Koninklijke Heijmans N.V. (HEIJM) Earnings Call Transcript & Summary

You are listening to the audio webcast of the presentation of the annual results 2025 of Royal Heijmans. In the upcoming minutes, you will hear at first our CEO, Mr. Ton Hillen, followed by our CFO, Mr. Gavin van Boekel. There is no opportunity to ask questions online. There is only opportunity for the people here present in Amsterdam to ask questions. I would like to ask you to state your name and the company you are representing as a gesture to our listeners online if you ask the questions through the microphone. Mr. Ton Hillen, the floor is yours.

Thank you, Martijn. Ladies and gentlemen, this morning, we published the 2025 annual results of Royal Heijmans. 2025 was a strong and successful year for Heijmans and lays the foundation for a profitable growth. As usual, we'll start this meeting with a short video showing the highlights of the past year. [Presentation]

You can see that Heijmans has once again delivered many high-profile projects and this despite global unrest and unstable political climate in the Netherlands. Over the past year, Heijmans has further shaped its strategic agenda and the financial results are certainly satisfactory. Despite the current tight labor market, Heijmans managed to grow its workforce to approximately 6,100 employees, an increase of 8%. Heijmans remains an attractive employer. This was demonstrated among other things at the Heijmans' Family Festival organized by and for employees, where we welcomed more than 4,500 colleagues and their families to get better acquainted with Heijmans and the construction sector. The results of the employee engagement survey with a participation rate of 84% and a great NPS score of around 36 for the construction sector also shows that many employees recommend Heijmans as an employer, and that's something to be really proud of. Now let's go look at the safety performance. Despite the fact that Heijmans always prioritizes safety in its operations. We are confronted a fatal accident last year involving the operator's lift of a tower crane on the construction site in Tilburg. Although it had been shut down due to an unsafe situation, a mechanic from a subcontractor lost his life during the repair. This has deeply affected us all. It underlines once again how essential continued attention to safety within Heijmans and throughout the entire construction sector is and must be. As to our safety policy, we focused last year on further tightening safety procedures, specifically addressing high-risk activities, promoting safe behavior by encouraging the reporting of safe and unsafe situations while reinforcing leadership and the role model behavior and deploying safety innovations such as an emergency brake assistant and the AI environment assistant for heavy equipment. We observed that our TRA indication, the Total Recordable Incident Ratio with a safety measure of work-related accidents is 7.2, and we see an improving safety culture at Heijmans, but it can and must still be better. There's an increased willingness to report safe and unsafe situations with an increase of near-miss reporting, which has enabled us to take proactive measures to improve safety. During the infrastructure works, road users unfortunately pay less and less attention to the people working on or alongside the road. A striking example earlier this year was a motorist slaloming around cones marking roadworks. Irritation among drivers caused by increasing delays due to roadworks is rising and the number of road users ignoring red crosses above lanes is worrying. The major task ahead to replace our infrastructure, delays will likely only increase in the coming years. Therefore, I call all road users. Please respect our road workers even in case of delays. We are increasingly using digital tools to instruct colleagues in advance about the layout of construction sites. And with VR headsets, we are able to simulate construction scenarios, which prepare employees to help them perform in a safer way. Beyond all our daily activities and ongoing projects, large and small, 2025 was also marked by our strategic agenda together towards 2030 based on 5 pillars: well-being, sustainability, connection, producibility and team. Last year, the focus was on translating societal challenges into concrete feasible solutions. This has enabled us to drive integrated business innovations rather than isolated initiatives. Some examples in the era of producibility includes an increase in modular and industrial production of homes in our timber frame factory in Heerenveen. Optimization and sustainability improvements of offshore housing concepts at Civiel. A successful collaboration with TenneT to assemble standardized prefab high-voltage modules in a factory setting, contributing to safer, more predictable and more efficient processes fully in line with our goal of working twice as smart instead of harder. And in large-scale nonresidential buildings, cables and pipes are increasingly installed using modular kits. Pipeline routes are assembled offsite in frames and mounted as complete modules to the ceiling. This improves working conditions, increases quality, keeps workspaces tidier and accelerates the realization process. When looking at our financial performance, we are pleased with what has been achieved over the past year and what has been structurally built in recent years. Heijmans has already been a robust and stable company for some years with a proven track record. That today thanks to the efforts of all our employees. Revenue in 2025 amounted to just under EUR 2.8 billion with an underlying EBITDA of EUR 252 million, resulting in a margin of 9.1% and a net profit of EUR 130 million, what is 4.7%. This is a 45% increase in net profit. During the general meeting of shareholders, we will propose distributing 50% of this net profit as a cash dividend. The order book has remained strong and grew to EUR 3.7 billion. In addition, recurring service activities and asset management contracts continue to grow on top of defense projects. In recent years, we have also seen step-by-step improvement, year-by-year in the quality of the order book. Heijmans expects to achieve around EUR 3.1 billion in revenue in 2026, including the Hegeman acquisition. Underlying EBITDA growing towards 9.5%. Given the enormous construction challenge in our country in housing, infrastructure, the replacement and renovation of roadworks, the grid [indiscernible] protection program and the upcoming defense related construction work, it's essential for Heijmans to remain selective in tender and focus on work, aligned with our core competencies. Can we deliver it? Based on experience and available staff. And this project strike the right balance between risk assessments and earnings potential. We have great confidence in these prospects in the coming years. Then to the housing market. Although the pressure on the housing market remains high, Heijmans sold about 3,100 homes. Sales of ground level homes increased and consumer demand for such homes remains strong. However, in the inner city apartment market, we see a slight cooling down in sales. In planning, there is an oversupply of inner city apartments that are increasingly difficult to develop profitably under the 2/3 affordability rule imposed by municipalities. For 2026, we expect stable or slightly declining home sales due to ongoing market disruptions. The housing market still lacks consistent policy and decisiveness. The never ending, nitrogen issue remains unresolved. Many real-estate investors are avoiding the Dutch housing market and a growing shortage of local government staff to assess and Dutch housing projects is causing delays. In addition the permitting process continues to hang-up project execution. This couple of obstacles have led to it that we have not succeeded in acceleration of housing production in the recent years. For Heijmans the housing market remains an important driver, given our strong position, ambition of the new cabinet and ambition enjoying wide political support, as well as the substantial demand for housing. There are many opportunities to solve this couple of obstacles and things could so much be better. Then the Dutch infrastructure market. If the Netherlands want to remain competitive and maintain the economic growth needed for our prosperity as highlighted in the report by Peter Wennink, a vital infrastructure is essential. This concerns not only aging road network, but also water systems, aviation, rail, energy and digital infrastructure. In recent decades, infrastructure maintenance budgets have been reduced drastically for years and the nitrogen issue has also not helped to encourage investment in the infrastructure expansion. Meanwhile, the intensity and load on our large post-war infrastructure has only increased. With the substantial defense-related construction work task ahead, pressure on infrastructure will increase even further, and give Heijmans new opportunities for our construction activities. The changing security situation in Europe requires a strong military and modern defense real estate. With the start of the technology central land project in Leusden, we are already contributing our expertise to strengthen the armed forces. And we also be renovating the runway at Eindhoven Air Base. Heijmans also participates in the New Commandopost real estate, a partnership between the Ministry of Defense, the Central Government Real Estate Agency and market parties, linking the strength of military infrastructure to construction sector knowledge, capacity and innovation. In addition, this urgent and challenging appeal to develop new forms of collaboration also provides Heijmans with an opportunity to accelerate digitalization and modular industrial production. By bundling similar projects in the pipeline, rather than treating each bridge of viaduct as a stand-alone project, efficiency gains can be achieved and repeatable improvements can reduce costs. Heijmans is eager to take this on. It can be done together. Given the major societal challenges, we expect strong growth in working and connecting projects in the coming years. I now hand over you to Gavin van Boekel for the financial figures per segment and Heijmans' sustainability agenda.

It is once again my pleasure to further explain the financial results of our great company. With satisfaction, we look back on 2025. All business segments once again achieved profitable growth. With an underlying EBITDA margin of 9.1% for the total company, we performed above the strategic bandwidth of 7% to 9% for 2027 as communicated at our Capital Markets Day in 2024. Heijmans has also shown once again this past year that it is a predictable company where projects and contracts are in control. This resulted in a net cash position of EUR 58 million at the end of '25 and the return on capital employed of almost 28%. On group level, revenue increased by almost EUR 200 million to EUR 2.8 billion. All business segments contributed to this growth. However, as we've stated many times, revenue growth is not a goal in itself. We aim for profitable growth. That is why it's even more predominant to us that last year, the underlying EBITDA margin rose by 140 basis points to 9.1%, representing an underlying EBITDA increase of EUR 53 million to EUR 252 million. This again demonstrates that we have successfully achieved profitable growth. Net profit rose 45% versus '24 and amounted to EUR 130 million. Our margin over volume strategy continues to pay off. And this leads, Ton mentioned it, to a dividend proposal of EUR 2.37 cash per share. The order book has risen sharply to EUR 3.7 billion, with the largest increase being visible in the Working segment. We see the quality of the order book continuing to improve, which is encouraging. Of the total order book of EUR 3.7 billion, EUR 2 billion relates to the year 2026. The remaining EUR 1.7 billion will be executed in the years thereafter. It is also important to note that in 2026, Heijmans will transition to a new ERP system from SAP R/3 to S/4HANA. The cost for this changeover budgeted at EUR 11 million will not be capitalized, but expensed directly through the P&L. In 2025, we incurred more than EUR 3 million in cost related to this transition. The remaining EUR 8 million will be expensed in 2026. In '25, our total cash flow amounted to EUR 85 million, resulting in a year-end net cash position of EUR 58 million. This includes both the effects of the acquisition of Hegeman and the purchase of our Heijmans headquarters in Rosmalen. Solvency stands at a solid 32.9%, demonstrating Heijmans financial health. The fact that solvency decreased 90 basis points over '25 was primarily driven by the EUR 45 million dividend payout over the '24 financial year. Return on capital employed of 28% compared to 90% a year earlier, we significantly improved our return on capital employed. As usual, we'd like to give some color to our business segments via photos. And on the 3 photos of living, you can see from left to right, INCK in Eindhoven, a development of approximately 400 homes in an inner city location between the city center and the high-tech campus. The residential buildings are equipped by Heijmans Energy with a grid-aware heating and cooling system. By buffering heat, the system reduces peak demand on the local electricity grid during periods of energy grid congestion. Combined with battery technology and solar energy, this allows for a smaller main connection. In the middle, Noorderhaven in Zutphen, a large-scale area development by León. This project adds significantly to the expansion of our property development portfolio. And also in the last phase, we will construct 47 homes from our timber frame housing factory in Heerenveen. On the right, the Kamperpoort-Zuid, where we signed a letter of intent with the local municipality to realize circa 400 bio-based homes. Here, we deploy our expertise in bio-based construction, including the use of locally grown fiber crops such as hemp processed into bio-based construction materials. We also investigate how we can operate with as much bio-based materials as possible and source locally to contribute to CO2 reduction and the circular future-proof construction sector. Within living, the housing market conditions in 2025 were similar to those in '24. Home sales declined slightly to 3,103 homes sold. Sales of ground level suburban homes continued to perform well. Revenue increased from EUR 994 million to over EUR 1 billion, and underlying EBITDA rose to EUR 112 million, resulting in a strongly improved underlying EBITDA margin of 11.1%. We also continued to expand our land bank in '25 to approximately 40,000 positions. The order book increased by roughly 30% to EUR 1.1 billion. The 3 photos of our working segment show from left to right, a photo of the technology center for the Ministry of Defense in Leusden. With the start of this project, we are strengthening our position in strategic nonresidential projects. This project underscores the confidence placed on us by an important public client and contributes to a growing order book within the working segment. In the middle photo, the signing of the Hegeman acquisition. With this acquisition, we strengthened our regional presence and execution capacity within working. The addition of expertise, capacity and market position aligns with our strategy to selectively grow inorganically in core markets. This move increases our scale, improves our competitive position and creates synergy benefits within the existing organization. On the right, a photo of the renovation of the new Postillion Island. This demonstrates how we sustainably and circularly transform existing buildings. Through the reuse of materials such as donor steel and future-proof solutions, we create value for both the client and the environment. This type of inner city development fits perfectly with our focus on sustainable growth and efficient capital deployment. At working, revenue increased by nearly 9% in 2025, particularly in services. Our recurring business continues to grow and market conditions remain positive. The share of one-on-one projects and construction teams where Heijmans engages early with the clients increased as well. Total revenue reached EUR 690 million, and we again achieved profitable growth. Underlying EBITDA margin increased by 60 basis points to 8%. The H2 margin was somewhat lower than H1 because for 4 large new projects, we recognized revenue, but not yet profit in accordance with our accounting rules that dictate a 0 profit recognition should happen during the first 20% of large project completion. Given we closed the Hegeman acquisition just before Christmas, this deal is not yet reflected in our 2025 P&L numbers. The order book increased significantly as expected, by more than 60% to EUR 1.5 billion, driven by projects such as TCL in Leusden and Physics in Delft. This positions us well for '26 and '27 with strong expected growth in project activities. With this order book, we expect significant future revenue growth in the working segment, particularly in the project-based activities, which are expected to grow even faster in the coming years than the recurring activities. Finally, 3 photos from the connecting segment, but from left to right, the photo of the opening of the TenneT Assembly Facility with this factory designed for the rapid assembly of high-voltage fields, we support the acceleration of grid reinforcement in the Netherlands. This project aligns with the national structural investment agenda in energy infrastructure and further strengthens our position in the energy transition. In the middle, a photo of the contract signing for a sustainable heating system for a new district in Utrecht. In Kamperpoort, in addition to amenities, shops and restaurants, over 3,600 new homes will be built. This project illustrates our role as an integral partner in area development where energy, infrastructure and housing come together. It contributes to recurring activities in energy and heat networks and reinforces our portfolio of sustainable urban solutions. Lastly, a photo of the renewal of the Polderbaan runway at Schiphol, where also our collaboration with Schiphol for these type of maintenance activities was continued. This reflects the mutual trust in the strategic partnership. Such large-scale infrastructure projects provide continuity within our connecting activities and contribute to predictable revenue and long-term customer relationships. Revenue in the connecting segment increased to EUR 1.1 billion, driven in particular by strong growth in energy-related activities. Profitability also improved. Underlying EBITDA rose from EUR 70 million in 2024 to EUR 93 million in 2025. The corresponding underlying EBITDA margin reached 8.2%, an increase of 110 basis points. The order book of connecting grew to EUR 1.1 billion, with the share of energy-related activities within rising sharply to 32%. To conclude this section, a number of notable nonfinancial highlights from the past year. In November '25, Heijmans won the annual CSRD award in the Large Company category. It is a valuable recognition of our endeavors on transparent and candid sustainability reporting. By the end of '25, more than 3,400 leased cars were fully electric. We have also been extending this approach to cargo vehicles alike, although the required towing capacity or driving gains is not yet always available to make the switch. It is also encouraging that both the IFM and the VBDO confirmed Heijmans leading position in the area of biodiversity last year. This recognition is a testament to our colleagues who work on this every day, continuously helping Heijmans to take meaningful steps forward. Finally, we now cultivate fiber as a bio-based insulation material for our homes. Over the past year, we expanded this from 6 to 20 hectares, enough to provide insulation for 125 homes. And with that, I would now like to hand the floor back to Ton for the outlook.

Thank you, Gavin. Looking ahead to 2026, Heijmans sees great potential. In recent years, demand for technical service activities in nonresidential buildings has grown. Clients increasing to be unburdened. Building insulators are becoming more complex and more buildings must be made sustainable to reduce the environmental impact. As mentioned earlier, in the coming years, there will be a strong increase in demand for nonresidential and infrastructure projects. We also see that clients are reserving capacity earlier and approaching Heijmans more frequently as a knowledge partner from engineering to realization and in some cases, even for maintenance and operations. It's important that Heijmans deploy capacity effectively and remains critical of the tenders we accept. But this also provides great confidence for the future given the role Heijmans can play as a project orchestrator. Energy transition is an area which Heijmans has strengthened its position in recent years. Significant work will continue in this segment. In the coming years, we will further integrate our energy-related activities to be even better positioned for the market and our clients. Area I spoke critically about the housing markets because I see that for decades decisiveness and consistent policy had been lacking, leading to foreign real estate divestures to withdraw from the Dutch market, slowing the housing sector even further. Because too few homes were built in recent decades, we now face a shortage. Whereas the demand for new homes is high. So as I said before, build what you can build in all segments and thereby also create a moving carousel in the existing housing market. Heijmans is well positioned in the housing sector. Our Horizon housing concepts meets consumer needs well. The housing market therefore remains attractive for Heijmans and we see strong potential. Heijmans expects to achieve around EUR 3.1 billion in revenue in 2026, including the Hegeman acquisition with an underlying EBITDA growing towards 9.5%. This is already above the 7% to 9% range we previously set for 2027. We will organize a Capital Markets Day on the 21st of May. In short, we will continue on our chosen path with steady growth in results and revenues, thanks to sound business operations based on the principles, we do what we can balance between risk acceptance and earner capacity, there to say no and margin above volume. We most certainly have a new cabinet over the next 2 weeks. The challenges for the Netherlands are significant. With consistent policy and decisive actions of the government, we can accelerate together. Through intensified cooperation between market parties, government and politics as a whole, we can and must take concrete steps together and build a strong Netherlands. Heijmans is ready. It can be done together. Thank you for your attention, and now it's place to have a few questions.

Thank you, gentlemen. I'll start on my left. Please state your name and the company you representing.

Yes, my first question is about the residential business. If I think about, let's say, the mix, and I think you mentioned already in the presentation that the urban development is under pressure. Is there now a, let's say, quite a big difference in profitability between the suburban and the inner city developments?

What you see in the suburban developments, the profit is a little bit higher than in the urban projects. And that is one of the reasons is the 2/3 affordability regulation there now is. So it is -- suburban is a little bit better than the urban a little bit.

And to build on that, Tijs, bear in mind that often suburban is constructed via land holdings. That means capital employed. So also the margin should be better compared to inner city developments.

It's incorporated, yes, also -- and there's also a third element in the profitability of the residential business, the wooden homes. How is that developing throughout 2025? Is it breakeven? And how do you look, let's say, into '26, '27?

It is about breakeven. We are almost there. So it's a couple of million loss, but it will be breakeven in '26.

It will be breakeven or both.

No, breakeven, we think breakeven. Let's hope it will above, but I think it will be breakeven.

And then a question on the Hegeman acquisition. There was -- you paid EUR 25 million that's in the cash flow. If I recall, it was a EUR 35 million takeover price. Is there an earn-out also coming later?

So in the end, we paid cash EUR 45 million. And for that, we got EUR 23 million in cash.

And the enterprise value. And it's not in the profit and loss, as you mentioned, but is it already included in the order book of the nonresidential division?

No.

And on the balance sheet?

Yes.

So there is a kind of a normalization in terms of percentage of revenue, if I look at the trade working capital components.

Correct.

Yes, could you give a little bit guidance on the expected CapEx for this year?

The reason why I'm hesitating, Tijs, is that we are looking as we have done last year with the AI factory for TenneT is that we are looking, as Ton mentioned, about the production of kits to also look for a factory in which we can produce kits. If that would not materialize, CapEx EUR 30 million. If that would materialize, it could easily be EUR 10 million, EUR 15 million more.

And one final question for now. And I have always had a lot of difficulty understanding it, but the correction on JVs EBITDA went up quite significantly from 16 million to 22 million. So that means that you are cooperating more with other construction companies in projects.

It's more, I think, the thing with JVs is it works a bit like our normal business. If we have investment in a JV, we do investment now and it can materialize into profit only in a couple of years. So yes, on an annual level, you could reduce, we do more, but it's often already started years earlier. So for me, it's also why in underlying EBITDA, we include JVs because for me, it's like normal way of working.

Yes, it's looking back -- and there's also a correlation between that line item and the income from JVs or participation.

There is a correlation, but not necessarily within the year. This makes it a bit more challenging.

Can you give any guidance on this year a little bit because, yes, it has a material impact on -- potentially on the net profit expectations in the market.

Then I would go for the same number of '25 as a best proxy.

For both?

For both.

Martijrej from ABN AMRO. I'll start off with a slightly higher-level question. Order book increasingly of high quality. You aimed for approaching 9%. You did 9.1%. Your medium-term target for 2030 was 10%. You're now guiding for 9.5% for 2026. Is there any reason why we couldn't assume a medium-term target of between 9% and 11%?

So a, to my knowledge, we haven't guided for 10% in [indiscernible]. We have given a guidance of 7% to 9% for '27. And to answer your question, we'll give some more clarity on the 21st of May.

And I will always come back to this question about capital allocation. I just did a back of the envelope calculation. So on your new EUR 3.1 billion revenue, 9.5%, just to make it easier. That's roughly EUR 300 million in EBITDA, minus, let's call it, EUR 40 million in CapEx. You have negative trade working capital. You're growing EUR 300 million. So that's roughly -- that's a cash inflow. I get to even including the dividend payment that you're still going to pay to over EUR 100 million that can be added in 2026.

Will be early.

Yes. What are you going to do with all that cash?

Well, I know that some parties are going to share buybacks. We thought also about it. But we prefer to invest in the company for further growth by example, investing in land positions for the housing market. looking for acquisitions opportunities, M&A, our business operations for making more sustainable company and invest in innovations in the field of digitalization, modular and industrial production, and Gavin also mentioned. So thereby, the increase in the earnings potential was also on the long term. So yes, we want to invest in the company. That's the preference that we have.

Okay. So no change on that element either. Which is fine. And then I had a question with regards to your contingent liabilities and the land bank. On your existing land bank, so what's in the balance sheet, could you give us a rough estimation of what the average age is? Is that like a 10-year, 12 years, 15 years? Just to give us a bit of a sense of how much between brackets hidden reserves you have in that land bank.

I will find it very difficult, but...

I must give an answer later on. I don't know at the moment.

Is it more than 10 years? Is that a fair assessment?

There are some positions are more than 10 years, I know, but I don't know how many percentage. I know what the duration is...

So to Ton's point, there are positions in there that have been there for a very long time. You could argue almost too long time. And there are positions in there that are very recent. I just don't know to your underlying question of what duration is what that mix is. That's not how we look at it. So it's not on top of my mind. I also can say that land bank position over the 10 year, then you have also an other allocation of the back book value before the crisis. So I think there's not a reason to concern that.

And with regards to that EUR 85 million increase in the contingent liabilities, I hope you will bear with me for just a second. So EUR 85 million, let's take that an average plot size is 100 square meters, average price is EUR 1,000. So land is EUR 100,000, EUR 85 million divided by EUR 100,000, gives you roughly 850, 900 homes. The average price of a home in these days is EUR 0.5 billion -- EUR 0.5 million. So that represents that EUR 85 million is another EUR 500 million addition to the backlog. Is that too simplified?

That is very simplified, but I understand where your calculation is coming from. So the fact that we added 2,000 homes to our portfolio of provisions, you can do a similar calculation and get to a similar number. So yes.

So that's quite a substantial investment in your longer-term positioning and growth.

But bear in mind, Martijn, the way we do backlog, we only add things to the backlog when they have materialized. So we don't do backlog as in all the home positions are in there. We really need the permit, the to start. So in your underlying question, is it already in the backlog? No.

One more and then I'll hand it over. On Hegeman, when you bought it, it had slightly lower EBITDA margins than Heijmans. So it's kind of dilutive in 2026.

Correct.

How long do you think you will need to get it to the required level?

12 months.

12.

You're not integrating it.

No.

How do you do that?

By adding, but bear in mind, this is a midsized company. And I think there are quite a few elements that we can add from a Heijmans point of view to that company. We can also help them, especially in the bigger projects to help them get them off the floor. I think we have Heijmans have better skills to do that. But on the other hand, where we have midsized projects, Hegeman can help Heijmans. So simply in that cross-fertilization of projects, we feel we can find that 20 basis points that we need to cross the bridge.

So rebalancing the portfolio.

I have some more, but I'll leave the floor unless there's nobody.

I'll do the walking through the microphone. No questions, no questions. I'll shift to this point of the room.

Simon Van Oppen, Kepler Cheuvreux. I have a question on the order backlog of working and the conversion. You're seeing a substantial acceleration in the order backlog of working towards EUR 1.5 billion. How quickly do you expect to convert this into revenue? And what risks or obstacles are associated with this conversion? And on top of that, what margin potential do you see in the segment in the long run?

So a couple of things. So the order book, like I said earlier, is really a combination of elements. So also for working, some of it will be in '26. But as the increase in order book is primarily in the project phase, this will take a couple of years. So if I look at the longest project in there that will be completed in 2031. So let's say, over the next 5 years, more in the nearer years, a little bit less in the further years out will come to fruition via revenue. We feel if we look at the tightness of the market and the fact that we are more able to get on one-on-one relationships with our customers that there is room for further margin uplift.

And I think on top of that, in the past, you have indicated that the 3 different divisions would ultimately each account for roughly 1/3 of your revenue. And we now see that connecting is growing faster than working. And given the potential recovery in residential construction, living could also accelerate, do you still expect the working division to eventually represent 1/3 of your business?

It's still the outlook. We still think working is the fastest-growing division for the upcoming years.

And last question from my side is, we have recently heard conflicting signals from various research institutes regarding the expected increase in residential construction activity in the Netherlands. I just wanted to pick your brain on what do you expect over the next 2 to 3 years?

So in all fairness, I think unless something materially changes in the way particularly government is managing the challenges around permits, around nitrogen, around energy grid congestion, how to make sure that there is infrastructure to the new suburbs that are being created. Unless it integrally is resolved, we don't think that number of homes will significantly change year-on-year. So glass half full, I think at least the new cabinet has laid out their plans and they really like to expedite the number of homes in the Netherlands. Glass half empty. That has been the case for the last 10 years, and we've not been able to do it. So for us, we are currently planning on a similar level as '24, as '25, likely also going forward unless this unlock happens, which I hope for a Netherlands point of view will happen. And we are there as a market party to really also step in and try with government to make it happen, but that requires government to really being able and willing to take consistent and tough choices.

There's an opportunity.

Leontien de Waal, ABN AMRO. I would like to elaborate on grid congestion. You've been investing in the district heating solution. How does that help Heijmans to keep ahead of this challenge of grid congestion. So in terms of impact, how does that work out for you probably faster than competitors -- being faster than competitors converting order backlog into real production.

As what we, for example, have done with INCK in Eindhoven, seen one of the photos is if we would not have found a solve how to get to a lower main connection, we would not have been able to develop that plot. So the fact that we were able via our heat systems to actually shave the peaks out of that energy demand, we couldn't actually pull it off. So I think the capability that we're now building will help us to make sure that the backlog in property development has a higher chance of succession into actually coming to fruition. You've seen in the news yesterday that already 3 provinces are now being gridlocked from an energy point of view. And I'm a bit surprised that everybody is surprised by it because we've seen this coming for a couple of years. So we are trying to find the solutions. We're looking into it. We're innovating in it. But it needs also from a Netherlands point of view to really expedite especially from TenneT and the energy companies, the amount of new cables and stations.

And are you able to put a number on it on a percentage or how it works in Athens for you?

Let's be fair. This is still in its early infancy. This is a nascent division that we have. We get now the few first clear examples where it will work. INCK is working, Kamperpoort, what I said, it's working, but it's still a very early stage. So that's not quite a victory yet, but we're heading in the right direction.

I have one follow-up question, a bit of a forward-looking topic. You showed great performance during the past years by being, I would say, quite conservative or at least critical concerning order intake. But what all the opportunities in the energy sector, for example, wouldn't that require a bit more proactive or maybe more aggressive stance? How do you see that?

No, we are -- we are already aggressive what we are doing. We're doing what we can do. We have some teams we can work with, and we don't accelerate when we have no teams for to make it. So what I said, we do what we can, risk balance between earning capacity and dare to say no. When we have the teams, we don't do that work.

Saw someone raising a hand over here.

Martijn, ABN AMRO again. I just wanted to come back to one of your statement, Ton. I think you mentioned something like we're positioning infra-related better or combining activities. You mentioned something to position your...

I don't know what you mean. Sorry.

I think you said something like we're going to combine or optimize our...

Combining projects together because...

That's what you meant...

So we're making not only one bridge or viaduct to realization, but a combining of more of that kind of viaduct, so we can acceleration and also a learning curve making and the costs are going down then. So make it easier. That's what I want to say.

I thought it was something incredibly complicated, but it's not.

No, it isn't. I'm not so complicated. I'm very clear normally.

You mentioned that the percentage of energy-related projects in connecting would go up sharply. Could you tell us perhaps a little bit of what that means for margin? So the general question is, roughly by how much does an energy-related project generate a higher EBITDA margin? Is that like 30 basis points? Is that like 50 basis points? Just give us a bit of a feel for what it might do to EBITDA margins, that sales mix change.

The question is it depends on what type of energy activity because whether you do it for local energy companies has a different margin profile than when you would do it for the kind of TenneT or Gasunie. But it would easily be -- it would even be percentages rather than basis points.

Yes. And also when you're taking more risk because it is more complex, yes, you have also other earnings. So you can't say general, it is more profitably than other. So difference between the risk acceptance and also the earning capacity.

Got it profitably. The delta in revenue that you've generated in 2025, how much of that is just price, you're being able to better price project? And how much is really volume? And how should we view that in 2026, given that the labor market is still tight...

We don't make a split of revenue in volume and price, but you can roughly say that inflation and maybe a bit higher given that wage is an important component is the price index for '25 will be the same in '26. So all our contracts for the longer term are indexed. So we basically all the labor wage increases out of the collective labor agreements are passed on to customers, hence passed on to revenues.

Maybe I should rephrase the question. Can you generate the same amount of growth or even more with the same amount of people given that your efficiencies in terms of the teams that you have and the higher price per project?

That is the strategic agenda. We want to be smarter and not hard working. So we must more digitalization, more innovation, modular production and industrialization. So this is the way we want.

So the answer is yes, but unless we find a solve to Ton's point about how can we decouple hands from euro turnover, there will be an end at some point on this. So for now, it's still feasible because if you look at 3.1, bear in mind, that's including Hegeman to Ton's point, as that's already EUR 150 million simply inorganically. Now then you are left with EUR 150 million, roughly, you go from EUR 2.8 billion to EUR 3.1 billion. Then there is a price component in there. So that volume component is certainly doable.

How much net FTEs did you add in 2025?

Net out of Hegeman, 300.

Which is what in percentages, just to refresh our memory?

5%, something about that.

You can ask that question yourself. How much did you spend on acquiring your headquarter?

EUR 80 million...

EUR 80 million.

EUR 80 million. No press release with regards to that element.

No.

And then my final question, the S/4HANA thing, the EUR 11 million, why didn't you adjust for that in the P&L?

Adjust for it?

Yes, you came up with the adjusted EBITDA. So I would assume this is a one-off.

It is a one-off. But at the end of the day, last year, we had CSRD. And I already think our line stating what we exclude from EBITDA is quite a bit. I don't want to turn it into a page. I want to be transparent about you by stating it. I don't want to make it more complicated by just subtracting all bits and pieces out of the EBITDA.

Any other one-off pluses and minus that you want to share?

No. The only other one that you probably are aware of it is the impact of the share appreciation rights. So just to go back in memory, when Heijmans turned 100, we have given each employee who was employed by that time 100 kind of shares, share appreciation rights. That implies that if your stock price doubles like it did again last year, the provision also increased significantly. So there's an EUR 8 million provision increase. If you go to the balance sheet, you will find it in the long positions in the provisions actually increasing by EUR 10 million. Over EUR 8 million of that is the SAP.

Where in the P&L did you hide that because I didn't see that yet.

Just normal running cost.

So there's EUR 11 million of cost in this adjusted EBITDA, which is already better than we expected.

If you didn't expect the SAP, yes.

I didn't.

Tijs, from ING again. Yes, on the discussion you had with Martijn, the 300 people, is that mostly in the nonresidential division?

Infrastructure and nonresidential.

Okay. It's widely spread.

Not in one division only.

And you're continuing, let's say, campaigning for more people.

Definitely. We need all the capable hands we can find.

Clear. Yes, then some more detailed questions, the first session. I also indeed noticed the, let's say, all the different provisions so that you explained that because I think the rest more or less remained stable year-over-year. I'm always looking at, let's say, the cash flow and the P&L numbers on the taxes paid and the interest and there's quite a big difference in the cash flow taxes compared to the P&L, but it was also the case to a lesser extent, but the same direction in 2024. I noticed that your income tax liability went from [indiscernible] so that partly explains it. Is there any other hidden, let's say, delayed cash payments in the...

No, there's a delayed cash benefit, as you will find in the balance sheet in the end. So in '25, we, in hindsight, paid EUR 7 million too much tax. So we will get back when we did the tax return for '25.

That's positive for '26, you mean?

From a cash point of view, yes. So the EUR 57 million you will see as cash out, should have been EUR 50 million and then between EUR 45 million and EUR 50 million just timing differences that we have between recognizing it in the P&L and actually paying it to tax authorities.

Yes. And back to the trade working capital. So I understand indeed the dynamics with the acquisition. But the positive cash inflow was quite large in 2025 and also following quite a big positive impact in '24. So is it wise to assume that some of the trade working capital positions on the liability side of the balance sheet will reduce a little bit this year and next year to be conservative? or.

I -- so basically, what's happening is 2 things. So a, when you grow in turnover, your prefinancing, which is the core of the model in construction actually increases. That's one. Secondly, take working. If we move more to project-based rather than the recurring part, you get relatively more prefinancing. Given like we just discussed that especially in working, but I think also in the energy part, bigger projects will be a larger part. That will cost to more prefinancing. So long story short, I will just explain.

Any more questions from the people in this room? I guess there's not. I don't see any raising hands. So thank you for coming here. Thank you for the people online listening to this audio webcast. wishing you a very nice weekend, and we hope to that you join us again during our half year results. Thank you, and bye-bye.