An anonymous benchmark of 42 European contractors. Where margin is leaking, by tier and by region — and what the top quartile is doing differently.
02 Apr 2026·12 min read·By M. Lindqvist, Director
The headline
Median EBIT margin across the 42 contractors in the panel was 2.8% in FY2025 — a 70-basis-point compression on FY2024 and the lowest reading since we started running the survey in 2018. The story underneath the median is more interesting than the median itself: the top quartile expanded margin by 110 bps in the same year. The middle did not just stagnate; it actively gave ground.
2.8%
Median EBIT margin, full panel, FY2025
+110 bps
Top-quartile margin expansion year-on-year
42
Contractors in panel · €1bn–€8bn revenue
How the panel is built
Forty-two contractors, all between €1bn and €8bn in annual revenue, across the UK, DACH, Nordics, Iberia and Benelux. Each submits audited segment-level data under NDA. We run the workbook; participants get a redacted peer set; nobody outside the panel sees individual numbers. The data covers FY2025 closes through end of February.
Where margin is leaking
Tendering, not delivery. The single biggest gap between top and bottom quartile is hit-rate at projected margin. The bottom quartile wins more work — and almost all of the extra work it wins is below their bid-curve assumption.
Variation orders. Time-to-cash on signed variations widened from 84 days (FY2024) to 119 days (FY2025) at the median. The top quartile held the line at 71 days. This is process, not luck.
Subcontractor solvency. Provisions for sub-tier failure rose 38% year-on-year. Most of it is concentrated in MEP and façades.
Indirect cost drift. Site indirects as a % of contract value rose 60 bps at the median; the top quartile drove theirs down 20 bps with tighter project-team sizing.
The contractors that expanded margin in 2025 did not have better projects. They had better tendering discipline and a faster variation-order machine. Both are management questions, not market questions.
— Survey commentary, p. 14
Region snapshot
UK — Median 1.9%. The most compressed market in the panel. Hit-rate discipline is the only reliable margin lever.
DACH — Median 3.4%. Held up better than expected; variation-order cash was the differentiator.
Nordics — Median 4.1%. The top of the table, dragged up by two outliers with strong industrial-segment exposure.
Iberia — Median 2.6%. Subcontractor failure provisions were the largest single hit; expect another tough year.
Benelux — Median 3.0%. A wide spread inside the median; the gap between best and worst was the largest of any region.
Figure 1 — EBIT margin distribution by region, FY2025
What the top quartile does differently
Three patterns repeat across every top-quartile contractor in the panel. None of them are cheap; all of them are cultural before they are systemic.
A standing tender review committee that can kill bids without escalating. The bottom quartile escalates. The top quartile shoots.
A variation-order desk that is paid on collected cash, not on signed claims. Different metric, different speed.
Quarterly subcontractor solvency reviews with right-of-replacement built into the head contract. Provisions fall when this exists.
What to do with this
Three things, in order. First, run your own number against the panel medians and find the largest single bps gap. Second, understand whether that gap is a tender-side or a delivery-side problem — they have completely different fixes. Third, do not start with the obvious one. The obvious one is rarely the largest.
The full anonymised dataset and per-region cuts are available to panel participants. Non-participants can request the executive memo on a briefing call.