Current Activities and Development
Structure of sales revenue of the Budimex Group
Sales of the construction segment
In 2014, the construction market (measured by the value of sales of the construction and assembly production) increased by 2.6% in comparison to 2013. The sector of facilities construction recognised negative dynamic at the level of -1.5%, while the infrastructure construction sector increased by 6.4%.
In the discussed period, the value of sales in the construction segment of the Budimex Group was by 13.9% higher when compared to 2013. Sales in the infrastructure and facilities construction sector increased by 9.1% and 20.9% respectively as compared to 2013, in both cases exceeding the recorded market growth rate.
The share of the infrastructure segment in the total construction and assembly services revenues of the Group dropped from 59.3% in 2013 to 56.8% in 2014. Good situation in the housing market was reflected by the value of contracts won in this sector and, as a consequence, the share of housing construction segment in the structure of sales of the construction segment increased from 4.8% in 2013 to 6.1% in 2014.
The sales structure by individual sectors of the construction market is presented in the table below:
| Type of construction | Sales value | |||
|---|---|---|---|---|
| 2014 | 2013 | |||
| PLN million | % | % | ||
| Civil engineering (infrastructure) | 2 680 | 56,8% | 2 456 | 59,3% |
| Buildings, of which: | 2 037 | 43,2% | 1 685 | 40,7% |
| - non-residential buildings | 1 748 | 37,1% | 1 485 | 35,9% |
| - residential buildings | 289 | 6,1% | 200 | 4,8% |
| Total sales of construction and assembly services | 4 717 | 100% | 4 141 | 100% |
Development activities
In 2014, sales of the development business amounted to PLN 250,565 thousand, recording 11.3% increase compared to the previous year. Sales revenues on development activities are recognised upon transfer of the ownership title to a flat/premises to the buyer after the technical acceptance report has been signed for the entire building. Notary sales of the flats depends on the dates of completion of the construction projects and delivery of finished flats to the customers. It is not a seasonal phenomenon and it cannot be compared annually.
As a result of the factors specified in section 1.1 (general characteristics of the market), in 2014 a significant revival and dynamic growth in demand for new flats could be observed on the entire development market. It was directly reflected in the record level of pre-booking sale of the flats. In 2014, 1,685 flats were sold in the pre-booking system, compared to 742 flats sold in the prior year.
To meet the customers’ requirements and ensure the stability of sales revenue in the following years, in 2014 the construction of over 2,000 new flats was commenced within twelve new development projects located in Warsaw, Kraków and Poznań. As of 31 December 2014, 2,751 flats were under construction. In 2014, the Group commenced the portfolio diversification process by implementing the “Nowe Czyżyny” project, including 1,374 flats (therefore using a material part of the land bank located in Kraków) and purchasing new plots. Construction of over 5.4 thousand new flats is possible on the currently owned land bank.
Major construction contracts concluded by the Budimex Group companies in 2014:
| Contract date | Contract value allocated to the Budimex Group | Customer | Customer |
|---|---|---|---|
| 2014-07-10 | 725,000 | PGE Górnictwo i Energetyka Konwencjonalna SA | Design and construction of a power unit at Turów power plant in the “turnkey” formula. |
| 2014-12-03 | 387,281 | General Directorate for National Roads and Motorways, branch in Poznań | Construction of S5 expressway Żnin–Gniezno, section: “Mielno” junction – Gniezno |
| 2014-10-29 | 344,618 | General Directorate for National Roads and Motorways, branch in Lublin | Construction of the S19 expressway Lubartów–Kraśnik at the section from Dąbrowica junction (without the junction) to Konopnica junction (with the junction) and connection with existing national road No 19 |
| 2014-09-16 | 292,478 | General Directorate for National Roads and Motorways, branch in Rzeszów | Continuation of the construction of the A4 motorway on the section from Rzeszów (Eastern Junction) to Jarosław (Wierzbna Junction) |
| 2014-10-16 | 283,409 | General Directorate for National Roads and Motorways, branch in Kielce | Construction of the S7 expressway at the section Jędrzejów – border of Świętokrzyskie and Małopolskie Provinces |
| 2014-09-30 | 263,229 | General Directorate for National Roads and Motorways, branch in Łódź | Continuation of the project and construction of the A1 motorway on the section from Stryków to Tuszyn junction (Task III) |
| 2014-11-18 | 238,533 | General Directorate for National Roads and Motorways, branch in Poznań | Construction of Jarocin ring road in the area of the S11 road |
| 2014-11-05 | 237,636 | General Directorate for National Roads and Motorways, branch in Olsztyn | Construction of S7 expressway section Miłomłyn–Olsztynek, subsection Miłomłyn–Ostróda North (subsection “A”) |
| 2014-07-31 | 234,250 | General Directorate for National Roads and Motorways, branch in Wrocław | Design and construction of S5 expressway Poznań – Wrocław at the section Korzeńsko (excluding the junction) – Widawa Wrocław junction |
| 2014-02-21 | 198,799 | General Directorate for National Roads and Motorways, branch in Poznań | Completion of construction of S5 expressway Poznań – Wrocław |
| 2014-11-25 | 189,880 | Landprop Services I Sp. z o.o. | Construction of the 3rd stage of Business Garden Wrocław, i.e. 3 office buildings (4, 5, 7) and a restaurant pavilion R1 with a shared underground parking lot. |
| 2014-08-14 | 153,700 | Ferrero Polska Sp. z o.o. | Construction of a warehouse with its associated infrastructure in Belsk Duży |
| 2014-05-28 | 120,741 | Polskie Koleje Państwowe SA | Construction of an integrated transport centre in Bydgoszcz – Stage 1 Bydgoszcz Główna Railway Station |
| 2014-12-31 | 118,416 | General Directorate for National Roads and Motorways, branch in Łódź | Construction of a ring road for the city of Bełchatów within National Road No 8 |
| 2014-12-18 | 102,000 | Beyond.pl Sp. z o.o. | Construction and equipping of the BEYOND.pl IT Research Centre |
| 2014-07-08 | 89,941 | Warmia i Mazury Sp. z o.o. | Construction of the take-off area with guardhouse at the “Mazury” Airport in Szymany |
| 2014-03-12 | 89,723 | Marshal Office of Lubelskie Voivodeship | Completion of construction of the headquarters of the Marshal Office and Conference Centre in Lublin |
| 2014-04-25 | 88,944 | Urban Infrastructure Management in Słupsk | Performance of construction works within the project “New route for national road No 21 in Słupsk” |
| 2014-03-03 | 87,696 | Szczecin Airport Goleniów Sp. z o.o. | Expansion and modernisation of airfield and airport infrastructure at Szczecin–Goleniów Airport |
| 2014-11-17 | 83,649 | General Directorate for National Roads and Motorways, branch in Zielona Góra | Construction of the second carriageway of the Międzyrzecze ring road in the area of the S3 expressway |
| 2014-12-30 | 74,917 | Maritime Office in Słupsk | Koszalin Coastland protection works — tasks VI and VII |
| 2014-02-07 | 61,127 | Olsztyn Commune | Designing and building a tram depot at ul. Kołobrzeska 40 in Olsztyn |
| 2014-04-18 | 58,231 | Jeronimo Martins Polska SA | Distribution centre of JMP SA |
| 2014-12-19 | 51,187 | Bouygues Immobilier Polska Sp. z o.o. | Construction of residential and commercial complex “LA CLARTE” (building B – stage 1 and building A – stage 2) |
| 2014-04-22 | 49,660 | General Directorate for National Roads and Motorways, branch in Łódź | Work completion for the A1 motorway in the section from Sójki junction to Piątek junction |
| 2014-01-22 | 44,114 | Voivodeship Roads Board in Lublin | Development of voivodeship road No 747: Iłża–Konopnica, for the section between Konopnica and Kamień |
| 2014-11-25 | 39,710 | Regional Infrastructure Administration in Szczecin | Building works pertaining to the preparation of the infrastructure for the quartering of soldiers in the Konotop camp |
Geographical structure of the Budimex Group sales in 2014
The main markets on which the Budimex Group operates are:
- Poland
- Germany
The geographical structure of revenue from sales in 2014 is as follows:
Construction activities on the German market
In 2014, only workshop services were rendered on the German market. Sales revenue in Germany amounted to PLN 157,963 thousand and were by PLN 1,672 thousand, i.e. 1.1% higher compared to 2013. The increase occurred on prefabrication works (4.9%) with a simultaneous decrease on metal-related works (5.7%). The share of metal-related works in the sales structure decreased by 2.4% in 2013 and amounted to 34.0%. Gross profit generated in 2014 was by 6.3% lower than in the previous year which resulted mainly from the bankruptcy of a customer and a write-down on receivables from prefabrication works. Profitability achieved from other customers acquiring prefabrication services was lower than generated in 2013 by 1.6%, and profitability on metal-related works was higher by 1.1% as compared with the previous year. Operating profit on the German market amounted to PLN 18,319 thousand in 2014, while in 2013 it amounted to PLN 20,104 thousand. Customer structure in both segments shows dispersion and the share of each customer in total sales revenue does not exceed 10%.
