Koninklijke Heijmans N.v. · EURONEXT:HEIJM
Koninklijke Heijmans — FY2005 Earnings Presentation
38 slides from Koninklijke Heijmans's earnings presentation, Mar 2, 2006
Slide 1: Presentation annual results 2005
Presentation annual results 2005 2-3-2006 1
Slide 2: Linking: infrastructure, building and property development
Linking: infrastructure, Focussed on the building and property future development Service, innovation, Enduring, not just a cooperation fashionable “fad” 2-3-2006 2
Slide 3: Annual results 2005
Annual results 2005 Guus Hoefsloot/Dick van der Kroft 2 March 2006
Slide 4: Results 2005: highlights
Results 2005: highlights • 11% more houses sold and at better margins • Substantial contribution to profits by large infrastructure projects • New building and infrastructure projects in sharp competition; restrained tendering • Divestment in Opstalan, Bouw Toe and Vebo (not yet finalised) • Access
Slide 5: Construction output Netherlands is growing, but prices are still too low
Construction output Netherlands is growing, but prices are still too low 6 Construction output 2005 2.5% 4 2 0 -2 -4 -6 2003 q2 2003 2004 q2 2004 2005 q2 2005 2006 f 2-3-2006 Source EIB/CBS 5
Slide 6: "Operational result" under IFRS
“Operational result” under IFRS • Before balance of financial assets and liabilities • Before earnings from associates • Before profits tax The balance of financial assets and liabilities includes the income from capitalised interest • Profit after tax is not affected 2-3-2006 6
Slide 7: Current policy achieves results
Current policy achieves results In € millions 2005 2004 difference Revenues 2,835 2,672 6% Operating result 129 111* 16% Profit after tax 87 70* 25% Operational cash flow 109 245 Orderbook 2,559 2,362 8% *Before special expenditure competition fine 2-3-2006 7
Slide 8: After correction for incidental results, profit increases by 12%
After correction for incidental results, profit increases by 12% € millions 2005 2004 Profit after tax 87 70* Profit booked for sale of 5 0 Opstalan Release provision participation 4 0 plan Profit after tax excl. non 78 70 recurring tems Profit margin 2.8% 2.6% *Before special expenditure competitio
Slide 9: Spreading activities reduces risk profile
Spreading activities reduces risk profile property international international 8% property 19% development productie 27% 1% development 40% production 2% infra- structure 26% infra- structure 25% building 27% building 25% Revenues Profit after tax € 2,835 million € 87 million 2-3-2006 9
Slide 10: Heijmans benefits from strong markets
Heijmans benefits from strong markets In € millions 2005 2004 Difference Property 37 25 47% Building 23 25 -8% Infrastructure 24 20 20% Production 1 2 International 7 3 Elimination and not -5 -5 allocated Profit after tax 87 70* 25% *Before special expenditure competition fine 2-3-2006 10
Slide 11: Property: Home sales increase by 11% to 3,786
Property: Home sales increase by 11% to 3,786 In € millions 2005 2004 difference Revenues 889 801 11% Operating result 66 46 43% Profit after tax 37 25 47% Net margin 4.1% 3.1% Orderbook 798 730 7% 2-3-2006 11
Slide 12: Property: Strong growth in profit margin
Property: Strong growth in profit margin • Improved market conditions • Improvements in design and concept quality • Good results from landbank • No low profits from commercial real estate 2-3-2006 12
Slide 13: Exposure in (commercial) real estate has dropped
Exposure in (commercial) real estate has dropped • 15% more taken up in 2005, especially by IT and demand for replacement • More activity potential tenants • 20% less vacancies m² 2005 2004 Unsold 51,400 57,300 Of which are let 15,000 11,400 Unlet 36,400 45,900 2-3-2006 13
Slide 14: Property: Dynamics of the Dutch owner occupied housing market
Property: Dynamics of the Dutch owner occupied housing market • Shortage of approximately 170,000 houses • Government plans for catching up on shortage: 450,000 houses in the next 5 years • Mortgage interest 100% tax deductible • Lack of private investors in the housing market results in low volatil
Slide 15: Property: Increasing market share
Property: Increasing market share 4000 80000 • Housing construction in the Netherlands +3% to 67,500 (CBS) 3500 70000 • Average price in the Netherlands +5.5% to € 227,000 3000 60000 • Heijmans sales +11% to 3,786 2500 50000 • Average Heijmans price € 245,000 2000 40000 • Heijmans market share appro
Slide 16: Property: Development potential is source of growth
Property: Development potential is source of growth Heijmans’ potential 46,000 houses Housing requirement in Dutch towns 350,000 houses Fewer than 10,000 Land position 10,000 to 20,000 Development claim 20,000 to 30,000 from land position 30,000 or more 2-3-2006 16
Slide 17: Property: Development potential is source of growth
Property: Development potential is source of growth • Total potential 46,000 houses • At least 50% realisation before 2010 • Potential for commercial real estate 675,000 m² (35% realisation before 2010) 2-3-2006 17
Slide 18: Tailor housing at De Landen Pijnacker
Tailor housing® at De Landen Pijnacker • 59 houses • 2 and 3 semi-detached houses • Terrace houses from € 250,000 • Corner houses € 300.000 2-3-2006 18
Slide 19: Katwijk – 2nd phase Harbour Area
Katwijk – 2nd phase Harbour Area • Transformation of harbour area to a high quality housing estate. • Renovation of various historical and attractive buildings. • Proper-Stok as coordinating developer • Approx. 400 houses and apartments • Approx. 450 parking spaces • 18 Boat houses • Day-care centre
Slide 20: Building: More tenders
Building: More tenders In € millions 2005 2004 difference Revenues 889 877 1% Operating result 30 33 -9% Profit after tax 23 25 -8% Profitmargin 2.6% 2.8% Orderbook 1,031 990 4% 2-3-2006 20
Slide 21: Building: Operational excellence and innovation
Building: Operational excellence and innovation 50% 40% 30% 20% 10% residential 54% 0% non residential private 17% negotiated work public tender property non residential public 18% development buildingservices 11% revenues orderbook Operational excellence: Full service: Risk management Woonvitaal Co
Slide 22: Technical facility management Schiphol Airport
Technical facility management Schiphol Airport 2-3-2006 22
Slide 23: Technical facility management Schiphol Airport
Technical facility management Schiphol Airport • Long-term maintenance of terminals, piers, electronic and mechanical engineering installations, and fire protection • In joint venture with Stork • Minimalisation of risks and inconvenience to passengers and air traffic 2-3-2006 23
Slide 24: Eindhoven Airport, passenger terminal
Eindhoven Airport, passenger terminal 2-3-2006 24
Slide 25: Eindhoven Airport, passenger terminal
Eindhoven Airport, passenger terminal • Client and provider operate in design and construction teams from the start • Partners have a joint interest: minimum construction time = minimum hindrance to air traffic • Innovative construction method (prefab where possible) and high production speed • Make
Slide 26: Infrastructure: substantial contribution from large projects
Infrastructure: substantial contribution from large projects In € millions 2005 2004 difference Revenues 776 766 1% Operating result 34 27 26% Profit after tax 24 20 20% Profitmargin 3.1% 2.6% Orderbook 588 603 -2% 2-3-2006 26
Slide 27: Infrastructure: Intense price competition
Infrastructure: Intense price competition • Selective contracting policy is maintained • Large tenders in 2006 for subsequent completion • Large maintenance contracts in 2006 central government 17% local government 34% companies 32% one on one 25% competition 75% real estate 17% 2-3-2006 27
Slide 28: Infrastructure: managing for profitability
Infrastructure: managing for profitability road construction 44% engineering 3% concrete construction 19% environmental 4% sports&cultural tecchnique 3% traffic- and special techniques 10% technical infra 11% industrial services 6% Large projects Regular infrastructure Tender costs Strong asphalt po
Slide 29: Infrastructure: total development industrial sites
Infrastructure: total development industrial sites Borchwerf Roosendaal • Contract sum to make ready for construction and housing € 45 million • PPS contract • Size of project 140 hectares • Development of industrial site 2-3-2006 29
Slide 30: Heitkamp Rail
Heitkamp Rail Airport connection Birgltunnel: ICE-Halle: Cologne/Bonn • Construction of 2- • New station Dortmund- • Connection between way high speed line Spähenfelde airport and existing • Length 3 km HSL, total 15 km railway • 5.5 km tunnel 2-3-2006 30
Slide 31: International: Growth of results
International: Growth of results In € millions 2005 2004 difference Revenues 545 502 9% United Kingdom 227 166 Belgium 265 283 Germany 53 50 Operating result 13 11 18% Profit after tax 7 3 Profitmargin 1.4% 0.6% Orderbook 433 429 1% 2-3-2006 31
Slide 32: Sufficient room for strategic investments
Sufficient room for strategic investments • Operational cash flow € 109 600 million 500 • Return on average invested 400 capital from 11.1% to 14.5% 300 • Net debt from € 515 million to € 403 million 200 100 0 2004 2005 shareholder's equity net debt 2-3-2006 32
Slide 33: Full service strategy
Full service strategy Engineering services Property Building Infrastructure Service and maintenance Consulting/ design > (Risky) development > Completion > Maintenance > Exploitation/ management Examples: long-term maintenance contract NAM- oil drilling platforms, PPS industrial site development Bor
Slide 34: Strategic objectives for 2008 within reach
Strategic objectives for 2008 within reach Position 2003* Position 2005 Objective 2008 ROI 10,8% 14,5% 18% ROS 2,3% 2,8% 3% Front chain 25% ≈35% 35% Rear chain 5% <10% 20% 2003 based on Dutch GAAP: ROI = EBIT:average invested capital 2-3-2006 34
Slide 35: End to certification as a protective mechanism
End to certification as a protective mechanism • Voting powers to holders of depositary receipts at all times • Depositary receipts merely to combat absenteeism • Issue of protected preference shares from 50 to 100% • Issuing rights for preference shares with executive board • Complete compliance wi
Slide 36: Good prospects for Heijmans' markets
Good prospects for Heijmans’ markets • The Netherlands: growth in 2006 in all market segments (3.5%), but uncertainty regarding exact timing of price recovery • Belgium: growth in all segments (4.2%) in 2006 • Germany: possible growth in infrastructure and rail. • United Kingdom: after market stabil
Slide 37: Prospects for 2006
Prospects for 2006 • Anticipated production growth, but uncertainty about the course of prices in infrastructure and construction markets • It is therefore too soon to provide a profit prognosis for 2006 at this point in time. 2-3-2006 37
Slide 38: 2-3-2006
2-3-2006 38