budget. Some investors think that if the contract is won below the budget of the investor, it will be a loss. Do we notice such a phenomenon?

Yes, we notice that the price pressure caused by the lack of trade in 2021 is very high and our competition and contracts with very low values reaching 70% of the investor's budget value. Based on experience from previous years, Usually, these contracts ended with a loss and a rather difficult situation. And here I can only confirm that the price pressure for acquiring contracts is very high and causes very low offers for customers.

Thank you very much. This was the last question in the Q&A session. We answered all the questions, so we can consider this part of the Q&A session closed.

Ladies and gentlemen, thank you very much for your presence in our summary of the financial results for 2021. Of course, we invite you to the next presentation. We will keep you up to date with our successes, but also failures and challenges that we will have ahead of us. I believe that 2021 will be an even better year, both in terms of results and in terms of sales and profitability, but also in terms of diversification of our portfolio. Thank you very much for our meeting on behalf of all of us.