The accounting information in the financial statements is partly based on estimates and assumptions. The Group makes these estimates and makes assumptions about future developments, based on factors such as experience and expectations about future events that may reasonably be expected to occur given the current state of affairs. These estimates and assumptions are continually reassessed.
Revisions of estimates and assumptions, or differences between estimates and assumptions and actual outcomes, may lead to material adjustments to the carrying amounts of assets and liabilities.
The most significant uncertainties, judgements and estimates in the preparation of the consolidated financial statements are related to:
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determining the best estimate for the measurement of work in progress (both debit and credit), including determining project progress and estimating total expected costs and the related revenue;
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determining the best estimate for the valuation of the strategic land positions, including the determination of the net realisable value; and
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determining the lowest cash generating unit and the annual tests for impairment of goodwill.
In addition to the nature of the estimates already described in the financial statements, the key elements of estimation uncertainty are explained below.
Macroeconomic developments
The Executive Board closely monitors macroeconomic developments at home and abroad. In 2025, the Dutch economy grew by approximately 1.7%, despite persistent inflationary pressure and continued labour market tightness. The impact of the import duties feared at the start of 2025 has, so far, remained limited. The lower mortgage rate compared with 2024 has created favourable market conditions in the housing market. However, the issues surrounding permit procedures and the lack of consistent government policy continue to constrain the volume of new-build homes in the Netherlands. For Working, macroeconomic conditions are favourable in essence. Demand for large integrated non-residential projects is strong, and the Group continues to succeed in taking on projects on a one-to-one basis. Recurring business in Services benefits from the fact that market demand exceeds supply. This applies to both service projects and management and maintenance activities. The market conditions for Connecting are also favourable in essence: demand from the energy market remains undiminished, as does the market for management, maintenance and renovation activities. The above means that the Group’s outlook for the coming years is good, partly due to a diversified order book that is sound in both size and quality and with a good balance between risk and earning capacity.
Climate-related matters
Climate change brings both risks and opportunities for the Group. These may have consequences for the medium-term forecasts that underlie the measurement of assets. The sustainability statement in the annual report includes an overview of the opportunities and risks relating to climate change. This statement shows that the opportunities are greater than the risks. The Group does not see any reason to adjust its medium-term projections downwards. The risk of impairment of assets recognised in the statement of financial position is limited, given the nature of the assets concerned and the relatively short realisation period. Any valuation risks are expected primarily in respect of:
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Older equipment recognised in property, plant and equipment at a low carrying amount and which may become less deployable over time, for example older lorries with excessively high greenhouse gas emissions. There is a second-hand market for the older material (at least for the time being), largely in second-world and third-world countries, which means that the current residual values can often still be realised. In addition, older material that cannot, for example, be used in town centres may still be used outside these areas. There is an ambition to replace this equipment with cleaner equipment.
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The risk of impairment of the 50% interest in AsfaltNu due to the impact of climate risks is medium. For example, requirements relating to emissions of greenhouse gases and other harmful substances are expected to become increasingly stringent, meaning that existing asphalt plants will, in time, require additional investments in cleaner solutions. Among other things, the Group seeks to mitigate this by investing, via AsfaltNu, in a new asphalt plant (the new European standard) in Utrecht and by developing more sustainable asphalt. In the long term, demand for roads is not expected to decrease; a more environmentally friendly alternative to asphalt is not yet available.
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In the long term, there is a risk that land may become unusable due to the effects of climate change and transition risks, such as flooding and water stress. The Group is confident that the Netherlands, as a prosperous country, will take measures against this, as there is still enough time to do this. Climate risks are, however, an integral part of the decision-making framework when acquiring land positions.
Measurement of projects
For more information on the key assumptions used in the measurement of projects, see note ‘6.17 Work in progress’.
Financing
The financing terms are further explained in note '6.22 Interest-bearing financial obligations'. One important condition involves satisfying the banking covenant ratios, specifically the interest cover ratio, the leverage ratio and the solvency ratio.
Proper management of project risks (see above) is crucial to complying with these ratios. The same applies to the realisation of the order book, the business plan and multi-year projections.
Pensions
The key actuarial assumptions for the calculation of the pension liabilities are outlined in note ‘6.23 Provision for employee benefits’. The expected contributions to the insured plans also depend on the agreements made regarding a new indexation measure in those plans.
Deferred tax assets
See note ‘6.15 Deferred tax assets and liabilities’ for more information on the key assumptions used in the measurement of deferred tax assets.
Strategic land holdings
See note ‘6.16 Inventories’ for more information on the key assumptions used in the measurement of the strategic land holdings.
Annual goodwill impairment test
Changes in market interest rates result in changes in the discount rate (WACC) used for the annual impairment test of goodwill. The risk of a future impairment as a result of a possible increase in market interest rates is only very limited, due to the substantial headroom between the carrying amount and the value in use of the relevant cash-generating units (see note '6.12 Intangible assets').
See note ‘6.12 Intangible assets’ for the main principles used in the annual determination of the recoverable amount of intangible assets.
Business combinations
The Group applies the acquisition method for the measurement of business combinations. The consideration transferred for the acquisition is generally measured at fair value, as are the net identifiable assets acquired. This is explained in more detail in note ‘6.2 Business combinations’.