VolkerWessels achieved strong results for 2022. The EBT margin increased by 30 basis points to 3.9%, revenue increased by 7% to € 6,599 million and net profit increased by 16% to € 192 million. A strong reduction in failure costs and the continued sharp focus on risk and contract management contributed to the improved results. Solvency increased to 23% and the net cash position stood at € 207 million as at 31 December 2022.
- Net profit attributable to shareholders € 192 million (2021: € 165 million)
- Earnings before tax (EBT) € 260 million (2021: € 225 million)
- Order book at year-end 2022 € 8,773 million (2021: € 9,236 million)
- Revenue € 6,599 million (2021: € 6,193 million)
- Solvency 23.3% (2021: 22.0%)
Given the challenging market circumstances, resulting from geopolitical developments and the aftermath of the Covid pandemic, VolkerWessels is satisfied with its performance. Last year, in almost all operations, the business faced increased inflation, specifically in the pricing of raw materials and cost of labour. Constructive dialogue with clients allowed the business to pass on part of the increased cost, resulting in a limited effect on our margin.
Additionally, a continued reduction in failure costs allowed VolkerWessels to further offset the negative effects of these cost increases on our margin. Thanks to all our colleagues, the business continued to deliver on its contractual obligations under challenging conditions. Last year, despite these turbulent circumstances, we continued the uninterrupted delivery of our projects. This success is down to VolkerWessels’ employees and the strong cooperation within the group, the supply chain, subcontractors and clients.
The 2022 results of most segments showed an increase on 2021. In particular the results of the UK showed solid growth, the increase on 2021 coming mainly from a strong recovery of the results of one business unit. The focus on the four home markets (the Netherlands, the UK, Germany and North America) ensure a good spread of risk within our business.
VolkerWessels’ safety performance continued to improve, with a decrease in the number of accidents compared to 2021. In the second half of the year, a new safety behavioural campaign was launched, encouraging a safety leadership mindset amongst all our c.17,000 employees. The aim of this campaign is to further increase safety awareness amongst the workforce.
In terms of sustainability, VolkerWessels has a leading position in the sector and is taking important steps to further reduce its CO2 emissions. Compared to 2019, the baseline year, CO2 emissions have decreased by 23%. VolkerWessels’ ambition is to work with its clients and partners to become a company that can operate emission-free by 2030. Visit "www.emissievrij2030.nl", for an indication of how it expects to achieve this.
Net profit and EBT margin
VolkerWessels is focused on profitable growth and prioritises margin over volume. So we are pleased with the increase in EBT margin from 3.6% over 2021 to 3.9% in 2022. Net profit came in at € 192 million, up 16% on 2021.
Revenue in 2022 increased by 6.6% to € 6,599 million, compared to € 6,193 million in 2021. This increase was mainly visible in the UK, the Energy and Telecoms segment and in our operations in North America. Revenue for Construction & Real Estate Development was stable, while revenue in the Dutch Infrastructure segment increased slightly. In Germany, turnover decreased by 7%.
VolkerWessels' order book at 31 December 2022 decreased by 5% to € 8,773 million compared to € 9,236 million at 31 December 2021 but remains solid at more than 1.3 times the 2022 revenue. The decline is partly due to a selective tendering policy and partly the result of delays in obtaining the necessary permits and market conditions for Construction & Real Estate Development projects. The steady flow of mainly smaller projects in the infrastructure segment in the Netherlands remained at a good level; however, the order intake for large multidisciplinary projects is at a lower level. The order book in the UK remains solid and decreased slightly, mainly due to negative exchange rate effects, while the order book in Germany actually showed growth again as a result of the start of a number of new residential construction projects.
Solvency and liquidity
VolkerWessels has a solid capital structure with a solvency of 23% as at 31 December 2022 (31 December 2021: 22%). Group equity as at 31 December 2022 amounted to € 0.9 billion. The increased solvency level is mainly due to the increase in the net profit for 2022, net of dividend payments for 2022. The net cash position (excluding IFRS 16) continues to be strong at € 207 million at the end of 2022.
VolkerWessels expects that during 2023 revenue and results in the residential construction and property development operations will come under pressure, mainly due to sharply rising interest rates and uncertainty in the mid-market rental sector in the Netherlands . Public investments by (lower) governments in infrastructure are expected to remain stable in the coming years.
As a result of geopolitical developments, VolkerWessels foresees increasing growth opportunities from the accelerated energy transition. In addition, it expects that adjustments in global trade flows can be positive for the future growth of its activities. Access to specialist labour and raw materials remains an ongoing area of focus and a pre-requisite for the successful delivery of its projects.
In the other segments, turnover and results are expected to remain stable. VolkerWessels remains selective in the work it undertakes and is focused on its EBT margin.
Jan de Ruiter
Cees de Wijs