Budimex S A Shs

I think we can start. Hello ladies and gentlemen, let me welcome you to our reserved conference for the big quarter of 2024. We will start with a short presentation. Thank you. Thank you. . . so so so so so so Thank you. Hello, I'm very glad to see you.

Today, we will present our results. But first, let me introduce my team.

I'm Macarish, HR Director, Alvaro Garcia. Jacek Lech, president of the company Mostostal Kraków. Marcin Wygłowski, member of the board and responsible for finances in our company.

Cezary Łysenko, member of the board and responsible for infrastructure and construction in our company.

Maciej Olek, member of the board responsible for railway and infrastructure, and Olek Magacek, member of the board in charge of railway and energy construction.

Ladies and gentlemen, let me start with our five main achievements. I think they are really exceptional and prove that we always try to fulfill our strategy. First of all, we achieved record high order book with the level of 15.8 billion, which means 30% of increase. It give us stability, and the second perspective for the future the second kpi are the contract files of 8.2 billion in comparison to 4.8 the last year, we basically reached the contracts first time at the level of the whole year after three quarters. That was the first PEI hour ago, which also had reached the record high for the book at the level of 4.4 billion.

The market is really difficult. It's really difficult to win contracts, so we are very happy with the results.

The fourth KPI, our profitability, which includes 1% in comparison to the previous year.

We optimise our projects and manage our contracts.

And the last KPI that we are really proud of our company in from incoming projects 285 million zlotys, which means that we are on the 20th position of the ranking of the company income tax payers in Poland.

Ladies and gentlemen, now let's go through the details of those KPIs.

And we will also talk about our forecast for the future. Let me start with macroeconomic data.

The year 2024.

GDP as you can see on the slide inflation of more or less 3.10 but I guess that after September forecast of 4.9 it will be difficult to reach I guess it will be at the level more or less of 5%.

It, of course, translates into interest rates.

We don't think it will go down till the year 2025. PMI index more or less stable, reaching around 50%. It hasn't changed much.

But if we see the construction and the STEMP production increase rate, then we can see a decrease. It seems that June and September are really exceptional in that context. It's the effect of the decrease of prices on the residential market.

We can see 10% in specialized construction works, among others.

The dynamics of prices in the construction industry is obviously lower.

The dynamics are falling, but 5.3% is really quite high and the pressure over price is still exceptional for all the construction companies. The general business climate

index is at the level of minus 3.9 and we foresee

that it is going to be lower in the next months.

The housing market that influence all the construction sector.

There is a sharp decrease in sales of residential flats. Firstly, because the prices have grown exceptionally. The median price in Warsaw is 17.9 thousand zlotys per meter. program that was going to help the buyers, the governmental program is not coming into force right now. All these transfers into margin As we see practically all companies, small and large, are lowering their margins from 11.4% for smaller companies to 6.7% in case of bigger companies.

the level is a little bit lower and we expect further decrease.

We may say that the companies that have a big portfolio may are well prepared for the future

for the future on the market. We have the same level of construction companies that see the lack of man force as an obstacle for their development.

Also, another factor is the inflation.

which is considered obviously a huge obstacle.

In the case of materials, the situation is better now. This index is at 5.5 level instead of 16.9 in 2002, which was a record year in this respect.

Also, the prices of the materials are

The percentage of construction companies that consider material costs as an obstacle is also lowering. Prices of selected materials as we see the concrete is growing.

Also of asphalt, fuel and diesel are stabilizing.

Let me remind you, ladies and gentlemen, our five main sectors.

First of all, we have construction. which is Budimex, Budimex Kolejnictwo for railway contracts, Budimex Budownictwo, our sister company that places tenders, and Mostostal Kraków, that specializes in steel structures.

On the foreign markets, we have Budimex Bau, is active in Germany.

We have Rail PX that is dedicated to the overhead lines, power lines for the railway construction.

And also we have our branches in Czech Republic, Slovakia and Poland.

In services, we have FBSedWaste and circular constructions. We have renewables.

and other companies like Magnolia, Windfarm, Camellia, Photovoltaic Farm, Azalia, another photovoltaic farm.

Also, we have Budimex Mobility, Parking Wrocław and Real Estate. And now, our results from operations of the company, the revenues are 7% lower than

than the year before.

We will talk about the reasons of the situation in terms of the price for us in place later. In spite of that, the profitability is higher. After nine months, we have 7.8% of profitability. So, in nominal terms, we have 508 million zlotys of profit. thanks to our optimization of the running project. In net profit, we have also a little increase, 6.9%.

And now,

As I mentioned, looking at the revenues we achieved in the construction segment, it is PLN 5,875,000,000, and this is mainly the difference, 8% of the difference to the previous year, but if we look at the year 2022, we have a stable growth. At the end of the year, we will prepare a presentation that will show the trends for the last five years and you will be able to see that the revenues are increasing. Nevertheless, in nominal terms, there is a decrease which is due to the change of the EU budget.

There are less tenders on the market.

Some tenders have finished already. We have also finished some strategic contracts that were contributing in our revenues. Also, in some of the contracts there are some proceedings that are taking more time than expected and those proceedings may However, I would like to assure you that from next year we see that our revenues will increase significantly. If we look at our portfolio so successively, we are satisfied with the fact that, looking at it from this perspective, they will significantly increase. What we are very happy about, what I mentioned at the beginning, is that our profitability is increasing, in fact, in every segment and in every group. Last year it was 6.7 in the construction. This year it's 7.6%. 446 million. Notice which is due to the stabilization. prices and better accessibility of the material. Also, we have finished some complicated work from the last years. To protect our portfolio, we decided to diversify it. Now, we made... We are very happy to say that we have also contracts in the Slovak market, in Czech Republic and in other countries abroad. It makes us maintain the revenue when the new tenders in Poland are at the lower level. There are also contracts when we help with the financing process. In services, we have 686 million of revenue. Also, the profitability has increased.

The increase is not very high, but I must say that in this sector, there were no indexation in the contracts.

So, this is actually an achievement, maintaining the profitability of this level.

Net cash position, we finished September at the level of 2.5 billion zlotys, which is according to our plan, it's a good level that lets us see the bright future and good perspective for the company.

As you know, our strategy consists in paying 100% of the benefits in dividends. For 2023, we've paid 911 million in dividends, which

Total gives more than 215 lotties per share during the last 16 years.

Contract times, it's also record-breaking year, 8.2 billion lotties in a contract. But what is really encouraging is that our railway sector is growing. We're getting more and more tenders.

You may see that there were years that we didn't get as much job.

in the railway as we shoot and now we're getting back to the path of growth. LK-104 Limanowa-Klemczany, a contract worth PLN 1.6 billion. T-35, a contract in the features of the Limanowa-Klemczany motorway for PLN 650 million. Three sections, S-10 Szczecin-Kiła, each of them has a average value of PLN 1.5 billion. And this is, I would say, an amazing reason. I don't think anyone has done this in the country. We won last year. which is an exceptional achievement. No one has ever done this. Five sections, the longest, The S16 contract is worth more than PLN 1 billion. What is very important is that due to the reduced number of these trade procedures, we notice that we are witnessing an aggressive fight against prices, both in the road and railway areas, as well as in the cubature market. More tenders, more companies are placing their tenders. Also, there are some companies from abroad, from different parts of the world.

And sometimes the tenders are very aggressive.

We have 16 billion of our portfolio, which is a record-breaking data. And it's a reason for our joy and it gives us satisfaction and also some stability for the next years.

We actually don't need to worry about 2025 and 2026, basically, which is important.

We got two tunnel contracts.

We haven't been that present in this sector.

We are going to execute two tunnels, one in Limanovo and the other one, S19 highway. This is a very satisfactory situation. If you see the diversification is quite high in the order book, each sector has own profitability This all gives a perspective for stable growth. Contracts awaiting signature. As you see, those are 9.9 billion zlotys. We're awaiting the signature of S10. We are waiting for the signing of section S16 Olsztyn-Barczewo.

This is a contract worth more than PLN 400 million.

And contract TW635. This is a contract with Mazochówka-Olecko.

A contract worth more than PLN 200 million.

Let's move on to our companies. KFB Service Company. Alvaro.

Thank you, Artur. Good day to you. Going back to the first quarter of 2024 and the first nine months, I can say that those have been very good moments for our company. Our good results are mainly related to our facility management activity and waste management. As far as people are concerned, the level is very similar to what we reached a year ago. Our next treasury position, very satisfactory.

The main impact would be on the fee that we have to pay and also dividend.

These are the main factors that influence in the treasury position.

If I can see the next slide.

So, the first quarter, we won two important projects. Very important for our company. At the same time, we find contacts with Wrocław for two sectors, both towns and city districts. We have also renewed the agreement that we will implement on the waste management of the Rondex Rui mine. We are also very happy with the offer of the General Directorate to the PUABE region. The contract is worth 34 billion zlotys.

for the road maintenance in the region of Puławy.

The worth of the contract is of 44 million. The general road direction of Białystok has chosen our offer for the delivery of coal and then

Road administration in Katowice and the contract for road maintenance till the year 2020.

Our waste management division means almost 50% of our activity. In October, we managed to obtain a contract for the waste management in Warsaw.

That's all that I wanted to share with you. Thank you very much.

Now let's go to most of us. Kraków. Kraków. Kraków. Kraków. Kraków. Kraków. Kraków. we signed contracts worth PLN 416 million. We have signed contracts worth PLN 416 million. We have doubled our margin from PLN 19.3 million last year. We have doubled our margin from PLN 19.3 million last year.

up to the level of 47.2.

Both marketing and collaboration management caused that the cash reached 94 million. As we have informed in our strategy, the bridge plays a very important role in sales diversification. As you have noticed, the 45% increase over the year could not have happened without our export. Today, the share of export is 32% and we are currently on three markets, the Lithuanian market, the Swedish market and the German market. Now a few words about each of the markets. As you remember, at the beginning of the year, we informed you that together with Constellation, we built a large bridge in Kown. Today, I can boast that the first elements were delivered to Kown and we started the process of building this construction. We are planning to finish this activity in the third quarter of this year. As for Sweden, we have installed 1,500 tons of construction for the needs of Avicii Arena.

and both 1,500 tons

This market has proved to be very good for us, offering good results and we perceive it as a market with good perspective. We have identified more tenders for bridges in Germany, and we want to participate in those tenders together with our subsidiaries.

So, we are very hopeful as far as our foreign operations are concerned. Thank you for your attention.

One more information. I was wondering if I should share a little bit more about the next one, but we have received the first owner from Westinghouse, the contractor of the first holding of the energy power station.

So, we will participate in the first Polish nuclear power station project.

So, the market and perspective.

Let me start with European Union and its funds. We would like to remind you that in the previous first lecture, we reached the level of What is the new perspective? The new perspective till the year 2027 has a very similar level of 24 billion. We are expecting the growth of our of our revenues and connecting Europe, possibility, resources for all countries. like recovery plan more than over 60 billion euro. Those elements that are very important for us are three main factors.

First of all, we power energy.

We want to participate in the conversion of our country, terms of energy sources, and we can see the level of the funds dedicated to this purpose, which is more or less 25 billion.

Now I will give the floor to Matej Olek to comment on energy transformation. First of all, National Energy and Climate Plan.

We have two scenarios. Very important elements are transmission overhead power lines.

There will be contract published in the following years, in the following months.

A very important element of the energy transformation is the first nuclear power plant. We are still waiting the signature of the contractor with the general contractor.

We are, of course, in touch with the consortium, which will execute the contract, of course, hoping for the participation in this project. We have signed a contract for designing the road. to the new power plant. It's not that impressive, but we really want to be active in that field and take part in many projects.

Thank you. And now the road start.

Ladies and gentlemen, you have seen on the new contract diagram that the construction in Pudlinak is very good.

It's of 8.8 billion

Please see the first diagram. One, two, three. In 2023, the whole amount, the whole value of the contract was Three, another 16 after opening, seven in total, but the total value of these orders exceeds 5.5 billion. We have 23 tenders announced that sum up to 5.5 billion losses of GST.

We knew that because of the change of the EU budget, we will have less contract announced.

But nevertheless, we still haven't got to the level of last year. We still have 98 billion from the EU budget to when? 58 billion. For 2030-2033, there are some other investment programs. It's important for us that those tenders should be announced at the equal rate between 2018 because if there are less tenders, the appetite of the other players on the markets are growing and there is more aggressiveness in the tenders. Our CEO has mentioned our STEM contract.

That's true.

We won five. tenders directly and another one was awarded to us by the KIO Commission.

This is a very good situation. Six sections executed at the same time will let us optimize What you can see on the slide is that there are 98 billion in the EU budget for Poland, but also there are 56 billion in Czech Republic and 14 billion in Slovakia. This explains why we have decided to enter those markets.

Their investment programs are comparable to So we are now concentrating on the pre-qualifications for D35, which is a PPP project. To fill our portfolio, we are waiting the signature of S19, two sections of S10.

Thank you very much, Czarek.

And now to the railway market.

As our CEO said, the railway market has gone back to the right track in terms of new contracts.

Our main client, PKPPL,

Okay. Announce 70 billion in tender. We have now 11 billion announced, which can translate into signing of the contract in the second half of the next year.

And the production from this contract will appear in 2026.

In medium and long term, our perspectives are very good as a company.

We are prepared to execute those contracts. We have the competence, we have the structure to execute the contract I think the worst times in terms of revenues are behind us. and there are going to be more and more revenues from the railway sector.

This year we are going to port 1.5 billion in sales to the general data. We also see the national railway program which are 100 million slots, very slotted and will give us more and more construct in the future. Solidarity Hub due to the change of the government we are at the stage of repurposing and redeveloping the program. but we are still very interested in the road segment and also the airport segment, still awaiting the agenda, the exact agenda of the whole project. Now we're executing one job, one... construction works for the railway line to the Solidarity Hub. It's a tunnel, railway tunnel in the starting chamber for the tunnel in India. We expect the terminal, the railway part and also the airport part is going to be Thirdly, when it comes to our rail operation abroad, as you know, we are active in two countries at the moment. We are working with Czech Republic, no, only with Germany, where we have RailBX company, which is working with the traction network. We already have the first orders there, the first successes. We hope that after completing our initial tasks, our first success. And we've managed to survive the first difficulties, as you know, the kidneys may be difficult. I think every year we will look to advance and be even better. And the other Project flagship project Grail Baltica is joint venture doing IFAS. It's advancing not as fast as we would like to, but we already have support for new orders and we expect the typical growth to start shortly. The client has already the financing I must say that this contract is quite complicated in terms of the documentation and the design. So the revenues will be We're thinking about entering the tech market, the tech railway market, There are some PPP projects when we want to take part. Also, these projects require different credentials than the Rail Baltica, so we may be a good competition for those projects.

That's all from me.

Thank you.

Now, renewables.

As you know, we founded Budimex Ferrovial Energia Company, which established it with Ferrovial. We have 31... And now this company is executing four projects. Our main goal is to reach 500 MW. And we are developing projects for 1143 megawatts. So, I think we may exceed our strategic goal. There are more and more projects on the market that are growing. Also, I would like to mention that Magnolia is already working. Two turbines of seven megawatts, which are very profitable projects and we are very happy to execute it.

There is more interest in DC fast chargers.

We are doing some changes. We changed 18 chargers.

Today, we're working on more than 500 locations for the connections. By 2026, we are planning to have 460 chargers in main cities in this country.

What is worth looking for?

that this business requires a lot of investment, a lot of capex.

So we are considering an agreement with some external investor.

It's not that we lack money, we are very prudent while investing our money. So we are looking for investors.

We have no slide on the housing market of the real estate. We have one project on its way and working on another in Poznań. When we sign next contract, we inform you, obviously.

I would like to mention that we're also developing strongly our data center and working on some locations

We hope that by the end of the year you may inform me on our first activity with FACT.

We want to invest here not only to be the contractor but also the investor. Ladies and gentlemen, please let's move to ESG.

Hello again. Our ESG strategy for till the year 2026 has in the environmental scope to obtain 100% of energy from renewables and we will reach this objective. Camellia Photovoltaic Farm produces energy for the needs of our company. Another important goal that we had set for hours in service cycles, one hundred, seventy hundred percent of soil and waste other than hazardous waste. Right now we have reached seventy three percent of the level of risk by clean, We meet in the Board of Directors and the Supervisory Board, where we also review these goals, we analyze possible risks and chances of achieving these goals.

Here we also take care of informing our internal representatives.

and quarterly we also command all the documents of ESG. Objectives we publish are in terms of building, we also train our employees in the taxonomy field and the ESG field. For instance, right now we are in the middle of the campaign autumn for ESG. To recollect data in a group of the size of the Budimex group is really very difficult.

That is why we've been creating a special tool for this data recopulation and we are training our employees in this field.

Let's go to CSR.

and we conduct a number of activities that inform our employees how to work in intergenerational, intergenerational, intercultural, intercultural groups. As we know, we are already working on several different foreign markets. We have more and more people Another aspects are concerned. We run different webinars, competitions, quizzes related to this topic. We also pay attention to the development of our young engineer staff. We want to develop their competencies as well on the foreign markets, our foreign markets and Ferrovial Group foreign markets. We hire 24 trainees. We have different

In addition, we employ a very large group of students year-on-year.

This year, it is about 400 people who joined us as part of the student and technical practice. We also support vocational trainings, vocational education, so we organize the meetings in vocational schools, also at the universities we invite students and the We also have signed agreements on cooperation with technical universities. We have signed contracts, collaboration contracts with different educational facilities. We participate in job fairs. The next goal is also to develop our internal competencies offering different types of training. and possibilities for our employees to participate in external conferences among others. We also train for site managers for site engineers for contract conditions specialists or for foremen. We have finished the third edition of the first edition of the program called NAIL. It is a program dedicated to women in the management positions. We are also in September, after the opening of the 4th edition of the Mentoring Programme, Mistrzowskie Synergie, which this year was joined by a record number of mentoring groups. 47 mentoring groups decided to share their knowledge, competences and skills within our organisation. Another important goal in the field of CSR is the support of OHS. awareness. Of course, these are trainings in the field of first aid. Among others, we organize campaigns such as Safety Week, performing safety visits on our sites. This year, we have proposed around 200 state divisions. We also have non-profit activities. But there's campaigns for flood victims in the south of Poland.

Many of our employees have participated.

in helping our victims and also eliminating vote effects. We have worked on three aspects this year. At least, we have conducted many compliance trainings More than 50 groups this year have been trained. And we also try to include this topic in very different from the programs such as Young Engineer Academy, Welcome to the Group and so on. Our newly hired employees are always made aware of the fact how important those topics are for us. This year, we have prepared a conflict of interest manual We have conducted trainings in that field as well as campaigns regarding corruption risk prevention, that kind of Topics were the subject of trainings developed in different localizations and the territory of OHL Poland and then OHS. We have conducted an external audit which allows us to maintain our security system certification.

related to information security. So, summing up the third quarter, we are finishing it with the order book at the level of 15.8 billion, record-breaking level. We are improving our profitability in all segments of our operations. That's really important.

What we are focusing on is the value of our order book and we are obviously working very hard to prepare our organisation for the future growth and development.

Our order group is 30% higher than in previous years and we expected to keep on growing.

The construction market problem needs more tenders. It would make the situation more stable and would discourage many companies from presenting very aggressive The market also needs dialogue and collaboration with contracting authorities.

We want to talk about future contracts.

and work together for the mutual benefit of the world. If you're mentioning last week when the 4th of October, a very important Tenders was given in the European Court of Justice. We indicate that it allows to establish additional requirements for companies from outside of EU if they want to participate in tenders.

I think it's really very important to have the summary and right now we are at your disposal and we are eager to answer any question you have. First of all, people will gather here in this room.

You're welcome to ask.

For you, as a key contractor in Poland, what is the main factor that is complicating your job?

Also, I'm sorry, but it's impossible to hear the question, the quality of the subject right now.

Let me answer your question.

now executing one of the railway contracts co-financed by the recovery plan.

Which is key here is the moment, the date of the settlement of the contract we expect it to be extended

which will make more feasible the spending of the funds.

There are very few recovery projects on the market. Everyone expects the extension of the term.

In three months we may have more to say about that.

About the tram, you asked about the functionality. You would already know what the media is announcing. We are going to move the traffic from one alternate traffic to another. The roads are going to stay alternated till the next year because we are now removing underground installation.

If you see the words when you go by our site, you would know that after removing the collision, we try to repave

also on the road. And the same goes for bike roads. Bike roads are going to be built successfully, gradually. And now we're focusing on the crossing to give access to tram stops and we will finish the rest when we finish the West Road, the West Street. All the traffic organization in Belvederska Street

It's due to the whole organization of the tram traffic in Warsaw, not only due to the works that Budimex is carrying on the Wilanów tram. I don't know if this answer is sufficient for you.

Nobel Securities.

I would like to ask about Rail Baltica.

It is said that Latvia has no funds to execute this project.

We have the first contract signed, but is it going to be possible to sign the rest?

From the beginning, it was known that this contract is very complicated, a long-term contract. And cleaning for Latvia, considering its volume, We meet regularly with all the people that have some power over this project and there is a discussion on the cape of the project. some part of the work that would connect it to the Riga airport.

As I said, we have 700 million guaranteed for the financing.

The total, which is 24 billion euros, they are here. and gradually there are going to be more and more funds from the EU. Also Latvia is trying to get as much funds as possible. I think that during the next conferences we will update you on this topic. In our opinion, we have work for next two years.

Even if there are going to be parts, not a single large segment done, I think that gradually the determination of the local government is going to be bigger.

I may add that much against the theme I'm working on the tender.

We're preparing the tender for Estonia and Lithuania.

So we are looking at this project as a whole about the state project. And we have a huge

and the knowledge that will let us extend this contract to another market in Estonia.

We have two big tenders with a different formula and see for us

These are alliance contracts where you may win only one of two sections, which is the whole section of Rail Baltic and Estonia. In Lithuania, we are certified.

place tenders as a general contractor now, not as a subcontractor. Also, Jacek's client for steel structures has placed a winning tender

So we may be involved in this project after all.

Considering Latvian part, it's going to be executed until autumn of 2026? The first stage.

You said that you're going to do... No, this is an eight-year contract from the beginning, 68 construction permits. And every year, a client is going to activate 300 million euros.

By now, we have already 700 million euros confirmed, which gives us two years of production. But this is... This is a general framework contract, so there are going to be another fund. This is a big project. We know what Solidarity has in... how Solidarity Hub is doing in Poland, what emotions are here. This is a strategic European project and also a key project for defense

So Russia is obviously very interested in it and there is a lot of press which may be inspired by those who are not happy about this project. So the discussions may continue and during the next few there may be no jobs, no work. No, the Latvian government is determined to execute the contract this time. A contract for the execution, but what they need is financing.

The Latvian railway, the same as the Polish railway, is financed mainly by EU funds. So there are going to be discussions of this. But the client is very determined to execute the next project. but obviously there are some formalities required which take time. I don't see the reason for them to stop the project.

As the project has already started, it doesn't make sense to cut it because we are going to have this railway line in the middle of nowhere.

Maybe some other topic? I would like to ask about most of the contracts about the contract for the nuclear power plant.

This is not a technological need.

Also, it's not the part when we already knew that Mostostan is going to participate in some other way. There is a contract for construction. It is not wrong.

Mostostal is one of the seven companies that qualified for this project.

For some time now,

are trying to get this mock-up structure into testing structure.

And the first order we got is for the part of the training, the training for the most hostile personnel and implementing all the procedures in the company that are required for the execution. So there's the first for the training, next stage to get eventually the job.

Do we have any more questions from the audience? If not, I don't see any.

Yes, please. I would like to ask about PPLK activity. They had the idea to announce 17 billion of standards by the end of the year.

Is it viable? Is it feasible? Or it's just the PR?

We don't have any detailed agenda, but considering the declarations from June, we've already had 11 billion agendas, so I think it is feasible to announce 17 billion by the end of the year. But considering our This experience we have with all the formalities we need to expect more and more months until the contract is signed, six months. And after that, the sale would appear in 2026, as late as 2026.

It's not design and build, because that formula fends the time even more.

But anyway, the works physically are going to be carried out in 2020.

There are many companies with low portfolios, those who carry out the PKP contracts.

So there would be some aggressiveness in the tenders, right? Nothing new, since we've been present in this market. There are between 15 and 20 tenders placed in small contracts.

We have also some competitions from the state of the company too. What we would expect from PKP is that their companies are going to stand there on the maintenance of the railway. Well, anyway, these contracts are complicated, big and challenging, and we have huge experience in that. If the competition is fair, we have No fear about that.

Two years ago, the situation was similar. We think we can manage to get about 20% of the market quota.

There are very big contracts like Gdynia-Helonia for 3 billion. There are very few companies that are able to execute this contract.

There are not going to be 15 tenders in that.

On the last conference, you said that the occupation was of 2%.

Has anything changed? We've reached up to 3% which is because we are assembling more and more fast chargers.

And we're considering to change the AC chargers everywhere we can. Is it sensible to carry on that business?

There are no benefits, the capex are high, as you've already said.

What is the goal of this business? It's relatively connected to our basic activities. activity, construction of roads, reconstruction of fields.

We have very high competence in terms of reconstruction of the installation and now we're connecting our competence with the possibility to act in the renewable energy and traffic.

What you say is true, we cannot expect

Thank you very much. Are there any more questions?

There is one more question.

Hello, Krzysztof Pado.

I would like to ask some comments on general construction. I would like to know how you evaluate the situation of this part of the market. I guess it's really fine. The order book is of 3.6 billion. The production reaches

2 billion during a year. Right now, we have more than 14-16 months of production to execute. We have four more projects in industrial and commercial sector. And as far as the residential part is concerned, we do it in the framework of JV.

When Budimex announced that it was open to participate in projects ready to be or in JVs, we have received more than 90 offers and we've been analysing them since then.

We also see a great potential in the framework of military projects.

A great part of our GDP will be invested for the kind of projects where the competition is lower. Thank you very much. If there are no questions from the room, I would like to give the floor to our online viewers. What do you think about the sentence that you mentioned regarding non-EU companies?

What kind of impact it can have on the market?

Well, we have to follow the situation. I guess that all the companies

was very interested in that kind of sentence.

So the final decision was that it's the competence of member state countries to establish additional requirements for non-EU

that companies from EU countries used to declare resources.

They also presented credentials from different countries from outside the European Union and it was difficult to prove them.

real and truthful. So right now it's possible to set additional conditions which allows to participate in the tenders on equal terms.

We will see what will be the attitude of our contracting authorities to this new ruling and we will keep you informed.

Right now I would like to ask you about the plans for

of the general road and highway directorate.

Are they realistic? Well, Looking at the first nine months, there were tenders announced of 3.7 billion. And the declaration is that till the end of the year, the administration will announce Fingers crossed. The declaration is that till 2030, 8,000 kilometres of highways will be built. I believe it's possible. Looking at the companies that operate on our market,

But a really important contribution of the public administration is also needed.

There are really some obstacles that need to be overcome.

We are in the middle of dialogue with public administrations and we think that public administration needs more staff

that works on that kind of projects, railway, energy, general construction projects, taking into account limited

resources, limited human resources in the framework of public administration, its effectiveness is not as we would like it to be. And we have to take into account that there will be more and more strategic projects that will need special attention. So there is still a lot to be done in that respect.

Someone else would like to ask a question.

What's the impact of the floods in Budimex operations?

We've been trying to support flood victims.

We are conducting some projects in the south of Poland. We destined some of our equipment to help to reinforce anti-flood structures. Three contracts suffered some damages. Some of the contracts executed for Polish Water Administration, Kutryn Reservoir, contract In the region of the Nesakowska River, our company is the contractor responsible for the execution of the racibus reservoir.

I think it's a success because this reservoir received 150 million because, of course, it wasn't possible to get enough water. This reservoir managed to protect the people living in its surroundings.

The damages are evaluated at the level of 26 billions. and of course they need to be repaired and it's right now difficult to predict how we will participate in the reparation of those damages or in the construction of more reservoirs for the future.

Construction and assembly production.

We can see that it's going down, and what we expect for the future, for this year and the next one, at the end of September, reached the level 7.4. for lower than the previous year. I wouldn't expect to reach zero level. As I said, it's minus 7.4. I can't expect recovery next year. And seeing that tenders are announced late, I think that construction and assembly production would be around zero.

And I think that perhaps next year it will go down a little bit and right after.

Question.

Regarding FBS service, what do you think about the evolution of the order book and revenues? At the end of this year, we risked two contracts directly awarded by the contracted authority.

Our assumptions were a little bit lower. As far as the order book is concerned,

I showed 947 million during the last conference. Right now, I showed a lower result. I'm sorry, but the quality of sound makes it impossible to interpret. Well, I always look with some kind of envy that Budimex has still contracts to perform till the year 2028, but we in general managed to renew our order book during the year.

For the next year, we have 19 projects correlated to waste.

I have to stress that the last quarter

will require a lot of work in order to achieve a better order book. As it also translates into EBIT and revenues.

Thank you very much. Thank you very much.

We have next email about the EU court judgment.

The judgment will not make it possible for the external companies to place their tenders, but it will make it a little bit more complicated. It will require them to add more data, more precise data to the tenders. And if any client will want to eliminate a company from outside the EU, it will not be possible. But there are going to be some more requirements in the tender conditions.

We have another question online.

Have we noticed some more difficult tenders from the subcontractors considering there are less contracts on the market? If the quantity of the new tenders is falling, The stance of the subcontractors is not more complicated for us, but nevertheless, we still try to rely on long-term relationship. There are always hard negotiations, everyone wants to earn their money, but nothing Exceptional, the situation is not usually. If you see the margins in the construction market, you may notice that the subcontractors are getting more aggressive in their offers, in their tenders.

Thank you very much. Another question online. What is the potential for 2021? What part of contracts and orders will be implemented in the next five or six quarters?

Which part of the contract in the portfolio will enter to the execution stage in the next six quarters?

Well, you've seen the flight.

We have some part of the contract that will enter into execution in... six quarters more or less, but we also get more and more contracts gradually.

We have this information on the formalities that are getting longer and longer.

And we have this question about the getting late on the start of the work. for 2017 and are there going to be penalties for that?

Well, in case of the delays,

Some of them are caused by the formalities, as I said, from the client's part. And in the contract, there are some deadlines placed. So if the deadline isn't met because of the delays from the client's part, we are due a fine.

compensation in that case.

Are there any Polish companies that are going to execute some work in this nuclear plant?

We hope. For now,

The company, the state-owned company that is expected to build the nuclear plant has no EPC contract for now. And we hope that the execution of the work is going to be provided by

some Polish companies in the UK.

The local providers get as much as 67% of the whole scope and we hope it's going to be the same in Poland. We as a sector hope.

that this project financed by the Polish government by the taxpayers, by us.

So we hope that this project will let us create a new sector of the industry and will let us be part of the works.

Thank you very much. The next question is about the supply chain for this project. The next question is about the foreign market.

What is the status of the tender's place and all the formalities and procedures?

We've placed 3.5 billion zlotys of tenders mainly in Czechia and Slovakia. B11 in Czech Republic was cancelled.

There was a contract signed with a local company, Metrostav Roads.

In other markets, I think I will give the floor to Maciek, who will tell us something about this in other markets, because Polish market is very open for the

for the foreign companies. Czech Republic is a very good example. Yes, we've been telling this for months now. There's no other company as open to the foreign companies as Poland.

We've executed more than 10 billion zlotys

of contracts complicated in Poland in the railway sector, like Czechowice Dziedzice or Warszawa Zachodnia, which is approaching closure. We still are not able to fulfil all the requirements of the Czech Railways to place tender. We need to get exams We need some authorization. This is a very complicated process. It's impossible in Czechia that the company that hasn't even executed any contract may place a tender. On the contrary, in Poland, this is not very well controlled and verified.

Deutsche Bahn is highly complicated. You need to have your own machinery and your own workers to place tenders. And by now,

impossible for us to place tender for high value contracts. We can only place tender up to some value of the contract before we pass to another level.

Baltic countries is the same.

Very complicated, very challenging.

We have also Finland, and this is a completely different reality.

The requirements are much higher than here. think we need to consider that here in Poland because when there are no new tenders we as a company need to maintain to fund people and machinery and after two years without any new tender there is a completely new company that appears out of nowhere no machinery, no stuff and they can just place the tender and I think companies that pay their taxes, that have their staff here on a stable job contract, need to have some preferences in this tender.

Any questions? I would like to ask

Your commentary on the migration policy, how do you evaluate what the government is doing in terms of migration policy? We have 1,300,000 employees in the sector, 400,000 are workers from abroad.

360,000 are Ukrainians. We don't have that much workers from abroad in our company, but among our subcontractors, one third of them is from abroad and they work for us.

don't know the details of the new policy. What will change the situation is when the war in Ukraine ends and some part of them is going to go back and the reconstruction of Ukraine is going to start, and some of them are going to go there and work. So probably it's going to be more profitable for them. And when the problem That's when the problem will start.

For now, it's too early to comment on that. We don't see problems for now. What we lack

which for now is the specialized engineering workforce in energy and nuclear energy and power lines. Also for some very specialized projects like data centers.

We're working on that situation.

We collaborate with 40 universities, also from Ukraine, to try to convince Ukrainian

so that they come to work for us. We're working on our collaboration with some specialized faculties in universities.

We have talked with universities about starting new faculties and helping their staff to create more competence in the topics that are not very well analyzed in Poland.

I would like to ask about Solidarity Hub.

You said that WAN-C is probably not going to participate in this project. Are there any details on that?

You need money to carry on a business.

Considering Van Sea, there are probably some conversations between the CPC and Van Sea that what we see are information that appears.

In relation to the change of the investment that is going to take place because of the change of the scope, probably the government has decided that they are able to finance that on their own. The CPK company is active in

European Union tenders and they're looking actively for EU funds.

So maybe they are considering financing it on their own.

Most part of the railway component

is the part of the EU project. What we know is that

the public part of the information, so there are some proceedings on that.

That's the only thing we may say. Maybe now the last question.

What is the general forecast of the results for the fourth quarter? This is going to be a good year for Budimex, as we've already said. You may see by the results that we're showing, we don't expect any exceptional events and we're going to continue on our path.

We expect less revenues. in comparison to the last year, but we need to say that there were some exceptional events in the last year, like the indexation that was signed by the end of the year. We finished some important projects.

Because of that, we had our revenue increase last year.

By the end of this year, we expect less revenue.

Then in 2023, but the profitability is going to be maintained at the expected level and what is a very good indicator is the record-breaking portfolio. And we need to prepare ourselves for the execution.

Thank you for taking more questions.

questions we will finish by now. Thank you very much. I would like to invite all of you present for our coffee break. Thank you.