Developments per business area

Property development

Property development looks back on a six-month period in which challenging conditions in the housing market in particular played a significant role in its performance. Sales of inner-city high-rise apartments in the affordable segment went reasonably well. This could not be said for sales of inner-city high-rise apartments in the more expensive price segment. Out-of-town sales did go well. A bright spot at Heijmans is that we sold more homes in H1 2023 than we did in H2 2022. This was partly thanks to the flattening of the rise in mortgage interest rates and inflation, together with the stabilisation of consumer confidence.

x € 1 million

Property development

H1 2023

H1 2022

2022

Revenues

200

294

570

Underlying EBITDA

13

21

42

Underlying EBITDA margin

6.5%

7.1%

7.4%

Order book

523

676

596

In the first six months of this year, Heijmans sold 876 homes (compared with 1,031 in H1 2022), with a stable trend in B2B sales (602 in 2023 compared with 598 in 2022) and a decline in B2C (274 in 2023 compared with 433 in 2022), mainly driven by low sales of homes in the more expensive price segment.

Rising mortgage rates and inflation had an impact on consumer confidence and the borrowing capacity of home seekers. In addition, the lack of suburban planning capacity in particular was and remains the bottleneck in the addition of new affordable houses. Houses priced at up to € 550,000 remained a market segment where sales were still at a reasonable level. Heijmans has a number of projects in that market segment and managed to sell a reasonable number of homes, including in Lent near Nijmegen, in Pijnacker and in Zutphen. Housing corporations have once again increased their investments in the rental market, especially in transformation districts such as the Afrikaander neighbourhood in Rotterdam, where the local council and Heijmans are working together to realise targeted quality improvements through area development.

As a rule, Heijmans does not start construction until 70% of the homes in a project have been sold. We can occasionally deviate from this rule of thumb if the risk profile of the project is deemed acceptable, as happened in Zutphen. In the latter project, it was decided to start construction when presales had reached 50%. More than 60% of this project has now been sold and we expect to complete the project in 2025.

For the second half of the year, Heijmans remains dependent on the issuance of permits for several large projects. In addition, the government could stimulate supply in the housing market by activating large expansion locations in suburban areas. This would offer property developers like Heijmans the opportunity to realise energy-efficient (family) homes.

Building & Technology

Building & Technology performed well, recording a sharp increase in revenue, partly driven by renovation assignments for housing corporations and recurring business in the Services domain. In the first six months of this year, Heijmans renovated approximately 900 homes and made them more sustainable. This was almost double the approximately 500 homes renovated in the same period last year. Due to the conscious decision to allow Residential building to reach agreements on a number of construction contracts with external parties, such as investors and corporations, Residential building's financial performance remained at a healthy level, despite the pressure on the housing market for private buyers. Heijmans’ Non-residential business area also delivered a solid performance, with more one-to-one projects, the winning of tenders in non-residential project construction, and more long-term maintenance contracts. As a result, Building & Technology's order book increased to just over € 1.5 billion. 

x € 1 million

Building & Technology

H1 2023

H1 2022

2022

Revenues

510

429

933

Underlying EBITDA

21

17

38

Underlying EBITDA margin

4.1%

4.0%

4.1%

Order book

1,515

1,267

1,227

One of the many new contracts that Heijmans won in the first half of this year was the contract to redevelop the Arnhem station area, commissioned by the Central government’s Real Estate Agency (Rijksvastgoedbedrijf). This project involves the renovation and expansion of a building to realise a new government office, which will act as a showcase in terms of sustainability. The listed building, a former post office, will house the Dutch Tax Authority, the Central government's Real Estate Agency and the Executive Education Agency (DUO).

Heijmans also won a number of prestigious contracts from housing corporations in the first half. Cazas Wonen commissioned Heijmans to build 120 rental apartments in the sustainable Snellerpoort district in the western part of Woerden. Heijmans concluded 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. Another housing corporation, Woongroep Marenland, awarded Heijmans the contract to renovate 292 homes in the municipalities of Eemsdelta and Het Hogeland and make them more sustainable.

The past six months was also marked by a number great results. One of these was the completion of Heijmans’ renovation of Paleis Het Loo. Another milestone was the start of the large-scale renovation of the Gemini North educational building on the grounds of the Eindhoven University of Technology (TU/e). This project involves the low-rise section with laboratories and teaching and study areas with a floor area of 14,000 square metres. In coordination with the client, Heijmans has made a start on the technical design for this facility. Plus the new-build project for 735 student homes on the TU Eindhoven campus is currently in full swing. Heijmans is aiming to complete this project in the summer of 2024.

In June, Heijmans delivered the first project phase of the refurbishment and new-build construction of an asylum seekers' centre in Zeist. The project is part of a national maintenance and management contract with the Dutch Central Agency for the Reception of Asylum Seekers. Heijmans has a well-filled portfolio of long-term maintenance and management contracts with both public and private clients. Our Services business unit won a number of new contacts for clients including the Leiden University Medical Centre (LUMC) (renovation of the Casualty department) and the Central government's Real Estate Agency (replacement of fire alarm systems).

Infra

In line with expectations, the Infra business area delivered a solid performance in the first six months of 2023. Revenue increased by more than 20% compared with the same period a year earlier and as expected bounced back to 2021 levels. The underlying EBITDA margin was at the high end of Heijmans' strategic range for Infra.

x € 1 million

Infra

H1 2023

H1 2022

2022

Revenues

381

309

661

Underlying EBITDA (excluding Wintrack II)

23

15

36

Underlying EBITDA margin (excluding Wintrack II)

6.0%

4.9%

5.4%

Order book

1,010

830

1,007

One of the many great projects realised in the first half of this year was the opening of the Piet Hein tunnel in Amsterdam. In early May, Heijmans also completed the major maintenance of the Zwanenburg runway for Schiphol Airport. We completely renewed the asphalt of the runway, covering an area of 86 football pitches, and we managed to reuse 60% of the asphalt to be renewed. We also replaced all runway lighting with a more sustainable LED lighting system. In the process, we replaced a total of more than 400 kilometres of cable and 2,300 lamps. This maintenance ensures that Schiphol will be able to continue to use the runway in the coming years.

In March, the central government confirmed that improving and maintaining existing infrastructure is a priority. As a result, work is increasingly shifting from the building of new roads to replacement and renovation projects. For Heijmans' Infra business area, this offers attractive opportunities and the potential to compete for central government replacement and renovation budgets worth around € 3 billion a year.

The reconstruction of the De Nieuwe Meer intersection in Amsterdam, a major tender won by a consortium including Heijmans in November of last year, is on schedule and the first designs for this project have been submitted. This reconstruction is one of the components of the Zuidasdok programme, which aims to make the northern part of the Randstad urban conurbation more accessible by road and by public transport.

In the past six months, it also became clear that Heijmans will be one of a total of six preferred suppliers for the expansion and reinforcement of TenneT's high-voltage grid in the Netherlands. The EU-302 Civil Works Cable Connections framework agreement has an initial term of eight years. We started the construction of high-voltage connections between high-voltage substations in the first half of this year.

In the past few months, Heijmans also started the sustainable dyke reinforcement of the Groningen section of the Lauwersmeer dyke. Heijmans is using emission-free equipment in this project, including an electric wire crane, and is reusing various materials from the dyke. Another major infrastructure project in which Heijmans is using electric equipment is the widening of the A1 motorway near Twello. In the past six months, Heijmans also started a collaboration in the field of charging infrastructure for electric cars.

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