Highlights
- Revenue rises to € 1.217 billion (H1 2023: € 937 million).
- Underlying EBITDA rises sharply to € 91 million from € 49 million (margin to 7.5% from 5.2%).
- Number of homes sold: 1,587 compared with 876 in H1 2023. Increase primarily from B2C market and driven by acquisition of Van Wanrooij (528 homes sold).
- Order book increased to € 3.0 billion from € 2.6 billion (H1 2023).
- Accelerated repayment of € 35 million acquisition financing thanks to good financial performance.
- Earnings per share € 1.39 (H1 2023: €0.77).
- Heijmans revises its outlook for FY2024 upwards: underlying EBITDA margin to around 7.5% (was at least 6.5%) on increasing revenue heading towards € 2.5 billion (revenue outlook unchanged).
Ton Hillen, Heijmans CEO
"Royal Heijmans delivered good results in the first half of 2024, with margin over volume continuing to be our guiding principle. In addition to the growth in revenue, we saw a sharp improvement in our underlying EBITDA margin, which increased to 7.5%. All segments showed healthy a margin development, in line with the medium-term target issued during our Capital Markets Day (CMD) earlier this year. Thanks to improved project profitability, we were able to post a higher net profit. This in turn meant we were able to accelerate the repayment of part (€ 35 million) of our Van Wanrooij acquisition financing. Heijmans sold 1,587 homes in the first six months of 2024, substantially more than in the first half of 2023 (876 homes). This significant increase consisted primarily of residential sales to consumers (B2C), demonstrating the high demand for new-build homes. This reinforces our belief that the underlying indicators for the housing market are good. This is partly why we recently announced our proposed acquisition of project developer and construction firm Van Gisbergen, which is currently before the Consumer and Market Authority for approval".
"It would be good if the new cabinet looked at the housing market as a whole and allowed the construction of homes for all target groups, i.e. for first-time buyers, as well as people moving up the property ladder. After all, circulation on the housing market will free up more existing housing stock and help make it future-proof. ”
New cabinet and the housing market
"We are pleased that the new cabinet's outline agreement signals a continuation of the current housing policy. Nevertheless, Heijmans continues to call for the government to devote attention to the addition of plan capacity (in and outside urban areas) and the shortening and speeding up of spatial planning procedures and the granting of permits, among other things by adding official capacity. In addition, the new Housing Minister needs to look at the housing market as a whole and thus also at the circulation of homeowners. Of course, the construction of affordable homes is important, especially for first-time buyers, but we also need to add more expensive homes to the existing housing stock. By building in all price ranges, we encourage people to move up the property ladder, which will free up more affordable, existing homes for first-time buyers. Only a balanced combination of measures will be effective in making affordable housing available to young people. On top of this, a mix of housing also ensures that our housing stock is future-proof for the longer term."
Safety is a prerequisite
At Heijmans, we see safety is a hard prerequisite: either we work safely or we do not work at all. The fact that work on the A13 did not start over a weekend, despite hundreds of employees being on standby, was disappointing and obviously not good. But safety was not in order. The fact that the work did not start, was a clear signal that the safety mindset in the Netherlands is changing. It is a credit to both our client the Ministry of Public Works and Waterways and our organisation that we did not start work. We applied the adage I used above, providing valuable lessons for the future.
Making progress on sustainability
As a prominent player in the sector, Heijmans wants to play a leading role in making the living environment more sustainable. We can make a difference by designing and building sustainably, with an eye to alternative and decentralised energy generation, the efficient (re)use of raw materials and equipment and an optimum focus on comfort and user experience.
In accordance with the new reporting requirements pursuant to the EU Corporate Sustainability Reporting Directive (CSRD), Heijmans performed a so-called double materiality analysis in the recent period. This identified the following seven material themes as being of major importance to Heijmans: (1) climate change, (2) water and marine resources, (3) biodiversity and ecosystems, (4) material use and the circular economy, (5) own employees, (6) employees in the value chain, and (7) business conduct. Heijmans is working hard to be able to report on these themes, including the relevant indicators, by the end of 2024.
AsfaltNu (a collaboration of Heijmans and BAM) and Theo Pouw Group recently announced that they are joining forces to build the most sustainable, innovative and environmentally friendly asphalt plant in Europe. This plant will be able to produce asphalt at a greatly reduced temperature. This will reduce CO₂ emissions by more than 50% compared with the current standard.
Heijmans raises outlook
The tentative recovery of the housing market seen in late 2023 has continued, resulting in rising home sales and a strong performance in the Living segment. Heijmans is also acquiring an increasing number of recurring management and maintenance orders (recurring business) in the Working and Connecting segments. Thanks to Heijmans' strong financial performance in the first half of the year, we are well on track with the guidance issued during our Capital Markets Day earlier this year. At that event, we also presented our perspective on effective risk management in the construction industry and our revised strategy, 'Together towards 2030'. Revenue of € 2.5 billion remains in sight for the full year 2024. We now expect profitability for the full year 2024 to increase to an underlying EBITDA margin of around 7.5%, from our previous target of at least 6.5%. Our strong financial results in the first half of 2024 enabled us to accelerate partial repayment of the temporary term loan for the acquisition of Van Wanrooij. Heijmans expects to achieve a positive net cash position no later than early 2025 (was: in 2026). The order book increased to € 3.0 billion from € 2.6 billion at the end of H1 2023 and gives us a structural foundation for EBITDA margin growth in a range of 7% to 9% towards 2027. This means that Heijmans is firmly on track with respect to the multi-year outlook issued during our Capital Markets Day.
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