Commentary by Artur Popko, President of Budimex SA, on the results of the Budimex Group for the first quarter of 2025

We assess the first quarter of 2025 as very good. The Group’s operating profitability remained at a level similar to that of the previous year, and the operating profitability of the construction segment improved, reaching 7.5%. The geographically diversified order book reached PLN 17.5 billion, securing optimal capacity utilization and a safe outlook for the coming quarters.

The Budimex Group generated an operating profit of PLN 111 million (compared  to PLN 115 million in the first quarter of 2024), while recording a slight decrease in profitability from 7.0% to 6.8%, while maintaining a similar level of sales revenues.

The gross profit of the Budimex Group amounted to PLN 131 million with a profitability of 8.0% compared to 9.4% in the first quarter of the previous year.

1 kw. 2024

y/y

Sale

1 642

1 645

-0,2%

Operating profit

111

115

-3,6%

% of sales

6,8%

7,0%

-0.2% pp.

Gross profit

131

155

-15,4%

% of sales

8,0%

9,4%

-1.4% pp.

Net profit*
from continuing operations

114

119

-4,1%

% of sales

7,0%

7,2%

-0.3% pp.

*attributable to shareholders of the Parent Company

Construction and assembly production in the first quarter of 2025, expressed in current prices, increased by 4.0% year-on-year from PLN 26.1 billion to PLN 27.1 billion. In the buildings segment, sold production increased by 4.1%, while in the infrastructure area, an increase of 3.7% was recorded.

1 kw. 2024

y/y

Production
Sold

27,1

26,1

4,0%

Buildings

15,1

14,5

4,1%

share

55,7%

55,6%

0,1%

Engineering

12,0

11,6

3,7%

of which: roads

3,8

3,8

1,5%

of which: railways

1,3

0,9

50,8%

share

44,3%

44,4%

-0,1%

In the first quarter of 2025, the sales of the construction segment of the Budimex Group amounted to PLN 1,489 million (an increase of 5.2% y/y), while recording an increase in  operating profitability (from 6.7% to 7.5%) and at the same time a decrease in gross profitability (from 9.5% to 8.9%).

1 kw. 2024

y/y

Sale

1 489

1 415

5,2%

Operating profit

111

95

16,4%

% of sales

7,5%

6,7%

0.7% pp.

Gross profit

133

135

-1,4%

% of sales

8,9%

9,5%

-0.6% pp.

Order Backlog

17 539

14 645

19,8%

Contracting

1 046

2 703

-61,3%

The increase in sales revenues in the first quarter of 2025 in the construction segment, compared to the corresponding period of the previous year, was recorded mainly in the area of cubature construction, both in the residential and non-residential segments. The increase in throughput was a consequence of several factors, m.in. a high and well-diversified order portfolio, a favourable layout of work schedules on several key contracts and favourable weather conditions.

At the same time, in the first quarter of 2025, the level of revenues generated by Budimex SA’s foreign branches on the Czech and Slovak markets increased noticeably. This increase is a consequence of the implementation of foreign construction contracts, acquired as part of the direction of geographical diversification of the Group’s construction portfolio adopted a few years ago and consistently pursued.

The operating profitability of the construction segment amounted to 7.5% and was higher compared to the corresponding period of the previous year, when it amounted to 6.7%.

An improvement in operating profitability was recorded m.in. in the segment of building construction. The improved results are the result of the completion of several large and difficult contracts, but also the consequence of intensive work on adapting the portfolio of customers and cubature projects, the aim of which is to optimize margins in order to achieve sustainable profitability of this business.

The gross margin of the construction segment in the period under discussion amounted to 8.9% and was lower by 0.6% than in the first quarter of 2024. The decrease in gross profit margin was the result of lower net interest income, which was a consequence of maintaining a lower net cash position in the first quarter of 2025 compared to the same period of the previous year.

In the first quarter of 2025, we acquired contracts worth more than PLN 1 billion. The Budimex Group’s order book at the end of March 2025 amounted to PLN 17.5 billion. The high value of the order book secures the Group’s work front for the entire current year and 2026-2027. Intensive work on the acquisition of new projects has resulted in the fact that the value of projects awaiting signing and those where the offer of Budimex or Group companies has been rated the highest is currently about PLN 9.3 billion, of which PLN 5.3 billion is attributable to the Rail Baltica contract in Latvia and Estonia. In the perspective of the coming quarters, this gives the opportunity to take a responsible approach to bidding in upcoming tenders. In addition, in March 2025, a consortium with the participation of Budimex S.A. took first place in the tender procedure for the design and construction of the main Rail Baltica line in Estonia, on the Pärnu – Latvian border section with a total contract value of approximately EUR 332 million (approximately PLN 1.4 billion). Budimex has a 40% share in the construction part of the contract. We are currently waiting for it to be signed. This is another step towards expansion and development on foreign markets.

The Budimex Group ended the first quarter of 2025 with a net cash position exceeding PLN 2.8 billion. The slight decrease in the level of cash in the first quarter of this year compared to the end of 2024 was mainly due to high corporate income tax payments, implementation of investment programs in the construction of renewable energy sources, expansion of road and rail equipment base, as well as development activities. At the same time, there was a seasonal increase in the involvement of financial resources in working capital.

In fulfilling the assumptions of the adopted dividend policy, the Management Board of Budimex SA recommended to the General Meeting of Shareholders the payment of a dividend from the profit generated for 2024 in the amount of PLN 649 million, i.e. PLN 25.43 per share. The Management Board of Budimex SA proposed to set the dividend date for 5 June 2025, and the dividend payment date for 13 June 2025.

1 kw. 2024

y/y

Sale

224

234

-4,29%

Operating profit

22

20

11,3%

% of sales

9,7%

8,4%

1.4% pp.

Gross profit

22

21

4,2%

% of sales

9,6%

8,9%

0.8% pp.

The revenues of the FBSerwis Group, which is a key asset in the services segment (the results of the service part also include the activities of companies from the RES area, Budimex Mobility and Budimex Parking Wrocław) amounted to PLN 220 million. Operating profitability amounted to 7 p.p.. recording a noticeable increase compared to the same period of the previous year. 

Market outlook

The Budimex Group’s order book at the end of the first quarter of 2025 reached PLN 17.5 billion. This level fully secures the work front until the end of this year and at the same time provides a strong foundation for operations for 2026-2027. The current portfolio offers the prospect of a stable margin – more than half of the portfolio value are orders signed from the beginning of 2024, which were offered at current prices, and in addition, indexation is planned in most projects. ‎

The technical potential of general contractors in Poland still significantly exceeds the scale of investments commissioned by the largest contracting authorities. In the railway segment, the number of tenders announced in recent years has remained at a relatively low level. Therefore, this market is witnessing aggressive competition for orders, with bids for several key projects being submitted in recent months.

We are consistently implementing the internally set directions of development of the Budimex Group. The diversification of the Group’s operations, including building its position in the tunnel infrastructure segment, military investments, entering the energy transmission market, as well as expansion into foreign markets, is already bringing measurable results. Sales on foreign markets are one of the key components of sales growth in the construction segment. A few weeks ago, the official commissioning of the TBM shield on railway line No. 104 was carried out, which once again confirms the Group’s readiness to implement the most technically demanding investments. Key infrastructure projects – road and rail – are on the horizon, including tunnel construction, in which we plan to use our previous experience. The long-term references gained can be used in other investments, including the construction of the metro.

We are expanding our structures and preparing the organization to carry out orders for the construction of a nuclear power plant. We are consistently developing the industrial and energy area, which results in m.in. obtaining the first position in the ranking of offers
in the procedure for the design and construction of the Łódź Recycling Centre with a net value of PLN 691 million or bids submitted to the investor PSE for the construction of transmission lines. Further scaling of development activities, investments in the Data Centres market and RES projects are additional areas outside the construction segment, which will allow the Budimex Group to further diversify its operations in the long term.

In the coming quarters, the priority will be the responsible execution of the record order book and scaling of businesses on foreign markets.  The key challenge this year will be to increase the scale of sales revenues while maintaining a stable operating margin. In 2024, we recorded consolidated revenues of over PLN 9.1 billion with an operating margin of 8.2%.

Social commitment and innovation

As a company implementing investments throughout Poland and in the region, we operate close to local communities. In March this year, the fifth edition of one of our flagship initiatives – “Przystanek Zieleń” – was launched, which we run as part of the Tram to Wilanów project. Together with housing communities and cooperatives in Mokotów and Wilanów, we will plant another 140 trees, which will contribute to creating a friendly, green space for the residents of the capital. Over the last two years, we have planted a total of 510 trees and 50 shrubs in 60 locations in this part of Warsaw.

This year’s edition of our long-term “Hello ICE” program will also start soon. Budimex for Children”, in which we educate the youngest in the field of safety 

in road traffic. However, before we set off on a series of events in Poland, in March we had the pleasure of being a partner of the 14th edition of the Małopolska Competition “Reflective School” promoting the wearing of reflectors among children. ‎

We are engaged last year in the fight against the effects of the flood that hit Poland in September last year. In addition to the participation of Budimex teams and equipment in the clean-up work and financial and material assistance, we will rebuild the infrastructure destroyed during the disaster. After the demolition carried out by us, we will carry out the construction of a new bridge in Stronie Śląskie, which is currently one of the most important investments in Lower Silesia. The new crossing will be 40 meters long and will allow both pedestrian and car traffic.

As a market leader, we feel obliged not only to support communities, but also to stimulate processes that will affect the future of the industry. Our innovation activities so far in the first quarter of this year. we have expanded it to include the Budimex Acceleration Program. It is an initiative to which we invite young companies with ready-made prototypes of solutions m.in. in the area of green technologies, health and safety, artificial intelligence or robotics, which we will help them develop on our construction sites. ‎

Careers in construction

We operate in one of the industries that are currently on the most dynamic development path – both in terms of innovation and striving to achieve climate neutrality. We also create such an image of the construction industry among students interested in a career in the sector. Last quarter, we launched our annual Internship Program, in which we offer a record number of 316 places for students from all over Polish. As many as 70 percent. vacancies are intended for persons 

in engineering and construction faculties. Interns will be able to gain experience in the implementation of key infrastructure investments, such as the DCT T3 terminal in Gdańsk, the S10 expressway, the University of Gdańsk Sports Centre and the modernisation of railway line No. 139.

Highlight

The beginning of this year also brought us many awards in priority areas for the development of our Group. The National Labour Inspectorate, in the “Build safely” competition, appreciated the activities we undertook on the occasion of the construction of the Provincial Hospital in Krakow. During this investment, employees were supported by an innovative collaborative robot that helped to move heavy objects and work at night, increasing the comfort and safety of the team. The Forbes editorial team also distinguished us among the “Best Employers of 2025”. It was with great satisfaction that during this year’s edition of the European Economic Congress in Katowice, we received the award granted by the jury of the “Investor Without Borders” competition. Thus, we are among the entities appreciated for their effective expansion on foreign markets, which remains one of our strategic goals for the coming years.