26. Provisions

Provisions for warranties, restructuring costs, claims/legal obligations, associates and joint ventures and onerous contracts are recognised when: (a) the Group has a present legal or constructive obligation as a result of past events; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) the amount can be reliably estimated.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

Restructuring provisions are recognised when a detailed formal plan has been approved, and the restructuring has either commenced or has been announced publicly. Restructuring provisions comprise lease termination penalties and employee termination payments. Future operating losses are not recognised. If the Group’s share in losses exceeds the carrying amount of the investment (including separately presented goodwill and other uninsured receivables), further losses will not be recognised, unless the Group has provided securities to the associate or joint venture, committed to liabilities or payment on behalf of the associate and joint venture. In that case, the excess will be provided for.

Provisions are classified in the balance sheet as follows:

2025

2024

Non-current

85,806

64,646

Current

133,329

116,155

219,135

180,801

The non-current part of provisions is discounted at a rate in the range of 0% to 6% (2024: 0% to 6%).

The provision for onerous contracts is based on judgments and uncertainties as described in note 3.1. Approximately 49% of the provision is current in nature (2024: 65%).

The provision for warranty concerns the best estimate of the expenditure required to settle complaints and deficiencies that became apparent after the delivery of projects and that fall within the warranty period. In reaching its best estimate, the Group takes into account the risks and uncertainties that surround the underlying events which are assessed periodically. Approximately 67% of the provision is current in nature (2024: 55%).

The provision for claims and legal obligations represents the Group’s best estimate, at the reporting date, of the expenditure required to settle present obligations arising from claims, building repair responsibilities and other compliance related matters. The recognised amount includes expected costs for investigations, remediation activities, building repair work and for addressing matters related to evolving building safety requirements. Approximately 89% of the provision is current in nature (2024: 100%).

Warranty

Restructuring

Claims and legal obligations

Joint ventures

Onerous contracts

Other

Total

As at 1 January 2024

30,957

7,117

-

2,334

148,071

8,415

196,894

Charged/(credited) to the income statement:

- Additional provisions

15,960

12,236

6,796

651

133,734

1,072

170,449

- Release

(3,307)

-

-

-

(3,880)

(1,499)

(8,686)

Used during the year

(6,798)

(15,559)

-

(1,584)

(153,471)

(1,691)

(179,103)

Exchange rate differences

-

-

139

-

1,073

35

1,247

As at 31 December 2024

36,812

3,794

6,935

1,401

125,527

6,332

180,801

Charged/(credited) to the income statement:

- Additional provisions

23,570

8,563

40,757

3,571

98,302

4,575

179,338

- Release

(5,610)

(673)

-

-

(9,287)

(46)

(15,616)

Used during the year

(10,185)

(7,760)

(2,050)

(1,123)

(102,179)

(472)

(123,769)

Exchange rate differences

-

-

(934)

-

(621)

(64)

(1,619)

As at 31 December 2025

44,587

3,924

44,708

3,849

111,742

10,325

219,135

As at 31 December 2025, other provisions include €3.0 million for the remaining exposure on financial guarantees related to the sale of BAM Deutschland AG (2024: €3.0 million).