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Royal BAM Group nv<br />
Runnenburg 9, 3981 AZ Bunnik / P.O. Box 20, 3980 CA Bunnik,<br />
Netherlands<br />
Telephone +31 (0)30 659 89 88<br />
Postbank 2903344 / ABN AMRO bank ’s-Gravenhage 43.00.08.97<br />
Date 10 May 2012<br />
No. of pages 6<br />
BAM records net profit of €5 million under difficult conditions<br />
• Construction and M&E services and Civil engineering: volumes and margins under pressure<br />
• Property: worsening climate in the Netherlands, unchanged in other countries<br />
• PPP: on track, with healthy active tender pipeline<br />
• Order book incre<strong>as</strong>ed in Q1 due mainly to large orders in Germany and Australia<br />
• Financial position strengthened by refinancing<br />
• Sale of Tebodin completed in April<br />
(in € million, unless otherwise indicated)<br />
First quarter<br />
2012<br />
First quarter<br />
2011<br />
Full year<br />
2011<br />
Revenue from continuing operations 1,556 1,625 7,697<br />
Result before tax from continuing operations 2.8 24.1 143.5<br />
Margin before tax from continuing operations 0.2% 1.5% 1.9%<br />
Net result (including Tebodin) 5.1 20.1 126.0<br />
Order book continuing operations (period-end) 10,800 11,800 10,400<br />
Nico de Vries, Chairman of the Executive Board of Royal BAM Group:<br />
“BAM’s Group results for the first three months of 2012 were broadly in line with our expectations for<br />
what is our se<strong>as</strong>onally weakest quarter. Lower volumes and margins at Construction and M&E<br />
services and Civil engineering reflected the tailing off of older, more profitable contracts in 2011, the<br />
greater competitive pressure on new orders booked in recent quarters which are now flowing through<br />
to revenue and the somewhat more severe winter conditions. We expect operational results to<br />
improve in the remainder of the year. The closing order book is up on end-2011 but down versus a<br />
year ago, reflecting our selective approach to tendering to protect profitability.<br />
In our Property sector, conditions in the Dutch residential and commercial property markets are a<br />
source of concern and we are monitoring these closely. PPP is performing well, with a strong pipeline<br />
of active tenders and prospects.<br />
<strong>De</strong>spite the difficult environment, we are making good progress on our strategic priorities to promote<br />
synergies across the Group, to strengthen our financial position and to grow in new markets.”<br />
Live audio webc<strong>as</strong>t<br />
On 10 May 2012, at 9.00 hrs CET, there will be a conference call in English for analysts, followed at<br />
10.00 hrs CET by a conference call in Dutch for the press. Both calls can be followed via live audio<br />
webc<strong>as</strong>t (www.bam.eu).<br />
Further information<br />
Press: A.C. Pronk, +31 (0)30 659 86 21, ac.pronk@bamgroep.nl<br />
Analysts: P. Snippe, +31 (0)30 659 87 07, p.snippe@bamgroep.nl
Royal BAM Group nv<br />
Press rele<strong>as</strong>e of 10 May 2012, page 2 of 6<br />
Analysis by sector<br />
(x € million) First quarter of 2012 First quarter of 2011<br />
Results and revenue Result Revenue Result Revenue<br />
Construction and M&E services 6.2 682 22.2 733<br />
Civil engineering 1.3 773 3.7 823<br />
Property 0.4 130 2.0 128<br />
Public Private Partnerships (PPP) 1.8 128 1.2 94<br />
Eliminations and miscellaneous - -157 -0.1 -153<br />
Total for continuing sectors 9.7 1,556 29.0 1,625<br />
Group overhead -2.2 -4.5<br />
Group interest charge -4.7 -6.7<br />
Result before tax from continuing<br />
2.8 0.2% 17.8 1.1%<br />
operational activities<br />
Dredging - 6.3<br />
Result before tax from continuing operations 2.8 0.2% 24.1 1.5%<br />
Order book for continuing sectors (close of period) Q1 2012 Q4 2011<br />
Construction and M&E Services 4,291 4,456<br />
Civil engineering 5,484 5,087<br />
Property 1,219 1,103<br />
Public Private Partnerships (PPP) 792 908<br />
Eliminations and miscellaneous -986 -1,154<br />
Total 10,800 10,400<br />
Q1 2012 results and order book for continuing operations<br />
Total revenue of continuing sectors of €1,556 million w<strong>as</strong> down by €69 million (-4%) on the comparable<br />
revenue in the first quarter of 2011. This decline w<strong>as</strong> due mainly to Construction and M&E services<br />
and Civil engineering, each down by approximately €50 million, offset by a €35 million incre<strong>as</strong>e at PPP.<br />
Revenue at Property w<strong>as</strong> in line. The total result of continuing sectors w<strong>as</strong> €9.7 million, a decline from<br />
€29.0 million l<strong>as</strong>t year for the same sectors. Lower margins at Construction and M&E services<br />
contributed most to this fall. Civil engineering and Property made a small profit, and the result at PPP<br />
w<strong>as</strong> higher. After Group costs and interest, the result before tax from continuing operations w<strong>as</strong><br />
€2.8 million, giving a total Group pre-tax margin of 0.2% (Q1 2011 including dredging: €24.1 million, a<br />
margin of 1.5%).<br />
In regional terms, the already negative market conditions in most activities in the Netherlands<br />
continued to deteriorate in the quarter; the other four home markets were relatively stable.<br />
BAM International recorded, especially in Australia and the Middle E<strong>as</strong>t, good results and orders.<br />
The total order book for continuing operations closed the quarter at €10.8 billion, up by €0.4 billion<br />
(+4%) from €10.4 billion at 31 <strong>De</strong>cember 2011. Most of the incre<strong>as</strong>e w<strong>as</strong> attributable to Civil<br />
engineering, with orders at Property also higher. Order books fell at Construction and M&E services<br />
and at PPP.<br />
Q1 2012 Sector performance<br />
At Construction and M&E services, revenue fell by €51 million (-7%) to €682 million, in line with<br />
expectations. Most of this w<strong>as</strong> due to the UK and Dutch non-residential activities following lower order<br />
intake in 2011, offset by some growth in Germany and Belgium. After higher margins in Q1 2011 on
Royal BAM Group nv<br />
Press rele<strong>as</strong>e of 10 May 2012, page 3 of 6<br />
older orders, the margin in Q1 2012 w<strong>as</strong> sharply lower due to fierce competition for new orders booked<br />
l<strong>as</strong>t year. The sector pre-tax result fell to €6.2 million, equivalent to a margin of 0.9%. The closing order<br />
book of €4,291 million w<strong>as</strong> 4% lower than end-2011 due to a continued selective approach to<br />
tendering. Looking ahead, volumes of new tenders are low and competition remains intense.<br />
Revenue at Civil engineering w<strong>as</strong> €50 million lower (-6%) at €773 million, also in line with<br />
management’s estimates. Revenue trends in most of the domestic markets are lower. BAM<br />
International performed strongly. Due to the lower quality of the order book in 2011, the sector pre-tax<br />
result fell to €1.3 million from €3.7 million l<strong>as</strong>t year. Good new orders in Germany and BAM<br />
International helped push up the closing order book to €5,484 million (+8%). The ongoing climate for<br />
new tenders is mixed with some signs of improvement in the United Kingdom and a strong outlook at<br />
BAM International, and a more subdued picture in the Netherlands and Belgium.<br />
In Property, total revenue grew by 2% to €130 million, and there w<strong>as</strong> a small positive pre-tax result of<br />
€0.4 million. Conditions in the Dutch residential housing and commercial property markets continued to<br />
worsen during the quarter. In the Netherlands, 619 homes were sold (Q1 2011: 662). The Dutch sales<br />
mix w<strong>as</strong> significantly bi<strong>as</strong>ed to cheaper, ‘student’ apartments and to institutional rather than retail<br />
buyers. Elsewhere, conditions in Ireland and the United Kingdom outside the South-E<strong>as</strong>t remained<br />
subdued; the performance in Belgium w<strong>as</strong> again encouraging.<br />
Total investment in the stock of property at end-Q1 2012 w<strong>as</strong> €1,499 million (31 <strong>De</strong>cember 2011:<br />
€1,492 million). €1,192 million of this total amount w<strong>as</strong> invested in the Netherlands; this included stock<br />
of 142 completed but unsold homes, approximately 10,700 m 2 of finished but unlet commercial<br />
property and 319 unsold homes still under construction.<br />
Looking ahead, the economic and political developments in the Netherlands since the end of the<br />
quarter may lead to further weakening in the Dutch property markets. This, in turn, could lead us to use<br />
more prudent <strong>as</strong>sumptions in the valuation of our Dutch property <strong>as</strong>sets.<br />
At Public-Private Partnerships (PPP), revenue w<strong>as</strong> up significantly to €128 million. The positive result<br />
of €1.8 million w<strong>as</strong> due mostly to the book profit on the transfer of one small project to the joint venture<br />
with PGGM. The closing order book of € 792 million w<strong>as</strong> down on three months earlier but the tender<br />
pipeline remains healthy, with currently 12 active bids of which 5 expected final decision this year and<br />
18 new projects expected to commence bidding this year. European governments continue to<br />
recognise the financial and operations merits of using PPP structures for new infr<strong>as</strong>tructure and<br />
construction projects, particularly in times of austerity.<br />
Financial position<br />
An incre<strong>as</strong>e of working capital in Q1 of approximately €280 million w<strong>as</strong> mostly due to the normal<br />
se<strong>as</strong>onal pattern. The corporate interest-bearing debt dropped by approximately €210 million, following<br />
the refinancing concluded in Q1. This led to the reduction of €495 million c<strong>as</strong>h in hand to €518 million<br />
at the end of the quarter, in line with the more efficient use of c<strong>as</strong>h <strong>as</strong> previously announced. The<br />
Group w<strong>as</strong> within the limits of all its banking covenants <strong>as</strong> at 31 March 2012.<br />
Subsequent event<br />
The sale of Tebodin by BAM to Bilfinger Berger w<strong>as</strong> completed on 24 April 2012 and results in a profit<br />
contribution of approximately € 65 million in 2012.
Royal BAM Group nv<br />
Press rele<strong>as</strong>e of 10 May 2012, page 4 of 6<br />
Outlook<br />
Royal BAM Group is confident about its prospects b<strong>as</strong>ed on a sharp focus on its core business<br />
activities, its scope to promote synergies across the Group, its strengthened financial position and its<br />
prospects for growth in new markets. However, BAM is not yet issuing any profit guidance for 2012<br />
given the economic and political uncertainties.<br />
Annexes<br />
1. Condensed consolidated income statement<br />
2. Consolidated balance sheet<br />
3. Condensed c<strong>as</strong>h flow statement<br />
4. Explanatory notes to the interim report<br />
1. Condensed consolidated income statement<br />
(x € million)<br />
First quarter<br />
of 2012<br />
First quarter<br />
of 2011<br />
Full year<br />
2011<br />
Revenue 1,556 1,625 7,697<br />
Operating result before depreciation, amortisation and impairments 26.1 46.2 238.7<br />
<strong>De</strong>preciation and amortisation -20.3 -26.7 -103.3<br />
Operating result 5.8 19.5 135.4<br />
Finance income 18.9 16.0 72.7<br />
Finance expense -22.4 -19.3 -99.0<br />
Result from <strong>as</strong>sociates 0.5 7.9 34.4<br />
Result before tax 2.8 24.1 143.5<br />
Income tax -2.0 -5.1 -28.0<br />
Net result from continuing operations 0.8 19.0 115.5<br />
Minority interest 0.0 -0.1 -1.6<br />
Net result from continuing operations attributable to<br />
0.8 18.9 113.9<br />
shareholders<br />
Net result from discontinued operations 4.3 1.2 12.1<br />
Net result attributable to shareholders 5.1 20.1 126.0<br />
Number of shares ranking for dividend (x 1,000) 232,938 231,765 232,938<br />
Average number of shares ranking for dividend (x1,000) 232,938 231,765 232,378<br />
Per ordinary share with par value of €0.10<br />
- Net result from continuing operations attributable to shareholders 0.00 0.08 0.49<br />
- Net result attributable to shareholders 0.02 0.09 0.54
Royal BAM Group nv<br />
Press rele<strong>as</strong>e of 10 May 2012, page 5 of 6<br />
2. Consolidated balance sheet<br />
(x € million)<br />
31 March<br />
2012<br />
31 <strong>De</strong>cember<br />
2011<br />
31 March<br />
2011<br />
Property, plant and equipment 362.3 373.6 397.6<br />
Intangible <strong>as</strong>sets 734.2 734.5 845.1<br />
PPP receivables 835.3 743.3 808.6<br />
Associates 19.1 19.2 217.6<br />
Other financial <strong>as</strong>sets 71.8 70.9 49.3<br />
<strong>De</strong>rivative financial instruments 0.9 0.8 3.0<br />
Pension plan <strong>as</strong>sets 140.9 137.6 114.0<br />
<strong>De</strong>ferred tax <strong>as</strong>sets 154.6 149.4 159.8<br />
Non-current <strong>as</strong>sets 2,319.1 2,229.3 2,595.0<br />
Inventories 1,520.6 1,514.5 1,638.7<br />
Trade and other receivables 2,158.9 2,116.9 2,015.5<br />
Current income tax receivable 39.4 36.5 6.5<br />
<strong>De</strong>rivative financial instruments 4.1 5.1 1.7<br />
C<strong>as</strong>h and c<strong>as</strong>h equivalents 517.6 1,012.6 709.6<br />
Non-current <strong>as</strong>sets held for sale 297.3 303.2 0.1<br />
Current <strong>as</strong>sets 4,537.9 4,988.8 4,372.1<br />
Total <strong>as</strong>sets 6,857.0 7,218.1 6,967.1<br />
Equity attributable to the Company's shareholders 1,167.7 1,162.4 1,140.8<br />
Minority interest 0.8 0.7 1.7<br />
Group equity 1,168.5 1,163.1 1,142.5<br />
Borrowings 1,711.8 1,951.1 1,956.9<br />
<strong>De</strong>rivative financial instruments 254.4 249.5 104.9<br />
Employee benefit obligations 100.3 100.9 122.1<br />
Provisions 77.9 82.5 70.3<br />
<strong>De</strong>ferred tax liabilities 75.5 76.1 67.8<br />
Non-current liabilities 2,219.9 2,460.1 2,322.0<br />
Borrowings 350.0 240.1 374.0<br />
Trade and other payables 2,822.2 3,047.9 3,055.9<br />
<strong>De</strong>rivative financial instruments 2.1 2.0 2.9<br />
Provisions 51.8 54.3 49.6<br />
Income tax payable 17.5 17.5 20.2<br />
Liabilities non-current <strong>as</strong>sets held for sale 225.0 233.1<br />
Current liabilities 3,468.6 3,594.9 3,502.6<br />
Total equity and liabilities 6,857.0 7,218.1 6,967.1<br />
Capital b<strong>as</strong>e 1,292.7 1,362.4 1,342.4
Royal BAM Group nv<br />
Press rele<strong>as</strong>e of 10 May 2012, page 6 of 6<br />
3. Condensed c<strong>as</strong>h flow statement<br />
(x € million)<br />
First quarter<br />
of 2012<br />
First quarter<br />
of 2011<br />
Full year<br />
2011<br />
Net result for the period 5.1 20.2 127.7<br />
Adjustments for:<br />
- Taxation 2.0 5.7 31.0<br />
- <strong>De</strong>preciation and amortisation 20.4 27.4 106.0<br />
- Result on sale of PPP projects -1.9 - -11.7<br />
- Result on sale of property, plant and equipment -0.7 -1.0 -4.3<br />
- Finance income and expense 3.5 3.3 26.3<br />
- Result from <strong>as</strong>sociates -0.5 -7.9 -34.4<br />
Investment ppp-receivables -102.6 -87.3 -419.0<br />
Changes in provisions -11.1 -11.3 -40.2<br />
Changes in working capital (excl. net c<strong>as</strong>h position) -265.9 -195.3 -90.9<br />
C<strong>as</strong>h flow from operations -351.7 -246.2 -309.5<br />
Interest paid -27.4 -24.7 -130.0<br />
Income tax paid -4.8 -3.6 -13.5<br />
Net c<strong>as</strong>h flow from operating activities -383.9 -274.5 -453.0<br />
Investment/divestment fixed <strong>as</strong>sets -4.7 -8.5 136.1<br />
Sale PPP projects 4.8 - 25.4<br />
Received interest 19.2 15.7 72.9<br />
Received dividend 0.6 0.7 41.8<br />
Other investment activities -1.0 -3.1 -3.0<br />
Net c<strong>as</strong>h flow from investing activities 19.1 4.8 273.2<br />
Repurch<strong>as</strong>e preference shares - - -0.3<br />
Changes long-term loans -139.6 63.4 291.2<br />
Paid dividend (incl. minority interest) - - -5.3<br />
Net c<strong>as</strong>h flow from financing activities -139.6 63.4 285.6<br />
Incre<strong>as</strong>e/decre<strong>as</strong>e in net c<strong>as</strong>h position -504.4 -206.3 105.8<br />
Net c<strong>as</strong>h position at beginning of the year 1,008.0 912.9 912.9<br />
Change net-liquidities <strong>as</strong>sets and liabilities held for sale - - -17.2<br />
Exchange rate differences on net c<strong>as</strong>h position 0.3 -7.5 6.5<br />
Net c<strong>as</strong>h position at period-end 503.9 699.1 1,008.0<br />
Of which in construction consortiums and other partnerships 224.3 223.6 204.8<br />
4. Explanatory notes<br />
Royal BAM Group w<strong>as</strong> incorporated under Dutch law and is domiciled in the Netherlands. This interim<br />
report contains the financial data for the first quarter of 2011 for the Company and its subsidiaries<br />
(jointly referred to <strong>as</strong> ‘the Group’) and for its share in joint ventures.<br />
This interim report does not contain all the information and explanatory notes prescribed for financial<br />
statements and should therefore be read in conjunction with the 2011 Annual Report.<br />
This interim report w<strong>as</strong> approved by the Supervisory Board and rele<strong>as</strong>ed for publication by the<br />
Executive Board. This interim report also serves <strong>as</strong> an interim statement <strong>as</strong> referred to in Section 5:25e<br />
of the Financial Supervision Act [Wet financieel toezicht].<br />
This press rele<strong>as</strong>e h<strong>as</strong> not been audited.