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Koninklijke BAM Groep N.V.
Earnings Release • Sep 19, 2023
3817_ir_2023-09-19-220838_57170cfa-26dd-4c54-a521-4567b559d9b4.pdf
Earnings Release
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Royal BAM Group nv Runnenburg 9, 3981 AZ Bunnik / P.O. Box 20, 3980 CA Bunnik, Netherlands Telephone +31 (0)30 659 89 88
Postbank 2903344 / ABN AMRO bank 's-Gravenhage 43.00.08.97
Date 17 August 2023
No. of pages 24
BAM reports €119 million adjusted EBITDA in first half-year
Royal BAM Group nv delivered an adjusted EBITDA margin of 4.0 per cent in the first half-year of 2023. The cash position and order backlog are at a good level. Although market conditions remain challenging, most activities showed a satisfactory performance. BAM expects to deliver an adjusted EBITDA margin higher than 4 per cent for the full-year 2023.
- Combined revenue of division Netherlands and division United Kingdom and Ireland in line with H1 2022
- Adjusted EBITDA was €119 million, reflecting a margin of 4.0%; H1 2022 included contribution divested companies and positive hedge revaluation (totalling €32 million)
- Net result of €60 million, reflecting earnings per share of €0.22 (€0.31 in H1 2022)
- Liquidity position decreased to €0.7 billion reflecting normalisation of trade working capital
- Capital ratio improved to 22.3% (21.2% year-end 2022)
- Order book remains at good level of €9.5 billion
| Key results (x € million, unless otherwise indicated) |
1st half-year 2023 |
1st half-year 2022 |
Full-year 2022 |
|---|---|---|---|
| Revenue | 2,969 | 3,329 | 6,618 |
| Adjusted EBITDA 1 | 119.4 | 182.0 | 350.2 2 |
| Adjusted EBITDA 1 margin | 4.0% | 5.5% | 5.3% 2 |
| Net result attributable to shareholders | 60.2 | 85.7 | 179.6 |
| Order book (end of period) | 9,549 | 12,221 | 10,038 |
| Trade working capital efficiency | -14.8% | -16.6% | -15.8% |
1 Adjusted EBITDA defined as result before interest, tax, depreciation and amortisation, excluding restructuring costs, impairment charges and pension one-offs.
2 Including €52 million result on the Wayss & Freytag Ingenieurbau transaction.
Ruud Joosten, CEO of Royal BAM Group:
'In the first half-year of 2023, conditions in our markets remained challenging. Against this background, I am pleased that most of our activities showed a satisfactory operational performance. In the Netherlands, civil engineering continued the positive trend of recent quarters and made a substantial contribution to the Group's results. Our Dutch residential activities reported a satisfactory contribution. The lower result of the division Netherlands was mainly due to design issues and cost overruns at the four non-residential projects in Denmark, which will be completed in the coming quarters. The division United Kingdom and Ireland performed well, with a higher contribution of Ventures and Ireland. There were positive results from the activities in Belgium and the PPP joint venture. Since year-end 2022, our capital ratio further improved by 1.1 per cent to 22.3 per cent. We are also pleased with the conversion from adjusted EBITDA to the net result of €60 million.
We continue to make progress with our strategy 'Building a sustainable tomorrow'. We remain focused on managed growth through selective tendering, helping our clients to achieve their goals while providing value driven, reliable and sustainable solutions for construction and vital infrastructure. In line with our recently introduced sustainability strategy, we are investing in electric plant and equipment and the use of biofuels to decarbonise current and future projects. The Dutch residential market is under pressure, but remains a key focus area of our Group because of the structural shortage of homes. In June, we acquired land positions
Press release of 17 August 2023, page 2 of 24
for 500 new homes. We will present an update of our strategy for the period up to 2026 in the first half of 2024.
Our order book is maintained at a good level of €9.5 billion, with a clear focus on the quality of the order intake. BAM expects to deliver an adjusted EBITDA margin higher than 4 per cent for the full-year 2023.'
Business review first half-year 2023
| Income statement (x € million, unless otherwise indicated) |
1st half-year 2023 | 1st half-year 2022 | ||
|---|---|---|---|---|
| Revenue | Adj. EBITDA |
Revenue | Adj. EBITDA |
|
| Division Netherlands | 1,348 | 55.1 | 1,384 | 97.6 |
| Division United Kingdom and Ireland | 1,559 | 62.9 | 1,549 | 47.7 |
| Germany, Belgium and International | 62 | 1.1 | 398 | 24.5 |
| Invesis 1 | 3.1 | 16.0 | ||
| Eliminations and miscellaneous | - | -2.8 | -2 | -3.8 |
| Total Group | 2,969 | 119.4 | 3,329 | 182.0 |
| Adjustment items 2 | -0.2 | -1.1 | ||
| Depreciation and amortisation | -54.4 | -61.6 | ||
| Impairments | 0.3 | -12.0 | ||
| Finance result | 6.9 | 1.6 | ||
| Result before tax | 72.0 | 108.9 | ||
| Income tax | -11.9 | -24.1 | ||
| Non-controlling interest | 0.1 | 0.9 | ||
| Net result attributable to shareholders | 60.2 | 85.7 |
1 Invesis is the BAM's 50 percent equity stake in the joint venture with PGGM.
2Restructuring costs and pension one-off results.
- The combined revenue of the division Netherlands and division United Kingdom and Ireland decreased by 1 per cent. The Group revenue declined by 11 per cent to €3.0 billion compared to the first half-year of 2022, mainly due to the divestments in Germany and Belgium in 2022. The development of the British pound exchange rate had a negative impact of €50 million.
- Adjusted EBITDA decreased to €119 million versus €182 million in the first half-year of 2022, which included positive contributions of divested companies (€18 million), hedge revaluations (€14 million), and two major settlements (Museum of the Future and sea lock IJmuiden/OpenIJ, totalling €32 million). The adjusted EBITDA margin was 4.0 per cent (H1 2022: 5.5 per cent).
- The net result was €60 million (H1 2022: €86 million), or earnings per share of €0.22 (H1 2022: €0.31). The finance result improved supported by increased interest rates. The reported income tax was €12 million (effective tax rate: 17 per cent) and included the positive effect of the recognition of a deferred tax asset of €5 million on liquidation losses in BAM International.
- The order book remained solid at €9.5 billion versus €10 billion at year-end 2022, with a clear focus on the quality of the order intake. The decline included the cancellation of a €300 million highways framework contract, following an additional review by the UK government. The development of the British pound exchange rate had a positive effect of €126 million.
Press release of 17 August 2023, page 4 of 24
Division Netherlands
| (x € million, unless otherwise indicated) | 1st half-year 2023 | 1st half-year 2022 | ||
|---|---|---|---|---|
| Revenue | Adj. EBITDA |
Revenue | Adj. EBITDA |
|
| Construction and Property | 962 | 29.1 | 964 | 56.4 |
| Civil engineering | 400 | 28.5 | 436 | 31.0 |
| Other, eliminations and miscellaneous | -14 | -2.5 | -16 | 10.2 |
| Total division Netherlands | 1,348 | 55.1 | 1,384 | 97.6 |
| Trade working capital efficiency | -13.1% | -15.9% | |
|---|---|---|---|
| Revenue growth | -3% | -3% | |
| Adjusted EBITDA margin | 4.1% | 7.1% | |
| 1st half-year 2023 | Full-year 2022 | ||
| Order book | 4,438 | 4,366 | |
| Order book growth | 2% |
- Revenue declined by 3 per cent compared to the first half-year of 2022.
- Adjusted EBITDA decreased to €55.1 million compared to €97.6 million in the first half-year of 2022, reflecting an adjusted EDITDA margin of 4.1 per cent (H1 2022: 7.1 per cent). The Dutch residential activities reported a satisfactory contribution. Residential home sales were lower at 494 (H1 2022: 858) reflecting the more challenging market conditions. Based on the project pipeline, BAM expects to sell approximately 1,500 homes in 2023 (FY 2022: 2,028). The decrease of adjusted EBITDA was mainly due to design issues and cost overruns at the four non-residential projects in Denmark, which will be completed in the coming quarters. Telecom and Energy Systems continued to contribute strongly. The operational performance of civil engineering was strong; the first half-year 2022 result included the OpenIJ settlement (€16 million).
- The order book increased by 2 per cent to €4.4 billion driven by non-residential construction and civil engineering, partly offset by residential construction and property. Recent project wins included residential renovation projects in Beverwijk, Capelle aan den IJssel and Tilburg, while civil engineering is benefiting from several framework contracts.
- Market development: The recent fall of the Dutch government has added to the uncertainty for the construction and property industry, especially regarding the ambition to build more homes and the legislation regarding nitrogen. Currently, cost increases and rising interest rates are leading to delays of some project awards. For the medium to longer term, there remains a strong rationale for essential investments in energy transition, infrastructure and sustainable and affordable homes. Demand in BAM's energy, water and telecom markets remains strong.
Press release of 17 August 2023, page 5 of 24
Division United Kingdom and Ireland
| (x € million, unless otherwise indicated) | 1st half-year 2023 | 1st half-year 2022 | ||
|---|---|---|---|---|
| Revenue | Adj. EBITDA |
Revenue | Adj. EBITDA |
|
| Construction UK | 498 | 15.5 | 512 | 22.0 |
| Civil engineering UK | 648 | 16.9 | 609 | 19.4 |
| Ventures UK (including property) | 199 | 23.7 | 108 | 6.0 |
| Ireland (construction, property, civil engineering) | 246 | 9.2 | 351 | 5.9 |
| Other, eliminations and miscellaneous | -32 | -2.4 | -31 | -5.6 |
| Total division United Kingdom and Ireland | 1,559 | 62.9 | 1,549 | 47.7 |
| Trade working capital efficiency | -16.4% | -18.1% | |
|---|---|---|---|
| Revenue growth 1 | 1% | 7% | |
| Adjusted EBITDA margin | 4.0% | 3.1% | |
| st half-year 2023 1 |
Full-year 2022 | ||
| Order book 1 | 4,770 | 5,402 | |
| Order book growth | -12% |
1 The British pound exchange rate had a €50 million negative effect on revenues and a positive effect of €126 million on the order book.
- Revenue increased by 1 per cent compared to the first half-year of 2022, supported by the high activity level in civil engineering. The British pound exchange rate had a €50 million negative effect on revenue. In Ireland, revenues declined as a result of progress on large contracts.
- Adjusted EBITDA improved to €63 million compared to €48 million in the first half-year of 2022, reflecting an adjusted EDITDA margin of 4.0 per cent (H1 2022: 3.1 per cent). The contribution of Construction UK was impacted by inflation and supply chain challenges on some larger contracts, while Civil engineering UK showed a satisfactory performance supported by a high activity level. The Ventures business had a strong performance, also driven by the divestment of an office development. The performance in Ireland was solid. Regarding National Children's Hospital, BAM is fully resourced for the planned scope of work and the tireless effort of BAM's staff and supply chain partners has driven the build phase to more than 85 per cent completion. BAM is fully committed to delivering this world-class hospital within the shortest possible timeframe.
- The order book declined by 12 per cent to €4.8 billion, including the cancellation of a €300 million highways framework contract, following an additional review by the UK government. The development of the British pound exchange rate had a positive effect of €126 million. Recent project wins included additional works for HS2, two converter stations for SSEN Transmission and National Grid Electricity Transmission, a three-year contract with the Tudor Grange Academies Trust to deliver Integrated Facilities Management services and a new school building at Sunderland's Farringdon Community Academy.
- Market development: In the UK, there is a healthy pipeline for education projects and opportunities in healthcare and regional frameworks. The energy sector is offering significant opportunity as the UK drives towards independence in this area. The infrastructure market is expected to remain relatively steady. Also, the outlook for the rail market is favourable. There are opportunities in key markets in Ireland, and BAM remains focused on winning projects with the right risk/reward balance.
Press release of 17 August 2023, page 6 of 24
Germany, Belgium and BAM International
| (x € million, unless otherwise indicated) | 1st half-year 2023 | 1st half-year 2022 | ||
|---|---|---|---|---|
| Revenue | Adj. EBITDA |
Revenue | Adj. EBITDA |
|
| Germany, Belgium and International | 62 | 1.1 | 398 | 24.5 |
The activities in Belgium had a satisfactory performance. Revenues declined substantially due to the divestments of Wayss & Freytag Ingenieurbau, BAM Galère and BAM Contractors nv during 2022. In Germany, BAM still shares responsibility for some projects of the former BAM Deutschland.
PPP joint venture Invesis
In the first half-year of 2023, Invesis continued to create value from the operational portfolio by successfully refinancing the University Hospital Schleswig-Holstein project and transferring the Dendermonde prison project to PGGM.
No new projects were added to the portfolio, with several preferred bidder decisions expected in the coming quarters. One project was transferred to a new owner. At 30 June 2023, there were 42 operational projects (FY 2022: 43) with a further 5 under construction (FY 2022: 5), making 47 PPP projects in total (FY 2022: 48).
Investigation Dutch authorities
In October 2022, the Dutch Fiscal Information and Investigation Service (FIOD) and the Dutch Public Prosecutions Office (Openbaar Ministerie) have informed BAM International that it is the subject of an investigation into suspicions relating to potential fraud and corruption at some already completed projects. The timing and possible outcome of the investigation are uncertain. Therefore, the potential adverse financial impact of the outcome of the investigation, if any, cannot be reliably estimated at this time but could possibly be material.
BAM is fully cooperating with the investigation and taking appropriate steps in connection with the investigation, including an internal review of the relevant projects. In July 2020, BAM announced its intention to wind down BAM International. Meanwhile all projects of BAM International have been completed.
Financial review
Cash flow 1
| 1st half-year | 1st half-year | Full-year | |
|---|---|---|---|
| (x € million) | 2023 | 2022 | 2022 |
| Cash flow from operations 2 | 113 | 152 | 246 |
| Working capital | -180 | -272 | -466 |
| Provisions and pensions | -26 | -27 | 24 |
| Cash flow from operating activities | -93 | -147 | -196 |
| Cash flow from investing activities | -37 | -87 | -163 |
| Cash flow from financing activities | -67 | -56 | -93 |
| Increase/decrease in cash position | -197 | -290 | -452 |
| Cash and cash equivalents beginning period | 841 | 1,285 | 1,285 |
| Changes in assets and liabilities held for sale | - | -146 | 42 |
| Exchange rate differences, other changes | 17 | -19 | -34 |
| Cash and cash equivalents | 661 | 830 | 841 |
1 Based on the IFRS cash flow statement.
2 Net result for the period adjusted for depreciation and amortisation, impairment charges and other non-cash elements.
Cash and cash equivalents totalled €661 million, which is €180 million below the position at year-end 2022 of €841 million.
In the first half-year of 2023, BAM generated a cash flow from operations of €113 million (H1 2022: €152 million), mainly driven by the operational performance. The outflow of working capital followed the seasonal pattern, reflecting the unwinding of advance payments on large projects as a consequence of BAM's adjusted tendering strategy, and including the effect of higher interest rates.
Cash flow from investing activities of -€37 million primarily relates to regular capital expenditure, while the comparable period last year included a net outflow of -€40 million from the divestments of BAM Galère and BAM Contractors nv.
Cash flow from financing activities in the first half-year of 2023 of -€67 million included the payments related to dividend of €34 million. The remainder relates to leases and repayment of interest bearing debt.
Press release of 17 August 2023, page 8 of 24
Financial position
| 1st half-year | Full-year | 1st half-year | |
|---|---|---|---|
| (x € million) | 2023 | 2022 | 2022 |
| Cash position | 661 | 841 | 830 |
| Interest-bearing debt | -47 | -53 | -45 |
| Net (debt) / cash before lease liabilities | 614 | 788 | 785 |
| Lease liabilities | -169 | -174 | -193 |
| Net (debt) / cash | 445 | 614 | 592 |
| Trade working capital | -839 | -1,010 | -1,037 |
| Trade working capital efficiency | -14.8% | -15.8% | -16.6% |
| Shareholders' equity | 845 | 811 | 756 |
| Balance sheet total | 3,785 | 3,819 | 4,280 |
| Capital ratio | 22.3% | 21.2% | 17.7% |
| Capital employed | 1,196 | 1,194 | 1,275 |
| Return on average capital employed | 14.0% | 16.8% | 8.7% |
The trade working capital efficiency percentage increased, ending the first half-year of 2023 at -14.8 per cent (FY 2022: -15.8 per cent), which reflects a further normalisation as a result of unwinding of advance payments on large projects as a consequence of BAM's adjusted tendering strategy and the effect of higher interest rates.
The increase in shareholders' equity of €34 million to €845 million is driven by the net result for the first halfyear (€60 million), exchange rate differences (€23 million), cash flow hedges and share-based payments (€4 million), partly offset by the of the payment of dividend and the related share buyback (-€34 million) and remeasurement of post-employment benefit obligations (-€19 million).
BAM's capital ratio improved by 1.1 per cent to 22.3 per cent at mid-year 2023, compared to 21.2 per cent at year-end 2022.
Press release of 17 August 2023, page 9 of 24
Risks and uncertainties
As indicated in the annual report for the 2022 financial year, there is a Group-wide focus on risk management in the primary process, in order to improve predictability and performance. The Group's risk management system does not imply avoidance of all risks. Instead it aims to identify opportunities and threats and manage them. The risks that can have a material impact on the Group's results and its financial position are described in detail in the annual report for the 2022 financial year. Other risks, or risks that are either not currently known or currently considered non-material could prove to have an effect (material or otherwise) in due course on the markets, objectives, revenue, results, assets, liquidity or funding of the Group.
Executive Board, Royal BAM Group nv
Ruud Joosten, CEO Frans den Houter, CFO
Analyst meeting and audio webcast
Ruud Joosten, CEO, and Frans den Houter, CFO, will host an analyst meeting at 10.00 a.m. CET on 17 August 2023. A live audio webcast of this meeting will be made available at the Royal BAM Group website: www.bam.com.
Key dates
| 2 November 2023 | Trading update first nine months 2023 |
|---|---|
| 15 February 2024 | Publication of annual results 2023 |
| 10 April 2024 | Annual General Meeting |
Further information
-
analysts: Michel Aupers, [email protected], +31 (0)30 659 89 88;
-
press: Bert Ooms, [email protected], or Arno Pronk, [email protected], +31 (0)30 659 89 88.
Regulated information
This press release contains information that qualifies or may qualify as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Forward looking statements
This press release contains 'forward-looking statements', based on currently available plans and forecasts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future, and BAM cannot guarantee the accuracy and completeness of forward-looking statements.
These risks and uncertainties include, but are not limited to, factors affecting the realisation of ambitions and financial expectations, exceptional income and expense items, operational developments and trading conditions, economic, political and foreign exchange developments and changes to IFRS reporting rules.
Press release of 17 August 2023, page 10 of 24
BAM's outlook, in line with these forward-looking statements, merely reflects expectations of future results or financial performance and BAM does not make any representation or warranty in that respect. Statements of a forward-looking nature issued by the company must always be assessed in the context of the events, risks and uncertainties of the markets and environments in which BAM operates. These factors could lead to actual results being materially different from those expected, and BAM does not undertake to publicly update or revise any of these forward-looking statements.
Declaration in accordance with the Dutch Financial Supervision Act
In accordance with their statutory obligations under Article 5:25d(2)(c) of the Dutch Financial Supervision Act, the members of the Executive Board declare that, in so far as they are aware:
- the half-yearly financial report provides a true and fair reflection of the assets and liabilities, the financial position and the result generated by the Company and by companies included in the consolidated accounts; and
- the half-yearly report by the Executive Board provides a true and fair overview of the information required pursuant to Article 5:25d(8) and (9) of the Dutch Financial Supervision Act.
Bunnik, the Netherlands, 17 August 2023
Press release of 17 August 2023, page 11 of 24
1. Interim consolidated income statement
| st half-year 1 |
st half-year 1 |
Full-year | ||
|---|---|---|---|---|
| (x € million) | Notes | 2023 | 2022 | 2022 |
| Revenue | 6 | 2,968.7 | 3,328.9 | 6,618.1 |
| Gain on sale of subsidiaries | 8.14 | - | - | 52.3 |
| Raw materials and consumables used | -657.5 | -714.8 | -1,424.9 | |
| Subcontracted work and other external charges | -1,485.8 | -1,691.7 | -3,456.3 | |
| Employee benefit expenses | -557.2 | -652.4 | -1,193.2 | |
| Depreciation and amortisation charges | -54.4 | -61.7 | -116.6 | |
| Impairment charges | -0.6 | -12.5 | -13.5 | |
| Other operating expenses | -152.6 | -123.8 | -305.0 | |
| Exchange rate differences | -11.5 | 3.0 | -4.5 | |
| -2,919.6 | -3,253.9 | -6,514.0 | ||
| Share of result of investments in associates and joint ventures | 8.13 | 15.1 | 31.8 | 58.5 |
| Share of impairment charges in investments in associates and joint ventures |
0.9 | 0.5 | -1.5 | |
| 16.0 | 32.3 | 57.0 | ||
| Operating result | 65.1 | 107.3 | 213.4 | |
| Finance income | 10.8 | 5.0 | 8.9 | |
| Finance expense | -3.9 | -3.4 | -6.6 | |
| Total finance income and expense | 6.9 | 1.6 | 2.3 | |
| Result before tax | 72.0 | 108.9 | 215.7 | |
| Income tax | 8.5 | -11.9 | -24.1 | -38.0 |
| Net result | 60.1 | 84.8 | 177.7 | |
| Attributable to: | ||||
| - Shareholders of the Company | 60.2 | 85.7 | 179.6 | |
| - Non-controlling interests | -0.1 | -0.9 | -1.9 | |
| 60.1 | 84.8 | 177.7 | ||
| Earnings per share (x €1) | ||||
| Basic | 0.22 | 0.31 | 0.66 | |
| Diluted | 0.22 | 0.31 | 0.65 |
Press release of 17 August 2023, page 12 of 24
2. Interim consolidated statement of comprehensive income
| st half-year 1 |
st half-year 1 |
Full-year | ||
|---|---|---|---|---|
| (x € million) | Notes | 2023 | 2022 | 2022 |
| Net result for the period | 60.1 | 84.8 | 177.7 | |
| Items that may be reclassified to the income statement, net of tax | ||||
| Fair value movement of cash flow hedges | -0.4 | 0.5 | 0.6 | |
| Tax on fair value of cash flow hedge | 0.1 | -0.2 | -0.2 | |
| Cash flow hedges | -0.3 | 0.3 | 0.4 | |
| Fair value movement of cash flow hedges in joint ventures | 8.13 | 1.7 | 18.7 | 34.2 |
| (net) Exchange rate differences |
22.7 | -18.7 | -27.8 | |
| Items that will not be reclassified to the income statement, net of tax | ||||
| Movement in remeasurements of post-employment benefit | -22.8 | 18.2 | -27.5 | |
| obligations Tax on movement in remeasurements of post-employment |
4.3 | -3.5 | 8.7 | |
| benefit obligations Remeasurements of post-employment benefit obligations |
-18.5 | 14.7 | -18.8 | |
| Other comprehensive income | 5.6 | 15.0 | -12.0 | |
| Total comprehensive income, net of tax | 65.7 | 99.8 | 165.7 | |
| Attributable to: | ||||
| - - Shareholders of the Company |
65.8 | 100.7 | 167.6 | |
| - Non-controlling interests | -0.1 | -0.9 | -1.9 | |
| 65.7 | 99.8 | 165.7 |
Exchange rate differences in the first six months of 2023 include the translation effects of foreign subsidiaries as a result of movements in the euro to pound sterling exchange rates as well as the reclassification of translation reserve (positive) to 'Exchange rate differences' in the consolidated income statement (negative) for €8 million (2022: nil) related to the winddown of subsidiaries of BAM International.
Press release of 17 August 2023, page 13 of 24
3. Interim condensed consolidated statement of changes in equity
| sth half-year 1 |
st half-year 1 |
Full-year | ||
|---|---|---|---|---|
| (x € million) | Notes | 2023 | 2022 | 2022 |
| As at 1 January | 808.5 | 653.4 | 653.4 | |
| Net result for the period | 60.1 | 84.8 | 177.7 | |
| Cash flow hedges | -0.3 | 0.3 | 0.4 | |
| Actuarial gains and losses pensions Cash flow hedges in joint ventures |
8.13 | 1.7 | 18.7 | 34.2 |
| Exchange rate differences Remeasurements of post-employment benefit obligations |
-18.5 | 14.7 | -18.8 | |
| Exchange rate differences | 22.7 | -18.7 | -27.8 | |
| Exchange rate differences Other comprehensive income net of tax |
5.6 | 15.0 | -12.0 | |
| Total comprehensive income | 65.7 | 99.8 | 165.7 | |
| Issue of share capital | 8.12 | - | - | - |
| Repurchase of ordinary shares | 8.12 | -11.5 | - | -14.3 |
| Dividends paid (including non-controlling interests) | 8.12 | -22.0 | - | - |
| Share-based payments | 2.0 | 2.0 | 3.7 | |
| Total change | 34.2 | 101.8 | 155.1 | |
| Position as at period-end | 842.7 | 755.2 | 808.5 |
Press release of 17 August 2023, page 14 of 24
4. Interim consolidated statement of financial position
| 30 June | 30 June | 31 December | ||
|---|---|---|---|---|
| (x € million) | Notes | 2023 | 2022 | 2022 |
| Property, plant and equipment | 207.8 | 182.4 | 199.5 | |
| Right-of-use assets | 165.2 | 187.7 | 170.7 | |
| Intangible assets | 325.5 | 336.2 | 325.5 | |
| PPP receivables | 14.2 | 16.3 | 13.6 | |
| Investments in associates and joint ventures | 8.13 | 335.0 | 291.7 | 327.0 |
| Other financial assets | 8.10 | 82.7 | 79.5 | 77.6 |
| Employee benefits | 63.0 | 124.2 | 72.5 | |
| Deferred tax assets | 8.5 | 62.4 | 66.5 | 57.5 |
| Non-current assets | 1,255.8 | 1,284.5 | 1,243.9 | |
| Inventories | 471.5 | 442.5 | 482.0 | |
| Trade and other receivables | 1,377.9 | 1,316.3 | 1,229.8 | |
| Income tax receivable | 13.1 | 5.0 | 14.2 | |
| Derivative financial instruments | 0.1 | 0.5 | 0.5 | |
| Cash and cash equivalents | 8.11 | 660.7 | 830.0 | 841.3 |
| Current assets | 2,523.3 | 2,594.3 | 2,567.8 | |
| Assets held for sale | 5.6 | 401.5 | 7.7 | |
| Total assets | 3,784.7 | 4,280.3 | 3,819.4 | |
| Share capital and premium | 839.3 | 839.3 | 839.3 | |
| Reserves | -46.6 | -77.1 | -70.7 | |
| Retained earnings | 8.12 | 52.2 | -5.9 | 42.0 |
| Equity attributable to the shareholders of the Company | 844.9 | 756.3 | 810.6 | |
| Non-controlling interests | -2.2 | -1.1 | -2.1 | |
| Total equity | 842.7 | 755.2 | 808.5 | |
| Borrowings | 8.7 | 38.0 | 24.6 | 40.7 |
| Lease liabilities | 114.2 | 133.0 | 118.9 | |
| Derivative financial instruments | - | - | - | |
| Employee benefits | 27.9 | 61.9 | 45.6 | |
| Provisions | 93.8 | 84.1 | 94.4 | |
| Social security and other taxes | - | 104.2 | - | |
| Deferred tax liabilities | 8.5 | 16.0 | 31.1 | 18.5 |
| Non-current liabilities | 289.9 | 438.9 | 318.1 | |
| Borrowings | 8.7 | 9.2 | 20.8 | 12.0 |
| Lease liabilities | 54.4 | 59.7 | 55.8 | |
| Trade and other payables | 2,425.7 | 2,614.1 | 2,468.5 | |
| Derivative financial instruments | 0.6 | - | - | |
| Provisions | 148.3 | 94.7 | 145.7 | |
| Income tax payable | 13.9 | 9.0 | 10.8 | |
| Current liabilities | 2,652.1 | 2,798.3 | 2,692.8 | |
| Liabilities held for sale | - | 287.9 | - | |
| Total equity and liabilities | 3,784.7 | 4,280.3 | 3,819.4 | |
Press release of 17 August 2023, page 15 of 24
5. Interim consolidated statement of cash flows
| st half-year 1 |
st half-year 1 |
Full-year | ||
|---|---|---|---|---|
| (x € million) | Notes | 2023 | 2022 | 2022 |
| Net result | 60.1 | 84.8 | 177.7 | |
| Adjustments for: | ||||
| Income tax | 8.5 | 11.9 | 24.1 | 37.9 |
| Depreciation and amortisation | 54.4 | 61.6 | 116.6 | |
| Impairments | 0.6 | 12.5 | 13.5 | |
| Share of impairment charges in investments | -0.9 | -0.5 | 1.5 | |
| Gain on sale of subsidiaries | 8.14 | - | - | -52.3 |
| Gain on sale of property, plant and equipment | -1.6 | -6.2 | -10.1 | |
| Share of result of investments in associates and joint | ||||
| ventures | -15.1 | -31.8 | -58.5 | |
| Share based payments | 2.0 | - | 3.7 | |
| Finance income | -10.8 | -5.0 | -8.8 | |
| Finance expense | 3.9 | 3.4 | 6.6 | |
| Interest received | 11.0 | 4.5 | 7.3 | |
| Dividends received from investments | 12.5 | 17.7 | 36.0 | |
| Changes in provisions and pensions | -26.0 | -27.4 | 24.0 | |
| Changes in working capital (excluding cash and cash | ||||
| equivalents) | -179.9 | -271.8 | -466.3 | |
| Cash flow from operations | -77.9 | -134.1 | -171.2 | |
| Interest paid | -5.7 | -5.5 | -10.9 | |
| Income tax received / (paid) | -8.6 | -6.1 | -15.2 | |
| Net cash flow from ordinary operations | -92.2 | -145.7 | -197.3 | |
| Investments in PPP receivables | -1.1 | -1.5 | -0.8 | |
| Repayments of PPP receivables | 0.2 | 0.3 | 2.2 | |
| Net cash flow from operating activities | -93.1 | -146.9 | -195.9 | |
| Purchases of property, plant and equipment | -33.4 | -46.7 | -92.9 | |
| Purchases of intangible assets | -0.1 | - | -1.6 | |
| Investments in non-current receivables and other financial | ||||
| assets | -11.3 | -13.7 | -28.9 | |
| Proceeds from sale of property, plant and equipment | 5.5 | 7.5 | 15.5 | |
| Repayments of non-current receivables (loans) | 0.4 | 5.2 | 9.9 | |
| Proceeds from disposal of intangible assets | 2.1 | - | 0.6 | |
| Net proceeds from sale of subsidiaries | - | -39.8 | -65.6 | |
| Net cash flow from investing activities | -36.8 | -87.5 | -163.0 | |
| Proceeds from borrowings | 1.7 | 9.7 | 39.1 | |
| Repayments of borrowings | -7.2 | -28.4 | -50.6 | |
| Repayments of principal amount of lease liabilities | -28.6 | -37.3 | -67.4 | |
| Repurchase of ordinary shares | 8.12 | -11.5 | - | -14.3 |
| Dividends paid to shareholders of the Company | 8.12 | -22.0 | - | - |
| Net cash flow from financing activities | -67.6 | -56.0 | -93.2 | |
| Change in net cash and cash equivalents | -197.5 | -290.4 | -452.1 | |
| Cash and cash equivalents at beginning of the year | 841.3 | 1,284.7 | 1,284.7 | |
| Change in cash and cash equivalents in assets and liabilities | ||||
| held for sale | 0.0 | -145.5 | 42.3 | |
| Exchange rate differences on cash and cash equivalents | 16.9 | -18.8 | -33.6 | |
| Net cash position at period-end | 8.11 | 660.7 | 830.0 | 841.3 |
Press release of 17 August 2023, page 16 of 24
6. Segment and revenue information
The Group comprises of three reportable segments: Division Netherlands (NL), Division United Kingdom and Ireland (UK&I) and Invesis. Belgium and Germany and International are considered individual operating segments that are not reportable, and thus combined. The performance of the segments Netherlands, UK&I and Invesis are separately reported to and reviewed by the Executive Board. The Executive Board is identified as the Chief Operating Decision Maker ('CODM').
Adjusted EBITDA is the main segment performance measure. Adjusted EBITDA is defined as result before interest, tax, depreciation and amortisation, excluding restructuring costs, impairment charges and pension oneoffs.
| (x € million) | Division NL | Division UK&I |
Invesis1 | Belgium, Germany2 and International |
Other including eliminations |
Total |
|---|---|---|---|---|---|---|
| Revenue and results | ||||||
| st half-year 2023 1 |
||||||
| Revenue | 1,348.0 | 1,559.3 | - | 61.6 | -0.2 | 2,968.7 |
| Adjusted EBITDA | 55.1 | 62.9 | 3.1 | 1.1 | -2.8 | 119.4 |
| Adjusted items | -0.1 | -0.5 | - | 0.5 | -0.1 | -0.2 |
| EBITDA | 55.0 | 62.4 | 3.1 | 1.6 | -2.9 | 119.2 |
| Depreciation and amortisation | -36.6 | -16.0 | - | -1.1 | -0.7 | -54.4 |
| Impairment | 0.3 | - | - | - | - | 0.3 |
| Operating result | 18.7 | 46.4 | 3.1 | 0.5 | -3.6 | 65.1 |
| Finance result | -0.1 | 9.5 | - | 1.1 | -3.6 | 6.9 |
| Result before tax | 18.6 | 55.9 | 3.1 | 1.6 | -7.2 | 72.0 |
| st half-year 2022 1 |
||||||
| Revenue | 1,383.9 | 1,548.6 | - | 397.7 | -1.3 | 3,328.9 |
| Adjusted EBITDA | 97.6 | 47.7 | 16.0 | 24.5 | -3.8 | 182.0 |
| Adjusted items | -0.1 | -1.1 | - | 0.1 | - | -1.1 |
| EBITDA | 97.5 | 46.6 | 16.0 | 24.6 | -3.8 | 180.9 |
| Depreciation and amortisation | -39.3 | -12.0 | - | -9.6 | -0.7 | -61.6 |
| Impairment | -1.3 | - | - | -7.7 | -3.0 | -12.0 |
| Operating result | 56.9 | 34.6 | 16.0 | 7.3 | -7.5 | 107.3 |
| Finance result | -0.2 | -0.4 | - | 2.3 | -0.1 | 1.6 |
| Result before tax | 56.7 | 34.2 | 16.0 | 9.6 | -7.6 | 108.9 |
1 In the first half-year of 2023, Invesis' 100 per cent revenue amounts to €28 million (2022: €18 million). BAM holds 50 per cent interest in the Invesis joint venture with PGGM.
2 Adjusted EBITDA in the first half-year 2022 included adjusted EBITDA of Wayss & Freytag Ingenieurbau, which amounted to €15.8 million. Wayss & Freytag Ingenieurbau was sold by the Group on 15 September 2022.
Press release of 17 August 2023, page 17 of 24
The revenue in the reportable segments of Division NL and Division UK&I is further disaggregated as follows:
| Revenue | Division NL | Division UK&I |
|---|---|---|
| st half-year 2023 1 |
||
| Construction and property | 962 | 498 |
| Ventures | - | 199 |
| Civil engineering | 400 | 648 |
| BAM Ireland | - | 246 |
| Other, eliminations and miscellaneous | -14 | -32 |
| Total | 1,348 | 1,559 |
| st half-year 2022 1 |
||
| Construction and property | 964 | 512 |
| Ventures | - | 108 |
| Civil engineering | 436 | 609 |
| BAM Ireland | - | 351 |
| Other, eliminations and miscellaneous | -16 | -31 |
| Total | 1,384 | 1,549 |
Total revenue of Belgium, Germany and International of €62 million (2022: €398 million) comprises revenue from Belgium of €54 million (2022: €166 million), Germany of nil (2022: €215 million) and International of €8 million (2022: €17 million).
Revenue is further disaggregated by nature as follows:
| (x € million) | Division NL | Division UK&I |
Belgium, Germany and International |
Other including eliminations |
Total |
|---|---|---|---|---|---|
| Revenue and results st half-year 2023 1 |
|||||
| Construction contracts | 1,145.8 | 1,425.2 | 31.3 | -0.2 | 2,602.1 |
| Property development | 186.1 | 73.8 | 22.0 | - | 281.9 |
| Service concession | |||||
| arrangements and other | 16.1 | 60.3 | 8.3 | - | 84.7 |
| 1,348.0 | 1,559.3 | 61.6 | -0.2 | 2,968.7 | |
| st half-year 2022 1 |
|||||
| Construction contracts | 1,119.8 | 1,494.2 | 370.9 | -1.3 | 2,983.6 |
| Property development | 251.3 | 0.9 | 18.7 | 270.9 | |
| Service concession | |||||
| arrangements and other | 12.8 | 53.5 | 8.1 | 74.4 | |
| 1,383.9 | 1,548.6 | 397.7 | -1.3 | 3,328.9 |
7. Figures per ordinary share with par value of €0.10
| st half-year 1 |
st half-year 1 |
Full-year | |
|---|---|---|---|
| (x €1, unless indicated otherwise) | 2023 | 2022 | 2022 |
| Earnings per share (basic) | 0.22 | 0.31 | 0.66 |
| Earnings per share (diluted) | 0.22 | 0.31 | 0.65 |
| Equity attributable to shareholders of the Company | 3.10 | 2.77 | 3.02 |
| Number of shares ranking for dividend (x 1,000) | 272,930 | 273,407 | 268,120 |
| Average number of shares ranking for dividend (x 1,000) | 270,401 | 273,334 | 271,783 |
| Number of shares ranking for dividend diluted (x 1,000) | 272,930 | 273,407 | 268,120 |
| Average number of shares ranking for dividend diluted (x 1,000) | 272,708 | 273,334 | 275,555 |
Press release of 17 August 2023, page 18 of 24
8. Explanatory notes to the half-year 2023 Interim Financial Statements
1. General information
Royal BAM Group nv ('the Company') was incorporated under Dutch law and is domiciled in the Netherlands. These interim financial statements contain the financial data for the first six months of 2023 for the Company and its subsidiaries (jointly referred to as 'the Group') and includes its share in joint operations.
These interim financial statements were approved by the Supervisory Board and released for publication by the Executive Board on 16 August 2023. The information in these interim condensed consolidated financial statements is reviewed, not audited.
2. Basis of preparation
These interim financial statements for the six months ended 30 June 2023 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the EU. The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2022, which have been prepared in accordance with IFRS as adopted by the EU, and the commentary by the Executive Board earlier in this condensed interim report. The interim financial statements have been prepared on a going concern basis.
3. Accounting principles
The accounting policies adopted in the preparation of the interim financial statements are consistent with those applied in the Group's consolidated financial statements for the year ended 31 December 2022. The Group did not adopt early any new accounting standards, interpretations and amendments that have been issued but are not yet effective. Several amendments apply for the first time in 2023, but do not have an impact on the interim condensed consolidated financial statements of the Group.
The presentation of the interim consolidated income statement and the interim consolidated statement of comprehensive income as presented in this report have been extended to align with the presentation of the respective statements in the annual financial statements.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The Group performed an assessment and concluded that the amendments have no impact on the Group's interim condensed consolidated financial statements, and is not expected to affect the accounting policy disclosures in the Group's annual consolidated financial statements.
Exchange rates
The following exchange rates of the euro against the pound sterling (£) have been used in the preparation of these interim financial statements:
| st half-year 1 |
st half-year 1 |
Full-year | |
|---|---|---|---|
| 2023 | 2022 | 2022 | |
| Closing exchange rate | |||
| Pound sterling | 0.861 | 0.861 | 0.884 |
| Average exchange rate | |||
| Pound sterling | 0.876 | 0.844 | 0.853 |
Press release of 17 August 2023, page 19 of 24
4. Estimates and judgements in the interim financial statements
The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense, including the current market and climate change developments. The Group's assessment of the impact of climate-related matters and supply chain disruptions and inflation to judgments, estimates and assumptions remains the same as in the financial statements for the year ended 31 December 2022.
Actual results may differ from these estimates.
The significant assumptions and judgements made by management remains the same as those that were applied to the financial statements for the year ended 31 December 2022.
5. Taxes
As per 30 June 2023, the result before tax amounted to €72.0 million and the income tax expense amounted to €11.9 million. The effective tax rate is 16.5 per cent (30 June 2022: 22.1 per cent).
During the first half-year of 2023, the effective tax rate differs from the weighted average nominal rate of 25.1 per cent. The difference is mainly attributable to the recognition of additional deferred tax assets of €4.6 million relating to liquidation losses in BAM International.
Carry forward tax losses
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits are available against which tax losses can be utilised. BAM reassesses the forecasted future taxable profits and the tax loss settlement potential twice a year.
Other developments
In December 2022, the Council of the EU unanimously adapted the Directive implementing Pillar Two global minimum tax rules. This directive aims to ensure a global minimum level of taxation of 15 per cent in all countries in which multinational companies are present. The Group completed an initial assessment of the impact of the new rules based on initiatives presented by governments in countries in which the Group is active. In all such countries the applicable tax rate is above 15 per cent, except Ireland (12.5 per cent). However, it is expected that Pillar Two will not have an impact as the Irish government announced that it will increase the applicable tax rate to (or above) 15 per cent for large multinational companies once Pillar Two global minimum tax rules are adopted. An increased tax rate in Ireland will obviously have an impact to the Group's tax expense.
In the Netherlands, Pillar Two may have an impact to the Group's tax expense when significant liquidation losses (e.g. BAM International) are claimed. Liquidation losses are disregarded by Pillar Two; depending on the amount of liquidation losses and the amount of pre-tax income in a particular year, the effective tax rate in the Netherlands may be lower than 15 per cent as a result of which additional taxes may be due under Pillar Two regulations.
The Group is currently performing a more detailed assessment and implementing administrative requirements.
6. Goodwill
Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment. In an impairment test, the recoverable amount of a cash-generating units (CGU) is
Press release of 17 August 2023, page 20 of 24
determined based on a value-in-use calculation. This is determined using discounted cash flow projections and requires estimates in connection with the future development of revenues, profit before tax margins and the determination of appropriate discount rates. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
In 2023, impairment indication analyses were performed for CGUs with goodwill, consisting of qualitative and quantitative elements. BAM Bouw en Techniek (non-residential division NL) was identified as a CGU with an impairment indicator. Therefore, an impairment test was performed, together with CGUs with limited headroom at year-end 2022 (BAM Contractors and Kairos), reflecting recent developments and the latest market expectations. It was concluded that earlier applied key assumptions at year-end 2022, including discount rate, revenue growth rates and forecasted profit margins, remain appropriate. The impairment tests did not reveal any impairments; for CGU BAM Bouw en Techniek sufficient headroom remains. For CGUs with limited headroom, a reasonably possible change in a key assumption in the future could cause the CGU's carrying amount to exceed its recoverable amount. The sensitivity analyses for the CGUs with limited headroom are not significantly different compared to 31 December 2022.
7. Covenants
In various finance arrangements, the Group is bound by terms and conditions, both qualitative and quantitative and including financial ratios, in line with the industry's practice.
In the first half-year of 2023, the revolving credit facility was not used.
As per 30 June 2023, BAM complies with all financial covenant requirements; the recourse leverage ratio was negative 4.49 (≤ 2.75) and the recourse solvency ratio was 30.3 per cent (≥ 15 per cent). The Group reports a net recourse interest income instead of an expense in the first six months period ended 30 June 2023, making the recourse interest cover ratio not applicable (≥ 4.0).
The Group performed a sensitivity analysis on the covenant requirements for the next four quarters with satisfactory outcome. BAM notes that sensitivity analysis is to a certain extent judgmental and given the uncertainty inherent to forecasts, actual results may differ.
8. Contingencies
8.1 Legal proceedings
In the normal course of business the Group is involved in legal proceedings predominantly concerning litigation as a result of claims with respect to construction contracts.
In accordance with current accounting policies, the Group has recognised provisions for these claims, where appropriate, in its balance sheet. Some proceedings, if decided adversely or settled, may have a material impact on the Group's financial position, operational result or cash flows. In the first half-year of 2023 no significant legal proceedings took place.
8.2 Investigation
In October 2022, the Dutch Fiscal Information and Investigation Service (FIOD) and the Dutch Public Prosecutions Office (Openbaar Ministerie) have informed BAM International that it is the subject of an investigation into suspicions relating to potential fraud and corruption at some already completed projects. The timing and possible outcome of the investigation are uncertain. Therefore, the potential adverse financial impact of the outcome of the investigation, if any, cannot be reliably estimated at this time but could possibly be material.
Press release of 17 August 2023, page 21 of 24
BAM is fully cooperating with the investigation and taking appropriate steps in connection with the investigation, including an internal review of the relevant projects. In July 2020, BAM announced its intention to wind down BAM International. Meanwhile all projects of BAM International have been completed.
9. Related party transactions
Transactions with related parties are conducted at arm's length, on terms comparable to those for transactions with third parties. In the first half-year of 2023 no significant related party transactions outside the ordinary course of business took place.
10. Fair value measurements and disclosures
The fair value of financial instruments not quoted in an active market is measured using valuation techniques. The Group uses various techniques and makes assumptions based on market conditions on balance sheet date. One of these techniques is the calculation of the net present value of the expected cash flows (DCF-method). The fair value of the interest rate swaps is calculated as the net present value of the expected future cash flows. The fair value of the forward exchange contracts is measured based on the 'forward' currency exchange rates on balance sheet date. In addition, valuations from financial institutions are requested for interest rate swaps.
Financial instruments include receivables valued on fair value through profit and loss, which are part of other non-current financial assets. These amounted to €68 million (2022: €63 million) and are classified as a level 3 valuation method. The fair value is determined based on the DCF-method, with no significant changes in assumptions compared to 31 December 2022.
11. Cash and cash equivalents
Cash and cash equivalents include the Group's share in cash of joint operations as part of the conditions in project specific funding agreements and amount to €299 million (31 December 2022: €254 million). From the remaining cash balance, an amount of €25 million (31 December 2022: €19 million) is not at the free disposal of the Group.
12. Equity
Ordinary shares
In the first half-year of 2023, the Group issued 4.6 million new ordinary shares to fulfil its obligation to shareholders that opted for the stock dividend (2022: nil). The shares were issued at no cost.
Dividend
On 12 April 2023, cash dividend of €0.15 per ordinary share with scrip alternative was approved (2022: nil). On 8 May 2023, the Group paid €22 million in cash and distributed 9.2 million shares to shareholders that opted for stock dividend (2022: nil).
Treasury shares
In the first half-year of 2023, the Group repurchased 6.0 million own shares for a total consideration of €11.5 million (first half-year of 2022: nil). The repurchases consist of the repurchase programme to offset the dilution effect due to the issue of stock dividend and of the various running share-based employee incentive schemes (5.2 million shares) and repurchase of vested shares from employees to settle their wage tax and social security premiums (0.8 million shares).
Press release of 17 August 2023, page 22 of 24
13. Investment in associates and joint ventures
Investment in associates and joint ventures
In the first half-year of 2023, the share of result of investment in associates and joint ventures amounted to a gain of €15 million (2022: €31.8 million), which resulted from the share of result from Invesis and other (property development) joint ventures.
Invesis joint venture
During the first half-year of 2023, the share of result of investments in the Invesis joint venture amounted to €3.1 million (2022: €16 million). In the first half-year of 2023, fair value of hedge instruments in Invesis resulted in a €1.7 million gain (2022: €18.7 million gain) in other comprehensive income (i.e. the effective portion of the hedge) and a €1 million gain (2022: €14 million gain) in profit and loss. Inherently, these unrealised gains reverse towards the maturity of the underlying instruments, resulting in a decrease in the carrying amount of Invesis. The gains are not distributable by the Group and therefore included in the legal reserve as explained in note 7.1 of the Company financial statements for the year ended 31 December 2022.
14. Assets held for sale and divestments
On 30 June 2022, assets held for sale comprised of the Group's stake in Wayss & Freytag Ingenieurbau AG, a wholly owned subsidiary within the Germany operating segment, including other non-core related assets. The sale of Wayss & Freytag Ingenieurbau AG was finalised on 15 September 2022, resulting to a gain of €52 million.
15. Events after the balance sheet date
No material events after the balance sheet date have occurred.
Press release of 17 August 2023, page 23 of 24
Independent auditor's review report
To: the shareholders and the supervisory board of Royal BAM Group nv
Our conclusion
We have reviewed the interim condensed consolidated financial information included in the accompanying half-yearly financial report of Royal BAM Group nv based in Bunnik for the period from 1 January 2023 to 30 June 2023.
Based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial information of Royal BAM Group nv for the period from 1 January 2023 to 30 June 2023, is not prepared, in all material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.
The interim condensed consolidated financial information comprises:
- The interim consolidated statement of financial position as at 30 June 2023
- The following interim consolidated statements for the period from 1 January 2023 to 30 June 2023: the income statement, the statement of comprehensive income, the condensed statement of changes in equity and statement of cash flows
- The notes comprising material accounting policy information and selected explanatory information
Basis for our conclusion
We conducted our review in accordance with Dutch law, including the Dutch Standard 2410, "Het beoordelen van tussentijdse financiële informatie door de accountant van de entiteit" (Review of interim financial information performed by the independent auditor of the entity). A review of interim financial information in accordance with the Dutch Standard 2410 is a limited assurance engagement. Our responsibilities under this standard are further described in the Our responsibilities for the review of the interim condensed consolidated financial information section of our report.
We are independent of Royal BAM Group nv in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Responsibilities of the executive board and the supervisory board for the interim condensed consolidated financial information
The executive board is responsible for the preparation and presentation of the interim condensed consolidated financial information in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. Furthermore, the executive board is responsible for such internal control as it determines is necessary to enable the preparation of the interim condensed consolidated financial information that is free from material misstatement, whether due to fraud or error.
The supervisory board is responsible for overseeing Royal BAM Group nv's financial reporting process.
Press release of 17 August 2023, page 24 of 24
Our responsibilities for the review of the interim condensed consolidated financial information
Our responsibility is to plan and perform the review in a manner that allows us to obtain sufficient and appropriate assurance evidence for our conclusion.
The level of assurance obtained in a review engagement is substantially less than the level of assurance obtained in an audit conducted in accordance with the Dutch Standards on Auditing. Accordingly, we do not express an audit opinion.
We have exercised professional judgement and have maintained professional scepticism throughout the review, in accordance with Dutch Standard 2410.
Our review included among others:
- Updating our understanding of Royal BAM Group nv and its environment, including its internal control, and the applicable financial reporting framework, in order to identify areas in the interim condensed consolidated financial information where material misstatements are likely to arise due to fraud or error, designing and performing analytical and other review procedures to address those areas, and obtaining assurance evidence that is sufficient and appropriate to provide a basis for our conclusion
- Obtaining an understanding of internal control as it relates to the preparation of interim condensed consolidated financial information
- Making inquiries of the executive board and others within Royal BAM Group nv
- Applying analytical procedures with respect to information included in the interim condensed consolidated financial information
- Obtaining assurance evidence that the interim condensed consolidated financial information agrees with, or reconciles to, Royal BAM Group nv's underlying accounting records
- Evaluating the assurance evidence obtained
- Considering whether there have been any changes in accounting principles or in the methods of applying them and whether any new transactions have necessitated the application of a new accounting principle
- Considering whether the executive board has identified all events that may require adjustment to or disclosure in the interim condensed consolidated financial information
- Considering whether the interim condensed consolidated financial information has been prepared in accordance with the applicable financial reporting framework and represents the underlying transactions free from material misstatement
Utrecht, 16 August 2023
Ernst & Young Accountants LLP
Signed by J.H.A. de Jong