Business model

Business lines

The unique diversity of countries and sectors in which the Group operates and of the relationships that BAM maintains with its clients and subcontractors enables BAM to continuously expand and increase its potential.

Construction and mechanical and electrical services

BAM is active in the Construction and mechanical and electrical services sector in all BAM’s home markets, as well as in Switzerland and Denmark. In addition to carrying out non-residential construction work in all the home markets, BAM also carries out residential construction contracts (mainly in the Netherlands, Belgium, Germany and Ireland). BAM International also carries out non-residential construction projects, in the Middle East and Indonesia in particular. BAM International operates from its headquarters in the Netherlands and from regional offices in Tanzania, Dubai, Panama, Indonesia and other locations. BAM’s Construction and mechanical and electrical services
sector employs approximately 7,300 staff. 

Civil engineering

BAM operates in the Civil engineering sector in all BAM’s home markets. BAM International also carries out specialised civil engineering works worldwide. BAM’s Civil engineering sector employs approximately 1,400 staff. 

Property

BAM is active in property development in the Netherlands, the United Kingdom, Ireland and Belgium. Principally, construction of the project development activities is carried out by BAM’s construction operating companies in the respective home markets. BAM develops single family homes in the Netherlands with area and project developer AM. BAM’s Property sector employs approximately 200 staff. 

Public Private Partnerships

BAM PPP is responsible for BAM’s presence in the European public private partnerships market: its results reflect the returns from investment activities only. Operating from offices in Bunnik, Birmingham, Brussels, Dublin, Frankfurt am Main and Glasgow, BAM  PPP operates in the roads, rail, education, health care, judicial and general accommodation sectors and employs approximately 100 staff. 

Creating financial value

BAM offers an extensive range of products and services in the operational sectors (Construction and mechanical and electrical services and Civil engineering) and investment sectors (Property and Public Private Partnerships). With the current product portfolio and expertise, presence in these sectors of BAM’s five home markets and encouraging internal collaboration enables BAM to utilise free working capital from its operations to invest in selected property and PPP projects which again generates construction contracts. > Image 2 illustrates the financial interaction between the sectors including the relevant financial metrics to assess BAM’s performance.

Value chain

The Group’s value chain management and subcontractor engagement provides the opportunity to bring value to BAM’s clients from innovations and cross-fertilisation from the value chain. With lean planning techniques, BAM can incorporate 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 CSR including targets and BAM requires its major value chain partners to share information on their CO2 emissions.

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 96 per cent of BAM’s purchases were locally sourced in 2015. BAM expects comparable percentages in its other home countries. An exception to the rule is tropical timber (typically under FSC- or PEFC-labelling). 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. Typical supply chain partners are mechanical and electrical suppliers, often in conjunction with local labour suppliers as well as local small and medium enterprises.

Key business activities

The construction industry provides services on a project-by-project basis. A project may comprise various stages:

Bid/development
At this stage the type and scope of a project is determined, including stakeholder analysis. Conceptual drawings are developed to visualise the desired outcome. A project may be bid at this stage on a design-and-build basis or after the design stage on a construction only basis.

Design
The main purpose is to develop the design of the project according to functional demands.

Engineering
Details and work method of the construction and installation together with a project schedule, budget and resource estimate are determined.

Construction
Once designed the project is built and commissioned to ensure it meets the project requirements, including budget and planning.

Maintenance
When the building or infrastructure development has been completed it is put into service. Facility management delivers life cycle services and ensures that the development is operated and maintained efficiently.

End-of-life/recycling
This is generally the starting point for a new development.

Typically before reuse, the structure is assessed for future use as construction elements or raw material.

The earlier BAM gets involved in a development the greater its opportunity is to influence the sustainability of the development at a lower cost. Where BAM is the property developer or where BAM is part of a public private partnership, BAM has the greatest opportunity to maximise sustainability outcomes, as the company can set sustainability ambitions in the early concept stages. This allows life cycle costing to be taken into consideration at the early design stages, allowing for higher capital investment to be considered against lower maintenance and operational costs.

Innovative solutions are developed by BAM’s operating companies during the search for sustainable solutions to meet its clients’ needs. BAM also supports a number of organisations in the research of specific technology and process innovations. BAM is also part of a number of international and industry leading forums sharing best practice on sustainability (see Stakeholder engagement, page 7).

 

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