Annual Report
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Annual Report WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf Key Revenue Net result attributable to Year-end order book (in € million) shareholders (in € million) (in € million) 10,000 360 14,000 12,000 349.0 8,000 288 13,800 13,100 8,954 10,400 8,646 8.646 8.646 10,000 7,770 7.770 7,493 7.493 7,425 6,000 7,425 216 8,000 8,900 9,100 6,000 4,000 144 4,000 153.3 2,000 72 137.0 106.4 7.493 2,000 56.0 0 0 0 03* 04 05 06 07 03* 04 05 06 07 03* 04 05 06 07 Equity / capital base Net result per share Dividend per ordinary share (in € million) (fully diluted) (in € 1.-) (in € 1.-) 1,400 3.0 1.0 1,200 2.4 0.8 0.90 2.60 1,000 1,266 994 1.8 0.6 800 940 790 600 1.2 0.4 693 0.45 1.28 582 2007 584 0.40 556 400 1.21 1.04 0.31 0.31 441 435 0.6 0.2 200 0.68 0 0.0 0.0 / 03* 04 05 06 07 03* ** 04** 05 06 07 03 04 05 06 07*** Equity Capital base * Based on NL GAAP ** Excluding competition fine *** Proposal Revenue by sector 2007 Order book by sector 2007 Margin results by region 2007 2006 2% 2% Construction 2,3% -1,2% 2% 1% 1% 4% Property 7,3% 6,8% Civil engineering 3,2% 3,6% 38% 40% 39,8% 41% 34% Public-private partnerships 3,1% M & E contracting 5,6% 4,2% Consultancy and engineering 13,0% 11,8% 21% 14% Revenue by region 2007 Margin results by region 2007 2006 5% Netherlands 4,5% 4,2% 5% United Kingdom 5,0% 4,2% 9% Belgium 3,9% 2,2% 5% 42% Ireland 3,8% 4,7% 7% Germany -0,9% -15,2% 27% United States 3,4% 3,8% Worldwide 9,4% 9,7% WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf figures Contents Key figures (in € million, unless otherwise indicated) 3 Foreword 5 Outlook 2007 2006 6 Organisational structure and offices Revenue 8,954 8,646 8 Mission, vision, ambition and goals Operating result 1 340.7 262.6 10 Royal BAM Group nv shares Result before tax 428.1 228.4 14 Report by the Supervisory Board to the Net result attributable to shareholders 349.0 137.0 shareholders 22 Remuneration report Revenue from continued operations 8,539 8,150 26 Particulars of the Supervisory Board members Operating result from continued operations 1 327.2 237.2 28 Particulars of the Executive Board members Result before tax from continued operations 341.8 209.8 Net result from continued operations 268.3 124.8 Report by the Executive Board 29 Financial results Earnings per share (x €1.-) 34 Acquisitions and disposals - basic 2.80 1.11 35 Corporate governance - basic, from continued operations 2.15 1.01 40 Decision on article 10 Takeover Directive - fully diluted 2.60 1.04 45 Risk and risk management - fully diluted, from continued operations 2.01 0.95 49 Corporate social responsibility 50 Human resources management Dividend per ordinary share (in €1.-) 2 0.90 0.45 51 Works Councils 1 Payout ratio (as percentage) 34 41 51 Construction industry barometer Number of issued ordinary shares 55 Construction 2007 as at year-end (x 1,000) 129,906 123,758 63 Property Total number of issued shares 67 Civil engineering as at year-end (x 1,000) 136,016 136,012 75 Public-private partnerships Closing price ordinary shares on 31 December (in €1.-) 16.10 14,69 77 Mechanical and electrical contracting 79 Consultancy and engineering Equity attributable to shareholders 993.5 692.6 Capital base 1,265.8 939.8 Financial Statements 2007 81 Contents of Financial Statements Order book 3 13,800 13,100 82 Consolidated balance sheet as at 31 December 83 Consolidated income statement Net addition to tangible fixed assets 131.7 119.2 84 Consolidated statement of equity Depreciation/amortisation: 85 Consolidated cash flow statement - Tangible assets 93.6 96.5 86 Notes to the consolidated financial statements - Intangible assets 7.7 3.4 147 Statutory balance sheet as at 31 December Cash flow before dividend 450.3 236.9 147 Statutory income statement 148 Notes to the statutory financial statements Average number of employees 28,007 28,330 Number of employees at year-end 27,578 30,338 Other information 156 Proposed appropriation of profit for 2007 Ratios (in %) 156 Provisions of the Articles of Association concerning Result before tax as % of income 1 4.8 2.7 profit appropriation Result before tax, as % of income from 157 Anti-takeover measures continued operations 1 4.0 2.6 159 Auditors’ report Net result as % of revenue 3.9 1.6 160 Principal subsidiaries and associates Net result as % of average equity 41.4 21.5 161 Royal BAM Group executive officers 162 Ten year key figures Capital ratios: 164 Key financial dates - equity attributable to shareholders as % of total assets 14.2 10.7 - capital base as % of total assets 18.1 14.7 1 2006: excluding fines. 2 Dividend proposal 2007. 3 The order book comprises both signed contracts and verbally agreed upon orders. WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf Shopping centre Lilien-Carré near Wiesbaden central station (BAM Deutschland in joint venture). 2 2007 WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf Annual Report 2007 Foreword Royal BAM Group nv can look Employer of choice back on a successful financial BAM has expressed its desire to be the employer of choice in year in 2007. Sustained by the construction sector. In light of the loyalty of the consistenly favourable workforce and our ability to attract new employees, BAM circumstances in our five takes pride in being a good employer. One of the areas European home markets, where we can undoubtedly make further progress is that of BAM achieved a net profit of ‘women in the building industry’. We are endeavouring to €349 million on a turnover of strike a more proportionate balance between men and approximately €9 billion. We women, including in managerial positions. With all the have also taken many steps in attention being paid to cultural changes and innovation in the past year towards the our sector, BAM should be at the forefront of creating career objectives we set out in the strategic agenda for 2009. opportunities for women. We hope that BAM, as a Group, The successes are a substantial incentive for us to continue will make clear progress in this regard during 2008. developing on our strategic course during 2008. We explain the key points of our Strategic Agenda 2007-2009 on page 8 Expectations of this Annual Report. BAM is doing well, and our entire organisation - from construction operatives to management – is making an The net profit includes a figure of €72 million from the sale enormous effort and displaying great enthusiasm for the of our American operating company Flatiron. This sale fits in continued development and improvement of performance. with our Strategic Agenda because one of the main policy The Board is deeply grateful to all BAM Group employees 3 lines is to strengthen the Group’s European base, as is for their efforts. Based on current information and in light apparent from the acquisition of the Belgian project of the quality of the order book, Royal BAM Group expects 2007 developer Kaïros and the Belgian infrastructure contractor to achieve a turnover in the region of €9 billion for 2008, Betonac. and deems a net profit of at least €250 million feasible. Share price Bunnik, Netherlands, 19 March 2008 The mood on the European stock exchanges was depressed J.A.P. van Oosten during the second half of 2007, partly because of the continuing credit crunch, and BAM shares unfortunately could not escape the effects. BAM’s share price rose by approximately 10 percent in 2007, thus outperforming the Midkap (minus 3 percent) and the Netherlands Construction and European Construction sectors (minus 20 percent and minus 1 percent respectively). Sustainability Report 2007 was not only succesful for BAM in the financial sense. For example, our determined efforts focused on safety improvement in all of our activities has yielded improved performance in our statistics for the fourth year in a row. However, our commitment to sustained improvement of safety performance remains a priority. The importance that we attach to safety and other aspects of sustainable corporate social responsibility justify a more extensive report than would be appropriate in the confines of this annual report. To allow a report on sustainability issues and corporate social responsibility in the most transparent manner possible, BAM has published a separate sustainability report. WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf Surtees Bridge, Stockton-on-Tees (Nuttall). 4 2007 WorldReginfo - 41b92370-e491-4424-8ce0-355552a5baaf Outlook Royal BAM Group started 2008 with a healthy order book regulations and making resources available to tackle of €13.8 billion (year-end 2006: €12.2 billion on a deprived areas, will probably lead to a further increase in comparable basis). This increase, of about 12 percent, was residential construction. It is expected that BAM will be in achieved throughout the Group. Of the total order book, a position to benefit from such an increase. Royal BAM Group expects to carry out contracts amounting to €7.5 billion in 2008 and €6.3 billion in Euroconstruct forecasts growth in all of the Group’s home subsequent years.