Koninklijke Bam Groep Nv · EURONEXT:BAMNB
Koninklijke Bam Groep Nv — Royal BAM Group — FY2015 Earnings Presentation
39 slides from Koninklijke Bam Groep Nv's earnings presentation, Feb 18, 2016
Slide 1: Annual results 2015 and strategy update
Annual results 2015 and strategy update Annual results 2015 and strategy update Amsterdam, 18 February 2016
Slide 2: Royal BAM Group nv Annual results 2015 and strategy update | 18 February 2016
Royal BAM Group nv Annual results 2015 and strategy update | 18 February 2016 1
Slide 3: BAM delivers Back in Shape and updates strategy
Royal BAM Group nv BAM delivers Back in Shape and updates strategy Back in Shape programme completed successfully within five quarters Adjusted 2015 result improved, driven by Civil engineering; held back by Dutch non-residential Construction Positive cash flow from property divestments and trade wo
Slide 4: Revenue and adjusted results per sector
Royal BAM Group nv Revenue and adjusted results per sector (in € million) 2015 2014 Revenue Result Revenue Result Construction and M&E services 3,266 -9.2 3,016 -5.5 Civil engineering 3,926 74.4 3,949 14.2 Property 474 15.5 477 19.6 PPP 185 18.7 258 38.6 Eliminations and other -428 1.0 -386 1.4 Tota
Slide 5: Construction and M&E services
Royal BAM Group nv Construction and M&E services (in € million) Market • UK non-residential markets improved; cautious Revenue Result growth NL residential, NL non residential still subdued; BE and DE stable. Business • Revenue: UK helped by FX; NL non residential up; DE higher due to strong order i
Slide 6: Civil engineering
Royal BAM Group nv Civil engineering (in € million) Market • IE and UK improved; NL cautiously improving; DE Revenue Result unchanged stable; BE lower government spending; INT effected by developments oil and gas. Business • Revenue: NL lower activity on larger projects; UK revenue stable before FX
Slide 7: Property
Royal BAM Group nv Property (in € million) Market • Continued twin track development NL residential Revenue Result market. • Non-residential property UK improved; BE stable and NL weakened further. Business • Revenue: residential higher reflecting rising house sales; non-residential down due lower d
Slide 8: PPP
Royal BAM Group nv PPP (in € million) Market • Good opportunities in most home markets. Portfolio (number) Result Business • Portfolio: grew to 41 due to four project wins (hit rate 50%). • Result: book profits lower reflecting two transfers to the JV with PGGM (2014: six). Revenue Investment • Reve
Slide 9: Income statement
Royal BAM Group nv Income statement (in € million, unless stated otherwise) 2015 Margin 2014 Margin Total sectors 100.4 1.4% 68.3 0.9% Group overhead -9.6 -0.6 Group interest charge -2.6 -5.5 Adjusted result before tax 88.2 1.2% 62.2 0.9% Restructuring -38.6 -68.8 Impairments -39.1 -115.8 Pension on
Slide 10: Cash flow analysis
Royal BAM Group nv Cash flow analysis (in € million) 2015 2014 • Business cash flow 2015 supported by improved result Net cash result 85 20 and property divestments. Investments TFA -53 -42 ∆ Trade working capital 31 -15 • Trade working capital improved after strong inflow at year end Net Investment
Slide 11: Trade working capital
Royal BAM Group nv Trade working capital Trade working capital Trade working capital (in € million) (in € million and TWC as %) 3.000 0 0% 2.000 -200 1.000 -5% 0 -400 -1.000 -10% -2.000 -600 -3.000 Q2 Q4 Q2 Q4 -800 -15% 2014 2014 2015 2015 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Work-in-progress credit Work-in-p
Slide 12: Financial position
Royal BAM Group nv Financial position (in € million, unless stated otherwise) FY15 FY14 • Recourse cash position improved 637 624 by €23 million, including €54 Cash position million cash out for restructuring. Interest-bearing debt 597 664 • Capital ratio improved to 21.2% Net cash / (debt) position
Slide 13: Back in Shape delivered (1)
Royal BAM Group nv Back in Shape delivered (1) Overhead Trade working capital Divestments (in € million) (in € million) (in € million) 660 0 200 640 620 -200 150 600 €105 580 -400 560 100 €312 540 -600 520 50 500 -800 480 Q2 Q4 0 end 2013 end 2015 2014 2015 2014 2015 Annual results 2015 and strategy
Slide 14: Back in Shape delivered (2)
Royal BAM Group nv Back in Shape delivered (2) Operational audit Stage Gate 1 Stage Gate 2 Stage Gate 3 Stage Gate 4 Stage Gate 5 Decision Initial Approval of Approval final If won: to tender validation A-form contract reality check Tender Contract submitted awarded Peer review Annual results 2015 a
Slide 15: Order book
Royal BAM Group nv Order book 2015 2014 Δ • Order book quality improving due to new stage gate Construction and tendering. M&E services 4,608 4,424 +4% • Positive movement order book includes €0.3 bn Civil engineering 6,272 5,129 +22% currency effects. Property 797 859 -7% • Growth in civil engineer
Slide 16: Sustainability
Royal BAM Group nv Sustainability Safety CO2 Waste (IF) (kilotonnes) (kilotonnes) • IF (Incidents per millions hours worked) reduced 6 300 300 from 5.0 to 4.5 5 250 250 • CO2 emissions, corrected for turnover, 4 200 200 reduced by 5% • Construction and office 3 150 150 waste, corrected for turnover,
Slide 17: Dividend 2015
Royal BAM Group nv Dividend 2015 BAM proposes a dividend of 2 euro cents per ordinary share, in line with its dividend policy to pay out 30 to 50% of the net result for the year. This will be paid in cash, with a scrip alternative. Annual results 2015 and strategy update | 18 February 2016 16
Slide 18: Outlook
Royal BAM Group nv Outlook For the full year 2016, BAM expects the adjusted result before tax to be higher than the level of 2015. BAM anticipates a restructuring charge of approximately €20 million, mainly related to the Dutch activities. Annual results 2015 and strategy update | 18 February 2016 1
Slide 19: Building the present, creating the future
Royal BAM Group nv ‘Building the present, ‘Building the present, creating the future’ creating the future’ Annual results 2015 and strategy update | 18 February 2016 18
Slide 20: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating the future’ Focus Shape Create project business future portfolio portfolio portfolio Differentiating capabilities BAM’s unique culture Annual results 2015 and strategy update | 18 February 2016 19
Slide 21: External analysis
Royal BAM Group nv External analysis Industry economics favour focus on scale or expertise Markets mixed, New technologies vulnerable macro are reshaping our outlook value chain Customers face new challenges Annual results 2015 and strategy update | 18 February 2016 20
Slide 22: Internal analysis
Royal BAM Group nv Internal analysis Back in Shape Project analysis Culture Structure Processes Cost reduction Working capital Project control Divestments Annual results 2015 and strategy update | 18 February 2016 21
Slide 23: Focusing project portfolio (1)
Royal BAM Group nv Focusing project portfolio (1) < 2014 Back in Shape 2020 Σ project results Focus Fix Σ projects Annual results 2015 and strategy update | 18 February 2016 22
Slide 24: Focusing project portfolio (2)
Royal BAM Group nv Focusing project portfolio (2) Scale Expertise Annual results 2015 and strategy update | 18 February 2016 23
Slide 25: Focusing project portfolio (3)
Royal BAM Group nv Focusing project portfolio (3) Operational Selection Stage gate Peer review audit Annual results 2015 and strategy update | 18 February 2016 24
Slide 26: Shape business portfolio
Royal BAM Group nv Shape business portfolio Fix or Develop new propositions Inside Home markets exit along lifecycle Stay Leverage high-margin Outside out specialisms High Low Level of competition Annual results 2015 and strategy update | 18 February 2016 25
Slide 27: Create future portfolio
Royal BAM Group nv Create future portfolio Digital construction process Digital built environment Annual results 2015 and strategy update | 18 February 2016 26
Slide 28: Culture
Royal BAM Group nv Culture Culture Performance Profitable projects Selected segments Ownership Execution Under- Collaboration standing Proposition Learning Innovation Annual results 2015 and strategy update | 18 February 2016 27
Slide 29: Capabilities
Royal BAM Group nv Capabilities Profit Operating companies Group Profit Synergies in Smart selected engineering Project specialisms selection BAM + Controls & systems Talent deve- lopment and exchange = value Project execution Best in Financial industry strength digital Annual results 2015 and strat
Slide 30: Targets 2020
Royal BAM Group nv Targets 2020 Profit Profit Profit People ROCE >10% Safety IF < 3.5 Planet Adjusted Property pre tax margin < €500m Net positive impact 2-4% TWC < -10% Annual results 2015 and strategy update | 18 February 2016 29
Slide 31: Implementation of strategy is key in 2016
Royal BAM Group nv Implementation of strategy is key in 2016 Plan People Delivery Culture Capabilities Focus project portfolio Shape business portfolio Create future portfolio Project Management Office Annual results 2015 and strategy update | 18 February 2016 30
Slide 32: Annexes
Royal BAM Group nv Annexes Home sales the Netherlands Property investments PPP investments Net debt analysis Revenue sector/country Covenants Annual results 2015 and strategy update | 18 February 2016 31
Slide 33: Home sales the Netherlands
Royal BAM Group nv Home sales the Netherlands 2015 2014 Number of homes sold from own development: Q1 496 444 Q2 602 492 Q3 542 488 Q4 547 453 Total 2,187 1,877 Annual results 2015 and strategy update | 18 February 2016 32
Slide 34: Property investments
Royal BAM Group nv Property investments Total investments (Q4 2015) (in € million, unless stated otherwise) Q4 2015 Q4 2014 (in € million) 700 Land and building rights 429 420 600 Property development 311 403 500 Total investments (a) 740 823 400 300 Non-recourse loans 116 161 200 Recourse loans 80
Slide 35: PPP investments
Royal BAM Group nv PPP investments (in € million, unless stated otherwise) Q4 2015 Q4 2014 PPP assets (intangibles, receivables) 276 318 Non-recourse PPP loans -195 -206 Recourse PPP loans (equity bridges) -53 -63 PPP associates/JV/other 44 10 Investment equity1) 72 59 Committed equity2) 114 101 Tot
Slide 36: Net debt analysis
Royal BAM Group nv Net debt analysis (in € million, unless stated otherwise) Q4 2015 Q4 2014 Non recourse PPP loans 195 206 Non recourse project financing 124 170 Other project financing 133 135 Total ‘project related’ 452 511 Subordinated loan 124 124 Financial lease liabilities 14 22 Bank overdraf
Slide 37: Revenue sector/country
Royal BAM Group nv Revenue sector/country Construction Civil Property and M&E PPP Total engineering development Services Netherlands 15% 14% 4% 1% 34% United Kingdom 15% 15% 1% 0% 31% Belgium/L’bourg 3% 7% 1% 0% 11% Germany/Swiss 7% 4% - 0% 11% Ireland - 4% 0% 1% 5% International - 8% - - 8% Total 4
Slide 38: Recourse leverage and coverage ratios
Royal BAM Group nv Recourse leverage ratio Recourse interest coverage ratio 4,0 10,0 9,3 8,8 3,0 9,0 8,3 2,0 7,8 7,6 8,0 7,3 7,7 7,4 7,3 1,0 1,0 6,4 6,6 6,8 1,5 1,4 1,4 7,0 0,0 -1,2 0,8 -1,1 0,9 5,6 -1,0 6,0 -2,0 -0,9 -2,8 -0,6 -1,1 5,0 -3,0 4,0 -2,6 -4,0 3,0 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3
Slide 39: Contact details
Royal BAM Group nv Contact details BAM Investor Relations Joost van Galen +31(0) 30 659 87 07 ir@bam.nl Annual results 2015 and strategy update | 18 February 2016 38