Ballast Nedam Annual Results 2010: Higher Profit in Difficult Market

Mar 11, 2011, 01:29 ET from Ballast Nedam NV

    NIEUWEGEIN, The Netherlands, March 11, 2011 /PRNewswire-FirstCall/ --

    - Operating profit rises to EUR 18 million (2009: EUR 17 million)
    - Profit for the period up: EUR 7 million: EUR 6 million)
    - Revenue stable at EUR 1.4 billion (2009: 1.4 billion)
    - Strong growth in order book in 4th quarter: EUR 1.8 billion (3rd
      quarter: EUR 1.6 billion)
    - Higher proposed dividend for 2010: EUR 0.36 per share (for 2009: EUR
      0.31 per share)
    - Forecast for 2011: operating profit of approximately EUR 15 million -
      EUR 20 million
    - 10% CO2 reduction achieved
    - Organization structure changed


    Key figures

    x EUR 1 million                    2010   2009

    Revenue                           1 359  1 384

    EBIT                                 18     17

    Margin                             1.4%   1.2%

    Profit before income tax             11      8

    Profit for the period                 7      6

    Basic earnings per share (EUR)     0.73   0.62

    order book                        1 841  1 818

    Shareholders' equity                161    162

    Capital ratio                       15%    16%

    Net financing position           ( 231)   ( 92)

CEO Theo Bruijninckx about 2010: 'We have produced a creditable profit in 2010 in a market that has already attracted enough comment. The operating profit for 2010 is higher than the forecast we issued in March last year. Ballast Nedam consolidated its position on the growing integrated contracts market in 2010. The company is increasingly integrating its know-how and capacity. The new organization structure will move us even closer to the business in 2011. For 2011 we expect largely unchanged results.

Results above forecast

Ballast Nedam achieved a higher profit in a difficult market in 2010. The market volume declined by 10% last year, intensifying competition for new projects while increasing the pressure on the margins. Against this background, Ballast Nedam performed well, with a revenue of EUR 1.4 billion and a higher operating profit of EUR 18 million. This profit exceeded the forecast of between EUR 10 million and EUR 15 million that Ballast Nedam issued in March last year. The margin increased from 1.2% to 1.4%. 94% of the revenue was earned in the Netherlands (2009: 92%). Ballast Nedam consolidated its position on the growing integrated projects market in 2010 through the award of the largest contract ever given by the Directorate-General for Public Works and Water Management: the section of the A15 highway from Maasvlakte to Vaanplein.

    Financial results

    Revenue

    x EUR 1 million              2010    2009

    Infrastructure                710     707
    Building and Development      670     705
                                1 380   1 412
    Other / elimination          ( 21)   ( 28)

    Total                       1 359   1 384


    Revenue was slightly lower at EUR 1 359 million.
    Infrastructure

The revenue of the Infrastructure division remained almost unchanged at EUR 710 million. The underlying revenue from the major projects was driven up by the enormous production rate on the Nuon Magnum multifuel power station construction project in Groningen. The revenue of the raw material companies rose contrary to the market because of the delivery of stone to Maasvlakte from our concession in Norway. The revenue of the prefabricated concrete companies went down.

The Infrastructure division improved its operating profit. This is a fine performance in view of the unfavourable market conditions.

The additional central government expenditure has increased the supply of major projects, and the volume in the infrastructure market therefore remained reasonable. Volumes in the prefabricated concrete market and the raw materials market declined. The intense price pressure in the public procurement market for traditional contracts was undiminished. The regional companies continued to be largely dependent on this type of contract for smaller projects from local authorities, and they therefore had a difficult year. We are also observing increased competition for the new major projects because of the price pressure. The ongoing major projects booked an excellent profit, thanks to the contributions from the niche segments of industrial construction, offshore wind turbines and international projects. The specialized companies and the raw material companies achieved good results. The prefabricated concrete companies incurred losses because of the sharp fall in volume and the associated poor prices.

The Infrastructure division improved its profit through a well implemented strategy. More projects were implemented in new contract forms and where the focus is on sustainability. Operational performance improved through better utilization of the knowledge and capacity available within Ballast Nedam. Some good projects were acquired in the niche segments, such as offshore wind turbines.

A 6-kilometre section of the N329 was reconstructed to form the Road of the Future for the municipality of Oss and the provincial government of Noord-Brabant. This design and construct road building project was won on quality by a regional company in consortium. The traffic handling, innovation, integration into the surroundings and sustainability were what made the difference. A feature was the reduction and compensation of CO2 emission.

Ballast Nedam was part of the consortium that acquired the major PPP project for the A15 Vaanplein - Maasvlakte section. This project involves widening the A15 highway between Maasvlakte and Vaanplein and the construction of a new Botlek bridge. The A-Lanes A15 consortium is responsible for the design, construction, financing and maintenance of the project, which has a value of approximately EUR 1.5 billion. Ballast Nedam's stake in this consortium is 24%, and the company is responsible for one third of the design, construction, and the 20-year management and maintenance period.

The Infrastructure division performed well in the energy field, including in the European growth markets for offshore wind turbines and for alternative fuels.

The heavy lift vessel Svanen completed the Belwind Offshore Wind Farm project off the Belgian coast in February 2010. The heavy lift vessel was then used in the installation of 90 foundations for the Sheringham Shoal Offshore Wind Farm in England. A leased heavy lift vessel was used in 2010 for the successful installation of 21 foundations and 1 substation for the Baltic I Offshore Wind Farm project in Germany. In the past year two new contracts were acquired that will ensure good utilization of the heavy lift vessel Svanen into the third quarter of 2012. The installation of 51 foundations for the English Walney II Offshore Wind Farm will start in the second quarter of 2011. The installation of foundations for the Danish offshore wind farm Anholt, which will have 111 turbines, is scheduled to start at the end of 2011. The prospects for acquiring offshore wind farm projects and utilization of the heavy lift vessel Svanen remain good for the next few years.

CNG Net has extended the national network of largely green natural gas filling stations to 41, of which 7 are under construction, and also made a positive contribution to the profit. Running on natural gas is less expensive than other fuels. Natural gas-fuelled vehicles are quieter, have negligible nitrogen dioxide emissions, and produce no particulates. A start will be made in the second quarter on the construction of two Ballast Nedam-developed filling stations for natural gas in liquid form (LNG) for trucks. Also in 2011, the first Green Gas, the almost CO2-neutral natural gas replacement for automotive use, will be produced by refining biogas. This will be in partnership with a waste processing company that produces biogas by fermenting kitchen and garden waste.

The business unit Feniks Recycling has now started the construction of a new installation in the UK for recovering secondary raw materials from waste incinerator ash. This concept enables reductions of millions of kilos of CO2 emission in mining and refining. Feniks now has 7 installations in the UK and 3 in the Netherlands. Further growth in the UK is forecast in the next few years.

Building and Development

The revenue of the Building and Development division declined slightly by 5% to EUR 670 million in 2010. However, the decline was less than the 10% figure for the construction market as a whole. The main limiting factor in the decline was the high production achieved in long-term projects acquired in previous years. The projects concerned included the Komfort consortium PPP construction project in Utrecht and the Ministry of Justice and Ministry of the Interior building in The Hague. The revenue of the property development and regional construction companies declined.

The Building and Development division performed well in maintaining the profit in a contracting property market in the face of increased competition. The construction companies, both in the major projects and the regional construction companies, managed to improve operating profit. The profits of the property development and prefabricated concrete companies fell in line with the overall market.

The residential building activities declined in 2010. Property development marked time, with a start on building only 28 homes from internal property development in the past year. The corresponding figure in 2009 was still 177 homes. The total number of homes under construction declined from 2 097 at year-end 2009 to 669 at year-end 2010.

Ballast Nedam had taken measures in anticipation of the expected trends in the housing market: the development of smaller-scale projects and implementation of cost savings, including by merging regional companies. New opportunities were tackled, such as cooperating in new contract forms with housing associations, and starting the construction of a factory for the industrial fabrication of homes.

Of a project consisting of 91 land-based homes in Vleuten that went on sale at the end of 2010, more than 80% were sold within 3 months. Construction has now started. Some new integrated contracts were acquired. Woonteam+ is the name of the consortium comprising the housing association Com-wonen, Ballast Nedam and our joint chain partners in the Schollevaar project. This project consists of 1 950 homes to be renovated in the next 5 years in a process involving complete chain integration. A second project of 700 homes in Rotterdam-Ommoord was added to this contract in February of this year.

The construction of the iQwoning(R) factory in Weert for the industrial fabrication of homes started in 2010. Production will start in 2011. The iQwoning(R)'s short site construction time makes it an ideal response to the market demand for solutions that work in small-scale and inner city redevelopment. With a saving of up to 40% on transport movements during the process, this working method achieves an impressive CO2 reduction. The iQwoning(R) therefore comfortably exceeds the new EPC standard, and facilitates energy-neutral building. The iQwoning(R) can be connected conveniently to various sustainable systems, such as those for heat/cold storage and solar energy. The systems used for insulation, underfloor heating and ventilation do the rest.

The total risk of unsold stock went down in 2010 by EUR 8 million to EUR 42 million. The total investment in unsold property projects for own risk, both delivered and under construction, increased by EUR 9 million. The remaining obligation to complete unsold property under construction decreased from EUR 20 million at year-end 2009 to EUR 3 million at year-end 2010. The number of unsold homes went down from 184 at year-end 2009 to 124. However, the constituent number of completed homes increased by 61 to 102, spread over 11 projects. Of this, approximately 35% of the sales risk is shared in some way with other parties. The completed unsold stock consisted moreover of 1 609 m2 of leased and 1 000 m2 of unleased commercial space.

The estimated development potential of Ballast Nedam's land bank in the Netherlands decreased from 15 600 homes to 14 900. The carrying amount of the land bank rose by EUR 3 million to EUR 160 million because of a number of relatively small acquisitions, and payments on existing investment obligations. The net impairment of land positions was EUR 4 million. Outstanding unconditional purchase obligations for land at year-end increased by EUR 6 million to EUR 30 million, of which EUR 6 million will fall in 2011.

Ballast Nedam is observing a structural increase in the shortage on the housing market, in terms of both quantity and quality. Residential construction therefore does have promise in the long term. Recovery will take more time in the office market, given the national vacancy levels of 7 million m2.

In the leisure field, Ballast Nedam has developed a luxury resort through an area development financed by means of private money. Beach Resort Nieuwvliet-Bad has 200 homes and a multifunctional main building with all facilities. The first 100 homes recently went on sale.

A milestone in the leisure field was also achieved with the extension to a concession in Canada (British Columbia) for the development of a new four-season recreation area known as the Kicking Horse Mountain Resort. Ballast Nedam built the infrastructure and developed the core of the village. The 1 131 hectare ski resort has entered a new 10-year operating period, and it is among the finest quality of its type in North America. In close partnership with the province of British Columbia the development potential of this concession was expanded substantially last year from 1 000 residential units to more than 4 500. Ballast Nedam also acquired the minority shareholder's interest in 2010. More than 400 homes have now been built. The resort attracts approximately 160 000 visitors each year.

    EBIT

    x EUR 1 million             2010   2009

    Infrastructure                22     20
    Building and Development       4      4
                                  26     24
    Other                        ( 8)   ( 7)

    Total                         18     17

Ballast Nedam's operating profit rose from EUR 17 million in 2009 to EUR 18 million in 2010.

The Infrastructure division improved its operating profit by 10% to EUR 22 million. The improved operating profit was upheld by the major projects, such as in industrial construction, offshore wind farms and international projects.

The Building and Development division succeeded in maintaining its operating profit at EUR 4 million. This is better than the approximately break-even forecast given in March 2010. The underlying profit of major projects increased sharply and the profit of the prefabricated concrete companies decreased.

The Other result was EUR 1 million lower than one year earlier, because of an increase in the provisions for old competition-related penalties and claims, which were largely compensated by revenues from the out-of-court settlement of old claims. The holding company costs were almost unchanged.

    Margin

                               2010   2009

    Infrastructure             3.1%   2.8%
    Building and Development   0.6%   0.5%

    Total                      1.4%   1.2%

The overall margin rose to 1.4% on a fractionally lower revenue. Because of the unfavourable conditions on the property market, this margin was well below the target range of 3% to 5%. The margin of the Infrastructure division rose from 2.8% to 3.1% on an approximately equal revenue. The Building and Development division maintained its margin on a 5% lower revenue.

    Profit for the period

    x EUR 1 million
                                                    2010   2009

    EBIT                                              18     17
    Net finance income and expense                   ( 7)   ( 9)
    Profit before income tax                          11      8
    Income tax benefit / (expense)                   ( 4)   ( 2)

    Profit for the period                              7      6

Ballast Nedam's profit for the period increased by EUR 1 million to EUR 7 million in 2010.

Profit before income tax went up EUR 3 million to EUR 11 million. Finance income and expense declined because of an increase in capitalized interest income on PPP receivables. The interest payable on loans rose by EUR 1 million to EUR 11 million.

The tax burden increased to 38% because it was not possible to settle all profits outside the fiscal unity. The deferred tax asset increased by EUR 1 million to EUR 38 million. The portion concerned with carry-forward losses was unchanged at EUR 33 million.

    Order book

    x EUR 1 million             2010    2009

    Infrastructure             1 138     888
    Building and Development     746     977
                               1 884   1 865
    Other / elimination         ( 43)   ( 47)

    Total                      1 841   1 818

The order book grew in the fourth quarter of 2010 by EUR 235 million to EUR 1 841 million. The order book was accordingly somewhat better filled than at year-end 2009. The quality, composition and size of the total order book puts Ballast Nedam in a relatively favourable starting position in a poor market.

Growth in the Infrastructure division order book of EUR 250 million to EUR 1 138 million is attributable in particular to the major long-term PPP road project A15. Together with the major long-term A2 Maastricht tunnel project acquired in an innovative contract form in 2009, this project will provide stability for the Infrastructure division for the next few years.

The Building and Development division order book contracted by EUR 231 million to EUR 746 million. Most of this decrease was attributable to the high production achieved in long-term projects acquired in previous years. Furthermore, the level of acquired contracts was low because of increased competition and price pressure. These market conditions put Ballast Nedam in a position in 2011 to acquire part of the operations of the construction company Heddes. The acquisition involved projects with a volume of approximately EUR 100 million and the small-scale building activities. Heddes Bouw & Ontwikkeling will operate as a regional company with over 100 employees from its head office in Hoorn. With this acquisition, Ballast Nedam is strengthening its position in the Noord-Holland region. The Netherlands Competition Authority (NMA) has granted exemption from the obligatory waiting period. Final approval is expected within four weeks.

Equity and cash flows

Ballast Nedam's shareholders' equity fell by EUR 1 million to EUR 161 million at year-end 2010. This decline comprised the profit for the period of EUR 7 million less the dividend distribution of EUR 3 million, the acquisition of a non-controlling interest for EUR 3 million and other negative changes of EUR 2 million.

Total assets increased by EUR 50 million to EUR 1 084 million because of progress on the PPP projects. The increase in assets and the fractional decline in shareholders' equity caused the capital ratio to decrease from 16% at year-end 2009 to 15%. Capital employed increased by EUR 146 million to EUR 425 million. Non-current assets increased by EUR 68 million, in particular because of the PPP projects, and current assets minus current liabilities rose by EUR 28 million because of the increase in inventories and the decline in prepayments. However, average capital employed was higher during the year. Any sale of some of the operational PPP projects would cause a decrease in capital employed.

The choice of proportionate consolidation for joint ventures, such as the PPP projects, which is currently allowed under IFRS, has a major impact on the consolidated statement of financial position. This impact is conspicuous when comparing the statement of financial position with one in accordance with the other option allowed under IFRS, in which joint ventures are accounted for as an interest at the share in the assets (i.e. the equity method). It is expected that only the equity method will be allowed within a few years, and the proportionate consolidation option will no longer be available. Application of the equity method results in a decrease in assets of EUR 261 million to EUR 823 million, a decrease in capital employed of EUR 180 million to EUR 245 million, an increase in shareholders' equity of EUR 2 million to EUR 163 million and an improvement in net financing position by as much as EUR 175 million to EUR 56 million. The capital ratio would then amount to 20% as opposed to 15%. In comparison with 2009, the capital ratio in accordance with this other IFRS option would then remain unchanged at 20%, as opposed to the 1% decrease to 15%, as reported now. These differences arise in particular because of the five ongoing PPP projects, which are largely financed by loans that provide no opportunity of recourse on Ballast Nedam.

The accumulated capital contributions to the PPPs were EUR 9 million. The net outstanding obligation for additional capital contributions increased by EUR 4 million to EUR 18 million.

The cash flow for 2010 was EUR 50 million negative as opposed to EUR 19 million positive in 2009

The operating cash flow was EUR 39 million negative compared with a positive operating cash flow of EUR 61 million for 2009. Substantial prepayments that were received on major projects in 2009 were largely utilized in 2010 in implementing these projects. The cash flow from work in progress consequently changed from EUR 72 million positive for 2009 to EUR 59 million negative.

The cash flow from investing activities improved by EUR 5 million to EUR 92 million negative, consisting largely of EUR 104 million in investments, EUR 2 million in dividend received and EUR 12 million in disposals. Investments included EUR 32 million of property, plant and equipment, EUR 2 million of intangible assets and EUR 70 million of financial assets. The financial assets were concerned with the PPP receivables. The net investments in property, plant and equipment of EUR 24 million were lower than depreciation by EUR 1 million.

The positive cash flow from financing activities of EUR 82 million consisted of EUR 88 million net drawing of long-term loans, a EUR 3 million dividend payout for 2009 and EUR 3 million for the acquisition of a non-controlling interest.

    Net financing position

    x EUR 1 million                       2010    2009

    Net cash                                61     111
    Current portion of long-term loans     ( 7)    ( 6)
    Long-term loans                      ( 285)  ( 197)

                                         ( 231)   ( 92)

Ballast Nedam's net financing position decreased by EUR 139 million to EUR 231 million. The long-term loans increased on balance by EUR 88 million to EUR 285 million, attributable specifically to the net EUR 73 million increase in PPP loans and two new project loans together amounting to EUR 14 million. Net cash decreased by EUR 50 million to EUR 61 million because of the strong decline in prepayments received on major projects in 2009 of EUR 38 million to EUR 90 million. The financing requirement was higher in the course of the year than at year-end.

Financing

There will be no need to refinance the long-term loans in the years ahead. The general loan of EUR 50 million now matures on 1 April 2014 and has a fixed interest rate of 5.4%. Mortgages were taken out on a number of properties in use by Ballast Nedam as security for the loan. The other large loan of EUR 34 million is mainly for financing several land positions in a separate company. This loan matures in October 2015 and the interest rate is Euribor plus a margin. The land positions concerned were mortgaged as security for the loan. There are no financial covenants in the conditions of either loan.

The other long-term loans of EUR 202 million consist of EUR 165 million for the PPP loans, which provide no opportunity for recourse on Ballast Nedam, and for which the interest rate is fixed by means of derivatives.

Ballast Nedam's shares

There were 9 700 000 shares in issue at the end of 2010 out of the 10 million issued shares. At year-end Ballast Nedam held 300 000 shares in portfolio to hedge the obligations arising from the management option scheme. The basic earnings per average ordinary share in issue rose from EUR 0.62 in 2009 to EUR 0.73.

The Ballast Nedam share price on NYSE Euronext at the end of 2009 was EUR 15.20. The share price at the end of 2010 was 5% lower at EUR14.40. Shareholders' equity per average ordinary share in issue was EUR 16.58. The highest price of EUR 15.25 was reached on 22 January 2010. The lowest price of EUR 10,20 was quoted on 19 August 2010. The liquidity of Ballast Nedam shares declined from 11 820 per trading day in 2009 to 8 697 in 2010. The Amsterdam Small Cap Index, which includes Ballast Nedam shares, rose 11% in 2010.

According to shareholdings reported, Navitas and Hurks Group were the largest shareholders at the end of 2010, each with an interest of 15.4%. Via Finis Invest announced a 5% shareholding in 2010. Other parties holding 5% or more of the shares or depository receipts for shares in Ballast Nedam at year-end were Delta Deelnemingen Fund, Delta Lloyd, Menor Investments and Bibiana Beheer.

Dividend policy

Ballast Nedam's current dividend policy is to place 50% of the profit for the period at the disposal of shareholders for distribution as dividend. The Board of Management, with the approval of the Supervisory Board, proposes to distribute a dividend for 2010 in line with this policy of EUR 0.36 per ordinary share in issue. The dividend for 2009 was EUR 0.31. Distribution will take place on 31 May 2011. The date of the ex-dividend listing will be 23 May 2011.

CO2 reduction

Ballast Nedam achieved its target of a 10% CO2 reduction in 2010. The company is therefore well on the way to meeting our objective of 30% less CO2 emission in 2020 relative to 2008. After the Infrastructure division's earlier achievement of level 5 on ProRail's CO2 performance ladder, the Building and Development division followed suit in late 2010. We are now the second major construction group to be certified as a whole at the top level. Ballast Nedam qualifies for a 10% advantage when bidding for ProRail contracts, as a contractor that actively combats climate change. Achieving the highest level of this certification puts Ballast Nedam in an excellent position in view of the increasing use of performance ladders of this kind among public and semipublic authorities. Ballast Nedam pursues a reduction in energy consumption and is actively engaged in sustainable energy, including the application of green gas, heat/cold storage and wind energy.

Outlook for Ballast Nedam in 2011

Ballast Nedam does not expect the construction and infrastructure market to recover before the end of 2011. Competition and the associated price pressure will remain substantial.

The volume in the infrastructure market will decrease slightly. However, the supply of major projects will remain stable because of additional central government expenditure. The number of contracts from local authorities will decline. Ballast Nedam is optimistic about the markets for offshore wind turbine projects and for alternative fuels.

Although the economy is picking up in some sectors, there will be no improvement yet in volumes of both the residential and nonresidential sectors, because of further restrictions in financing and the late cyclical nature of the construction industry.

The Board of Management expects approximately the same operating profit for 2011 of between EUR 15 million and EUR 20 million, on a lower revenue. The operating profit for 2010 was EUR18 million. The production volume on the major Building and Development division projects will return to a more usual level compared with the extremely high production in 2010.

New organization structure

At the start of this year Ballast Nedam brought its organization structure more in line with the strategy of consolidating its position on the growing integrated projects market. The operations are managed out of six clusters, which were formed around products and processes. The six cluster directors together with the Board of Management constitute the Ballast Nedam Group Management Board. Starting with the 2011 half-yearly figures, Ballast Nedam will increase transparency by reporting based on the operating segments Building and Development, Infrastructure, Specialized Companies, and Supplies, as opposed to two divisions.

Strategy and policy

Ballast Nedam's strategy is oriented to integrated projects. In other words, the company intends to start contributing in the preliminary stages of projects and to continue our involvement for a longer period. The company accordingly focuses in the development, construction and management phases - the horizontal value chain - on customer needs and activities. As a consequence Ballast Nedam's products and services are becoming ever more specific, with a growing number of Ballast Nedam product-market combinations in the horizontal value chain, such as those concerned with parking and the care sector.

Horizontal and vertical value chains reinforce each other

Ballast Nedam is able to provide sustainable total solutions in the horizontal value chain because of the support from Ballast Nedam's specialized and supply companies - the vertical value chain. These two kinds of company serve as procurement specialists for the entire organization, and distinguish themselves through high quality, innovation and cost leadership. The product range of these specialized companies is being expanded constantly, and they are enhancing their position. Ballast Nedam is always on the lookout, on behalf of the raw material companies, for opportunities to expand the concessions that exist.

Enhancing the value of the business

Ballast Nedam is enhancing the value of the business by improving the structural margin, which we seek to achieve with the following four strategic actions.

Changes to the activity mix, by expanding development and maintenance and operational management activities, relative to construction.

A sharper focus on market niches such as industrial construction, high-rise building, hospitals, international projects and offshore wind farm construction, with possible deployment of the heavy lift vessel Svanen.

Strengthening and continuing to expand the specialized and supply companies in the vertical value chain.

An improvement in the operating performance of the companies by reducing failure costs and intensifying internal teamwork.

Sustainable total solutions and added value

The activities Ballast Nedam chooses to include in its portfolio depend on various decision criteria. Consideration is always given to whether an activity is able to contribute to sustainable total solutions in the built environment, and this is indeed Ballast Nedam's focus. The company intends to add value to these total solutions in both the horizontal and vertical chains. It goes without saying that Ballast Nedam also upholds its distinctive profile through innovation and efficiency benefits, sustainability, the need for investment, the risk profile, and timing. Another self-evidently important criterion is the potential return of the activities.

The consolidated income statement, balance sheet and cash flow statement included in this press release are based on sections of the financial statements prepared as at and for the year ended 31 December 2010. In accordance with statutory provisions, the financial statements will be disclosed at least 42 days prior to the Annual General Meeting of Shareholders on 19 May 2011. The auditors authorized for issue an unqualified opinion on the financial statements that were signed by the Board on 10 March 2011.

    Consolidated income statement


    x EUR 1 million                                     2010            2009

    Revenue                                            1 359           1 384
    Other operating income                                 6

    Raw materials and subcontractors         (1 005)         (1 026)
    Personnel expenses                        ( 278)          ( 277)
    Other operating expenses                   ( 37)           ( 39)
                                                      (1 320)         (1 342)

    Share in results of associates                         -               -

    EBITDA                                                45              42

    Depreciation and amortisation                       ( 26)           ( 25)

    Impairment of tangible and intangible assets         ( 1)              -

    EBIT                                                   18             17

    Financial income                              10               5
    Financial expenses                          ( 17)           ( 14)
    Net finance income and expense                       ( 7)            ( 9)

    Profit before income tax                              11               8

    Income tax benefit / (expense)                       ( 4)            ( 2)

    Profit for the period                                  7               6




    Consolidated statement of comprehensive income


    x EUR 1 million                                     2010            2009

    Profit for the period                                  7               6

    Foreign currency translation differences               1               1
    Net change in hedging reserve                        ( 3)              1
    Other comprehensive income                           ( 2)              2

    Total comprehensive income for the period              5               8

    Attributable to:
    Owners of the company                                  5               8
    Non-controlling interest                                               -
    Profit for the period                                  5               8

    Attributable to owners of the company:

    Basic earnings per share (EUR)                      0.73            0.62
    Diluted earnings per share (EUR)                    0.73            0.62




    Consolidated statement of financial position


    x EUR 1 million                       31 December 2010  31 December 2009

    Non-current assets
    Intangible assets                           29                28
    Property, plant and equipment              184               184
    Financial assets                           167               103
    Investments in associates                    2                 -
    Deferred tax assets                         38                37
                                                       420               352

    Current assets
    Inventories                                252               230
    Work in progress                           101               105
    Receivables                                230               221
    Cash and cash equivalents                   81               126
                                               664               682
    Current liabilities
    Bank overdrafts                           ( 20)             ( 15)
    Current portion of long-term loans         ( 7)              ( 6)
    Prepaid on inventories                     ( 1)             ( 12)
    Work in progress                         ( 128)            ( 191)
    Trade payables                           ( 217)            ( 237)
    Income tax payable                         ( 1)              ( 1)
    Other liabilities                        ( 178)            ( 151)
    Provisions                                ( 46)             ( 31)
                                             ( 598)            ( 644)
    Current assets minus current liabilities            66                38

                                                       486               390

    Non-current liabilities
    Loans                                      285               197
    Derivatives                                 18                14
    Deferred tax liabilities                     4                 3
    Employee benefits                            5                 4
    Provisions                                  13                10
                                                       325               228
    Total equity

    Equity attributable to owners of
    the company                                161               162
    Non-controlling interest                                               -
                                                       161               162

                                                       486               390



    Summary consolidated statement of changes in equity


    x EUR 1 million                       31 December 2010  31 December 2009

    Share capital                                       60                60
    Share premium                                       52                52
    Reserves                                            50                56

    Opening                                            162               168

    Foreign currency translation differences             1                 1
    Net change in hedging reserve                      ( 3)                1

    Other comprehensive income                         ( 2)                2

    Profit for the period                                7                 6
    Dividend paid                                      ( 3)             ( 12)
    Other                                              ( 3)              ( 2)

    Closing                                            161               162



    Consolidated statement of cash flows

    x EUR 1 million                                2010              2009

    Net cash - opening balance                         111                92

    Profit for the period                         7                 6
    Adjustments
    Depreciation                                 25                23
    Amortization                                  1                 2
    Impairment                                    1                 -
    Interest expenses                            17                14
    Interest income                            ( 10)              ( 5)
    Equity-settled share-based payment
    transactions                                  -                 1
    Income tax expense / (benefit)                4                 2
    Share in results of associates                -                 -
    Movements
    Movements in other receivables              ( 4)                1
    Movement in work in progress               ( 59)               72
    Movement in inventories                    ( 33)             ( 48)
    Movement in provisions and employee
    benefits                                     19               ( 8)
    Interest paid                              ( 11)             ( 10)
    Paid on hedging instruments                 ( 5)              ( 3)
    Interest received                             -                 -
    Income taxes paid                           ( 3)              ( 1)
    Change in other current assets and current
    liabilities                                  12                15

    Net cash from operating activities                ( 39)               61

    Intangible assets
      investments                               ( 2)              ( 5)
      disposals                                   -                 -
    Property, plant and equipment
      investments                              ( 32)             ( 32)
      disposals                                   8                 3
    Financial fixed assets
      investments                              ( 70)             ( 65)
      disposals                                   4                 3
      dividends received                          2                 -
    Investments in associates                   ( 2)
    Acquisitions of subsidiaries                                  ( 1)
    Cash acquired in acquisitions                                   -

    Net cash used in investing activities             ( 92)             ( 97)

    Proceeds from long-term loans               107                90
    Repayment of long-term loans               ( 19)             ( 19)
    Acquisition of non-controlling interest     ( 3)
    Dividend paid                               ( 3)             ( 12)
    Repurchase of own shares                      -               ( 3)

    Net cash from financing activities                  82                56

    Effect of exchange rate fluctuations on cash held  ( 1)              ( 1)

    Net cash - closing balance                          61               111

    Net cash

                                               31 December       31 December
    x EUR 1 million                                   2010              2009

    Cash and cash equivalents                           81               126
    Bank overdrafts                                   ( 20)             ( 15)

                                                        61               111

    Unrestricted cash balances                          47                86
    Proportionately consolidated                        14                25

                                                        61               111

    Net financing position

                                                31 December      31 December
    x EUR 1 million                                    2010             2009

    Net cash                                             61              111
    Current portion of long-term loans                  ( 7)             ( 6)
    Long-term loans                                   ( 285)           ( 197)

                                                      ( 231)            ( 92)


    Operating segments


    Revenue

    x EUR 1 million                 2010   2009

    Infrastructure                   710    707
    Building and Development         670    705
                                   1 380  1 412
    Other / elimination             ( 21)  ( 28)

    Total                          1 359  1 384


    EBIT

    x EUR 1 million                 2010   2009

    Infrastructure                    22     20
    Building and Development           4      4

                                      26     24
    Other                            ( 8)   ( 7)

    Total                             18     17


    Margin
                                    2010   2009

    Infrastructure                  3.1%   2.8%
    Building and Development        0.6%   0.5%

    Total                           1.4%   1.2%


    Profit for the period

    x EUR 1 million
                                    2010   2009

    EBIT                              18     17
    Net finance income and expense   ( 7)   ( 9)

    Profit before income tax          11      8
    Income tax benefit / (expense)   ( 4)   ( 2)

    Profit for the period              7      6


    Order book

    x EUR 1 million                 2010   2009

    Infrastructure                 1 138    888
    Building and Development         746    977
                                   1 884  1 865
    Other / elimination             ( 43)  ( 47)

    Total                          1 841  1 818


    Assets

    x EUR 1 million                 2010   2009

    Infrastructure                   568    485
    Building and Development         602    617
                                   1 170  1 102

    Other                           ( 86)  ( 68)

    Total                          1 084  1 034

The statement of financial position if the joint ventures are not proportionately consolidated is shown below, in accordance with the current IFRS standard. For the purpose of comparison, the proportionately consolidated statement of financial position is also shown.


                           Proportionately
                            consolidated    Not proportionately consolidated

    x EUR 1 million      31 December 2010  31 December 2010  31 December 2009
    Non-current assets
    Intangible assets        29               27                26
    Property, plant and
    equipment               184              166               164
    Financial assets        169               53                52
    Deferred tax assets      38               33                33
                                     420               279                275
    Current assets
    Inventories             252              216               188
    Work in progress        101               99               100
    Receivables             230              169               176
    Cash and cash
    equivalents              81               60                91
                            664              544               555
    Current liabilities
    Bank overdrafts        ( 20)             ( 8)                -
    Current portion of
    long-term loans         ( 7)             ( 1)              ( 5)
    Prepaid on inventories  ( 1)               -               ( 9)
    Work in progress      ( 128)            ( 55)            ( 105)
    Trade payables        ( 217)           ( 160)            ( 199)
    Income tax payable      ( 1)               -                 -
    Other liabilities     ( 178)           ( 255)            ( 199)
    Provisions             ( 46)            ( 47)             ( 31)
                          ( 598)           ( 526)            ( 548)
    Current assets minus
    current liabilities               66                18                  7

                                     486               297                282

    Non-current liabilities
    Loans                   285              107                95
    Derivatives              18                -                 -
    Deferred tax liabilities  4                3                 3
    Employee benefits         5                5                 5
    Provisions               13               19                17
                                     325               134                120
    Total equity
    Equity attributable to
    owners of the company   161              163               162
    Non-controlling interest                                     -
                                               -         -                  -
                                     161               163                162

                                     486               297                282

    Capital ratio                    15%               20%                20%


Ballast Nedam has a leading position in construction and infrastructure. The company operates mainly in the Netherlands on integrated and other projects for companies, public authorities and housing consumers, in the fields of mobility, housing, employment, leisure and energy. Ballast Nedam operates internationally in various areas of expertise. Ballast Nedam supplies project, process and contract management in the development, implementation and management phases. The company also provides specialized know-how and skills, and semi-finished and finished products. Ballast Nedam is listed on NYSE Euronext in Amsterdam. The share is included in the Amsterdam Small Cap Index.

SOURCE Ballast Nedam NV