6.22 Interest-bearing loans and other financing liabilities

Heijmans has various financing arrangements in place, both at group and project level. Following the refinancing in 2023 and the accelerated repayment in 2024, Heijmans’ current financing arrangement amounts to € 177.5 million, runs until 1 September 2028 and consists of the following components:

• Linear loan amounting to € 80 million, which was repaid early in 2024, which meant that the outstanding amount of this loan stood at zero at year-end 2024 (2023: € 75 million) (see note 6.22a) and this is not revolving

• Revolving credit facility in the amount of € 177.5 million, € 30 million of which is in the form of a overdraft facility (see 6.22b).

Established securities

At the time of the refinancing in 2023, no changes were agreed to the collateral package provided to financiers and this was also the case in 2024. These securities are recorded in pledges, with an intercreditor agreement regulating in what situations and in what way securities can be recovered. As long as Heijmans continues to comply with the banking covenants, including the financial covenants (see 6.22c), these situations do not arise.

The securities established consist of pledged receivables, bank accounts and any insurance proceeds. This criterion only applies insofar as Heijmans is the 100% owner of the companies concerned and, measured by revenue, at least 95% of the revenue must be represented by the subsidiaries that co-sign the financing facility (the so-called guarantor cover). Finally, the financiers have established mortgage securities on a number of land holdings with a carrying amount of € 39.9 million at year-end 2024. These securities will be released as the land holdings are developed.

The total breakdown of interest-bearing loans and other financing liabilities is shown below:

6.22a Linear loan

At the time of the refinancing in 2023 in connection with the Van Wanrooij acquisition, a distinction was made between acquisition financing in the form of a linear loan and a revolving credit facility, as the revolving credit facility offers more flexibility to absorb fluctuations in working capital over the course of the year.

The linear loan was provided in equal parts by ABN Amro, ING and Rabobank. The linear loan amounted to € 80 million at the time of the acquisition and was supposed to be repaid in four years on a straight-line quarterly basis. Heijmans was entitled to make early repayments at any time. Heijmans made repayments in March (€5 million), June (€40 million) and December (€30 million) 2024, as a result of which the outstanding sum at year-end 2024 was zero.

6.22b Revolving credit facility

The revolving credit facility amounted to € 177.5 million at year-end 2024. This amount is fully committed until 1 September 2028 on the understanding that from 30 September 2027 the total commitment will be reduced in four quarters on a straight-line basis to € 150 million. Of this facility, € 30 million has been provided in the form of a committed overdraft facility with ING Bank. ABN Amro Bank and Rabobank (each) provided € 52.5 million of the remainder of the revolving credit facility, while ING Bank provided € 42.5 million. A feature of the revolving credit facility (and thus the overdraft facility) is that the facility can be used according to need. The revolving character ensures that repaid amounts are available again in the future within the limits of the total commitment, enabling Heijmans to absorb working capital fluctuations during the year.

In terms of interest conditions, the basic interest rate is one-month Euribor plus a margin that depends on the outcome of the leverage ratio and lies between 1.9% and 2.9%. In 2024, and also expected in 2025, the margin premium will be 1.90% or 2.15%. The unused portion of the revolving credit facility is subject to a commitment fee linked to the margin payable. Heijmans is allowed to voluntarily reduce the revolving credit facility prematurely at any time.

The margin grid is linked to a bonus/malus system of plus or minus five basis points on the basis of four sustainability criteria. In effect, Heijmans is raising its sustainability ambitions by committing to improvements in terms of reducing (CO₂) emissions, the number of accidents (drop in IF rate), the average CO₂ emissions of the homes it delivers, and increasing the share of electric cars in its total fleet. Heijmans had achieved all four of these criteria by year-end 2024, which means the company obtained a bonus of 5 basis points and that the applicable margin for the revolving credit facility will be adjusted as soon as the compliance certificate is approved by ABN Amro, ING and Rabobank.

It should be noted that at the time of the acquisition of Van Wanrooij, Heijmans did not yet have sufficient insight into Van Wanrooij’s score in terms of the agreed sustainability criteria. In that context, it was agreed that Heijmans has until the annual results for 2024 to map out these scores, and on that basis to agree adjusted sustainability objectives with the banks, including Van Wanrooij's contribution.

6.22c Bank covenants related to the syndicated facility

The syndicated facility is subject to several covenants, consisting of information obligations, general obligations and minimum financial requirements (so-called financial covenants). If Heijmans fails to meet these financial covenants, the facility is repayable on demand. The financial covenants are measured on the basis of the reported figures based on IFRS. Certain matters are subject to adjustments, for instance if project financing is on a non-recourse basis. The covenants are also adjusted for IFRS 11, which means that Heijmans will not use the equity method for joint ventures but will instead report financial results on the basis of proportionate recognition.

The covenants are subject to a solvency ratio, which is measured at the end of each year to check whether this meets the required minimum of 21%. This ratio is the solvency ratio reported in the annual report on the basis of the capital base. As the cumulative financing preference shares B were fully redeemed (in 2022), the capital base equals group equity. The covenants are also subject an interest cover ratio, calculated at the end of each quarter and a minimum value of 5 is required. In addition, a leverage ratio is also calculated each quarter and this must not exceed 3. The interest cover ratio is calculated by dividing EBITDA (earnings before interest, tax, depreciation and amortisation) by net interest expenses calculated over the past 12 months. The leverage ratio is obtained by dividing net debt by EBITDA, with both criteria calculated over the past 12 months. The definitions of these items include several adjustments to the reported figures, as agreed with the bank consortium in the credit agreement. Significant adjustments compared with the net debt for accounting purposes are an increase in respect of the net debt from joint ventures and certain project financing arrangements where there is no recourse against Heijmans. Significant adjustments compared with the EBITDA for accounting purposes are related to the capitalised interest, results related to business units that have been sold off, fair value adjustments, restructuring costs and EBITDA results from joint ventures. The main adjustment to the net interest expense for accounting purposes is related to the exclusion of interest expense on non-recourse project financing. Heijmans operated well within the agreed covenants throughout the year.

Compliance with the covenants is actively monitored within Heijmans. Based on the 2025 business plan and its solid financial starting position at year-end 2024, the Group expects to be able to continue operating well within the covenants in the year ahead, the key parameters here being the developments in terms of EBITDA and net debt. Changes in the net debt position are a function of fluctuations in working capital, which are due to seasonal effects and fluctuations driven by specific projects. The working capital requirement is generally higher during the course of the year than at year-end, and this can lead to an increase in net debt by as much as € 10-50 million. Heijmans funds these fluctuations in working capital via the headroom offered by the revolving credit facility.

6.22d Project financing

Project financing arrangements have been entered into in connection with specific (property development) projects. This pertains to property development projects at Heijmans Property Development for a total amount (pro rata share of Heijmans) of € 7.6 million (2023: 12.2 million). The project financing repayment schedules are usually related to the progress on projects. Project financing generally expires no later than the date of completion and/or sale of the projects. Recourse is limited to project assets only, including future positive cash flows from these projects, as well as the contracts and mortgage collateral related to the project / project company in most cases. In principle, Heijmans N.V. (or group companies belonging to it) does not issue parent company guarantees for the payment of instalments and/or interest for any of project financing facilities.

6.22e Other liabilities

The other liabilities pertain to financing arrangements provided by related parties in a number of specific land holdings. As security for these financing arrangements, amounting to € 0.9 million (2023: € 1.4 million), Royal Heijmans N.V. has provided guarantees in respect of repayments/payment of interest.

6.22f Average interest rate

• *The disclosed percentage is exclusive of amortised refinancing costs and fees.

6.22h Movements in interest-bearing liabilities

The movements in the interest-bearing liabilities were as follows:

The cash flows related to the revolving credit facility are presented on a net basis in both the above movement table and the cash flow statement. This is because it pertains to (very) short-term financing involving large amounts and short terms. For example, the drawings during 2023 were mainly used as part of the Van Wanrooij acquisition financing and the drawings in 2024 were used to cover working capital movements. The highest amount drawn on the revolving credit facility in 2024 was € 40 million (2023: € 110 million), which was then repaid in full over the course of the financial year.