HEIJMANS: NET EARNINGS RISE BY MORE THAN 40 PERCENT AND REACHES FINAL AGREEMENT ON ACQUISITION OF KONINKLIJKE IBC

Dividend proposal
A dividend is proposed for 2000 of € 1 (0.72 for 1999) per ordinary share with NLG 0.05 nominal value, to be paid out as desired in cash or depositary receipts for shares to be debited to the (share premium) reserve. The ratio will be announced no later than 5 May 2001. This amounts to a pay-out of more than 40%.

Living and working accommodation (The Netherlands)
Turnover for the division Heijmans Bouw en Vastgoedontwikkeling B.V. rose in 2000 by 35% to € 865 million (1999 € 639 million). The operating results rose 32% to € 44,1 million (1999: € 33,4 million).
More than € 33 million of the turnover growth was due to the acquisition of Verenigde Hijbeek Bedrijven BV (Hijbeek Groep) in Zwijndrecht. The autonomous turnover growth was 30%. 40% of the the turnover was realised through the division's own developments and 60% through third-party orders. The share of residential construction was 70%, the share of utility construction, 30%. Total construction production for residential and utility construction was around € 32 billion in 2000, according to the EIB. Heijmans'market share was therefore 2.7%.

The number of developed and sold housing units which were self-managed was 2,513 in 2000, compared to 2,948 in 1999. As at 31 December 2000, the land positions and the number of housing units to be built by Heijmans were around 22,000 housing units. In addition to self-developed housing units, 1,756 housing units were built for third parties. For utility construction, 294.042 m2 office space and business space was realised, 272.498 m2 of which was for third-party orders and 21,544 m2 was self-developed.
The acquisition of IBC will result in a considerable strengthening in the living and working accommodation segment. The new combination will have a market share of about 5%. IBC has a working supply of almost 9,000 housing units and around 225,000 m2 of commercial real property. Together, the total working supply of Heijmans and IBC bv will be approximately 31,000 housing units and around 600,000 m2 of commercial real property.

After the acquisition of IBC, the division Heijmans Bouw en Vastgoedontwikkeling will be split into a division Heijmans IBC Vastgoedontwikkeling B.V. with turnover of around € 650 million (before inter-company turnover elimination) and a division Heijmans IBC Bouw B.V. with turnover of around € 950 million (before elimination).

Traffic and Transportation (The Netherlands)
The markets for traffic and transportation (above ground and underground)) are the areas in which the divisions Heijmans Infrastructuur & Milieu B.V. (road and line construction, traffic technology) and Heijmans Beton- en Waterbouw B.V. (engineering projects, foundation technology) are involved. Heijmans achieved turnover of € 705 million in this sector in 2000. Heijmans' market share in the civil engineering sector in the Netherlands is around 7%. The operating result rose 30% to € 24.3 million (1999 € 18.7 million).

€ 565 million of the turnover in this sector was realised in the division Heijmans Infrastructuur & Milieu B.V., compared to € 476 million in 1999. Almost € 32 million of this was due to the acquisition of Van Hees in Tilburg on 1 January 2000. The autonomous growth was 12%. The result improved in line with the turnover growth.

Turnover of the division Heijmans Beton- en Waterbouw B.V. was € 140 million in 2000, compared to € 105 million in 1999, an autonomous growth of more than 33%.
The operating result rose to the Heijmans average for the first time in years. The investments in the large projects made in previous years are now being recovered.

The market was dominated in 2000 by the start of work on long-awaited large infrastructure projects such as the Betuwe line and the high-speed train line (HSL)-South. In these two large projects, Heijmans is playing an important role in combination with other builders. For the Betuwe line, these are the Sophiatunnel and the construction of earth embankments and engineering works on a 50-kilometer-long piece (between Zwijndrecht and Tiel) of the in total 160-kilometer Betuwe line. On the HSL-South project, Heijmans is involved in realising the route from the 'Green Heart' to Rotterdam and the Prinsenbeek-Belgian border route. Heijmans is also involved in HSL projects in Belgium. Further, in combination with third parties, Heijmans is realising the fly-over between Schiphol en Zaandam, the so-called Hemboog, for Dutch Railways. Various innovative tendering forms are being used in these projects.

In addition to these large, eye-catching and extensive infrastructure projects, Heijmans continues to be active in all types of civil engineering projects for governmental bodies, utility companies and private parties. The position in this market was strengthened by establishing two regional offices for concrete construction and hydraulic engineering. Despite the enormous turnover in the large projects, these projects continue to account for 55% of the turnover from concrete construction and hydraulic engineering and for approximately 90% of the turnover from road construction.

Heijmans' prospects with regard to land and road construction and hydraulic engineering are excellent for 2001. The order portfolio for concrete construction, hydraulic engineering and road construction has never been better. As a result, further turnover growth to € 75 million is predicted.

The acquisition of IBC does not directly affect Heijmans' market positions in the traffic and transportation sector, because IBC has no activities of its own in this area. It is expected, though, that IBC activities relating to development of inner-city areas and utility construction will in particular lead in the future to attractive new possibilities for the Heijmans companies in this sector.

Industry and production
Effective January 1st 2001, Prefab beton Vebo B.V. in Bunschoten and NeHoBo B.V. in Tienray (production of and trading in concrete elements and steel lintels) were, together with the activities of Heijmans Industrie Services B.V., placed in the new division Heijmans Industrie en Productie B.V. In 2000, this division realised turnover of € 99 million. The operating result dropped to € -1.8 million (1999 € 3.3 million).
AGMI in Tegelen (traffic signs and traffic regulation installations) was sold on 1 January 2000 to an industrial party. Polyprofiel in Drachten (synthetic façade elements) was sold on 1 January 2000 to the management. Prefab beton Vebo B.V. once again performed extremely well in 2000. The changes implemented in 1999 at NeHoBo B.V. resulted in a clear improvement in processes in 2000. The result was still negative in 2000, however.

Turnover at Heijmans Industrie Service B.V. decreased in 2000 to € 60 million, compared to € 75 million in 1999. This decrease was primarily due to the sharp rise in oil prices and the related less favourable prospects for the petrochemical industry, resulting in postponement of many investments. Heijmans Industrie Services B.V.'s result fell below the Heijmans average for the first time in years.

For 2001, market conditions are expected to improve in the industrial market, as continuing high oil prices will result in a growth in oil production investments in Europe. The market prospects for steel construction are good due to work starting on a large number of infrastructure projects. Market conditions in the wind energy area are seen as improving in 2001.

Foreign activities
In addition to The Netherlands, Heijmans is active in Belgium and Germany. Heijmans International B.V. achieved turnover of € 188 million in 2000, compared to € 112 million in 1999. This turnover increase was largely due to the acquisition of cable and line company Van den Berg N.V., with turnover of € 59 million. The autonomous turnover increase was above 15%. Foreign activities constituted 12% of Heijmans' turnover in 2000. The operating result increased by more than 300% to € 8.3 million (1999: € 1.9 million).

The acquisition of IBC means expansion of Heijmans' activities in Belgium by about one-third. Heijmans and IBC reinforce each other in Belgium, because IBC is primarily active in real property development, residential and utility construction, while Heijmans is primarily active in land and road construction and hydraulic engineering. Before inter-company elimination, the combintion will realise turnover of around € 240 million in Belgium in 2001.

The activities in Germany suffered in 2000 because of stagnating residential construction projects. As a result of postponement or cancellation of projects in the Berlin region in particular, Heijmans' activities there dropped to a low point. It was thus decided to close Heijmans' Berlin office. The costs in this connection caused Heijmans Bau GmbH to have a slightly negative result, for the first time since 1982. Signs of recovery in the construction market have still not appeared. Nevertheless, partly because of the good order portfolio at the end of 2000, the German activities will show a profit for Heijmans in 2001.

Employees
The number of employees rose in 2000 by 843 to an average of 7139 (1999: 6296), an increase of more than 13 %. More than 14% of this increase ( 891 employees) was due to acquisitions. The difference is caused by a decrease in the number of staff due to deconsolidation of companies. Staff turnover is low.

Tax burden
The tax burden was 25.7% in 2000, compared to 30.8 % in 1999. In the coming years, Heijmans expects that the tax burden will not exceed 30% because of the existence of tax-compensable losses in acquired companies in The Netherlands and Belgium. At the end of 2000, the compensable losses were € 89 million.

Solvency and shareholders' equity
In 2000, more than € 30 million was debited from shareholders' equity for goodwill for acquisitions. Solvency was 26.5% at the end of 2000, compared to 31.1% at the end of 1999. This decrease is the result of, among others, amortisation of goodwill and increase of working capital as a result of the growth of the companies activities.

Share issue
Heijmans is acquiring all IBC shares for cash payment of around € 80 million. To finance the acquisition sum, Heijmans will issue around 1,850,000 ordinary shares in 2001. The remaining portion of the purchase price will be financed from subordinated loans (€ 45 million), as well as from an optional dividend for the year 2000. As a result, due to cost-savings considerations, Heijmans is going back on the promise made in December to allow the optional dividend to lapse. This has already been taken into account in the annual report and accounts.

Prospects
At the end of 2000, the order portfolio was € 1.67 billion, an increase of almost 39% in comparison to € 1.20 billion at the end of 1999. IBC had an order portfolio of around
€ 750 million at the end of 2000. As a result, turnover of around € 2.25 billion is expected for 2001, and net earnings of around € 68 million (+ 40%). The earnings per share are expected to increase by 30%. A share issue to finance the acquisition of IBC and treatment of the goodwill to be paid in that connection as an asset has been taken into account. Heijmans is sticking to its long-term targets of at least a 3.5% net profitability in 2003 on turnover (excl. acquisitions) of € 2.5 billion..