Welcome to the Royal BAM Group first half year results 2026. Today's presentation will be followed by a Q&A session. For those of you who have joined the Zoom webinar, you can use the raise hand function at the bottom of your Zoom screen at any time to join the queue to ask a question, and you will be called upon during the Q&A session. If you have dialed in, please press star nine to enter the queue. If you want to withdraw your question, please lower your hand using the raise hand function in the Zoom app or, via telephone, press star nine. I will now hand over to Michel Aupers to begin the presentation.
Good morning, everyone, and welcome to the Royal BAM Group conference call. My name is Michel Aupers, Investor Relations Manager. I'm pleased to have you with us today. The meeting is hosted by our CEO, Ruud Joosten, and our CFO, Henri de Pater, who will take you through the key highlights of BAM's first half 2026 results. The presentation slides are available on our website. After their remarks, we will take your questions. I would like to draw your attention to the disclaimer shown here. Ruud, over to you, please.
Thank you, Michel, and good morning all. On the cover slide, on this slide, you see the construction of the Narrow Water Bridge, the landmark infrastructure project linking Northern Ireland and Ireland across Carlingford Lough. The bridge will improve connectivity, support tourism, and create new opportunities for communities on both sides of the border. It's a good example of the expertise we bring to important civil engineering projects in our U.K. and Ireland division. Now I would like to start with the key points of the first half year of 2026. We are pleased to report a strong performance in the first half year of 2026. Revenue increased by 3% to EUR 3.5 billion, supported by both divisions. Adjusted EBITDA increased to EUR 240 million, up 36% compared with the first half year of last year. The margin also improved to 6.9%.
These results reflect the strength and quality of our portfolio, with higher profitability across both divisions. Our net result increased by 25% to EUR 127 million, reflecting earnings per share of EUR 0.49. We also maintained a strong financial position with a cash position of EUR 715 million and a robust solvency of 22.9%. The order book remained at a high level of EUR 12.6 billion. We continue to focus on the quality of order intake, disciplined contract selection, and a healthy balance between risk and reward. We also continue to make steady progress on our strategy. In the Netherlands, we strengthened our residential development pipeline by acquiring a strategic land position in Veldhoven and completing the acquisition of Gebr. Blokland. We also secured several defense projects in the Netherlands, including facilities in Den Helder, Wezep, and Eindhoven.
This is in line with the Dutch government's ambition to meet NATO requirements, which is expected to lead to further investments in defense, including non-residential construction. In the U.K., recent project wins included social infrastructure, particularly in the education sector, as well as civil engineering works. Innovation and industrialized construction are becoming increasingly important enablers for our strategy delivery. A good example is the plug-and-play compact substation we recently introduced in the Netherlands. This can facilitate a faster rollout of a substation infrastructure needed for the energy transition. Safety is fundamental to the way we work at BAM. It is with deep sadness that we report the passing of a subcontractor's employee at one of our sites in May. Our thoughts are with his family, friends, and colleagues.
We are closely working with the authorities and will carefully consider any findings that can help us further improve our safety practices. This tragic loss reminds us why we must keep investing in our safety culture so that everyone who works for or with BAM can return home safely every day. Looking ahead, we continue to see strong demand across our markets. This is supported by the energy transition, investment in infrastructure and defense, and the need for sustainable and affordable homes. For the full year 2026, BAM expects to deliver an Adjusted EBITDA margin of at least 6.5%. Let's continue to the next slide, where I will highlight the performance of our Dutch division. On this slide, you see the new stairways linking Schiphol's future bus station with the railway station below.
This milestone marks an important step in the redevelopment of Schiphol's transport hub, helping improve accessibility and accommodate growing passenger numbers. We are delivering this project in close collaboration with Schiphol, the Regional Transport organization, and ProRail, demonstrating how long-term partnerships with our clients help bring complex projects like this forward. The activities in the Netherlands performed strongly. Revenue increased by 3%, and Adjusted EBITDA increased by 25% to EUR 138 million, reflecting a substantial margin improvement to 8.2%. The performance was supported by good operational execution across construction and property. Residential construction and property development also made a strong contribution. In the first half year, we sold 935 homes, 35% more than in the same period last year. For the full year, we expect home sales to be broadly in line with 2025.
Civil engineering also delivered a substantially higher contribution, supported by continued growth in activity levels and strong project performance, including in energy transition projects. Here, you see Darlington Station, one of the most significant recent investments on the East Coast Main Line. The expansion includes two new platforms, a new step-free footbridge, and enhanced passenger facilities, providing greater capacity and improved connectivity across North East England. Rail infrastructure in the U.K. is an important growth market for BAM, and projects like this show the role we can play in delivering better, more reliable transport infrastructure. In the U.K. and Ireland, we also delivered a strong performance. Revenue increased by 4%, supported by sustained high activity levels. We are pleased to report a 48% increase in Adjusted EBITDA to EUR 98 million.
The Adjusted EBITDA margin improved to 5.7%, helped by further profitability improvements in construction U.K. and good operational progress across the portfolio. Civil engineering U.K. also performed well in the first half-year. The result was supported by some claim settlements and by high-quality order book in rail and energy transition-related projects. In Ireland, the result included additional costs related to the delivery of the National Children's Hospital. Most of the project has now been handed over to the Children's Health Ireland organization. Demand in our core markets remains supported by continued investment in essential infrastructure, including energy, transport, water, healthcare, education, and defense. I will now hand over to Henri, who will take you through the financials in more detail.
Thank you, Ruud, and good morning, everyone. On this slide, you see The Martin, a residential tower within Amsterdam's Bajes Kwartier redevelopment. With its distinctive architecture and transparent façade, the building is part of the transformation of the former Bijlmermeer site into a vibrant and sustainable mixed-use neighborhood, which BAM is developing. I will now take you through the income statement in a bit more detail. Revenue for the first half came in on a level of EUR 3.5 billion, 3% higher than last year, with both divisions contributing to this growth. Adjusted EBITDA increased to EUR 240 million compared with EUR 176 million in the first half of 2025. This brought the Adjusted EBITDA margin to 6.9%, upped from 5.2% a year earlier. These results reflect consistent delivery across the business and show the progress we are making in executing our strategy.
Depreciation and amortization were EUR 89 million, mainly reflecting our continued investment in areas such as sustainable, digital and modular solutions, as well as the electrification of our equipment. The finance result came to EUR 6 million, and the effective tax rate was 18%, compared with 10% in the first half of 2025, when a lower rate mainly reflected a higher revaluation of deferred tax assets. For the full year 2026, we expect an effective tax rate in the 15%-17% range. This resulted in a net result of EUR 127 million, 25% above the first half of 2025. Earnings per share came out on a level of EUR 0.49, a EUR 0.10 improvement versus last year. Let's now move on to cash flow. Our operational performance translated into a cash flow from operations of EUR 211 million, resulting in a very strong cash position of EUR 750 million at the end of the period.
Working capital showed an outflow of EUR 150 million. This reflects the normal seasonal pattern in the first half of the year, as well as investments totaling EUR 61 million in development positions. It's good to see that trade working capital efficiency somewhat improved to -12.5% versus the -11.9% at year-end 2025. Cash flow from investing activity was -EUR 110 million. This mainly related to the acquisition of Gebroeders Blokland, capital expenditure and investments in joint ventures. Cash flow from financing activities was -EUR 135 million. This included the payment of EUR 77 million in cash dividends, EUR 32 million related to the share buyback program. Together with the dividend, this brought total distributions to shareholders to 55% of the 2025 net income. Let's now look at our financial position. Our net cash position after lease liabilities of EUR 300 million is substantially higher than the comparable period last year.
Shareholders' equity was slightly higher versus the full year 2025. Our solvency is 22.9%, slightly below the level of full year 2025. We had a strong net result in the first half of the year of EUR 127 million. In the first half year, we also distributed EUR 109 million to shareholders via dividends and share buybacks. Now back to you, Ruud.
Thank you, Henri. I would like to conclude with the market trends for outlook for the full year 2026. Shown here is the new police headquarters in The Hague that we delivered this July, bringing around 2,200 officers and staff together in a single location. Designed as a flexible and future-ready workplace. It's also the first police building in the Netherlands to achieve a BREEAM Excellent design certification. We are pleased that our order book remained at the high level of EUR 12.6 billion. While we continue to focus strongly on order book quality, selective tendering, and risk management in the markets where we have proven competitive advantage. The Dutch order book increased by 7% to EUR 6 billion, supported by strategic project wins and development acquisitions, including Veldhoven, the Matser site next to the Rabobank headquarters in Utrecht, the Rail Zone, and TenneT's two-gigawatt Gamma Converter Station.
Overall, these contracts highlight the strength and resilience of our Dutch order book. Our order book in the U.K. and Ireland decreased to EUR 6.1 billion, mainly due to the timing of major civil project awards, with a number of major project awards expected to come through in our U.K. and Ireland division in the second half of the year. Recent project wins in the United Kingdom include Royal School Wolverhampton, Our Cultural Heart Phase Two in Huddersfield, and River Tees Academy in Grangetown. We'll have a look at the market trends. In the Netherlands, market conditions remain favorable, supported by ongoing public and private investment in the energy transition, infrastructure renewal, structural housing shortage, building modernization, and defense. At the same time, we continue to see uncertainty related to grid connection constraints and broader market conditions.
This underlines the importance of clear planning, decisive decision-making, collaboration between public and private partners. In the United Kingdom, demand is supported by investment in energy security, infrastructure, and defense. The government's 10-year infrastructure plan is ambitious, and the recently approved Planning and Infrastructure Act has the potential to accelerate approvals for major projects. In Ireland, the EUR 275 billion National Development Plan is expected to provide a significant boost to the construction sector, creating opportunities in utilities, water, energy, and transport programs. Delivering complex infrastructure projects and new homes is essential for creating thriving communities, but it requires stability, clear planning, and commitment beyond short-term political agendas. We continue our disciplined approach to contract and risk management, which remains a fundamental priority in our strategy to enhance financial performance and predictability. For full year 2026, BAM expects to deliver an Adjusted EBITDA margin of at least 6.5%.
Today's results give us confidence. They show a business that is performing well, making clear choices, and building momentum through our strategy. Now, we will take your questions.
Ladies and gentlemen, we will now begin our Q&A session. For those of you who have joined via the Zoom webinar, if you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. Once called upon, please unmute your audio and ask your question. If you have dialed in, please press star nine to enter the queue and star six to unmute once called upon. Our first question is from Simon van Oppen from Kepler Cheuvreux. Please unmute your line and ask your question. Simon, if you can please press star six to unmute your line. Our next question is from Martijn den Drijver from ABN. Please unmute your line and ask your question. Martijn, you are unmuted. Please go ahead. Martijn, we're going to unmute your other line if you'd like to please go ahead.
Please press star six to unmute.
Am I audible?
You are. Please go ahead.
Yeah, I apologize. It's a bit of a mix-up with the Zoom. I have a few questions. I'll start with the Netherlands. In construction and property, the 8.6% EBITDA margin is obviously a very strong performance. I had to look it up in my Excel model, but nowhere in any time period have you achieved that level of EBITDA margin. You also guide for better home sales in H2. My question is that 8% plus level sustainable going forward? If not, why not? I'll do them all by one.
Yeah, I think it is sustainable. Thanks for the question, Martijn. I think this is reflecting, I think, where we are in the Dutch division with regard to residential. I don't see this as an outlier in margin development.
Understood. That's a short answer, but it definitely does the trick. My second question for the Netherlands is, you obviously had a very good performance there as well. Does the order book support further growth, both in absolute terms and relative terms, support further growth in the energy transition segment?
Yes, I do believe that is the growth driver for the future, not only in the Netherlands but also in the U.K. and Ireland, where both enormous investment programs are on the table. I see there indeed the strongest growth for the next probably 5 - 10 years for our industry. We decided a few years ago to focus on that part of the market, next to residential, by the way. That's not to overlook that segment, but I see indeed opportunities there for further growth. The market is there. I think the projects are there. It will be more a question of who has the capacity, who has the resources to make it happen. I think that's more important than having the market projects availability. In both divisions I foresee they're the biggest growth driver for the next year.
Understood. Moving on to the U.K. On U.K. construct, you report an improving EBITDA margin. Can you shed a bit of light on the facilities services management unit that is also included in U.K. construct? Did that perform at the same level in 2026 as in 2026? Just to get a proper understanding of how the underlying U.K. construct unit performed.
Martijn, morning.
Morning.
Within the revenue levels from the U.K., on an annual base, we are trading on a level of EUR 110 million revenue-wise, and EBITDA-wise, it's around 6%-7%. There is still, let's say, trading on a very solid level also in facility management.
Okay. Understood. Moving on to Ireland. If you assume a normal EBITDA margin of 6%, you would get to an EBITDA of roughly EUR 19 million. You did EUR 10 million. There's EUR 9 million in one, of course, related to the final stages of handing over the hospital to the client. Is that it? Do you think this is it? That's question one. The second one is, will Ireland go back to the 5%-6% normal EBITDA margin level in H2, given the strong performance and also the more qualitative remarks about the strong demand in the Irish market?
Let's first of all touch upon the first question. I like the approach, Martijn, I think we need a bit more nuance.
Okay.
Of course, to a certain extent, related to additional cost with regard to the handover of the hospital. It has also to do with the phasing of results. We do have property revenue results over there as well, but those projects are turnkey projects, and a big one will be delivered in the third quarter with high revenue and also results. It's also, let's say, driving this difference if you compare it to the same period a year ago.
Understood. The question about Ireland going back to its more normalized level of EBITDA margin?
Yeah. Looking to the order book and the new orders, we are indeed expecting at a normal level of margin as presented also in previous periods.
My final question is more related to the updated Adjusted EBITDA margin of at least 6.5%. Without naming any particular project, but have you baked in some sort of headroom for some of these still there legacy projects? Are you confident enough to not have done that?
Well, I think we are making a big step here. If you look a year ago, Martijn, we said for the outlook at least 5%.
Let's say exactly a year ago. If you look at that, we're very happy, of course, to make now the statement 6.5%, and that's 1.5% uptick on that outlook compared to last year. Of course, we are confident that we can realize that margin within the total portfolio with all the ups and downs you always have in a company like this with thousands of projects. Looking at the numbers today, we feel confident to realize that number.
I'm going to squeeze in one more, and then I'll pass on the Q&A. Heijmans mentioned that normal seasonality, where H2 is better than H1, materially better sometimes, that seasonality is diminishing. Do you feel the same way? Do you see the same trends that the seasonality of H2 being significantly better than H1? Is it going to be different this year, or should we just assume the same seasonalities we've seen in 2025, 2024, 2023?
Yeah. Maybe first one additional comment with regard to the first half year figures. We are reporting out a 6.9% EBITDA, it's also included, maybe you've seen it as well, with some positive settlements within the infrastructure business in the U.K.
If you take that out, we are still trading on a level which is also part of our guideline going forward. Based on that, you see indeed a slightly different trend going forward with regard to the seasonality. Still strong figures also in the second half expected.
That's all from my side. Thank you, gentlemen.
Thank you. As a reminder, if you would like to ask a question, please use the raise hand feature. If you have dialed in, please press star nine, and once you've been invited to ask your question, please unmute your line by pressing star six and ask your question. Our next question comes from Simon van Oppen from Kepler Cheuvreux. If you'd like to press star six to unmute your line and ask your question.
Good morning, gentlemen. Can you hear me?
Yes, we can.
Yeah.
Perfect. Yeah. Apologies, I clicked on hashtag instead of star. Thanks, and good morning. First question from my side. It seems that CapEx has come down quite significantly year-over-year. Can you please, yeah, comment on this development and what should we expect for, let's say, the remainder of this year and going forward?
I think we are still investing in CapEx on the same level like we did in the last years. Hence, also the higher depreciation, which is reported also in our half year figures. The CapEx level will be on a level of around EUR 80 million, EUR 85 million for the whole year.
What has driven the, let's say, decrease versus H1 last year?
Well, I think it's not really-
If you compare half years
... we are always really focused on doing the right things with regard to investments in our equipment. A big part of that was also related to our sustainability agenda, and I think we are already there in terms of the electrification of all kind of equipment. Then you will see over time a more stabilizing line with regard to CapEx.
Okay. That's helpful. Thank you. Second question on construction and property in the Netherlands. If you exclude the contribution of Blokland in H1, it seems that revenue has actually gone down roughly 3%. You're also flagging in the press release that, in the Dutch residential markets, you're seeing some affordability pressures from higher interest rates that is affecting parts of the market. Can you please comment on this development and also why revenues excluding Blokland seem to have gone down in H1?
With regard to the revenue excluding Blokland, I think it is important to emphasize that we are consolidating Blokland since April, at the end of the first quarter. The contribution in terms of revenue was quite limited in the first half. If you take that out, then the revenue levels are more or less comparable with the same period in 2025. No decline.
Okay. Thank you. Maybe last question from my side. If we look at revenue and the other, including an elimination line, it was -EUR 49 million in H1 versus -EUR 32 million last year. What is driving this increase as it seems to have gone up proportionally more than your revenues?
We always focus on internal collaboration as well. Using the capabilities within the company. It means if that is going, let's say, in the right direction, then your internal elimination will grow as well to avoid double counting. That is the only reason to see an increase in that number as well. Yeah, from my point of view, a very positive development.
Okay. That is all from my side. Thank you very much.
Thank you, Simon. This concludes the Q&A session. I will now hand back to CEO Ruud Joosten for closing remarks.
Yes. Thank you for your time and your questions in this call. Have a good day and probably will talk to you soon after the full year in the Q3. Thank you