6.28 Contingent liabilities

General

Contingent liabilities are potential liabilities resulting from events prior to the reporting date. The liabilities are potential because the outflow of economic resources depends on the occurrence of uncertain events in the future.

Contingent liabilities can be divided into bank guarantees, Group guarantees and other contingent liabilities.

Bank and Group guarantees

The guarantees set out below relate to obligations of the Group’s 100% subsidiaries, either as contractor towards the client or as participant in a partnership, in which latter case the client can take direct recourse against Royal Heijmans N.V. and the partnership does not act as the primary debtor (this therefore excludes the guarantees where the underlying obligation rests with the joint venture, as explained in '6.28a Contingent liabilities joint ventures').

A bank guarantee is a bank’s conditional promise to pay a beneficiary (usually the client) a specified amount. This is an independent commitment made by the bank to the beneficiary that the bank must fulfil without Heijmans’ intervention. For each bank guarantee issued, the bank requires a counter-guarantee from Royal Heijmans N.V. (meaning that any payment made by the bank to the client must be repaid by Royal Heijmans N.V.). The bank guarantees are mainly issued for the execution of projects (including warranty obligations).

Royal Heijmans N.V. guarantees the obligations of subsidiaries, joint operations and joint ventures by means of a group guarantee. These group guarantees have mainly been issued for the purpose of project realisation (including warranty obligations). The Group does not expect to incur material credit losses on this.

The group guarantees issued in respect of divested activities (Leadbitter) are not included in the table above and amount to € 12 million (2024: € 22 million). With regard to work completed and work in progress, the guarantees have been taken over by the buyer. The buyer has provided a bank or corporate guarantee for cases where this was not possible.

Other contingent liabilities

The other contingent liabilities relate mainly to commitments to purchase land when there is a final zoning plan, a building permit and/or an achieved sales percentage. Of this, € 372 million (2024: € 319 million) is expected to have a significant cash impact and € 20 million (2024: € 24 million) a limited cash impact. Of these other contingent liabilities, € 6 million (2024: € 5 million) is included in joint operations. As in the previous year, no group guarantees have been issued for these other contingent liabilities.

In addition, the Group is jointly and severally liable for the obligations of joint arrangements entered into in the form of a general partnership (VOF). A liability or provision arising from this joint and several liability is recognised in the statement of financial position only if and to the extent that the financial position of the joint arrangement and/or one or more of the other partners gives rise to this. Total obligations to third parties not recognised in the statement of financial position arising from such joint and several liabilities amount to € 111 million (2024: € 109 million) at year-end.

6.28a Contingent liabilities joint ventures

In a very limited number of cases, there is a bank guarantee under which the bank can call on the joint venture to meet its obligations (2025: € 3 million; 2024: € 3 million). In such cases, the joint venture may subsequently have recourse against the participants. Other contingent liabilities of joint ventures in which the Group participates amount to € 21 million (2024: € 18 million) (Heijmans share) and relate mainly to commitments to purchase land when a building permit has been obtained and/or a sales percentage has been achieved.

Of this, € 10 million (2024: € 4 million) is expected to have a significant cash impact and € 11 million (2024: € 14 million) a limited cash impact.