32. Contingencies

32.1 Claims and legal proceedings

In the normal course of business, the Group is exposed to claims from (sub)contractors and clients that generally arise from a dispute about the quality of work and the amount of compensation. Additionally, the Group is exposed to certain risks following guarantees and indemnities provided in divestments of (former) subsidiaries. The Group recognises provisions for claims and/or exposures when a cash outflow is probable. When not resolved or settled, claims may subsequently involve legal proceeding which, if decided or settled adversely, may have a material impact on the Group’s financial position, operational result or cash flows.

Ethical misconduct or non-compliance with applicable laws and regulations (such as competition, bribery and corruption) could expose BAM to liabilities or have a negative impact on its business and reputation. BAM may be subject to administrative, civil or criminal liabilities including significant fines and penalties, as well as suspension or debarment from government or non-government contracts for some period of time.

32.2 Guarantees

Guarantees and bonds are provided in the ordinary course of business to clients, either by the Company (parental guarantees), by banks (bank guarantees), or by surety companies (surety bonds), to secure due performance of the Group’s contractual obligations. These securities can only be called by the client in case of (proven) default. It is not expected that any material risks will arise from these securities. The parental guarantees issued by the Company amount to €120 million (2024: €111 million). Guarantees and bonds issued by banks and surety companies amount to €1.3 billion (2024: €1.3 billion). Guarantee facilities (capacity at banks and securities to issue guarantees and bonds) amount to €2 billion (2024: €2.1 billion).