Financial performance

The Back in Shape programme is completed successfully this year. The adjusted result is driven by a strong rebound in margins at Civil engineering, but was held back by Dutch non-residential Construction and M&E activities. The result at Property was driven by commercial property divestment. As anticipated, PPP made a lower result after the high profits on project transfers to the joint venture in 2014.

Management summary

  • Revenue €7,423 million, 1.5 per cent up compared to 2014;
  • Adjusted result before tax of €88.2 million, 42 per cent up compared to 2014;
  • Order book increased in the year with €1,212 million, or 12 per cent, to €11,480 million; 
  • Results delivered by the Back in Shape programme in 2015 are in line with targets.
  • Gross (property) divestments totalling €95 million in 2015, almost reaching the annual target of €100 million;



Revenue increased with €109 million, or 1.5 per cent, in 2015 principally due to a foreign exchange rate effect of the pound sterling of 3 per cent. The operational sectors reported an increase in revenue of 3.3 per cent on average whilst revenue of the investment sectors declined with 11.5 per cent. Revenue in the Construction and M&E sector was up 8.3 per cent, Civil sector revenue was slightly down, mainly in the Netherlands due to lower activity levels at larger projects and in Belgium due to lower government spending and project delays. 

Order book

As at 31 December 2015 the order book (orders in hand for the next five years) amounted to €11.5 billion representing an increase of €1,2 billion compared to prior year.
The (net) order intake of the operational sectors amounted to €1,327 million (2014: €440 million) while the investment sectors reported a decline of €52 million (2014: €129 million) attributable in full to the sector Property. Of the current order book position, €5.9 billion (2014: €5.8 billion) is expected to be carried out in 2016 and €5.6 billion (2014: €4.4 billion) in the years after. Approximately 81 per cent of the forecasted revenue for the year 2016 has been secured, which is slightly higher than 2014, both in relative and absolute terms. In addition, the Group has more than €2.6 billion (2014: €2.7 billion) in the order book beyond five years, mainly comprising long-term maintenance contracts for PPP projects.

Earnings per share

The number of outstanding common shares of BAM decreased by 0.6 million in 2015 to 270.4 million shares as at 31 December 2015, due to the repurchase of shares. Earnings per share was 4 cents (2014: negative).

Dividend proposal 

The announced dividend of 2 eurocents per share (in cash or in shares) for 2015 (2014: nil) will be proposed to shareholders at the annual General Meeting of Shareholders to be held on 20 April 2016. The recommended dividend is in line with our dividend policy to target a pay-out ratio in the range of 30 to 50 per cent of the net result. The dividend return amounts to 0.4 per cent, based on the 2015 closing price (2014: nil).



Cash and cash equivalents

Cash and cash equivalents was €637 million as at 31 December 2015 (2014: €624 million), of which €181 million (2014: €163 million) concerns the Group’s share of cash and cash equivalents in joint operations.


As at 31 December 2015 total borrowings amounted to €597 million (2014: €664 million) of which €319 million (2014: €376 million) concerned non-recourse debt. The decrease in 2015 is driven by non-recourse debt; both non-recourse loans associated with PPP projects and property development decreased in 2015 with €11 million and €46 million (2014: €89 million and €110 million) principally due to divestments in the year and consequential debt repayment.

As at 31 December 2015 a net cash position is achieved of €40 million (2014: €40 million net debt position) and comprised non-recourse PPP and property loans of €319 million (2014: €376 million).

The Group had two credit facilities as at 31 December 2015: a subordinated loan with a nominal value of €125 million (2014: €125 million) and a committed syndicated credit facility of €500 million. In December 2015 the Group has reached agreement with two bank syndicates on the extension of the existing revolving credit facility to an amount of €412.5 million until 30 January 2018 and on the extension of the existing subordinated loan to an amount of €108 million until 30 July 2018. The previously agreed bank covenants remain unchanged. As at 31 December 2015 the committed syndicated credit facility was not used, consistent with 2014.

The recourse net debt, part of the recourse leverage ratio in BAM’s financing arrangements, mainly comprising equity bridge loans for PPP projects and property loans on a recourse basis minus cash and cash equivalents, amounted to a net cash position of €359 million as at 31 December 2015, €23 million up compared to 2014.

Capital employed

Non-current assets

On balance, non-current assets increased in the year with €38 million.

As the annual depreciation was partly compensated by the net capital expenditures in the year, the carrying amount of property, plant and equipment decreased with €24 million to €292 million. The majority of the capital expenditures and disposals concerned the asset category equipment and installations in the sector Civil engineering.

Intangible assets predominantly comprises goodwill with a carrying amount of €406 million, an increase of €6 million compared to 2014 owing to the exchange rate of the  pound sterling compared to the prior year with an effect of approximately €9 million compensated by the goodwill impairment charge of approximately €3 million. Goodwill is tested for impairment annually and this did result in an impairment this year on a Belgian cash generating unit. The sensitivity analyses indicated that for another Belgian cash-generating unit, representing a goodwill amount of €16 million, a limited headroom remains in case of a negative change of 50 basis points on the discount rate and/or growth rate beyond the forecast period.

Non-current PPP receivables decreased in 2015 to €279 million from €304 million principally due to the transfer of two projects to the joint venture with PGGM (€144 million) compensated by progress on the construction of current PPP projects (€154 million). In addition, an amount of €39 million (2014: €117 million) has been reclassified to assets held for sale in anticipation of the transfer of one associated PPP project to the joint venture with PGGM in 2016.

The carrying amounts of investments (accounted for using the equity method) and other financial assets decreased in the year with €1 million (from €95 million to €94 million) respectively increased by €13 million (from €85 million to €98 million). The increase in other financial assets includes a reversal of impairment charges of €1 million. 

The pension asset increased in 2015 with €57 million to €75 million and fully relates to the defined benefit schemes in the United Kingdom. This increase is mainly attributable to the supplementary contributions of €36 million in the year and changes in actuarial assumptions with an positive effect of €26 million.

Net working capital

Net working capital (excluding cash and cash equivalents and current borrowings) as at 31 December 2015 amounted to minus €340 million (2014: minus €223 million). Gross investment in property development has been reduced with €83 million in 2015 to €740 million. Net investment in property development, taking into account associated borrowings, amounted to €544 million (2014: €592 million).

The further improvement of net working capital in 2015 was mainly driven by the progress on the property divestment programme and also takes account for an impairment charge of €37 million (2014: €54 million) on land and building rights and property development.

Shareholders’ equity and capital base

Shareholders’ equity significantly increased by €75 million in 2015 to €902 million as at 31 December 2015. Apart from the net result for the year of €10 million, this increase is principally due the favourable development of the remeasurements of post-employment benefit obligations (€37 million) and foreign exchange rate differences (€26 million).

Capital base includes the subordinated loan amounting to €124 million (2014: €125 million).

Capital ratio

As at 31 December 2015 capital ratio is 21.2 per cent (2014: 19.2 per cent) determined by using the capital base. Recourse solvency, the ratio in accordance with the bank covenants, increased with 1.2 per cent point to 29.3 per cent as at 31 December 2015 (2014: 28.3 per cent), which comfortably exceeds the required minimum of 15 per cent.

Other significant movements in balance sheet items

Post-employment benefits

The net defined benefit liability amounted to €47 million as at 31 December 2015, a decrease of €93 million compared to 2014 principally due to changes in actuarial assumptions, specifically the discount rate used. The current year balance allows for a pension one-off gain of €3 million in connection with a defined benefit scheme in the Netherlands.


Provisions, other than post-employment benefits, significantly decreased by €37 million to €150 million (2014: €187 million). The restructuring provision decreased by €16 million to €41 million as at 31 December 2015. Additional restructuring provisions of net €28 million, in connection with the Back in Shape programme, were recognised in the year compensated by restructuring payments of €44 million. 

Deferred tax assets and liabilities

The Group had a net deferred tax asset of €221 million (2014: €217 million) principally reflecting the tax losses carry forward in the Netherlands and Germany. The valuation as at 31 December 2015 allows for estimates of the level and timing of future taxable profits for the upcoming nine years (the Netherlands) and for an indefinite period (Germany) including available tax planning opportunities.

Assets and liabilities held for sale

The assets and liabilities held for sale as at 31 December 2015 amounted to €42 million (2014: €127 million) for the assets and €46 million (2014: €129 million) for the liabilities and were fully attributable to one PPP project (2014: one PPP project) that is expected to be transferred to the joint arrangement with PGGM in 2016. 

Sector results

Revenue at Construction and M&E services rose by 8 per cent to €3,266 million. This was mainly attributable to the UK, including the benefit of the stronger pound sterling. The loss for the sector was due to negative results in the Netherlands on some older non-residential projects and to a lesser extent under recovery of overheads. Plans are being finalised to integrate Dutch construction and property activities to restore profitability. The result in the UK improved from a low level in 2014. The order book increased by 4 per cent to €4,608 million at year end 2015 excluding the foreign exchange effect, the increase was 1 per cent. The order book rose in the UK (mainly foreign exchange) and Germany; the order book fell in Belgium and the Netherlands.

In Civil engineering, revenue slipped by 1 per cent to €3,926 million. 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 activities at larger projects, while Belgium was impacted by project delays and lower government spending. The sector result came mainly from the Netherlands, BAM International and Ireland. The order book grew 22 per cent despite the lower order intake at BAM International reflecting developments in the oil and gas industry and in Belgium. The increase was driven by the intake of some large multi-year projects in the Netherlands, Ireland and Germany.

In Property, the result was again supported by non-residential sales in Belgium, the Netherlands and the UK. Margins at residential property remained low due to the market opportunities focused on affordable homes and developments on impaired land. Dutch house sales in 2015 were up by 17 per cent at 2,187, with a rise in the proportion of sales to private buyers to 75 per cent (2014: 70 per cent). 

The non-cash impairments of €34.3 million (2014: €93.2 million) reflected value adjustments for Dutch land bank (€20.8 million) and retail commercial property (€13.5 million). In 2015 the market developed further along the ‘twin track’. The ‘strong track’ applies to the areas in and around the major cities and to smaller and more affordable houses and apartments, where volumes and prices rose. Conversely, the ‘weak track’ is still evident in some regional areas. The retail property market was affected by pressure on rental prices due to bankruptcies of retailers and growing internet sales.

The total investment in property reduced by €83 million to €740 million at the end of 2015. These investments were financed by €80 million recourse property loans (year-end 2014: €57 million) and €116 million non recourse property loans (year-end 2014: €161 million).

The sector PPP had another operational good year. Although the adjusted result for 2015 of €18.7 million was down from €38.6 million in 2014, the net result increased by 14 per cent in 2015.

The 2014 adjusted result before tax was driven by asset management profits on transfers of older projects to the joint venture with PGGM. Going forward, the focus is on divesting newly completed projects.

The success of the joint venture is reflected by PGGM’s decision in 2015 to increase its commitment. The total committed funding for the joint venture is now €600 million.

ln addition to the result from asset management, PPP generated a result from its growing portfolio.

PPP won four projects in 2015, a hit rate of 50 per cent for the second year in a row. These represent approximately €620 million of construction revenues for the operational sectors in the coming years. The pipeline of active bids is healthy.

At the end of 2015 the number of PPP projects in the portfolio was 45 of which BAM PPP retains interest in 41; for the remaining 4 projects only asset management services are provided by BAM PPP.

Four projects reached financial close in 2015:

  • Tram line Antwerp (BRABO 2), Belgium
  • M11 road (M11), Ireland
  • Irish Courts Bundle (Courts), Ireland
  • Lock IJmuiden (IJmond), Netherlands

BAM PPP’s projects are spread across BAM’s European markets with revenue based mainly on the availability criterion. Investments in volume based projects have been reduced or impaired in 2014. The ratio of accommodation to civil engineering projects is also balanced, although civil engineering projects are often greater in size.

The joint venture with PGGM made good progress during 2015, with the investment in two new projects. The joint venture provides BAM PPP with the twin benefits of a strong position from which to pursue further projects and a stable platform within which equity can be made available for new investments.


BAM PPP harnesses the strengths, experience and expertise within Royal BAM Group, coordinating the provision of lifecycle solutions for the benefit of public-sector clients. The company focuses on BAM’s European home markets where the Group has proven construction and maintenance skills and expertise. 

Its strategy aims to grow the portfolio to provide short-term construction turnover, long-term Facility Management and lifecycle turnover, equity investment returns and asset management income.


The PPP markets continue to offer an attractive supply of bidding opportunities. Competition continues to be intense and is demonstrated by the increased number of competitors at the prequalification stage. The bidding opportunities are spread reasonably evenly across all of our markets with the exception of the UK. The availability of long term debt has improved in the last years and is currently not an area of concern.

BAM PPP Portfolio financial performance

At year-end 2015, shareholders equity invested by BAM PPP totaled €72 million (€59 million 2014), of which BAM PPP invested €41 million and transferred for €27 million to the BAM PPP PGGM joint venture in 2015. BAM PPP does not invest in projects until their structural completion, with the shareholders’ equity part being financed with a bridging loan.

Committed equity is €171 million, all by the joint venture. The invested and committed equity totaled €242 million. New projects will mainly be undertaken by the joint venture.

The future asset flow is based on the expected inflow of cash from the concessions portfolio for the shareholders’ equity (dividend and repayment). The discounted value of this future cash inflow is the Director’s valuation and totals €239 million (2014: €222 million).

A comparison of the directors’ valuation and the discounted value of the invested and committed equity results in an unrealised value of the portfolio of €77 million (2014: €78 million).

Business development

The current portfolio provides BAM PPP with returns on equity investments, in addition, as at year-end 2015, to an order book of construction turnover of €1,481 million and Facility Management and lifecycle turnover for BAM sister companies of €3.2 billion. BAM PPP has in the pipeline 14 active bids, providing potential equity investments of €184 million, potential construction turnover of €2.1 billion and potential Facility Management turnover (excluding lifecycle) of €1.4 billion.

Directors’ valuation

The directors’ valuation is intended to illustrate movements in the value of the PPP portfolio during the year taking account of the impact of intervening transactions, through the application of a consistent methodology. The valuation is based on the forecast returns of the projects, based on current projections, and may differ significantly from the book value of the investments shown in the accounts. Cash flows accruing from projects are calculated on the basis of financial models, based on contractual terms with clients and have been approved by external lenders. The valuation is calculated using the widely acknowledged discounted cash flow basis, discounting all future cash flows to BAM PPP at an appropriate discount rate. All future cash flows are converted into euros. All projects that have reached financial close are taken into account; projects for which BAM PPP is the preferred bidder have been excluded.

Discount rates

BAM PPP applies discount rates based on the company’s knowledge of the market, the agreed transfer mechanism with PGGM, through the joint venture, and the use of a simple project phase analysis. A higher discount rate is applied from financial close through to construction completion before stepping it down once into operations due to the reduced risk and greater certainty of future cash flows. BAM PPP believes this approach is preferable to using and adjusted market risk free rate approach as we have the benefit of up-to-date market information based on our discussions and agreement with PGGM.


The > table below shows the sensitivity of the directors’ valuation if all the project discount rates applied are changed simultaneously by plus or minus 1 per cent and 2 per cent.


Acquisitions and divestments 

There were no material acquisitions in 2015.

On 3 February 2015, BAM Infra Nederland transferred the drainage activities of its subsidiary BAM Nelis De Ruiter, to Mos Grondwatertechniek.

The transaction includes nine employees, work in progress, and plant and equipment. The annual sales from them for BAM Infra were approximately €2 million. The transaction was part of the organisational streamlining that BAM implemented through its Back in shape programme.

On 4 March 2015, BAM Infra Nederland transferred the piling and civil engineering activities of its subsidiary BAM Nelis de Ruiter at Halfweg (near Amsterdam) to Kleybruggen B.V., which will continue the activities in a new subsidiary Nelis Infra. The drilling activities will be continued by Gebr. van Leeuwen Boringen B.V.

The transaction included forty employees, work in progress and plant and equipment. The transaction was part of the current organisational streamlining that BAM implemented through its Back in Shape programme. 

On 19 March 2015, BAM Infra transferred the heat and cold storage activities of its subsidiary BAM Nelis De Ruiter at Halfweg, including the service and maintenance department, to De Ruiter Grondwatertechniek bv. The transaction included 33 employees, work in progress and plant and equipment.

BAM Infra Nederland sold its subsidiary Nootenboom Sports bv at Hardinxveld-Giessendam to D.R. Nootenboom Holding bv and Drechtmolen Holding bv on 23 April 2015. Nootenboom Sports specialises in constructing and maintaining sports facilities. The transaction related to work in progress, equipment and five employees.

BAM saw insufficient opportunities to develop the activities of Nootenboom Sports and considered its added value limited. The sale was part of the organisational streamlining that BAM implemented through its Back in Shape programme. The annual turnover of Nootenboom Sport in recent years amounted to approximately €8 million.

BAM Infra Nederland sold its subsidiary Mostert De Winter bv in Hardinxveld-Giessendam to Elkarij bv in Wouw on 23 October 2015. Mostert De Winter is a roof garden, façade vegetation system and landscaping specialist. The transaction included all 39 employees, work in progress and plant and equipment.

BAM saw insufficient opportunities for further development of the activities of Mostert De Winter and considered the added value of this specialisation for the Group limited. The transaction was in line with the streamlining of the organisation in relation to BAM’s Back in Shape programme. Last year Mostert De Winter’s turnover was approximately €16 million.

BAM Bouw en Vastgoed bv sold its subsidiary BAM Techniek - Integrated Works to the management on 17 December 2015. The transaction included all eight employees and work in progress.

BAM saw insufficient opportunities for further development of the activities of BAM Techniek - Integrated Works, which is specialised in telecommunications, and considers the added value of this specialisation for the Group limited. The transaction was in line with the streamlining of the organisation in relation to BAM’s Back in Shape programme. Last year BAM Techniek - Integrated Works’ turnover was approximately €1 million.

BAM sold the production facility for precast concrete elements to Betonfabriek Vrijenban with effect from 1 January 2016. Betonfabriek Vrijenban produces high-tech precast concrete elements, retaining walls and concrete mortars and has already production plants in Delft and Vianen, both in the Netherlands.

In the course of 2015, as part of its Back in Shape programme BAM came to the conclusion that there were insufficient opportunities to continue the activities of its concrete production facility. This then led to closure of the plant. This transaction related only to the real estate and did not include a transfer of projects or guarantees. 

After bance sheet date, BAM Infra Nederland bv has sold its water treatment activities, which formed part of BAM Infra Milieu, to SITA Remediation bv in Utrecht. The transaction refered to the four employees, work in progress and plant and water treatment equipment.

BAM saw insufficient opportunities for further development of the water treatment activities and considered the added value of this specialisation for the Group limited. Furthermore, the transaction was in line with the streamlining of the organisation.