Message from the CEO
BAM has much to be proud of. With a history stretching back 150 years, and through a variety of acquisitions, we have transformed from a small carpentry business into a truly international construction firm – one of the largest in Europe.
To celebrate 150 years of constructing and maintaining some of the world’s most iconic buildings and infrastructure projects, BAM will plant 150,000 trees
in 2019 – giving back to the communities in which we work.
2018 has been a year of good progress for BAM. Most of our businesses performed well, which reflected the benefits of ongoing improvements in our tendering and project execution. Although the sea lock IJmuiden adversely affected our result and cash flow, we have made further steps in de-risking the project. Our overall cash flow for the year was positive and our financial position remained strong.
Adjusted result before tax for the year 2018 improved by €128.3 million to €153.2 million. The adjusted pre-tax margin was 2.1 per cent (0.4 per cent). The overall order book growth (€12,700 million at year-end 2018 compared to: €11,600 million at year-end 2017) was driven by positive market conditions and winning multiyear projects especially in civil engineering in the UK. The margin on the new order intake continued to improve and is well within the strategic target margin bandwidth of 2 per cent to 4 per cent.
Worldwide safety campaign
In 2018 our safety performance improved again and we launched a new campaign: Your Safety is My Safety. We are very grateful to all 20,000 BAM employees for their continuous attention to safety and their efforts to incorporate safer working conditions.
This year’s Worldwide BAM Safety Day reflected our collective responsibility for safety, facilitating an open dialogue to engage with all persons involved (employees, supply chain, clients).
Generating sustainable value for all our stakeholders
Our purpose as a company is clear: to create sustainable environments that enhance people’s lives. Sustainable in terms of the quality of experience for the hundreds of thousands of people touched by our projects – including our own employees. Providing our clients with sustainable solutions across the total lifecycle of an asset. Minimising our environmental impact. And generating sustainable value for all our stakeholders. To make sure we are delivering on our purpose we have defined clear targets in three categories: people, planet and profit. People, in terms of safety, our employee engagement and enhancing the lives of people by creating skills and learning opportunities and through voluntary and charitable work. Planet, in terms of our net positive impact, waste and CO2 reduction. And profit, in terms of return on capital employed, margin, trade working capital and property investment.
Accelerate strategy execution
To fulfil our purpose, we need to deliver on our strategy: Building the present, creating the future. Doing things better, doing better things and doing new things, including innovating through digital technologies and digital construction so we can anticipate any issues before the implementation phase and make our performance more predictable – in other words, we make it (digitally) before we make it (physically). Enabling our people, our biggest asset, to capitalise on state-of-the-art knowledge and resources, talent and training, and rolling-out our uniform project approach and uniform business controlling, as well as developing an organisational structure and governance to support our One BAM way of working, those are the things that enable us to get the very best out of our company for all our clients and other stakeholders, today and in the future.
For 2019, we expect the revenue to be around €7 billion and aim to further improve the adjusted result before tax margin within the strategic target range of 2 to 4 per cent.
Also on behalf of Frans den Houter 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. We are confident that more rigorous strategy execution will enable us to deliver on our 2020 targets supported by our digital and sustainability agenda.
Rob van Wingerden,
CEO Royal BAM Group nv
Bunnik, the Netherlands, 19 February 2019