Beurs2020 schreef op 23 mei 2017 09:50:
BAM is door ABN AMRO onder de loep genomen.
BAM Group is one of the largest construction companies in Europe. BAM is active in the sectors Construction and Property, Civil Engineering, Public-private Partnerships. The company's geographical exposure is NL (39% of total sales), UK (29%), Belgium (11%), Germany (12%), and Ieland (5%).
Argumentatie Let op! De inhoud van deze factsheet is bijgewerkt en wordt momenteel vertaald. U leest alvast de actuele Engelstalige tekst.
We rate BAM Buy given the high expected FCF (free cash-flow) yield and its attractive valuation. We believe that BAM is starting to reap the benefits of the 'Back in Shape' programme, which has led to good cost control, improved earnings and cash flow generation, and a strong balance sheet. On top, BAM's end markets, like the Dutch housing market, are recovering.
With the successful execution of the Back in Shape programme, BAM is now implementing its
2016 - 2020 strategy. At the beginning of 2016 Management provided an update on its strategy for 2016 - 2020, which was not ground-breaking (as expected), but we believe that the strategy will substantially improve management controls and consequently lead to better returns.
The three main objectives of the strategy are:
1) To focus on the project portfolio ('Doing Things Better'). This ultimately boils down to improving the overall margins of projects
2) To shape the business portfolio ('Doing Better Things'), which implies that BAM will be focusing on
developing new propositions in its home markets that offer attractive opportunities
3) To create the future portfolio ('Doing New Things') by increasingly making use of digitisation opportunities.
We continue to believe that BAM's underlying business is improving, for which there are clear signs in both earnings and TWC (trade working capital). BAM, due to long-term nature of construction business, is in our view like an oil tanker that needs to change course. It takes a while before the full effect of management actions is visible, but the trend is undeniably positive. This gives us confidence that once the legacy projects are out of the order book shareholders will own a robust construction
company with a strong balance sheet, healthy margins and high free cash flows.