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Heijmans Annual Report About Heijmans Title of chapter 2 Annual Report 2013 - Heijmans Title of chapter About Heijmans Title of chapter A sea of light connecting the different buildings Ministry of Defence, The Hague Annual Report 2013 - Heijmans 3 About Heijmans Title of chapter heijmansjaaroverzicht.nl The annual report of Heijmans N.V. for 2013 is available in electronic form at heijmans.nl. View the online annual review at heijmansjaaroverzicht.nl. Publication date: 27 February 2014 This annual report is also published in English. In case of differences between the Dutch and the English version, the former shall prevail Cover illustration: TivoliVredenburg, Utrecht Copyright cu2030.nl 4 Annual Report 2013 - Heijmans Title of chapter Contents 6 Chairman's foreword Executive Board 8 Supervisory Board 11 12 Heijmans profile The past 10 years at Heijmans, The Heijmans share in figures 15 18 Strategic agenda in 2013 23 26 Operating performance Financial situation 33 42 Human Resource Management Corporate Improve social responsibility 47 51 Renew 55 Vision of corporate governance 59 63 Corporate Governance Conduct, integrity Risk management and dilemmas 67 70 Report of the Remuneration report Supervisory Board 80 86 Statement by the Executive Board 89 Financial statements 91 177 Result appropriation Independent auditor’s report 178 180 Appendices 187 Abbreviations CHAIRMAN'S FOREWORD Improvement today and renewal tomorrow Ambidextrousness which quality is more important than size, so that we The construction industry has can continue to offer added value for our customers and changed so much since 2009 use opportunities to improve our margins. that one cannot really still describe it as a crisis. Actually Improvement we face a new reality. In this As an extension of our revised strategy in 2012, we new context, we have to manage devoted much time and attention to ‘improving the core’, many different things at once, in other words, improving our core with widely diverse dimensions. activities and processes. There are four programmes and Bert van der Els Leonardo da Vinci famously was actions that fall into this category. CEO Heijmans N.V. able to write either right-handed or left-handed. The future Firstly, we have greatly streamlined our tender manage- ultimately belongs to organisa- ment by means of central direction and a programme tions that can focus on improvement today and also on approach. The aim of the programme is to tender more renewal tomorrow. efficiently, improve our information on current tenders, reduce risks and increase hit rates. Significant progress This is, however, not possible without a struggle, since was made with this programme in 2013, and it has been 2013 was another difficult year. The market is tough, implemented in the Dutch business unit. and consumer confidence failed to recover in 2013. Winning new projects and sales of existing products We are also working on centralising and improving our continue to be extremely challenging, and the pressure procurement, which will generate better information on on prices is as intense as ever. The picture is the same in cooperation and our chain partners. Targets have been all the market sectors in which Heijmans operates. In set for each product group that should ensure exploita- the 'connection' segment the government is centralising, tion of scale and also improve quality standards. and contractors are increasingly moving towards design Procurement processes for the majority of our product and construct and management and maintenance. The groups were repositioned in the market in 2013, and same development can be seen in the 'work' segment, in agreements were made with suppliers. Project manage- which the Government Buildings Agency is an impor- ment is another strategic area of attention. As a tant customer. There was a slight improvement in the project-driven business, it is crucial to standardise the ‘residential’ segment last year, although the upward quality of management and thus put measures in place move in the market in 2013 has not yet really contin- to further reduce failure costs. An important step in this ued. The housing agreement has provided the clarity improvement programme is the harmonisation of needed for politicians and consumers, however the processes and the inclusion of more explicit ‘go/no go’ actual recovery still has to materialise. We sold more moments. Fourthly, we have focused on improving the homes to private customers in 2013, although the commercial effectiveness of our company. A proposal for figures are still low in historical terms. In this context a uniform market segmentation was put forward in Heijmans was able to maintain a decent result, despite 2013, and different market teams were formed. Based on much lower sales. Ultimately, this result reflects our these four themes, the company was further centralised strategy of prioritising margin over volume. A policy in in 2013 in order to achieve improvement quickly and 6 Annual Report 2013 - Heijmans About Heijmans Title of chapter decisively. In addition to these improvement pro- Organisation grammes, improvement specialists have been involved Our workforce was reduced further in 2013, partly due to in all business flows for a number of years. We use the the reorganisation at Residential Building, despite the LEAN6Sigma improvement methodology to work on acquisition of Brinck Group. The business has been continuous improvement. further centralised by setting up central management teams for all operating companies and initiating direct Renewal reporting on strategic programmes to group manage- As the creator of double-layer ZOAB and Tailorhousing, ment. Furthermore, all programmes are designed to renewal is our second nature. The opportunities implement expertise along the line, so that knowledge presented by technology are endless and can represent and know-how can be quickly embedded. a fantastic development for the construction industry. We also launched prize-winning and cutting-edge Outlook innovations in 2013. The Dutch Design Award for 2014 will be another challenging year. Cuts in govern- commissioning practice for the National Military ment spending are still on the agenda, with projects Museum to the creative sector, the interactive Van Gogh being scrapped or postponed. Heijmans will continue to bicycle track that we developed with Studio Roosegaarde pay close attention to costs and efficiency. We expect to and the Hydrea Thermpipe which generates heat from see a better economic outlook after 2014, meaning that the sewerage system are just a few examples. Knowledge in addition to this continuous improvement we will need is increasingly becoming the added value of these to set our course towards a point on the horizon. innovations that can be included in licences and patents. Ultimately, this means that construction will increasing- This provides a good reason to further professionalise ly focus on knowledge and the added value of this innovation in 2014 and focus even more on the sale of knowledge. This makes new techniques and ideas distinguishing technological expertise, both in the essential for the future, ranging from power-generating Netherlands and abroad. baffle boards to smart water meters. This is how we will demonstrate the business sense that will be required. Thanks to the confidence of our shareholders, we held a successful ‘sub 10’ issue last year. This capital contribut- Bert van der Els ed to the funding of our restructuring expenses and the Chairman of the Executive Board of Heijmans NV acquisition of Brinck Group. This strengthened our 27 February 2014 market position in the supply, installation, service and maintenance of smart gas, electricity, water and heat meters. Annual Report 2013 - Heijmans 7 About Heijmans Title of chapter Executive Board Ir. L.J.T. (Bert) van der Els (1954), Chairman Mr M.C. (Mark) van den Biggelaar MiF Dutch nationality; appointed Chairman of the Executive (1968), CFO Board of Heijmans N.V. with effect from 18 April 2012 Dutch nationality; appointed as CFO and member and as Vice-Chairman and Member of the Executive of the Executive Board of Heijmans N.V. on 1 September Board on 28 April 2010. He was previously Member of 2009. the Executive Committee for Non-Residential Building Prior to joining Heijmans, he was employed by Samas and Technical Services at Heijmans. N.V., ABN AMRO Bank N.V., Koninklijke Nedlloyd N.V. and Prior to joining Heijmans, he was employed by Burgers Randstad Holding N.V. Ergon, Yokogawa and ABB. At Samas N.V. he was CFO and member of the principal He was managing director of Burgers Ergon starting in board from 2007 to 2009. 1999. Additional functions: member of the Supervisory Board of TCPM Ingenieurs & Adviseurs, member of the Supervisory Board of Spirit IT, chairman of Bossche Energie Convenant, member of the Executive Board of De Groene Zaak, and chairman of the Muziekgebouw Eindhoven Fonds. 8 Annual Report 2013 - Heijmans Title of chapter About Heijmans Title of chapter Ing. A.G.J. (Ton) Hillen (1961), member Executive Board Dutch nationality; appointed as member of the Executive From left to right: Board of Heijmans N.V. on 18 April 2012. He has held Mark van den Biggelaar various positions at Heijmans since 1992, and has been CFO and executive director Bert van der Els a member of the Executive Committee for Property Chairman of the Executive Board Development and Residential Building at Heijmans Ton Hillen Executive director since 2008. Prior to joining Heijmans, he was employed by BAM and Anton Obdeijn Projectontwikkeling. Additional functions: member of the Supervisory Council of Stichting Waarborgfonds Koopwoningen (SWK) and member of the board of the Dutch Association of Property Developers and Investors (NEPROM). Annual Report 2013 - Heijmans 9 About Heijmans Title of chapter 10 Annual Report 2013 - Heijmans Title of chapter Supervisory Board A.A. (André) Olijslager (1944), Chairman Ing. R. (Rob) van Gelder (1945) Dutch nationality; former Chairman of the Group Dutch nationality; formerly Chairman of the Executive Executive Board of Royal Friesland Foods N.V.