Civil engineering has driven improved results and the order book increased with a number of multi-year civil engineering project wins.
Revenue for construction and M&E services rose by 8% to €3,266m (£2,546m). This was mainly attributable to the UK, including the benefit of the stronger pound sterling.
But restructuring measures are having to be planned to restore profitability for Dutch construction and property, which was less successful.
Royal BAM Group CEO Rob van Wingerden said: ‘I am pleased with the major advances we made in 2015 to successfully implement the Back in Shape programme. With our 21,500 people working together, we delivered on demanding targets. Our results for the year show we are turning around our performance, and there is more potential to be unlocked.”
The Back in Shape programme, which started in October 2014, was designed to turn around BAM’s performance by strengthening its culture, simplifying its structure and sharpening its processes. It was completed successfully by the end of 2015, meeting its key targets for cost reduction, projects in control, trade working capital reduction and divestments.
He added: “Our updated strategy for 2016-2020 – ‘Building the present, creating the future’ – will further improve the performance of our current project and business portfolio, and will position us for future opportunities. In a fragile macro-economic environment, our objective is to improve profitability and capital efficiency by ‘doing things better’. This means a more disciplined focus on market segments and projects where we can use either scale or expertise as critical success factor. Secondly, we will shape our business portfolio towards ‘doing better things’ by rationalising our propositions and developing new solutions for customers. Thirdly, we will invest in digitalisation to be an industry leader in how we build and what we build – ‘doing new things’.
He sees 2016 will be a year of reinforcement with a top priority to implement ‘Building the present, creating the future’.
For the full year 2016, the company expects the adjusted result before tax to be higher than the level of 2015. It anticipates a restructuring charge of approximately €20m, mainly related to the Dutch activities.
For 2015, revenue of €7,423m was up by €109m (2%) on the comparable revenue of 2014. The adjusted result before tax was €88.2m, up by €26m compared to last year.
In civil engineering, revenue slipped by 1% to €3,926m, despite apositive currency effect. Revenue was up at BAM International due to order phasing, in the UK driven by the currency effect and in Ireland reflecting the strong position in a recovering market. Revenue in the Netherlands was down due to lower activity levels at larger projects, while Belgium was impacted by project delays and lower government spending.
PPP had a good year, with a result of €18.7m coming from the growing portfolio and the transfer of two newly completed projects to a joint venture with PGGM. As expected, this was below the result of 2014 which had benefited from book profits on six projects transfers to the joint venture. PPP won four infrastructure and accommodation projects in 2015, a hit rate of 50%. These represent approximately €0.7 billion of construction revenues for the operational sectors in the coming years. The pipeline of active bids remains healthy, said the company.
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