Koninklijke Heijmans N.v. · EURONEXT:HEIJM
Koninklijke Heijmans — H1 2006 Earnings Presentation
28 slides from Koninklijke Heijmans's earnings presentation, Aug 31, 2006
Slide 1: Presentation halfyear results 2006
Presentation halfyear results 2006 31 August 2006 1
Slide 2: Heijmans realises half year profit of €36 million and confirms forecast for 2006
Heijmans realises half year profit of € 36 million and confirms its forecast for 2006 Guus Hoefsloot/Dick van der Kroft 31 August 2006
Slide 3: Construction output in the Netherlands is growing, and for years to come too
Construction output in the Netherlands is growing, and for years to come too Forecast for growth in construction 5 output in 2006: 4% construction output 4 GDP 3 2 1 0 -1 -2 -3 -4 2001 2002 2003 2004 2005 2006 f 2007 f 2008 f 31 August 2006 Source EIB 3
Slide 4: Spread of activities cushions risk profile
Spread of activities cushions risk profile First half of 2006 International International Property 14% 23% 26% Infrastructure 15% Property Infrastructure 52% Building Building 23% 28% 19% Revenues (before elimination) Operating profit € 1,451 million € 53 million 31 August 2006 4
Slide 5: Results for first half of 2006: key points
Results for first half of 2006: key points • Growth in results at Property, International and Production compensates for pressure on results at Infrastructure and Building • Property: substantial increase in profit; sale of homes and order intake on schedule; risk of unsold/unlet non- residential pr
Slide 6: Development of results on schedule to achieve forecast for year
Development of results on schedule to achieve forecast for year In € million 2006H01 2005H01* difference Revenues 1,353 1,296 4% Operating profit 53 56 -5% Profit after tax 36 35 3% Operational cash flow -58 -64 Order book 2,963 2,632 13% *adjusted for comparison purposes (see interim report 2006) 3
Slide 7: Heijmans compensates results in market sectors
Heijmans compensates results in market sectors In € million 2006H01 2005H01 difference Property 27 22 23% Building 9 17 -47% Infrastructure 8 15 -47% International 7 4 75% Production 2 -3 Other/not allocated 0 1 Operating profit 53 56 -5% 31 August 2006 7
Slide 8: Increase in operating profit after correction for non-recurring items
Increase in operating profit after correction for non- recurring items € million 2006H01 2005H01 Operating profit 53 56 Book profit on sale of 5 5 subsidiary Release of management 0 6 participation plan Operating profit excl. non- 48 45 recurring items 31 August 2006 8
Slide 9: Property: stable revenues with higher margins
Property: stable revenues with higher margins In € million 2006H01 2005H01 difference Revenues 377 374 1% Operating profit 27 22 23% Operational margin 7.1% 5.9% Order book 807 773 4% 31 August 2006 9
Slide 10: Exposure has declined in non-residential property
Exposure has declined in non-residential property • More activity among potential tenants; less unoccupied property • Risk profile improved • On Heijmans balance sheet as investment of € 133 million (end of 2005: € 142 million) m² 2006H01 2005 Unsold 45,400 51,400 Of which let 30,900 15,000 unlet 14
Slide 11: Property: strong growth in profit margin for owner-occupied homes
Property: strong growth in profit margin for owner-occupied homes • Better market conditions : • Sale of 1,570 homes in first half of 2006; 925 from land positions, 645 from competitions • Average price € 247,000 (no legal/transfer costs) • Good results from landbank • Strengthening of conceptual qu
Slide 12: Owner-occupied housing market: healthy price development
Owner-occupied housing market: healthy price development 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 1998 1999 2000 2001 2002 2003 2004 2005 1st half 2006 10-year mortgage price development for ow ner-occupied homes Source: NVM 31 August 2006 12
Slide 13: Starter homes: Young and Living
Starter homes: Young and Living • Affordable rented homes and owner-occupied homes for starters in Pijnacker: to rent from € 460 /month, to buy from € 135,000 31 August 2006 13
Slide 14: Property: development potential is source of growth
Property: development potential is source of growth • Total potential of 47,000 homes; land positions and competitions • Potential for non-residential property 675,000 m² • Success in competitions for integrated projects (first half of 2006: 800 homes from 7 competitions) • Successful development of
Slide 15: Integrated, with other Heijmans disciplines too
Integrated, with other Heijmans disciplines too • Development of urban area of Groningen • Purchase of site, demolition and redevelopment, building infrastructure • 350 apartments, 50 homes and 4,200 m2 of non-residential property • Expected revenues of € 100 million 31 August 2006 15
Slide 16: Building: fall in revenues and lower quality order book put pressure on results
Building: fall in revenues and execution of lower quality order book put pressure on results In € million 2006H01 2005H01 difference Revenues 405 453 -11% Operating profit 9 17 -47% Operational margin 2.3% 3.8% Order book 977 953 3% 31 August 2006 16
Slide 17: Building: Selective contracting and operational excellence
Building: Selective contracting and operational excellence orderbook ultimo H01 2006 orderbook ultimo 2005 revenues 2005 residential 42% private non-residential 19% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% public non-residential 27% one to one call for tenders service building 12% Operational exc
Slide 18: Infrastructure: end of mega project contribution put margins under pressure
Infrastructure: as expected, end of substantial contribution from mega projects put margins under pressure In € million 2006H01 2005H01 difference Revenues 334 352 -5% Operating profit 8 15 -47% Operational margin 2.4% 4.2% Order book 968 667 45% 31 August 2006 18
Slide 19: Large, integrated projects require different skills and emphasis
Large, integrated projects require different skills and emphasis A2/A67 for example • Contract value € 294 million • Completed at least 1 year early • 17 km of motorway, approx. 70 constructions • 736,000 tons of asphalt • 45 km of sewers • 2,500,000 m³ sand/earth • 6,000 foundation piles • 90 km of
Slide 20: Infrastructure: adjust organization to suit market developments
Infrastructure: adjust organization to suit market developments • Increasing demand for large, integrated projects • Business unit for major integrated projects: engineering, contract management, risk management, coordination of work • Lowest price and efficiency are main selection criteria in regul
Slide 21: International: on the right track on a broad front
International: on the right track on a broad front In € million 2006H01 2005H01 difference Revenues 335 253 32% United Kingdom 126 102 24% Belgium 155 126 23% Germany 54 25 116% Operating profit 7 4 79% Operational margin 2.1% 1.5% Order book 583 528 +10% 31 August 2006 21
Slide 22: Liège, Bavière site: integrated area development
Liège, Bavière site: integrated area development • Expected turnover € 100 million • 600 apartments, shops, hotels and restaurants, sports and recreational facilities, crèche and 700 parking spaces 31 August 2006 22
Slide 23: Financial position offers room for investments
Financial position offers room for investments (in € millions) 600 500 400 300 200 100 0 2004 30-June -05 2005 30-June -06 net debt equity 31 August 2006 23
Slide 24: Trends in property, infrastructure and building
Trends in property, infrastructure and building • Continuing housing shortage • Demand for integrated multidisciplinary projects: • Property: area development • Infrastructure: new contract forms • Building: PFI • Stimulus for scale • Increasing outsourcing of maintenance and management • Increasing
Slide 25: Heijmans' strategy
Heijmans’ strategy • Growth through more development, involvement in design, integrated projects and technical facility management • Operational excellence • Internationalization where full service is possible • Balance between Property, Infrastructure and Building • Organic growth and acquisition o
Slide 26: Strategic targets for 2008 upheld
Strategic targets for 2008 upheld Position in Position in Target for 2008 2003* 2005 ROI 10.8% 14.5% 18% ROS 2.3% 2.8% 3% Front of chain 25% ≈35% 35% Back of chain 5% <10% 20% 2003 based on NL GAAP : ROI = EBIT : average invested capital 31 August 2006 26
Slide 27: Prospects for whole of 2006
Prosepects for whole of 2006 (barring unforeseen circumstances) • Revenues approx. € 3 billion (2005: € 2.8 billion) • Profit after tax approx. € 87 million (2005: € 87 million) • Profit per share € 3.62 (2005: € 3.67) • Dividend proposal €1.45 per share (2005: € 1.45) 31 August 2006 27
Slide 28: 31 August 2006
31 August 2006 28