BAM

Royal BAM Group
Quick Facts
Type	Public
sector	Construction
Headquarters (Benelux Organization)	Bunnik, the Netherlands
Year of Origin	1869
Emissions (All Scopes)	7.87 megatons of CO2 (2020)
Total Revenue	EUR 7.3 billion (2021)
Stock Exchange	Euronext (BAMNB)
Key People	Ruud Joosten, Henk Rottinghuis
Number of Employees	15,739
Subsidiaries	Interbuild Kairos Wayss & Freitag Ingenieurbau

Royal BAM Group, stylized as BAM, designs, builds and maintains buildings, homes and infrastructure for public- and private-sector clients. Its history goes back to 1869, although the current name derives from 1927. Headquartered in the Netherlands, BAM has divisions in the Netherlands, the United Kingdom and Ireland, as well as Belgium and Germany. It has about 15,000 employees and annual revenues of approximately €7 billion. Net result was 18.1 million Due to deferred taxes, BAM’s effective tax rate was 74 percent. Without deferred taxes the effective tax rate would have been 23 percent. Some of BAM’s highlights in 2021 were the completion of Zeesluis IJmuiden en de Zalmhavens (Rotterdam). Balance sheet value in 2021 was a little over 2 billion euro. Shares of BAM Group are listed on Euronext Amsterdam.

Company Structure

BAM is a large European construction firm with operating companies active in two business lines, Construction & Property and Civil engineering, as well as in public-private partnerships. BAM is active in the Netherlands, UK, Ireland, Belgium, Germany and Denmark BAM's leadership structure is a two-tier structure, where the day-to-day management is executed by a executive board and an executive committee and overseen by a supervisory board. In the Netherlands, most of BAM's activities take place in BAM Infra or BAM Bouw en Techniek. Next to those there is the smaller operations in BAM Residential en BAM Specials.

Most shares of BAM group are hold by Dutch shareholders. Currently, no shareholders hold more than 3 percent of all outstanding shares.

Board of Directors

Executive Board 2021

Name	Function	Remuneration x1000 EUR
Ruud Joosten	CEO	1691 EUR
Frans den Houter	CFO	1287 EUR

Executive Committee

The Executive Committee consists of the Executive Board and two Chief Operating Officers (one for the Netherlands division and one for the United Kingdom and Ireland division). The Executive Committee decides - with final responsibility lying with the Executive Board - on strategic issues and policies, based on input from the operating companies and functions. Their remuneration is not disclosed.

Management Board

Name	Function
Joost Nelis	Chief operating officer (NL)
John Wilkinson	Chief operating officer (UK & Ireland)

Supervisory Board

Supervisory Board

Name	Function	Remuneration x1000 EUR
Henk Rottinghuis	Chairman	102 EUR
Gosse Boon	Vice-chair	67 EUR
Bob Elfring	Member	62 EUR
Denise Koopmans	Member	65 EUR
Paul Sheffield	Member	59 EUR
Nina Skorupska	Member	42 EUR

Accountant

The external accountant of BAM Groep is Ernst & Young Accountants LLP

Main Activities

BAM's companies are active in Business lines Construction and Property, Civil Engineering and Public-Private Partnerships (PPP). Construction and Property is all about building. This includes residential, non-residential, technical installations, accomodation and design. Civil Engineering encompasses all larger projects, like infrastructural works, civil architecture and industrial construction. BAM also carries out international civil and marine engineering works.

Public-Private Partnerships are carried out by Invesis. This is a global investor and developer in infrastructural projects. Invesis manages all aspects of an investment from development and financing through to design, construction, maintenance, operations, all the way through to hand back. It is jointly owned by Royal BAM Group and pension fund manager and global investor, PGGM.

Government

BAM has completed numerous projects for the Dutch Government. Notable are the building of the Dutch Hoge Raad, the renovation of the Afsluitdijk, expansion of Maasvlakte 2 and the construction of Zeesluis IJmuiden. However, in the recent decade, the risk to profit ratio has changed drastically, making BAM hesitant to take on new projects of a similar scale. The construction of Zeesluis IJmuiden came with unexpected costs for BAM of nearly 100 million, putting great pressure on profit margins.

BAM received royal status during its 125th anniversary in 1994. BAM has not received NOW-support during corona-times.

Paris Agreement untill Today

BAM states the following CO₂ reduction targets in its 2021 Annual Report: Reduce Scope 1 and Scope 2 CO₂ intensity by 50 per cent compared to 2015; Reduce Scope 3 CO₂ emissions by 20 per cent compared to 2017 (the first year BAM assessed its entire Scope 3 emissions).

Financial Results since 2015

No dividend is proposed over 2021. Also, no dividend has been paid over 2020

Financial situation

Year	Revenue	Profit	Dividend
2015	7.4 billion EUR	10.2 million EUR	5 million EUR
2016	7 billion EUR	48.6 million EUR	24.3 million EUR
2017	6.6 billion EUR	12.5 million EUR	27.3 million EUR
2018	7.2 billion EUR	23.8 million EUR	38.3 million EUR
2019	7.2 billion EUR	11.8 million EUR	5.5 million EUR
2020	6.8 million EUR	122.2 million EUR (loss)	0 EUR
2021	7.3 billion EUR	18.1 million EUR	0 EUR

Scandals and controversies

During 2017, a car park under construction by BAM at Eindhoven Airport collapsed. In the aftermath of the disaster, BAM identified a further 25 hazardous constructions at other locations, also including the Ministry of the Interior as well as the Ministry of Justice and Security.

The same year, the construction by BAM of a new pier for large cruise ships on Curaçao destroyed a large portion of coral reef. Investigations indicated that BAM had neglected to follow the rules and regulations for the protection of the coral reef, to which it had consented in the building permit.

In 2020, BAM agreed to a €200-million settlement with the City of Cologne over the ill-fated construction of a new metro line in 2009. Among other things, these construction works caused the collapse of the Historical City Archives, killing two people as well as damaging adjacent buildings.

BAM has a long history of excessive money and time spent on projects. The new sea lock at IJmuiden cost an additional two years and €100 million until it was completed in 2021. Renovation of the Afsluitdijk causeway, slated for 2025, is now claimed to cost €400 million instead of the original €120 million.

International subsidiaries of BAM have repeatedly run into the same troubles. In Belgium, BAM Contractors and BAM Interbuild incurred total losses of around €60 million on projects in Antwerp before their activities were dissolved by BAM. The British subsidiary BAM Nuttall is refusing to compensate its subcontractors for debts incurred on the HS2 railway construction, which was slated to cost around GBP 30 billion and be finished in 2026 but is now planned no earlier than 2029 at a cost of GBP 87 billion.

On top of all, BAM Ireland has submitted almost 1,000 claims worth €542 million in total against the National Children's Hospital, even though it has failed to uphold its delivery in 2023 at a cost of €800 million. Instead, delivery is now planned for 2025 at a cost of €1.7 billion. Still, BAM claims that the hospital is to blame for incomplete design information.

Current Emissions

It is notable that BAM discloses more information on emissions (especially in scope 3) to the non-profit organization The Carbon Disclosure Project than to its own shareholders through its annual reports.

Total emissions since 2015 ( in megatonnes CO₂-eq.)

Year	Scope 1	Scope 2	Scope 3	Total
2015 , ,	0.2	0.04	5.16	5.4
2016 ,	0.17	0.04	8.78	8.99
2017 ,	0.15	0.03	7.79	7.97
2018 ,	0.16	0.03	7.69	7.88
2019 ,	0.14	0.02	8.72	8.88
2020 ,	0.12	0.03	7.72	7.87
2021	n/a	n/a	n/a	n/a

Climate Policy and Plans

BAM formulated a strategy from 2021-2023, called a sustainable tomorrow. This strategic plan is mainly dedicated to de-risking BAM’s portfolio and building on profitability in market where BAM has competitive strengths. Reducing carbon emissions is not a main point of focus in this strategy.

By 2030 BAM wants to achieve relative emission reduction in scope 1 and 2 of 50 percent compared with 2015 as baseyear. According to own reports, BAM achieved 44 percent intensity reduction so far since 2015. BAM however only very limited reports its scope 3 emissions in its annual report. It does however mention that it discloses its full scope 3 reports tot he Carbon Disclosure Project. BAM wants to reduce scope 3 emissions by 20 percent by 2030 in comparison to base year 2017. This was the first year BAM fully disclosed its scope 3 emissions. BAM plans to release new sustainability targets in 2022.

Due Diligence

According to the environmental targets in its 2021 Annual Report, BAM strives to use 100% sustainable timber. It claims that 99% of its timber was sustainable in 2021, when looking at 89% of its organisation. However, it admits that it struggles to use sustainable timber in Ireland, which it excludes from this figure. In addition, it excludes its activities in Germany and Belgium, which would lower the percentage of coverage to 82%.

Conclusion

BAM Group is one of the largest construction companies in the Netherlands. It is mainly known from huge infrastructural projects. BAM has a yearly revenue of around 7 billion, but the profit margins are very small (less than 1%). Therefore, hardly any dividend has been paid out over the last years. BAM formulated clear targets for 2030 and wants to be climate positive by 2050. Despite being clear, the targets are not enough to be in line with the Paris Agreement. This is due to the scope 3 target being only 20% reduction. Looking at the emission numbers of the past years, there is no declining trend. Emission numbers have been stable at around 8 megatonnes since 2016. BAM is currently not on track to reach its own climate targets, let alone the targets set out by the Paris Agreement.