Message from the CEO
'Strategy will provide the basis to restore profit and will serve as a foundation to play a leading role in the construction industry’
BAM’s results in the past year do not reflect the underlying potential of the Group. Especially, Covid-19 has been a cloud over our markets, businesses, clients and colleagues in 2020, and continues to drive uncertainty in our markets. I am really impressed with how our people have responded to the challenge by adapting our operations, preserving our resilience and supporting our communities.
BAM’s adjusted result before tax for the year 2020 was €34.3 million (2019: €74.1 million). The adjusted pre-tax margin was 0.5 per cent (2019: 1.0 per cent). The overall order book was €13,800 million at year-end 2020 (year-end 2019: €12,659 million).
From an operational perspective, our activities in Dutch Construction and Property and BAM PPP contributed well in 2020. In our other businesses, there is clearly room for improvement. The additional loss by BAM International was disappointing.
In July 2020, BAM decided to wind down the operating company BAM International, active outside our European markets, given the lack of a positive outlook. This wind-down and the Cologne metro settlement resulted in a significant improvement of BAM’s risk profile.
In December, we announced the extension of our partnership with PGGM. PGGM Infrastructure Fund has acquired a 50 per cent interest in BAM PPP. We were pleased to announce this important milestone, which will deliver accelerated growth benefiting both shareholders. BAM PPP will continue to work closely with its BAM sister companies to offer our clients the best whole-life solutions. The expertise and global networks of both organisations will also support the development of new investment opportunities.
We are on track with our cost reduction programme, announced at the end of September, with a target of €100 million annually. Although the necessity is widely accepted, for many of our staff it has been (and for some it still is) an uncertain period.
This integrated report illustrates positive developments in areas such as digital construction, innovation and sustainability. BAM’s inclusion in CDP’s Climate A list (Carbon Disclosure Project, January 2021) is again a recognition of our efforts to reduce emissions and to achieve a net-positive impact.
Ensuring a safe working environment remains our top priority. It is very regrettable that in 2020 a long-standing colleague died in an accident at a BAM site, and our thoughts are with his family.
BAM recognises and values the benefits that diversity brings. In 2020, BAM appointed women managing directors at two operating companies, BAM Infra Nederland and BAM Interbuild.
Since my appointment as CEO on 1 September, we have started to define our new strategic agenda in order to create more value for our shareholders and solid prospects for all our stakeholders, including our employees.
Under our new strategy for 2021-2023, ‘Building a sustainable tomorrow’, the Group will restructure its portfolio of businesses to focus on markets and projects where it can leverage its proven competitive strengths and serve the growing demand for sustainable solutions in the construction sector, while substantially lowering our projects’ risk profile. Serving all our stakeholders – employees, clients, partners, suppliers and the communities in which we do business – BAM will structurally improve the profitability and predictability of the Group as a client- and service-driven business.
When visiting some of BAM’s projects, I saw that our teams are well-prepared and extremely motivated. BAM is a company with good capabilities and much potential.
I therefore firmly believe that our strategy for success will provide the basis, not only for the restoration of profit and cash conversion, but also serve as a foundation to play a leading role in the construction industry in the years to come. I look forward to working closely with my colleagues to achieve this ambition.
BAM will provide its outlook for 2021 in due course.
Finally, also on behalf of the Executive Committee, I would like to thank all our stakeholders for their confidence in BAM. I would like to especially thank our employees for their hard work and commitment to serve our clients.
Bunnik, the Netherlands, 17 February 2021
CEO Royal BAM Group nv
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