Letter from the President to the stakeholders

GRI:

Dear All,

I submit to you the integrated annual report of the Budimex Group for 2021.

Last year was full of events influencing the shape of both the business in the construction industry and the overall functioning of the market and social life in Poland. Several important factors had an impact on the formation of the directions of sustainable development activities. In the reported year, there were significant changes in the Budimex Group. On 24 May 2021, an agreement on the sale by Budimex SA of all shares in Budimex Nieruchomości sp. z o.o. was signed. We believe that by focusing our resources and experience on key areas of activity we will be able to continue our strategic development with due diligence in all ESG areas.

We recognise the need to intensify the business’s efforts to stem the growing negative effects of climate change, so in order to strengthen its strategic planning in Area E (Environment), the Budimex Group conducted a Climate Risk Analysis, the results of which we publish in this report in Chapter 7.2 Climate Change and Long-Term Prospects for the Group’s Business. We also worked to meet the requirements of the first reporting cycle for compliance with the EU Taxonomy, and information on the results of our work can be found in this report in chapter 6. Compliance with the EU Taxonomy. As a result of our activities, Scope 1+2 market-based GHG emissions decreased by 23.1% over the last year for the whole Budimex Group.

2021 was a period of intensive development of the Budimex Group and preparation for geographical expansion in accordance with internal assumptions. As part of the planned activities on the German, Czech and Slovak markets, we established special purpose vehicles. We have signed the first order on the German market. The next milestone will be winning contracts on the Czech and Slovak markets, where we focus primarily on road and hydraulic engineering projects.

In accordance with the chosen development direction of the Budimex Group, we consistently work on photovoltaic and wind farm projects, both onshore and offshore. On 22 February 2022, we finalised the transaction for the purchase of a company implementing a project to build a wind farm with a capacity of up to 7 MW. For us, this is a first, very important step that marks Budimex’s entry into the segment of electricity generation from renewable energy sources in high-power projects. The new project in Budimex’s portfolio provides for construction of a wind farm consisting of 2 wind turbines with estimated annual production exceeding 25 GWh. We are planning further investments in renewable sources of energy with simultaneous entry onto selected foreign markets, in accordance with the development directions adopted by the Budimex Group.

The Budimex Group also invests in innovative solutions, including green technologies, i.e. aiming at the reduction of its carbon footprint. We are planning that by 2030 all the energy we consume will be obtained from green sources. We are also analysing investments in young technological companies operating in a pro-ecological way. As part of the Budimex Startup Challenge, we have selected 5 companies and committed to cooperate with them.

t the beginning of 2022, Budimex Group started the construction of a dam on the Polish-Belarusian border. Due to its specificity, the investment has prompted various communities to discuss and consider threats to biodiversity. The topic of dam construction activities on the border is addressed in ongoing communication with stakeholders. A summary of the most important information about the construction of the dam is provided in Chapter 7.7 Impact on the local environment and biodiversity.

Safety management on the conducted contracts is an extremely important area for the Budimex Group. As every year, we have organised a “Safety Week”, during which our employees receive practical knowledge on occupational health and safety. The Budimex Group has a process in place to ensure in-depth analysis of each safety incident. As a result of the analyses conducted in 2021, we have systematically improved and developed our systems – both through additional training and extension of existing procedures.

In 2021, we experienced the further development of the COVID-19 pandemic and its consequences. Budimex Group introduced a set of procedures and measures to ensure the safety of our employees as early as 2020. We ran a “Stay strong” programme supporting employees in taking care of their mental and physical well-being. We adapt the forms of communication with our stakeholders to the current recommendations and restrictions related to the pandemic. Despite difficult market conditions caused by the effects of the COVID-19 pandemic, and rising prices of key materials, we maintained operational continuity on the Budimex Group contracts and implemented strategic plans in the areas of development and ESG.

In the past year, we placed great emphasis on preparing to meet the Good Practices of Listed Companies 2021 in terms of diversity. The Budimex Group is an organisation that is open-minded and resolutely against any manifestation of discrimination. The basis for our activities in the area of diversity was the implementation of the Diversity Policy in 2021, which applies both to all persons employed by the Budimex Group and the Group’s top management structures.

As the leader of the construction sector in Poland, Budimex offers unique development opportunities for both potential and existing employees. In 2021, we continued our development offer as part of programmes such as the “Young Engineer’s Academy” and the “Contract Manager’s Academy”.

Despite the demanding environment, we honour our contractual obligations and carry out the tasks entrusted to us as stipulated, while ensuring quality and maintaining the highest environmental and social standards. In 2021, our efforts were recognised with numerous awards, including the Sustainable Economy Diamonds competition in the Sustainable Construction Leader category. We also won as many as five Construction of the Year 2020 awards, the most among all general contractors. Our construction of the new unit at Turów Power Plant was recognised by the State Labour Inspectorate as the safest construction site in 2021.

We are proud of our ever improving results. I would like to thank all employees as well as key stakeholders and investors for their contribution to the sustainable development of the Budimex Group.

Prezes Zarządu Budimex SA
Artur Popko

About the report

This publication is another integrated annual report which presents the entire financial, social and environmental performance of the Budimex Group.

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