Financial results

Revenue and underlying EBITDA

In 2023, Heijmans’ revenue increased by almost 17% to € 2,117 million from € 1,812 million. On an organic basis, excluding the impact of the Van Wanrooij acquisition, revenue came in 10% higher. Building & Technology and Infra both recorded strong growth. The decline at Heijmans Property Development was related to the nationwide decline in home sales, which became visible from mid-2022 and was accompanied by a rapid rise in (mortgage) interest rates. However, home sales have visibly picked up again since the fourth quarter of 2023, prompted by a slight drop in interest rates combined with wage increases. Van Wanrooij’s revenue as from 5 September, driven by 431 net home conveyances, developed well and amounted to € 125 million.

Infra managed to respond to the central government’s heavier emphasis on replacing and renovating the existing road network, as well as the flood protection programme and energy transition. At Building & Technology, both Services and Non-residential Projects posted solid volume growth. Despite the lower volume coming from Property Development, Residential Building managed to maintain its overall volume by carrying out assignments for housing corporations and investors. Residential building saw a particularly sharp increase in revenue from housing corporations, for new-build, maintenance and renovation projects.

Heijmans is targeting underlying EBITDA margins of 4% - 6% for all its construction activities and 6% - 8% for its property development activities and, as it did in 2022, managed to meet these target margins in all business areas in 2023. Infra came in even higher due to a combination of volume growth and strong project performance, even if the release of the Wintrack II provision is excluded. The Wintrack II case ended for Heijmans with the final ruling of the Board of Arbitration on appeal. The ruling on the case was positive for Heijmans, which meant we could release the provision taken for reasons of prudence. 

Underlying EBITDA rose to € 147 million from € 126 million in 2023. Building & Technology and Infra recorded an increase in underlying EBITDA, while at Property Development underlying EBITDA fell in line with lower revenue to € 27 million from € 42 million. Van Wanrooij contributed € 20 million to EBITDA from 5 September. The purchase price allocation as part of the acquisition resulted in the revaluation of all development positions to market value as of 5 September. Under IFRS, this revaluation results in a higher cost of sales for the land under development. This non-cash fair value step-up of the land had an impact of € 11 million from 5 September to year-end. For a more detailed explanation of the impact of the purchase price allocation, please see the financial statements, section 6.2 Business combinations.

Property Development

In line with the decline in volume in the housing market, Property Development recorded a decline in revenue to € 412 million (2022: € 570 million). Underlying EBITDA fell to €27 million from €42 million. Projects performed at a similar level to the previous year, but the lower volume led to under-coverage of indirect costs, which resulted in a decline in the underlying EBITDA margin to 6.6% from 7.4%. There were two main reasons for the lower revenue. Firstly, it took longer - especially for large-scale, inner-city apartment complexes - to achieve the desired pre-sales percentages required for the start-of-construction decision. Secondly, projects are being delayed due to increasingly lengthy zoning procedures, with objection procedures taking extra time.

Residential sales picked up again from the fourth quarter of 2023 onwards. This is particularly pronounced in the suburban house segment. Inner-city projects are larger and more difficult to phase, so the recovery is somewhat slower in that segment. In 2023, Heijmans ultimately sold 1,803 homes, with 680 of these sold to private buyers and 1,123 to housing associations and investors. This means the total number of homes sold remained practically the same as in 2022 (1,811 homes sold). Projects involving the construction of houses, such as Blent in Nijmegen, Hulakker in Lunteren and Borg and Buiten in Culemborg contributed to this development.

The scarcity in the housing market remains, the result of years of government policy with a focus on inner-city construction, primarily of apartment complexes. This government policy has resulted in a one-sided supply of mostly large-scale, inner-city projects with long construction times and difficult business cases. Increasing suburban planning capacity and shortening spatial planning procedures is essential if we are to arrive at a structural solution for the shortages in the housing market. There is certainly demand for affordable homes, but in say seven to 10 years’ time, today’s first-time buyers will need to move up on the property ladder. Our plea is therefore to build for starters, but not to lose sight of mobility in the housing market in the near future.

Van Wanrooij

From 5 September (the acquisition date) to year-end, Van Wanrooij posted revenue of € 125 million. Underlying EBITDA in this period was € 20 million after the allocation of the release of the fair value step-up of € 11 million that was performed as part of the purchase price allocation (for a more detailed explanation see the financial statements, section 6.2 Business combinations). Project Development saw 431 homes transferred to buyers in the last months of the year. Due to the high number of transfers in the final months - accounting for more than half of the full year figure, the underlying EBITDA in this period was relatively high compared with the full year. Van Wanrooij uses separate purchase and contract agreements, resulting in a lower revenue base and correspondingly higher margin than at Heijmans Property Development. The high level of standardisation resulting in higher productivity per employee also contributes to this higher margin.

In 2023, Van Wanrooij sold 1,009 homes (gross) compared with 1,025 in the previous year, almost entirely in the private segment. In a year in which home sales lagged considerably behind previous years, particularly in the first three quarters of the year (see NVM and CBS reports, among others), Van Wanrooij therefore remained within the set bandwidth of 1,000 to 1,500 homes (gross) in terms of home sales. On a ‘net’ basis, i.e. after deducting the proportional part realised by cooperation partners, Van Wanrooij sold 776 homes. As this is the definition used by Heijmans Property Development for residential sales, we will be reporting on this basis in the future. In this case, the target range will be 750 to 1,250 homes (net) per year.

Van Wanrooij’s primary sales channel is the consumer market and sales figures remained at a stable level in that market in 2023. Although Van Wanrooij also suffered from an unfavourable sales climate due to rising costs and pressure on affordability, Van Wanrooij’s homes in suburban locations remain highly sought-after. This is because the mainly suburban house development areas are easier to phase than inner-city projects, which are often in high-rise buildings. More than 90% of the homes Van Wanrooij built in 2023 were based on the Optio concept. Good examples of projects in which the Optio concept shows its value include Landgoed Coudewater (‘s-Hertogenbosch) and Huurlingsedam (Wijchen). Both projects are characterised by a great deal of variation in housing types and price categories. From affordable starter homes, rental homes, spacious terraced and corner houses to luxury semi-detached houses. Van Wanrooij continues to innovate the Optio housing concept, keeping homes affordable and ensuring diversity in plans.

With a work inventory of land positions that has increased to over 14,000 homes (net), Van Wanrooij is in an excellent position to accelerate when the recovery in the housing market continues and residential sales continue to pick up. The first signs of this were already visible in Q4 2023, supported by falling interest rates and rising wages, which increased borrowing capacity for consumers. These aspects increase affordability for (prospective) buyers.

Building & Technology

Revenue at Building & Technology increased to € 1,076 million from € 933 million. Driven by higher volume, underlying EBITDA rose to € 46 million from € 38 million. At 4.3%, the margin was slightly higher than in the previous year. This margin includes the start-up costs of the timber-frame housing production plant in Heerenveen, which opened in October. The basic premise in the development of these homes is sustainability and affordability through industrial and modular production. The Heijmans Horizon concept has many options and variations. At the same time, we build and develop in a nature-inclusive and climate-adaptive way. This is how we contribute to a healthy living environment for people and nature. After the opening of the timber-frame housing production plant, the first houses of this were placed for a housing association in Eindhoven at the end of 2023 and the first owner-occupied houses have now been sold in Culemborg.

The increase in revenue at Building & Technology was largely realised in the Services business. Heijmans was particularly pleased with the share of recurring business, arising from existing, long-term relationships. Royal FloraHolland (RFH) is the most recent partner with whom Heijmans has closed a long-term contract in this context.

There was also strong growth at Non-residential projects. Heijmans was commissioned to renovate and expand a listed municipal building to create a new government office in the Arnhem railway station area. This involves a former post office, which will house the Tax and Customs Administration, the Central Government Real Estate Agency and the Education Executive Agency. The contract, including maintenance, has a total contract value of over € 55 million. Heijmans also received the definitive contract for the technical design of the new building for the Faculty of Applied Sciences at Delft University of Technology. The design phase started last year, after which demolition of the current plot will start in the course of 2024. The total project has a revenue value of around € 65 million for Heijmans.

Despite a lower share of construction projects from Heijmans Property Development, the revenue share for the construction/renovation of homes remained at the same level. This was partly due to more renovation contracts from housing associations, which last year resumed investing in new-build projects and making existing homes more sustainable as a result of the removal of the landlord levy. This involved a total of around 2,000 homes that were made more sustainable. On the other hand, through more new-build projects, such as the construction of 264 rental apartments (156 social and 108 mid-rental apartments and around 1,500 m² of social business space and workplaces) in Utrecht’s Leidsche Rijn Centrum. Heijmans recently started construction work on the Bloei030 project in Utrecht. The revenue value of the project is € 55 million. Last year, Heijmans also signed an agreement with the Woonkracht10 housing corporation for the realisation of 137 new-build houses and apartments in the Kraaihoek district in the centre of Papendrecht. The revenue value of this contract is € 26 million.

Infra

Infra’s revenue rose 21% to € 800 million from € 661 million. This strong increase was primarily due to higher volume at energy infrastructure, asset management and the government’s Flood Protection Programme (Dutch: HWBP). Following the Board of Arbitration’s final ruling on appeal in the Wintrack II project case, the case ended in Heijmans’ favour. This meant Heijmans was able to release the remaining provision, which had a positive impact of € 14 million on underlying EBITDA. Infra’s underlying EBITDA increased to € 66 million from € 55 million, resulting in an excellent margin (net of the impact of the release of the Wintrack II provision) of 6.6%. Infra’s order book remains above € 1 billion.

Infra is well positioned for the energy transition, as evidenced, among other things, by its partnership with TenneT in the EU 303 tender for upgrading high-voltage substations in the Netherlands. Last year, Infra‘s delivered the modification of the Krimpen high-voltage substation with the maximum achievable client satisfaction. Other projects in the context of this partnership are still in progress.

At the end of 2023, Heijmans was awarded the maintenance contract for the motorways in the province of South Holland. Heijmans was also awarded the Variable Maintenance of the national motorways in the eastern part of the Netherlands. This is a four-year framework agreement worth around € 125 million. Earlier this year, Heijmans also won other maintenance contracts, including those for sections of the A2 and A12 motorways in the central Netherlands. In collaboration with a partner, Heijmans has started work on the replacement and renovation of two bridges, the Spijkenisse Brug and the Brug over de Noord, also known as the Alblasserdam bridge. In 2023, Heijmans and GMB, working as the Waddenkwartier construction consortium, started work on the reinforcement of the Groningen section of the Lauwersmeer dyke. The construction phase represents a value of around € 90 million, with the Heijmans share amounting to 75% of this. 

In the future, the theme of water will become an increasingly important one for Infra, in terms of both water safety and water balance and quality. With projects like the Médoclaan in Maastricht, which involves the storage of rainwater, and in Rotterdam‘s Hart van Zuid district, which involves the reuse of rainwater after local treatment to clean buildings and in fountains, Infra is already showing that it is responding to this issue.

Operating result

Heijmans‘ operating result (EBIT) came in at € 81 million in 2023 (2022: € 71 million). This included € 12 million in transaction costs related to the Van Wanrooij acquisition, consisting of advisory costs, other transaction costs, including transfer tax, a one-off employee retention bonus and costs related to the calculation of the purchase price allocation in the financial statements. The 2023 operating result was also impacted by € 3 million in restructuring costs due in particular to qualitative adjustments to the organisation (2022: € 3 million).

Compared with 2022, depreciation and amortisation increased to € 46 million from € 39 million. About half of the higher depreciation was related to increased investments in electric equipment and the timber-frame housing production plant, while the other half was related to the acquisition of Van Wanrooij.  At Van Wanrooij, depreciation was largely related to leases (offices and cars) and to the amortisation of the Bouw order book that was valued as a result of the Purchase Price Allocation (see financial statements section 6.2 Business combinations).

The composition of the operating result can be specified as follows:  

Financial income and expenses

The balance of financial income and expenses in 2023 was a negative € 3 million (2022: negative € 4 million). Compared with the previous year, there were three main movements. Firstly, prior to the acquisition of Van Wanrooij, Heijmans was in net cash position. In the first eight months of the year, Heijmans deposited € 100 million in a deposit account. Given that short-term interest rates rose sharply from the summer of 2022, this led to interest income of a rounded 3% on an annual basis, increasing interest income compared with the previous year. Secondly, as a direct consequence of the Van Wanrooij acquisition, Heijmans once again drew on its syndicated bank facility from 5 September. This also increased interest expenses. The syndicated bank facility consists of a Term Loan and a revolving loan that are both subject to a floating rate of interest (three-month Euribor and one-month Euribor respectively). The applicable interest rate on the drawn amounts, including interest margin, was over 6%. Finally, interest expenses were no longer payable on the cumulative preference shares, as these were fully redeemed and cancelled in 2022.

The interest expenses also consist of (a limited number of) project financing facilities, capitalised fees related to refinancing costs, costs for keeping credit available (preparation costs) and the interest expense for lease obligations resulting from the application of IFRS 16 Leases. In addition to receipts in the deposit account as described above, interest income relates to loans granted and capitalised interest from land holdings.

Result from associates

The result from joint ventures came in at € 3 million in 2023, which was lower than in the previous year. There were no exceptional items in this item; the decline was mainly due to lower volume in joint ventures that are not proportionally consolidated. A number of joint ventures were added with the acquisition of Van Wanrooij. The profit contribution of these joint ventures was adjusted downwards due to the fact that part of the fair value step-up of the inventory position is in joint ventures.

Taxes

Pre-tax profit came in at € 81 million in 2023, which was higher than in the previous year (2022: € 73 million). The tax rate in 2023 was 26.4%, which was higher than a year earlier (2022: 18.5%) and also slightly higher than the nominal rate of 25.8%. The increase was mainly due to two factors. Firstly, compared with the previous year, there were only limited unrecognised tax loss carry-forwards that could still be capitalised. In 2022, this had a net impact of € 5 million. Secondly, part of the transaction costs incurred as part of the Van Wanrooij acquisition were not deductible for corporate income tax purposes. The effective tax rate is expected to be in line with the nominal rate in the coming year. 

Net profit and proposed dividend

Net profit for the full year 2023 came in at € 60 million, the same as in 2022. Heijmans proposes to make € 0.89 dividend per share available for the 2023 reporting year in the form of an optional dividend. This dividend proposal is in line with Heijmans’ dividend policy, which envisages an annual pay-out ratio of 40% of net profit. 

Cash flow

In 2023, cash flow was heavily influenced by investments. Both in the form of property, plant and equipment (see the investments in electrification and the timber-frame housing production plant), and in particular the acquisition of Van Wanrooij. Total investment cash flow (investments including acquisitions less depreciation) was a negative € 314 million. However, operating cash flow was strong, driven by an excellent net result development adjusted for the cash dividend and a slight improvement in working capital. Working capital (excluding Van Wanrooij for comparison’s sake) remained at similar levels to the previous year. Higher inventories at Property Development and lower accounts payable were offset by substantially better pre-financing (work in progress position credit).

The combination of investment cash flow and operating cash flow led to a movement in net debt of € 288 million to a total net debt of € 137 million (2022: € 151 million in cash). In addition to limited movements in project financing and leases, the main factor was a € 197-million drop in cash and cash equivalents and the fact that Heijmans drew on € 75 million of its Term Loan. At the end of the year, Heijmans had not drawn on its revolving credit facility.

Capital and funding

The condensed balance sheet as at 31 December based on invested capital can be specified as follows:  

Solvency remained at a stable level of 29% at year-end 2023 (2022: 29%), despite the substantial impact of the acquisition of Van Wanrooij on the balance sheet. Heijmans’ balance sheet total increased by a lower amount than the acquisition price, as Heijmans paid a considerable part of the acquisition price from freely available cash. Furthermore, the balance sheet lengthened slightly as property, plant and equipment increased as a result of the investments in the timber-frame housing production plant and the electrification of equipment. The higher revenue led to slightly higher working capital line items. As the inventory of development positions in real estate (Heijmans Property Development and Van Wanrooij) is part of working capital and the inventory of development positions increased substantially as a result of the Van Wanrooij acquisition, total working capital (assets and liabilities side netted) was positive rather than negative. Adjusted for the inventory position, working capital remained negative, as most of the activities in the construction sector were pre-financed.

In addition, equity increased due to a combination of profit retention (net profit less cash dividend for the 2022 reporting year) and the fact that part of the acquisition (€ 23.5 million) was paid by issuing 2.3 million shares to the seller at an issue price of € 10.214 per share.

Invested capital: fixed assets

The composition of fixed assets can generally be specified as follows:

Within fixed assets, last year saw a € 42 million increase in property, plant and equipment. This increase was primarily driven by Infra and the holding company. At Infra, there was a higher level of investment (compared with the level of depreciation/disinvestment) in heavy equipment. At holding company level, this was related to investments in the timber-frame housing production plant in Heerenveen, the assets of which have been transferred to Heijmans’ facilities business and where Building & Technology produces the homes. The Van Wanrooij acquisition had an impact of € 13 million on fixed assets. The other business areas saw only limited changes in property, plant and equipment.    

The increase in the rights of use of leased assets was mainly due to the electrification of the fleet combined with a higher number of lease cars, as well as the acquisition of Van Wanrooij. The total leased assets item at Van Wanrooij is € 9 million and consists primarily of head office rental and staff lease cars.

The increase in intangible assets is primarily due to the goodwill related to the acquisition of Van Wanrooij (see financial statements, section 6.2 Business combinations).

Other fixed assets increased to € 157 million from € 111 million. This item consists primarily of company buildings and land, machinery, installations, large equipment and other fixed operating assets. In the year under review, investments amounted to € 44 million (2022: € 26 million). These investments were mainly in the electrification of equipment. Within other fixed assets, we also saw a slight increase in associates. This was largely due to an increase in the net asset value of AsfaltNu.

Invested capital: working capital

Working capital stood at € 80 million at year-end 2023 (2022: -/- € 116 million). The change was primarily due to the acquisition of Van Wanrooij, which led to a significant increase in the inventory position. As part of the Purchase Price Allocation, the development positions were revalued at market value, which led to a fair value step-up. As at 31 December 2023, Van Wanrooij’s total inventory position stood at € 207 million. At Property Development, the inventory remained a similar level as the previous year.

If rising inventories are excluded, working capital fell by € 20 million. On the liabilities side, there was a substantial improvement in pre-financing (work in progress debit and credit netted), which was partly offset by a lower accounts payable position. On balance, Heijmans remains pre-financed. The increase in the absolute level of pre-financing was largely related to the rising volume in the larger projects at Building & Technology and Infra.

The composition of working capital can generally be specified as follows:

Although working capital shows considerable fluctuations in any given year, in recent years Heijmans has managed to make its activities and the related impact on working capital less seasonally dependent. Working capital requirements are largely project-specific and related to clients’ payment schedules. Seasonality in the construction sector is generally explained by higher levels of activity in the second and fourth quarters (especially due to lower production during the winter and summer months), as well as an increased level of notarial transfers and the settlement of additional work prior to balance sheet dates. Higher working capital requirements during the year lead to a higher capital requirement which, if necessary, Heijmans will meet by making use of a Revolving Credit Facility. Even after the acquisition of Van Wanrooij, the headroom in this facility remains high; at the end of 2023, Heijmans had only used the Term Loan (€ 75 million).

Property development inventory position

In the property development business, the working capital requirement is largely determined by the inventory position, including land under development (homes in preparation and under construction). This item increased substantially in 2023 due to the acquisition of Van Wanrooij.

The consolidated inventory position increased to € 367 million from € 159 million. On balance, this was an increase of € 208 million, € 207 million of which was attributable to Van Wanrooij. Van Wanrooij‘s positions were valued at market value as of 5 September and changed slightly towards the end of December. 

Property Development‘s strategic land holdings increased by € 80 million to € 159 million, € 68 million was accounted for by Van Wanrooij. The increase at Heijmans Property Development relates to the acquisition of several new positions. Properties in preparation and under construction increased by € 128 million to € 208 million, with € 139 million due to Van Wanrooij. On balance, Heijmans Property Development saw a decline in its position, related to the lower construction volume. The ‘completed and unsold‘ inventory at the end of 2023 was nine homes and three units (2022: 12 apartments).

In addition to ownership positions, Heijmans Property Development’s work inventory also consists of development rights, which qualify as ‘off-balance sheet commitments’. In this category, unconditional liabilities increased by € 4 million to € 34 million in 2023, mainly due to a position at Van Wanrooij. Van Wanrooij frequently works with contingent liabilities - often linked to zoning procedures - which resulted in a substantial increase in contingent liabilities to € 247 million from € 61 million. In the case of Heijmans Property Development’s contingent liabilities, land does not usually have to be acquired until a certain pre-sale percentage has been achieved. In addition to the contingent and unconditional liabilities, Heijmans also has development rights and claims. This position declined to € 131 million from € 140 million in 2023. These are positions where Heijmans has the development right without having the land holdings on its balance sheet. Van Wanrooij also has construction claims, but as part of the purchase price allocation, these have already been valued as part of the strategic land positions and homes under preparation and under construction. A different approach therefore applies to Heijmans Property Development because these positions may not be revalued.

Financing: equity

In the year under review, equity increased by € 67 million to € 384 million, from € 317 million a year earlier. As in 2022, net profit remained stable at € 60 million. In addition, equity declined by € 12 million due to the payment of dividend (gross) in the form of cash dividend for the 2022 reporting year. The remaining part of the dividend payment, amounting to € 11 million, was paid in the form of stock dividend via the issue of 972,934 (depository receipts for) ordinary shares. The increase in equity was also due to the fact that on 5 September 2023 equity increased by € 23.5 million in connection with the issuance of 2,300,000 (depositary receipts for) ordinary shares as part of the payment of the purchase price relating to the acquisition of Van Wanrooij at the issue price of € 10.214 per share as set out in the purchase agreement. Last year also saw a change in pension valuations amounting to -/- € 5 million, which was recognised directly in equity. This change arises from the annual recalculation of actuarial liabilities and relates to a changed actuarial interest rate and the size and demographic expectations of the participant base.

The composition of the changes in equity can generally be specified as follows:

Financing: net interest-bearing debt

As a result of the acquisition of Van Wanrooij, Heijmans’ net cash position changed from € 151 million at year-end 2022 to a net debt position of € 137 million at year-end 2023. Heijmans anticipated this higher level of debt in good time by extending and renewing its syndicated bank financing facilities in view of and immediately prior to the acquisition of Van Wanrooij. The original financing facility of € 117.5 million was committed until the end of 2025. The new financing facility has been extended by € 140 million to € 257.5 million and runs until 1 September 2028 and consists of the following components:

• Term Loan in the amount of € 80 million repayable on a straight-line basis over four years (see note 6.22a of the financial statements)

• Revolving credit facility in the amount of € 177.5 million, € 30 million of which is in the form of a current account facility (see note 6.22b of the financial statements).

• When Heijmans refinanced its debt in 2023, no changes were agreed to the package of securities provided to financiers. These securities are laid down in pledges, with an intercreditor agreement regulating in what situations and how securities can be redeemed. As long as Heijmans continues to comply with the banking covenants, including the financial covenants (see note 6.22c), these situations do not arise.

The securities established consist of the pledged receivables, bank accounts and any insurance proceeds. This criterion only applies insofar as Heijmans is 100% owner of the companies concerned and, measured by revenue, at least 95% of the revenue must be represented by the subsidiaries that co-sign the financing agreement (the so-called guarantor cover). Finally, the financiers have secured mortgages on a number of historical land holdings with a carrying value of € 42 million at year-end 2023. These securities will be released as the land holdings are developed.

With the exception of a number of project financing arrangements and leases, Heijmans had not drawn on the revolving credit facility at year-end 2023 and the outstanding sum on the Term Loan was € 75 million. However, Heijmans did draw on the revolving credit facility in the course of the year (only after the acquisition date of 5 September). At year-end 2023, leases had an impact of € 90 million on the net cash position and of € 12 million on the project financing (partly in Heijmans Property Development and partly in Van Wanrooij).

Order book

The order book for Heijmans as a whole increased by € 400 million in 2023, to € 2.8 billion from € 2.4 billion at year-end 2022 (€ 149 million of which was due to the addition of Van Wanrooij. Chapter 19 Financial Statements shows the order book excluding Joint Ventures at € 2.6 billion). At Infra, the order book remained stable at a strong level of more than € 1 billion. Property Development’s order book declined due to the fact that the start of construction was postponed at several projects. This was due to the failure to achieve minimum pre-sales percentages in some inner-city projects, as well as the structural national shortage of planning capacity/objection procedures before the Council of State/progress in spatial planning procedures. At Building and Technology, the order book increased by 25% to € 1.5 billion from € 1.2 billion. The Residential Building business, which traditionally generates the majority of its revenue through Property Development, had a high order intake from third parties (primarily housing associations), which kept the overall order book at a good level. The increase was particularly visible in Non-Residential Projects and Services. The acquisition of Van Wanrooij will increase the order book by around € 149 million by the end of the year. Van Wanrooij generally has somewhat smaller, short-term cyclical works with separate purchase and construction contracts in progress compared with Heijmans Property Development and Residential building. Based on the progress in home sales, there is a substantially larger work inventory, which is not included in the order book until 70% pre-sales have been achieved.

Given the current state of the order book, all business areas have plenty of work for 2024 and there is a good spread of execution capacity and types of projects. This means it is likely that Heijmans will see higher revenue in 2024. All business areas added numerous medium-sized (€ 10 million to € 40 million) projects to the order book, which contributed to a good spread. In 2023, Heijmans acquired five larger new works in the range up to € 70 million. These include three projects at Property Development/Residential Building, one Non-residential renovation project and one dyke reinforcement project at Infra.

Outlook 2024

Heijmans is confident about the future. As a centrally organised player, Heijmans is in an excellent position to provide solutions for the infrastructure, construction and property development challenges of today and tomorrow. Thanks to this strong positioning, combined with sound risk management and a diversified portfolio, we expect to outperform the outlook for the market as a whole. Our refined strategy puts an even stronger focus on looking to connect with clients to find solutions for complex societal themes.

We started 2024 with a well-filled order book, which, as in previous years, continued to grow and in qualitative terms gives us a solid basis to meet our return targets. Building & Technology and Infra have both seen an increase in the share of recurring business in management and maintenance. This gives us a much clearer picture of revenue and result development for 2024 and we expect further growth in both business areas this year. We are also positive about Heijmans Property Development and Van Wanrooij, as we are confident about the housing market. This confidence is backed up by the increasing home sales over the past five months, especially in suburban areas. Partly thanks to the acquisition of Van Wanrooij, Heijmans is in a good position in the housing market. The pick-up in home sales in particular is expected to result in healthy growth in revenue and profit after 2024.

Heijmans’ revenue growth will continue in 2024, partly because Van Wanrooij will be included in the figures for the full year, bringing the € 2.5 billion mark in sight. We are targeting an underlying EBITDA margin of at least 6.5% for 2024, partly driven by the underlying EBITDA at Van Wanrooij, which we expect to be in a bandwidth of € 30 million to € 50 million in 2024, including the impact of the purchase price allocation of around € 20 million. At the time of the Van Wanrooij acquisition, we stated that we wanted to return to a net cash position by the end of 2026. We expect to take a healthy step in that direction this year thanks to a clearly positive cash flow. In addition, we are targeting a solvency ratio higher than 30% and a leverage ratio (net debt/underlying EBITDA) that remains well below 1.0 in 2024.