BAM's operating companies are active in the business lines Construction and Property and Civil engineering, as well as through Public Private Partnerships.
BAM’s European home markets are the Netherlands, Belgium, the United Kingdom, Ireland and Germany. In addition the Group delivers projects in Denmark, Luxembourg and Switzerland. BAM International is providing services to clients outside Europe: Africa, the Americas, Asia Pacific, Australia, the Middle East and Antarctica.
Construction and Property
BAM operates non-residential construction activities in all its home markets, as well as in Switzerland and Denmark. In addition, BAM delivers residential construction projects, primarily in the Netherlands and Belgium.
BAM’s non-residential property development activities are carried out in the Netherlands, the United Kingdom, Ireland and Belgium. Family homes are developed and built mainly in the Netherlands.Development and construction of these projects are provided in fully integrated solutions.
The business line Construction and Property employs approximately 9,000 professionals.
The civil engineering activities cover all BAM’s home markets, as well as Denmark and Luxembourg. BAM International carries out civil engineering works in niche markets around the world.
The business line Civil engineering employs approximately 10,000 professionals.
Public Private Partnerships
In addition BAM is a well respected player in the European market for Public Private Partnerships projects. These projects deliver construction and recurring maintenance revenue for BAM's business lines, and operates concessions for roads, rail, education, health care and government buildings.
BAM PPP employs approximately 100 professionals.
For the financial, social and environmental performance of BAM’s business lines see chapter 3.
1 - Organisational structure
2 - Creating financial value
New business models
BAM’s unique product market combination and broad geographical presence, as well as its relationship with clients and the supply chain and stakeholders, enable BAM to continuously expand and improve its potential. BAM’s strategic agenda ‘Building the present, creating the future’ – focus project portfolio, shape business portfolio, create future portfolio – is reflected in BAM’s business model.
In line with BAM’s strategic objective to create a future portfolio, a startup programme was designed and implemented in 2016. This programme focuses on developing new business models at the edge of BAM’s existing organisation. Guided by the Lean Startup Methodology, new business models based on digital opportunities are being explored.
Creating financial value
Shareholders and financial institutions provide funds that BAM invests in its business lines Construction and Property and Civil engineering, as well as in Public Private Partnerships.
BAM’s strategic target for 2020 is an ROCE of over 10 per cent. BAM uses free working capital from the (non-)residential construction and civil engineering activities in selected property and PPP projects. These projects generate a return on investment and provide construction and recurring maintenance revenue for the business lines.
BAM uses capital from within its businesses for the continuation of an extensive range of products and services in its construction and property, civil engineering and Public Private Partnerships business lines. With the current product portfolio and expertise, and through the collaboration between these business lines in the five home markets, BAM can utilise free working capital from its activities for the investment in selected real estate and PPP projects, which again lead to new construction contracts.
For BAM’s performance, see chapter 3.1.
Creating environmental value
Sustainability is used as an umbrella term for the broader focus on sustainable innovation, a solution-oriented approach (exceeding customer expectations) and for benefits arising from the use of digital construction. BAM aims to have a net positive impact on climate change, material resources and people by 2050. This is to be achieved in close conjunction with our supply chain, through a digital and innovative rational in our projects and realising social, economic and environmental benefits. BAM is able to offer life cycle solutions that use less energy and are more efficient to manage and operate. The company uses as much materials that can be re-used at the end of their current life and therefore maintain higher residual values for key assets in the built environment. In BAM’s strategy these two strands are called ‘climate positive’ and ‘resource positive’.
3 - BAM’s vision on sustainable value creation
BAM delivers products to the market and/or services to its clients that lead to a greater reduction of emissions. This includes the development of new assets that have a low or zero carbon footprint, or improves the existing; the deployment of renewable energy systems or energy reduction measures for clients or communities, as part of an ESCO (Energy Service Company) offering. Additionally BAM offers the delivery of reductions in lifecycle carbon impact of buildings and infrastructure through material selection, design or asset management. This way, BAM strives to reduce its own impact on natural capital as well as the impact in the supply chain, both up- and downstream.
Consumption of raw materials, land use and producing waste during the building process have a negative impact on natural capital. The Group has made great progress in reducing construction waste by increasing efficiency, using off-site production and by eliminating waste from the supply chain during the life cycle of its developments. The ultimate goal is to design out waste and avoid the creation of waste. The ability of BAM to achieve this depends in part on matters over which the company has limited direct influence, such as national and European waste legislation. However, acknowledging that the creation of waste costs money – in wasted materials and in processing, disposing of and dealing with waste – and therefore by aiming to reduce
BAM’s waste ‘budget’ to zero, will lead to benefits across the value chain as well.
BAM creates value by having the lowest possible negative impact on natural capital and, ideally, contributing to the restoration of natural resources. By embracing the principles of the circular economy, products and services are (re)designed to ensure that materials for constructing buildings and infrastructure are natural and renewable or can be recovered at a high quality. This may include working together with suppliers in developing ‘circular’ materials and building elements, new business models, as well as designs that allow assets to be used in different ways and therefore retain their value over a longer period of time. Circular economic value propositions provide new opportunities to deploy new business models.
For BAM’s environmental performance see chapter 3.3.
Creating social value
BAM aims to make a real and positive difference in the lives of people with whom colleagues come into contact with through its activities. This is about adding real value through activities that would not occur without BAM’s support/intervention, and also about supporting people through grassroots movements as well as those with a wide reach. BAM's activities for 'enhancing lives' are largely focused on employment, training, education, community involvement and charity. Outcomes support one or more of social, economic and environmental sustainability leading to a positive impact on social and human capital. This will involve direct support from BAM, but also through partnerships with its supply chain.
For BAM’s social performance see chapter 3.2.
The Group’s value chain management and subcontractor engagement provide the opportunity to bring value to BAM’s clients from innovations and cross-fertilisation from the value chain. With lean planning techniques, BAM incorporates schedules of supply chain partners, allowing for a reduction in labour and equipment costs. Value chain management requires sharing BAM’s business principles and policies on sustainability, including its targets, and BAM requires its major value chain partners to share information on their CO2 emissions and circular developments.
BAM’s operating companies achieve most of their turnover in collaboration with their subcontractors and suppliers. More than 75 per cent of turnover is sourced from supply chain partners. Projects may also be carried out in collaboration with other construction companies as part of a joint arrangement.
Natural, human and financial capital are typically sourced locally in BAM’s home markets. In the Netherlands, 97 per cent of BAM’s purchases were locally sourced in 2017. BAM expects comparable percentages in its other home countries. BAM operates mainly in a business-to-business environment and in a business-to-government environment. Within all its European home countries, BAM works for national and local governments as well as property investment and development companies. An example of typical supply chain partners are mechanical and electrical suppliers, often in conjunction with local labour suppliers as well as local small and medium enterprises.
The construction sector provides services on project basis. An increasing part of the design and engineering takes place digitally according to the concept 'make it before you make it'. A project is virtually built using simulation techniques, which among other things leads to a reduction in failure costs and a more efficient construction process.
The sooner BAM becomes involved in the development, the greater the ability to realise sustainable development at lower costs. As soon as BAM is the project developer or BAM is part of a Public Private Partnership, BAM is in the best possible position to maximise the sustainability results, because the company can then already set sustainability ambitions in the early stages of its development. This makes it possible to consider life-cycle thinking already in the early design stages, allowing better utilisation of the invested capital against lower maintenance and operational costs.
Innovative solutions and intellectual capital are developed by BAM's operating companies during the advancement of sustainable solutions to meet the needs of its customers. BAM also supports a number of organisations in the research of specific technology and process innovations. Moreover BAM is a member of a number of international and leading forums that share best practices on sustainability (see chapter 3.2 Stakeholder engagement and material themes).
4 - How BAM creates value