I'd like to welcome you all very warmly to today's general meeting. Before we go any further, I'd like to attract your attention to the safety rules. In the event of a disaster, I would ask you, please, to leave the room as calmly as possible and then follow further instructions. On the left-hand side and right-hand side of the room, the other way around for you will find emergency exits, and the staff will help you to move on from there.
The Royal BAM Group is a Dutch company. We've therefore decided to hold this meeting in Dutch. You can follow the meeting online via a webcast, including with an English simultaneous interpretation. This company and this meeting is therefore held in the Dutch language. Non-Dutch participants to this meeting listen to the English translation of what is being said in this meeting. Please make yourself known if you don't have a device to be able to listen to the translation.
A very warm welcome also to representatives of the Central Works Council and the Central Works Council Shares Foundation for the BAM Group. Mr. Paul Hamer, whose nomination as Supervisory Board Member is on today's agenda, Mr. De Jong, Signing Partner for EY, the external auditor who has checked through the 2025 accounts of the group. He's being backed up by Mr. Smeets from KPMG, our new auditor, then Mr. Marron, on behalf of IQ-EQ, who is taking part in order to represent those shareholders who have submitted questions and comments in advance.
As you can see, all members of the Supervisory Board and the Executive Board are here today. We have three further members of the Executive Committee with us. In addition to the Members of the Executive Board, we have Ms. Van Hoydonk, who is CHRO, Ms. Rodenburg, who is COO for the Netherlands, and Mr. Wilkinson, who is COO of the U.K. and Ireland division. I'd identify the BAM company secretary, Mr. Beckers, who will be secretary of today's meeting.
For minuting purposes, the meeting will be recorded in digital form so that the minutes can be recorded. This meeting was legally convened by announcement on the BAM website on the 25th of March, 2026. At the same time, all the meeting documents were made available on the website. In the notice of the meeting, shareholders were informed that they could submit written questions by the 30th of April if they wished. However, no individual shareholders have chosen to send in any questions regarding agenda items.
Could I ask everyone, please, if you wish to ask questions during the meeting, please restrict yourself to maximum of three questions. I'd also ask you, please, to express your questions in a concise manner. Any follow-up questions, also, please, maximum three. This is in order to make sure that the meeting can run smoothly. I will enforce this rule if necessary, and I will intervene if things drag on too long. We will try to answer all your questions today at the meeting. Any questions which can't be raised as part of the agenda can be dealt with under any other business. Questions which have been dealt with before will not be dealt with again.
The answers to the questions which cannot be answered during the meeting for whatever reason will be responded to as quickly as possible after the meeting is over and dealt with on the website. Now, as in previous years, we will not be voting after each agenda item separately. Instead, voting will remain open throughout. The voting will be closed after Agenda Item 9. That means that during the whole meeting, you can vote on any agenda item at any stage. Voting results will be made known to you just before the meeting is over.
The number of persons and the number of shares represented at today's meeting will be communicated to you in due course so w e're still working on that. Now we'll move on to Agenda Item 2, report from the Supervisory Board on financial year 2025. The Supervisory Board report you can find on page 61 and following. In the report, we deal with the Supervisory Board's work and all its committees and the membership of the Supervisory Board and Executive Board. I'd now like to invite shareholders to raise any questions. When you do so, please give us your name. If you represent an organization, please tell us whom. Any questions regarding the Supervisory Board report?
If there are no questions, then I note that you have taken notice of the report, and we'll move on to the next agenda item. It is application of the Supervisory Board's remuneration policy in 2025. Information regarding this policy for the Executive Board is set out in the remuneration report, which you can find on page 70 and following of the annual report. Shareholders are free to cast a non-binding vote on this matter. I'll now open the floor to any shareholders to which you ask questions on this matter, and where necessary, Ms. Koopmans, Chair of the Remuneration Committee, will answer any questions you may have. She's here with us today.
Yes, thank you very much, Chairman. My name is Tim Bosma. I'm representing the VEB associations organization. I've got a question on your remuneration report, particularly the targets, short-term incentives, because one aspect of this sprung to my attention, that about 10% was attached to one particular objective, 10% of the short-term bonus. If I understand correctly, this is safety. The safety, it deals also with risk projects, and this is then communicated to the Executive Committee.
After 20 visits of this kind, you get a maximum score, and last year it came up with exactly one more. It came into 21 was the score, according to the remuneration report. That does raise some questions in my mind, because this appears to be an objective to be striven for. People have to be present and then report on what's actually happened and of course it doesn't say much about what actual improvements to have been made to safety. This raises my questions. To what extent does the Remuneration Committee actually set a challenging objective? In other words, how tough is it to achieve this target? Basically, it consists of visiting projects and reporting on them.
Second question, why is the board not measured according to measurable results? Last time, for example, we had the incident frequency. That seems to us to be more objective and easier to measure. It also gives you a more precise picture of what's actually happening on the safety front, much more than just how many projects you visited and reported on. Why has that policy changed? Those are my questions.
I'll give the floor to Ms. Koopmans in a moment. This is a very interesting question that you've raised, and I'd like to respond to you a bit. In the past, mostly we used lagging indicators, that is to say, looking back. The advantage of that was you could measure those very precisely. It doesn't tell you anything about what effort is being made and has to be made by management in order to improve safety and t hat is why we decided to make a change to this and have this leading indicator rather than a lagging indicator.
So far, I would certainly say that safety policy, which we talk a lot about in the relevant committee, the policy is bearing fruit, and the actions which the Executive Board and Executive Committee have taken on the safety front have led to better results. That's a real priority for us. That's a general policy response, and I'll give the floor to Ms. Koopmans.
Yes, I'll just add something to that. As our chairman said, we think that the impact of the safety visit by the Executive Committee has more impact on simply in than simply the indicators we had in the past. We do think that it contributes to our safety culture, which is very, very important for us, and it was a target issue in 2025, as you know. There are a number of criteria that the visits have to abide by so i t's not a free hand when you have carry out a visit. It's got to be a high-risk project. As you said yourself, there must be a safety expert present. You must have proper preparation for the meeting, and any incident must be very thoroughly discussed with project management, and the findings and outcomes must therefore be discussed at the Executive Committee.
There's more to these visits than might spring to the eye. We have objectives which we address if there is an accident involving loss of life. Once again, we think that this way of managing safety data, which is part of our broad safety transformation program across the group, we just think that this is great important, and it is gonna make a better contribution to a change of culture and better organization and better safety.
Thank you. A follow-up question, if I might. Could you tell us anything about the possibility of combining both indicators? You were talking about the forward-looking one and the lagging one. I'm thinking that if we have an objective setting for a target to do something, but then that doesn't actually lead to any improvement in the safety record, I wonder if you could address that question.
Well, it remains difficult to summarize safety in just a couple of indicators, whatever you do. Particularly, what we need to do is achieve a change of culture, and I assure you we are right on top of that in the Supervisory Board and the Executive Committee, right across the organization, because we are absolutely confident that everyone is working flat out to achieve high levels of safety. It is absolutely acceptable if people can't go home in the same state that they started the working day with BAM. We are absolutely motivated by this, it's a very important issue, and we've discussed it a great deal with the Executive Committee. It remains difficult to summarize it in indicators, and simply having the lagging indicator is certainly not the right way. Thank you.
Any further questions? If not, I note there are no further questions, and I'll now proceed to ask you to move on to providing your- Oh, I beg your pardon. Please go ahead.
That's quite all right. Good morning. My name is Robert Fraker. We connect you. Now, BAM is really doing very well indeed. It's excellent news. But BAM can make further progress. What I really want to talk about is, at the moment, in Washington, Moscow, and Beijing, there's a number of old men in charge who are suboptimal in their performance. The result of that is that very swiftly. We need to extend our Dutch defense industry. There's a lot of money to be made there. My question is, how can BAM integrate defense?
It seems to me that, following on from what Mr. Joosten was saying in his example in the past, I think that we don't really appreciate Mr. Joosten as well as we should because BAM is doing so fantastically well. That doesn't help us, says the chairman. Yes it does, because if we get thoroughly involved in defense, then things will only get better 'cause the margins are much higher in the defense world, and then there's enough money out there. I'd also like to thank Ms. Koopmans, because she's on the international board of the World Wide Fund for Nature.
Are you certain your question is relevant to the remuneration issue?
Yes. What's really important is that the CEO is a kind of figurehead, and that's very important in this world. Regarding sustainability, things are shall we say suboptimal. Now, Ms. Koopmans is setting a good example, and I think it would be a very good thing if BAM could respond to the World Wide Fund for Nature across the board.
I think you are drifting far off today's this agenda item. Could you please focus your question?
Yes. Okay. You can see a great deal of countries where we are working with huge amount of jungle and wooden houses being built, and BAM can make a real contribution.
I really do not see what this has to do with remuneration. You can raise that question again in any other business if you wish. Yeah, or some other agenda item.
Yes, if you can find an agenda item that it falls under.
Okay, in that case, I will conclude that there are no further questions. I also conclude that there will be no further questions. You can now cast your advisory vote on this agenda item. Now we move on to applying the remuneration policy for the Supervisory Board in 2025. You can see a guide to the application of this policy in page 78 and following of the annual report. Here again, shareholders are free to cast an advisory vote if they wish. Here again, you may ask questions if you want. It will be Ms. Koopmans answering if appropriate.
No one thinks the view of the Supervisory Board isn't getting enough money? Okay. In that case, I note there are no further questions or comments. I would now invite you, please, to cast your vote. We now move on to Item 3 on the agenda, the report from the Executive Board regarding 2025, including the sustainability report for 2025. For the full annual report, I would refer you to the written version. I'll now give the floor to Ruud Joosten because he's Chairman of the Executive Board, and he will run you through further points.
Thank you, Henk. Thanks. Well, we've got some very nice projects underway in the U.K. This is a coast reinforcement project in Norfolk. It's a good example of our climate adaptation projects across the divisions. This one, of course, a very important one, protecting the coast of England in Norfolk. Next slide, please. In 2025 was a very good year for BAM, you can see that on the slide here. A very nice overview of the whole thing, I think, s etting it out very well. You can see turnover revenues of EUR 7 billion, EBITDA of EUR 400 million so g ood improvement on the previous year. Net profit EUR 211 million, which comes out at EUR 0.81 per share.
Solvency is also doing well, very well. That's gone up as well. As you saw in today's press release, we've got an order book of EUR 13 billion. That's almost two years' worth of turnover in the order books so w e're very pleased with that. Regarding sustainability, I'll come to that in a moment. We got a climate A rating for CDP. We're very delighted with that. Of course, a dividend proposal. We are proposing EUR 0.30 per share, which is up from EUR 0.25 in 2024 and t here's a buyback has taken place, EUR 40 million worth of shares.
Our position across the whole of BAM on all fronts is improving financially, but also on the sustainability front. We're very proud of that. Another important issue is how much money in recent years has been made available to our shareholders and here y ou can see a nice breakdown of the figures. You can see that in recent years, there's been a sharp upward trend in the amounts being released for our shareholders, not only dividends, but also buybacks. EUR 357 million has been returned to the shareholders. You can see there's a huge difference between 2023 to six and earlier years.
Here's another nice example, an important project in the U.K., Woodmill High School. A highly sustainable building, very special kind of school, it's very important to show this project because it really shows how important education is for us in the U.K. It is an important part of the U.K. government, is to invest a lot more in schools, they really need to. This is just a nice example of what high quality we can achieve and t his school, as you see, is already in use.
Now, a moment ago, I was mentioning the CDP ranking. For the seventh year in a row, we are A-listed. It seems to be almost automatic now we can achieve A, it's not something that just happens. It's pretty much unique for a construction company to get an A listing. There are very few European companies that have achieved that, so it's a huge achievement by the whole group.
A further improvement in our CO2 emissions, Scope 1, 2, and 3, t hat is fully in line with BAM's policy, the long-term CO2 reduction policy. What about safety? Well, we mentioned that a moment ago. It's a very important focus, not only for the Supervisory Board, but also for the whole of management. Where we are, we had a real transformation in our approach to safety over the past year. It's not that we were doing worse than our competitors in the past, but we felt that there were too many people going home injured after a day's work, and sometimes it could be an injury which could impact their lives in the long term. That is unacceptable so w e have made huge investments in safety over the last year and t hat should mean fewer incidents. Incidents is what we call injuries.
We can see it's already beginning to happen in 2025. You see this in the annual report, but also the first quarter of this year, I'm delighted to say. We can see the downtrend continuing. You've got to strike a balance, and it's not easy. On the one hand, looking back, on the other hand, looking forward. This gives us a much better overview. We're not only therefore looking at incidents that have actually happened. We're also looking at what we call near misses, accidents that almost happened, to see what we can learn from those in order to avoid further accidents. This is a real priority for management. We want everyone to go home safe and sound in the evening.
It's not just safety at work itself, but also how people feel and wellbeing, as we call it. It's very, very important. Apart from accidents at the workplace in the project, we want to pay attention to people's mental state. That's very important too. It's called safety and wellbeing, to summarize it, and that is a very important priority for 2026 as well. Now here we have a very nice project in the Netherlands. Amsterdam Central Station. It's a real landmark in the Netherlands in terms of architecture. It's a hugely complicated project 'cause there's all the historical aspects and all the requirements regarding any kind of building work. It's Amsterdam Central Station. It's also high time it was done. It's a really lovely project for our BAM team in non-residential in the Netherlands.
Perhaps I could just focus on one thing to finish off this part of the presentation here. We got a press release on the first quarter. We're not talking here about quantitative explanation of profitability and turnover and so on. I'm just saying that things are looking good for the first quarter. We're calling it a solid start. We got an increase in sales and an increase in EBITDA. A good company result. I'm delighted to report the acquisition, which is strengthening our position in the housing market in the Netherlands.
2,400 up to 24,000 positions with Gebroeders Blokland, and this means that the further development can continue by BAM. We've seen a further increase in this in the first quarter and for solvency too. The order book, that is say work that has not yet been done, that has stabilized this year for EUR 13 billion. That's heading towards two years of revenue already on the books for the future. Here's a nice example of a project as well, the Bajeskwartier, where the prison used to be in Amsterdam. Again, very fine bit of urban development.
Converting from a prison to an absolutely glorious place to live. Hundreds of people have already moved in, and we're continuing to develop that. It's AM doing it and partly BAM constructing it. Now, since 2025, just for clarity purposes, I'd like to tell you about our compliance with the Corporate Governance Code, which has been adapted. It goes without saying that BAM is fully in line with the Corporate Governance Code, and I can see our lawyers team nodding happily to me so t here we are. That has been dealt with.
Here's another project, electrification, energy transition. This is a huge project, a huge focus for BAM in the past years, and also into the future as well. I think it'll be a major growth factor for BAM. This really is a lovely photo. It gives you a good example of what can be done. This is Borssele, where we got high-voltage network being set up for our TenneT. In this case, it's a really good example of how important this is for the Netherlands, and therefore also for BAM. That brings me to my conclusion on 2025.
Thank you, Mr. Joosten. Well, as you saw, Mr. Joosten did dwell briefly on compliance with the revised Dutch Corporate Governance Code dated 2025, and that is dealt with in agenda Item 3 B. Now the share is open for any shareholders who wish to ask questions. Mr. Rinks, please.
Yes, indeed. My name is Rinks, as you said. There's a couple of things I'd just like to draw your attention to. Firstly, recycling of construction material. BAM says in the annual report, and also on the website, that recycling is an important issue. My question is, how much is actually happening in reality c ause some things are going very well. Steel has been good for a long time. Scrap is going back to the kilns. That's been happening a long time ago. Asphalt, again, good recycling position there. Road is being dug up, and so on. It goes back to the rubbish center, some of it. What about the other construction materials?
I, it doesn't seem to me that recycling is getting going, partly because of rules, because there can be lead in old plastic, other kinds of pollutants, whereas new plastics, PVC, I'm thinking of, for example, is different and t hen questions like wood. You can't do much with old wood, you can grow more trees. That could help to reduce the environmental burden. All these things end up, a lot of them, on the rubbish tip. My question is, how does BAM see things working in the future? How can you change this? 'Cause the problem is, if you want to achieve change on large scale, you need to spend money on it. It's more expensive than just buying new stuff.
Of course, you've got clay and silt, sand that need to be gathered to build, to make bricks, and so on. My specific question is, how does BAM plan to enhance the level of recycling of construction materials, including the difficult examples, what is technically difficult, without impoverishing ourselves b ecause, of course, we shareholders don't particularly want to see BAM losing EUR 10 million a year because of recycling so much. My second point. I see a 10-year overview over the annual report. That was very nice, towards the very, very end. One thing that struck me here was EUR 7 billion revenue. That was 10 years ago, we got the same figure. We had 20,000 people working for us then. We've only got 13,000 working at BAM.
BAM is actually, has been shrinking in the last decade. What about inflation? If we take EUR 20 million, well, if you compare EUR 20 million now, the money value now with what it was worth 20 years ago, we should have several percent more if we're doing equally well. We've got the same revenue figure, but it actually means we're doing far less work than we used to be. Those are my questions. Well, would you recognize that, in fact, this is not a growth company, but a negative growth company? Is it possible to become a growth company again? If so, how are we going to change that trend? Have we got enough people? Can we recruit enough people? Do we need to get involved in high-risk projects again?
Of course, everyone is being very picky at the moment, and that's very nice what projects you want to take on. You're choosing far fewer high-risk projects, and talk about only the nice growth projects, and so on. That's why the share, the share price has gone up as well, EUR 0.81. Those are the things I welcome your response to. Thank you.
[ Thank you very much. Thank you for your questions, Mr. Rinks. In your question, you've more or less answered the question. No, that's not very clever, says Mr. Rinks.
Mr. Joosten.
You're quite right. Your first question on recycling. Indeed, recycling is extremely important in our industry. The most important thing is that when you set up the project, you design the project, you try to use raw materials that are recyclable and that can be used later on. That is how we, from now onwards, or we've been doing this for a couple of years, this is how we approach projects. To set up the project in such a way that we can actually proceed to recycling at the end of the project. Futhermore, w hat is it that we're doing today on a daily basis on the building sites? It's important that you separate your waste.
The people that need to process the waste need to be able to easily convert it into recyclable material and t hat's a very important part of the project. Page 124 of the annual report, you'll find further information about that. The entire sector or industry has been achieving impressive results. We are recycling about 80% of the waste from construction efforts. It's very helpful. Of course it continues to be difficult. Not all material can be recycled. 80%, you'll find that on page 130 of the annual report. I think that's hopeful for the future.
It's not enough. Of course, the goal is to increase it to 100%. We're not there yet. All of us have rolled up our sleeves and are really working on this. It's all about the design or the setup of the project and using the right materials. As far as your second question is concerned, your 10-year overview, quite right. BAM used to be bigger 10 a couple of years ago. I would characterize BAM as a growing company, especially regarding the payout to shareholders. Interesting for those present here today, the EUR 357 million that we've paid out to shareholders now. It's an interesting benchmark also to look at that instead of revenue. Revenue can increase.
You can accept all these high-risk projects, and it's not that difficult to generate that kind of revenue. What we want to do is create a stable company with steady growth of payout to shareholders, dividend and share buybacks that we've been doing for a couple of years, but also for our own staff and our clients, our customers. We want to be a stable organization, and we're proud that we can present those EUR 7 billion now with good results with a profitable company, in which we can pay back our shareholders and also our staff. Growth is important. We've had to divest a number of operations, and fortunately, we've been able to offset that, and we do have the EUR 7 billion.
Yes, but this is the same amount that you had a couple of years ago.
We're looking at what happened as from 2020. We had operations in 37 countries at the time, and now we have operations in four countries. The first assignment to Mr. Joosten was shrink and healthy. BAM is healthy again, and from there on, you can grow. The ambition to have operation in 37 countries and not to be able to make a lot of money, we've let go of that.
I was always against that.
We do listen to you. Sometimes it takes a while, but we do listen. If I look at 2027 and the years after that, as Mr. Joosten said, this is our policy. Large projects contribute to revenue, but usually not to margin, and we're going for quality and sustainability.
This is what van Wingerden just said at the time, but he didn't succeed. It's been the goal of the company for a couple of years now, but it's good to see that it's working out. I'm looking forward to a revenue of EUR 8 billion and not only on the back of inflation.
Noted. VEB.
Thank you, Chairman. I have a question really about the provisions. We just saw these wonderful figures on the screen. I'd like to deep dive a bit more. When I looked at the financial statements, I saw that you have a provision of EUR 40 million approximately for claims and legal obligations. From the explanatory note of the financial statements, I couldn't really infer what this provision really relates to. The annual report does specify that the amount has to do with expected costs of rectification, operations, and things that have to do with changing safety requirements for buildings.
My first question is, can the board perhaps explain what this provision relates to of EUR 40 million precisely, and especially regarding changing safety requirements for buildings? That really caught my eye. In this provision, does it also concern obligations in the U.K., for instance, as a consequence of the U.K. Building Safety Act?
Mr. de Pater will be answering this question.
Thank you for that question. These provisions indeed have increased. In the first place, we have to look back. In the past two years, we've shown a 12% revenue growth. At 25, it was 9%, 3% in the year before that. With revenue growth, that means that your guarantee provisions will grow proportionately. Part of the increase relates to the ordinary guarantee obligations. That doesn't mean that you pay it out, but it's got to do with the process that you need to comply with.
The second part concerns this Building Safety Act. It's got to do with our construction business in the U.K., mainly focusing on more residential non-residential rather. The risk profile, therefore, of that company in that respect is rather limited. Despite that, we felt that we wanted to deal with it very prudently, which is why we increased the provision slightly. This towards the future gives us a comfortable start as from 2027. T
This has got to do with legal obligations, says the shareholder. The estimate of EUR 40 million, how did you come to that estimate? I was wondering, because I understand that this consists of projects that consist of a number of floors and that there could be defects.
Yes. The estimate has to do with the height of the building and also the cladding on the facade and in which measure that could be related to fire safety. When were those buildings built? How was that all designed? What are the implications for today's situation? We make an estimate.
Do you believe that the estimate will remain the same? I looked up some peers of BAM, and some of these companies took provisions of hundreds of millions euros. Of course, I understand they can't be compared one-on-one, but my question is this it, or do you see a risk that in the future these provisions need to be increased?
This is a big difference between a builder that focuses on residential and non-residential. Particularly in non-residential, the risks are much, much higher, which is why in competing companies you see much higher provisions. In the first quarter we've been stable in this respect. That's what all we can say.
In terms of the future risk profiles, will you be taking that into account?
We focus on the non-residential parts. With that, you avoid that risk.
I have some other questions about something else, but it's fine to give the floor to someone else should someone else have other questions.
Please continue.
One more question, deep diving into the financial statements. Variable consideration in revenue. What struck me is that this year, EUR 570 million, almost 10% or 8% or 10% of the total revenue. 2024, this item was high, EUR 400 million, the years before that it was somewhere around EUR 30 million-EUR 40 million. I understand that BAM estimates that it's highly probable that revenue will actually be realized, and from an accounting point of view, that means that chances are in excess of 75% that they will materialize.
This also concerns amounts for which there's no final agreement, claims, for instance, and that makes it questionable, because you're accounting for this in the financial statements, but there still is an considerable risk that part of these amounts will not be received or not entirely received. I have a couple of questions about that. First question is, how is it that this amount is increasing so considerably, EUR 570 million, variable considerations, and in the past it was only EUR 30 million-EUR 40 million? There was also a breakdown that I found specifically regarding the Dutch division or business unit, and it says that EUR 360 million out of the EUR 570 million concerns a civil engineering project in the Netherlands.
Specifically, I read that this concerns unapproved variation orders. This is a substantial amount in the revenue that is apparently unapproved. Can you explain as a board what the state of play of the project is? It's a Danish project, correct me if I'm wrong. I don't know how to pronounce it, Fehmarnb elt tunnel project.
Well, we don't refer to projects. As a rule, we refer to the premises that we use in these input variation orders. That's IFRS, and we report in accordance with IFRS. When we refer to unapproved variation orders, then that all that is documented in detail. Why do we see it as revenue? It's revenue. Well, that is because the documents are very robust, and that is why we've embarked on this path. It all depends on the type of project and the phase we're in. That is why you see changes from one year to the next.
Yes, I'm asking about this project specifically because of the magnitude of this amount of variable consideration in the revenue in the Dutch business unit. I can't imagine any other business in which these amounts would be outstanding with customers. I also read in the news that the whole debate about this Fehmarnb elt tunnel is increasing and that the joint venture is facing claims of EUR 2 billion with the principal. That does mean that the situation might be sensitive. How sure are you that you're actually gonna achieve this revenue? Could you give us a bit more details?
I think that would be very helpful for shareholders. This question will be answered by Mr. Joosten.
By definition, we do not discuss projects, specific projects to protect the client, but also our joint venture partners and ourselves. We'll be reporting on that should it be appropriate and that in cooperation also with the client. It might be good to highlight that last night we had an important sinking project milestone in the project. 220 m have been sunken on the Danish sea floor, indicating that this is a successful technological concept, and we can show and demonstrate that this tunnel is going to be realized. That's very positive and encouraging, so that will be published later today.
Great. Wonderful you answering my follow-up question. I knew this was an issue, so I'd like, I was curious about sinking this equipment. For other people who might not be fully informed, we have a 12.5% share in this project.
Do you have any other questions?
Yes, about a different topic.
You're representing many shareholders.
Recurring business, recurring revenue. Couple of questions about the strategic pillar transform because BAM is shifting its attention to, from one-off projects to scalable, less risky operations, and I'd like to hear more about the state of play and whether BAM can provide more information to shareholders. First of all, my first question, can the board indicate in which how the board sees BAM shifting in this respect? Which percentage of the revenue is made from recurring business, and how does that relate to the situation three, four, five years ago? What about profitability as BAM as a total, but also breakdown into the different business units? I'm also interested in the differences in profitability of the traditional one-off projects and the recurring projects.
Well, we do not disclose percentages on recurring revenue as part and parcel of our entire revenue. We do see the percentage increase considerably because of the decisions that we've taken in the U.K., for instance, increasing part of our projects are part of long-term frameworks. For several years, 10 years, five years, seven years, we engage in arrangements with the authorities, for instance, to carry out projects. Is this recurring revenue? Well, that's debatable.
We see it as a long-term commitment, part of our long-term revenue. In the Netherlands, we see a considerable increase of long-term arrangements and contracts. With Nexus, for instance, in the south of the Netherlands, we have 10, 12-year contracts that we're entering into. Slowly but surely, we are making major progress in recurring revenue. You could even venture to say that in this example that I just gave, the Bajeskwartier, the former prison area, is it recurring? Well, I don't know, but it's a long-term project. Over several years, we are realizing residential property, more and more strategic parts of our revenue will comply with this broader definition of recurring, and it is certainly the priority in our strategy.
I hear you say that we see the percentage increasing, why wouldn't you disclose this with the investors?
Well, perhaps in the future, it's all about the definition, what is recurring? Is that the narrow definition you need a contract with for a couple of years with an amount? Could you refer to a framework agreement also as recurring revenue? We're always very conservative in disclosing information to shareholders. If it's recurring, they'll probably also want to know whether it's actually recurring, but the definition for BAM is strategically broader, we would have to engage in a whole debate about that.
Well, I think that a broad, a good definition would help because that would help investors see how you're doing in terms of this transform pillar.
Clear.
In the margin profile, do you see differences between the recurring business that you just referred to that complies with the definition versus the one-off projects?
That's very difficult to define. It all depends on the segment that we operate in. It could be difference between residential and non-residential infrastructure, where we have different types of contracts. In general, we see that in these long- contracts, we can achieve higher margins because there's this learning effect. You get a learning curve across the years, we can work more efficiently with our clients and can achieve a better performance and better results for our clients, but also for ourselves.
Are you referring to 1%, 2%, 3% additional margin?
I'm not going to say, no comment on this.
Last topic, takeovers, acquisition. I read in the annual report that BAM doesn't rule out any takeovers. Recently, you actually finalized one, at the same time, BAM is reducing its risk, simplifying the company, being more selective in its projects. I'd like to hear from the board how you see any possible takeovers, what would you focus on? Would it be residential? Would it be about strengthening your customer relations or modular or industrial building operations, also geographically?
It was just referred to, BAM has reduced the number of countries in which it has a footprint. Are there any takeovers that you are considering within these core markets, or are you also looking outside your core markets? Finally, in terms of the magnitude of the transactions, would that be smaller, add-on acquisitions, or would you also be considering larger acquisitions, or takeovers or mergers that could lead to a different financial structure?
Thank you very much for these questions. M&A, of course, we never refer to that. We never comment on that. I don't think that would be sensible. We've seen a wonderful acquisition in the first quarter, you're quite right, focusing on our residential positions, 2,800 positions in the Netherlands, a long-term investment for the development of residential properties that are in demand in the Netherlands, so we continue to look at that.
Technological acquisitions can also come up in the energy transition, for instance, that can help us to grow as BAM as a whole in a segment that will continue to grow over the next three to five years, also in the U.K. We also look at that. The degree of funding is really not that relevant. I mean, if there would be a very attractive opportunity, we would consider it. We're also very proud of the results and the performance that we've shown as BAM now. We'd take a very careful look at the possibilities and opportunities.
First and foremost, we would look at our residential developments in the Netherlands and technology, particularly regarding the energy transition. I think that these would be the main areas. For the rest, as a board, we must always look at all the opportunities that arise, and we actually also do so, should they arise.
So basically, there would mainly be smaller acquisitions in the residential core markets.
Those are your words. . Thank you.
Good morning. Lon van der Veer of the VBDO, the Association for Investors in Sustainable Development. We've been visiting your AGMs for many years, and this year again, and it was with great pleasure that I read your annual report, and I read about your progress in terms of sustainability. Today, you limited your presentation on carbon dioxide emissions. We also look at the broader picture, also social issues and governance. My first question does concern the environment, a new topic that we have in our association, and that is pollution.
We're quite worried about pollution, soil pollution, something that appears on the news on a daily basis, PFAS, pollution of water, contamination of water. We're going to have to deal with new legislation that has been in place for a while, but a year-end 2027 can lead to uncomfortable situations, the Framework Directive Water. Pollution is a topic that we have embraced, we're pleased to see that BAM has included it as a material topic in the annual report. It's not mentioned in its sustainability strategy. I haven't been able to find it, but perhaps if you update it, you can include it. I even see possibilities to improve your scores. I mean, you could leave land behind cleaner than it was when you arrived at the building site.
Thank you. Thank you to have you here, and thank you for your compliments. Contamination or pollution has not been included explicitly as part and parcel of our sustainability strategy. Not that we don't consider it to be important, but because we take different perspectives to address sustainability. It all starts with the design of the project. In the Netherlands, we work with an MKI score, and we try to indicate what the impact will be also in terms of pollution or contamination of the project. MKI stands for environmental cost indicator. We look at contamination in terms of carbon dioxide reduction, and there's a clear link here with pollution, one of the key priorities of BAM. As you see, we've made progress, but there's still a long way to go.
Circularity is also an important part of our strategy. We also take a look at waste, how we deal with waste. Mr. Rinks' question referred to that just now. In that way, we try to address pollution, making sure that the waste doesn't end up in the environment, but that it be recycled and reused. We also have biodiversity as a third part, in which we really look at the impact on the natural environment of what we do and how we leave behind the land when we leave. For instance, planting trees or plants, and we also look at, well, flora and fauna. The ecologists are also involved, and we look at the whole package. No, it hasn't been mentioned explicitly, but it does have priority from the three perspectives in terms of our sustainability strategy.
Perhaps next time you can be somewhat more explicit. I'm sure you'll work on that. Second topic is ESG. Of ESG is S, social, living wage. We've been asking questions about that for years. Today, we'd like to zoom in on, w ell, we assume that all your employees have a living wage and that you're taking care of them, and we trust you in that. You also work a lot with subcontractors. There are all these other people who are working on the building site.
Are these people also paid a living wage? Perhaps also if they come from abroad or if other people are hired to do these projects. What is your perspective on that?
For BAM, we work a lot with subcontractors, and we have operations in Northwest Europe, I would say, fortunately. We have collective labor agreements. If subcontractors work for us, they have to agree to complying with our code of conduct that we've drawn up for our subcontractors. That will cover most of these issues. Furthermore, we also have an external check. We have the tax revenue department that will also look at how our subcontractors deal with that. We have the Labor Foundation and Constructionline in the U.K. These are external bodies that supervise this and make sure that a living wage ends up with these workers. It's a very important topic, and we need to keep a close eye on the ball here.
Yes, especially because there's a shortage of staff and also of workers come from abroad. My last topic is governance. The CSRD is how you reported on this, congratulations with that, you continue to embrace this even though legislation has become somewhat less strict. You are part of the group that really has to do this and pull this off, so you can also set the example. Another element of CSRD is the double materiality analysis, which means that you need to engage with stakeholders in terms of determining the topics that are important and relevant. What we see happening with other companies is that they say, "We have the stakeholders, but we also work with vaguer notions, the silent stakeholders, giving nature a voice, giving water a voice, future generations," so taking a broader look, a broader perspective. Is this something that has trickled down into BAM somehow?
Yes, a very important topic. These are silent stakeholders that can't really defend themselves or fend for themselves, and you I just mentioned the ecologists that we have employed that play a very important role in the project, also in the execution of every project, and also the MKI analysis that we carry out when we start a project to determine how we can contribute to the environment in which we operate. That's how we start, with such an analysis. Furthermore, it's also important that we be challenged by external parties, Greenl abel in the Netherlands, but we have entered into a partnership with the Eden Project in the U.K. that has very strict guidelines and opinions.
We're also being challenged as a building company in this respect. In-house, we are trying to establish clear directives and guidelines, the way we manage projects. Also externally, there are always external parties that are monitoring this and challenging us. Future generations, we're fortunate to have lots of young people that we hire every year in the Netherlands and also U.K. We engage with them very actively, asking them how they see these things and how they feel about that. I can assure you that they are quite well-versed in putting forward their views and engaging in a debate with us.
Thank you very much.
Any other questions?
Oh. Who, yes? You go ahead first, please. Good morning. [Alexander van Asselt]. I'm a private shareholder. I've got a question about the, with the cancellation of the own purchased shares, the bought back shares. I can't see anything about that in the annual report. Buyback shares are canceled, are they not? Could you tell us more about that?
Yes. That depends from year to year. Last year we did, you can see that, we have the plan there.
Is that the last batch then? Is that the case?
Yes, we did. Yes, some were canceled, for 2025 it will depend on what we decide to do.
What does it depend from?
Well, we purchased EUR 40 million worth. As you know, that's gonna start on Monday. We'll be looking at the status every week and see what's happening in the outside world. Depending on 2026 policy, we'll decide whether or not to cancel them.
The previous EUR 40 million have not been canceled?
Yes, some of the previous EUR 40 million were canceled in 2024.
The EUR 40 million are starting off on Monday then. Is the plan to cancel them?
No, we haven't discussed that yet. We've currently got 257 million shares there. We're looking to see what we can purchase on the stock exchange and seeing what happening in the future. In addition to that, we'll see what we're going to do with the bought back shares.
1973, we had an oil crisis back then. You'd think that, well, you can learn lessons from that, 50 years down the road, we've got an oil and energy crisis. What's nice now is that my BAM shares have gone up by 100%, and that's really very good news. I'm very pleased about it. What's important now is for you, now you're building all kinds of things, but you can build in an independent manner. That is to say that companies can continue operating even if there's an energy crisis on the way. It's fairly simple to do with solar panels, huge batteries. Sodium batteries, for example, are on the way through, and you can really be at the forefront of that. It's important not only to do it, but to be good and tell it, because your figures are looking fabulous.
The VBDO, Investors for Sustainable Development, are delighted t hat's pretty unusual. You got excellent results, which means you can continue work on tasks of this kind, because this is what we need to wait for. You're building. You've got a housing crisis in the Netherlands. You're building 25,000 residential units. That'll be a very good opportunity to make the, to build houses that save huge amounts of water and electricity, for example. Building green. I think the nice thing is if you can have your outside contacts, your external profile saying, "We're not just building in a sustainable way, but we're building in an independent way," because that's what the Netherlands needs. We can see strange-minded people in Washington and Beijing and Moscow doing odd things.
I think we're looking at a further investment in defense as well to help Ukraine. That's important to keep things peaceful here in the Netherlands. BAM can do a lot more on that front too. Let's communicate that to the outside world. These are important projects. Think of the WWF, think of the universities. You're doing a lot there. You could communicate it much more to the outside world. You could greatly improve communications. That would really improve you and can bring a lot of money in, and you'd get the best graduate recruits.
Specifically, being independent on all fronts. Secondly, much better communication about your excellent performance to the outside world. Another thing, cybercrime. Now, good news here is that you yourselves are working with AI. You can now hack into everybody if you want. That's not only members of the Supervisory Board and the Executive Board of BAM, but also all the other hackers worldwide. They do manage to sabotage a lot of things that you're made ruling in the Odido, for example. It's not just a problem for BAM, it's a problem for the whole world. It needs a great deal more attention. Those are my specific questions at this stage. Thank you.
Well, I can't really answer all your questions specifically at the moment. I notice some advice you're giving us regarding our external communication about our excellent figures. Yes, I appreciate that. I'd rather think it'd be nice if you'd repeated your point about my under-remuneration. The energy transition is indeed a very important topic, and we've been working flat out on that for several years, and we're going to step that up in future. We'll certainly take your advice on that.
Defense, yes, indeed. It's a new, well, new-ish source of income, which we intend to respond to with a number of projects in the Netherlands and across the U.K. That again is certainly an important source of revenue for the coming years. Graduate recruitment, yes, indeed. We're delighted to say that the brightest students do want to come and work for BAM, and we want to keep things that way. There again, I would say you are absolutely right. Cybercrime. Yes, indeed, this is a real problem. Henri, would you like to add something about that perhaps? About our structural approach to cyber defense?
Yes, indeed, Ruud. Yes, we really keep an eagle eye on this. How shall I put it? We have a constant monitoring of our cybersecurity systems, 24/7 monitoring using the latest technology, and external partners are involved. We train our people to really be aware of this issue. I think we can see an upward trend in awareness and also the question of defense of our data. Yes, again, we need to have a very solid, strong system, which we have got.
Thank you for your replies. I'd just like to come back to what Mr. Joosten was saying about his remuneration. Well, yes, I overlooked something because you can see that we can agree with you regarding that as far as I'm concerned. I think that a specific target could be biodiversity and tree planting. You are at the forefront of many topics, and I think you could strengthen your position because the government ain't doing much about it, and lots of other companies aren't either. You can easily take a forerunner approach there. I'd like to advise you to do that and then report it to the outside world because you can be at the forefront. It would be really lovely to use that expertise in the Netherlands and use it in the outside world.
Thank you for your advice. Yes, we can recognize the trends which you indicated. Perhaps Mr. Rinks, sitting next to you, can assure you that it's a very fine growth market. If there are no further questions, I would inform you, I would note that you have noted the Executive Board report and the compliance with the new Corporate Governance Code 2025. We've discussed it. We'll move on to agenda item 4, not until I tell you about how many people are here today and what that means in terms of votes.
Well, what's important is the present percentage of capital regarding the entire amount of capital entitled to vote is 51.38%. That's the highest turnout we've ever achieved, as far as I can find. Regards the number of persons here and represented, it is 1,095 shareholders, and the total amount of capital present or represented here, in other words, entitled to vote, is after this 51.38%. In the room itself, we've got 173,385 votes. That's 0.13%. Via IQ-EQ, we got 131,984,203, which represents therefore altogether 99.87% of the votes. Just a whisker under 100%. We've got 51.38%, as I mentioned earlier. There's a nice high level of representation of our shareholders.
Now I'd like to move on to the next agenda item, adopting the annual report for 2025. You can find that on pages 163 and following in the annual report. The financial statements have been drafted by the Executive Board and discussed with the Supervisory Board, which accepted them. We've got the external auditors report, which you can find on page 225 and following in the annual report. Now, before we go on to discuss the financial statements, I'd like to invite Mr. De Jong from EY, who is responsible for auditing the BAM annual report. I'd like to invite him to give an introduction to the auditing he carried, his audit activities and the procedures.
Here I tell you that EY, for the purposes of today's meeting, has been released from its duty of confidentiality. I'd also tell you that EY has a duty of correction. That means that if something happens in the course of this meeting which gives a substantially incorrect picture of the real situation regarding the financial statements or the auditing process, then EY will request a correction of that. That might happen during the meeting, or it might happen before the final version of the minutes is adopted and that i t gives me pleasure to invite Mr. De Jong to speak.
Well, good morning, everyone. I'm delighted to give you a presentation today. Yes, indeed, all formalities have been correctly observed, so I'm entitled to give you this presentation today. Indeed, I have got the duty of correction. I've no reason so far to intervene. All the answers so far given to the very sound questions regarding the financial statements I can fully agree with. Well, EY, my name is De Jong, and on behalf of EY, I'm here to run you through the 2025 work we did and the main findings. This is the last time I'll be doing it, so it's quite a special moment for me.
EY has been BAM's auditor for 10 years now, totally independent. Of course, KPMG has been nominated to take over next year. We have my successor in the room with us here today, and we've already had the handover, and I think everyone involved was satisfied with that. Now, I'd just like to walk you through the slide you can see on the screens now. There's an awful lot of wording on there. I'll just take you through it. Of course, I'll be happy to deal with any questions as best I can afterwards. Starting at the top left-hand corner, scope. What did we do? What did we cover?
What do we actually investigate when we look at the annual reports, the consolidated version and the simplified version, and we give reasonable assurance? That means to say we can be reasonably certain that the annual report gives a correct image. We look at the report. That is to say the Executive Board's report and the Supervisory Board's report. We look at all the data. You can see a number of topics that came to the forefront. Corporate governance, the code there, we've been talking about that and w e concluded that the company has abided by the corporate code. The risk management, I'll be telling you more about that in a moment.
We look at the remuneration report. We had a specific instruction to look at the sustainability statement. We're investigating that in order to give limited assurance. There's a limited level of certainty, in other words. I'll tell you more about that in a moment. Now halfway down on the left, strategy and execution. Teaming, first of all. Well, I'm the responsible auditor. I've got dozens of people working with me, monitoring BAM. In the Netherlands, we've got a team of auditors working at the group here, but we've also got specialists for a lot of fields, tax, pensions, IT, real estate valuation, risk management, reporting. A lot of people are involved in those tasks.
Also involved, we had a question about this last year, in fact, is an independent quality assessor. That's a colleague, partner who is at arm's length from the issue and t hat person monitors everything we do and tells us what we need to do to see whether our auditing has been in line with all the requirements. Before a statement is made, we ask for permission to give the assurance statement. We have teams, EY teams working in the U.K., Ireland, Belgium. They get instructions. We touch base with them regarding risk assessment and all the work. Sometimes we do it online. Sometimes we do it at physical meetings. We come to see them. They come to see us.
In the course of the year, there's a lot of visiting going on. Specifically for Fehmarnbelt, we were talking about a non-EY auditor, and they also get instructions, and we report back. I beg your pardon. They report back to us. Perhaps it would be worth mentioning that I myself have been involved in Fehmarnbelt with a number of people and dealing with the relevant finance director from BAM. Well, a number of topics that always crop up for our attention. Going concern is important, continuity is important, and the assumptions underlying it.
Fraud, compliance with laws and regulations, and a number of other topics which are important in auditing process. We call those the key audit matters. There are two of those. One is valuation of key projects and the revenue recognition. We had some good question about that last time around, looking at variable considerations and variation orders. I can assure you that is very much looked into under this heading, and we look greatly into it, and that's how we come up with the highly probable criterion. Another key audit matter is valuation of land and building rights. We look at that very emphatically.
When it comes to sustainability statements, we look at key audit matters t hat doesn't really apply to this field. Looking at materiality at the left bottom left-hand corner, we had a reasonable degree of certainty for the annual report. It's not absolute certainty. We look through it carefully. We have a degree of tolerance for errors, and we look at that by in terms of a percentage of revenue, 0.8% of the revenue. That's EUR 54 million, and the EUR 45 million is the basis on which we set a threshold, which is what we use when looking through BAM administration.
If we find any errors more than EUR 2.7 million, we report them to the Executive Board, and we assume that corrections active will be taken. There's always quality materiality. Those are the figures. Some things are important in terms of quality. Perhaps I could give you an example, remuneration and the number of working visits, which of course is one of the obligations. Ms. Koopmans was talking about the conditions that apply to these visits a moment ago. We do actually check whether the visit has taken place. We see the report on the visit, and in the report, we can see that all those requirements have been met. That's a quality aspect of auditing rather than actually looking at figures.
Moving on to the right top right-hand corner, other focus areas. I won't run through them all, but I think it's worth mentioning about the statement on risk management. This is new in the 2025 Corporate Governance Code. You can see we've done very good preparatory work for this in BAM. We'd had a great many consultations on the subject in advance, looking to see what internal management systems we have and what level of conformity exists there. That led to a statement in the report saying that we are fully in line with the requirements.
Moving on to sustainability assurance. Now, environment, social, and government, we had someone mentioned that in the questions a moment ago. This is a very important topic for BAM. It's part of the corporate strategy. It's very high up on the Supervisory Board and Executive Board list of priorities, and it's important for us, of course, when looking at our insurance engagement, making sure that BAM is reporting in line with CSRD, ESRS, and the Taxonomy Regulation. This brings me to my conclusion and the reports we produce. Now, in the course of the year, we have a number of reports.
First quarter, May 2025, in this case, we have an assurance plan. First a draft, we talk that through with a number of groups within the company, then we have the final version. The assurance plan basically is our risk assessment materiality and the work we carry on on that front. The mid-year figures, after the second quarter, in other words, we give feedback on the, our observations, our comments on the mid-year figures. After the third quarter, we look at internal management, the well-known management letter, and I can inform you that if you look at the type and content of that letter, things are moving in a very positive direction.
We fewer points to be made, fewer pages to be taken up. The important thing is to see that BAM is following up very, very thoroughly, not just because we report it, but because BAM themselves think it's important in itself. Another important part of the consultations are soft controls, that is say, discussing the Executive Board and Supervisory Board to talk about general behaviors. In addition to the auditing statement and the sustainability statement, we also produce an annual report looking here at the financial statements and including a conclusion. Our main conclusions are set out in the 2025 saying, "Does the 2025 financial statements give a sound picture of the financial situation at the end of 2025, the cash flow and the end result?"
We look therefore at the report to see whether all the figures are in line with the legal requirements. Is the report in line with the annual report and the general image that we got in the course of our auditing activities? Then we look at the statement to see whether anything is out of line with the relevant regulations. This brings me to the end of my story. I think it's important for me to thank you all as shareholders very sincerely for the confidence you've shown in EY as your auditors. Now looking around the room to see if anyone wants to ask any questions. Yes, Mr. De Jong will answer any questions regarding the audit activities, the procedures observed and the statement by the auditor. Any questions?
Yes. Thank you very much, Chairman. Now, one of the key points that EY mentioned and identified is on the slide, in fact, valuation of key projects and revenue recognition. I've got a question on that then to start off with. I wonder if EY could tell us anything more about how these key projects are selected. How do you choose the ones to value? Bearing in mind they seem to have got a lot of small projects, and some are rather smaller than some of the big ones in the past. How do you pick the projects to value?
Then for you, EY was telling there's a number of questions which don't belong to any particular project for whatever reason. Are they then booked to a project? If so, what projects were they? Finally, I'm intrigued to hear, after your 10 years as an auditor, as our auditor, I wonder what suggestions you would make for improvement at BAM in the light of the internal management. What would you recommend? Those are my three questions.
Well, thank you. Those are good questions. Regarding key projects, I think the main thing is to make sure that it depends on the scale, the complexity, and the duration of the project. What we can see is that BAM has its own definition of key projects, internal audit has it, and we have it as well as external auditors. We've had very explicit alignment to see whether we have the same definition of key projects, and the answer is yes, we do. The management's idea of key projects, which reports then of course to the Supervisory Board and others, and how we assess key projects. I think a very important point here is to mention the different composition of the order book these days, which means we have to bear in mind what kind of thing will be key projects in the future.
That is very much on the BAM agenda, so we can look at the order book as it currently stands, also to be in line with KPMG so that we can keep everything in line. Your question regarding costs attached to projects. Yes, that's part of our work program. Yes, you're aware of how we look at these projects. I can't give into individual projects, but please rest assured that part of our work program is to see which costs belong to a project. Are they recorded in the right place? Are they being shoved into aside?
We look very emphatically at that. If I look at internal management, well, we've done a lot on that front. I think when it comes to IT, for example, BAM has invested a lot in its systems. We can see that this is more and more anchored in IT. It's a never-ending story, of course. We have more internal management of the system rather than having things dependent on humans. I think that's the most important aspect.
Well, I've got a follow-up question then.
Yes.
I could imagine that over the past year, we have an increasing number of key projects being audited because we don't have so many big projects, and we've got more smaller key projects. That runs the risk, I think, of costs, knowingly or unknowingly drifting from on project to another one. Have you found any examples of that? If we had if we have found any, then we have reported on it, and it's been corrected.
I think the audit, as long as you've been looking at the legacy projects, and I'm pleased to say there are fewer and fewer of those as time goes by. We can see, if you like, we're undergoing a redefinition of key projects. We used to be talking about larger projects, which would be called key projects immediately because of their scale, and risk profile, and valuation of them. Thank you very much.
Any other questions? If not, I'd like to take this opportunity, Mr. De Jong, to thank you personally for all your huge commitment to BAM. You've been more than just a professional interest. As it turned out, you had a real love and enthusiasm for this project and for construction, so that you really gave us your trust. You've done your work in a fantastic way with your team, and please do communicate my thanks to them all.
Certainly. Thank you.
From next year, EY will be replaced by KPMG as your external auditor. They will be responsible for examining the financial statements for 2026, 2027, and 2028, and be responsible for providing assurance on sustainability statements for those years. The annual general meeting, as shared, has made that decision last year. This brings us on. I will conclude that these financial statements for 2025 can now be voted on. If you wish to adopt them, can I ask you please to cast your vote on that issue? Next, dividend over 2025. This is Agenda Item 5. In accordance with our dividend policy, BAM proposes that there should be a dividend of EUR 0.30 per share. This is a payout ratio of 37% of the net result.
For a full description of the dividend proposal, I would refer you to the annotated agenda on this topic. The floor is now open if anyone wishes to ask questions. If there are no questions, I conclude that you can now proceed to vote on Agenda Item 5. Of course, you can continue to vote until the end meeting is over. This brings us next to discharge. Firstly, 6A, discharge of members of the Executive Board for their activities in 2025. This applies to those who were members of the Executive Board in 2025. For a full description of this proposal, I would refer you once again to the annotated agenda for today. The floor is now open for any questions you may wish to raise.
If there are no further questions or comments, you may now vote on Agenda Item 6A or a lso 6B, which is discharge of the members of the Supervisory Board for their supervision of the management of the financial year 2025. The meeting is invited to grant discharge for the Supervisory Board for supervisory activities in 2025 for those persons who were members of the Supervisory Board in the course of 2025. Here again, there is further information for you in the annotated agenda.
Are there any questions on that one? If not, I conclude that there are no questions or comments. Once again, you can cast your vote. Next agenda item, membership of the Supervisory Board, in particular naming Mr. Paul Hamer as member of the Supervisory Board. in a press report of the 11th of December last year, the company indicated that the Supervisory Board intended to propose Mr. Paul Hamer for nomination as a member of the Supervisory Board in order to fill the vacancy which will be arising as Mr. Paul Sheffield reaches the end of his term of office.
For a full description of the proposal, I would refer you to the annotated agenda. The Central Works Council supports this proposal and has chosen not to recommend any other candidate for this vacancy. I assume that today's meeting does not wish to avail itself of the right to nominate a further candidate. The Supervisory Board therefore confirms the nominee's proposal to present Mr. Hamer for nomination to the board for a period which will end at the end of the annual general meeting in 2030. Mr. Hamer, may I ask you to introduce yourself to the meeting? You may speak English if you wish, of course.
A very good morning, ladies and gentlemen. Thank you for not making me struggle in Dutch. It's not as good as it used to be. A brief resume. My name's Paul Hamer. I live near Manchester in England, for all those who are interested in football. If you'd like to know my persuasion, you can talk to me later. Just fair to say it's blue rather than red. A little bit of a brief resume. I've spent almost 40 years solely working in engineering and construction my entire life from leaving university. In that time, I've worked across construction, consultancy, energy, and defense. I've done that in the U.K., I've done it in Europe, and I've done it right across the world.
I'm hopeful I can bring an element of expertise and experience to the BAM business. I'm delighted to have been nominated to come and support this fantastic organization. I knew them very well when I was working for a competitor and knew Jong very well and always had them and held them in great esteem. I'm delighted to have been nominated here today, and I very much look forward to working with the board and all the teams around the BAM business to make sure that we can continue building a very strong, a very successful, and a very sustainable tomorrow. I will be around after the meeting if everybody wants to come and say hello and introduce themselves. Delighted to be here, and thank you very much.
Thank you. Any questions for Mr. Hamer? No. There are no further questions. We can now proceed to vote on Agenda Item 7. Before we move on to the next agenda item, I'd just like to take this opportunity to talk about Mr. Paul Sheffield, who's leaving us. He's been with BAM for nine years, and Mr. Sheffield has made huge contribution to the company, not only in his capacity as member of the Supervisory Board but also as a delegated member of the Supervisory Board when the Executive Committee needed support during the COVID crisis, among other crises.
We had an interim CEO who was Mr. CFO, den Houter. In his long career with large British construction companies, Mr. Sheffield has built up huge experience and expertise in the construction sector in the U.K. market and beyond. That's an important market for BAM, of course. We have greatly appreciated Mr. Sheffield's experience and expertise, and we will most certainly miss him on a personal level as well. We write to wish him every success in his future activities and wish him the best of health and success. I really would like to thank him for his great loyalty throughout difficult periods that BAM was going through.
Now, a comment on adjusting the rotation schedule for the Supervisory Board. You might have read that in the press release that was issued this morning. Both Ms. Koopmans and myself will be retiring sooner as supervisory directors of BAM. Ms. Koopmans will do so after the AGM in 2027. I will be stopping at the end of the year. These decisions are part and parcel of a broader approach to organize the continuity and the succession in a proper fashion. Otherwise, the mandate of three supervisory directors would end at the same time. Ms. Koopmans and myself, over the next period of time, will be working closely with the Supervisory Board, particularly with Mr. Elfring as my successor, in order to make it possible to proceed smoothly.
In 2020, we had a mistake. Three supervisory directors were appointed at the same time. We had a different setup at the time. Perhaps it was useful at the time, but it's something that we could not maintain. In view of the corporate governance, that was not the correct method. We are supposed to organize a proper succession rotation. We've been able to do that with this measure. I'm pleased that Mr. Elfring is prepared to continue the continuity of the company in the form of the chairmanship. He is Vice Chairman of the Supervisory Board. Let us proceed to designation of the authority of the Executive Board, which is Item 8, issuance or granting of rights to subscribe for ordinary or cumulative preference shares.
For a detailed description of this annual authorization of the Executive Board as the body authorized to issue shares within certain limits, I'd like to refer to the notes to this agenda item. Are there any questions? If not, I would request you to cast your vote. 8 B now, restriction or exclusion of the preemptive rights in connection with the issue of or the granting of rights to subscribe for ordinary shares. Here, once again, I'd like to refer to the customary designation and the explanatory notes to this agenda item. If there are no questions on this item, I confirm that there are no questions or comments, and I would now request you to cast your vote on Agenda Item 8 B or to do so before the end of the meeting.
Item 9 is granting authorization to the Executive Board to arrange for the company to acquire ordinary shares in BAM. For a detailed description of this customary and annual authorization, I'd like to refer to the explanatory notes. Mr. Rinks.
Yes, just one more thing before we wrap this up yet again. I don't think it's such a clever thing to buy back shares after an enormous share price increase. You should look at it as a true investor. If you think that your shares are undervalued, it's a wonderful tool. I mean, if you have some money to do so. If the shares in a couple of years' time, increase from EUR 2 to 10 EUR, I mean, I don't know whether it's such a clever thing to do. I mean, you would buy in fewer shares for the EUR 40 million that you're going to spend now, I believe, than was the case about two years ago. Actually, I think it would be much cleverer to stop the share buyback, which is why I have voted against this item. I'd also like to hear your perspective on this.
Well, yet again, you've provided the answer to the question yourself. Conclusion is that we still feel that we are undervalued as a share. Well, I think, says Mr. Rinks, we have a difference of opinion. Indeed, I understand your answer, and I understand that you proceed with it.
It also works the other way around. We look at the cash position of the company and liquidity, and that is determined. If there's a surplus, we also feel that it's better to pay it back to shareholders or to return it to shareholders in the form of share buyback.
I would prefer one-off additional dividend. Why don't you add another EUR 0.20 of special dividend on top of the ordinary dividend? You don't need the money for investments or to reduce your debts. Reducing debts, I also consider that to be important because contractors can operate and make do with a high level of debts, but I think solvency rate could be in excess of 30%.
Mr. de Pater, could you answer the question?
Yes. You're quite right with your questions, we have a strategy for that. This is a so-called capital allocation plan. We look at four pillars, one of which is solvency. The other one is, how much do we want to invest in equipment? Third one concerns the investments in acquisitions that we touched upon today, in the land bank, for instance. Third one concerns dividend and share buybacks. Every year, we take a fresh look at it.
All the other things that you mentioned, are more important than share buyback. We can agree to disagree on that. I think all the other things you mentioned, reducing the debt, solvency, increasing that a bit, and securing more land in the Netherlands is still very important. Not so much in the U.K., but it is important in the Netherlands. Otherwise, you really can't operate in the Netherlands if you don't have the land. I can assure you that we consider all these interests. Well, I'm also considering things, says Mr. Rinks, which is why I wanted to say a few words about this.
Thank you. Any other comments? Any other questions? We can confirm.
I apologize have a question about the changing composition of the Supervisory Board. You can ask that question under any other business. I'd like to wrap this up first. Here, we're talking about share buyback. You asked whether there were any other questions. Why don't you ask the question under any other business?
Okay, I see that there are no further questions on authorizing the Executive Board to acquire ordinary shares. I'm now requesting you to cast your vote as item 9 of the agenda. This takes us to the end of all these voting items. I'll give you half a minute to cast your last votes. I suggest we close voting. I will request the civil law notary to start counting and I'll give you the results in a couple of moments. This takes us to Item 10. Any other business before we show you the results of the vote? I'll give you the opportunity first.
As far as the changes in the Supervisory Board are concerned, I think you should move to the Balkenende standard in terms of remuneration. Mr. Elfring is also supervisory director at ASR, which is a very sustainable company. I think that he can face the challenge. I think BAM can do a lot. Look at the 80,000 bridges in the Netherlands that need to be replaced. A lot of money can be made here replacing those bridges, and it's great if the bridges work, and you don't have to drive around for another 10 km because the bridge has broken down.
What about the farms in the Netherlands? Why don't we equip all the farms in the Netherlands with solar panels and set up all these wonderful batteries, and so we don't have to put all the solar panels on the wonderful meadows that we have in the Netherlands? Now we're on the topic of solar panels, let's make sure that the solar panels can be recycled. Now the solar panels can't be recycled because it costs about EUR 10-EUR 100 more. It would be wonderful if you could tell the Netherlands how you can do this.
The main thing is here, you are going to build 25,000 houses in the Netherlands. I think you're the biggest company to do that. The government has no clue. No clue. Not even Mona Keijzer, she has no clue how to do it. Why don't you show us how to proceed, how to do that? That's what we want in the Netherlands, and plus you build sustainably. I'm looking forward to Mr. Elfring joining the Supervisory Board, and I think that we should remunerate him according to the Balkenende standard. You've not been able to benefit from that, but you've done a wonderful job here. I'm looking forward to a new mandate, and I hope that you're going to support Ms. Koopmans with her World Wildlife Fund work. I hope you start sponsoring the World Wildlife Fund.
Thank you. Any other questions for any other business?
[Kees Samson], I'm a retail shareholder. I didn't ask this question when we were talking about the financials, but my question is: In which measure do you have a minimum level of current and quick ratio funding of fixed assets? That shouldn't be borne by long-term debt because that needs to be amortized. I hope that funding is done through the equity, company equity.
This is something we look at every quarter. We always want a good ratio in terms of what we capitalize and what we invest. Part of that is done through equity and part of that is solved through lease arrangements.
Thank you.
I see that there are no further questions for any other business. I'm going to ask the notary to show us the voting results. We're going to show you the results for the first items. On this slide, you can see the results. Now we can move to the next slide, which are the remaining items. There we go. I'd like to hand back the floor to you, Chairman.
Thank you, and I confirm that your meeting has approved all the points with the required majority. Thank you for the trust you have placed in us. I do have a pleasant duty. First of all, I'd like to thank Paul Hamer for being a candidate, and now I can confirm that he has become part of BAM. We have a lady here who will be handing over the PPE. That just underscores how important safety is for us. This is not a lagging indicator, by the way. I'd also like to give Paul Sheffield and Jaap de Jong some flowers and thank them for what they have done for BAM. Thank you very much for attending this meeting.