Hello, and welcome to the BAM first nine months 2023 trading update. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your line has been listen-only mode. However, you will have the opportunity to ask questions at the end of the call, and this can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I'd like to call over to your host today, Mr. Ruud Joosten, CEO, to begin today's conference. Please go ahead, sir. Good morning, and welcome to this analyst call for Royal BAM Group. Following the publication of our trading statement this morning. I am Ruud Joosten, CEO. With me are Frans den Houter, our CFO, and Michel Aupers, our Investor Relations Manager. Before we open the line for questions of the analysts, we would like to reflect briefly on the most important aspects of our press release. For our opening slide, we show you an artist's impression of ABN AMRO's new home base at the Foppingadreef in Amsterdam-Zuidoost. The redevelopment project for 100,000 sq m office space was launched in the last quarter. It's one of the largest and most sustainable non-residential construction projects in the Netherlands. Commissioning is expected to take place in 2027. Looking at the third quarter of this year, we are pleased with solid operational performance of our group. We delivered an adjusted EBITDA of EUR 80 million, reflecting a margin of 5.1%. This is a strong result, certainly if you take into account that the adjusted EBITDA of EUR 99 million, which BAM reported in the third quarter of last year, included EUR 52 million of the Wayss & Freytag transaction. Regarding our financial performance in the first nine months, revenue for the Netherlands, U.K., and Ireland was in line with last year. Our adjusted EBITDA for the first nine months totaled EUR 199 million, or a margin of 4.4%. Let me highlight the developments per division. In the Netherlands, it's good to see that the operational performance of civil engineering remains solid. Our residential activities reported a satisfactory contribution under difficult market conditions. House sales picked up after the slow first half year. Home sales totaled more than 850 versus 1,100 homes sold in a comparable period last year. Based on the project pipeline, BAM expects to sell approximately 1,500 homes this year. As we told you last August, the structural shortages of homes in the Netherlands is a huge opportunity for BAM for the long run, and we are positioning ourselves for when conditions improve. It's also positive that the performance of our Dutch non-residential company recovered. Contribution of our telecom solutions and our energy and water activities continue to be strong. In the United Kingdom and Ireland, Civil Engineering U.K. delivered good results. This was supported by a high activity level. BAM Ventures and BAM Ireland both continued their strong performance. We are pleased with the progress on the National Children's Hospital, which is now approximately 90% complete. The results of construction in the U.K. were impacted by inflation and supply chain challenges on some larger contracts. In the period, we successfully handed over the redevelopment Perth Museum in Scotland, and we received a GBP 5 million grant from the U.K. government to lead an industry-wide initiative to develop the use of hydrogen to replace diesel on construction sites. At the end of the third quarter, our order book was stable versus the situation in mid-2023. With several larger project wins, we had especially good momentum in the Netherlands in non-residential, while the order intake in the division U.K., United Kingdom and Ireland, was somewhat lower. Overall, I'm satisfied with our position, and we continue to focus on quality above volume and on projects with a sustainability edge. Our cash position remains strong. Our capital ratio further improved based on our good performance in the third quarter. As expected, our trade working capital efficiency further normalized due to tendering strategies and the effect of higher interest rates. For the full year 2023, we now expect to deliver an adjusted EBITDA margin of approximately 4.5%. BAM is nearing the end of the three-year strategic plan, and we are on track to deliver on our 2021-2023 strategic agenda. We have made major steps to reshape our portfolio and become a more predictable company. We'll update you on the strategic plan 2024-2026 soon after the publication of our full year results. Now, let's open the line for questions. Thank you very much, sir. Ladies and gentlemen, once again, if you have any questions, please press star one on your telephone keypad. Also, please ensure your mute function is accurate to allow us to reach your equipment. Our first question this morning is coming from Martijn den Drijver, calling from ABN AMRO. Please go ahead. Thank you, operator. Good morning, Ruud. Good morning, Frans. Good morning, Martijn. I have four questions, two a little bit more high over and two detailed questions. So approximately 4.5% adjusted EBITDA margin 2023, despite, as you said yourself, challenging conditions. If you look at the, your order book, and the margins in your order book, and inflation is coming down, mortgage rates are stabilizing, your non-resi business is improving, do you think that it would be sensible to assume that you can achieve a 2024 EBITDA margin that is better than in 2023? I'll do them one by one, please. ... Okay, yeah, well, let's focus on 2023. It's a pretty volatile market, and we are happy to say indeed that we delivered on our promise to have a better, let's say, second half year than the first half year. But now to look already ahead for 2024 is difficult to do. We are on track with our strategic changes indeed, so we have a more normalized portfolio, but still we come back later with messaging on the 2024. Okay, I'll leave that for now. The second one is with regards to your risk profile. You've been quite adamant in refusing to go for projects with a lump sum component over EUR 150 million. I was just wondering if you could clarify. You actually showed a picture of the ABN AMRO head office. Estimates in the market that it has a value of EUR 200 million. You're also involved in the Eastern Green Link project in the U.K., the high voltage distribution centers, that has a project value for BAM, estimated by U.K. media at GBP 700 million. So are you becoming a little bit more confident? Are you a little bit more comfortable now, given the improvements that you have, that you're accepting somewhat higher risk in terms of lumps, lump sums? No, not at all. Not at all. This strategy line on lump sum project is still very valid, so we don't go for projects over EUR 150 million based on these kind of contracts, the lump sum projects. So if you see project wins with higher amounts, then you can be sure that these projects, let's say, are part of a different contract structure. Sometimes we call that two-stage projects or projects where we take a very long time to detail out the project, and then we feel confident to do it. It's not at all like that that BAM will not take on bigger projects. It's one of our strengths to be able to take bigger projects, but it must fit into this contract form, where the risk is, let's say, fairly distributed over the customer and the builder. Well, that's exactly why I was surprised to see the Eastern Green Link, because it relates to a segment of the market where, as far as I could tell, you didn't have a lot of experience, so it seemed to be the odd one out, to be honest. But you're saying that your part does not exceed EUR 150 million? Lump sum projects, we will not take on. Let's say the strategy is not to look at lump sum projects anyhow, and if we take them, they're indeed below the EUR 150 million. Got it. Okay, moving on. The third question was, is with regards to, the Netherlands, non-resi business. You, you mentioned a recovery. Is that recovery actual, actually visible in sales and margins, or are we talking about RFQs and discussions with clients and actual order intakes? So can you elaborate a little bit on that recovery in non-residential? Yeah, I think it's a mix of kind of the elements here. So it's about order intake, it's about portfolio, and it's about how we see the current valuation of the projects and the remaining risk profile. So we have stabilized it, and we see some recovery in the bottom line there. And what do you think is the reason for that? Are end customers more comfortable with the environment, your interest rate environment, with the building materials price environment? What's causing the improvement? Now, so it's partly operational, of course, yeah, because we also have projects that are ongoing. If you look at, yeah, the, the transaction, still the interest rate impact in the, in the discussions we have with clients is still there, of course, yeah. Mm-hmm. So we are careful in being too upbeat, but we've... The word recovery is the right word. I think we are less negative than we were first half year. Got it. And then my final question: Well, you've actually talked about the Children's Hospital in Ireland yourself. I think the press release mentioned a constructive dialogue on the completion date. Is there a constructive dialogue also on other elements, including claim resolution? Well, you know, we never, let's say, are discussing in public the discussions we have with customers on claims. But what we do see is that the discussions are indeed on a constructive level at this moment in time. Mm. ... which is good. And of course, when you read all the publications, a lot of that is politics within the Irish government, where we stay out of, of course. For us, it's really important to finalize the project next year. Mm-hmm. Fully focused on that. Re-resourced for that, we are now at 90%. Very enthusiastic about the quality level of this project going forward. And indeed, the discussions with the customer, Irish government in this case, are constructive. When you mention constructive dialogue on the completion date, is that still May 2024? No. That's part of the discussion indeed, going forward. So probably on short notice, the customer will inform the market about the completion date. Okay. I have a few more questions, but I'll move back into queue. Thank you. Yeah, very good. Thanks, sir, Martijn. Thank you very much, sir. Ladies and gentlemen, once again, if you have any questions, please press star one. We'll now move to Tim Ehlers, calling from Kepler Cheuvreux. Please go ahead, sir. Yeah. Hey, good morning, everyone. Thanks for taking my questions. I wanna start with the margin improvement in Q3. So if I look at the just EBITDA margins, 5.1% in Q3, clearly a step up compared to the first half. Can you maybe elaborate a bit more where this margin improvement comes from? So you already touched upon non-resi. Is there any other business line or maybe geography where the, the improvement comes from? Well, I think the good news is that you see overall in the portfolio our steady performance. So a little bit de-risked, indeed, like we intended it to be. And you see in the Dutch civil good performance, but also the U.K. is having a steady steady performance in, especially also in civil, but also Ireland is doing a good job. In the Netherlands, also, indeed, apart from civil, also energy, telecom, very strong results. So it's a broader story. It's not one part of the company only, but it's a company-wide steady performance. Okay, so this is structural performance across- Yeah - divisions. Okay, Nice, nicely balanced, and also without exceptionals in there, eh? So it's, Yeah ... really a nice overall, stable contribution. Yeah, indeed. Then the question regarding U.K., the U.K. performance. You mentioned that you added some facility management service contracts there, and in general, more service-oriented businesses. Is that fair to assume that this is also a higher margin business? Yeah, that is true. These are interesting contracts, longer term contracts, with sometimes, you'll need a little bit higher margin than a regular contract. That's the case. So you see that also back in the performance of the ventures, part of the business in the U.K., indeed. Yeah. Okay, and then one last question regarding your number of houses sold. You now guide for approximately 1,500 homes. If I look at Q3, it's more than 600, and last year, Q4 was the strongest quarter. Could 1,500 be, let's say, a floor with some room on top of that? Or is that really the, let's say, guidance? Yeah, sometimes difficult to predict, eh, because these sales- Yeah ... can happen in a quarter, yes or no. It's binary in that sense. So based on our pipeline that we have today, we are coming to this number. Okay. All right, clear. Thanks a lot. Thank you very much, sir. We'll now move to Mr. Maarten Verbeek of The IDEA! Please go ahead, sir. Good morning, it's Maarten Verbeek of The IDEA! A couple of questions from my side. Firstly, I'm a bit surprised by the low level of your cash position, about EUR 500 million, and don't know if it's rounding, but when I look at the impact of your trade working capital, I'm estimating that's about EUR 100 million, but still you have generated the cash through operations. So give me a bit more color about your current cash level of EUR 500 million. Yeah, happy to do so, Maarten. So if you look at trade working capital impact, it's a bit—it's bigger than EUR 100 million year to date, right? We see really a normalization- I'm talking quarter on quarter, because I'm also referring it to your cash level of mid-year. Yeah, okay. So for the quarter, sorry, I was answering year to date. So indeed, for the quarter, that's the correct amount. So that's quite a significant cash out. Then it's the normal seasonal pattern with daily swings, eh? So this dip is in line with our expectations, where, yeah, we see about EUR 450 million of operational cash consumed in the business, and that leaves us with an excess cash of EUR 50 million, which is in line with where we try to guide the market. So for us, it's on track with how we pictured this earlier. Okay. Okay, So there's no, there's no, there's no disappointment in there. The cash profile is according to our expectation. Where we said to the market that we expect towards year end, a little bit of uplift again, in terms of, the cash, in line with the seasonal pattern. But since the trade working capital is a rolling quarter average, for four quarters rolling, we expect it to decrease with another percent. But that's not a cash out, because we have a strong quarter last year that will be replaced with the Q4. Okay, thanks. It all looks like a very clean result in Q3. Regarding Invesis, that did not have a gain from selling projects? No, there was no one-off transactions in Invesis. Okay. Then, the other week, the construction industry agreed with the government about more stringent regulations about nitrogen and the carbon footprint. On one hand, will it have an impact on your capital expenditure going forward? And secondly, will it be more beneficiary to you as a larger construction company compared to the smaller and mid-sized companies? Yeah, I think it's really good news. I think it fits completely into our sustainability strategy, where we set targets till 2030. And one of these elements there is indeed to electrify all the work we're doing. So we are investing already for a couple of years in this development, and we can only support this development. And indeed, we think for BAM, it's an opportunity because we have the knowledge and the experience and the cloud, also with suppliers, to yeah, to go faster and indeed supporting our sustainability strategy. So we are fully behind this. And maybe on your CapEx question, let's repeat the guidance there. We stated that despite that we are a smaller company than several years ago because of the divestments-... Our CapEx level will be, yeah, quite, on the, on the same level as it used to be, maybe even a bit bigger, because we are, we are accelerating in electrifying our equipment, and we are also investing, in industrialization in, the plan for wooden homes that we are building. So CapEx programs are, are reflecting, what clients, want from us. You're convinced that also, despite these investments or maybe through these investments, you'll be able to pass on these costs to your customers? Yeah, that is the idea. So sustainability is in the heart of where we want to be as an organization and our purpose. But it's also, of course, a business model. Our clients have need for these low carbon footprint solutions, and we are, you know, we're working hard to provide them. Mm-hmm. Okay. And one just a brief remark concerning your strategic update, which will take place soon after you will report your full year results, which are, according to me, on February fifteenth. I hope you will also take into account that that will be a very busy period with a lot of companies reporting and, yeah, to get more exposure for yourself, I hope that you will pick a date that everybody will be able to attend and to listen to your new strategic plan going forward. Yeah, that's a fair remark, and that's why we, this time, we don't combine the strategic update with our full year results. So indeed, we try to listen and come up with the more appropriate date for that. Okay, thanks. Thank you very much, sir. We'll now have follow-up questions from Martijn den Drijver of ABN AMRO. Please go ahead, sir. Yeah, thank you, operator. First of all, I fully agree with Maarten. Let's do that, CMD somewhere at the end of March, please. Then the additional questions that I had: You didn't have any positive one-offs, but there was a bit of headwind in U.K., in construction, so not in civil engineering. How should we view that? Was that, you know, low single digit, high single digit, and was it multiple projects, or was it one big project? Just a bit more color on that slight headwind in construction U.K., please. Yeah, it's indeed, it has to do with the supply chain, some delays, some problems with suppliers to us. I think fair to make the remark, but we're not going into, let's say, the details per segment in this queue. Before, it was fair to mention that there was some... Yeah, let's say in line with earlier remarks on some of these projects, also in Q3, we had some headwinds in that, in Construct U.K. We also mentioned the fact that indeed, that market is indeed a little bit cooler than before. You see that as also one of the items that we mentioned to see. We see some hesitations with customers to step into new projects. Good news is that now renovation is getting more and more important, so we are refocusing a bit on renovation projects in the U.K. as well. A bit the same like in the Netherlands, but then in residential, where we see indeed less activity in new build, but a lot of activity in renovation, compensating a bit the lack of new build in that sense. Okay, too bad that you just don't want to give, like, a small indication as to what that could be. I think a small range would be helpful, but if you don't want to, then I'll move on. On civil U.K., you mentioned strong results. Is there any impact from the U.K.'s decision not to continue with the northern part of HS2? Does that impact your sales funnel, or in general? Yeah, that's a very good question, because indeed we are active on the first legs of the HS2, and still for the coming years, and we'll have a lot of work for BAM going forward on the first legs to, let's say, that ends in Birmingham. Mm-hmm. So, short term, no impact at all. Long term, it's a bit more complex because indeed, the U.K. government announced to stop after Birmingham, to put it simple. Mm-hmm. It means that, well, in the same, let's say, announcement, they also made a remark that they still reserve, let's say, that money, which is about GBP 30 billion- Mm-hmm ... Will be invested in that part of the country, in the northern part of the U.K., in infrastructure. So in that sense, it can also give us opportunities because we have a strong position there, but difficult to predict. It's a long-term thing. Mm. For now, we have years to go in activity on high speed. Yeah. On the high-speed project, and then we have to see how the GBP 30 billion will be spent after that. True. True, but it's likely that it will not be allocating as much to rail as it was in the HS2 program, and you're very strong in rail, so seems like it's a small negative, even though it's still far out. Would that be a fair assessment? Yeah, I don't know. The people in our organization are pretty comfortable with this, and they think also in other, let's say, projects of the U.K. government, for example, electrification, we play a very strong role in that part of the country. So it can also be positive. So I would not, at this moment in time, give it that assessment. Okay, fair enough. A question for Frans. Can you give us the updated CapEx guidance for 2023 and your thoughts on 2024? ... So for 2023, we said in line with last year, so EUR 125 million. As I'm still in line with that, as we say, we are accelerating on the electrification and investing, so it will not be lower, maybe slightly, even a bit higher than that. So but around that number is still the right guidance. For next year, we will give data points in releasing the new strategy. Okay, and the final one, given that you have tax losses carried forward, is there any guidance you can give on cash taxes, especially in relation to the question about the net cash position at year-end? No. So let's not give new guidance other than that we did in Q2, where we said that we enjoy indeed, specifically in the Netherlands, the deferred tax assets, and you can consume half of them, so 12.5%, for the coming years, is the number for the Netherlands. And then we will give you more insight on the actuals for this year in Q4. And of course, when we do the new strategy, we will comment on many indicators going forward, also on tax. Thank you very much, gentlemen. Thank you much, sir. Ladies and gentlemen, sorry to interrupt you, sir. Ladies and gentlemen, as a final reminder, please press star one if you have any questions. We do not appear to have any further questions at this time. Mr. Joosten, I'd like to turn the call back over to you for any additional closing remarks. Thank you. Yes, thank you. Ladies and gentlemen, this brings us to the end of the call. Hopefully we meet again at the analyst meeting for our full year results on February 15, 2024. For now, I would like to thank the analysts for their questions and all shareholders and interested parties for listening in to the webcast. Your interest in BAM and your support is very much appreciated. We wish you a good day. Thank you very much, sir. Ladies and gentlemen. Thank you. That's the end of today's presentation. You may now disconnect.