Budimex S A Shs

Good morning. Welcome to the summary of the results after the first half of the year 2022 of the Budimex Group. Thank you very much for the tactical introduction of you here directly and for the people who are connected to us online. I would like to introduce the people who will present the results with me today. Marcin Węgłowski, member of the board of directors of the financial company Budimex. Artur Pielech, president of the board of the FB Service Group. Jacek Lech, president of the Mostostal Kraków Group. Before we get to the results, I would like to present a short video summarizing our first three months, our first and second three months when it comes to the implementation. We have done a lot in these, after these three months and a lot of things have happened and we would like to present it in the film. I cordially invite you. No. Hello. Thank you. so so No. Hey. I. As you have noticed at the company, the first six months are full of challenges for our organization, but also six months with huge successes. We can boast that we have completed before the deadline key investments for Poland and strategic investments, two sections of the building of the Baltic Pipe gas pipeline, completed ahead of time, with success and a bonus for the implementation of these works. the completion of the construction of a dam on the border between Poland and Belarus, also in a very short and tense term, but also the acquisition of contracts outside the Polish borders. What we said and planned. We present that we are achieving our objectives and our plans, so a year full of challenges, but also huge successes. We will now move forward. Marcin, I would like to ask you to start with macroeconomic data, and then we will move on to discussing concrete results.

Hello, I hope you can hear me. Let's move on to a short summary of the macroeconomic environment in which we have to deal with this company. Of course, I will start with inflation. This is probably the number one topic for economists today in the modern world. Everyone talks about it, everyone knows about it, but above all, I think that everyone is also afraid of it. 15.6%, this is the level that has been achieved at the moment at the end of June, we are waiting for July. The forecasts of the National Bank of Poland are such that the average annual is 14.2, 12.3, 4.1. This time, I think, comparing to those forecasts that I see, that banks publish, it is more cautious in relation even to those more optimistic that some banks give. Nevertheless, it seems to me that at the moment planning this inflation is difficult. I think the first one will be in the fall and winter, when the prices of energy resources needed for the production of electricity and heating will really show what inflation is and what can threaten us. I will check it and only then I think we will find out more about it. Of course, as inflation increases, interest rates increase. practically every month, which obviously causes and translates into GDP, which we see here planned by the National Bank of Poland. Still 4.4% in 2022, but the slowdown in 2023-2024 is expected. As I say, winter will show us how much we have a problem with raw materials in Europe and how much we are threatened with a recession or only with a slowdown. When it comes to the macroeconomic environment measured by PMI indicators, we see that this is level 44.4, but to say what this 44 is, we have to compare it to other years. The worst indicator that there was was this pandemic period of 31.9. You can see that we are going in this direction, which is quite dangerous, i.e. approaching levels around 40%, while the construction and installation production is 5.3% growth, of course it is different in buildings 15.2, it pulls buildings up very much when it comes to the first half of the year, when it comes to land engineering plus 5%, but what is important, this dynamics, it falls, so even though it is 5.3 growth, as we look at the first months of 2028-27.6 in March, these 5.3, you can see that the dynamics are falling and we have to expect that the construction and installation production will go down. We have the first slide that we probably didn't show before, but it's quite interesting, which shows the construction situation at the end of June 2022. This is an assessment of the industry, of course, it is a bit averaged, but an assessment of the industry, what is a barrier to activity, taking into account building materials and employees. The first of these indicators is the lack of materials, i.e. 16.9% of companies said it was a barrier to further growth. 16% does not look much compared to other percentages, which I will talk about later, but it also shows that In relation to the history, where this indicator was at a very low level, about 5%, it can be seen that there was a lot of feeling in the first quarter of 2022. Unfortunately, we don't have half a year yet. When it comes to the cost of building materials, it already looks much worse. So, these costs, however, the increase in the price of building materials, that 77% of companies say that this is a big barrier to growth. And moving on to the employees, level 41 as a barrier, it has been at this level for many years, between 40 and 50, so here you can't see that there is some big growth, although 50% still believes that there is a lack of labor force in construction. However, when it comes to costs, they hold on very high and reach the level of 71.4%. And moving on to the price of building materials, it is shining practically everywhere, when it comes to concrete, asphalt, steel, all diesel raw materials, here it is from Europe. Everyone is wondering if this is the end, if this is the moment we have already achieved. It looks like it is almost the same as it is today, Stal Kraków will talk about how it looks in detail and monthly, how it is related to the price of steel. It looks like we have reached a certain level already higher. Of course, we must also take into account the situation that inflation is high and the prices of raw materials have influenced very strongly and may still influence the rise in the prices of selected building materials.

In summary, In the events that took place at the beginning of this half-year, we would like to emphasize a few key issues. For sure, the positive information is that on July 5, the Council of Ministers adopted the novelization of the OZE Act, so the 10H condition was lifted, which is a very important element for our company, because we want to invest in this segment and we are very focused on wind farms. So very positive information. Another element is the CPK talks. As a company, we have been qualified for preparatory work, but we also conduct ongoing dialogue on the development of a framework agreement with the CPK and on investment related to the construction of the entire CPK, including railway lines. When it comes to global conditions, as a construction company, of course, we are very dependent on valorization, not only the valorization with key customers, i.e. with the General Directorate of Land, Infrastructure and Autostrada, but also with the local authorities, with the railway segment, I would also say, and here, of course, with expectation, we approach what is considered by the Ministry of Development and Transport, when it comes to the special law on changes and valorization also in these smaller contracts, as for us in this segment, primarily self-governmental. And, of course, we are looking with great concern and expectation for funds from the KPO, because, of course, it is a very important element for us when conducting our activities, and it mainly applies to the railway sector. What was of key importance for our company Budimex is, first of all, Exactly a week ago, we signed a contract, a valuation of contracts with General Directorate of Transport and Autostrada. This is very positive information. The valuation has been increased from 5% to 10%. This will help us significantly and make it easier to implement these contracts. This valuation does not cover all the costs that we have caused by the increase in the price of materials. As we have seen here on the charts, they are much higher, but at least in some way, of course, it will compensate for these costs. And as we always say, we emphasize, we do not want to earn on the valuation, but we want it to cover our costs, which are related to it. We have presented to you and adopted the dividend policy for the years 2022-2026. It says that we will allocate 100% of the profit for the dividend, which is a very important element, I think, for shareholders, so we have already clearly presented this policy to you. As for contracts, very important and we are very satisfied with it. We would like to boast of it. The content of the contract with the company DCT. When the DCT contract is implemented, the coast will be the largest container coast on the Baltic Sea with a value of over PLN 800 million. A very prestigious investment and one that will later allow us, with references, to acquire such clients, I think, throughout Europe. It was also a year, half a year, when we were selected for a large contract D1-D4 in Slovakia. This is a highway contract, Bratislava's subsidiary, so we will be able to enter the Slovak market and it is already such a fairly large contract, so we will be able to show you the results and activities carried out outside the Polish territory. We also had agreements on the construction of the future nuclear power plant in the country. We have reached an agreement with the Bechtel company. This is a company from the United States, which is in the case of signing an agreement with the Americans, will implement this contract and we signed an agreement with the French on the subject of the possibility when the company from France was chosen. What We presented it. I would also like to present four contracts. We have previously shown such key contracts that we held at the turn of these six months. This is the Frito-Lays factory. This is a factory for Pepsi, where chips will be produced in Poland. It is the largest factory built for Pepsi in all of Europe. We signed an annex worth PLN 120 million, which includes the indexation of this contract, because the annex was worth over PLN 400 million. We valued this contract. Through conversations with the applicant, they also partially expand the scope of work that we conduct there. We signed this DCT contract, which is very important, especially for the coast, worth over PLN 800 million. We have included key agreements with the General Directorate of over PLN 1 billion, two express roads S17 and S1. And the winning contract D1-D4 Slovakia. Coming smoothly to the financial results. Ladies and gentlemen, very good half-year when it comes to income. Income 24% higher than in 2021. We have achieved over PLN 3.4 billion. This is mainly due to the effect caused by two factors. One, the weather conditions this year were very favorable for the construction industry. In fact, we cannot say that we did not feel the effect of winter at all. And the second effect, which is key to this activity, is that at the turn of the year we signed an agreement with the state on the construction of a dam on the border with Belarus. And it was a very short contract, implemented for four months, and it allowed us to increase our income by over PLN 350 million. As for EBIT, EBIT in 2021, here we divided into two segments due to the fact that part of this result was associated with the sale of real estate Budimex and resulted in the deconsolidation of real estate Budimex. However, very good EBIT after the first half of 2022, 5.9%. It can be said that it is very comparable to last year, including real estate Budimex. significantly higher than expected, so 5.2%. We have noted a lot of improvement resulting primarily from financial activity. Here we can say that, of course, the level of cash that we have at the moment, over PLN 2 billion, has moved to very good financial activity, an improvement of PLN 40 million due to the interest and capital that we have invested. When it comes to income according to segments. As you can see in the construction segment, if we analyze the whole half year and we should look at the whole half year, the improvement in the construction segment is over 20%. When it comes to the service segment, the improvement is also 6.2%, so both the construction segment and the service segment brought us better income and improved results. As far as the march is concerned, the first quarter, I'm sorry, the first quarter, we came to the first quarter with great concern and such a reserve for our activities, of course related to the outbreak of war in Ukraine. We established some reserves and we came up with a little, first of all, we came up with responsibility, as we always do, as our company. putting reserves into our contracts, because we did not know what to expect in the second quarter. The second quarter has already shown a completely different situation. We saw which companies will keep the contracts that we had included in the supply of materials, what happens to the materials. Today, the prices of materials have actually stabilized, some of the materials have started to decline, so the results of the second quarter have improved significantly and here we can see that this second quarter, year after year, has improved and here this improvement, rather, we expect a continuous improvement and expect better results in the remaining quarters, because I believe that the situation is under control at the moment and these supplies of materials and also cooperation with subcontractors have already been stabilized and we can look at what is happening in the future. I think that to the previous year and better both to the previous year, but to what we expected after the first quarter, because the first quarter was such a big question mark when it comes to what will happen due to the situation in Ukraine and if it does not come to some extraordinary situations related to with energy-related factors, of course, or also with key carriers of energy and power supply, and it will not apply to the price, then these results will certainly be satisfactory. As for the service segment, We have slightly noted a drop in profitability, it is still two-digit, so the EBIT, which you see, is over 10%, 11.1%. We have a prepared presentation, we say it on separate slides, but of course what we have noted is that due to competition in waste collection fairs, we noticed that, of course, we have to fight quite aggressively to obtain contracts, and these were the effects of this in the service segment. But we discuss this in detail during the presentation on FB Service. As for the cash position, the yellow column shows exactly year-to-year our cash level in the half-year. Looking at the history, a very good year, 2022, over PLN 2 billion, of course lower than in 2021, but I will only remind you that in 2021 there was a sale of building materials, hence there was such a high level of cash, but we should also remember that we paid PLN 600 million in dividends, so today we have a lower cash position, but if we look at for the previous years, this position is really at a very satisfying level. As for the dividend, as you know, for 13 years we have been sharing the profit with you, so for 21 years over PLN 31 was paid for the shares, which is a very good effect, we paid PLN 14 dividends as interest for 2022. In total, we will see that it is over PLN 4 billion paid at the turn of 13 years. And as I told you at the beginning, we have adopted a policy that imposes until the year 2026 that the entire profit will be paid in dividends, unless there are some unexpected circumstances. Portfolio of orders. I think this is such a key, our very good part of the activities. We have a very diversified portfolio of orders for many years. We are fighting to increase our diversification all the time and work on diversification. At the end of the year, over 13 billion is giving us, I would say, such comfort of action, comfort of offering offers. We do not have to aggressively fight for these bids. It should be emphasized here that in the first half of the year we did not include a value of PLN 3 billion, because these offers were made at the turn of 2021-2022. At the time when the orderer chose us, it was after February 24, we calculated and responsibly approached these offers. we decided that we would not sign these contracts worth PLN 3 billion, which was a very difficult decision for us. However, today, looking back, we believe that it was a very good and responsible decision and policy. After the first half of the year, we have over PLN 12 billion in our portfolio and, as I mentioned, it is very well diversified. The key issue and the biggest challenge for our company is the contract. aroused a lot of concern in our company when it comes to contracts. Today, I think it is under control and we are very satisfied with the results achieved after the first half of the year. We signed contracts after the second quarter worth over PLN 2 billion, but PLN 4 billion, which we marked here with such a dotted line, These are contracts where we take the first place, we expect to choose our offer or also the date of signing and the content of this contract. Here there are no more than 2 billion already signed DCT contracts with a value of PLN 800 million and S1 motorway, S1 expressway with a value of PLN 400 million. So we expect to sign contracts with no less value than PLN 6 billion. This is actually according to our plan, so looking at the previous years, We are at a very close level and this is such an expected level for us. 2020 was a unique year because knowing that the EU perspective is coming to an end, then we focused very much on contracting. Today, there are definitely fewer orders, both in the public and private segments, i.e. in the public and private sectors, i.e. we consider these 6 billion for a very good result.

I would like to go to the AB Service company. Artur.

Ladies and gentlemen, I welcome you from my side. I think that I will not stop on this slide for too long, because to tell you what is happening in our company and what are the prospects, it will be worth going to the level of individual businesses in a moment. However, the fact is, which can be seen here undeniably, that our path, step by step, when it comes to company growth, is slowly being exhausted. It is exhausted because we just have to keep investing to maintain this growth dynamics. So after 2021, which was the next practically the ninth, because now we are celebrating the tenth year of consecutive growth. In 2022, this growth was greatly flattened. When it comes to revenues, it flattened, and when it comes to profitability, it even went down. In a moment I will tell you what happened. However, at the EBITDA level, we had minus 15 million zlotys year to year, and at the EBITDA level minus 17%, As you can see here, the percentage was about 4% on the yield decline on EBITDA and 5% on EBITDA.

And now moving on to the most important issues.

In revenues, It looks like our main train engine of the company's growth in recent years, i.e. the waste and raw materials business, has practically not grown in the first half of this year, it has even minimally decreased. However, the rest of the businesses, especially road business, have grown quite a bit, because I have almost PLN 30 million. and our smallest business, i.e. maintaining the technical infrastructure of buildings and lighting, more or less remained at the level of a year ago. What happened here? And maybe it is also worth adding this image to the comment on the profitability of these businesses. While the road business has improved its profitability compared to the same period of the previous year by over PLN 8 million, the profitability of the waste business dropped by PLN 25 million year-on-year. What happened? First of all, the prices have dropped. For the first time in many, many years, the prices have dropped when it comes to waste management. That is, the contract that Mr. Popko just mentioned, which we had at the beginning of last year and this year, in order to maintain at least the volume of waste that we receive, we had to win and win the fairs, we just had to go down in prices. This is a trend that, from today's perspective, because I am talking about the contract that will have its impact on the company's results in 2023, it has already reversed, so we will have such a sinusoid, We do not see any trend of price drop in this business. We can even see a trend in the return of these prices. And it may even be less due to the fact that companies want to react to the cost increase. Of course, too, but the main trend that will cause prices to rise again in waste there is an increasing pressure and an increasing need to meet environmental standards and revenue standards, i.e. to transform waste in such a way that at least half of the waste that is to be processed was processed in a way that gave them recycling. I will remind you that Poland adopted many years ago, along with introducing this garbage revolution in 2013, that every year we will increase the level of profit and in 2025 we will reach 50% on average, that 50% of waste will have to be subjected to recycling. Recycling is a much more expensive and costly process than simple, for example, storage or simple waste processing, so it has a huge impact on what prices we will have on the market in the future, so there will probably be more discussions on the public forum about whether the waste management system in Poland is not too expensive, but this is the consequence of the fact that, as in energy, we go to renewable energy, which is more expensive by definition. Likewise, if we want to make raw materials out of these waste, it will unfortunately be more expensive. So I expect that the average cost of accepting waste that fell this year will be raised again next year, because the contract that takes place today simply indicates this. The second thing I will talk about in a moment is, of course, investment, but I will talk about it in a moment. In the road business, I will add two more words. We currently have a portfolio of orders of about PLN 300 million. Another PLN 300 million is waiting to be signed. We are already selected in six major proceedings in Poland by the General Directorate. Will we really sign all six contracts and will there be a doubling of this portfolio? We are considering this decision, we will make it for sure in a moment. If what Mr. President Popko said was to happen, that maintenance contracts will also be valued. I think we will be here a lot more positive eye to look at increasing this portfolio and the exposure of the company in this business. Well, if it doesn't happen, it certainly won't.

Moving on.

Ladies and gentlemen. To go back to this growth path, i.e. to help mainly the waste and raw materials business, We have to intensify our investments even more. Here you have a comparison of the last three years when it comes to CAPEX. This year we are predicting the issue of over PLN 50 million. From year to year, these CAPEX budgets are increased. You can see on the right side that also in the road business, and this is rather certain, that we will spend more money mainly on simply to equip new contracts. However, when it comes to waste business, it is such a peak of investment. I would expect it to happen in the years 2024-2027 in the company. We are literally at the end of such a very complex investment program to move the company from just processing waste much more towards producing raw materials, specific raw materials and fuel. and perhaps even energy from these fuels in their own facilities. So we have projects, we have identified locations where we would like to implement these projects. We still need to discuss this with the owner and perhaps at the turn of this and next year we could also show it to you. In addition, we would like to strongly support this business with M&A's. We have been telling you for a few months that we want to finalize the acceptance transaction in this area in the second quarter. We did it. That is, we came up with a company that should provide us with about PLN 30 million in income per annum, i.e. such, I would say, average income on this business. Average, but that doesn't mean bad. We also have, I remind you, companies that have over 20% profitability. Nevertheless, these M&A processes will be so important that they will be faster, I hope, in supporting the growth of this waste business than just waiting to build your own installations, because these will be years-long processes. will really start to be visible in our results around 2025 as the first.

These amounts, yes, exactly.

I just wanted to say that, but you are right, these are unaccountable amounts as a result of M&A expenses. So this expense, which we also incurred in the second quarter for the purchase of the company, is not accounted for here. Due to certain obligations we have from the sellers, I would not like to talk today about the exact amount of this transaction. And at the very end, a summary. Ladies and gentlemen, I have never hidden that... Thank you, Mr. President. I will also pay attention. I have never hidden that we see the greatest potential and we will continue to see it in waste management. Here we are also analyzing the expansion of our waste management. We carry out further intensive activities in the direction of the industrial clients segment. We have a whole large team of several people who deal only with this business, i.e. industrial clients this year. As well, we would be very interested in joining the alliance or the PPP formula. with customers who order public facilities for construction and management of municipal facilities or private facilities for the processing of waste in the raw material or the production of waste energy. As for road IEM, it seems to me that I have said most of the things. We had changes here on the position of the Executive Director, internal advance, However, it is not our priority to develop this business at all costs, but only when we are sure of the profitability of this business. I can give exactly the same comments when it comes to the FM and street lighting business. However, when it comes to new businesses, we are interested and analyzing the OZE issue of electromobility together as part of the Budimex Group. We as a service company and Budimex more as an investor and a construction company. So that's it, I think, when it comes to FB Service and I hand over the floor to Mr. President, oh, sorry, to Mr. Mostostal.

Ladies and gentlemen, a few words about the results of Mostostal. It was a very good half-year when it comes to company revenues. We have recorded a sales level of 220 million. This is a 61% increase year-on-year. Also, when it comes to the cash position, we have reduced the debt from 4 to 1 million, maintaining a high level of cash at the level of 32 million. When it comes to contracts, the historical figure in the first half of the year we signed 320 million zlotys. Thanks to this, we increased the backlog by over 100 million and today it is at the level of 580 million, which allows us to calmly look into the future. When it comes to EBITDA, the EBITDA result after the first half of the year is a consequence of the increase in the price of steel. I will say a few words on the next slide about what the price of steel looked like in the first half of the year, how it fluctuated. We have consistently considered these increases in the price of contracts and hence the result we present. At the same time, I would also like to add that we have conversations with all the applicants. in terms of payments and valuations and I am calm when it comes to the second half of the year, that is, the second half of the year will be much better when it comes to the EBIT result. What this chart shows is what the price of steel looked like. We use 20-25 thousand tons of construction steel. As you can see, from the price of PLN 54.70 at the peak, the price was PLN 12 per kilogram in order to achieve a level of about PLN 6 or 7 today. Although this chart looks good from our point of view, i.e. the prices are falling, I would like to emphasize that today's price is 100% higher than the price from the beginning of last year. So it is still, when it comes to the largest cost-effective factor, i.e. steel, Mostostal must continuously mitigate the risk associated with it. A few words about where we are and what we want to do. Mostostal Board, including the Board of Directors last year, adopted the company's strategy. Until 2024, we want to have an income of between PLN 150 and PLN 200 million from exports. We are developing this activity. Consequently, we are obtaining certificates. As in the film presented at the beginning, we obtained a certificate on the Czech market. In August, I hope, we will obtain a certificate on the British market, the so-called UKCA certificate. which will allow us to export steel constructions to European markets. I would also like to add that today Mostostal exports construction to almost all continents, so we are developing this activity. In the first half of the year, we managed to get revenues of PLN 40 million and I think that by the end of the year we will be close to PLN 100 million. From such interesting contracts that we carry out, we build two waste burners, one in Great Britain, where we deliver steel construction, the second in Germany, in Dislaken. There, the formula is a little different, there we deliver and mount steel construction, including panels, but there is also a curiosity, we send, as I mentioned earlier, construction to to our partners, whether in the United States or in South America. In fact, we can say that to all continents. Of course, taking into account the Budimex strategy, together with Budimex, we are starting in contracts on the global market and we can prove ourselves here with the first successes that we will present on a regular basis in our communications. That's all from me.

Thank you. I'm waiting for a question if there are any. Market perspectives.

We present to you at the moment these two key applicants, i.e. PKP PLK and the General Directorate of Drucker and Autostrad. After the first half of the year in the General Directorate, we have submitted offers, that is, we have analyzed offers worth 64 billion. The share of Budimex is over 15%. We have just obtained contracts S17 and S1, so a very comparable level when it comes to the participation of Budimex for the previous years. However, what is noticeable is of course the value of the progress announced by the Trade Commission in the General Directorate has decreased. And the future prospects that are also represent the fact that this number of proceedings will be a little less than the previous years and the previous EU perspective. As for PKP PLK, the situation is quite, I would say, full of challenges, because the year 2020-2021 is actually showed that the number of proceedings was generally very limited. It was the result of the completion of the implementation and the perspective of this UN 2014-2020. We were all waiting and we are waiting today for the beginning of this new perspective. As we know, the KPO is mainly connected and the KPO funds are associated with investments in the queue. This is over 2.6 billion euros. PLK announced these bidding procedures so as not to waste time, which we considered and still consider a very good decision. It announced bids worth almost 13.6 billion zloty. However, the key question is whether these bids after the offers will be signed. For now, there is no information from the PKP.pl orderer whether these funds will be found and whether, in the event of a lack of funds from the EU funds, they will be refinanced somewhere, whether they will come from budget funds. If we look at the submitted offers, Budimex has now taken first place in contracts worth over PLN 4.9 billion, which is a very good result. but I would like to clarify that this is a bit deceptive, because part of the offers that we have submitted are in the first phase of submitting an offer, so I will describe this situation a bit. The bids in PKP are different from the bids in general. The bids in PKP PLK are two-stage. First, we submit an offer, and then, after submitting the offer, all bidders go to the auction. So, after the auction phase, we only know which of the companies takes the first place. So, we are at one of the auctions after the auction phase worth PLN 400 million and we are waiting for the signing of the contract with PKP.pl. However, on one of the large contracts worth 4 billion, we are in the phase where we have submitted this offer, but it is before the start of the auction and everything will depend on how we will, of course, how this auction process will end. However, for sure, the question mark will be what will happen to the contracts and how the EU funds will be available on pkp.pl contracts. Generally speaking, perspective and the year 2023, we will certainly see a slowdown and we will certainly see a significant decline in investment, both in the public and private segments. In the housing segment, we all see that 50% of the investment is definitely below what was planned. Some of the investment that was planned is suspended due to the war in Ukraine, not only in the housing, but also in the industrial private segment. When it comes to the public sector, I would divide it into three stages. PKP PLK at the moment, what I mentioned, is a big question mark, a question mark. What will happen to the funds when it comes to the general management? It goes according to the plan, but this plan is smaller and definitely smaller than the previous years, so there is also a level of offers and, I would say, competition is definitely at a higher level than in previous years. However, when it comes to the self-government segment, because it is also a large segment when it comes to self-government, i.e. municipal roads, municipal roads, here we notice a situation that a lot of procedures are neglected due to the exceeded budgets. Here we are talking to the applicant in order to first of all, of course, sit down and calculate these budgets and update the prices, costs of both materials and labor in these budgets, or to consider whether it was not worth it and whether we should not reduce the rates on some investments, as long as the orderers want to realize these investments, because otherwise, of course, it will not be possible to sign these agreements, which I think is unfavorable for you and also unfavorable, of course, for us, but Poland is still in the development phase and due to the geopolitical situation, we believe in it and we know that we need to invest, because these interrupted supply chains from China caused that we know that many companies that run some material production want to move from China and produce it in Europe and it was worth using it. Of course, these factories were created in Poland. These are the key elements when it comes to perspective. What is also important from our side is that Seeing this situation, we went outside of Poland. We started to focus very much and devote a lot of attention to going outside of Poland to the Czech Republic, Slovakia and Germany. But here, yes, in Slovakia, we managed to make this offer and get the first place on this highway worth almost PLN 550 million. Czech Republic, at the moment, we have made a dozen offers. And we are actually taking the podium, but of course, when we take the second or third place, it is not a success and we have to take the first place. In the last month, we took the first place in the Czech market for one of the procedures worth PLN 300 million. However, the orderer made mistakes in our offer. We do not fully agree with this, but we were excluded from this trade procedure. Well, I think that competition does not help us in these eastern markets and has a lot of fear of entering Budimex into the eastern markets, because we will be quite a lot of competition, so we have to push ourselves a little bit and fight for these markets. However, I can boast that we are currently in such a pre-qualification phase, in very large progress in the area of, for example, Łotwa, we have made an offer which is also in the pre-qualification phase in Łotwa, it concerns the Baltic Sea and it is a contract worth over PLN 4 billion, so a very promising contract when it comes to the railway part and diversification of our portfolio. We have made an offer, we are the only company qualified to connect Poland with Lithuania in the Harmony Link contract, i.e. supply and energy connection between Poland and Lithuania. And this is also a significant contract worth about a billion zlotys, where we have a chance to get this contract. And we are also making offers all the time in Germany. At the moment, we are implementing these two contracts, but we are also in the first place in a few negotiations. We are waiting for the choice of our offer. So this segment, when it comes to work outside Poland, is developing quite strongly and promisingly, so it also gives us a chance and a perspective that in the event that we have fewer orders, the less implementation in Poland, we believe that we will complete it and diversify it in the coastal areas. But this diversification has developed in many aspects and here we cannot forget about our strategy, that we are entering into green energy and here we are also developing very much in the green energy segment. A few words about KPO. I would not like to focus on millstones, because we all have this information from the general information available. What is very important for us as a construction company is of course the risk associated with the lack of funds for PKP PLK. Here we have presented to you how it unfolds when it comes to the value of maintained transfers, both from borrowings and donations. a total of over EUR 45 billion, with a split for each year. The year 2022 is over EUR 2.9 billion in subsidies and EUR 1.4 billion in loans. However, when we look at the left-hand corner, we see that in turn it is EUR 2.6 billion on the road, EUR 0.7 billion. And this also shows the situation that, of course, KPO is a very important element for us, But also, if this KPO does not reach the finalization of the KPO, then of course, looking at our portfolio, our diversification and our activity, it is not such an important element that it can have a very important impact on our activity. Having a portfolio worth 13 billion PLN, we really have the comfort of working until the end of 2023, actually until 2024. And this gives us such a perspective, I would say, of long-term looking. When it comes to our activities, of course, outside of business, CSR, ESG, we received four awards in the first half of the year. The first award is especially important for us, it is the year's building brand. We were selected among the survey of 300 subcontractors as the best cooperation company. It is a very big distinction for us and we are proud of it, that as a construction company, which has a history of more than 50 years, we are able to build our own brand and industry. Without partners and co-workers, in the form of companies and suppliers, we would not really be able to be such an effective company and we thank you for this distinction. We also achieved We are proud of this investment, a very modern research center, actually one of the most modern in Europe. We also won the White List of Politics for the distinction for the most responsible and responsible company socially, but also, as you can see on the company, our ladies from our company, of course. Six of these ladies were selected for the European Women in Construction Engineering and one of these ladies stood on the podium when it comes to our staff, and we are increasing the potential from year to year when it comes to women. Yesterday, we completed the second stage of our heart home investment. We handed over the keys to an investment for a multi-child family with six children, where two children are really very sick and the parents fought for it and the priority for them was to create comfortable conditions for care for these children. And the day before yesterday, once with partners, we completed this investment and handed over the keys to this family. It was also the moment, the first half of the year, when we completed the 40th parent zone in the hospital in Pisze. And we are also proud of this, because we would like to show that this is not such a one-off action, but these actions are repeated year after year. Together with employees, we do everything to, of course, expand this and engage, of course, our employees to help and we feel responsible for the company, responsible for public support for local residents. We also carry out a number of other activities, as far as we are concerned, we continue both the Voluntariat Grant, the Hello Zone, when it comes to our activities, help with children and also support for the university, because it is important that this year we want to devote, that each of the contracts also devote to support for the university. We have such an initiative that each of the contracts will support one of the universities. We would like to cooperate very much with the universities, encourage young people to choose construction directions and also support people coming from Ukraine. Here, a big element is that we signed an agreement with the university and the Krakow University of Technology. where we co-finance the construction direction for employees from Ukraine, educating young people as engineers and also gaining legal knowledge, I would say the knowledge that we have here in Poland, with such an initiative that we believe that during the reconstruction of Ukraine, also as a company Budimex, we would like to participate and we also see and see it as a great opportunity, of course, for the construction industry. But in the first place, of course, these war activities must end and this tragic situation that takes place in Ukraine. That's all about our presentation, ladies and gentlemen. We are at your disposal. If you have any questions, of course, we will try to answer all the questions that you have for us as representatives, representatives of the Budimex company. Thank you very much.

Let's start with the questions from the room, please.

Good morning, Michał Majerski, PT Allianz. Could you, Mr. President, point out a little more exactly what this trading procedure looks like in these lines, this two-stage thing, right? I understand that they make an offer, there is some chosen as the most profitable and then there is what? There is an auction and it can totally change. Can other offers give lower prices and this first phase doesn't matter? I understand it well.

I may not have explained it correctly. There is a two-stage bidding process in PLC. The orderer announces the bidding, the companies submit an offer. This is an initial offer. After this offer, the orderer verifies this offer. If none of the companies made a mistake, all these companies can start the auction. The second stage of the bidding process is announced. in the form of an auction, and then each of the companies that has not made a mistake in placing an offer, because, let's say, it did not include any references, it did not include a proper guarantee, so if it has not made a formal mistake, it has the right to enter the auction. And then, after the second process at the auction, simply who will make the most profitable offer,

Do the companies know each other's offers that they have made in the first phase or not, or do they still put them together in the dark?

They know the value of the offers made by the competition, but during the auction system they no longer know how to reduce the reduction of their original offer.

This very large 4 billion trade is the one in Katowice, right? Yes, it is. I wanted to ask, because I think it was at the previous conference, you were talking about the participation of EU funding in road and railway contracts. I think it was said about roads, I asked in turn, I did not get an answer. Could you remind me what it looks like?

What is the share of this? From the perspective of the EU 2021-2026, if I'm not mistaken, it is on the same level as the previous perspective when it comes to the range of railway parts and it is worth it. I would not like to make a mistake.

Michał, could you remind me what it is worth? About financing, right? About the cohesion fund.

5 billion euros, when it comes to the security fund.

However, it should be emphasized that we have two EU budgets. One is of course the Phoenix that we have today, so it is on a comparable value when it comes to railway issues, but we cannot forget about the funding from CEF. CEFU are contracts that are awarded and awarded by the European Union, where each of the European Union countries has the right to submit and proceed with the procedure, I would say, gaining points and funding. And this range is very comparable to the previous EU perspective, so the funds from the European Union for this perspective will mainly be spent on the railway part, but they are also of significant value when it comes to roads.

My question was different. If we have 100%, for example, this new plan for our railway, for example, for a ten-year-old or for the road, how much does the EU funding weigh in it, especially the KPO?

And how much is the national funding, for example? KPO, I will answer you right away. KPO is 2.6 billion euros. So when it comes to KPO, it is for the railway, if it comes to the fee, 2.6 billion euros. When it comes to these funds outside of the KPO, i.e. budgetary, it is what we said, 5 billion euros. And what is of course funded from government funds, i.e. on a regular basis, if it comes to government funds, I don't know, of course, depending on the contract, there is various funding when it comes to the state.

Thank you, maybe I'll give it back, please. Hello, Adrian Zwolak, Hightown Bank.

Mr. President, I would like to ask two questions.

You have already talked about prospects for the next period, but I would like to know what are the most important market risks in the near future? And the second question, how are you going to manage cash during this high inflation? It's over PLN 2 billion. Is there any specific plan to use these funds?

I would like to ask about the cash, the financial director, to describe the whole situation, and then I will answer the first question.

Cash, that is, when it comes to the cash position, it is high. Of course, there may be some temptation to take instruments that are more risky and invest so that there is a much higher rate of return. However, we are not a company that takes this type of risk, i.e. this cash that we have, we invest in such instruments that are safe for our group, i.e. these are term locations, so the percentage that we are currently gaining it is approaching the level of 6 or 7 percent, as far as I remember, so it is slowly moving towards inflation, but it will probably be very difficult for us to achieve this level of inflation, i.e. we do not invest in any instruments such as banks or other institutions that deal with pure financing, i.e. we treat the money that is for the development of our activities and, of course, question about the management of our cash, I think more about how we should invest.

Yes, that's what I was talking about.

Exactly, if that's what it's about. Because our goal is not to keep cash. Hence, there is also a decision to pay dividends of the profit. However, we have financial surpluses that come from the sale of real estate in Budimek. It is about PLN 600-700 million of this part of the capital, not the profit, which we worked out from the sale. And we are planning invest this money in several areas. The first is, of course, the basic one is green energy. We want to be electric energy producers, hence our first investment in the construction of these two wind turbines of 7 megawatts. Of course, the FB Service, as the President said, in order to continue to grow and achieve sales revenues, a billion is already close, let's say 2 billion zlotys. You just have to buy assets, both those that are permanent funds and also just through acquisitions. And the third element that the president mentioned is the entry into foreign markets. And we do not exclude here how the situation calms down in the markets. You can say that in the markets the situation calms down in the war. We do not exclude the purchase of foreign companies.

No, no, no, I think you've done a great job and here we expect significant funds for the development of the group and organic this time, as far as the FB Service company is concerned, we know that the EU regulations are very much dependent on how It is necessary to invest in this segment and this is a segment in which we get a very good result when it comes to EBIT, two-digit, and here it is worth investing these funds in the development of this service, so this is the key when it comes to these investments. We also need funds. in the proceedings, maybe I will add the Polish League, for example, which predicts that throughout the entire investment period, the contractor must finance this investment, so these are, I would say, quite interesting investments for us, because there is less competition there, but unfortunately it requires financing. And these are also funds that are located in this way when it comes to what we do, in addition, of course, to maintaining funds on the account, which is not a positive effect at all when it comes to inflation. I'm sorry, could you just clarify the first question, because I didn't hear it very well.

Yes, I asked here a little in reference to what you said earlier. From your perspective, what are the biggest hand risks that may occur, materialize in the near future?

There are a lot of risks that are actually hard to estimate and predict. I think that this winter period ahead of us is a big question mark due to energy carriers. And we know that this is a big question mark. However, there are a lot of building elements, and this especially applies to cubature elements, i.e. the residential or industrial segment. It is brought from outside Poland, it is produced on the territory of the entire European Union, but not only. And here, if there are disturbances in gas storage, I don't know, and I think everyone is predicting it, it will probably lead to an increase in the price of materials, further increase in the price of materials, which of course is a great risk for us. because we are not able to completely secure these prices. We have long-term contracts signed, but history has already shown and taught us that many companies can withdraw from a signed contract and it is more profitable to sign or pay fines than to continue the supply of materials. This is one of the main risks. The second risk we see is of course the EU funds, and this is certainly a risk that is noticeable in our scale of activity. However, we consider the remaining elements rather to be challenges, and we also see a chance for our activities here, because the geopolitical position of Poland allows us to have a slightly optimistic view of the future, because we are a very flexible company and here we always emphasize that we fit into the market at the moment. As you know, last year we sold a developer company, but we also focused very much on other segments, which we may not mention here, but this is the military segment and here I see a great chance for our company when it comes to the military segment. We currently have a contract worth almost PLN 1 billion with the military segment, which is also a segment that is developing very dynamically, so we are very flexible in approaching certain elements and this situation that has place on the market and with such a large, I would say, use of the opportunities that are ahead of us.

I understand. Thank you. Tomasz Dziuba, M-Bank.

I have a question about these signed revalidation annexes, namely these 11 contracts, more or less what is the total value and how much do they cost in the GDAK backlog?

In the entire backlog of GDAK? In the backlog of GDAK. Okay. The value is about 1.5 billion zloty. These are not all the annexes. due to the fact that the General Directorate has a lot of signed agreements and a lot of executors. We were the first company to be invited to sign these annexes. The General Directorate divided the signing of these annexes into two stages so that any company would not feel offended. also neglected, so we have included the largest number of these annexes in the first place. However, we are waiting for the second stage of including these annexes. So at the moment it is PLN 1.5 billion plus a total portfolio of about PLN 4 billion.

Thank you.

I would like to ask about your outlook on the profitability of the construction segment. Is the worst already behind us? Taking into account that some of the materials, but not all of them, we probably have the peak behind us. As we talked a quarter ago, the goal was to maintain profitability from last year. Now, for the first half of the year, it is better. Then we were still before the introduction of valorization. Are you optimistic now, gentlemen?

I can say for our company, because I feel responsible here. When it comes to our company, the worst is definitely behind us. 90% of our portfolio is orders in the public sector. What is key for our company is that we actually focus on these orderers, I would say key when ordering, i.e. the General Directorate and PKP PLK. So we have greatly reduced our risk associated with valorization and we actually have few contracts signed with the governments, which is very positive information, because these government contracts When we have 2,500 local governments, each contract looked different and many of these contracts, even if they had valuable notes included, they were illusory notes and there are practically no valuations. So, with our portfolio, this information about the signed and included annexes from the General Directorate is very positive. We are waiting and we are still conducting a dialogue with PKP.pl and I believe that we will reach an agreement and these contracts will also be valued. However, we avoided this problem with self-governmental contracts, where these contracts are much smaller in scale, but still have a very large impact on price growth. and transferred to a small margin on self-employed contracts. We avoided it because, as I said, we don't have many of them and here I think that what happened at the moment, when it comes to this difficult situation, is behind us. However, for other companies, I think the situation is quite serious.

Last question from my side. What was the balance of reserves for losses on contracts in the first half of the year?

I mean, we don't have exact, I can't answer you right away with exact data, but we had reserves for the possibility of further price increase, price increase in materials, and we had, of course, we predicted an increase in the margin due to the increase in the price of materials and interrupted supply chains. But I will not tell you exactly what the value was.

Do zapraszamy do zadawania pytań, chociaż tutaj jest zgłoszenie.

Good morning, Karol Badowski, DNA Rynków.

I would like to ask about these military contracts, because Minister Błaszczak said that the number of Polish troops will be increased twice. And logistics, therefore, will increase very much. I'm curious, because from what I understand now, the value of all military contracts carried out by Budimex is a billion zlotys, right?

Yes, it is signed.

I understand. And would Dimex expect much greater increase in the value of these contracts in the coming years? And if so, what are the values?

As for the first part of the question, of course, we expect an increase in the number of public orders when it comes to this military segment. However, I don't know the value, I can't tell you when it comes to the value, because many of these investments contain a trust clause and I can't even reveal it, because these procedures are subject to special procedures when it comes to secrecy, so please forgive me, I'm not even able to mention the names of the contracts that we have signed. and also the value of these contracts in particular due to the necessity of maintaining continuity.

Thank you. Are there any more questions from the audience?

In the meantime, maybe we will move on to questions asked online. The question is how high is the gross gross margin for sales in the construction segment at a level of more than 10% in the second quarter?

However, when it comes to the gross margin in construction activity, we have to look at the first two quarters together, which give us above 5%. The first quarter was weaker and much better than the second quarter. The first quarter was caused by a certain accumulation of the correction of the results on the contracts that were aggregated in this one quarter through the price of our contracts, which were caused by the increase in the price of materials and, of course, the war in Ukraine. And this next quarter is a normalized quarter.

Thank you. Another question, also online. How does the management look at the next quarter in terms of sales?

When it comes to sales, to sum up in general, because we are obviously looking at the future and the end of the year, what the end of 2022 will look like. We believe that we will exceed the planned plans and we should achieve sales at the level of PLN 8 billion.

Thank you. Another question. Assuming that raw materials are stabilizing or reaching a peak, is the EBIT margin from the first half of this year and is to be repeated in the second half of this year?

Yes, if Nothing special will happen and nothing will happen when it comes to the materials. We will certainly maintain the margin that we have shown and presented after the first half of the year, and we are even expecting an improvement in this margin.

Thank you. Another question. Is the export direction, in terms of EBIT's profitability, higher or lower than the national one?

I can say, when it comes to the Kraków bridge company, and here I would ask, because we have a few companies that operate on the market outside of Poland, but we will sum it up in a moment. Jacek, may I ask what it looks like in the bridge?

I mean, when it comes to profitability, it is comparable to the profitability that we gain from contracts in Poland, but it should be divided again when it comes to supply and assembly. When it comes to supply, as I said, profitability is on a similar level. When it comes to matters related to more general performance, i.e. assembly of construction, the margin is better than what we gain from Polish buildings.

When it comes to the German market, It is worth emphasizing that we have been existing and building on the German market for 30 years. We have more than 1,000 employees employed there. And this is a stable level of both sales and margin. Sales is at the level of about 200 million a year at the moment. And when it comes to EBIT, it is a two-digit fund, so it is much better than EBIT achieved in the Polish market. However, as for the contracts signed and included, or also predicted for implementation, it is still difficult for us to say something about the Czech or Slovak market, because when it comes to the Slovak market, we have just laid out this offer, so we will only start these jobs, so I will be able to tell you something about it next year.

Thank you very much. Another question. Does cooling of economic activity makes it easier to manage the costs of foreign services and the termination of construction projects?

We are only in such an early phase when it comes to sweetening. We have had a very big problem over the past few years, both with the availability of materials and with the availability of subcontractors. And actually, at the turn of the last month, we noticed that the availability of subcontractors is starting to increase, and so it shows that, and also the availability of producers when it comes to materials, it shows that companies are starting to look for, I would say, jobs and work, and also a little about this slowdown, so we think that the end of this year and the next year will already give a chance to achieve lower prices when it comes to workmanship and also a drop in material prices due to a smaller amount of investment.

Thank you. Another question. What is the current general perspective for 2023 in terms of revenue and margin? Does the current portfolio give such a perspective of revenue and margin improvement in 2023? Or should we expect stabilization in relation to this year?

We came out of difficult contracts. The end of the year 2021 showed that we had completed the most difficult contract for us, so above all industrial, it was the construction of the power plant in Turów and the construction of the combustion plant in Wilno, which were very heavy on our results. Most of the contracts that we are currently implementing, we have 193 contracts, these are contracts with a positive margin. We notice or also note negative results somewhere, but they are really insignificant when it comes to the value of contracts. These six months allowed us to, above all in the housing segment and the private segment, we reached an agreement, we valued these contracts. which is a very positive effect, or they are in the final phase when it comes to signing and including add-ons related to valorization, so we have a very healthy portfolio. So I look with great optimism when it comes to the year 2023, because these contracts are healthy and this portfolio that we have to implement allows us, provides us with sales and, I would say, as a functionality and continuation of this core business that we have in our company.

Thank you for answering. Another question, a request for a wider update on EU funds, but other sources than the KPO. When, in the opinion of the Board, will they really appear on the market in financing the implemented contracts? Well, it's about funds from the Phoenix and CEF program.

Mr. President said that when it comes to KPO, which is controversial and I hope that something will come of it, but we don't know. The level of the European Union Fund, these standard five-year-olds, will be implemented on a regular basis. Their level is at the same level as it was in previous years.

It may be a bit difficult, we have a problem with the sound of this microphone, so I don't know if we need to repeat the answers in a moment.

Now I don't know if it's better to listen. Oh, now it's better, yes. The level of the European Union Fund, which is not related to the KPO, but to these funds, in five-year phases, it is at a similar level to previous years. Of course, inflation has caused that the real level of these is smaller. However, these projects will be implemented, as in previous years. Of course, I am talking about these projects in our part of the road infrastructure and railway infrastructure.

Thank you very much. We still have a few questions left. There are not too many questions left. How does PKP PLK look at advancing work on the new national railway program? On the next perspective.

On August 31, there will be a meeting with the Ministry of Infrastructure on its new program. So, please forgive me, we have to wait for the official announcement of this information by PKP.pl, because these questions should be dedicated to them.

Thank you. How much of the second quarter of this year is already the effect of annexes with the general direction, increasing the valuation limit to 10%? How does the valuation of contracts in the incubator and industrial areas look like? And is it possible to sign the annexes? Does the company have any problematic contracts yet?

As for the annexes included and their adoption in the budget, they are not adopted in the budget, because we analyze and prepare the budget for the next three months every quarter. We never predict the future of something that is only a theory, so when we sign the annex, we only insert it into the budget. These annexes that we signed are not included in the future budget. This is the first part of the question. When it comes to difficult contracts, we have, when it comes to the entire company, one difficult contract is the Museum of the History of Poland. At the turn of the last month, we signed an annex with the applicant who takes over the valuation of this contract. and extending the term of the contract to July 2023. But it is a difficult contract for us and full of challenges when it comes to implementation. This is the only contract that is quite important when it comes to our company, with a value of PLN 400 million. However, when it comes to the annexation of valuation in the industry, In fact, we have completed these two main contracts that I mentioned are important for our company. In addition to these contracts, we have implemented gas contracts that have been completed before the deadline. And here is a very important element. Signed contracts with the gas system company included a bonus for completing them before the deadline, so we received additional bonus due to completion of these contracts before the deadline, so it was very positive information and it was included in the results.

Thank you very much. A question to the FB Service about an update related to planned acquisitions.

Currently, we are working on

One project that is already highly advanced, we are conducting an analysis of the company's intelligence. It is a company from the fuel production industry, alternative from waste. I think I will be able to say something more about the reality of this acquisition after the third quarter, when we finish the analysis. We also have on the target, but very, very early, other targets, more towards the production of biological, organic waste and biogas production. However, we always want to work in parallel, but actually work on one project that is carried out by us in a way from A to Z, i.e. from a non-binding offer through due diligence to a binding offer and then focusing on closing such a transaction. We also talk, analyze the various projects that come to us at various initial stages. There are a lot of them, I will tell you honestly, because a lot of companies especially in the waste and raw materials industry, which have been developing over the last few years. They see a barrier to further organic growth based on their own resources or even external financing. A lot of companies are either looking for an investor or want to sell. I still see a big trend of this market consolidation, which means that in the end, in the vicinity of the year 2030, I expect rather strengthening of large companies and reducing the number of smaller players, because simply the requirements of CAPEX, as well as the very management of this business in a very changing and quite difficult regulatory environment, causes many people, especially those who run this business on their own account, simply can't do it. So here I expect, I say, if Mr. President has confirmed once again that the group is willing to invest in our development, also inorganic. I am calm about the leads, about their quality, of course, we must be sure, because we have not yet managed to find a perfect target that would not be devoid of any defects. But in the meantime, we have probably given ourselves the advice as a team to deal with these defects and try to mitigate them. These are mainly defects, ladies and gentlemen, in terms of the quality of environmental decisions, based on which these companies operate. This is not something that cannot be fixed if it is defective. We are able to do it. So, I think that by the end of the year, maybe we will be able to, or at the turn of this and next year, to carry out another project. And I say, we already have some more in the pipeline. So, I would like these M&As to do at least a few more in the coming years. And apart from that, these Greenfield investments, which I also hope you will say a lot more about at the beginning of next year. And because it is a very wide spectrum, yes, it is a spectrum from production of fuels by burning these fuels. I am talking about fuels coming from solid fuels waste, i.e. so-called RDF. We are also talking about biogas, which can be scrapped, which we can either burn in our own installations or even power it with a gas network or also sell it to fuel networks, which can then sell it as biogas. We are talking here about composting installations, we are talking about installations related to the recycling of artificial materials, as well as glass. Also a very wide range of projects that we are working on. And I think that's it for now.

Thank you very much. Thank you very much for your answer. Among the questions that were also reported earlier by analysts and investors, There is a question about human resources. How has the situation changed since the last conference, when it comes to the availability of employees?

I think it is very similar. The situation has actually stabilized. We do not see a greater threat when it comes to employees. This part, primarily related to subcontractors, who based on employees from Ukraine, I think that the impact of what is happening, what is happening in Ukraine has dealt with it, supplementing these people with other immigrants, because we have also noticed people from other countries. However, when it comes to our company, it is stable, we have a very stable number of employees, that is over 7,000 people. and it is actually at a very close level, already year to year, and this rotation is very low when it comes to a construction company, because it is between 7 and 8 percent.

Thank you very much. And also another question that has not yet been answered, an answer from investors on valuation. What does valuation look like when it comes to private investors? And what does it look like, what are the perspectives in the governments?

When it comes to private investors, most private investors, these people notice the need for the contract to be valued. And we have annexes, in fact, we have annexes in 90% of private investors regarding valuation. So it went quite easily here, because, however, every private investor does not have to wait for the approval decision and approval and makes a decision, because he sees exactly what is happening on the market. And especially private investors are very dependent on the pace and time of investing and starting their activities. When it comes to local governments, these conversations are very difficult. Most local governments are waiting for the signature of the government special bill, what we said at the beginning, and waiting for some green light from the Ministry of Development, that it will be systematized, I would say, in a way. However, we are not waiting for a decision and a special government bill. We propose to self-governmental investors to solve this in a different way. Most often it is our proposal of agreement, or also a pre-trial one, or an agreement and some kind of agreement before the Prosecutor's Office, and we conduct such conversations. and they are partly already completed successfully, partly during the implementation phase, because yet most of the governments also want and see, want to have a conversation, want to sign an annex, only waiting for, I would say, formalization, for transparency of this transaction, of course, so most of the time we conduct these conversations with the governments before the prosecutor's office.

Thank you very much. And the last question from the questions posted online, this time about OZE. A request for an update on the renewable energy segment. Is the company acquiring any other projects? If so, in what area and what is the scale?

At the moment, after the agreement was signed and the purchase of the Magnolia company, where it is a wind farm building with a capacity of 7 megawatts, We are in the final phase of the implementation of this contract, as you can see in the video, and this investment will be completed at the turn of December 2022. However, we have started other projects, but here, already in the phase of, I would say, accepting projects at a different stage, I would say, development or accepting design. We are developing part of the investment from the so-called greenfield. By the end of this year, we would like to sign a contract with these developers for 50 megawatt photovoltaic farms, but that's not all. But we are conducting very advanced talks on cooperation and the construction of windmills on the sea, and actually not only the implementation, but also as an investor in the construction of windmills on the sea, so that we can participate in the segment and at this stage concession to this type of investment. However, I cannot say which company it is, because we have a trust agreement. However, at the turn of the last two weeks, you will receive this information, because it will be officially announced.

Thank you very much. And this is the end of the questions when it comes to online. Any more questions from the room? Are there any applications? Here I see, yes.

May I ask you to give the microphone?

I would like to ask in general what these agreements that you signed in the field of nuclear energy with these two companies, the American and the French, were about.

Due to the fact that, of course, we do not have access to technology when it comes to building an atomic power plant, we would like to be a partner in this construction part, which is very important anyway, because it is several tens of billions of zlotys, and therefore a very important element for us. We signed with Bechtel, an American company that is responsible for the implementation of this part of the incubator. We signed an agreement on cooperation, that in the case when the Polish government approves an agreement with the Americans, we have an agreement on cooperation on the implementation of this part of the incubator. the construction part. And the same applies to the French, so when it comes to this part of the French, if there was such a situation when it comes to France, then the same agreement on compliance with cooperation when implementing this investment. But we also have a signed agreement with the Koreans when it comes to Hyundai, when it comes to long-term cooperation and such a framework agreement when it comes to the Polish territory. Of course, today we are still waiting for which offer, when it comes to Poland and the construction of the power plant, will be included by the Polish government. Any more questions? Ladies and gentlemen, thank you very much. Once again, thank you very much for the numerous arrivals, both here and in the place, as well as those of you who are connected remotely. I cordially invite you to a modest snack. Thank you again and I invite you to the next summary of the next third quarter. Thank you very much.