Royal Bam Group has announced a major restructuring programme following heavy losses in its construction and civil engineering arms.
The executive board of Royal Bam Group has set out details of a restructuring programme designed to streamline several departments and cut costs.
There will be a major change in structure, with the group’s operating companies being split into two business lines: construction and property; and civil engineering plus Bam PPP.
Bam also announced its workforce will be reduced by approximately 650 over the course of 2015.
The job losses will be mainly in the Netherlands and focused on back office positions, with the UK arm of the company set to largely avoid any reductions, despite reporting major losses in the group’s latest annual results.
The group’s ‘Back in Shape’ programme will also continue to be implemented, aimed at improving Bam’s tendering processes and project execution.
It will focus on “better insights into project risks and opportunities, financial as well as operational”, and Bam said it “aims to get its results on projects into a 2 to 4 per cent range in the longer term”.
Bam will maintain its existing target for divestments of at least €100m per year. So far in 2014, Bam has achieved divestments of property for a total of €160m.
The group says it “expects divestments in the rest of 2014 and in 2015 to come mainly from sales of commercial properties, plus small divestments of non-core assets as part of establishing the new organisation structure”.
The group said it is simplifying its organisational structure in the Netherlands and Belgium by merging companies.
In the Netherlands, 12 companies will be bundled into two companies, one in each of the two business lines: construction and property; and civil engineering plus Bam PPP.
In Belgium, six companies will operate from one company – Bam Belgium – across both business lines.
Royal Bam Group CEO Rob van Wingerden said: “Our recent performance shows we need to change in order to deliver on our group strategy and capitalise on our potential.
“We are reshaping our operational model by strengthening our culture, simplifying our structure and sharpening our processes.
“That will translate into better project control, a lower cost base and stronger balance sheet. And that in turn will improve our competitive position and create more value for our shareholders.”