2. Accounting policies

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union and also comply with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code.

The financial statements have been prepared on a going concern basis and, unless otherwise stated, under the historical cost convention. The material accounting policies applied in the preparation of these consolidated financial statements have been consistently applied, unless otherwise stated.

The preparation of financial statements requires management to use certain critical accounting estimates and to make judgements and use assumptions that affect the amounts of assets and liabilities, income and expense. Areas involving a higher degree of judgments or complexity, or areas with significant assumptions and estimates are disclosed in note 4.

2.1.1 Climate-related matters

The Group continuously takes steps to reduce its footprint and create sustainable environments. The Group’s strategy focuses amongst other things on the themes of decarbonisation, circularity and climate adaptation and is working towards the following targets:

• an 80% relative reduction (versus 2015) of Scope 1 and 2 CO₂ intensity by 2026.

• a 50% relative reduction (versus 2019) of Scope 3 CO₂ emissions in 2030.

• a 75% reduction (versus 2015) of construction and office waste intensity by 2030.

On a long term basis, the Group’s ambition is to have a reduced impact on climate and resources by 2050. 

The following table summarises the most relevant financial impacts of these targets:

In its 2025 double materiality assessment, the Group identified the Dutch nitrogen regulatory environment as a material pollution-related risk and the energy transition as a material long‑term opportunity with potential financial effects. Nitrogen developments were assessed for their possible impact on permitting, project timing and compliance costs, and they remain subject to political dynamics around future nitrogen standards. However, based on information available at year‑end, no project delays, impairments or provisions were applicable (Note 6.3). The energy transition creates strategic opportunities supported by strong market demand and long‑term investment programmes, but related financial impacts from capacity expansion and upskilling is considered limited.

Taking the above into consideration, the Group assessed that climate related matters do not have a significant adverse financial impact on the Group’s financial statements. 

2.2 Changes in accounting policies

The only IFRS amendment effective from 1 January 2025 is IAS 21 “Lack of Exchangeability” and does not have a material effect on the financial statements of the Group.

A number of new standards and amendments to existing standards and interpretations are effective for annual periods beginning on or after 1 January 2026 and have not been applied in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Group except for IFRS 18 Presentation and Disclosure in Financial Statements. This standard will replace IAS 1 and is expected to be effective on 1 January 2027. The standard intends to respond to investors’ demand for better information about companies’ financial performance. It includes updated and/or new requirements for presentation of the income statement, guidance on aggregation and disaggregation of information and disclosure of management-defined performance measures. The Group has completed an initial assessment and is preparing for implementation to ensure readiness by the effective date.

In 2025, BAM completed the divestment of its share in Invesis. Therefore, remaining loans and receivables previously presented as ‘PPP receivables’, together with the related borrowings, were reclassified to ‘Other financial assets’ and ‘Other loans’ to align their presentation with the underlying contractual characteristics. This reclassification is reflected in the statement of financial position and the related disclosures, and the comparative 2024 figures have been adjusted accordingly. This affects the following notes: Note 4 (Financial risk management), Note 20 (Trade and other receivables) and Note 24 (Borrowings).

2.3 Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The cost of an acquisition is measured as the aggregate of the consideration transferred, exclusive of acquisition related costs, which are expensed as incurred. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date; any gains or losses arising from such remeasurement are recognised in the income statement. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in the income statement. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised in the income statement.

Intercompany transactions, balances and unrealised gains and losses on transactions between group companies are eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity.

When the Group ceases to have control in a business, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in the income statement. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that business are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to the profit or loss or to retained earnings.

2.4 Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in ‘euro’ (€), which is the Group’s presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement within ‘exchange rate differences’.

The results and financial position of the group companies that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities are translated at the closing rate at the date of that balance sheet;

• income and expenses are translated at average exchange rates; and

• all resulting exchange rate differences are recognised in equity in ‘other comprehensive income’.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange rate differences arising from the translation of these items are recognised in ‘other comprehensive income’.

The following exchange rates of the euro against the pound sterling (£) have been used in the preparation of these financial statements:

• closing exchange rate: 0.872 (2024: 0.829)

• average exchange rate: 0.854 (2024: 0.846)

2.5 Derivative financial instruments and hedging

Derivatives are used for economic hedging purposes and not as speculative investments and are recognised at fair value. The recognition of subsequent gains or losses depends on whether the derivative is designated as a hedging instrument and if so, the nature of the hedged item. The Group designates the derivatives as hedges of a particular risk associated with a recognised asset or liability, a highly probable forecast transaction or the foreign currency risk of an unrecognised commitment.

At inception of the transaction the Group documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are effective in offsetting changes in fair values or cash flows of hedged items. A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• there is ‘an economic relationship’ between the hedged item and the hedging instrument;

• the effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship;

• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

The fair value of a hedging derivative is classified as a non-current when the remaining hedged item is more than twelve months and as a current when it is less than twelve months. The effective portion of changes in the fair value of cash flow hedges is recognised in other comprehensive income, the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are reclassified to the income statement in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps is recognised within ‘finance income/expense’ and the gain or loss relating to the effective portion of forward foreign exchange contracts is recognised within ‘exchange rate differences’. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecasted transaction is ultimately recognised in the income statement. When a forecasted transaction is no longer highly probable, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. When a disposal group is classified as held for sale, the Group concludes that any forecast transactions subject to hedge accounting are no longer highly probable. Hedge accounting is then discontinued and the cumulative gain or loss in equity is reclassified to the income statement.

2.6 Statement of cash flows

The statement of cash flows is prepared using the indirect method. Cash flows in foreign exchange currencies are converted using the average exchange rate. Exchange rate differences on the net cash position are separately presented in the statement of cash flows. Payments in connection with interest and income tax are included in the cash flow from operations. Paid dividend is included in cash flow from financing activities.

The purchase price paid for acquisitions of subsidiaries is included in the cash flow from investing activities, net of cash and cash equivalents acquired. In the statement of cash flows the interest paid related to leases is presented as part of the cash flow from operating activities, while the repayments are presented as part of the cash flows from financing activities.

Non-cash transactions are not included in the statement of cash flows.