Royal BAM Group nv Half-year results 2012 Analysts meeting Amsterdam, 23 August 2012
Highlights Net loss including impairments for H1 2012: 251 million Results at Construction and M&E services and Civil engineering in line with management expectations given very difficult market circumstances Lower revenue at Property; further deterioration in Dutch property market leads to non-cash impairments of property portfolio by 247 million and of goodwill by 150 million Solid performance and good bid pipeline at PPP Order book at 10.8 billion at end of H1 2012 (year-end 2011: 10.4 billion) Sale of Tebodin completed in April; contribution to net result of 65 million Well within limits of banking covenants Royal BAM Group Half-year results 2012 2
Construction and M&E services 1H12 1H11 Δ Revenue 1,570 1,547 +1% Result 1) 29.7 45.7 Margin 1.9% 3.0% Order book 4,266 4,456-4% (in million, unless stated otherwise) 1) Result before tax Fiercely competitive market conditions continuing Revenue up in non-residential in UK, B and D; offset by fall in NL Margin of 1.9% in line with H2 2011 and in line with expected margin of around 2% for FY 2012 Fall in order book due to selective tendering Royal BAM Group Half-year results 2012 3
Civil engineering 1H12 1H11 Δ Revenue 1,761 1,810-3% Result 1) 24.2 47.3 Margin 1.4% 2.6% Order book 5,574 5,087 +10% (in million, unless stated otherwise) 1) Result before tax Market conditions and outlook in European home markets mainly negative; some signs of improvement in IE and UK Good results and prospects BAM International, especially in Australia and Middle East Lower margin in H1 2012 due to lower quality of order book Still in line with expected margin of around 2% for FY 2012 Increase in order book due to BAM International and Germany Royal BAM Group Half-year results 2012 4
Property 1H12 1H11 Δ Revenue 240 305-21% Result 1) -10.2 1.2 Margin Neg. 0.4% Order book 1,129 1,103 +2% (in million, unless stated otherwise) 1) Result before tax Market conditions in NL deteriorating ( later, fewer and lower ) Markets in UK and IE remained subdued; encouraging performance in Belgium NL sales mix biased to cheaper, student apartments and to institutional buyers (60%) Operational loss due to impact of adjusted assumptions in NL Impairments property 247 million Impairments goodwill 150 million Royal BAM Group Half-year results 2012 5
Impairments: Dutch market conditions 115 110 105 100 95 90 Price index homes 60.000 50.000 40.000 30.000 20.000 10.000 0 Homes sales average* *4 quarters rolling average Source: Centraal Bureau voor de Statistiek, Den Haag/Heerlen 30.000 25.000 20.000 15.000 10.000 5.000 0 Building permits issued average* Royal BAM Group Half-year results 2012 6
Impairments: process At AM: Total land bank of AM of 230 land positions with a total value of 755 million have been reviewed (partly with external appraisers) Review led to impairments totalling 230 million for 100 land positions, reducing book value from 485 million to 255 million (average impairment 47%) The other 130 positions with a total value of 270 million were valued at or above book value Other property activities (including other countries) Review of all positions, including commercial, resulted in impairments totalling 17 million Royal BAM Group Half-year results 2012 7
Impairments: categories Land and building rights Property development Q4 2011 Additions* /usage H1 2012 Reclassify Later Impairments Fewer & lower H1 2012 601 70 315-245 741 891-39 -315-2 535 Total 1,492 31 - -247 1,276 (in million, unless stated otherwise) * Including 66 million as a result of reappraisal of obligations relating to land purchases Royal BAM Group Half-year results 2012 8
Property investments (after impairments) Investments Netherlands ( 966 million) Netherlands 966 United Kingdom 178 Belgium 93 Ireland 39 Total: 1,276 in million Commercial ( 161) Residential ( 145) Land and building rights ( 660) Land bank developments > 8 yr ( 222) Land bank developments < 8 yr ( 439) in million Royal BAM Group Half-year results 2012 9
Property Netherlands 2012 2011 Number of home sold from own development: Q1 619 662 Q2 535 563 Q3 408 Q4 597 Total 1,154 2,230 Stock of unsold and unlet premises : 1H12 2011 - homes under construction (number) 280 308 - homes finished (number) 160 170 - commercial property (m 2 ) 11,500 10,800 Royal BAM Group Half-year results 2012 10
Public private partnerships 1H12 1H11 Δ Revenue 275 229 +20% Result 1) 4.1 0.0 Margin 1.5% 0.0% Order book 715 908-21% (in million, unless stated otherwise) 1) Result before tax Operational profit first half year includes one small transfer to PGGM JV Total book profit on transfers to PGGM JV of around 10 million expected for FY 2012 19 active bids in pipeline, with 4 final decisions expected in 2012 Royal BAM Group Half-year results 2012 11
Public private partnerships: portfolio 1H12 2011 2010 Contracts in portfolio 34 34 32 Of which: - Operational 24 22 21 - Under construction 1) 10 12 11 Balance sheet positions 2) 1H12 2011 2010 PPP assets (intangibles, receivables) 1,290 1,079 1,019 PPP loans 1,191 991 941 Net PPP equity investment 3) - Actual 97 88 87 - Committed (approx.) 249 253 240 Directors valuation (approx.) 302 300 300 (in million, unless stated otherwise) 1) 2011 and 1H12: excluding two contracts in preferred bidder stage 2) Excluding contracts held for sale 3) BAM share in equity of PPP contracts Royal BAM Group Half-year results 2012 12
Revenue and results per sector 1H12 1H11 Revenue Result 1) Revenue Result 1) Construction and M&E Services 1,570 29.7 1,547 45.7 Civil engineering 1,761 24.2 1,810 47.3 Property 240-10.2 305 1.2 PPP 275 4.1 229 0.0 Eliminations and other -386-0.1-334 0.0 Total sectors 3,460 47.7 3,557 94.2 (in million, unless stated otherwise) 1) Result before tax Royal BAM Group Half-year results 2012 13
Key figures: income statement 1H12 margin 1H11 margin Total result sectors 47.7 1.4% 94.2 2.6% Group overhead 1.8-6.9 Group interest -5.0-13.3 Operating activities 44.5 1.3% 74.0 2.1% Dredging - 9.2 Result before tax 44.5 1.3% 83.2 2.3% Impairment at Property -247.4 - Impairment goodwill -150.4 - Income tax 38.0-20.5 Minority interest -0.3-0.8 Net result from continuing activities -315.6 62.0 Discontinued operations 65.0 3.8 Net result -250.6 65.8 (in million, unless stated otherwise) Royal BAM Group Half-year results 2012 14
Key figures: balance sheet 1H12 2011 1H11 Balance sheet total 6,679 7,218 7,144 Shareholders equity 877 1,162 1,165 Capital base 1,002 1,362 1,365 Capital ratio 15.0% 18.9% 19.1% Net cash 428 1,008 571 Interest-bearing debt 1,982 2,191 2,191 Net debt position 1,507 1,178 1,615 Recourse net debt 69-56 416 Shareholders equity and capital base affected by impairments, resulting in lower capital ratio Recourse net debt improved by 347 million vs 1H11 due to sales of Van Oord and Tebodin Fixed assets 2,388 2,229 2,454 Net operating capital (excl. cash and st-debt) (in million, unless stated otherwise) 564 621 683 Royal BAM Group Half-year results 2012 15
Breakdown of net debt position 1H12 2011 1H11 Non-recourse PPP loans 1,075 860 764 Non-recourse project financing 363 375 435 Other project financing 317 351 384 Total project related 1,755 1,586 1,583 Subordinated loan 125 200 201 Loan BAM - 360 360 Financial lease liabilities 40 36 38 Bank overdrafts and other loans 63 9 9 Total interest-bearing debts 1,982 2,191 2,191 Less: cash -476-1,013-576 Net debt position 1,506 1,178 1,615 Recourse net debt position 69-56 416 (in million, unless stated otherwise) Royal BAM Group Half-year results 2012 16
Recourse leverage ratio Recourse interest coverage ratio 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0-0,5 1,1 1,6 2,2 1,7 0,7 1,6 0,8 1,2 0,5 1,3 1,5 1,4-0,2 0,9 0,4 11,0 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 10,4 9,9 7,7 8,7 6,2 7,3 7,7 4,9 7,1 6,4 6,1 6,5 4,8 4,5 5,0 Recourse leverage Limit recourse leverage Recourse interest coverage Limit recourse interest coverage Current ratio Recourse solvency ratio 1,50 1,40 1,30 1,20 1,10 1,00 0,90 1,39 1,24 1,21 1,23 1,251,27 1,31 1,25 1,13 29,0% 27,0% 25,0% 23,0% 21,0% 19,0% 17,0% 15,0% 13,0% 19,8% 19,9% 20,3% 20,4% 20,8% 19,3% 26,4% 25,2% 25,3% 24,0% 24,9% 24,9% 25,4% 23,8% 23,3% Current ratio Limit current ratio Recourse solvency Limit recourse solvency Royal BAM Group Half-year results 2012 17
Order book 1H12 2011 Construction and M&E Services 4,266 4,456 Civil engineering 5,574 5,087 Property 1,129 1,103 PPP 715 908 Eliminations and other -884-1,154 Total sectors 10,800 10,400 (in million) Order book up mainly due to new orders BAM International and Germany in the Civil engineering sector Royal BAM Group Half-year results 2012 18
Outlook Royal BAM Group is confident about its prospects based on a sharp focus on its core business activities, its scope to promote synergies across the Group and its prospects for growth in new markets BAM forecasts a result before tax and impairments from continuing operations for the full year 2012 of at least 100 million, based on an expected margin of around 2% for Construction and mechanical and electrical services and Civil engineering Royal BAM Group Half-year results 2012 19
NOTES: Royal BAM Group First quarterly results 2012 20 Royal BAM Group nv - Investor Relations - Patrick Snippe - +31 30 659 8707 - p.snippe@bamgroep.nl