Polish construction companies 2016
– Major Players, Key Growth Drivers and
Development Prospects
Contents
Introduction 5
Chapter 1. Financial analysis of the largest construction companies
7
1.1. List of the largest construction companies in Poland by revenue earned in 2015
8
1.2. List of the largest construction companies in Poland by operating income in 2015
1.3. List of the largest construction companies in Poland by net profit in 2015
10
12
1.4. Debt of the largest construction companies in 2015
15
1.5. Capital expenditure to sales ratio of the largest construction companies in 2015
16
1.6. Revenue of the largest construction companies by region and by type in 2015
18
1.7. 1.7.Market capitalization of the largest construction companies listed on
the Warsaw Stock Exchange 26
Chapter 2. Prospects for development of construction companies in Poland
33
2.1.
Introduction 34
2.2. Key growth drivers for the construction market in Poland
36
2.3. Bankruptcies in the construction sector
38
2.4. Employment in the construction sector
39
2.5. Development prospects for construction market segments in Poland
41
2.6.
Market Perspective 58
2.7.
Summary 61
Chapter 3. Profiles of the largest construction companies in Poland
64
Bibliography 113
Contact us115
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Introduction
Dear Sirs and Madams,
We have the pleasure to present the fourth report
entitled Polish Construction Companies 2016 – Major
Players, Key Growth Drivers and Development
Prospects, analysing the condition of fifteen largest
construction companies in Poland, as measured by
revenues, and describing market prospects for growth.
Having analysed the financial data for 2015, we
observed further improvement in revenues and
profitability of top players in the Polish construction
market. The total revenues of all the fifteen largest
companies grew by PLN 3.1 billion, i.e. 11.3% compared
to the 2014 figures. The revenue growth translated into
higher operating profit and net profit of the top 15. At
the end of 2015, market capitalization of the fifteen
largest construction companies listed on the Warsaw
Stock Exchange and included in the ranking was
considerably higher than a year before.
Undoubtedly, further growth in 2015 resulted from the
general upturn in the Polish economy and completion
of works and projects carried out under the previous
EU financial framework. As in previous years, large
infrastructure projects in the road, railway and
industrial
construction sectors, in particular in the energy
market, were key drivers of the industry.
Still, in 2016 the construction market saw a
considerable slowdown. This results from postponing
key infrastructure projects carried out under the new
financial perspective to 2017 and 2018. The slowdown
will be particularly visible in the market of contracts for
modernization of railroads. Undoubtedly, the major
rescheduling of key investment projects will impede
sector growth in 2016 and entail an accumulation of
construction works in the following years.
The second section comprises an analysis of the
prospects for the industry’s short-term and mid-term
growth, a discussion of possible capital expenditure
in individual market segments, bankruptcy figures,
and employment trends in the sector. At the end
of this section, a summary of the industry’s current
condition and the key growth drivers are presented
from the perspective of the largest Polish construction
companies and key public investors, such as PKP
Polskie Linie Kolejowe S.A. and the Directorate
General for National Roads and Motorways.
In the final part of the report, we briefly examine the
characteristics of the business activity of the fifteen
most important market players in 2015.
We include the most crucial information concerning
the scope of their activities, ownership structures
and detailed financial data derived from their annual
financial statements.
Our report has been prepared based on publically
available financial data or information provided directly
by entities discussed in the report.
We hope that you will find the report: Polish
Construction Companies 2016 – Major Players,
Key Growth Drivers and Development Prospects
informative and that it will give you a better
understanding of the current situation in the Polish
construction market, including the opportunities
and challenges that lie ahead of sector investors and
construction companies.
As always, we highly encourage you to contribute your
insights and suggestions concerning any issues
discussed in the report.
The first part of our report presents a financial analysis
of companies operating on the Polish construction
sector, based on fifteen entities that have managed to
build the strongest market position. It examines their
revenues, sales profits, net profits, debt, geographical
and revenue structure.
5
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
6
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Chapter 1.
Financial analysis
of the largest
construction
companies
7
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.1. List of the largest construction
companies in Poland by revenue
earned in 2015
In 2015, the combined revenue of the fifteen
largest construction companies totalled PLN
31.1 billion, up by PLN 3.1 billion (11.3%) vs.
2014. The largest players did not change
compared to the preceding year. This year’s
list is again topped by Skanska Group, whose
revenue reached PLN 5.5 billion, up by 8.4%.
It is followed directly by Budimex Group,
controlled by the Spanish company
Ferrovial, with revenue totalling PLN 5.1
billion, which means a 3,7% rise year-onyear. The Austrian Strabag is the third
largest construction company in Poland,
whose revenue increased by 22% vs.
2014, reaching PLN 3.8 billion. It should
be emphasised that the Strabag Group
reported the most considerable increase
in its revenue (PLN 693 million) in nominal
terms among all the ranked companies.
Apart from Strabag Group, the revenue of
Torpol Group and Polimex Mostostal Group
also rose substantially in value terms,
by PLN 463 million and PLN 446 million,
respectively. The most exponential increase
in percentage terms (by almost 60%) was
reported by Torpol Group. Consequently,
it went up from the 15th place in 2014
to 12th position a year later. Apart from
Strabag Group, a strong increase in revenue,
exceeding 30%, was also seen by companies
that are new to the ranking, i.e. Mota - Engil
S.A. and Hochtief Polska S.A.
Table 1.1: List of the largest construction companies in Poland by revenue (in PLN ‘000)
Revenue
2015
No. Company name
Revenue
2014
Change in nominal
Change in
terms
percentage terms
1
Skanska Group
5 509 363
5 081 675
427 688
8.4%
2
Budimex Group
5 133 994
4 949 939
184 055
3.7%
3
Strabag Group**
3 835 846
3 142 849
692 997
22.0%
4
Polimex-Mostostal Group
2 548 575
2 102 197
446 378
21.2%
5
PBG Group
1 798 815
1 530 248
268 567
17.6%
6
Erbud Group
1 763 282
1 692 055
71 227
4.2%
7
Trakcja Group
1 329 180
1 601 674
-272 494
-17.0%
8
PORR Group***
1 293 120
1 045 019
248 101
23.7%
9
Mostostal Warszawa Group*
1 275 431
1 509 524
-234 093
-15.5%
10
Unibep Group
1 242 860
1 079 703
163 157
15.1%
11
Elektrobudowa Group
1 242 830
1 108 316
134 514
12.1%
12
Torpol Group*
1 238 241
775 399
462 842
59.7%
13
Warbud S.A.
1 106 860
1 049 886
56 974
5.4%
14
Mota - Engil Central Europe S.A.
949 576
658 133
291 443
44.3%
15
Hochtief Polska S.A.
788 488
579 348
209 140
36.1%
Total
31 056 460
27 905 965
3 150 495
11.3%
average
2 070 431
1 860 398
210 033
11.3%
Increase
Decrease
No change
Note: This analysis does not take account of the revenue generated by foreign branches of construction companies operating in Poland or that of special purpose vehicles established to carry out specific
projects as part of consortia, as their revenue is included in the consolidated revenue of the consortium members
Source: Financial statements for 2014-2015
8
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In 2015, the most considerable drop in
revenue in nominal and percentage terms
was reported by the Trakcja Group (PLN 272
million and 17% respectively). An equally
large percentage drop was seen by the
Mostostal Warszawa Group (15.5% year-onyear).
report a decrease in revenue for two
consecutive years.
Considering the last five years, the high level
of revenue in 2011 was the consequence
of major infrastructure projects carried
out in Poland before EURO 2012 and the
accumulation of investments in the first
financial perspective. Increases seen in
2014 and 2015 were attributable to the
improvement of the overall economic
conditions in Poland and worldwide as well
as the completion of work relating to projects
implemented in the first financial perspective
(2007 – 2013).
In 2015, the number of companies whose
revenue increased did not change as
compared to the preceding year (eleven).
As many as 13 companies (eleven in 2014)
recorded growth in 2015. The Mostostal
Warszawa Group was the only entity to
Diagram 1.1: Change in average revenue of the ranked companies between 2011 and 2015 (in PLN ‘000)
2 818 580
2 070 431
2 266 448
1 735 847
2011
2012
2013
1 900 183
2014
2015
Based on previous editions of reports presenting the largest construction companies in Poland (Deloitte reports: Polish Construction Companies 2011 - 2015) Source: Financial statements 2011-2015
9
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.2. List of the largest construction
companies in Poland by operating
margin in 2015
The operating margin of the largest
construction companies, defined as the
difference between operating revenue
and cost of goods sold (excluding other
operating revenue and expenses) shows
that for the majority of the ranked entities
increases/decreases in revenue in 2015
were correlated with increases/decreases
in operating income (except Warbud
and Hochtief which reported a drop in
operating margin despite an increase in
revenue). The average operating margin
for the largest companies went up by more
than PLN 52 million, which is similar to the
increase seen in 2014. As in the past year,
the Skanska Group reported the highest
operating margin and earned operating
income of PLN 664 million. Budimex Group
was second, with operating margin of PLN
493 million, i.e. more than 13% more than
in the previous year. Strabag Group came
third with operating margin of PLN 287
million (more than twice as high as in the
preceding year).
For Strabag Group and Hochtief which
prepare their profit and loss account by
nature of expense, operating margin takes
account of selling costs and general and
administrative costs (as opposed to the
other ranked entities)
Table 1.2 Operating profit of the fifteen largest construction companies in nominal terms (in PLN ‘000)
Operating margin Operating margin Change in nominal
Change in
2015
2014
terms
percentage terms
No. Company name
1
Skanska Group
664 060
567 685
96 375
17.0%
2
Budimex Group
492 714
432 680
60 034
13.9%
3
Strabag Group**
287 052
114 632
172 420
150.4%
4
Trakcja Group
166 133
202 128
-35 995
-17.8%
5
Polimex-Mostostal Group
152 868
-201 623
354 491
175.8%
6
Erbud Group
121 701
99 242
22 459
22.6%
7
PBG Group
117 652
94 494
23 158
24.5%
8
Mostostal Warszawa Group*
110 274
121 104
-10 830
-8.9%
9
Elektrobudowa Group
109 201
73 218
35 983
49.1%
10
Warbud S.A.
106 123
136 033
-29 910
-22.0%
11
Torpol Group*
67 760
48 368
19 392
40.1%
12
Unibep Group
67 238
66 713
525
0.8%
13
Mota - Engil Central Europe S.A.
48 949
25 791
23 157
89.8%
14
Hochtief Polska S.A.
7 153
7 826
-673
-8.6%
15
PORR Group***
no data
no data
no data
no data
Average
179 920
127 735
Average sales margin (%)
8.46%
6.66%
Increase
Decrease
Source: Financial statements for 2014-2015
10
No change
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In 2015, ten out of the fourteen ranked
companies saw an increase in their sales
and four had a lower result than over
the comparable period in the preceding
year. The most exponential increase was
reported by Polimex-Mostostal Group
(more than PLN 354 million) and the most
noticeable drop - by Trakcja Group (more
than PLN 35 million). The list also shows
that thirteen out of the fourteen ranked
companies which have made their financial
data available earned operating income
both in 2014 and 2015.
The average operating margin was 8.46%
in 2015. This is an almost 2 p.p. increase
vs. 2014 (6.66%). The highest operating
income in percentage terms was generated
by Trakcja Group, whose operating margin
was 12.50%. Second place went to Skanska
Group with an operating margin of 12%,
whereas Budimex occupied third position
with an operating margin of 9.60% together
with Warbud, whose margin was 9.59%.
Hochtief, whose operating margin equalled
0.91% was at the bottom of the list.
As in the past year, 2015 increases in
revenue were accompanied by further rises
in the operating margins of the largest
construction companies.
12.62%
12.50%
10.00%
Average
PORR Group***
Hochtief Polska S.A.
Mota - Engil Central Europe S.A.
Unibep Group
Torpol Group
Polimex-Mostostal Group
PBG Group
Erbud Group
Strabag Group**
Mostostal Warszawa Group*
Elektrobudowa Group
Warbud S.A.
Budimex Group
15.00%
Skanska Group
Trakcja Group
Diagram 1.2: Operating margins of the largest construction companies (%)
12.96%
12.05%
11.17%
9.60%
8.74%
9.59%
8.79%
6.61%
8.65%
8.46%
8.02%
7.48%
6.90%
5.87%
6.54%
6.18%
6.00%
5.00%
6.24%
5.47%
6.66%
6.18%
5.41%
5.15%
3.92%
3.65%
0.91%
1.35%
no data
0.00%
-5.00%
-10.00%
-9.59%
-15.00%
2015
2014
Source: Financial statements for 2014-2015
11
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.3. List of the largest construction
companies in Poland by net profit in
2015
Net profit is another indicator reflecting the
overall condition of the largest construction
companies. On average, the fourteen
largest construction companies generated
net profit of PLN 71 million, which means a
PLN 25 million increase compared to PLN
45 million in 2014. Skanska Group reported
the highest net profit (PLN 417 million),
which represents a 29% increase year-onyear.
On the other hand, PBG Group incurred
a net loss of PLN 201 million despite a
positive operating margin.
As many as thirteen ranked companies
reported a net profit, whereas only one
incurred a loss. For comparison, in 2014 ten
entities posted a net profit and the average
net profit of all the ranked companies was
lower. Ten companies reported a net profit
both in 2014 and 2015.
Second place went to Budimex Group,
which generated a net profit of PLN 237
million. Strabag Group was third with a net
profit of PLN 178 million.
Table 1.3: Net profit/loss of the largest construction companies in nominal terms (in PLN ‘000)
Net profit/loss for Net profit/loss for Change in nominal
Change in
2015
2015
terms
percentage terms
No. Company name
1
Skanska Group
417 314
324 185
93 129
29%
2
Budimex Group
236 520
193 938
42 582
22%
3
Strabag Group**
177 987
148 981
29 006
19%
4
Polimex-Mostostal Group
68 975
-153 226
222 201
145%
5
Trakcja Group
51 758
50 391
1 367
3%
6
Elektrobudowa Group
49 965
27 015
22 950
85%
7
Warbud S.A.
35 728
48 416
-12 688
-26%
8
Mostostal Warszawa Group
32 466
-8 738
41 204
472%
9
Torpol Group*
31 954
25 009
6 945
28%
10
Erbud Group
31 689
27 892
3 797
14%
11
Hochtief Polska S.A.
29 769
22 203
7 566
34%
12
Unibep Group
23 281
20 925
2 356
11%
13
Mota - Engil Central Europe S.A.
4 540
-12 841
17 381
135%
14
PBG Group
-201 104
-80 799
-120 305
-149%
15
PORR Group***
no data
no data
no data
no data
Average
70 774
45 239
Average procentowa marża netto
3.33%
2.36%
Increase
Decrease
Source: Financial statements for 2014-2015
12
No change
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In percentage terms, the average net
profit (3.33%) in 2015 was higher than in
the preceding year. The list is topped by
Skanska Group with a net profit margin
of 7.57%. Second place went to Strabag
Group and the third to Budimex Group,
with a net profit margin of 4.64% and
4.61%, respectively. These top companies
recorded the highest net margins both in
2014 and in 2015.
As regards the operating income, the
majority of the ranked companies saw an
increase in their net profit margins. Thus,
events which were not directly related to
their core business and the profit/loss on
financing activities did not have an adverse
effect on their performance, although their
margins did not increase as exponentially
as in the preceding year.
Average
PORR Group***
PBG Group
Mota - Engil Central Europe S.A.
Erbud Group
Unibep Group
Mostostal Warszawa Group
Torpol Group
Polimex-Mostostal Group
Warbud S.A.
Hochtief Polska S.A.
Trakcja Group
Elektrobudowa Group
Budimex Group
20.00%
Strabag Group**
Skanska Group
Diagram 1.3: Net profit margins of the largest construction companies (%)
15.00%
10.00%
7.57%
6.38%
5.00%
4.64% 4.74%
4.61%
3.92%
4.02%
2.44%
3.89%
3.78%
3.15%
4.83%
4.61%
3.23%
2.71%
2.58% 3.23% 2.55%
3.33%
2.36%
1.87% 1.94% 1.80% 1.65%
0.48%
0.00%
-0.58%
-5.00%
no data
-1.95%
-5.28%
-7.29%
-10.00%
-11.18%
-15.00%
-20.00%
2015
2014
Source: Financial statements for 2014-2015
13
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Our reports presenting the performance of
largest construction companies in Poland
show that 2015 was another year showing
performance improvement, both in regards
to gross profit margin on the core business
(gross profitability) and net profit margin
including other operating and financing
activities. Since 2012, which saw a massive
drop in the transaction volume (in 2012
the results on unprofitable infrastructure
contracts carried out in the prior financial
perspective announced by the European
Parliament for years 2007 - 2013 were
taken into account), the margins on
projects and the performance of the largest
construction companies have clearly been
improving.
Diagram 1.3.1: Change in average net and gross profit margins of the ranked companies between 2011 and 2015 (in %)
10,0%
5,0%
0,0%
-5,0%
-10,0%
-15,0%
-20,0%
2011
Gross profitability
Net profitability
Source: Financial statements for 2011-2015
14
2012
2013
2014
2015
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.4. An analysis of the debt ratios of
the largest construction companies
The debt ratios of the largest construction
companies were relatively high both in
2014 and in 2015. The average debt
weighted by revenue was 78% in 2015.
In the analysed period, seven companies
increased and seven reduced the share of
debt capital in their funding.
As in 2014, five entities used debt capital
to finance at least 75% of their assets. PBG
Group had the highest debt in percentage
terms, which did not change as compared
to 2014. At the end of 2015, the company’s
total debt constituted 137% (that is, it was
37% higher than the value of its assets),
and it went up by 6 p.p. vs. 2014. Having
lost liquidity in 2012, the company
went into bankruptcy proceedings open
to composition arrangements, which
was finally voted for by the creditors in
August 2015. As regards the remaining
entities, Skanska Group reported the most
considerable increase in its debt, from 67%
at the end of 2014 to 73% a year later. The
debt of the other ranked companies did
not increase by more than 5 p.p. in 2015.
Diagram 1.4: Debt ratios between 2014 and 2015
PBG Group
1.31
0.87
0.86
Budimex Group
0.83
0.86
Mostostal Warszawa Group
0.82
0.80
Warbud S.A.
0.80
0.84
Polimex-Mostostal Group
Skanska Group
0.67
0.73
0.73
0.70
Strabag Group**
0.72
0.70
Unibep Group
0.71
0.73
Erbud Group
0.71
0.70
Mota - Engil Central Europe S.A.
0.67
Torpol Group
0.66
Hochtief Polska S.A.
0.57
Elektrobudowa Group
0.45
Trakcja Group
PORR Group***
1.37
0.73
0.74
0.63
0.53
no data
0.78
0.77
Average
0.00
0.25
0.50
0.75
1.00
1.25
1.50
2015
2014
Source: Financial statements for 2014-2015
15
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
The debt ratio of Trakcja Group (45%) was
the lowest out of all the ranked companies.
At the end of 2015, the average debt ratio
of the largest construction companies rose
by approx. 1% year-on-year.
1.5. Capital expenditure to sales ratio
of the largest construction companies
in 2015
Companies operating in the construction
sector typically have a relatively low ratio of
capital expenditure (defined as investment
in fixed assets and intangible assets) to
sales, due to a high volume of sales and a
relatively low level of capital expenditure
necessary to provide construction services.
In 2015, the combined capital expenditure
of the largest companies totalled almost
PLN 254 million, and was PLN 54 million
higher compared to 2014.
It should also be emphasized that fewer
than half of all the ranked companies
reduced their expenditure as compared to
the preceding year.
Table 1.5: Capital expenditure of the fifteen largest construction companies in nominal terms (in PLN ‘000)
Capital expenditure Capital expenditure Change in nominal
Change in
in 2015
in 2014
terms
percentage terms
No. Company name
1
Budimex Group
67 915
24 072
43 843
182%
2
Trakcja Group
44 309
25 674
18 635
73%
3
PBG Group
29 214
17 125
12 089
71%
4
Torpol Group
26 280
15 046
11 234
75%
5
Mostostal Warszawa Group
18 757
8 279
10 478
127%
6
Warbud S.A.
17 220
19 187
-1 967
-10%
7
Mota - Engil Central Europe S.A.
17 182
8 328
8 854
106%
8
Elektrobudowa Group
13 838
11 489
2 349
20%
9
Erbud Group
13 318
16 077
-2 759
-17%
10
Unibep Group
2 825
3 191
-366
-11%
11
Polimex-Mostostal Group
2 480
26 869
-24 389
-91%
12
Hochtief Polska S.A.
752
450
302
67%
13
Strabag Group**
no data
24 464
no data
no data
14
Skanska Group
no data
no data
no data
no data
15
PORR Group***
no data
no data
no data
no data
Razem ****
254 090
175 787
78 303
45%
Average
21 174
15 404
5 770
37%
Increase
Decrease
No change
**** - for the purpose of calculating the ratios of percentage and nominal change of capital expenditures, the amounts concerning Strabag Group in 2014 were excluded. Source: Financial statements for
2014-2015
16
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In 2015, Budimex Group incurred the highest
capital expenditure in nominal terms (PLN 68
million up by 182% vs. 2014). Trakcja Group
with total expenditure of PLN 44 million (a
73% increase year-on-year) and PBG Group
with expenditure of PLN 29 million (a 71%
rise year-on-year) came second and third,
respectively.
In 2015, the capital expenditure to sales
ratio was 1.24%, which was a 0.3 p.p. yearon-year. Trakcja Group and Torpol Group
reported the highest capital expenditure
to sales ratios. Both these entities have a
considerable share in the railway contract
market. In 2015, the lowest capital
expenditure to sales ratio was reported
by Hochtief Polska and Polimex-Mostostal
Group.
Diagram 1.5: Capital expenditure to sales ratio (figures for 2015 and 2014)
Trakcja Group
2.12%
1.94%
Torpol Group
Mota - Engil Central Europe S.A.
1.81%
1.27%
PBG Group
1.62%
1.12%
1.56%
Warbud S.A.
Mostostal Warszawa Group
1.11%
1.04%
0.76%
Erbud Group
0.10%
0.08%
0.10%
Polimex-Mostostal Group
Skanska Group
0.95%
0.23%
0.95%
Unibep Group
PORR Group***
1.32%
0.98%
Elektrobudowa Group
Strabag Group**
1.83%
1.47%
0.55%
Budimex Group
Hochtief Polska S.A.
3.33%
1.60%
1.28%
no data
0.78%
no data
no data
Average
0.00%
1.03%
0.50%
1.00%
1.24%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
2015
2014
Source: Financial statements for 2014-2015
17
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.6. Revenue of the largest
construction companies by region and
by type in 2015
1.6.1 Revenue structure by region
Large construction groups operating in
Poland are also present on foreign markets.
However, their sales volume generated
abroad is still relatively low and Poland
remains the key market on which they
provide construction services. In nominal
terms, the average revenue earned by the
largest construction companies abroad
was PLN 173 million, down by almost
PLN 22 million as compared to 2014. This
means an 11% drop year-on-year. Trakcja
Group, which controls AB Kauno a large
construction group operating in Lithuania
and other Baltic states, generated the
highest revenue abroad. It totalled PLN 487
million but was 14% lower than in 2014.
Second place went to Polimex-Mostostal
Group (same as in the preceding year),
which reported revenue of PLN 443 million
and a 15% increase vs. 2014. The Unibep
Group, whose revenue totalled PLN 239
million, was third and reported a 25% drop
compared to the preceding year.
The exports of Polish construction
companies focus on neighbouring markets,
mainly Eastern Europe, Scandinavia and
Germany.
Table 1.6.1: Revenue earned by the largest construction companies abroad, in nominal terms (in PLN ‘000)
Revenue from
sales on foreign
markets in 2015
No. Company name
1
Trakcja Group
486 978
565 884
-78 906
-14%
2
Polimex-Mostostal Group
442 622
383 978
58 644
15%
3
Unibep Group
238 590
319 497
-80 907
-25%
4
Budimex Group
206 959
195 632
11 327
6%
5
Erbud Group
158 218
195 373
-37 155
-19%
6
PBG Group
128 643
226 268
-97 625
-43%
7
Elektrobudowa Group
113 134
67 336
45 798
68%
8
Torpol Group
62 243
28 507
33 736
118%
9
PORR Group***
48 809
10 379
38 430
370%
10
Mostostal Warszawa Group
13 172
144 453
-131 281
-91%
11
Strabag Group**
8 685
8 883
-198
-2%
12
Warbud S.A.
0
0
0
0%
13
Mota - Engil Central Europe S.A.
0
0
0
0%
14
Hochtief Polska S.A.
0
0
0
0%
15
Skanska Group
no data
no data
no data
n/a
Total
1 908 053
2 146 190
-238 137
-11%
Average
173 459
195 108
-21 649
-11%
Increase
Decrease
Source: Financial statements for 2014-2015
18
Revenue from
Change in nominal
Change in
sales on foreign
terms
percentage terms
markets in 2014
No change
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
The average share of revenues from sales
on foreign markets in the total operating
revenue of the ranked companies was over
8%, down by almost 2 p.p. as compared to
2014. Foreign sales of one entity, namely
the Trakcja Group, accounted for 37% of
their total sales revenue.
An analysis of sales by region reveals
that a growing number of companies
from the construction sector are looking
for opportunities to fulfil contracts and
find clients on foreign markets. In the
longer term, searching for new markets
and, consequently, the diversification of
business risk, will be of crucial importance
after the EU funds received in the 20142020 perspective have been used up. A
number of companies have already made
attempts to fulfil contracts on foreign
markets (principally on the neighbouring
markets and in Scandinavia), which should
translate into greater regional diversity of
their operations in the future.
Diagram 1.6.1: Percentage share of foreign sales in total sales for the fifteen largest construction companies in 2015
40.00%
35.00%
36.64%
35.33%
30.00%
29.59%
25.00%
20.00%
19.20%
17.37%
18.27%
14.79%
15.00%
11.55%
9.57%
8.97%
Mostostal Warszawa Group
PORR Group***
Budimex Group
Torpol Group
PBG Group
Erbud Group
Elektrobudowa Group
Polimex-Mostostal Group
0.23% 0.28%
0%
0%
0%
0%
0%
0%
no data
Average
0.99% 1.03%
0.00%
Unibep Group
10.45%
3.95% 3.77%
Skanska Group
4.03%
Hochtief Polska S.A.
3.68%
Mota - Engil Central Europe S.A.
5.03%
5.00%
Trakcja Group
8.40%
7.15%
6.08%
Warbud S.A.
9.10%
Strabag Group**
10.00%
2015
2014
Source: Financial statements for 2014-2015
19
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Diagram 1.6.2: Sales of the fifteen largest construction companies in 2015 – by region
MARKETS
Domestic
West European
East European
Scandinavian
Asian
Other
TOTAL
(2015, in PLN ‘000)
842 202
No information about where foreign revenues are generated.
Value of foreign revenues - 486 978
1 329 180
Polimex-Mostostal Group
2 105 953
No information about where foreign revenues are generated.
Value of foreign revenues - 442 622
2 548 575
Unibep Group
1 004 270
29 760
Budimex Group
4 927 035
174 854
Erbud Group
1 605 064
No information about where foreign revenues are generated.
Value of foreign revenues - 158 218
1 763 282
PBG Group
1 670 172
No information about where foreign revenues are generated.
Value of foreign revenues - 128 643
1 798 815
Elektrobudowa Group
1 129 696
Torpol Group
1 175 998
No information about where foreign revenues are generated.
Value of foreign revenues - 62 243
1 238 241
PORR Group***
1 244 311
No information about where foreign revenues are generated.
Value of foreign revenues - 48 809
1 293 120
Mostostal Warszawa Group
1 262 259
Strabag Group**
3 827 161
Warbud S.A.
1 106 860
Trakcja Group
3 367
2 359
76 804
131 868
18 476
78 460
6 848
10 112
158
1 242 860
32 105
5 133 994
5 983
701
No information about where foreign revenues are generated.
Value of foreign revenues - 9 685
1 242 830
1 275 431
3 835 846
1 106 860
Mota - Engil Central Europe S.A.
949 576
949 576
Hochtief Polska S.A.
788 488
788 488
Skanska Group
No data
5 509 363
TOTAL:
Source: Financial statements for 2014-2015
20
31 056 460
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Diagram 1.6.3: Sales of the fifteen largest construction companies in 2014 – by region
MARKETS
Domestic
West European
East European
Scandinavian
Asian
Other
TOTAL
(2014, in PLN ‘000)
Trakcja Group
1 035 790
No information about where foreign revenues are generated.
Value of foreign revenues - 565 884
1 601 674
Polimex-Mostostal Group
1 718 219
No information about where foreign revenues are generated.
Value of foreign revenues - 383 978
2 102 197
Unibep Group
760 206
22 152
Budimex Group
4 754 307
158 085
Erbud Group
1 496 682
No information about where foreign revenues are generated.
Value of foreign revenues - 195 373
1 692 055
PBG Group
1 303 980
No information about where foreign revenues are generated.
Value of foreign revenues - 226 268
1 530 248
Elektrobudowa Group
1 040 980
9 806
173 964
123 323
21 545
17 427
10 966
58
1 079 703
37 547
4 949 939
7 592
1 108 316
746 892
No information about where foreign revenues are generated.
Value of foreign revenues - 28 507
775 399
PORR Group***
1 034 640
No information about where foreign revenues are generated.
Value of foreign revenues - 10 379
1 045 019
Mostostal Warszawa Group
1 365 071
Strabag Group**
3 133 966
Warbud S.A.
1 049 886
Torpol Group
79 701
23 090
39 959
1 703
No information about where foreign revenues are generated.
Value of foreign revenues - 8 883
1 509 524
3 142 849
1 049 886
Mota - Engil Central Europe S.A.
658 133
658 133
Hochtief Polska S.A.
579 348
579 348
Skanska Group
No data
5 081 675
TOTAL:
27 905 965
Source: Financial statements for 2014-2015
21
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.6.2 Sales by type
Sales by type reflect diversification of the operations carried out
by the largest construction companies in the general, energy, road
and railway sectors. A material part of their revenue is also derived
from the housing construction and construction engineering
sectors.
Diagram 1.6.2.1: Sales by type - fifteen largest companies in 2015
MARKETS
General
construction
Polimex-Mostostal Group
Housing
construction
224 165
Road and
railroad
construction
Civil
engineering
Energy
construction
Other
operations
1 801 367
495 539
2 548 575
460 328
5 133 994
246 426
1 798 815
1 047 388
195 442
1 242 830
129 498
114 213
1 242 860
103 851
1 293 120
88 206
1 329 180
61 387
949 576
47 864
1 763 282
16 200
1 238 241
15 374
1 106 860
2 626
1 275 431
27 504
Budimex Group
4 673 666
PBG Group
1 552 389
Elektrobudowa Group
Unibep Group
PORR Group***
999 149
1 189 268
Trakcja Group
1 240 975
Mota - Engil Central Europe S.A.
138 385
Erbud Group
1 130 960
41 418
330 741
Torpol Group
Warbud S.A.
708 385
253 717
1 222 041
1 091 486
Mostostal Warszawa Group
272 421
Hochtief Polska S.A.
614 933
1 000 384
94 605
78 838
113
TOTAL
(2015, in PLN ‘000)
788 488
Skanska Group
No data
5 509 363
Strabag Group**
No data
3 835 846
TOTAL:
Source: Financial statements for 2014-2015
22
31 056 460
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Diagram 1.6.2.2: Sales by type - fifteen largest companies in 2014
MARKETS
General
construction
Housing
construction
Road and
railroad
construction
Energy
construction
Other operations
968 837
427 447
2 102 197
383 311
4 949 939
342 172
1 530 248
904 583
203 733
1 108 316
124 871
87 574
1 079 703
44 926
1 045 019
127 588
1 601 674
33 816
658 133
45 448
1 692 055
20 211
775 399
1 038 747
11 139
1 049 886
Mostostal Warszawa Group
317 063
3 159
1 509 524
Hochtief Polska S.A.
417 048
Polimex-Mostostal Group
239 740
466 173
Budimex Group
4 566 628
PBG Group
317 063
1 188 076
Elektrobudowa Group
Unibep Group
PORR Group***
867 258
1 000 093
Trakcja Group
1 474 086
Mota - Engil Central Europe S.A.
70 808
Erbud Group
507 332
1 397 537
46 177
160 185
Torpol Group
Warbud S.A.
Civil engineering
88 885
755 188
92 677
Skanska Group
Strabag Group**
69 508
No data
114
TOTAL
(2014, in PLN ‘000)
579 348
383 311
No data
5 081 675
3 142 849
TOTAL:
27 905 965
* General and civil engineering construction Source: Financial Statements for 2014-2015
Source: Financial statements for 2014-2015
23
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Diagram 1.6.2: Other activities of the largest construction companies in 2015.
Other operations
2015
No. Company name
Change in nominal
terms
Change in
percentage terms
1
Polimex-Mostostal Group
495 539
427 447
68 092
15.9%
2
Budimex Group
460 328
383 311
77 017
20.1%
3
PBG Group
246 426
342 172
-95 746
-28.0%
4
Elektrobudowa Group
195 442
203 733
-8 291
-4.1%
5
Unibep Group
114 213
87 574
26 639
30.4%
6
PORR Group***
103 851
44 926
58 925
131.2%
7
Trakcja Group
88 206
127 588
-39 382
-30.9%
8
Mota - Engil Central Europe S.A.
61 387
33 816
27 572
81.5%
9
Erbud Group
47 864
45 448
2 416
5.3%
10
Torpol Group
16 200
20 211
-4 011
-19.8%
11
Warbud S.A.
15 374
11 139
4 235
38.0%
12
Mostostal Warszawa Group
2 626
3 159
-533
-16.9%
13
Hochtief Polska S.A.
113
114
-2
-1.7%
14
Skanska Group
no data
no data
no data
n/a
15
Strabag Group**
no data
no data
no data
n/a
1 847 569
1 730 638
116 931
Total
Source: Financial statements for 2014-2015
24
Other operations
2014
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In nominal terms, the highest share
of other non-construction revenue in
total revenue in 2015 was reported by
Polimex Group and Budimex Group
(PLN 496 million and PLN 460 million,
respectively). As compared to 2014,
the average percentage share of other
operating revenue went down from 9.6%
to 9.2%. In 2015, in most cases, the share
of construction and assembly services as
a percentage of total sales ranged from
80% to 100%. The operations of Polimex
- Mostostal Group continue to show the
highest degree of diversification.
The scope of the Group’s non-construction
operations includes mainly assembly and
manufacturing services. On the other hand,
Budimex Group, which occupies second
place, mainly derives its other operating
revenue from property development.
Out of the thirteen entities analysed
above, which earned revenue from other
operations, only five increased their
percentage share of non-construction
operations in total revenue in 2015 vs.
2014. This was mainly due to a continued
increase in the value of revenue generated
by the largest companies on construction
and assembly services in 2015.
Diagram 1.6.2.3: Share of revenue from other (non-construction) operations in total operating revenue (for 2015-2014)
20.0%
19.6%
Unibep Group
Polimex-Mostostal
Group
19.4%
20.3%
13.7%
PBG Group*
Budimex Group
7.7%
PORR Group***
6.6%
Mota - Engil CE S.A.
5.1%
9.0%
8.0%
4.3%
Trakcja Group
8.0%
6.5%
3.4%
Elektrobudowa Group
22.4%
18.4%
2.7%
2.7%
Erbud Group
Warbud S.A.
1.4%
1.1%
Torpol Group
1.3%
Mostostal
Warszawa Group
2.6%
0.2%
0.2%
0.0%
0.0%
Hochtief Polska S.A.
Strabag Group**
no data
Skanska Group
no data
9.2%
9.6%
Average
0%
25%
2015
2014
Source: Financial statements for 2014-2015
25
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
1.7. Market cap of the largest
construction companies whose shares
are traded on the Warsaw Stock
Exchange
2015 was a period when the WIG
Budownictwo (WIG BUD) index regained
the trust of investors. The said index
increased by ca. 30% year-on-year, while
the main WIG index dropped by ca. 10%
in 2015, compared to the end of the
preceding year.
A relatively low share of revenue is earned
on non – construction related operations.
This trend should reverse once projects
receiving EU support in the second
financial perspective have been finalized. It
should be emphasised, though, that large
construction groups have already begun
to diversify their business and invest in
areas which are not directly related to
construction or property development
operations, such as property management,
supply and installation of specialist
industrial equipment or construction
advisory and consulting services.
The shares of nine out of the fifteen largest
construction companies ranked in the
report were traded on the Warsaw Stock
Exchange, which was used as the basis
for the market cap ranking. At the end
of 2015, the combined market value of
nine construction companies listed on the
Warsaw Stock Exchange was PLN 8 billion
and was PLN 2.4 billion higher than their
combined market cap at the end of 2014.
In percentage terms, the combined market
cap increased by 42%.
The list of companies whose shares are
traded on the Warsaw Stock Exchange
is topped by Budimex, whose share in
the combined market cap is almost 60%.
Nevertheless, even excluding Budimex, the
increase in the market cap of the remaining
entities was 50% year-on-year.
At the beginning of 2016 the WIG BUD
index recorded a drop caused by the
limited volume of construction and
assembly works in the winter season and
a decrease in the volume of new building
construction projects. In May 2016, there
was another decrease in the index and it
reached its lowest value in mid-June 2016.
The significant decrease of the WIG BUD
index in May and June was correlated with
the general stock exchange trend, driven by
the information of the potential withdrawal
of the United Kingdom from the European
Union - the withdrawal was confirmed by
the results of the referendum which was
arranged in the UK in June 2016. Beginning
Diagram 1.7: Changes in WIG and WIG-Budownictwo indices between 2014 and 2016
50000
3500
3000
48000
2500
46000
2000
44000
1500
42000
1000
40000
500
0
WIG
WIG BUDOWNICTWO
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
26
2016-09-09
2016-07-29
2016-06-20
2016-05-09
2016-03-24
2016-02-12
2015-12-30
38000
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
from that date we observe a reversal of the
short-term downturn and an increase of
the WIG BUD index which, in September
2016, came close to the high levels
observed in 2015.
This might confirm that, despite negative
information about a considerable
slowdown in the building construction
sector in 2016 - which is well visible in
the diagram below - investors take note
that listed companies will soon reap
the benefits linked with running large
infrastructural contracts financed under
the new EU perspective for 2014 - 2020.
Diagram 1.7.1: Construction and assembly market ratis in years: 2015 - 2016 (YoY)
10.00%
5.00%
0.00%
-5.00%
-10.00%
-15.00%
-20.00%
-25.00%
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
2015
XII
I
II
III
IV
V
VI
VII
VIII
2016
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
27
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
The market value of none of the nine
analysed companies decreased in 2015.
Budimex, whose market cap was PLN 4,953
million (up by 37% compared to 2014), has
been the unquestionable leader since 2011.
The market cap of Budimex constitutes
60% of the cap value of all the analysed
companies. Trakcja PRKiI was ranked second
and Elektrobudowa - third (their market
capitalisation was PLN 650 million and PLN
617 million, respectively).
As compared with the previous year, at
the end of 2015 there was a significant
(42%) increase of the market cap ratio of
the largest construction companies. Such
a trend is consistent with the increasing
revenue of the ranked companies, which
was discussed above.
Table 1.7: Market cap of the largest construction companies listed on the Warsaw Stock Exchange as at 31 December 2015
(in PLN ‘000)
Market cap as
at 31 December
2015
No. Company name
1
Budimex S.A.
2
Market cap as
at 31 December
2014
Change
in nominal
terms
Change
in percentage
terms
4 952 839
3 612 509
1 340 330
37%
Trakcja PRKiI S.A.
650 204
390 637
259 568
66%
3
Elektrobudowa S.A.
617 189
350 373
266 816
76%
4
Polimex-Mostostal S.A.
498 924
303 166
195 758
65%
5
Unibep S.A.
378 763
288 281
90 482
31%
6
Erbud S.A.
354 376
324 153
30 223
9%
7
Torpol S.A.
285 287
229 011
56 277
25%
8
Mostostal Warszawa S.A.
260 000
120 000
140 000
117%
9
PBG S.A.
25 445
23 444
2 001
9%
8 023 028
5 641 573
2 381 455
42%
Total
Increase
Decrease
No change
Diagram 1.7.1: Market cap share of the largest construction companies listed on the Warsaw Stock Exchange as at 31/12/2015
Budimex S.A.
3.24% 0.32%
3.56%
Trakcja PRKiI S.A.
4.72%
Elektrobudowa S.A.
Erbud S.A.
6.22%
Polimex-Mostostal S.A.
4.42%
Unibep S.A.
7.69%
8.10%
Torpol S.A.
61.73%
Mostostal Warszawa S.A.
PBG S.A.
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
28
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Based on the financial data as at 30 June
2016, the combined capitalisation of the
analysed companies fell by over 14% as
compared with the end of December 2015
(the decrease is 5% higher if Budimex is
excluded). As indicated above, in May and
June 2016 all stock exchange indices had
a considerable decrease connected with
the information concerning the potential
withdrawal of the United Kingdom from
the European Union, which was finally
confirmed in the referendum of mid-June
2016.
In the second half of the year, the most
considerable increase in the market cap in
percentage terms was reported by PBG,
which resulted from an arrangement with
its creditors and the closing of bankruptcy
proceedings. On the other hand, Torpol,
Elektrobudowa and Polimex-Mostostal
reported the most significant decreases in
their market capitalisation.
Diagram 1.7.1: Market cap of the largest construction companies listed on the Warsaw Stock Exchange as at 30/06/2016
(in PLN ‘000)
Market cap as at 30 Market cap as at 31
June 2016
December 2015
(in PLN '000)
(in PLN '000)
No. Company
1
Budimex S.A.
2
Nominal change
(in PLN '000)
Percentage change
2016 vs. 2015
4 386 071
4 952 839
-566 768
-11.44%
Trakcja PRKiI S.A.
508 856
650 204
-141 349
-21.74%
3
Elektrobudowa S.A.
446 228
617 189
-170 961
-27.70%
4
Erbud S.A.
330 418
354 376
-23 958
-6.76%
5
Polimex-Mostostal S.A.
361 200
498 924
-137 724
-27.60%
6
Unibep S.A.
339 484
378 763
-39 279
-10.37%
7
Torpol S.A.
195 934
285 287
-89 353
-31.32%
8
Mostostal Warszawa S.A.
241 400
260 000
-18 600
-7.15%
9
PBG S.A.
34 165
25 445
8 720
34.27%
6 843 755
8 023 028
-1 179 273
-14.70%
Total
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
29
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In the first half of 2016 the companies
listed on the Warsaw Stock Exchange
reported a slight increase (by almost
2%) in their sales revenue year-on-year.
Budimex Group with revenue of PLN 2.4
billion (a rise by more than 7% increase
year-on-year) was again the major player.
It should be emphasised that the average
operating margin for the first six months of
2016 went up to 9.4% as compared to the
corresponding period in 2015, when it was
7.74%.
2015 was a successful year for the largest
construction companies. In the first half of
2016 they managed to keep the investor's
trust and their revenues even slightly
exceeded the turnover obtained during a
comparable period in 2015. The second
half of 2016 and the following years will be
crucial from a sort-term perspective. The
current level of the WIG BUD shows that,
despite a significant decline in contract
volume in 2016, investors still believe that
there will be a positive impact from the
infrastructure contract initiative, and that
companies operating on the construction
market will continue to benefit.
The delay in announcing new tenders may
erode this trust, because investors may
decide to withdraw their capital, which in
turn will result in a drop of the WIG BUD
index and lower market capitalization of
the analysed companies.
Diagram 1.7.2: Market cap of the largest construction companies listed on the Warsaw Stock Exchange as at 30 June 2016
(in PLN ‘000)
0%
Budimex S.A.
4%
3%
Trakcja PRKiI S.A.
5%
Elektrobudowa S.A.
5%
Erbud S.A.
5%
Polimex-Mostostal S.A.
7%
7%
Unibep S.A.
64%
Torpol S.A.
Mostostal Warszawa S.A.
PBG S.A.
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
30
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Table 1.7.2: Revenues of companies listed on the Warsaw Stock Exchange as at 30 June 2016 and 30 June 2015.
Revenue June 2016
(in PLN '000)
No. Company name
1
Budimex Group
2
Revenue June 2015
(in PLN '000)
Change in nominal
terms
Change in
percentage terms
2 429 700
2 268 240
161 460
7.1%
Polimex-Mostostal Group
641 952
511 049
130 903
25.6%
3
PBG Group
788 660
771 957
16 703
2.2%
4
Erbud Group
788 168
805 820
-17 652
-2.2%
5
Trakcja Group
478 829
564 772
-85 943
-15.2%
6
Mostostal Warszawa Group
732 999
569 898
163 101
28.6%
7
Unibep Group
501 551
574 787
-73 236
-12.7%
8
Elektrobudowa Group
528 228
592 901
-64 673
-10.9%
9
Torpol Group
335 960
443 379
-107 419
-24.2%
Total
7 226 047
7 102 803
123 244
1.7%
Average
802 894
789 200
13 693.8
1.7%
Source: Deloitte analysis based on data published on the website of the Warsaw Stock Exchange.
Diagram 1.8: Revenue of construction companies listed on the Warsaw Stock Exchange in the first half of 2016 (in PLN '000)
3000000
2500000
2000000
1500000
1000000
Torpol Group
Elektrobudowa Group
Unibep Group
Mostostal Warszawa Group
Trakcja Group
Erbud Group
PBG Group
Polimex-Mostostal Group
0
Budimex Group
500000
Revenue June 2016 (in PLN million)
Revenue June 2015 (in PLN million)
Source: Financial statements as at 30 June 2016
* The financial data for 2014 were reconciled with the financial statements for 2015 after adjustments had been made to the opening balance.
**Considering that consolidated financial statements of the Strabag Group are not available, for simplicity's sake, the financial data are comprised of the total revenue of companies: Strabag Sp. z o.o. and Strabag
Infrastruktura Południe Sp. z o.o. The financial data of Strabag for 2014 were reconciled with the financial statements for 2015, after adjustments had been made to the opening balance.
***In 2015 PORR BAU GMBH acquired Bilfinger Infrastructure S.A.. Considering that consolidated financial statements of the are not available, the financial data for 2015 are presented as the aggregate of the data
derived from the financial statements of PORR Polska Construction S.A. and PORR Polska Infrastructure S.A. (formerly Bilfinger Infrastructure S.A.). The data pertaining to 2014 have been derived from the financial
statement of PORR Polska Construction S.A.
31
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
32
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Chapter 2.
Prospects for
Development
of Construction
Companies
in Poland
33
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.1 Introduction
This section of the Report includes an
analysis of the factors which affect the
condition of the construction industry
as well as supporting data, such as
bankruptcies among construction
companies and employment rates in the
sector. Next, key information concerning
selected segments of the construction
sector is presented along with an analysis
of their prospects for development in the
short and medium term. Finally, a summary
of the current conditions and the key growth
drivers in the sector are presented from
the perspective of representatives of Polish
construction companies.
Following a period of decline in 2012 and
2013, the construction sector in Poland saw
a modest recovery in 2014 and 2015.
In 2015, the Polish construction sector
grew by 2.9% at constant prices (growth
at current prices amounted to 0.13%). In
2014, the sector grew by 4.9% in current
prices (5.9% at constant prices). Considering
delays in contract award procedures relating
to large infrastructure projects supported
in the new 2014-2020 EU perspective, the
upward trend observed over the past two
years will not be seen this year.
The effects of the said delays have already
been demonstrated in data published by
the Central Statistical Office. In August,
production in the construction and
assembly sector dropped by 20.5% (at
constant prices). It also went down (by
14.9% at current prices) in the entire period
from January to August 2016.
The latest data regarding bankruptcies
in the enterprise sector also support
that trend. After three consecutive years
when construction company bankruptcies
decreased in number, in the first half of
2016 they grew by 8% as compared with the
corresponding period of 2015.
Sold production in construction industry (in PLN bn)
12.0
17.2
10.9
10.0
8.0
7.7
7.3
7.0
7.0
6.3
6.0
4.0
2.0
0.0
1H 2012
2H 2012
1H 2013
2H 2013
1H 2014
2H 2014
1H 2015
2H 2015
1H 2016
Source: Central Statistical Office
Within the next few years we can expect many changes,
because the business climate in the construction
industry to a large extent depends on infrastructure
projects. Beginning from 2018, the planned road and
railway projects will be launched and most likely, they will
accumulate, which in turn may cause a price war in the
sector.
Piotr Janiszewski, CEO, Skanska S.A.
Delays in inviting tenders for large
infrastructure projects in 2016 have had an
adverse effect on the current situation in the
construction sector. Nevertheless, the average
pay in the industry rose in early 2016. It is also
anticipated that the demand for workforce will
increase due to the expectation of the launch
of EU supported projects.
As the level of funding from the EU
perspective is known but the project
timelines are still uncertain, construction
companies have refrained from investing
in modern fixed assets or innovative
technology solutions.
34
10.9
10.5
The influx of funds from the European
Union will be of crucial importance to the
improvement of the conditions on the
infrastructure construction market in Poland
in the upcoming years. The EU structural
and investment funds allocated to Poland for
2014-2020 total EUR 86.6 billion, out of which
EUR 0.8 billion (0.9% of the total allocated
amount) had been disbursed by the European
Union by May 2016. The aggregate value
of applications filed under all the available
operational programmes for 2014-2020
by July 2016 exceeded PLN 143.5 billion,
including PLN 88 billion of EU support.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Representatives of the largest construction
companies see the new EU financial
perspective as a great opportunity but
they also voice concerns over the delays in
inviting tenders and completing the existing
contract award procedures. Following the
change in the government in October 2015,
the new authorities have begun to revise
the key infrastructure programmes, that is
the National Road Building Programme and
the National Railway Programme. According
to the Ministry of Infrastructure, in its
current version the National Road Building
Programme would require additional funds
of PLN 90 billion so that all the objectives
defined therein could be achieved. Such
conclusions have been arrived at following
the verification of plans and costs assumed
in the National Road Building Programme. At
the beginning of August 2016, the Ministry
of Infrastructure and Construction held
a dialogue with road contractors, which
resulted in the announcement of work on
the improvement of public procurement
processes. Representatives of the industry
emphasized that unpredictability of the
investment process was their major
concern. On 2 September 2016, the
Minister of Infrastructure, PKP PLK and the
Directorate General for National Roads and
Motorways presented the road and railway
construction status and plans.
According to the Minister, the situation
in the road segment is relatively good as
opposed to that in the railway segment,
where tenders that should have been
invited a year ago will only be invited this
and next year. This was due to a lack of
documentation, which should have been
prepared by the former government
The housing construction segment enjoys
a strong growth in the demand, which has
continued uninterruptedly since 2014.
In the short-term perspective this trend
is expected to continue, considering that
Poland has one of the lowest ratios of
flats per 1,000 citizens in Europe and
that government programmes intended
to support housing (such as “Flats for
the Young” or the “National Housing
Programme”) have been launched. In
addition, part of the demand is generated
by investment-oriented transactions. Low
interest rates, which significantly restrict the
profitability of investing in deposits, along
with the unfavourable situation on the
Warsaw Stock Exchange which discourages
investors result in an increased focus on
real property investments. Nonetheless, in
the mid-term, a slowdown in the housing
construction segment can be expected
in view of the finalization of the Flats for
the Young programme in 2018 and the
heightened restrictions of mortgage loan
availability.
In 2015, the supply on the office
construction market was the highest
on record. This is evidenced by an
unprecedented volume of office space built
(622,000 sq.m.). The demand increased as
well and the overall lease transaction value
was 40% higher than in 2014. According
to Colliers International, over 1.5 million
sq.m. of office space is being constructed
at present, half of which is in Warsaw. It can
be expected though that - considering the
high demand that can be observed now and
that is planned for the future - the unrented
space ratio for the major Polish markets will
be going up over the next few quarters.
In the upcoming years, construction
companies will, on the one hand, focus on
taking advantage of the increased volume of
projects (as a result of an influx of EU funds
and the launch of government housing
programmes), and on the other on ensuring
growth in value in the long term. In order
to maintain a competitive advantage after
the end of the 2014-2020 EU perspective,
companies continue their expansion on
foreign markets, to include Western Europe,
Scandinavia or the Balkans, both through
exports and through development of
operations in other countries. They have
also been diversifying their business and
developing new competences, such as
modernization projects in building and
facility construction or maintenance in
the infrastructure segment. Additionally,
managers have launched operational
optimisation initiatives (such as headcount
reduction or operational structure changes).
The aforementioned factors show that the
conditions in the construction sector vary
considerably by segment. The infrastructure
segment, which depends on public funding
and government decisions, is faced with the
most problematic situation.
A slowdown in that segment may lead to an
end of the upward trend observed in the
construction sector for the past two years.
The sector companies will have to make it
through the temporary delays in the major
infrastructure projects, which are caused by
the launch of the 2014-2020 EU perspective
and revision of the existing road and railway
programmes. In this chapter we attempt
to sum up the opportunities that are now
available, indicate the key growth drivers
and prospects for development.
As the Polish construction
market is expected to
shrink after the end of the
current EU perspective,
Polish construction
companies should
consider international
expansion now.
Leszek Gołąbiecki - Chairman
of the Management Board,
Unibep S.A.
35
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Early 2016 saw a slowdown in the growth
rate to 2.6% (January - March) as compared
to a rate of 3.8% in the corresponding
period in the preceding year. Initial
estimates by the Central Statistical Office
show that in Q2 2016 GDP went up by 3%
year-on-year vs. 3.2% a year before. The
slowdown results mainly from a decline in
infrastructure investment accompanied by
a drop in government spending in relation
to the EU funding cycle. The government's
forecasts as to the planned 3.8% growth
were updated in the second half of
August to 3.5%. However, considering
the decline in infrastructure investment
and the uncertainty resulting from the
announcement of Brexit, it may be difficult
to reach GDP growth even at the reduced
level.
36
6%
5.0%
3.6%
3.3%
3.1%
3%
2%
3.4%
3.3%
3.2%
2020F
3.7%
2019F
4%
2018F
5%
2.9%
1.6%
1.3%
1%
2017F
2016F
2015
2014
2013
2012
0%
2011
Economic growth
In 2015, the compound average growth
rate in Poland was 3.6%. The growth was
fuelled mainly by household consumption
and a rise in exports that was attributable to
improved competitiveness of Polish goods
(primarily owing to depreciation of the Polish
currency relative to the euro and U.S. dollar).
Increase of Poland's GDP
2010
2.2. Key growth drivers for the
construction market in Poland
In the upcoming years, the condition
of the construction sector will be
determined mainly by such factors as
the macroeconomic situation in Poland
(primarily, its economic growth) and the
use of the funds allocated to infrastructure
investments in the 2014-2020 EU
perspective, which will depend on the
possibilities of subsidizing infrastructure
projects limited by the criterion of the public
debt level.
Source: EIU, Country Forecast Poland, August 2015 update
Geographical diversification is the strategic objective
of the Trakcja PRKiI Group. The Group is present in
the Lithuanian market and strives to acquire new
clients in markets offering many opportunities, such
as Scandinavia or the Balkans. Ultimately, the Group
intends to generate 50 percent of its revenue from
export sales.
Jarosław Tomaszewski – Chairman of the Management Board,
Trakcja PRKiI S.A.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Government debt
The level of government debt largely
determines the possibilities of the State and
local governments to support infrastructure
projects. At the end of 2015, the government
debt-to-GDP ratio was 48.4%. According
to the government debt management
strategy for 2016-2019, as proposed by the
Minister of Finance, in 2015 and 2016 the
government debt-to-GDP ratio will rise to
49.0% but it will gradually decrease to 47.5%
in 2019.
Public debt as a GDP percentage
60%
58%
56%
54%
53.4%
53.9%
52.6%
52%
50%
47.8%
48%
48.4%
49.0%
49.0%
48.1%
47.5%
46%
EU funds
The influx of funds from the European Union
in the 2014-2020 financial perspective is
a key growth driver for the construction
market, especially in the infrastructure
sector. The total funds allocated to Poland
under the cohesion policy is EUR 82.5
billion, including EUR 45.6 billion earmarked
for grants under National Operational
Programmes. Detailed allocation of funds to
each Operational and National Programme
was presented in the previous edition of the
Report.
Funds for infrastructure projects are derived
mainly from the Eastern Poland programme
and the Infrastructure and Environment
programme. The Eastern Poland Operational
Programme covers infrastructure projects
on two priority axes, namely the Modern
Transport Infrastructure and the SupraRegional Railway Infrastructure.
In 2015, no grant applications and no
contracts were signed under the 2014 2020 perspective. Likewise, no applications
for payments linked with infrastructure
projects were settled under the program by
the end of 2015.
Under the Infrastructure and Environment
Operational Programme (POIiŚ) 2014-2020,
grant agreements totalling EUR 615.7 million
had been signed by the end of 2015 in
relation to railway infrastructure projects
(core network, comprehensive network and
other railways) and EUR 1.9 billion for roads
and motorways (the total value of grant
agreements signed under the programme as
a whole was EUR 2.5 billion out of EUR 14.6
billion available).
44%
42%
40%
2011
2012
2013
2014
2015
2016F
2017F
2018F
2019F
Source: Ministry of Finance – “Public Finance Sector Debt Management Strategy for 2015-2018, September 2014
Allocation of EU funds under 2014-2020 perspective (in PLN bn)
1.57
3.83
1.18
4.05
1.17
4.27
1.17
4.47
1.17
4.68
1.17
4.88
1.17
5.09
6.19
6.49
6.80
7.39
5.85
7.10
5.52
2014
2015
2016
2017
2018
2019
2020
Rural Development Programmes
Regional Operational Programmes
National Operational Programmes
Source: Ministry of Development and Infrastructure
Establishing the Polish Cluster of Construction
Exporters, an association of construction companies
controlled by Polish investors, will help strengthen the
position of Polish companies in foreign markets.
Leszek Gołąbiecki - Chairman of the Management Board, Unibep S.A.
37
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Number of bankruptcies among construction contractors between 2011 and 1H 2016
2.3. Bankruptcies in the construction
sector
In the first half of 2016, the number of
bankruptcies in the construction sector
increased by 8% year-on-year, which was
a consequence of a temporary lack of
contracts. However, this does not fully
reflect the condition of construction
companies. The real drop in construction
investment is almost twice as high as the
increase in the number of bankruptcies in
absolute terms. Companies expect that the
situation will improve once infrastructure
projects have been launched in the new EU
perspective.
The majority of entities going bankrupt
are those operating in the road and water
supply system infrastructure segment, while
the number of bankruptcies in the housing
construction segment is definitely lower. At
present, the condition of companies in the
housing construction segment is considered
good. As the supply has a good correlation
with the demand, the problem of unsold
projects has disappeared. However, the
medium-term outlook is less optimistic as
banks are planning to reduce the number
of new loans (increased pressure to match
the asset and liability portfolios and the
38
27%
22%
20%
17%
20%
66
71
273
253
250
184
200
150
146
146
100
50
2015
2014
2013
0
2011
Based on the economic factors and
the expected influx of EU funds we
may conclude that the prospects for
the construction sector are good. The
statistical data concerning bankruptcy and
employment (discussed below) well reflect
the current situation in the sector and its
prospects for the nearest future. In addition,
section 2.6 of our report presents our
forecast regarding the market situation from
the perspective of companies, PKP PLK and
the Directorate General for National Roads
and Motorways.
29%
1H2016
20%
300
1H2015
Share of bankruptcies in the construction sector in all bankruptcy petitions
2012
The recent decision of the UK to leave the
European Union may reduce the available
EU funds. Needless to say, withdrawal
from the EU is a lengthy process, which will
probably take several years. However, the
United Kingdom is one of the largest net
payers to the EU budget. Consequently,
its secession may lead to a reduction in
the number of investment projects and
introduction of more stringent financing
criteria.
Source: Euler Hermes
A serious challenge, from the perspective of both
investors and general contractors, is to understand
the changes to the Public Procurement law, namely
the 40% non-price criterion. Indisputably, it is the right
direction that will favour companies focused on social
responsibility, innovation, security and sustainability.
Piotr Janiszewski, CEO, Skanska S.A.
necessity to implement more stringent
credit analysis criteria).
The social tenement housing programme
proposed by the government may have
an impact on the market in the longer
term. The major threat for companies
operating in the infrastructure segment
is delays in contract award procedures as
well as an uncertainty as to the pricing of
construction materials in the case of project
accumulation.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.4. Employment in the construction
sector
In the first half of 2016, the number of
employees in the construction sector
ceased to fall for the first time since 2012.
According to the Polish Central Statistical
Office, in the first half of 2016,
the average number of employees
increased by 0.2% as compared to the
corresponding period in the preceding
year, although a drop by 0.3% YoY was seen
in the first quarter. In 2015, the average
number of employees was 387,600, which
means a 5,8% drop (in 2013 an 8.6%
decrease was reported, followed by a 7.6%
decline in 2014).
With a decelerating downward trend in
employment in the construction sector, the
average gross monthly pay in 2015 was PLN
4,076.47, up by 4.9% year-on-year.
In the first half of 2016 the average pay
was PLN 4,169.37 (i.e. 2.3% more than in
2015). Considering that over the past three
years the average pay in the first half of the
year was ca. 2% lower than the average
annual pay, a further increase in pay may be
expected in the construction sector in 2016
as a whole.
According to a survey conducted by the
Central Statistical Office among construction
companies, a shortage of qualified staff is a
growing problem in the industry. In August
2016 28.1% of companies identified this
factor as a barrier to business. The ratio was
higher only between 2006 and 2008. As in
the preceding year, employment costs were
considered the heaviest financial burden.
They were identified as a barrier to business
by 61% of employers (vs. 62% in 2015).
Average employment and gross salary in the construction sector from 2008 to 1H2016
4 300
550
4 100
478.2
446.1
443.3
3 900
4077
488.1
4169
4043
500
445.8
450
411.5
398.9
3 888
3 700
3 704
387.6
3 728
3 702
382.5
383.4
3 540
3 500
350
3 464
3 359
3 300
400
300
3 100
250
2 900
200
2008
2009
2010
2011
2012
2013
2014
2015
1Q 2016
1H 2016
Gross average pay [PLN]
Average employment in year [in thousands]
Source: Central Statistical Office
Average gross pay in the first half of 2016 in specific construction sectors
4 500
4 400
4 300
4 200
4 169
4 100
4 393
4 000
4 121
3 900
4 018
3 800
Building construction
Works linked with construction of
civil and water engineering structures
Specialized construction work
Average pay in specific segments
Average pay in construction industry
Source: Central Statistical Office
Significant EU funds used for financing Polish infrastructure projects and no barriers of entry on the
domestic market created fierce competition for contracts and considerably reduced margins earned by
general contractors. The fact that projects under the new perspective are delayed by almost three years
makes us cautious, because now it is uncertain whether all investment projects planned under the National
Railway Programme will be delivered and whether the PLN 66 bn will be fully used.
Jarosław Tomaszewski – Chairman of the Management Board, Trakcja PRKiI S.A.
39
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Employment outlook
The latest report entitled “Manpower
Employment Outlook Barometer” presents
the employment outlook for the economy
for Q4 2016.1 The data contained in the
report shows that employers in Poland
are clearly optimistic about the future. The
net employment outlook is positive for
nine out of ten sectors surveyed. In Q4,
15% of the respondents are planning to
increase the number of their employees,
75% declare that no changes will be made
in this regard and 7% expect a headcount
reduction. Optimism prevails also among
employers in the construction sector. The
net employment outlook for the analysed
period is +13%, which translates into a 2 p.p.
rise year-on-year.
This means that 13% more companies
expect that the number of their employees
will increase as opposed to fall. Before
the seasonal update, the net employment
outlook is +12%. Considering a large
number of projects to be implemented
within the next 6-7 years with the support
of the European Union, the number of
employees in the infrastructure segment
may be expected to rise over the years 2014
- 2020.
Hays forecasts that the employment rate
will increase mainly in the road and railway
infrastructure segments and candidates
for the position of site manager, contract
manager and industry manager will be most
frequently searched for in 2016 by general
contractors.
Key business challenges faced by construction companies
70%
62%
62%
61%
60%
50%
40%
34%
30%
35%
31%
30%
31%
28%
28%
19%
20%
22%
10%
0%
Employment costs
Insufficient demand
Cots of materials
Shortage of competent
staff
August 2014
August 2015
August 2016
Source: Central Statistical Office
We are constantly developing our machinery stock.
New specialized equipment will bring us a competitive
advantage and it will certainly be required in domestic
and Scandinavian contracts. Investments in specialized
machinery stock and highly qualified staff are of key
importance for further growth of the Torpol Group.
Grzegorz Grabowski, Chairman of the Management Board of
Torpol S.A.
1 The “net employment outlook” in the "Manpower
Employment Outlook Barometer" is a percentage
difference between the number of employers
anticipating an increase in the total number of
employees and the number of employers expecting a
fall in the total number of employees in their branch
in the nearest quarter.
40
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5. Development prospects for
construction market segments in
Poland
In 2015, the structure of construction and
assembly production was similar to that
reported in the preceding year. A slight
increase was observed in infrastructure
construction (from 38.2% to 38.6%) and in
specialist construction (from 33.5% to 34.0%),
to the benefit of works relating to the erection
of buildings.
In 2015, the Polish construction sector
grew by 2.9% at constant prices (growth
at current prices amounted to 0.13%).
According to revised data published by the
Central Statistical Office, the growth rate
was considerably higher a year before, when
it reached 4.9% at current prices (5.9% at
constant prices). The 2016 figures reflect a
slowdown resulting from the suspension of
contract award procedures and delays in
infrastructure investments. According to the
Central Statistical Office, construction and
assembly production dropped by 20.5% in
August vs. July 2015, and between January
and August the decrease was 14.9% (at
constant prices). Considering the anticipated
acceleration of infrastructure projects due
to the necessity to implement government
programmes and use EU funds, the
construction market value may be expected to
increase in the upcoming years. However, as
the completion of contract award procedures
and the selection of contractors will take more
time and, due to the fact that a number of
road and railway projects are carried out in
the design-build formula, market growth will
probably be seen only in 2018.
The medium term
objective of the Unibep
Group is to grow
the share of exports
in total revenues.
Modular construction
in Scandinavia is a key
element of the Group's
development strategy.
Leszek Gołąbiecki - Chairman
of the Management Board,
Unibep S.A.
Structure of the construction market in Poland in 2015
100%
90%
80%
38.2%
38.6%
28.3%
27.4%
33.5%
34.0%
2014
2015
70%
60%
50%
40%
30%
20%
10%
0%
Construction of civil and water engineering structures
Building construction
Specialized construction
Source: Central Statistical Office
Polish construction market divided into segments 2010 - 2015 [PLN bn]
CAGR*
-2.3%
69.1
51.4
37.7
60.6
63.2
64.1
47.0
45.5
52.9
55.5
56.4
2013
2014
2015
64.1
48.9
47.0
41.0
71.8
64.2
63.1
2010
2011
2012
Specialized construction work
Construction of civil and water engineering structures
Building construction
* CAGR - Compound Annual Growth Rate
Source: Central Statistical Office
41
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Despite a drop in production in the
construction segment, the "WIG
Budownictwo" index has been rising
steadily since February 2016, after a
period of slight decline in the winter,
which may be attributable to an expected
increase in the number of contracts on the
market. Taking account of the expected
increase of employment levels in the
construction industry, it may be concluded
that the market expects more orders in
the infrastructure sector and continued
optimism in the housing construction
segment.
WIG BUD and WIG20 for the period 31.07.2008- 16.09.2016
2015-01-02
2015-11-02
2016-09-02
3500
3000
2500
2000
1500
1000
500
0
WIG 20
WIG Budownictwo
Source: stooq.pl
The Torpol Group plans further business growth in
the Norwegian market, where it has been winning new
deals.
Grzegorz Grabowski, Prezes, Torpol S.A.
42
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.1. Road construction
In the road construction sector, 2015 was a
period of transition between the 2007-2013
perspective and the new EU 2014-2020
perspective. Prior perspective projects
were being completed and new perspective
projects were being planned and prepared
at the same time. Investments supported
by the EU in the 2014-2020 perspective will
be realized in accordance with the National
Road Building Programme for 2014-2023
(with projections by 2025) (the “NRBP”),
set by the Ministry of Infrastructure and
Development in September 2015. Detailed
assumptions underlying the programme
were presented in the previous edition of
the Report.
In 2015, funds totalling PLN 11.5 billion,
derived from all the available sources, were
spent on road projects. In 2015, the road
project spending from the National Road
Fund itself went down as compared to the
preceding year (PLN 8.4 billion in 2015 vs.
PLN 12.8 billion in 2014), which represents
a drop of 34%.1 In 2015, 24.7 kilometres of
expressways and motorways were made
available for use and 61.8 kilometres of
national roads were rebuilt. This is slightly
less than planned in the NRBP (36.0 and
66.4 kilometres, respectively).
New contract award procedures were
suspended for the NRBP verification period
and resumed after the announcement
of the "Road and Railway Investment
Initiative" by the Ministry of Infrastructure
and Construction on 2 September. An
investment budget of more than PLN
4 bn was opened in September with
14 invitations to tender. Other tender
proceedings worth PLN 8 billion will be
announced by the end of the year. Following
the execution of these contracts the total
value of works would reach PLN 60-65
billion, i.e. 60% of the planned amount.
Investment projects will
accumulate primarily in
the railway segment - we
expect that fewer projects
will be undertaken in the
road segment.
Wojciech Trojanowski –
Member of the Management
Board of Strabag Sp. z o.o.
Although the resumption of road
investments is a positive sign, it is still
questionable whether funds necessary to
implement the programme in the upcoming
years will be secured, in particular if the total
expenditure were to increase to PLN 198
million. In July, the Ministry of Infrastructure
and Construction announced that the debt
of the National Road Fund exceeded PLN 40
billion (ca. PLN 60 billion along with interest).
Investments in expressways and motorways under the National Road Building
Programme for 2014-2023 (with projections by 2025) – completion status after
2015
Changes made to the Ministry of
Infrastructure and Construction after the
establishment of a new government in 2015
have had an impact on the implementation
of the road building programme. The
NRBP was revised, specifically in terms of
its financial assumptions. Initially, PLN 107
billion was to be secured under the NRBP
to fulfil the tasks planned. Currently, the
Ministry of Infrastructure and Construction
estimates that PLN 198 billion will be
necessary for that purpose2. It has not been
decided yet whether additional funds will
be secured to fulfil all the tasks and the
NRBP will be updated or whether the list
of investments will be verified in terms of
priority and precedence.
1 Supreme Chamber of Control report on adherence
to the government budget in 2015 (Section 39 –
Transport).
2 Presentation by Jerzy Szmit, Deputy Minister of
Infrastructure and Construction, at the meeting of
the Parliamentary Infrastructure Committee on 11
March 2016.
Completed or in progress
New investments under
the NRBP 2014-2023
Source: National Road Building Programme for 2014-2023 (with projections by 2025)
43
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Before the announcement of the "Initiative",
in the new EU perspective under the
Infrastructure and Environment Operational
Programme 2014-2020, the Directorate
General for National Roads and Motorways
signed an agreement whereby funding
would be received for 23 projects totalling
PLN 30.9 bn (funding of PLN 13.2 bn) – to be
carried out in the years 2015-2020.
The technical condition of roads, which
deteriorated both in 2014 and 2015 despite
considerable investment, is a major problem
for road infrastructure in Poland. At the end
of 2015, 14.1% of roads were considered “in
poor condition” (as compared to 13.2% at
the end of 2014) and 25.3% were regarded
as “unsatisfactory” (vs. 25.1% in 2014).
According to the Report on the Technical
Condition of National Roads as at the end of
2015, prepared by the Directorate General
for National Roads and Motorways, the
following factors affected the deterioration
of the technical condition of national roads:
National road condition by region (as at the end of 2015)
Good condition
Unsatisfactory condition
Poor condition
• insufficient funds considering the
identified repair needs;
• adverse weather conditions –
exceptionally low temperatures in winter
and high in summer;
• changes to the road condition
assessment methodology – a longer list
of parameters and the application of
innovative measurement techniques;
• a smaller increase in the length of new
roads (in good technical condition) in
2015 as compared to 2014.
• national road condition by region (as at
the end of 2015).
The Dangerous Road Section Management
Programme (the "DRSMP") was launched
earlier this year with a view to improving
the condition of the existing national roads.
The tasks defined in the programme are
mainly aimed at improving the safety of
unprotected traffic participants. In 2016,
a total of 292 tasks are to be fulfilled, for
which the amount of PLN 300 million has
been allocated. The National Road Fund
and the government budget allocated to the
annual programmes implemented by the
Directorate General for National Roads and
Motorways are the sources of funding for
44
Source: Report on the Technical Condition of National Roads as at the end of 2015
75 percent of the domestic revenue of the Strabag
Group come from infrastructure projects, while the
remaining 25 percent - from the construction of
buildings and facilities.
Wojciech Trojanowski – Member of the Management Board of
Strabag Sp. z o.o.
the aforementioned programme. Ultimately,
PLN 600 million will be allocated to the
programme annually.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Local government road network
In addition to national roads (including
expressways and motorways), the Polish
public road network consists of local
government (regional, district and municipal)
roads.
The Ministry of Infrastructure and
Development supports local government
road investments as part of the general
subvention fund and the "Municipal and
District Road Development Programme" for
2016-2019.
The general subvention fund dates back
to 1999 and is created annually in the
government budget under the Act on
Local Government Unit Income. In 2016,
PLN 336 million was allocated as part of
the general subvention to support local
government road investments, with more
than half earmarked for four regions,
namely Mazowsze, Pomorze, Śląsk and
Wielkopolska. The fund will account for
50% of the task value. Allocation of funds
to each task has been presented on the
website of the Ministry of Infrastructure
and Construction: http://mib.gov.pl/2Rezerwasubwencjiogolnej.htm.
The aggregate value of tasks to be
supported under the Municipal and District
Road Infrastructure Programme for 20162019 is PLN 4 billion. The list (based on
priority) includes 418 projects relating to
district and 938 to municipal roads. Every
year ca. 2,200 km of district and municipal
roads may be built, rebuilt or repaired under
the programme. According to the Supreme
Chamber of Control, the condition of 36%
of district and municipal roads is poor as
compared to only 29% whose condition is
considered good or satisfactory3. Due to the
fact that the current technical condition of
municipal and district roads is unsatisfactory
and that the local road infrastructure will
not receive any considerable support in the
2014-2020, EU perspective4, the necessary
funds must be provided by the State.
3 As of March 2014, considering the effects of the
implementation of the National Programme for
Local Road Rebuilding between 2008 and 2015.
4 Investments in provincial roads may be fiananced
from Regional Operational Programmes.
Polish public road categories (as at 31 December 2014)
Road
category
Length
[km]
Share
[%]
Road administration
authority*
Ownership
National
roads
19 293
4.6%
Directorate General
for National Roads and
Motorways
State Treasury
Regional
roads
28 593
6.9%
Central administration
authority in the region
Local administration
authority in the region
District
roads
125 330
30.1%
Central administration
authority in the district
Local administration
authority in the district
Municipal
roads
243 810
58.5%
Municipality Head
(Mayor)
Local administration
authority in the
municipality
Total
417 026
100%
-
-
*in district cities/towns, the mayor is the administration authority for all public roads, except motorways and expressways
Source: Central Statistical Office, Deloitte analysis
Division of general subvention fund resources
łódzkie - (1%)
kujawsko-pomorskie - (6%)
dolnośląskie - (1%)
podkarpackie - (6%)
lubuskie - (2%)
lubelskie - (7%)
świętokrzyskie - (2%)
zachodniopomorskie - (9%)
warmińsko-mazurskie - (3%)
wielkopolskie - (9%)
opolskie - (4%)
śląskie - (10%)
podlaskie - (4%)
pomorskie - (10%)
małopolskie - (5%)
mazowieckie - (21%)
Source: Ministry of Development and Infrastructure
45
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.2. Railway Construction
The scope of railway construction projects
includes the modernization and development
of railway and tram infrastructure. In
Poland, 19,300 kilometres of railways are
used at present, out of which ca. 96% are
administered by PKP PLK S.A. The technical
condition of the railway infrastructure
is unsatisfactory. However, it has been
improving steadily since 2010. The condition
of 52% of the railways administered by PKP
PLK is considered good, 27% satisfactory and
21% unsatisfactory.
The railway investment framework has
been defined in two documents, namely
the Multi-Annual Railway Sector Investment
Programme by 2015 (with projections by
2020), which was adopted under a resolution
on 13 March 2015, the "MARSIP", and the
National Railway Programme by 2023,
dated 15 September 2015 (the “NRP”),
which continues the MARSIP. The underlying
assumptions were presented in the previous
edition of the Report.
In 2015, projects of PLN 7.2 billion5 were
completed under the MARSIP vs. PLN 9.0
billion planned. This shows that the plan
for 2015 was 80% implemented in terms
of spending but the stage of completion of
the construction works was 90%, which is
partly attributable to cost savings realized in
contract award procedures.
Currently, the NRP is being updated. As at
the date of this Report, the latest version of
the draft programme was published on 11
July 2016. The time limit for the expression
of opinions on the draft programme in
a social consultation process expired on
2 September. The programme is being
updated primarily with a view to making
the investment plans more flexible. They
previously assumed that 50% of the contract
award procedures planned for a 6-year
period would be completed in 2019 and
2020.
5 In 2015, the total expenditure met using individual
sources of funding was PLN 7.2 billion, whereas the
expenses paid by PKP PLK to contractors amounted
to PLN 7.7 billion. The difference of ca. PLN 0.5 billion
is a refund, which will be transferred to the accounts
of PKP PLK in 2016, once it has been verified by the
Centre for the EU Transport Projects.
46
Railway spending of PKP PLK (in PLN billion)
18.4
14.3
12.2
12.2
12.9
9.5
8.6
7.1
7.7
7.0
6.2
5.3
5.3
2.4
3.2
3.8
2.8
3.9
2.8
6.1
4.3
3.4
3.0
1.4
1.9
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Delivery
Estimates
Previous version NRP
NRP forecast
Source: PKP PLK reports, Multi-Annual Railway Sector Investment Programme, National Railway Programme, Deloitte analysis
The updated version provides for
changes in the schedule (acceleration for
2016-2017) and extension of the time
limit for completion of the investment
projects beyond 2020. The objective is to
avoid paralysis of the railway traffic and
accumulation of investments in 2019
and 2020 which could lead to delays,
higher costs and financial problems of the
contractors, as it did in the case of road
building projects.
Until now towns were using EU funds for purchases of
rolling stock, but now we can expect more substantial
outlays on building tram rails.
Wojciech Trojanowski – Member of the Management Board of
Strabag Sp. z o.o
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
By the end of September, tenders had been
invited for projects with an aggregate value
of PLN 18.8 billion (total investments under
the NRP estimated at PLN 66 billion). PKP
PLK has announced that further tenders will
be invited by the end of 2016 with respect
to projects of PLN 6.5 billion. In 2017,
investments of PLN 5.5 billion in total are
to be realized (the additional PLN 1.5 billion
will be spent on purchases of materials and
works performed by PKP PLK itself) and
tenders will be invited for projects of ca. PLN
5.0 billion.
In addition to the volume and value of
investments financed by the State and
EU funds, the condition of the railway
construction sector is also determined by
the local government activity in the field of
repair and improvement of suburban rail.
Such projects are financed by grants-in-aid
and the Railway Fund. The annual funding
limit for 2016-2019 is PLN 110 million.
The scope of municipal investment plans
also includes the construction and repair
of tram lines. In the new EU perspective,
up to PLN 13 billion may be spent on
the development of tram transport
(infrastructure and rolling stock). It may be
estimated that about a half of that amount
will be spent on infrastructure. However,
the latest Multi-Annual Financial Plans
for the five largest cities assume railway
infrastructure spending of PLN 1.5 billion by
2020.
Funding of NRP capital expenditures in 2016 - 2023 (in PLN billion)
1.2
1.0
0.9
0.4
4.8
4.6
1.6
1.2
6.1
0.9
1.3
2.6
1.8
2.1
1.1
0.1
1.0
2016
2017
3.1
2.9
2018
4.3
2019
4.6
2020
4.7
2021
4.1
1.1
0.4
0.3
2022
2023
Other
RPO 2007-2013
RPO 2014-2020
PO PW
POliŚ 2007-2013
POliŚ 2014-2020
CEF
Source: PKP PLK reports, Multi-Annual Railway Sector Investment Programme, National Railway Programme, Deloitte analysis
Railway infrastructure investments planned for 2014-2020 under the National
Railway Programme vs. completed MARSIP projects
Time pressure related to the
deadlines for completion of
railway investment projects
and their final settlement in the
period required by the new EU
perspective is one of the major
sector risks.
Grzegorz Grabowski, Chairman
of the Management Board of
Torpol S.A.
Source: Draft National Railway Programme by 2023, dated 11 July 2016
47
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.3. Energy construciton6
Poland has large-scale power industry
investment plans. According to the Energy
Regulatory Office power companies are
planning to make (in aggregate) almost
16 GW of new capacity available between
2016 and 2028, the major part of which
will be by the end of 2020. The total capital
expenditure on new capacity, planned for
2014-2028, is estimated at PLN 55 billion.
Wind farms were to account for the major
part of the new investments. However,
in the context of the legal changes being
introduced, the investment plans will have
to be revised. The Wind Farm Investment
Act published in July 2016 introduced major
changes to the wind power industry.
Some power companies had to write off
investment projects previously planned.
Additionally, in 2017 changes will be
made to the taxation of property where
wind farms are located. Under the new
act, property tax will apply not only to the
structure (foundation and tower) but also to
the technical components, which account
for ca. 70% of the total wind farm value,
and this will further reduce the return
on such investments. However, the final
consequences of the legal changes may
not be determined at present, as new draft
amendments to the act were prepared
in September with a view to reducing the
negative effects of such modifications to a
minimum.
6 The national power industry investment plans
discussed in the previous edition of the Report have
not changed.
48
Planned generation capacity (MW)
4.5
3.9
4.0
3.6
3.5
3.0
3.0
2.8
2.5
2.0
1.9
1.5
1.0
0.5
0.5
0.3
0.0
2016
2017
2018
2019
2020
2021
AFTER 2021
Source: Energy Regulatory Office Newsletter No. 3 (93) of 30 September 2015
The margins on energy projects generated by
technology providers and construction companies differ,
with the former reporting much better performance.
Antoni Józwowicz, CEO, Polimex-Mostostal S.A.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Selected key investments in the power
industry (by stage of completion):
Projects in progress7:
1.One Unit in Kozienice Power Plant (1075
MW; hard coal);
2.Two units in Opole Power Plant ( 2 x 900
MW; hard coal);
3.Stalowa Wola Power Plant (450; 240 MW;
natural gas);
4.Włocławek Power Plant (463 MW; natural
gas);
5.Turów Power Plant (450 MW; brown coal);
6.Jaworzno Power Plant (910 MW; hard
coal);
7.Płock Heat and Power Plant (596 MWe;
natural gas; planned to be made available
for use by the end of 2017).
two nuclear power plants with a total
capacity of approx. 6000 MW net (4-8
nuclear power units). At present, the
Ministry of Energy is working on a
programme for the construction of the
first nuclear power unit with a capacity of
ca. 1000 MW, to be built within the next
decade. According to the industry, the
construction of nuclear power plants in
Poland is not certain. The visions of the
ministries of development and energy
concerning the future of the power industry
differ and nuclear power plant investment
requires massive expenditure.
There are new investment plans for the
renewable energy sector in Poland, too.
According to the Energy Regulatory Office,
the installed capacity in the renewable
energy sector is 82 GW (as at 30 June
2016). The Institute for Renewable Energy
forecasts investments in new renewable
energy sources of 15 GW (electricity) and of
9 GW (heat). According to the Energy Market
Agency, the share of renewable energy in
Poland should account for about 19% in
2030.8
Figure 1: Map of selected key capacity investments – in progress and planned
Żarnowiec
Projects planned (contract signed /
pending contract award procedure / preimplementation analyses):
Gąski
Rajkowy
Grudziądz
1.Żerań Heat and Power Plant (420-490
MW; natural gas);
Płock
Włocławek
2.North Power Plant (ultimately 2 x 800 MW;
hard coal; a construction permit has not
been obtained yet);
Żerań
3.Grudziądz Power Plant (ca. 420-600 MW;
natural gas; project suspended);
Kozienice
Puławy
4.Puławy Power Plant (ca. 400 MW; natural
gas);
Turów
5.Czeczott Power Plant (ca. 1000 MW).
Suspended projects:
1.Łagisza Power Plant (413 MW; natural
gas) – the project has been suspended by
Tauron Group, which was communicated
in September 2016 when the Group's
Strategy for 2016-2025 was being
announced.
The power industry plays an important
role in the draft "Responsible Growth
Strategy" presented by the government
in August 2016. The "Polish Nuclear
Power Programme" is planned to be
continued. The Programme provides for the
development of
7 Above 100 MW
Opole
Źródło
energii:
Sources
of energy:
Łagisza
Stalowa Wola
Jaworzno
Wola k/Pszczyny
coalkamienny
--hard
węgiel
--brown
węgielcoal
brunatny
--natural
gaz gas
of nuclear
powerjądrowej
--considered
rozważanelocations
lokalizacje
elektrowni
plant consideration
Source: Deloitte analysis
8 2030 capacity forecast assuming predefined
technical and economic parameters for nuclear
power plants, ARE S.A., June 2013
49
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
In addition to capacity investments, a
number of projects aimed at developing
the transmission and distribution networks
are planned. Based on the plans adopted in
2014, total expenditure on distribution and
transmission infrastructure between 2016
and 2019 is to reach ca. PLN 42 billion.
Table: Total agreed capital expenditure of five distribution system operators and
the transmission system operator for 2014-2019 (in PLN million).
Year
2014*
2015*
2016
2017
2018
2019
Expenditure
6,482
6,680
6,361
7,617
8,199
5,246**
* - delivery
** - expenditures 5 OSD (no OSP)
Source: Energy Regulatory Office
We believe that business
diversification and
undertaking projects in the
energy and road segments
maximize our chances of
development.
Jarosław Tomaszewski –
Chairman of the Management
Board, Trakcja PRKiI S.A.
Table: Key investments realized or planned in the field of distribution and
transmission systems
Project
Contractor
Estimated expenditure
(in PLN billion)
Baltic Pipe (PolandDenmark)
Gaz-System
PLN 1.6 billion
LNG FSRU Terminal
Gaz-System
PLN 0.5-0.9 billion
Natural gas storage facility
PGNiG
PLN 0.9 billion
EFRA Project
Lotos Group
PLN 2.2 billion
Oil terminal construction in
Gdańsk
PERN
PLN 0.4 billion
LNG terminal development
in Świnoujście
Gaz-System
PLN 0.7-1.7 billion
GIPL gas pipeline (PolandLithuania)
Gaz-System
PLN 1.9 billion
North-South Gas Corridor
Gaz-System
PLN 4.5 billion
Construction of gas
pipelines across Poland
PGNiG
PLN 8.4 billion
Source: "Bezpieczeństwo warte miliardy”, the Rzeczpospolita daily, 27 May 2016
50
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
According to the draft "Development plan
for the satisfaction of the current and future
demand for electricity between 2016 and
2025", during the first five years PSE plans
to incur capital expenditure of PLN 7.08
billion to develop the transmission network.
Almost 78% of that amount will be spent
on the construction of new transmission
facilities, while the remaining part on
modernization projects. Outlays of PLN 6.43
billion are estimated for the second half of
the investment horizon.
Figure 2: Transmission network map – forecast as at the end of 2025
Decisions on the implementation of
projects relating to the development and
modernization of transmission networks
will be taken after the relevant criteria
have been satisfied (to include a definition
of connection conditions or execution of
connection agreements).
Source: PSE, Development plan for satisfaction of the current and future demand for electricity between 2016 and 2025
51
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.4. Environmental protection
Funds allocated under the Infrastructure
and Environment Operational Programme
2014-2020 to investments in water
and sewage management and in waste
management total EUR 1.62 billion and
EUR 0.93 billion, respectively. They will
enable Poland to continue its investment
programme aimed at bringing the Polish
infrastructure into line with the parameters
defined by the European Union.
Water and sewage management
Investments planned in the field of
water and sewage management have
been defined in the “Master Plan for
the implementation of Council Directive
91/271/EEC” (the “Master Plan”) and the
“National Programme for Municipal Sewage
Treatment” (the “NPMST”). In May 2016, an
"Update to the Master Plan" was approved
by the Ministry of Environment. Currently,
the fourth version of the NPMST dated 21
April 2016 is in force. At the beginning of
September, work on the fifth version of the
NPMST began, to be completed in March
2017.
According to the latest version, the
total estimated value of the projects
implemented under the NPMST for 2015
is PLN 6 billion and the total estimated
expenditure along with the amount to
be spent in 2016 is PLN 23 billion, where
almost PLN 17.5 billion is to be spent by the
end of 2020.
In 2015, 4,862 kilometres of sewage pipes
were built and 698 kilometres modernized.
As a result, the number of people using
sewage management services increased by
ca. 606,000.
The fourth version assumes that
investments will be realized in 824
treatment plants, that 16,918 kilometres
of new sewage pipes will be built and a
further 3,505 kilometres modernized.
As a result, the number of people using
sewage management services following
the development and modernization of the
network will increase by ca. 1.8 million.
52
Structure of the planned expenditures, according to NPMST
Wastewater treatment
incl. septic sludge
treatment and
management 33%
Construction
of sewage
system 52%
Modernization of
sewage system
15%
Source: NPMST 2015 Update
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Waste management
The investments planned in the field of
waste management have been defined
mainly in the National Waste Management
Plan 2022 (the “NWMP”). The resolution
to introduce the new plan was adopted
on 1 July 2016 and issued on 11 August
2016. The objectives and tasks defined in
the document concern the years 20162022 and the years 2023-2030 in the
long term. The key objective of the NWMP
is to avoid waste production and to use
waste as a resource. The said objective is
consistent with the measures defined in the
Infrastructure and Environment Operational
Programme with respect to municipal waste
management. The planned investment
projects support the plan assumptions that
50% of municipal waste should be recycled
by 2020 (60% by 2025) and no more than
30% of such waste ought to be incinerated.
In the 2014-2020 perspective, funds of EUR
0.93 billion have been allocated to municipal
waste management under the Infrastructure
and Environment Operational Programme.
Construction of municipal waste incineration facilities – projects in progress and planned
Estimated
project cost
(in PLN
million)
Project
location
Capacity of
Solid Waste
Treatment
Warsaw
40
Bydgoszcz
180
523
Additional
funds form IEOP
2014-20 (in PLN
million)
Project
formula
Expected project length
Existing
Traditional
Operating
255
Traditional
Operating
Kraków
220
826
372
Traditional
Operating
Białystok
120
333
210
Traditional
Operating
Konin
94
388
165
Traditional
Operating
Poznań
210
720
352
PPP
Operating
Preparatory stage
Traditional
Investment approx. 80% completed. Originally, it was planned to be
completed by the end of 2015. The deadline was extended until 10
December 2016, but in June 2016 the contractor (Mostostal) withdrew
from the contract. The process of selecting the new contractor is
1 100
Traditional
MPO (City Sanitation Department) has signed an engineer's contract with
the consortium Eko-Inwest, ECM Group Polska with respect to extension
of the municipal waste incineration facilities in Warszawa-Targówek. The
project is scheduled to be completed at the turn of
160
400
Traditional
The project contractor has been selected. The project is scheduled for
2018.
92
340
PPP
The procedure to select the contractor is in
Szczecin
150
666
Warsaw
305
Oświęcim
Koszalin
255
Gdańsk
250
400-500
PPP
The provisions of the PPP contract are being negotiated with 5 preselected
contractors. The construction work is scheduled for 2018 - 2020.
Olsztyn
100
250
PPP
"The project is at the planning stage. The project is scheduled to be
completed in 2020."
Rzeszów
100
285
Traditional
"The construction contract has been signed.
The scheduled launch date is in 2018."
Legnica
120
347
Traditional
No decision concerning the start of the
Sosnowiec
180
480
Traditional
No decision concerning the start of the
Ruda
Śląska
500
1 699
Traditional
The stage of public consultations has ended. No decision concerning the
start of the investment.
Łódź
200
1 130
Project abandoned
PPP
The current capacity of waste incineration facilities
Project abandoned.
864 thousand tons per year
Capacity to be achieved in 2017:
1 014 thousand tons per year
Potential capacity if all projects that are being considered are to be carried out:
2 781 thousand tons per year
Source: Deloitte analysis
53
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.5. Construction in the commercial
and service sector
In 2015, the commercial space market in
Poland increased by almost 650,000 sq.m.
A higher supply was observed in the second
half of the year, when almost two-thirds of
new commercial space was made available
for use. Shopping centres accounted for ca.
550,000 sq.m. and commercial warehouses
represented 98,000 sq.m. At the end of the
first half of 2016, more than 13.5 million
sq.m. of modern commercial space was
available in Poland.
Structure of commercial space opened in 2015 by investment type and format
15%
2%
1%
1%
3%
21%
57%
In 2015, 23 new commercial and service
facilities were opened, the largest being
"Zielone Arkady" in Bydgoszcz (51,000
sq.m.), "Sukcesja" in Łódz (46,000 sq.m.) and
"Tarasy Zamkowe" in Lublin (38,000 sq.m.).
Development of existing shopping
centres accounted for more than 25% of
commercial space made available for use
in 2015. Fifteen facilities were extended,
including "Centrum Bielany" in Wrocław
(additional 35,000 sq.m. built), which thus
became the largest shopping centre in
Poland with a total area of 145,000 sq.m.
In 2015, the vacancy rate on mature
markets in the eight largest cities was
2.9% on average vs. 4.0% in regional cities.
The lowest rate was recorded in Warsaw,
Wrocław and Lublin (1.5%) and the highest
in Bydgoszcz, Radom and Toruń (6.0%, 5.7%
and 5.2%, respectively).
Currently, almost 700,000 sq.m. of
commercial space is being built, out of
which 450,000 sq.m. is planned to be made
available for use in 2016.
Nonetheless, the outlook for commercial
space construction companies is uncertain
due to the changes in the Polish legal
system and the political and economic
climate in Europe. On 14 June 2016 the
Polish government ratified the final version
of the Act on trade tax and it is estimated
that approx. 100 major commercial
networks operating in Poland will become
liable to that levy. The increased level of
uncertainty in Europe (inter alia due to
Brexit), especially in the Context of FOREX
54
New Shopping Centres
Extension of Shopping Centers
New Commercial Parks
Extension of Commercial Parks
New Outlet Centres
Extension of Outlet Centres
Mega Department Stores
Source: Cushman&Wakefield Analyses
rates, may check the inflow of foreign
capital, which in turn will lead to a decrease
of investment volumes in the commercial
real property segment.
We have great competence
in the field of general and
engineering construction, but
we are also looking out for new
areas of expertise. We plan to
reinforce our footprint in the large
project segment , which does
not mean that we will neglect
local investments. Our company
increasingly relies on innovation.
Delivering top-quality services
and the safety of our employees
at construction sites constitute
our main priorities.
Piotr Janiszewski, CEO, Skanska
S.A.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.4.6. Housing construction
The outlook for housing construction
companies remains positive. The ratio of
flats per 1,000 citizens in Poland is lower
than in other European countries. This
means a potential for further growth and an
opportunity for entities active on the Polish
housing construction market.
Number of flats per 1000 inhabitants in 2015
700
600
500
363 375
400
300
471 486
438 448 451 455
418 436 437
532 533 543
510 512 516 522
573
295
200
In 2015, both the demand and supply
on the residential property market were
strong. Not only did the number of flats sold
increase but the number of new flats made
available on the market went up as well.
According to REAS, 51,800 flats were sold
in 2015 (vs. 43,000 in 2014), while 51,900
were made available for sale (as compared
to 47,500 in 2014). The first half of 2016 was
also exceptionally good in this regard. The
number of flats sold was 29,400 and flats
made available for sale was 31,400, which
was a 21% and 28% rise, respectively, as
compared to the first half of 2015.
As regards the supply, a recovery on
the housing construction market is also
reflected in such statistics as the number
of flats for which an occupancy permit
was issued or the number of residential
building construction permits issued (In
2015, 147,595,000 and 72,000, respectively).
This was a 3% rise in the number of new
flats vs. 2014 and a 10% increase in the
number of issued construction permits. A
more considerable increase in the supply
was seen in the first half of 2016, when the
number of flats for which an occupancy
permit was issued went up by 15% and
the number of construction permits issued
increased by 14% year-on-year.
100
0
Source: Euromonitor International, Deloitte analysis
Number of flats sold in six largest Polish cities (in thousand)
16
14
12
10
8
10.9
11
4Q
2013
1Q
2014
9.6
7.4
10.4
10.4
2Q
2014
3Q
2014
11.2
4Q
2014
1Q
2015
14.3
4Q
2015
1Q
2016
15.1
13.2
12.7
11.5
14.4
8.1
6
4
2
0
1Q
2013
2Q
2013
3Q
2013
2Q
2015
3Q
2015
2Q
2016
Source: REAS
Number of flats sold in six largest Polish cities (in thousand)
180
160
153
160
136
140
145
148
143
132
120
91
100
88
85
80
76
67
65
72
60
Construction and modernization
of hospital buildings can generate
higher volumes of investment
projects in the coming years.
Wojciech Trojanowski –
Member of the Management
Board of Strabag Sp. z o.o
74
39
40
20
0
2009
2010
2011
2012
2013
2014
2015
1H 2016
Number of flats placed into service
Issued housing construction permits
Source: Central Statistical Office
55
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Factors affecting the demand on the
housing construction market
In 2015, the favourable conditions on
the housing construction market were
additionally sustained by government
programmes supporting flat purchases and
the vision of more stringent requirements
for home loans.
Mortgages in Poland in 2010-2015 and 1H 2016
374.1
382.9
370
350.4
2 000 000
330.8
313.7
1 500 000
316.3
320
263.6
270
2,027 ,972
1,994 ,677
1,896 ,779
1,819 ,796
1,731 ,593
500 000
1,630 ,694
1 000 000
1,448 ,828
According to the National Bank of Poland
report entitled "The Loan Market in Q3
2016", published in July 2016, banks
imposed stricter criteria for granting
home loans in Q2 2016 and announced
the establishment of more demanding
requirements with respect to collateral
pledged by borrowers, as a result of which a
drop in the demand is expected. However,
in 2015 and in the first half of 2016, the
demand was still considerable and at the
end of Q1 2016 the overall number of active
mortgage agreements administered by the
Polish banking sector exceeded 2 million for
the first time.
420
2 500 000
220
170
0
120
2010
2011
2012
2013
2014
2015
1H 2016
Number of active contracts
Total indebtedness (in PLN billion)
Source: Central Statistical Office
One of the factors fuelling the demand for
home loans was the continuation of the
"Flats for the Young" programme for 20142018. The fact that the programme is limited
in time and the borrowers' concerns that
the funds allocated to subsidies under the
"Flats for the Young" programme9 for 2017
will soon be used up contributes to good
conditions on the housing market.
It should also be emphasized that currently
the provisions of the National Housing
Programme are being drafted. The
programme is also aimed at facilitating flat
purchases. It provides for the establishment
of the National Housing Fund, which will
enable the construction of tenement houses
that may later be purchased at attractive
prices, without the use of State funds. The
land to be used for construction purposes,
to secure funds for projects implemented
in other locations or for the provision of
financial support, is mainly State-owned
property.
9 Under the applicable regulations, where the downpayment may not be partially covered in 2016, an
application may be filed with the planned subsidy
payment date in 2017.
56
The objective of the programme is to
increase the supply of flats and their
availability and to lower rents for individuals
who cannot afford their own flat or fail to
satisfy the loan granting criteria.
Under the programme, the spending on
social tenement houses should reach PLN
157.2 million and PLN 12.8 million in 2017
and 2018, respectively, and PLN 4,730.4
million between 2019 and 2025. A total of
almost 200,000 flats are planned to be built
(7,000 in 2017, 13,000 in 2018 and 179,000
between 2019 and 2025).
One of the objectives of the National
Housing Programme is to catch up with the
average number of flats per 1,000 citizens in
the European Union. It is estimated that this
will require the construction of 2 million flats
in Poland by 2030.
As in the past year, the attractiveness of
investments in flats for rent was a major
factor influencing the purchase of flats in
the context of an uncertain outlook for
the Warsaw Stock Exchange. On the one
hand, it is expected that foreign investors
may return to the Warsaw Stock Exchange
following an outflow of investments, but on
the other, the possibility that open-ended
pension funds will be done away with, the
fact that opinions about Poland are not
particularly favourable on foreign markets
and that the number of IPOs is decreasing
have considerably weakened the position of
the Warsaw Stock Exchange over the past
few years. The future of the Warsaw Stock
Exchange will depend on the economic
conditions in Poland and abroad, which may
not be determined at present.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.5.7. Office construction
In 2015, the supply on the office
construction market in Poland was the
highest on record. The total modern office
space available in the nine largest Polish
cities (Warsaw, Kraków, Wrocław, Tricity,
Katowice, Poznań, Łódź, Szczecin and
Lublin) was 8.2 million sq.m. at the end
of 2015. Only in 2015, 643,000 sq.m. of
modern office space was constructed, out
of which 278,000 sq.m. was in the capital
and 366,000 sq.m. in regional markets. The
demand on the office construction market
was very high last year as well. The overall
lease transaction value was 40% higher than
in the preceding year.
Nonetheless, it needs to be emphasised
that the situation on the office construction
market may deteriorate over the next
few quarters. Access to foreign funding
(due to low interest rates offered in
developed countries), which contributed
to the increase of the available space, may
become restricted in the months to come.
In addition, considering the anticipated
high supply, it is to be expected that the
unrented space ratio will go up in the largest
Polish cities.
2.5.8. Warehouse construction
The warehouse construction market grew
considerably both in 2015 and in Q1 2016.
At the end of March 2016, Poland had
a total of 10.3 million sq.m. of modern
warehouse space. Growing demand makes
the market outlook even more optimistic.
The transactions entered into in Q1 2016
involved 637,000 sq.m. of warehouse space,
which means an 8% (45,000 sq.m.) increase
year-on-year. The rise in the demand was
accompanied by the increasing supply of
warehouse space. Only in Q1 2016, the
warehouse space resources increased by
447,000 sq.m., which represented almost
a half of the supply recorded in 2015 as a
whole. Additionally, the fact that the vacancy
rate has again gone down shows that the
supply has a good correlation with the
demand. At the end of Q1 2016, the vacancy
rate was 5.9% of the existing resources, i.e.
ca. 0.9 p.p. less than in the corresponding
period of the preceding year.
Warehouse space in construction 1Q 2016 (in sq.m.)
200000
At the end of 1Q 2016 the vacancy rate in
Poland equalled 12.6%, with the highest
rate recorded in Szczecin (18.3%), Katowice
(17.4%), Poznań (14.4%), Warsaw (14,1%)
and Tricity (14%).
184,000
180000
160000
140000
120000
The National Bank of Poland points out the
growing imbalance on the real property
market which is a consequence of excess
supply. Considering the increasing number
of vacancies and the associated drop in
rents, the cost-effectiveness of investing in
office space will go down, which is already
reflected in the valuation of investment
certificates of closed investment funds
investing in real property.
110,000
106,000
100000
99,000
91,000
81,000
80000
60,000
60000
44,000
40000
20000
8,000
0
Warsaw
Warszawa
- the city - the suburbs
Central
Poland
Upper
Silesia
Poznań
Wrocław
Tricity
Kraków
Other
regions
Source: Cushman&Wakefield Analyses
57
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.6. Market perspective
Construction industry companies emphasise
that 2016 seems more challenging than
expected due to delays in the performance
of EU co-financed projects. The estimated
revenue of entities in the infrastructure
construction sector in 2016 are 50% lower
than expected.
The future of the energy construction
industry will depend on political decisions
on supporting selected sources of energy.
According to contractors, simultaneous
performance of three or four large projects
proves disadvantageous due to the lack
of a qualified workforce. Following the
completion of a considerable number of
contracts in 2019, considerable oversupply
of workers is expected.
Energy projects also differ in margins
generated by technology providers and
construction companies, with the former
reporting much better performance. It is not
certain, though, if this trend will continue in
the long run.
The situation in the general construction
segment is considerably better, but the
continued growth of supply depends on
further inflow of foreign capital, which may
slow down over the next few months.
At present the commercial market reports
growth. Contractors have recognized the
potential of modernizing old shopping malls
and offices and the demand for commercial
and office space in towns and smaller
cities. The public sector is also expected
to increase the demand for general
construction works in the healthcare and
defence sectors.
The residential construction market has
seen a rapid growth. Market players
mention the investment boom resulting
from the expected termination of the
Flat for the Young mortgage subsidy
programme and limited access to mortgage
loans. Property companies do not believe
that the Flat Plus Programme following
the government's social support policy,
will considerably affect the residential
construction market. This is because the
flats under the programme will mainly
be provided to individuals with low
creditworthiness. From the viewpoint
of construction companies, under this
assumption, the Programme should entail
many new projects.
Despite delays in infrastructure projects,
the expected margin pressure and fierce
competition in tenders, EU funds will still
drive investments in the coming years.
Contractors, however, are fully aware that
new strategies should be implemented now
to ensure growth beyond 2020.
The supply gap in infrastructure construction
in 2016 results from the transition period in
EU co-financed projects and amendments
to the public procurement law. Still, the shift
is more significant than anticipated following
the change of government in 2015 and the
suspension of public tender proceedings
during investment programme reviews.
The analysis of government programmes
carried out by the Ministry of Infrastructure
and Construction has shown a ca. PLN 90
billion underestimation of outlays on road
construction and substantial delays in railway
projects. The shortfall for road projects will be
difficult to find, considering the National Road
Fund already had PLN 60 billion of debt. It
has not been decided yet if additional funds
(and how much) will be allocated to finance
all projects planned or if the projects will be
reprioritized and rescheduled.
In our opinion, much weight in the tendering procedure should to be attached to
the quality criterion. Ideally, the price criterion weight should not exceed 40 percent,
and the non-price criteria should take on added significance. At the meetings of
Investment Forum working groups, working hand in hand with contractors, we have
prepared a list of non-price criteria.
Rejecting the lowest and the highest price bids also seems a reasonable approach in
tender assessment. Another idea which is worth considering in the future is to extend
the scope of the contract with the contractor to include maintenance services, e.g. for
a period of 10 years after putting the infrastructure into operation.
We have reviewed our investment projects and updated the schedules to prevent
project accumulation in the coming years. In the last quarter of the year we intend to
call for tenders with a total value of PLN 6.5 billion under the new EU perspective.
Ireneusz Merchel, CEO, PKP Polskie Linie Kolejowe S.A.
58
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
According to the Directorate General for
National Roads and Motorways all public
procurement projects are carried out in line
with the schedule. An investment budget
of more than PLN 4 billion was opened in
September with 14 invitations to tender.
Other tender proceedings worth PLN 8 billion
will be announced by the end of the year.
Following the execution of these contracts
the total value of works would reach PLN 6065 billion, i.e. more than 60% of the planned
amount. The legislators are currently working
on making the soft tender appraisal criteria
more detailed, but the tenders announced so
far are conducted in line with the regulations
binding so far, which primarily rely on the
price.
According to the Directorate General for
National Roads and Motorways, no problems
with tenders for road projects are expected,
even if additional State budget funds are
allocated to increase capital expenditure
spent under the NRBP.
The situation in the railway construction
sector is more complicated, though. Tenders
are announced with 12 month delays, which
implies that most investment projects may
be carried out during the last years of the
EU 2014-2020 perspective, considering the
duration of the tendering processes and
the designing stage. Sector participants
emphasise that due to the accumulation of
investment projects a considerable number
of railroad sections may be closed at the
same time, disrupting rail traffic.
They also claim that there is a serious threat
that PKP PLK will not be able to consume all
allocated funds. According to the ProKolej
Foundation, PKP PLK considers carrying
out alternative projects involving special
purpose vehicles and using the funds
to construct railway stations and railway
sidings. Construction companies claim,
however, that this would imply shifting the
burden of contribution from central to local
administration.
According to PKP PLK the review of the
planned investment projects and their
timeframe will make fund allocation more
realistic in the coming years and prevent
closing all railway lines in a given direction
at the same time. Moreover, if purchases of
materials and their financing are planned
in advance, some problems with their
transportation when lines are closed and the
price growth effects can be avoided.
The winning bid prices have been decreasing,
which is perceived as a negative trend. Two
years ago the winning bid price comprised ca.
70% of the investment budget, while in 2015
the share dropped to 60% and in 2016 - to
50%. According to construction company
leaders, although the railway investment
initiative announced by the Ministry and PKP
PLK encouraged companies to purchase
equipment and employ new staff, no
investment boom occurred.
Apart from the strong price pressure,
increased competition has also been
observed in tenders. Recently, the number of
bidders has increased twice, and the group
also includes companies from Western
Europe (for instance from Portugal, Spain,
Italy and Austria), which did not operate on
the Polish market in previous years.
Polish construction companies, however,
positively assess expected changes in tender
proceedings. The key change is limiting the
price criterion weight to a maximum of 60%.
Experts emphasise, however, that the final
outcome will depend on what other nonprice criteria are applied. They also suggest
that rejecting the lowest price bid could
prevent spoiling the market. Moreover, they
mention the Scandinavian model, where the
selection of the winning bidder is based on
the economic benefits produced by the offer
presented. The category includes factors
such as supply period, payment terms, supply
terms, social and environmental impact,
and quality. Market participants, however,
indicate that non-price criteria are difficult to
measure, they require advanced knowledge
and experience. What is more, such criteria
are generally avoided by authorities in fear of
alleged corruption.
A positive change was appointing the Council
of Experts on Road Construction by the
Ministry of Infrastructure and Construction.
The Council is composed of contractors,
clients and non-government organizations.
The key responsibility of the Council of
Experts is to draw up contract templates,
develop guidelines on preparing descriptions
of the object of the contract and guidelines
on tender proceedings.
Still, a discussion on contract award procedures has
started among clients and contractors. It is a positive
trend, as the dialogue may lead to developing solutions
beneficial to the market.
Grzegorz Grabowski, Chairman of the Management Board of
Torpol S.A.
59
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
According to the Directorate General, for
National Roads and Motorways non-price
criteria should focus on the quality of works,
and the warranty period should no longer
constitute a selection criterion, but become
a requirement. Moreover, the requirement
to use your own human resources is
considered a good idea. The Directorate
General for National Roads and Motorways
emphasises that, in response to the needs
of contractors, beginning from autumn
2013 (under the new financial perspective
2014 - 2023) contracts ensure contract price
adjustment using rates published by the
Central Statistical Office (with the cap of 1%
of the contract value).
Railway construction issues are discussed
by PKP PLK and contractors at working
group meetings of the Investment Forum.
One of the items on the agenda are tender
conditions. The list of possible soft (nonprice) criteria as part of tender assessment
has already been discussed.
According to PKP PLK the target price
criterion weight could equal 40% in
procedures related to services linked with
the investment process (especially the
engineer, pre-investment documentation,
and project documentation). Other
proposed changes which are positively
assessed are the introduction of advance
payments, and financing purchases of
materials. The maximum warranty period
required by PKP PLK will be 6 years. This
change is a more effective solution than
a ten year warranty period, which made
contractors promise the maximum warranty
period, as the price still remained the
decisive criterion. According to PKP PLK
an interesting solution, which would be
worth considering, would be a ten-year
contractual maintenance period managed
by the contractor after putting the railway
infrastructure into operation. PKP PLK also
agrees with the idea of rejecting bids with
the lowest and the highest price.
Learning from the experience of projects
co-financed with EU funds from the previous
perspective, companies carried out a
number of modernisation and investment
initiatives aimed at mitigating operational
risk, revenue diversification, increasing
efficiency and flexibility, which are essential
in the changing market environment.
Some companies have started optimizing
processes and organizational structures
and follow downsizing strategies. Still, it
has not resulted in a sector headcount
reduction. According to the data of the
Central Statistical Office, in the first half of
2016, the average headcount increased
slightly (by 0.2% YoY). Moreover, companies
have diversified their portfolios in terms
of operations and region. Companies gain
new competencies, such as the increasingly
popular construction of buildings
(commercial and office space), real estate
administration or "green construction".
A number of companies get involved in
smaller projects, i.e. the construction of local
roads or the development of buildings in
smaller cities and towns.
Many entities follow geographical
diversification strategies based on growing
exports, mergers and acquisitions and
establishing foreign branches. Companies
focus on Scandinavia, Germany, the Baltic
States and the Balkans, although Balkan
investment projects involve increased
political risks and challenges related to
economic volatility.
For the Directorate General for National Roads and Motorways, the possible increase
in expenditure in the next few years will not cause any organizational problems related
to processing additional tendering procedures.
Tendering procedures are performed as planned. In September 2016, contractors
were invited to tenders with an aggregate value exceeding PLN 4 billion (according to
investment budgets). By the end of the year, we are planning to invite contractors to
tenders for another PLN 8 billion.
The warranty period will no longer constitute a selection criterion. Non-price criteria
should focus on quality.
Iwona Stępień – Pilipczuk - Deputy General Director, Directorate General for National Roads
and Motorways
60
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
2.7. Summary
2015 was a year of stagnation for the
construction sector. Production in the
construction sector went up by a symbolic
0.13%. A major trend observed in 2016
is a drop in the number of contracts in
the infrastructure segment, which is the
consequence of the end of the 20072013 EU perspective and delays in the
implementation of government projects that
will receive financial support in the 20142020 perspective. Currently, changes to the
programmes are being discussed so as to
improve the public procurement process
and prevent the accumulation of projects
during the final years of the 2014-2020
perspective, which would have an adverse
effect on construction companies through
a rise in the prices of materials and labour
costs in addition to disturbing road and
railway transport. The market players
emphasize the positive aspect of the
dialogue between the public side and
contractors, considering the large-scale
investment plans for the upcoming years
and prior EU perspective experience.
Table: Volume of selected planned investments, broken down by construction
market segment
Years
Planned investment
volume
Expressways and
motorways
2014-2025
PLN 97.5 bn
Ring roads
2014-2025
PLN 9.6 bn
Maintenance of the
technical standard of the
existing road network
2014-2025
PLN 46.8 bn
Source
Comments
National Road Building
Programme for 20142023 (with projections
by 2025)
Excluding expenditure on
modernization of regional and
municipal roads.
PLN 7,2 bn
General Directorate
for National Roads and
Motorways
The amount represents the
financial needs related to
elimination of the unsatisfactory
and poor condition of national
roads. The amount that the
Directorate General for National
Roads and Motorways is
actually planning to spend on
that purpose is not known.
Government budget
expenditure on programme
implementation
Road
construction
Road repair works
Railway
Construction
Energy
construction
Environmental
protection
2015
Municipal and district
roads
2016-2020
PLN 4 bn
Municipal and district
road infrastructure
programme for 20162020
Railways
2014-2023
PLN 66 bn
National Railway
Programme by 2023
Trams and suburban rail
2015-2020
PLN 1,5 bn
Multi-Annual Financial
Plans for the six largest
cities in Poland
Transmission and
distribution networks
2014-2019
PLN 42 bn
Energy Regulatory Office
Capacity
2014-2028
PLN 55 bn
Energy Regulatory Office
Sewage systems
2014-2015
after 2015
PLN 4.1 m
PLN 15.4 m
NPMST Update
Sewage treatment
2014-2015
after 2015
PLN 2,7 bn
PLN 7.6 bn
NPMST Update IV
The amounts planned in the
budgets of individual cities do
not represent the total capital
expenditure on tram networks
in those cities (some will be
financed by municipal tram
companies).
Construction of new capacity
of 18 GW is planned.Excluding
capital expenditures on nuclear
power plant construction.
61
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Years
Construction
of buildings
and facilities
(commercial
and service
facilities,
residential,
office and
warehouse
buildings)
Source: Deloitte analysis
62
Planned investment
volume
Source
Comments
The volume of investments
in progress is high in the
commercial construction
segment, but an increasing
imbalance of the demand
and supply can be observed,
which may check the growth
dynamics.
No forecasts as to
amounts in the longer
term.
In the housing construction
segment, the demand
depends mainly on the funding
available under government
programmes. The demand in
the segment is expected to
decline following the expiry
of the "Flats for the Young"
programme, which is planned
to be continued until 2018. The
heralded "Flat Plus Programme"
will be a factor influencing
the housing market but its
effects are difficult to predict at
present.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
64
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Chapter 3.
Profiles of the
largest construction
companies in
Poland
65
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Skanska Group
Skanska has been operating in Poland
since the early 1970s, when it built the
first Western-standard hotels: Novotel
Warszawa Centrum (former Forum Hotel)
and Sofitel Victoria Warszawa (former
Victoria Hotel) in Warsaw in addition to a
dry dock for the Gdynia Shipyard.
Civil engineering
Skanska S.A. builds roads and bridges in
addition to carrying out hydro-technical,
environmental protection, and railway
projects.
In 2000 Skanska acquired Exbud Group
and has been continuously present on the
Polish construction market.
The company has a network of bituminous
material production facilities, concrete
production plants, road laboratories,
aggregate mines, equipment bases and a
steel structure manufacturing plant.
Skanska Group operates on the European
and North American markets where it acts
as a general contractor and developer on
housing and office projects. It carries out
PPP projects as well
As in the previous year, for the purpose
of this edition of the report we have only
been provided with selected consolidated
financial data of Skanska Group companies
operating in Poland for 2015.
Skanska S.A. acts as the general contractor
and thorough its units, has a footprint
all over Poland. It specialises in general
construction and construction engineering.
It carries out both small-scale projects
for local authorities and large, nationwide
investments. Skanska has implemented
BIM technology at the stage of offering,
design, construction and post-construction
measurements.
In 2015, the revenue earned by Skanska
Group totalled PLN 5.5 billion and its
operating profit amounted to PLN 470
million.
General construction
The Skanska Group acts as a general
contractor delivering shopping and
entertainment centres, healthcare and
educational facilities, offices, hotels,
residential buildings, sports and
industrial facilities with the accompanying
infrastructure.
66
In 2015, the Group employed almost 8,000
people in Poland.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
1 437 026
340 095
597 603
322.5%
Current assets
2 563 677
4 383 950
2 723 054
-41.5%
Total assets
4 000 704
4 724 045
3 320 657
-15.3%
Equity
1 082 656
1 577 801
1 102 756
-31.4%
Total equity and liabilities
4 000 704
4 724 045
3 320 657
-15.3%
5 509 363
5 081 675
4 202 767
8.4%
EBIDTA
446 174
367 908
196 253
21.3%
EBIT
469 999
396 675
159 624
18.5%
Net profit/loss
417 314
324 185
132 165
28.7%
Equity and liabilities
Profit and loss account
Revenue
67
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Budimex Group
Budimex S.A., previously Centrala Handlu
Zagranicznego Budownictwa Budimex,
was founded in 1968 in order to export
construction services, mainly to developing
markets in Asia and Africa, and to the
Socialist block countries.
In the late 1980s and the early 1990s,
Budimex became a leading contractor on
the Polish market.
In 1992, the enterprise was privatised
and two years later it was converted into
a joint-stock company. Since 1995, its
shares have been traded on the Warsaw
Stock Exchange. As at 31 December 2015,
the mainly shareholders of Budimex were
Valivala Holdings B.V. (the Netherlands)
holding 59.06% of shares (a company
operating in the Spanish Ferrovial S.A.
Group) and Aviva OFE Aviva BZ WBK
holding 5.01% of shares.
Budimex Group provides broadly defined
construction and assembly services
acting as a general contractor, both
in Poland and abroad, it is a property
developer and manager and engages in
sales, manufacturing, transport and other
activities. Apart from its construction
operations, Budimex S.A. is an advisory,
management and financial centre in the
capital group.
68
In 2015, the revenue of Budimex Group
went up by 3.7% year-on-year. Poland and
Germany are the key markets where the
Group operates.
In 2015, sales revenue generated on the
German market, where Budimex acts
mainly as a provider of workshop services,
exceeded PLN 170 million, which means
a rise of more than 10% vs. 2014. Foreign
market sales accounted for 4% of the total
revenue generated by the Group in 2015.
Construction and assembly works
represented more than 91% of the total
revenue earned in 2015. As compared to
2014, sales in this segment increased by
2.3% to PLN 4.6 bn.
In 2015, revenue from sales of property
development and management services
amounted to PLN 291.4 million, which was
a ca. 17% year-on-year increase. In 2015,
net pre-sales of new flats was 1,918 vs.
1,685 in the preceding year.
The Group’s EBIT was PLN 292.2 million,
up by 18.2% year-on-year. The net profit
also increased by 22%. Improvement of
the Group’s performance in 2015 was
attributable to a rise in sales revenue,
which increased by 3.7% as compared to
the preceding year.
At the end of 2015, total debt increased by
12.8% vs. 2014. In 2015, capital expenditure
incurred by the Group on non-financial
non-current assets went up by 182% to
PLN 68 million.
In 2015, Budimex Group companies
entered into construction contracts
totalling PLN 7.1 billion, a PLN 0.8 billion
increase vs. 2014. As at 31 December 2015,
the Group’s contract portfolio totalled
PLN 8.4 billion, which represented a ca.
38% year-on-year increase. The company’s
market cap increased from PLN 3.6 billion
at the end of 2014 to PLN 4.95 billion a year
later.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
821 207
677 496
622 230
21.2%
3 892 157
3 178 532
3 064 523
22.5%
0
2 181
0
-100.0%
4 713 364
3 858 209
3 686 753
22.2%
Equity
603 124
522 509
645 175
15.4%
Provisions for liabilities
317 256
290 767
267 802
9.1%
Long-term liabilities
262 535
233 460
200 309
12.5%
Short-term liabilities and accruals
3 530 449
2 811 473
2 573 467
25.6%
Total equity and liabilities
4 713 364
3 858 209
3 686 753
22.2%
Revenue
5 133 994
4 949 939
4 749 459
3.7%
Domestic sales
4 927 035
4 754 307
4 198 885
3.6%
206 959
195 632
550 574
5.8%
4 673 666
4 566 628
4 005 617
2.3%
Other operations
460 328
383 311
743 842
20.1%
EBIDTA
314 566
270 349
362 199
16.4%
EBIT
292 218
247 318
333 306
18.2%
Net profit/loss
236 520
193 938
301 300
22.0%
1 697 114
1 504 048
1 382 795
12.8%
87.2%
86.5%
82.5%
0.9%
1.3%
0.5%
0.4%
164.6%
4 952 839
3 612 509
3 369 973
37.1%
Current assets
Non-current assets held for sale
Total assets
Equity and liabilities
Profit and loss account
Export sales
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
69
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
3%
6%
4%
91%
96%
Construction operations
Domestic sales
Property management and property development
Export sales
Other activities
EBIDTA, EBIT and net profit/loss in years 2013 -2015
400
350
PLN million
300
250
200
150
100
50
0
2015
2014
2013
70
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Strabag
STRABAG has been operating on the
construction market since 1835. In 1985,
the company launched its operations in
Poland, which is its third most important
market in Europe. In 2015, the company’s
revenue generated in Poland amounted
to PLN 3.8 billion, a 22% increase from
preceding year.
The core business of the Polish
entities includes general construction,
infrastructure construction, and bridge
and railway construction. STRABAG is
also present in other sectors, inter alia
hydro-technical construction and power
engineering, it is also active in the property
development and facility management
market. Its key companies in Poland
are STRABAG Sp. z o.o. and Strabag
Infrastruktura Południe Sp. z o.o.
The financial statements of the STRABAG
Group are not consolidated at the local
level.
STRABAG SP. Z O.O.
The operations of STRABAG Sp. z o.o.
focus mainly on infrastructure investments
as well as general construction and
construction engineering. It also carries
out projects in the field of environmental
protection, railway construction,
modernization and construction of
wharves, industrial and power engineering
construction, also in relation to renewable
energy.
As compared to the preceding year, the
company’s revenue dropped by 24.1% to
PLN 3.3 billion.
However, the company’s EBIT was positive
and amounted to PLN 146 million and its
profit totalled PLN 143 million.
The company’s net debt was similar to
that reported at the end of the preceding
year and amounted to PLN 343 million at
the end of 2015. It had been accumulated
mainly through trade liabilities and
measurement of contracts.
STRABAG Group companies do not use any
external sources of funding and participate
in a cash pool system instead.
71
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
721 158
515 395
558 305
39.9%
Current assets
2 384 751
1 990 207
1 673 328
19.8%
Total assets
3 105 908
2 505 601
2 231 633
24.0%
Equity
891 569
748 350
618 256
19.1%
Provisions for liabilities
649 890
511 302
315 664
27.1%
0
0
0
0.0%
Short-term liabilities and accruals
1 564 450
1 245 949
1 297 713
25.6%
Total equity and liabilities
3 105 908
2 505 601
2 231 633
24.0%
Revenue
3 253 370
2 620 636
2 854 633
24.1%
Domestic sales
3 246 691
2 616 875
2 851 224
24%
6 679
3 761
3 409
78%
Construction operations
no data
no data
no data
n/a
Other operations
no data
no data
no data
n/a
EBIDTA
207 640
230 188
130 125
-9.8%
EBIT
146 185
152 543
38 111
-4.2%
Net profit/loss
142 519
132 261
57 490
7.8%
342 854
348 274
494 567
-2%
71%
70.1%
72.3%
2%
no data
0.8%
1.6%
n/a
Equity and liabilities
Long-term liabilities
Profit and loss account
Export sales
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
72
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
EBIDTA, EBIT and net profit/loss in years 2013 -2015
350
300
PLN million
250
200
150
100
50
0
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
73
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Strabag Infrastruktura
Południe Sp. z o.o.
The Company has been active on the
Polish market for 20 years and its business
focuses mainly on design and construction
works in the road and bridges sector, as
well as airfield pavements. Until the end
of 2014, it operated under the name of
Heilit+ Woerner Sp. z o.o. and then changed
its name to STRABAG as part of a single
brand initiative. The company specializes
mainly in concrete pavements. The majority
of its revenue is generated in Poland.
The operations of Strabag Infrastruktura
Południe are not particularly diversified.
The company recorded an 11.5% yearon-year increase in its revenue, from PLN
522.1 million in 2014 to PLN 582.5 million in
2015. Its EBIT and net profit amounted to
PLN 40.3 million (vs. PLN 18 million in 2014)
and PLN 35.5 million (vs. PLN 16.7 million
in 2014), respectively. The company's
operations are financed mainly with cash
pool loans from related parties.
74
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014*
Percentage
change
'15 vs. '14
2013*
Assets
Non-current assets
64 294
45 796
27 905
40.4%
Current assets
492 674
239 732
213 149
105.5%
Total assets
556 968
285 528
241 054
95.1%
111 579
76 111
59 392
46.6%
80 650
80 118
69 655
0.7%
0
0
0
0
Short-term liabilities and accruals
364 738
129 299
112 007
182.1%
Total equity and liabilities
556 968
285 528
241 054
95.1%
Revenue
582 476
522 213
444 121
11.5%
Domestic sales
580 470
517 091
441 985
12.3%
2 006
5 122
2 136
-60.8%
Construction operations
no data
no data
no data
n/a
Other operations
no data
no data
no data
n/a
EBIDTA
44 241
22 260
22 836
98.7%
EBIT
40 338
17 977
18 064
124.4%
Net profit/loss
35 468
16 720
16 861
112.1%
Net debt
4 522
6 117
34 139
-26.1%
Debt/Balance sheet total
80.0%
73.3%
75.4%
9.0%
no data
0.5%
0.4%
n/a
Equity and liabilities
Equity
Provisions for liabilities
Long-term liabilities
Profit and loss account
Export sales
Other data
Capital expenditure/revenue
*The financial data of Strabag for 2013 and 2014 were reconciled with the financial statements for 2015 and 2014, respectively, after adjustments had been made to
the opening balance.
75
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by region in 2015
1%
99%
Domestic sales
Export sales
PLN million
EBIDTA, EBIT and net profit/loss in years 2013 -2015
50
45
40
35
30
25
20
15
10
5
0
2015
2014
2013
76
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Polimex-Mostostal Group
Polimex-Mostostal Group is one of
the largest Polish capital groups with a
construction and engineering profile,
and it is an entity of strategic importance
to the national economy. The history of
Polimex-Mostostal S.A., which is the parent
company, dates back to the early post-war
era. In its current form, the company was
established through a merger of PolimexCekop S.A. and Mostostal Siedlce, which
took place in 2004. Polimex-Mostostal
S.A. has been listed on the Warsaw Stock
Exchange since 1997.
The Group operates in the power
engineering, petrochemical and industrial
construction sectors. Polimex-Mostostal is
also a manufacturer of steel structures and
products, which includes catwalk grids, and
a provider of hot-dip galvanising services.
It has built the power units in the Kozienice
and Opole power plants.
Apart from the parent company, in
2015, the capital group was composed
of Naftoremont-Naftobudowa Sp. z o.o.
Polimex Power Sp. z o.o (these are two
operating companies of the Group),
Polimex Opole Sp. z o.o. sp.k. (former:
Polimex Projekt Opole Sp. z o.o.), PRInż
– 1 Sp. z o.o., Stalfa Sp. z o.o., PolimexMostostal Ukraina SAZ, Polimex Opole Sp.
z o.o. (former: Polimex Projekt Kozienice Sp.
z o.o.).
In 2015, the number of employees in the
Group decreased by 413 to just over 5,000,
which resulted from the implementation of
a restructuring plan.
In 2015, the Polimex-Mostostal Capital
Group completed the operational
restructuring process. A new organizational
structure was developed to centralize the
support functions; two segments, namely
petrochemicals and power engineering,
were separated organizationally and
transferred to Naftoremont-Naftobudowa
Sp. z o.o. and Polimex Power Sp. z o.o.,
which are separate commercial companies.
In 2015, the Group's sales revenue totalled
PLN 2.5 billion (up by 21% as compared to
2014). In 2015, 83% of the Group’s revenue
was generated on domestic sales and 17%
on export sales, mainly to European Union
member states and Ukraine. As compared
to 2014, the group's sales went up both on
the Polish market (by 23%) and abroad (by
15%).
Currently, the portfolio of contracts
entered into by the Polimex-Mostostal
Group, less sales to other consortium
members, is worth ca. PLN 4.6 billion.
In September 2015, the Polimex-Mostostal
Group presented its new strategy for the
years 2016-2020. The growth strategy
focuses on the following areas of the
Group's operations:
• power engineering;
• oil-gas-chemicals;
• industrial construction;
• production.
In the preceding years, the Group reported
losses but it generated a profit in 2015.
EBIT totalled PLN 119.3 million, while the
net profit amounted to PLN 69 million.
The aforementioned improvement in
the Group's performance was mainly
attributable to higher contract profitability,
lower costs, and fewer losses on sales and
liquidation of non-current assets, a drop
in general and administrative expenses
and a decrease in the value of provisions
recognised in 2015.
As compared to the preceding year, the net
debt of the Polimex-Mostostal Group went
up by ca. PLN 22 million, and the debt ratio
decreased by 4 p.p. vs. 2014 and reached
80.2% as at 31 December 2015.
77
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
1 164 624
908 997
1 347 640
28.1%
Current assets
1 385 347
1 331 986
1 698 060
4.0%
177 818
450 614
97 476
-60.5%
2 727 789
2 691 597
3 143 176
1.3%
Equity
540 851
431 558
363 202
25.3%
Provisions for liabilities
303 378
328 455
177 401
-7.6%
Long-term liabilities
465 473
606 814
266 342
-23.3%
1 299 696
1 058 434
2 336 231
22.8%
118 391
266 336
0
-55.5%
2 727 789
2 691 597
3 143 176
1.3%
Revenue
2 548 575
2 102 197
2 362 752
21.2%
Domestic sales
2 105 953
1 718 219
1 774 271
22.6%
442 622
383 978
588 481
15.3%
2 053 036
1 674 750
1 755 420
22.6%
Other operations
495 539
427 447
607 332
15.9%
EBIDTA
150 903
-343 685
-105 093
143.9%
EBIT
119 351
-395 752
-173 607
130.2%
68 975
-153 226
-260 889
145.0%
1 560 793
1 583 006
2 276 702
-1.4%
80.2%
84.0%
88.4%
-4.5%
0.1%
1.3%
1.2%
-92.4%
498 924
303 166
190 758
64.6%
Assets held for sale
Total assets
Equity and liabilities
Short-term liabilities and accruals
Liabilities directly related to assets held for sale
Total equity and liabilities
Profit and loss account
Export sales
Construction operations
Net profit/loss
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
78
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
1%
Sales by region in 2015
3%
7%
17%
17%
1%
83%
71%
Production
Domestic sales
Industry
Export sales
Power Engineering
Infrastructure Construction
Petrochemicals
Other activity
EBIDTA, EBIT and net profit/loss in years 2013 -2015
200
100
PLN million
0
-100
-200
-300
-400
-500
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
79
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
PBG Group
PBG Group began its operations in 1994
as a family-owned partnership under the
name of Piecobiogaz s.c. Jerzy Wiśniewski,
Małgorzata Wiśniewska. During the first
years of its operations, the entity focused
primarily on construction, modernization
and maintenance of pressure reduction
and metering stations, as well as the
construction of steel and polyethylene
pipelines for the transmission and
distribution of natural gas. In 1997,
Technologie Gazowe "Piecobiogaz" Sp. z
o.o. was established and it took over the
key part of the partnership’s business
involving the construction of gas facilities.
Continuous growth and implementation of
innovative projects resulted in a change of
the company's legal form and name to PBG
S.A. (a joint-stock company).
An initial public offering, which took place
in mid-2004, was another important step.
The IPO on the Warsaw Stock Exchange
enabled the company to secure funding
and establish the PBG Capital Group.
Since June 2012, PBG S.A. has been in
bankruptcy by arrangement. The vote
on the arrangement with creditors was
held in August 2015. In October 2015,
the Bankruptcy Court approved the
arrangement with creditors, which became
final under a court judgement in June 2016.
80
At the end of 2015, Jerzy Wisniewski holding
27.15% of interest in the share capital
and 42.23% of the voting rights was the
key shareholder of PBG S.A. is the parent
company in the capital group, which acts as
a general contractor on natural gas, oil and
fuel facility projects as well as a provider
of comprehensive project services in the
power engineering sector.
The business operations of PBG Group
mainly focus on the Polish market, which
is considered to be the key one due
to current investments in the power
engineering sector, planned investments
in the natural gas and oil sector as well as
hydro-technical projects relating to flood
prevention systems.
At the end of 2015, PBG Group reported an
18% increase in sales revenue year-on-year.
The Group's revenue went up from PLN 1.5
billion in 2014 to PLN 1.8 billion in 2015. The
Group's performance was worse in 2015.
EBIT was negative and amounted to PLN
190.6 million, while the net loss totalled
PLN 201.1 million.
At the end of 2015, the value of PBG
Group’s contract portfolio was ca. PLN
4.92 billion, out of which contracts
totalling ca. PLN 1.97 billion will be fulfilled
in 2016 and the remaining part in the
following years. The share of contracts
in the power engineering sector is the
highest (94%). These include a contract
for the construction of power units in the
Jaworzno III Power Plant. The oil, gas and
fuel segment is the second largest one
with a 6% share in the Group's contract
portfolio.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013*
Assets
Non-current assets
879 473
1 072 886
1 014 080
-18.0%
1 314 334
1 116 319
1 665 378
17.7%
2 055
75 881
3 083
-97.3%
2 193 807
2 189 205
2 679 458
0.2%
-808 100
-672 757
-582 846
-20.1%
Provisions for liabilities
462 577
506 213
659 880
-8.6%
Long-term liabilities
188 146
139 774
135 623
34.6%
Short-term liabilities and accruals
2 351 184
2 215 975
2 466 801
6.1%
Total equity and liabilities
2 193 807
2 189 205
2 679 458
0.2%
Revenue
1 798 815
1 530 248
1 227 600
17.6%
Domestic sales
1 670 172
1 303 980
997 088
28.1%
128 643
226 268
230 512
-43.1%
1 552 389
1 188 076
774 302
30.7%
Other operations
246 426
342 172
453 298
-28.0%
EBIDTA
-171 625
-26 397
362 569
-550.2%
EBIT
-190 638
-46 254
333 217
-312.2%
Net profit/loss
-201 104
-80 799
207 512
-148.9%
2 660 161
2 757 269
3 088 410
-3.5%
136.8%
130.7%
121.8%
4.7%
1.6%
1.1%
14.7%
45.1%
25 445
23 444
31 592
8.5%
Current assets
Assets held for sale
Total assets
Equity and liabilities
Equity
Profit and loss account
Export sales
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
* The financial data for 2013 was reconciled with the financial statements for 2014 after adjustments had been made to the opening balances.
81
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
1%
7%
13%
86%
93%
Natural gas, oil and fuels
Domestic sales
Energy construction
Export sales
Other
EBIDTA, EBIT and net profit/loss in years 2013 -2015
400
300
PLN million
200
100
0
-100
-200
-300
2015
2014
2013
82
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Erbud Group
Erbud Group is one of the five largest
construction companies in Poland, with
over 25 years experience in the industry.
It was established by Eryk Grzeszczak
and his son Dariusz Grzeszczak in 1990
under the name of Przedsiębiorstwo
Budowlane i Usług Technicznych ERBUD.
In 1993, its German subsidiary – GWI
Bauunternehmung GmbH – was founded
to carry on the Group's business abroad.
In 1999, Józef Adam Zubelewicz became a
shareholder of Erbud – his responsibility
as a management board member was to
develop the company’s business in Poland.
Przedsiębiorstwo Budownictwa DrogowoInżynieryjnego S.A. was established.
In 2012, the group purchased shares
in Engorem, a company providing
comprehensive investment, repair and
diagnostic services to the power industry.
Development of the business in the area of
modernization, repair and maintenance of
the existing industrial and power facilities
resulted in the establishment of a new
entity, Erbud Industry, in 2014. Erbud
Industry comprises Engorem.
As at 31 December 2015, Wolff&Müller
GmbH & Co. KG holding 32.41% of the
shares was the key shareholder of the
company. The other shareholders are:
In 2003 Erbud received a capital injection
from a strategic investor – a German
company Wolff&Müller GmbH & Co.
KG. Since 2004, the company has been
developing its independent regional
branches in Poland and its Western
European expansion began in 2005, to
include such markets as Belgium, France,
Sweden, Ireland and England.
• Dariusz Grzeszczak and DGI Fundusz
Inwestycyjny Zamknięty Aktywów
Niepublicznych, controlled by Dariusz
Grzeszczak (22.72% interest in total),
In 2006, Erbud was converted into a jointstock company and in 2007 made its IPO
debut on the Warsaw Stock Exchange.
In 2006 Erbud took over Budlex S.A. - at
present the group is in the process of
selling that entity. At the end of 2007,
Erbud also acquired Rembet Plus Sp. z
o.o., a company operating in the road and
engineering sector. Przedsiębiorstwo Robót
Drogowych S.A. (PRD SA), operating in the
road sector, joined the group in 2008. In
2010 the road companies belonging to the
group, i.e. PRD SA and Rembet Plus Sp. z
o.o. were consolidated, as a result of which
Erbud Group provides general contracting
and subcontracting services in the
commercial, public utilities, power and
residential sectors, as well as services in
the area of road and engineering in Poland
and other European countries (primarily
Germany, Belgium, Luxembourg and the
Netherlands).
• Adler Properties Sp. z o.o. controlled by
Józef Adam Zubelewicz 6.56%
In 2015, Erbud Group earned revenue of
PLN 1.8 billion and reported a4.2% increase
in sales year-on-year. 91% of its sales
revenue was generated in Poland, whereas
9% was derived from business carried out
in Western Europe. Building construction
was the key source of the group's revenue,
accounting for 64% of its consolidated
sales in 2015.
In the analysed period, the Group's
profitability increased and the consolidated
EBIT was PLN 51.5 million, up by 20% vs.
2014. The net profit totalled PLN 31.7
million and was 13.6% higher than in the
preceding year.
In 2015, the net debt of the Group
remained at a similar level to the one
reported in the preceding year: PLN 529
million. At the end of 2015, the Group
equity financed 28.7% of its operations.
Eurbud Group employs 2,044 people.
• two Open-Ended Pension Funds (ING
and AVIVA) holding 19.12% of shares in
the company
One of the group’s priorities is its further
growth in the segment of general
construction, specifically office buildings,
shopping centres and public utility
buildings, and in the power engineering
segment in Poland and abroad.
83
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
174 585
162 161
117 755
7.7%
Current assets
924 304
889 284
678 175
3.9%
1 098 889
1 051 445
795 930
4.5%
315 787
287 531
266 966
9.8%
Provisions for liabilities
70 510
72 944
63 556
-3.3%
Long-term liabilities
98 106
94 425
19 913
3.9%
614 486
596 545
445 495
3.0%
1 098 889
1 051 445
795 930
4.5%
Revenue
1 763 282
1 692 055
1 223 609
4.2%
Domestic sales
1 605 064
1 496 682
1 013 873
7.2%
158 218
195 373
209 736
-19.0%
1 715 418
1 646 607
1 173 979
4.2%
Other operations
47 864
45 448
49 630
5.3%
EBIDTA
62 096
52 003
40 427
19.4%
EBIT
51 528
43 128
32 700
19.5%
Net profit/loss
31 689
27 892
18 079
13.6%
528 964
554 651
404 374
-4.6%
71.3%
72.7%
66.5%
-1.9%
0.8%
1.0%
1.0%
-20.5%
354 376
324 153
432 167
9.3%
Total assets
Equity and liabilities
Equity
Short-term liabilities and accruals
Total equity and liabilities
Profit and loss account
Export sales
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
84
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
9%
14%
19%
64%
3%
91%
Construction - General Construction
Domestic sales
Property Development
Export sales
Road and engineering
Energy construction
EBIDTA, EBIT and net profit/loss in years 2013 -2015
70
60
PLN million
50
40
30
20
10
0
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
85
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Trakcja Group
Trakcja PRKiI S.A. is among the largest
entities operating in the infrastructure
construction and railway modernization
sector in Poland. The company has been
operating under this name since the end
of 2013, but in organizational terms it
continues the tradition and draws on the
experience gained by its predecessors over
the past 60 years (PKRE S.A., PRKiI S.A., PRK
7 S.A.).
The Group fulfils a number of important
contracts related to the modernization of
road and railway infrastructure in Poland
and abroad. It is also active in the urban
rail transport, roads, bridges and power
engineering sectors. The core business
of its subsidiaries is the preparation of
feasibility studies and project documents,
provision of specialist railway infrastructure
maintenance services as well as general
and residential construction.
The company's current status has been
achieved in stages. First, as a stateowned enterprise it was restructured
in 1995. Another stage of development
took place in 2004, when the control of
Trakcja Polska S.A., a holding company
previously established, was assumed
by Przedsiębiorstwo Kolejowych Robót
Elektryfikacyjnych S.A. The company was
privatised in 2005 through the sale of a
minority interest to Comsa S.A. Spain.
At the beginning of April 2008, the
company made its IPO debut on the
Warsaw Stock Exchange. In 2009, the
company was merged with PRK-7 S.A. and
in 2011 the Tiltra Group was acquired. In
2012, the company’s name was changed
to Trakcja S.A. In 2013, the company
continued the organizational and legal
restructuring project at the Capital Group.
86
Its key aspect was the merger of Trakcja
S.A. and PRKiI S.A., as a result of which
Trakcja PRKiI S.A. was established.
With a 28.8% interest and share in the
voting rights, Comsa S.A. remains the
company’s key shareholder.
At present, the business of the Trakcja
Group focuses specifically on the
comprehensive design of railway and
road infrastructure, urban rail transport
with associated buildings and facilities,
the construction and modernization of
railways, contact lines, underground and
overhead lines, power supply systems,
the construction and modernization of
roads, highways, utility infrastructure and
engineering structures.
In 2015, export sales remained at a
level similar to the preceding year and
accounted for 37% of total sales, which
was mainly attributable to major contracts
fulfilled for Lithuanian railways. PKP PLK
S.A. is a key client of the Group in Poland.
In 2015, the Trakcja Group employed 1,908
people and generated revenue of PLN 1.3
billion, down by 17% as compared to the
preceding year. The Group's EBIT in 2015
was PLN 76.7 million vs. PLN 85.8 million
in 2014, a 10.6% drop. In 2015, EBITDA was
PLN 99 million and decreased by 9.6% yearon-year. The net profit for 2015 totalled
PLN 51.8 million. In 2015, debt capital
represented 45% of the Group's funding.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
704 278
719 867
721 913
-2.2%
Current assets
623 143
725 949
776 004
-14.2%
1 327 421
1 445 816
1 497 917
-8.2%
726 291
674 503
623 372
7.7%
59 505
53 939
51 204
10.3%
Long-term liabilities
106 159
119 294
80 337
-11.0%
Short-term liabilities and accruals
435 466
598 080
743 004
-27.2%
1 327 421
1 445 816
1 497 917
-8.2%
1 329 180
1 601 674
1 274 222
-17.0%
Domestic sales
842 202
1 035 790
811 295
-18.7%
Export sales
486 978
565 884
462 926
-13.9%
1 240 974
1 474 086
1 144 184
-15.8%
Other operations
88 206
127 588
130 038
-30.9%
EBIDTA
98 992
109 518
63 277
-9.6%
EBIT
76 726
85 844
40 591
-10.6%
Net profit/loss
51 758
50 391
29 995
2.7%
349 695
709 467
790 946
-50.7%
45.3%
53.3%
58.4%
-15.1%
3.3%
1.6%
1.4%
108.0%
650 204
390 637
530 443
66.4%
Total assets
Equity and liabilities
Equity
Provisions for liabilities
Total equity and liabilities
Profit and loss account
Revenue
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
87
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
3%
2%
2%
3%
36%
25%
64%
65%
Railway construction
Domestic sales
Road construction
Export sales
Bridge construction
Tramway construction
Production
Other
EBIDTA, EBIT and net profit/loss in years 2013 -2015
120
PLN million
100
80
60
40
20
0
2015
2014
2013
88
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
PORR Polska Construction S.A.
Established in 1869, PORR is one of the
largest construction companies
in Austria and in Europe. With numerous
offices across Central, Eastern and SouthEastern Europe, PORR has embarked on
expansion in the Middle East, mainly in
Qatar.
In Poland, PORR has been carrying out
construction operations since 1987 and the
main company in the group, PORR (Polska)
S.A., (currently PORR Polska Construction
S.A.) was established in 1993. PORR Polska
Construction S.A. offers a wide range of
construction services, specifically in the
buildings and facilities segment (hotels,
office buildings, residential buildings,
educational facilities, shopping centres and
industrial facilities). In 2015, PORR Polska
Infrastructure S.A. (formerly Bilfinger
Infrastructure S.A.) joined the PORR Group.
PORR Polska Infrastructure S.A. is a market
leader in the scope of road infrastructure
in Poland. Since 2012 it has also been
involved in bridge construction projects in
Norway. The financial statements of PORR
Group are not consolidated at the local
level.
PORR Polska Construction S.A.
PORR Polska Construction S.A. specializes
in the construction of buildings and
facilities as well as railway engineering.
In 2015, PORR Polska Construction S.A.
generated revenue of PLN 626.9 million
from its core operations, which was a
40% drop compared to the preceding
year. Construction and assembly services
accounted for 95% of the said revenue
and the remaining 5% was earned on
other operations. Additionally, 97% of the
company's revenue was generated on the
Polish market.
89
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
Percentage
change
'15 vs. '14
2014
Revenue
626 862
1 045 019
-40.0%
Domestic sales
608 600
1 034 640
-41.2%
18 262
10 379
75.95%
592 682
1 000 093
-40.7%
34 179
44 926
-23.9%
Export sales
Construction operations
Other operations
Sales by region in 2015
Sales by type in 2015
3%
5%
97%
95%
90
Construction operations
Domestic sales
Other operations
Export sales
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
PORR Polska Infrastructure S.A.
PORR Polska Infrastructure S.A. specializes
in infrastructure, power engineering,
civil engineering and hydro-technical
construction.
In 2015 PORR Polska Infrastructure S.A.
generated revenue of PLN 666.2 million
from its core operations, which was an
11% decrease compared to the preceding
year. Construction and assembly services
accounted for 90% of the said revenue
and the remaining 10% was earned on
other operations. Additionally, 95% of the
company's revenue was generated on the
Polish market.
Key figures
(PLN '000)
2015
Percentage
change
'15 vs. '14
2014
Revenue
666 258
600 661
10.9%
Domestic sales
635 711
570 126
11.5%
30 547
30 535
0.
596 586
544 177
9.6%
69 672
56 484
23.3%
Export sales
Construction operations
Other operations
Sales by type in 2015
Sales by region in 2015
5%
10%
90%
95%
Construction operations
Domestic sales
Other operations
Export sales
91
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Mostostal Warszawa Group
Mostostal Warszawa was founded in
1945 and its first projects consisted of
reconstructing post-war Warsaw buildings.
Mostostal Warszawa launched its overseas
business in 1973. In 1991, the enterprise
was converted into a joint-stock company
and privatised. On 14 October 1993,
Mostostal Warszawa made its IPO debut on
the Warsaw Stock Exchange.
In 1994, Mostostal Warszawa began to
build its own capital group, which currently
comprises more than ten design and
construction companies. In 1999, the
company was merged with the Spanish
Acciona Group.
At the end of 2015, Acciona S.A. with
50.09% of shares was the majority
shareholder of Mostostal Warszawa.
Otwarty Fundusz Emerytalny PZU
“Złota Jesień”, an open-ended pension
fund, and AVIVA PTE AVIVA BZ WBK S.A.
also held a considerable interest of 18.33%
and 5.09%, respectively
The operations of Mostostal Warszawa can
be divided into two main segments, namely
engineering and industrial, and general
construction. The key projects completed
in 2015 were a Cultural and Congress
Center in Jordanki (Toruń), the Municipal
Stadium in Tychy, redevelopment of the
Elbląg Canal, the Power Engineering Center
of the AGH University of Science and
Technology in Kraków, Szymany Airport,
construction of tanks for IDS-BUD in
Gdańsk, construction of an IOS facility for
PKN ORLEN S.A. as well as platform module
assembly at Gdańska Stocznia Remontowa.
92
The consolidated revenue generated by
Mostostal Warszawa in 2015 amounted
to PLN 1.3 billion and was almost entirely
derived from construction operations. The
majority of contracts focused on general
construction as well as engineering and
industrial works. The revenue earned in
2015 was lower than in the preceding year
and 1% of sales revenue was generated
abroad. In 2015, the Group reported a net
profit of PLN 32.5 million. In 2015, EBIT was
positive and amounted to PLN 49 million,
which was more than double 2014 EBIT
(PLN 23.9 million).
In 2015, the average headcount in
Mostostal Warszawa Group was 1,463,
which was a 5% drop compared to 2014.
The net debt ratio in 2015 was 83% and it
was lower than in the preceding year, when
it was 86%.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
203 859
232 100
377 088
-12.2%
1 083 276
1 135 362
1 119 610
-4.6%
0
0
113 443
n/a
1 287 135
1 367 462
1 610 141
-5.9%
223 682
193 372
212 060
15.7%
59 485
53 737
81 331
10.7%
Long-term liabilities
188 253
224 102
84 101
-16.0%
Short-term liabilities and accruals
815 715
896 251
1 119 211
-9.0%
0
0
113 438
n/a
1 287 135
1 367 462
1 610 141
-5.9%
Revenue
1 275 431
1 509 524
1 633 363
-15.5%
Domestic sales
1 262 259
1 365 071
1 219 101
-7.5%
13 172
144 453
414 262
-90.9%
1 272 805
1 506 365
1 632 383
-15.5%
2 626
3 159
980
-16.9%
EBIDTA
62 132
49 579
-205 844
25.3%
EBIT
49 062
23 931
-237 450
105.0%
Net profit/loss
32 466
-8 738
-314 380
471.5%
710 723
971 796
1 292 591
-26.9%
82.6%
85.9%
86.8%
-3.2%
1.5%
0.5%
0.8%
0.9%
260 000
120 000
89 800
116.7%
Current assets
Assets held for sale
Total assets
Equity and liabilities
Equity
Provisions for liabilities
Liabilities directly related to assets held for sale
Total equity and liabilities
Profit and loss account
Export sales
Construction operations
Other operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
93
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
1%
21%
79%
99%
Engineering and industry
Domestic sales
General construction
Export sales
Other operations
EBIDTA, EBIT and net profit/loss in years 2013 -2015
100
50
PLN million
0
-50
-100
-150
-200
-250
-300
-350
2015
2014
2013
94
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Unibep Group
UNIBEP S.A., whose history dates back to
1950, is the parent company in the UNIBEP
Capital Group. The company first operated
as a state-owned enterprise and in 1998
it was converted into a limited liability
company. In 1999, the company’s name
was changed to UNIBUD BEP Sp. z o.o. and
in 2004 it was converted into a joint-stock
company. The company has been operating
under its current name since 2006. From
2008 the company's shares have been
traded on the Warsaw Stock Exchange.
As at 31 December 2015, the key
shareholders of UNIBEP S.A. were: Zofia
Mikołuszko with 25.09% of the share
capital, Zofia Stajkowska with 14.26%, Beata
Skowrońska with 16.52%, AVIVA OFE AVIVA
BZ WBK S.A. with 9.75% of the share capital
as well as Nationale-Nederlanden OFE with
6.11%.
The core business of the Unibep Group is
general building construction - property
development, construction and assembly
services, and road and bridge building.
Such works are delivered both in Poland
and abroad.
Unibep Group is distinguished from its
competitors through its involvement
in production activity. Fabryka Domów
Modułowych in Bielsk Podlaski, which is the
largest plant producing modular houses
in Poland, produces modular buildings
which are then assembled in Scandinavia
(primarily in Norway). The revenue from
this segment constitutes approx. 10% of
the overall revenue of the Group, whereas
the remaining 20% is derived from the
operations carried out in the roads and
bridges, and property development
segments.
In 2015, EBITDA amounted to PLN 31.3
million (down by 36% vs. 2014). The Group's
EBIT totalled PLN 23.5 million as compared
to PLN 25.1 million in 2014. The net profit
for 2015 was PLN 23.3 million which was
almost PLN 2.4 million higher than in the
preceding year.
In 2015, the share of equity in the Group’s
funding was 28.3%.
At the end of 2015, the contract portfolio
of the UNIBEP Group totalled ca. PLN 1.3
billion, up by ca. 30% year-on-year.
In 2015, UNIBEP Group employed
1,129 people and its revenue from core
operations amounted to PLN 1.2 billion,
which was more than 15% increase
compared to the preceding year. In 2015,
81% of revenue was generated in Poland,
whereas the remaining part was earned on
exports, mainly to Scandinavia (especially
Norway), Russia, Belarus and Germany.
By market segment, 70% of revenue
was generated on building and facility
construction.
95
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
209 803
172 281
144 911
21.8%
Current assets
556 920
494 353
409 183
12.7%
0
10
0
-100.0%
766 723
666 644
554 094
15.0%
Equity
217 203
203 046
185 820
7.0%
Provisions for liabilities
119 471
91 872
59 968
30.0%
96 337
68 396
63 391
40.9%
Short-term liabilities and accruals
333 712
303 330
244 915
10.0%
Total equity and liabilities
766 723
666 644
554 094
15.0%
Revenue
1 242 860
1 079 703
905 553
15.1%
Domestic sales
1 004 270
760 206
676 284
32.1%
238 590
319 497
229 269
-25.3%
1 128 648
992 129
623 640
13.8%
114 213
87 574
281 913
30.4%
EBIDTA
31 349
49 299
38 773
-36.4%
EBIT
23 475
25 138
24 682
-6.6%
Net profit/loss
23 281
20 925
17 585
11.3%
419 611
337 530
368 452
24.3%
71.7%
69.5%
57.9%
2.1%
0.2%
0.3%
1.9%
0.0%
378 763
350 373
522 237
8.1%
Assets held for sale
Total assets
Equity and liabilities
Long-term liabilities
Profit and loss account
Export sales
Construction operations
Other operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
96
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
11%
19%
9%
10%
70%
81%
Construction of buildings and facilities
Domestic sales
Road construction
Export sales
Property Development
Lightweight structures
EBIDTA, EBIT and net profit/loss in years 2013 -2015
60
PLN million
50
40
30
20
10
0
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
97
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Elektrobudowa Group
The parent company – ELEKTROBUDOWA
S.A. – was founded in 1953 as
Przedsiębiorstwo Montażu Elektrycznego
"Elektrobudowa”. In 1992, this stateowned enterprise was converted into a
joint-stock company, and three years later
the company’s IPO was executed and its
shares were traded on the Warsaw Stock
Exchange for the first time in 1996. In
2000, a restructuring process was carried
out, which affected employees, assets,
marketing, organizational structure and
finance.
At present, ELEKTROBUDOWA S.A. Group
provides comprehensive construction and
assembly services for the needs of the
power engineering, petrochemical, mining
and public utility building construction
sectors. The business activity of the Group
can be divided into the following segments:
At the end of 2015, the key shareholders
were open-ended pension funds: AVIVA
OFE AVIVA BZ WBK S.A. (10.75%), NationaleNederlanden Otwarty Fundusz Emerytalny
(9.89%), PKO BP Bankowy Otwarty Fundusz
Emerytalny (9.74%), AXA Otwarty Fundusz
Emerytalny (9.41%), OFE PZU "Złota Jesień”
(9.31%), PTE Allianz Polska SA (6.31%),
MetLife Otwarty Fundusz Emerytalny
(6.08%), and Generali Otwarty Fundusz
Emerytalny (5.09%).
• industry – complete electrical
installations for the industry;
98
• power engineering – electrical
installations, stations and power
transmission and distribution facilities;
• construction – general construction of
buildings (turnkey delivery) and electrical
installations;
• automatic control – MV and LV indoor
switchgears.
In 2015, ELEKTROBUDOWA SA Group
employed 2,158 people and generated
revenue of PLN 1.2 billion, which was a
more than 12% increase compared to
the preceding year. In 2015, as much as
91% of revenue was generated in Poland.
The remaining part was earned on sales
of products and services, inter alia, in
European Union member states, Eastern
Europe and Asia, and it was 68% higher
than the revenue generated abroad in
2014.
In 2015, EBITDA amounted to PLN 77.7
million, up by 58% vs. 2014. The Group's
EBIT for 2015 totalled PLN 63.1 million,
compared to PLN 35.7 million in the
preceding year. The net profit for 2015
amounted to PLN 50.0 million and
increased by 85% year-on-year.
In 2015, debt capital accounted for 57%
of the Group's funding, down by 6 p.p.
compared to the preceding year.
The contract portfolio of
ELEKTROBUDOWA SA totalled PLN 1.3
billion at the end of 2015.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
188 569
174 263
199 527
8.2%
Current assets
709 258
737 303
576 137
-3.8%
0
246
0
-100.0%
897 827
911 812
775 664
-1.5%
386 802
338 243
326 724
14.4%
9 212
10 422
12 482
-11.6%
14 445
14 737
12 338
-2.0%
Short-term liabilities and accruals
487 368
548 410
424 120
-11.1%
Total equity and liabilities
897 827
911 812
775 664
-1.5%
Revenue
1 242 830
1 108 316
905 553
12.1%
Domestic sales
1 129 696
1 040 980
676 284
8.5%
113 134
67 336
229 269
68.0%
1 047 388
904 583
623 640
15.8%
195 442
203 733
281 913
-4.1%
EBIDTA
77 739
49 299
38 773
57.7%
EBIT
63 090
35 718
24 682
76.6%
Net profit/loss
49 965
27 015
17 585
85.0%
404 974
511 330
368 452
-20.8%
56.9%
62.9%
57.9%
-6.0%
1.1%
1.0%
1.9%
0.1%
617 189
350 373
522 237
76.2%
Non-current assets held for sale
Total assets
Equity and liabilities
Equity
Provisions for liabilities
Long-term liabilities
Profit and loss account
Export sales
Construction operations
Other operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
99
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
14%
2%
9%
84%
91%
Construction and assembly
Domestic sales
Electrotechnical products
Export sales
Other services
Sales of materials
EBIDTA, EBIT and net profit/loss in years 2013 -2015
90
80
PLN million
70
60
50
40
30
20
10
0
2015
2014
2013
100
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Torpol Group
Torpol Sp. z o.o., the parent company,
was established in 1999. In 2012, it was
converted into a joint-stock company. On
1 July 2014, the shares in Torpol S.A. were
allocated as part of an initial public offering,
when the former shareholder, Polimex
– Mostostal sold all its shares in the
company. Torpol S.A. shares and allotment
certificates were traded on the Warsaw
Stock Exchange for the first time on 8 July
2014.
The Group's EBIT, EBITDA and the net profit
increased considerably.
In 2015, EBIT amounted to PLN 43.3 million
(up by 33%), while EBITDA totalled PLN 55.8
million (up by 29%). The net profit increased
by 28% from PLN 25 million in 2014 to PLN
32 million in 2015.
Debt capital accounts for 67% of the
funding used by Torpol Group.
The core business of the Group involves
general contractor services related to the
construction of roads and railways.
The Group also provides general
construction services relating to line
distribution facilities – power and
telecommunication lines, as well as design
services.
As at 31 December 2015, the key
shareholders of Torpol S.A. were: TF Silesia
Sp. z o.o. (38%), PKO TFI (8.59%), and
Nationale-Nederlanden OFE (6.97%).
In 2015, the Group employed more than
614 people on average. In 2015, sales
revenue increased substantially (by nearly
60% compared to 2014 ) to PLN 1.2 billion.
This was attributable to a rise in revenue
both on the domestic and foreign markets.
A major part of the Group's revenue is
earned on operations carried out in the
railway segment (ca. 89% of total revenue).
101
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
155 576
115 987
105 727
34.1%
Current assets
520 342
648 523
373 412
-19.8%
Total assets
675 918
764 510
479 139
-11.6%
222 890
203 312
123 008
9.6%
Provisions for liabilities
24 288
10 262
914
136.7%
Long-term liabilities
90 223
33 415
31 718
170.0%
Short-term liabilities and accruals
338 517
517 521
323 499
-34.6%
Total equity and liabilities
675 918
764 510
479 139
-11.6%
Revenue
1 238 241
775 399
415 717
59.7%
Domestic sales
1 175 998
746 892
401 790
57.5%
62 243
28 507
13 927
118.3%
1 222 041
755 188
394 033
61.8%
Other operations
16 200
20 211
21 684
-19.8%
EBIDTA
55 804
43 161
21 369
29.3%
EBIT
43 257
32 647
10 730
32.5%
Net profit/loss
31 954
25 009
4 790
27.8%
110 169
361 949
252 306
-69.6%
67.0%
73.4%
75.2%
-6.4%
2.1%
1.9%
1.7%
0.2%
285 287
229 011
IPO took place on
08/07/2014
24.6%
Equity and liabilities
Equity
Profit and loss account
Export sales
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
Market cap
102
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
Sales by region in 2015
10%
1%
5%
89%
95%
Railways
Domestic sales
Tramways
Export sales
Other
EBIDTA, EBIT and net profit/loss in years 2013 -2015
60
PLN million
50
40
30
20
10
0
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
103
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Warbud
Warbud has been present on the Polish
market since 1989. Initially, the company
operated as a private enterprise. In 1992,
Warbud was converted into a joint-stock
company with the participation of a French
construction tycoon – now VINCI Group.
VINCI Construction International Network
remains the majority shareholder of the
company with 99.76% of the share capital
as at 31 December 2015. For several years
now, VINCI Group has been a leader among
the largest construction companies in
Europe in terms of revenue. As it is part of
the VINCI Group, Warbud may draw on the
international experience of its experts in
addition to enjoying stability and a strong
financial position.
The primary focus of Warbud is to provide
services in the construction sector,
mainly in the field of building and facility
construction (shopping centres, office
buildings, housing estates), civil engineering
structures (roads, bridges), healthcare
facilities (hospitals, healthcare centres,
health farms), cultural facilities (theatres,
concert halls, museums), environmental
protection projects (sewage treatment
plants, incineration plants) as well as
specialised construction works
and concrete production.
Considering VINCI's 20-plus years
experience in PPP, for several years Warbud
has been popularizing public-private
partnerships in respect of the development
and management of public infrastructure.
104
In 2015, the company signed the first PPP
contract with the Polish government to
construct Regional Court in Nowy Sącz and
it actively participates in many PPP tender
procedures.
In 2015, Warbud employed 1,042 people
and its revenue from core operations
amounted to PLN 1.1 billion, which
was a more than 5% increase vs. 2014.
Construction and assembly services
accounted for 99% of the said revenue,
and the remaining 1% was earned on other
operations. The company's revenue was
generated entirely on the Polish market.
The Company's EBIT in 2015 was PLN 40.8
million, compared to PLN 48.8 million in
2014, a 16% decrease.
In 2015, EBITDA was PLN 50.6 million, a
10.8% decrease compared to 2014. The net
profit for 2015 totalled PLN 35.7 million and
dropped by 26% year-on-year. In 2015, debt
capital accounted for 82% of the company's
funding, which was a 2.2 p.p. increase
compared to the preceding year. The
funding structure has remained virtually
unchanged over the past few years.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
79 814
80 393
79 401
-0.7%
Current assets
708 482
659 294
705 639
7.5%
Total assets
788 296
739 687
785 040
6.6%
141 963
146 697
131 063
-3.2%
Provisions for liabilities
35 259
36 583
29 830
-3.6%
Long-term liabilities
97 690
103 581
114 017
-5.7%
Short-term liabilities and accruals
513 384
452 826
510 130
13.4%
Total equity and liabilities
788 296
739 687
785 040
6.6%
Revenue
1 106 860
1 049 886
1 121 472
5.4%
Domestic sales
1 106 860
1 049 886
1 121 472
5.4%
Construction operations
1 091 486
1 038 747
1 107 460
5.1%
Other operations
15 374
11 139
14 012
38.0%
EBIDTA
50 584
56 726
43 965
-10.8%
EBIT
40 786
48 775
37 022
-16.4%
Net profit/loss
35 728
48 416
32 555
-26.2%
233 227
171 687
209 654
35.8%
82.0%
80.2%
83.3%
1.8%
1.6%
1.8%
1.0%
-0.3%
Equity and liabilities
Equity
Profit and loss account
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
105
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
1%
99%
Revenue from construction and assembly
Revenue from other services
EBIDTA, EBIT and net profit/loss in years 2013 -2015
60
PLN million
50
40
30
20
10
0
2015
2014
2013
106
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Mota-Engil Central Europe S.A.
Mota-Engil Central Europe S.A. is among
the largest construction companies
in Poland. It was established through
the merger of two Polish enterprises,
namely Krakowskie Przedsiębiorstwo
Robót Drogowych S.A. (KPRD) and
Przedsiębiorstwo Budowy Mostów w
Lubartowie Sp. z o.o. (PBM), which had
been present on the local market since
1949. Today, Mota-Engil Central Europe is a
strong construction company drawing on
more than 60 years' Polish tradition in road
and bridge construction and specializing
at the same time in the construction of
buildings and facilities, railways, and in
power engineering. Additionally, it has a
mine in Górka Sobocka, where high quality
aggregate is extracted for sale.
Mota-Engil Central Europe has built
hundreds of kilometres of roads which
are of crucial importance to Poland,
including the A4, A2 motorways, and the
S3, S5, S8 and S17 expressways. It has also
constructed residential and public utility
buildings and electric power stations.
Acting as the general contractor on major
construction projects in Poland, Mota-Engil
Central Europe employs more than 1,500
people and cooperates with hundreds of
local businesses.
People are the key assets of Mota-Engil
Central Europe. Its success on the Polish
market would not be possible without
respect for long-established tradition,
professionalism, know-how and the
capabilities of its employees – people who
work on the most innovative and ambitious
projects that satisfy the highest quality
standards at all times.
Corporate social responsibility is one of the
major elements of the strategy adopted by
the company, expressed in its management
style, which is ethically, socially and
ecologically responsible.
The company has substantial equipment
resources, a network of bituminous
material production facilities as well as its
own boarding and scaffolding division.
In 2015, the revenue earned by MotaEngil Central Europe S.A. totalled PLN
950 million, up by almost PLN 300 million
versus the preceding year.
Revenue from construction services
accounted for almost 94% of its total
revenue in 2015. Other revenue was
derived from sales of materials and
products (aggregate, mineral and asphalt
mixtures).
In 2015 EBITDA exceeded PLN 41 million,
compared to ca. PLN 24 million
the year before. EBIT equalled over PLN 7
million, which was a PLN 12 million yearon-year increase. In 2015, the company
reported a profit of PLN 4.5 million
compared to a loss of almost PLN 13 million
in the preceding year.
Its contract portfolio totalled PLN 2.1 billion
at the end of 2015.
107
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
284 190
316 977
356 896
-10.3%
Current assets
475 958
426 541
433 590
11.6%
Total assets
760 147
743 518
790 486
2.2%
Equity
224 153
221 246
201 745
1.3%
Provisions for liabilities
113 773
81 435
83 154
39.7%
85 005
139 983
154 202
-39.3%
Short-term liabilities and accruals
337 216
300 853
351 386
12.1%
Total equity and liabilities
760 147
743 518
790 486
2.2%
Revenue
949 576
658 133
1 166 578
44.3%
Domestic sales
949 576
658 133
1 166 578
44.3%
0
0
0
-
888 188
624 317
1 140 455
42.3%
Other operations
61 387
33 816
26 122
81.5%
EBIDTA
35 480
23 252
37 971
52.6%
EBIT
7 044
-5 132
7 376
237.3%
Net profit/loss
4 540
-12 841
-11 236
135.4%
413 610
377 356
474 001
9.6%
70.5%
70.2%
74.5%
0.3%
1.8%
1.3%
1.6%
0.5%
Equity and liabilities
Long-term liabilities
Profit and loss account
Export sales
Construction operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
108
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
4%
6%
15%
75%
Public works
Real property
Sanitary sewage and power supply systems
Sale of products and materials
EBIDTA, EBIT and net profit/loss in years 2013 -2015
60
PLN million
50
40
30
20
10
0
-10
-20
EBIDTA
EBIT
Net profit/loss
2015
2014
2013
109
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Hochtief Polska S.A.
HOCHTIEF Polska is a company from the
multinational HOCHTIEF construction
group. The HOCHTIEF Group has more
than 140 years experience and it has been
present on the Polish market since 1990.
HOCHTIEF Polska Sp. z o. o. launched its
operations in 1996. On 31 December 2009,
the company was converted into HOCHTIEF
Polska S.A.
All the shares in the company are
held by HOCHTIEF Construction Erste
Vermögensverwaltungsgesellschaft GmbH,
a wholly-owned subsidiary of HOCHTIEF
Infrastructure GmbH.
HOCHTIEF Polska specializes in the
construction of buildings and facilities, as
well as infrastructure construction. The
scope of its services includes mainly the
construction of office facilities, residential,
industrial and public utility buildings,
shopping and entertainment centres,
civil and water engineering structures for
major infrastructure projects, construction
works for waste incineration plants as well
as the implementation of projects for the
commercial power industry. In cooperation
with HOCHTIEF PPP Solutions, the entity
participates in the implementation of
public-private partnership projects in the
social infrastructure sector in Poland.
HOCHTIEF Polska operates across Poland
through its branches and offices located in
Warsaw, Poznań, Kraków and Katowice.
110
In 2015, the company's sales revenue
totalled PLN 788.5 million, up by 36%
year-on-year. The company also managed
to improve its performance considerably
versus the preceding year. In 2015, its
EBIDTA amounted to PLN 25.4 million,
increased from PLN 19.1 million in 2014.
EBIT for 2015 totalled PLN 24.3 million
compared to PLN 18.1 million in the
preceding year. The net profit for 2015
totalled PLN 29.8 million and increased by
nearly PLN 7.5 million year-on-year.
In 2015, debt capital represented 66% of
the company's funding.
The company employed more than 650
people in 2015.
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Key figures
(PLN '000)
2015
2014
Percentage
change
'15 vs. '14
2013
Assets
Non-current assets
92 291
79 731
69 280
15.8%
Current assets
290 216
381 460
374 117
-23.9%
Total assets
382 507
461 191
443 397
-17.1%
129 058
118 523
124 795
8.9%
74 993
75 258
70 731
-0.4%
0
0
0
-
Short-term liabilities and accruals
178 457
267 411
247 870
-33.3%
Total equity and liabilities
382 507
461 191
443 397
-17.1%
Revenue
788 488
579 348
631 785
36.1%
Domestic sales
788 488
579 348
631 785
36.1%
0
0
0
-
788 376
579 233
631 779
36.1%
113
114
6
-0.9%
EBIDTA
25 406
19 120
20 641
32.9%
EBIT
24 265
18 053
19 898
34.4%
Net profit/loss
29 769
22 203
20 860
34.1%
100 071
193 754
174 602
-48.4%
66.3%
74.3%
71.9%
-8.0%
0.1%
0.1%
0.3%
0.0%
Equity and liabilities
Equity
Provisions for liabilities
Long-term liabilities
Profit and loss account
Export sales
Construction operations
Other operations
Other data
Net debt
Debt/Balance sheet total
Capital expenditure/revenue
111
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
Sales by type in 2015
10%
12%
78%
General Construction
Housing Construction
Energy Construction
EBIDTA, EBIT and net profit/loss in years 2013 -2015
60
PLN million
50
40
30
20
10
0
2015
2014
2013
112
EBIDTA
EBIT
Net profit/loss
Polish construction companies 2016 | Major Players, Key Growth Drivers and Development Prospects
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53. http://www.pois.gov.pl/media/18557/Zal_5_Wykaz_projektow_zidetyfikowanych_2016-04-13.pdf
54. http://www.rynek-kolejowy.pl/watki/fundusze-unijne.html
55. Article http://www.rynek-kolejowy.pl/wiadomosci/jest-pierwsza-wersja-nowego-krajowego-programu-kolejowego-76778.html
56. http://www.mg.gov.pl/Power+jadrowa elektro-innowacje.pl
57. http://odnawialnezrodlaenergii.pl/oze-aktualnosci/item/2290-wojewodztwo-podlaskie-wyda-50-mln-zl-z-ue-na-inwestycje-w-oze
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