- Higher revenue and underlying EBITDA in the third quarter compared to 2019
- Number of houses sold 1,581 (by October 31, 2020)
- Order backlog in the third quarter at a healthy level of 1.9 billion euros
- Heijmans adjusts its outlook for 2020 upwards, revenue and underlying EBITDA up 5-10%
- The cash position remains strong
Ton Hillen, Chairman / CEO Heijmans:
“We are well on the way to achieving good annual results in 2020. Higher sales and underlying EBITDA improved our outlook for 2020. Our Real Estate Development and Infrastructure divisions achieved particularly good results. The prospects for the second half of the year are good and our well-distributed order book remains healthy at 1.9 billion euros. Just like at the beginning of this year, I look to the future with confidence. Our mission – to create a healthy living environment – remains our guiding principle. We want to deliver better, smarter and more sustainable work with a long-term perspective. Current developments related to Covid-19 remain uncertain, but despite deteriorating economic forecasts, our customers seem to be keeping their investment budgets available for these issues. “
Real estate development has maintained the growth of the first half of the year. Both sales and profits increased in the third quarter. The number of homes sold through October 31, 2020 was 1,581 (up from 1,577 in 2019). The demand for houses remains strong. Due to a lack of locations and production delays, planning is still too little planned due to the slower building permit process. There is still great confidence in the long-term prospects of the real estate market.
The newly built Maanwijk project in Leusden is one of our prime examples of a healthy living environment. In the third quarter, the design phase of the Maanwijk project was awarded the NL Greenlabel A label by NL Greenlabel, the specialist for measurable sustainability improvements in the living environment. Label A is the highest level awarded by Greenlabel. In West Brabant, Heijmans signed an agreement with the Alwel housing association for the comprehensive maintenance and renovation of 2,000 houses in Breda, Etten-Leur and Roosendaal.
The Fenix I project in Rotterdam continues to gain recognition: the residential complex was nominated for the Gouden Piramide (Golden Pyramid) 2020, won the Dutch National Staalprijs 2020 (residential building category) in the third quarter and took first place in the BNA Beste Gebouw van het Jaar (best building of the year) 2020 (viability and social cohesion category). The complex also won first prize at the Architectenweb Awards. Last but not least, there is an international trophy in the third quarter: the ULI Europe Award for Excellence.
At the National Staalprijs Awards 2020, the light art work ‘De Zwerm’ in Eindhoven also won first prize (category characteristic steel construction elements).
In the third quarter, the picture for Building & Technology remained largely the same as in the first half of 2020. Residential Building and Services performed solidly. As in the first half of the year, non-residential projects are still hardest hit by delays and inefficiencies as a result of the Covid-19 outbreak. This applies in particular to the NACH project, which is currently in the final phase.
The Kunstenpand (art building – theater and library) delivered in spring 2020 is an important part of the development of the Hart van Zuid area, the area around Ahoy and Zuidplein in Rotterdam. Her Majesty Queen Máxima opened the theater in the middle of September this year. This new building gives the Zuidplein Theater the opportunity to expand to 120,000 visitors per year. Another part of the Hart van Zuid project is the formal handover of the renowned Ahoy International Congress Center, which will take place in November.
Heijmans will also renovate a building for Maastricht University to create a large practice laboratory for students. In the third quarter, we will also deliver part of the offices of the Dutch government’s real estate agency (Rijksvastgoedbedrijf) in Laan op Zuid in Rotterdam.
Our Infrastructure division again delivered a strong performance. We are making solid progress on a number of projects including the A1 between Apeldoorn and Azelo. In this project, Heijmans is working for the Ministry of Public Works and Waterways to widen more than 40 kilometers of the motorway between Twello and Azelo. In addition, Minister Cora van Nieuwenhuizen has now gradually opened one of the longest land tunnels in the Netherlands (Gaasperdammertunnel).
In the coming years Heijmans will work on strengthening the Lekdijk (dike and road on the Lek river). The project extends over a length of 55 kilometers from Amerongen to Schoonhoven and will promote sustainable innovations. As part of our customer’s innovation partnership, the Stichtse Rijnlanden Water Board, Heijmans works with GMB and de Vries & van de Wiel. Together with these parties, Heijmans has already set up the Emission Free Infra Network (Emissieloos Netwerk Infra – ENI) to accelerate the energy transition.
In Breda, Heijmans and a pilot won a worldwide award for an innovative semi-open asphalt mixture on a porous foundation. The so-called Klimaflex asphalt was developed for use in city centers in order to combat heat stress in the environment and a lack of groundwater. This is in line with Heijmans’ sustainability strategy, which includes climate adaptation, circular building, energy and biodiversity.
Since the third quarter, most of the infrastructure operations have met all the requirements for step 4 of the so-called safety culture ladder (Veiligheidsladder). This is one of the methods customers use to gauge how much progress a company is making on security. The aim of this national assessment method is to reduce the number of occupational accidents.
Heijmans has reached an agreement with 3i Infrastructure to sell its stakes in the Heijmans Capital joint venture. Heijmans Capital is an investment vehicle that has interests in four PFI / DBFM projects. As the availability certificate has been received for all four projects and the projects are currently in a long-term management and maintenance phase, Heijmans has decided to sell its 20% stake in Heijmans Capital.
After the transaction, 3i Infrastructure will hold 100% of the shares in Heijmans Capital. The transaction, which is subject to certain conditions, including customary third party approvals, is expected to close in the fourth quarter of 2020. The transaction will generate proceeds of more than EUR 7 million for Heijmans.
The impact of Covid-19 on Heijmans results has so far been limited to several large utility projects. Our organization has proven sufficiently adaptable to continue our activities. However, the medium-term effects of current developments on our customers’ investment patterns are still unclear. The government’s new nitrogen emissions plan is another worrying issue. This could bring some relief to housing construction, but the current proposals will not solve the structural problem, particularly in the infrastructure sector.
Heijmans has adjusted its outlook for 2020 upwards and now expects an increase in sales and the underlying EBITDA between 5% and 10%. The order backlog is good at EUR 1.9 billion and Heijmans’ cash position remains strong.
Everyone wants to have clean air, live in a nice neighborhood, work in a good workplace and be able to travel safely from A to B. By making things better, more sustainable and more intelligent, Heijmans creates a healthy living environment. Jan Heijmans started out as a road builder in 1923. Today Heijmans is a publicly traded company that combines activities in real estate development, construction and technology, and infrastructure. In addition, we work safely and create added value for the places where we are active. This is how we build the room contours of tomorrow together with our customers: www.heijmans.nl/en/
For further information / not for publication:
Jeroen van den Berk
+31 73 543 52 17
+ 31 73 543 52 17