

Progress on specific projects
Heijmans has made solid progress in terms of making the Drachtsterweg and N23 projects manageable. The work on the Drachtsterweg in Leeuwarden is now progressing well. The aqueduct was recently partly opened and motorised traffic can now make use of this road section. The whole project will be completed by the end of this year. The work on the N23 Westfrisiaweg is now running full steam ahead after the restart of the project in the first quarter of this year and is progressing according to plan. Delivery is planned for end-2018.
For the RIVM project, a technical solution has been agreed and the commencement certificate has been issued. A committee of experts has examined the issue of a financial compensation and has now issued a recommendation. On the basis of this recommendation, Heijmans maintains its previous estimates regarding this project.
The arbitration proceedings related to the Wilhelminasluis lock project in Zaandam are currently on-going and Heijmans is awaiting a ruling.
Progress transition
Heijmans is on track with its transition into a profitable, Dutch core company with a strong position in the property development, residential building, non-residential and infrastructure sectors. Based on its ‘Focus, Discipline, Excellence’ strategy for the period 2017 – 2019, Heijmans is now focusing on the sustainable recovery of its business and its profitability, debt reduction and the structural improvement of its financial leverage. The creation of a Dutch core company has now been completed following the disposal of Heijmans’ foreign activities in Belgium and Germany.
The main focus of the strategy is the selective acquisition of new contracts in the property development, construction and infrastructure disciplines based on Heijmans’ core competences. As part of this strategy, Heijmans is focusing on the expansion of its role as contractor/manager and the development of long-term client relationships via services, maintenance and management.
As part of the de-risking strategy at Infra, Heijmans recently devised a new structure for the management of the infra organisation. This includes the new role of the Chief Risk Officer in the management. This officer’s task is to take the risk management at every level and across the entire Infra organisation to a higher level and to do so sustainably. We have already started on the implementation of the new organisational structure.
A major factor in the success of this transition is a business culture that encourages the desired focus, discipline and excellence and embeds these values in the organisation. Heijmans is using internal strategy and culture programmes to devote specific attention to the attitude and behaviour of our employees; focused on the disciplines property development and residential building, non-residential and infrastructure, but always based on the same principles and values. These programmes translate the desired behavioural traits of focus on results, ownership and collaboration into initiatives for every level of the company.
The same values are at the heart of the safety programme GO!, which is part of Heijmans’ on-going structural effort to promote safe working practices. The (12 months rolling) IF (Injury Frequency) figure is 3.7 (IF at year-end 2016: 3.6).
Heijmans shapes innovation into specific forms of expertise, technology and product development, in Heijmans’ areas of expertise, close to the business and in cooperation with its clients. The development of the moveable Heijmans ONE home, the BeSense concept for smart building management and the innovative asphalt product Recoflex are all examples of these innovations.
Heijmans is working towards an optimal cost structure that is in line with the company’s revised scope and strategy.

Thomas Thunnissen
BeSense, the digital goldRevenues
Revenues in the first half of 2017 amounted to € 646 million and were lower than in the same period last year (first half 2016: € 705 million). The decline is the result of the selective acquisition policy, especially at Non-Residential and to a lesser extent at Infra and Residential Building. Revenues at Property Development were higher, partly as a result of positive market developments.
Result before tax Income tax expense Result after tax |
23 -3 20 |
-14 2 -12 |
104 -6 -110 |
in €1 million | H1 2017 | H1 2016 | 2016 |
Revenues Netherlands | 646 | 705 | 1.370 |
Property development Residential Non-Residential Infra Corporate/other |
8 2 -1 1 -1 |
6 2 1 -13 -5 |
15 4 -14 -73 -5 |
Underlying EBITDA Netherlands | 9 | -9 | -73 |
depreciation/amortisation Netherlands | -6 | -6 | -13 |
Underlying operating result Netherlands | 3 | -15 | -86 |
Underlying operating result foreign | 0 | 8 | 20 |
Underlying operating result | 3 | -7 | -66 |
correction operating result joint ventures | 11 | -5 | 1 |
write down on property assets | -3 | -1 | -19 |
restructuring costs | -4 | -2 | -4 |
bookresult on sale of subsidiaries | 31 | 0 | -6 |
Operating result | 38 | -15 | -94 |
financial results share of profit of associates and joint ventures |
-4 -11 |
-3 4 |
-8 -2 |
Underlying EBITDA
The underlying EBITDA for the Netherlands improved strongly in the first half of 2017, compared to the same period last year, and amounted to € 9 million (first half 2016: € 9 million negative). The property development activities recorded an underlying EBITDA of € 8 million and formed the basis for the result. The sharp improvement was largely due to the improved result of € 14 million at Infra.
Net result
The net result also improved in the first half of 2017, when compared with the same period of last year, and amounted to € 20 million (first half 2016: € 12 million negative), as a result of the book profits on the sale of Heijmans’ foreign operations. The sale of these activities generated a book profit of € 31 million. The net result was also impacted by restructuring costs and write down on property assets. The costs for measures to streamline the organisation amounted to a total of € 4 million in the first half of 2017. Heijmans recorded a book loss totalling € 3 million on the sale of a number of land holdings.
The above resulted in earnings per share after tax of € 0.92.
Capital position, net debt and financing
At end-June 2017, net debt amounted to € 45 million (end-June 2016: € 77 million). In addition to the structural attention devoted to working capital management, the sale of Heijmans’ Belgian and German subsidiaries also made a significant contribution to the reduction of Heijmans’ debt. Following the effectuation of the sale of the foreign activities, solvency had returned to approx. 27% at end-June 2017
The new financing agreements, which Heijmans reached with its banking syndicate in February of this year, include agreements on minimum levels of EBITDA and solvency on a quarterly basis. These include an agreement on a minimum EBITDA of 0 for Q2 2017, rising to € 20 million in Q4 2017, and solvency rising to a minimum of 20% in Q4 2017. With the results recorded in the first half of 2017 and current solvency, Heijmans meets the covenant requirements set by its banks.
The completion of the divestment programme related to Heijmans’ foreign activities in Belgium and Germany generated total proceeds of € 116 million (€ 97 million after the deduction of the cash and cash equivalents sold with the companies) and a related book profit of € 31 million, which made a significant contribution to the reduction of Heijmans’ debt and the improvement of its solvency.
As a result of the sale of Heijmans’ foreign activities and the planned exit of Deutsche Bank from the company’s banking syndicate, the size of the syndicate’s loan was reduced by € 80 million compared with year-end 2016 and amounted to € 176 million at end-June. Heijmans and its banks had agreed to reduce the loan to € 215 million. Heijmans had used € 25 million of this at 30 June 2017. Heijmans will continue to focus on cash generation in the period ahead, with the aim of reducing this loan to € 122 million by mid-2019.
Order book
The order book is at a healthy level with € 2.1 billion at end-June 2017. The order book increased at both Residential Building and Infra, while Property Development’s order book remained at a comparable level and Non-Residential’s order book declined slightly. The largest contribution to the order book came from the Zuidasdok project and the Wintrack II project for TenneT.

Outlook
This year is a transition year for Heijmans. The company is developing according to plan and is on track to make the transition to a profitable Dutch company with a solid financial basis. Property Development and Residential Building are well on track to benefit from the positive development on the Dutch housing market. This requires the development of sufficient locations to meet the growing demand. Non-Residential is seeing an upward trend in volume in the market for new-build projects, but no positive price development as yet, and is maintaining its selective acquisition policy, while Services offers potential for growth. Infra is developing positively thanks to its focus on core competencies and is showing a strong improvement in performance. The completion of a number of projects will continue to require attention, but the impact of these is manageable and steadily declining. The situation at the end of the first half offers perspective for the period ahead and represents a first step towards structural recovery. Heijmans expects all of its business units to be contributing to the company’s result towards the end of this year.

Heijmans won the tender for the transformation of Amsterdam Sloterdijk.
Corporate governance
On 10 July, Heijmans announced its intention to appoint Hans Janssen as a member of the Executive Board / chief financial officer (CFO) effective 1 December 2017. Heijmans will present the proposed appointment during an Extraordinary General Meeting of Shareholders to be held at a date yet to be determined. Following this appointment, the Heijmans Executive Board will consist of Ton Hillen, Ruud Majenburg and Hans Janssen. The position of CFO is currently held ad interim by Age Lindenbergh.
Trading update
On 1 November of this year, Heijmans will publish a trading update before the opening of the stock exchange.