2011 Annual Report Revenue Net result attributable to shareholders Year-end order book (in € million) (in € million) (in € million) 10,000 400 14,000 12,000 8,000 320 13,800 13,100 8,954 8,835 349.0 10,000 8.646 12,100 8,324 7,920 7.770 11,100 6,000 7,611 240 8,000 10,400 6,000 4,000 160 4,000 161.9 2,000 80 126.0 2,000 31.3 15.3 0 0 0 07 08 09 10 11 07 08 09 10 11 07 08 09 10 11 Equity / capital base Net result per share Dividend per ordinary share (in € million) (fully diluted) (in €) (in €) 1,400 3.00 1.00 1,200 1,362 2.40 0.80 0.90 1,302 1,266 1,000 2.60 1,162 1,098 1,100 1,077 994 1.80 0.60 800 875 847 600 1.20 0.40 0.50 Netherlands 400 1.20 2011 0.60 United0.20 Kingdom 200 0.18 0.08 0.54 Belgium 0.03 0.16 0 0.00 0.00 0.10 07 08 09 10 11 07 08 09 10 11 Germany 07 08 09 10 11* Ireland Equity Capital base *proposal Worldwide Revenue by sector year-end 2011 Order book by sector year-end 2011 Result before tax/revenues 2011 2010 by sector 3% 6% Construction and M&E services 2.2% 3.0% 8% Property neg. neg. Civil engineering 2.4% 2.8% 38% 39% Public Private Partnerships 2.1% 1.1% 44% 44% Consultancy and engineering 6.8% 6.5% 8% 10% Revenue by region year-end 2011 Netherlands 3% 5% 9% United Kingdom Belgium 11% 46% Germany Ireland Worldwide 25% Result before tax/revenues 2011 2010 by sector Construction and M&E services 2.2% 3.0% Property neg. neg. Civil engineering 2.4% 2.8% Public Private Partnerships 2.1% 1.1% Consultancy and engineering 6.8% 6.5% Contents Key figures (in €million, unless otherwise indicated) 3 Foreword 5 Outlook 2011 2010 6 Organisational structure and offices Revenue 7,920 7,611 8 Core of BAM’s strategy, mission and ambition for 2020 Operating result 150.7 (30.3) 13 Royal BAM Group shares Result before tax 158.7 26.0 17 Report by the Supervisory Board to the shareholders Net result attributable to shareholders 126.0 15.3 28 Remuneration report 36 Particulars of the Supervisory Board members Earnings per share (x €1,–) 38 Particulars of the Executive Board members • Basic 0.54 0.08 • Fully diluted 0.54 0.08 Report by the Executive Board 39 Financial results Dividend per ordinary share (in €1,–) 1 0.16 0.03 44 Declaration in accordance with the Dutch Payout ratio (as percentage) 30 45 Financial Supervision Act Number of issued ordinary shares as at year-end (x 1,000) 232,938 231,766 44 Acquisitions and disposals Total number of issued shares as at year-end (x 1,000) 232,938 232,585 45 Corporate governance Closing price ordinary shares on 31 December (in €1,–) 3.26 4.60 54 Decision on Article 10 of the Takeover Directive 57 Risk and risk management Equity attributable to shareholders 1,162.4 1,099.9 65 Corporate social responsibility Capital base 1,362.4 1,301.5 67 Human resources management 69 Worker participation 1 Order book 2 10,400 12,100 70 Construction industry barometer 2011 72 Construction and mechanical and Net addition to tangible fixed assets 57.2 68.5 electrical services Depreciation/impairments 80 Civil engineering • Tangible assets 94.9 97.3 92 Property • Intangible assets 11.1 10.9 98 Public Private Partnerships • Other impairments - 127.3 100 Consultancy and engineering Cash flow before dividend 232.0 250.9 Financial statements 2011 Average number of employees (fte) 26,639 26,840 103 Contents of the financial statements 2011 Number of employees at year-end (fte) 27,007 26,088 104 Consolidated balance sheet as at 31 December 105 Consolidated income statement Ratios: 106 Consolidated statement of comprehensive income • Result before tax as % of revenue 3 2.0 2.0 107 Consolidated statement of equity • Net result for the year as % of revenue 1.6 0.2 108 Consolidated cash flow statement • Net result for the year as % of average equity 11.1 1.6 109 Notes to the consolidated financial statements 177 Company balance sheet as at 31 December Capital ratios: 177 Company income statement • Equity attributable to shareholders as % of total assets 16.1 15.4 178 Notes to the company financial statements • Capital base as % of total assets 18.9 18.2 Other information 1 Dividend proposal 2011. 187 Proposed appropriation of profit for 2011 2 The order book comprises both signed contracts, as well as verbally agreed upon orders. 187 Provisions of the Articles of Association concerning 3 Before impairment. profit appropriation 188 Anti-takeover measures 191 Independent auditor’s report 192 Overview of principle subsidiaries and associates 193 Royal BAM Group nv executive officers 194 Ten-year key figures 196 Key financial dates Sporen in Arnhem: modernisation and expansion of Arnhem Station (platforms, roof, new track, viaducts, noise barriers). BAM Rail, BAM Civiel, BAM Infraconsult, BAM Infratechniek, BAM Utiliteitsbouw, BAM Wegen, (in joint venture). Annual Report 2011 Foreword Royal BAM Group nv hereby presents the Annual Report for the financial year 2011 with a net result of €126.0 million and a revenue of €7.9 billion. Although the European construction and property markets were under great pressure for the third year in a row (and it is not clear when volumes and margins may start to recover), BAM can look back on a successful 2011. BAM’s operating companies are obviously not immune to decreasing volumes, stiff competition and a sharp drop in prices, but thanks in large part to the Group’s earlier strategic decisions – including a focus on excellence in project execution, risk management and sustainable operations – BAM was able to deliver solid and stable performances given the conditions on the market. The currently limited prospects for further growth for Everyone in the BAM Group continues to work with the Group on most of BAM’s markets were the main undiminished enthusiasm and commitment to further 3 reason why the Executive Board took the decision in 2011 improve the Group’s sustainability performance. BAM’s 2011 to revise the Group’s strategic agenda for 2010-2012. The ambitions and the results achieved in this area are briefly result is an enhanced focus on core business, optimum discussed in this Annual Report on page 64. More details deployment of the Group’s strengths through increased can be found in a separate sustainability report, which synergy, a reinforced financial position and the we highly recommend. Across the board, BAM is fully development of new growth opportunities. This revised engaged in corporate social responsibility, especially agenda represents a solid basis for the new strategic with regard to the key priorities of safety, reduction of agenda 2013-2015 which will be presented towards the CO2 emissions and waste. end of 2012. As part of the process of updating the Group’s strategy, BAM has gained access to new growth BAM started the 2012 financial year with an order book opportunities by establishing permanent branches in standing at €10.4 billion (year-end 2011: €12.1 billion). Switzerland and Luxembourg, organising closer In addition, the Group has approximately €2.9 billion cooperation between companies in the BAM Group and worth of contracts in the order book for post-2016 reinforcing BAM International’s positions in growth (mainly maintenance work under PPP contracts and markets outside Europe. More information about the concession income). This healthy amount of work in the Group’s strategic choices can be found in this Annual order book demonstrates the customers’ appreciation Report, starting on page 8. of BAM’s constructive role as a partner in the implementation of often large-scale and complex This report is structured differently than those of development and construction projects. This situation previous years, as the information in this Annual Report is an excellent starting point from which to expand on 2011 is presented according to the Group’s new BAM Group’s good reputation and its leading position organisational breakdown into four sectors: construction in the international construction and property markets in and mechanical and technical services, civil engineering, the interests of all stakeholders. property and public-private partnerships (PPP). This simplified structure improves opportunities to increase Bunnik, Netherlands, 7 March 2012 focus and achieve optimum synergy. N.J. de Vries University of the Arts, part of the regeneration of King’s Cross in Central London. BAM Construct UK, BAM Nuttall. Outlook Royal BAM Group started 2012 with an order book worth At present, a large number of bids for PPP contracts €10.4 billion (year-end 2010: €12.1 billion). This reduction involving the Group are pending in various countries. The is reflected in every sector, mainly through selective number of new contracts remains high, given the current tendering policies. Of the total order book, it is expected economic climate. In accordance with the strategic plan, that €5.8 billion will be carried out in 2012 and €4.6 the Group expects to be able to make further investments billion in subsequent years. This means that in PPP contracts to the extent that approximately almost 80 percent of the anticipated turnover 10 percent of BAM’s total revenue could ultimately consist for 2012 is assured. This percentage is the same of PPP contracts.