Message from the CEO
‘Working together to better serve our clients, improving our financial performance, and acting as preferred employer and partner, creating a better, more sustainable future. We made further progress delivering on our strategy Building the present, creating the future.
The majority of our activities performed in line with our expectations in 2017. We had another year of positive business cash flow and our overall financial position remains strong. However, we are disappointed that the project loss at sea lock IJmuiden setback our 2017 result by €68 million and damaged our margin by 1 per cent-point.
BAM’s total revenue of €6,604 million was €372 million (5 per cent) below the level of 2016, of which €142 million was attributable to the weaker pound sterling. We have consistently maintained our tender discipline throughout BAM and our order book improved to €11,600 million (31 December 2016: €10,200 million).
Looking ahead we will accelerate our strategy execution to capitalise on our potential, and of course implement the key learnings from sea lock IJmuiden. Key priorities for 2018 are further IT standardisation, enhancing business control, digitalisation and improving pre-construction management.
Ensuring a safe working environment remains a top priority for BAM. Our safety and sustainability performance further improved. We are proud that BAM has won the 2017 Crystal Prize, the award for the most transparent 2016 integrated report in the Netherlands. The jury appreciated BAM’s efforts to firmly keep social issues on the agenda, and to include them in its integrated report. It specifically welcomed the way in which BAM invites its stakeholders to participate in discussions on the long-term vision and the 2020 strategic objectives.
Our strategic agenda for 2020 is aimed at achieving a double-digit return on capital employed in that year, by improving the performance of our current project and business portfolio, and positioning us well for future opportunities. A more disciplined focus on market segments and projects where we can use either scale or expertise as critical success factors (‘doing things better’), will contribute to improving our profitability and capital efficiency.
Secondly, we are shaping our business portfolio towards ‘doing better things’ by rationalising our propositions and developing new solutions for customers. Thirdly, we keep investing in digitalisation to be an industry leader in how we build and what we build – ‘doing new things’.
Our distinctive capabilities are enhanced by our One BAM culture through learning and collaboration and employee engagement. Four values – predictable performance, scalable learning, proactive ownership and open collaboration – underpin the successful further development of our Group. We work together to better serve our clients, improve our financial performance, and be a preferred employer and partner to create a better, more sustainable future.
Most of BAM’s markets are developing in a positive direction which is reflected in our order book. At the same time, we are feeling rising pressure on cost and availability in some parts of our supply chain. For the full year 2018 we expect an adjusted result before tax margin of around 2 per cent.
Also on behalf of Thessa Menssen and Erik Bax, I would like to thank all our stakeholders for their confidence in BAM and especially our employees for their hard work and commitment throughout the year. I am confident we will be able to accelerate on strategy delivery in 2018. With our combined capabilities and dedication we will reach our goals.’
Bunnik, the Netherlands, 20 February 2018
Rob van Wingerden,
Royal BAM Group nv