CURRENT
ACTIVITIES
AND DEVELOPMENT
Sales structure
Sales of the construction segment
In 2016, the construction market (measured by the value of sales of construction and assembly production) decreased by 14.4 per cent in comparison with 2015. The decline was recorded in the infrastructural construction segment (-19.0 per cent) and general construction segment (-9.1 per cent).
In the discussed period, the value of sales in the construction segment of the Budimex Group was 9.2 per cent higher when compared to 2015. Sales in the infrastructural construction segment grew by 26 per cent, while sales in the general construction segment dropped by 8 per cent against 2015.
The share of the infrastructural construction segment in total revenue from sales of the Group’s construction and assembly services increased from 50.6 per cent in 2015 to 58.4 per cent in 2016. The sound trends maintained on the residential market were reflected in the share of residential construction in the construction segment sales structure which rose from 10.1 per cent in 2015 to 12.6 per cent in 2016.
The sales structure by individual segments of the construction market is presented in the table below:
| Type of construction | Sales value | |||
|---|---|---|---|---|
| 2016 | 2015 | |||
| PLN million | % | PLN million | % | |
| Civil engineering (infrastructure) | 3 146 | 58,4% | 2 497 | 50,6% |
| General construction, of which: | 2 245 | 41,6% | 2 440 | 49,4% |
| - non-residential buildings | 1 564 | 29,0% | 1 939 | 39,3% |
| - residential buildings | 681 | 12,6% | 501 | 10,1% |
| Total sales of construction and assembly services | 5 391 | 100% | 4 937 | 100% |
Development activities
In 2016, the revenues from sales in the development business amounted to PLN 349 586 thousand, thus recording a 19.5 per cent increase compared to the previous year. Revenues from sales of the development business are recognised upon the 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 flats depend on the dates of completion of the construction projects and the delivery of finished flats to the customers. It is not a seasonal phenomenon, nor can it be compared annually.
As a result of the factors specified in pt. 1.1 (general characteristics of the market), in 2016 a significant revival and a rapid growth in demand for new flats could be observed on the entire development market. In 2016, 1 615 flats were sold in the pre-selling system, compared to 1 918 flats pre-sold in the previous year. The decrease in the number of pre-sold flats by 16 per cent results from the expiry of the attractive offer of the “Nowe Czyżyny” project in Kraków.
In order to live up to customers’ expectations and ensure stability of the revenues from sales in the following years, in 2016 the development of more than a thousand new flats commenced in nine development projects located in Warsaw, Kraków, Poznań and Tri-City. As at 31 December 2016, more than four thousand flats were under construction. In 2016, the Group continued the process of land stock diversification by purchasing new plots in Warsaw, Poznań, Kraków and Gdańsk. The construction of over 6.4 thousand new flats is possible on the presently owned lands.
Major construction contracts concluded by the Budimex Group companies in 2016:
| Contract date | Contract value allocated to Budimex SA | Customer | Type of construction |
|---|---|---|---|
| 2016-03-29 | 742 291 | General Directorate for National Roads and Motorways branch in Olsztyn |
Construction of the S51 Olsztyn–Olsztynek at the section of Olsztyn-Wschód to Olsztyn-Południe (formerly: Construction of the Olsztyn ring road as part of national road no. 16 — Task No. 2: from approx. km 10+000 to the end of the prepared area on approx. km 24+701, behind the Olsztyn-Wschód junction) |
| 2016-09-29 | 375 841 | JSC “Vilniaus kogeneracine jegaine” | Construction of a new combined heat and power plant in Vilnius – Lot1 |
| 2016-04-13 | 292 102 | General Directorate for National Roads and Motorways branch in Poznań |
Design and construction of the S5 Poznań-Wrocław express road at the Wronczyn-Kościan Południe section |
| 2016-06-06 | 285 673 | Medical University of Gdańsk | Construction of the Non-Invasive Medicine Centre in Gdańsk — stage 1 |
| 2016-11-22 | 275 191 | Kujawsko-Pomorskie Inwestycje Medyczne Sp. z o.o. |
Conversion and development of L. Rydygier Provincial Polyclinic Hospital in Toruń |
| 2016-01-27 | 235 750 | General Directorate for National Roads and Motorways branch in Lublin |
Design and construction of the S17 express road Warsaw (Zakręt junction) – Garwolin at the section of “Lubelska” junction (without the junction) – Garwolin (start of the ring road), divided into three parts: Part No. 3: at the section from Kołbiel (end of the ring road) to Garwolin (start of the ring road), from approx. km 27+900 to approx. km 40+915, with a length of approx. 13 015 km. |
| 2016-05-05 | 189 145 | General Directorate for National Roads and Motorways branch in Poznań |
Construction of the S5 Poznań–Wrocław express road at the Radomicko–Kaczkowo section, stage II of the Leszno Płd. (with junction) – Kaczkowo section |
| 2016-02-05 | 153 224 | General Directorate for National Roads and Motorways branch in Zielona Góra |
Construction of the second roadway of express road S3 at Sulechów–Nowa Sól section – third section from km 299+350 to km 316+640. |
| 2016-11-24 | 145 180 | City Council of Białystok |
Construction of the Trasa Niepodległości in Białystok Stage III: Construction of the Aleja I. J. Paderewskiego in Białystok within the lane of provincial road no. 669, section from Aleja Niepodległości to provincial road no. 678, including construction and reconstruction of technical infrastructure. |
| 2016-11-24 | 140 764 | City Council of Białystok |
Construction of the Trasa Niepodległości in Białystok Stage II: Construction of the Aleja Niepodległości in Białystok within the lane of provincial road no. 669, section from Narodowych Sił Zbrojnych Street to Aleja I. J. Paderewskiego, including construction and reconstruction of technical infrastructure. |
| 2016-06-10 | 118 907 | Lidl Sp. z o.o Sp. k. | Construction of Distribution Centre in Będzin |
| 2016-06-14 | 118 000 | Spóldzielnia Mleczarska “Mlekpol” | Construction of a group of production facilities for assembly of installations for milk and whey drying and storage located on a plot at ul. Kormoranów 29/5 in Mrągowo |
| 2016-09-29 | 83 787 | City Council of Olsztyn | Construction of ul. Towarowa in Olsztyn, from the junction of ul. Towarowa and ul. Leonharda to the planned Olsztyn ring road |
| 2016-06-01 | 81 800 | BZ WBK Leasing SA | Construction of office and commercial building in Wrocław at ul. Robotnicza 11 |
| 2016-06-07 | 76 999 | IKEA Centres Polska SA in Janki |
Construction of a Convenience Center type facility with offices and an underground garage within the Retail Park Franowo in Poznań |
| 2016-03-18 | 69 704 | Comarch SA | Construction of the SSE7 office building in Kraków, with an underground garage, along with roads, footpaths and parking places, landscaping features, networks and systems |
| 2016-07-14 | 58 985 | LC Corp Invest XVII sp. z o.o. Projekt 21 Sp. k. | Construction of “Retro Office House” commercial and service facilities including internal and external infrastructure in Wrocław at ul. Piłsudskiego, Komandorska, Bogusławskiego |
Geographical structure of the Budimex Group sales in 2016
The main markets on which the Budimex Group operates are:
- Poland
- Germany
The geographical structure of revenues from sales in 2016 is as follows:
Construction activities of the Budimex Group on the German market
In 2016, mainly workshop services were rendered on the German market. Sales revenues in Germany amounted to PLN 184 852 thousand (of which PLN 163 990 was earned by Budimex SA) and were PLN 9 998 thousand, i.e. 5.7 per cent higher compared to 2015. An increase was recorded in the case of prefabrication works (11.6 per cent), while a decline was recorded for metal-related works (3.8 per cent). In 2016, the share of metal-related works in the sales structure decreased by 2.8 per cent and amounted to 28.9 per cent. The operating profit on the German market amounted to PLN 24 505 thousand in 2016, while in 2015 it was PLN 21 220 thousand. Profitability achieved on the prefabrication works was 0.1 per cent higher than in 2015 and profitability of the metal-related works was 0.2 per cent lower than in the previous year. Gross profit generated in 2016 was 17.3 per cent higher than the previous year, which resulted from higher sales, a higher gross margin and the lower impact of operating and financial expenses on the result. The customer structure shows dispersion and only in the metal sector did the share of a single customer exceed the level of 10 per cent of the total metal-related turnover by 2.1 percentage points.