Ladies and gentlemen present here or listening to us over the webcast, a very warm welcome to the presentation of Heijmans' annual figures for 2022. Before we proceed to our presentation, we'll start with a short video. In 100 seconds, you saw a bird's-eye view of 100 years of Heijmans. The speaker in the film is the founder, Jan Heijmans. He started our beautiful company on 3 April 1923 as a paver, with his first job for the Dutch Railways at Den Bosch station for NLG 375. You see a picture of Heijmans behind me, the man with the helmet. There was a helmet at the time. Could have been a straw hat, but anyway. Step by step, Jan Heijmans, a true entrepreneur, managed to expand his company.
The post-war reconstruction prompted a rapid development when Heijmans started focusing on residential and non-residential construction, in addition to infrastructure. During this period, the sons of Jan Heijmans joined the company. 1964, the founder retired from Heijmans and handed over the baton to his sons. With the arrival of Joop Jonker in the late 1980s, the company started making acquisitions. Thanks to the many acquisitions, Heijmans grew from being a regional player to a national company in construction and infrastructure. Real estate was added to the portfolio as a new operation. Ultimately, in 1993, this led to the listing of Heijmans at the stock exchange, and the company changed from a successful family business with a social perspective, to a more business-driven company with a stock exchange. Both these aspects, human touch and the stock exchange, proved their added value.
Today, Heijmans is a leading national player with an eye for both the business context of the stock exchange and its stakeholders, such as employees, customers, suppliers, in order to fulfill its social role in society. This makes us a listed company that operates on the basis of values of the original family business, and we focus on the long term and are a reliable partner for our stakeholders. It is up to us to secure this fine balance, listed of the stock exchange and family roots. This is a wonderful asset. I myself was welcomed over 30 years ago by Mr. Lambert Heijmans, and I became part of this Heijmans family, and I still feel at home here every day. Since then, I've acquired yellow blood. That's what we call it at Heijmans.
Between 2008 and 2016, Heijmans experienced a difficult period. The financial economic crisis left its mark on Heijmans, and this ultimately led to Heijmans having to sell its foreign operations, amongst other things. In recent years, we can look back on a solid recovery, and the performance can be called robust. Heijmans is well-positioned for the future as it embarks on its next 100 years. Heijmans still operates in infrastructure, construction, engineering, and real estate, and operates nationwide. Its mission being to create a healthy living environment. We challenge ourselves to continuously improve, to become smarter and more sustainable, because intrinsically, this is what we want to do, but also because our clients and today's society demand this. This calls for new entrepreneurship, building on what Jan Heijmans started 100 years ago.
After this somewhat extended retrospective view of 100 years of Heijmans, I'd like to take you to the performance for the year 2022, starting with safety. In this past year, we paid a lot of attention to improving our safety culture, and this mainly concerns having an open conversation, talking to each other and not looking the other way when faced with undesirable situations. Here, we really see improvement. That doesn't detract from the fact that we've been faced with more accidents than the year before. We've gone up from 66 to 71 reports. Of accidents. The sad news is that in this respect, there's been a fatal accident with a subcontractor, working on the N3 road.
Against this backdrop of this sad news, I can, however, report that our IF figures improved from 3.8 to 2.7, meaning that the number of days, lost time incidents relative to the hours that have been worked has decreased. Each accident is one too many, which means that in 2023, safety is also high on the agenda. With our GO! program, we strive for no accidents. I keep repeating the same thing, we either work safely or we don't work at all. This is a picture of the dike reinforcement, Gorinchem-Waardenburg. It's an alliance with Waterschap Rivierenland and the contractor combination, Heijmans, GMB, de Vries & van de Wiel. The work involves dike reinforcements over a length of, in total, 23 km with a contract sum of EUR 200 million.
This project is one of the seven most urgent dike reinforcement projects in the Netherlands. In 2026, the dike must be high water safe again. Here we also see an electric wire crane. We switched the fossil fuel equipment with a battery. Looking back on 2022, I would like to express my appreciation to all Heijmans employees. Because of their agility, as an organization, we were able to respond well too, and perform well in this very volatile world last year. We started 2022 with COVID-19. Soon our focus turned to the war in Ukraine. In addition to human suffering for the people there, the war has had major impact on the economy. Everyone started to deal with the increased cost of living and turmoil over the energy security and supply, which brought about a lot of uncertainty.
Especially in this light, I consider our strong performance as a big compliment to all our staff. Last year, we saw an unprecedented accumulation of uncertainties associated with geopolitical and macroeconomic conditions. The rebounding economy early 2022 as a result of the lifting of global lockdowns, combined with the war in Ukraine, resulted in extreme price increases for materials and labor. In some cases, the availability also became under pressure, serious pressure. High inflation led not only to cost price increases, but also to rising interest rates. The rapidly rising mortgage interest rates has an impact on the house sales. There were other influences such as rent policy adjustments and of course, the ruling in the PAS case. Let's take a look at the key figures for 2022. Yes, we have a revenue of in excess of EUR 1.8 billion.
EUR 60 million up from last year, with an underlying EBITDA of EUR 126 million, including the release of EUR 90 million on the Wintrack II file. This led to a net result of EUR 60 million with a payout ratio of 40%. We have a dividend proposal of EUR 1.01 per share, which is a dividend yield of 10% per share at the 2022 closing price. Gavin will be elaborating on the financial performance, but at 29%, we maintain strong solvency, especially taking into account that the removal of the cumprefs at the middle of last year, had a negative impact of 3 percentage points on the solvency ratio. Order book increased by some EUR 300 million, mainly at Infra, up to a level of EUR 2.4 billion, with a good quality.
Also our cash position remains strong. Again, throughout 2022, we did not draw on our bank facilities. With more than 4,900 employees at the end of 2022, the number of colleagues increased slightly, partly due to the acquisitions of Dynniq Energy and the factory where we produce timber frame houses. We also managed to maintain our employee base organically. Despite the pressure on the labor market, we noticed that Heijmans is an attractive employer. As you know, at Heijmans, we mainly focus on margin over volume, thereby gaining control of the company. Despite this, we've been able to maintain revenue in this past year and in recent years, even grow slightly year-on-year.
Relevant is the course is that we set a course bearing that bears fruit in increased margin, which has grown further to 7% this year. In 2023, we also foresee slight growth in turnover, revenue, with a well-spread order book of EUR 2.4 billion. With a good quality, there's a good foundation for this year. Future housing construction assignments, investments in energy transition, flood protection program, and the postponed investments taking place in the replacement and renovation of roads and flyovers, we're well-positioned for future profitable growth. Here in this chart, you see, at the right, you see the growth in terms of underlying EBITDA of the past few years, from EUR 53 million in 2017 to EUR 126 million last year.
What is particularly important that this past year, all business streams have contributed to profit, in recent years, they've all been operating within strategic ranges that we formulated for margin targets. Even in the current macroeconomic environment, we expect to continue to operate within these ranges, these bandwidths in 2023. Here you see works of reconstruction of the junction De Nieuwe Meer and part of the A10 South over a length of 2 km as part of the Zuidoasdok. Heijmans is in the TriAX consortium with Dura Vermeer and Besix. The works involves approximately EUR 350 million. Heijmans, in 2022, sold a total of 1,811 homes as compared to the 2,682 homes in the previous year, a decline of over 30%.
By the way, in earlier years, we sold between 2,200 homes a year. 2021 was an extremely positive year in terms of home sales. Since the second half of last year, we mainly see a big drop in private sales. Furthermore, we faced investor caution, which prevented some investment transactions from materializing in 2022, partly due to changes in the government's rental policy. The Dutch housing market has seen tremendous growth in recent years. Sales prices grew rapidly, and due to a lack of supply, buyers in the existing market were even forced to outbid. In my view, as I've pointed out before, this was not a healthy situation, and the affordability for buyers was under enormous pressure. The Netherlands had an unbalanced supply in new construction in recent years, with too many larger inner-city flat developments.
As I mentioned earlier, there's a lack of suburban planning capacity, and I keep repeating this. Furthermore, we're dealing with derailed permit processes. These processes take too long, and people increasingly file appeals, which once again, is very time-consuming and slows down the building production or output. Furthermore, architectural ambitions, combined with increasing regulatory pressure, have added to construction costs. Aforementioned situation is still taking place, but linked to rapidly rising mortgage rates and high energy costs, which have greatly reduced borrowing capacity for buyers. We saw a change in the housing market in the second half of 2022. That the housing market is taking a step back after years of growth, in my view, is simply healthy, probably also resulting in the relaxation of construction costs.
The housing market is suffering from short-term headwinds, but with housing requirements of 900,000 homes up to 2030, which is challenging to achieve, this gives us enough confidence and perspective in the housing market for the medium term. In this respect, it's positive that the central government, once again, is taking the reins and is controlling and steering the housing market. We cannot immediately reverse the delays and lack of output over the recent years, but The Hague seems to be listening to us now, and it's also up to the market to realize the ambitious targets together with the minister. Some things to speed up this output are, in my opinion, adding more, especially suburban planning capacity, greatly simplifying and speeding up planning procedures, and making proper arrangements in terms of the nitrogen situation.
At Heijmans, we're committed to further industrialization of homes to enable more sustainable and affordable output. Today, we also see that energy-efficient and sustainable new build homes are more competitive compared to existing construction. Overall, therefore, we're confident about the housing market. Now I'd like to briefly comment on the Wintrack II file. As reported previously, in the first half of 2022, we've released EUR 90 million of the total provision of EUR 34 million and credit it to the result. For now, there are no further developments to report as long as the case is sub judice. As mentioned earlier, the final outcome of arbitration may still have a material impact, both negative as well as positive. By the way, I don't expect any news in this situation, this file in the short term. Now I'd like to give the floor to Gavin.
Thank you.
I will comment on the performance of our sector. First of all, in real estate, our revenue and also profit has increased. Turnover increased by 4%, and the margin increased, our underlying EBITDA increased by 17%. Ton already said that in 2022, we sold 1,811 homes, especially in the second half, we saw a decline in the number of houses sold, a trend that was visible nationwide. The decline was particularly visible in house sales to private owners. Interestingly, in the most recent NVM data, we really see a break in the trend from the summer onwards. Whereas traditionally, the average house prices of new and existing construction move almost in the same direction. Since then, a considerable decline has been visible in the existing construction, while new build houses, in terms of price levels, remain reasonably flat.
In our opinion, the very favorable energy labels of new build houses are the main reasons for that. It wouldn't surprise us if this trend would continue, as banks are also increasingly adjusting their lending capacity to energy costs. With highly sustainable homes, and particularly the houses that we build in Heerhugowaard in our timber frame house factory, we're well positioned to respond to this trend. For the first time in years, late last year, we still had unsold homes at the end of 2022 for the first time in years. Although at 12, this number is manageable, still very low in a historical context. With the good progress in the project development and a lower level of land acquisitions than we would ideally like, the total land bank decreased. This had a positive impact on cash flow.
For the medium term, we will continue to focus on looking for new development sites and aim to keep the land bank, including the positions that we hold in joint ventures, therefore have not been consolidated, to keep them at least at its current level. In recent years, we also see an increase in the number of acquired development rights and claims. They don't appear on the balance sheet, but they do give us access to new housing and areas to be developed, and this without posing a burden for our working capital. These claims and rights are very often a result of collaborations with governments and/or corporations, for example, for the transformation of the 1960 neighborhoods. Combining these off-balance-sheet entitlements with the land bank, total access to new housing development remained stable last year. Here you see the project Parels in Culemborg.
This is a new neighborhood near the city's natural landscape with lots of lakes and canals with a historical center. Heijmans is building 1,000 new homes over the next 10 years. Parels is really different. It's not a straightforward new construction. Parels consists of separate neighborhoods, each with their own character. A cozy little square, modern design houses on the bank of the canal, enterprising self-builders, tiny houses along a green avenue, and its own city park in the middle of the neighborhood. Construction engineering saw a significant revenue growth of 18% and performed in terms of profitability with 4%-6%, in terms of profitability, 4.1%.
Underlying EBITDA increased by EUR 4 million, despite the start-up cost for our timber frame housing factory, which is proceeding in line with plan and business case, and with the first houses to be completed in 2023. Our services branch in construction engineering again performed strongly, showing stable, profitable growth as in previous years. A number of large contracts were renewed and new contracts were added in 2021, including at Schiphol Airport and ASML. This leads to a strong pipeline of recurring business in 2022. In non-residential projects, last year we achieved, among other things, an important milestone with the reopening of Paleis Het Loo, which could be opened to the public after substantial renovation. In addition, the portfolio of projects grew through one-on-one awards with clear indexation agreements.
Last year at housing construction, we renovated and made more than 1,200 homes more sustainable and safe for fire. We do this while the residents still live there at the same time, which is a tall order considering that an entire roof has to be replaced, for example, while these people still live there. The resident satisfaction figures are very positive. We think that this segment will continue to grow in the future given the renovation and sustainability challenge that we're facing together here in the Netherlands. Last November, we started construction for the Eindhoven Housing Corporation Woonbedrijf to build 735 student houses on the campus of Eindhoven University of Technology. The construction is expected to take one and a half year, and this means that Heijmans will complete this in the summer of 2024.
The plan consists of two residential towers and a student village. Both towers are about 50 meters high, 16 residential floors, and between the two towers, there'll be a student village with 86 dwellings spread over five two-story streets, mainly for group living. This is an example of a project that we're realizing for third parties, so not for our own real estate branch. Last year, we saw the share of third-party turnover within residential building rise in line with our ambition. These houses, by the way, will be located where first we had the pavilion, which was the first building built for the Eindhoven University of Technology. The pavilion was demolished on a circular basis. Our infra business now has had a very solid year in line with the outline that we put forward at the beginning of the year.
As anticipated, due to lower number of large projects, the revenue fell by 10% to EUR 661 million. At the same time, the EBITDA margin increased to 8.3%. This was also positively impacted by the EUR 19 million release on Wintrack II project provision. Even without this release, the margin remained at 5.4% at the upper end of the strategic EBITDA margin range of 4%-6%. The fact that our contracts at Infra feature clear indexation agreements has also contributed to this. In infrastructure, we clearly see the benefits of a differentiated order portfolio and strong project control. The project portfolio is performing well, and with the further growth of our high-yielding asset management operations, as in non-residential, the share of recurring business or long-term maintenance is increasing.
We're pleased with the better balance between large and smaller projects and reaping the benefits of the policy we've started, margin over volume. Late Q2 last year, we acquired Dynniq Energy to further strengthen our position in the energy infrastructure market. With the acquisition of this highly positioned company, we're even better positioned for growth, given the very substantial investment ambitions of grid operators. Major reason for investing in this company is that there are very few parties that are sufficiently certified to be able to perform certain high-quality works for grid managers. We see an increase of the order portfolio at Infra of EUR 1 billion, an increase of more than 40%, despite the fact that a number of large new construction projects have been postponed because of the nitrogen issues.
At the same time, due to the mix of large and smaller projects and the increased share of asset management, we see that the order portfolio has come to have a slightly shorter time horizon in recent years. We also see market opportunities in the area of increasing government investment related to climate and maintenance of the Dutch infrastructure. As one of Europe's largest airports, Schiphol Airport handles tens of millions of passengers and many tons of cargo every year. We work as a main contract in order to make sure that infrastructure and facilities are and remain available. Heijmans has developed into an asset manager, not purely an executing contractor, but we help in terms of advice, design, and maintenance strategy.
The airport is a continuous operation, which is why maintenance and management of infrastructure is organized so smartly that the transport of aircraft, goods, and people can always continue. Work at Schiphol is very diverse, from a cycling path to a runway or a complete public transport hub with energy-neutral roofing. We started to work on the renovation of the Zwanenburgbaan runway. Now, the financials. Let's start with profit and loss account. As Ton pointed out, revenue is slightly higher, and underlying EBITDA increased significantly from EUR 106 million to EUR 126 million. The latter also positively impacted by the release of the provision of Wintrack II file.
As a net figure, we see a strong result of EUR 60 million, 20% higher than in 2021, which is why we're proposing a dividend of EUR 1.01 per share, in line with our 40% payout policy. Some of the items that you see here will be explained in detail. Higher write-offs relate to increased investments in electrical equipment and also investments in the new timber frame housing factory in Heerhugowaard. The tax sign, I'll comment on that later on. Tax rate for 2022 amounted to 18.5%, lower than the nominal tax rate of 25.8%.
This was mainly related to increased profitability and outlook for the coming years, and as a result of which, the remainder of unrecognized tax losses of EUR 19 million from the past have now fully been valued and recognized. The normal impact here of was EUR 4.6 million. With this, year-end 2022, we have no remaining unrecognized losses to be valued. The impact on the tax rate, the other permanent differences, more specifically the participation exemption and nondeductible costs, is relatively limited. We expect that the tax rate will be moving towards a nominal tax rate for 2023. Due to new loss offsetting rules from 2022 onwards, tax losses are indefinitely can be compensated against taxable profit in the future.
However, on an annual basis, this compensation is limited to only 50% of taxable profits above EUR 1 million. In 2022, the cash out amounted to approximately EUR 9 million. EUR 8.5 million had been paid last year through a provisional payment in 2022. Cash flow and financing. Cash flow development was again strong. Operating cash flow was driven by strong development of working capital, which in 2022 improved by EUR 38 million. This was despite the fact that Heijmans, as per the first of July, implemented a shorter statutory payment period for SMEs. The balance sheet impact hereof was approximately EUR 30 million. This measure was almost fully recognized in the balance sheet at year-end, and therefore won't have a material impact on the cash flow for 2023.
Working capital development was particularly positively impacted by a decline of the inventory and work in progress position. Combined with the the item participating interest, which mostly consists of development combinations, is this inventory position decreased by EUR 50 million, and the positive effect on working capital was due to the good progress made in developing land positions. The consequence, however, is that the land bank has now reached a point where investments have to be made in increasing amounts. Net debt improved by EUR 60 million in 2022 to a net cash position of EUR 151 million. Just as in previous years, cash net generation, therefore, was larger than retained earnings, primarily explained by the decrease in the land bank.
Furthermore, it's relevant in the cash flow that there was a high level of investments, partly due to the acquisition of Dynniq Energy, partly due to the investment required to electrify our equipment, but also the investment to get the timber frame house plant operational. Given the strong cash flow development, our syndicated loan, Ton already said that, again remained unused throughout the year. In July, the cumulative preference shares were fully taken out and canceled. As this financing structure was assessed as debt by the auditor, the redemption had no impact on our net cash position. On a gross basis, this repayment naturally did lead to a decline in available cash, which still remains at a robust level.
This structure did count as guarantee equity, it also had an impact on our solvency. The redemption of cumulative preference shares therefore reduced our solvency by three percentage points. Nevertheless, remained almost constant at 29%. Last year, we once again comfortably met our financial covenants. Not only what we perform is important, but also how we perform. This is Britt Hendrix. She chose engineering after a career in retail. She's following the vocational training, a combination of school and practice, and Britt is one of the few female entrants to hands-on professions. Not surprising either, if you know that only 4% of girls follow a technical study at the vocational college.
It's in this context that we're very proud that the percentage of women across Heijmans has grown again in 2022, from 12.9% two years ago to 14.3% by year-end 2022. We continue to work actively to increase the share of girls further. In 2022, one out of every five job openings was filled by a woman. Sustainability. Sustainability at Heijmans is not simply a project. Sustainability is an integral part of our strategy, which is reflected in the governance of the organization, such as reporting and performance indicators. Last year, we again made significant progress on the different themes in sustainability, such as climate, circularity, biodiversity, and nature-inclusive construction. It's great to see that Heijmans is being appreciated for that in the industry. It's been chosen as Cobouw's most sustainable construction company.
We're also very active in all sorts of partnerships in order to make the built environment more sustainable. Heijmans remains intrinsically motivated to become more sustainable, but it's good to see that sustainability is also becoming an increasingly important component within the MVI criteria. Even though the share, around 35% in average, in on average in public tenders, should also grow. Emission-free construction, but also sustainability of existing real estate is continuing in the Netherlands. Over the next few years, we will have to make major adjustments to the infrastructure in the Netherlands. The energy infrastructure, we see an even higher energy efficiency for new construction on the horizon, and there'll be more focus on indirect emissions from material use.
Heijmans is well-positioned with its activities and portfolio to anticipate on these important trends, and wants to play and continue to play a leading role in this respect. What I just said to you, I'd like to make it more specific. We almost halved our CO2 footprint since 2015. From the first of January, 2023 onwards, only new electric passenger cars will be leased. Existing lease contracts for petrol cars will be shortened by two to three years. Our vans are gray license plates. Here also, we will switch to electric wherever technically possible. We're making major investments in making our equipment more sustainable, such as excavators, rollers, asphalt spreaders. EUR 34 million in total over the past two years alone is involved with this, and we'll continue to do this in the future. We see the first applications of circular concrete in practice.
In addition to the examples you see here, also currently at Rabobank's headquarters in Utrecht. We make material flow analyses for our housing concepts to achieve maximum circularity. We developed a platform for the exchange of used land and materials, and we're committed to 100% reusable or recyclable packaging materials in construction. We also give specific measures to create a healthy living environment through projects that create better drainage and biodiversity, for example. Biodiversity is an integral part of our design, and of course, subsequently in the construction, for example, of the A12 motorway. Another example is Tilburg, where we constructed De Blauwe Ader, an underground ditch, a sort of water storage road that separates cleaner rainwater from wastewater and drains it to a storage facility outside the city. Also provides better drainage after extreme rainfall.
The outlined route of sustainability is well reflected, for instance, in the widening of the A1 motorway between Apeldoorn and Twello. Work on the road has now started. The planned opening is for the second quarter of 2025. This project has a turnover for Heijmans of around EUR 150 million. The contract concerns phase II of the widening of the A1 motorway to partly two, to three, and partly two to four lanes between Apeldoorn and Twello over some 14 km of motorway. Our client, the authority, central authorities, has the ambition to be fully climate neutral and to work in a circular way by 2030 at the latest. Heijmans Infra is achieving this by applying new techniques, reusing materials, and using emission-free equipment. This is 2022. Let me proceed to Ton for the outlook in 2023.
Thank you very much. Making specific statements about this year is very difficult, also, due to the ongoing macroeconomic volatility. Nevertheless, both the current outlook as well as the performance for 2022 give us sufficient confidence. For 2023, the order book, with a good spread, 30% recurring business and a volume of EUR 2.4 billion with good quality, is at a robust level. We expect that total revenue will increase slightly over 2023, despite a decline in property as a result of lower home sales. In the medium term, Heijmans remains confident about the housing market, as explained earlier. The decline in revenue in real estate or property is more than compensated by the volume at infra, which rebounded above EUR 700 million in revenue.
Despite the decline in new construction due to the nitrogen situation, the infra task continues to grow, mainly in the field of dike reinforcement, as a result of high water protection program, energy transition, and the large replacement renovation assignment for roads and flyovers. Growth is also expected in construction and engineering in terms of revenue, thanks to good order intake. Services activities will continue to grow stably, in previous years, but we see further growth in non-residential projects in particular. We're seen as a cooperation partner, and our knowledge and skills are recognized by the market. As a result, we're increasingly working on a one-to-one basis, which lowers the risk profile for both client and Heijmans.
All in all, 2023 will be a year with a slightly increasing revenue and a similar underlying EBITDA as in 2022, apart from movements and changes in the Wintrack II file. Heijmans is reassessing its strategy. Sustainability will play an even more prominent role in this process. We'll return to this in the second half of 2023. Ladies and gentlemen, I'm incredibly proud of this organization, and I'm looking forward to celebrating 100 years of Heijmans with our people, these people. Heijmans as a company is well positioned for the future. I'm looking forward to the next 100 years with confidence. Thank you very much.
Thank you, Ton. Thank you, Gavin. I see the first question on the right-hand side. Please state your name and the organization you are representing. Yes, Martijn and ABN AMRO.
First question, what's next?
You have achieved your target margin, margins, net cash, working capital even. You haven't had to draw on your RCF despite the repayment of the preference shares. What can we expect from Heijmans? Is it steady as she goes, deal with the headwinds that is there, or also issue an additional program? Can we expect more acquisitions such as Dynniq? A bit more detail perhaps. What can we expect? What's next?
First of all, it's very important that we don't have loss-incurring works. We're stable and we're a robust company. That's one thing. It's very difficult to make any statements in these volatile circumstances. We even dare to say what our outlook is for 2023. You heard Gavin say that we want to invest again in land positions. That's one thing. We also want to invest in sustainability.
We will have to also invest in material. Yes, this past year we took the first steps in terms of acquisitions such as the plant in Heerhugowaard and Dynniq. Now, I'm not saying that we are gathering beads, stringing beads, but particularly in the second half of 2023, when we recalibrate our strategy, when we're going to try to make clear statements about sustainability and the future of the company, we will take all this on board. It's quite possible that we might be able to take further steps.
Thank you. Second question. Indeed, it's positive that you feel so comfortable that you dare to give an outlook for 2023. Would you dare to do the same thing for house sales?
Would you say, well, it'll probably be a decline of 10% and no more than that, or perhaps you wouldn't dare to say anything?
Ton Hillen. It's very difficult to say. It's quite volatile. In 2021, we had 2,682. There was an investment transaction that didn't happen, so the documents could not be signed. Yeah, we couldn't go ahead. Over the past few weeks, I must say that there are quite some positive sales, but it's early days yet. My impression is if you look at the underlying situation, I'm looking not only at 2023 but also 2024, have a longer horizon, that 900,000 homes have to be realized in 2030. That's important.
If this year, I said that if we have a lower revenue in property this year, that's not that bad. We saw this in 2021, I believe. Construction and engineering went back to EUR 800 million in terms of revenue and volume, and now it's increased up to EUR 900 million. Last year, I said infra's going to decline EUR 100 million. We also accepted that. Ultimately, you see that this leads to profitability. We still have margin over volume. We do whatever we are good at, and we dare to say no, and this applies to all three sectors.
Another question about renovation. Renovation was particularly mentioned in the context of infrastructure. How do you see renovation of apartment buildings that are managed by housing corporations?
Anybody with an office in excess of 140 sq m should have an energy label of C, we're not achieving that. What else do we need to do? What do you expect will happen in non-residential and multi-tenant, for instance?
Gavin van Boekel. We see a need to make these buildings more sustainable. We need to move to label C. Should have been the case from January 1 onwards. I don't think it's a secret that there are quite a number of buildings that don't comply with this. In our service business, we see that there's quite a demand. We're very active.
Question, do you see an increase?
No, says Ton Hillen. What we see is that land bound houses for corporations and investors, there's quite a challenge here.
If you look at changing offices into homes and things like that, you do see it happening. The Ministry of the Interior and Justice, we did that in The Hague. We have other examples like that, but it's not very large scale. With the offices, you may be located in a desolate area. The question is whether that's a nice residential area for people. There are two aspects that come into play. Yes, for temporary residents, that might be a good idea, but with respect to finding structural solutions to allow people to live there, whereas it might be in an area that is very much a business area. I don't know whether it's nice to live there.
I mean, you should have planned this in your urban planning and to do this in an ad hoc way, I don't really see a lot of positivity here.
Okay, what about rebuilding commercial buildings into residential buildings? If you look at the stock that we have in non-residential, do you have the impression that owners are more prepared to invest in renovation and to move to heat pumps and all the other instruments that are needed to make buildings more sustainable?
Ton Hillen. Making buildings more sustainable? Yes, I do see this happening. But if you look at transforming offices to dwellings and having investors have to write off their investments, I don't really think that's gonna happen at a big scale.
Tijs Hollestelle of ING.
I would like to discuss a scenario that the house market in the Netherlands would come under even more pressure than what we see now. Ton has a background in real estate development. From 2009 to 2013, not only at Heijmans, but many construction companies, we've been talking about impairments on the land positions. Everybody wanted to reduce the land bank, whereas the economic rule is if there's a downturn, it might be an opportunity. Heijmans' position now is quite different from at the position at the time. My first question is do you have a strategic leeway to buy land positions in which you might have a bit more time than the cowboys out there in the market?
You might be able to buy cheaper land, keep it on the balance sheet for a longer period of time, but you might be able to increase your profits in the long run. Perhaps an awkward question, but in the past, we would always ask about overall reviews of the land positions and whether we did that. Most building companies did that every two and a half years. Is it necessary? Is this an issue? Would there be significant deviations with impairments, et cetera?
Ton Hillen. I think Gavin pointed out that we have a land bank with good positions, but we also found other ways to carry out acquisitions, cooperation with corporations and municipalities. We can operate the land, we can introduce our expertise with less capital. We have access to the market. There's been a real movement here.
Whether you see this in Overvecht and IJburg here in Amsterdam, you see that we really are a party to be reckoned with. Second, we've pointed out that this past year, the land bank has declined substantially. Indeed that is the case. This past year, we did the first investment in this land portfolio. I must add that there were many proposals, and economically speaking, they were not at the right value, let me put it that way. We continue to be quite critical when we look at this. Of course, we may have deep pockets because we have a good cash position. I'm not a cowboy, and I don't want to be a cowboy. I don't think we should want to be a cowboy.
Really, we need to examine the business cases and also look at the horizon, the timeframe and the years before 2008, let me put it that way, we sometimes derailed, that we bought strategic land positions that perhaps are still on the balance sheet in some cases. We're not gonna do that anymore, Tijs. We're not doing that. We don't wanna do that. We're looking at shorter horizons that sometimes are perhaps a bit more expensive, but there's more security to it. We're looking for new land positions, and that could be an access to the market for us as a building company. That is clear. If you look at the overall valuation of our land bank, we think that the valuation is good. Some positions need to be adjusted. We have an impairment of EUR 4 million mid-2022, we did that.
That was the Zuidplas polder. We did that deliberately. We take a very adequate look at this. I can't really see that the entire housing market, and this is a difference, the need for houses, 900,000 homes that we need now, this is the need of the Dutch population. If you then also look at the number of new people arriving in our country, the influx. Yes, there's a reticence, and we're dealing with the fact that over the past few, four or five years, there's been such an increase in the housing market also in terms of value, and this has become unaffordable, and that is putting a brake on the housing market.
There's a bit of headwind now, and that helps us normalize the building costs, construction costs. It's a concern, but in the medium term, we have full confidence in the market.
Question. Specifically, the institutional parties, they decide not to push through. What are they saying? Of course, there are high interest rates and building materials. The costs of the contractors are, I assume, very high, exceed the high end of the bandwidth. Are they telling you when they'll be back? What needs to happen for them to come back?
Ton Hillen. We've seen an enormous increase in costs over the past few years. It's very volatile because some costs are dropping very quickly, so there's a great deal of volatility in terms of cost. Of course, we also deal with government policy.
What you saw was that the government wanted to avoid that the people who are usurping the market and are charging high rent in the market, they're trying to put a limit to that because they didn't want that. You see the number of foreign investors, because of these sudden measures, sort of surprised. Investors need long-term trust and confidence, and that has been broken, so they withdrew. Fortunately, we do have Dutch institutional investors, and slowly but surely, we see more of an appetite there to participate in certain projects.
Of course, question, you can wait until the interest rate drops, but you can also try to find new solutions, working with parties such as Heijmans.
Ton Hillen. Of course, the situation is volatile. You see this in the presale, thresholds are not being achieved.
When Eberhard van der Laan was minister, he issued starting subsidies in order to be able to make those thresholds and then accelerate things so that you don't get a dip in the housing market, and you don't have lots of workers leaving the labor market, the building labor market. We've talked to all sorts of parties. What I don't think is that we will be decreasing the VAT here. Some sort of encouragement could help to increase and maintain the output for the next few years and not to have this decline.
Question. Are there any concessions on your part? Do you give away margin? I assume that you have customers that you work with on a regular basis. You might want to work with them.
Ton Hillen. I don't think I should give away margin.
I can look and see whether we can do things more efficiently, I'm also looking at what's happening with the land prices. There are several factors that come into play here. I will repeat again, I have a company that offers work to 5,000 people, margin over volume, and they come to work day in, day out.
Question. I have a question about the takeover with these guys who have certificates. It's a small company. What if I have a certificate and I go and talk to the client, and we see 50 Heijmans guys joining in? What is the synergy like here? What about the long-term framework contracts of the businesses? What about Heijmans?
Heijmans is a construction company. It isn't renowned there. Gavin.
Grid managers, they're not that many in the Netherlands, and they know Dynniq Energy, and they know Heijmans. What you saw is that they were working in different sectors. Dynniq was working a specific sector. It all depends on the number of people you need and the working packages that you have. What you see is the sort of training mechanism. We train you for the lower levels and the mid-levels and the higher power levels. If you want a certificate, you need to follow training of six years. We gave it some thought. We thought about doing the training ourselves or not. To be honest, if you look at energy infrastructure, you've got to act right now. If we're gonna start training right now, you know, it takes time.
We decided to buy a company, and Dynniq Energy has the knowledge, has the certified engineers. Together, we join forces, we talk to the customers, and the customers are not thinking, "Oh, what is Heijmans doing here?" Because we also work for grid managers. So we're working in high voltage now. So in terms of training and also offering the grid managers an entire package.
Question. The grid managers might think, you know, they might be able to enter into more interesting contracts with Heijmans in the mix.
Gavin. We worked with Dynniq even before the takeover in order to offer a combination. To be honest, this is a market that is really moving, it's developing. You see the grid managers looking for contracts, the right partners in order to carry out the transition.
These grid managers are faced with a question. They are on a quest, "How are we going to do this and do this together?" If we look at our satisfaction ratings, that is Heijmans, including Dynniq, we're doing really well. We have good scores, and this is something we have to do together. It's a new way of working together. We have to make sure that we prepare the Netherlands for the future of this. You know, there are too many areas where it's quite a challenge to expand in terms of electricity, so we need solutions. That's clear. I do have one other question about the comment you made that you were doing more work for third parties in housing construction. There you're also the main contractor, so you try to use as many subcontractors as possible.
Ton Hillen, yes, we are the main contractor, but we felt that we were becoming too reliant of the internal property business. Always good to have this balance. 60%-70% is what you do from your property business, 30%-40% from the external market in order to, yeah, strike a better balance. As you're quite right here. You want to make sure that you're less vulnerable.
Thank you.
Luuk van Beek, Degroof Petercam.
Question about the willingness of the government. The government really wants to increase the number of new build houses, and that is becoming more difficult because of all the requirements, inner city building, percentages of rent, of low rent and middle rent. Is there an outlook of more flexibility in order to increase your output?
Ton Hillen.
I haven't read it entirely, there's a bill of law, submitted by Hugo de Jonge. He wants to designate municipalities if local municipalities do not proceed quickly. I was asked today whether I felt this was positive or negative. Actually, I referred back to the past. In the nineties, we had these new built neighborhoods. The idea was 30% social purchase or low rent, and then 30% very expensive, and the rest was in the middle. It was in this context that these new neighborhoods were built, such as Vathorst, De Vaart, [inudible], Terheijden, where we have a wonderful segregation. We have the composition of all the target groups in the Netherlands. We had wonderful, very complete neighborhoods. Some people are saying, you know, if we're going to designate municipalities, it'll only be subsidized rent.
I'm thinking, you know, you want the execution to be more local, and it's a good thing to take the reins here. We have a Minister of living who can control things. Of course, can't remedy the past because some people have said, "Okay, the housing market is done and dusted." Never none and done and dusted. We have to deal with the planning of the Netherlands. We've got to take decisions about agriculture, nature, planning, where are we going to build our houses. Planning is never done and dusted. I think the Minister is trying to find a way to sometimes designate if municipalities are reluctant. It's not so bad, and we practice this with these new build neighborhoods. I've always said, let's make sure that we have a portfolio for inner city and outside the cities.
Inner city is more complex. It's very unilateral supply because it's usually apartments 9 out of 10 times. Not everybody wants to live in an apartment building. Of course, there are people who love to live in apartments, but there are also people who want to live outside the cities. If you live in a village and you cannot continue to live in your village where you grew up, that's not a good thing. We need to strike a balance at these locations, inner city and outside the cities. That way, we'll move to a healthy housing market. I'm quite pleased that we have a minister that is dedicated to living. Sometimes it's an issue, it's challenging, because we don't always agree with him and his decisions, but he's intrinsically motivated to really allow the housing market to progress.
I got a question to Infra. What is approximately the share you generate through everything that is energy transition related and water works, everything, basically preparing our infrastructure against climate change influences? Do you also see higher margins in that field compared to road building and other fields?
I don't really see that big differences in terms of margins, in the past, and things have really changed that with Rijkswaterstaat, there were large projects and big losses were incurred by building companies. We know that. We all know that. We have agreements that risk acceptance and profitability are in balance, also with this two-phase structure that we're working on right now. We also see that the government has limits to its own capacity. They are trying to make sure that they renovate one bridge out of the 10 bridges that have more or less the same specs. You see movements that are interesting for the market. That way, you can practice and industrialize as well. That's one thing.
I don't really see that in dike reinforcement or energy transition or in renovation, that there are big differences in the revenues there. What we have done is, this past year, that we saw that the calendar in new build sort of dried up. I had a list here. It said 25 projects, all new build projects, have been postponed for the time being, a minimum of six months. You know, we'd have to wait and see. The road from Eindhoven to Tilburg wasn't even on the list anymore. As a company, we transformed not only into new build, but particularly also other sectors to train our people and to deploy them on these types of projects.
you know, we are managing to make money here in a decent way, not that all of a sudden it's become extremely more or less. Gavin?
We have different focus in the company, and that might lead to a difference in profitability. We do see, and this is why this past year, also with Dynniq Energy, but also organically, we were able to hire people. Labor in the building industry is really increasingly becoming a bottleneck. There are very few people working with their hands. There's very little appreciation for people who do hands-on work, and there's enormous challenge for the Netherlands, whether it be renovation, housing, energy. To get the people, to get your hands on the people that really are capable of doing that is a challenge.
If a company has these people, yes, that is a premium.
If I look at your margin, they are pretty good for infra, also comparing them to peer group. Do you have explanation why you do better in infra than others, margin-wise?
No, I don't really think much better than others. It's a normal margin. If we deploy our knowledge, our expertise, and we invest so much energy to do these things, we must be able to make decent money. The question is whether everybody's used to that, but this is the way it should be.
Recurring revenues. I know that is also one of your focuses, and I'm not sure if I missed it in your presentation, maybe because of the lack of language, but I'm not sure. The biggest share of recurring revenues is in infra, I guess. Is that correct? Or is it, in-
In infra and services utility.
Okay. Do you see an opportunity to grow that market there?
Yes.
Okay.
Yeah.
Okay.
It's one of the focus points, because it is steady revenue generating, but also profitable.
Yeah.
It's one of the focus areas we want to increase.
Okay.
Leontien de Waal. Leontien de Waal, ABN AMRO.
Fortunately, in The Hague we have Minister De Jonge, who is doing a lot of work to move away the obstacles in the housing market. At the same time, we have something new, which is called water and land steering. It's about dealing with climate adaptation. What does that mean for the land that we can construct on? Have you looked at your land bank from that perspective, and what can you tell us about that vis-à-vis the future?
I can't tell you everything about it, because we don't know where it's gonna end. But in principle, it could be a PFAS or a nitrogen situation, so we are focused. We have looked at our own land portfolio to see how much the impact could be.
We do think that we will have to change our way of thinking about water management. In Tilburg, for instance, we have the first tenders here that rainwater needs to be collected. Here we do expect a major change to take place in the market.
Does this have an impact on the housing typology that you have in your product range?
Yes. I can't rule that out, says Mr. Hillen. To be honest, we're working with Bouwend Nederland, the association on that. We'll keep an eye on you. Let's move from land positions to the housing market and the number of houses that you're realizing.
Which part thereof could you call flexible housing, Mr. Hillen?
That is quite limited, to be very honest.
I would say that over the past few years, about between 50 and 100 flexible houses have been built, so that's not a lot. Once we push forward in our plant, we might be able to increase the number. Most of the houses that we make are wet connections.
With the 10 upcoming tenders, the tender that has been issued by the government, that you would play a part in that? No, we didn't partake in that. What about future tenders?
I can't rule that out, says Mr. Hillen. No, we decided not to take part in that tender.
Anybody else?
Now that we have a little bit more visibility on the where inflation is heading to and that the supply chains overall ease a little bit, how do you see the procurement process going forward? Do you see the tension going out of it a little bit? Do you still see it as one of the challenges to overcome in the next one and a half years? What's your take there?
Uh, uh,
Can I do this in Dutch or in English?
English.
I think that the tricky thing, Tim, is that there is no uniform picture. I don't think we can talk or call it the procurement market. Anything, we have learnt over this past year that it can move in all directions. Steel, for instance, the prices change, and all of a sudden prices are dropping very quickly 30%. Other prices are increasing by 30%. That's why the tricky thing is, we don't see a uniform picture, and I don't have I can't read the tea leaves here. You can't say, you know, this is what gonna happen. I think the main thing here is how to deal with it, and this is what Ton said at the beginning.
How can we make proper arrangements with the customers that if prices increase, that we be compensated for that in a decent way?
Also for our own people, what are the alternatives? How can we define specs for our works in such a way that procurement has more possibilities?
If we really say, you know, in a very detailed way, this is what we need, there might be one or two suppliers. If we're a bit more flexible, we might have more possibilities. I'd like to compliment the procurement department. We have learned so much and the metrics of project buyers, the commodity groups, this is what they concentrate on. So in the works, these buyers work together. There's this cross-fertilization that is working very well. You also see that the agility makes sure that the costs have become manageable for Heijmans. 2023, I wouldn't venture to say that the costs are going to decline, perhaps overall.
As we saw last year, I've learned my lessons, I mean, it's very difficult to cast concrete without steel, so you've got to have your products in order to be able to build. We continue to concentrate on that. The availability is also something we need to you know, concentrate on. I don't really think the market has cooled down, and especially says Mr. Hillen, the availability is important. We have a central procurement department. That is important, but availability at local level, that has to work really well, and I think that we have quite a good grip on that.
Gavin, as Heijmans, it's important that we understand what we need, without losing the family business roots. We need to understand the products and things that we need. We can bundle forces, pool forces.
We have a view to the future. Of course, we deal with our suppliers in a decent way, whether it be bad times or good times. That means that this past year we saw no impact. Knock on wood, this year, we won't be seeing it either. Any other questions? I would like to thank you. Thank you for your attention and also people following the webcast. We'll be seeing each other for the semi-annual figures. Thank you.