Heijmans : Half year results 2019

• Underlying EBITDA (excl. IFRS 16) improves in first half: € 25 million (first-half 2018: € 20 million), with all business units making a positive contribution;
• Revenue lower in first half: € 730 million (first half 2018: € 780 million);
• Number of homes sold comparable with last year: 1,061 homes sold in first half of 2019 (1,065 homes sold in the first half of 2018);
• Net result after taxes € 15 million (first half of 2018: € 8 million);
• Order book increases to € 2.1 billion at end-June (year-end 2018: € 2.0 billion);
• Net debt (excl. IFRS 16) € 23 million at end-June 2019 (end-June 2018: € 14 million).

'We continued the positive start we made in the early part of the year. There is generally enough work in all the markets in which we are active, but making the right decisions in terms of order intake remains crucial. Despite the lower revenues, caused by the delayed construction start of several inner city property development projects, we managed to further improve our result. This was partly thanks to our selective intake policy. The underlying EBITDA, excluding IFRS 16, increased by 25% to € 25 million and the net margin doubled to 2%. In addition to the improvement of our underlying EBITDA, this was due to the fact that over the past few years we have managed to significantly reduce our financing expenses. We are on the right path to once again making Heijmans a robust company. On the basis of our balanced mix of activities, which are developing in line with expectations, we are looking forward to the second half of this year with confidence.'

Property Development recorded revenues of € 206 million in the first half of 2019, which were lower than in the first half of 2018 (first half 2018: € 245 million). The underlying EBITDA came in at € 11 million (first half 2018: € 13 million), while the margin as a percentage of revenue remained stable at 5.3%. The pipeline of new projects is well-filled and the order book remained at a healthy level of € 451 million at end-June (year-end 2018: € 435 million). The decline in revenue is largely due to longer throughput times at a number of mainly inner city projects, which means construction starts later and revenues from these projects are recorded at a later date.

Heijmans sold 1,061 homes in the first half of 2019, which is comparable to the number of homes sold in the year-earlier period (first half of 2018: 1,065 homes). A total of 564 of these homes (53%) were sold to private buyers (in the first half of 2018, this figure was 561 homes), while 497 (47%) were sold to investors and housing corporations. The housing sales prices continued to increase in the first half, due to the pressure on availability, which put further pressure on the affordability of homes for private buyers.

In the spring of this year, Heijmans announced the start of the Porseleinhaven project in Loosdrecht. The transformation of Fenixloodsen I in Rotterdam is approaching completion and all commercial spaces have now been filled. The municipality of Rotterdam has awarded Heijmans the contract for the new-build Parkbuurt project at the Oedevlietsepark, where Heijmans will build a wide range of different types of homes (a total of 137). Rotterdam, Feyenoord Stadium and Stichting Gebiedsontwikkeling aan de Maas (of which Heijmans is one of the partners) also signed an agreement on the Feyenoord City area development project. Heijmans closed a cooperation agreement for the redevelopment and repurposing of listed site Hooge Riet in Ermelo. The listed building will be converted to include a range of attractive apartments, while various types of homes are planned for across the park.

137 energy-efficient owner-occupied and rental homes in Rotterdam Hoogvliet

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Building & Technology delivered a solid performance in the first half of this year, as revenues increased to € 390 million (first half of 2018: € 349 million) and underlying EBITDA increased to € 11 million (first half of 2018: € 6 million).

Heijmans' residential building activities recorded an increase in both revenues and result. The order book was also well-filled at € 493 million (year-end 2018: € 508 million). With its Heijmans Huismerk and Heijmans Wenswonen formulas, Heijmans enables its clients to respond to the need for a combination of quality, comfort and affordability. Heijmans recently added a new type of home to its portfolio, primarily in response to the growing demand of one-person and two-person households. These are homes with a bay size of 3.60 or 3.90 metres. These homes will be built at projects in Culemborg (14) and Pijnacker (37). Heijmans recently made a start on the realisation of the Land van Dico project in Uden and the Greenville project in Leidsche Rijn in Utrecht.

Heijmans' non-residential building activities are on track and recorded an increase in both revenues and result. The technical services (maintenance and management) delivered a solid performance, with growth and healthy margins. The order book (of non-residential building activities) stood at the healthy level of € 731 million at end-June 2019 (year-end 2018: € 694 million). The New Amsterdam Court House project is making progress. The new-build project for the headquarters of the European Medicines Agency (EMA) in Amsterdam's Zuidas business district is progressing well. Heijmans has won a contract from the Hanzehogeschool in Groningen for the maintenance of all the educational institute's buildings. And over the past few months, Heijmans has been working on building the project organisation and the start-up of the work for the Schiphol main contract - Terminals 1 and 2 plus piers.

Renovating national monument

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Heijmans' selective acquisition policy is paying off in the form of improved margins and a better balance between large projects and regional projects, asset management and specialised activities. Revenue came in at € 297 million in the first half of 2019, slightly lower than the year-earlier period (first half of 2018: € 312 million). The underlying EBITDA amounted to € 7 million (first half of 2018: € 6 million).

In April, Heijmans won the contract from Hoogheemraadschap Hollands Noorderkwartier (HHNK) for the repair and maintenance of ('polder') roads and cycle paths in the management area to the north of the North Sea Canal (a total of around 1,400 kilometres). In addition, it was announced that the Dutch Ministry of Public Works and Waterways (Rijkswaterstaat) had awarded Heijmans the contract for variable maintenance of a number of motorways in the eastern section of the province of Noord-Brabant. For the coming four years, Heijmans will be working on the energy grid in the North and Centre districts of Amsterdam for grid operator Liander. Heijmans also won the contract to modernise and maintain Liander's medium-voltage units in the province of Noord-Holland and parts of Zuid-Holland for the coming 10 years. The consortium for the Zuidasdok project, in which Heijmans is a 15% partner, is currently in discussion with the client regarding the future steps in this project. In Utrecht, Heijmans is putting the final touches to the waste water treatment plant (RWZI) expected to be opened in October of this year. The renovation work on the Koningstunnel in The Hague is also well underway. As a result, it will be opened to traffic shortly.

Over the past few months, Heijmans took a number of steps aimed at putting its strategy 2023 - better, smarter, sustainable - into operation. For instance, Heijmans announced that from next year it plans to reduce packaging to the minimum and set additional requirements for any essential packaging. From 2021 onwards, we will only accept 100% recyclable or renewable packaging. This will apply to both construction projects and to our own business operations. Heijmans will also advocate the creation and use of single-material packaging flows, which means that Heijmans will no longer allow packaging in which different materials haven been integrated on the construction sites where it is active. Heijmans will work with suppliers and sub-contractors on this initiative.