Independent auditor’s report

To: the General Meeting of Shareholders and the Supervisory Board of Royal Heijmans N.V.

Report on the audit of the financial statements 2024 included in the annual report 

Our opinion

In our opinion:

• the accompanying consolidated financial statements give a true and fair view of the financial position of Royal Heijmans N.V. as at 31 December 2024 and of its result and its cash flows for 2024, in accordance with International Financial Reporting Standards as endorsed by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

• the accompanying company-only financial statements give a true and fair view of the financial position of Royal Heijmans N.V. as at 31 December 2024 and of its result for 2024 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the financial statements 2024 of Royal Heijmans N.V. based in Rosmalen. The financial statements include the consolidated financial statements and the company-only financial statements.

The consolidated financial statements comprise:

1. the consolidated statement of financial position as at 31 December 2024;

2. the following consolidated statements for 2024: the statement of profit or loss, the statements of comprehensive income, changes in equity and cash flows; and

3. the notes comprising material accounting policy information and other explanatory information.

The company-only financial statements comprise:

1. the company-only balance sheet as at 31 December 2024;

2. the company-only statement of profit or loss for 2024; and

3. the notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

We are independent of Royal Heijmans N.V. 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 designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations, climate and the key audit matters was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

Summary

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 22 million. The materiality is determined with reference to revenue (0.9%). We consider an activity-based benchmark to be the most appropriate basis to determine materiality. Given the current market conditions, we consider revenue to be a stable and appropriate basis, also as it best reflects the size and performance of Royal Heijmans N.V.

We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.

We agreed with the Supervisory Board that misstatements identified during our audit in excess of EUR 880,000 would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

Scope of the group audit

Royal Heijmans N.V. is at the head of a group of components (hereafter “Group”). The financial information of this group is included in the consolidated financial statements of Royal Heijmans N.V.

We performed risk assessment procedures throughout our audit to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements. To appropriately respond to those assessed risks, we planned and performed further audit procedures, either at component level or centrally. We as group auditor audited the entire group and as such, did not involve any other audit firms. Through our centralized audit approach, direction and supervision of the audit, the team operates as an integrated unit.

We have performed substantive procedures for 97% of Group revenue and 92% of Group total assets. At group level, we assessed the aggregation risk in the remaining financial information and concluded that there is less than reasonable possibility of a material misstatement.

We consider that the scope of our group audit forms an appropriate basis for our audit opinion. Through performing the procedures mentioned above we obtained sufficient and appropriate audit evidence about the Group’s financial information to provide an opinion on the financial statements as a whole.

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapter ‘Governance & riskmanagement’ and ‘Sustainability’ of the annual report, the Executive Board describes its procedures in respect of the risk of fraud and non-compliance with laws and regulations.

As part of our audit we have gained insights into Royal Heijmans N.V. and its business environment and Royal Heijmans N.V.’s risk management in relation to fraud and non-compliance. Our procedures included, among other things, assessing the code of conduct, whistleblowing procedures, incidents register and Royal Heijmans N.V.’s procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with the Executive Board, the Supervisory Board and other relevant functions, such as Legal Counsel and Internal Audit and included correspondence with relevant supervisory authorities in our evaluation.

We have also incorporated elements of unpredictability in our audit, such as alternative criteria to identify and test journal entries with a higher risk of fraud and testing representation costs.

As a result from our risk assessment, we identified the following laws and regulations as those most likely to have a material effect on the financial statements in case of non-compliance: laws and regulations regarding contract acquisition (due to the nature of the business as a construction company) and laws and regulations regarding corruption and bribery.

Based on the above and on the auditing standards, we identified the following risks that are relevant to our audit, including the relevant presumed risks laid down in the auditing standards, and responded as follows:

Revenue recognition and valuation of construction contracts and service contracts

Risk

In a construction company like Royal Heijmans N.V., estimating the progress and results of construction contracts and service contracts is an integral part of revenue and result recognition. We recognize a higher risk that the result of construction and service contracts may be materially misstated. The extent to which this risk is present, depends on the size and complexity of construction contracts and service contracts. In the financial statements, this risk pertains to the valuation of work-in-progress and provisions for work in progress losses in the statement of financial position and the completeness of revenue in the statement of profit or loss.

Audit approach

We describe our audit procedures to address this fraud risk as part of the key audit matter “Revenue recognition and valuation of construction contracts and service contracts”.

Valuation of strategic land positions and land positions under development

Risk

We recognize the significant risk that the valuation of strategic land positions and lands under development may be incorrectly estimated. The extent to which this risk is present depends on quantitative and qualitative factors and is influenced by developments in the housing market and other subjective elements. In the financial statements, this risk pertains to the valuation of strategic land positions and land positions under development in the statement of financial position.

Audit approach

We describe our audit procedures to address this fraud risk as part of the key audit matter “Valuation of strategic land positions and land positions under development”.

Bribery and/or corruption

Risk

Due to the nature of the business activities and the characteristics of related transactions, we identify an increased risk of bribery and/or corruption regarding contract acquisition and obtaining permits from (local) governments. Bribery and/or corruption can cause damage to the company, for example, through fines and/or exclusion from tender procedures. Such bribery could take place or be concealed in various ways, for instance, through sponsorship. We specifically recognize this risk for the business areas ‘Connecting’ and ‘Working’.

Audit approach

Our audit procedures designed to address this fraud risk include, among others:

• We evaluated the design and implementation of internal controls related to the tendering process;

• We performed detailed testing over sponsorship contracts and specific cost types following our risk assessment, including sponsorship costs. As part of our testing, we assess, for example, whether there is an arm’s length reason for the sponsorship. We reconcile these costs with source documentation, including contracts, invoices, bank statements, and financial records.

Furthermore, we performed data analyses on journal entries with a higher risk related to bribery and/or corruption. Where we identified unexpected journal entries or other risks through our data analysis, we performed additional audit procedures, including tracing transactions back to source information.

Management override of control

Risk

Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively, such as in estimates related to the valuation of construction contracts and service contracts and the valuation of strategic land positions and land positions under development.

Audit approach

We evaluated the design and implementation of internal controls that mitigate fraud risks, such as processes related to journal entries and estimates.

Furthermore, we performed data analyses on journal entries with a higher risk related to revenue recognition, including journal entries with certain descriptions. Where we identified unexpected journal entries or other risks through our data analysis, we performed additional substantive audit procedures, including tracing transactions back to source information.

Additionally, we evaluated significant estimates as well as judgments and assumptions made by management, including performing a retrospective review of judgments included in the financial statements of the previous financial year.

Our evaluation of procedures performed related to fraud and non-compliance with laws and regulations did lead to the key audit matters as described hereafter.

We communicated our risk assessment, audit responses and results to the Executive Board and the Supervisory Board.

Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are considered material for our audit.

Audit response to going concern

As explained in the accounting policies of the financial statements, the financial statements were prepared on a going concern basis. The Executive Board has performed its going concern assessment and has not identified any going concern risks.

To assess the Executive Board’s assessment, we have performed, inter alia, the following procedures :

• we considered whether the Executive Board’s assessment of the going concern risks includes all relevant information of which we are aware as a result of our audit;

• we analyzed the market developments, financial position as at year-end and in comparison to the previous financial year, obtained and evaluated budgeted operational results and related cash flows for the upcoming financial year and considered whether they indicate a going concern risk;

• we inspected the financing agreement’s terms of conditions that could lead to going concern risks, including the maturity date and any covenants.

The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on management’s going concern assessment.

Audit response to climate-related risks

Royal Heijmans N.V. has set out its ambitions relating to climate change in the chapter ‘Our Strategy Together towards 2030’ (section ‘Sustainability’) of the annual report. By 2030, Royal Heijmans N.V. has set the ambition to be 100% CO₂e neutral in their direct business operations and electricity consumption (known as scope 1 and 2) and to have reduced greenhouse gas emissions in the chain by at least 50% (scope 3) compared to 2019. In addition, Royal Heijmans N.V. has set the goal to operate in a CO₂e-neutral manner by 2040.

The Executive Board has assessed, how climate-related risks and opportunities and Royal Heijmans N.V.’s own ambitions could have an impact on its business or could impose the need to adapt its strategy. The Executive Board has also considered the impact of climate-related risks on the financial statements. As described in note 6.30 (‘section climate-related matters) of the financial statements the risks and potential negative financial impacts for the financial statements particularly concern the valuation of joint ventures and associated participations, and to a lesser extent the valuation of old equipment in tangible fixed assets, with the recognized risk being greatest for the valuation of the participation in AsfaltNu.

As part of our audit we performed a risk assessment of the impact of climate-related risk and the ambitions made by Royal Heijmans N.V. in respect of climate change on the financial statements and our audit approach. In doing this we performed the following:

• Understanding the Executive Board’s assessment of the impact of climate-related risks on the financial statements including the identified risk for the valuation of the participation in AsfaltNu.

• Royal Heijmans N.V. has disclosed that it has prepared its sustainability report in accordance with the European Sustainability Reporting Standards (ESRS). We have read, and considered as part of our risk assessment, these sustainability statements, which includes information over material sustainability matters relating to material impacts, risks and opportunities relating to climate change. As part of this, we have read and considered the information reported over the connectivity of the sustainability statements with the financial statements.

• We have evaluated the business strategy in which the climate ambitions of Royal Heijmans N.V. are described.

• Together with our forensic specialists, we have evaluated climate-related fraud risk factors, including sustainability performance linked to executive remuneration, in relation to climate-related risks to determine whether these factors indicate a risk of material misstatement in the financial statements.

Based on the procedures performed above we found climate related risks have no material impact on the current financial statements.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.

Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report contains other information.

Based on the following procedures performed, we conclude that the other information:

• is consistent with the financial statements and does not contain material misstatements; and

• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and other information.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.

The Executive Board is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements and ESEF

Engagement

We were initially appointed by the General Meeting of Shareholders as auditor of Royal Heijmans N.V. on 3 April 2023, as of the audit for the year 2024.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities.

European Single Electronic Format (ESEF)

Royal Heijmans N.V. has prepared its annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion the annual report prepared in XHTML format, including the (partly) marked-up consolidated financial statements as included in the reporting package by Royal Heijmans N.V., complies in all material respects with the RTS on ESEF.

The executive board is responsible for preparing the annual report including the financial statements in accordance with the RTS on ESEF, whereby the executive board combines the various components into one single reporting package.

Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ’Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting). Our examination included among others:

• Obtaining an understanding of the entity's financial reporting process, including the preparation of the reporting package;

• Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:

• • Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the RTS on ESEF;

  • Examining the information related to the consolidated financial statements in the reporting package to determine whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.

Description of responsibilities regarding the financial statements

Responsibilities of the Executive Board and the Supervisory Board for the financial statements

The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In that respect the Executive Board, under supervision of the Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence.

As part of the preparation of the financial statements, the Executive Board is responsible for assessing the ability of Royal Heijmans N.V. to continue as a going concern. Based on the financial reporting frameworks mentioned, the executive board should prepare the financial statements using the going concern basis of accounting unless the Executive Board either intends to liquidate Royal Heijmans N.V. or to cease operations, or has no realistic alternative but to do so. The Executive Board should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements. 

The Supervisory Board is responsible for overseeing the financial reporting process of Royal Heijmans N.V.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Royal Heijmans N.V.;

• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the executive board;

• concluding on the appropriateness of the executive board’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Royal Heijmans N.V. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern;

• evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

• evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We are responsible for planning and performing the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the financial statements. We are also responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We bear the full responsibility for the auditor’s report.

We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Supervisory Board we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

Rotterdam, 28 February 2025

KPMG Accountants N.V.

J. van Delden RA