Heijmans on track: Results improved; balance sheet strengthened (NL)

Rob van Gelder, Chairman of the Heijmans Executive Board: "We are well on track; the downsizing is proceeding more rapidly than planned and we make progress on the reduction of debt. The company is progressively doing better. Stagnation of the housing market is still affecting us adversely."

General developments
The underlying operating result exhibited a positive trend over the past few months. The underlying operating margin amounts to approximately 1% of revenues in the months of July, August and September. Performance during the past few months considerable improved compared with the same period in 2008. This is largely explained by the fact that the Dutch Building Activities and the projects in Belgium that were highly unprofitable in 2008, made on balance a positive contribution to the result over the past few months.

Compared with the same period in 2008, the level of Heijmans' revenues in the Netherlands in the last few months is lower due to the selective contracting policy and the slowdown in the housing market. Revenues generated by international activities over the last few months are slightly higher than the same period in 2008.

The Heijmans order book at September 30, 2009 rose slightly in comparison to the end of June 2009. Due to a selective contracting policy, the quality level of the order book in terms of gross margin is good.

Streamlining the organization
Over the past few months, the Heijmans organization has been further adjusted and has consequently become more responsive. At the end of the third quarter, the number of FTEs in the Netherlands on balance declined by approximately 1,000 in comparison to one year ago. Current projections call for a decline of approximately 1,300 FTEs as per the end of the first quarter of 2010. The program effects all business areas.

Revenues and order book

Property Development continues to be severely impacted by poor housing market conditions. While a somewhat increased movement in the housing market is perceptible, the revenues from and the sale of new homes in the last few months continues to lag behind 2008 levels. In the first 10 months of this year, exclusive of dissolutions, approximately 1,000 homes were sold, versus approximately 2,150 homes for the entire year 2008. Compared with prior years, a relatively higher number of homes were sold in the somewhat lower market segment.

The revenues of Residential Building, Non-residential Building and Infrastructure declined over the past few months in comparison to the same period in 2008, partly as a result of the stricter policy of pursuing margin over volume. Technical Services revenues remained at a good level.

The Heijmans order book in the Netherlands at September 30, 2009 rose slightly in comparison to its status at the end of June 2009. The Property Development order book declined due to the deferral of residential building projects. The order book rose in other sectors.

The order book for Non-residential Building and Technical Services at September 30, 2009 rose in comparison to June 30, 2009 in part due to the umbrella contract for the realization of the Vredenburg Music Centre in Utrecht valued at €81 million. With respect to the Infrastructure order book; the €87.5 million Prorail contract for the substructure of the track doubling project between Utrecht-Lunetten and Houten, as well as the approximately €50 million contract with the Directorate-General for Public Works and Water Management for the widening of the A50 Valburg - Grijsoord motorway, contributed significantly to the increase.

Foreign operations
The revenues generated by foreign operations rose over the last few months in comparison to the same period in 2008. Revenues in the United Kingdom and Belgium declined. Revenues in Germany rose over the last few months. The three subsidiaries Heitkamp, Oevermann and Franki all contributed to this increase.

The order book in these three countries as per the end of September 2009 is slightly higher c

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