Half-year figures July 2015

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Albert Atkinson
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1 Half-year figures July 2015

2 Agenda Erik van der Noordaa, CEO Ballast Nedam Highlights 3 Peter van Zwieten, CFO Ballast Nedam Finances 7 Erik van der Noordaa, CEO Ballast Nedam Public offer 25 Q&A 2

3 Highlights 3

4 Highlights - results Results Ballast Nedam Operational loss of 10 million ( year 2014: 45 million loss) 4 million restructuring and reorganization costs 1 million book profit on disposals 3.2 million earn-out fee resulting from the sale of Ballast Phoenix Ltd 2014 Net result 15 million loss (-year 2014: 51 million loss) Order book excluding PPP projects 789 million (end of 2014: million) Order book including PPP projects million (end of 2014: million) Financing position 48 million negative (end of 2014: 38 million positive) 4

5 Highlights announced measures Announced measures Financial Refinancing successfully completed Approval of General Meeting of Shareholders for 20 million rights issue in 2015 Strategic Agreements with project partners to reduce interests in major infrastructure projects 5

6 Highlights operational divisions Operational divisions Infrastructure No deterioration on major projects Few projects were acquired; selective enrollment, focus on medium-sized projects Building & Development Disappointing results ongoing projects Better margin on new projects Additional contract Erasmus MC Rotterdam Provisional awarded Rijkskantoor de Knoop in Utrecht and Imaging Center VU MC Specialized companies & supplies Stable results for raw material and specialized companies Utilization losses in the concrete factories -year 2015, second half 2015 better utilization 6

7 Financial results 7

8 Highlights results divisions Results divisions Infrastructure Underutilization of capacity due to lower revenue Building & Development Positive contribution result project Erasmus Medical Center Rotterdam Project losses on: Hospital Nobo Otrobanda on Curaçao, development project Beusichem and PI Zaanstad Book profit 1 million on the disposals of the interests in the Benelux Secondary PPP Fund and PI2 B.V. Specialized companies & supplies Single earn-out fee of 3.2 million resulting from the sale of Ballast Phoenix Ltd in

9 Financial results Key figures x 1 million year 2015 year Revenue EBIT ( 10) ( 45) ( 65) Profit for the period ( 15) ( 51) ( 103) Solvency 0% 4% 2% 9

10 Financial results Revenue x 1 million year 2015 year Infrastructure Building & Development Specialized Companies Supplies Total

11 Financial results EBIT x 1 million year 2015 Reported year year 2015 Normalized year Infrastructure ( 9) ( 59) ( 59) ( 9) ( 59) ( 112) Building & Development 2 ( 3) ( 7) 1 1 ( 1) Specialized Companies Supplies Other ( 7) ( 7) ( 21) ( 3) ( 1) ( 1) ( 10) ( 45) ( 65) ( 10) ( 52) ( 102) Write-down - ( 4) ( 11) Bookprofit Exceptional gains Restructuring costs ( 4) ( 11) ( 28) Total ( 10) ( 45) ( 65) 11

12 Financial results Order book including PPP projects x 1 million year 2015 year Infrastructure Building & Development Specialized Companies Supplies Total

13 Financial results Infrastructure x 1 million year 2015 year Revenue EBIT ( 9) ( 59) ( 59) Margin (11.1%) (31.7%) (12.9%) Order book Assets

14 Financial results Infrastructure: ongoing projects N31 Traverse Harlingen P3 Schiphol Stena Line Focus medium-sized projects A9 Gaasperdammerweg Bridge at Ewijk A15 Maasvlakte - Vaanplein Opportunities industrial construction and concrete and civil engineering Selective tendering regarding foreign market 14

15 Financial results Building & Development x 1 million year 2015 year Revenue EBIT 2 ( 3) ( 7) Margin 0.7% (1.1%) (1.2%) Order book Assets

16 Financial results Building & Development: ongoing projects iqwoning Food Center Amsterdam E- and F-piers Schiphol Integrated complex projects Opportunities in general building PI Zaanstad Erasmus MC Rotterdam Thialf Residential market slight growth More homes in production of 2015 than in the whole of

17 Financial results Exposure property development x 1 million year Land positions Unsold stock under construction 3 4 Unsold stock delivered 7 7 Total on balance Liabilities to complete projects under construction - - Liabilities to acquire land positions Total liabilities off-balance Exposure property development

18 Financial results Specialized companies x 1 million year 2015 year Revenue EBIT Margin 1.6% 1.0% 2.6% Order book Assets

19 Financial results Supplies x 1 million year 2015 year Revenue EBIT Margin 7.0% 31.1% 11.3% Order book Assets

Financial results Specialized companies & Supplies:

OVT Arnhem Increase of production residential market

materials A9 Gaasperdammerweg Redevelopment Lus van

materials Development third-party market in Belgium

20 Financial results Specialized companies & Supplies: onging projects Specialized companies Supplies Dark OVT Arnhem Increase of production residential market offers opportunities to prefabrication market and raw materials A9 Gaasperdammerweg Redevelopment Lus van Linne Cautious recovery general building market offers opportunities to prefabrication market and raw materials Development third-party market in Belgium and Germany 20

21 Financial results Financing position x 1 million year 2015 year Cash Escrow account Bank overdrafts ( 41) ( 68) ( 3) Net cash 32 ( 25) 120 Recourse loans ( 80) ( 91) ( 82) Financing position ( 48) ( 116) 38 Non-recourse loans ( 4) ( 14) ( 5) Financing position including non-recourse ( 52) ( 130) 33 21

22 Financial results Loans x 1 million year 2015 year PPP loans Land bank financing Business loans Finance leases Other loans Recourse Non recourse

23 Financial results Package of financial measures Rights issue of 20 million underwritten by Sanderink Investments and the banking syndicate Two bridge loans totalling 20 million The finalized refinancing has the following components: Refinancing Subordinated bank loan of 10 million maturing on 31 March 2017 Subordinated bank loan of 43 million maturing on 31 March 2017 A revolving credit facility of 8.9 million expiring on 31 December 2015 Other facilities are: financing Rabobank and FGH bank of total 78 million maturing on 31 December 2016 (extension) A committed guarantee facility of 261 million 23

24 Highlights results announced measures Refinancing successfully completed Financial covenants which will be measured quarterly from the third quarter of 2015: Guarantee capital floor: Shareholders equity plus the subordinated loans Net cash floor: own freely available liquid assets netted against the drawn credit facility EBITDA floor: EBITDA corrected for impairments, book profit/losses and restructuring costs The three mentioned covenants include a 5 million headroom Approval of General Meeting of Shareholders Rights issue of 20 million detained until 31 December 2015 at the latest Amendment to the articles of association reducing the par value of the shares from 1.00 to

25 Public offer 25

26 Agenda Announcement Public offer Introduction Renaissance Construction Process to date Development share price Transaction details: financial and non-financial Strategic fit Attractive to stakeholders Indicative timetable public offer 26

27 Announcement public offer Announcement public offer Recommended public offer by Renaissance Construction 1.55 in cash per issued and outstanding depositary receipt 29.2% premium to the closing price of 18 May 2015, the day before Ballast Nedam announced it was conducting exploratory discussions with several foreign parties Board of Management and Supervisory Board of Ballast Nedam fully support and unanimously recommend the Offer Renaissance Construction supports Ballast Nedam s strategy Intended offer in the best interest of all stakeholders 27

Locations and markets Renaissance is a Turkish headquartered construction company, operating primarily in its home market and the CIS region.

28 Locations and markets Renaissance is a Turkish headquartered construction company, operating primarily in its home market and the CIS region. The company has shown an impressive growth track record and aims to become one of the top 10 international contractors out of Europe With Ballast Nedam s high quality engineering skills future projects can be executed in markets in which Renaissance has acquired a strong position. 28

29 Process to date Process to date First discussions with Renaissance originated in late 2014 In May 2015, Ballast Nedam received expression of interest from Renaissance Transaction Committee was formed consisting of Board of Management and Supervisory Board members Alternative options were also carefully considered Boards have carefully assessed the intended offer and in line their fiduciary duties, the strategic options and interests of all stakeholders KPMG and Leonardo & Co have issued fairness opinions Unanimous decision to choose for offer Renaissance by both Boards 29

30 Development share price Development Ballast Nedam share Sinds juni 2007 heeft Ballast Nedam een glijdende beurskoers gehad , , ,00 Close Slotkoers price (EUR) (EUR) , , , , ,

31 Transaction details: financial Announcement public offer: 1.55 Close Slotkoers price (EUR) , , , , , ,50 Offer Renaissance: EUR May Ballast Nedam issues press release on conducting exploratory discussions with several foreign parties on the possibilities of a merger or takeover of the company 29.2% The closing price of 18 May 2015 is the price on the day prior to Ballast Nedam announcing exploratory discussions with several foreign parties on the possibilities of a merger or takeover of the company. Compared to the 18 May 2015 closing price, the offer price is a premium of: 29.2% to the 18 May 2015 closing price; , , ,00 EUR % to the 5-business days volume weighted average price; and 31.2% to the 10-business days volume weighted average. Nov Dec Jan Feb Mar Apr Mei 2015 Jun Jul

32 Transaction details Transaction details: financial Recommended public offer by Renaissance Construction for Ballast Nedam of EUR 1.55 (cum dividend) in cash per issued and outstanding depositary receipt of Ballast Nedam; The Offer price represents a premium of 29.2% to the undisturbed closing price of 18 May 2015 Board of Management and Supervisory Board of Ballast Nedam fully support and unanimously recommend the Offer; Renaissance Construction shall make a capital contribution to Ballast Nedam of EUR 30 million upon successful settlement of the Offer, by: a 20 million rights issue and a 10 million private placement at a market customary discount; or to be determined by Renaissance Construction at its sole discretion in the event it holds more than 95%. The aggregate Offer Price will be financed from available cash in hand, providing a high degree of deal certainty; and At the offer price, Renaissance will purchase the Depositary Receipts from Navitas Capital, being Ballast Nedam's largest Depositary Receipts holder approximately 19.99% 32

33 Transaction details Transaction details: non-financial Renaissance Construction has agreed to certain non-financial covenants, including the following: Renaissance supports Ballast Nedam's business strategy and necessary improvement plans; Ballast Nedam maintains its corporate identity and brand; Ballast Nedam remains a separate legal entity with headquarters, central management and key support functions in the Netherlands; Renaissance respects all existing rights and benefits of the Ballast Nedam employees; Ballast Nedam remains properly financed to safeguard the continuity of the business and the execution of the strategy; and Protection of Ballast Nedam's minority shareholders' interests as well as non-financial covenants through the appointment of two independent Supervisory Board members with certain veto rights, for a period of at least three years after the settlement date. 33

34 Strategic fit Renaissance and Ballast Nedam: strategic fit Renaissance Proven competencies in building construction for business, residential, infrastructure, transport and industry Growing competencies in heavy industries with projects in chemicals, refinery, steel production and oil extraction Strategically increasing infrastructure exposure through acquisitions 2009: 10% interest in Porr (Austria) 2013: 100% interest in Alpine Bau GmbH Hergiswil (Switzerland) 2014: 100% interest in Heitkamp Ingenieur- und Kraftwerksbau GmbH (Germany) Ballast Nedam High quality engineering skills Entrepreneurial spirit and innovation towards more industrial ways of building Strong capabilities and experience in integrated projects 34

35 Attractive to stakeholders Benefits For shareholders the intended offer holds a premium 29.2% to the 18 May 2015 closing price and an opportunity to exit for a cash consideration versus new capital injection requirements and uncertain market outlook Strengthening Ballast Nedam s solvency Ballast Nedam will eventually benefit from international expansion to higher margin business Possibilities for international growth Enriched (international) career opportunities for employees 35

36 Indicative timeline Public Offer 1 October 2015 Long stop date Offer memorandum Offer period 22 July 2015 Announcement Public Offer September 2015 Approval AFM September 2015 Start offer period November 2015 End offer period* November 2015 Settlement August 2015 Filing offer memorandum September 2015 Offer memorandum issued November 2015 EGM November 2015 Offer unconditional (press release) * Possible post-offer period (max two weeks) 36

37 Q&A 37

RENAISSANCE CONSTRUCTION INTENDS TO MAKE A RECOMMENDED CASH OFFER FOR ALL THE ISSUED AND OUTSTANDING DEPOSITARY RECEIPTS OF BALLAST NEDAM

RENAISSANCE CONSTRUCTION INTENDS TO MAKE A RECOMMENDED CASH OFFER FOR ALL THE ISSUED AND OUTSTANDING DEPOSITARY RECEIPTS OF BALLAST NEDAM JOINT PRESS RELEASE This is a joint press release by Ballast Nedam N.V. ("Ballast Nedam") and RC RÖNESANS İNŞAAT TAAHHÜT A.Ş. ("Renaissance Construction") pursuant to the provisions of Section 4, paragraphs