CONSOLIDATED FINANCIAL STATEMENTS 2019	3
CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019 4
Consolidated income statement 4
Statement of total comprehensive income 4
Consolidated balance sheet 5
Consolidated cash flow statement 6
Statement of changes in equity 7
Consolidated statement of fixed assets as at 31 December 2019 8
Consolidated statement of fixed assets as at 31 December 2018 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 10
Basic principles 10
Changes in accounting policies 10
Consolidation 12
Scope of consolidation 15
Currency translation 19
Consolidated companies and associates 20
Accounting policies 27
Notes on the items of the consolidated income statement 41
Notes on the items in the consolidated balance sheet 46
Notes on finacial instruments 62
Segment report 73
Other Notes 75
List of subsidiaries, equity-accounted investments and investee companies as at 31 December 2019 80
GROUP MANAGEMENT REPORT 95
Important events 95
Country report 103
Order backlog 119
Financial performance 120
Financial position and cash flows 122
Capital expenditures 124
Financing/Treasury 124
Segment report 127
Risk management 134
Research and development 141
Website Corporate Governance Report 142
Disclosures pursuant to Sec 243a Para 1 UGB 142
Related parties 143
Outlook 143
Events after the reporting period 144
AUDITOR'S REPORT 145
INDIVIDUAL FINANCIAL STATEMENTS 2019150
STATEMENT OF ALL LEGAL REPRESENTATIVES224

CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019

Consolidated income statement

T€	Notes	2019	2018
Revenue	(1)	15,668,574	15,221,832
Changes in inventories		24,943	-66,328
Own work capitalised		6,419	33,268
Other operating income	(2)	233,142	222,977
Construction materials, consumables and services used	(3)	-10,111,854	-10,125,771
Employee benefi ts expenses	(4)	-3,745,149	-3,618,941
Other operating expenses	(5)	-1,024,017	-854,892
Share of profi t or loss of equity-accounted investments	(6)	-21,479	83,176
Net income from investments	(7)	82,716	57,282
EBITDA		1,113,295	952,603
Depreciation and amortisation expense	(8)	-510,714	-394,388
EBIT		602,581	558,215
Interest and similar income		30,973	38,617
Interest expense and similar charges		-56,315	-66,049
Net interest income	(9)	-25,342	-27,432
EBT		577,239	530,783
Income tax expense	(10)	-198,684	-167,999
Net income		378,555	362,784
attributable to: non-controlling interests		6,860	9,249
attributable to: equity holders of the parent company		371,695	353,535
Earnings per share (€)	(11)	3.62	3.45

Statement of total comprehensive income

T€	Notes	2019	2018
Net income		378,555	362,784

Differences arising from currency translation		10,013	-2,205
Recycling of differences arising from currency translation		47	779
Change of interest rate swaps		-21,217	-3,902
Recycling of interest rate swaps		13,697	12,896
Change in cost-of-hedging reserves		278	72
Change in fair value of currency hedging instruments		-15,241	-10,600
Recycling of fair value of currency hedging instruments		9,795	0
Deferred taxes on neutral change in equity	(10)	6,264	3,349
Other income from equity-accounted investments		-6,471	-3,174
Total of items which are later recognised ("recycled") in the income statement		-2,835	-2,785
Change in actuarial gains or losses		-47,506	1,478
Deferred taxes on neutral change in equity	(10)	13,704	1,285
Other income from equity-accounted investments		-156	78
Total of items which are not later recognised ("recycled") in the income statement		-33,958	2,841
Other income		-36,793	56

Total comprehensive income		341,762	362,840
attributable to: non-controlling interests		6,863	9,389
attributable to: equity holders of the parent company		334,899	353,451

Consolidated balance sheet

CONSOLIDATED FINANCIAL STATEMENTS

T€ Notes 2019 2018 Revenue (1) 15,668,574 15,221,832 Changes in inventories 24,943 -66,328 Own work capitalised 6,419 33,268 Other operating income (2) 233,142 222,977 Construction materials, consumables and services used (3) -10,111,854 -10,125,771 Employee benefi ts expenses (4) -3,745,149 -3,618,941 Other operating expenses (5) -1,024,017 -854,892 Share of profi t or loss of equity-accounted investments (6) -21,479 83,176 Net income from investments (7) 82,716 57,282 EBITDA 1,113,295 952,603 Depreciation and amortisation expense (8) -510,714 -394,388 EBIT 602,581 558,215 Interest and similar income 30,973 38,617 Interest expense and similar charges -56,315 -66,049 Net interest income (9) -25,342 -27,432 EBT 577,239 530,783 Income tax expense (10) -198,684 -167,999 Net income 378,555 362,784 attributable to: non-controlling interests 6,860 9,249 attributable to: equity holders of the parent company 371,695 353,535 Earnings per share (€) (11) 3.62 3.45

T€ Notes 2019 2018 Net income 378,555 362,784

Differences arising from currency translation 10,013 -2,205 Recycling of differences arising from currency translation 47 779 Change of interest rate swaps -21,217 -3,902 Recycling of interest rate swaps 13,697 12,896 Change in cost-of-hedging reserves 278 72 Change in fair value of currency hedging instruments -15,241 -10,600 Recycling of fair value of currency hedging instruments 9,795 0 Deferred taxes on neutral change in equity (10) 6,264 3,349 Other income from equity-accounted investments -6,471 -3,174 Total of items which are later recognised ("recycled") in the income statement -2,835 -2,785 Change in actuarial gains or losses -47,506 1,478 Deferred taxes on neutral change in equity (10) 13,704 1,285 Other income from equity-accounted investments -156 78 Total of items which are not later recognised ("recycled") in the income statement -33,958 2,841 Other income -36,793 56

Total comprehensive income 341,762 362,840 attributable to: non-controlling interests 6,863 9,389 attributable to: equity holders of the parent company 334,899 353,451

AS AT 31 DECEMBER 2019

Statement of total comprehensive income

Consolidated income statement

T€	Notes	31.12.2019	31.12.2018
Intangible assets	(12)	490,852	493,407
Rights from concession arrangements1	(13)	530,357	547,237
Property, plant and equipment	(14)	2,632,486	2,144,015
Equity-accounted investments	(15)	454,532	378,617
Other investments	(16)	175,062	185,297
Receivables from concession arrangements	(19)	599,036	630,262
Other fi nancial assets	(22)	229,910	250,137
Deferred taxes	(17)	137,617	146,940
Non-current assets		5,249,852	4,775,912
Inventories	(18)	983,546	890,157
Receivables from concession arrangements	(19)	39,323	36,268
Contract assets	(20)	1,354,897	1,282,907
Trade receivables	(21)	1,700,729	1,735,944
Non-fi nancial assets		128,397	127,008
Income tax receivables		43,715	40,200
Other fi nancial assets	(22)	289,538	293,381
Cash and cash equivalents	(23)	2,460,814	2,385,828
Current assets		7,000,959	6,791,693
Assets		12,250,811	11,567,605

Share capital		110,000	110,000
Capital reserves		2,315,384	2,315,384
Retained earnings and other reserves		1,396,820	1,195,301
Non-controlling interests		33,695	33,088
Total equity	(24)	3,855,899	3,653,773
Provisions	(25)	1,136,915	1,116,592
Financial liabilities2	(26)	1,066,698	1,087,621
Other fi nancial liabilities	(28)	92,218	78,755
Deferred taxes1	(17)	48,696	43,216
Non-current liabilities		2,344,527	2,326,184
Provisions	(25)	893,306	734,481
Financial liabilities3	(26)	355,509	275,709
Contract liabilities	(20)	957,247	974,566
Trade payables	(27)	2,826,640	2,615,255
Non-fi nancial liabilities		498,350	520,227
Income tax liabilities		134,971	74,609
Other fi nancial liabilities	(28)	384,362	392,801
Current liabilities		6,050,385	5,587,648
Equity and liabilities		12,250,811	11,567,605

1 Adjustment of values 2018 due to initial consolidation in accordance with IFRS 3.45

2 Thereof T€ 597,187 concerning non-recourse liabilities from concession arrangements (2018: T€ 665,861)

3 Thereof T€ 68,339 concerning non-recourse liabilities from concession arrangements (2018: T€ 64,912)

Consolidated cash fl ow statement

CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019

T€ Notes	2019	2018
Net income	378,555	362,784
Deferred taxes	32,903	52,348
Non-cash effective results from consolidation	-18,984	-1,191
Non-cash effective results from equity-accounted investments	-16,425	-58,826
Other non-cash effective results	-14,444	-12,196
Depreciations/reversal of impairment losses	515,825	406,350
Change in non-current provisions	24,171	-34,122
Gains/losses on disposal of non-current assets	-50,554	-60,764
Cash fl ow from earnings	851,047	654,383
Change in inventories	-24,188	-103,422
Change in receivables from concession arrangements,
contract assets and trade receivables	-85,763	-57,726
Change in non-fi nancial assets1	-1,730	-4,706
Change in income tax receivables1	-3,796	22,778
Change in other fi nancial assets1	14,945	-2,741
Change in current provisions	108,228	-24,494
Change in contract liabilities and trade payables	197,227	194,965
Change in non-fi nancial liabilities1	-18,519	46,361
Change in income tax liabilities1	60,633	-3,898
Change in other fi nancial liabilities1	-22,149	67,476
Cash fl ow from operating activities	1,075,935	788,976
Purchase of fi nancial assets	-31,379	-27,552
Purchase of property, plant, equipment and intangible assets	-647,440	-644,988
Infl ows from asset disposals	105,476	116,053
Change in other fi nancing receivables1	-11,233	-13,978
Change in scope of consolidation	-8,721	-70,263
Cash fl ow from investing activities	-593,297	-640,728
Issue of bank borrowings	16,650	33,465
Repayment of bank borrowings	-135,248	-184,589
Repayment of bonded loan	-18,500	0
Repayment of bonds	-100,000	-175,000
Change in lease liabilities	-56,424	0
Change in other fi nancing liabilities	-4,493	-20,068
Change in non-controlling interests due to acquisition	-3,586	-78,027
Distribution of dividends	-110,014	-109,953
Cash fl ow from fi nancing activities	-411,615	-534,172
Net change in cash and cash equivalents	71,023	-385,924
Cash and cash equivalents at the beginning of the period	2,384,343	2,789,687
Change in cash and cash equivalents due to currency translation	3,963	-18,695
Change in restricted cash and cash equivalents	640	-725
Cash and cash equivalents at the end of the period (31)	2,459,969	2,384,343

Statement of changes in equity

Consolidated cash fl ow statement

Change in receivables from concession arrangements,

T€ Notes 2019 2018 Net income 378,555 362,784 Deferred taxes 32,903 52,348 Non-cash effective results from consolidation -18,984 -1,191 Non-cash effective results from equity-accounted investments -16,425 -58,826 Other non-cash effective results -14,444 -12,196 Depreciations/reversal of impairment losses 515,825 406,350 Change in non-current provisions 24,171 -34,122 Gains/losses on disposal of non-current assets -50,554 -60,764 Cash fl ow from earnings 851,047 654,383 Change in inventories -24,188 -103,422

contract assets and trade receivables -85,763 -57,726 Change in non-fi nancial assets1 -1,730 -4,706 Change in income tax receivables1 -3,796 22,778 Change in other fi nancial assets1 14,945 -2,741 Change in current provisions 108,228 -24,494 Change in contract liabilities and trade payables 197,227 194,965 Change in non-fi nancial liabilities1 -18,519 46,361 Change in income tax liabilities1 60,633 -3,898 Change in other fi nancial liabilities1 -22,149 67,476 Cash fl ow from operating activities 1,075,935 788,976 Purchase of fi nancial assets -31,379 -27,552 Purchase of property, plant, equipment and intangible assets -647,440 -644,988 Infl ows from asset disposals 105,476 116,053 Change in other fi nancing receivables1 -11,233 -13,978 Change in scope of consolidation -8,721 -70,263 Cash fl ow from investing activities -593,297 -640,728 Issue of bank borrowings 16,650 33,465 Repayment of bank borrowings -135,248 -184,589 Repayment of bonded loan -18,500 0 Repayment of bonds -100,000 -175,000 Change in lease liabilities -56,424 0 Change in other fi nancing liabilities -4,493 -20,068 Change in non-controlling interests due to acquisition -3,586 -78,027 Distribution of dividends -110,014 -109,953 Cash fl ow from fi nancing activities -411,615 -534,172

Net change in cash and cash equivalents 71,023 -385,924 Cash and cash equivalents at the beginning of the period 2,384,343 2,789,687 Change in cash and cash equivalents due to currency translation 3,963 -18,695 Change in restricted cash and cash equivalents 640 -725 Cash and cash equivalents at the end of the period (31) 2,459,969 2,384,343

1 To clarify the representation the items were adjusted to the balance sheet structure and the comparison period was adjusted.

T€	Share capital	Capital reserves	Retained earnings	Hedging reserves1	Foreign currency reserves	Group equity	Non controlling interests	Total equity
Balance as at 31.12.2017	110,000	2,315,384	1,073,907	-78,797	-50,021	3,370,473	27,246	3,397,719
Initial application of IFRS 9	0	0	2,742	0	0	2,742	-180	2,562
Initial application of IFRS 15	0	0	27,502	0	0	27,502	1,528	29,030
Balance as at 1.1.2018	110,000	2,315,384	1,104,151	-78,797	-50,021	3,400,717	28,594	3,429,311
Net income	0	0	353,535	0	0	353,535	9,249	362,784
Differences arising from
currency translation	0	0	-65	0	-1,504	-1,569	143	-1,426
Change in foreign exchange
forward	0	0	0	-10,528	0	-10,528	0	-10,528
Change in equity-accounted
investments	0	0	-106	906	-3,896	-3,096	0	-3,096
Change of actuarial gains
and losses	0	0	1,483	0	0	1,483	-5	1,478
Change of interest rate swaps	0	0	0	8,994	0	8,994	0	8,994
Deferred taxes on neutral
change in equity	0	0	1,283	3,349	0	4,632	2	4,634
Total comprehensive income	0	0	356,130	2,721	-5,400	353,451	9,389	362,840
Transactions concerning
non-controlling interests	0	0	-106	0	3	-103	-836	-939
Transactions concerning
non-controlling interests
due to changes in scope of
consolidation	0	0	0	0	0	0	104	104
Distribution of dividends2	0	0	-133,380	0	0	-133,380	-4,163	-137,543
Balance as at 31.12.2018	110,000	2,315,384	1,326,795	-76,076	-55,418	3,620,685	33,088	3,653,773

T€	Share capital	Capital reserves	Retained earnings	Hedging reserves1	Foreign currency reserves	Group equity	Non controlling interests	Total equity
Balance as at 1.1.2019	110,000	2,315,384	1,326,795	-76,076	-55,418	3,620,685	33,088	3,653,773
Net income	0	0	371,695	0	0	371,695	6,860	378,555
Differences arising from
currency translation	0	0	0	0	10,035	10,035	25	10,060
Change in foreign exchange
forward	0	0	0	-5,168	0	-5,168	0	-5,168
Change in equity-accounted
investments	0	0	-156	-4,349	-2,122	-6,627	0	-6,627
Change of actuarial gains
and losses	0	0	-47,477	0	0	-47,477	-29	-47,506
Change of interest rate swaps	0	0	0	-7,520	0	-7,520	0	-7,520
Deferred taxes on neutral
change in equity	0	0	13,697	6,264	0	19,961	7	19,968
Total comprehensive income	0	0	337,759	-10,773	7,913	334,899	6,863	341,762
Transactions concerning
non-controlling interests	0	0	0	0	0	0	-3,085	-3,085
Distribution of dividends2	0	0	-133,380	0	0	-133,380	-3,171	-136,551
Balance as at 31.12.2019	110,000	2,315,384	1,531,174	-86,849	-47,505	3,822,204	33,695	3,855,899

1 The hedging reserve includes also the cost of hedging, see page 68.

2 The total dividend payment of T€ 133,380 corresponds to a dividend per share of € 1.30 based on 102,600,000 shares.

Consolidated statement of fi xed assets as at 31 December 2019

CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019

Acquisition and production costs Accumulated depreciation

Disposals in scope of consolidation

Carrying amount as at 31.12.2017

Carrying amount as at 31.12.2018

	Balance as	Additions	Disposals in scope
T€	at 1.1. 2019	in scope of consolidation	of consoli dation	Currency translation	Additions	Transfers
I. Intangible assets
1. Concessions, software, licences, rights	136,929	1,810	831	-29	6,036	230
2. Goodwill	686,181	3,409	2,000	1,595	0	0
3. Advances paid	270	0	0	0	109	-230
Total	823,380	5,219	2,831	1,566	6,145	0

II. Rights from concession arrangements	551,793	0	0	0	0	0

III. Tangible assets
1. Properties and buildings	1,553,326	401	2,642	2,677	37,131	25,309
2. Right-of-use assets2	358,905	0	0	70	41,802	0
3. Technical equipment and machinery	2,797,411	2,486	3,525	-3,649	329,951	16,324
4. Other facilities, furniture and fi xtures and offi ce equipment	1,193,984	1,824	1,930	1,395	215,108	-327
5. Advances paid and facilities under construction	117,869	0	0	-147	59,028	-41,306
6. Investment property	146,874	0	0	18	79	0
Total	6,168,369	4,711	8,097	364	683,099	0

Consolidated statement of fi xed assets as at 31 December 2018

Acquisition and production costs Accumulated depreciation

			Disposals in scope
	Balance as at 31.12.	Additions in scope of	of consoli	Currency
T€	2017	consolidation	dation	translation	Additions	Transfers
I. Intangible assets
1. Concessions, software, licences, rights	132,408	3,175	9	-553	4,519	307
2. Goodwill	685,427	1,398	0	-644	0	0
3. Advances paid	447	0	0	0	72	-249
Total	818,282	4,573	9	-1,197	4,591	58

II. Rights from concession arrangements4	0	551,793	0	0	0	0

III. Tangible assets
1. Properties and buildings	1,498,108	4,835	5,109	-3,652	62,503	27,247
2. Technical equipment and machinery	2,759,145	4,033	30	-17,765	268,638	20,376
3. Other facilities, furniture and fi xtures and offi ce equipment	1,104,408	1,062	351	-2,116	214,074	778
4. Advances paid and facilities under construction	73,377	25	0	-994	94,741	-48,459
5. Investment property	155,203	0	0	-11	441	0
Total	5,590,241	9,955	5,490	-24,538	640,397	-58

1 Of this amount, impairments of T€ 20,164, reversal of impairment losses T€ 7
2 First-time adoption of IFRS 16 with an effective date of 1.1.2019
3 Of this amount, impairments of T€ 5,664, reversal of impairment losses T€ 120
4 Adjustment of values due to initial consolidation in accordance with IFRS 3.45

Acquisition and production costs Accumulated depreciation

Consolidated statement of fi xed assets as at 31 December 2019

1 Of this amount, impairments of T€ 20,164, reversal of impairment losses T€ 7

3 Of this amount, impairments of T€ 5,664, reversal of impairment losses T€ 120 4 Adjustment of values due to initial consolidation in accordance with IFRS 3.45

2 First-time adoption of IFRS 16 with an effective date of 1.1.2019

Consolidated statement of fi xed assets as at 31 December 2018

96,316 1,152 716 -183 8,712 0 852 104,429	233,657 0 0	141,627
			2,518
-1 2,024 0 0 235,680		689,185	0
0 0 0 0 0 0 0 0	149		0
329,973 1,152 716 -184 10,736 0 852 340,109		830,961	2,518
4,556 0 0 0 16,880 0 0 21,436		551,793	0
678,794 110 76 1,598 51,398 -591 34,752 696,481		1,564,127	52,075
0 0 0 -1 58,607 0 3,172 55,434		381,781	18,996
2,094,143 2,107 73 -2,264 230,765 -103 177,403 2,147,172		2,958,911	180,087
751,078 1,341 823 1,060 142,131 694 121,499 773,982		1,275,820	134,234
0 0 0 0 0 0 0 0		119,615	15,829
141,434 0 0 0 197 0 1,132 140,499		145,800	1,171
3,665,449 3,558 972 393 483,098 0 337,958 3,813,568		6,446,054	402,392

Acquisition and production costs Accumulated depreciation

Carrying Carrying amount amount as at as at 31.12.2018 31.12.2017	Balance as at	31.12.2018	Disposal	Transfers	Additions3	Currency translation	Disposals in scope of consoli dation	Additions in scope of consolidation	Balance as at 31.12. 2017	Balance as at 31.12.2018	Disposal
40,613 43,068	96,316		1,847	0	8,011	-380	9	1,201	89,340	136,929	2,918
452,524 455,312		233,657	0	0	1,734	1,808	0	0	230,115	686,181	0
270	0		0	0	0	0	0	0	0	270	0
493,407 498,827		329,973	1,847	0	9,745	1,428	9	1,201	319,455	823,380	2,918

547,237	4,556		0	0	4,556	0	0	0	0	551,793	0
874,532 839,717		678,794	14,180	140	37,233	-1,396	1,490	96	658,391	1,553,326	30,606
703,268 646,616		2,094,143	213,559	-37	206,260	-12,394	30	1,374	2,112,529	2,797,411	236,986

442,906 376,322		751,078	112,287	-103	136,300	-884	267	233	728,086	1,193,984	123,871 123,871
117,869 73,377	0		0	0	0	0	0	0	0	117,869	821
5,440 6,244		141,434	7,819	0	294	0	0	0	148,959	146,874	8,759
2,144,015 1,942,276		3,665,449	347,845	0	380,087	-14,674	1,787	1,703	3,647,965	5,809,464	401,043

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Basic principles

The STRABAG Group is a leading European technology group for construction services. The company has its headquarters in Triglavstraße 9, 9500 Villach, Austria. From its core markets of Austria and Germany, STRABAG is present via its numerous subsidiaries in all countries of Eastern and South-East Europe including Russia, in selected markets in North and Western Europe and the Arabian Peninsula, as well as in the project business in Africa, Asia and the Americas. STRABAG's activities span the entire construction industry (Building Construction & Civil Engineering, Transportation Infrastructures, Tunnelling, construction-related services) and cover the entire value-added chain in the fi eld of construction.

The consolidated fi nancial statements of STRABAG SE, at the reporting date 31 December 2019, were drawn up under application of Section 245a Paragraph 2 of the Austrian Commercial Code (UGB) in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), including the interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

Applied were exclusively those standards and interpretations adopted by the European Commission before the reporting deadline and published in the Offi cial Journal of the European Union. Further reporting requirements of Section 245a Paragraph 1 of the Austrian Commercial Code (UGB) were fulfi lled as well.

In addition to a statement of total comprehensive income and the consolidated balance sheet, the fi nancial statements include a cash fl ow statement in accordance with IAS 7, and a statement of changes in equity (IAS 1). The disclosures in the Notes also contain a segment reporting section in accordance with IFRS 8.

In order to improve the clarity of the representation, various items in the balance sheet and the income statement have been combined. These items have been shown separately and are explained in the Notes. The income statement has been drawn up in accordance with the nature of expense method.

The consolidated fi nancial statements were drawn up in T€. The presentation in T€ may result in rounding differences.

Changes in accounting policies

NEW AND REVISED STANDARDS AND INTERPRETATIONS THAT ARE EFFECTIVE FOR THE 2019 FINANCIAL YEAR

The IASB has made the following amendments to the existing IFRS and passed several new IFRS and IFRIC, which have also been adopted by the European Commission. Application thus became mandatory on 1 January 2019.

	Application for fi nancial years which begin on or after (according to IASB)	Application for fi nancial years which begin on or after (according to EU endorsement)
IFRS 16 Leases	1.1.2019	1.1.2019
Amendments to IFRS 9 Financial Instruments	1.1.2019	1.1.2019
IFRIC 23 Uncertainty over Income Tax Treatments	1.1.2019	1.1.2019
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures	1.1.2019	1.1.2019
Annual Improvements to IFRS 2015–2017	1.1.2019	1.1.2019
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement	1.1.2019	1.1.2019

FIRST-TIME ADOPTION OF IFRS 16 LEASES

NOTES TO THE CONSOLIDATED

construction-related services) and cover the entire value-added chain in the fi eld of construction.

The consolidated fi nancial statements were drawn up in T€. The presentation in T€ may result in rounding differences.

NEW AND REVISED STANDARDS AND INTERPRETATIONS THAT ARE EFFECTIVE FOR THE 2019 FINANCIAL YEAR

been adopted by the European Commission. Application thus became mandatory on 1 January 2019.

The IASB has made the following amendments to the existing IFRS and passed several new IFRS and IFRIC, which have also

IFRS 16 Leases 1.1.2019 1.1.2019 Amendments to IFRS 9 Financial Instruments 1.1.2019 1.1.2019 IFRIC 23 Uncertainty over Income Tax Treatments 1.1.2019 1.1.2019 Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures 1.1.2019 1.1.2019 Annual Improvements to IFRS 2015–2017 1.1.2019 1.1.2019 Amendments to IAS 19 Plan Amendment, Curtailment or Settlement 1.1.2019 1.1.2019

Application for fi nancial years which begin on or after (according to IASB)

Application for fi nancial years which begin on or after (according to EU endorsement)

FINANCIAL STATEMENTS

the International Financial Reporting Interpretations Committee (IFRIC).

graph 1 of the Austrian Commercial Code (UGB) were fulfi lled as well.

up in accordance with the nature of expense method.

Changes in accounting policies

Notes also contain a segment reporting section in accordance with IFRS 8.

Basic principles

STRABAG SE adopted IFRS 16 on 1 January 2019.

IFRS 16 was applied using the modifi ed retrospective approach in accordance with the transitional provisions of IFRS 16. Here the right-of-use asset was measured at the amount of the lease liability. The previous year's fi gures were not adjusted. See also the notes on page 48.

With the fi rst-time adoption of IFRS 16, the group recognised lease liabilities for leases previously classifi ed as operating leases under IAS 17. These liabilities are measured at the present value of the remaining lease payments, discounted at the lessee's incremental borrowing rate as at 1 January 2019. The weighted average incremental borrowing rate of the lessee applied to the lease liabilities as at 1 January 2019 is 1.76 %.

As part of the initial adoption of IFRS 16 the following fi gures were presented.

T€	First-time adoption of IFRS 16
Assets
Right-of-use assets	358,905

Equity and liabilities
Non-current fi nancial liabilities	306,455
Current fi nancial liabilities	52,450
The effects of adopting IFRS 16 as of 1 January 2019 are presented in detail in the following table.
	Lease

T€	liability
Obligations under operating leases as at 31.12.2018	236,721
Short-term leases recognised as an expense	-9,348
Leases of low-value assets	-6,268
Adjustments due to differences in the treatment of termination and extension options	207,579
Effect of discounting during adoption of IFRS 16	-69,778
Lease liability as at 1.1.2019	358,905

There were no onerous leases at the date of fi rst-time adoption of IFRS 16, so no impairment of the right-of-use assets was required.

The group applied the following practical expedients to facilitate the adoption of IFRS 16:

The accounting of leases with a remaining term of less than twelve months as at 1 January 2019 as short-term leases.
The non-inclusion of initial direct costs in the measurement of right-of-use assets at the time of adoption.
The retroactive determination of the lease term for contracts with extension or termination options ("use of hind-sight").
For leases concluded before the transition date, the group opted not to re-examine whether a contract was or contained a lease at adoption, but to maintain the previous treatment under IAS 17 and IFRIC 4.

The fi rst-time adoption of the other above-stated IFRS standards and IFRIC interpretations had only an immaterial impact on the consolidated fi nancial statements as at 31 December 2019, as the changes were only applicable in individual cases.

FUTURE CHANGES OF FINANCIAL REPORTING STANDARDS

The IASB and the IFRIC approved further standards and interpretations. However, these were neither required to be applied in the 2019 fi nancial year nor adopted by the European Commission. The amendments affect the following standards and interpretations:

	Application for fi nancial years which begin on or after (according to IASB)	Application for fi nancial years which begin on or after (according to EU endorsement)	Impact on the consolidated fi nancial statements
IFRS 17 Insurance Contracts	1.1.2023	n. a.	no
Amendments to IFRS framework	1.1.2020	1.1.2020	minor
Amendments to IFRS 3 Business Combinations	1.1.2020	n. a.1	minor
Amendments to IAS 1 and IAS 8	1.1.2020	1.1.2020	minor
Amendments to IFRS 9, IAS 39 and IFRS 7 –
Interest Rate Benchmark Reform, Phase I	1.1.2020	1.1.2020	is being analysed

The IBOR reform will result in the modifi cation of cash fl ows included in a hedging relationship when existing interest rate benchmarks are replaced by alternative interest rate benchmarks. Given the existing uncertainties, current requirements in IFRS 9 may require hedge accounting for hedging relationships to be discontinued. IFRS 9 may also prevent entities from designating new hedging relationships as long as the uncertainties persist. The IASB has published amendments to IFRS 9, IAS 39 and IFRS 7 as a reaction to the potential effects of the IBOR reform (Phase 1) with the intention of mitigating the effects that the reform will have on fi nancial reporting.

Early application of the new standards and interpretations is not planned.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidation

The fi nancial statements of the domestic and foreign companies included in the scope of consolidation are drawn up in accordance with uniform methods of accounting and valuation. The annual fi nancial statements of the domestic and foreign group companies are adapted accordingly.

SUBSIDIARIES

Entities whose fi nancial and operating policies are controlled by the group constitute subsidiaries.

The consolidated fi nancial statements include the fi nancial statements of the parent company and entities (including structured entities) over which the group has control. An entity is considered to be under control if the following criteria are met:

The parent company has power over the investee.
The parent company is exposed to variable returns on the investment.
The parent company has the ability to affect the returns from the investment through its power over the investee.
Control over an entity is reassessed if facts and circumstances indicate that there are changes to one or more of the three elements of control discussed above.
Owning a majority of the voting rights is not always necessary to have power and control over an investee, but can be achieved through other rights or contractual agreements which give the parent company the possibility to affect the returns of the investee.

A subsidiary is included in the consolidated fi nancial statements from the date on which the parent company acquired control. Conversely, the entity is deconsolidated when control ends.

Capital consolidation is performed in accordance with IFRS 3 using the acquisition method. The cost of acquisition of the subsidiary is measured as the sum of the fair values of assets given, equity instruments issued and liabilities assumed. Contingent considerations are also measured at their fair value from the date of the business combination. Later deviations from this value are recognised in profi t or loss. Transaction costs are also recognised immediately in profi t or loss.

Non-controlling interests are recognised based on their proportional interest in the net assets of the acquired entity (partial goodwill method). The option of recognising non-controlling interests at fair value is not used.

11In business combinations achieved in stages (step acquisitions), the existing equity interest of the entity is remeasured at fair value from the date of acquisition. The resulting profi t or loss is recognised in the income statement.

The acquisition costs, contingent considerations, existing equity interests and non-controlling interests are to be compared with all identifi able assets and liabilities of the subsidiary, measured at fair value. Any remaining difference on the assets side is classifi ed as goodwill. Differences arising from the capital consolidation on the liabilities side are recognised immediately in profi t and loss following another review. Goodwill is subjected to an impairment test in accordance with IAS 36 at least once a year.

In the 2019 fi nancial year, T€ 3,409 (2018: T€ 1,399) in goodwill arising from capital consolidation were recognised as assets. Impairments in the amount of T€ 2,024 (2018: T€ 1,734) were made.

Immaterial subsidiaries are not consolidated; these are reported at amortised cost and recognised in the item other investments.

TRANSACTIONS WITH NON-CONTROLLING INTERESTS THAT DO NOT RESULT IN LOSS OF CONTROL

Differences arising from the acquisition or disposal of investments in affi liated entities without acquisition or loss of control are recognised in full in equity outside profi t or loss.

DISPOSAL OF SUBSIDIARIES

Application for fi nancial years which begin on or after (according to IASB)

IFRS 17 Insurance Contracts 1.1.2023 n. a. no Amendments to IFRS framework 1.1.2020 1.1.2020 minor Amendments to IFRS 3 Business Combinations 1.1.2020 n. a.1 minor Amendments to IAS 1 and IAS 8 1.1.2020 1.1.2020 minor

Interest Rate Benchmark Reform, Phase I 1.1.2020 1.1.2020 is being analysed

• Control over an entity is reassessed if facts and circumstances indicate that there are changes to one or more of the three

• Owning a majority of the voting rights is not always necessary to have power and control over an investee, but can be achieved through other rights or contractual agreements which give the parent company the possibility to affect the returns

A subsidiary is included in the consolidated fi nancial statements from the date on which the parent company acquired con-

Non-controlling interests are recognised based on their proportional interest in the net assets of the acquired entity (partial

this value are recognised in profi t or loss. Transaction costs are also recognised immediately in profi t or loss.

goodwill method). The option of recognising non-controlling interests at fair value is not used.

• The parent company has the ability to affect the returns from the investment through its power over the investee.

Entities whose fi nancial and operating policies are controlled by the group constitute subsidiaries.

Amendments to IFRS 9, IAS 39 and IFRS 7 –

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

that the reform will have on fi nancial reporting.

eign group companies are adapted accordingly.

• The parent company has power over the investee.

elements of control discussed above.

1 n. a. – endorsement process is still in progress

• The parent company is exposed to variable returns on the investment.

trol. Conversely, the entity is deconsolidated when control ends.

Consolidation

SUBSIDIARIES

of the investee.

Early application of the new standards and interpretations is not planned.

Application for fi nancial years which begin on or after (according to EU endorsement)

Impact on the consolidated fi nancial statements

When control over a subsidiary is lost, any remaining investment is remeasured at fair value. The difference to the existing carrying amounts is recognised in profi t or loss. Associates, joint arrangements or fi nancial assets are initially recognised at this fair value. All previous amounts recognised to date in other income are accounted for as if the assets and liabilities of the affected entities had been sold directly.

STRUCTURED ENTITIES

Structured entities are entities that are not controlled by voting rights, but mainly through contractual arrangements for a specifi c business purpose. The business purpose is usually restricted to a narrow fi eld of activity. Structured entities typically have little equity capital and rely on owner fi nancing.

ASSOCIATES

Entities in which the group exercises signifi cant infl uence constitute associates. This is generally the case with a holding of between 20 % and 50 % of the voting rights. Investments in associates are accounted for using the equity method and recognised in the item equity-accounted investments: the acquired investment is initially measured at cost. Any differences that arise are treated according to the principles of consolidation. In subsequent years, the carrying amount of the investment increases or decreases in proportion to the share of profi t or loss and/or the investee's other income. Distributions reduce the carrying amount of the investment. As soon as the group's share of losses equals or exceeds the interest in the associate, no further losses are recognised unless the group is liable for the associate's losses.

At the end of every accounting period, the group determines whether there are any indications for an impairment of the investment in the associate. If there are, then the difference between the carrying amount and the recoverable amount is recognised as an impairment expense in the income statement.

In the year under review, the initial equity measurement of newly acquired entities did not result in any goodwill, which is reported under equity-accounted investments.

Associates which are immaterial and therefore not recognised using the equity method, are recognised at amortised cost and accounted for in the item other investments.

JOINT ARRANGEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Joint ventures are entities over which the group exercises joint control together with a third entity. Joint control exists when the determination of the fi nancial and operating policies requires the unanimous consent of all parties to the joint control. STRABAG accounts for joint ventures using the equity method and these are recognised in the item equity-accounted investments.

Joint ventures which are immaterial and therefore not recognised using the equity method, are recognised at amortised cost and accounted for in the item other investments.

Consortia are quite common in the construction industry in Austria and Germany. According to the Institute of Public Auditors in Germany (IDW) and a statement by the Austrian Financial Reporting and Auditing Committee (AFRAC), the typical German and Austrian construction consortium meets the requirements to be classifi ed as a joint venture. Earnings from construction consortia are presented proportionately under share of profi t or loss of equity-accounted investments. The receivables from and payables to construction consortia include mainly in- and outfl ows of cash, charges resulting from services as well as proportional contract results and are recorded under trade receivables and trade payables.

Joint arrangements for the execution of construction work in the remaining countries are accounted for either as joint ventures or as joint operations depending on the substance of the arrangement.

In the year under review, the initial equity measurement of newly acquired entities resulted in net goodwill in the amount of T€ 20,209 (2018: T€ 0), which are reported under equity-accounted investments.

INVESTMENTS

In accordance with IFRS 9, investments which do not constitute subsidiaries, joint ventures or associates are recognised at fair value through profi t or loss and are stated under other investments.

CONSOLIDATION PROCEDURES

As part of the consolidation of intercompany balances, any trade receivables, loans and other receivables existing within the group are set off against the corresponding liabilities and provisions of the subsidiaries included in the consolidated fi nancial statements.

Expenses and revenues from intra-group transactions are eliminated. Results incurred from intra-group transactions that are recognised in the non-current and current assets are eliminated if they are material. Non-controlling interests are taken into consideration during the elimination of intra-group profi ts or losses.

Unrealised profi ts from transactions between group entities and associates are eliminated in proportion to the group's share in the associate.

Non-controlling interests in equity and profi ts of companies controlled by the parent company are shown separately in the consolidated fi nancial statements.

The necessary tax deferrals are made for consolidation procedures.

Scope of consolidation

JOINT ARRANGEMENTS

and accounted for in the item other investments.

ments.

INVESTMENTS

statements.

in the associate.

CONSOLIDATION PROCEDURES

consolidated fi nancial statements.

Joint ventures which are immaterial and therefore not recognised using the equity method, are recognised at amortised cost

Joint arrangements for the execution of construction work in the remaining countries are accounted for either as joint

In the year under review, the initial equity measurement of newly acquired entities resulted in net goodwill in the amount of

In accordance with IFRS 9, investments which do not constitute subsidiaries, joint ventures or associates are recognised at

Unrealised profi ts from transactions between group entities and associates are eliminated in proportion to the group's share

Non-controlling interests in equity and profi ts of companies controlled by the parent company are shown separately in the

proportional contract results and are recorded under trade receivables and trade payables.

ventures or as joint operations depending on the substance of the arrangement.

T€ 20,209 (2018: T€ 0), which are reported under equity-accounted investments.

fair value through profi t or loss and are stated under other investments.

consideration during the elimination of intra-group profi ts or losses.

The necessary tax deferrals are made for consolidation procedures.

The consolidated fi nancial statements as at 31 December 2019 include STRABAG SE as well as all major domestic and foreign subsidiaries over which STRABAG SE either directly or indirectly has control. Associates and joint ventures are reported in the balance sheet using the equity method (equity-accounted investments).

Group companies which are of minor importance for the purpose of giving a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the group are not consolidated. The decision to include an entity in the scope of consolidation is based on quantitative and qualitative considerations.

Subsidiaries and equity-accounted investments included in the 2019 consolidated fi nancial statements are given in the list of investments.

The fi nancial year for all consolidated and associated companies, with the exception of the following companies that are included in the scope of consolidation on the basis of an interim report effective 31 December 2019, is identical with the calendar year.

Companies	Reporting date	Method of inclusion
EFKON INDIA Pvt. Ltd., Mumbai	31.3.	consolidation
Thüringer Straßenwartungs- und Instandhaltungsgesellschaft mbH & Co. KG, Apfelstädt		equity-accounted
	30.9.	investment

The number of consolidated companies changed in the 2018 and 2019 fi nancial years as follows:

	Consolidation	Equity method
Situation as at 31.12.2017	295	22
First-time inclusions in year under report	12	3
First-time inclusions in year under report due to merger/accretion	6	0
Merger/accretion in year under report	-11	0
Exclusions in year under report	-12	-1
Situation as at 31.12.2018	290	24
First-time inclusions in year under report	4	4
First-time inclusions in year under report due to merger/accretion	11	0
Merger/accretion in year under report	-17	0
Exclusions in year under report	-3	-1
Situation as at 31.12.2019	285	27

ADDITIONS TO SCOPE OF CONSOLIDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following companies formed part of the scope of consolidation for the fi rst time on the reporting date:

Consolidation	Direct stake %	Date of acquisition or foundation
DISTRICT DEVELOPMENT SRL, Bucharest	100.00	1.1.20191
STR Holding Generál Kft., Budapest	100.00	31.3.2019
STR Holding MML Kft., Budapest	100.00	1.1.2019
STRABAG PFS Polska Sp. z o.o., Warsaw	100.00	1.3.2019
Merger/Accretion
BAYSTAG GmbH, Wildpoldsried	100.00	27.8.20192
Heimfeld Terrassen GmbH, Cologne	100.00	21.8.20192
INDUSTRIJA GRADEVNOG MATERIJALA OSTRA d.o.o., Zagreb	100.00	19.6.20192
Offshore Services Cuxhaven GmbH, Cologne	100.00	12.8.20192
Offshore Wind Logistik GmbH, Stuttgart	100.00	27.8.20192
PRID-CIECHANOW Sp.z o.o., Warsaw	100.00	31.1.20192
Steffes-Mies GmbH, Sprendlingen	100.00	19.8.20192
STRABAG Offshore Wind GmbH, Stuttgart	100.00	27.8.20192
STRABAG PFS FM Sp. z o.o., Warsaw	100.00	30.11.20192
Strabag Property and Facility Services Sp. z o.o., Pruszkow	100.00	31.10.20192
Züblin Services GmbH, Stuttgart	100.00	3.9.20192
at-equity
Leopold Ungar Platz 3 GmbH, Vienna	50.00	21.8.20193
NWM Nordwestdeutsche Mischwerke GmbH & Co. KG, Großenkneten	50.00	1.1.2019
Silenos Energy Geothermie Garching a.d. Alz GmbH & Co. KG, Augsburg	50.00	1.1.2019
SQUARE Two GmbH & Co KG, Vienna	50.00	21.8.20193

ACQUISITIONS

Via its 100 % subsidiary Strabag Property and Facility Services GmbH of Vienna, STRABAG has acquired 100 % of the shares in PORREAL Polska Sp. z o.o. and Caverion Polska Sp. z o.o., both based in Warsaw. The acquisitions supplement the company's service portfolio in Poland with additional technical expertise and open up new customer segments. With these purchases, STRABAG PFS rises to the top fi ve in the market in Poland. The companies newly acquired in 2019 were merged with the existing Strabag Property and Facility Services Sp. z o.o., Pruzkow, and included in the consolidated fi nancial statements for the fi rst time.

The following table presents a preliminary allocation of the purchase prices to the assets and liabilities acquired:

T€	Acquisition STRABAG PFS Polska
Acquired assets and liabilities
Goodwill	2,558
Other non-current assets	796
Current assets	5,711
Non-current liabilities	172
Current liabilities	3,982
Trade-off (purchase price)	4,911
Acquired cash and cash equivalents	-1,101
Net cash outfl ow from acquisition	3,810

¹ Due to its increased business volumes, the company was included in the scope of consolidation of the group for the fi rst time effective 1 January. The foundation/acquisition of the company occurred before 1 January 2019.

² The companies listed under Merger/Accretion were merged with/accrued on already consolidated companies and as such are at once represented as additions to and removals from the scope of consolidation.

³ The presentation of interest is done using the economic approach, the interest as defi ned by civil law may deviate from this presentation.

15Companies included for the fi rst time were consolidated at the date of acquisition or a near reporting date, provided this had no signifi cant difference to an inclusion at the date of acquisition.

From the fi rst-time consolidation of the other companies in the 2019 fi nancial year, goodwill in the amount of T€ 851 (2018: T€ 0) occurred. This amount is reported under other operating income; the remaining differences of T€ 264 (2018: T€ -428) were recognised in the income statement.

Assuming a fi ctitious fi rst-time consolidation on 1 January 2019 for all new acquisitions, consolidated revenue and net income would not change in the fi scal year.

All companies which were consolidated for the fi rst time in 2019 contributed T€ 30,701 to revenue (2018: T€ 38,007) and T€ 1,226 (2018: T€ -3,397) to net income after minorities.

at-equity

ADDITIONS TO SCOPE OF CONSOLIDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidation

Merger/Accretion

at-equity

ACQUISITIONS

statements for the fi rst time.

Acquired assets and liabilities

of the company occurred before 1 January 2019.

removals from the scope of consolidation.

The following companies formed part of the scope of consolidation for the fi rst time on the reporting date:

DISTRICT DEVELOPMENT SRL, Bucharest 100.00 1.1.20191 STR Holding Generál Kft., Budapest 100.00 31.3.2019 STR Holding MML Kft., Budapest 100.00 1.1.2019 STRABAG PFS Polska Sp. z o.o., Warsaw 100.00 1.3.2019

BAYSTAG GmbH, Wildpoldsried 100.00 27.8.20192 Heimfeld Terrassen GmbH, Cologne 100.00 21.8.20192 INDUSTRIJA GRADEVNOG MATERIJALA OSTRA d.o.o., Zagreb 100.00 19.6.20192 Offshore Services Cuxhaven GmbH, Cologne 100.00 12.8.20192 Offshore Wind Logistik GmbH, Stuttgart 100.00 27.8.20192 PRID-CIECHANOW Sp.z o.o., Warsaw 100.00 31.1.20192 Steffes-Mies GmbH, Sprendlingen 100.00 19.8.20192 STRABAG Offshore Wind GmbH, Stuttgart 100.00 27.8.20192 STRABAG PFS FM Sp. z o.o., Warsaw 100.00 30.11.20192 Strabag Property and Facility Services Sp. z o.o., Pruszkow 100.00 31.10.20192 Züblin Services GmbH, Stuttgart 100.00 3.9.20192

Leopold Ungar Platz 3 GmbH, Vienna 50.00 21.8.20193 NWM Nordwestdeutsche Mischwerke GmbH & Co. KG, Großenkneten 50.00 1.1.2019 Silenos Energy Geothermie Garching a.d. Alz GmbH & Co. KG, Augsburg 50.00 1.1.2019 SQUARE Two GmbH & Co KG, Vienna 50.00 21.8.20193

T€ Acquisition STRABAG PFS Polska

Goodwill 2,558 Other non-current assets 796 Current assets 5,711 Non-current liabilities 172 Current liabilities 3,982 Trade-off (purchase price) 4,911 Acquired cash and cash equivalents -1,101 Net cash outfl ow from acquisition 3,810

1 Due to its increased business volumes, the company was included in the scope of consolidation of the group for the fi rst time effective 1 January. The foundation/acquisition

2 The companies listed under Merger/Accretion were merged with/accrued on already consolidated companies and as such are at once represented as additions to and

3 The presentation of interest is done using the economic approach, the interest as defi ned by civil law may deviate from this presentation.

The following table presents a preliminary allocation of the purchase prices to the assets and liabilities acquired:

Direct stake

Date of acquisition or foundation

With effect from 1 January 2019 , STRABAG and JOHANN BUNTE Bauunternehmung GmbH & Co. KG, Papenburg, set up a joint venture, NWM Nordwestdeutsche Mischwerke GmbH & Co. KG, based in Großenkneten.

Asphalt mixing plants in Lower Saxony, Westphalia, Hamburg and Schleswig-Holstein were transferred to this company by both shareholders, with STRABAG making a compensatory payment in the amount of T€ 26,679. STRABAG holds 50 % of the shares through its wholly owned subsidiary Deutsche Asphalt GmbH, Cologne.

The allocation of the purchase price to the assets and liabilities of the joint venture results in goodwill of T€ 19,676, which is reported as part of the equity-accounted investments.

The transfer of property, plant and equipment against company shares resulted in earnings of T€ 3,029, which is reported under other operating income. Due to the transfer of business operations as defi ned by IFRS 3, income recognition was made in full in accordance with IFRS 10.

The fi rst-time equity valuation of other companies resulted in goodwill of T€ 533 (2018: T€ 0), which is reported under equity investments.

Changes to initial consolidation under IFRS 3.45

PANSUEVIA GmbH & Co. KG, based in Jettingen-Scheppach, was consolidated for the fi rst time in the 2018 fi nancial year. The preliminary purchase price allocation made in 2018 was retrospectively adjusted in the 2019 fi nancial year in accordance with IFRS 3.45. This resulted in a reduction of the concession right and of the deferred tax liabilities in the amount of T€ 53,843, which is shown in the balance sheet as of 31 December 2018.

DISPOSALS FROM THE SCOPE OF CONSOLIDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at 31 December 2019, the following companies were no longer included in the scope of consolidation:

Disposals from scope of consolidation

Disposals from scope of consolidation
Leopold Ungar Platz 3 GmbH, Vienna	Partial sale
SQUARE Two GmbH & Co KG, Vienna	Partial sale
STRABAG Property and Facility Services Zrt., Budapest	Sale
Merger/Accretion1
"PUTEVI" A.D. CACAK, Cacak	Merger
BAYSTAG GmbH, Wildpoldsried	Merger
Heimfeld Terrassen GmbH, Cologne	Merger
INDUSTRIJA GRADEVNOG MATERIJALA OSTRA d.o.o., Zagreb	Merger
Offshore Services Cuxhaven GmbH, Cologne	Merger
Offshore Wind Logistik GmbH, Stuttgart	Merger
Preduzece za puteve BEOGRAD doo Beograd, Beograd	Merger
PRID-CIECHANOW Sp.z o.o., Warsaw	Merger
PZC SPLIT d.d., Split	Merger
Steffes-Mies GmbH, Sprendlingen	Merger
STRABAG BRVZ S.R.L., Bucharest	Merger
STRABAG Offshore Wind GmbH, Stuttgart	Merger
STRABAG PFS FM Sp. z o.o., Warsaw	Merger
Strabag Property and Facility Services Sp. z o.o., Pruszkow	Merger
VOJVODINAPUT-PANCEVO DOO, Pancevo	Merger
Züblin Chuquicamata SpA, Santiago	Merger
Züblin Services GmbH, Stuttgart	Merger

at-equity

DIRECTROUTE (LIMERICK) HOLDINGS LIMITED, Fermoy Sale

The effect from deconsolidation of STRABAG Property and Facility Services Zrt., Budapest, is comprised as follows:

T€	Disposals from scope of consolidation
Disposals of assets and liabilities
Other non-current assets	432
Current assets	25,058
Current liabilities	-19,194
Non-controlling interests	-3,085
Disposal profi t	16,233
Sale price	19,444
Disposals of cash and cash equivalents	-2,504
Net cash infl ow from sale	16,940

Resulting profi t from deconsolidation is recognised in other operating expenses.

Resulting profi t from other deconsolidation in the amount of T€ 1,588 (2018: T€ 2,629) and losses in the amount of T€ 0 (2018: T€ 3,675) are recognised in profi t or loss.

There were no signifi cant restrictions on the use of assets or risks related to structured entities at the end of the reporting period.

NON-CONTROLLING INTERESTS

As of 31 December 2019, the amount of the non-controlling interests stood at T€ 33,695 (2018: T€ 33,088) in the STRABAG SE Group and is thus immaterial. The non-controlling interests comprise numerous subsidiaries and concern mainly the 5.1 % share in Strabag Real Estate GmbH, Cologne, and its subsidiaries.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17Besides the above-mentioned investments, the ownership interests in other subsidiaries in the fi nancial year changed only insignifi cantly or had insignifi cant impact. The changes are represented in the list of subsidiaries, equity-accounted investments and investee companies which is included in the yearly fi nancial report.

Currency translation

DISPOSALS FROM THE SCOPE OF CONSOLIDATION

Disposals from scope of consolidation

Merger/Accretion1

at-equity

Disposals of assets and liabilities

T€ 3,675) are recognised in profi t or loss.

NON-CONTROLLING INTERESTS

As at 31 December 2019, the following companies were no longer included in the scope of consolidation:

Leopold Ungar Platz 3 GmbH, Vienna Partial sale SQUARE Two GmbH & Co KG, Vienna Partial sale STRABAG Property and Facility Services Zrt., Budapest Sale

"PUTEVI" A.D. CACAK, Cacak Merger BAYSTAG GmbH, Wildpoldsried Merger Heimfeld Terrassen GmbH, Cologne Merger INDUSTRIJA GRADEVNOG MATERIJALA OSTRA d.o.o., Zagreb Merger Offshore Services Cuxhaven GmbH, Cologne Merger Offshore Wind Logistik GmbH, Stuttgart Merger Preduzece za puteve BEOGRAD doo Beograd, Beograd Merger PRID-CIECHANOW Sp.z o.o., Warsaw Merger PZC SPLIT d.d., Split Merger Steffes-Mies GmbH, Sprendlingen Merger STRABAG BRVZ S.R.L., Bucharest Merger STRABAG Offshore Wind GmbH, Stuttgart Merger STRABAG PFS FM Sp. z o.o., Warsaw Merger Strabag Property and Facility Services Sp. z o.o., Pruszkow Merger VOJVODINAPUT-PANCEVO DOO, Pancevo Merger Züblin Chuquicamata SpA, Santiago Merger Züblin Services GmbH, Stuttgart Merger

DIRECTROUTE (LIMERICK) HOLDINGS LIMITED, Fermoy Sale

T€ Disposals from scope

Other non-current assets 432 Current assets 25,058 Current liabilities -19,194 Non-controlling interests -3,085 Disposal profi t 16,233 Sale price 19,444 Disposals of cash and cash equivalents -2,504 Net cash infl ow from sale 16,940

Resulting profi t from other deconsolidation in the amount of T€ 1,588 (2018: T€ 2,629) and losses in the amount of T€ 0 (2018:

There were no signifi cant restrictions on the use of assets or risks related to structured entities at the end of the reporting period.

1 The companies listed under Merger/Accretion were merged with already consolidated companies or, as a result of accretion, formed part of consolidated companies.

of consolidation

The effect from deconsolidation of STRABAG Property and Facility Services Zrt., Budapest, is comprised as follows:

Resulting profi t from deconsolidation is recognised in other operating expenses.

mainly the 5.1 % share in Strabag Real Estate GmbH, Cologne, and its subsidiaries.

The items contained in the fi nancial statements of each group entity are measured on the basis of the currency corresponding to the currency of the primary economic environment in which the entity operates (functional currency).

The functional currency of STRABAG's subsidiaries is the respective local currency, with the exception of the following companies, whose functional currency is the euro:

AKA Alföld Koncesszios Autopalya Zrt., Budapest
AMFI HOLDING Kft., Budapest
BHK KRAKÓW JOINT VENTURE Sp. z o.o., Warsaw
EVOLUTION TWO Sp. z o.o., Warsaw
EXP HOLDING Kft., Budapest
OOO "RANITA", Moscow

The consolidated fi nancial statements are prepared in euro, STRABAG's reporting currency.

Foreign currency transactions are translated into the functional currency at the foreign exchange rate on the day of the transaction. On the reporting date, monetary items are translated at the closing rate, while non-monetary items are translated at the rate on the day of the transaction. Exchange differences are recognised in profi t or loss.

Assets and liabilities of group entities whose functional currency is not the euro are translated from the respective local currency into euro at the average exchange rate on the reporting date. As well as the corresponding profi t for the period, the income statements of foreign group entities whose functional currency is not the euro are translated at the average exchange rate for the reporting period. The differences resulting from the use of both rates are reported outside profi t or loss.

Monetary items in form of receivables or payables which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of an entity´s net investment in a foreign operation. Currency translation differences arising on such monetary items are initially recognised in other comprehensive income and reclassifi ed from equity to profi t and loss on disposal of the net investment.

The most important currencies, including their average exchange rates, are listed under item 32. Currency translation differences of T€ 10,060 (2018: T€ -1,426) were recognised directly in equity in the fi nancial year. Forward exchange operations (hedging), excluding deferred taxes, in the amount of T€ -5,168 (2018: T€ -10,528) were recognised directly in equity.

Restatements in accordance with IAS 29 (Financial Reporting in Hyperinfl ationary Economies) were not necessary.

Consolidated companies and equity-accounted associates and joint ventures

The following list shows the consolidated companies included in the consolidated fi nancial statements:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Austria		Nominal capital T€/TATS	Direct stake %
"A-WAY Infrastrukturprojektentwicklungs- und -betriebs GmbH", Spittal an der Drau		35	100.00
"SBS Strabag Bau Holding Service GmbH", Spittal an der Drau		35	100.00
"Viennaer Heim" Wohnbaugesellschaft m.b.H., Vienna		741	100.00
ABR Abfall Behandlung und Recycling GmbH, Schwadorf		37	100.00
Asphalt & Beton GmbH, Spittal an der Drau		36	100.00
AUSTRIA ASPHALT GmbH & Co OG, Spittal an der Drau	TATS	500	100.00
Bau Holding Beteiligungs GmbH, Spittal an der Drau		48,000	100.00
BEWO - Projekt Q4a Reininghausstraße GmbH & Co KG, Graz		0	60.00
Bitumen Handelsgesellschaft m.b.H. & Co KG, Loosdorf	TATS	3,000	100.00
BITUNOVA Baustofftechnik Gesellschaft m.b.H., Spittal an der Drau	TATS	2,000	100.00
BLUMENFELD Liegenschaftsverwaltungs GmbH, Vienna	TATS	1,000	100.00
Böhm Stadtbaumeister & Gebäudetechnik GmbH, Vienna		36	100.00
BrennerRast GmbH, Vienna		35	100.00
Bug-AluTechnic GmbH, Vienna		5,000	100.00
Campus Eggenberg Immobilienprojekt GmbH, Graz		36	60.00
DC1 Immo GmbH, Vienna		35	100.00
Diabaswerk Saalfelden Gesellschaft m.b.H., Saalfelden		363	100.00
Eckstein Holding GmbH, Spittal an der Drau		73	100.00
EFKON GmbH, Raaba		28,350	100.00
Erdberger Mais GmbH & Co KG, Vienna		1	100.00
F. Lang u. K. Menhofer Baugesellschaft m.b.H. & Co. KG, Wiener Neustadt		1,192	100.00
Goldeck Bergbahnen GmbH, Spittal an der Drau		363	100.00
Ilbau Liegenschaftsverwaltung GmbH, Spittal an der Drau		4,500	100.00
InfoSys Informationssysteme GmbH, Spittal an der Drau		363	94.90
Innsbrucker Nordkettenbahnen Betriebs GmbH, Innsbruck		35	51.00
KAB Straßensanierung GmbH & Co KG, Spittal an der Drau		133	50.60
Kanzel Steinbruch Dennig Gesellschaft mit beschränkter Haftung, Gratkorn	TATS	500	75.00
Krems Sunside Living Projektentwicklung GmbH, Vienna		35	100.00
M5 Beteiligungs GmbH, Vienna		70	100.00
M5 Holding GmbH, Vienna		35	100.00
Mineral Abbau GmbH, Spittal an der Drau		36	100.00
Mischek Bauträger Service GmbH, Vienna		36	100.00
Mischek Systembau GmbH, Vienna		1,000	100.00
Mobil Baustoffe GmbH, Spittal an der Drau		50	100.00
Nottendorfer Gasse 13 Kom GmbH, Vienna		35	100.00
OAT - Bohr- und Fugentechnik Gesellschaft m.b.H., Spittal an der Drau	TATS	1,000	51.00
Osttiroler Asphalt Hoch- und Tiefbauunternehmung GmbH, Lavant i. Osttirol		36	80.00
Q4a Immobilien GmbH, Graz		35	60.00
Raststation A 3 GmbH, Vienna		35	100.00
RBS Rohrbau-Schweißtechnik Gesellschaft m.b.H., Linz		291	100.00
RE Beteiligungsholding GmbH, Vienna		35	100.00
RE Klitschgasse Errichtungs GmbH, Vienna		35	67.00
RE Projekt Errichtungs GmbH in Liqu., Vienna		35	100.00
RE Wohnraum GmbH, Vienna		35	100.00
RE Wohnungseigentumserrichtungs GmbH, Vienna		35	100.00
Sakela Beteiligungsverwaltungs GmbH, Vienna		35	100.00
SF Bau vier GmbH, Vienna		35	100.00
SILO DREI Beteiligungsverwaltungs GmbH & Co KG, Vienna		50	100.00
SILO DREI next LBG 57 Liegenschaftsverwertung GmbH & Co KG, Vienna		200	51.00
SILO II LBG 57 - 59 Liegenschaftsverwertung GmbH & Co KG, Vienna		200	51.00
SILO ZWEI Beteiligungsverwaltungs GmbH & Co KG, Vienna		50	100.00
SQUARE One GmbH & Co KG, Vienna		1	100.00
STRABAG AG, Spittal an der Drau		12,000	100.00
STRABAG Bau GmbH, Vienna		1,800	100.00
STRABAG BMTI GmbH, Vienna		1,454	100.00

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS


37	STRABAG BRVZ GmbH, Spittal an der Drau
35	STRABAG Holding GmbH, Vienna
727	STRABAG Infrastructure & Safety Solutions GmbH, Vienna
4,500	Strabag Liegenschaftsverwaltung GmbH, Linz
1,500	STRABAG Property and Facility Services GmbH, Vienna
44	STRABAG Real Estate GmbH, Vienna
110,000	STRABAG SE, Villach
440	TECH GATE VIENNA Wissenschafts- und Technologiepark GmbH, Vienna
37	TPA Gesellschaft für Qualitätssicherung und Innovation GmbH, Vienna
45	VIOLA PARK Immobilienprojekt GmbH, Vienna
35	Wohnquartier Reininghausstraße GmbH, Graz
55	Züblin Holding GesmbH, Vienna
1,500	Züblin Spezialtiefbau Ges.m.b.H., Vienna

Austria Nominal capital T€/TATS Direct stake % "A-WAY Infrastrukturprojektentwicklungs- und -betriebs GmbH", Spittal an der Drau 35 100.00 "SBS Strabag Bau Holding Service GmbH", Spittal an der Drau 35 100.00 "Viennaer Heim" Wohnbaugesellschaft m.b.H., Vienna 741 100.00 ABR Abfall Behandlung und Recycling GmbH, Schwadorf 37 100.00 Asphalt & Beton GmbH, Spittal an der Drau 36 100.00 AUSTRIA ASPHALT GmbH & Co OG, Spittal an der Drau TATS 500 100.00 Bau Holding Beteiligungs GmbH, Spittal an der Drau 48,000 100.00 BEWO - Projekt Q4a Reininghausstraße GmbH & Co KG, Graz 0 60.00 Bitumen Handelsgesellschaft m.b.H. & Co KG, Loosdorf TATS 3,000 100.00 BITUNOVA Baustofftechnik Gesellschaft m.b.H., Spittal an der Drau TATS 2,000 100.00 BLUMENFELD Liegenschaftsverwaltungs GmbH, Vienna TATS 1,000 100.00 Böhm Stadtbaumeister & Gebäudetechnik GmbH, Vienna 36 100.00 BrennerRast GmbH, Vienna 35 100.00 Bug-AluTechnic GmbH, Vienna 5,000 100.00 Campus Eggenberg Immobilienprojekt GmbH, Graz 36 60.00 DC1 Immo GmbH, Vienna 35 100.00 Diabaswerk Saalfelden Gesellschaft m.b.H., Saalfelden 363 100.00 Eckstein Holding GmbH, Spittal an der Drau 73 100.00 EFKON GmbH, Raaba 28,350 100.00 Erdberger Mais GmbH & Co KG, Vienna 1 100.00 F. Lang u. K. Menhofer Baugesellschaft m.b.H. & Co. KG, Wiener Neustadt 1,192 100.00 Goldeck Bergbahnen GmbH, Spittal an der Drau 363 100.00 Ilbau Liegenschaftsverwaltung GmbH, Spittal an der Drau 4,500 100.00 InfoSys Informationssysteme GmbH, Spittal an der Drau 363 94.90 Innsbrucker Nordkettenbahnen Betriebs GmbH, Innsbruck 35 51.00 KAB Straßensanierung GmbH & Co KG, Spittal an der Drau 133 50.60 Kanzel Steinbruch Dennig Gesellschaft mit beschränkter Haftung, Gratkorn TATS 500 75.00 Krems Sunside Living Projektentwicklung GmbH, Vienna 35 100.00 M5 Beteiligungs GmbH, Vienna 70 100.00 M5 Holding GmbH, Vienna 35 100.00 Mineral Abbau GmbH, Spittal an der Drau 36 100.00 Mischek Bauträger Service GmbH, Vienna 36 100.00 Mischek Systembau GmbH, Vienna 1,000 100.00 Mobil Baustoffe GmbH, Spittal an der Drau 50 100.00 Nottendorfer Gasse 13 Kom GmbH, Vienna 35 100.00 OAT - Bohr- und Fugentechnik Gesellschaft m.b.H., Spittal an der Drau TATS 1,000 51.00 Osttiroler Asphalt Hoch- und Tiefbauunternehmung GmbH, Lavant i. Osttirol 36 80.00 Q4a Immobilien GmbH, Graz 35 60.00 Raststation A 3 GmbH, Vienna 35 100.00 RBS Rohrbau-Schweißtechnik Gesellschaft m.b.H., Linz 291 100.00 RE Beteiligungsholding GmbH, Vienna 35 100.00 RE Klitschgasse Errichtungs GmbH, Vienna 35 67.00 RE Projekt Errichtungs GmbH in Liqu., Vienna 35 100.00 RE Wohnraum GmbH, Vienna 35 100.00 RE Wohnungseigentumserrichtungs GmbH, Vienna 35 100.00 Sakela Beteiligungsverwaltungs GmbH, Vienna 35 100.00 SF Bau vier GmbH, Vienna 35 100.00 SILO DREI Beteiligungsverwaltungs GmbH & Co KG, Vienna 50 100.00 SILO DREI next LBG 57 Liegenschaftsverwertung GmbH & Co KG, Vienna 200 51.00 SILO II LBG 57 - 59 Liegenschaftsverwertung GmbH & Co KG, Vienna 200 51.00 SILO ZWEI Beteiligungsverwaltungs GmbH & Co KG, Vienna 50 100.00 SQUARE One GmbH & Co KG, Vienna 1 100.00 STRABAG AG, Spittal an der Drau 12,000 100.00 STRABAG Bau GmbH, Vienna 1,800 100.00 STRABAG BMTI GmbH, Vienna 1,454 100.00

Alpines Hartschotterwerk GmbH, Leinfelden-Echterdingen 25 100.001 ARGE STRABAG, Cologne 100.00 Baumann & Burmeister GmbH, Halle/Saale 51 100.001 BBS Baustoffbetriebe Sachsen GmbH, Hartmannsdorf TDEM 30,000 100.001 BHG Bitumenhandelsgesellschaft mbH, Hamburg 26 100.001 BITUNOVA GmbH, Duesseldorf 256 100.001 Blees-Kölling-Bau GmbH, Cologne TDEM 2,500 100.001 Blutenburg Projekt GmbH, Cologne 25 100.001 CML Construction Services GmbH, Cologne 25 100.00 Deutsche Asphalt GmbH, Cologne 28 100.001 DIW Aircraft Services GmbH, Stuttgart 25 100.001 DIW Instandhaltung GmbH, Stuttgart 25 100.001 DIW Mechanical Engineering GmbH, Stuttgart 25 100.001 DIW System Dienstleistungen GmbH, Fürstenfeldbruck 25 100.001 DYWIDAG International GmbH, Munich 5,000 100.001 DYWIDAG-Holding GmbH, Cologne 600 100.001 E S B Kirchhoff GmbH, Leinfelden-Echterdingen 1,500 100.001 Ed. Züblin AG, Stuttgart 20,452 100.001 F 101 Projekt GmbH & Co. KG, Cologne 10 100.00 F. Kirchhoff GmbH, Leinfelden-Echterdingen 23,319 100.001 F.K. SYSTEMBAU GmbH, Münsingen 2,000 100.001 Fahrleitungsbau GmbH, Essen 1,550 100.001 Gaul GmbH, Sprendlingen 25 100.00 GBS Gesellschaft für Bau und Sanierung mbH, Leuna 513 100.00 Griproad Spezialbeläge und Baugesellschaft mbH, Cologne TDEM 400 100.001 Hexagon Projekt GmbH & Co. KG, Cologne 10 100.001 Ilbau GmbH Deutschland, Berlin 4,700 100.00 IQ Generalübernehmer GmbH & Co. KG, Oststeinbek 25 75.00 Kuhwald 55 Projekt GmbH & Co. KG, Cologne 10 100.001 Lift-Off GmbH & Co. KG, Cologne 10 100.001 LIMET Beteiligungs GmbH & Co. Objekt Cologne KG, Cologne 10 94.001 LIMET Beteiligungs GmbH, Cologne TDEM 50 100.001 MAV Kelheim GmbH, Kelheim 25 100.00 MAV Mineralstoff - Aufbereitung und - Verwertung GmbH, Krefeld 600 50.002 MAV Mineralstoff - Aufbereitung und Verwertung Lünen GmbH, Lünen 250 100.00 Mineral Baustoff GmbH, Cologne 25 100.001 Mitterhofer Projekt GmbH & Co. KG, Cologne 10 100.001 MOBIL Baustoffe GmbH, Munich 100 100.001 NE Sander Immobilien GmbH, Sande 155 100.001 PANSUEVIA GmbH & Co. KG, Jettingen-Scheppach 1,000 100.001 Pyhrn Concession Holding GmbH, Cologne 38 100.001 REPASS-SANIERUNGSTECHNIK GMBH Korrosionsschutz und Betoninstandsetzung, Munderkingen TDEM 51 100.001 ROBA Transportbeton GmbH, Berlin 520 100.001 SAT Straßensanierung GmbH, Cologne 30 100.001 SF-Ausbau GmbH, Freiberg 600 100.001	Germany	Nominal capital T€/TDEM		Direct stake %

1 For these companies, the option allowed by Sec 264 Para 3 or by Sec 264b of the German Commercial Code (HGB) was exercised.

2 The voting rights according to the contract of association amount to 50 % plus one vote.

SRE Erste Vermögensverwaltung GmbH, Cologne		25	100.00
SRE Projekt 1 GmbH & Co. KG, Cologne		10	100.00
STRABAG AG, Cologne		7,670	100.001
STRABAG BMTI GmbH & Co. KG, Cologne		307	100.001
STRABAG BRVZ GmbH & Co. KG, Cologne		30	100.001
STRABAG Facility Management GmbH, Berlin		30	100.001
STRABAG Facility Services GmbH, Nuremberg		53	100.001
STRABAG GmbH, Bad Hersfeld		15,000	100.001
STRABAG Großprojekte GmbH, Munich		18,100	100.001
STRABAG Infrastructure & Safety Solutions GmbH, Cologne		1,220	100.001
STRABAG Infrastrukturprojekt GmbH, Bad Hersfeld		1,280	100.001
STRABAG International GmbH, Cologne		2,557	100.001
STRABAG Kieserling Flooring Systems GmbH, Hamburg		1,050	100.001
STRABAG Projektentwicklung GmbH, Cologne	TDEM	20,000	100.001
STRABAG Property and Facility Services GmbH, Münster		5,000	100.001
STRABAG Rail Fahrleitungen GmbH, Berlin		600	100.001
STRABAG Rail GmbH, Lauda-Königshofen		25	100.001
STRABAG Real Estate GmbH, Cologne		30,000	94.90
STRABAG Real Estate Invest GmbH, Cologne		26	100.001
STRABAG Sportstättenbau GmbH, Dortmund	TDEM	200	100.001
STRABAG Umwelttechnik GmbH, Duesseldorf		2,000	100.001
STRABAG Wasserbau GmbH, Hamburg		6,833	100.00
Torkret GmbH, Stuttgart		1,023	100.001
TPA GmbH, Cologne		511	100.00
Turm am Mailänder Platz GmbH & Co. KG, Stuttgart		10	100.001
Wolfer & Goebel Bau GmbH, Stuttgart		25	100.001
Z. Brückenbau Immobiliengesellschaft mbH & Co. KG, Cologne		10	94.901
Z. Holzbau Immobiliengesellschaft mbH & Co. KG, Cologne		10	94.901
Z. Immobiliengesellschaft mbH & Co. KG, Cologne		10	94.901
Z. Sander Immobiliengesellschaft mbH & Co. KG, Cologne		10	94.901
Z. Stahlbau Immobiliengesellschaft mbH & Co. KG, Cologne		10	94.901
Z-Bau GmbH, Magdeburg		100	100.001
ZDE Sechste Vermögensverwaltung GmbH, Cologne		25	100.00
ZÜBLIN Bau GmbH, Munich		32	100.001
Züblin Chimney and Refractory GmbH, Cologne		511	100.001
Züblin Hoch- und Brückenbau GmbH, Bad Hersfeld		2,500	100.001
Züblin International GmbH, Stuttgart		2,500	100.001
Züblin Projektentwicklung GmbH, Stuttgart		2,557	94.881
Züblin Spezialtiefbau GmbH, Stuttgart	TDEM	6,000	100.001
Züblin Stahlbau GmbH, Hosena		1,534	100.001
ZÜBLIN Timber Gaildorf GmbH, Gaildorf		25	100.001
ZÜBLIN Timber GmbH, Aichach		1,534	100.001
Züblin Umwelttechnik GmbH, Stuttgart		2,000	100.001
Egypt		Nominal capital TEGP	Direct stake %
Züblin Egypt LLC, Cairo		20,000	100.00
Albania		Nominal capital TALL	Direct stake %
Trema Engineering 2 sh p.k., Tirana		545,568	51.00
Belgium		Nominal capital T€	Direct stake %
N.V. STRABAG Belgium S.A., Antwerp		18,059	100.00
N.V. STRABAG Benelux S.A., Antwerp		6,863	100.00
Bosnia and Herzegovina		Nominal capital TBAM	Direct stake %
STRABAG d.o.o. Sarajevo, Sarajevo		10	100.00
Bulgaria		Nominal capital TBGN	Direct stake %
"STRABAG REAL ESTATE" EOOD, Sofi a		4,635	100.00
"VITOSHA VIEW" EOOD, Sofi a		2,071	100.00
STRABAG EAD, Sofi a		13,313	100.00

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 For these companies, the option allowed by Sec 264 Para 3 or by Sec 264b of the German Commercial Code (HGB) was exercised.

Chile	Nominal capital TCLP	Direct stake %
Strabag SpA, Santiago de Chile	500,000	100.00
Züblin International GmbH Chile SpA, Santiago de Chile	7,909,484	100.00
China	Nominal capital TCNY	Direct stake %
Shanghai Changjiang-Züblin Construction&Engineering Co.Ltd., Shanghai	29,312	75.00
Denmark	Nominal capital TDKK	Direct stake %
KMG - KLIPLEV MOTORWAY GROUP A/S, Aarhus	500	100.00
Züblin A/S, Aarhus	1,000	100.00
India	Nominal capital TINR	Direct stake %
EFKON INDIA Pvt. Ltd., Mumbai	50,000	100.00
Italy	Nominal capital T€	Direct stake %
STRABAG S.p.A., Bologna	10,000	100.00
Canada	Nominal capital TCAD	Direct stake %
STRABAG INC., Toronto	11,700	100.00
Züblin Inc., Saint John/NewBrunswick	100	100.00
Colombia	Nominal capital TCOP	Direct stake %
STRABAG S.A.S., Bogotá, D.C.	4,829,402	100.00
Croatia	Nominal capital THRK	Direct stake %
MINERAL IGM d.o.o., Zapuzane	10,701	100.00
POMGRAD INZENJERING d.o.o., Split	25,534	100.00
STRABAG BRVZ d.o.o., Zagreb	20	100.00
STRABAG d.o.o., Zagreb	48,230	100.00
TPA odrzavanje kvaliteta i inovacija d.o.o., Zagreb	20	100.00
Latvia	Nominal capital T€	Direct stake %
STRABAG SIA, Milzkalne	1,423	100.00
Luxembourg	Nominal capital T€	Direct stake %
SRE Lux Projekt SQM 27E, Belvaux	13	100.00
Malaysia	Nominal capital TMYR	Direct stake %
ZUBLIN PRECAST INDUSTRIES SDN. BHD., Johor	500	100.00
Moldavia	Nominal capital TMDL	Direct stake %
I.C.S. "STRABAG" S.R.L., Chisinau	279,630	100.00
Montenegro	Nominal capital T€	Direct stake %
"Crnagoraput" AD, Podgorica, Podgorica	9,779	95.32
"Strabag" d.o.o. Podgorica, Podgorica	50	100.00
The Netherlands	Nominal capital T€	Direct stake %
STRABAG B.V., Herten	450	100.00
Züblin Nederland B.V., Breda	500	100.00
Oman	Nominal capital TOMR	Direct stake %
STRABAG OMAN L.L.C., Muscat	1,000	100.00
Poland	Nominal capital TPLN	Direct stake %
BHG Sp. z o.o., Pruszkow	500	100.00
BHK KRAKÓW JOINT VENTURE Sp. z o.o., Warsaw	58	100.00
BITUNOVA Sp. z o.o., Warsaw	2,700	100.00
EVOLUTION GAMMA Sp. z o.o., Warsaw	50	100.00
EVOLUTION ONE Sp. z o.o., Warsaw	50	100.00
EVOLUTION THREE Sp. z o.o., Warsaw	50	100.00

SRE Erste Vermögensverwaltung GmbH, Cologne 25 100.00 SRE Projekt 1 GmbH & Co. KG, Cologne 10 100.00 STRABAG AG, Cologne 7,670 100.001 STRABAG BMTI GmbH & Co. KG, Cologne 307 100.001 STRABAG BRVZ GmbH & Co. KG, Cologne 30 100.001 STRABAG Facility Management GmbH, Berlin 30 100.001 STRABAG Facility Services GmbH, Nuremberg 53 100.001 STRABAG GmbH, Bad Hersfeld 15,000 100.001 STRABAG Großprojekte GmbH, Munich 18,100 100.001 STRABAG Infrastructure & Safety Solutions GmbH, Cologne 1,220 100.001 STRABAG Infrastrukturprojekt GmbH, Bad Hersfeld 1,280 100.001 STRABAG International GmbH, Cologne 2,557 100.001 STRABAG Kieserling Flooring Systems GmbH, Hamburg 1,050 100.001 STRABAG Projektentwicklung GmbH, Cologne TDEM 20,000 100.001 STRABAG Property and Facility Services GmbH, Münster 5,000 100.001 STRABAG Rail Fahrleitungen GmbH, Berlin 600 100.001 STRABAG Rail GmbH, Lauda-Königshofen 25 100.001 STRABAG Real Estate GmbH, Cologne 30,000 94.90 STRABAG Real Estate Invest GmbH, Cologne 26 100.001 STRABAG Sportstättenbau GmbH, Dortmund TDEM 200 100.001 STRABAG Umwelttechnik GmbH, Duesseldorf 2,000 100.001 STRABAG Wasserbau GmbH, Hamburg 6,833 100.00 Torkret GmbH, Stuttgart 1,023 100.001 TPA GmbH, Cologne 511 100.00 Turm am Mailänder Platz GmbH & Co. KG, Stuttgart 10 100.001 Wolfer & Goebel Bau GmbH, Stuttgart 25 100.001 Z. Brückenbau Immobiliengesellschaft mbH & Co. KG, Cologne 10 94.901 Z. Holzbau Immobiliengesellschaft mbH & Co. KG, Cologne 10 94.901 Z. Immobiliengesellschaft mbH & Co. KG, Cologne 10 94.901 Z. Sander Immobiliengesellschaft mbH & Co. KG, Cologne 10 94.901 Z. Stahlbau Immobiliengesellschaft mbH & Co. KG, Cologne 10 94.901 Z-Bau GmbH, Magdeburg 100 100.001 ZDE Sechste Vermögensverwaltung GmbH, Cologne 25 100.00 ZÜBLIN Bau GmbH, Munich 32 100.001 Züblin Chimney and Refractory GmbH, Cologne 511 100.001 Züblin Hoch- und Brückenbau GmbH, Bad Hersfeld 2,500 100.001 Züblin International GmbH, Stuttgart 2,500 100.001 Züblin Projektentwicklung GmbH, Stuttgart 2,557 94.881 Züblin Spezialtiefbau GmbH, Stuttgart TDEM 6,000 100.001 Züblin Stahlbau GmbH, Hosena 1,534 100.001 ZÜBLIN Timber Gaildorf GmbH, Gaildorf 25 100.001 ZÜBLIN Timber GmbH, Aichach 1,534 100.001 Züblin Umwelttechnik GmbH, Stuttgart 2,000 100.001

Egypt Nominal capital TEGP Direct stake % Züblin Egypt LLC, Cairo 20,000 100.00

Albania Nominal capital TALL Direct stake % Trema Engineering 2 sh p.k., Tirana 545,568 51.00

Belgium Nominal capital T€ Direct stake % N.V. STRABAG Belgium S.A., Antwerp 18,059 100.00 N.V. STRABAG Benelux S.A., Antwerp 6,863 100.00

Bosnia and Herzegovina Nominal capital TBAM Direct stake % STRABAG d.o.o. Sarajevo, Sarajevo 10 100.00

Bulgaria Nominal capital TBGN Direct stake % "STRABAG REAL ESTATE" EOOD, Sofi a 4,635 100.00 "VITOSHA VIEW" EOOD, Sofi a 2,071 100.00 STRABAG EAD, Sofi a 13,313 100.00

1 For these companies, the option allowed by Sec 264 Para 3 or by Sec 264b of the German Commercial Code (HGB) was exercised.

EVOLUTION TWO Sp. z o.o., Warsaw	50	100.00
Mineral Polska Sp. z o.o., Czarny Bor	19,056	100.00
POLSKI ASFALT Sp. z o.o., Cracow	1,000	100.00
SAT Sp. z o.o., Olawa	4,171	100.00
STRABAG BMTI Sp. z o.o., Pruszkow	2,000	100.00
STRABAG BRVZ Sp. z o.o., Pruszkow	500	100.00
STRABAG INFRASTRUKTURA POLUDNIE Sp. z o.o., Wroclaw	16,140	100.00
STRABAG PFS Polska Sp. z o.o., Warsaw	336	100.00
STRABAG Sp. z o.o., Pruszkow	73,328	100.00
TPA Sp. z o.o., Pruszkow	600	100.00
Züblin Sp. z o.o., Pruszkow	7,765	100.00

Romania	Nominal capital TRON	Direct stake %
ANTREPRIZA DE REPARATII SI LUCRARI A R L CLUJ SA, Cluj-Napoca	64,974	98.59
BITUNOVA Romania SRL, Bucharest	16	100.00
DISTRICT DEVELOPMENT SRL, Bucharest	69	100.00
MINERAL ROM SRL, Brasov	10,845	100.00
STRABAG SRL, Bucharest	53,866	100.00
TPA SOCIETATE PENTRU ASIGURAREA CALITATII SI INOVATII SRL, Bucharest	0	100.00
ZUBLIN ROMANIA SRL, Bucharest	4,580	100.00
Russia	Nominal capital TRUB	Direct stake %
Ranita OOO, Moscow	10	100.00
STRABAG AO, Moscow	14,926	100.00
STRABAG BRVZ OOO, Moscow	313	100.00

Saudi Arabia	Nominal capital TSAR	Direct stake %
Dywidag Saudi Arabia Co. Ltd., Jubail	10,000	100.00
Sweden	Nominal capital TSEK	Direct stake %
Nimab Entreprenad AB, Sjöbo	501	100.00
STRABAG AB, Stockholm	50	100.00
STRABAG BRVZ AB, Kumla	100	100.00
STRABAG Projektutveckling AB, Stockholm	1,000	100.00
STRABAG Rail AB, Kumla	500	100.00
STRABAG Sverige AB, Stockholm	15,975	100.00
Züblin Scandinavia AB, Stockholm	100	100.00
Switzerland	Nominal capital TCHF	Direct stake %
STRABAG AG, Schlieren	8,000	100.00

STRABAG BMTI GmbH, Erstfeld STRABAG BRVZ AG, Erstfeld	20 100	100.00 100.00

Serbia	Nominal capital TRSD	Direct stake %
STRABAG d.o.o., Novi Beograd	1,306,748	100.00
TPA za obezbedenje kvaliteta i inovacije d.o.o. Beograd, Novi Beograd	32,550	100.00
Slovakia	Nominal capital T€	Direct stake %
BITUNOVA spol. s r.o., Zvolen	1,195	100.00
ERRICHTUNGSGESELLSCHAFT STRABAG SLOVENSKO s.r.o., Bratislava-Ruzinov	7	100.00
KSR - Kamenolomy SR, s.r.o., Zvolen	25	100.00
STRABAG BRVZ s.r.o., Bratislava	33	100.00
STRABAG Pozemne a inzinierske stavitel'stvo s. r. o., Bratislava	133	100.00
STRABAG s.r.o., Bratislava	66	100.00
TPA Spolocnost pre zabezpecenie kvality a inovacie s.r.o., Bratislava	7	100.00
Viedenska brana s.r.o., Bratislava	25	100.00
Slovenia	Nominal capital T€	Direct stake %
DRP, d.o.o., Ljubljana	9	100.00
STRABAG BRVZ d.o.o., Ljubljana	9	100.00
STRABAG gradbene storitve d.o.o., Ljubljana	500	100.00

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

South Africa		Nominal capital T€	Direct stake %
EFKON SOUTH AFRICA (PTY) LTD, Pretoria		166	100.00
Thailand		Nominal capital TTHB	Direct stake %
STRABAG Industries (Thailand) Co.,Ltd., Bangkok		180,000	100.00
Czech Republic		Nominal capital TCZK	Direct stake %
BHG CZ s.r.o., Ceske Budejovice		200	100.00
BITUNOVA spol. s r.o., Jihlava		2,000	100.00
FRISCHBETON s.r.o., Prague		20,600	100.00
KAMENOLOMY CR s.r.o., Ostrava		106,200	100.00
Na Belidle s.r.o., Prague		100	100.00
SAT s.r.o., Prague		1,000	100.00
STRABAG a.s., Prague		1,119,600	100.00
STRABAG Asfalt s.r.o., Sobeslav		10,000	100.00
STRABAG BMTI s.r.o., Brno		100	100.00
STRABAG BRVZ s.r.o., Prague		1,000	100.00
STRABAG Pozemnì a inzenyrskè stavitelstvì s.r.o., Prague		100,000	100.00
STRABAG Property and Facility Services a.s., Prague		46,800	100.00
STRABAG Rail a.s., Usti nad Labem		180,000	100.00
TPA CR, s.r.o., Ceske Budejovice		1,000	100.00
Ukraine		Nominal capital TUAH	Direct stake %
Chustskij Karier, Zakarpatska		3,279	100.00
Zezelivskij karier TOW, Zezelev		13,130	100.00
Hungary		Nominal capital THUF/T€	Direct stake %
AKA Zrt., Budapest	TEUR	96,000	100.00
AMFI HOLDING Kft., Budapest	TEUR	10	100.00
ASIA Center Kft., Budapest		1,830,080	100.00
Bitunova Kft., Budapest		50,000	100.00
EXP HOLDING Kft., Budapest	TEUR	10	100.001
First-Immo Hungary Kft., Budapest		100,000	100.00
Frissbeton Kft., Budapest		100,000	100.00
Generál Mély- és Magasépitö Zrt., Budapest		1,000,000	100.00
KÖKA Kft., Budapest		761,680	100.00
OAT Kft., Budapest		25,000	100.00
STR Holding Generál Kft., Budapest		3,000	100.00
STR Holding MML Kft., Budapest		3,000	100.00
STRABAG Általános Építö Kft., Budapest		1,000,000	100.00
STRABAG BMTI Kft., Budapest		2,000,000	100.00
STRABAG BRVZ Kft., Budapest		1,545,000	100.00
STRABAG Épitö Kft., Budapest		352,000	100.00
STRABAG Épitöipari Zrt., Budapest		20,000	100.00
STRABAG Generálépitö Kft., Budapest		3,000	100.00
STRABAG Rail Kft., Budapest		189,120	100.00
STRABAG Real Estate Kft., Budapest		3,000	100.00
STRABAG Vasútépítö Kft., Budapest		3,000	100.00
STRABAG-MML Kft., Budapest		510,000	100.00
TPA HU Kft., Budapest		113,000	100.00
Treuhandbeteiligung H		10,000	100.001
Züblin Kft., Budapest		3,000	100.00
United Arab Emirates		Nominal capital TAED	Direct stake %
Züblin Construction L.L.C., Abu Dhabi		150	100.00
Züblin Ground and Civil Engineering LLC, Dubai		1,000	100.00
Cyprus		Nominal capital T€	Direct stake %
BONDENO INVESTMENTS LTD, Limassol		55	100.00

EVOLUTION TWO Sp. z o.o., Warsaw 50 100.00 Mineral Polska Sp. z o.o., Czarny Bor 19,056 100.00 POLSKI ASFALT Sp. z o.o., Cracow 1,000 100.00 SAT Sp. z o.o., Olawa 4,171 100.00 STRABAG BMTI Sp. z o.o., Pruszkow 2,000 100.00 STRABAG BRVZ Sp. z o.o., Pruszkow 500 100.00 STRABAG INFRASTRUKTURA POLUDNIE Sp. z o.o., Wroclaw 16,140 100.00 STRABAG PFS Polska Sp. z o.o., Warsaw 336 100.00 STRABAG Sp. z o.o., Pruszkow 73,328 100.00 TPA Sp. z o.o., Pruszkow 600 100.00 Züblin Sp. z o.o., Pruszkow 7,765 100.00

Romania Nominal capital TRON Direct stake % ANTREPRIZA DE REPARATII SI LUCRARI A R L CLUJ SA, Cluj-Napoca 64,974 98.59 BITUNOVA Romania SRL, Bucharest 16 100.00 DISTRICT DEVELOPMENT SRL, Bucharest 69 100.00 MINERAL ROM SRL, Brasov 10,845 100.00 STRABAG SRL, Bucharest 53,866 100.00 TPA SOCIETATE PENTRU ASIGURAREA CALITATII SI INOVATII SRL, Bucharest 0 100.00 ZUBLIN ROMANIA SRL, Bucharest 4,580 100.00

Russia Nominal capital TRUB Direct stake % Ranita OOO, Moscow 10 100.00 STRABAG AO, Moscow 14,926 100.00 STRABAG BRVZ OOO, Moscow 313 100.00

Saudi Arabia Nominal capital TSAR Direct stake % Dywidag Saudi Arabia Co. Ltd., Jubail 10,000 100.00

Sweden Nominal capital TSEK Direct stake % Nimab Entreprenad AB, Sjöbo 501 100.00 STRABAG AB, Stockholm 50 100.00 STRABAG BRVZ AB, Kumla 100 100.00 STRABAG Projektutveckling AB, Stockholm 1,000 100.00 STRABAG Rail AB, Kumla 500 100.00 STRABAG Sverige AB, Stockholm 15,975 100.00 Züblin Scandinavia AB, Stockholm 100 100.00

Switzerland Nominal capital TCHF Direct stake % STRABAG AG, Schlieren 8,000 100.00 STRABAG BMTI GmbH, Erstfeld 20 100.00 STRABAG BRVZ AG, Erstfeld 100 100.00

Serbia Nominal capital TRSD Direct stake % STRABAG d.o.o., Novi Beograd 1,306,748 100.00 TPA za obezbedenje kvaliteta i inovacije d.o.o. Beograd, Novi Beograd 32,550 100.00

Slovakia Nominal capital T€ Direct stake % BITUNOVA spol. s r.o., Zvolen 1,195 100.00 ERRICHTUNGSGESELLSCHAFT STRABAG SLOVENSKO s.r.o., Bratislava-Ruzinov 7 100.00 KSR - Kamenolomy SR, s.r.o., Zvolen 25 100.00 STRABAG BRVZ s.r.o., Bratislava 33 100.00 STRABAG Pozemne a inzinierske stavitel'stvo s. r. o., Bratislava 133 100.00 STRABAG s.r.o., Bratislava 66 100.00 TPA Spolocnost pre zabezpecenie kvality a inovacie s.r.o., Bratislava 7 100.00 Viedenska brana s.r.o., Bratislava 25 100.00

Slovenia Nominal capital T€ Direct stake % DRP, d.o.o., Ljubljana 9 100.00 STRABAG BRVZ d.o.o., Ljubljana 9 100.00 STRABAG gradbene storitve d.o.o., Ljubljana 500 100.00

1 The presentation of interest is done using the economic approach, the interest as defi ned by civil law may deviate from this presentation.

The following list shows the equity-accounted associates and joint ventures included in the consolidated fi nancial statements:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Austria	Nominal capital T€	Direct stake %
Lafarge Cement CE Holding GmbH, Vienna	50	30.00
Leopold Ungar Platz 3 GmbH, Vienna	35	50.00 1
SQUARE Two GmbH & Co KG, Vienna	10	50.00 1
Germany	Nominal capital T€	Direct stake %
AMB Asphaltmischwerke Bodensee GmbH & Co KG, Singen (Hohentwiel)	767	50.00
AMH Asphaltmischwerk Hauneck GmbH & Co. KG, Hauneck	500	50.00
Bayerische Asphaltmischwerke GmbH & Co.KG für Straßenbaustoffe, Hofolding	12,300	48.33
Bodensee - Moränekies Gesellschaft mit beschränkter Haftung & Co.
Kommanditgesellschaft Tettnang, Tettnang	153	33.33
FLARE Living GmbH & Co. KG, Cologne	1	50.00
Kieswerk Rheinbach GmbH & Co. KG, Rheinbach	256	50.00
Kieswerke Schray GmbH & Co. KG, Steißlingen	2,045	50.00
Messe City Cologne GmbH & Co. KG, Hamburg	100	50.00
MesseCity Cologne Generalübernehmer GmbH & Co. KG, Oststeinbek	25	50.00
Natursteinwerke im Nordschwarzwald NSN GmbH & Co. KG, Mühlacker	3,100	25.00
NWM Nordwestdeutsche Mischwerke GmbH & Co. KG, Großenkneten	2,000	50.00
PANSUEVIA Service GmbH & Co. KG, Jettingen-Scheppach	50	50.00
SeniVita Social Estate AG, Bayreuth	2,000	50.00
Silenos Energy Geothermie Garching a.d. Alz GmbH & Co. KG, Augsburg	1	50.00
Steinbruch Spittergrund GmbH, Erfurt	80	50.00
Thüringer Straßenwartungs- und Instandhaltungsgesellschaft mbH & Co. KG, Apfelstädt	2,582	50.00
Colombia	Nominal capital TCOP	Direct stake %
DESARROLLO VIAL AL MAR S.A.S., Medellin	12,637,280	37.50
Croatia	Nominal capital THRK	Direct stake %
Autocesta Zagreb-Macelj d.o.o., Zagreb	88,440	50.001
The Netherlands	Nominal capital T€	Direct stake %
A-Lanes A15 Holding B.V., Nieuwegein	18	24.00
Poland	Nominal capital TPLN	Direct stake %
A2 ROUTE Sp. z o.o., Pruszkow	5	50.00
Qatar	Nominal capital TQAR	Direct stake %
Strabag Qatar W.L.L., Doha	200	49.00
Züblin International Qatar LLC, Doha	200	49.00
Romania	Nominal capital TRON	Direct stake %
SOCIETATEA COMPANIILOR HOTELIERE GRAND SRL, Bucharest	41,779	35.32
Hungary	Nominal capital T€	Direct stake %
MAK Mecsek Autopalya Koncesszios Zrt., Budapest	64,200	50.00

Accounting policies

INTANGIBLE ASSETS

The following list shows the equity-accounted associates and joint ventures included in the consolidated fi nancial statements:

Austria Nominal capital T€ Direct stake % Lafarge Cement CE Holding GmbH, Vienna 50 30.00 Leopold Ungar Platz 3 GmbH, Vienna 35 50.00 1 SQUARE Two GmbH & Co KG, Vienna 10 50.00 1

Germany Nominal capital T€ Direct stake % AMB Asphaltmischwerke Bodensee GmbH & Co KG, Singen (Hohentwiel) 767 50.00 AMH Asphaltmischwerk Hauneck GmbH & Co. KG, Hauneck 500 50.00 Bayerische Asphaltmischwerke GmbH & Co.KG für Straßenbaustoffe, Hofolding 12,300 48.33

Kommanditgesellschaft Tettnang, Tettnang 153 33.33 FLARE Living GmbH & Co. KG, Cologne 1 50.00 Kieswerk Rheinbach GmbH & Co. KG, Rheinbach 256 50.00 Kieswerke Schray GmbH & Co. KG, Steißlingen 2,045 50.00 Messe City Cologne GmbH & Co. KG, Hamburg 100 50.00 MesseCity Cologne Generalübernehmer GmbH & Co. KG, Oststeinbek 25 50.00 Natursteinwerke im Nordschwarzwald NSN GmbH & Co. KG, Mühlacker 3,100 25.00 NWM Nordwestdeutsche Mischwerke GmbH & Co. KG, Großenkneten 2,000 50.00 PANSUEVIA Service GmbH & Co. KG, Jettingen-Scheppach 50 50.00 SeniVita Social Estate AG, Bayreuth 2,000 50.00 Silenos Energy Geothermie Garching a.d. Alz GmbH & Co. KG, Augsburg 1 50.00 Steinbruch Spittergrund GmbH, Erfurt 80 50.00

Apfelstädt 2,582 50.00

Colombia Nominal capital TCOP Direct stake % DESARROLLO VIAL AL MAR S.A.S., Medellin 12,637,280 37.50

Croatia Nominal capital THRK Direct stake % Autocesta Zagreb-Macelj d.o.o., Zagreb 88,440 50.001

The Netherlands Nominal capital T€ Direct stake % A-Lanes A15 Holding B.V., Nieuwegein 18 24.00

Poland Nominal capital TPLN Direct stake % A2 ROUTE Sp. z o.o., Pruszkow 5 50.00

Qatar Nominal capital TQAR Direct stake % Strabag Qatar W.L.L., Doha 200 49.00 Züblin International Qatar LLC, Doha 200 49.00

Romania Nominal capital TRON Direct stake % SOCIETATEA COMPANIILOR HOTELIERE GRAND SRL, Bucharest 41,779 35.32

Hungary Nominal capital T€ Direct stake % MAK Mecsek Autopalya Koncesszios Zrt., Budapest 64,200 50.00

1 The presentation of interest is done using the economic approach, the interest as defi ned by civil law may deviate from this presentation.

Bodensee - Moränekies Gesellschaft mit beschränkter Haftung & Co.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Thüringer Straßenwartungs- und Instandhaltungsgesellschaft mbH & Co. KG,

Acquired intangible assets are recognised at their initial costs less depreciation and impairment if applicable.

Development costs for an internally generated intangible asset are capitalised if the group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for internal use or sale and if it can demonstrate the intent to complete the intangible asset and use or sell it. The group must also demonstrate that the intangible asset will generate probable future economic benefi ts, that it has adequate resources to complete the asset and that it is able to reliably measure the expenditure attributable to the asset during its development. The construction costs for these assets comprise all construction costs directly attributable to the construction process as well as production-related overheads. Borrowing costs are capitalised for qualifi ed assets. Research costs which do not fulfi l these criteria are recognised as an expense in the period in which they are incurred. Costs that have already been recognised as an expense are not capitalised in a subsequent period.

The subsequent measurement of intangible assets with defi nite useful lives is performed at cost less accumulated depreciation and impairment losses. Within the group, there are no intangible assets with indefi nite useful lives.

The following useful lives were assumed for intangible assets using the straight-line method:

Intangible assets Useful life in years

Property rights/utilisation rights/other rights 3–50 Software 2–5 Patents, licences 3–10

GOODWILL

Goodwill from a business combination is initially measured at cost. This is calculated as the excess of the consideration transferred over the identifi able assets acquired and liabilities assumed. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised, rather, it is subjected to an annual impairment test in accordance with IAS 36. The group conducts its annual test for goodwill impairment at year's end. Testing is also performed if events or circumstances indicate that the fi gure could be impaired. For the purpose of the impairment test, goodwill is assigned to one or more of the group's cash-generating units that should benefi t from the synergy effects of the combination. The recoverability of goodwill is determined by comparing the carrying amount of the respective cash-generating unit (CGU) or units with the recoverable amount. If the goodwill is impaired, an impairment loss is recognised. The possibility of a reversal of impairment losses once the reasons for the impairment no longer apply is not foreseen for goodwill.

RIGHTS FROM CONCESSION ARRANGEMENTS

Service concession arrangements between the STRABAG Group and the public sector to build, operate, maintain and fi nance infrastructure facilities are treated in accordance with the requirements of IFRIC 12.

A right from a concession arrangement is recognised if the consideration does not represent an enforceable right to payment, but instead a right to charge a usage fee is granted.

The right from the concession arrangement is accounted for at the fair value of the consideration and subsequently recognised less depreciation over the period of the concession and impairment losses. If the reasons for the previously recognised impairment no longer apply, these assets are written back through profi t or loss. The amount may not exceed the carrying amount that would have resulted if no impairment loss had been recognised in previous periods.

PROPERTY, PLANT AND EQUIPMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Property, plant and equipment is initially recognised at cost. STRABAG performs subsequent measurements using the cost model – cost less accumulated depreciation and impairment losses. If the reasons for a previously recognised impairment loss no longer apply, these assets are written back through profi t or loss. The amount may not exceed the carrying amount that would have resulted if no impairment loss had been recognised in the previous periods.

Subsequent acquisition costs are capitalised if it is probable that future economic benefi ts will fl ow to the group and if the costs can be reliably determined. Repair and maintenance costs which do not constitute signifi cant maintenance expenditures are recognised as expenses in the period in which they are incurred.

Depreciable property, plant and equipment is depreciated using the straight-line method over the expected useful life. If there is an indication that an asset may be impaired and if the present values of the future cash infl ow surpluses are below the carrying amounts, the amount is revalued to the lower recoverable amount in accordance with IAS 36.

The following useful lives were assumed for property, plant and equipment:

Useful life in years
10–50
5–40
3–15
3–10
4–9

INVESTMENT PROPERTY

Investment property is property held to earn rentals or for the purpose of capital gains. Investment property is initially measured at cost. STRABAG uses the cost model for subsequent measurements, i.e. the measurement is performed at cost less accumulated depreciation and impairment losses. If the present values of the future cash infl ow surpluses are below the carrying amounts, the amount is revalued to the lower recoverable amount in accordance with IAS 36. The recoverable amount of this investment property is disclosed separately. The fair value is determined using recognised methods such as derivation from the current market price of comparable properties or the discounted cash fl ow method.

The useful life of investment property varies between ten and 35 years. Investment property is depreciated using the straightline method.

The presentation in the balance sheet is under property, plant and equipment.

LEASES

A lease is a contractual arrangement in which the lessor (owner) grants the lessee (user) the right to control an identifi ed asset for a specifi ed period of time in exchange for a consideration.

The STRABAG SE Group is a lessee of real estate properties (offi ces, storage spaces, etc.). A large number of the contracts are stand-alone contracts with comparatively low annual rental payments, of both limited and unlimited duration and with ordinary termination rights.

Leases are to be presented as a right-of-use asset and a corresponding lease liability in the balance sheet. The lease payments are split into a fi nancing and a principal component. The fi nance costs are recognised in profi t or loss over the term of the lease, resulting in a constant periodic interest rate on the remaining amount of the liability for each period. The right-of-use asset is amortised on a straight-line basis over the shorter of the two periods of useful life or term of lease.

Lease payments are made at the group's incremental borrowing rate, i.e. the rate of interest that the group would have to pay to borrow the funds necessary to obtain an asset of a similar value and at similar terms in a similar economic environment.

Payments for short-term leases and leases for which the underlying asset is of low value are recognised as an expense. Short-term leases are leases with a term of up to twelve months.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 27To a minor extent, the group also acts as a lessor. This essentially involves offi ce space, in particular the Tech Gate Center in Vienna. These leases are to be classifi ed as operating leases. Rental income from these leases is shown in other operating income.

GOVERNMENT GRANTS

PROPERTY, PLANT AND EQUIPMENT

INVESTMENT PROPERTY

ordinary termination rights.

line method.

LEASES

Property, plant and equipment Useful life in years Buildings 10–50 Investments in third-party buildings 5–40 Machinery 3–15 Offi ce equipment/furniture and fi xtures 3–10 Vehicles 4–9

The useful life of investment property varies between ten and 35 years. Investment property is depreciated using the straight-

A lease is a contractual arrangement in which the lessor (owner) grants the lessee (user) the right to control an identifi ed asset

Payments for short-term leases and leases for which the underlying asset is of low value are recognised as an expense.

asset is amortised on a straight-line basis over the shorter of the two periods of useful life or term of lease.

would have resulted if no impairment loss had been recognised in the previous periods.

carrying amounts, the amount is revalued to the lower recoverable amount in accordance with IAS 36.

derivation from the current market price of comparable properties or the discounted cash fl ow method.

are recognised as expenses in the period in which they are incurred.

The following useful lives were assumed for property, plant and equipment:

The presentation in the balance sheet is under property, plant and equipment.

for a specifi ed period of time in exchange for a consideration.

Short-term leases are leases with a term of up to twelve months.

Government subsidies and investment grants are offset against the cost of the assets and amortised in proportion to their useful lives. A government grant is recognised when there is reasonable assurance that the grant will be received and the group complies with the necessary conditions for receiving the grant.

BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition or production of a qualifying asset are recognised as part of the cost of that asset. Qualifying assets are assets that necessarily take a substantial period of time (over six months) to get ready for their intended use or sale. Other borrowing costs are recognised as an expense in the period in which they are incurred.

IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets that are subject to depreciation or amortisation, as well as associates, are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may no longer be recoverable. Assets that have an indefi nite useful life, such as goodwill or intangible assets not yet available for use, are tested for impairment annually as such assets are not subject to depreciation or amortisation.

To identify the need for impairment, the recoverable amount is determined. The recoverable amount is the higher of fair value of the asset less costs to sell and value in use. If it is not possible to determine the recoverable amount for an individual asset, then the recoverable amount is determined for the smallest identifi able group of assets (cash-generating unit) to which the asset in question can be assigned.

Considering that, as a rule, market prices are not available for individual units, the present value of net cash infl ows is used to determine the fair value less costs to sell. The forecast of the cash fl ows is based on STRABAG's latest planning, with a planning horizon of at least four years. The last detailed planning year forms the basis for calculating the perpetuity if applicable legislation and legal requirements do not limit the usability of the cash-generating unit to a shorter period of time.

For the purpose of determining the fair value less costs to sell, the cash-generating unit is measured from the viewpoint of an independent market participant. In calculating the value in use of an asset, on the other hand, the cash fl ows are considered on the basis of the previous use. For the net cash infl ows beyond the detailed planning period, individual growth rates derived from market information are determined on the basis of long-term business expectations in both methods of calculation.

Net cash infl ows are discounted at the cost of capital, which is calculated as the weighted average cost of equity and debt. Consideration is given to the different yield and risk profi les of STRABAG's various areas of expertise by determining the individual costs of capital using comparison companies. The cost of equity corresponds to the required rate of return for investors, while the cost of debt is based on the long-term fi nancing conditions available to comparison companies. Both components are derived from capital market information.

The following table shows the parameters growth rate and cost of capital for the impairment tests:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

%	2019	2018
Growth rate	0.0–0.5	0.0–0.5
Cost of capital (after taxes)	5.7–6.8	5.9–7.4
Cost of capital (before taxes)	6.1–9.0	6.6–9.3

The Management Board has calculated the budgeted gross margin based on past developments and on expectations for future market development.

If the recoverable amount of an asset is lower than the carrying amount, the impairment is recognised immediately in profi t or loss. In the case of impairment losses related to cash-generating units which contain goodwill, existing goodwill is initially reduced. If the impairment exceeds the carrying amount of the goodwill, the difference is generally apportioned proportionally over the remaining non-current assets of the cash-generating unit.

With the exception of goodwill, non-fi nancial assets for which an impairment loss was charged in the past are reviewed at every balance sheet date to determine whether the impairment loss should be reversed.

FINANCIAL ASSETS

Financial assets are recognised in the consolidated balance sheet if STRABAG has a contractual right to receive cash or other fi nancial assets from another party. Regular way purchases and sales of fi nancial assets are recognised using settlement date accounting.

Financial assets that are not measured at fair value through profi t or loss are initially recognised at fair value plus transaction costs which are directly attributable to the acquisition.

Transaction costs which arise upon the acquisition of fi nancial assets measured at fair value through profi t or loss are immediately recognised as an expense.

Receivables bearing no interest or interest below the market rate are initially recognised at the present value of the expected future cash fl ows.

For purposes of subsequent measurement, fi nancial assets are classifi ed in one of the following categories in accordance with IFRS 9, with each category having its own measurement requirements. The classifi cation is determined at initial recognition.

For measurement and accounting purposes, fi nancial assets are to be assigned to one of the following categories:

Financial assets measured at amortised cost (AC)
Financial assets measured at fair value through profi t or loss
Financial assets, classifi ed as debt instruments under IAS 32, measured at fair value through other comprehensive income (FVOCI-debt)
Financial assets, classifi ed as equity instruments under IAS 32, measured at fair value through other comprehensive income (FVOCI-equity)

Financial assets measured at amortised cost

Financial assets in this category are measured at amortised cost if the objective of the business model is to hold the fi nancial asset to collect the contractual cash fl ows, and the contractual terms of the instrument give rise to cash fl ows that are solely payments of principal and interest on the principal amount outstanding. These are classifi ed as current fi nancial assets if they mature within twelve months after the reporting date or within the usual business cycle. Otherwise they are classifi ed as noncurrent fi nancial assets. As part of the subsequent measurement, fi nancial assets measured at amortised cost are valued using the effective interest method. When applying the effective interest method, all directly attributable fees, fees paid or received, transaction costs and other premiums or discounts included in the calculation of the effective interest rate are NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29amortised over the expected life of the fi nancial instrument. Interest income from the application of the effective interest method is recognised through profi t or loss under interest income from fi nancial instruments.

Service concession arrangements which provide an absolute contractual right to receive payment are shown separately. All receivables from concession arrangements are accounted for under the special balance sheet item receivables from concession arrangements. The receivables are carried at the present value of the payments to be made. The accumulation amount calculated annually using the effective interest method is recognised in revenue. Impairment allowances are made for expected credit losses.

Trade receivables, receivables from consortia, receivables from subsidiaries and receivables from participation companies, as well as other receivables, are measured at cost less impairment allowances for expected credit losses.

Financial assets measured at fair value through profi t or loss

The following table shows the parameters growth rate and cost of capital for the impairment tests:

ally over the remaining non-current assets of the cash-generating unit.

costs which are directly attributable to the acquisition.

• Financial assets measured at amortised cost (AC)

Financial assets measured at amortised cost

• Financial assets measured at fair value through profi t or loss

immediately recognised as an expense.

every balance sheet date to determine whether the impairment loss should be reversed.

future market development.

FINANCIAL ASSETS

date accounting.

future cash fl ows.

(FVOCI-debt)

(FVOCI-equity)

recognition.

% 2019 2018 Growth rate 0.0–0.5 0.0–0.5 Cost of capital (after taxes) 5.7–6.8 5.9–7.4 Cost of capital (before taxes) 6.1–9.0 6.6–9.3

The Management Board has calculated the budgeted gross margin based on past developments and on expectations for

With the exception of goodwill, non-fi nancial assets for which an impairment loss was charged in the past are reviewed at

Financial assets that are not measured at fair value through profi t or loss are initially recognised at fair value plus transaction

Transaction costs which arise upon the acquisition of fi nancial assets measured at fair value through profi t or loss are

Receivables bearing no interest or interest below the market rate are initially recognised at the present value of the expected

• Financial assets, classifi ed as debt instruments under IAS 32, measured at fair value through other comprehensive income

• Financial assets, classifi ed as equity instruments under IAS 32, measured at fair value through other comprehensive income

For measurement and accounting purposes, fi nancial assets are to be assigned to one of the following categories:

A fi nancial asset that is to be classifi ed as a debt instrument under IAS 32 is measured at fair value through profi t or loss if it is held for trading purposes, the cash fl ow criteria are not met, or it is designated as at FVPL at initial recognition. A fi nancial asset at STRABAG is assigned to this category if it was principally acquired with an intention to sell in the short term. Derivatives also belong to this category if they are not qualifi ed as hedging instruments. Assets in this category are recognised as current assets if the asset is expected to be realised within twelve months. All other assets are classifi ed as non-current. Value changes of fi nancial assets measured at fair value through profi t or loss are recognised through profi t or loss.

This category contains mainly securities presented under non-current fi nancial assets.

The fair value option may be elected for fi nancial assets which, on the basis of the underlying business model and the contractual cash fl ows, are classifi ed as measured at amortised cost if doing so eliminates or signifi cantly reduces a measurement or recognition inconsistency. The fair value option is not elected at STRABAG.

Financial assets which represent equity instruments under IAS 32 are also measured at fair value through profi t or loss. Value changes are recognised through profi t or loss in the income statement.

This category contains mainly investments below 20 % that are held under other investments.

Without exception, equity instruments are measured at fair value. If an equity instrument is not held for trading purposes, there exists an irrevocable option at initial recognition to measure value changes not in the income statement but in the other comprehensive income. Equity investments recognised in the other comprehensive income may not be later reclassifi ed to the income statement. The option is not exercised at STRABAG.

IMPAIRMENT OF FINANCIAL ASSETS AND CONTRACT ASSETS

For the recognition of impairments, STRABAG allows for expected credit losses under IFRS 9. The expected loss impairment model is used for debt instruments for which subsequent measurement is made at amortised cost. The impairment requirements under IFRS 9 are also applied to non-fi nancial contract assets.

Equity instruments measured at fair value through profi t or loss or through other comprehensive income are not within the scope of the IFRS 9 impairment requirements.

IFRS 9 outlines a three-stage model to determine the scope of the risk provision, requiring expected credit losses to be measured from initial recognition at an amount equal to the twelve-month expected credit losses or, if the credit risk has worsened signifi cantly, the full expected credit losses over the remaining life of the fi nancial instrument. The general impairment model (general approach) is used for receivables from concession arrangements and for current and non-current other fi nancial assets in the group. Besides the general impairment model, the simplifi ed impairment model (simplifi ed approach) is used for trade receivables and for contract assets under IFRS 15. The simplifi ed impairment model requires a risk provision equal to the expected losses over the full remaining life of the fi nancial instrument to be recognised for trade receivables or contract assets regardless of the respective credit quality.

Application of the 30-days-past-due criterion is not useful in the construction sector, on the one hand because of incomplete performance recognition, on the other hand because contracts are often fulfi lled for public-sector clients, whose internal processes to release payment may be lengthy but usually result in full and complete payment.

To determine the expected credit losses, trade receivables and contract assets are grouped into different portfolios with similar risk characteristics. In establishing the portfolios, STRABAG also considers the underlying country risk and the creditworthiness.

During the initial recognition of fi nancial assets, STRABAG takes into consideration the probability of defaults and continually monitors the development of the credit risk in each reporting period, taking into account all reasonable and supportable information and forecasts. This includes especially the following indicators:

• internal estimate of creditworthiness by the client

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• external information on creditworthiness based on the corresponding country risk

Macroeconomic information (such as market interest rates) and other forecasts are included in the assessment of the credit risk.

Besides the application of the general and the simplifi ed impairment approach, fi nancial assets are impaired if there is objective evidence of credit default indicators. STRABAG makes such impairments if the debtor has signifi cant fi nancial diffi culty; if there is a high probability that insolvency proceedings will be commenced against the debtor; if a breach of contract and payment default has occurred; or if the issuer's technological, economic, legal and market environment changes substantially.

Impairments lower the carrying amount of the fi nancial assets. The impairment loss or gain resulting from the application of the impairment requirements is recognised through profi t or loss in the other operating expense or income.

A fi nancial asset defaults if bankruptcy proceedings have been started or it is highly probable that there is no reasonable expectation for repayment. These fi nancial assets are then derecognised. When derecognising fi nancial assets, STRABAG continues to undertake enforcement measures to attempt to recover the receivables that are due.

During the year under report, there were no material changes with regard to the impairment approaches and criteria that were applied.

DERECOGNITION OF A FINANCIAL ASSET

Financial assets are derecognised when the contractual rights to receive payment from the fi nancial assets no longer exist or if the fi nancial assets are transferred along with all substantial risks and rewards. An asset is also derecognised if the substantial risks and rewards of ownership of the asset are neither transferred nor retained but control is relinquished. If control is retained, such transferred fi nancial assets are recognised to the extent of the continuing involvement.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Macroeconomic information (such as market interest rates) and other forecasts are included in the assessment of the credit

Impairments lower the carrying amount of the fi nancial assets. The impairment loss or gain resulting from the application of

During the year under report, there were no material changes with regard to the impairment approaches and criteria that were

control is retained, such transferred fi nancial assets are recognised to the extent of the continuing involvement.

the impairment requirements is recognised through profi t or loss in the other operating expense or income.

continues to undertake enforcement measures to attempt to recover the receivables that are due.

information and forecasts. This includes especially the following indicators:

• external information on creditworthiness based on the corresponding country risk

• internal estimate of creditworthiness by the client

DERECOGNITION OF A FINANCIAL ASSET

creditworthiness.

risk.

applied.

Derivative fi nancial instruments are employed exclusively to mitigate risks arising from movements in currency exchange rates and interest rates. The utilisation of fi nancial derivatives is subject to internal guidelines and controls.

Derivative fi nancial instruments are classifi ed as fi nancial assets measured at fair value through profi t and loss or as derivatives used for hedging purposes at the date of contract conclusion. Derivative fi nancial instruments are initially recognised at cost and measured at fair value in subsequent periods. Unrealised gains or losses on the measurement are recognised in the income statement if the conditions for hedge accounting under IFRS 9 are not met. Derivative fi nancial instruments are stated under other fi nancial assets or other fi nancial liabilities.

Derivative fi nancial instruments are measured on the basis of observable market data (interest and exchange rates) and non-observable market data (the competition's credit rating). The fair value is determined using generally accepted methods of mathematical fi nance.

On application of the hedge accounting requirements, the group designates derivative fi nancial instruments as hedging instruments to either:

hedge the exposure to changes in the fair value of a recognised asset or liability (fair value hedge), or to
hedge the exposure to variability in cash fl ows (cash fl ow hedge).

In the case of fair value hedge accounting, the change in the fair value of the hedged item that is attributable to the hedged risk and the change in the fair value of the hedging derivative are recognised in the income statement. Fair value hedging is not used in the STRABAG Group.

If, however, a derivative fi nancial instrument is used as a hedging instrument in a cash fl ow hedge, the effective unrealised gains or losses from the hedging instrument are initially accounted for under other income. They are reclassifi ed to profi t or loss when the hedged item affects profi t or loss. Any changes resulting from the ineffectiveness of these fi nancial instruments are recognised immediately in profi t or loss in the income statement.

When concluding a hedging transaction, STRABAG documents the clear hedging relationship between the hedging instrument and the hedged item, the objective of its risk management, and the underlying strategy. It is also established that there exists an economic relationship between the hedged item and the hedging instrument and that credit risk does not dominate the resulting value changes. The hedging relationship's hedging ratio refl ects the ratio between the designated nominal amount of the hedged item actually used by STRABAG and the designated nominal amount actually designated by STRABAG to hedge the nominal amount of the hedged item. An assessment is made at the beginning of the hedging relationship, with documentation provided continually thereafter, of whether the derivatives used in the hedge are effective or not in offsetting the changes in fair value or cash fl ow of the hedged item. Hedging relationships are adjusted when there are changes in the hedged item.

The critical term match method is used to determine the prospective hedge effectiveness, provided that the conditions for use are met. The retrospective determination of hedge ineffectiveness is made on the basis of the dollar offset method.

CURRENT AND DEFERRED INCOME TAXES

The income tax payables and receivables contain mainly rights and obligations with regard to domestic and foreign income taxes. These comprise the current year as well as possible rights and obligations from previous years. The receivables/ payables are calculated on the basis of the tax regulations in the respective countries.

Deferred taxes are measured using the balance sheet liability method for all temporary differences between the valuation of the balance sheet items in the IFRS fi nancial statements and the existing tax value at the individual companies. Furthermore, any realisable tax advantage from existing losses carried forward will be included in the calculation. Exceptions to this comprehensive tax deferral are balances from non-tax-deductible goodwill.

Deferred tax assets may only be recognised if the associated tax advantage is likely to be realisable. The calculation of the tax deferral is based on the usual income tax rate in the respective country at the point of the predicted reversal.

Recognition is made of deferred tax liabilities arising from temporary differences in relation to investments in subsidiaries and associates unless the timing of the reversal of the temporary differences in the group can be determined and the temporary differences are unlikely to reverse in response to this infl uence in the foreseeable future.

INVENTORIES

Inventory costs include cost of purchase and production and are required to be stated at the lower of cost and net realisable value.

Production costs include all direct costs as well as appropriate parts of overhead arising in the production. Distribution costs, as well as costs for general administration, are not included in the production costs. Borrowing costs related to production are recognised for inventories which are to be classifi ed as qualifying assets.

CONTRACT ASSETS AND CONTRACT LIABILITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

With regard to construction contracts with customers, revenue is recognised over time as required by IFRS 15, as the construction projects are built on the customers' properties and the customers thus always control the assets that are created or enhanced.

Construction is performed on the basis of stand-alone contracts. The allocation of the transaction price to each performance obligation is made on the basis of the work estimate for the respective stand-alone item. If signifi cant integration services are provided, a separate performance obligation is assumed. Transaction prices for construction contracts in the STRABAG SE Group are determined on the basis of the contract value agreed with the customer. Contractual penalties or bonus payments during the construction period may lead to amendments of the transaction price. These are carried with the most probable value by reason and amount on the basis of the project controlling.

Revenue recognition over time is made using the output-oriented method on the basis of the work performed. The actual work performed and the corresponding revenue are determined at the level of the stand-alone item according to the work estimate. Because of unforeseen deviations in the budgeted costs, the best indicator here is the percentage of completion as derived directly from the actual work performed. The performance completed to date, one of the key corporate governance fi gures, must be directly determined by the construction site team on a monthly basis.

The contract asset represents the group's right to consideration from construction contracts with customers. If the value of a contract asset of a construction contract exceeds the payments received for it, then this is shown on the assets side under contract assets. In the opposite case, the fi gure is reported on the equity and liabilities side under contract liabilities.

Payments for construction contracts are usually made parallel to the performance on the basis of regular invoicing. Payments of advance consideration before the actual performance are common practice, especially in building construction. Agreements covering extended terms of payment or staggered invoicing of performance completed are made only on a caseby-case basis with special approval by the Management Board of STRABAG SE.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 33If it is probable that the production costs exceed the recoverable proceeds, an onerous contract provision is recognised in accordance with IAS 37. The onerous contract provision, considered individually, is recognised at the amount that is required for the completion of the obligation from the construction contract. Up to the value of the contract asset, an impairment is recognised. If the value of the respective contract asset is exceeded, an onerous contract provision is recognised on the equity and liabilities side under the current provisions.

With regard to impairment, see the section "Impairment of fi nancial assets and contract assets".

Inventories that have not yet been used in the construction process but are already present on the construction sites are no longer accounted for as a separate asset but are instead assigned to the respective contract and recognised as a contract asset.

Claims in relation with construction contracts involve services which, based on the existing contractual agreements, cannot be invoiced until their invoicing potential or recognition is agreed with the client. While the costs are recognised through profi t or loss immediately when they arise, revenue from claims is recognised generally only after receipt of written acceptance by the client or, in the event that payment is received before the written recognition, with the payment itself.

The consideration for revenue from project developments which, on the basis of the work performed by the reporting date, are realised over time, are recorded under contract assets. The contract asset represents the group's right to considerations from project developments.

Revenue is recognised over time if a contractual agreement excludes the possibility of any alternative use and there exists a right to payment including a profi t margin on the work performed. These conditions are always met if real estate projects are sold already prior to their completion.

In these cases, the revenue is recognised pro rata based on the degree of completion of the work. If the real estate projects are only partially sold, for example, in the case of owner-occupied fl ats, the revenue is recognised pro rata only for those parts already sold. The project is then presented pro rata under contract assets.

The notes on construction contracts with customers apply by analogy.

The advances received are offset against the cost of the contract asset: if the advances received exceed the value of the contract asset, presentation is made on the equity and liabilities side under contract liabilities.

CASH AND CASH EQUIVALENTS

The cash and cash equivalents include all liquid fi nancial assets which at the date of acquisition or investment have a remaining term of less than three months. This comprises bank deposits, time deposits and cash on hand. Cash and cash equivalents are measured at amortised cost.

PROVISIONS

Deferred tax assets may only be recognised if the associated tax advantage is likely to be realisable. The calculation of the tax

Inventory costs include cost of purchase and production and are required to be stated at the lower of cost and net realisable value.

governance fi gures, must be directly determined by the construction site team on a monthly basis.

by-case basis with special approval by the Management Board of STRABAG SE.

deferral is based on the usual income tax rate in the respective country at the point of the predicted reversal.

comprehensive tax deferral are balances from non-tax-deductible goodwill.

recognised for inventories which are to be classifi ed as qualifying assets.

value by reason and amount on the basis of the project controlling.

CONTRACT ASSETS AND CONTRACT LIABILITIES

INVENTORIES

created or enhanced.

differences are unlikely to reverse in response to this infl uence in the foreseeable future.

The following defi ned benefi t plans for which provisions must be recognised exist within the group.

The company's obligation relating to defi ned benefi t plans consists in fulfi lling the promised benefi ts to current and former employees.

Defi ned contribution plans in the form of fi nancing through third-party support funds exist for employees of Austrian subsidiaries whose employment began after 1 January 2003. The defi ned benefi t obligations are funded by the regular payment of contributions into the employee provident fund.

PROVISIONS FOR SEVERANCE PAYMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The group is legally required to provide a one-off severance payment to employees of Austrian subsidiaries in the case of termination or at the date of retirement if their employment began before 1 January 2003. The level of this payment depends on the number of years at the company and amount due at the date of severance and comes to between two and twelve monthly salaries. A provision is made for this obligation.

Additionally, the severance payment rights in other countries in the case of termination or retirement amount from one to three monthly salaries. Due to the relatively insignifi cant amounts involved, provisions for severance payments arising from these obligations are determined using fi nancial mathematical methods.

PENSION PROVISIONS

The provisions for pensions are formed for obligations from the right to future pension payments and current payments to present and past employees and their dependents. The group's pension promises in Germany and Austria exist on the basis of individual contracts or internal labour-management agreements. The obligations are based on a number of different pension arrangements. The number of different employee benefi t plans is the result of the group's enterprise acquisitions in Germany. New agreements are not concluded within the group.

As a rule, the pension promises foresee the granting of monthly old age, invalidity and survivors' benefi ts. With some promises, the pension arrangement foresees benefi ts to be paid in the form of a capital payment.

The benefi t plans exist in various designs. The range of plan structures includes specifi ed benefi t systems (e.g. specifi ed amount per year of employment), dynamic systems (e.g. % per year of employment) and benefi t promises (e.g. specifi ed promise). Plans also exist with or without survivors' benefi ts.

In Switzerland, the legal regulations governing pension plans require payments to be made into pension foundations. One half of the contributions are made by the employer, the other half by the employee. The employee contributions depend on the years of service and are treated as reduction of the service cost. At retirement, the employees can choose to receive either a one-off severance payment or regular monthly pension payments.

As restructuring contributions are required if the pension foundation has insuffi cient funds for coverage, the promises are categorised as defi ned benefi t plan in accordance with IAS 19.

Within the STRABAG Group, the obligations of the pension funds are reinsured.

MEASUREMENT OF SEVERANCE AND PENSION PROVISIONS

The group's obligations relating to defi ned benefi t plans are determined separately for each plan using actuarial principles in accordance with the projected unit credit method. The projected unit credit method is used to determine the discounted pension entitlements acquired up to the end of the accounting period. The existing plan assets at their fair value are subtracted from the defi ned benefi t obligations. This yields the defi ned benefi t liability (asset) to be recognised.

Determination of the net defi ned benefi t liability at the end of the reporting year is based on an actuarial report from a certifi ed actuarial analyst.

The rate used to discount severance and pension provisions is determined on the basis of market yields at the end of the respective reporting period on high-quality fi xed-interest industrial bonds with a comparable term.

The assumptions relating to discounting, pay rises and fl uctuation that are used to calculate the severance and pension provisions vary in proportion to the economic situation of each specifi c country. Life expectancy is calculated according to the respective country's mortality tables.

Actuarial gains and losses are recognised in equity outside profi t or loss. The service cost is stated in employee benefi ts expense, while the interest component of the allocation to the provision is reported in the net interest income.

If the present value of a defi ned benefi t obligation changes in response to plan amendments, the resulting effects are recognised in profi t or loss as past service cost in the year of the amendment. Any income resulting from a settlement is also recognised directly in the income statement.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 35The company is exposed to various risks in relation to the defi ned contribution severance and pension plans. Besides the general actuarial risks such as the longevity risk and the interest rate risk, the group is also exposed to currency risk as well as to capital market risk or investment risk.

More information concerning the risks is available in the sensitivity analysis under item 25.

OTHER PROVISIONS

PROVISIONS FOR SEVERANCE PAYMENTS

PENSION PROVISIONS

certifi ed actuarial analyst.

the respective country's mortality tables.

recognised directly in the income statement.

monthly salaries. A provision is made for this obligation.

these obligations are determined using fi nancial mathematical methods.

Germany. New agreements are not concluded within the group.

promise). Plans also exist with or without survivors' benefi ts.

categorised as defi ned benefi t plan in accordance with IAS 19.

MEASUREMENT OF SEVERANCE AND PENSION PROVISIONS

either a one-off severance payment or regular monthly pension payments.

Within the STRABAG Group, the obligations of the pension funds are reinsured.

the pension arrangement foresees benefi ts to be paid in the form of a capital payment.

As a rule, the pension promises foresee the granting of monthly old age, invalidity and survivors' benefi ts. With some promises,

As restructuring contributions are required if the pension foundation has insuffi cient funds for coverage, the promises are

Determination of the net defi ned benefi t liability at the end of the reporting year is based on an actuarial report from a

The rate used to discount severance and pension provisions is determined on the basis of market yields at the end of the

Actuarial gains and losses are recognised in equity outside profi t or loss. The service cost is stated in employee benefi ts

expense, while the interest component of the allocation to the provision is reported in the net interest income.

from the defi ned benefi t obligations. This yields the defi ned benefi t liability (asset) to be recognised.

respective reporting period on high-quality fi xed-interest industrial bonds with a comparable term.

The other provisions take into consideration all realisable risks and uncertain obligations. They are recognised at the respective amount which, according to commercial judgement, is necessary at the balance sheet date to cover future payment obligations of the group. Hereby the respective amount which arises as the most probable on careful examination of the facts is recognised.

Long-term provisions are, as far as they are not immaterial, entered into the accounts at their discounted discharge amount as at the balance sheet date. The discharge amount also includes the cost increases to be considered on the reporting date. Provisions which arise from the obligation to recultivate gravel sites are allocated according to the rate of utilisation.

NON-FINANCIAL LIABILITIES

Non-fi nancial liabilities are carried at the repayment amount. Contract liabilities under IFRS 15 are qualifi ed as non-fi nancial liabilities.

FINANCIAL LIABILITIES

The fi nancial liabilities at STRABAG comprise non-derivative liabilities and derivatives with a negative fair value on the reporting date.

Non-derivative fi nancial liabilities are recognised in the consolidated balance sheet if STRABAG has a contractual obligation to transfer cash or other fi nancial assets to another party. Initial recognition of non-derivative fi nancial liabilities is made at fair value. As part of the subsequent measurement of non-derivative fi nancial liabilities at amortised cost, any premiums and discounts between the cash infl ow and the repayment amount are distributed over the fi nancing term using the effective interest method and stated on an accruals basis in interest expense.

Financial liabilities that are not measured at fair value through profi t or loss are initially recognised at fair value plus transaction costs, which are directly attributable to the acquisition.

Differing thereof, transaction costs which arise upon the acquisition of fi nancial assets measured at fair value through profi t or loss are immediately recognised as an expense.

Financial liabilities are derecognised if the contractual obligations are discharged, cancelled or have expired. Costs related to the issue of corporate bonds are offset over the term using the effective interest method.

CONTINGENT LIABILITIES

Contingent liabilities are present or possible future obligations for which an outfl ow of resources is not probable. They are – as long as IFRS 3 does not require recognition on acquisition – not refl ected in the balance sheet.

REVENUE RECOGNITION

The revenue within the STRABAG SE Group comprises revenue from construction contracts with customers, which regularly account for more than 80 % of the total revenue, revenue from project developments, revenue from construction materials, revenue from facility management, and other revenue.

The revenue from construction contracts with customers is recognised over time as required by IFRS 15. Revenue recognition over time is made using the output-oriented method on the basis of the work performed at the reporting date.

For further information, please see the notes on contract assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The recognition of revenue from construction contracts performed in consortia is made over time corresponding to the actual work performed by the reporting date. Impending losses arising from further construction work are accounted for by means of appropriate depreciation.

The revenue from project developments is recognised at a point in time after the performance obligation is satisfi ed by the STRABAG SE Group and after the customer assumes control and has the opportunity to derive benefi t from the project.

Alternatively, the revenue is recognised over time on the basis of the work performed by the reporting date if a contractual agreement for the STRABAG SE Group excludes the possibility of any alternative use and the contractual agreement foresees a right to payment including the profi t margin on the work performed.

For real estate projects that are sold already prior to their completion, the revenue is therefore recognised pro rata and the right to payment including the profi t margin is presented under the contract assets.

For further information, please see the notes on contract assets.

The revenue from construction materials, from the facility management, and the other revenue is recognised with satisfaction of the performance obligation upon obtainment of control by the customer.

Interest income is recognised as it accrues using the effective interest method. Interest related to concession models and default interest are part of the transaction price of contracts with customers and are therefore recognised under revenue.

Other income, such as rental income or expenses passed through, is stated on the basis of the amount accrued in accordance with the respective agreements.

The revenue from dividends and the share of profi ts from investments are recognised if a legal right to payment exists.

NET INTEREST INCOME

Net interest income includes interest income and interest expenses as well as foreign exchange gains and losses on fi nancing, as these are not part of the operating business. Changes in value as well as gains and losses on disposals of securities are also included in net interest income.

ESTIMATES

Estimates and assumptions which refer to the amount and recognition of the assets and liabilities accounted, the income and expenditure as well as the statement of contingent liabilities are necessary for the preparation of the consolidated fi nancial statements according to IFRS.

The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

(a) Recoverability of goodwill

REVENUE RECOGNITION

of appropriate depreciation.

with the respective agreements.

statements according to IFRS.

curities are also included in net interest income.

and liabilities within the next fi nancial year are discussed below.

NET INTEREST INCOME

ESTIMATES

revenue from facility management, and other revenue.

For further information, please see the notes on contract assets.

a right to payment including the profi t margin on the work performed.

For further information, please see the notes on contract assets.

right to payment including the profi t margin is presented under the contract assets.

satisfaction of the performance obligation upon obtainment of control by the customer.

For real estate projects that are sold already prior to their completion, the revenue is therefore recognised pro rata and the

The revenue from construction materials, from the facility management, and the other revenue is recognised with

Other income, such as rental income or expenses passed through, is stated on the basis of the amount accrued in accordance

The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets

The revenue from dividends and the share of profi ts from investments are recognised if a legal right to payment exists.

The group conducts an annual test to determine whether its goodwill is impaired in accordance with the accounting policies described in the section "Impairment of non-fi nancial assets". The recoverable amount of the CGUs was determined using fair value less costs of disposal. These calculations are based on assumptions about the expected business development and the recoverable margin. Estimates about the expected business development are based on the facts and circumstances prevailing at the time of preparation of the consolidated fi nancial statements as well as on realistic assumptions about the future development of the global and industry-specifi c environment. In response to changes in these underlying conditions which deviate from the assumptions and are beyond the Management Board's control, actual values may deviate from the estimated values.

All other things remaining equal, an annual 5 % decrease of the free cash fl ow used to calculate the recoverable amount would result in an impairment loss of T€ 0 (2018: T€ 44) while an isolated increase of the cost of capital by one percentage point would lead to an impairment of T€ 0 (2018: T€ 222). These two effects together would trigger an impairment loss of T€ 0 (2018: T€ 1,303).

(b) Recognition of revenue from construction contracts with customers and project developments

The revenue from construction contracts with customers is recognised over time. The group estimates the work performed by the reporting date as a percentage of the total volume of the order backlog as well as the remaining contract cost to be incurred. If it is probable that the production costs will exceed the recoverable proceeds, an impairment is recognised up to the value of the contract asset; if the value of the respective contract asset is exceeded, an onerous contract provision is recognised. Technically complex and demanding projects, in particular, involve the risk that the estimate of the total cost deviates considerably from the actual cost incurred.

The above also applies to over-time recognition of revenue from project developments.

(c) Equity-accounted investments

The group holds a 30 % investment in Lafarge Cement CE Holding GmbH. Lafarge operates cement works in Austria, Hungary, the Czech Republic and Slovenia. The carrying amount of the investment amounted to T€ 227,846 on 31 December 2019 (2018: T€ 230,996). The investment was tested for impairment by means of an impairment test.

All other things remaining equal, an annual 5 % decrease of the free cash fl ow used to calculate the recoverable amount would result in an impairment loss of T€ 0 (2018: T€ 0), while an isolated increase of the cost of capital by one percentage point would lead to an impairment of T€ 0 (2018: T€ 0). These two effects together would trigger an impairment loss of T€ 0 (2018: T€: 0).

Ed. Züblin AG, a subsidiary of the STRABAG Group, is a 33.33 % consortium member for the construction of the North-South urban metro line in Cologne. In March 2009, an accident resulted in the collapse of the Historical Archive of the City of Cologne and signifi cant portions of two neighbouring buildings. Two people were trapped under the rubble, and rescuers were only able to recover their bodies.

Two independent civil proceedings are currently being conducted at the District Court in Cologne: one to collect evidence as to the cause of the accident and another to establish the damage to the buildings and archives.

In the criminal proceedings concluded in 2018 in the fi rst instance and now pending on appeal, both the expert for the public prosecutor and the expert in the civil evidentiary proceedings into the cause of the damage, who testifi ed as a witness, identifi ed a defect in the diaphragm wall as the cause of the damage. The consortium therefore faces the possibility of recourse. In 2019, the amount of the provision was therefore adjusted. The amount of the recognised provision depends substantially on the estimation of the damage amount to the archival contents and on the degree of fault of the consortium, so that the actual value of recourse may deviate from the amount recognised as a provision.

(d) Income taxes

STRABAG has to calculate the actual income tax expected for each taxable entity and must assess the temporary differences arising from the different treatment of certain balance sheet items in the IFRS consolidated fi nancial statements and the statutory fi nancial statements required for tax purposes. The existence of temporary differences usually results in the recognition of deferred tax assets and liabilities in the consolidated fi nancial statements.

The management must make assessments in the calculation of current and deferred taxes. Deferred tax assets are recognised to the extent that their use is probable. The use of deferred tax assets depends on the possibility of realising suffi cient taxable income under the respective tax type and jurisdiction under consideration of any possible legal restrictions regarding the maximum loss carryforward period. A number of different factors is used to assess the probability of the future usability of deferred tax assets, such as the past fi nancial performance, operational planning, loss carryforward periods and tax planning strategies. If the actual results deviate from these estimates, or if these estimates must be adjusted in future periods, this could have a negative impact on the fi nancial position, fi nancial performance and cash fl ows. In the event of a changed assessment of the recoverability of deferred tax assets, the deferred tax assets which have been recognised are written down in profi t or loss or, depending on their original formation, outside profi t or loss; impaired deferred tax assets are similarly recognised either in profi t or loss or outside profi t or loss.

(e) Fair value of derivatives and other fi nancial instruments

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of fi nancial instruments that are not traded in an active market is determined by using suitable valuation techniques selected from among a number of different methods. The assumptions used are mainly based on market conditions existing at the balance sheet date. The group uses present value techniques to determine the fair value of a number of available-for-sale fi nancial assets that are not traded in an active market.

(f) Rights from leases and lease liabilities

Within the STRABAG SE Group, a large number of the contracts are lease contracts with comparatively low annual rental expenses, of both limited and indefi nite duration and with ordinary termination rights. The lease liability is determined by estimating the most likely duration in consideration of extension options and termination rights. All economic aspects for exercising or not exercising the options are taken into account. Deviations between the actual lease terms and these assumptions have an impact on the respective carrying amounts. The risk is reduced by the large number of stand-alone contracts, however.

(g) Severance and pension provisions

The present value of the severance and pension obligations depends on a number of different factors based on actuarial assumptions. One of the assumptions used to determine the net expenses or income for pensions is the discount rate. Any change to these assumptions will infl uence the carrying amount of the pension obligation.

The group determines the appropriate discount rate at the end of every year. The discount rate is the interest rate used to determine the present value of future cash fl ows required to settle the obligation. For the purpose of determining the discount rate, the group employs the interest rate of highest-grade industrial bonds in the same currency in which the benefi ts are paid and which have terms to maturity equivalent to those of the pension obligations.

Additional substantial assumptions relating to severance and pension obligations are based in part on market conditions. Further information and sensitivity analyses can be found in item 25.

(h) Other provisions

Other construction-related provisions, in particular, involve the risk that in individual cases the actual costs for warranty obligations or remaining performance obligations will turn out higher than expected. The balance sheet item other construction-related provisions is composed of several individual projects together, however, as a result of which the risk is reduced to the individual consideration of the projects.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 39Provisions have been set up in response to the investigation by the Public Prosecutor's Offi ce for Combating Economic Crimes and Corruption and the Federal Competition Authority into suspicions of illegal price fi xing that has been ongoing since mid-2017. These were adapted in the reporting period. The focus is on projects from the years 2006 to 2015 in multiple regions of Austria, mostly in the fi eld of transportation infrastructures. Due to the long period covered and because of the large number of construction projects involved, of which only some were executed by STRABAG, the facts of the case are extremely complex. If and to what extent STRABAG will be affected negatively cannot be defi nitively determined until after the conclusion of the investigation. The exact fi nancial impact may therefore differ from the estimated amount.

Provisions for ongoing and pending legal proceedings are formed on the basis of current assessments. The outcome of these legal proceedings cannot be determined or is subject to uncertainties. The actual claims from the legal proceedings may therefore differ from the provision amounts.

Notes on the items of the consolidated income statement

(1) REVENUE

(d) Income taxes

Additional substantial assumptions relating to severance and pension obligations are based in part on market conditions.

recognition of deferred tax assets and liabilities in the consolidated fi nancial statements.

similarly recognised either in profi t or loss or outside profi t or loss.

number of available-for-sale fi nancial assets that are not traded in an active market.

change to these assumptions will infl uence the carrying amount of the pension obligation.

Further information and sensitivity analyses can be found in item 25.

benefi ts are paid and which have terms to maturity equivalent to those of the pension obligations.

(e) Fair value of derivatives and other fi nancial instruments

(f) Rights from leases and lease liabilities

(g) Severance and pension provisions

to the individual consideration of the projects.

contracts, however.

(h) Other provisions

Revenue is represented as follows:

Revenue 2019

T€	North + West	South + East	International + Special Divisions	Other	Group
Business
Construction	7,323,176	4,649,284	1,278,747		13,251,207
Germany	5,749,644	88,608	78,525		5,916,777
Austria	27,202	1,988,688	109,912		2,125,802
Poland	958,100	191	8,026		966,317
Czech Republic	0	659,760	18,273		678,033
Hungary	0	666,585	2,233		668,818
Chile	0	0	664,631		664,631
Other countries, each below € 500 million	588,230	1,245,452	397,147		2,230,829
Construction materials	140,322	122,896	403,820		667,038
Facility management	0	0	880,063		880,063
Project development	0	0	554,427		554,427
Other	92,253	107,318	99,617	16,651	315,839
Total	7,555,751	4,879,498	3,216,674	16,651	15,668,574

Revenue 2018

T€	North + West	South + East	International + Special Divisions	Other	Group
Business
Construction	6,987,730	4,328,391	1,370,388		12,686,509
Germany	5,620,290	121,095	203,100		5,944,485
Austria	21,065	1,760,722	128,380		1,910,167
Poland	764,061	115	8,570		772,746
Chile	0	0	586,389		586,389
Czech Republic	0	557,115	17,118		574,233
Hungary	183	532,780	27,305		560,268
Other countries, each below € 500 million	582,131	1,356,564	399,526		2,338,221
Construction materials	149,679	100,858	379,615		630,152
Facility management	0	0	1,064,707		1,064,707
Project development	0	0	534,047		534,047
Other	105,007	92,564	89,063	19,783	306,417
Total	7,242,416	4,521,813	3,437,820	19,783	15,221,832

Service concession arrangements to develop, design, build and fi nance infrastructure facilities are part of the operating business of STRABAG SE. Interest income from these concession arrangements are therefore recognised in revenue from project development amounting to T€ 63,274 (2018: T€ 51,093)1 (see also the notes on receivables from concession arrangements).

The interest income is calculated using the effective interest method.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

All values presented under revenue involve revenue from contracts with customers.

In the 2019 fi nancial year, revenue from approved claims in the amount of T€ 142,930 (2018: T€ 103,651) was recognised. This involves a large number of individual projects. The costs arising from claims are recognised immediately in profi t or loss as they occur, whereas realisation takes place only following acknowledgement from the client.

Due to the complexity of construction projects, there can be numerous claims, some of which are approved during the construction process while others are negotiated only after project completion. During the execution of a construction project, therefore, new claims may arise on an ongoing basis while existing claims from previous periods may be approved. Up to 100 individual claims are quite common in a medium-sized construction project. It is therefore not possible to clearly allocate the costs to the approved claims, so that assumptions must be made when determining the value.

Revenue provides only an incomplete picture of the output volume achieved in the fi nancial year. Output volume is a usual concept in the construction industry and at the STRABAG Group comprises the value of the produced goods and services. The total output volume of the group is therefore represented in addition to the revenue to also include the proportional output of consortia and associates:

T€	2019	2018
Germany	7,818,592	7,876,652
Austria	2,678,665	2,541,497
Poland	1,129,217	975,346
Hungary	847,821	713,889
Czech Republic	782,779	706,445
Americas	713,511	667,015
Slovakia	369,043	514,490
Rest of Europe	342,788	349,475
Benelux	317,736	350,762
Switzerland	231,951	273,208
Romania	225,501	197,366
Sweden	205,270	178,343
Asia	179,062	162,128
Croatia	152,481	162,811
Serbia	148,108	111,034
Middle East	147,964	205,677
Denmark	99,485	91,710
Russia	71,420	77,459
Africa	66,013	57,133
Slovenia	48,707	68,338
Bulgaria	41,858	42,098
Total output volume	16,617,972	16,322,876

(2) OTHER OPERATING INCOME

T€ 2019 2018 Germany 7,818,592 7,876,652 Austria 2,678,665 2,541,497 Poland 1,129,217 975,346 Hungary 847,821 713,889 Czech Republic 782,779 706,445 Americas 713,511 667,015 Slovakia 369,043 514,490 Rest of Europe 342,788 349,475 Benelux 317,736 350,762 Switzerland 231,951 273,208 Romania 225,501 197,366 Sweden 205,270 178,343 Asia 179,062 162,128 Croatia 152,481 162,811 Serbia 148,108 111,034 Middle East 147,964 205,677 Denmark 99,485 91,710 Russia 71,420 77,459 Africa 66,013 57,133 Slovenia 48,707 68,338 Bulgaria 41,858 42,098 Total output volume 16,617,972 16,322,876

(see also the notes on receivables from concession arrangements).

development amounting to T€ 63,274 (2018: T€ 51,093)1

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

of consortia and associates:

1 In 2018, interest expenses of T€ -22,095 were deducted.

The interest income is calculated using the effective interest method.

All values presented under revenue involve revenue from contracts with customers.

as they occur, whereas realisation takes place only following acknowledgement from the client.

allocate the costs to the approved claims, so that assumptions must be made when determining the value.

Other operating income includes insurance compensation and indemnifi cation in the amount of T€ 56,862 (2018: T€ 47,067), exchange rate gains from currency fl uctuations in the amount of T€ 3,331 (2018: T€ 8,684) as well as gains from the disposal of fi xed assets without fi nancial assets in the amount of T€ 55,967 (2018: T€ 73,438).

(3) CONSTRUCTION MATERIALS, CONSUMABLES AND SERVICES USED

T€	2019	2018
Construction materials, consumables	2,951,464	2,994,170
Services used	7,160,390	7,131,601
Construction materials, consumables and services used	10,111,854	10,125,771

Services used are mainly attributed to services of subcontractors and professional craftsmen as well as planning services, machine rentals and third-party repairs. The change of provisions for onerous contracts arising from construction contracts is included in this item.

(4) EMPLOYEE BENEFITS EXPENSE

T€	2019	2018
Wages	1,315,287	1,252,942
Salaries	1,769,175	1,730,834
Social security and related costs	603,400	581,625
Expenses for severance payments and contributions to employee provident fund	13,887	14,431
Expenses for pensions and similar obligations	12,604	9,556
Other social expenditure	30,796	29,553
Employee benefi ts expenses	3,745,149	3,618,941

The expenses for severance payments and contributions to the employee provident fund and expenses for pensions and similar obligations include the expenses for service costs and indemnity claims resulting from old age part-time claims in the business year. The proportions of interest included in the expenses for severance payments as well as for pensions and similar obligations are recognised in the item net interest income.

Expenses from defi ned contribution plans amounted to T€ 12,447 (2018: T€ 11,539).

The average number of employees with the proportional inclusion of all participation companies is as follows:

Average number of employees (FTE)	2019	2018
White-collar workers	32,480	31,662
Blue-collar workers	44,439	43,798
Total	76,919	75,460

(5) OTHER OPERATING EXPENSES

Other operating expenses of T€ 1,024,017 (2018: T€ 854,892) mainly include general administrative costs, travel and advertising costs, insurance premiums, impairment of receivables, the balance of allocations to and utilisation of provisions, legal and advisory costs, rental and lease costs, interest expenses from concession projects and losses on the disposal of assets (excluding fi nancial assets). Other taxes amounting to T€ 53,226 (2018: T€ 59,535) are included.

Other operating expenses include losses from exchange rate differences from currency fl uctuations in the amount of T€ 22,246 (2018: T€ 4,671).

The changes in the other operating expenses include impairments for expected credit losses under IFRS 9 in the fi nancial year in the amount of T€ -4,975 as income (2018: T€ 3,183 expenses).

Spending on research and development arose in various special technical proposals, in connection with concrete competitive projects and in the introduction of building processes and products into the market, and was therefore recognised in full in the income statement.

(6) SHARE OF PROFIT OR LOSS OF EQUITY-ACCOUNTED INVESTMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€	2019	2018
Income from equity-accounted investments	44,322	87,622
Expenses arising from equity-accounted investments	-2,891	-3,663
Gains on the disposal of equity-accounted investments	95	0
Profi t from construction consortia	135,449	166,519
Losses from construction consortia	-198,454	-167,302
Share of profi t or loss of equity-accounted investments	-21,479	83,176

In 2019, the losses from joint ventures include risk provisions for litigations in joint ventures.

In 2018, the income from equity-accounted investments includes the non-cash revaluation amount for the remaining 50 % interest of PANSUEVIA due to the full acquisition of the company in the fi nancial year, amounting to T€ 55,314.

(7) NET INCOME FROM INVESTMENTS

T€	2019	2018
Investment income	90,254	67,058
Expenses arising from investments	-12,704	-9,234
Gains on the disposal of investments	10,295	11,425
Impairment and reversal of impairment losses of investments	-5,111	-11,962
Losses on the disposal of investments	-18	-5
Net income from investments	82,716	57,282

Net income from investments includes the reversal of a risk provision of T€ 20,700 from a project in the Netherlands.

(8) DEPRECIATION AND AMORTISATION EXPENSE

Depreciations and impairments are represented in the consolidated statement of fi xed assets. In the year under report impairments on intangible assets and on property, plant and equipment to the amount of T€ 18,140 (2018: T€ 3,930) and reversal of impairment losses in the amount of T€ 7 (2018: T€ 120) were made. Impairment on goodwill amounts to T€ 2,024 (2018: T€ 1,734). For goodwill impairments we refer to the details under item 12.

Depreciation and amortisation expense of intangible and tangible assets includes depreciation and amortisation of right-ofuse assets for leases in the amount of T€ 58,607 (2018: T€ 0).

(9) NET INTEREST INCOME

T€	2019	2018
Interest and similar income	30,973	38,617
Interest expense and similar charges	-56,315	-66,049
Net interest income	-25,342	-27,432

Included in interests and similar income are exchange rates gains amounting to T€ 5,720 (2018: T€ 18,000) and interest portions from the plan assets for pension provisions in the amount of T€ 1,553 (2018: T€ 1,449).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 43Included in interest expense and similar charges are interest components from the allocation of severance payment and pension provisions amounting to T€ 9,525 (2018: T€ 8,825) as well as currency losses of T€ 11,653 (2018: T€ 13,352).

Interest from leases in the amount of T€ 6,263 (2018: T€ 0) is included in the interest expense and similar charges.

(10) INCOME TAX EXPENSE

The changes in the other operating expenses include impairments for expected credit losses under IFRS 9 in the fi nancial

T€ 2019 2018 Income from equity-accounted investments 44,322 87,622 Expenses arising from equity-accounted investments -2,891 -3,663 Gains on the disposal of equity-accounted investments 95 0 Profi t from construction consortia 135,449 166,519 Losses from construction consortia -198,454 -167,302 Share of profi t or loss of equity-accounted investments -21,479 83,176

In 2018, the income from equity-accounted investments includes the non-cash revaluation amount for the remaining 50 %

T€ 2019 2018 Investment income 90,254 67,058 Expenses arising from investments -12,704 -9,234 Gains on the disposal of investments 10,295 11,425 Impairment and reversal of impairment losses of investments -5,111 -11,962 Losses on the disposal of investments -18 -5 Net income from investments 82,716 57,282

Net income from investments includes the reversal of a risk provision of T€ 20,700 from a project in the Netherlands.

Depreciation and amortisation expense of intangible and tangible assets includes depreciation and amortisation of right-of-

T€ 2019 2018 Interest and similar income 30,973 38,617 Interest expense and similar charges -56,315 -66,049 Net interest income -25,342 -27,432

Included in interests and similar income are exchange rates gains amounting to T€ 5,720 (2018: T€ 18,000) and interest

portions from the plan assets for pension provisions in the amount of T€ 1,553 (2018: T€ 1,449).

interest of PANSUEVIA due to the full acquisition of the company in the fi nancial year, amounting to T€ 55,314.

year in the amount of T€ -4,975 as income (2018: T€ 3,183 expenses).

(6) SHARE OF PROFIT OR LOSS OF EQUITY-ACCOUNTED INVESTMENTS

In 2019, the losses from joint ventures include risk provisions for litigations in joint ventures.

the income statement.

(7) NET INCOME FROM INVESTMENTS

(8) DEPRECIATION AND AMORTISATION EXPENSE

(9) NET INTEREST INCOME

use assets for leases in the amount of T€ 58,607 (2018: T€ 0).

(2018: T€ 1,734). For goodwill impairments we refer to the details under item 12.

Income tax includes taxes paid in the individual companies or owed on income, as well as deferred taxes and the payments of additional tax payments resulting from tax audits:

T€	2019	2018
Current taxes	165,781	115,651
Deferred taxes	32,903	52,348
Income tax expense	198,684	167,999

The following tax components are recognised directly in equity in the statement of comprehensive income:

T€	2019	2018
Change in hedging reserves	6,264	3,349
Actuarial gains/losses	13,704	1,285
Total	19,968	4,634

The reasons for the difference between the Austrian corporate income tax rate of 25 % valid in 2019 and the actual consolidated tax rate are as follows:

T€	2019	2018
EBT	577,239	530,783

Theoretical tax expenditure 25%	144,310	132,696
Differences to foreign tax rates	5,646	2,502
Change in tax rates	77	2,977
Non-tax deductible expenses	40,438	6,896
Tax-free earnings	-12,678	-25,574
Additional tax payments/tax refund	17,152	9,029
Change of valuation adjustment on deferred tax assets	2,514	38,668
Others	1,225	805
Recognised income tax	198,684	167,999

(11) EARNINGS PER SHARE

The basic earnings per share are calculated by dividing the consolidated profi t or loss by the weighted average number of ordinary shares.

As there are no stock options at the STRABAG Group, the diluted earnings per share equal the basic earnings per share.

	2019	2018
Number of ordinary shares	110,000,000	110,000,000
Number of shares bought back	-7,400,000	-7,400,000
Number of shares outstanding as at 31.12.	102,600,000	102,600,000

Profi t or loss attributable to equity holders of the parent company
(consolidated profi t/loss) T€	371,695	353,535
Weighted number of shares outstanding during the year	102,600,000	102,600,000
Earnings per share €	3.62	3.45

Notes on the items in the consolidated balance sheet

(12) INTANGIBLE ASSETS

The composition of and changes in intangible assets and goodwill is shown in the consolidated statement of fi xed assets.

No borrowing costs were capitalised for intangible assets in the year under report.

Notes to goodwill

The goodwill at the balance sheet date is composed as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€	31.12.2019	31.12.2018
STRABAG Cologne (N+W)	128,838	128,838
STRABAG Cologne (S+E)	61,105	61,105
Czech Republic (S+E)	71,600	70,720
STRABAG Poland (N+W)	61,736	61,096
DIW Group (incl. SPFS Austria, SPFS Czech Republic; I+S)	51,795	50,931
Ed. Züblin AG (N+W)	17,057	17,057
Germany (various CGUs; N+W)	40,262	42,262
Construction materials (various CGUs; I+S)	9,015	10,953
Other	12,097	9,562
Total goodwill	453,505	452,524

The comparison of the carrying amounts with the recoverable amounts of the cash-generating units determined by the annual impairment test showed a need for goodwill impairment of T€ 2,024 (2018: T€ 1,734). This fi gure is shown under depreciation and amortisation. The recoverable amount of the impaired cash-generating unit amounts to T€ 7,915 (2018: T€ 629).

The impairments in the fi nancial year concern a construction material company assigned to the segment International + Special Divisions. The recoverable amount of this cash-generating unit (CGU) corresponds to its fair value less costs to sell. The necessary impairment of the CGU exclusively affected the goodwill; impairment was not necessary for other assets of the unit.

The methods of measurement are explained in the section "Accounting policies" (Impairment of non-fi nancial assets). The method applied here is a Level 3 measurement.

Regarding the sensitivity analysis of goodwill, we refer to our notes under "Estimates (a) Recoverability of goodwill" on page 39.

The following table presents the key assumptions used in calculating the recoverable amount for signifi cant goodwill.

	Carrying amount	Methodology	Detailed planning period	Growth rate	Discount rate after tax
T€	31.12.2019	31.12.2019	31.12.2019	31.12.2019	31.12.2019
STRABAG Cologne (N+W)		FV less cost of disposal (Level 3)			6.10 %
	128,838	[2018: FV less cost of disposal (Level 3)]	4 (2018: 4)	0 (2018:0)	(2018: 6.59 %)
STRABAG Cologne (S+E)		FV less cost of disposal (Level 3)			6.43 %
	61,105	[2018: FV less cost of disposal (Level 3)]	4 (2018: 4)	0 (2018:0)	(2018: 6.99 %)
Czech Republic (S+E)		FV less cost of disposal (Level 3)			6.70 %
	71,600	[2018: FV less cost of disposal (Level 3)]	4 (2018: 4)	0 (2018:0)	(2018: 7.30 %)
STRABAG Poland (N+W)		FV less cost of disposal (Level 3)			6.82 %
	61,736	[2018: FV less cost of disposal (Level 3)]	4 (2018: 4)	0 (2018:0)	(2018: 7.43 %)
DIW Group (incl. SPFS Austria,		FV less cost of disposal (Level 3)			6.10 %
SPFS Czech Republic; I+S)	51,795	[2018: FV less cost of disposal (Level 3)]	4 (2018: 4)	0 (2018:0)	(2018: 6.59 %)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 45There were no intangible assets with indefi nite useful lives allocated to the CGUs listed below.

The method used is a discounted cash fl ow model based on recognised valuation techniques, with the forecast of the cash fl ows calculated by the management on the basis of experience. An annual 5 % decrease of the cash fl ow and a simultaneous increase of the interest rate by one percentage point would not result in any impairment loss of the goodwill mentioned above. The key assumptions used to determine the recoverable amount were future cash fl ows and the cost of capital. Management does not consider that any reasonably possible change in the key assumptions would cause the carrying amount of the CGU which contains the abovementioned goodwill to exceed its recoverable amount.

Capitalised development costs

Notes on the items in the consolidated balance sheet

No borrowing costs were capitalised for intangible assets in the year under report.

The goodwill at the balance sheet date is composed as follows:

The composition of and changes in intangible assets and goodwill is shown in the consolidated statement of fi xed assets.

T€ 31.12.2019 31.12.2018 STRABAG Cologne (N+W) 128,838 128,838 STRABAG Cologne (S+E) 61,105 61,105 Czech Republic (S+E) 71,600 70,720 STRABAG Poland (N+W) 61,736 61,096 DIW Group (incl. SPFS Austria, SPFS Czech Republic; I+S) 51,795 50,931 Ed. Züblin AG (N+W) 17,057 17,057 Germany (various CGUs; N+W) 40,262 42,262 Construction materials (various CGUs; I+S) 9,015 10,953 Other 12,097 9,562 Total goodwill 453,505 452,524

The methods of measurement are explained in the section "Accounting policies" (Impairment of non-fi nancial assets). The

Regarding the sensitivity analysis of goodwill, we refer to our notes under "Estimates (a) Recoverability of goodwill" on page 39.

The following table presents the key assumptions used in calculating the recoverable amount for signifi cant goodwill.

(12) INTANGIBLE ASSETS

Notes to goodwill

the unit.

method applied here is a Level 3 measurement.

At the balance sheet date, development costs in the amount of T€ 0 (2018: T€ 0) were capitalised as intangible assets. A total of T€ 7,501 (2018: T€ 8,707) in development costs incurred in the 2019 fi nancial year were recorded as expenses as the necessary capitalisation criteria were not met.

(13) RIGHTS FROM CONCESSION ARRANGEMENTS

STRABAG has held 100 % of PANSUEVIA GmbH & Co. KG of Jettingen-Scheppach since 28 September 2018.

The company concluded a concession arrangement with the Federal Republic of Germany to design, build and fi nance a section of the A8 motorway and to maintain and operate a section of the A8 motorway between Ulm and Augsburg.

In exchange, PANSUEVIA receives the right to charge trucks a uniform toll rate per kilometre on an approx. 57 km long concession section. The toll may be adapted annually. The term of the concession arrangement is set at 30 years and ends on 30 June 2041.

The development of the concession right can be found in the consolidated statement of fi xed assets. The concession right is amortised over the term of 30 years on the basis of the use of the concession section. The annual income from the toll collections is recognised as revenue.

The right from the concession arrangement is offset by variable and fi xed interest rate non-recourse fi nancing in the amount of T€ 384,406 (2018: T€ 392,046) classifi ed either as a current or non-current liability depending on the term to maturity. The resulting interest expenses are recognised under other operating expenses. The interest risk based on variable interest was hedged through the conclusion of interest rate swap agreements that satisfy the requirements for presentation as a cash fl ow hedge. The changes in the value of the interest rate swap are therefore recognised in the other comprehensive income.

(14) PROPERTY, PLANT AND EQUIPMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The composition of and changes in property, plant and equipment is shown in the consolidated statement of fi xed assets.

Borrowing costs in the amount of T€ 0 were capitalised for property, plant and equipment in the year under report (2018: T€ 1,612).

Leases

Lessee

The development of right-of-use assets from leases is shown in the consolidated statement of fi xed assets.

The cash outfl ows from leases in the 2019 fi nancial year break down as follows:

T€	31.12.2019
Interest from leases	6,263
Redemption of leases	56,424
Variable lease payments	6,371
Payments for short-term leases	8,944
Total lease payments	78,002

Additionally, expenses for short-term equipment rentals in the amount of T€ 161,131 (2018: T€ 151,530) were incurred in the fi nancial year.

To a minor extent, the STRABAG Group also rents offi ce space to third parties and thus acts as a lessor. This particularly involves the Tech Gate building in Vienna. The annual rental income amounts to T€ 2,638 and is shown in other operating income.

The carrying amount of this building as of 31 December 2019 is T€ 70,073 and is recorded under property, plant and equipment (properties and buildings). Rental income in the next year and the following fi ve years will remain roughly constant. All leases are classifi ed as operating leases.

Restrictions on property, plant and equipment/purchase obligations

As at the balance sheet date there were T€ 54,033 (2018: T€ 80,189) in contractual commitments for acquisition of property, plant and equipment which were not considered in the fi nancial statements.

Restrictions exist for non-current assets in the amount of T€ 287 (2018: T€ 326).

Investment property

The development of investment property is shown separately in the consolidated statement of fi xed assets. The fair value of investment property amounts to T€ 5,704 as at 31 December 2019 (2018: T€ 5,834). The fair value was determined using internal valuation reports or by employing the fair value of development land at market prices.

The rental income from investment property in the 2019 fi nancial year amounted to T€ 6,664 (2018: T€ 8,359) and direct operating expenses totalled T€ 6,475 (2018: T€ 6,108). Rental income in the next year and the following fi ve years will remain roughly constant. In the fi nancial year, as in the year before, no direct expenses were incurred from unlet investment property. Additionally, gains from asset disposals in the amount of T€ 0 (2018: T€ 356) and losses from asset disposals in the amount of T€ 40 (2018: T€ 0) were achieved. A reversal of impairment losses in the amount of T€ 0 was made in the fi nancial year 2019 (2018: T€ 0).

The internal valuation reports are to be classifi ed as Level 3 methods of measurements and build on data that are also based on values that cannot be observed in the market.

(15) EQUITY-ACCOUNTED INVESTMENTS

T€	2019	2018
Carrying amount as at 1.1.	378,617	350,013
Additions in scope of consolidation	42,877	14,311
Disposals in scope of consolidation	0	-55,314
Acquisitions/contributions	23,250	10,433
Proportional annual results	41,526	83,960
Received distributions	-25,016	-22,911
Proportional other income	-6,627	-3,096
Other	-95	1,221
Carrying amount as at 31.12.	454,532	378,617

Notes on associates

(14) PROPERTY, PLANT AND EQUIPMENT

Leases

Lessee

fi nancial year.

Investment property

2019 (2018: T€ 0).

on values that cannot be observed in the market.

leases are classifi ed as operating leases.

income.

The composition of and changes in property, plant and equipment is shown in the consolidated statement of fi xed assets.

Borrowing costs in the amount of T€ 0 were capitalised for property, plant and equipment in the year under report (2018: T€ 1,612).

T€ 31.12.2019 Interest from leases 6,263 Redemption of leases 56,424 Variable lease payments 6,371 Payments for short-term leases 8,944 Total lease payments 78,002

Additionally, expenses for short-term equipment rentals in the amount of T€ 161,131 (2018: T€ 151,530) were incurred in the

As at the balance sheet date there were T€ 54,033 (2018: T€ 80,189) in contractual commitments for acquisition of property,

The internal valuation reports are to be classifi ed as Level 3 methods of measurements and build on data that are also based

The development of right-of-use assets from leases is shown in the consolidated statement of fi xed assets.

The cash outfl ows from leases in the 2019 fi nancial year break down as follows:

Restrictions on property, plant and equipment/purchase obligations

plant and equipment which were not considered in the fi nancial statements.

Restrictions exist for non-current assets in the amount of T€ 287 (2018: T€ 326).

internal valuation reports or by employing the fair value of development land at market prices.

Lafarge Cement CE Holding GmbH, Vienna, is a signifi cant associate. The group's share of the capital and voting rights amounts to 30 %. The company is accounted for using the equity method. We also refer to item 34 (Notes on related parties).

The following fi nancial information concerns the consolidated fi nancial statements prepared in accordance with IFRS.

T€	2019	2018
Revenue	245,792	222,666
Income from continuing operations	30,470	13,916
Other income	-10,966	-5,156
Total comprehensive income	19,504	8,760
attributable to: non-controlling interests	3	91
attributable to: equity holders of the parent company	19,501	8,669

	31.12.2019	31.12.2018
Non-current assets	578,599	577,348
Current assets	144,061	152,887
Non-current liabilities	-173,855	-171,712
Current liabilities	-75,473	-74,696
Net assets	473,332	483,827
attributable to: non-controlling interests	4,123	4,120
attributable to: equity holders of the parent company	469,209	479,707

The fi nancial information presented here can be transferred to the equity carrying amount of the Lafarge Cement CE Holding GmbH in the consolidated fi nancial statements as follows:

T€	2019	2018 150,311
Group's share in net assets as at 1.1.	143,912
Group's share of net income from continuing operations	9,050	4,101
Group's share of other income	-3,200	-1,500
Group's share of total comprehensive income	5,850	2,601
Dividends received	-9,000	-9,000
Group's share in net assets as at 31.12.	140,762	143,912
Goodwill	87,084	87,084
Equity-carrying amount as at 31.12.	227,846	230,996

The following table arranges in aggregate form the carrying amount and the group's share of the profi t and other income from associates that would be insignifi cant by themselves:

T€	2019	2018
Total of equity-carrying amount as at 31.12.	105,782	100,849
Group's share of net income from continuing operations	19,405	8,949
Group's share of other income	-3,427	-1,574
Group's share of total comprehensive income	15,978	7,375

Notes on joint ventures

The following table arranges in aggregate form the carrying amount and the group's share of the profi t and other income from joint ventures that would be insignifi cant by themselves:

T€	2019	2018
Total of equity-carrying amount as at 31.12.	120,904	46,772
Group's share of net income from continuing operations	13,072	70,910
Group's share of other income	0	-22
Group's share of total comprehensive income	13,072	70,888

Notes on accumulated losses from equity-accounted investments

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Proportionate losses from equity-accounted investments in the amount of T€ 6,063 (2018: T€ 19,843) were not recognised in profi t or loss, as the carrying amounts of these investments already are T€ 0.

Notes on consortia

The group classifi es construction consortia as joint ventures and records their earnings under share of profi t or loss of equity-accounted investments. The following table shows the group's ten most important consortia with regard to the output volume in the 2019 fi nancial year.

Construction consortia	Stake in %
ARGE KORALMTUNNEL KAT 2, Austria (KAT)	85.00
ARGE NEUBAU DAIMLER HALLE 80 BREMEN, Germany (BRE)	45.00
ARGE NEUBAU TECHNISCHES RATHAUS MANNHEIM, Germany (MANN)	40.00
ARGE ROHTANG PASS HIGHWAY TUNNEL LOT 1, India (ROHT)	60.00
ARGE TULFES PFONS, Austria (TULF)	51.00
ARGE TUNNEL KRIEGSSTRASSE KARLSRUHE, Germany (KAR)	84.00
COMBINATIE HEREPOORT VOF, the Netherlands (HER)	37.50
CONSORCIO MAR 1, Colombia (MAR)	37.50
JV 5TH WATER SUPPLY SYSTEM TO JERUSALEM, Israel (JER)	99.90
T.H.V.HOUBEN-STRABAG QUARTIER BLEU HASSEL, Belgium (BLEU)	50.00

The fi nancial information in the 2019 fi nancial year on these consortia is presented 100 % before consolidation and valuation approaches deviating from the consortia balance sheet if applicable.

T€	Revenue	Non-current assets	Current assets	thereof cash and cash equivalents	Current liabilities
MAR	103,966	38,561	26,400	9,650	64,961
TULF	90,683	9,332	50,098	50,098	59,430
KAT	86,474	5,840	61,468	546	67,308
HER	65,920	462	42,242	802	42,704
ROHT	47,575	4,343	37,306	5,327	41,649
BLEU	43,872	0	25,919	6,774	25,919
KAR	43,606	321	13,438	3,765	13,759
BRE	38,703	0	29,593	9,441	29,593
MANN	29,218	14	18,653	7,997	18,667
JER	28,648	6,884	20,859	6,166	27,743

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 49In the 2019 fi nancial year, the share of profi t or loss of equity-accounted investments recorded for the above-mentioned consortia included T€ 19,187 in profi ts from consortia and T€ 50,970 in losses from consortia including impending losses.

The fi nancial information in the 2018 fi nancial year on these consortia is presented 100 % before consolidation and valuation approaches deviating from the consortia balance sheet if applicable.

T€	Revenue	Non-current assets	Current assets	thereof cash and cash equivalents	liabilities Current liabilities
MAR	42,281	20,931	22,287	5,077	43,218
TULF	133,961	13,643	65,544	65,544	79,187
KAT	96,392	7,156	51,187	1,437	58,343
HER	60,614	500	30,413	207	30,913
ROHT	44,732	9,430	28,398	7,032	37,828
BLEU	22,960	0	15,566	1,979	15,566
KAR	27,072	700	8,805	2,195	9,505
BRE	90,124	2	51,277	40,226	51,279
MANN	7,306	17	6,863	1,302	6,880
JER	19,247	6,514	15,768	5,135	22,282

In the 2018 fi nancial year, the share of profi t or loss of equity-accounted investments recorded for the above-mentioned consortia included T€ 61,182 in profi ts from consortia and T€ 32,548 in losses from consortia including impending losses.

The business transactions with the consortia in the fi nancial year can be presented as follows:

T€	2019	2018
Work and services performed	1,017,209	897,169
Work and services received	39,207	14,197
Receivables as at 31.12.	532,382	481,711
Liabilities as at 31.12.	498,565	322,432

(16) OTHER INVESTMENTS

The following table arranges in aggregate form the carrying amount and the group's share of the profi t and other income from

T€ 2019 2018 Total of equity-carrying amount as at 31.12. 105,782 100,849 Group's share of net income from continuing operations 19,405 8,949 Group's share of other income -3,427 -1,574 Group's share of total comprehensive income 15,978 7,375

The following table arranges in aggregate form the carrying amount and the group's share of the profi t and other income from

T€ 2019 2018 Total of equity-carrying amount as at 31.12. 120,904 46,772 Group's share of net income from continuing operations 13,072 70,910 Group's share of other income 0 -22 Group's share of total comprehensive income 13,072 70,888

Proportionate losses from equity-accounted investments in the amount of T€ 6,063 (2018: T€ 19,843) were not recognised in

Construction consortia Stake in % ARGE KORALMTUNNEL KAT 2, Austria (KAT) 85.00 ARGE NEUBAU DAIMLER HALLE 80 BREMEN, Germany (BRE) 45.00 ARGE NEUBAU TECHNISCHES RATHAUS MANNHEIM, Germany (MANN) 40.00 ARGE ROHTANG PASS HIGHWAY TUNNEL LOT 1, India (ROHT) 60.00 ARGE TULFES PFONS, Austria (TULF) 51.00 ARGE TUNNEL KRIEGSSTRASSE KARLSRUHE, Germany (KAR) 84.00 COMBINATIE HEREPOORT VOF, the Netherlands (HER) 37.50 CONSORCIO MAR 1, Colombia (MAR) 37.50 JV 5TH WATER SUPPLY SYSTEM TO JERUSALEM, Israel (JER) 99.90 T.H.V.HOUBEN-STRABAG QUARTIER BLEU HASSEL, Belgium (BLEU) 50.00

The fi nancial information in the 2019 fi nancial year on these consortia is presented 100 % before consolidation and valuation

assets Current assets

MAR 103,966 38,561 26,400 9,650 0 64,961 TULF 90,683 9,332 50,098 50,098 0 59,430 KAT 86,474 5,840 61,468 546 0 67,308 HER 65,920 462 42,242 802 0 42,704 ROHT 47,575 4,343 37,306 5,327 0 41,649 BLEU 43,872 0 25,919 6,774 0 25,919 KAR 43,606 321 13,438 3,765 0 13,759 BRE 38,703 0 29,593 9,441 0 29,593 MANN 29,218 14 18,653 7,997 0 18,667 JER 28,648 6,884 20,859 6,166 0 27,743

thereof cash and cash equivalents

Non-current

liabilities Current liabilities

Non-current

associates that would be insignifi cant by themselves:

joint ventures that would be insignifi cant by themselves:

Notes on accumulated losses from equity-accounted investments

approaches deviating from the consortia balance sheet if applicable.

profi t or loss, as the carrying amounts of these investments already are T€ 0.

Notes on joint ventures

Notes on consortia

volume in the 2019 fi nancial year.

T€ Revenue

The other investments in companies include investments in subsidiaries, associated companies, joint ventures and other investments which, being immaterial, are reported as not consolidated and are not included at equity in the consolidated fi nancial statements. Detailed information on the group's investments (shares of more than 20 %) can be found in the list of subsidiaries, equity-accounted investments and investee companies.

The development of the other investments in the fi nancial year was as follows:

T€	Balance as at 1.1.2019	Currency translation	Changes in scope of consolidation	Additions	Transfers	Disposal	Impairment/ Reversal of impairment losses	Balance as at 31.12.2019
Investments
in subsidiaries	86,071	0	-1,653	6,603	-134	-481	-3,790	86,616
Investments	99,226	215	-2,473	2,988	134	-10,323	-1,321	88,446
Other investments	185,297	215	-4,126	9,591	0	-10,804	-5,111	175,062

The development of the other investments in the previous fi nancial year was as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€	Balance as at 1.1.2018	IFRS 9 Change	Currency translation	Changes in scope of consolidation	Additions	Transfers	Disposal	Impairment/ Reversal of impairment losses	Balance as at 31.12.2018
Investments in
subsidiaries	82,711	0	0	1,107	12,948	284	-702	-10,277	86,071
Investments	99,987	5,299	690	-14,351	9,907	-284	-337	-1,685	99,226
Other investments	182,698	5,299	690	-13,244	22,855	0	-1,039	-11,962	185,297

(17) DEFERRED TAXES

Tax accruals and deferrals recognised in the balance sheet on temporary differences between the amounts stated in the IFRS fi nancial statements and the respective tax amounts as well as on losses carried forward developed as follows:

T€	Balance as at 1.1.2019	Currency translation	Changes in scope of consolidation	Other changes	Balance as at 31.12.2019
Intangible assets and property, plant and equipment	34,548	396	0	4,365	39,309
Financial assets	613	5	0	5,668	6,286
Inventories	14,558	51	0	1,145	15,754
Trade and other receivables	103,262	63	0	7,698	111,023
Provisions	193,688	-383	263	-1,456	192,112
Liabilities	37,135	311	0	8,666	46,112
Tax loss carryforwards	58,148	-63	0	14,847	72,932
Deferred tax assets	441,952	380	263	40,933	483,528
Netting out of deferred tax assets and
liabilities of the same tax authorities	-295,012	0	0	-50,899	-345,911
Deferred tax assets netted out	146,940	380	263	-9,966	137,617

Intangible assets and property, plant and equipment	-81,510	-151	0	-7,832	-89,493
Financial assets	-12,851	0	0	6,432	-6,419
Inventories	-8,828	-572	-72	-10,870	-20,342
Trade and other receivables	-208,352	147	-38	-40,584	-248,827
Provisions	-11,327	-150	0	7,036	-4,441
Liabilities	-15,360	4	0	-9,729	-25,085
Deferred tax liabilities	-338,228	-722	-110	-55,547	-394,607
Netting out of deferred tax assets and
liabilities of the same tax authorities	295,012	0	0	50,899	345,911
Deferred tax liabilities netted out	-43,216	-722	-110	-4,648	-48,696

Deferred taxes on losses carried forward were capitalised as these can probably be offset with future taxable profi ts. The planning period is limited to fi ve years.

No deferred tax assets were made for tax losses carried forward on the corporate income tax and on the German trade tax (Gewerbesteuer) totalling T€ 1,457,880 (2018: T€ 1,368,844), as their effectiveness as fi nal tax relief is not suffi ciently assured.

Of the non-capitalised losses carried forward T€ 1,295,907 (2018: T€ 1,274,665) have unrestricted use.

For the STRABAG SE tax group, Austria, deferred taxes were capitalised despite tax losses in the previous years as well as in the year under report. The recognised deferred taxes for losses carried forward amount to T€ 56,535 (2018: T€ 42,589), for the STRABAG SE tax group. This contains deferred tax assets on open one-seventh impairments in the amount of T€ 55,407 (2018: T€ 37,741). The Austrian Corporate Income Tax Act (Körperschaftsteuergesetz) requires a tax-effective impairment of investments to be claimed over a period of seven years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 51The losses of the ongoing year and of the past were strongly infl uenced by negative special items. To avoid such negative projects, the group has continuously expanded and improved its opportunity and risk management and implemented organisational and strategic improvements. The tax planning for the STRABAG SE tax group for the next fi ve years documents the usability of the tax loss carryforwards.

(18) INVENTORIES

The development of the other investments in the previous fi nancial year was as follows:

Currency translation

Changes in scope of

subsidiaries 82,711 0 0 1,107 12,948 284 -702 -10,277 86,071 Investments 99,987 5,299 690 -14,351 9,907 -284 -337 -1,685 99,226 Other investments 182,698 5,299 690 -13,244 22,855 0 -1,039 -11,962 185,297

Tax accruals and deferrals recognised in the balance sheet on temporary differences between the amounts stated in the IFRS

Intangible assets and property, plant and equipment 34,548 396 0 4,365 39,309 Financial assets 613 5 0 5,668 6,286 Inventories 14,558 51 0 1,145 15,754 Trade and other receivables 103,262 63 0 7,698 111,023 Provisions 193,688 -383 263 -1,456 192,112 Liabilities 37,135 311 0 8,666 46,112 Tax loss carryforwards 58,148 -63 0 14,847 72,932 Deferred tax assets 441,952 380 263 40,933 483,528

liabilities of the same tax authorities -295,012 0 0 -50,899 -345,911 Deferred tax assets netted out 146,940 380 263 -9,966 137,617

Intangible assets and property, plant and equipment -81,510 -151 0 -7,832 -89,493 Financial assets -12,851 0 0 6,432 -6,419 Inventories -8,828 -572 -72 -10,870 -20,342 Trade and other receivables -208,352 147 -38 -40,584 -248,827 Provisions -11,327 -150 0 7,036 -4,441 Liabilities -15,360 4 0 -9,729 -25,085 Deferred tax liabilities -338,228 -722 -110 -55,547 -394,607

liabilities of the same tax authorities 295,012 0 0 50,899 345,911 Deferred tax liabilities netted out -43,216 -722 -110 -4,648 -48,696

Deferred taxes on losses carried forward were capitalised as these can probably be offset with future taxable profi ts. The

Of the non-capitalised losses carried forward T€ 1,295,907 (2018: T€ 1,274,665) have unrestricted use.

Currency translation

fi nancial statements and the respective tax amounts as well as on losses carried forward developed as follows:

Balance as at 1.1.2019

consolidation Additions Transfers Disposal

Changes in scope of

consolidation Other changes

Impairment/ Reversal of impairment losses

Balance as at 31.12.2018

Balance as at 31.12.2019

IFRS 9 Change

Balance as at 1.1.2018

T€

Investments in

(17) DEFERRED TAXES

Netting out of deferred tax assets and

planning period is limited to fi ve years.

investments to be claimed over a period of seven years.

assured.

T€	31.12.2019	31.12.2018
Construction materials, auxiliary supplies and fuel	229,263	234,456
Finished buildings	136,191	146,795
Unfi nished buildings	263,724	145,361
Development land	291,538	284,653
Finished and unfi nished goods	30,015	29,415
Payments made	32,815	49,477
Inventories	983,546	890,157

Impairment in the amount of T€ 5,378 (2018: T€ 2,862) was recognised on inventories excluding construction materials, auxiliary supplies and fuel. T€ 20,014 (2018: T€ 27,836) of the inventories excluding construction materials, auxiliary supplies and fuel were reported with the net realisable value.

For qualifying assets, interest on borrowings was recognised in the amount of T€ 2,253 (2018: T€ 1,796).

(19) RECEIVABLES FROM CONCESSION ARRANGEMENTS

STRABAG has a 100 % interest in the Hungarian M5 motorway concession company, AKA Alföld Koncesszios Autopalya Zrt., Budapest (AKA).

In the concession arrangement with the Hungarian state, AKA committed to develop, plan, fi nance and to build and operate the M5 motorway. The motorway itself is the property of the state; all vehicles and equipment necessary for motorway operation are to be transferred to the state free of charge following the end of the concession period.

In exchange, AKA will regularly receive an availability fee, independent of transit volume, from the Hungarian state for making the motorway available to the public. AKA bears the operator's risk of motorway closure and non-compliance of contractually agreed roadway criteria.

The route totals 156.5 km and was built in three phases. The concession period runs until 2031. A one-time extension for up to 17.5 years is possible.

All services provided under this concession arrangement are accounted for under the separate balance sheet item receivables from concession arrangements. The receivables are carried at the present value of the payment to be made by the state. The annual accumulation amount is recognised in revenue.

The contract also includes interest adjustment payments to be made by the Hungarian state. As a result, the state bears the interest risk from the fi nancing of AKA. These interest adjustment payments represent a separate hedging transaction. Presentation is made as a cash fl ow hedge; as a result, changes in the fair value of the interest rate swap are recognised in other comprehensive income.

The market value of the interest rate swap in the amount of T€ -21,747 (2018: T€ -28,222) is also recognised as long-term receivables from concession arrangements.

Recognisable receivables from concession arrangements are offset by non-recourse fi nancing in the amount of T€ 281,120 (2018: T€ 338,728), classifi ed either as a current or non-current liability depending on the term to maturity. The resulting interest expense is recognised in other operating expenses.

(20) CONTRACT ASSETS AND CONTRACT LIABILITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The contract assets comprise the right to payment from construction contracts with customers as well as from project developments for the work performed by the reporting date. If the advances received exceed the payment rights, presentation is made under contract liabilities.

The contractual balances are comprised as follows:

T€	31.12.2019	31.12.2018
Contract assets (gross)	7,981,987	5,919,311
Advances received	-6,627,090	-4,636,404
Contract assets	1,354,897	1,282,907

Contract liabilities (gross)	-5,861,724	-5,914,866
Advances received	6,818,971	6,889,432
Contract liabilities	957,247	974,566

In the 2019 fi nancial year, revenue was recognised in the amount of T€ 974,566 (2018: T€ 1,021,253) that had been contained under contract liabilities at the beginning of the fi nancial year.

As of 31 December 2019, there are unsatisfi ed performance obligations from construction contracts with customers and project developments (order backlog) in the amount of T€ 15,026,196 (2018: T€ 14,228,066). The recognition of revenue from these performance obligations is expected with T€ 8,806,125 (2018: T€ 8,658,789) in the following fi nancial year and with T€ 6,220,071 (2018: T€ 5,569,277) in the next four fi nancial years.

In the year under report, no costs of contract initiation or contract satisfaction were capitalised as separate assets.

As is customary in the industry, the customer has the contractual right to retain part of the total amount of the invoice. As a rule, however, these retentions are redeemed by collateral (bank or group guarantees).

With regard to the contract assets and liabilities, we refer to our notes in the section "Estimates – (b) Recognition of revenue from construction contracts with customers and project developments".

(21) TRADE RECEIVABLES

Trade receivables are comprised as follows:

T€	Total	31.12.2019 thereof current	Total	31.12.2018 thereof current
Trade receivables	1,267,117	1,267,117	1,332,571	1,332,571
Receivables from consortia	334,780	334,780	313,025	313,025
Advances paid to subcontractors	98,832	98,832	90,348	90,348
Trade receivables	1,700,729	1,700,729	1,735,944	1,735,944

(22) OTHER FINANCIAL ASSETS

(20) CONTRACT ASSETS AND CONTRACT LIABILITIES

The contractual balances are comprised as follows:

contained under contract liabilities at the beginning of the fi nancial year.

T€ 6,220,071 (2018: T€ 5,569,277) in the next four fi nancial years.

from construction contracts with customers and project developments".

T€ Total

rule, however, these retentions are redeemed by collateral (bank or group guarantees).

is made under contract liabilities.

(21) TRADE RECEIVABLES

Trade receivables are comprised as follows:

T€ 31.12.2019 31.12.2018 Contract assets (gross) 7,981,987 5,919,311 Advances received -6,627,090 -4,636,404 Contract assets 1,354,897 1,282,907

Contract liabilities (gross) -5,861,724 -5,914,866 Advances received 6,818,971 6,889,432 Contract liabilities 957,247 974,566

In the 2019 fi nancial year, revenue was recognised in the amount of T€ 974,566 (2018: T€ 1,021,253) that had been

As is customary in the industry, the customer has the contractual right to retain part of the total amount of the invoice. As a

With regard to the contract assets and liabilities, we refer to our notes in the section "Estimates – (b) Recognition of revenue

Trade receivables 1,267,117 1,267,117 0 1,332,571 1,332,571 0 Receivables from consortia 334,780 334,780 0 313,025 313,025 0 Advances paid to subcontractors 98,832 98,832 0 90,348 90,348 0 Trade receivables 1,700,729 1,700,729 0 1,735,944 1,735,944 0

thereof current

31.12.2019 31.12.2018

thereof current

thereof non-current

thereof non-current Total

In the year under report, no costs of contract initiation or contract satisfaction were capitalised as separate assets.

Other fi nancial assets are comprised as follows:

T€	thereof current	31.12.2019 thereof non-current	Total	Total	31.12.2018 thereof current	thereof non-current
Securities	0	27,237	27,237	25,324	0	25,324
Receivables from subsidiaries	123,265	77	123,342	97,329	96,302	1,027
Receivables from participation companies	65,152	82,800	147,952	210,746	115,744	95,002
Other fi nancial assets	101,121	119,796	220,917	210,119	81,335	128,784
Other fi nancial assets total	289,538	229,910	519,448	543,518	293,381	250,137

(23) CASH AND CASH EQUIVALENTS

T€	31.12.2019	31.12.2018
Securities	3,100	3,080
Cash on hand	1,273	1,291
Bank deposits	2,456,441	2,381,457
Cash and cash equivalents	2,460,814	2,385,828

(24) EQUITY

The fully paid in share capital amounts to € 110,000,000 and is divided into 109,999,997 no-par bearer shares and three registered shares.

As at 31 December 2019, STRABAG SE had acquired 7,400,000 no-par bearer shares equalling 6.7 % of the share capital. The corresponding value of the share capital amounts to € 7,400,000. The acquisition extended between the period July 2011 and May 2013. The average purchase price per share was € 20.79.

Details as to the development of the equity of STRABAG SE are represented in the statement of changes in equity.

Long-term economic success, within the context of responsibility to our shareholders, customers, employees, suppliers, subcontractors and the company itself, is the primary entrepreneurial objective of the STRABAG Group. Working to pursue these goals, recognising opportunities and risks before and as they arise, and responsibly taking these into consideration safeguards the continuity of the group and protects the interests of the shareholders.

To guarantee the continuity of the company, the management and responsible employees assure that there is a balanced relationship between opportunities and risks during the selection of projects and assess the individual risks against the background of the overall company risk.

The group equity ratio target was defi ned at between 20 % and 25 % during the IPO of STRABAG SE in October 2007. The equity capital ratio is calculated from the carrying amount of the equity as at 31 December divided by the balance sheet total as at 31 December. The equity contains all parts of the equity according to the balance sheet: share capital, capital reserves, retained earnings and non-controlling interests.

The group equity ratio as at 31 December 2019 amounted to 31.5 % (2018: 31.6 %). With this equity base, the STRABAG Group will be able to participate increasingly in tenders for Public-Private Partnership (PPP) projects. This means that the necessary funds for a participation in equity capital are available and that the related change in the balance sheet total will be manageable.

If the group is awarded the tender for large-scale projects, or if a strategically suitable acquisition is made, the equity ratio could briefl y fall below the set minimum. In this case, the company reserves the right to adjust the dividend payments to the shareholders or to issue new shares.

(25) PROVISIONS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Balance as at 1.1.2019	Currency translation	Changes in scope of consolidation	Additions	Utilisation	Balance as at 31.12.2019
114,676	-790	138	10,656	0	124,680
420,311	134	647	14,824	0	435,916
375,807	-936	0	55,066	41,746	388,191
19,717	0	0	2,261	227	21,751
186,081	-593	0	62,382	81,493	166,377
1,116,592	-2,185	785	145,189	123,466	1,136,915
354,998	-81	239	379,768	352,375	382,549
180,424	-355	18	179,994	175,301	184,780
199,059	481	-110	326,119	199,572	325,977
734,481	45	147	885,881	727,248	893,306
1,851,073	-2,140	932	1,031,070	850,714	2,030,221

The actuarial assumptions as at 31 December 2019 used to calculate provisions for severance payments and pensions are represented as follows:

	Severance payments	Pension obligation Austria	Pension obligation Germany	Pension obligation Switzerland
Biometric tables	AVÖ 2018-P	AVÖ 2018-P	Dr. Klaus Heubeck	BVG 2015G
Discounting rate (%)	0.80	0.80	0.80	0.25
	(2018: 1.65)	(2018: 1.65)	(2018: 1.65)	(2018: 0.70)
Salary increase (%)	2.00	0.00	dependent on contractual	1.00
	(2018: 2.00)	(2018: 0.00)	adaption	(2018: 2.00)
Future pension increase (%)	dependent on contractual	dependent on contractual	1.50	0.25
	adaption	adaption	(2018: 1.50)	(2018: 0.25)
Retirement age for men	62	65	63–67	65
	(2018: 62)	(2018: 65)	(2018: 63–67)	(2018: 65)
Retirement age for women	62	60	63–67	64
	(2018: 62)	(2018: 60)	(2018: 63–67)	(2018: 64)

Sensitivity analysis

All other parameters remaining equal, a change in the discount rate by +/- 0.5 percentage points, a change in the salary increase by +/- 0.25 percentage points as well as a change in the pension increase by +/- 0.25 percentage points would have the following impact on the amount of the provisions for severance payments and pension obligations as at 31 December 2019:

T€	Change in Change in discounting rate salary increase			Change in future pension increase
Change2	-0.5 %-points	+0.5 %-points	-0.25 %-points	+0.25 %-points	-0.25 %-points	+0.25 %-points
Severance payments	-4,538	4,230	2,132	-2,196	n. a.	n. a.
Pension obligations	-42,111	37,763	693	-647	12,741	-13,155

Provisions for severance payments show the following development:

(25) PROVISIONS

are represented as follows:

Sensitivity analysis

T€

Salary increase (%) 2.00

Future pension increase (%) dependent on contractual

Balance as at 1.1.2019

Severance payments

(2018: 2.00)

Change in discounting rate

1 In the other personnel-related provisions plan assets in the amount of T€ 2,635 (2018: T€ 2,487) are deducted.

2 Sign: - increase of obligation, + decrease of obligation

adaption

Currency translation

Provisions for severance payments 114,676 -790 138 10,656 0 124,680 Provisions for pensions 420,311 134 647 14,824 0 435,916 Construction-related provisions 375,807 -936 0 55,066 41,746 388,191 Personnel-related provisions 19,717 0 0 2,261 227 21,751 Other provisions 186,081 -593 0 62,382 81,493 166,377 Non-current provisions 1,116,592 -2,185 785 145,189 123,466 1,136,915

Construction-related provisions 354,998 -81 239 379,768 352,375 382,549 Personnel-related provisions1 180,424 -355 18 179,994 175,301 184,780 Other provisions 199,059 481 -110 326,119 199,572 325,977 Current provisions 734,481 45 147 885,881 727,248 893,306

Total 1,851,073 -2,140 932 1,031,070 850,714 2,030,221

The actuarial assumptions as at 31 December 2019 used to calculate provisions for severance payments and pensions

Biometric tables AVÖ 2018-P AVÖ 2018-P Dr. Klaus Heubeck BVG 2015G Discounting rate (%) 0.80 0.80 0.80 0.25

Retirement age for men 62 65 63–67 65

Retirement age for women 62 60 63–67 64

Change2 -0.5 %-points +0.5 %-points -0.25 %-points +0.25 %-points -0.25 %-points +0.25 %-points Severance payments -4,538 4,230 2,132 -2,196 n. a. n. a. Pension obligations -42,111 37,763 693 -647 12,741 -13,155

dependent on contractual

Pension obligation

Austria

0.00 (2018: 0.00)

Change in salary increase

adaption

Changes in scope of

consolidation Additions Utilisation

Pension obligation Germany

dependent on contractual

adaption

1.50 (2018: 1.50)

Change in future pension increase

(2018: 1.65) (2018: 1.65) (2018: 1.65) (2018: 0.70)

(2018: 62) (2018: 65) (2018: 63–67) (2018: 65)

(2018: 62) (2018: 60) (2018: 63–67) (2018: 64)

Balance as at 31.12.2019

Pension obligation Switzerland

1.00 (2018: 2.00)

0.25 (2018: 0.25)

T€

T€	2019	2018
Present value of the defi ned benefi t obligation as at 1.1.	114,676	111,100
Changes in scope of consolidation/currency translation	-652	-563
Current service costs	5,441	7,226
Interest costs	1,435	1,311
Severance payments	-4,057	-4,633
Actuarial gains/losses arising from experience adjustments	815	871
Actuarial gains/losses arising from change in the discount rate	7,022	-1,251
Actuarial gains/losses arising from demographic changes	0	615
Present value of the defi ned benefi t obligation as at 31.12.	124,680	114,676

The development of the provisions for pensions is shown below:

T€	2019	2018
Present value of the defi ned benefi t obligation as at 1.1.	602,355	624,457
Changes in scope of consolidation/currency translation	7,173	6,845
Current service costs	8,758	8,887
Interest costs	8,090	7,514
Pension payments	-45,971	-43,385
Actuarial gains/losses arising from experience adjustments	-2,597	1,176
Actuarial gains/losses arising from change in the discount rate	49,453	-10,863
Actuarial gains/losses arising from demographic changes	739	7,724
Present value of the defi ned benefi t obligation as at 31.12.	628,000	602,355

The plan assets for pension provisions developed as follows in the year under report:

T€	2019	2018
Fair value of the plan assets as at 1.1.	182,044	184,350
Changes in scope of consolidation/currency translation	6,392	6,493
Income from plan assets	1,553	1,449
Contributions	7,457	8,432
Pension payments	-13,288	-18,430
Actuarial gains/losses	7,926	-250
Fair value of the plan assets as at 31.12.	192,084	182,044

The plan assets consist of the following risk groups:

T€	31.12.2019	31.12.2018
Shares1	28,252	20,882
Bonds1	64,236	60,977
Cash	1,284	1,893
Investment funds	4,076	5,061
Real estate	13,121	9,772
Liability insurance	61,530	58,341
Other assets	19,585	25,118
Total	192,084	182,044

The plan assets involve almost exclusively the assets of the pension foundation of STRABAG AG, Switzerland. Any investments in this regard are subject to the applicable laws and regulations governing the supervision of foundations. Capital investments are to be chosen by trained experts in such a way as to guarantee the investment goal of revenuegenerating and risk-minimising asset management while taking into consideration security, risk distribution, returns and the liquidity to fulfi l the pension purposes. The investment strategy can be adjusted on an annual basis in order to refl ect market changes. Currently the split is 50 % in nominal value assets and 50 % in tangible assets.

The expected contributions to pension foundations in the following year will amount to T€ 3,809 (2018: T€ 3,998).

Asset-liability matching strategy

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Pension payments in Switzerland are provided by pension foundations with funds dedicated to this purpose, while payments in Austria and in Germany are covered by readily available cash and cash equivalents as well as securities.

The actual return on plan assets amounted to T€ 9,128 (2018: T€ 690) in the fi nancial year.

The following amounts for pension and severance provisions were recognised in the income statement:

T€	2019	2018
Current service costs	14,199	16,113
Interest costs	9,525	8,825
Return on plan assets	1,553	1,449

The development of the net defi ned benefi t obligation for pension and severance provisions was as follows:

T€	31.12.2019	31.12.2018
Severance provisions obligation	124,680	114,676
Present value of the defi ned benefi t obligation (pension provision)	628,000	602,355
Fair value of plan assets (pension provision)	-192,084	-182,044
Pension provision obligation	435,916	420,311
Obligation total	560,596	534,987

The maturity profi le of the benefi t payments from the net defi ned benefi t liability as at 31 December 2019 was as follows:

T€	< 1 year	1–5 years	6–10 years	11–20 years	> 20 years
Provisions for severance payments	9,429	25,693	32,107	33,591	4,790
Provisions for pensions	36,572	145,239	145,843	197,840	165,760

The maturity profi le of the benefi t payments from the net defi ned benefi t liability as at 31 December 2018 was as follows:

T€	< 1 year	1–5 years	6–10 years	11–20 years	> 20 years
Provisions for severance payments	7,737	24,812	30,227	37,388	6,556
Provisions for pensions	40,174	149,622	151,575	210,244	182,667

The durations (weighted average term) are shown in the following table.

Years	31.12.2019	31.12.2018
Severance payments Austria	9.05	9.29
Pension obligations Austria	8.47	8.36
Pension obligations Germany	11.69	11.17
Pension obligations Switzerland	15.20	15.20

Other provisions

The expected contributions to pension foundations in the following year will amount to T€ 3,809 (2018: T€ 3,998).

Pension payments in Switzerland are provided by pension foundations with funds dedicated to this purpose, while payments

T€ 2019 2018 Current service costs 14,199 16,113 Interest costs 9,525 8,825 Return on plan assets 1,553 1,449

T€ 31.12.2019 31.12.2018 Severance provisions obligation 124,680 114,676 Present value of the defi ned benefi t obligation (pension provision) 628,000 602,355 Fair value of plan assets (pension provision) -192,084 -182,044 Pension provision obligation 435,916 420,311 Obligation total 560,596 534,987

The maturity profi le of the benefi t payments from the net defi ned benefi t liability as at 31 December 2019 was as follows:

T€ < 1 year 1–5 years 6–10 years 11–20 years > 20 years Provisions for severance payments 9,429 25,693 32,107 33,591 4,790 Provisions for pensions 36,572 145,239 145,843 197,840 165,760

The maturity profi le of the benefi t payments from the net defi ned benefi t liability as at 31 December 2018 was as follows:

T€ < 1 year 1–5 years 6–10 years 11–20 years > 20 years Provisions for severance payments 7,737 24,812 30,227 37,388 6,556 Provisions for pensions 40,174 149,622 151,575 210,244 182,667

Years 31.12.2019 31.12.2018 Severance payments Austria 9.05 9.29 Pension obligations Austria 8.47 8.36 Pension obligations Germany 11.69 11.17 Pension obligations Switzerland 15.20 15.20

market changes. Currently the split is 50 % in nominal value assets and 50 % in tangible assets.

in Austria and in Germany are covered by readily available cash and cash equivalents as well as securities.

The following amounts for pension and severance provisions were recognised in the income statement:

The development of the net defi ned benefi t obligation for pension and severance provisions was as follows:

The actual return on plan assets amounted to T€ 9,128 (2018: T€ 690) in the fi nancial year.

The durations (weighted average term) are shown in the following table.

Asset-liability matching strategy

The construction-related provisions include warranty obligations, costs of the contract execution and subsequent costs of invoiced contracts, as well as impending losses from projects pending which are not accounted for elsewhere. The personnelrelated provisions essentially include bonus obligations and premiums, service anniversary bonuses, contributions to occupational funds as well as costs of the old age part-time scheme and expenses for personnel downsizing measures. Other provisions especially include provisions for damages and litigations.

(26) FINANCIAL LIABILITIES

T€	Total	31.12.2019 thereof current	thereof non-current	Total	31.12.2018 thereof current	thereof non-current
Bonds	400,000	200,000	200,000	500,000	100,000	400,000
Bank borrowings	721,888	104,829	617,059	863,330	175,709	687,621
Lease liabilities	300,319	50,680	249,639	0	0	0
Financial liabilities	1,422,207	355,509	1,066,698	1,363,330	275,709	1,087,621

Physical securities were established to cover liabilities to banks in the amount of T€ 48,886 (2018: T€ 54,882).

The bank borrowings involve non-recourse liabilities from concession arrangements in the amount of T€ 665,526 (thereof non-current: T€ 597,187). This value amounted to T€ 730,773 (thereof non-current: T€ 665,861) in the previous year.

(27) TRADE PAYABLES

		31.12.2019			31.12.2018
T€	Total	thereof current	thereof non-current	Total	thereof current	thereof non-current
Trade payables	2,357,883	2,357,883	0	2,305,999	2,305,999	0
Liabilities from construction consortia	468,757	468,757	0	309,256	309,256	0
Trade payables	2,826,640	2,826,640	0	2,615,255	2,615,255	0

(28) OTHER FINANCIAL LIABILITIES

		31.12.2019			31.12.2018
T€	Total	thereof current	thereof non-current	Total	thereof current	thereof non-current
Payables to subsidiaries	107,827	107,827	0	107,641	107,641	0
Payables to participation companies	12,770	12,770	0	11,858	11,858	0
Other fi nancial liabilities	355,983	263,765	92,218	352,057	273,302	78,755
Other fi nancial liabilities total	476,580	384,362	92,218	471,556	392,801	78,755

(29) CONTINGENT LIABILITIES

Guarantees

The company has issued the following guarantees:

T€	31.12.2019	31.12.2018
Guarantees without fi nancial guarantees	174	182

(30) OFF-BALANCE SHEET TRANSACTIONS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In the construction industry, it is customary and necessary to provide various types of guarantees to secure the contractual obligations. These guarantees are usually issued by banks or credit insurers and most commonly comprise bid, contract performance, prepayment and warranty guarantees. In the event these guarantees are called upon, the relevant banks have a contractual right of recourse against the group. The risk that such guarantees are utilised and that a right of recourse arises materialises only if the primary contractual obligations are not properly performed.

Obligations and possible risks from such guarantees are recognised in the balance sheet as provisions or liabilities.

Not included in the balance sheet or the contingent liabilities as at 31 December 2019 are performance bonds in the amount of € 2.5 billion (2018: € 2.6 billion) of which an outfl ow of resources is unlikely.

As is customary in the industry, STRABAG SE shares liability with the other partners of consortia in which companies of the STRABAG Group hold a share interest.

(31) NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

The representation of the cash fl ow statement was made according to the indirect method and separated into the cash fl ows classifi ed by operating, investing and fi nancing activities. The cash and cash equivalents include exclusively cash on hand, bank deposits and short-term securities. Any effects from changes in the scope of consolidation were eliminated and represented in the cash fl ow from investing activities.

The cash and cash equivalents are composed as follows:

T€	31.12.2019	31.12.2018
Securities	3,100	3,080
Cash on hand	1,273	1,291
Bank deposits	2,456,441	2,381,457
Restricted cash and cash equivalents	0	0
Pledge of cash and cash equivalents	-845	-1,485
Cash and cash equivalents	2,459,969	2,384,343

Moreover, in construction projects executed through consortia there are cash and cash equivalents whose use can only be determined jointly with other partner companies.

The cash fl ow from operating activities in the reporting year contains the following items:

T€	2019	2018
Interest paid	36,546	45,587
Interest received	24,316	25,164
Taxes paid	122,740	90,357
Dividends received	88,144	70,522

T€	Bonds	Bank borrowings	Other fi nancial liabilities1	Lease liabilities	Total
Balance as at 1.1.2019	500,000	863,330	62,708	356,672	1,782,710
Issue	0	16,650	0	0	16,650
Repayment	-100,000	-153,748	0	0	-253,748
Increase (+)/decrease (-) of fi nancing	0	0	-4,493	-56,424	-60,917
Total cash fl ow
from fi nancing activities	-100,000	-137,098	-4,493	-56,424	-298,015
Currency translation	0	-2	-120	71	-51
Change in scope of consolidation	0	0	0	0	0
Other changes	0	-4,342	30,323	0	25,981
Total of non-cash-effective changes	0	-4,344	30,203	71	25,930
Balance as at 31.12.2019	400,000	721,888	88,418	300,319	1,510,625

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 59The cash fl ow from fi nancing activities for the fi nancial year 2019 can be derived from the balance sheet items as follows:

The cash fl ow from fi nancing activities can be derived as follows:

(30) OFF-BALANCE SHEET TRANSACTIONS

STRABAG Group hold a share interest.

materialises only if the primary contractual obligations are not properly performed.

of € 2.5 billion (2018: € 2.6 billion) of which an outfl ow of resources is unlikely.

(31) NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

represented in the cash fl ow from investing activities.

determined jointly with other partner companies.

The cash and cash equivalents are composed as follows:

Not included in the balance sheet or the contingent liabilities as at 31 December 2019 are performance bonds in the amount

As is customary in the industry, STRABAG SE shares liability with the other partners of consortia in which companies of the

T€ 31.12.2019 31.12.2018 Securities 3,100 3,080 Cash on hand 1,273 1,291 Bank deposits 2,456,441 2,381,457 Restricted cash and cash equivalents 0 0 Pledge of cash and cash equivalents -845 -1,485 Cash and cash equivalents 2,459,969 2,384,343

Moreover, in construction projects executed through consortia there are cash and cash equivalents whose use can only be

T€ 2019 2018 Interest paid 36,546 45,587 Interest received 24,316 25,164 Taxes paid 122,740 90,357 Dividends received 88,144 70,522

The cash fl ow from operating activities in the reporting year contains the following items:

Obligations and possible risks from such guarantees are recognised in the balance sheet as provisions or liabilities.

	Infl ow (+)
T€	Outfl ow (-)
Total cash fl ows from fi nancing activities	-298,015
Change in non-controlling interests due to acquisition	-3,586
Distribution of dividends	-110,014
Cash fl ow from fi nancing activities	-411,615

The cash fl ow from fi nancing activities for the fi nancial year 2018 can be derived from the balance sheet items as follows:

T€	Bonds	Bank borrowings	Other fi nancial liabilities1	Total
Balance as at 1.1.2018	675,000	618,977	98,889	1,392,866
Issue	0	33,465	0	33,465
Repayment	-175,000	-184,589	0	-359,589
Increase (+)/decrease (-) of fi nancing	0	0	-20,068	-20,068
Total cash fl ow from fi nancing activities	-175,000	-151,124	-20,068	-346,192
Currency translation	0	-368	-122	-490
Change in scope of consolidation	0	395,845	0	395,845
Other changes	0	0	-15,991	-15,991
Total of non-cash-effective changes	0	395,477	-16,113	379,364
Balance as at 31.12.2018	500,000	863,330	62,708	1,426,038

The cash fl ow from fi nancing activities can be derived as follows:

	Infl ow (+)
T€	Outfl ow (-)
Total cash fl ows from fi nancing activities	-346,192
Change in non-controlling interests due to acquisition	-78,027
Distribution of dividends	-109,953
Cash fl ow from fi nancing activities	-534,172

Notes on fi nancial instruments

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(32) FINANCIAL INSTRUMENTS

A fi nancial instrument is a contract that results in a fi nancial asset at one enterprise and a fi nancial liability or equity instrument at another. Financial assets include especially cash and cash equivalents, trade receivables and other receivables and derivatives. Financial liabilities are obligations to pay cash or other fi nancial assets on a regular basis. These include especially fi nancial liabilities such as bank borrowings, bonds, lease liabilities and trade payables.

The fi nancial instruments as at the balance sheet date were as follows:

	31.12.2019			31.12.2018
T€	Measurement category according to IFRS 9	Carrying amount	Fair value	Measurement category according to IFRS 9	Carrying amount	Fair value
Assets
Investments below 20 % (other investments)	FVPL	32,540	32,540	FVPL	40,660	40,660
Trade receivables	AC	1,601,896		AC	1,645,596
Receivables from concession arrangements	AC	660,107		AC	694,752
Other non-current fi nancial assets	AC	202,673		AC	221,594
Other current fi nancial assets	AC	288,271		AC	291,537
Cash and cash equivalents	AC	2,457,713		AC	2,382,749
Securities	FVPL	27,237	27,237	FVPL	25,324	25,324
Cash and cash equivalents (securities)	FVPL	3,101	3,101	FVPL	3,080	3,080
Derivatives held for hedging purposes
(receivables from concession arrangements)	Derivatives	-21,747	-21,747	Derivatives	-28,222	-28,222
Derivatives held for hedging purposes
(other fi nancial assets)	Derivatives	0	0	Derivatives	3,219	3,219
Derivatives other (other fi nancial assets)	FVPL	1,266	1,266	FVPL	1,843	1,843
Liabilities
Financial liabilities	FLaC	-1,422,207	-1,428,844	FLaC	-1,363,330	-1,367,175
Trade payables	FLaC	-2,826,640		FLaC	-2,615,255
Other non-current fi nancial liabilities	FLaC	-74,996		FLaC	-78,755
Other current fi nancial liabilities	FLaC	-367,466		FLaC	-381,808
Derivatives held for hedging purposes
(other fi nancial liabilities)	Derivatives	-32,920	-32,920	Derivatives	-10,740	-10,740
Derivatives other (other fi nancial liabilities)	FVPL	-1,199	-1,199	FVPL	-253	-253

	Measurement			Measurement
	categories			categories
	according to IFRS 9			according to IFRS 9
	AC	5,210,660		AC	5,236,228
	FVPL	62,945	62,945	FVPL	70,654	70,654
	FLaC	-4,691,309	-1,428,844	FLaC	-4,439,148	-1,367,175
	Derivatives	-54,667	-54,667	Derivatives	-35,743	-35,743
	Total	527,629	-1,420,566	Total	831,991	-1,332,264

No special disclosure of the fair value of fi nancial instruments is represented if the carrying amount is a reasonable approximation of fair value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 61Cash and cash equivalents, trade receivables and other receivables have for the most part short remaining terms. Accordingly, their carrying amounts on the balance sheet date approximate their fair value. The fair value of non-current fi nancial assets corresponds to the present value of the related payments under consideration of the prevailing market parameters as far as market values were not available.

Trade payables and other fi nancial liabilities typically have short terms; their carrying amounts approximate the fair value. The fair value of bonds, bank borrowing and lease liabilities are measured at the present value of the payments associated with them and under consideration of the relevant applicable market parameters as far as market values were not available. The fair value of the fi nancial liabilities would qualify as a Level 1 measurement at T€ 407,994 (2018: T€ 515,295) and as a Level 2 measurement at T€ 1,020,850 (2018: T€ 851,880).

T€ 845 (2018: T€ 1,485) of cash and cash equivalents, T€ 2,672 (2018: T€ 2,672) of securities and T€ 1,755 (2018: T€ 1,758) of other fi nancial instruments were pledged as collateral for liabilities.

The non-recourse liabilities related to concession projects (AKA and Pansuevia) are hedged using the income from concession arrangements.

The fi nancial instruments recognised at fair value, classifi ed by method of measurement (Level 1 to Level 3), are as follows.

Level 1: In measurement at market prices, the assets and liabilities are measured at the quoted prices in an active market for identical assets and liabilities.
Level 2: The measurement based on observable market input takes into account not only market prices but also directly or indirectly observable data.

Level 3: Other methods of measurement also consider data that are not observable on the markets.

Notes on fi nancial instruments

Carrying

Investments below 20 % (other investments) FVPL 32,540 32,540 FVPL 40,660 40,660

Securities FVPL 27,237 27,237 FVPL 25,324 25,324 Cash and cash equivalents (securities) FVPL 3,101 3,101 FVPL 3,080 3,080

(receivables from concession arrangements) Derivatives -21,747 -21,747 Derivatives -28,222 -28,222

(other fi nancial assets) Derivatives 0 0 Derivatives 3,219 3,219 Derivatives other (other fi nancial assets) FVPL 1,266 1,266 FVPL 1,843 1,843

Financial liabilities FLaC -1,422,207 -1,428,844 FLaC -1,363,330 -1,367,175

(other fi nancial liabilities) Derivatives -32,920 -32,920 Derivatives -10,740 -10,740 Derivatives other (other fi nancial liabilities) FVPL -1,199 -1,199 FVPL -253 -253

No special disclosure of the fair value of fi nancial instruments is represented if the carrying amount is a reasonable

Trade payables FLaC -2,826,640 FLaC -2,615,255 Other non-current fi nancial liabilities FLaC -74,996 FLaC -78,755 Other current fi nancial liabilities FLaC -367,466 FLaC -381,808

Measurement categories according to IFRS 9

amount Fair value

31.12.2019 31.12.2018

Measurement category according to IFRS 9

Measurement categories according to IFRS 9

FVPL 62,945 62,945 FVPL 70,654 70,654 FLaC -4,691,309 -1,428,844 FLaC -4,439,148 -1,367,175 Derivatives -54,667 -54,667 Derivatives -35,743 -35,743 Total 527,629 -1,420,566 Total 831,991 -1,332,264

AC 5,210,660 AC 5,236,228

Carrying

amount Fair value

fi nancial liabilities such as bank borrowings, bonds, lease liabilities and trade payables.

Measurement category according to IFRS 9

Trade receivables AC 1,601,896 AC 1,645,596 Receivables from concession arrangements AC 660,107 AC 694,752 Other non-current fi nancial assets AC 202,673 AC 221,594 Other current fi nancial assets AC 288,271 AC 291,537 Cash and cash equivalents AC 2,457,713 AC 2,382,749

The fi nancial instruments as at the balance sheet date were as follows:

(32) FINANCIAL INSTRUMENTS

Derivatives held for hedging purposes

approximation of fair value.

T€

Assets

Liabilities

STRABAG records reclassifi cations between different levels of the FV hierarchy at the end of the reporting period in which the change occurs.

The fair values as at 31 December 2019 for fi nancial instruments measured at fair value in the balance sheet were determined as follows:

T€	Level 1	Level 2	Level 3	Total
Assets
Investments below 20 % (other investments)			32,540	32,540
Securities	27,237			27,237
Cash and cash equivalents (securities)	3,101			3,101
Derivatives held for hedging purposes		-21,747		-21,747
Derivatives other		1,266		1,266
Total	30,338	-20,481	32,540	42,397
Liabilities
Derivatives held for hedging purposes		-32,920		-32,920
Derivatives other		-1,199		-1,199
Total		-34,119		-34,119

The fair values as at 31 December 2018 for fi nancial instruments measured at fair value in the balance sheet were determined as follows:

T€	Level 1	Level 2	Level 3	Total
Assets
Investments below 20 % (other investments)			40,660	40,660
Securities	25,324			25,324
Cash and cash equivalents (securities)	3,080			3,080
Derivatives held for hedging purposes		-25,003		-25,003
Derivatives other		1,843		1,843
Total	28,404	-23,160	40,660	45,904
Liabilities
Derivatives held for hedging purposes		-10,740		-10,740
Derivatives other		-253		-253
Total		-10,993		-10,993

During the fi nancial years 2019 and 2018 , there were no transfers between the levels.

Financial instruments in Level 1

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value is determined on the basis of quoted prices in an active market. An active market exists if the prices are regularly established and readily available to the market participant. The quoted market price for the fi nancial instruments presented in Level 1 corresponds to the bid price on 31 December 2019.

Financial instruments in Level 2

These fi nancial instruments are not traded in an active market. They involve exclusively derivatives concluded for hedging purposes in the group. The fair value is determined using methods of measurement on the basis of observable market data. Specifi cally, measurement is made using interest yield and currency curves in proportion to the term of the derivative.

Financial instruments in Level 3

These fi nancial instruments involve exclusively a large number of smaller investments below 20 % that are not traded on an active market. The fair value is determined on the basis of simplifi ed company valuations.

T€	2019
Carrying amount as at 1.1.	40,660
Currency translation	201
Additions	172
Disposals	-8,732
Changes in fair value	239
Carrying amount as at 31.12.	32,540

Due to the broad diversifi cation of the investments, no major fl uctuations in value are expected in the future.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 63The following derivatives existed which are not offsettable but which can be set off in case of insolvency:

The fair values as at 31 December 2018 for fi nancial instruments measured at fair value in the balance sheet were

T€ Level 1 Level 2 Level 3 Total

Investments below 20 % (other investments) 40,660 40,660 Securities 25,324 25,324 Cash and cash equivalents (securities) 3,080 3,080 Derivatives held for hedging purposes -25,003 -25,003 Derivatives other 1,843 1,843 Total 28,404 -23,160 40,660 45,904

Derivatives held for hedging purposes -10,740 -10,740 Derivatives other -253 -253 Total -10,993 -10,993

These fi nancial instruments involve exclusively a large number of smaller investments below 20 % that are not traded on an

T€ 2019 Carrying amount as at 1.1. 40,660 Currency translation 201 Additions 172 Disposals -8,732 Changes in fair value 239 Carrying amount as at 31.12. 32,540

Due to the broad diversifi cation of the investments, no major fl uctuations in value are expected in the future.

During the fi nancial years 2019 and 2018 , there were no transfers between the levels.

active market. The fair value is determined on the basis of simplifi ed company valuations.

presented in Level 1 corresponds to the bid price on 31 December 2019.

determined as follows:

Financial instruments in Level 1

Financial instruments in Level 2

Financial instruments in Level 3

Assets

Liabilities

T€	31.12.2019			31.12.2018
Bank	Assets	Liabilities	Total	Assets	Liabilities	Total
Deutsche Bank AG	0	-14,115	-14,115	0	-7,894	-7,894
KfW IPEX-Bank	0	-4,252	-4,252	582	0	582
Norddeutsche Landesbank	0	-4,426	-4,426	914	0	914
Republic of Hungary	-21,747	0	-21,747	-28,222	0	-28,222
SEB AG	0	-5,693	-5,693	979	-2,887	-1,908
Société Générale	0	-4,434	-4,434	743	0	743
Total derivatives held for hedging purposes	-21,747	-32,920	-54,667	-25,004	-10,781	-35,785
Bayerische Landesbank	27	0	27	195	-38	157
Commerzbank AG	0	0	0	0	-26	-26
Crédit Agricole Corp. & Investment	0	-267	-267	206	-31	175
Deutsche Bank AG	0	0	0	0	0	0
Erste Group Bank AG	0	-32	-32	42	-17	25
ING Bank N.V.	84	0	84	30	-30	0
Landesbank Baden-Württemberg	408	-900	-492	835	-68	767
Raiffeisenbank International AG	44	0	44	116	0	116
SEB AG	379	0	379	135	0	135
UniCredit Bank Austria AG	324	0	324	284	-1	283
Total other derivatives	1,266	-1,199	67	1,843	-211	1,632
Total	-20,481	-34,119	-54,600	-23,161	-10,992	-34,153

No hedge accounting is used for other derivatives, but they are part of the economic hedging relationships.

The net income effects of the fi nancial instruments according to valuation categories are as follows:

			2019			2018
T€	AC	FVPL	FLaC	Derivatives	AC	FVPL	FLaC	Derivatives
Interest	21,150	0	-34,138	0	18,141	0	-40,707	0
Interest from concession
projects	63,274	0	-22,548	-6,193	73,118	0	-15,964	-6,131
Result from securities	0	-803	0	0	0	-474	0	0
Impairment losses and reversal
of impairment losses	-9,169	0	0	0	-23,425	0	0	0
Disposal profi ts/losses	0	1,863	0	0	0	11	0	0
Gains from derecognition of
liabilities and payments of
written-off receivables	831	0	10,054	0	47	0	9,484	0
Net income recognised in profi t
or loss	76,086	1,060	-46,632	-6,193	67,881	-463	-47,187	-6,131
Value changes recognised
directly in equity	0	0	0	-12,688	0	0	0	-1,534
Net income	76,086	1,060	-46,632	-18,881	67,881	-463	-47,187	-7,665

Dividends and income from investments shown in net income from investments are part of operating income and therefore not part of net income of fi nancial instruments.

Impairment losses, reversal of impairment losses and profi ts or losses from the disposal of fi nancial assets without other investments and securities, as well as fi nancial liabilities are carried in other income or other expenses.

Impairment losses, reversal of impairment losses and profi ts or losses from the disposal of other investments are carried in net income from investments. Impairment losses, reversal of impairment losses and profi ts or losses from the disposal of securities are carried in net interest income.

Principles of risk management

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The STRABAG Group is subject to credit, market and liquidity risks related to its fi nancial assets, fi nancial liabilities and planned transactions. The goal of fi nancial risk management is to minimise these risks through ongoing fi nancially oriented activities.

The basics of the fi nancial policy are set by the Management Board and monitored by the Supervisory Board. The implementation of the fi nancial policy and responsibility for the risk management are the domain of the group treasury. Certain transactions require prior approval by the Management Board, which is regularly informed as to the scope and amount of the current risk exposure.

The group sees concentrations of risk with regard to interest rate risk, currency risk and credit risk as low because customers are located in different countries, belong to different industries and operate in largely independent markets.

The group's business activities are subject to market price risks that are customary in the industry. These risks are not hedged through derivatives or fi nancial instruments but through other hedging activities including but not limited to contractual agreements.

Further explanations on risk management and fi nancial instruments can be found in the group management report from 31 December 2019.

Interest rate risk

The fi nancial instruments bear variable interest rates on the assets side, on the liabilities side there are both variable and fi xed interest obligations. The risk of fi nancial instruments bearing variable interest rates consists of increasing interest charges and sinking interest revenue resulting from an unfavourable change in market interest rates. Fixed interest obligations mainly result from the bonds issued by STRABAG SE amounting to a total of T€ 400,000.

The amount of bank deposits and bank borrowings according to currency – giving the average interest rate at balance sheet date – is represented as follows:

Bank deposits

Currency	Carrying amount 31.12.2019 T€	Weighted average interest rate 2019 %

EUR	1,625,584	0.03
PLN	240,694	1.20
HUF	56,051	0.01
CZK	172,962	0.66
Other	361,150	0.47
Total	2,456,441	0.25

Currency	Carrying amount 31.12.2018 T€	Weighted average interest rate 2018 %
EUR	1,730,357	0.03
PLN	142,250	1.20
HUF	44,756	0.00
CZK	179,446	0.39
Other	284,648	0.50
Total	2,381,457	0.18

Bank borrowings

Principles of risk management

activities.

ments.

current risk exposure.

31 December 2019.

Interest rate risk

Bank deposits

Currency

date – is represented as follows:

The group sees concentrations of risk with regard to interest rate risk, currency risk and credit risk as low because customers

Further explanations on risk management and fi nancial instruments can be found in the group management report from

The amount of bank deposits and bank borrowings according to currency – giving the average interest rate at balance sheet

EUR 1,625,584 0.03 PLN 240,694 1.20 HUF 56,051 0.01 CZK 172,962 0.66 Other 361,150 0.47 Total 2,456,441 0.25

EUR 1,730,357 0.03 PLN 142,250 1.20 HUF 44,756 0.00 CZK 179,446 0.39 Other 284,648 0.50 Total 2,381,457 0.18

Carrying amount 31.12.2019 T€

Carrying amount 31.12.2018 T€

Weighted average interest rate 2019

Weighted average interest rate 2018

are located in different countries, belong to different industries and operate in largely independent markets.

result from the bonds issued by STRABAG SE amounting to a total of T€ 400,000.

Currency	Carrying amount 31.12.2019 T€	Weighted average interest rate 2019 %
EUR	721,880	1.14
Other	8	9.55
Total	721,888	1.14
	Carrying amount 31.12.2018	Weighted average interest rate 2018
Currency	T€	%
EUR	860,513	1.26

Other 2,817 9.80 Total 863,330 1.29

Had the interest rate level at 31 December 2019 been higher by 100 basis points, then the EBT would have been higher by T€ 18,794 (2018: T€ 19,425) and the equity at 31 December 2019 would have been higher by T€ 57,323 (2018: T€ 61,022). Had the interest rate level been lower by 100 basis points, this would have meant a correspondingly lower equity and EBT. The calculation is made based on the level of interest-bearing fi nancial assets and liabilities as at 31 December. Tax effects from interest rate changes were not considered.

Currency risk

Due to the decentralised structure of the group, characterised by local companies in the respective countries, mainly closed currency positions appear in the balance sheet. Loan fi nancing and investments were predominantly made by the group companies in the respective country's local currency. Receivables and liabilities from business activities mainly offset each other in the same currency.

The internal fi nancing of companies within the group using different functional currencies resulted in an earnings-relevant currency risk. To limit this risk derivative fi nancial instruments are transacted. The market values of these hedging transactions in the amount of T€ 67 (2018: T€ 1,138) are recognised in profi t or loss in the income statement. The hedging transactions are reported under other fi nancial assets or other fi nancial liabilities.

Development of the important currencies in the group:

Currency	Exchange rate 31.12.2019: 1 € =	Average rate 2019: 1 € =	Exchange rate 31.12.2018: 1 € =	Average rate 2018: 1 € =
HUF	330.5300	325.7517	320.9800	319.9725
CZK	25.4080	25.6588	25.7240	25.6784
PLN	4.2568	4.2990	4.3014	4.2684
CHF	1.0854	1.1111	1.1269	1.1516
CLP	843.6127	792.4677	794.3524	758.3645
USD	1.1234	1.1195	1.1450	1.1793

The following table shows the hypothetical changes in EBT and equity if the euro in the year 2019 had been revalued or devalued by 10 % in relation to another currency:

T€	Revaluation euro of 10 %			Devaluation euro of 10 %
Currency	change in EBT	change in equity	change in EBT	change in equity
PLN	545	2,545	-545	-2,545
HUF	-12,250	5,903	12,250	-5,903
CHF	-3,985	-9,513	3,985	9,513
CZK	3,474	12,974	-3,474	-12,974
CLP	0	2,670	0	-2,670
USD	15,926	15,926	-15,926	-15,926
Other	-19,704	-19,704	19,704	19,704

The following table shows the hypothetical changes in EBT and equity if the euro in the year 2018 had been revalued or devalued by 10 % in relation to another currency:

T€	Revaluation euro of 10%	Devaluation euro of 10%
Currency	change in EBT change in equity		change in EBT	change in equity
PLN	-10,917	-3,418	10,917	3,418
HUF	-8,520	10,173	8,520	-10,173
CHF	-2,006	-7,330	2,006	7,330
CZK	8,100	17,600	-8,100	-17,600
Other	-9,415	-9,418	9,415	9,418

The calculation is based on original and derivative foreign currency holdings in non-functional currency as at 31 December as well as underlying transactions for the next twelve months. The effect on tax resulting from changes in currency exchange rates was not taken into consideration.

Cash fl ow hedges

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Currency risks in the group result when the currency of the order differs from the functional currency of the company. The planned proceeds are received in the currency of the order (for example, euro or US dollar), while a substantial part of the associated costs is made in the local currency.

The group uses foreign exchange forwards to hedge against this risk. These contracts are classifi ed as hedges against future payments and are presented as cash fl ow hedges.

The group designates exclusively the spot element of foreign exchange forwards and swaps to hedge its currency risk and applies a hedge ratio of 1:1 or 100 %. The spot element corresponds to that part of the fair value that is determined exclusively on the basis of the spot exchange rate. The interest element (forward element), on the other hand, is determined from the difference between the total fair value and the cash element. The forward element is excluded from designation and recognised as cost of hedging. The critical conditions of the foreign exchange forward or swap correspond to the hedged item.

To hedge against variable interest rate obligations, interest rate swaps are used especially with fi nancing obligations from concession arrangements. This serves to hedge the variability of future cash fl ows from variable interest rate payments. Interest rate swaps are presented as cash fl ow hedges.

The group determines the existence of an economic relationship between the hedging instrument and the hedged item, for the purpose of assessing the effectiveness of the hedge, based on the interest rates benchmarks, terms, repricing dates and maturities of the nominal amounts.

The amounts of the hedged items as at 31 December 2019 are as follows:

T€	Value changes in the basis for
Hedged item	effectiveness measurement	Hedging reserves	Cost-of-hedging reserves
Exchange risk
USD sale	15,241	-16,018	321
Interest rate risk
Interest AKA	-2,104	-33,158	0
Interest PANSUEVIA	23,321	-25,612	0
Total	36,458	-74,788	321

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 67The amounts of the hedged items as at 31 December 2018 are as follows:

The following table shows the hypothetical changes in EBT and equity if the euro in the year 2018 had been revalued or

Currency change in EBT change in equity change in EBT change in equity PLN -10,917 -3,418 10,917 3,418 HUF -8,520 10,173 8,520 -10,173 CHF -2,006 -7,330 2,006 7,330 CZK 8,100 17,600 -8,100 -17,600 Other -9,415 -9,418 9,415 9,418

The group uses foreign exchange forwards to hedge against this risk. These contracts are classifi ed as hedges against future

USD sale 15,241 -16,018 321

Interest AKA -2,104 -33,158 0 Interest PANSUEVIA 23,321 -25,612 0 Total 36,458 -74,788 321

effectiveness measurement Hedging reserves Cost-of-hedging reserves

Value changes in the basis for

T€ Revaluation euro of 10% Devaluation euro of 10%

devalued by 10 % in relation to another currency:

rates was not taken into consideration.

associated costs is made in the local currency.

payments and are presented as cash fl ow hedges.

terest rate swaps are presented as cash fl ow hedges.

The amounts of the hedged items as at 31 December 2019 are as follows:

maturities of the nominal amounts.

T€

Hedged item

Exchange risk

Interest rate risk

Cash fl ow hedges

T€	Value changes in the basis for
Hedged item	effectiveness measurement	Hedging reserves	Cost-of-hedging reserves
Exchange risk
USD sale	10,600	-10,600	72
Interest rate risk
Interest AKA	-2,608	-45,395	0
Interest PANSUEVIA	6,416	-5,602	0
Interest A-WAY	94	-253	0
Total	14,502	-61,850	72

The hedging instruments as at 31 December 2019 were comprised as follows:

T€ Hedge Exchange risk	Nominal value	Carrying amount	Balance sheet item where the hedge is presented	OCI change in value of the hedge	Cost of hedging recognised in OCI	Recycling amount from hedging reserves	Recycling amount from cost of-hedging reserves	P&L item where the recycling value is recognised
USD sale	173,580		-15,697 other fi nancial liabilities	-15,241	278	9,824	-29	revenue
Interest rate risk
Interest rate swap AKA	281,120	-21,747	receivables from concession arrangements	2,104	0	10,134	0	other operating expenses
Interest rate swaps PANSUEVIA	257,875	-17,223	other fi nancial liabilities	-23,321	0	3,310	0	other operating expenses
Interest rate swap A-WAY	0	0	other fi nancial liabilities	0	0	253	0	interest expense
Total	712,575	-54,667		-36,458	278	23,521	-29

Possible sources of ineffectiveness in these hedging relationships include:

the effect of counterparty and own credit risk on the fair value of derivatives not refl ected in the change in the fair value of the hedged cash fl ows attributable to interest rates changes
differences in the repricing dates of the hedging instrument and the underlying transactions
changes in the expected value of the cash fl ows from the underlying transaction being hedged and from the hedging instrument

In the 2019 fi nancial year, no amounts from value changes resulting from ineffectiveness were recognised in the income statement.

The hedging instruments as at 31 December 2018 were comprised as follows:

T€ Hedge Exchange risk	Nominal value	Carrying amount	Balance sheet item where the hedge is presented	OCI change in value of the hedge	Cost of hedging recognised in OCI	Recycling amount from hedging reserves	Recycling amount from cost of-hedging reserves	P&L item where the recycling value is recognised
USD sale	170,306		-10,528 other fi nancial liabilities	-10,600	72	0	0	n. a.
Interest rate risk
Interest rate swap AKA	338,728	-28,222	receivables from concession arrangements	2,608	0	11,725	0	revenue
Interest rate swaps PANSUEVIA	262,999	3,218	other fi nancial assets	-6,416	0	814	0	interest expense
Interest rate swap A-WAY	8,833	-253	other fi nancial liabilities	-94	0	357	0	interest expense
Total	780,866	-35,785		-14,502	72	12,896	0

In the 2018 fi nancial year, no amounts from value changes resulting from ineffectiveness were recognised in the income statement.

On 31 December 2019, the group held the following instruments for the purpose of hedging exchange rate and interest rate fl uctuation:

	Maturity
T€	1–6 months	6–12 months	> 1 year
Foreign exchange forward
Nominal amount in TUSD	81,000	84,000	30,000
Average USD-CLP forward rate	665.88	694.09	689.40
Interest rate swap
Nominal amount in TEUR	32,951	32,408	473,636
Average fi xed interest rate (%)	2.64	2.61	1.79

On 31 December 2018, the group held the following instruments for the purpose of hedging exchange rate and interest rate fl uctuation:

	Maturity
T€	1–6 months	6–12 months	> 1 year
Foreign exchange forward
Nominal amount in TUSD	90,000	90,000	15,000
Average USD-CLP forward rate	651.22	649.59	652.63
Interest rate swap
Nominal amount in TEUR	40,699	30,867	538,994
Average fi xed interest rate (%)	2.83	2.63	1.89

The reconciliation of the equity components as at 31 December 2019 is as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€		Hedging reserves Cost-of-hedging reserves
As at 1.1.	-76,148	72
Fair value changes
Currency risk	-15,241	278
Interest rate risk	-21,217	0
Recycling
Currency risk	9,824	-29
Interest rate risk	13,697	0
Deferred taxes
Currency risk	1,347	-87
Interest rate risk	5,004	0
Change in hedging reserves from equity-accounted investments	-4,349	0
As at 31.12.	-87,083	234

The reconciliation of the equity components as at 31 December 2018 is as follows:

T€		Hedging reserves Cost-of-hedging reserves
As at 1.1.	-78,797	0
Fair value changes
Currency risk	-10,600	72
Interest rate risk	-3,902	0
Recycling
Currency risk	0	0
Interest rate risk	12,896	0
Deferred taxes
Currency risk	2,978	0
Interest rate risk	371	0
Change in hedging reserves from equity-accounted investments	906	0
As at 31.12.	-76,148	72

Credit risk

In the 2018 fi nancial year, no amounts from value changes resulting from ineffectiveness were recognised in the income statement.

On 31 December 2019, the group held the following instruments for the purpose of hedging exchange rate and interest rate

T€ 1–6 months 6–12 months > 1 year

Nominal amount in TUSD 81,000 84,000 30,000 Average USD-CLP forward rate 665.88 694.09 689.40

Nominal amount in TEUR 32,951 32,408 473,636 Average fi xed interest rate (%) 2.64 2.61 1.79

On 31 December 2018, the group held the following instruments for the purpose of hedging exchange rate and interest rate

T€ 1–6 months 6–12 months > 1 year

Nominal amount in TUSD 90,000 90,000 15,000 Average USD-CLP forward rate 651.22 649.59 652.63

Nominal amount in TEUR 40,699 30,867 538,994 Average fi xed interest rate (%) 2.83 2.63 1.89

T€ Hedging reserves Cost-of-hedging reserves As at 1.1. -76,148 72

Currency risk -15,241 278 Interest rate risk -21,217 0

Currency risk 9,824 -29 Interest rate risk 13,697 0

Currency risk 1,347 -87 Interest rate risk 5,004 0 Change in hedging reserves from equity-accounted investments -4,349 0 As at 31.12. -87,083 234

T€ Hedging reserves Cost-of-hedging reserves As at 1.1. -78,797 0

Currency risk -10,600 72 Interest rate risk -3,902 0

Currency risk 0 0 Interest rate risk 12,896 0

Currency risk 2,978 0 Interest rate risk 371 0 Change in hedging reserves from equity-accounted investments 906 0 As at 31.12. -76,148 72

The reconciliation of the equity components as at 31 December 2019 is as follows:

The reconciliation of the equity components as at 31 December 2018 is as follows:

Maturity

fl uctuation:

Foreign exchange forward

Interest rate swap

Fair value changes

Recycling

Deferred taxes

Fair value changes

Recycling

Deferred taxes

Interest rate swap

fl uctuation:

Credit risks arise when contractual parties do not meet their payment obligations by the date of settlement. Such risks exist with regard to payments of receivables from the operating business as well as the contractual cash fl ows from debt instruments in the category of measured at amortised cost (AC). To manage the credit risk from the operating business, STRABAG established a credit risk management system in line with the market rates and customers.

The maximum credit risk of the fi nancial assets corresponds to the carrying amounts presented in the balance sheet.

The risk for receivables from clients can be rated as low due to the wide dispersion, a constant creditworthiness check and the presence of the public sector as an important client.

The risk of default for other primary fi nancial instruments shown on the assets side can also be regarded as low, as the contract partners are mainly fi nancial institutions with the highest level of creditworthiness and/or the risk of default has been signifi cantly reduced as a result of assumed liabilities of third parties.

STRABAG SE holds no non-fi nancial assets as security collateral. Financial collateral is only of minor importance, as the large number of public-sector customers presents hardly any payment risk. The performance of work for private customers is largely secured by payments of advance consideration.

Impairments on trade receivables and on contract assets are determined using the simplifi ed approach. The impairments are determined taking into consideration the country-specifi c risks and the creditworthiness of the customers.

Impairments, considered individually, are also made of fi nancial assets if the carrying amount of the fi nancial asset is higher than the present value of the future cash fl ows. This can be triggered by fi nancial diffi culties, insolvency of the client, breach of contract or signifi cant default of payment. These impairments are composed of many individual items of which none, seen alone, is signifi cant.

During the period under report, there were no material changes with regard to the determination methods and criteria that were applied.

The risk provision as at 31 December 2019 for trade receivables and for contract assets developed as follows during the fi nancial year:

T€	Trade receivables	Contract assets
Gross carrying amount as at 31.12.2019	1,717,616	1,359,922
Lifetime ECL as at 1.1.	6,897	5,268
Exchange differences/change in scope of consolidation	-15	-18
Change due to ECL proprietary projects	0	-136
Change due to volume change	-1,265	334
Change due to rating change	-870	-423
Lifetime ECL as at 31.12.	4,747	5,025
Impairment as at 1.1.	106,920	0
Exchange differences/change in scope of consolidation	159	0
Allocation/utilisation	3,894	0
Impairment as at 31.12.	110,973	0
Net carrying amount as at 31.12.2019	1,601,896	1,354,897

In addition, expected credit losses on other fi nancial assets amounting to T€ 3,373 (2018: T€ 5,330) exist as at 31 December 2019.

The risk provision as at 31 December 2018 for trade receivables and for contract assets developed as follows during the fi nancial year:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€	Trade receivables	Contract assets
Gross carrying amount as at 31.12.2018	1,759,412	1,288,175
Lifetime ECL as at 1.1.	4,809	3,640
Exchange differences/change in scope of consolidation	-35	-20
Addition ECL proprietary projects	0	1,483
Change due to volume change	1,884	15
Change due to rating change	239	150
Lifetime ECL as at 31.12.	6,897	5,268
Impairment as at 1.1.	100,140	0
Exchange differences/change in scope of consolidation	-927	0
Allocation/utilisation	7,706	0
Impairment as at 31.12.	106,919	0
Net carrying amount as at 31.12.2018	1,645,596	1,282,907

The following overview summarises by risk class the gross carrying amounts of the fi nancial assets for the 2019 fi nancial year for which the expected credit losses were recognised over the entire remaining life:

T€	Trade receivables	Contract assets
Low risk	1,599,946	1,247,824
Medium risk	84,726	72,345
High risk	32,944	39,753
Gross carrying amount as at 31.12.2019	1,717,616	1,359,922

The following overview summarises by risk class the gross carrying amounts of the fi nancial assets for the 2018 fi nancial year, for which the expected credit losses were recognised over the entire remaining life:

T€	Trade receivables	Contract assets
Low risk	1,488,557	1,161,103
Medium risk	192,631	78,866
High risk	78,224	48,206
Gross carrying amount as at 31.12.2018	1,759,412	1,288,175

The risk classes were determined according to the probabilities of default depending on country risk and creditworthiness of the debtors. Below 0.55 % is assumed to be low, between 0.55 % and 1 % medium, and above 1 % high risk.

In addition, fi nancial guarantees in the amount of T€ 14,481 (2018: T€ 62,145) are issued (low risk). Theoretically these guarantees can be used at any time, leading to a short-term outfl ow of liquidity.

Liquidity risk

Liquidity for the STRABAG SE Group means not only solvency in the strict sense but also the availability of the necessary fi nancial margin for mainstay business through suffi cient aval lines.

To guarantee fi nancial fl exibility, liquidity reserves are kept in the form of cash and credit lines for cash and aval loans. The STRABAG SE Group keeps bilateral credit lines with banks and syndicated cash and aval credit lines in the amount of € 0.4 billion (2018: € 0.4 billion) respectively € 2.0 billion (2018: € 2.0 billion). The overall line for cash and aval loan amounts to € 7.9 billion (2018: € 7.8 billion). The syndicated surety credit line contains covenants which were fulfi lled at the balance sheet date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 71The medium- and long-term liquidity needs have so far also been covered by the issue of corporate bonds. In the years 2012 and 2013, STRABAG issued bonds of € 100 million and € 200 million, respectively, with a term to maturity of seven years each. The most recent was a € 200 million seven-year bond fl oated in 2015. In the 2019 fi nancial year, the € 100 million bond issued in 2012 was repaid in full. As per 31 December 2019, STRABAG SE had two bonds with a total volume of € 400 million on the market.

The following payment obligations arise from the fi nancial liabilities (interest payments based on interest rate as at 31 December and redemption) for the subsequent years:

Payment obligations as at 31 December 2019

The risk provision as at 31 December 2018 for trade receivables and for contract assets developed as follows during the

T€ Trade receivables Contract assets Gross carrying amount as at 31.12.2018 1,759,412 1,288,175 Lifetime ECL as at 1.1. 4,809 3,640 Exchange differences/change in scope of consolidation -35 -20 Addition ECL proprietary projects 0 1,483 Change due to volume change 1,884 15 Change due to rating change 239 150 Lifetime ECL as at 31.12. 6,897 5,268

Impairment as at 1.1. 100,140 0 Exchange differences/change in scope of consolidation -927 0 Allocation/utilisation 7,706 0 Impairment as at 31.12. 106,919 0 Net carrying amount as at 31.12.2018 1,645,596 1,282,907

The following overview summarises by risk class the gross carrying amounts of the fi nancial assets for the 2019 fi nancial year

T€ Trade receivables Contract assets Low risk 1,599,946 1,247,824 Medium risk 84,726 72,345 High risk 32,944 39,753 Gross carrying amount as at 31.12.2019 1,717,616 1,359,922

The following overview summarises by risk class the gross carrying amounts of the fi nancial assets for the 2018 fi nancial year,

T€ Trade receivables Contract assets Low risk 1,488,557 1,161,103 Medium risk 192,631 78,866 High risk 78,224 48,206 Gross carrying amount as at 31.12.2018 1,759,412 1,288,175

The risk classes were determined according to the probabilities of default depending on country risk and creditworthiness of

In addition, fi nancial guarantees in the amount of T€ 14,481 (2018: T€ 62,145) are issued (low risk). Theoretically these

Liquidity for the STRABAG SE Group means not only solvency in the strict sense but also the availability of the necessary

the debtors. Below 0.55 % is assumed to be low, between 0.55 % and 1 % medium, and above 1 % high risk.

for which the expected credit losses were recognised over the entire remaining life:

guarantees can be used at any time, leading to a short-term outfl ow of liquidity.

fi nancial margin for mainstay business through suffi cient aval lines.

fi nancial year:

Liquidity risk

sheet date.

T€	Carrying amount 31.12.2019	Cash fl ows 2020	Cash fl ows 2021–2024	Cash fl ows after 2024
Bonds	400,000	209,250	203,250	0
Bank borrowings	721,888	118,131	310,601	374,663
Lease liabilities	300,319	56,942	192,111	178,481
Financial liabilities	1,422,207	384,323	705,962	553,144

Payment obligations as at 31 December 2018

T€	Carrying amount 31.12.2018	Cash fl ows 2019	Cash fl ows 2020–2023	Cash fl ows after 2023
Bonds	500,000	113,500	419,000	0
Bank borrowings	863,330	192,919	340,836	422,898
Financial liabilities	1,363,330	306,419	759,836	422,898

The trade payables and the other liabilities without derivatives essentially lead to cash outfl ows in line with the maturity at the amount of the carrying amounts. For fi nancial guarantees see page 72. The payment obligations from leasing liabilities amount to T€ 56,450 for 2021, T€ 48,417 for 2022, T€ 45,409 for 2023 and T€ 41,835 for 2024.

Segment report

(33) SEGMENT REPORTING

The rules of IFRS 8 Operating Segments apply to the segment reporting. IFRS 8 prescribes defi ning the segments and reporting the earnings on the basis of the internal reporting (management approach). Segment assets are not disclosed as these do not form part of the regular internal reporting.

The internal reporting in the STRABAG Group is based on Management Board areas, which also represent the segments. The settlement between the single segments is made at arm's length prices.

The segment North + West bundles the construction activities in Germany, Poland, Benelux and Scandinavia as well as the ground engineering activities.

The segment South + East comprises the construction activities in Austria, Switzerland, Hungary, Czech Republic, Slovakia, Adriatic, Rest of Europe and Russia and the environmental engineering business.

The segment International + Special Divisions includes the international construction activities, tunnelling, services, real estate development and infrastructure development as well as the construction materials business.

In addition, there are the Central Divisions and Central Staff Divisions, which handle services in the areas of accounting, group fi nancing, technical development, machine management, quality management, logistics, legal affairs, contract management etc. These services are included in the segment Other.

Segment reporting for the fi nancial year 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

T€	North + West	South + East	International + Special Divisions	Other	Reconciliation to IFRS fi nancial statements	Group
	8,106,935	4,915,786	3,450,573	144,678		16,617,972
Output volume
Revenue	7,555,751	4,879,498	3,216,674	16,651	0	15,668,574
Inter-segment revenue	158,387	94,484	309,404	912,966
EBIT	310,205	121,967	183,968	869	-14,428	602,581
thereof share of profi t or loss of
equity-accounted investments	18,588	7,559	-47,719	93	0	-21,479
Interest and similar income	0	0	0	30,973	0	30,973
Interest expense and similar charges	0	0	0	-56,315	0	-56,315
EBT	310,205	121,967	183,968	-24,473	-14,428	577,239
Investments in property, plant and
equipment, and in intangible assets	0	0	0	689,244	0	689,244
Reversal of impairment losses,
depreciation and amortisation	0	0	2,024	508,690	0	510,714
thereof extraordinary reversal of impairment
losses, depreciation and amortisation	0	0	2,024	18,133	0	20,157

Segment reporting for the fi nancial year 2018

T€	North + West	South + East	International + Special Divisions	Other	Reconciliation to IFRS fi nancial statements	Group
Output volume	7,827,484	4,639,263	3,740,298	115,831		16,322,876

Revenue	7,242,416	4,521,813	3,437,820	19,783	0	15,221,832
Inter-segment revenue	116,114	130,304	315,535	855,708
EBIT	161,398	142,027	198,691	859	55,240	558,215
thereof share of profi t or loss of
equity-accounted investments	-28,693	18,893	37,110	552	55,314	83,176
Interest and similar income	0	0	0	38,617	0	38,617
Interest expense and similar charges	0	0	0	-66,049	0	-66,049
EBT	161,398	142,027	198,691	-26,573	55,240	530,783
Investments in property, plant and
equipment, and in intangible assets	0	0	0	644,988	0	644,988
Reversal of impairment losses,
depreciation and amortisation	1,734	0	0	392,654	0	394,388
thereof extraordinary reversal of impairment
losses, depreciation and amortisation	1,734	0	0	3,811	0	5,545

Reconciliation of the sum of the segment earnings to EBT according to IFRS fi nancial statements

Income and expense in the internal reporting are essentially shown in accordance with IFRS. An exception is income taxes, including those applicable to deferred tax, which are not considered in the internal reporting.

The basis for the internal reporting is formed by all subsidiaries. In the IFRS fi nancial statements, earnings from companies which were not fully consolidated or reported using the equity method are recognised in conformity with dividends, transfer of NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 73earnings and/or depreciation and amortisation. For this reason, the internal reporting does not conform with EBIT and EBT in the consolidated fi nancial statements in terms of the investment result.

Other minor differences result from entries in other consolidations.

Reconciliation of the internal reporting to IFRS fi nancial statements is allocated as follows:

T€	2019	2018
Net income from investments	-12,934	2,463
Non-operating step-up profi t	0	55,314
Other consolidations	-1,494	-2,537
Total	-14,428	55,240

Breakdown of revenue by geographic region

T€	2019	2018
Germany1	7,517,553	7,592,651
Austria1	2,800,751	2,658,357
Rest of Europe1	4,587,779	4,194,381
Rest of world1	762,491	776,443
Revenue	15,668,574	15,221,832

Presentation of revenue by region is done according to the company's registered place of business.

Other notes

Segment reporting for the fi nancial year 2019

thereof share of profi t or loss of

Investments in property, plant and

thereof extraordinary reversal of impairment

Segment reporting for the fi nancial year 2018

T€ North + West South + East

Reversal of impairment losses,

thereof share of profi t or loss of

Investments in property, plant and

thereof extraordinary reversal of impairment

Reversal of impairment losses,

T€ North + West South + East

International + Special

Divisions Other

Output volume 8,106,935 4,915,786 3,450,573 144,678 16,617,972

Revenue 7,555,751 4,879,498 3,216,674 16,651 0 15,668,574

EBIT 310,205 121,967 183,968 869 -14,428 602,581

equity-accounted investments 18,588 7,559 -47,719 93 0 -21,479

Interest and similar income 0 0 0 30,973 0 30,973 Interest expense and similar charges 0 0 0 -56,315 0 -56,315 EBT 310,205 121,967 183,968 -24,473 -14,428 577,239

equipment, and in intangible assets 0 0 0 689,244 0 689,244

depreciation and amortisation 0 0 2,024 508,690 0 510,714

losses, depreciation and amortisation 0 0 2,024 18,133 0 20,157

Output volume 7,827,484 4,639,263 3,740,298 115,831 16,322,876

Revenue 7,242,416 4,521,813 3,437,820 19,783 0 15,221,832

EBIT 161,398 142,027 198,691 859 55,240 558,215

equity-accounted investments -28,693 18,893 37,110 552 55,314 83,176

Interest and similar income 0 0 0 38,617 0 38,617 Interest expense and similar charges 0 0 0 -66,049 0 -66,049 EBT 161,398 142,027 198,691 -26,573 55,240 530,783

equipment, and in intangible assets 0 0 0 644,988 0 644,988

depreciation and amortisation 1,734 0 0 392,654 0 394,388

losses, depreciation and amortisation 1,734 0 0 3,811 0 5,545

Income and expense in the internal reporting are essentially shown in accordance with IFRS. An exception is income taxes,

Reconciliation of the sum of the segment earnings to EBT according to IFRS fi nancial statements

including those applicable to deferred tax, which are not considered in the internal reporting.

Inter-segment revenue 116,114 130,304 315,535 855,708

Inter-segment revenue 158,387 94,484 309,404 912,966

Divisions Other

Reconciliation to IFRS fi nancial

statements Group

(34) NOTES ON RELATED PARTIES

The core shareholders of STRABAG SE are the Haselsteiner Group, as well as the Raiffeisen-Holding NÖ-Wien Group, the UNIQA Group and MKAO "RASPERIA TRADING LIMITED", owned by Russian businessman Oleg Deripaska. A syndicate agreement remains in effect between the core shareholders.

Arm's-length fi nance and insurance transactions exist with the Raiffeisen Holding NÖ-Wien Group and the UNIQA Group. The payables on 31 December 2019 to Raiffeisen Group relating to fi nancing and current accounts amounted to T€ 32,980 (2018: T€ 37,817). The interest expense in the 2019 fi nancial year amounted to T€ 3,911 (2018: T€ 2,936).

Premiums for insurance contracts with the UNIQA Group were recognised as an expense in the amount of T€ 774 (2018: T€ 763).

Haselsteiner Group

The Haselsteiner Group holds 5.1% of Strabag Real Estate GmbH, Cologne, a 5.1% share in fi ve real estate companies of the Züblin subgroup and 5.1% of Züblin Projektentwicklung GmbH. The income from real estate companies attributable to the Haselsteiner Group is included in net interest income at T€ 93. For the remaining companies, the amount recognised in income attributable to non-controlling interests in 2019 amounts to T€ 1,513 (2018: T€ 932). In the 2019 fi nancial year, the dividends from the above-mentioned companies amounted to T€ 110 (2018: T€ 127).

The business relations between STRABAG SE and the companies of the Haselsteiner Group during the fi nancial year are presented below.

T€	2019	2018
Work and services performed	35,954	19,328
Work and services received	5,711	5,307
Receivables as at 31.12.	19,953	9,647
Liabilities as at 31.12.	1,209	37

1 To clarify the comparability, the comparison period was adjusted.

Basic Element

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Basic Element Group, a group with numerous industrial holdings, among other things in the area of construction, construction materials and infrastructure, is owned by Russian businessman Oleg Deripaska.

In the 2019 fi nancial year, as in the previous year, there were no business relations with the companies of the Basic Element Group.

The US Department of the Treasury's Offi ce of Foreign Assets Control (OFAC) on 6 April 2018 designated various persons, including Oleg Deripaska, as so-called Specially Designated Nationals (SDN) and imposed economic sanctions on them. This also applies to companies that are more than 50 % owned by these persons, meaning that MKAO "RASPERIA TRADING LIMITED" (Rasperia), a direct shareholder of Strabag SE, must also be designated as a SDN. The payment of dividends to Rasperia would therefore subject STRABAG SE to the risk of having secondary sanctions imposed on it.

To avoid such serious consequences, no dividends have been paid to Rasperia starting with the 2018 fi nancial year. Dividends payable to Rasperia, less capital gains tax, in the amount of T€ 53,722 (previous year: T€ 26,861) are recognised as other current fi nancial liabilities.

IDAG

IDAG Immobilienbeteiligung u. -Development GmbH is entirely held by private foundations whose benefi ciaries are the Haselsteiner Group and the Raiffeisen-Holding NÖ-Wien Group. It is the business purpose of IDAG Immobilienbeteiligung u. -Development GmbH to develop property and to participate in property projects.

STRABAG's headquarters in Vienna and offi ce buildings in Graz are held in the real estate portfolio of subsidiaries of IDAG Immobilienbeteiligung u. -Development GmbH. The buildings are let to the STRABAG Group at the usual market conditions. Rental costs arising from both buildings in the 2019 fi nancial year amounted to T€ 8,451 (2018: T€ 8,340). Under IFRS 16, these leases are recognised as right-of-use assets and lease liabilities. The consolidated fi nancial statements as of 31 December 2019 show right-of-use assets of T€ 73,049 and lease liabilities of T€ 44,816. The lease liabilities are presented less the rental deposits of T€ 28,929. Other services in the amount of T€ 88 (2018: T€ 312) were obtained from the IDAG Group.

Furthermore, revenues of T€ 1,116 (2018: T€ 1,014) were made with IDAG Immobilienbeteiligung u. -Development GmbH in the 2019 fi nancial year. At the balance sheet date of 31 December 2019, the STRABAG Group had receivables from rental deposits amounting to T€ 0 (2018: T€ 28,209) from IDAG Immobilienbeteiligung u. -Development GmbH.

Investments in equity-accounted investments

Lafarge Cement CE Holding GmbH bundles the cement activities of Lafarge, a market leader in construction materials manufacturing, and STRABAG in the countries of Central Europe. The joint activities aim at maintaining a commensurate cement supply in the group's core countries. In 2019, STRABAG procured cement services worth T€ 23,137 (2018: T€ 27,388) from Lafarge. At the balance sheet date, there were liabilities to Lafarge Cement CE Holding GmbH Group in the amount of T€ 698 (2018: T€ 1,003).

The business transactions with the other equity-accounted investments can be presented as follows:

T€	2019	2018
Work and services performed	231,641	113,803
Work and services received	68,670	46,216
Receivables as at 31.12.	45,202	14,764
Liabilities as at 31.12.	17,249	16,661
Financing receivables as at 31.12.	78,365	92,067

For information about consortia we refer to item 15 (Notes on consortia).

Concerning business transactions with the Management Board members and employees of the fi rst management level (management in key positions) and with their family members and companies which are controlled by the management in key positions or decisively infl uenced by them in the year under report, services worth T€ 386 (2018: T€ 299) were provided and services worth T€ 56 (2018: T€ 176) were procured. At the balance sheet dates, there were receivables in the amount of T€ 3 (2018: T€ 73) and liabilities in the amount of T€ 0 (2018: T€ 17) out of these business relations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 75The total remuneration including any severance and pension payments, as well as other long-term payments for employees of the fi rst management level amounted to T€ 20,378 (2018: T€ 19,573) in the year under report. Of this amount, T€ 20,185 (2018: T€ 19,398) is attributable to the current remuneration and T€ 193 (2018: T€ 175) to severance and pension payments.

(35) NOTES ON THE MANAGEMENT AND SUPERVISORY BOARDS

Management Board

Basic Element

IDAG

as other current fi nancial liabilities.

Investments in equity-accounted investments

For information about consortia we refer to item 15 (Notes on consortia).

T€ 698 (2018: T€ 1,003).

The Basic Element Group, a group with numerous industrial holdings, among other things in the area of construction,

In the 2019 fi nancial year, as in the previous year, there were no business relations with the companies of the Basic Element Group.

T€ 2019 2018 Work and services performed 231,641 113,803 Work and services received 68,670 46,216 Receivables as at 31.12. 45,202 14,764 Liabilities as at 31.12. 17,249 16,661 Financing receivables as at 31.12. 78,365 92,067

deposits amounting to T€ 0 (2018: T€ 28,209) from IDAG Immobilienbeteiligung u. -Development GmbH.

The business transactions with the other equity-accounted investments can be presented as follows:

T€ 3 (2018: T€ 73) and liabilities in the amount of T€ 0 (2018: T€ 17) out of these business relations.

construction materials and infrastructure, is owned by Russian businessman Oleg Deripaska.

u. -Development GmbH to develop property and to participate in property projects.

Rasperia would therefore subject STRABAG SE to the risk of having secondary sanctions imposed on it.

Dr. Thomas B i r t e l (CEO) Mag. Christian H a r d e r Klemens H a s e l s t e i n e r (since 1 January 2020) Dipl.-Ing. Dr. Peter K r a m m e r Dipl.-Ing. Siegfried W a n k e r Dipl.-Ing. (FH) Alfred W a t z l

Supervisory Board

Dr. Alfred G u s e n b a u e r (Chairman) Mag. Erwin H a m e s e d e r (Vice Chairman) Dr. Andreas B r a n d s t e t t e r Thomas B u l l Mag. Kerstin G e l b m a n n Dr. Oleg G. K o t k o v

Dipl.-Ing. Andreas B a t k e (works council) Miroslav C e r v e n y (works council) Magdolna P. G y u l a i n é (works council) Georg H i n t e r s c h u s t e r (works council) Wolfgang K r e i s (works council)

The total salaries of the Management Board members in the fi nancial year amount to T€ 8,269 (2018: T€ 7,163). The severance payments for Management Board members amount to T€ 118 (2018: T€ 149).

The remunerations for the Supervisory Board members in 2019 amounted to T€ 162 (2018: T€ 162). Neither the Management Board members nor the Supervisory Board members of STRABAG SE received advances or loans.

(36) EXPENSES FOR THE AUDITOR

The expenses for the auditor, KPMG Austria GmbH, incurred in the fi nancial year amount to T€ 1,360 (2018: T€ 1,279) of which T€ 1,282 (2018: T€ 1,250) were for the audit of the consolidated fi nancial statements (including the audit of separate fi nancial statements of group companies) and T€ 78 (2018: T€ 29) for other services.

(37) EVENTS AFTER THE BALANCE SHEET DATE

Like all industries, the STRABAG Group has also been impacted by the COVID-19 coronavirus disease, which on 11 March 2020 was declared a pandemic by the World Health Organisation. Especially those European countries in which the STRABAG Group generates most of its operating revenue have been particularly hard hit by COVID-19 and the associated government directives to prevent and contain its spread.

Every country has introduced its own measures to prevent the spread of COVID-19. These measures have included lockdowns and stay-at-home orders resulting in a restricted movement of goods, services and people between the European countries.

The restrictions have had a negative impact on the business operations of STRABAG SE, particularly on construction activity. Construction processes must be adapted and special protective measures implemented while dealing with the limited availability of (human and material) resources. This always involves a change in the intensity of the work performed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The impact has differed greatly from country to country. In March 2020, for example, regular construction operations were suspended in the home market of Austria for around ten days before being gradually ramped up again. Approximately 1,000 construction sites were affected by this measure. In addition, all construction work was ordered halted in countries such as Italy and Belgium, which are of minor importance for the STRABAG Group in terms of size.

Risks resulting from disruptions in the STRABAG Group's supply chain can be partially cushioned by its high level of value added in raw materials. The existing inventory of construction equipment, machinery and other vehicles benefi t the group in this regard as well. Precautions are also being taken as part of the business continuity management to ensure that business activity is maintained to the full extent as much as possible in the event of disruptions.

As the directives issued in the fi rst quarter of 2020 and the associated impact on the business operations proved to be quite different in the individual countries, across-the-board measures within the group made little sense. Action must be taken on a country-by-country basis. The Management Board of STRABAG SE has therefore been working together with the local management, the occupational safety specialists and the specialists from the service companies to continuously evaluate the risks in the individual group countries. This ensures that necessary decisions are made quickly and implemented effectively.

In all decisions made in connection with COVID-19, however, the Management Board must also always take into account its responsibility towards its employees. As a result of the mostly small, decentralised structures compared to other industries, the construction sector has a lower risk of simultaneous infection or quarantine of a critical part of the staff; nevertheless, the risk of infection must be further reduced with suitable measures such as avoiding in-person events, providing the workforce with hygiene information and supplies or enabling remote working where possible. It should be noted, however, that the number of known infected and quarantined persons among the workforce at the beginning of April 2020 remained relatively low and that the number of acute cases has been quite stable.

It is diffi cult to estimate how long the restrictions will last. As the situation is unlikely to return to normal in the short term, however, negative consequences are to be expected for the 2020 fi nancial year. Due to the numerous uncertainties, it is not yet possible to determine the exact impact on output, revenue and earnings and on the targeted EBIT margin of STRABAG SE. As of early April 2020, it was not yet clear to what extent the negative impact from the suspension of construction activity and productivity losses due to restricted site operations can be offset by any subsequent positive effects in the 2020 fi nancial year.

(38) DATE OF AUTHORISATION FOR ISSUE

In Austrian companies organised as corporations limited by shares, the consolidated fi nancial statements prepared by the Management Board are approved by the Supervisory Board. The STRABAG SE Supervisory Board meeting for the approval of the consolidated fi nancial statements for the year ended 31 December 2019 will take place on 23 April 2020.

Villach, 8 April 2020 The Management Board

availability of (human and material) resources. This always involves a change in the intensity of the work performed.

Italy and Belgium, which are of minor importance for the STRABAG Group in terms of size.

activity is maintained to the full extent as much as possible in the event of disruptions.

that the number of acute cases has been quite stable.

year.

Dr. Thomas Birtel CEO Responsibility Central Staff Divisions and Central Divisions BMTI, TPA as well as CML Construction Services

Mag. Christian Harder CFO Responsibility Central Division BRVZ

Klemens Haselsteiner Responsibility Central Divisions Digitalisation, Innovation and Business Development as well as Zentrale Technik, Responsibility Subdivision NN Russia

Dipl.-Ing. Siegfried Wanker Responsibility Segment International + Special Divisions

Dipl.-Ing. Dr. Peter Krammer Responsibility Segment South + East (except Subdivision NN Russia)

Dipl.-Ing. (FH) Alfred Watzl Responsibility Segment North + West

List of subsidiaries, equity-accounted investments and investee companies as at 31.12.2019

Company	Residence	Direct stake %
Consolidated companies
"A-WAY Infrastrukturprojektentwicklungs- und -betriebs GmbH"	Spittal an der Drau	100.00
"Crnagoraput" AD, Podgorica	Podgorica	95.32
"SBS Strabag Bau Holding Service GmbH"	Spittal an der Drau	100.00
"STRABAG REAL ESTATE" EOOD	Sofia	100.00
"Strabag" d.o.o. Podgorica	Podgorica	100.00
"VITOSHA VIEW" EOOD	Sofia	100.00
"Wiener Heim" Wohnbaugesellschaft m.b.H.	Vienna	100.00
ABR Abfall Behandlung und Recycling GmbH	Schwadorf	100.00
AKA Zrt.	Budapest	100.00
Alpines Hartschotterwerk GmbH	Leinfelden-Echterdingen	100.001
AMFI HOLDING Kft.	Budapest	100.00
ANTREPRIZA DE REPARATII SI LUCRARI A R L CLUJ SA	Cluj-Napoca	98.59
ARGE STRABAG	Cologne	100.00
ASIA Center Kft.	Budapest	100.00
Asphalt & Beton GmbH	Spittal an der Drau	100.00
AUSTRIA ASPHALT GmbH & Co OG	Spittal an der Drau	100.00
Bau Holding Beteiligungs GmbH	Spittal an der Drau	100.00
Baumann & Burmeister GmbH	Halle/Saale	100.001
BBS Baustoffbetriebe Sachsen GmbH	Hartmannsdorf	100.001
BEWO - Projekt Q4a Reininghausstraße GmbH & Co KG	Graz	60.00
BHG Bitumenhandelsgesellschaft mbH	Hamburg	100.001
BHG CZ s.r.o.	Ceske Budejovice	100.00
BHG Sp. z o.o.	Pruszkow	100.00
BHK KRAKÓW JOINT VENTURE Sp. z o.o.	Warsaw	100.00
Bitumen Handelsgesellschaft m.b.H. & Co KG	Loosdorf	100.00
BITUNOVA Baustofftechnik Gesellschaft m.b.H.	Spittal an der Drau	100.00
BITUNOVA GmbH	Duesseldorf	100.001
Bitunova Kft.	Budapest	100.00
BITUNOVA Romania SRL	Bucharest	100.00
BITUNOVA Sp. z o.o.	Warsaw	100.00
BITUNOVA spol. s r.o.	Jihlava	100.00
BITUNOVA spol. s r.o.	Zvolen	100.00
Blees-Kölling-Bau GmbH	Cologne	100.001
BLUMENFELD Liegenschaftsverwaltungs GmbH	Vienna	100.00
Blutenburg Projekt GmbH	Cologne	100.001
Böhm Stadtbaumeister & Gebäudetechnik GmbH	Vienna	100.00
BONDENO INVESTMENTS LTD	Limassol	100.00
BrennerRast GmbH	Vienna	100.00
Bug-AluTechnic GmbH	Vienna	100.00
Campus Eggenberg Immobilienprojekt GmbH	Graz	60.00
Chustskij Karier	Zakarpatska	100.00
CML Construction Services GmbH	Cologne	100.00
DC1 Immo GmbH	Vienna	100.00
Deutsche Asphalt GmbH	Cologne	100.001
Diabaswerk Saalfelden Gesellschaft m.b.H.	Saalfelden	100.00
DISTRICT DEVELOPMENT SRL	Bucharest	100.00
DIW Aircraft Services GmbH	Stuttgart	100.001
DIW Instandhaltung GmbH	Stuttgart	100.001
DIW Mechanical Engineering GmbH	Stuttgart	100.001
DIW System Dienstleistungen GmbH	Fürstenfeldbruck	100.001

1 For these companies, the option allowed by Sec 264 Para 3 or by Sec 264b of the German Commercial Code (HGB) was exercised.

Company	Residence	Direct stake %
DRP, d.o.o.	Ljubljana	100.00
DYWIDAG International GmbH	Munich	100.001
Dywidag Saudi Arabia Co. Ltd.	Jubail	100.00
DYWIDAG-Holding GmbH	Cologne	100.001
E S B Kirchhoff GmbH	Leinfelden-Echterdingen	100.001
Eckstein Holding GmbH	Spittal an der Drau	100.00
Ed. Züblin AG	Stuttgart	100.001
EFKON GmbH	Raaba	100.00
EFKON INDIA Pvt. Ltd.	Mumbai	100.00
EFKON SOUTH AFRICA (PTY) LTD	Pretoria	100.00
Erdberger Mais GmbH & Co KG	Vienna	100.00
ERRICHTUNGSGESELLSCHAFT STRABAG SLOVENSKO s.r.o.	Bratislava-Ruzinov	100.00
EVOLUTION GAMMA Sp. z o.o.	Warsaw	100.00
EVOLUTION ONE Sp. z o.o.	Warsaw	100.00
EVOLUTION THREE Sp. z o.o.	Warsaw	100.00
EVOLUTION TWO Sp. z o.o.	Warsaw	100.00
EXP HOLDING Kft.	Budapest	100.002
F 101 Projekt GmbH & Co. KG	Cologne	100.00

F. Kirchhoff GmbH	Leinfelden-Echterdingen	100.001
F. Lang u. K. Menhofer Baugesellschaft m.b.H. & Co. KG	Wiener Neustadt	100.00
F.K. SYSTEMBAU GmbH	Münsingen	100.001
Fahrleitungsbau GmbH	Essen	100.001
First-Immo Hungary Kft.	Budapest	100.00
FRISCHBETON s.r.o.	Prague	100.00
Frissbeton Kft.	Budapest	100.00
Gaul GmbH	Sprendlingen	100.00
GBS Gesellschaft für Bau und Sanierung mbH	Leuna	100.00
Generál Mély- és Magasépitö Zrt.	Budapest	100.00
Goldeck Bergbahnen GmbH	Spittal an der Drau	100.00
Griproad Spezialbeläge und Baugesellschaft mbH	Cologne	100.001
Hexagon Projekt GmbH & Co. KG	Cologne	100.001
I.C.S. "STRABAG" S.R.L.	Chisinau	100.00
Ilbau GmbH Deutschland	Berlin	100.00
Ilbau Liegenschaftsverwaltung GmbH	Spittal an der Drau	100.00
InfoSys Informationssysteme GmbH	Spittal an der Drau	94.90
Innsbrucker Nordkettenbahnen Betriebs GmbH	Innsbruck	51.00
IQ Generalübernehmer GmbH & Co. KG	Oststeinbek	75.00
KAB Straßensanierung GmbH & Co KG	Spittal an der Drau	50.60
KAMENOLOMY CR s.r.o.	Ostrava	100.00
Kanzel Steinbruch Dennig Gesellschaft mit beschränkter Haftung	Gratkorn	75.00
KMG - KLIPLEV MOTORWAY GROUP A/S	Aarhus	100.00
KÖKA Kft.	Budapest	100.00
Krems Sunside Living Projektentwicklung GmbH	Vienna	100.00
KSR - Kamenolomy SR, s.r.o.	Zvolen	100.00
Kuhwald 55 Projekt GmbH & Co. KG	Cologne	100.001
Lift-Off GmbH & Co. KG	Cologne	100.001
LIMET Beteiligungs GmbH	Cologne	100.001
LIMET Beteiligungs GmbH & Co. Objekt Köln KG	Cologne	94.001
M5 Beteiligungs GmbH	Vienna	100.00
M5 Holding GmbH	Vienna	100.00
MAV Kelheim GmbH	Kelheim	100.00
MAV Mineralstoff - Aufbereitung und - Verwertung GmbH	Krefeld	50.003
MAV Mineralstoff - Aufbereitung und Verwertung Lünen GmbH	Lünen	100.00
Mineral Abbau GmbH	Spittal an der Drau	100.00
Mineral Baustoff GmbH	Cologne	100.001
MINERAL IGM d.o.o.	Zapuzane	100.00
Mineral Polska Sp. z o.o.	Czarny Bor	100.00
MINERAL ROM SRL	Brasov	100.00

2 The presentation of interest is done using the economic approach, the interest as defined by civil law may deviate from this presentation.

3 The voting rights according to the contract of association amount to 50 % plus one vote.

Company	Residence	Direct stake %
Mischek Bauträger Service GmbH	Vienna	100.00
Mischek Systembau GmbH	Vienna	100.00
Mitterhofer Projekt GmbH & Co. KG	Cologne	100.001
MOBIL Baustoffe GmbH	Munich	100.001
MOBIL Baustoffe GmbH	Spittal an der Drau	100.00
N.V. STRABAG Belgium S.A.	Antwerpen	100.00
N.V. STRABAG Benelux S.A.	Antwerpen	100.00
Na Belidle s.r.o.	Prague	100.00
NE Sander Immobilien GmbH	Sande	100.001
Nimab Entreprenad AB	Sjöbo	100.00
Nottendorfer Gasse 13 Kom GmbH	Vienna	100.00
OAT - Bohr- und Fugentechnik Gesellschaft m.b.H.	Spittal an der Drau	51.00
OAT Kft.	Budapest	100.00
Osttiroler Asphalt Hoch- und Tiefbauunternehmung GmbH	Lavant i. Osttirol	80.00
PANSUEVIA GmbH & Co. KG	Jettingen-Scheppach	100.001
POLSKI ASFALT Sp. z o.o.	Krakow	100.00
POMGRAD INZENJERING d.o.o.	Split	100.00
Pyhrn Concession Holding GmbH	Cologne	100.001
Q4a Immobilien GmbH	Graz	60.00
Ranita OOO	Moscow	100.00
Raststation A 3 GmbH	Vienna	100.00
RBS Rohrbau-Schweißtechnik Gesellschaft m.b.H.	Linz	100.00
RE Beteiligungsholding GmbH	Vienna	100.00
RE Klitschgasse Errichtungs GmbH	Vienna	67.00

RE Projekt Errichtungs GmbH in Liqu.	Vienna	100.00
RE Wohnraum GmbH	Vienna	100.00
RE Wohnungseigentumserrichtungs GmbH	Vienna	100.00
REPASS-SANIERUNGSTECHNIK GMBH Korrosionsschutz und Betoninstandsetzung	Munderkingen	100.001
ROBA Transportbeton GmbH	Berlin	100.001
Sakela Beteiligungsverwaltungs GmbH	Vienna	100.00
SAT s.r.o.	Prague	100.00
SAT Sp. z o.o.	Olawa	100.00
SAT Straßensanierung GmbH	Cologne	100.001
SF Bau vier GmbH	Vienna	100.00
SF-Ausbau GmbH	Freiberg	100.001
Shanghai Changjiang-Züblin Construction&Engineering Co.Ltd.	Shanghai	75.00
SILO DREI Beteiligungsverwaltungs GmbH & Co KG	Vienna	100.00
SILO DREI next LBG 57 Liegenschaftsverwertung GmbH & Co KG	Vienna	51.00
SILO II LBG 57 - 59 Liegenschaftsverwertung GmbH & Co KG	Vienna	51.00
SILO ZWEI Beteiligungsverwaltungs GmbH & Co KG	Vienna	100.00
SQUARE One GmbH & Co KG	Vienna	100.00
SRE Erste Vermögensverwaltung GmbH	Cologne	100.00
SRE Lux Projekt SQM 27E	Belvaux	100.00
SRE Projekt 1 GmbH & Co. KG	Cologne	100.00
STR Holding Generál Kft.	Budapest	100.00
STR Holding MML Kft.	Budapest	100.00
STRABAG a.s.	Prague	100.00
STRABAG AB	Stockholm	100.00
STRABAG AG	Cologne	100.001
STRABAG AG	Spittal an der Drau	100.00
STRABAG AG	Schlieren	100.00
STRABAG Általános Építö Kft.	Budapest	100.00
STRABAG AO	Moscow	100.00
STRABAG Asfalt s.r.o.	Sobeslav	100.00
STRABAG B.V.	Herten	100.00
STRABAG Bau GmbH	Vienna	100.00
STRABAG BMTI GmbH	Erstfeld	100.00
STRABAG BMTI GmbH	Vienna	100.00

Company	Residence	Direct stake %
STRABAG BMTI GmbH & Co. KG	Cologne	100.001
STRABAG BMTI Kft.	Budapest	100.00
STRABAG BMTI s.r.o.	Brno	100.00
STRABAG BMTI Sp. z o.o.	Pruszkow	100.00

STRABAG BRVZ AB	Kumla	100.00
STRABAG BRVZ AG	Erstfeld	100.00
STRABAG BRVZ d.o.o.	Ljubljana	100.00
STRABAG BRVZ d.o.o.	Zagreb	100.00
STRABAG BRVZ GmbH	Spittal an der Drau	100.00
STRABAG BRVZ GmbH & Co. KG	Cologne	100.001
STRABAG BRVZ Kft.	Budapest	100.00
STRABAG BRVZ OOO	Moscow	100.00
STRABAG BRVZ s.r.o.	Bratislava	100.00
STRABAG BRVZ s.r.o.	Prague	100.00
STRABAG BRVZ Sp. z o.o.	Pruszkow	100.00
STRABAG d.o.o.	Novi Beograd	100.00
STRABAG d.o.o.	Zagreb	100.00
STRABAG d.o.o. Sarajevo	Sarajevo	100.00
STRABAG EAD	Sofia	100.00
STRABAG Épitö Kft.	Budapest	100.00
STRABAG Épitöipari Zrt.	Budapest	100.00
STRABAG Facility Management GmbH	Berlin	100.001
STRABAG Facility Services GmbH	Nuremberg	100.001
STRABAG Generálépitö Kft.	Budapest	100.00
STRABAG GmbH	Bad Hersfeld	100.001
STRABAG gradbene storitve d.o.o.	Ljubljana	100.00
STRABAG Großprojekte GmbH	Munich	100.001
STRABAG Holding GmbH	Vienna	100.00
STRABAG INC.	Toronto	100.00
STRABAG Industries (Thailand) Co.,Ltd.	Bangkok	100.00

STRABAG Infrastructure & Safety Solutions GmbH	Cologne	100.001
STRABAG Infrastructure & Safety Solutions GmbH	Vienna	100.00
STRABAG INFRASTRUKTURA POLUDNIE Sp. z o.o.	Wroclaw	100.00
STRABAG Infrastrukturprojekt GmbH	Bad Hersfeld	100.001
STRABAG International GmbH	Cologne	100.001
STRABAG Kieserling Flooring Systems GmbH	Hamburg	100.001
Strabag Liegenschaftsverwaltung GmbH	Linz	100.00
STRABAG OMAN L.L.C.	Maskat	100.00
STRABAG PFS Polska Sp. z o.o.	Warsaw	100.00
STRABAG Pozemne a inzinierske stavitel'stvo s. r. o.	Bratislava	100.00
STRABAG Pozemnì a inzenyrskè stavitelstvì s.r.o.	Prague	100.00
STRABAG Projektentwicklung GmbH	Cologne	100.001
STRABAG Projektutveckling AB	Stockholm	100.00
STRABAG Property and Facility Services a.s.	Prague	100.00
STRABAG Property and Facility Services GmbH	Münster	100.001
STRABAG Property and Facility Services GmbH	Vienna	100.00
STRABAG Rail a.s.	Usti nad Labem	100.00
STRABAG Rail AB	Kumla	100.00
STRABAG Rail Fahrleitungen GmbH	Berlin	100.001
STRABAG Rail GmbH	Lauda-Königshofen	100.001
STRABAG Rail Kft.	Budapest	100.00
STRABAG Real Estate GmbH	Cologne	94.90
STRABAG Real Estate GmbH	Vienna	100.00
STRABAG Real Estate Invest GmbH	Cologne	100.001

STRABAG Real Estate Kft.	Budapest	100.00
STRABAG S.A.S.	Bogotá, D.C.	100.00
STRABAG S.p.A.	Bologna	100.00
STRABAG s.r.o.	Bratislava	100.00

Company	Residence	Direct stake %
STRABAG SE	Villach	100.00
STRABAG SIA	Milzkalne	100.00
STRABAG Sp. z o.o.	Pruszkow	100.00
Strabag SpA	Santiago de Chile	100.00
STRABAG Sportstättenbau GmbH	Dortmund	100.001
STRABAG SRL	Bucharest	100.00
STRABAG Sverige AB	Stockholm	100.00

STRABAG Umwelttechnik GmbH	Duesseldorf	100.001
STRABAG Vasútépítö Kft.	Budapest	100.00
STRABAG Wasserbau GmbH	Hamburg	100.00
STRABAG-MML Kft.	Budapest	100.00
TECH GATE VIENNA Wissenschafts- und Technologiepark GmbH	Vienna	100.00
Torkret GmbH	Stuttgart	100.001
TPA CR, s.r.o.	Ceske Budejovice	100.00
TPA Gesellschaft für Qualitätssicherung und Innovation GmbH	Vienna	100.00
TPA GmbH	Cologne	100.00
TPA HU Kft.	Budapest	100.00
TPA odrzavanje kvaliteta i inovacija d.o.o.	Zagreb	100.00
TPA SOCIETATE PENTRU ASIGURAREA CALITATII SI INOVATII SRL	Bucharest	100.00
TPA Sp. z o.o.	Pruszkow	100.00
TPA Spolocnost pre zabezpecenie kvality a inovacie s.r.o.	Bratislava	100.00
TPA za obezbedenje kvaliteta i inovacije d.o.o. Beograd	Novi Beograd	100.00
Trema Engineering 2 sh p.k.	Tirana	51.00
Treuhandbeteiligung H		100.002
Turm am Mailänder Platz GmbH & Co. KG	Stuttgart	100.001
Viedenska brana s.r.o.	Bratislava	100.00
VIOLA PARK Immobilienprojekt GmbH	Vienna	75.00
Wohnquartier Reininghausstraße GmbH	Graz	60.00
Wolfer & Goebel Bau GmbH	Stuttgart	100.001
Z. Brückenbau Immobiliengesellschaft mbH & Co. KG	Cologne	94.901
Z. Holzbau Immobiliengesellschaft mbH & Co. KG	Cologne	94.901
Z. Immobiliengesellschaft mbH & Co. KG	Cologne	94.901
Z. Sander Immobiliengesellschaft mbH & Co. KG	Cologne	94.901
Z. Stahlbau Immobiliengesellschaft mbH & Co. KG	Cologne	94.901

Z-Bau GmbH	Magdeburg	100.001
ZDE Sechste Vermögensverwaltung GmbH	Cologne	100.00
Zezelivskij karier TOW	Zezelev	100.00
Züblin A/S	Aarhus	100.00
ZÜBLIN Bau GmbH	Munich	100.001
Züblin Chimney and Refractory GmbH	Cologne	100.001
Züblin Construction L.L.C.	Abu Dhabi	100.00
Züblin Egypt LLC	Cairo	100.00
Züblin Ground and Civil Engineering LLC	Dubai	100.00
Züblin Hoch- und Brückenbau GmbH	Bad Hersfeld	100.001
Züblin Holding GesmbH	Vienna	100.00
Züblin Inc.	Saint John/NewBrunswick	100.00
Züblin International GmbH	Stuttgart	100.001
Züblin International GmbH Chile SpA	Santiago de Chile	100.00
Züblin Kft.	Budapest	100.00
Züblin Nederland B.V.	Breda	100.00
ZUBLIN PRECAST INDUSTRIES SDN. BHD.	Johor	100.00
Züblin Projektentwicklung GmbH	Stuttgart	94.881
ZUBLIN ROMANIA SRL	Bucharest	100.00
Züblin Scandinavia AB	Stockholm	100.00
Züblin Sp. z o.o.	Pruszkow	100.00
Züblin Spezialtiefbau Ges.m.b.H.	Vienna	100.00
Züblin Spezialtiefbau GmbH	Stuttgart	100.001
Züblin Stahlbau GmbH	Hosena	100.001

2 The presentation of interest is done using the economic approach, the interest as defined by civil law may deviate from this presentation.

Company	Residence	Direct stake %
ZÜBLIN Timber Gaildorf GmbH	Gaildorf	100.001
ZÜBLIN Timber GmbH	Aichach	100.001
Züblin Umwelttechnik GmbH	Stuttgart	100.001

Equity accounted associate

A-Lanes A15 Holding B.V.	Nieuwegein	24.00
Bayerische Asphaltmischwerke GmbH & Co.KG für Straßenbaustoffe	Hofolding	48.33
Bodensee - Moränekies Gesellschaft mit beschränkter Haftung & Co. Kommanditgesellschaft
Tettnang	Tettnang	33.33
DESARROLLO VIAL AL MAR S.A.S.	Medellín	37.50
Lafarge Cement CE Holding GmbH	Vienna	30.00
MAK Mecsek Autopalya Koncesszios Zrt.	Budapest	50.00
Natursteinwerke im Nordschwarzwald NSN GmbH & Co. KG	Mühlacker	25.00
SeniVita Social Estate AG	Bayreuth	50.00
SOCIETATEA COMPANIILOR HOTELIERE GRAND SRL	Bucharest	35.32
Strabag Qatar W.L.L.	Doha	49.00
Züblin International Qatar LLC	Doha	49.00

Equity accounted joint venture

A2 ROUTE Sp. z o.o.	Pruszkow	50.00
AMB Asphaltmischwerke Bodensee GmbH & Co KG	Singen (Hohentwiel)	50.00
AMH Asphaltmischwerk Hauneck GmbH & Co. KG	Hauneck	50.00
Autocesta Zagreb-Macelj d.o.o.	Zagreb	50.002
FLARE Living GmbH & Co. KG	Cologne	50.00
Kieswerk Rheinbach GmbH & Co. KG	Rheinbach	50.00
Kieswerke Schray GmbH & Co. KG	Steißlingen	50.00
Leopold Ungar Platz 3 GmbH	Vienna	50.002
Messe City Köln GmbH & Co. KG	Hamburg	50.00
MesseCity Köln Generalübernehmer GmbH & Co. KG	Oststeinbek	50.00
NWM Nordwestdeutsche Mischwerke GmbH & Co. KG	Großenkneten	50.00
PANSUEVIA Service GmbH & Co. KG	Jettingen-Scheppach	50.00
Silenos Energy Geothermie Garching a.d. Alz GmbH & Co. KG	Augsburg	50.00
SQUARE Two GmbH & Co KG	Vienna	50.002
Steinbruch Spittergrund GmbH	Erfurt	50.00
Thüringer Straßenwartungs- und Instandhaltungsgesellschaft mbH & Co. KG	Apfelstädt	50.00

Subsidiaries not consolidated

"BITUNOVA" S.R.L.	Chisinau	100.00
"DOMIZIL" Bauträger GmbH	Vienna	100.00
"Granite Mining Industries" Sp. z o.o.	Breslau	100.00
"IWL Pernik" EOOD	Pernik	100.00
"Mineral 2000" EOOD	Sofia	100.00
"RE PROJECT DEVELOPMENT" Sp. z o.o.	Warsaw	100.00
"Strabag Azerbaijan" L.L.C.	Baku	100.00
9. Züblin Vorrats GmbH	Stuttgart	100.00
A 1 Lohne-Bramsche GmbH & Co. KG	Cologne	100.00
A 49 Autobahn Verwaltungs GmbH	Bad Hersfeld	100.00
A 49 Autobahngesellschaft mbH & Co. KG	Bad Hersfeld	100.00
A.S.T. Bauschuttverwertung GmbH	Klagenfurt	66.67
A.S.T. Bauschuttverwertung GmbH & Co KG	Klagenfurt	66.67
Al-Hani General Construction Inc.	Tripolis	60.00
AMH Asphaltmischwerk Hellweg GmbH i.L.	Erwitte	50.50

1 For these companies, the option allowed by Sec 264 Para 3 or by Sec 264b of the German Commercial Code (HGB) was exercised.

2 There are deviating contractual provisions concerning this joint venture.

Company	Residence	Direct stake %
A-Modell Lohne-Bramsche Verwaltungsgesellschaft mbH	Cologne	100.00
A-Modell Ulm-Augsburg Verwaltungsgesellschaft mbH	Jettingen-Scheppach	100.00
AMW Westsachsen Verwaltung GmbH	Cologne	100.00
Arriba GmbH	Stuttgart	100.00
Asesorías de Ingenería y Construcciones Ltda.	Santiago	100.00
Asfalt Slaski Wprinz Sp. z o.o.	Warsaw	100.00
Asphaltmischwerk Rieder Vomperbach GmbH	Zirl	60.00
Asphaltmischwerk Rieder Vomperbach GmbH & Co KG	Zirl	60.00
Asphaltmischwerk Roppen GmbH	Roppen	70.00
Asphaltmischwerk Roppen GmbH & Co KG	Roppen	70.00
Asphaltmischwerk Westsachsen GmbH & Co. KG	Oberwiera	100.00
Asphaltmischwerk Zeltweg Gesellschaft m.b.H.	Steyr	100.00
AUSTRIA ASPHALT GmbH	Spittal an der Drau	100.00
A-WAY Zrt.	Újhartyán	100.00
AWB Asphaltmischwerk Büttelborn GmbH & Co. KG	Büttelborn	100.00
AWB Asphaltmischwerk Büttelborn Verwaltungs-GmbH	Büttelborn	100.00
B + R Baustoff-Handel und -Recycling Köln GmbH	Cologne	100.00
Baugesellschaft "Negrelli" Ges.m.b.H.	Vienna	100.00
Beijing Züblin Equipment Production Co., Ltd.	Beijing	100.00
Betobeja Empreendimentos Imobiliarios, Lda	Beja	100.00
Beton AG Bürglen	Bürglen TG	65.60
BHG Bitumen Adria d.o.o.	Zagreb	100.00
BHG Bitumen Kft.	Budapest	100.00
BHG COMERCIALIZARE BITUM SRL	Bucharest	100.00
BHG SK s.r.o.	Bratislava	100.00
BHV GmbH Brennstoffe - Handel - Veredelung i.L.	Lünen	100.00
Bitumen Handelsgesellschaft m.b.H.	Vienna	100.00
BITUNOVA UKRAINA TOW	Brovary	60.00
BPM Bau Prozess Management GmbH in Liqu.	Vienna	100.00
BrennerWasser GmbH	Vienna	100.00
BRVZ-Contabilidade, Organizacao,Representacao e Administracao de Empresas,S.U.,Lda	Lisbon	100.00
BSB Betonexpress Verwaltungsges.mbH	Berlin	100.00
BSS Tunnel- & Montanbau GmbH i.L.	Bern	100.00
BVHS Betrieb und Verwaltung von Hotel- und Sportanlagen GmbH	Berlin	100.00
Center Systems Deutschland GmbH	Berlin	100.00
CENTRUM BUCHAREST DEVELOPMENT SRL CML CONSTRUCTION SERVICE S.R.L.	Bucharest Bologna	100.00 100.00
CML Construction Services	Antwerpen	100.00
CML Construction Services AB	Stockholm	100.00
CML CONSTRUCTION SERVICES d.o.o.	Zagreb	100.00
CML Construction Services d.o.o. Beograd	Belgrad	100.00
CML Construction Services GmbH	Vienna	100.00
CML Construction Services GmbH	Schlieren	100.00
CML CONSTRUCTION SERVICES s. r. o.	Bratislava	100.00
CML CONSTRUCTION SERVICES s.r.o.	Prague	100.00
CML CONSTRUCTION SERVICES Sp. z o.o.	Pruszkow	100.00
CML CONSTRUCTION SERVICES SRL	Bucharest	100.00
CML Construction Services Zrt.	Budapest	100.00
CML OOO	Moscow	100.00
Coldmix B.V.	Roermond	100.00
Constrovia Construcao Civil e Obras Publicas Lda.	Lisbon	95.00
Cottbuser Frischbeton GmbH	Wiesengrund	100.00
Demirtürk Uluslararasi Insaat, Ithalat, Ihracat ve Ticaret Sirketi	Istanbul	100.00
Diófa Apartments Kft.	Budapest	100.00
DRUMCO SA	Timisoara	70.00
DYWIDAG ROMANIA SRL	Bucharest	100.00
DYWIDAG Schlüsselfertig und Ingenieurbau GmbH	Munich	100.00

Company	Residence	Direct stake %
DYWIDAG-Service-GmbH Gebäude- und Anlagenmanagement	Bad Hersfeld	100.00
E.S.T.M. KFT	Budapest	100.00
EBERHARDT Baugesellschaft mbH Deutschland	Berlin	100.00
ECS European Construction Services GmbH i.L.	Mörfelden-Walldorf	100.00
EFKON ASIA SDN. BHD.	Kuala Lumpur	100.00
EFKON Belgium BVBA	Antwerpen	100.00
EFKON IRELAND LIMITED	Dublin	100.00
EFKON USA, INC.	Dallas	100.00
Eichholz Eivel GmbH	Berlin	100.00
Eraproject Immobilien-, Projektentwicklung und Beteiligungsverwaltung GmbH	Berlin	100.00
Erlaaer Straße Liegenschaftsverwertungs-GmbH	Vienna	100.00
ERMATEC Maschinen Technische Anlagen Gesellschaft m.b.H. in Liqu.	Vienna	100.00
Erste Nordsee-Offshore-Holding GmbH	Vienna	51.00
Eslarngasse 16 GmbH	Vienna	100.00
EURO SERVICES Catering & Cleaning GmbH	Mörfelden-Walldorf	100.00

EUROTEC ANGOLA, LDA	Luanda	100.00
F 101 Verwaltungs GmbH	Cologne	100.00
Fachmarktzentrum Kielce Projekt GmbH	Berlin	100.00
Facility Management Holding RF GmbH	Vienna	100.00
Fanny von Lehnert Straße 4 Komplementär GmbH	Vienna	100.00
Fanny von Lehnert Straße 4 Projektentwicklung GmbH & Co KG	Vienna	100.00
FLOWER CITY SRL	Bucharest	100.00
Forum Mittelrhein Beteiligungsgesellschaft mbH	Hamburg	51.00
Forum Mittelrhein Koblenz Generalübernehmergesellschaft mbH & Co.KG	Oststeinbek	51.00
Forum Mittelrhein Koblenz Kultur GmbH & Co. KG	Hamburg	51.00
Freo Projektentwicklung Berlin GmbH i.L.	Berlin	50.10
Frisspumpa Kft.	Budapest	100.00
Fürstenallee 21 GmbH in Liqu.	Vienna	100.00
FUSSENEGGER Hochbau und Holzindustrie GmbH	Dornbirn	100.00
GTE-Gebäude-Technik-Energie-Betriebs- und Verwaltungsgesellschaft m.b.H.	Vienna	61.00
GTE-Gebäude-Technik-Energie-Betriebs- und Verwaltungsgesellschaft m.b.H. & Co. KG	Vienna	62.00
Hillerstraße - Jungstraße GmbH	Vienna	100.00
HMC Autópálya Kft.	Budapest	100.00
Hotel AVION Management s.r.o.	Bratislava	100.00
Hotel AVION s.r.o.	Bratislava	100.00
Hotel Na Belidle s.r.o.	Prague	100.00
Hotelprojekt am Tabor GmbH & Co KG	Vienna	100.00
Hrusecka obalovna, s.r.o.	Hrusky	80.00
IBV - Immobilien Besitz- und Verwaltungsgesellschaft mbH Werder i. L.	Cologne	99.00
iCOR INTELLIGENT CORROSION CONTROL GmbH	Mönchengladbach	100.00
Intolligent Toll Road Management Pvt. Ltd.	Mumbai	100.00
I-PAY CLEARING SERVICES Pvt. Ltd.	Mumbai	100.00
IQ Plan Beteiligung GmbH	Oststeinbek	75.00
IQ Plan GmbH & Co. KG	Hamburg	75.00
ITC Engineering GmbH & Co. KG	Stuttgart	100.00
ITC Engineering Verwaltungs GmbH	Stuttgart	100.00
IVERUS ENTERPRISES LTD	Limassol	100.00
JBA GmbH	Cologne	50.10
JV HEILIT Umwelttechnik-BioPlanta S.R.L.	Orhei	100.00
KAB Straßensanierung GmbH	Spittal an der Drau	50.60
KFX Holding Kft.	Budapest	100.00

Kieswerk Diersheim GmbH	Rheinau/Baden	60.00
Kieswerk Ohr GmbH	Cologne	100.00
Kirchner Baugesellschaft m.b.H.	Spittal an der Drau	100.00
Kirchner PPP Service GmbH	Bad Hersfeld	100.00
KIRCHNER ROMANIA SRL	Bucharest	100.00
KRAMARE s.r.o. v likvidacii	Bratislava	100.00
Latasfalts SIA	Milzkalne	100.00

Company	Residence	Direct stake %
Leonhard Moll Tiefbau GmbH	Munich	100.00
Lieferasphalt Gesellschaft m.b.H. & Co OG, Viecht	Viecht	66.50
Lieferasphalt Gesellschaft m.b.H. & Co. OG	Maria Gail	60.00
Ludwig Voss GmbH	Cuxhaven	100.00
MANIERITA LTD	Limassol	100.00
MAYREN ENTERPRISES LTD	Limassol	100.00
Mazowieckie Asfalty Sp. z o.o.	Pruszkow	100.00
MBO UK d.o.o.	Ljubljana	100.00
Metallica Stahl- und Fassadentechnik GmbH	Stuttgart	100.00
Metallica Stahl- und Fassadentechnik GmbH	Vienna	100.00
MHA Projekt GmbH	Vienna	100.00
Mikrobiologische Abfallbehandlungs GmbH	Schwadorf	51.00
MINERAL RS d.o.o. BEOGRAD	Novi Beograd	100.00
Mischek Leasing eins Gesellschaft m.b.H.	Vienna	100.00
Mister Recrutamento Lda.	Lisbon	100.00
Mobil Baustoffe AG in Liquidation	Erstfeld	100.00
MSO Mischanlagen GmbH Ilz & Co KG	Ilz	52.81
MSO Mischanlagen GmbH Pinkafeld & Co KG	Pinkafeld	52.67
MUST Razvoj projekata d.o.o. u likvidaciji	Zagreb	100.00
NEUE REFORMBAU Gesellschaft m.b.H. in Liqu.	Vienna	100.00
Nimab Anläggning AB	Sjöbo	100.00
Nimab Support AB	Sjöbo	100.00
Northern Energy GAIA I. GmbH	Aurich	100.00
Northern Energy GAIA II. GmbH	Aurich	100.00
Northern Energy GAIA III. GmbH	Aurich	100.00
Northern Energy GAIA IV. GmbH	Aurich	100.00
Northern Energy GAIA V. GmbH	Aurich	100.00
Northern Energy SeaStorm I. GmbH	Aurich	100.00
Northern Energy SeaStorm II. GmbH	Aurich	100.00
Northern Energy SeaWind I. GmbH	Aurich	100.00
Northern Energy SeaWind II. GmbH	Aurich	100.00
Northern Energy SeaWind III GmbH	Aurich	100.00
Northern Energy SeaWind IV. GmbH	Aurich	100.00
Nottendorfer Gasse 13 GmbH	Vienna	100.00
NR Bau- u. Immobilienverwertung GmbH	Berlin	100.00
OAT spol. s r.o.	Bratislava	100.00
OAT,s.r.o.	Prague	100.00
OBIT GmbH	Berlin	100.00
OBZ Oberkärntner Baurestmassenzentrum GmbH	Spittal an der Drau	100.00
ODEN Anläggning Fastighets AB	Stockholm	100.00
ODEN Entreprenad Fastighets AB	Stockholm	100.00
OOO "STROJMONTAZHGRUPP"	Moscow	100.00
Passivhaus Kammelweg Bauträger GmbH	Vienna	100.00
PGA Projekt GmbH	Cologne	100.00
PH Bau Erfurt GmbH	Erfurt	100.00
Poltec Sp. z o.o. i.L.	Wroclaw	100.00
PPP Conrad-von-Ense-Schule GmbH	Bad Hersfeld	100.00
PPP Management GmbH	Cologne	100.00
PPP Schulen Kreis Düren GmbH	Bad Hersfeld	100.00
PPP Schulen Monheim am Rhein GmbH	Bad Hersfeld	100.00
PPP SchulManagement Witten GmbH & Co. KG	Cologne	100.00
PPP SeeCampus Niederlausitz GmbH	Bad Hersfeld	100.00
PRO Liegenschaftsverwaltungs- und Verwertungsgesellschaft m.b.H.	Vienna	100.00
PRZEDSIEBIORSTWO ROBOT DROGOWYCH Sp.z o.o. W LIKWIDACJI	Choszczno	100.00
RBZ Holding Kft.	Budapest	100.00
RE PROJECT DEVELOPMENT SRL	Bucharest	100.00
RE Projekt Development OOO	Moscow	100.00
Reutlinger Asphaltmischwerk Verwaltungs GmbH	Reutlingen	100.00

Company	Residence	Direct stake %
Rezidencie Machnac, s.r.o.	Bratislava	100.00
RGL Rekultivierungsgesellschaft Langentrog mbH	Langenargen	80.00
Rhein-Regio Neuenburg Projektentwicklung GmbH	Neuenburg am Rhein	90.00
ROBA Kieswerk Merseburg GmbH i.L.	Merseburg	100.00
Rößlergasse Bauteil Sechs GmbH	Vienna	100.00
RST Rail Systems and Technologies GmbH	Barleben	82.00
S.U.S. Abflussdienst Gesellschaft m.b.H.	Vienna	100.00
SAN GALLY HOME LTD	Limassol	100.00
SAT REABILITARE RECICLARE SRL	Cluj-Napoca	100.00
SAT SANIRANJE cesta d.o.o.	Zagreb	100.00
SAT SLOVENSKO s.r.o.	Bratislava	100.00
SAT Ukraine	Brovary	100.00
SAT Útjavító Kft.	Budapest	100.00
Schiffmühlenstraße 120 GmbH	Vienna	100.00
Schotter- und Kies-Union GmbH & Co. KG	Leipzig	57.90
Schotter- und Kies-Union Verwaltungsgesellschaft mbH	Leipzig	100.00
SCHOTTERWERK EDLING GESELLSCHAFT M.B.H.	Spittal an der Drau	74.00
SEF Netz-Service GmbH	Munich	100.00
SENSOR Dichtungs-Kontroll-Systeme GmbH	Neustadt in Holstein	100.00
SF-BAU-Grundstücksgesellschaft "ABC-Bogen" mbH	Cologne	100.00
Silenos Energy Verwaltungs GmbH	Cologne	100.00
SILO DREI Komplementärgesellschaft m.b.H.	Vienna	51.00
SILO II Komplementärgesellschaft m.b.H.	Vienna	51.00
SPK - Errichtungs- und Betriebsges.m.b.H.	Spittal an der Drau	100.00
SRE Lux Projekt BN 20	Belvaux	100.00

SRE Zweite Vermögensverwaltung GmbH	Cologne	100.00
STHOI Co., Ltd.	Bangkok	100.00
STR Mély- és Magasépítö Kft	Budapest	100.00
STRABAG (B) Sdn Bhd	Bandar Seri Begawan	100.00
STRABAG A/S	Aarhus	100.00
STRABAG ABU DHABI LLC	Abu Dhabi	100.00
STRABAG Algerie EURL	Algier	100.00
STRABAG Anlagentechnik GmbH	Thalgau	100.00
STRABAG Aszfalt Kft.	Budapest	100.00
STRABAG AUSTRALIA PTY LTD	Brisbane	100.00
STRABAG BahnLogistik GmbH	Gerasdorf bei Wien	100.00
STRABAG Baustoffaufbereitung und Recycling GmbH	Duesseldorf	51.00
STRABAG Bedachungsgesellschaft m.b.H.	Vienna	100.00
STRABAG Beton GmbH & Co. KG	Berlin	100.00
STRABAG BMTI BVBA	Antwerpen	100.00
STRABAG BMTI d.o.o.	Zagreb	100.00
STRABAG BMTI D.O.O. BEOGRAD	Novi Beograd	100.00
STRABAG BMTI Rail Service GmbH	Berlin	100.00
STRABAG BMTI S.R.L.	Bucharest	100.00
STRABAG BMTI s.r.o.	Bratislava	100.00
STRABAG BMTI Verwaltung GmbH	Cologne	100.00
STRABAG BRVZ A/S	Trige	100.00
STRABAG BRVZ BVBA	Antwerpen	100.00
STRABAG BRVZ d.o.o. BEOGRAD	Novi Beograd	100.00
STRABAG BRVZ EOOD	Sofia	100.00
STRABAG BRVZ SRL	Bologna	100.00
STRABAG BRVZ Verwaltung GmbH	Cologne	100.00
STRABAG Construction Co., Ltd.	Bangkok	100.00
STRABAG Corp.	Delaware	100.00
STRABAG Dredging GmbH	Hamburg	100.00
STRABAG DROGI WOJEWODZKIE Sp. z o.o.	Pruszkow	100.00
STRABAG Dubai LLC	Dubai	100.00
STRABAG Energy Technologies GmbH	Vienna	100.00

Company	Residence	Direct stake %
STRABAG FACILITY MANAGEMENT SRL	Bucharest	100.00
STRABAG HYDROTECH Sp. z o.o.	Pruzkow	100.00
STRABAG India Private Limited	Mumbai	100.00
STRABAG Infrastructure & Safety Solutions GmbH	Erstfeld	100.00
STRABAG Infrastruktur Development OOO	Moscow	100.00
STRABAG Krankenhaus Errichtungs- und BetriebsgmbH	Vienna	99.00
STRABAG Logisztika Kft.	Budapest	100.00
STRABAG Motorway GmbH	Spittal an der Drau	100.00
STRABAG OW EVS GmbH i. L.	Hamburg	51.00
STRABAG Oy	Helsinki	100.00
STRABAG PFS s.r.o.	Prague	100.00
STRABAG Property and Facility Services d.o.o.	Zagreb	100.00
STRABAG Property and Facility Services s.r.o.	Bratislava	55.00
STRABAG Ray Ltd. Sti.	Ankara	100.00
STRABAG Real Estate OOO	Moscow	100.00
STRABAG Residential Property Services GmbH	Berlin	99.51
Strabag RS d.o.o.	Banja Luka	100.00
Strabag Saudi Arabia	Dhahran	100.00
STRABAG Silnice a.s.	Prague	100.00
STRABAG Szolnoki Aszfalt Kft.	Budapest	100.00
STRABAG Unterstützungskasse GmbH i.L.	Cologne	100.00
STRABAG Versicherungsvermittlung GmbH	Cologne	100.00
STRABAG Vorrat Eins GmbH	Vienna	100.00

STRABAG Vorrat Vier GmbH	Vienna	100.00
STRABAG Vorrat Zwei GmbH	Vienna	100.00
STRABAG-PROJEKT 2 Sp.z o.o.	Pruszkow	100.00
STRABAG-PROJEKT Sp.z o.o.	Pruszkow	100.00
STRABIL STRABAG Bildung im Lauenburgischen GmbH	Cologne	100.00
Südprojekt A-Modell GmbH & Co. KG	Bad Hersfeld	100.00
Südprojekt A-Modell Verwaltung GmbH	Bad Hersfeld	100.00
SWO (SOLID WASTE OPERATION) PRAHOVA S.R.L.	Bucharest	100.00
SZYBKI TRAMWAY Sp. z o.o.	Pruszkow	100.00
TETI TRAFFIC	Centurion	54.00
TolLink Pakistan (Private) Limited	Islamabad	60.00
TOO STRABAG Kasachstan	Astana	100.00
TPA EOOD	Sofia	100.00
TPA Gesellschaft für Qualitätssicherung und Innovation GmbH	Erstfeld	100.00
TPA OOO	Moscow	100.00
Trema Engineering 2 Sh.p.k.	Pristina	100.00
Treuhandbeteiligung B		100.00
Treuhandbeteiligung Q		100.00
UND-FRISCHBETON s.r.o.	Kosice	75.00
Universitätszentrum Althanstraße Erweiterungsgesellschaft m.b.H.	Vienna	100.00
VAM-Valentiner Asphaltmischwerk Gesellschaft m.b.H.	Linz	75.00
VAM-Valentiner Asphaltmischwerk Gesellschaft m.b.H. & Co.KG	Linz	75.00
Vasagatan Op6 Holding AB	Solna	100.00
Verwaltung Forum Mittelrhein Koblenz Generalübernehmergesellschaft mbH	Oststeinbek	51.00
WMB Drogbud Sp. z o.o.	Lubojenka	51.00
Wohnbauträgergesellschaft Objekt "Freising - Westlich der Jagdstraße" mbH	Cologne	100.00
Wohnen am Krautgarten Bauträger GmbH	Vienna	100.00
Wollhaus HN GmbH & Co. KG	Cologne	100.00
WSK PULS GmbH	Erfurt	100.00
Z.P.C. Deutschland GmbH	Stuttgart	100.00
Z.P.C. Lda	Amadora	100.00
Z-Bau Immobilien Verwaltungs GmbH	Cologne	100.00
ZDE Siebte Vermögensverwaltung GmbH	Cologne	100.00
Z-Design EOOD	Sofia	100.00
Züblin (Thailand) Co. Ltd.	Bangkok	100.00

Company	Residence	Direct stake %
Züblin AS	Oslo	100.00
Züblin Australia Pty Ltd	Perth	100.00
Züblin Bulgaria EOOD	Sofia	100.00
Zublin Corporation	Wilmington	100.00
Züblin Engineering Consulting (Shanghai) Co., Ltd.	Shanghai	100.00
ZÜBLIN Haustechnik Mainz GmbH	Mainz	100.00
Züblin Holding (Thailand) Co. Ltd.	Bangkok	79.35
Züblin Hrvatska d.o.o.	Zagreb	100.00
Züblin International Malaysia Sdn. Bhd.	Kuala Lumpur	100.00
Züblin Ireland Limited	Dublin	100.00
Zublin Saudi Arabia LLC	Riyadh	100.00
Zucotec - Sociedade de Construções, Unip., Lda.	Amadora	100.00
Zweite Nordsee-Offshore-Holding GmbH	Vienna	51.00

Investee companies not consolidated

"kabelwerk" bauträger gmbh	Vienna	25.00
"Zentrum Puntigam" Errichtungs- und Betriebsgesellschaft m.b .H. in Liqu.	Vienna	50.00
ABO Asphalt-Bau Oeynhausen GmbH.	Oeynhausen	22.50
AGS Asphaltgesellschaft Stuttgart GmbH & Co.Kommanditgesellschaft	Stuttgart	40.00
AGS Asphaltgesellschaft Stuttgart Verwaltungs-GmbH	Stuttgart	40.00
AL SRAIYA - STRABAG Road & Infrastructure WLL	Doha	49.00
A-Lanes Management Services B.V.	Utrecht	25.00
AMB Asphalt-Mischanlagen Betriebsgesellschaft m.b.H.	Zistersdorf	40.00
AMB Asphalt-Mischanlagen Betriebsgesellschaft m.b.H.& Co.KG	Zistersdorf	40.00
AMG - Asphaltmischwerk Gunskirchen Gesellschaft m.b.H.	Linz	33.33
AMG-Asphaltmischwerk Gunskirchen Gesellschaft m.b.H. & Co.KG	Linz	33.33
AMH Asphaltmischwerk Hauneck Verwaltungs GmbH	Hauneck	50.00
AML - Asphaltmischwerk Limberg Gesellschaft m.b.H. in Liqu.	Limberg	50.00
AMS-Asphaltmischwerk Süd Gesellschaft m.b.H.	Linz	35.00
AMSS Asphaltmischwerke Sächsische Schweiz GmbH & Co. KG	Dresden	24.00
AMSS Asphaltmischwerke Sächsische Schweiz Verwaltungs GmbH	Dresden	24.00
Anton Beirer Hartsteinwerke GmbH & Co KG	Pinswang	50.00
Arena Development	Hasselt	50.00
ASAMER Baustoff Holding Wien GmbH	Vienna	30.93
ASAMER Baustoff Holding Wien GmbH & Co.KG	Vienna	30.93
ASB Transportbeton GmbH & CO.KG	Osterweddingen	50.00
ASF Frästechnik GmbH	Kematen	40.00
ASF Frästechnik GmbH & Co KG	Kematen	40.00
ASG INVEST N.V.	Genk	25.00
Asphaltmischwerk Betriebsgesellschaft m.b.H.	Rauchenwarth	20.00
Asphaltmischwerk Betriebsgesellschaft m.b.H. & Co KG	Rauchenwarth	20.00
Asphaltmischwerk Bodensee Verwaltungs GmbH	Singen (Hohentwiel)	50.00
Asphaltmischwerk Greinsfurth GmbH	Amstetten	33.33
Asphaltmischwerk Greinsfurth GmbH & Co OG	Amstetten	33.33
Asphaltmischwerk Kundl GmbH	Kundl	50.00
Asphaltmischwerk Kundl GmbH & Co KG	Kundl	50.00
ASTRA - BAU Gesellschaft m.b.H. Nfg. OG	Bergheim	50.00
AUT Grundstücksverwaltungsgesellschaft mbH	Stuttgart	40.00
A-WAY LAGAN INFRASTRUCTURE SERVICES LIMITED	Ballyoran, Castlelyons, Co. Cork	50.00
AWM Asphaltwerk Mötschendorf Gesellschaft m.b.H.	Graz	50.00
AWM Asphaltwerk Mötschendorf GmbH & Co.KG	Graz	50.00
BASALT-KÖZÉPKÖ Köbányák Kft	Uzsa	25.14
Bayerische Asphaltmischwerke Gesellschaft mit beschränkter Haftung	Hofolding	48.29
BBO Bauschuttaufbereitung Verwaltungsgesellschaft mbH	Steißlingen	33.33
BBO Bodensee/Hegau Bauschuttaufbereitung GmbH & Co. KG	Steißlingen	22.22
BBO Bodenseekreis Bauschuttaufbereitung GmbH & Co. KG	Steißlingen	25.00

Company	Residence	Direct stake %
Beton Pisek spol. s.r.o.	Pisek	50.00
Betun Cadi SA	Trun	35.00
Brnenska obalovna, s.r.o.	Brno	50.00
BRW Baustoff-Recycling GmbH & Co KG	Wesseling	25.00
BS-Baugeräte-Service GmbH & Co. KG i.L.	Augsburg	25.00
BS-Baugeräte-Service-Verwaltungsgesellschaft mbH i.L.	Augsburg	25.00
C.S.K.K. 2009. Kft.	Budapest	30.00
CAPE 10 Errichtung & Betrieb GmbH	Vienna	26.00
Continental Apartements Stockholm Holding AB	Stockholm	50.00
Continental Apartments View AB	Stockholm	50.00
Continental Living Stockholm AB	Stockholm	50.00
CSE Centrum-Stadtentwicklung GmbH i.L.	Cologne	50.00
DAM Deutzer Asphaltmischwerke GmbH & Co. KG	Cologne	40.44
DAM Deutzer Asphaltmischwerke Verwaltungs-GmbH	Cologne	40.44
DC Waterline GmbH	Vienna	50.00
Diabaswerk Nesselgrund GmbH & Co KG	Floh-Seligenthal	20.00
Diabaswerk Nesselgrund Verwaltungs-GmbH	Floh-Seligenthal	20.00
DIRECTROUTE (FERMOY) CONSTRUCTION LIMITED	Dublin	25.00
DIRECTROUTE (LIMERICK) CONSTRUCTION LIMITED	Fermoy	40.00
DIRECTROUTE (TUAM) CONSTRUCTION LIMITED	Dublin	25.00
Donau City Residential GmbH	Vienna	50.00
DYWIDAG Verwaltungsgesellschaft mbH	Munich	50.00
EDEN Jizni roh s.r.o.	Prague	50.00
Eisen Blasy Reutte GmbH	Pflach	50.00
Entwicklung Quartier am Mailänder Platz Beteiligungsgesellschaft mbH	Hamburg	50.00
Entwicklung Quartier am Mailänder Platz Management GmbH	Hamburg	50.00
Entwicklung Quartier am Mailänder Platz Nr. 1 GmbH & Co. KG i.L.	Hamburg	48.08
Entwicklung Quartier am Mailänder Platz Nr. 2 GmbH & Co. KG i.L.	Hamburg	48.08
Entwicklung Quartier am Mailänder Platz Nr. 3 GmbH & Co. KG i.L.	Hamburg	48.08
Filstal Fliessestrich und Mörtel Transportbeton Göppingen GmbH & Co. KG	Göppingen	22.10
FLARE Grundstück Verwaltungs GmbH	Berlin	50.00
GFR remex Baustoffaufbereitung GmbH & Co. KG, Krefeld	Krefeld	50.00
GFR remex Baustoffaufbereitung Verwaltungs-GmbH Krefeld	Krefeld	50.00
Grandemar SA	Cluj-Napoca	41.27
GUS Gußasphaltwerk GmbH & Co KG	Stuttgart	50.00
GUS Gußasphaltwerk Verwaltungs GmbH	Stuttgart	50.00
H S Hartsteinwerke GmbH	Pinswang	50.00
HK-Rohstoff & Umwelttechnik GmbH & Co. KG	Hildesheim	50.00
HOTEL SCHLOSS SEEFELS BESITZ- UND MANAGEMENT GMBH	Techelsberg am Wörthersee	30.00
Immorent Oktatási Kft.	Budapest	20.00
Industrial Engineering and Contracting Co. S.A.R.L. (INDECO) i.L.	Beirut	50.00
IQ Office Beteiligungsgesellschaft mbH	Hamburg	49.00
IQ Office GmbH & Co. KG	Hamburg	49.00
IQ Residential Beteiligungsgesellschaft mbH	Hamburg	49.00
IQ Residential GmbH & Co. KG	Hamburg	49.00
IQ Tower Beteiligungsgesellschaft mbH	Hamburg	49.00
IQ Tower GmbH & Co. KG	Hamburg	49.00
JCO s.r.o.	Plana	50.00
Jumbo Betonpumpen Service GmbH & Co.KG	Limbach-Oberfrohna	50.00
KAB Kärntner Abfallbewirtschaftung GmbH	Klagenfurt	36.25
KASERNEN Projektentwicklungs- und Beteiligungs GmbH	Vienna	24.90
Kies- und Betonwerk AG Sedrun	Sedrun	35.00
Kiesabbau Gämmerler-Hütwohl GmbH & Co. Aug Kommanditgesellschaft	Königsdorf	50.00
Kiesabbau Gämmerler-Hütwohl GmbH & Co. Grube Grafing KG	Königsdorf	50.00
Kiesabbau Gämmerler-Hütwohl GmbH&Co. Grube Leitzinger Au KG	Königsdorf	50.00
Kiesabbau Gämmerler-Hütwohl Verwaltungs- GmbH	Königsdorf	50.00
Kiesgesellschaft Karsee Beteiligungs-GmbH	Immenstaad am Bodensee	50.00
Kiesgesellschaft Karsee GmbH & Co. KG	Immenstaad am Bodensee	50.00

Company	Residence	Direct stake %
Kieswerk Rheinbach Gesellschaft mit beschränkter Haftung	Cologne	50.00
Kieswerke Schray Verwaltungs GmbH	Steißlingen	50.00
Kirchhoff + Schleith Beteiligungs-GmbH	Steißlingen	50.00
Kirchhoff + Schleith Straßenbau GmbH & Co. KG	Steißlingen	50.00
Klinik für Psychosomatik und psychiatrische Rehabilitation GmbH	Spittal an der Drau	30.00
KSH Kalkstein Heiterwang GmbH	Pinswang	30.00
KSH Kalkstein Heiterwang GmbH & Co KG	Pinswang	30.00
Liberecka Obalovna s.r.o.	Liberec	50.00
Lieferasphalt Gesellschaft m.b.H.	Vienna	50.00
Lieferasphalt Gesellschaft m.b.H.& Co.OG, Zirl	Vienna	50.00
Lieferbeton Simmern GmbH & Co. KG i. L.	Simmern/Hunsrück	50.00
Lieferbeton Simmern Verwaltungs-GmbH i.L.	Simmern/Hunsrück	50.00
Linzer Schlackenaufbereitungs- und vertriebsgesellschaft m.b.H.	Linz	33.33
LISAG Linzer Splitt- und Asphaltwerk GmbH.	Linz	50.00
LISAG Linzer Splitt- und Asphaltwerk GmbH. & CO KG	Linz	50.00
Main-Aurach-Autobahngesellschaft mbH & Co. KG	Berlin	50.00
Mecsek Autopalya-üzemeltetö Zrt.	Budapest	25.00
Messe City Köln Beteiligungsgesellschaft mbH	Hamburg	50.00
MIGU-Asphalt-Baugesellschaft m.b.H.	Lustenau	50.00
Milet Ditzingen Beteiligungsgesellschaft mbH	Heidelberg	49.00
MLT Maschinen Logistik Technik GmbH & Co. KG	Nesse-Apfelstädt	50.00
MLT Verwaltungs GmbH	Nesse-Apfelstädt	50.00
MSO Mischanlagen GmbH	Ilz	33.33

Natursteinwerke im Nordschwarzwald NSN Verwaltungsgesellschaft mit beschränkter Haftung	Mühlacker	25.00
NUOVO MERCATO GIANICOLENSE SRL	Bologna	40.00
Oder Havel Mischwerke GmbH & Co. KG i.L.	Berlin	33.33
ODRA-ASFALT Sp. z o.o.	Szeczecin	33.33
Ontwikkelingscombinatie Maasmechelen N.V.	Antwerpen	50.00
PAM Pongauer Asphaltmischanlagen GmbH	St. Johann im Pongau	50.00
PAM Pongauer Asphaltmischanlagen GmbH & Co KG	St. Johann im Pongau	50.00
Philman Holdings Co.	Philippinen	20.00
PPP Campus AM + SEEA GmbH	St. Pölten	50.00
PPP Campus AM + SEEA GmbH & Co KG	St. Pölten	50.00
Prottelith Produktionsgesellschaft mbH	Liebenfels	24.00
QMP Generalübernehmer GmbH & Co. KG	Oststeinbek	50.00
REMEX Coesfeld Gesellschaft für Baustoffaufbereitung mbH	Dülmen-Buldern	50.00
RFM Asphaltmischwerk GmbH & Co KG	Traiskirchen	46.00
RFM Asphaltmischwerk GmbH.	Traiskirchen	46.00
Rieder Asphaltgesellschaft m.b.H.	Ried im Zillertal	50.00
Rieder Asphaltgesellschaft m.b.H. & Co. KG.	Ried im Zillertal	50.00
ROBA-Neuland Beton GmbH & Co. KG	Hamburg	50.00
Rohstoff & Umwelttechnik Verwaltungs GmbH	Hildesheim	50.00
RSV Rheinische Schlacke Verwertungs GmbH	Leverkusen	50.00
Salzburger Lieferasphalt GmbH & Co OG	Sulzau	20.00
SAM Sindelfinger Asphalt-Mischwerke GmbH & Co KG i.L.	Sindelfingen	22.22
SAT Spezialbau GmbH	Cologne	50.00
Satellic NV	Groot-Bijgaarden	24.00
SAV Südniedersächsische Aufbereitung und Verwertung Verwaltungs GmbH	Hildesheim	50.00
Schlackenkontor Bremen GmbH	Bremen	25.00
SHKK-Rehabilitations GmbH	Vienna	50.00
SHUSHICA HYDROPOWER sh p.k.	Tirana	33.00
SIFEE TERRA HEAT SRL	Selimbar	25.00
Sindelfinger Asphalt-Mischwerke GmbH i.L.	Sindelfingen	22.22
SMB Construction International GmbH	Sengenthal	50.00
Spolecne obalovny, s r.o.	Prague	50.00
SRK Kliniken Beteiligungs GmbH	Vienna	25.00
STA Asphaltmischwerk Strahlungen GmbH	Strahlungen	24.90
stahl + verbundbau gesellschaft für industrielles bauen m.b.H.	Dreieich	30.00

Company	Residence	Direct stake %
Steinbruch Mauterndorf Gesellschaft m.b.H.	St. Michael/Lungau	50.00
Stephan Beratungs-GmbH	Linz am Rhein	30.00
STRABAG ARCHIRODON LTD.	Port Louis	50.00
STRABAG Gorzów Wielkopolski Sp. z o.o.	Gorzów Wielkopolski	49.00
Strabag Oktatási PPP Kft.	Budapest	30.00
Straktor Bau Aktien Gesellschaft	Kifisia	50.00
STRAVIA Kft.	Budapest	25.00
Syrena Immobilien Holding Aktiengesellschaft	Spittal an der Drau	50.00
TBG Ceske Budejovice spol. s.r.o.	Budweis	50.00
TBG-STRABAG d.o.o.	Zagreb	50.00
TDE Mitteldeutsche Bergbau Service GmbH	Espenhain	50.00
Tierra Chuquicamata SpA	Santiago	50.00
Tollink Royal JV	Peshawar	50.00
TORONTO TUNNEL PARTNERS 401 RER INC.	London Ontario	50.00
Triplus Beton GmbH	Zell am See	50.00
Triplus Beton GmbH & Co KG	Zell am See	50.00
TSI VERWALTUNGS GMBH	Apfelstädt	50.00
Unterstützungseinrichtung für die Angestellten der ehemaligen Bau-Aktiengesellschaft
"Negrelli" Gesellschaft m.b.H.	Vienna	50.00
VCO - Vychodoceska obalovna, s r.o	Hradec Kralove	33.33
Vereinigte Asphaltmischwerke Gesellschaft m.b.H.	Spittal an der Drau	50.00
Vereinigte Asphaltmischwerke Gesellschaft m.b.H. & Co KG	Spittal an der Drau	50.00
Verwaltung Grundstücksgesellschaft Kaiserplatz Aachen Adalbertstraße GmbH i.L.	Hamburg	50.00
Verwaltung MesseCity Köln Generalübernehmer GmbH	Oststeinbek	50.00
Verwaltung QMP Generalübernehmer GmbH	Oststeinbek	50.00
Verwaltungsgesellschaft ROBA-Neuland Beton m.b.H.	Hamburg	50.00
VIANOVA - Bitumenemulsionen GmbH	Fürnitz	24.90
VIANOVA SLOVENIJA d.o.o.	Logatec	50.00
VKG-Valentiner Kieswerk Gesellschaft m.b.H.	Linz	50.00
Walter Group International Philippines, Inc.	Philippinen	26.00
WIBAU Holding GmbH	Linz	21.78
WMW Weinviertler Mischwerk Gesellschaft m.b.H.	Zistersdorf	33.33
WMW Weinviertler Mischwerk Gesellschaft m.b.H. & Co KG	Zistersdorf	33.33
Wohnbau Tafelgelände Beteiligungs-GmbH	Munich	25.00
Wohnbau Tafelgelände GmbH & Co. KG	Munich	25.00
Z.I.P.O.S. d.o.o.	Antunovac	50.00

GROUP MANAGEMENT REPORT

Important events

FEBRUARY

Future reporting of STRABAG SE for fi rst and third quarters

With the amendment of the Vienna Stock Exchange's Prime Market rules in February 2019, it is up to the listed companies to decide whether and how they report on the fi rst and third quarters of the year. After considering the interests of all stakeholders, STRABAG has decided not to prepare IFRS fi nancial statements in the fi rst and third quarters of the year. These have been replaced by the publication of a trading statement that includes the output volume, order backlog and employee numbers as well as an update of the outlook and targets for the respective fi nancial year. The trading report can be made available closer to the end of the quarter than was the case with the quarterly reports.

Large-scale contract to build a section of the D35 motorway in the Czech Republic

Through its subsidiary STRABAG a.s., acting as part of a consortium (42 %), STRABAG was awarded the contract to build a new section of the D35 motorway in the Czech Republic. The object of the contract with a total value of CZK 3.38 billion (~ € 132 million) is the construction

of a new four-lane, connection with two interchanges including 25 bridge structures and seven noise abatement walls. Work on the Opatovice–Časy section with a length of 12.6 km will last 44 months from the start of construction in spring 2019.

Extension of mining contract in Chile

Züblin International GmbH Chile SpA, a subsidiary of STRABAG SE, was awarded an extension to its contract with Mina Candelaria Subterránea for the Candelaria open pit and underground mine in Copiapó in Chile's Atacama region for another four years. The contract value amounts to € 65 million. The extension to the contract involves, among other works, 22,400 m of horizontal developments, plus 1,771,000 tones of loading and transport of material.

MARCH

Bridge upgrades along A9 motorway near Allersberg

In March 2019, a consortium consisting of the group companies STRABAG AG and Ed. Züblin AG began with the upgrade of a total of eight bridges on the A9 motorway in Germany between the Nuremberg/Feucht interchange and the Hilpoltstein junction on behalf of Autobahndirektion Nordbayern, the motorway authority for northern Bavaria. All bridges will be torn down and rebuilt. The contract value of approx. € 38 million also includes renovation works on the roads beneath three of the bridges as well as the demolition and new construction of a noise protection wall near Altenfelden. The contract also involves the construction of temporary ramps and roads to the construction sites and a provisional acceleration strip at the Allersberg junction. The project is scheduled for overall completion by the end of 2020.

Mining contracts for € 500 million in Chile

Züblin International GmbH Chile SpA was awarded two new long-term mining contracts for the Nuevo Nivel Mina project, at the El Teniente mine in Rancagua. The contracts have a total value of about € 500 million and comprise the construction of tunnels with a total length of 32.5 km. Nuevo Nivel Mina is one of fi ve key projects of copper mining company Codelco and consists of extending the mine into a deeper sector, thus increasing the useful lifespan of El Teniente mine by another 50 years. The fi rst contract involves 6,049 m of horizontal developments and civil engineering works in a 25-month period. The second contract consists of tunnelling and civil works for a period of 39 months to

Important events

FEBRUARY

MARCH

Future reporting of STRABAG SE for fi rst and third quarters

Large-scale contract to build a section of the D35 motorway in the Czech Republic

in spring 2019.

replaced by the publication of a trading statement that includes the output volume, order backlog and employee numbers as well as an update of the outlook and targets for the respective fi nancial year. The trading report can be made available closer to the end of the quarter than was the case with the quarterly reports.

another four years. The contract value amounts to € 65 million. The extension to the contract involves, among other works, 22,400 m of horizontal developments, plus 1,771,000 tones of

approx. € 38 million also includes renovation works on the roads beneath three of the bridges as well as the demolition and new construction of a noise protection wall near Altenfelden. The contract also involves the construction of temporary ramps and roads to the construction sites and a provisional acceleration strip at the Allersberg junction. The project is scheduled for

32.5 km. Nuevo Nivel Mina is one of fi ve key projects of copper mining company Codelco and consists of extending the mine into a deeper sector, thus increasing the useful lifespan of El Teniente mine by another 50 years. The fi rst contract involves 6,049 m of horizontal develop-

overall completion by the end of 2020.

loading and transport of material.

GROUP MANAGEMENT REPORT

Extension of mining contract in Chile

Bridge upgrades along A9 motorway near Allersberg

Mining contracts for € 500 million in Chile

Contract awarded for Boll-Sinneringen bypass in Switzerland

STRABAG AG of Switzerland was awarded the contract for the transportation infrastructures and engineering ground works for the Boll-Sinneringen rail bypass in the Bernese municipality of Vechingen. The project foresees changing the route of the railway. All of the measures will increase safety and improve the train crossings. A new station will also be built at Boll-Utzigen. The

Renovation of the south section of M3 metro line in Budapest

STRABAG, through its Hungarian subsidiary, won the contract to rehabilitate the southern section of the M3 metro line in Budapest. The contract value totals HUF 24.7 billion (~ € 76 million). In addition to the renewal of fi ve stations and passenger areas, the track structure is also being modernised. The works should be completed in 2020.

Refi nancing of € 2.4 billion in loans before maturity

STRABAG SE took advantage of the favourable fi nancing environment to refi nance two loans totalling € 2.4 billion before their original maturity. The conditions and terms to maturity of the € 2.0 billion syndicated surety loan and the € 0.4 billion syndicated cash credit line have for Bern-Solothurn. The works for STRABAG AG include the new construction of the 425 m railway embankment between Worbstrasse and Bernstrasse, the main element of the project, as well as the construction of the Moosgasse underpass and of the access roads to the new station area.

client is RBS, the regional transport association

STRABAG is renovating the south section of the M3 metro line in Budapest

been redefi ned. The new fi ve-year terms to maturity – i.e. until 2024 – with two options to extend by one year each will further allow STRABAG SE to secure its comfortable fi nancing position for the long term.

Financial close of "Autopista al Mar 1" project in Colombia completed

Work on the Autopista al Mar 1 in Colombia

Devimar, the concession company operating the public-private partnership project Autopista al Mar 1 in Colombia, successfully concluded the long-term fi nancing totalling USD 713 million. The project, which was awarded by the Colombian infrastructure agency ANI to Devimar in 2015, has thus fully obtained the required funding. The fi nancial close confi rms the reputation and experience of Devimar's sponsors consisting of SACYR (Spain, 37.5 %), STRABAG (Austria, 37.5 %) and CONCAY (Colombia, 25 %). At the time of the fi nancial close, the Autopista al Mar 1 project was in the construction phase and about 30 % complete. The project is proceeding on more than 130 active work fronts, creating 2,200 direct and indirect jobs.

APRIL

Acquisition of property management assets of CORPUS SIREO

STRABAG Property and Facility Services GmbH (STRABAG PFS) of Germany, as part of a jointly developed partner model, in April acquired the property management business and all employees of CORPUS SIREO Real Estate GmbH. In tandem with the agreement, several longterm property management contracts were also concluded between STRABAG PFS and the Swiss Life Group. This involves more than 340 Swiss Life properties in various asset classes held in Germany. The focus is on residential and offi ce buildings. An above-average contract period was agreed for the portfolio.

ZÜBLIN to design and build wastewater pumping station in Qatar

Züblin International Qatar L.L.C. signed a contract for the design and construction of an infrastructure project in Doha, Qatar, worth € 113 million. The company will build a wastewater pumping station by July 2021. The works include the construction of a wastewater pumping shaft with a depth of 50 m, a diameter of 36 m and a planned pumping capacity of 6,000 l/s. Also being built are an upstream screen shaft with a similar depth and a diameter of 24 m, including a state-of-the-art odour control system, as well as ancillary buildings and facilities.

Construction of Lot 6 of Limmat Valley rail line in Dietikon West

Rendering of Limmattalbahn

EFKON expands its presence on the Norwegian market

EFKON, the STRABAG subsidiary specialising in toll collection systems, has expanded its share in the Norwegian toll collection system market with two more projects. Following the Bypakke Bergen and Oslopakke 3 contracts with more than 100 tolling stations and a maintenance contract for eight years, EFKON was entrusted with the implementation of two new projects, "Nordhordland package in Hordaland" STRABAG AG of Switzerland was awarded the contract to build the Limmattalbahn (Limmat Valley rail line) in Dietikon West (Lot 6) with a value of about CHF 58 million (~ € 51 million, STRABAG share: 50 %). Central project elements of the works at Lot 6 include the redesign of the intersections Überlandstrasse/Badenerstrasse and Mutschellenstrasse/Industriestrasse.

and "Damåsen-Saggrenda". The contracts for Nordhordland and Damåsen include the construction and operation of at least fi ve toll stations near Bergen and at least three near Oslo. Commissioning took place at the latest in the fi rst quarter of 2020. The order includes a maintenance contract of at least seven years with the option of an annual renewal.

JUNE

Groundbreaking ceremony for educational campus Seestadt Aspern Nord in Vienna

Together with the city of Vienna, the groundbreaking ceremony for the construction of the educational campus Seestadt Aspern Nord took place on 17 May 2019. The bidding consortium of HYPO NOE Leasing and STRABAG Real Estate (SRE) was awarded the contract in an EU-wide tender for the further design, build, fi nance and operate phases of the educational campus Seestadt Aspern Nord and the educational campus Aron Menczer. The new educational facility includes a kindergarten with 12 groups, an all-day elementary school with

Rendering of the educational campus

17 classes and a middle school with 16 classes, for a total of 1,100 children, as well as a youth

Acquisition of property management assets of CORPUS SIREO

ZÜBLIN to design and build wastewater pumping station in Qatar

Construction of Lot 6 of Limmat Valley rail line in Dietikon West

EFKON expands its presence on the Norwegian market

Groundbreaking ceremony for educational campus Seestadt Aspern Nord in Vienna

Zürich

Rendering of Limmattalbahn

MAY

APRIL

JUNE

36 m and a planned pumping capacity of 6,000 l/s. Also being built are an upstream screen shaft with a similar depth and a diameter of 24 m, including a state-of-the-art odour control system, as well as ancillary buildings and facili-

STRABAG AG of Switzerland was awarded the contract to build the Limmattalbahn (Limmat Valley rail line) in Dietikon West (Lot 6) with a value of about CHF 58 million (~ € 51 million, STRABAG share: 50 %). Central project elements of the works at Lot 6 include the redesign of the intersections Überlandstrasse/Badenerstrasse and Mutschellenstrasse/Industriestrasse.

Architekten ZT GmbH, Vienna

option of an annual renewal.

Rendering of the educational campus

period was agreed for the portfolio.

ties.

Züblin International Qatar L.L.C. signed a contract for the design and construction of an infrastructure project in Doha, Qatar, worth € 113 million. The company will build a wastewater pumping station by July 2021. The works include the construction of a wastewater pumping shaft with a depth of 50 m, a diameter of centre. The facility is to open on schedule at the beginning of the 2021/22 school year.

STRABAG PFS buys PORREAL in Poland and the Czech Republic

STRABAG PFS Austria signed an agreement to acquire 100 % of the shares of PORREAL Polska sp. z o.o. of Warsaw and PORREAL Česko s.r.o. of Prague. The target companies had previously been owned by the PORR Group, which is withdrawing from the property and facility management business in these regions. Together, the two companies generate annual revenue of approximately € 6 million. At PORREAL in Poland,

83 employees are largely responsible for the technical and infrastructural facility management for offi ce properties in Warsaw. In addition to this new customer segment, the acquisition increased STRABAG PFS's level of vertical integration in the areas of refrigeration and fi re protection. In the Czech Republic, most of the revenue is generated in Prague with twelve technical specialists.

STRABAG SE expands its Management Board to include digitalisation

Effective 1 January 2020, STRABAG SE has added digitalisation, among others, as a Management Board responsibility, correspondingly increasing the size of the board from fi ve to six members. The new portfolio, Digitalisation, Innovation and Business Development, will be assigned to Klemens Haselsteiner. Klemens Haselsteiner started his career in 2004 at the auditing fi rm KPMG in Austria. After completing his civil service and gathering work experience at a Russian industrial group, he joined the STRABAG Group in Russia in 2011. There he was entrusted with central controlling, among other things. From 2015, he was employed at the German STRABAG group company Ed. Züblin AG, Stuttgart subdivision – initially as commercial business unit manager for turnkey construction, as of 2018 as commercial subdivision manager.

STRABAG commences expanded € 1 billion contract for polyhalite mine in the UK

The TBM "Stella Rose" ready for action at Wilton

STRABAG SE was issued a notice of commencement to begin two further tunnel construction contracts (Drives 2 and 3) on behalf of York Potash Ltd. for its North Yorkshire Polyhalite Project. The two drives between the shaft at Lockwood Beck and the Woodsmith Mine will have a total length of 24 km and a depth of 360 m. STRABAG had already commenced the design-and-build contract for Drive 1, a 13 km section from the tunnel portal at Wilton to Lockwood Beck in the fi rst quarter of 2018. The total amount commenced to date is about € 1.0 billion from the contract awarded to STRABAG, which also includes the construction of the underground material transport system, the contract for which will commence later this year.

EFKON wins large Smart City project in in India

EFKON is implementing a traffi c monitoring system in Aligarh, India. The contract value for this Smart City project is approx. € 13 million. The contract covers the installation, operation and maintenance of a new traffi c surveillance system covering an area of 85 km² with 227 cameras and 63 pan-tilt-zoom (PTZ) cameras, red light surveillance systems with 74 cameras, and other traffi c management components. Construction will take place over twelve months, followed by 60 months of operation and maintenance.

Modernisation of a railway line in the south of the Czech Republic

STRABAG Rail a.s. was awarded the contract to modernise the 11.3 km railway section between Soběslav and Doubí on behalf of the Czech national railway infrastructure authority. The contract value amounts to CZK 3.86 billion (~ € 150 million). Work began in September 2019 and will last 46 months. The contract was awarded to a consortium consisting of STRABAG Rail a.s., EUROVIA CS a.s. and Metrostav a.s. The share attributable to consortium leader STRABAG Rail a.s. amounts to 53.21 %.

First Motel One in Poland developed and completed by STRABAG Real Estate

Motel One in the centre of Warsaw, Poland

STRABAG Real Estate handed over a hotel building it developed in the centre of Warsaw to hotel operator Motel One GmbH. The 333 stateof-the-art rooms and a spacious interior including a reception and lobby, a lounge and a bar as well as conference rooms with a total usable area of about 10,580 m² were completed within a period of two years opposite the Chopin Museum in Tamka Street.

AUGUST

JULY

GROUP MANAGEMENT REPORT

Modernisation of a railway line in the north of the Czech Republic

STRABAG Rail a.s. was awarded the contract by the Czech railway infrastructure authority to modernise the approximately 12 km railway section between Oldřichov u Duchcova and Bílina in the north of the Czech Republic. The contract has a total value of CZK 1.91 billion (~ € 74 million). The construction works are scheduled for completion in the spring of 2021. The contract was awarded to a consortium consisting of STRABAG Rail a.s., OHL ŽS, a.s. and MONZAS, spol. s r.o. The share attributable to consortium leader STRABAG Rail a.s. amounts to 73 %.

Project start at "In der Wiesen Ost" to build privately fi nanced owner-occupied fl ats

Privately fi nanced owner-occupied fl ats at In der Wiesen Ost

STRABAG Real Estate Austria is developing a high-quality residential complex located at Rößlergasse 13, 1230 Vienna, within the In der Wiesen Ost development area. The project in the highly sought-after Obere Wiese residential area will have a total of 143 privately fi nanced owner-occupied fl ats with modern and ecologically sustainable living standards. The multifaceted nature of the complex is refl ected in the characteristic façade design of the three buildings. "Esprit" features textiles in eye-catching colours, "Harmonie" puts the spotlight on wood panels and "Elegance" presents itself with timeless aesthetics in glass. Special highlights include a fl exible event space, a modern gym and a meeting area. Completion is scheduled for autumn 2021.

SEPTEMBER

EFKON wins large Smart City project in in India

Modernisation of a railway line in the south of the Czech Republic

Modernisation of a railway line in the north of the Czech Republic

Motel One in the centre of Warsaw, Poland

AUGUST

JULY

STRABAG Real Estate Austria is developing a high-quality residential complex located at Rößlergasse 13, 1230 Vienna, within the In der

Privately fi nanced owner-occupied fl ats at In der Wiesen Ost

First Motel One in Poland developed and completed by STRABAG Real Estate

Motel One

cameras and 63 pan-tilt-zoom (PTZ) cameras, red light surveillance systems with 74 cameras, and other traffi c management components. Construction will take place over twelve months, followed by 60 months of operation and mainte-

2019 and will last 46 months. The contract was awarded to a consortium consisting of STRABAG Rail a.s., EUROVIA CS a.s. and Metrostav a.s. The share attributable to consortium leader STRABAG Rail a.s. amounts to 53.21 %.

scheduled for completion in the spring of 2021. The contract was awarded to a consortium consisting of STRABAG Rail a.s., OHL ŽS, a.s. and MONZAS, spol. s r.o. The share attributable to consortium leader STRABAG Rail a.s. amounts

Wiesen Ost development area. The project in the highly sought-after Obere Wiese residential area will have a total of 143 privately fi nanced owner-occupied fl ats with modern and ecologically sustainable living standards. The multifaceted nature of the complex is refl ected in the characteristic façade design of the three buildings. "Esprit" features textiles in eye-catching colours, "Harmonie" puts the spotlight on wood panels and "Elegance" presents itself with timeless aesthetics in glass. Special highlights include a fl exible event space, a modern gym and a meeting area. Completion is scheduled for

Museum in Tamka Street.

to 73 %.

autumn 2021.

Project start at "In der Wiesen Ost" to build privately fi nanced owner-occupied fl ats

nance.

Final agreement between STRABAG consortium and Autostrada Pedemontana Lombarda

STRABAG AG, as the contractor's consortium leader, and Autostrada Pedemontana Lombarda S.p.A. announced that the basic agreement reached in April 2019 had now become legally binding. A legal dispute involving a consortium led by Austria's STRABAG AG in connection with the Pedemontana motorway project in northern Italy had led the client to invoke a guarantee in March 2018, which the consortium deemed unjustifi ed. The present settlement agreement not only put an end to the interim proceedings concerning the invocation of the guarantee, but also to the pending legal disputes related to the construction delays and the accompanying considerable cost overruns.

STRABAG Group presents the latest trends for building the future

The latest trends for building tomorrow were the focus of the STRABAG Innovation Day 2019 at the ZÜBLIN Campus in Stuttgart, Germany. At the comprehensive interactive exhibition, teams from STRABAG AG, Ed. Züblin AG and other group companies featured innovative products and processes for the entire spectrum of construction – in transportation infrastructures, building construction and civil engineering. Visitors could experience how to systematically optimise building processes with digital tools, they were able to inform themselves about the pollutant-reducing ClAir® Asphalt, resourcesaving textile concrete façades or PM-absorbing moss wall modules (MoosTex) and gained vivid insights into the use of augmented reality and robotics in the construction industry.

At the STRABAG Innovation Day 2019, visitors got to know the humanoid robot BAGSTAR (very top), gained insights into the technology of mobile mapping (top left) or found out more about the project partnering scheme teamconcept (top right).

ZÜBLIN realising new modern, three-part offi ce complex in Berlin-Schönefeld

Ed. Züblin AG, acting as general contractor, is realising a modern three-part offi ce building complex on Mizarstraße in Berlin-Schönefeld, Germany, on behalf of client DIE AG Sechste Projektgesellschaft mbH & Co. KG. The order, which has a value of approx. € 46 million, covers the turnkey construction of three four-storey offi ce buildings with a total gross fl oor area of approx. 24,700 m² on U-shaped and L-shaped

GROUP MANAGEMENT REPORT

fl oor plans. The design by Blumers Architekten of Berlin provides for three light-fl ooded block buildings surrounding a green inner courtyard. An underground car park with 89 spaces and a further 119 outdoor parking spaces complete the new building project. Construction began in September, with completion scheduled approx. 22 months later in July 2021.

STRABAG building Hatta pumped storage power plant in Dubai OCTOBER

STRABAG will design, build and commission the Hatta pumped storage power plant in the emirate of Dubai on behalf of the Dubai Electricity and Water Authority. The total contract value for the consortium, consisting also of Austrian company ANDRITZ as the technology supplier and Turkish construction company ÖZKAR İNŞAAT, amounts to approximately € 340 million. STRABAG is the consortium leader with a share of 35 % or € 118 million. The pumped storage power plant is located in the Hajar Mountains, 140 km southeast of the city of Dubai. STRABAG will build a turbine shaft with a diameter of approximately 36 m and a depth of almost 70 m to house two Francis turbines with a power output of 250 MW. A 1.2 km long pressure tunnel to be excavated by the construction consortium will connect the existing lower reservoir, upgraded by STRABAG, to the new upper reservoir. The upper reservoir will be constructed with two roller-compacted concrete dams with a height of approximately 35 m and 70 m. In addition, STRABAG has been entrusted with the construction of two road tunnels with a length of approximately 470 m and 440 m using blast excavation. The scope of the contract also includes the reinforced concrete outfl ow and intake structures, several ancillary buildings as well as their extension and mechanical and electrical systems.

ZÜBLIN and MAX BÖGL awarded € 500 million contract for airport connection of new Stuttgart–Ulm railway line

The consortium consisting of ZÜBLIN (technical management) and the Max Bögl Group has been awarded the contract for the project approval section 1.3a of the new Stuttgart–Ulm railway line in Germany. The order, worth a total of approximately € 500 million, covers a 5.3 km section of the new railway line alongside the A8 motorway between the boundaries of project approval sections 1.2 (Filder Tunnel) and 1.4 (Filder Plain to Wendlingen) and also includes the new long-distance and regional station beneath the Stuttgart airport and trade fair centre, its connection to the new railway line through the approximately 2.1 km airport tunnel, and the partial relocation of state road 1204. This new project section also comprises a new connection between the new railway line and the airport curve, to be built at a later date to link the existing airport/trade fair station, including a new third track, to the Stuttgart–Hattingen railway line (Gäu Railway).

Witten/Herdecke University opts for timber in new campus building

The groundbreaking ceremony for the threestorey hybrid timber building, built to a design by the Berlin-based architects Kaden+Lager as a link between the existing buildings of the Witten/Herdecke University campus in Germany, is scheduled for May 2020. The approx. € 22 million turnkey construction contract including planning and outdoor facilities went to the Aichach-based timber construction specialist ZÜBLIN Timber, a subsidiary of Ed. Züblin AG. In addition to offi ce, administrative and seminar

New campus building at Witten/Herdecke University: open space for work and communication

rooms, the extension building will also house the library, event rooms and a café/bar. Witten/ Herdecke University wants to create more space for its 2,600 students and over 900 employees to support them in their personal, academic and professional development. The completion of the extension building is scheduled for the summer of 2021.

NOVEMBER

ZÜBLIN realising new modern, three-part offi ce complex in Berlin-Schönefeld

STRABAG building Hatta pumped storage power plant in Dubai

of 250 MW. A 1.2 km long pressure tunnel to be excavated by the construction consortium will connect the existing lower reservoir, upgraded by STRABAG, to the new upper reservoir. The upper reservoir will be constructed with two roller-compacted concrete dams with a height of approximately 35 m and 70 m. In addition, STRABAG has been entrusted with the construction of two road tunnels with a length of approximately 470 m and 440 m using blast excavation. The scope of the contract also includes the reinforced concrete outfl ow and intake structures, several ancillary buildings as well as their extension and mechanical and

beneath the Stuttgart airport and trade fair centre, its connection to the new railway line through the approximately 2.1 km airport tunnel, and the partial relocation of state road 1204. This new project section also comprises a new connection between the new railway line and the airport curve, to be built at a later date to link the existing airport/trade fair station, including a new third track, to the Stuttgart–Hattingen railway

New campus building at Witten/Herdecke University:

open space for work and communication

prox. 22 months later in July 2021.

electrical systems.

line (Gäu Railway).

ZÜBLIN and MAX BÖGL awarded € 500 million contract for airport connection of new

Witten/Herdecke University opts for timber in new campus building

Stuttgart–Ulm railway line

OCTOBER

STRABAG building second section of new pumping station for Toronto wastewater treatment plant

The Canadian subsidiary of the STRABAG Group was awarded a contract by the City of Toronto to build the second section of the new integrated pumping station at the Ashbridges Bay Wastewater Treatment Plant. The contract with a value of around CAD 120 million (approx. € 80 million) covers the construction of shafts and feeder tunnels. The integrated pumping station allows the underground transport of wastewater to the Ashbridges Bay Wastewater Treatment Plant. The main part of the project involves two largescale shafts: one 68 m deep with a diameter of 27 m and another 27 m deep with a diameter of 32 m. Including fi ve smaller shafts, this results in a total of 153 m of shafts to be built. The shafts will be linked to feeder tunnels with a total length of 445 m, with a rock tunnel section as well as a parallel pressure pipe in an open cut close to the surface.

The pumping station will be built on this site of the Ashbridges Bay Wastewater Treatment Plant.

DECEMBER

STRABAG investing € 9 million in Austria's most modern apprenticeship training centre

The new training centre will meet the training needs of 250 apprentices per year.

STRABAG is planning a new corporate apprentice training workshop in Ybbs on the Danube to meet the training needs of approximately 250 apprentices a year. The company is investing € 9 million in the most modern apprenticeship training centre in Austria. The 31,000 m² facility will include a training shop with classrooms, open space for construction equipment operator training and accommodations for 40 apprentices including recreational areas. Ybbs on the Danube was chosen as the location as it lies along the important Westbahn rail corridor and because, due to the presence of other companies' training facilities, an extensive infrastructure for apprentices already exists in the area.

Country report

GROUP MANAGEMENT REPORT

DIVERSIFYING THE COUNTRY RISK

Despite its strong presence in the home markets of Austria and Germany, STRABAG sees itself as a European company. The group has been active in Central and Eastern Europe for decades. On the one hand, it is a tradition for the company to follow its clients into new markets; on the other hand, the existing country network with local management and established organisational structures makes it easier to export and to use the technology and the equipment in new regions. To diversify the country risk even further, and to profi t from the market opportunities in other parts of the world, STRABAG is also active internationally, i.e. in countries outside of Europe.

The STRABAG SE Group generated a record output for the third year in a row in the 2019 fi nancial year. With a plus of 2 % to € 16.6 billion, the company exceeded its own forecast. Business was characterised in particular by growth in the home market of Austria and in transportation infrastructures in Poland, Hungary and the Czech Republic, which more than compensated for the decline caused by the loss of a key German client in property and facility services. Performance in the remaining markets was mixed.

€ mln.	2019	% of total output volume 20191	2018	% of total output volume 2018	∆ %	∆ absolute
Germany	7,819	47	7,877	48	-1	-58
Austria	2,679	16	2,542	16	5	137
Poland	1,129	7	975	6	16	154
Hungary	848	5	714	4	19	134
Czech Republic	783	5	706	4	11	77
Americas	714	4	667	4	7	47
Slovakia	369	2	515	3	-28	-146
Rest of Europe	343	2	349	3	-2	-6
Benelux	318	2	351	2	-9	-33
Switzerland	232	1	273	2	-15	-41
Romania	225	1	197	1	14	28
Sweden	205	1	178	1	15	27
Asia	179	1	162	1	10	17
Croatia	152	1	163	1	-7	-11
Middle East	148	1	206	1	-28	-58
Serbia	148	1	111	1	33	37
Denmark	99	1	92	1	8	7
Russia	71	1	78	1	-9	-7
Africa	66	0	57	0	16	9
Slovenia	49	0	68	0	-28	-19
Bulgaria	42	0	42	0	0	0
Total	16,618	100	16,323	100	2	295

OUTPUT VOLUME BY COUNTRY

ECONOMY CONTINUES TO MOVE SIDEWAYS1

Country report

OUTPUT VOLUME BY COUNTRY

1 Rounding differences are possible

€ mln. 2019

DIVERSIFYING THE COUNTRY RISK

% of total output volume 2018

∆ %

∆ absolute

was mixed.

20191 2018

% of total output volume

Germany 7,819 47 7,877 48 -1 -58 Austria 2,679 16 2,542 16 5 137 Poland 1,129 7 975 6 16 154 Hungary 848 5 714 4 19 134 Czech Republic 783 5 706 4 11 77 Americas 714 4 667 4 7 47 Slovakia 369 2 515 3 -28 -146 Rest of Europe 343 2 349 3 -2 -6 Benelux 318 2 351 2 -9 -33 Switzerland 232 1 273 2 -15 -41 Romania 225 1 197 1 14 28 Sweden 205 1 178 1 15 27 Asia 179 1 162 1 10 17 Croatia 152 1 163 1 -7 -11 Middle East 148 1 206 1 -28 -58 Serbia 148 1 111 1 33 37 Denmark 99 1 92 1 8 7 Russia 71 1 78 1 -9 -7 Africa 66 0 57 0 16 9 Slovenia 49 0 68 0 -28 -19 Bulgaria 42 0 42 0 0 0 Total 16,618 100 16,323 100 2 295

GROWTH COMPARISON CONSTRUCTION VS. GDP EUROPE

The World Bank revised its growth forecast for the global economy in 2019 down by 0.2 percentage points to 2.4 % and expects growth of 2.5 % and 2.6 % in 2020 and 2021. According to its latest report, the United States is primarily harming itself with its trade confl icts. The reason for the lowest growth since the fi nancial crisis more than a decade ago is the unexpectedly weak recovery in trade and investment. At the same time, the World Bank warns of a new wave of debt in emerging and developing countries.

The economic momentum also slowed signifi cantly in the 19 Euroconstruct countries in 2019. The turmoil in world trade is reducing industrial production and the propensity to invest in Europe. Euroconstruct's most recent macroeconomic forecasts do not anticipate a global crisis, but only forecast annual GDP growth of between 1 % and 2 % for the years up to 2022.

BCONSTRUCTION SECTOR EXPECTS STIMULUS FROM NEW EUROPEAN ENVIRONMENTAL POLICY

With solid 2.3 % growth, the construction economy in the 19 Euroconstruct countries expanded for the sixth year in a row in 2019 and thus again grew more strongly than the economy as a whole – albeit at a somewhat slower pace. The construction sector is benefi ting from economic factors such as the currently solid purchasing power of households, favourable fi nancing conditions and higher corporate profi ts. Additional stimulus is expected from the European Commission's Green Deal and the associated stronger environmental policies of the national governments. Nevertheless, the experts at Euroconstruct remain cautious and in their current forecasts for 2020–2022 only expect growth rates between 0.9 % and 1.1 %.

Construction output in the 19 Euroconstruct countries was around € 1,637 billion in 2019. Yet even after fi ve years of continuous growth, this is still far below the peak before the fi nancial crisis of 2008. This is mainly due to the developments in Spain and Italy, although two-thirds of the Western European countries expected a higher total construction volume in 2019 than in 2007. The national differences, therefore, remain large.

¹ All growth forecasts as well as the particular national construction volumes are taken from the Euroconstruct and EECFA (Eastern European Construction Forecasting Association) winter 2019 reports. The indicated market share data are based on the data from the year 2018.

CIVIL ENGINEERING CONTINUES TO OUTPERFORM RESIDENTIAL CONSTRUCTION AND OTHER BUILDING CONSTRUCTION

GROWTH COMPARISON CONSTRUCTION SECTOR EUROPE

GROUP MANAGEMENT REPORT

Viewed by sector, European civil engineering saw the strongest growth in the past year with an increase of 5.1 %, followed by other building construction with +1.8 % and residential construction with +1.3 %.

Residential construction, which accounts for nearly half of all European construction output, grew by 1.3 % in 2019. In absolute numbers, France and Germany were again at the top, followed by the United Kingdom and Italy. The largest growth rates were recorded in Slovakia, Hungary, Ireland, Portugal and Poland. In 2020, however, growth in the sector is likely to slow further to a total of 0.7 %. Above-average growth rates are predicted especially for Ireland, which has been among the top performers here for years, as well as the Czech Republic and Portugal. The development in Germany is likely to stagnate in 2020.

Other building construction, which was responsible for almost a third of the European construction volume in 2019, grew by 1.8 % in the 19 Euroconstruct countries. Viewed by country, Ireland, Hungary, the Netherlands, Poland, Norway and Sweden saw the highest increases. Euroconstruct forecasts moderate declines in Germany in this sector in the coming years.

Civil engineering, which accounts for around 20 % of the European construction volume, showed a highly inconsistent picture in 2019, although overall, with a plus of 5.1 %, it was signifi cantly above the forecasts. The strongest increases were recorded in Hungary, Ireland, Poland, France, the United Kingdom, Norway and Sweden, while Germany was only slightly positive with +0.7 %. Euroconstruct sees a more uniform picture for the future and expects growth of 2.6 % for 2020. This development should be supported above all by the high dynamics in the Eastern European countries with the exception of the Czech Republic. For Germany, the largest market in terms of volume, Euroconstruct expects a slight decline from 2020 to 2022.

GERMANY

CIVIL ENGINEERING CONTINUES TO OUTPERFORM RESIDENTIAL CONSTRUCTION AND OTHER

2017 2018e 2019e 2020e 2021e

2020 to 2022.

0.7

1.1

1.3

0.7 0.0 Residential

the 19 Euroconstruct countries. Viewed by country, Ireland, Hungary, the Netherlands, Poland, Norway and Sweden saw the highest increases. Euroconstruct forecasts moderate declines in Germany in this sector in the coming years.

2.6 2.2 Civil 1,8engineering

0.9 Other building

0,8

1,1

construction 1,0

output

construction

Total construction

BUILDING CONSTRUCTION

6 %

0 %

struction with +1.3 %.

to stagnate in 2020.

2.8

2.0

3.2

5.8

GROWTH COMPARISON CONSTRUCTION SECTOR EUROPE

Viewed by sector, European civil engineering saw the strongest growth in the past year with an increase of 5.1 %, followed by other building construction with +1.8 % and residential con-

Other building construction, which was responsible for almost a third of the European construction volume in 2019, grew by 1.8 % in

1.8

1.3

2.3

5.1

The German economy was in a slight downturn in 2019. While GDP growth still stood at 1.5 % in 2018, the forecasts for 2019 only see an increase of 0.6 %. The main reasons for this development are a decline in foreign trade due to international trade confl icts as well as the uncertainties regarding the impact of Brexit. Overall, the mood in Germany's export-oriented industry has been slightly subdued since the beginning of 2018. Especially the automotive industry, which is very important for the country, is facing major challenges. The medium-term moderate growth of around 1 % p.a. therefore results primarily from the relatively stable private domestic consumption.

According to Euroconstruct, the German construction industry is likely to have seen its last growth year for the time being in 2019 with a plus of 0.8 %. The impact from the massive public-sector investment in residential construction has now fl attened out, and the extent of public investment in the modernisation of the rail network cannot yet be clearly estimated. The sector is being stimulated by low lending rates and rising real wages, while the impact of the tax relief for energy-saving measures from the government's climate package is not yet clearly evident. In the coming years, residential construction, which still represents more than half of the total German construction volume, is likely to be characterised by a slightly downward trend. For the entire construction sector, Euroconstruct already expects a slight decline of 0.6 % in 2020, while slight downward growth of -0.8 % and -0.7 % is also expected for the following two years.

Thanks to the general economic development in 2019, other building construction remained in positive territory with a slight increase of 0.1 %. In the medium term, however, rising energy prices, the growing importance of foreign production sites and the triumphant advance of online retail, which is dampening the demand for new commercial buildings, are also suggesting slightly declining results in this sector.

Civil engineering recently benefi ted from government investment programmes for rail and road infrastructure. The ongoing budget recovery at the local level also had a positive impact on the construction and expansion of roads and water networks. While the sector still achieved growth of 0.7 % in 2019, it should face a moderate correction phase in the coming years.

With a market share of 2.3 %, the STRABAG Group is the market leader in Germany. Its 15.6 % share of the German road construction sector is signifi cantly higher than that of the market as a whole. With € 7,818.59 million, around 47 % of STRABAG's total group output volume was generated in Germany in 2019 (2018: 48 %). Most of the output is allocated to the North + West segment, while the property and facility services provided in Germany are allocated to International + Special Divisions.

AUSTRIA

GROUP MANAGEMENT REPORT

Overall construction volume:		€ 43.7 billion
GDP growth:	2019e: 1.7 % / 2020e: 1.4 %
Construction growth:	2019e: 2.6 % / 2020e: 1.3 %

Euroconstruct reports signifi cantly higher growth rates for the Austrian construction industry in 2019. Residential construction has been the main growth driver in recent years, supported by low fi nancing costs. Overall, construction output grew by 2.6 % in 2019. However, the upward curve is expected to fl atten to +1.3 % in 2020 and consolidate in 2021 and 2022 with growth of 1.4 % in each of those years.

In Euroconstruct's assessment, Austrian residential construction recorded a remarkable increase in output of +3.5 % in 2019. Fundamental indicators and a decline in building permits suggest that the sector may lose some momentum in the coming years, however. Similar to the construction industry as a whole, a slowdown to +1.0 % is expected for 2020 before the growth rates level off at 1.2 % and 1.1 % in 2021 and 2022.

Other building construction was also able to benefi t from the general economic development in 2019 with an increase of 1.9 %. Due to increased foreign and domestic demand, industry and retail were again more dynamic, though they probably passed their respective highs already in 2018. Given the growing need for care facilities, positive stimulus can currently only be expected from the healthcare sector. As neither the economic development nor the public sector is expected to provide additional growth impulses, the experts forecast that other building construction will grow by 1.1 % in 2020. In 2021 and 2022, growth should pick up again slightly to 1.4 % and 1.8 %.

Even civil engineering in Austria achieved growth of 2.0 % in 2019, primarily due to investments in transportation infrastructure. The further expansion of the road and especially the rail network will continue to have a fi xed place in the Austrian budget in the coming years. Investments in the energy sector are expected to provide additional stimulus. Euroconstruct therefore expects an increase of 2.4 % for 2020, with growth of 1.9 % and 1.3 % forecast for 2021 and 2022, respectively.

The STRABAG Group generated 16 % of the total group output volume in its home market of Austria in 2019 (2018: 16 %). Austria thus continues to be one of its top three markets along with Germany and Poland. The output reached a volume of € 2,678.66 million in 2019. With a share of 6.0 %, STRABAG is the market leader in the country. In road construction, the market share stands at 38 %.

POLAND

AUSTRIA

16 % contribution to the group output volume

that follow.

The Austrian economy grew by 1.7 % in 2019, once again above the average of the neighbouring countries. Nevertheless, the growth rate for Austria is also expected to decline further. The Austrian economy is primarily driven by exports and strong domestic consumption. In contrast to Germany, the experts at Euroconstruct estimate the risk of a recession for Austria as rather low. Despite forecasts of a further economic slowdown to a value of +1.4 % for 2020, growth should remain at least at this level in the years in 2019 with an increase of 1.9 %. Due to increased foreign and domestic demand, industry and retail were again more dynamic, though they probably passed their respective highs already in 2018. Given the growing need for care facilities, positive stimulus can currently only be expected from the healthcare sector. As neither the economic development nor the public sector is expected to provide additional growth impulses, the experts forecast that other building construction will grow by 1.1 % in 2020. In 2021 and 2022, growth should pick up again slightly

Overall construction volume: € 43.7 billion GDP growth: 2019e: 1.7 % / 2020e: 1.4 % Construction growth: 2019e: 2.6 % / 2020e: 1.3 %

to 1.4 % and 1.8 %.

share stands at 38 %.

tively.

growth of 1.4 % in each of those years.

Other building construction was also able to benefi t from the general economic development

Overall construction volume:		€ 59.8 billion
GDP growth:		2019e: 4.5 % / 2020e: 4.0 %
Construction growth:		2019e: 8.0 % / 2020e: 4.2 %

After strong fl uctuations in the past few years, the Polish construction industry once again had a very successful year in 2019 with growth of 8.0 %. The main drivers for the high growth rates in recent years were the numerous investment projects carried out under the EU's 2014–2020 Infrastructure and Environment Programme. As the majority of these subsidies have now been absorbed, Euroconstruct is predicting only 4.2 % growth for the sector in 2020. The continuing shortage of labour could prove to be an additional bottleneck. For 2021 and 2022, Euroconstruct is therefore forecasting growth rates of only 0.7 % and 1.8 %, respectively, for the Polish construction industry.

The residential construction sector exhibited growth of 6.6 % in 2019. The still high demand for residential real estate can be attributed, among other factors, to the positive development of private income compared to real estate prices. For 2020, Euroconstruct predicts moderate growth of +2.9 % before the construction volume is expected to decline by 2.5 % in 2021, although it should increase again by 3.4 % in 2022.

Other building construction also achieved a solid plus of 5.4 % in 2019. In addition to large orders from local governments and the public sector ahead of the Polish parliamentary elections, investments by foreign companies in new production facilities also provided some momentum. As part of the modernisation of the rail network, the renovation of 200 railway stations is also planned in the coming years. Euroconstruct forecasts that the sector will grow by 4.0 % in 2020, while the values should fl uctuate between +5.3 % and +2.9 % in 2021 and 2022.

By far the strongest growth in 2019 came in civil engineering with a plus of 12.8 %. In addition to the positive development of the Polish economy as a whole, this is due above all to the EU funding programmes. The greatest increases were registered in rail construction. The Polish government attaches high priority to the construction of the Via Carpata, a trans-European road link between Lithuania and Greece, which runs for 760 km through Poland. Against this background, Euroconstruct forecasts that civil engineering will grow by a further 5.6 % in 2020. With the end of the EU's fi nancial framework for 2014–2020, however, the momentum will decrease in 2021 with -2.4 % and in 2022 with -0.9 %.

As the number two in the construction sector in Poland, STRABAG realised a construction volume of € 1,129.22 million here in 2019, representing 7 % of the group's total output volume (2018: 6 %). Poland thus represents the third-largest market of the STRABAG Group. Its market share in the entire Polish construction market was 1.8 % and its share of road construction was 8.8 %.

HUNGARY

GROUP MANAGEMENT REPORT

Overall construction volume: € 15.6 billion GDP growth: 2019e: 4.5 % / 2020e: 3.3 % Construction growth: 2019e: 13.3 % / 2020e: 5.4 %

The growth momentum of the Hungarian economy weakened somewhat in the reporting period, although in a European comparison it remained at a relatively high level of +4.5 %. The high level of economic growth is primarily due to the high level of EU funding for the 2014–2020 period and the resulting public sector contracts, particularly in the construction sector. In total, gross fi xed capital formation in Hungary increased by a strong 15.9 % in 2019, as rising foreign demand ensured a high trade surplus. At the same time, rising household incomes and statutory wage increases, with a simultaneously falling unemployment rate, boosted domestic consumption. Against this background, Euroconstruct forecasts another solid GDP increase of 3.3 % for 2020.

The Hungarian construction economy recorded another strong upswing of 13.3 % in 2019. The positive development was largely supported by the above-average dynamic in residential construction and civil engineering. For 2020, Euroconstruct predicts a further 5.4 % increase in the industry before growth slows to 3.0 % in 2021 when the current EU fi nancial framework expires. After fi ve years in a row with positive growth rates, the forecast for 2022 sees a decrease of the construction volume of -5.1 %.

Residential construction once again saw strong growth in 2019, at +9.1 %, although the momentum was signifi cantly lower than in previous years. The market for new buildings had been booming here due to persistently low interest rates and a generous fi scal policy with subsidies and special loans aimed at raising the standard of living especially of young families. Now, however, Euroconstruct is forecasting that the sector will stagnate or undergo an adjustment in the coming years. While weak growth of 0.6 % should still be possible in 2020, a correction phase with declines of 1.7 % and 3.5 %, respectively, is likely in 2021 and 2022.

Stimulated by massive public investments and extensive EU subsidies, other building construction also achieved a remarkable plus of 10.7 % in 2019. Intense construction activity can be seen above all in industry, offi ce real estate, tourism, healthcare and the sports sector. Foreign companies are investing heavily in new industrial facilities, and between 200,000 and 250,000 m² of new offi ce space are currently being built in the big cities alone. At the same time, the government is funding extensive town and village renewal programmes as well as the renovation of historic buildings in the cultural sector. For 2020 and 2021, Euroconstruct still forecasts annual growth rates of 6.4 % and 5.6 % for other building construction. Due to the end of the EU fi nancial framework for 2014–2020, however, a decrease of 7.6 % is expected for 2022.

Civil engineering proved to be the most successful segment with an increase of 19.7 % in 2019. One of the primary goals of the Hungarian catching-up process is the creation of modern infrastructure. Euroconstruct expects the growth trend in civil engineering to continue in 2020 with +7.7 % and a growth rate of 3.2 % in 2021. A decline of 3.3 % is expected for 2022 for the fi rst time in six years.

The STRABAG Group generated € 847.82 million, or 5 % of its output, in Hungary in 2019 (2018: 4 %). This puts STRABAG in fi rst place in the Hungarian construction market. Its share of the total market reached 5.2 %, that in road construction 21.8 %.

CZECH REPUBLIC

HUNGARY

5 % contribution to the group output volume

of 3.3 % for 2020.

Overall construction volume: € 15.6 billion GDP growth: 2019e: 4.5 % / 2020e: 3.3 % Construction growth: 2019e: 13.3 % / 2020e: 5.4 %

spectively, is likely in 2021 and 2022.

decrease of 7.6 % is expected for 2022.

fi rst time in six years.

construction 21.8 %.

volume Overall construction volume: € 22.5 billion. GDP growth: 2019e: 2.6 % / 2020e: 2.4 % Construction growth: 2019e: 3.3 % / 2020e: 1.6 %

The Czech economy grew by 2.6 % in 2019, a rate that was again signifi cantly above the average of the European countries. The positive economic development is being driven mainly by private consumption and the extremely positive employment situation. In addition, a national investment plan presented by the government foresees massive investments in more than 17,000 projects for the years 2019 to 2030, although the total estimated investment volume is not considered to be realisable. Due to the further increase in the already strong private consumption, Euroconstruct continues to expect moderate GDP growth rates of around 2.3 % p.a. for the next three years.

After several years of volatile development, the Czech construction industry showed solid growth of 3.3 % in 2019. This made the construction sector the last sector to recover after the 2008 fi nancial crisis. In addition to structural problems, the delayed consolidation was mainly due to a massive shortage of skilled workers, which is currently driving wage costs up by around 10 % annually. Moreover, the Czech Republic is one of the 40 slowest countries in the world in terms of the processing time for building permits. For 2020, Euroconstruct therefore again forecasts a lower growth rate of 1.6 % for the Czech construction industry. As funds begin to fl ow in 2021 from the new EU fi nancial framework for 2021–2027, the experts predict the country will see somewhat higher growth rates of 1.8 % and 2.4 % in 2021 and 2022.

The high demand for new apartments and singlefamily houses, spurred by low mortgage rates, led to remarkable growth of 3.6 % in residential construction in 2019. In recent years, real estate developers had already reached their limit in fi nding suitable building sites and receiving building permits; in the meantime, however, amendments to Czech building law have clearly helped to relieve this situation. Against this background, Euroconstruct continues to predict strong growth of 5.3 % for 2020. In 2021 and 2022, theses fi gures should decrease to still very solid +4.3 % and +3.6 %, respectively.

Other building construction grew by 2.2 % in 2019 after the sector had already recovered from a multi-year recession in the two years before. Investments in industrial and logistics centres, as well as the construction of shopping centres and large offi ce buildings, should bring this sector a signifi cant plus of 3.8 % in 2020, a decline of 0.2 % in 2021, and stagnation the following year. Nevertheless, the Czech Republic remains very attractive to foreign investors.

Czech civil engineering likely reached a peak in 2019 with a strong plus of 4.3 %. In addition to projects already started in rail and road construction as well as in metro lines and waterways, other investments in the pipeline include work on the power grid, upgrades for existing nuclear power plants and the expansion of two airports. Due to the general economic slowdown and the end of the EU fi nancial framework for 2014–2020, however, Euroconstruct predicts the sector to contract signifi cantly in 2020 with -6.3 % before the trend clearly points upwards again in 2021 and 2022 with +0.6 % and +3.7 %.

STRABAG is the number two on the market in the Czech Republic. With an output volume of € 782.78 million in 2019, around 5 % of the group's total output (2018: 4 %) was generated in the country. The market share in the entire construction market is 3.2 % and in road construction even amounts to 17.2 %.

SLOVAKIA

GROUP MANAGEMENT REPORT

Overall construction volume:		€ 5.5 billion
GDP growth:	2019e: 2.4 % / 2020e: 2.3 %
Construction growth:	2019e: 0.2 % / 2020e: 1.0 %

The Slovak construction industry grew by 0.2 % in 2019, signifi cantly more weakly than in the two previous years. According to Euroconstruct, the fundamental direction is unlikely to change in the next two years and will even result in a minus of 0.4 % in 2022. Residential construction, which increased by a remarkable 11.7 % in 2019, again benefi ted from the low interest rates on loans and the increased demand for real estate for personal use and for investment purposes. This effect is probably only temporary, however. For the next three years, Euroconstruct predicts the sector's growth momentum to fall below zero.

Despite positive general economic fi gures, other building construction in Slovakia grew by only 0.1 % in 2019, even though large investments by car manufacturers for the expansion of their production capacities still had a positive impact and the retail sector demanded modern logistics centres and warehouses. According to Euroconstruct, the implementation of several large investment projects in Bratislava should again result in somewhat better capacity utilisation in 2020 (+1.0 %) and 2021 (+1.8 %) before the curve turns into the negative with -2.7 % in 2022.

After a remarkable growth rate of 18.6 % in the previous year, civil engineering suffered a painful decline of -7.8 % in the reporting period, albeit at a high absolute level. This development was due in part to the expiry of funding from the EU fi nancial framework for 2014–2020. Largescale projects in particular are likely to lead to positive growth rates of 4.3 %, 4.6 % and 3.3 % in the next three years, however.

With a market share of 9.3 % and an output volume of € 369.04 million in 2019, STRABAG is the market leader in Slovakia. In road construction, STRABAG's share is 17.4 %. In 2019, Slovakia contributed 2 % to the group's total output volume (2018: 3 %).

BENELUX (BELGIUM AND NETHERLANDS)

The economy in Belgium and the Netherlands developed moderately dynamically in 2019. Low yet steady GDP growth of 1.1 % in Belgium and somewhat higher growth of 1.8 % in the Netherlands can be attributed to rising corporate investments, slightly higher

BELGIUM

Overall construction volume:		€ 47.7 billion
GDP growth:		2019e: 1.1 % / 2020e: 1.1 %
Construction growth:		2019e: 2.8 % / 2020e: 3.8 %

NETHERLANDS

Overall construction volume:		€ 83.4 billion
GDP growth:		2019e: 1.8 % / 2020e: 1.5 %
Construction growth:	2019e: 3.6 % / 2020e: 0.5 %

household incomes and somewhat lower unemployment.

The Belgian construction industry achieved a plus of 2.8 % in the reporting period; in particular civil engineering grew strongly by +6.5 %. Large national infrastructure projects, such as the expansion of the regional express rail network, contributed to this positive development. As these generate around 40 % of growth in the entire Belgian construction sector, Euroconstruct forecasts a somewhat stronger increase of 3.8 % and 3.4 % for 2020 and 2021, respectively. In addition, the government that was newly elected in May 2019 gave a clear indication of upcoming investments. The growth is expected to slow back to 1.2 % in 2022, however. Other building construction, which has been somewhat weak in recent years, also benefi ted from public sector investments in national programmes. Residential construction, which had benefi ted primarily from temporary tax breaks and a signifi cant expansion of building permits in recent years, grew rather moderately in 2019 at +1.6 %. Due to the start of energy effi ciency promotion programmes, however, Euroconstruct predicts growth of between 3.4 % and 3.9 % for the next two years before levelling off again at +1.1 % in 2022.

SLOVAKIA

2 % contribution to the group output volume

In parallel to the slowdown in economic momentum across the entire eurozone, GDP growth in Slovakia also slowed to 2.4 % in 2019. The development was still driven by the high level of consumer spending by private households and the high net exports. Despite an expected decline in public investment, Euroconstruct forecasts that the Slovak economy will continue to grow steadily between 2.3 % and 2.8 % over the next three years. This assessment is based, among other factors, on the good order situation of the automobile manuDespite positive general economic fi gures, other building construction in Slovakia grew by only 0.1 % in 2019, even though large investments by car manufacturers for the expansion of their production capacities still had a positive impact and the retail sector demanded modern logistics centres and warehouses. According to Euroconstruct, the implementation of several large investment projects in Bratislava should again result in somewhat better capacity utilisation in 2020 (+1.0 %) and 2021 (+1.8 %) before the curve turns into the negative with -2.7 % in 2022.

Overall construction volume: € 5.5 billion GDP growth: 2019e: 2.4 % / 2020e: 2.3 % Construction growth: 2019e: 0.2 % / 2020e: 1.0 %

household incomes and somewhat lower unem-

Overall construction volume: € 83.4 billion GDP growth: 2019e: 1.8 % / 2020e: 1.5 % Construction growth: 2019e: 3.6 % / 2020e: 0.5 %

Overall construction volume: € 47.7 billion GDP growth: 2019e: 1.1 % / 2020e: 1.1 % Construction growth: 2019e: 2.8 % / 2020e: 3.8 %

The Belgian construction industry achieved a plus of 2.8 % in the reporting period; in particular civil engineering grew strongly by +6.5 %.

in the next three years, however.

output volume (2018: 3 %).

ployment.

NETHERLANDS

BELGIUM

BENELUX (BELGIUM AND NETHERLANDS)

facturers based in the country.

below zero.

2 % contribution to the group output volume

The Dutch construction industry, with an increase of 3.6 %, seems to have passed the zenith of a multi-year growth phase in 2019. According to Euroconstruct, growth could shrink to 0.5 % and 1.3 % in 2020 and 2021, respectively. A new, very restrictive law by the Dutch government that will limit nitrogen emissions in environmentally sensitive regions of the densely populated country will have a major impact on future development. As an estimated 18,000 projects are affected by the new regulation, this is having a strong impact on the overall construction activity in the country and is delaying many building permits. By 2022, however, this change should largely be coped with, and Euroconstruct again forecasts solid growth of 2.7 % in the industry.

Despite increasing demand for new projects, residential construction, which had previously been the pillar of positive development, saw an increase of only 2.1 % in 2019. Due to high construction costs and a general capacity bottleneck, Euroconstruct predicts a decline of 0.2 % in residential construction for 2020 before the curve goes back up again to +0.7 % in 2021 and +2.7 % in 2022. Other building construction again posted a strong increase of 5.9 % in 2019. The main contributors to this development were new buildings for the retail, healthcare and education sectors, as well as new offi ce properties, industrial buildings and warehouses. But other building construction will also feel the effects of the new nitrogen emissions law. For this reason, and due to a general decline in exports, Euroconstruct predicts that this sector will only grow by 1.5 % in 2020 before the growth levels off at 2.8 % in 2021 and 2.5 % in 2022. Civil engineering increased by 3.4 % in the reporting period and was therefore signifi cantly weaker than originally forecast. The nitrogen emissions law has particularly signifi cant effects on infrastructure projects – and here again explicitly in road construction, which accounts for more than half of the civil engineering volume in the Netherlands. Euroconstruct therefore already anticipates a sideways movement of the sector with +0.6 % each for 2020 and 2021 before a recovery of +2.7 % is expected for 2022.

STRABAG achieved an output volume of € 317.74 million in the Benelux countries in 2019. This corresponds to a 2 % share of the group output volume (2018: 2 %).

1 % contribution to the group output volume

SWITZERLAND

Overall construction volume: € 61.3 billion GDP growth: 2019e: 0.9 % / 2020e: 1.9 % Construction growth: 2019e: 0.7 % / 2020e: -0.4 %

The growth forecasts for the Swiss economy were almost entirely revised downward due to the development of the most important trading partners. Overall GDP growth in 2019 probably only amounted to 0.9 %. Primarily supported by strong wage growth and a healthy labour market, private consumption grew by 1.1 %. In view of the budget surpluses, the experts also see room for public sector investments. However, the declining capacity utilisation in the industrial sector prompted the national bank to conduct a revaluation of the Swiss franc and enact an expansive monetary policy in the reporting period. For 2020 and 2021, Euroconstruct is therefore forecasting slightly higher growth rates of 1.9 % and 1.5 % for the country, with a solid increase of 2.5 % expected again in 2022.

The growth of the Swiss construction industry clearly lost momentum in 2019 with an increase of 0.7 %. While residential construction had been the sector with the most sustained growth in recent years, the momentum is now coming mainly from civil engineering. Euroconstruct is forecasting a slight decline of 0.4 % for the Swiss construction industry overall in 2020, before the trend points up slightly again at +0.2 % in both 2021 and 2022.

In view of extensive market saturation, Swiss residential construction declined signifi cantly in 2019 with a minus of 2.1 %. While the momentum is clearly weakening in the periphery, the demand for residential buildings in cities like Zurich and Geneva continues to increase. Further rising property prices and high vacancy rates are causing Euroconstruct to predict declines between 2.2 % and 2.5 % for this sector as a whole over the next three years.

In contrast, Swiss companies currently have a little more room for investments in corporate real estate. In 2019, extensive construction projects by the major pharmaceutical and biotechnology companies primarily contributed to the moderate growth in other building construction of 1.8 %. Not least due to planned investments in the healthcare and education sectors, Euroconstruct predicts that other building construction will move sideways by 0.1 % in 2020, although stronger growth rates of 2.3 % and 2.9 % are expected for the two years thereafter.

While residential construction weakened in the past year, civil engineering, as mentioned above, grew by 5.1 %. Here, too, however, the momentum seems to be slowing down: growth is likely to be signifi cantly lower at 2.9 % and 2.6 % in 2020 and 2021, respectively, and to decline to 1.1 % in 2022. The growth in this sector is essentially based on investments by the two infrastructure funds implemented by the Swiss government.

In 2019, Switzerland contributed € 231.95 million, or 1 % (2018: 2 %), to the total output volume of the STRABAG Group.

ROMANIA

GROUP MANAGEMENT REPORT

output volume	Overall construction volume:	€ 19.1 billion
	GDP growth:	2019e: 4.1 % / 2020e: 3.6 %
	Construction growth:	2019e: 6.4 % / 2020e: 3.7 %

The Romanian economy once again showed a solid upward trend with an increase of 4.1 % in 2019. The momentum primarily resulted from the further increase in private consumption, which in turn was supported by wage growth and pension increases. Increases in industrial production and retail sales also had a positive effect. The impact of these factors should continue over the next two years, leading to growth rates of 3.6 % and 3.3 % in 2020 and 2021, respectively.

The Romanian construction industry reported positive growth of 6.4 % in 2019, and growth rates of 3.7 % and 2.8 % are also expected for 2020 and 2021. Supported by rising wages and low interest rates on loans, residential construction posted a strong plus of 8.9 % in 2019, which was largely driven by new construction. A large number of ongoing projects and building permits allow growth of 6.0 % and 5.0 % to be expected in 2020 and 2021, respectively, before rising property prices and simultaneously rising interest rates on loans, in some places combined with an oversupply, are likely to cause a slowdown.

Other building construction also saw a strong increase of 11.5 % in 2019, supported in particular by investments by international property developers in new offi ce buildings. Investments by industry and retail also contributed to the positive performance. Foreign companies continue to make targeted use of the comparatively lower wages and, at the same time, the high level of qualifi cations of the Romanian workforce. Against this background, EECFA also forecasts growth of 2.4 % and 2.5 % also for the next two years.

Civil engineering showed a slight decline of 1.1 % in the year under review. In addition to the presidential elections in autumn 2019 and the associated uncertainties, the low level of funding from the new EU funding programmes, especially for infrastructure measures in the road sector, was a key factor in this development. However, due to new EU funding, EECFA predicts a slight upturn in 2020 with growth of

SWEDEN

with a solid increase of 2.5 % expected again in

In 2019, Switzerland contributed € 231.95 million, or 1 % (2018: 2 %), to the total output vol-

permits allow growth of 6.0 % and 5.0 % to be expected in 2020 and 2021, respectively, before rising property prices and simultaneously rising interest rates on loans, in some places combined with an oversupply, are likely to cause a

GDP growth: 2019e: 4.1 % / 2020e: 3.6 % Construction growth: 2019e: 6.4 % / 2020e: 3.7 %

ume of the STRABAG Group.

ernment.

volume Overall construction volume: € 19.1 billion

slowdown.

years.

as a whole over the next three years.

2022.

in both 2021 and 2022.

ROMANIA

1 % contribution to the group output

spectively.

2.1 % before a return to negative growth rates in 2021 with -0.1 %.

With an output volume of € 225.50 million in 2019 and a market share of 1.1 %, the STRABAG Group continues to be the market leader in the Romanian construction market. In Romanian road construction, the share of the market stands at 3.6 %.

volume	Overall construction volume:	€ 42.8 billion
	GDP growth:	2019e: 1.2 % / 2020e: 1.1 %
	Construction growth:	2019e: -0.3 % / 2020e: -1.9 %

The Swedish economy saw slight growth of 1.2 % in 2019. This development was supported by rising real wages with falling unemployment fi gures and the resulting higher domestic consumption. By contrast, private investment, which has been the driving force behind growth, recently declined. Euroconstruct's medium-term forecast remains unchanged, however. Even if the momentum slows down somewhat, the Swedish economy remains in a phase of upswing. However, the high level of household debt and the expected decline in public investment over the next three years are likely to result in a slight reduction in GDP growth to an average of 1.5 % p.a.

After very dynamic growth in previous years, the Swedish construction volume declined for the second year in a row in 2019 with -0.3 %. For 2020 and 2021, Euroconstruct also anticipates a decline in construction output of 1.9 % and 0.5 %, respectively, before the curve points upwards again in 2022 with +2.9 %. The previous construction boom in residential construction came to a standstill in 2018 due to the entry into force of new fi nancial regulations for private households. For 2019, the sector is attested a further decline of 7.6 %, which should continue in the following two years with losses of 5.5 % and 3.0 %, respectively. Here, too, the trend reversal should succeed in 2022 with +1.9 %.

After several years of solid growth, other building construction entered a phase of consolidation in 2018. In 2019, however, the sector recorded solid growth again with an increase of 4.4 %. This was driven by a general increase in real estate projects and the continuing high level of interest from international investors thanks to the attractive returns in the Swedish real estate market. The forecasts for the coming years are not overly optimistic, however. According to Euroconstruct, the momentum in other building construction should cool down again to -2.5 % and -1.4 % in 2020 and 2021 before picking up again in 2022 with +1.9 %.

Swedish civil engineering again grew above average in 2019 with a plus of 6.8 %. Public sector investments in rail infrastructure and public transport, as well as the implementation of several major projects in Stockholm and Gothenburg, provided signifi cant stimulus, some of which extends beyond the reporting year. Euroconstruct therefore expects solid growth also in the coming years (2020 and 2021: +4.1 % each, 2022: +2.8 %).

The output volume of the STRABAG Group in Sweden amounted to € 205.27 million in 2019.

CROATIA

GROUP MANAGEMENT REPORT

volume	Overall construction volume:	€ 4.4 billion
	GDP growth:	2019e: 2.9 % / 2020e: 2.6 %
	Construction growth:	2019e: 11.3 % / 2020e: 8.9 %

With a plus of 2.9 %, the Croatian economy again grew more strongly in 2019 than the EU average. In addition to private consumption, the development was powered by strong investment momentum and tourism. The government appears to be getting the national debt under control. In order to keep young, ambitious people in the country, the country has simplifi ed the process of establishing new companies and granting building permits. Large-scale investment projects in the healthcare sector are ongoing and secured for the future through EU funding and international investments. EECFA therefore expects the GDP growth rates to remain largely unchanged for the coming years.

The Croatian construction sector saw a signifi cant increase of 11.3 % in 2019. The strongest and most positive growth was in civil engineering, with 27.1 %, supported by massive infrastructure investments. Residential construction also registered a solid increase of 6.2 % and is expected to grow by a further 5.6 % in 2020 before yielding somewhat in 2021 (-1.0 %). According to EECFA estimates, the Croatian construction industry as a whole is expected to grow again by 8.9 % in 2020, though only a lower growth rate of 2.0 % is expected for 2021.

Other building construction recorded a slight increase of 1.8 % in the reporting year. The construction volume grew among warehouses and industrial buildings as well as buildings in the healthcare and education sectors, while the growth in offi ce development is more restrained. Hotel construction also fell slightly short of expectations. Overall, EECFA forecasts that other building construction will see cautious increases of 1.2 % (2020) and 1.5 % (2021) in the coming years.

A decisive factor for the strong plus in civil engineering in 2019 was, in addition to the optimised use of EU funding, above all large-scale infrastructure projects for rail and shipping. Also driving the growth is the construction of oil pipelines and national electricity and telecommunications networks. For 2020, EECFA once again predicts a strong increase of 18.4 % for the sector and a further increase of 5.2 % for 2021.

The STRABAG Group generated € 152.48 million in the Croatian market in 2019. It is the country's second-largest market participant.

SERBIA

CROATIA

1 % contribution to the group output

GDP growth: 2019e: 2.9 % / 2020e: 2.6 % Construction growth: 2019e: 11.3 % / 2020e: 8.9 %

The STRABAG Group generated € 152.48 million in the Croatian market in 2019. It is the country's second-largest market participant.

ing years.

volume Overall construction volume: € 4.4 billion

volume	Overall construction volume:		€ 3.5 billion
		GDP growth:	2019e: 3.8 % / 2020e: 4.3 %
		Construction growth:	2019e: 21.5 % / 2020e: -3.2 %

With an increase of 21.5 %, Serbia's construction industry saw a downright boom in 2019 that went clear across all sectors. Residential construction grew strongly again with a plus of 8.7 % after solid growth in the previous year (+9.6 %), while the reform of the procedure for building permits also had a positive effect in other building construction (+17.0 %). Shopping centres, hotels and industrial buildings were particularly in demand here, while offi ce space only slowly caught up. Civil engineering, which also accounts for the largest share of the Serbian construction volume, developed most strongly in 2019 with +28.1 %. The main driver here is and remains pipeline construction. An interim minus of 8.4 % is being forecast for the sector in 2020, however, and EECFA predicts a slight overall correction of -3.2 % for the Serbian construction industry in 2020. In 2021 things are expected to go up again with a plus of 4.5 %.

The STRABAG Group generated an output volume on the Serbian market of € 148.11 million in 2019.

MIDDLE EAST, AMERICAS, AFRICA, ASIA

In order to make itself as independent as possible from the economic development of individual countries and so spread its country risk as widely as possible, STRABAG is also active outside of its main markets in Europe. As a rule, the company acts as a main contractor in direct export. With this in mind, the group has been present in Africa and Asia, Canada and Chile and the Middle East for many years, often even decades. STRABAG focuses on areas that are characterised by high technological expertise: civil engineering, industrial and infrastructure projects as well as tunneling.

In 2019, the STRABAG Group generated a total € 1,106.54 million, or 7 %, of its total output outside Europe (2018: 7 %). The activities in non-European countries are – with a few exceptions – assigned to the International + Special Divisions segment.

DENMARK, RUSSIA, SLOVENIA, BULGARIA AND REST OF EUROPE

Overall construction volume:	€ 36.5 billion
GDP growth:	2019e: 1.3 % / 2020e: 1.3 %
Construction growth:	2019e: 1.6 % / 2020e: 1.3 %

RUSSIA

Overall construction volume:	€ 124.4 billion
GDP growth:		2019e: 1.3 % / 2020e: 1.7 %
Construction growth:		2019e: -0.4 % / 2020e: 1.9 %

SLOVENIA
Overall construction volume:		€ 3.3 billion
GDP growth:		2019e: 2.8 % / 2020e: 3.0 %
Construction growth:		2019e: 5.7 % / 2020e: 2.1 %

BULGARIA

Overall construction volume:		€ 7.4 billion
GDP growth:	2019e: 3.6 % / 2020e: 3.0 %
Construction growth:	2019e: 8.7 % / 2020e: 6.5 %

Denmark

GROUP MANAGEMENT REPORT

In fundamentally good shape, the Danish economy saw GDP growth of 1.3 % in 2019. The development was supported by private consumption, new residential construction and the positive trade balance. The considerable wealth of private individuals and the national debt within the Maastricht criteria allow modest but steady growth to be expected in the coming years. Uncertainties linger due to Brexit as the UK is the country's most important trading partner.

The Danish construction sector, with a plus of 1.6 %, developed slightly better than the overall economy in 2019, with Euroconstruct predicting growth rates at a similarly high level for the coming years (+1.3 % in both 2020 and 2021). Residential construction grew most strongly in the reporting period with an increase of 1.9 % – a trend that is likely to continue (+1.3 % in both 2020 and 2021). Other building construction, which grew by 1.9 % in 2019, can expect a light stimulus from a comprehensive programme of "green" public investments in the coming years. Here Euroconstruct expects growth of 1.6 % for 2020 and +1.4 % for 2021. At +0.8 %, the civil engineering sector registered the lowest growth in 2019 due to priority shifts in the run-up to the parliamentary elections. Euroconstruct cautiously forecasts growth between +0.7 % and +1.2 % for this sector in the years 2020–2022.

The output volume of the STRABAG Group in Denmark amounted to € 99.49 million in 2019.

Russia

The Russian economy continued its tentative upward path in 2019 with 1.3 % growth; however, all forecasts for the coming years were revised downwards. The continuing sanctions of the West and the still unresolved war in Syria are likely to continue to dampen the country's development noticeably. For 2020, EECFA therefore forecasts only a slightly higher growth rate of 1.7 %, although the momentum should pick up again somewhat in 2021 with + 3.1 %.

The Russian construction economy declined in 2019 by -0.4 %. In 2020, however, the trend should turn into positive territory at +1.9 %, while solid growth of 3.1 % is again forecast for 2021. The 1.2 % decline in residential construction in 2019 is mainly due to the low purchasing power of private households. Due to government housing programmes, however, this sector is likely to grow again in 2020 (+2.7 %) and even increase by 3.8 % in 2021. Other building construction registered a strong plus of 4.7 % in the year under review, with growth of 3.0 % and 1.9 % expected here in the coming years. The Russian civil engineering sector underwent a slight downwards adjustment in 2019 with -1.3 %. However, EECFA forecasts a slight upward trend of +0.8 % and +2.7 % for this sector in 2020 and 2021, respectively.

The STRABAG Group generated an output volume of € 71.42 million in Russia in 2019. In the region, STRABAG is active almost exclusively in building and industrial construction.

Slovenia

DENMARK, RUSSIA, SLOVENIA, BULGARIA AND REST OF EUROPE

RUSSIA

SLOVENIA

BULGARIA

Denmark

DENMARK

4 % contribution to the group output volume

partner.

Russia

Overall construction volume: € 36.5 billion GDP growth: 2019e: 1.3 % / 2020e: 1.3 % Construction growth: 2019e: 1.6 % / 2020e: 1.3 %

Residential construction grew most strongly in the reporting period with an increase of 1.9 % – a trend that is likely to continue (+1.3 % in both 2020 and 2021). Other building construction, which grew by 1.9 % in 2019, can expect a light stimulus from a comprehensive programme of "green" public investments in the coming years. Here Euroconstruct expects growth of 1.6 % for 2020 and +1.4 % for 2021. At +0.8 %, the civil engineering sector registered the lowest growth in 2019 due to priority shifts in the run-up to the parliamentary elections. Euroconstruct cautiously forecasts growth between +0.7 % and +1.2 % for this sector in the years 2020–2022.

Overall construction volume: € 124.4 billion GDP growth: 2019e: 1.3 % / 2020e: 1.7 % Construction growth: 2019e: -0.4 % / 2020e: 1.9 %

Overall construction volume: € 3.3 billion GDP growth: 2019e: 2.8 % / 2020e: 3.0 % Construction growth: 2019e: 5.7 % / 2020e: 2.1 %

Overall construction volume: € 7.4 billion GDP growth: 2019e: 3.6 % / 2020e: 3.0 % Construction growth: 2019e: 8.7 % / 2020e: 6.5 %

The output volume of the STRABAG Group in Denmark amounted to € 99.49 million in 2019.

power of private households. Due to government housing programmes, however, this sector is likely to grow again in 2020 (+2.7 %) and even increase by 3.8 % in 2021. Other building construction registered a strong plus of 4.7 % in the year under review, with growth of 3.0 % and 1.9 % expected here in the coming years. The Russian civil engineering sector underwent a slight downwards adjustment in 2019 with -1.3 %. However, EECFA forecasts a slight upward trend of +0.8 % and +2.7 % for this sector

The STRABAG Group generated an output volume of € 71.42 million in Russia in 2019. In the region, STRABAG is active almost exclusively in

in 2020 and 2021, respectively.

building and industrial construction.

The Russian construction economy declined in 2019 by -0.4 %. In 2020, however, the trend should turn into positive territory at +1.9 %, while solid growth of 3.1 % is again forecast for 2021. The 1.2 % decline in residential construction in 2019 is mainly due to the low purchasing With a plus of 2.8 %, the Slovenian economy again exhibited GDP growth above the EU average in 2019. A new investment promotion law is stimulating both the production and service sector. According to EECFA, rising real wages and a positive development in exports should continue to give the country solid GDP growth of 3.0 % and 2.7 % in the next two years.

The good economic situation was also refl ected in the Slovenian construction industry, which was able to post a very positive result in 2019 with a plus of 5.7 %. This trend should continue in the next two years, albeit somewhat weaker (2020: +2.1 %, 2021: +0.6 %). In particular, residential construction experienced a boom in the reporting period with +12.2 %, driven mainly by the construction of new single-family houses. Other building construction saw a sideways movement (+1.0 %) in 2019 after two years of enormous growth, and this trend is likely to continue with a slight decline of 0.3 % and 0.6 % in the next two years. Finally, civil engineering showed an increase of 4.1 % thanks to new infrastructure projects in the fi eld of renewable energies. For 2020, EECFA predicts further growth of 1.5 % in this segment, while the trend is likely to decline slightly at -2.3 % in 2021.

The STRABAG Group achieved an output volume of € 48.71 million in Slovenia in 2019.

Bulgaria

The Bulgarian economy again exhibited very robust growth in 2019 with a plus of 3.6 %. Stable fi scal conditions, a good employment situation and the favourable development of the national budget lead EECFA to predict GDP growth of 3.0 % and 2.9 % for the next two years.

After the dramatic slump in 2016 (-39.7 %), the Bulgarian construction industry continued its upswing for the third year in a row in 2019 with an increase of 8.7 %. This development was supported above all by residential construction (+18.1 %), which benefi ted primarily from low mortgage rates and rising real wages. In view of government programmes to improve energy effi ciency, EECFA predicts strong growth of 8.4 % for this sector in 2020 before the curve turns downwards by -3.2 % in 2021. Other building construction, whose development has been fl uctuating for years, saw a solid increase of 7.0 % in 2019. In the capital of Sofi a in particular, investments by foreign companies noticeably increased the need for modern offi ce space. Civil engineering, in turn, (+2.8 %) benefi ted from numerous large-scale projects in rail and road construction and the expansion of gas grid connections to neighbouring countries. Growth of 6.3 % is expected here in 2020 before the start of the new EU fi nancial framework for 2020–2027 brings about a massive increase of 16.9 % in 2021.

The STRABAG Group generated € 41.86 million on the Bulgarian market in 2019.

Order backlog

GROUP MANAGEMENT REPORT

ORDER BACKLOG BY SEGMENT AS AT 31 DECEMBER 2019

	Total	North +	South +	Inter national + Special		Total	∆ total	∆ total
€ mln.	2019	West	East	Divisions	Other	2018	%	absolute
Germany	7,617	6,604	159	851	3	7,178	6	439
Austria	1,885	5	1,580	300	0	2,056	-8	-171
Poland	1,498	1,455	0	43	0	1,632	-8	-134
Americas	1,056	0	0	1,056	0	1,134	-7	-78
Rest of Europe	1,036	14	139	883	0	431	140	605
Czech Republic	761	0	745	16	0	454	68	307
Hungary	649	0	618	31	0	967	-33	-318
Benelux	439	423	2	14	0	567	-23	-128
Asia	410	0	5	405	0	398	3	12
Romania	282	14	261	7	0	187	51	95
Middle East	281	0	5	276	0	173	62	108
Slovakia	224	0	215	9	0	262	-15	-38
Serbia	194	0	194	0	0	108	80	86
Croatia	188	0	185	3	0	92	104	96
Sweden	171	135	0	36	0	390	-56	-219
Switzerland	151	8	141	2	0	181	-17	-30
Denmark	150	150	0	0	0	211	-29	-61
Italy	116	0	7	109	0	115	1	1
Russia	103	0	102	1	0	84	23	19
Bulgaria	92	0	92	0	0	105	-12	-13
Africa	69	0	0	69	0	125	-45	-56
Slovenia	39	0	39	0	0	50	-22	-11
Total	17,411	8,808	4,489	4,111	3	16,900	3	511

DEVELOPMENT OF ORDER BACKLOG

The order backlog as at 31 December 2019 grew by 3 % year-on-year to reach another record level of € 17.4 billion. Declines were seen in Hungary, Austria and Poland, for example, as work progressed on numerous major projects in these countries. This development was contrasted by the substantial expansion of an existing order in the United Kingdom and a signifi cant increase in the order backlog in Germany and the Czech Republic. The projects acquired in 2019 include the construction of a section of the D35 motorway and the modernisation of several railway lines in the Czech Republic, the upgrading of bridges on the A9 motorway near Allersberg in Germany, two mining contracts for the El Teniente mine in Chile, the transportation infrastructure and civil engineering works for the Boll-Sinneringen bypass in Switzerland, the renovation of the southern section of Budapest's M3 metro line in Hungary, as well as the construction of a wastewater pumping station in Qatar, a pumped storage power plant in Dubai and a pumping station for a wastewater treatment plant in Toronto, Canada.

CONSTRUCTION SITES INCLUDED IN THE ORDER BACKLOG AS AT 31 DECEMBER 2019

Category	Number of construction sites	Number of construction sites as % of total	Order backlog € mln.1	Order backlog as % of total
Small orders (€ 0–1 mln.)	8,617	78	1,444	8
Medium-sized orders (€ 1–15 mln.)	1,993	18	3,660	21
Large orders (€ 15–50 mln.)	297	3	4,397	25
Very large orders (>€ 50 mln.)	132	1	7,910	46
Total	11,039	100	17,411	100

Part of the risk management

DEVELOPMENT OF ORDER BACKLOG

Order backlog

€ mln.

ORDER BACKLOG BY SEGMENT AS AT 31 DECEMBER 2019

North + West

South + East

International + Special Divisions Other

Germany 7,617 6,604 159 851 3 7,178 6 439 Austria 1,885 5 1,580 300 0 2,056 -8 -171 Poland 1,498 1,455 0 43 0 1,632 -8 -134 Americas 1,056 0 0 1,056 0 1,134 -7 -78 Rest of Europe 1,036 14 139 883 0 431 140 605 Czech Republic 761 0 745 16 0 454 68 307 Hungary 649 0 618 31 0 967 -33 -318 Benelux 439 423 2 14 0 567 -23 -128 Asia 410 0 5 405 0 398 3 12 Romania 282 14 261 7 0 187 51 95 Middle East 281 0 5 276 0 173 62 108 Slovakia 224 0 215 9 0 262 -15 -38 Serbia 194 0 194 0 0 108 80 86 Croatia 188 0 185 3 0 92 104 96 Sweden 171 135 0 36 0 390 -56 -219 Switzerland 151 8 141 2 0 181 -17 -30 Denmark 150 150 0 0 0 211 -29 -61 Italy 116 0 7 109 0 115 1 1 Russia 103 0 102 1 0 84 23 19 Bulgaria 92 0 92 0 0 105 -12 -13 Africa 69 0 0 69 0 125 -45 -56 Slovenia 39 0 39 0 0 50 -22 -11 Total 17,411 8,808 4,489 4,111 3 16,900 3 511

Total 2018

∆ total %

∆ total absolute

Total 2019

13.1 14.8

2015 2016 2017 2018 2019

16.6 16.9

17.4

€ 20 bn.

€ 0

The total order backlog is comprised of 11,039 individual projects. More than 8,600 of these, or 78 %, involve small orders with a volume of up to € 1 million each; the much smaller remaining proportion of 22 % covers medium-sized to very large orders with contract volumes of € 1 million and up. A total of merely 132 projects have a volume above € 50 million. The high number of individual contracts guarantees that the risk involved with one project does not, as far as possible, threaten the group success as a whole. The ten largest projects in the order backlog as at 31 December 2019 added up to 18 % of the order backlog.

THE TEN LARGEST PROJECTS IN THE ORDER BACKLOG AS AT 31 DECEMBER 2019

Country	Project	Order backlog € mln.	as % of total order backlog
	United Kingdom North Yorkshire Polyhalite Project	878	5.0
Chile	Alto Maipo power plant	387	2.2
Germany	New rail line /airport tunnel	379	2.2
Germany	EDGE East Side	265	1.5
Chile	El Teniente – main supply tunnel	242	1.4
Singapore	Deep Tunnel Sewerage System	227	1.3
Germany	Stuttgart 21, underground railway station	216	1.2
Germany	JV Tunnel Hauptbahnhof Second core rapid transit route, Munich	198	1.1
Germany	Modernisation of main university building, Bielefeld	148	0.9
Chile	El Teniente – access tunnel	131	0.8
Total		3,072	17.6

Financial performance

The consolidated group revenue for the 2019 fi nancial year amounted to € 15,668.57 million. As with the output volume, this corresponds to a slight plus of 3 %. The ratio of revenue to output increased slightly from 93 % to 94 %. The operating segments North + West contributed 48 %, South + East 31 % and International + Special Divisions 21 % to the revenue.

The changes in inventories involve mainly the real estate project development business, which continued to be very active. The own work capitalised declined as a result of the completion of new corporate locations. The total of expenses for construction materials, consumables and services used and the employee benefi ts expense, expressed in relation to the revenue, fell from 90 % to 88 %.

EXPENSES

GROUP MANAGEMENT REPORT

€ mln.	2019	2018	∆ %
Construction materials, consumables and services used	10,111.85	10,125.77	0
Employee benefi ts expense	3,745.15	3,618.94	3
Other operating expenses	1,024.01	854.89	20
Depreciation and amortisation expense	510.72	394.39	29

Due to project provisions, the earnings from joint ventures, and thus the share of profi t or loss of equity-accounted investments, were negative. In the previous year, this item had included a non-operating step-up profi t in the amount of € 55.31 million resulting from the full consolidation

of the concession company PANSUEVIA that operates the A8 motorway in Germany. The net income from investments is composed of the dividends and expenses of many smaller companies or fi nancial investments.

DEVELOPMENT OF EBITDA AND EBITDA MARGIN1

In total, the earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 17 % to € 1,113.30 million, topping the € 1.0 billion mark for the fi rst time. The EBITDA margin grew from 6.3 % to 7.1 %. What must be taken into account here, however, is that the fi rst-time application of IFRS 16 Leases means that rental expenses recognised in EBITDA in previous years are now shown as depreciation and interest. If comparison is made with the EBITDA adjusted for the non-operating step-up profi t in the previous year, the increase amounts to 24 %.

The depreciation and amortisation expense grew by 29 %. One of the reasons for this development is the fi rst-time application of IFRS 16 Leases, according to which right-of-use assets from leases are to be measured less depreciation and the corresponding lease expenses can no longer be recognised under the item "Other operating expenses".

The earnings before interest and taxes (EBIT) increased by 8 % to € 602.58 million, which corresponds to an EBIT margin of 3.8 % after 3.7 % in 2018. Adjusted for the previous year's non-operating step-up profi t, the EBIT grew by 20 %. The improvement is primarily attributable to the North + West segment, where the earnings nearly doubled.

At € -25.34 million, the net interest income was comparable to that of the previous year. Although a negative exchange rate result of € -5.93 million was achieved with regard to the exchange rate differences, the interest expense was reduced as well due to the repayment of a bond in the previous year.

In the end, the earnings before taxes grew by 9 %. The income tax rate stood at 34.4 %, slightly higher than in the previous year (2018: 31.7 %). The net income amounted to € 378.56 million, an increase of 4 % compared to 2018.

Effective tax rate: 34.4 %

^{1 2016} adjusted for non-operating income in the amount of € 27.81 million. 2018 adjusted for a non-operating step-up profi t in the amount of € 55.31 million.

The earnings owed to minority shareholders amounted to € 6.86 million after € 9.25 million in the previous year. The net income after minorities for 2019 stood at € 371.70 million – an increase of 5 %. The earnings per share amounted to € 3.62 (2018: € 3.45).

The return on capital employed (ROCE)¹ reached 7.5 % after 7.6 % in the previous year.

Earnings per share: € 3.62

EXPENSES

€ 1,500 mln.

€ 0

GROUP MANAGEMENT REPORT

DEVELOPMENT OF EBITDA AND EBITDA MARGIN1

EBITDA (€ mln.) EBITDA adjusted (€ mln.) EBITDA margin (%) EBITDA margin adjusted (%)

6.2 6.26.9 816.10

855.18

1 2016 adjusted for non-operating income in the amount of € 27.81 million. 2018 adjusted for a non-operating step-up profi t in the amount of € 55.31 million.

amounts to 24 %.

operating expenses".

Effective tax rate:

34.4 %

€ mln. 2019 2018 ∆ % Construction materials, consumables and services used 10,111.85 10,125.77 0 Employee benefi ts expense 3,745.15 3,618.94 3 Other operating expenses 1,024.01 854.89 20 Depreciation and amortisation expense 510.72 394.39 29

of the concession company PANSUEVIA that operates the A8 motorway in Germany. The net income from investments is composed of the dividends and expenses of many smaller com-

15 %

0 %

7.1

1,113.30

In the end, the earnings before taxes grew by 9 %. The income tax rate stood at 34.4 %, slightly higher than in the previous year (2018: 31.7 %). The net income amounted to € 378.56 million,

an increase of 4 % compared to 2018.

nearly doubled.

2015 2016 2017 2018 2019

834.58

5.96.7 827.37

bond in the previous year.

panies or fi nancial investments.

6.3

952.60

897.29

Financial position and cash fl ows

BALANCE SHEET

€ mln.	31.12.2019	% of balance sheet total2	31.12.2018	% of balance sheet total2
Non-current assets	5,249.85	43	4,775.92	41
Current assets	7,000.96	57	6,791.69	59
Equity	3,855.90	31	3,653.77	32
Non-current liabilities	2,344.53	19	2,326.19	20
Current liabilities	6,050.38	49	5,587.65	48
Total	12,250.81	100	11,567.61	100

The total assets and liabilities increased to € 12.3 billion compared to € 11.6 billion on 31 December 2018, in part due to the fi rst-time application of IFRS 16 Leases. This also explains the increase in property, plant and equipment and fi nancial liabilities. Despite this increase of the balance sheet total, the equity ratio remained nearly unchanged at 31.5 % (2018: 31.6 %).

¹ ROCE = (net income + interest on debt – interest tax shield (25 %))/(average group equity + interest-bearing debt) 2 Rounding differences are possible.

KEY BALANCE SHEET FIGURES

	31.12.2015	31.12.2016	31.12.2017	31.12.2018	31.12.2019
Equity ratio (%)	31.0	31.5	30.7	31.6	31.5
Net debt (€ mln.)	-1,094.48	-449.06	-1,335.04	-1,218.28	-1,143.53
Gearing ratio (%)	-33.0	-13.8	-39.3	-33.3	-29.7
Capital employed (€ mln.)	5,448.01	5,258.17	5,242.91	5,552.09	5,838.71

Net cash position of more than € 1.1 billion

GROUP MANAGEMENT REPORT

As usual, a net cash position was reported on 31 December 2019. This fi gure fell slightly in the

face of the marginally higher fi nancial liabilities from € 1.2 billion to € 1.1 billion.

CALCULATION OF NET DEBT1

€ mln.	31.12.2015	31.12.2016	31.12.2017	31.12.2018	31.12.2019
Financial liabilities	1,579.75	1,426.08	1,293.98	1,363.33	1,422.21
Severance provisions	96.13	110.02	111.10	114.68	124.68
Pension provisions	451.50	457.48	440.11	420.31	435.92
Non-recourse debt	-489.53	-439.38	-389.78	-730.77	-665.53
Cash and cash equivalents	-2,732.33	-2,003.26	-2,790.45	-2,385.83	-2,460.81
Total	-1,094.48	-449.06	-1,335.04	-1,218.28	-1,143.53

The cash fl ow from operating activities improved from € 788.98 million to € 1,075.94 million as a result of a higher cash fl ow from earnings and a further, even higher reduction of the working capital. The expectation of a signifi cant reduction in advance payments in 2019 and a concomitant increase in working capital to familiar levels thus did not materialise. The cash fl ow from investing activities was less negative, largely due to the smaller changes in the scope of consolidation. The previous year's fi gure had included the cash outfl ow from the PANSUEVIA transaction. The cash fl ow from fi nancing activities stood at € -411.62 million after € -534.17 million in the previous year. This decrease is due to the lower volume of a bond repayment and the fact that the 2018 fi gure had been affected by a cash outfl ow related to the acquisition of the minority shares of the nowdelisted German subsidiary STRABAG AG.

REPORT ON OWN SHARES

On 31 December 2019, STRABAG SE held 7,400,000 bearer shares equalling 6.7 % of the share capital. The corresponding value of the share capital amounts to € 7,400,000.00. The acquisition took place over a period from July 2011 to May 2013 to any purpose allowed by Sec 65 Para 1 No 8 of the Austrian Stock Corporation Act (AktG), especially for the purpose of using own shares as acquisition currency. The average purchase price per share was € 20.79.

Capital expenditures

KEY BALANCE SHEET FIGURES

CALCULATION OF NET DEBT1

Net cash position of more than € 1.1 billion

REPORT ON OWN SHARES

As usual, a net cash position was reported on 31 December 2019. This fi gure fell slightly in the

31.12.2015 31.12.2016 31.12.2017 31.12.2018 31.12.2019

from € 1.2 billion to € 1.1 billion.

face of the marginally higher fi nancial liabilities

scope of consolidation. The previous year's fi gure had included the cash outfl ow from the PANSUEVIA transaction. The cash fl ow from fi nancing activities stood at € -411.62 million after € -534.17 million in the previous year. This decrease is due to the lower volume of a bond repayment and the fact that the 2018 fi gure had been affected by a cash outfl ow related to the acquisition of the minority shares of the nowdelisted German subsidiary STRABAG AG.

by Sec 65 Para 1 No 8 of the Austrian Stock Corporation Act (AktG), especially for the purpose of using own shares as acquisition currency. The average purchase price per share

was € 20.79.

1 The non-recourse liabilities that were considered are related to two PPP projects. Non-recourse liabilities from other PPP projects had,

based on their amount, only an immaterial impact and are therefore not subtracted in the calculation of net debt.

Equity ratio (%) 31.0 31.5 30.7 31.6 31.5 Net debt (€ mln.) -1,094.48 -449.06 -1,335.04 -1,218.28 -1,143.53 Gearing ratio (%) -33.0 -13.8 -39.3 -33.3 -29.7 Capital employed (€ mln.) 5,448.01 5,258.17 5,242.91 5,552.09 5,838.71

€ mln. 31.12.2015 31.12.2016 31.12.2017 31.12.2018 31.12.2019 Financial liabilities 1,579.75 1,426.08 1,293.98 1,363.33 1,422.21 Severance provisions 96.13 110.02 111.10 114.68 124.68 Pension provisions 451.50 457.48 440.11 420.31 435.92 Non-recourse debt -489.53 -439.38 -389.78 -730.77 -665.53 Cash and cash equivalents -2,732.33 -2,003.26 -2,790.45 -2,385.83 -2,460.81 Total -1,094.48 -449.06 -1,335.04 -1,218.28 -1,143.53 STRABAG had forecast net capital expenditures (cash fl ow from investing activities) in the amount of no more than € 550 million for the 2019 fi nancial year. In the end, they totalled € 593.30 million.

The gross investments (CAPEX) before subtraction of proceeds from asset disposals stood at € 687.54 million. This fi gure includes expenditures on intangible assets and on property, plant and equipment not including the non-cash additions to right-of-use assets of € 647.44 million, the purchase of fi nancial assets in the amount of € 31.38 million and € 8.72 million from changes to the scope of consolidation.

Most of the maintenance investments were made in the core markets of Germany, Poland and

COMPOSITION OF CAPEX

Austria, as well as in Serbia. Capital investments, which this time exceeded the maintenance investments, were impacted above all by the large tunnel construction orders, for example equipment was increasingly required in the mining business in Chile. In addition, the group pushed ahead with the expansion of its network of asphalt and concrete mixing plants, especially in Croatia, Austria and Romania.

Expenditures on intangible assets and on property, plant and equipment during the year under report must be seen against the depreciation and amortisation expense in the amount of € 510.72 million. The goodwill impairment of € 2.02 million is almost unchanged from the previous year.

Financing/Treasury

KEY FIGURES TREASURY

	2015	2016	2017	2018	2019
Interest and other income (€ mln.)	82.07	73.90	46.90	38.62	30.97
Interest and other expense (€ mln.)	-106.49	-77.68	-74.05	-66.05	-56.32
EBIT/net interest income (x)	-14.0	-112.4	-16.5	-20.4	-23.8
Net debt/EBITDA (x)	-1.3	-0.5	-1.6	-1.3	-1.0

The number one objective for the treasury management of STRABAG SE is assuring the continued existence of the company through the maintenance of constant solvency. This objective is to be reached through the provision of suffi cient short-term, medium-term and long-term liquidity. Liquidity for STRABAG SE means not only solvency in the strict sense but also the availability of guarantees. The activity of building requires the constant availability of bid, contract fulfi lment, pre-payment and warranty guarantees and/or sureties. The fi nancial scope of action is thus defi ned on the one hand by suffi cient cash and cash credit lines, on the other hand by suffi cient surety credit lines.

The management of liquidity risks has become a central element of the corporate management at STRABAG. In practice, liquidity risks come in various forms:

• In the short term, all daily payment obligations must be covered in time and/or in their entirety.

GROUP MANAGEMENT REPORT

In the medium term, liquidity levels must be suffi cient so that no transactions or projects become impossible due to a lack of suffi cient fi nancial means or guarantees or that they cannot be executed at the desired pace.
In the long term, there should be suffi cient fi nancial means available to be able to pursue the strategic development targets.

In the past, STRABAG has always oriented its fi nancing decisions according to the risk aspects outlined above and has organised the maturity structure of the fi nancial liabilities in such a way as to avoid a refi nancing risk. In this way, the company has been able to maintain a great scope for action, which is of particular importance in a diffi cult market environment. The respective liquidity needed is determined by targeted liquidity planning. Based on this, liquidity assurance measures are made and a liquidity reserve is defi ned for the entire group.

The medium- and long-term liquidity needs have so far also been covered by the issue of corporate bonds. STRABAG SE (and its predecessor FIMAG) has regularly issued bonds on the Austrian capital market since 2002. In the 2015 fi nancial year, the company successfully placed a € 200 million tranche with a coupon of 1.625 % and a term to maturity of seven years. With the proceeds from the issue, which were used for general business purposes such as refi nancing the € 100 million bond issued in 2010 or making investments in property, plant and equipment, STRABAG SE preserved its optimal fi nancing structure. As per 31 December 2019, STRABAG SE had two bonds with a total volume of € 400 million on the market. One bond with a volume of € 200 million is scheduled to mature in 2020.

In order to diversify the fi nancing structure, STRABAG SE had placed a bonded loan in the amount of € 140.00 million in the 2012 fi nancial year. The outstanding volume of € 18.50 million was paid off in 2019.

The existing liquidity of € 2.5 billion assures the coverage of the group's liquidity needs. STRABAG SE has a total credit line for cash and surety loans in the amount of € 7.9 billion. The credit lines includes a syndicated surety credit line in the amount of € 2.0 billion and a revolving syndicated cash credit line of € 0.4 billion, each with a term to maturity until 2024 with two options to extend by one year each. These two credit lines were refi nanced ahead of maturity in March 2019, with terms and maturities redefi ned. The group also has bilateral credit lines with banks. With a high degree of diversifi cation regarding its surety and cash credit, STRABAG creates an adequate risk spread in the provision of the credit lines and secures its comfortable liquidity position.

In June 2015, Standard & Poor's (S&P) raised STRABAG SE's investment grade rating by one level from BBB-, outlook stable, to BBB, outlook stable. This rating was again confi rmed in September 2019. S&P sees STRABAG SE's strengths and opportunities above all in the stable margins in an otherwise quite cyclical market environment, the strategic access to construction materials, the strong market positions and the high reputation in the credit markets.

PAYMENT OBLIGATIONS

liquidity. Liquidity for STRABAG SE means not only solvency in the strict sense but also the availability of guarantees. The activity of building requires the constant availability of bid, contract fulfi lment, pre-payment and warranty guarantees and/or sureties. The fi nancial scope of action is thus defi ned on the one hand by suffi cient cash and cash credit lines, on the other placed a € 200 million tranche with a coupon of 1.625 % and a term to maturity of seven years. With the proceeds from the issue, which were used for general business purposes such as refi nancing the € 100 million bond issued in 2010 or making investments in property, plant and equipment, STRABAG SE preserved its optimal fi nancing structure. As per 31 December 2019, STRABAG SE had two bonds with a total volume of € 400 million on the market. One bond with a volume of € 200 million is scheduled to

In order to diversify the fi nancing structure, STRABAG SE had placed a bonded loan in the amount of € 140.00 million in the 2012 fi nancial year. The outstanding volume of € 18.50 million

mature in 2020.

was paid off in 2019.

liquidity position.

The management of liquidity risks has become a central element of the corporate management at STRABAG. In practice, liquidity risks come in

• In the short term, all daily payment obligations must be covered in time and/or in their entirety.

• In the medium term, liquidity levels must be suffi cient so that no transactions or projects become impossible due to a lack of suffi cient fi nancial means or guarantees or that they cannot be executed at the desired pace.

• In the long term, there should be suffi cient fi nancial means available to be able to pursue

the strategic development targets.

reserve is defi ned for the entire group.

hand by suffi cient surety credit lines.

various forms:

€ mln.	Book value 31.12.2019	Book value 31.12.2018
Bonds	400.00	500.00
Bank borrowings	721.89	863.33
Lease liabilities	300.32	0
Total	1,422.21	1,363.33

PAYMENT PROFILE OF BONDS

Segment report

GROUP MANAGEMENT REPORT

OVERVIEW OF THE FOUR SEGMENTS WITHIN THE GROUP

The business of STRABAG SE was divided into four segments in 2019, of which there are three operating segments North + West, South + East and International + Special Divisions, and the segment Other, which encompasses the group's central divisions and central staff divisions.

In 2019, the segments were comprised as follows1 :

NORTH + WEST

Management Board responsibility: Alfred Watzl Germany, Poland, Benelux, Scandinavia, Ground Engineering

SOUTH + EAST

M. B. responsibility: Peter Krammer

Austria, Czech Republic, Slovakia, Hungary, South-East Europe, Switzerland, Environmental Technology

M. B. responsibility: Thomas Birtel2 Russia

INTERNATIONAL + SPECIAL DIVISIONS

M. B. responsibility: Siegfried Wanker International, Tunnelling, Services, Real Estate Development, Infrastructure Development, Con-

struction Materials

OTHER

M. B. responsibility: Thomas Birtel and Christian Harder Central Divisions, Central Staff Divisions Construction projects are assigned to one of the segments (see chart below). Of course, projects may also be assigned to more than one segment. This is the case, for example, with PPP projects in which the construction part is assigned to its respective geographic segment, but the concession part is assigned to the concessions unit of International + Special Divisions. In projects which span more than one segment, the commercial and technical responsibility is generally assigned to that segment which has the higher share of the overall project value.

Geographic segments may be desirable, but they are not always possible. Particularly the specialty fi elds – e.g. tunnelling – are in demand all around the world. As it is therefore not possible to assign these to a certain country, such business fi elds are listed under the segment International + Special Divisions. At the same time, the two segments North + West and South + East may contain international business fi elds such as sports facilities. These are usually organised from a country assigned to one of the respective geographic segments.

With only a few exceptions, STRABAG offers its services in all areas of the construction industry in the individual European markets in which it operates and covers the entire construction value chain. These services include:

	North + West	South + East	International + Special Divisions
Residential Construction			
Commercial and Industrial Facilities			
Public Buildings			
Production of Prefabricated Elements		
Engineering Ground Works			
Bridge Construction			
Power Plants			
Environmental Technology		
Railway Construction		
Roads, Earthworks			
Waterway Construction, Embankments		
Landscape Architecture and Development, Paving, Large-Area Works		
Sports and Recreation Facilities		
Protective Structures			
Sewerage Systems			
Production of Construction Materials			
Ground Engineering	
Tunnelling			
Real Estate Development			
Infrastructure Development			
Operation/Maintenance/Marketing of PPP Projects			
Property and Facility Services			

1 Services may be performed in more than one segment. The activities and countries below have been assigned to those segments in which the most signifi cant portion of the services was provided. Details are available in the table.

2 Until 31 December 2019

NORTH + WEST: BUILDING BOOM IN CORE MARKETS

The North + West segment executes construction services of nearly any kind and size with a focus on Germany, Poland, the Benelux countries and Scandinavia. Ground engineering can also be found in this segment.

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018 – 2019 absolute
Output volume	8,106.93	7,827.48	4	279.45
Revenue	7,555.75	7,242.42	4	313.33
Order backlog	8,807.66	8,804.15	0	3.51
EBIT	310.20	161.40	92	148.80
EBIT margin (% of revenue)	4.1	2.2
Employees (FTE)	25,386	24,222	5	1,164

OUTPUT VOLUME NORTH + WEST

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018 – 2019 absolute
Germany	6,402	6,221	3	181
Poland	999	895	12	104
Benelux	285	305	-7	-20
Sweden	180	169	7	11
Denmark	96	87	10	9
Rest of Europe	48	59	-19	-11
Austria	28	25	12	3
Switzerland	23	28	-18	-5
Americas	21	9	133	12
Romania	16	13	23	3
Middle East	4	7	-43	-3
Africa	4	7	-43	-3
Czech Republic	1	1	0	0
Hungary	0	1	-100	-1
Total	8,107	7,827	4	280

Segment report

GROUP MANAGEMENT REPORT

NORTH + WEST

Engineering

Technology

Russia

OTHER

SOUTH + EAST

struction Materials

M. B. responsibility:

2 Until 31 December 2019

OVERVIEW OF THE FOUR SEGMENTS WITHIN THE GROUP

overall project value.

graphic segments.

1 Services may be performed in more than one segment. The activities and countries below have been assigned to those segments in which the

Residential Construction Commercial and Industrial Facilities Public Buildings

Engineering Ground Works Bridge Construction Power Plants

Roads, Earthworks

Protective Structures Sewerage Systems Production of Construction Materials

Tunnelling Real Estate Development Infrastructure Development Operation/Maintenance/Marketing of PPP Projects Property and Facility Services

Production of Prefabricated Elements

Environmental Technology Railway Construction

Waterway Construction, Embankments Landscape Architecture and Development, Paving, Large-Area Works Sports and Recreation Facilities

most signifi cant portion of the services was provided. Details are available in the table.

Ground Engineering

chain. These services include:

North + West South + East

Construction projects are assigned to one of the segments (see chart below). Of course, projects may also be assigned to more than one segment. This is the case, for example, with PPP projects in which the construction part is assigned to its respective geographic segment, but the concession part is assigned to the concessions unit of International + Special Divisions. In projects which span more than one segment, the commercial and technical responsibility is generally assigned to that segment which has the higher share of the

With only a few exceptions, STRABAG offers its services in all areas of the construction industry in the individual European markets in which it operates and covers the entire construction value

International + Special Divisions

In 2019, the segments were comprised as follows1

Management Board responsibility: Alfred Watzl Germany, Poland, Benelux, Scandinavia, Ground

Austria, Czech Republic, Slovakia, Hungary, South-East Europe, Switzerland, Environmental

M. B. responsibility: Peter Krammer

M. B. responsibility: Thomas Birtel2

Thomas Birtel and Christian Harder Central Divisions, Central Staff Divisions

INTERNATIONAL + SPECIAL DIVISIONS M. B. responsibility: Siegfried Wanker

International, Tunnelling, Services, Real Estate Development, Infrastructure Development, Con-

The North + West segment posted a 4 % higher output volume of € 8,106.93 million in 2019. This is due to the two largest countries in the segment – Germany and Poland – while the other markets, such as Benelux, Sweden and Denmark, showed small, inconsistent deviations.

The revenue, like the output, increased by 4 % and reached € 7,555.75 million. The EBIT nearly doubled to € 310.20 million thanks to strong growth in the German infrastructure business and a lower number of new loss-making projects in building construction and civil engineering compared to the previous year – and despite the strong cost infl ation in Poland. The EBIT margin increased from 2.2 % to 4.1 %.

Order backlog remains at a high level

The order backlog as at 31 December 2019 was at the unchanged high level of € 8,807.66 million. The decline in Sweden, Poland and Benelux caused by the working-off of large orders could be fully compensated by the increase in Germany, where the main projects included the modernisation of the main building at Bielefeld University, the realisation of the offi ce building "Airsite West" at the airport in Munich and the construction of the airport connection to the new Stuttgart–Ulm rail line.

Employee numbers grow with output

GROUP MANAGEMENT REPORT

The number of employees in Germany and Poland grew along with the output volume.

Outlook1 : Demand remains strong

In view of the continued expectations for high demand in the segment, the output volume in North + West should almost reach the previous year's level in 2020. The high level in Germany should remain the same. There also is no slowdown in the construction industry in sight yet in Benelux and Scandinavia.

The prices for subcontractors and suppliers in the German building construction business and for reinforcing steel are relaxing somewhat but remain at a relatively high level. STRABAG counteracts the capacity risk and price increase risk already in the cost estimation phase through the early inclusion of partner companies. At the same time, the group is strengthening its relationships with core subcontractors and suppliers.

There is also continuing demand in the regional business in the German transportation infrastructures sector. Given the still limited capacity for executing projects, this is causing a continued

SELECTED PROJECTS NORTH + WEST

Overall, the staff levels in the segment increased by 5 % to 25,386 employees.

rise in prices for subcontractors and suppliers. While two signifi cant orders helped push the order backlog with regard to large-scale transportation infrastructure projects to a higher level than the year before, competition in some areas remains strong.

The development of the Polish construction industry confi rms the scenario that had been outlined so far: A high order backlog, in combination with rising costs from labour shortages, among other things, is leading to a reduction in profi tability. Other developments observed include competition from Chinese companies as well as an increased cancellation of already decided public procurement procedures. In transportation infrastructures, many projects are not being awarded because the bidding prices often exceed the clients' budgets. Building construction is the only sector in Poland where STRABAG was able to increase its order backlog signifi cantly.

Project	Order backlog in € mln.	as % of total group order backlog
A1 Kamieńsk–Radomsko	94	0.5
S7 Strzegowo–Pieńki	88	0.5
S13 Troisdorf	86	0.5
Carlsberg City District BA9	79	0.5
Combinatie Herepoort	79	0.5

SOUTH + EAST: GROWTH IN OUTPUT VOLUME, DECREASE IN EARNINGS

The geographic focus of the South + East segment is on Austria, the Czech Republic, Slovakia, Hungary, South-East Europe, Russia and Switzerland. The environmental technology activities are also handled within this segment.

			∆ 2018 – 2019	∆ 2018 – 2019
€ mln.	2019	2018	%	absolute
Output volume	4,915.79	4,639.26	6	276.53
Revenue	4,879.50	4,521.81	8	357.69
Order backlog	4,489.37	4,311.00	4	178.37
EBIT	121.97	142.03	-14	-20.06
EBIT margin (% of revenue)	2.5	3.1
Employees (FTE)	19,850	18,729	6	1,121

OUTPUT VOLUME SOUTH + EAST

			∆ 2018 – 2019	∆ 2018 – 2019
€ mln.	2019	2018	%	absolute
Austria	2,176	1,979	10	197
Hungary	677	545	24	132
Czech Republic	636	557	14	79
Slovakia	318	460	-31	-142
Switzerland	205	235	-13	-30
Romania	179	156	15	23
Germany	151	145	4	6
Serbia	146	109	34	37
Croatia	131	148	-11	-17
Rest of Europe	126	110	15	16
Russia	67	70	-4	-3
Slovenia	42	61	-31	-19
Bulgaria	36	37	-3	-1
Asia	17	15	13	2
Poland	3	0	n. a.	3
Benelux	3	8	-63	-5
Middle East	2	0	n. a.	2
Americas	1	4	-75	-3
Total	4,916	4,639	6	277

Employee numbers grow with output

Outlook1

GROUP MANAGEMENT REPORT

Benelux and Scandinavia.

The number of employees in Germany and Poland grew along with the output volume.

: Demand remains strong

There is also continuing demand in the regional business in the German transportation infrastructures sector. Given the still limited capacity for executing projects, this is causing a continued

The geographic focus of the South + East segment is on Austria, the Czech Republic, Slovakia, Hungary, South-East Europe, Russia

SELECTED PROJECTS NORTH + WEST

Country Project

Overall, the staff levels in the segment increased

and Switzerland. The environmental technology activities are also handled within this segment.

∆ 2018 – 2019 %

as % of total group order backlog

∆ 2018 – 2019 absolute

by 5 % to 25,386 employees.

remains strong.

backlog signifi cantly.

Order backlog in € mln.

Poland A1 Kamieńsk–Radomsko 94 0.5 Poland S7 Strzegowo–Pieńki 88 0.5 Germany S13 Troisdorf 86 0.5 Denmark Carlsberg City District BA9 79 0.5 Netherlands Combinatie Herepoort 79 0.5

Output volume 4,915.79 4,639.26 6 276.53 Revenue 4,879.50 4,521.81 8 357.69 Order backlog 4,489.37 4,311.00 4 178.37 EBIT 121.97 142.03 -14 -20.06

Employees (FTE) 19,850 18,729 6 1,121

SOUTH + EAST: GROWTH IN OUTPUT VOLUME, DECREASE IN EARNINGS

€ mln. 2019 2018

EBIT margin (% of revenue) 2.5 3.1

1 This outlook does not take into account any impact from the coronavirus pandemic.

€ 0 2017 2018 2019 142 205 122

EBIT down in contrast to output due to provisions

The output volume in the South + East segment was up by 6 % to € 4,915.79 million in 2019. Increases were recorded mainly in Austria, Hungary, the Czech Republic and Serbia, while a decline was recorded in Slovakia, for example.

The revenue increased by 8 % to € 4,879.50 million. Due to provisions, on the other hand, the EBIT fell by 14 % to € 121.97 million and the EBIT margin slipped from 3.1 % to 2.5 %.

Order backlog: Growth in the Czech Republic offsets declines in Hungary and Slovakia

Thanks to several large orders in the second half of the year, the order backlog grew to € 4,489.37 million, a plus of 4 % compared to the end of 2018. On the one hand, this fi gure fell back in two markets as expected: In Hungary, resources are currently being used primarily to work off the high order backlog. At the same time, however, another large-scale project – the renovation of the southern section of the M3 metro line in Budapest – was added to the books in 2019. And in Slovakia, bid evaluations on the client side are regularly delayed, sometimes for several years. On the other hand, these developments were compensated, among other things, by several modernisation orders from the railways in the Czech Republic.

Output-related increases in the number of employees

The same dynamic by country as with the output volume was evident in the number of employees, which also increased in total by 6 % to 19,850.

Outlook1 : Inconsistent trends

A consistently high output volume is expected for the South + East segment in 2020. The home market of Austria, in particular, continues to be characterised by positive developments. The positive environment for building construction is no longer limited to the Vienna metropolitan area but can also be confi rmed for the metropolitan areas of Graz and Linz. This applies to both residential construction as well as commercial and industrial construction. In the fi rst quarter of 2019, STRABAG was commissioned with the construction of the Austrian headquarters of an international technology group. In transportation infrastructures, the

1 This outlook does not take into account any impact from the coronavirus pandemic.

development is also positive. The output volume and order backlog could be moderately increased here.

GROUP MANAGEMENT REPORT

In Hungary, incoming orders for the industry as a whole fell in 2019, following the large number of large-scale public-sector projects that had been awarded until than, due to the EU funding period expiring in 2020. As a result, construction growth in this country far outpaced overall economic growth, a situation that is also expected for 2020.

The extremely strong competition with simultaneous cost increases and staff shortages in the Czech Republic and Slovakia continues. These risks are monitored on an ongoing basis, especially as STRABAG is handling a number of large railway construction contracts in the Czech Republic. In the building construction segments of both countries, STRABAG is working primarily on commercial projects for private clients, such as the automotive industry.

In Switzerland, construction activity picked up in 2019. Public-sector clients are preparing additional large-scale projects, but the price situation remains tense.

The situation in South-East Europe is characterised by strongly mixed trends. While the tendering activity can be described as active in transportation infrastructures in Croatia, few activities that would be attractive for STRABAG are currently taking place in Slovenia. Romania is experiencing political instability, lack of legal certainty and a low price level despite a large number of tenders and material price increases. What all markets have in common is a lack of qualifi ed personnel, extremely high bitumen prices and increasing competition from Chinese companies. In building construction, some countries are exhibiting high demand, while activity is low in others.

The environmental technology business is gaining in importance in view of the current Europe-wide discussions concerning the reduction of CO2 emissions. Here STRABAG not only has the technology for the production of biogas, but also the references in order to be able to meet the increasing demand – mainly from local governments and private project development companies. In the fi eld of geothermal energy, projects in Germany, Romania and Croatia are being pursued together with the STRABAG Group's project development unit. In the highly fragmented market for landfi ll construction, the company is once again one of the few providers that can service the German market nationwide. The stricter requirements for the storage and recycling of soils and mineral building waste will form the basis for continued positive development in this business area.

Russia exhibits different trends depending on the construction sector. Demand in building construction in Moscow is generally high albeit dampened by legislative measures for project fi nancing in those segments that are relevant for STRABAG. Large-scale projects that could be of interest to STRABAG are being planned in industrial construction.

SELECTED PROJECTS SOUTH + EAST

Country	Project	Order backlog in € mln.	as % of total group order backlog
Hungary	M30 Miskolc–Tornyosnémeti	108	0.6
	Czech Republic Modernisation of Veselí–Soběslav railway line	80	0.5
Croatia	Pelješac access road	64	0.4
Austria	Triiiple Residential Towers, Vienna	60	0.4
Hungary	Metro M3 – modernisation of fi ve stations	55	0.3

INTERNATIONAL + SPECIAL DIVISIONS: EXPECTED LOSS OF A LARGE ORDER IN THE PROPERTY & FACILITY SERVICES BUSINESS

The International + Special Divisions segment includes, on the one hand, the fi eld of tunnelling. The concessions business, on the other hand, represents a further important area of business, with global project development activities in transportation infrastructures in particular. Regardless of where the services are rendered, the construction materials business, including the company's dense network of production plants but with the exception of asphalt, also belongs to this segment. The real estate business, which stretches from project development and planning to construction and operation and also includes the property and facility services business, completes the wide range of services in this segment. Additionally, most of the services in non-European markets are also bundled in International + Special Divisions.

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018– 2019 absolute
Output volume	3,450.57	3,740.30	-8	-289.73
Revenue	3,216.67	3,437.82	-6	-221.15
Order backlog	4,110.77	3,782.41	9	328.36
EBIT	183.97	198.69	-7	-14.72
EBIT margin (% of revenue)	5.7	5.8
Employees (FTE)	25,219	26,279	-4	-1,060

OUTPUT VOLUME INTERNATIONAL + SPECIAL DIVISIONS

			∆ 2018 – 2019	∆ 2018– 2019
€ mln.	2019	2018	%	absolute
Germany	1,207	1,464	-18	-257
Americas	678	652	4	26
Austria	448	506	-11	-58
Rest of Europe	168	180	-7	-12
Asia	162	147	10	15
Hungary	158	163	-3	-5
Middle East	142	198	-28	-56
Czech Republic	140	144	-3	-4
Poland	119	74	61	45
Africa	62	50	24	12
Slovakia	47	52	-10	-5
Romania	29	27	7	2
Benelux	29	36	-19	-7
Sweden	23	8	188	15
Croatia	19	14	36	5
Slovenia	6	7	-14	-1
Bulgaria	5	4	25	1
Russia	3	6	-50	-3
Denmark	3	4	-25	-1
Switzerland	2	3	-33	-1
Serbia	1	1	0	0
Total	3,451	3,740	-8	-289

€ 0

2017 2018 2019

184

development is also positive. The output volume and order backlog could be moderately number of tenders and material price increases. What all markets have in common is a lack of qualifi ed personnel, extremely high bitumen prices and increasing competition from Chinese companies. In building construction, some countries are exhibiting high demand, while

The environmental technology business is gaining in importance in view of the current Europe-wide discussions concerning the reduc-

has the technology for the production of biogas, but also the references in order to be able to meet the increasing demand – mainly from local governments and private project development companies. In the fi eld of geothermal energy, projects in Germany, Romania and Croatia are being pursued together with the STRABAG Group's project development unit. In the highly fragmented market for landfi ll construction, the company is once again one of the few providers that can service the German market nationwide. The stricter requirements for the storage and recycling of soils and mineral building waste will form the basis for continued positive develop-

but with the exception of asphalt, also belongs to this segment. The real estate business, which stretches from project development and planning to construction and operation and also includes the property and facility services business, completes the wide range of services in this segment. Additionally, most of the services in non-European markets are also bundled in

International + Special Divisions.

as % of total group order backlog

emissions. Here STRABAG not only

activity is low in others.

ment in this business area.

dustrial construction.

Order backlog in € mln.

Hungary M30 Miskolc–Tornyosnémeti 108 0.6 Czech Republic Modernisation of Veselí–Soběslav railway line 80 0.5 Croatia Pelješac access road 64 0.4 Austria Triiiple Residential Towers, Vienna 60 0.4 Hungary Metro M3 – modernisation of fi ve stations 55 0.3

INTERNATIONAL + SPECIAL DIVISIONS: EXPECTED LOSS OF A LARGE ORDER IN THE PROPERTY &

tion of CO2

In Switzerland, construction activity picked up in 2019. Public-sector clients are preparing additional large-scale projects, but the price sit-

such as the automotive industry.

SELECTED PROJECTS SOUTH + EAST

FACILITY SERVICES BUSINESS

Country Project

uation remains tense.

increased here.

for 2020.

Continued very high EBIT margin

The International + Special Divisions segment generated an output volume of € 3,450.57 million in 2019. This corresponds to an already expected 8 % decline resulting from the cancellation of a major property & facility services order in the middle of the year.

The revenue fell at a somewhat lower rate than the output, slipping by 6 % to settle at € 3,216.67 million. Starting from a high level, the EBIT dropped slightly to € 183.97 million (2018: € 198.69 million) while the EBIT margin weakened a bit to 5.7 % (2018: 5.8 %). The continued positive environment in real estate development and a capital gain from the sale of a facility management investment in Hungary had a positive impact on the fi gures. This was contrasted by the loss of the large order in the property & facility services business.

GROUP MANAGEMENT REPORT

Order backlog driven by major order in the UK

The order backlog increased by 9 % compared to 31 December 2018. The numerous new largescale projects were able to signifi cantly overcompensate for the reduction in order backlog in the home markets of Germany and Austria. The order expansion for the North Yorkshire Polyhalite Project in the UK contributed especially to boosting the order backlog. In Chile, the contracts for the Candelaria open-pit and underground mine were extended and the group received two new long-term contracts for the Nuevo Nivel Mina project at the El Teniente mine in Rancagua. In Qatar, a wastewater pumping station plant is being designed and built by a group subsidiary. And the tolling specialist EFKON expanded its presence on the Norwegian and Indian markets with further projects.

In general, we can see a shift of capacities from European core markets to international markets and the United Kingdom. In total, staff levels fell

by 4 % to 25,219 people.

Capacity shift from core markets to international markets and the UK

In view of the relatively large size of the individual projects in the International + Special Divisions segment, the number of employees in the various countries is subject to very strong fl uctuations.

Outlook1 : Slightly lower output volume expected in 2020

The output volume in the International + Special Divisions segment for the 2020 fi nancial year is expected to reach a level slightly below that of the previous year. The strong impact from large projects in this segment must be taken into account.

Both the booming real estate markets and the existing project pipeline make us optimistic that the real estate development business will continue to contribute positively to our earnings. Several properties were sold in Germany in 2019, such as the hotel in MesseCity Cologne, two sites in Freiburg and the Haus der Höfe in Bonn, in addition to project handovers in Hanover and Böblingen. Numerous rental successes were also registered. The continuing low interest rate level and the further high demand for both commercial and residential real estate are fostering a generally friendly environment for this business segment. Against the backdrop of rising land prices, however, it became challenging to initiate new project developments with a long-term profi t. STRABAG's acquisition focus in Germany is therefore also on "B cities" as well as on geographic markets such as Poland, Romania and individual projects in other Central and Eastern European countries. Alone in Warsaw, Poland, the group acquired for redevelopment the centrally located ATRIUM property, sold the STRABAG-developed ASTORIA Premium Offi ces, and handed over to the operator the fi rst Motel One Hotel in Poland in 2019. In Austria, the group continues to offer the entire range of residential construction from subsidised to affordable to privately fi nanced housing, primarily in the large cities, supplemented by real estate with residential use – e.g. student housing – and commercial project developments.

A number of milestones were also achieved in the fi eld of property & facility services. The transfer of the Deutsche Telekom account to a competitor on 30 June 2019 proceeded according to plan, and the further diversifi cation of the customer portfolio was successful with new accounts including HANSAINVEST Real Assets. In addition, STRABAG is focusing on acquisitions that round off the existing business. In April 2019, for example, the group took over the property management business and employees of CORPUS SIREO Real Estate GmbH. This was followed in June by the purchase of PORREAL Polska sp. z o.o. of Warsaw, and PORREAL Česko s.r.o. of Prague, which provide services in technical and infrastructural facility management.

Compared to real estate development and the property & facility services business, the current market conditions in infrastructure development are much more challenging. This applies especially to public-private partnerships (PPP) in the core European markets, which is why projects must be chosen very selectively. Nevertheless, some successes were recorded in 2019, such as the conclusion of the long-term fi nancing for the Autopista al Mar 1 concession project in Colombia and the sale of investments in the two motorway project companies DirectRoute (Fermoy) Holdings Ltd. and DirectRoute (Limerick) Holdings Ltd. in Ireland.

The environment in tunnelling also remains a diffi cult one. Although there are numerous projects on the market, there is no end in sight to the extremely strong competition for the time being. The group therefore remains selective in

1 This outlook does not take into account any impact from the coronavirus pandemic.

this market, pursuing projects in the UK and in the international mining sector.

Order backlog driven by major order in the UK

commercial project developments.

1 This outlook does not take into account any impact from the coronavirus pandemic.

Outlook1

ORDER BACKLOG

€ 10 bn.

3.9

€ 0

2017 2018 2019

3.8

GROUP MANAGEMENT REPORT

4.1

Capacity shift from core markets to international markets and the UK

: Slightly lower output volume expected in 2020

underground mine were extended and the group received two new long-term contracts for the Nuevo Nivel Mina project at the El Teniente mine in Rancagua. In Qatar, a wastewater pumping station plant is being designed and built by a group subsidiary. And the tolling specialist EFKON expanded its presence on the Norwegian and Indian markets with further projects.

In general, we can see a shift of capacities from European core markets to international markets and the United Kingdom. In total, staff levels fell

ick) Holdings Ltd. in Ireland.

by 4 % to 25,219 people.

ment.

The international business, i.e. the business that STRABAG conducts in countries outside of Europe, is showing inconsistent performance. For many years now, the focus has been on parts of Africa, the Middle East and successful specialities such as test track construction. The competition – in part from Chinese providers – is increasing in the international area as well.

The development of the construction materials business is essentially linked to that of the construction sector. Here we should point out that the bitumen price has risen sharply in 2019.

SELECTED PROJECTS INTERNATIONAL + SPECIAL DIVISIONS

Country	Project	Order backlog in € mln.	as % of total group order backlog
	United Arab Emirates Hatta Pumped Storage Power Plant, Dubai	117	0.7
Chile	Candelaria Norte	113	0.7
Israel	5th Line Water Supply, Jerusalem	85	0.5
Canada	Pumping station, Toronto	74	0.4
Austria	Koralmtunnel 2	69	0.4

OTHER (SERVICE COMPANIES AND CENTRAL STAFF DIVISIONS)

This segment encompasses the group's internal central divisions and central staff divisions.

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018– 2019 absolute

Output volume	144.68	115.84	25	28.84
Revenue	16.65	19.78	-16	-3.13
Order backlog	3.68	2.15	71	1.53
EBIT	0.87	0.86	1	0.01
EBIT margin (% of revenue)	5.2	4.3
Employees (FTE)	6,464	6,230	4	234

Risk management

The STRABAG Group is subject to a number of risks in the course of its business activities. These risks are systematically identifi ed and assessed using an active risk management system and dealt with using an appropriate risk management policy. This risk management policy is an integral part of the management system. It describes a set of fi xed principles and responsibilities for risk management and how to deal with the material risk categories.

RISK MANAGEMENT AS A CORE TASK OF MANAGEMENT

Risk management is a core task of the management. The identifi cation and assessment of risks is the responsibility of the respective management level. The risk controlling process includes the integrated quality management system with internal group directives and complementary business, process and technical instructions for the workfl ow in the operating units, supportive central divisions and central staff divisions with technical, legal and administrative service and consulting activities, and the internal audit department as neutral and independent auditing entity.

Responsibility for the implementation of the project risk management systems in the divisions was transferred to the commercial division management. The central division Project Risk Management System/Organisational Development/ International BRVZ Coordination handles the continuous improvement and development of the risk management system for the procurement and execution of construction projects.

All STRABAG management employees, within the scope of their duties and responsibilities, and according to the Rules of Procedure and relevant company regulations, are obliged to

work with the employees to set risk identifi cation measures,
monitor the risks,

GROUP MANAGEMENT REPORT

• introduce countermeasures, and

• pass on relevant information about risks to other units or levels within the company. This requirement especially applies to all employees of the STRABAG Group.

The STRABAG SE Management Board prohibits engaging in business transactions whose realisation could endanger the company's existence.

RISK MANAGEMENT USING DEFINED RISK GROUPS

The group's internal risk report defi nes the following central risk groups:

External risk
Operating and technical risks
Financial risks
Ethical risks
Human resource risks
IT risks
Investment risks
Legal risks
Political risks

EXTERNAL RISKS COUNTERED THROUGH DIVERSIFICATION

The entire construction industry is subject to cyclical fl uctuations and reacts to varying degrees depending on region and sector. Overall economic growth, development of the construction markets, the competitive situation, the conditions on the capital markets and technological changes in construction can all result in risks. These risks are continually observed and monitored by the central departments and operating units. Changes in external risks lead to adjustments in STRABAG's organisation, market presence and range of services as well as the adaptation of strategic and operating planning. STRABAG further responds to market risk with geographic and product-related diversifi cation in order to keep the infl uence on the company's success exerted by an individual market or by the demand for certain services as low as possible. To avoid bearing the risk of rising prices, STRABAG makes efforts at signing cost escalation clauses and cost-plus-fee contracts in which the client pays a previously agreed margin on the costs of the project.

Additional risks exist with regard to work safety, environmental protection, quality, business continuity and supply chain. These are described in separate policies within the management system. The rules for proper business behaviour are conveyed by the ethics and business compliance system.

Following ISO 31000 and the Committee of Sponsoring Organisations of the Treadway Commission (COSO), our risk management system forms part of our integrated management system. We deal with the risks identifi ed by us as follows:

OPERATING AND TECHNICAL RISKS REDUCED THROUGH BINDING MINIMUM STANDARDS

These risks primarily include the complex risks regarding project selection and execution along with the technical risks that need to be assessed for each project, e.g. site, geology, construction method, technology, materials, equipment, design, work planning, etc. An integral part of the project risk management system are minimum standards with group-wide validity for the procurement and execution of construction projects (common project standards). These comprise clearly defi ned criteria for the evaluation of new projects, a standardised process for preparing and making bids, as well as integrated internal control systems serving as fi lters to avoid lossmaking projects. Business transactions requiring consent are reviewed and approved by business unit and subdivision managers or by division managers according to internal rules of procedure.

Principally, bids must be analysed by internal commissions and reviewed for their technical and economic feasibility. The construction and project teams can contact the experts at the central divisions BMTI, TPA and Zentrale Technik for assistance in assessing the technical risks and working out innovative solutions for technical problems. Project execution is managed by the construction or project team on-site using documented procedures and controlled by monthly target/performance comparisons. At the same time, our central controlling provides constant commercial offi ce support for these projects, ensuring that risks of individual projects do not endanger the continuity of the company.

FINANCIAL RISKS: ACTIVE LIQUIDITY AND RECEIVABLES MANAGEMENT

Under fi nancial risks, STRABAG understands risks in fi nancial matters and in accounting, including instances of manipulation. Special attention is paid to the liquidity and receivables management, which is secured through continuous fi nancial planning and daily status reports. Compliance with internal commercial guidelines is guaranteed by the central accounting and controlling departments, which are also responsible for internal reporting and the periodic planning process. Risks from possible instances of manipulation (acceptance of advantages, fraud, deception or other infringements of the law) are monitored by all business areas in general and by the internal audit department in particular.

STRABAG is subject to interest, currency, credit and liquidity risks related to its assets, liabilities and planned transactions. The goal of fi nancial risk management is to minimise these risks through ongoing fi nancial activities. The basics of the fi nancial policy are set by the Management Board and monitored by the Supervisory Board. The implementation of the fi nancial policy and responsibility for the risk management are the domain of the group treasury. Detailed information can be found in the Notes under item 32 Financial Instruments.

All STRABAG management employees, within the scope of their duties and responsibilities, and according to the Rules of Procedure and relevant company regulations, are obliged to

• introduce countermeasures, and

ees of the STRABAG Group.

pliance system.

as follows:

• pass on relevant information about risks to other units or levels within the company. This requirement especially applies to all employ-

The STRABAG SE Management Board prohibits engaging in business transactions whose realisation could endanger the company's existence.

adaptation of strategic and operating planning. STRABAG further responds to market risk with geographic and product-related diversifi cation in order to keep the infl uence on the company's success exerted by an individual market or by the demand for certain services as low as possible. To avoid bearing the risk of rising prices, STRABAG makes efforts at signing cost escalation clauses and cost-plus-fee contracts in which the client pays a previously agreed

margin on the costs of the project.

• work with the employees to set risk identifi ca-

RISK MANAGEMENT USING DEFINED RISK GROUPS

EXTERNAL RISKS COUNTERED THROUGH DIVERSIFICATION

The group's internal risk report defi nes the

tion measures,

• monitor the risks,

• External risk

• Financial risks

• Ethical risks

• IT risks

• Legal risks

• Political risks

• Human resource risks

• Investment risks

following central risk groups:

• Operating and technical risks

ETHICAL RISKS COUNTERED WITH AN ETHICS AND BUSINESS COMPLIANCE SYSTEM

Business Partners, and the personnel structure of the STRABAG business compliance model, consisting of the group business compliance coordinator, the regional business compliance representatives, the internal ombudspersons and the external ombudsperson. Details on the ethical risks are available in the Consolidated Non-Financial Report pursuant to Sec 267a of the Austrian Commercial Code (UGB).

People & Workplace

GROUP MANAGEMENT REPORT

HUMAN RESOURCE RISKS: COUNTERMEASURES WITH CENTRAL HUMAN RESOURCE MANAGEMENT AND NEEDS-ORIENTED HUMAN RESOURCE DEVELOPMENT

Material human resource risks, such as recruiting bottlenecks, skilled labour shortages, fl uctuation and labour law risks, are countered with a central human resource administration and long-term, needs-oriented human resource development. Human resource risks are to be reduced as far as possible through the targeted recruiting of qualifi ed skilled workers and managers, extensive training activities, performance-based pay based on binding compliance with labour law provisions, as well as early succession planning. Additionally, systematic potential management is in place to ensure the development and career planning of company employees. Complementary initiatives to promote employee health, improve employment conditions and raise employee satisfaction further contribute to the company's attractiveness and prestige. Details on the human resource risks are available in the Consolidated Non-Financial Report pursuant to Sec 267a UGB.

IT RISKS: IT USAGE GUIDELINES AND CONTINUOUS REVIEW OF SECURITY CONCEPTS TO COUNTER CYBERCRIME

With the increasing threat of IT risks, different measures are being implemented in the form of multistep security and anti-virus concepts, user access rights, password-controlled access, appropriate backups and independent power supply. The company is also working together with professional specialty service providers to ensure an effi cient defence against cybercrime and is constantly reviewing its security concepts. By issuing IT usage guidelines and repeatedly informing on the necessity of risk awareness when working with information and communication technologies, we aim to ensure the security, availability, performance and compliance of the IT systems. Project ideas to improve and develop IT-related processes and control systems are evaluated and prepared by nominated IT committees using a structured business process management (BPM) approach.

INVESTMENT RISKS: SECTOR-TYPICAL MINORITY HOLDINGS OF MIXING PLANTS

The shares in mixing companies typically involve minority interests, as is usual in this sector. With these companies, economies of scope are at the fore.

LEGAL RISKS AVOIDED THROUGH EXTENSIVE RISK ANALYSIS

The central division CML Construction Services supports the risk management of the operating divisions with regard to construction industry questions or in the analysis of risks in the construction business in all project phases (contract management) and provides, organises and coordinates legal advice (legal services). Its most important tasks include comprehensive reviews and consultation in project acquisition – e.g. analysis and clarifi cation of tender conditions, performance specifi cations, pre-contract agreements, tender documents, draft contracts and framework conditions – as well as support in project management.

POLITICAL RISK: INTERRUPTIONS AND DISPOSSESSION POSSIBLE

The group also operates in countries which experience political instability. Interruptions of construction activity, restrictions on ownership interests of foreign investors, and even dispossession or expropriations are among the possible

consequences of political changes which could have an impact on the group's fi nancial structure. These risks are analysed during the tendering phase and assessed by internal committees.

HUMAN RESOURCE RISKS: COUNTERMEASURES WITH CENTRAL HUMAN RESOURCE

IT RISKS: IT USAGE GUIDELINES AND CONTINUOUS REVIEW OF SECURITY CONCEPTS TO

INVESTMENT RISKS: SECTOR-TYPICAL MINORITY HOLDINGS OF MIXING PLANTS

succession planning. Additionally, systematic potential management is in place to ensure the development and career planning of company employees. Complementary initiatives to promote employee health, improve employment conditions and raise employee satisfaction further contribute to the company's attractiveness and prestige. Details on the human resource risks are available in the Consolidated Non-Financial

repeatedly informing on the necessity of risk awareness when working with information and communication technologies, we aim to ensure the security, availability, performance and compliance of the IT systems. Project ideas to improve and develop IT-related processes and control systems are evaluated and prepared by nominated IT committees using a structured business process management (BPM) approach.

sector. With these companies, economies of

important tasks include comprehensive reviews and consultation in project acquisition – e.g. analysis and clarifi cation of tender conditions, performance specifi cations, pre-contract agreements, tender documents, draft contracts and framework conditions – as well as support in

consequences of political changes which could have an impact on the group's fi nancial structure. These risks are analysed during the tendering phase and assessed by internal committees.

scope are at the fore.

project management.

Report pursuant to Sec 267a UGB.

MANAGEMENT AND NEEDS-ORIENTED HUMAN RESOURCE DEVELOPMENT

The shares in mixing companies typically involve minority interests, as is usual in this

LEGAL RISKS AVOIDED THROUGH EXTENSIVE RISK ANALYSIS

POLITICAL RISK: INTERRUPTIONS AND DISPOSSESSION POSSIBLE

COUNTER CYBERCRIME

People & Workplace

MANAGEMENT SYSTEM FOR WORK SAFETY AND HEALTH IN PLACE

In order to control the risks related to employee safety and health, STRABAG is implementing a work safety and health management system in accordance with OHSAS 18001 (ISO 45001 in the future) and/or SCC. Moreover, the company works to maintain this system and ensures a suitable emergency organisation. Persons with designated responsibility make sure that the group-wide work safety standards are followed. The aspects of work safety and health also form part of the evaluation of subcontractors and suppliers. Details on the risks related to employee safety and health are available in the Consolidated Non-Financial Report pursuant to Sec 267a UGB.

CERTIFIED ENVIRONMENTAL AND ENERGY MANAGEMENT SYSTEM DESIRED

STRABAG works at reducing the negative environmental impact from its activities as far as this is technically possible and economically feasible. The company implements an environmental and energy management system based on ISO 14001 and/or ISO 50001, maintains this system and – wherever possible – minimises the use of natural resources, avoids waste and promotes recycling. Details on the environmental risks are available in the Consolidated Non-Financial Report pursuant to Sec 267a UGB.

QUALITY MANAGEMENT AS COMPONENT OF THE INTEGRATED MANAGEMENT SYSTEM

In concordance with its vision and values, it is the company's aim to realise construction projects on schedule, of the highest quality and at the best price. This helps to ensure the quality of the company's processes, services and products at any time. In this process, quality management forms a component of an integrated management system. This system is documented in the Management Manual, in group directives and in subordinated provisions.

BUSINESS CONTINUITY: RIGOROUS INCLUSION OF GROUP CENTRAL DIVISIONS

The failure of equipment and production facilities, of subcontractors and suppliers, of human resources, of the IT system, of offi ce buildings and accommodation must not be allowed to threaten the company's existence. For this reason, precautions are being made under a business continuity management system to make sure that incidents or disasters only temporarily interrupt business activity – if at all. This includes the rigorous inclusion of the group's own specialised central divisions. These are capable of procuring, for example, equipment, accommodation, IT systems or staff on short notice, they build up long-term strategic partnerships with selected subcontractors and suppliers, and they have emergency scenarios audited in the IT division.

EVALUATION OF PARTNER COMPANIES TO REDUCE RISKS IN THE SUPPLY CHAIN

In the interest of quality and profi tability, STRABAG not only taps its own skills and resources to work off its orders, but also relies on the support of proven subcontractors and suppliers. The company focuses on long-term partnerships, a clear, transparent and complete description of the services and products to be procured, and an agreement on acceptance criteria for the products and services. STRABAG also systematically evaluates subcontractors, service providers and suppliers as part of its decision-making foundation for future orders.

A review of the current risk situation reveals that there were no risks which jeopardised the company's existence, nor were there any visible future risks

REPORT ON KEY FEATURES OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM IN RELATION TO THE FINANCIAL REPORTING PROCESS

Introduction

GROUP MANAGEMENT REPORT

The control structure as defi ned by COSO (Committee of Sponsoring Organisations of the Treadway Commission) provides the basis for the description of the key features of the internal control and risk management systems in relation to the fi nancial reporting process in the management report. The COSO framework consists of fi ve related components: control environment, risk assessment, control activities, information and communication, and monitoring. On this basis, the STRABAG Group set up a company-wide risk management according to generally accepted principles. The aim of the internal control system is to support management in such a way that it is capable of assuring internal controls in relation to fi nancial reporting which are effective, and which are improved on an ongoing basis. The system is geared to the compliance with rules and regulations and to creating conditions which are conducive to performing specifi c controls in key accounting processes.

Control environment

of its responsibility for monitoring compliance with the law and corporate guidelines in the technical and commercial areas. The internal audit department also monitors the effectiveness of business compliance. During these inspections, the internal audit department analyses the legality and correctness of individual actions. The department also conducts regular, independent reviews of compliance with internal guidelines in the area of accounting. The head of the internal audit department reports directly to the CEO. The effectiveness of the work of the internal audit department is reviewed periodically by the fi nancial auditor. After the most recent review in 2015, a renewed audit was commissioned in 2019.

Risk assessment

The management identifi es and monitors risks relating to the fi nancial reporting process, with a focus on those risks that are typically considered to be material.

The preparation of the fi nancial statements requires regular forecasts, with the inherent risk that the actual future development will deviate from the forecast. This especially affects the following matters/items of the Consolidated Financial Statements: assessment of unfi nished construction projects, recognition and measurement of provisions (including social capital), the outcome of legal disputes, the collectability of receivables as well as the recoverability of investments and goodwill. In individual cases, external experts are called in or publicly available sources are considered in order to minimise the risk of a false assessment.

Control activities

REPORT ON KEY FEATURES OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

cesses.

company-wide risk management according to generally accepted principles. The aim of the internal control system is to support management in such a way that it is capable of assuring internal controls in relation to fi nancial reporting which are effective, and which are improved on an ongoing basis. The system is geared to the compliance with rules and regulations and to creating conditions which are conducive to performing specifi c controls in key accounting pro-

of its responsibility for monitoring compliance with the law and corporate guidelines in the technical and commercial areas. The internal audit department also monitors the effectiveness of business compliance. During these inspections, the internal audit department analyses the legality and correctness of individual actions. The department also conducts regular, independent reviews of compliance with internal guidelines in the area of accounting. The head of the internal audit department reports directly to the CEO. The effectiveness of the work of the internal audit department is reviewed periodically by the fi nancial auditor. After the most recent review in 2015, a renewed audit

Financial Statements: assessment of unfi nished construction projects, recognition and measurement of provisions (including social capital), the outcome of legal disputes, the collectability of receivables as well as the recoverability of investments and goodwill. In individual cases, external experts are called in or publicly available sources are considered in order to minimise the

was commissioned in 2019.

risk of a false assessment.

IN RELATION TO THE FINANCIAL REPORTING PROCESS

The management identifi es and monitors risks relating to the fi nancial reporting process, with a focus on those risks that are typically consid-

Introduction

Control environment

Risk assessment

ered to be material.

All control activities are applied in the current business process to ensure that errors or deviations in fi nancial reporting are prevented or detected and subsequently corrected. The control activities range from a review of the period results to specifi c monitoring of accounts and cost centres to the analysis of ongoing accounting processes. It is the responsibility of the Management Board to design the levels of hierarchy in such a way that an activity and the control of that activity are not performed by the same person (four-eyes principle). This separation of functions encompasses a separation between decision-making, implementation, inspection and reporting. The organisational units of the

Information and communication

The management regularly updates the rules and regulations for fi nancial reporting and communicates them to all employees concerned. In addition, regular discussions regarding the fi nancial reporting and the rules and regulations in this context take place in various committees. These committees are composed of the corporate management as well as the department head and senior staff from the accounting department. The committees' work aims, among BRZV central division support the Management Board in this task.

Processes which are relevant to fi nancial reporting are increasingly automated. IT security control activities therefore represent a cornerstone of the internal control system. The separation of sensitive activities is supported by a restrictive approach to IT access authorisation. For its accounting and fi nancial reporting, the company mainly uses self-developed software which refl ects the unique features of the construction sector. The effectiveness of the fi nancial reporting system is further assured through automated IT controls included in the system.

other things, at guaranteeing compliance with accounting rules and regulations and at identifying and communicating weak points and potential areas for improvement in the fi nancial reporting process. Accounting employees receive regular training regarding new methods of national and international fi nancial reporting in order to identify risks of unintended misreporting at an early stage.

Monitoring

The Management and Supervisory Boards bear responsibility for the ongoing company-wide monitoring. Additionally, the remaining management levels are responsible for the monitoring of their respective areas of responsibility. Controls and plausibility checks are carried out at regular intervals. The internal audit department is also involved in the monitoring process.

The top management receives monthly summarised fi nancial reports on the development of the output volume, the results of the respective segments and countries, and the liquidity. Financial statements to be published are reviewed internally by several instances within management, receiving a fi nal appraisal by the senior accounting staff and the Chief Financial Offi cer before being passed on to the Supervisory Board's Audit Committee.

Research and development

GROUP MANAGEMENT REPORT

To take a more active role in shaping this change, and to use it for its own benefi t, the STRABAG Group gave itself a more technological focus, represented by the organisationally established, systematic innovation management that has been in place since 2014. The aim is to support the exchange of experience and information with regard to the development activities between the employees and the decision-makers – after all, the diversity of the STRABAG Group is refl ected as much in the number of different competencies as in the different demands placed upon it. At the beginning of 2020, the topic was anchored at the executive level with the new Management Board position for Digitalisation, Innovation and Business Development, which underlines the importance of this task.

The cooperation among the various divisions facilitates and promotes new developments across the individual business units. A special focus in 2019 was on the digitalisation of processes. The platform-based tracking of prefabricated parts, such as stairs or façade elements, is becoming increasingly widespread. In transportation infrastructures, the focus is also on the logistics chain in order to continuously optimise delivery to the major corridor construction sites. Countless time-consuming, error-prone surveys on paper forms during construction – in terms of work safety inspections, workstations, concrete deliveries and reinforcement performance levels – are now handled in an app-based manner. The data are entered on mobile end devices suitable for construction sites: Protocols and target/actual comparisons are generated automatically and made available to the participating construction offi ces and back offi ces. This signifi cantly reduces the time required for administrative tasks related to the construction.

Cooperation with international universities and research institutions, joint development activities with partner companies around the world, and internal research and development projects have also been a routine part of the group's daily activities for years. In overall charge of the planning and execution of these projects within the STRABAG Group are the two central divisions Zentrale Technik (ZT) and TPA Gesellschaft für Qualitätssicherung und Innovation GmbH (TPA), each of which report directly to a member of the Management Board.

ZT is present at 34 locations with over 1,0001 highly qualifi ed employees. It provides services in the areas of tunnelling, ground civil and structural engineering, and turnkey construction along the entire construction process. From the early acquisition stage and bid processing to construction design and site management, ZT offers innovative solutions with regard to construction materials technology, construction management, building physics, and software solutions. Central topics for innovation activities are digitalisation, sustainable construction, renewable energy and, as of recent, additive processes (3D printing). Among other things, the employees at ZT develop methods and tools to optimise construction activity from the digital design to the impact on the environment. The specialist Development and Innovation staff department oversees the systematic networking of people and relevant topics, promotes new ideas and helps to drive innovation.

TPA is the group's competence centre for asphalt, concrete, earthworks, geotechnics and environmental engineering, quality management and materials-related research and development with a focus on road construction and transportation infrastructures. Its main tasks include ensuring the quality of the construction materials, structures and services, the safety and improvement of the processes, as well as developing and reviewing standards for the handling and processing of construction materials.

The research focus in 2019 included the development and the fi rst installation of ClAir® asphalt in cooperation with STRABAG BMTI. The photocatalytic granulate with titanium dioxide used in road construction breaks down toxic nitrogen oxides and converts them into harmless substances. In this way, the new road surface is designed to contribute to nitrogen dioxide reduction. In addition, a number of projects in the fi eld of cement/concrete were carried out around issues related to raising process safety and thus the quality of the buildings. TPA has about 9501 employees at 130 locations in 18 countries, making it one of Europe's largest private laboratory companies.

EFKON GmbH – a subsidiary of STRABAG – is active in the research and development of intelligent traffi c telematics systems, especially with regard to electronic toll collection and enforcement – a business fi eld that requires intensive research, development and innovation activities. The focus last year was on the introduction of complex toll systems that blend unobtrusively into the cityscape. The implementation in Bergen, Norway, is particularly noteworthy. The slim device developed by EFKON, equipped with laser, high-resolution camera and radar, identifi es and classifi es vehicles in up to two lanes and at speeds of up to 160 km/h. With this system, traffi c fl ows can also be optimised in historic city districts to ensure the implementation of environmental zones.

The STRABAG Group spent about € 17 million on research, development and innovation activities during the 2019 fi nancial year (2018: about € 14 million).

The majority of the development activity is triggered by construction projects in all our business areas. Here challenges or specifi c questions regularly arise that require a technologically new process or an innovative solution on site. In many cases, support is offered by the aforementioned central divisions. Some issues require medium-term research and development projects, often with partner organisations.

Website Corporate Governance Report

The STRABAG SE Consolidated Corporate Governance Report is available online at www.strabag.com > Investor Relations > Corporate Governance > Corporate Governance Report.

Disclosures under Sec 243a Para 1 UGB

1. The share capital of STRABAG SE amounts to € 110,000,000 and consists of 110,000,000 fully paid-in, no-par value shares with a pro rata value of € 1 per share of the share capital. 109,999,997 shares are bearer shares and are traded in the Prime Market segment of the Vienna Stock Exchange. Three shares are registered shares. Each bearer share and each registered share accounts for one vote (one share – one vote). The nomination rights associated with registered shares No. 1 and No. 2 are described in more detail under item 4.
1. The Haselsteiner Group (Haselsteiner Familien-Privatstiftung, Dr. Hans Peter Haselsteiner), the Raiffeisen Group (Raiffeisen-Holding Niederösterreich-Wien reg. Gen.m.b.H, BLR Baubeteiligungs GmbH, "GULBIS" Beteiligungs GmbH), the UNIQA Group (UNIQA Insurance Group AG, UNIQA Beteiligungs-Holding GmbH, UNIQA Österreich Versicherungen AG, UNIQA Erwerb von Beteiligungen Gesellschaft m.b.H.) and MKAO "Rasperia Trading Limited"2 (controlled by Oleg Deripaska), as shareholder groups of STRABAG SE, have signed a syndicate agreement governing (1) nomination

rights regarding the Supervisory Board, (2) the coordination of voting during the Annual General Meeting, (3) restriction on the transfer of shares and (4) joint development of the Russian market as a core market. The Haselsteiner Group, the Raiffeisen Group together with the UNIQA Group, and MKAO "Rasperia Trading Limited" each have the right to nominate two members of the Supervisory Board. The syndicate agreement also requires the syndicate partners to exercise their voting rights from syndicated shares unanimously at the Annual General Meeting of STRABAG SE. The syndicate agreement further foresees restrictions on the transfer of shares in the form of mutual pre-emptive rights as well as a minimum shareholding on the part of the syndicate partners. In accordance with Sec 65 Para 5 of the Austrian Stock Corporation Act (AktG), all rights were suspended for 7,400,000 no-par shares (6.7 % of the share capital) effective 31 December 2019 as these shares are held by STRABAG SE as own shares as defi ned in Sec 65 Para 1 No 8 of the Austrian Stock Corporation Act (AktG).

one share - one vote

Research and development

As a technology group for construction services, the STRABAG Group does business in a rapidly changing environment. It is in this context that the company applies its assets, comprised not only of its material and fi nancial means but also of its human resources – the knowledge and know-how of its employees –, its structural and organisational capital, and its relational and market capital. The growing crossover between industries – driven by increasing societal demands, by the fast pace of technological progress, particularly in information and communications technology, and by customer demands – confront the company with ever more rapidly Cooperation with international universities and research institutions, joint development activities with partner companies around the world, and internal research and development projects have also been a routine part of the group's daily activities for years. In overall charge of the planning and execution of these projects within the STRABAG Group are the two central divisions Zentrale Technik (ZT) and TPA Gesellschaft für Qualitätssicherung und Innovation GmbH (TPA), each of which report directly to a

member of the Management Board.

helps to drive innovation.

tive tasks related to the construction.

1 Head count

shifting challenges.

of this task.

¹ Head count

² The shareholder Rasperia Trading Limited, Cyprus, moved its headquarters to the Russian Federation and is now called MKAO "Rasperia Trading Limited".

To the knowledge of STRABAG SE, the following shareholders held a direct or indirect interest of at least 10.0 % of the share capital of STRABAG SE on 31 December 2019:

GROUP MANAGEMENT REPORT

Haselsteiner Group ........................... 26.4 %
Raiffeisen Group ............................... 13.2 %
UNIQA Group .................................... 14.3 %
MKAO "Rasperia Trading Limited" .....25.9 %

The company itself held 7,400,000 no-par shares on 31 December 2019, which corresponds to 6.7 % of the share capital. These shares are currently intended, among others, as acquisition currency. The remaining shares of STRABAG SE, amounting to about 13.5 % of the share capital, are in free fl oat.

Three shares are – as mentioned under item 1 – registered shares entered in the shareholder register. Registered shares No.1 and No. 2 require the consent of the Supervisory Board for their full or partial sale and pledging. Registered shares No. 1 and No. 3 are held by

Related parties

Business transactions with related parties are described in item 34 of the Notes.

Outlook

STRABAG SE expects to be able to maintain an output of over € 16 billion in the 2020 fi nancial year. This assumption is well-supported by the high order backlog. From today's perspective, no signifi cant changes in the output volume should be observed in any of the three segments North + West, South + East and International + Special Divisions.

The planned EBIT margin (EBIT/revenue) of more than 3.5 % for the 2020 fi nancial year represents another step toward the medium-term target of 4.0 % in 2022. The planning for 2020 is based, among other things, on the expectation that the earnings contributions from the traditionally strong specialty business fi elds of real estate development and property and facility the Haselsteiner Group and registered share No. 2 is held by MKAO "Rasperia Trading Limited". Registered shares No. 1 and No. 2 allow their bearers to nominate a member each to the Supervisory Board of STRABAG SE.

1. No employee stock option programmes exist.
1. No further regulations exist beyond items 2 and 4 regarding the nomination and recall of members of the Management and Supervisory Boards or regarding changes to the Articles of Association which do not result directly from relevant law and legislation.
1. With the exception of the agreements over a syndicated surety loan and a syndicated cash credit line, there exist no signifi cant agreements to which STRABAG SE is party and which would become effective, change or end due to a change of ownership in STRABAG SE following a takeover offer.
1. No compensation agreements exist between STRABAG SE and its Management and Supervisory Board members or employees in the event of a public takeover offer.

services will weaken somewhat, but that at the same time further progress will be made in project risk management and that the strong demand in the construction sector in markets such as Poland or Germany will be refl ected in market-driven building prices in the construction sector.

The net investments (cash fl ow from investing activities) in 2020 are not expected to exceed the value of € 500 million.

The effects of the ongoing coronavirus pandemic on output volume, revenue and earnings in the 2020 fi nancial year could not yet be taken into account here, as it was not yet possible to quantify the impact by the beginning of April 2020.

Events after the reporting period

The material events after the reporting period are described in item 37 of the Notes

Villach, 8 April 2020 The Management Board

To the knowledge of STRABAG SE, the following shareholders held a direct or indirect interest of at least 10.0 % of the share capital of STRABAG SE on 31 December 2019:

the Haselsteiner Group and registered share No. 2 is held by MKAO "Rasperia Trading Limited". Registered shares No. 1 and No. 2 allow their bearers to nominate a member each to the Supervisory Board of STRABAG SE.

No employee stock option programmes exist.
No further regulations exist beyond items 2 and 4 regarding the nomination and recall of members of the Management and Supervisory Boards or regarding changes to the Articles of Association which do not result directly
With the exception of the agreements over a syndicated surety loan and a syndicated cash credit line, there exist no signifi cant agreements to which STRABAG SE is party and which would become effective, change or end due to a change of ownership in STRABAG SE following a takeover offer.
No compensation agreements exist between STRABAG SE and its Management and Supervisory Board members or employees in

The net investments (cash fl ow from investing activities) in 2020 are not expected to exceed

the value of € 500 million.

the event of a public takeover offer.

from relevant law and legislation.

• Haselsteiner Group ........................... 26.4 %

• Raiffeisen Group ............................... 13.2 %

• UNIQA Group .................................... 14.3 %

• MKAO "Rasperia Trading Limited" .....25.9 %

Three shares are – as mentioned under item 1 – registered shares entered in the shareholder register. Registered shares No.1 and No. 2 require the consent of the Supervisory Board for their full or partial sale and pledging. Registered shares No. 1 and No. 3 are held by

Business transactions with related parties are

of the share capital, are in free fl oat.

Related parties

tional + Special Divisions.

Outlook

described in item 34 of the Notes.

Dr. Thomas Birtel CEO Responsibility Central Staff Divisions and Central Divisions BMTI, TPA as well as CML Construction Services

Klemens Haselsteiner Responsibility Central Divisions Digitalisation, Innovation and Business Development as well as Zentrale Technik, Responsibility Subdivision NN Russia

Dipl.-Ing. Siegfried Wanker Responsibility Segment International + Special Divisions

Mag. Christian Harder CFO Responsibility Central Division BRVZ

Dipl.-Ing. Dr. Peter Krammer Responsibility Segment South + East (except Subdivision NN Russia)

Dipl.-Ing. (FH) Alfred Watzl Responsibility Segment North + West

AUDITOR'S REPORT

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Audit Opinion

We have audited the consolidated fi nancial statements of

STRABAG SE, Villach, Austria,

and its subsidiaries ("the Group"), which comprise the consolidated Balance Sheet as at 31 December 2019, and the Consolidated Income Statement and Statement of total Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Cash Flow Statement for the year then ended, and the Notes to the Consolidated Financial Statements.

In our opinion, the consolidated fi nancial statements present fairly, in all material respects, the consolidated fi nancial position of the Group as at 31 December 2019, and its consolidated fi nancial performance and consolidated cashfl ows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, the additional requirements pursuant to Section 245a UGB (Austrian Commercial Code).

Basis for our Opinion

We conducted our audit in accordance with the EU Regulation No. 537/2014 ("AP Regulation") and Austrian Standards on Auditing. These standards require the audit to be conducted in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the "Auditor's Responsibilities" section of our report. We are independent of the audited Group in accordance with Austrian company law and professional regulations, and we have fulfi lled our other responsibilities under those relevant ethical requirements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signifi cance in our audit of the consolidated fi nancial statements. These matters were addressed in the context of our audit of the consolidated fi nancial statements as a whole, however, we do not provide a separate opinion thereon.

Measurement of construction contracts and revenue and earnings from construction contracts

Refer to notes section (15) and (20)

Risk for the Consolidated Financial Statements

Revenue recognized in the consolidated fi nancial statements of STRABAG SE as of 31 December 2019 mainly consists of revenue from construction contracts, which is accounted for by reference to their stage of completion (over time recognition using an output-oriented method on the basis of the work already performed). Furthermore, the item share of profi t or loss of equity-accounted investments includes signifi cant amounts of profi t or loss from projects managed in cooperation with partners in construction consortia, which are also measured over time based on an output method.

The stage of completion for construction contracts, whether executed alone or in cooperation with partners, is updated on an ongoing basis by means of periodic reporting. Besides the services already performed and the order backlog, in particular taking contract deviations and supplementary claims into account, periodic reporting also includes the costs incurred to date as well as remaining costs to be incurred. The data used in the measurement of construction contracts includes estimates regarding the progress and expected outcome of the projects. Profi t or loss is recognized by reference to the stage of completion of a project (over time recognition using an output-oriented method on the basis of the work already performed).

Technically complex and demanding projects, in particular, involve the risk that estimated total cost deviate considerably from actual cost incurred. Additionally, there is also a risk that receivables from construction contracts and construction consortia are not recoverable.

Our Response

AUDITOR'S REPORT

We have evaluated the measurement of construction contracts and revenue and earnings from construction contracts as follows:

Our audit procedures included the assessment of controls in connection with the recognition and measurement of construction contracts as well as detailed tests of individual cases for signifi cant large projects and random samples of other projects.
In the course of testing internal controls in respect of the accounting for projects, we critically analyzed the relevant controls and performed an assessment of their operating effectiveness. These controls include, on the one hand, automated IT-supported controls for the purpose of determining the relevant amounts respective in the fi nancial statements as well as system test routines for identifying abnormalities, and on the other hand manual controls in connection with order acceptance, ongoing project management as well as project monitoring and fi nalization of projects.

The tests of individual cases primarily included the following audit procedures:

Systematic and detailed inquiries regarding selected signifi cant construction contracts, in order to verify the correct accounting method, particularly in respect of project risks
Sample-based examination of contracts in respect of their components signifi cant to the assessment
Discussions with the Management Board and the operating management regarding individually signifi cant projects in order to assess the planning assumptions.
A critical analysis of the internal project reporting, in order to evaluate whether all known information was taken into account in the preparation of the fi nancial statements
Sample-based evaluation of the recoverability of accounts receivable from construction contracts (contract assets) and construction consortia
Retrospective assessment of individually signifi cant projects in connection with estimation uncertainties

Furthermore, we analyzed whether the required disclosures in the notes to the consolidated fi nancial statements include all necessary explanations in regards to revenue recognized from construction contracts and construction consortia and whether they appropriately describe the signifi cant estimation uncertainties.

Recoverability of deferred tax assets

Refer to notes section (17)

Risk for the Financial Statements

Deferred tax assets represent a signifi cant asset of STRABAG SE.

Before offsetting, deferred tax assets recognized in the consolidated fi nancial statements of STRABAG SE as of 31 December 2019 amount to EUR 483,528 k (thereof EUR 72,932 k from tax loss carryforwards). Furthermore, deferred tax assets were not recognized for tax loss carryforwards amounting to EUR 1,457,880 k, since utilization of the tax losses is not suffi ciently assured. Recognition of deferred tax assets is based mainly on the expected realization of future taxable profi ts as well as tax planning opportunities available to the entity.

Due to the signifi cance of deferred tax assets recognized and those not recognized as well as existing uncertainties in respect of their recoverability, this represents a key audit matter.

Our response

are not recoverable.

AUDITOR'S REPORT

Our Response

projects.

follows:

We have evaluated the measurement of construction contracts and revenue and earnings from construction contracts as

• Our audit procedures included the assessment of controls in connection with the recognition and measurement of construction contracts as well as detailed tests of individual cases for signifi cant large projects and random samples of other

• In the course of testing internal controls in respect of the accounting for projects, we critically analyzed the relevant controls and performed an assessment of their operating effectiveness. These controls include, on the one hand, automated IT-supported controls for the purpose of determining the relevant amounts respective in the fi nancial statements as well as system test routines for identifying abnormalities, and on the other hand manual controls in connection with order acceptance, ongoing

• Systematic and detailed inquiries regarding selected signifi cant construction contracts, in order to verify the correct ac-

• Discussions with the Management Board and the operating management regarding individually signifi cant projects in order

• A critical analysis of the internal project reporting, in order to evaluate whether all known information was taken into ac-

• Sample-based evaluation of the recoverability of accounts receivable from construction contracts (contract assets) and

Due to the signifi cance of deferred tax assets recognized and those not recognized as well as existing uncertainties in respect

• Sample-based examination of contracts in respect of their components signifi cant to the assessment

• Retrospective assessment of individually signifi cant projects in connection with estimation uncertainties

project management as well as project monitoring and fi nalization of projects.

The tests of individual cases primarily included the following audit procedures:

counting method, particularly in respect of project risks

count in the preparation of the fi nancial statements

they appropriately describe the signifi cant estimation uncertainties.

Deferred tax assets represent a signifi cant asset of STRABAG SE.

to assess the planning assumptions.

Recoverability of deferred tax assets

Risk for the Financial Statements

planning opportunities available to the entity.

of their recoverability, this represents a key audit matter.

construction consortia

Refer to notes section (17)

We have evaluated the recoverability of deferred tax assets as follows:

Our audit procedures included the assessment of controls in connection with the recognition and measurement of deferred tax assets and assumptions made by the Management Board and representatives of the operating divisions in respect of future taxable profi t as well as tax planning opportunities.
We compared the estimated future profi ts used as input data with the planning for the group of which the Supervisory Board has taken notice.
Furthermore, we compared the assumed earnings trend of the group with its historic data, specifi cally taking into account its sensitivity with regard to performance and outcome. Tax planning opportunities were analyzed particularly in regard to their feasibility.
Furthermore, we examined whether the Notes to the consolidated fi nancial statements include all required disclosures in connection with deferred tax assets and whether all signifi cant estimation uncertainties have been described adequately.

Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated fi nancial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, the additional requirements pursuant to Section 245a UGB (Austrian Commercial Code) and for such internal controls as management determines are necessary to enable the preparation of consolidated fi nancial statements that are free from material misstatement, whether due to fraud or error.

Management is also responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intents to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The audit committee is responsible for overseeing the Group's fi nancial reporting process.

Auditor's Responsibilities

Our objectives are to obtain reasonable assurance about whether the consolidated fi nancial statements as a whole are free from material misstatement – whether due to fraud or error – and to issue an auditor's report that includes our audit opinion. Reasonable assurance represents a high level of assurance, but provides no guarantee that an audit conducted in accordance with the AP Regulation and Austrian Standards on Auditing (and therefore ISAs), will always detect a material misstatement, if any. Misstatements may result from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these consolidated fi nancial statements.

As part of an audit in accordance with the AP Regulation and Austrian Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit.

Moreover:

We identify and assess the risks of material misstatement in the consolidated fi nancial statements, whether due to fraud or error, we design and perform audit procedures responsive to those risks and obtain suffi cient and appropriate audit evidence to serve as a basis for our audit opinion. The risk of not detecting material misstatements resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or override of internal control.
We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
We conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the respective note in the consolidated fi nancial statements. If such disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the consolidated fi nancial statements, including the notes, and whether the consolidated fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We obtain suffi cient appropriate audit evidence regarding the fi nancial information of the entities and business activities within the Group to express an opinion on the consolidated fi nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our audit as well as signifi cant fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.
We communicate to the audit committee that we have complied with the relevant professional requirements in respect of our independence, that we will report any relationships and other events that could reasonably affect our independence and, where appropriate, the related safeguards.
From the matters communicated with the audit committee, we determine those matters that were of most signifi cance in the audit i.e. key audit matters. We describe these key audit matters in our auditor's report unless laws or other legal regulations preclude public disclosure about the matter or when in very rare cases, we determine that a matter should not be included in our audit report because the negative consequences of doing so would reasonably be expected to outweigh the public benefi ts of such communication.

REPORT ON OTHER LEGAL REQUIREMENTS

Group Management Report

AUDITOR'S REPORT

In accordance with Austrian company law, the group management report is to be audited as to whether it is consistent with the consolidated fi nancial statements and prepared in accordance with legal requirements.

Management is responsible for the preparation of the group management report in accordance with Austrian company law.

We have conducted our audit in accordance with generally accepted standards on the audit of group management reports as applied in Austria.

Opinion

In our opinion, the group management report is consistent with the consolidated fi nancial statements and has been prepared in accordance with legal requirements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Statement

Based on our knowledge gained in the course of the audit of the consolidated fi nancial statements and our understanding of the Group and its environment, we did not note any material misstatements in the group management report.

Other Information

going concern.

AUDITOR'S REPORT

achieves fair presentation.

and, where appropriate, the related safeguards.

the public benefi ts of such communication.

REPORT ON OTHER LEGAL REQUIREMENTS

Group Management Report

as applied in Austria.

Opinion

appropriate.

Statement

• We conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the respective note in the consolidated fi nancial statements. If such disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a

• We evaluate the overall presentation, structure and content of the consolidated fi nancial statements, including the notes, and whether the consolidated fi nancial statements represent the underlying transactions and events in a manner that

• We obtain suffi cient appropriate audit evidence regarding the fi nancial information of the entities and business activities within the Group to express an opinion on the consolidated fi nancial statements. We are responsible for the direction,

• We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our audit as well as signifi cant fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.

• We communicate to the audit committee that we have complied with the relevant professional requirements in respect of our independence, that we will report any relationships and other events that could reasonably affect our independence

• From the matters communicated with the audit committee, we determine those matters that were of most signifi cance in the audit i.e. key audit matters. We describe these key audit matters in our auditor's report unless laws or other legal regulations preclude public disclosure about the matter or when in very rare cases, we determine that a matter should not be included in our audit report because the negative consequences of doing so would reasonably be expected to outweigh

In accordance with Austrian company law, the group management report is to be audited as to whether it is consistent with

Management is responsible for the preparation of the group management report in accordance with Austrian company law.

We have conducted our audit in accordance with generally accepted standards on the audit of group management reports

Based on our knowledge gained in the course of the audit of the consolidated fi nancial statements and our understanding of

the Group and its environment, we did not note any material misstatements in the group management report.

the consolidated fi nancial statements and prepared in accordance with legal requirements.

supervision and performance of the group audit. We remain solely responsible for our audit opinion.

Management is responsible for other information. Other information is all information provided in the annual report, other than the consolidated fi nancial statements, the group management report and the auditor's report. We expect the annual report to be provided to us after the date of the auditor's report.

Our opinion on the consolidated fi nancial statements does not cover other information and we do not provide any kind of assurance thereon.

In conjunction with our audit, it is our responsibility to read this other information as soon as it becomes available, to assess whether, based on knowledge gained during our audit, it contains any material inconsistencies with the consolidated fi nancial statements or any apparent material misstatement of fact.

Additional Information in accordance with Article 10 AP Regulation

We were elected as auditors at the Annual General Meeting on 28 June 2019 and were appointed by the supervisory board on 28 June 2019 to audit the fi nancial statements of Company for the fi nancial year ending on that date.

We have been auditors of the Company, without interruption, since the consolidated fi nancial statements at 31 March 1999. We declare that our opinion expressed in the "Report on the Consolidated Financial Statements" section of our report is consistent with our additional report to the Audit Committee, in accordance with Article 11 AP Regulation.

We declare that we have not provided any prohibited non-audit services (Article 5 Paragraph 1 AP Regulation) and that we have ensured our independence throughout the course of the audit, from the audited Group.

Engagement Partner

The engagement partner is Mr Mag. Ernst Pichler.

Linz, 8 April 2020

KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

signed by: Mag. Ernst Pichler Wirtschaftsprüfer (Austrian Chartered Accountant)

This report is a translation of the original report in German, which is solely valid.

The consolidated fi nancial statements together with our auditor's opinion may only be published if the consolidated fi nancial statements and the group management report are identical with the audited version attached to this report. Section 281 Paragraph 2 UGB (Austrian Commercial Code) applies.

INDIVIDUAL FINANCIAL STATEMENTS AS AT 31 DECMEBER 2019 152
Balance sheet as at 31 December 2019 152
Income statment for the 2019 financial year 154
NOTES TO THE 2018 FINANCIAL STATEMENTS OF STRABAG SE, VILLACH 155
I. Application of Austrian Business Enterprise Code 155
II. Accounting policies 155
III. Notes to the balance sheet 157
IV. Notes to the income statement 159
V. Additional disclosures 159
Statement of changes in non-current assets as of 31 December 2019
(Appendix 1 to the Notes of the financial statements) 162
List of participations (20.00 % interest minimum)
(Appendix 2 to the Notes of the financial statements) 164
Management and Supervisory Board (Appendix 3 to the Notes of the financial statements) 166
GROUP MANAGEMENT REPORT 167
Important events 167
Country report 175
Order backlog 191
Financial performance 192
Financial position and cash flows 194
Capital expenditures 196
Financing/Treasury 196
Report on the financial performance, financial position and cash flows of
STRABAG SE (Individual Financial Statements) 199
Segment report 201
Risk management 208
Research and development 215
Website Corporate Governance Report 216
Disclosures under Sec 243a Para 1 UGB 216
Related parties 217
Outlook 217
Events after the reporting period 218
AUDITOR'S REPORT 219

INDIVIDUAL FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019

Balance sheet as at 31 December 2019

		31.12.2019	31.12.2018
	Assests	€	T€
	A. Non-current assets:
	I. Property, plant and equipment:
	Other facilities, furniture and fi xtures and offi ce equipment	1,025,759.88	1,055
	II. Financial assets:
	1. Investments in subsidiaries	2,576,670,815.38	2,558,859
	2. Investments in participation companies	24,551,292.09	25,401
	3. Loans to participation companies	86,597,825.94	90,477
	4. Other loans	21,798.99	21
		2,687,841,732.40	2,674,758
		2,688,867,492.28	2,675,814
	B. Current assets:
	I. Accounts receivable and other assets:
	1. Trade receivables	31,164.25	33
	2. Receivables from subsidiaries	714,679,898.85	767,711
	thereof with a remaining term more than one year	250,000,000.00	250,000
	3. Receivables from participation companies	7,265,928.84	9,313
	thereof with a remaining term more than one year	2,133,570.13	2,194
	4. Other receivables and assets	33,750,128.67	32,658
	thereof with a remaining term more than one year	24,992,666.67	23,956
		755,727,120.61	809,715
	II. Cash assets, including bank accounts	2,839,186.74	118
		758,566,307.35	809,833
	C. Accrual and deferrals	176,270.00	839
	D. Deferred tax assets	10,797,265.00	5,526

Total		3,458,407,334.63	3,492,011

	31.12.2019	31.12.2018
Equity	€	T€
A. Equity:
I. Called up and paid in nominal capital (share capital):
Subscribed nominal capital (share capital)	110,000,000.00	110,000
less nominal value of own shares	-7,400,000.00	-7,400
	102,600,000.00	102,600
II. Capital reserves (committed)	2,152,047,129.96	2,152,047
III. Retained earnings:
1. Legally required reserves	72,672.83	73
2. Voluntary reserves	560,710,209.02	478,250
	560,782,881.85	478,322
IV. Reserves for own shares	7,400,000.00	7,400
V. Unappropriated net profi t	121,000,000.00	143,000
thereof profi t brought forward	9,620,000.00	9,620
	2,943,830,011.81	2,883,369
B. Provisions:
1. Provisions for taxes	1,021,000.00	615
2. Other provisions	24,918,756.00	28,646
	25,939,756.00	29,261
C. Accounts payable:
1. Bonds	400,000,000.00	500,000
thereof with a remaining term up to one year	200,000,000.00	100,000
thereof with a remaining term more than one year	200,000,000.00	400,000
2. Bank borrowings	0.00	18,500
thereof with a remaining term up to one year	0.00	18,500
3. Trade payables	1,141,178.77	1,054
thereof with a remaining term up to one year	1,141,178.77	1,054
4. Payables to subsidiaries	23,722,795.87	19,917
thereof with a remaining term up to one year	23,722,795.87	19,917
5. Payables to participation companies	54,337,840.41	27,294
thereof with a remaining term up to one year	54,337,840.41	27,294
6. Other payables	9,435,751.77	12,617
thereof taxes	1,730,551.35	1,266
thereof social security liabilities	30,843.14	20
thereof with a remaining term up to one year	9,435,751.77	12,617
	488,637,566.82	579,381
thereof with a remaining term up to one year	288,637,566.82	179,381
thereof with a remaining term more than one year	200,000,000.00	400,000
Total	3,458,407,334.63	3,492,011

Income statement for the 2019 fi nancial year

	2019	2018
	€	T€
1. Revenue (Sales)	76,043,288.19	63,530
2. Other operating income	549,873.53	619
3. Cost of materials and services:
a) Materials	-47,639.64	-55
b) Services	-17,963,659.47	-17,066
	-18,011,299.11	-17,120
4. Employee benefi ts expense:
a) Salaries	-9,400,256.86	-8,582
b) Social expenditure	-855,264.04	-717
thereof severance payments and contributions to employee benefi t plans	-117,815.81	-149
thereof social security contributions, as well as payroll-related and
other mandatory contributions	-620,566.20	-376
thereof other social expenditure	-116,882.03	-193
	-10,255,520.90	-9,299
5. Depreciation	-30,081.98	-30
6. Other operating expenses:
a) Taxes other than those included in item 15	-108,032.86	-114
b) Miscellaneous	-25,232,648.75	-17,524
	-25,340,681.61	-17,637
7. Subtotal of items 1 through 6 (operating result)	22,955,578.12	20,062
8. Income from investments	145,181,811.29	86,506
thereof from subsidiaries	140,690,870.99	84,887
9. Other interest and similar income	20,113,540.28	31,663
thereof from subsidiaries	14,457,074.13	23,872
10. Income from disposal and write-up of fi nancial assets and marketable securities	38,146,708.37	243
11. Expenses related to fi nancial assets:	-21,213,957.10	-6,111
a) Depreciation from subsidiaries	-19,115,025.00	-3,542
b) Other depreciation	0.00	-308
c) Other expenses from subsidiaries	-748,932.10	-11
d) Other	-1,350,000.00	-2,250
12. Interest and similar expenses	-12,563,914.99	-18,947
13. Subtotal of item 8 through 12 (fi nancial result)	169,664,187.85	93,355
14. Result before taxes	192,619,765.97	113,417
15. Taxes on income and gains	1,220,846.24	-2,220
thereof income tax	-2,269,930.29	-953
thereof tax allocation	-1,780,325.47	-1,884
thereof deferred tax income	5,271,102.00	617
16. Income after taxes = net income for the year	193,840,612.21	111,198
17. Reversal of retained earnings (voluntary reserves)	0.00	22,182
18. Allocation to retained earnings (voluntary reserves)	-82,460,612.21	0
19. Profi t for the period	111,380,000.00	133,380
20. Profi t brought forward	9,620,000.00	9,620
21. Unappropriated net profi t	121,000,000.00	143,000

NOTES TO THE 2019 FINANCIAL STATEMENTS OF STRABAG SE, VILLACH

I. Application of Austrian Business Enterprise Code

The Management Board of the company prepared these fi nancial statements as of 31 December 2019 in accordance with the Austrian Business Enterprise Code (UGB).

In preparing the present fi nancial statements, the previous method of presentation was maintained.

Where an asset or liability relates to more than one item in the balance sheet, the relationship of such asset or liability to the relevant items is disclosed in the notes.

The income statement was prepared in report form using the nature of expense method.

Additional information was provided in the notes as far as was necessary to ensure a true and fair view of the fi nancial position, fi nancial performance and cash fl ows.

The company is the topmost parent company of the companies within the scope of consolidation of STRABAG SE, Villach. The consolidated fi nancial statements are deposited with the Landes- als Handelsgericht Klagenfurt (District and Commercial Court Klagenfurt).

The company is a large corporation (Kapitalgesellschaft) as defi ned by Sec 221 of the Austrian Business Enterprise Code (UGB).

II. Accounting policies

GENERAL PRINCIPLES

The fi nancial statements were prepared in accordance with the "principles of orderly accounting" and following the general norm of presenting a true and fair view of the fi nancial position, fi nancial performance and cash fl ows.

The fi nancial statements were prepared in conformity with the "principle of completeness".

The valuation premise adopted is that of a going concern.

Individual assets and liabilities were measured in accordance with the "principle of individual valuation".

The fi nancial statements were prepared in accordance with the "principle of prudence" by only reporting profi t which was realized on the balance sheet date. All recognizable risks and impending losses which occurred in 2019 or an earlier fi nancial year were taken into consideration.

Estimates are based on a conservative assessment. If statistically measurable experiences from similar circumstances are available, these were considered when making the estimates.

The previously applied accounting policies were kept.

NON-CURRENT ASSETS

Property, plant and equipment

Property, plant and equipment are valued at historical cost less accumulated depreciation. In line with the relevant tax legislation, the company takes a full year's depreciation for acquisitions during the fi rst six months of the year and a half year's depreciation for acquisitions during the second six months of the year.

The depreciation is calculated using the straight-line method over the following useful lives:

	Years
from	to
Other facilities, furniture and fi xtures and offi ce equip 4	15

Low-value assets (individual cost up to € 400.00) are depreciated in full in the year in which they are acquired.

Extraordinary depreciation on a lower fair value measurement at the reporting date is undertaken where the impairment is considered permanent.

Financial assets

Financial assets are valued at cost or a lesser fair value if one is attributable where the impairment is considered permanent.

Loans are measured at historical cost. Lower values are recognized for permanent or signifi cant impairment losses.

Increases in non-current assets

The value of non-current assets is increased where there is no more cause for depreciation. The increase is not higher than the net carrying value calculated under consideration of the regular depreciation that would have been charged in the mean-time.

CURRENT ASSETS

Accounts receivable and other assets

Trade and other receivables are reported at nominal value.

The valuation of foreign currency receivables follows the strict "lowest value principle".

Individual value adjustments are made for recognizable risk.

Increases in current assets

Reversals of depreciation for current assets are done where there are no more cause for depreciation.

DEFERRED TAXES

Deferred taxes are recognized in accordance with Sec 198 Para 9 and 10 UGB using the balance sheet concept without discounts using the current corporate income tax rate of 25 %. No deferred tax assets are recognized for tax loss carryforwards.

The deferred tax assets resulting from the transition effective 1 January 2016 are distributed over fi ve years in accordance with Sec 906 Para 34 UGB.

PROVISIONS

All recognizable risks and impending losses were taken into account in the calculation of provisions in accordance with the legal framework.

Other provisions

Under application of the "principle of prudence", all recognizable risks at the date of balance sheet creation as well as liabilities of uncertain timing or amount were recognized in the item "Other provisions" at the value required according to reasonable entrepreneurial assessment.

LIABILITIES

Liabilities are valued at their settlement value.

Foreign currency liabilities are measured in accordance with the strict "highest value principle".

III. Notes to the balance sheet

NON-CURRENT ASSETS

The non-current assets are itemized and their changes in the year under report are recorded in the statement of changes in non-current assets (Appendix 1 to the Notes).

Information on investments can be found in the list of participations (Appendix 2 to the Notes).

Of the loans, an amount of € 4,408,000.00 (previous year: T€ 4,408) is due within the next year.

ACCOUNTS RECEIVABLE AND OTHER ASSETS

Receivables from subsidiaries involve cash-clearing, fi nancing, routine clearing, the calculation of intra-group and clearing of tax allocations and transfers of profi ts.

The item "Other receivables and assets" includes income of € 1,366,123.09 (previous year: T€ 469) which will be cash effective after the balance sheet date.

DEFERRED TAX ASSETS

Deferred tax assets were recognized on the reporting date for temporary differences between the tax base and the carrying amount for the following items:

	31.12.2019	31.12.2018
	€	T€
Property, plant and equipment	9,416.00	4
Financial assets	1,040,000.00	1,387
Remaining seventh from depreciation of participation	49,033,317.00	56,117
Provisions	16,865,794.00	18,550
Liabilities	3,549,333.00	664
Total	70,497,859.00	76,722
Resulting deferred taxes on 31.12. (25%)	17,624,465.00	19,181

The deferred taxes developed as follows:

	2019	2018
	€	T€
Balance on 1.1.	5,526,163.00	4,959
Distribution according to Sec 906 (34) UGB	6,827,200.00	6,827
Change in profi t or loss	-1,556,098.00	-6,210
Balance on 31.12.	10,797,265.00	5,526

EQUITY

The fully paid in share capital amounts to € 110,000,000.00 and is divided into 109,999,997 no-par bearer shares and three registered shares.

PROVISIONS

Other provisions were made for profi t sharing, investment risks and claims.

ACCOUNTS PAYABLE

Payables to subsidiaries involve routine clearing and clearing of tax allocation.

The item "Other payables" includes expenses in the amount of € 7,223,452.12 (previous year: T€ 10,612) which will be cash effective after the balance sheet date.

CONTINGENT LIABILITIES

	31.12.2019	31.12.2018
	€	T€
Sureties/Guarantees	7,857,032.47	52,776
Declarations of patronage	18,465,336.72	60,062
Total	26,322,369.19	112,838
thereof with subsidiaries	26,322,369.19	66,840

The company has made an unlimited warranty statement for the benefi t of STRABAG BRVZ GmbH, Spittal an der Drau, whereby is commited to fulfi l the obligations from the fi nancial futures contracts concluded by STRABAG BRVZ GmbH, Spittal an der Drau, if necessary.

Performance bonds in the amount of € 636,968,796.55 (previous year: T€ 654,092) exist for construction projects of subsidiaries.

Due to long-term rentals, letting and leasing, the use of property, plant and equipment not shown in the balance sheet results in an obligation of € 7,281,853.44 (previous year: T€ 7,281) for the 2020 fi nancial year. The sum of all obligations for the next fi ve years is € 36,409,267.20 (previous year: T€ 36,407).

IV. Notes to the income statement

REVENUES (SALES)

	2019	2018
	€	T€
Domestic revenue	36,986,903.32	32,847
Foreign revenue	39,056,384.87	30,683
Total	76,043,288.19	63,530

The revenue, which mostly involves the clearing of intra-group allocations as well as the pass-through of guarantee fees, insurance and rental costs, is generated domestically and abroad.

EMPLOYEE BENEFITS EXPENSE

The company employed on the average 6 employees during the year (previous year: 6 employees).

The severance payment expenses include contributions to employee benefi t plans in the amount of € 117,815.81 (previous year: T€ 68).

The salaries of the Management Board members in the 2019 fi nancial year amounted to T€ 8,269 (previous year: T€ 7,163).

OTHER OPERATING EXPENSES

Supervisory Board member salaries in the period under review amounted to € 162,000.00 (previous year: T€ 162).

The other operating expenses reported mainly include surety fees, legal and advisory costs, travel and advertising costs, insurance costs and other general administrative expenses.

V. Additional disclosures

EVENTS AFTER THE REPORTING PERIOD

Like all industries, the STRABAG Group has also been impacted by the COVID-19 coronavirus disease, which on 11 March 2020 was declared a pandemic by the World Health Organization. Especially those European countries in which the STRABAG Group generates most of its operating revenue have been particularly hard hit by COVID-19 and the associated government directives to prevent and contain its spread.

Risks resulting from disruptions in the STRABAG Group's supply chain can be partially cushioned by the high level of value added in raw materials. The existing inventory of construction equipment, machinery and other vehicles benefi t the group in this regard as well. Precautions are also being taken as part of the business continuity management to ensure that business activity is maintained to the full extent as much as possible in the event of disruptions.

In all decisions made in connection with COVID-19, however, the Management Board must also take into account its responsibility towards its employees. As a result of the mostly small, decentralised structures compared to other industries, the construction sector has a lower risk of simultaneous infection or quarantine of a critical part of the staff; nevertheless, the risk of infection must be further reduced with suitable measures such as avoiding in-person events, providing the workforce with hygiene information and supplies or enabling remote working where possible. It should be noted, however, that the number of known infected and quarantined persons among the workforce at the beginning of April 2020 remained relatively low and that the number of acute cases has been quite stable.

APPROPRIATION OF NET INCOME

The reported balance sheet profi t of € 121,000,000.00 enables the distribution of a dividend for the 2019 fi nancial year based on 110,000,000 shares of up to € 1.10 per share.

BOARD AND RELATED PARTY DISCLOSURES

The members of the Management and Supervisory Boards are listed separately (Appendix 3 to the Notes).

An agreement was concluded with STRABAG BRVZ GmbH, Spittal an der Drau, covering fi nancial and management accounting, operating and cost accounting, payroll accounting, cash management, insurance management and facility management.

The company is a group parent under Sec 9 Para 8 of the Austrian Corporate Income Tax Act (KStG) of 1988. Tax adjustments (both positive and negative allocations) between the group parent and the company were arranged in the form of tax allocation agreements.

For the benefi t of Mineral Abbau GmbH, Spittal an der Drau, there is a commitment to cover the losses, which may be terminated by giving three months' notice to the end of the calendar year.

For the benefi t of STRABAG AG, Cologne, there is a voluntary transfer of losses as outlined in Sec 302 of the German Stock Corporation Act (dAktG) for the 2020 fi nancial year.

The expenses for the auditor, KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz, for the fi nancial year amount to T€ 755 (previous year: T€ 691), of which T€ 62 (previous year: T€ 61) are for the audit of the fi nancial statements, T€ 629 (previous year: T€ 618) for other audit services and T€ 64 (previous year: T€ 12) for miscellaneous services.

In addition, T€ 14 (previous year: T€ 17) were calculated for miscellaneous services to subsidiaries.

Villach, 8 April 2020 The Management Board

Dr. Thomas Birtel CEO Responsibility Central Staff Divisions and Central Divisions BMTI, TPA as well as CML Construction Services

Mag. Christian Harder CFO Responsibility Central Division BRVZ

Klemens Haselsteiner Responsibility Central Divisions Digitalisation, Innovation and Business Development, Zentrale Technik as well as Division NN Russia

Dipl.-Ing. Siegfried Wanker Responsibility Segment International + Special Divisions

Dipl.-Ing. Dr. Peter Krammer Responsibility Segment South + East (except Division NN Russia)

Dipl.-Ing. (FH) Alfred Watzl Responsibility Segment North + West

Statement of changes in non-current assets as of 31 December 2019

Acquisition and production costs
Balance 1.1.2019	Additions	Transfers	Disposals	Balance 31.12.2019


1,316,774.44	548.34	0.00	548.34	1,316,774.44
1,316,774.44	548.34	0.00	548.34	1,316,774.44

2,745,121,396.11	3,893,624.94	-872,077.00	881,896.75	2,747,261,047.30
38,431,148.10	148,122.72	872,077.00	2,269,946.86	37,181,400.96
90,476,606.16	7,163,255.57	0.00	11,042,035.79	86,597,825.94
21,255.09	543.90	0.00	0.00	21,798.99
2,874,050,405.46	11,205,547.13	0.00	14,193,879.40	2,871,062,073.19
2,875,367,179.90	11,206,095.47	0.00	14,194,427.74	2,872,378,847.63

APPENDIX 1 TO THE NOTES TO THE 2019 FINANCIAL STATEMENTS OF STRABAG SE, VILLACH
Carrying values	Accumulated depreciation
Balance Carrying values Carrying values Transfers Disposals 31.12.2019 31.12.2019 31.12.2018	losses	Reversal of impairment	Additions	Balance 1.1.2019
0.00 548.34 291,014.56 1,025,759.88 1,055,293.52	0.00		30,081.98	261,480.92
0.00 548.34 291,014.56 1,025,759.88 1,055,293.52 1,055,293.52	0.00		30,081.98	261,480.92
-200,000.00 586,741.92 170,590,231.92 2,576,670,815.38 2,558,859,447.27		34,000,000.00	19,115,025.00	186,261,948.84
200,000.00 600,000.00 12,630,108.87 24,551,292.09 25,401,039.23	0.00		0.00	13,030,108.87
0.00 0.00 0.00 86,597,825.94 90,476,606.16	0.00		0.00	0.00
0.00 0.00 0.00 0.00 0.00 0.00 21,798.99 21,798.99 21,255.09 21,255.09	0.00 0.00		0.00 0.00	0.00 0.00
0.00 1,186,741.92 183,220,340.79 2,687,841,732.40 2,674,758,347.75 2,674,758,347.75		34,000,000.00	19,115,025.00	199,292,057.71
1,187,290.26 183,511,355.35 2,688,867,492.28 2,675,813,641.27 2,675,813,641.27	0.00	34,000,000.00	19,145,106.98	199,553,538.63

List of participations (20.00 % interest minimum)

	Interest	Equity/negative Equity 1	Result of the last fi nancial year 2
Name and residence of the company	%	T€	T€
Investments in subsidiaries:
"A-WAY Infrastrukturprojektentwicklungs- und -betriebs GmbH", Spittal an der Drau	100.00	35,506	32,015
"SBS Strabag Bau Holding Service GmbH", Spittal an der Drau	100.00	313,735	32,143
"Strabag Azerbaijan" Limited Liability Company, Baku	100.00	-3,156	-228
"Strabag" d.o.o. Podgorica, Podgorica	100.00	6,757	87
Asphalt & Beton GmbH, Spittal an der Drau	100.00	6,982	794
Bau Holding Beteiligungs GmbH, Spittal an der Drau	65.00	1,194,323	35,339
BHG Sp. z o.o., Pruszkow	100.00	3,082	273
CML Construction Services, Antwerpen	100.00	22	3
CML Construction Services AB, Stockholm	100.00	4	0
CML Construction Services d.o.o. Beograd, Belgrade	100.00	43	27
CML CONSTRUCTION SERVICE S.R.L., Bologna	100.00	10	0
CML CONSTRUCTION SERVICES d.o.o., Zagreb	100.00	60	3
CML Construction Services GmbH, Cologne	100.00	281	215
CML Construction Services GmbH, Schlieren	100.00	95	16
CML Construction Services GmbH, Vienna	100.00	119	3
CML CONSTRUCTION SERVICES Sp. z o.o., Pruszkow	100.00	256	-31
CML CONSTRUCTION SERVICES s. r. o., Bratislava	100.00	97	15
CML CONSTRUCTION SERVICES s.r.o., Prague	100.00	57	16
CML CONSTRUCTION SERVICES SRL, Bucharest	100.00	0	94
CML Construction Services Zrt., Budapest	100.00	225	20
DC1 Immo GmbH, Vienna	100.00	96	-78
DRP, d.o.o., Ljubljana	100.00	-8,428	-1,221
ERRICHTUNGSGESELLSCHAFT STRABAG SLOVENSKO s.r.o., Bratislava-Ruzinov	100.00	7,376	498
Erste Nordsee-Offshore-Holding GmbH, Vienna	51.00	134	-69
Facility Management Holding RF GmbH, Vienna	100.00	9	3

KMG - KLIPLEV MOTORWAY GROUP A/S, Aarhus	100.00	1,787	363
Mazowieckie Asfalty Sp. z o.o., Pruszkow	100.00	-303	-33
Mikrobiologische Abfallbehandlungs GmbH, Schwadorf	51.00	4193	2163
Mineral Abbau GmbH, Spittal an der Drau	100.00	7,219	2,214
OOO "CML Construction Services", Moscow	100.00	426	34
PRZEDSIEBIORSTWO ROBOT DROGOWYCH SPOLKA Z OGRANICZONA
ODPOWI W LIKWIDACJI, Choszczno	100.00	4	4
SAT REABILITARE RECICLARE SRL, Cluj-Napoca	100.00	1,217	284
SAT SANIRANJE cesta d.o.o., Zagreb	100.00	53	-74
SAT SLOVENSKO s.r.o., Bratislava	100.00	2,254	481
SAT Ukraine, Brovary	100.00	4,3133	3613
SF Bau vier GmbH, Vienna	100.00	-48	-7
STRABAG A/S, Aarhus	100.00	121	-60
STRABAG AG, Schlieren	100.00	6,456	-13,741
STRABAG AG, Cologne	100.00	1,197,241	112,061
STRABAG Infrastruktur Development, Moscow	100.00	128	62
STRABAG Oy, Helsinki	100.00	24	-265
STRABAG Property and Facility Services a.s., Prague	100.00	2,649	-800
STRABAG Real Estate GmbH, Cologne	28.40	216,482	6,830
Strabag RS d.o.o., Banja Luka	100.00	-699	-30
STRABAG Sh.p.k., Tirana	100.00	4	4
STRABAG Silnice a.s. (vormals: Karlovarske silnice, a.s.), Prague	100.00	2,597	6
TECH GATE VIENNA Wissenschafts- und Technologiepark GmbH, Vienna	94.00	3,288	15
TOO STRABAG Kasachstan, Astana	100.00	-3,2693	-3523
TPA GmbH, Cologne	100.00	652	140
Zweite Nordsee-Offshore-Holding GmbH, Vienna	51.00	-8,854	-127

2 net income/loss of the year

3 Financial statements as of 31.12.2018 4 no statement according to Para 242 Sec 2 UGB

	Interest	Equity/negative Equity 1	Result of the last fi nancial year 2
Name and residence of the company	%	T€	T€
Investments in participation companies:
A-Lanes A15 Holding B.V., Nieuwegein	24.00	4	4
ASAMER Baustoff Holding Wien GmbH, Vienna	20.93	4	4
ASAMER Baustoff Holding Wien GmbH & Co.KG, Vienna	20.93	4	4
DYWIDAG Verwaltungsgesellschaft mbH, Munich	50.00	4	4
Klinik für Psychosomatik und psychiatrische Rehabilitation GmbH, Spittal an der Drau	30.00	4	4
Prottelith Produktionsgesellschaft mbH, Liebenfels	24.00	4	4
SHKK-Rehabilitations GmbH, Vienna	50.00	4	4
SOCIETATEA COMPANIILOR HOTELIERE GRAND SRL, Bucharest	35.31	4	4
SRK Kliniken Beteiligungs GmbH, Vienna	25.00	4	4
Straktor Bau Aktien Gesellschaft, Kifi sia	50.00	4	4
Syrena Immobilien Holding Aktiengesellschaft, Spittal an der Drau	50.00	4	4

1 according to Para 224 Sec 3 UGB

2 net income/loss of the year

3 Financial statements as of 31.12.2018 4 no statement according to Para 242 Sec 2 UGB

Management and Supervisory Board

Management Board:

Suvervisory Board:

Dr. Alfred G u s e n b a u e r (Chairman) Mag. Erwin H a m e s e d e r (Vice Chairman) Dr. Andreas B r a n d s t e t t e r Thomas B u l l Mag. Kerstin G e l b m a n n Dr. Oleg G . K o t k o v Dipl.-Ing. Andreas B a t k e (works council) Miroslav C e r v e n y (works council) Magdolna P. G y u l a i n é (works council) Georg H i n t e r s c h u s t e r (works council) Wolfgang K r e i s (works council)

GROUP MANAGEMENT REPORT

Important events

FEBRUARY

Future reporting of STRABAG SE for fi rst and third quarters

Large-scale contract to build a section of the D35 motorway in the Czech Republic

Extension of mining contract in Chile

MARCH

Bridge upgrades along A9 motorway near Allersberg

Mining contracts for € 500 million in Chile

Contract awarded for Boll-Sinneringen bypass in Switzerland

Renovation of the south section of M3 metro line in Budapest

client is RBS, the regional transport association for Bern-Solothurn. The works for STRABAG AG include the new construction of the 425 m railway embankment between Worbstrasse and Bernstrasse, the main element of the project, as well as the construction of the Moosgasse underpass and of the access roads to the new station area.

STRABAG is renovating the south section of the M3 metro line in Budapest

Refi nancing of € 2.4 billion in loans before maturity

STRABAG SE took advantage of the favourable fi nancing environment to refi nance two loans totalling € 2.4 billion before their original maturity. The conditions and terms to maturity of the € 2.0 billion syndicated surety loan and the € 0.4 billion syndicated cash credit line have been redefi ned. The new fi ve-year terms to maturity – i.e. until 2024 – with two options to extend by one year each will further allow STRABAG SE to secure its comfortable fi nancing position for the long term.

Financial close of "Autopista al Mar 1" project in Colombia completed

Work on the Autopista al Mar 1 in Colombia

APRIL

ments and civil engineering works in a 25-month period. The second contract consists of tunnelling and civil works for a period of 39 months to

Renovation of the south section of M3 metro

Refi nancing of € 2.4 billion in loans before maturity

Financial close of "Autopista al Mar 1" project in Colombia completed

Work on the Autopista al Mar 1 in Colombia

line in Budapest

2020.

Contract awarded for Boll-Sinneringen bypass in Switzerland

complete 26,439 m of horizontal developments

been redefi ned. The new fi ve-year terms to maturity – i.e. until 2024 – with two options to extend by one year each will further allow STRABAG SE to secure its comfortable fi nanc-

STRABAG is renovating the south section of the M3 metro

creating 2,200 direct and indirect jobs.

ing position for the long term.

line in Budapest

and 4,179 m of shafts.

Acquisition of property management assets of CORPUS SIREO

ZÜBLIN to design and build wastewater pumping station in Qatar

Construction of Lot 6 of Limmat Valley rail line in Dietikon West

Rendering of Limmattalbahn

EFKON expands its presence on the Norwegian market

JUNE

Groundbreaking ceremony for educational campus Seestadt Aspern Nord in Vienna

Rendering of the educational campus

17 classes and a middle school with 16 classes, for a total of 1,100 children, as well as a youth centre. The facility is to open on schedule at the beginning of the 2021/22 school year.

STRABAG PFS buys PORREAL in Poland and the Czech Republic

STRABAG SE expands its Management Board to include digitalisation

STRABAG commences expanded € 1 billion contract for polyhalite mine in the UK

The TBM "Stella Rose" ready for action at Wilton

EFKON wins large Smart City project in in India

Modernisation of a railway line in the south of the Czech Republic

First Motel One in Poland developed and completed by STRABAG Real Estate

Motel One in the centre of Warsaw, Poland

AUGUST

JULY

GROUP MANAGEMENT REPORT

17 classes and a middle school with 16 classes, for a total of 1,100 children, as well as a youth

The TBM "Stella Rose" ready for action at Wilton

STRABAG PFS buys PORREAL in Poland and the Czech Republic

STRABAG SE expands its Management Board to include digitalisation

STRABAG commences expanded € 1 billion contract for polyhalite mine in the UK

centre. The facility is to open on schedule at the

at a Russian industrial group, he joined the STRABAG Group in Russia in 2011. There he was entrusted with central controlling, among other things. From 2015, he was employed at the German STRABAG group company Ed. Züblin AG, Stuttgart subdivision – initially as commercial business unit manager for turnkey construction, as of 2018 as commercial subdivi-

beginning of the 2021/22 school year.

technical specialists.

sion manager.

Modernisation of a railway line in the north of the Czech Republic

Project start at "In der Wiesen Ost" to build privately fi nanced owner-occupied fl ats

Privately fi nanced owner-occupied fl ats at In der Wiesen Ost

SEPTEMBER

Final agreement between STRABAG consortium and Autostrada Pedemontana Lombarda

STRABAG Group presents the latest trends for building the future

ZÜBLIN realising new modern, three-part offi ce complex in Berlin-Schönefeld

GROUP MANAGEMENT REPORT

Final agreement between STRABAG consortium and Autostrada Pedemontana Lombarda

(top right).

guarantee in March 2018, which the consortium deemed unjustifi ed. The present settlement agreement not only put an end to the interim proceedings concerning the invocation of the guarantee, but also to the pending legal disputes related to the construction delays and the accompanying considerable cost overruns.

robotics in the construction industry.

SEPTEMBER

STRABAG Group presents the latest trends for building the future

STRABAG building Hatta pumped storage power plant in Dubai OCTOBER

ZÜBLIN and MAX BÖGL awarded € 500 million contract for airport connection of new Stuttgart–Ulm railway line

Witten/Herdecke University opts for timber in new campus building

New campus building at Witten/Herdecke University: open space for work and communication

STRABAG building second section of new pumping station for Toronto wastewater treatment plant NOVEMBER

The pumping station will be built on this site of the Ashbridges Bay Wastewater Treatment Plant.

DECEMBER

STRABAG investing € 9 million in Austria's most modern apprenticeship training centre

The new training centre will meet the training needs of 250 apprentices per year.

Country report

GROUP MANAGEMENT REPORT

rooms, the extension building will also house the library, event rooms and a café/bar. Witten/ Herdecke University wants to create more space for its 2,600 students and over 900 employees

The new training centre will meet the training needs of 250

treatment plant

surface.

apprentices per year.

DECEMBER

NOVEMBER

to support them in their personal, academic and professional development. The completion of the extension building is scheduled for the summer

The pumping station will be built on this site of the Ashbridges Bay Wastewater Treatment Plant.

of 2021.

STRABAG building second section of new pumping station for Toronto wastewater

STRABAG investing € 9 million in Austria's most modern apprenticeship training centre

area.

DIVERSIFYING THE COUNTRY RISK

€ mln.	2019	% of total output volume 20191	2018	% of total output volume 2018	∆ %	∆ absolute
Germany	7,819	47	7,877	48	-1	-58
Austria	2,679	16	2,542	16	5	137
Poland	1,129	7	975	6	16	154
Hungary	848	5	714	4	19	134
Czech Republic	783	5	706	4	11	77
Americas	714	4	667	4	7	47
Slovakia	369	2	515	3	-28	-146
Rest of Europe	343	2	349	3	-2	-6
Benelux	318	2	351	2	-9	-33
Switzerland	232	1	273	2	-15	-41
Romania	225	1	197	1	14	28
Sweden	205	1	178	1	15	27
Asia	179	1	162	1	10	17
Croatia	152	1	163	1	-7	-11
Middle East	148	1	206	1	-28	-58
Serbia	148	1	111	1	33	37
Denmark	99	1	92	1	8	7
Russia	71	1	78	1	-9	-7
Africa	66	0	57	0	16	9
Slovenia	49	0	68	0	-28	-19
Bulgaria	42	0	42	0	0	0
Total	16,618	100	16,323	100	2	295

OUTPUT VOLUME BY COUNTRY

ECONOMY CONTINUES TO MOVE SIDEWAYS1

GROWTH COMPARISON CONSTRUCTION VS. GDP EUROPE

BCONSTRUCTION SECTOR EXPECTS STIMULUS FROM NEW EUROPEAN ENVIRONMENTAL POLICY

CIVIL ENGINEERING CONTINUES TO OUTPERFORM RESIDENTIAL CONSTRUCTION AND OTHER BUILDING CONSTRUCTION

GROWTH COMPARISON CONSTRUCTION SECTOR EUROPE

GROUP MANAGEMENT REPORT

ECONOMY CONTINUES TO MOVE SIDEWAYS1

3.2

GROWTH COMPARISON CONSTRUCTION VS. GDP EUROPE

2.3

1.3

2.0 1.4

Global politics has once again become a key factor signifi cantly impacting the development of the global economy. The trade confl ict between the US and China as well as the discussions and uncertainties surrounding Brexit adversely affected the confi dence of companies and households, resulting in weaker investment growth, exports and private consumption. GDP growth therefore remained relatively low in many economies in 2019. In the more highly developed countries, the slowdown occurred on a broad front. In the emerging and developing countries, the decline in economic activity was 2.5 % and 2.6 % in 2020 and 2021. According to its latest report, the United States is primarily harming itself with its trade confl icts. The reason for the lowest growth since the fi nancial crisis more than a decade ago is the unexpectedly weak recovery in trade and investment. At the same time, the World Bank warns of a new wave of debt in emerging and developing countries.

0.9

1.4

GDP growth Europe

Growth of construction output Europe

1.5

1.1

for 2020–2022 only expect growth rates be-

and 2 % for the years up to 2022.

tween 0.9 % and 1.1 %.

main large.

1 All growth forecasts as well as the particular national construction volumes are taken from the Euroconstruct and EECFA (Eastern European Construction Forecasting Association) winter 2019 reports. The indicated market share data are based on the data from

BCONSTRUCTION SECTOR EXPECTS STIMULUS FROM NEW EUROPEAN ENVIRONMENTAL

2018 2019e 2020e 2021e 2022e

1.1

The World Bank revised its growth forecast for the global economy in 2019 down by 0.2 percentage points to 2.4 % and expects growth of

even more pronounced.

POLICY

6 %

0 %

the year 2018.

Other building construction Residential construction

output

Total construction

AUSTRIA

GROUP MANAGEMENT REPORT

Other building construction Residential construction

output

Total construction

GERMANY

47 % contribution to the group output volume

of 0.6 % in 2020, while slight downward growth of -0.8 % and -0.7 % is also expected for the

Overall construction volume: € 352.8 billion GDP growth: 2019e: 0.6 % / 2020e: 0.9 % Construction growth: 2019e: 0.8 % / 2020e: -0.6 %

International + Special Divisions.

slightly declining results in this sector.

following two years.

domestic consumption.

Overall construction volume:	€ 43.7 billion
GDP growth:	2019e: 1.7 % / 2020e: 1.4 %
Construction growth:	2019e: 2.6 % / 2020e: 1.3 %

POLAND

Overall construction volume:	€ 59.8 billion
GDP growth:	2019e: 4.5 % / 2020e: 4.0 %
Construction growth:	2019e: 8.0 % / 2020e: 4.2 %

HUNGARY

GROUP MANAGEMENT REPORT

POLAND

7 % contribution to the group output volume

Following the positive development of the past few years, the Polish economy again posted a stable plus of 4.5 % in 2019. Similarly solid though somewhat lower growth is also forecast for the coming years. Rising consumption, which in turn is being fuelled by the positive situation on the job market, should also shape the coming years. The massive investments of the public sector in important infrastructure projects, cofi nanced by EU funding programmes, are also contributing to the positive development. In 2019, corporate investments for the fi rst time contributed the largest share to the increase in Other building construction also achieved a solid plus of 5.4 % in 2019. In addition to large orders from local governments and the public sector ahead of the Polish parliamentary elections, investments by foreign companies in new production facilities also provided some momentum. As part of the modernisation of the rail network, the renovation of 200 railway stations is also planned in the coming years. Euroconstruct forecasts that the sector will grow by 4.0 % in 2020, while the values should fl uctuate between +5.3 % and +2.9 % in 2021 and 2022.

Overall construction volume: € 59.8 billion GDP growth: 2019e: 4.5 % / 2020e: 4.0 % Construction growth: 2019e: 8.0 % / 2020e: 4.2 %

struction was 8.8 %.

total gross fi xed capital formation.

2022.

Overall construction volume: € 15.6 billion GDP growth: 2019e: 4.5 % / 2020e: 3.3 % Construction growth: 2019e: 13.3 % / 2020e: 5.4 %

CZECH REPUBLIC

GDP growth: 2019e: 2.6 % / 2020e: 2.4 % Construction growth: 2019e: 3.3 % / 2020e: 1.6 %

SLOVAKIA

GROUP MANAGEMENT REPORT

CZECH REPUBLIC

5 % contribution to the group output

for the next three years.

2.4 % in 2021 and 2022.

volume Overall construction volume: € 22.5 billion.

building permits; in the meantime, however, amendments to Czech building law have clearly helped to relieve this situation. Against this background, Euroconstruct continues to predict strong growth of 5.3 % for 2020. In 2021 and 2022, theses fi gures should decrease to still very solid +4.3 % and +3.6 %, respectively.

GDP growth: 2019e: 2.6 % / 2020e: 2.4 % Construction growth: 2019e: 3.3 % / 2020e: 1.6 %

struction even amounts to 17.2 %.

Overall construction volume:		€ 5.5 billion
GDP growth:	2019e: 2.4 % / 2020e: 2.3 %
Construction growth:	2019e: 0.2 % / 2020e: 1.0 %

BENELUX (BELGIUM AND NETHERLANDS)

BELGIUM

Overall construction volume:		€ 47.7 billion
GDP growth:	2019e: 1.1 % / 2020e: 1.1 %
Construction growth:	2019e: 2.8 % / 2020e: 3.8 %

NETHERLANDS

Overall construction volume:		€ 83.4 billion
GDP growth:	2019e: 1.8 % / 2020e: 1.5 %
Construction growth:	2019e: 3.6 % / 2020e: 0.5 %

household incomes and somewhat lower unemployment.

STRABAG achieved an output volume of € 317.74 million in the Benelux countries in 2019. This corresponds to a 2 % share of the group output volume (2018: 2 %).

SWITZERLAND

Overall construction volume: € 61.3 billion GDP growth: 2019e: 0.9 % / 2020e: 1.9 % Construction growth: 2019e: 0.7 % / 2020e: -0.4 %

In 2019, Switzerland contributed € 231.95 million, or 1 % (2018: 2 %), to the total output volume of the STRABAG Group.

ROMANIA

GROUP MANAGEMENT REPORT

Large national infrastructure projects, such as the expansion of the regional express rail network, contributed to this positive development. As these generate around 40 % of growth in the entire Belgian construction sector, Euroconstruct forecasts a somewhat stronger increase of 3.8 % and 3.4 % for 2020 and 2021, respectively. In addition, the government that was newly elected in May 2019 gave a clear indication of upcoming investments. The growth is expected to slow back to 1.2 % in 2022, however. Other building construction, which has been somewhat weak in recent years, also benefi ted from public sector investments in national programmes. Residential construction, which had benefi ted primarily from temporary tax breaks and a signifi cant expansion of building permits in recent years, grew rather moderately in 2019 at +1.6 %. Due to the start of energy effi ciency promotion programmes, however, Euroconstruct predicts growth of between 3.4 % and 3.9 % for the next two years before levelling off Euroconstruct again forecasts solid growth of

ery of +2.7 % is expected for 2022.

group output volume (2018: 2 %).

STRABAG achieved an output volume of € 317.74 million in the Benelux countries in 2019. This corresponds to a 2 % share of the

also see room for public sector investments. However, the declining capacity utilisation in the industrial sector prompted the national bank to conduct a revaluation of the Swiss franc and enact an expansive monetary policy in the reporting period. For 2020 and 2021, Euroconstruct is therefore forecasting slightly higher growth rates of 1.9 % and 1.5 % for the country,

Overall construction volume: € 61.3 billion GDP growth: 2019e: 0.9 % / 2020e: 1.9 % Construction growth: 2019e: 0.7 % / 2020e: -0.4 %

2.7 % in the industry.

again at +1.1 % in 2022.

SWITZERLAND

1 % contribution to the group output volume

SWEDEN

2.1 % before a return to negative growth rates in 2021 with -0.1 %.

GDP growth:	2019e: 1.2 % / 2020e: 1.1 %
Construction growth:	2019e: -0.3 % / 2020e: -1.9 %

The output volume of the STRABAG Group in Sweden amounted to € 205.27 million in 2019.

CROATIA

GROUP MANAGEMENT REPORT

SWEDEN

1 % contribution to the group output

age of 1.5 % p.a.

2.1 % before a return to negative growth rates in

GDP growth: 2019e: 1.2 % / 2020e: 1.1 % Construction growth: 2019e: -0.3 % / 2020e: -1.9 %

The output volume of the STRABAG Group in Sweden amounted to € 205.27 million in 2019.

2021 with -0.1 %.

market stands at 3.6 %.

volume Overall construction volume: € 42.8 billion

again in 2022 with +1.9 %.

2022: +2.8 %).

volume	Overall construction volume:
	GDP growth:	2019e: 2.9 % / 2020e: 2.6 %
	Construction growth:	2019e: 11.3 % / 2020e: 8.9 %

The STRABAG Group generated € 152.48 million in the Croatian market in 2019. It is the country's second-largest market participant.

SERBIA

volume		Overall construction volume:		€ 3.5 billion
		GDP growth:		2019e: 3.8 % / 2020e: 4.3 %
		Construction growth:	2019e: 21.5 % / 2020e: -3.2 %

The STRABAG Group generated an output volume on the Serbian market of € 148.11 million in 2019.

MIDDLE EAST, AMERICAS, AFRICA, ASIA

DENMARK, RUSSIA, SLOVENIA, BULGARIA AND REST OF EUROPE

Overall construction volume:		€ 36.5 billion
GDP growth:	2019e: 1.3 % / 2020e: 1.3 %
Construction growth:	2019e: 1.6 % / 2020e: 1.3 %

RUSSIA

Overall construction volume:		€ 124.4 billion
GDP growth:		2019e: 1.3 % / 2020e: 1.7 %
Construction growth:		2019e: -0.4 % / 2020e: 1.9 %

SLOVENIA
Overall construction volume:		€ 3.3 billion
GDP growth:		2019e: 2.8 % / 2020e: 3.0 %
Construction growth:		2019e: 5.7 % / 2020e: 2.1 %

BULGARIA

Overall construction volume:		€ 7.4 billion
GDP growth:	2019e: 3.6 % / 2020e: 3.0 %
Construction growth:	2019e: 8.7 % / 2020e: 6.5 %

Denmark

GROUP MANAGEMENT REPORT

SERBIA

1 % contribution to the group output

The Serbian economy continued its upswing in 2019 with GDP growth of 3.8 %. In addition to higher employment fi gures and growing wages, investments by industry and commerce further boosted the economic engine, while the construction industry also made a signifi cant contribution. Moreover, foreign direct investment reached a record level. The current GDP forecasts of +4.3 % (2020) and +4.5 % (2021) may building construction (+17.0 %). Shopping centres, hotels and industrial buildings were particularly in demand here, while offi ce space only slowly caught up. Civil engineering, which also accounts for the largest share of the Serbian construction volume, developed most strongly in 2019 with +28.1 %. The main driver here is and remains pipeline construction. An interim minus of 8.4 % is being forecast for the sector in 2020, however, and EECFA predicts a slight overall correction of -3.2 % for the Serbian construction industry in 2020. In 2021 things are expected to go up again with a plus of

GDP growth: 2019e: 3.8 % / 2020e: 4.3 % Construction growth: 2019e: 21.5 % / 2020e: -3.2 %

The STRABAG Group generated an output volume on the Serbian market of € 148.11 million

characterised by high technological expertise: civil engineering, industrial and infrastructure

projects as well as tunneling.

Special Divisions segment.

4.5 %.

volume Overall construction volume: € 3.5 billion

in 2019.

MIDDLE EAST, AMERICAS, AFRICA, ASIA

7 % contribution to the group output volume

therefore be revised upwards.

The output volume of the STRABAG Group in Denmark amounted to € 99.49 million in 2019.

Russia

The STRABAG Group generated an output volume of € 71.42 million in Russia in 2019. In the region, STRABAG is active almost exclusively in building and industrial construction.

Slovenia

With a plus of 2.8 %, the Slovenian economy again exhibited GDP growth above the EU average in 2019. A new investment promotion law is stimulating both the production and service sector. According to EECFA, rising real wages and a positive development in exports should continue to give the country solid GDP growth of 3.0 % and 2.7 % in the next two years.

Bulgaria

After the dramatic slump in 2016 (-39.7 %), the Bulgarian construction industry continued its upswing for the third year in a row in 2019 with an increase of 8.7 %. This development was supported above all by residential construction (+18.1 %), which benefi ted primarily from low mortgage rates and rising real wages. In view of government programmes to improve energy effi ciency, EECFA predicts strong growth of 8.4 % for this sector in 2020 before the curve turns reporting period with +12.2 %, driven mainly by the construction of new single-family houses. Other building construction saw a sideways movement (+1.0 %) in 2019 after two years of enormous growth, and this trend is likely to continue with a slight decline of 0.3 % and 0.6 % in the next two years. Finally, civil engineering showed an increase of 4.1 % thanks to new infrastructure projects in the fi eld of renewable energies. For 2020, EECFA predicts further growth of 1.5 % in this segment, while the trend is likely to decline slightly at -2.3 % in 2021.

The STRABAG Group achieved an output volume of € 48.71 million in Slovenia in 2019.

downwards by -3.2 % in 2021. Other building construction, whose development has been fl uctuating for years, saw a solid increase of 7.0 % in 2019. In the capital of Sofi a in particular, investments by foreign companies noticeably increased the need for modern offi ce space. Civil engineering, in turn, (+2.8 %) benefi ted from numerous large-scale projects in rail and road construction and the expansion of gas grid connections to neighbouring countries. Growth of 6.3 % is expected here in 2020 before the start of the new EU fi nancial framework for 2020–2027 brings about a massive increase of 16.9 % in 2021.

The STRABAG Group generated € 41.86 million on the Bulgarian market in 2019.

Order backlog

GROUP MANAGEMENT REPORT

Slovenia

Bulgaria

reporting period with +12.2 %, driven mainly by the construction of new single-family houses. Other building construction saw a sideways movement (+1.0 %) in 2019 after two years of enormous growth, and this trend is likely to continue with a slight decline of 0.3 % and 0.6 % in the next two years. Finally, civil engineering showed an increase of 4.1 % thanks to new infrastructure projects in the fi eld of renewable energies. For 2020, EECFA predicts further growth of 1.5 % in this segment, while the trend is likely to decline slightly at -2.3 % in 2021.

The STRABAG Group achieved an output volume of € 48.71 million in Slovenia in 2019.

The STRABAG Group generated € 41.86 million

on the Bulgarian market in 2019.

16.9 % in 2021.

3.0 % and 2.9 % for the next two years.

ORDER BACKLOG BY SEGMENT AS AT 31 DECEMBER 2019

	Total	North +	South +	Inter national + Special		Total	∆ total	∆ total
€ mln.	2019	West	East	Divisions	Other	2018	%	absolute
Germany	7,617	6,604	159	851	3	7,178	6	439
Austria	1,885	5	1,580	300	0	2,056	-8	-171
Poland	1,498	1,455	0	43	0	1,632	-8	-134
Americas	1,056	0	0	1,056	0	1,134	-7	-78
Rest of Europe	1,036	14	139	883	0	431	140	605
Czech Republic	761	0	745	16	0	454	68	307
Hungary	649	0	618	31	0	967	-33	-318
Benelux	439	423	2	14	0	567	-23	-128
Asia	410	0	5	405	0	398	3	12
Romania	282	14	261	7	0	187	51	95
Middle East	281	0	5	276	0	173	62	108
Slovakia	224	0	215	9	0	262	-15	-38
Serbia	194	0	194	0	0	108	80	86
Croatia	188	0	185	3	0	92	104	96
Sweden	171	135	0	36	0	390	-56	-219
Switzerland	151	8	141	2	0	181	-17	-30
Denmark	150	150	0	0	0	211	-29	-61
Italy	116	0	7	109	0	115	1	1
Russia	103	0	102	1	0	84	23	19
Bulgaria	92	0	92	0	0	105	-12	-13
Africa	69	0	0	69	0	125	-45	-56
Slovenia	39	0	39	0	0	50	-22	-11
Total	17,411	8,808	4,489	4,111	3	16,900	3	511

DEVELOPMENT OF ORDER BACKLOG

CONSTRUCTION SITES INCLUDED IN THE ORDER BACKLOG AS AT 31 DECEMBER 2019

Category	Number of construction sites	Number of construction sites as % of total	Order backlog € mln.1	Order backlog as % of total
Small orders (€ 0–1 mln.)	8,617	78	1,444	8
Medium-sized orders (€ 1–15 mln.)	1,993	18	3,660	21
Large orders (€ 15–50 mln.)	297	3	4,397	25
Very large orders (>€ 50 mln.)	132	1	7,910	46
Total	11,039	100	17,411	100

Part of the risk management

THE TEN LARGEST PROJECTS IN THE ORDER BACKLOG AS AT 31 DECEMBER 2019

Country	Project	Order backlog € mln.	as % of total order backlog
	United Kingdom North Yorkshire Polyhalite Project	878	5.0
Chile	Alto Maipo power plant	387	2.2
Germany	New rail line /airport tunnel	379	2.2
Germany	EDGE East Side	265	1.5
Chile	El Teniente – main supply tunnel	242	1.4
Singapore	Deep Tunnel Sewerage System	227	1.3
Germany	Stuttgart 21, underground railway station	216	1.2
Germany	JV Tunnel Hauptbahnhof Second core rapid transit route, Munich	198	1.1
Germany	Modernisation of main university building, Bielefeld	148	0.9
Chile	El Teniente – access tunnel	131	0.8
Total		3,072	17.6

Financial performance

¹ Rounding differences are possible.

EXPENSES

GROUP MANAGEMENT REPORT

Financial performance

Special Divisions 21 % to the revenue.

1 Rounding differences are possible.

DEVELOPMENT OF EBITDA AND EBITDA MARGIN1

Effective tax rate: 34.4 %

^{1 2016} adjusted for non-operating income in the amount of € 27.81 million. 2018 adjusted for a non-operating step-up profi t in the amount of € 55.31 million.

DEVELOPMENT OF ROCE

The return on capital employed (ROCE)¹ reached 7.5 % after 7.6 % in the previous year.

Earnings per share: € 3.62

Financial position and cash fl ows

BALANCE SHEET

€ mln.	31.12.2019	% of balance sheet total2	31.12.2018	% of balance sheet total2
Non-current assets	5,249.85	43	4,775.92	41
Current assets	7,000.96	57	6,791.69	59
Equity	3,855.90	31	3,653.77	32
Non-current liabilities	2,344.53	19	2,326.19	20
Current liabilities	6,050.38	49	5,587.65	48
Total	12,250.81	100	11,567.61	100

KEY BALANCE SHEET FIGURES

	31.12.2015	31.12.2016	31.12.2017	31.12.2018	31.12.2019
Equity ratio (%)	31.0	31.5	30.7	31.6	31.5
Net debt (€ mln.)	-1,094.48	-449.06	-1,335.04	-1,218.28	-1,143.53
Gearing ratio (%)	-33.0	-13.8	-39.3	-33.3	-29.7
Capital employed (€ mln.)	5,448.01	5,258.17	5,242.91	5,552.09	5,838.71

Net cash position of more than € 1.1 billion

GROUP MANAGEMENT REPORT

Financial position and cash fl ows

6.4

€ mln. 31.12.2019

The total assets and liabilities increased to € 12.3 billion compared to € 11.6 billion on 31 December 2018, in part due to the fi rst-time application of IFRS 16 Leases. This also explains the

2 Rounding differences are possible.

Non-current assets 5,249.85 43 4,775.92 41 Current assets 7,000.96 57 6,791.69 59 Equity 3,855.90 31 3,653.77 32 Non-current liabilities 2,344.53 19 2,326.19 20 Current liabilities 6,050.38 49 5,587.65 48 Total 12,250.81 100 11,567.61 100

6.7

2015 2016 2017 2018 2019

1 ROCE = (net income + interest on debt – interest tax shield (25 %))/(average group equity + interest-bearing debt)

The return on capital employed (ROCE)¹ reached 7.5 % after 7.6 % in the previous year.

7.6

GROUP MANAGEMENT REPORT

% of balance

sheet total2 31.12.2018

increase in property, plant and equipment and fi nancial liabilities. Despite this increase of the balance sheet total, the equity ratio remained nearly unchanged at 31.5 % (2018: 31.6 %).

% of balance sheet total2

7.5

amounted to € 3.62 (2018: € 3.45).

4.1

DEVELOPMENT OF ROCE

10 %

Earnings per share:

€ 3.62

BALANCE SHEET

0 %

As usual, a net cash position was reported on 31 December 2019. This fi gure fell slightly in the

face of the marginally higher fi nancial liabilities from € 1.2 billion to € 1.1 billion.

CALCULATION OF NET DEBT1

€ mln.	31.12.2015	31.12.2016	31.12.2017	31.12.2018	31.12.2019
Financial liabilities	1,579.75	1,426.08	1,293.98	1,363.33	1,422.21
Severance provisions	96.13	110.02	111.10	114.68	124.68
Pension provisions	451.50	457.48	440.11	420.31	435.92
Non-recourse debt	-489.53	-439.38	-389.78	-730.77	-665.53
Cash and cash equivalents	-2,732.33	-2,003.26	-2,790.45	-2,385.83	-2,460.81
Total	-1,094.48	-449.06	-1,335.04	-1,218.28	-1,143.53

REPORT ON OWN SHARES

Capital expenditures

STRABAG had forecast net capital expenditures (cash fl ow from investing activities) in the amount of no more than € 550 million for the 2019 fi nancial year. In the end, they totalled € 593.30 million.

Most of the maintenance investments were made in the core markets of Germany, Poland and

COMPOSITION OF CAPEX

Financing/Treasury

KEY FIGURES TREASURY

	2015	2016	2017	2018	2019
Interest and other income (€ mln.)	82.07	73.90	46.90	38.62	30.97
Interest and other expense (€ mln.)	-106.49	-77.68	-74.05	-66.05	-56.32
EBIT/net interest income (x)	-14.0	-112.4	-16.5	-20.4	-23.8
Net debt/EBITDA (x)	-1.3	-0.5	-1.6	-1.3	-1.0

Capital expenditures

to the scope of consolidation.

Financing/Treasury

The number one objective for the treasury management of STRABAG SE is assuring the continued existence of the company through the

KEY FIGURES TREASURY

COMPOSITION OF CAPEX

€ 700 mln.

€ 0

6.10 395.75

23.29

Acquisition of intangible assets and PPE Acquisitions of fi nancial investments

GROUP MANAGEMENT REPORT

2015 2016 2017 2018 2019

maintenance of constant solvency. This objective is to be reached through the provision of suffi cient short-term, medium-term and long-term

Interest and other income (€ mln.) 82.07 73.90 46.90 38.62 30.97 Interest and other expense (€ mln.) -106.49 -77.68 -74.05 -66.05 -56.32 EBIT/net interest income (x) -14.0 -112.4 -16.5 -20.4 -23.8 Net debt/EBITDA (x) -1.3 -0.5 -1.6 -1.3 -1.0

€ -50 mln. 2015 2016 2017 2018 2019

-4.43

457.62

48.38

70.26

27.55

8.72

31.38

647.44

644.99

Enterprise acquisitions (changes to the scope of consolidation)

158.00

412.16

39.03

Croatia, Austria and Romania.

previous year.

Most of the maintenance investments were made in the core markets of Germany, Poland and The management of liquidity risks has become a central element of the corporate management at STRABAG. In practice, liquidity risks come in various forms:

• In the short term, all daily payment obligations must be covered in time and/or in their entirety.

GROUP MANAGEMENT REPORT

In the medium term, liquidity levels must be suffi cient so that no transactions or projects become impossible due to a lack of suffi cient fi nancial means or guarantees or that they cannot be executed at the desired pace.
In the long term, there should be suffi cient fi nancial means available to be able to pursue the strategic development targets.

PAYMENT OBLIGATIONS

€ mln.	Book value 31.12.2019	Book value 31.12.2018
Bonds	400.00	500.00
Bank borrowings	721.89	863.33
Lease liabilities	300.32	0
Total	1,422.21	1,363.33

PAYMENT PROFILE OF BONDS

199 50

MANAGEMENT REPORT

Report on the fi nancial performance, fi nancial position and cash fl ows of STRABAG SE (Individual Financial Statement)

FINANCIAL PERFORMANCE

The company's revenue increased signifi cantly from € 63.53 million in the previous year, growing by € 12.51 million to € 76.04 million. This development is essentially due to a sharp increase in the settlement of guarantee fees.

	2019	2018
Revenue in T€ (sales)	76,043	63,530
Earnings before interest and taxes in T€ (EBIT)	185,071	100,701
Return on sales in % (ROS)1	>100.0	>100.0
Return on equity in % (ROE)2	6.6	3.9
Return on investment in % (ROI)³	5.3	2.8

The earnings before interest and taxes (EBIT) increased signifi cantly from € 100.70 million in the previous year, growing by € 84.37 million to € 185.07 million. This fi gure is characterised by a sharply higher net income from investments.

The operating earnings for the 2019 fi nancial year amount to € 22.96 million, € 2.90 million above the previous year's level (€ 20.06 million). The positive earnings effect results from the increased income from guarantee fees.

The considerable increase in the fi nancial earnings by € 76.31 million from € 93.35 million to € 169.66 million was achieved through signifi cantly higher dividend distributions from the subsidiaries. A further positive earnings effect resulted from the signifi cantly higher income from the disposal and write-up of fi nancial assets

FINANCIAL POSITION AND CASH FLOWS

compared to the previous year. This includes a signifi cant write-up on an investment in the project development business.

The interest income reached a positive total of € 7.55 million (2018: € 12.72 million). This fi gure is based on the interest income for fi nancing provided to subsidiaries and from the external fi nancing costs for interest-bearing borrowings. The decrease is due to lower interest income from cash clearing receivables.

Overall, the company generated a net profi t of € 193.84 million for the 2019 fi nancial year (2018: € 111.20 million).

The improvement in earnings is also refl ected positively in the profi tability indicators.

The reduction in receivables from subsidiaries mainly relates to receivables from cash clearing.

The decrease in liabilities results from a bond repayment. In addition, bank borrowings were reduced through the repayment of the bonded loan.

	31.12.2019	31.12.2018
Net debt in T€1	107,402	115,795
Working capital in T€2	74,440	41,675
Equity ratio in %	85.1	82.6
Gearing ratio in %3	3.6	4.0

The net debt of € 107.40 million as at 31 December 2019, slightly lower compared to the previous year (€ 115.80 million), results from the reduction in cash and cash equivalents due to the repayment of a bond. Due to an increase in equity, the gearing ratio improved from 4.0 % in the previous year to 3.6 % in the reporting year.

Report on the fi nancial performance, fi nancial position

Revenue in T€ (sales) 76,043 63,530 Earnings before interest and taxes in T€ (EBIT) 185,071 100,701 Return on sales in % (ROS)1 >100.0 >100.0 Return on equity in % (ROE)2 6.6 3.9 Return on investment in % (ROI)³ 5.3 2.8

development is essentially due to a sharp increase in the settlement of guarantee fees.

compared to the previous year. This includes a signifi cant write-up on an investment in the pro-

Overall, the company generated a net profi t of € 193.84 million for the 2019 fi nancial year

The improvement in earnings is also refl ected

The reduction in receivables from subsidiaries mainly relates to receivables from cash clearing.

The decrease in liabilities results from a bond repayment. In addition, bank borrowings were reduced through the repayment of the bonded

positively in the profi tability indicators.

ject development business.

from cash clearing receivables.

(2018: € 111.20 million).

loan.

2019 2018

and cash fl ows of STRABAG SE (Individual Financial

Statement)

FINANCIAL PERFORMANCE

MANAGEMENT REPORT

The company's revenue increased signifi cantly from € 63.53 million in the previous year, growing by € 12.51 million to € 76.04 million. This

creased income from guarantee fees.

FINANCIAL POSITION AND CASH FLOWS

some balance sheet items.

1 ROS = EBIT/revenue 2 ROE = EBT/avg. equity 3 ROI = EBIT/avg. total capital

The total assets of STRABAG SE as at 31 December 2019 remained unchanged at € 3.5 billion compared to the previous year (€ 3.5 billion). Nevertheless, there were signifi cant changes in The working capital increased from € 41.68 million by € 32.76 million to € 74.44 million in the 2019 fi nancial year. The basis for this was the increase in receivables from profi t and loss transfers.

Due to the increase in equity, the equity ratio of 85.1 % is above that of the previous year (82.6 %) and remains at a very high level.

T€	2019	2018
Cash fl ow from operating activities	109,505	32,454
Cash fl ow from investing activities	5,732	20,775
Cash fl ow from fi nancing activities	-225,344	-280,790

The cash fl ow from operating activities amounts to € 109.51 million and is largely attributable to the cash fl ow from earnings. The increase in working capital had a negative impact.

The cash fl ow from investing activities saw an infl ow of cash and cash equivalents totalling € 9.77 million, thereof € 4.41 million from the reduction of fi nancing receivables and € 5.36 million from disposals of fi nancial assets. This contrasts with the use of funds for additions to fi nancial assets in the amount of € 4.04 million. The total cash fl ow from investing activities amounts to € 5.73 million.

The payment of the dividend for the 2018 fi nancial year in the amount of € 106.84 million, the bond repayment in the amount of € 100.00 million and the repayment of the bonded loan in the amount of € 18.5 million led to an outfl ow of € 225.34 million in the cash fl ow from fi nancing activities in 2019.

1 Net debt = interest-bearing liabilities + non-current provisions - cash and cash equivalents 2 Working capital = current assets - cash and cash equivalents - current non-interest-bearing liabilities

3 Gearing ratio = net debt /equity

Segment report

GROUP MANAGEMENT REPORT

OVERVIEW OF THE FOUR SEGMENTS WITHIN THE GROUP

In 2019, the segments were comprised as follows1 :

NORTH + WEST

Management Board responsibility: Alfred Watzl Germany, Poland, Benelux, Scandinavia, Ground Engineering

SOUTH + EAST

M. B. responsibility: Peter Krammer

Austria, Czech Republic, Slovakia, Hungary, South-East Europe, Switzerland, Environmental Technology

M. B. responsibility: Thomas Birtel2 Russia

INTERNATIONAL + SPECIAL DIVISIONS

M. B. responsibility: Siegfried Wanker International, Tunnelling, Services, Real Estate

Development, Infrastructure Development, Construction Materials

OTHER

	North + West	South + East	International + Special Divisions
Residential Construction			
Commercial and Industrial Facilities			
Public Buildings			
Production of Prefabricated Elements		
Engineering Ground Works			
Bridge Construction			
Power Plants			
Environmental Technology		
Railway Construction		
Roads, Earthworks			
Waterway Construction, Embankments		
Landscape Architecture and Development, Paving, Large-Area Works		
Sports and Recreation Facilities		
Protective Structures			
Sewerage Systems			
Production of Construction Materials			
Ground Engineering	
Tunnelling			
Real Estate Development			
Infrastructure Development			
Operation/Maintenance/Marketing of PPP Projects			
Property and Facility Services			

2 Until 31 December 2019

NORTH + WEST: BUILDING BOOM IN CORE MARKETS

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018 – 2019 absolute
Output volume	8,106.93	7,827.48	4	279.45
Revenue	7,555.75	7,242.42	4	313.33
Order backlog	8,807.66	8,804.15	0	3.51
EBIT	310.20	161.40	92	148.80
EBIT margin (% of revenue)	4.1	2.2
Employees (FTE)	25,386	24,222	5	1,164

OUTPUT VOLUME NORTH + WEST

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018 – 2019 absolute
Germany	6,402	6,221	3	181
Poland	999	895	12	104
Benelux	285	305	-7	-20
Sweden	180	169	7	11
Denmark	96	87	10	9
Rest of Europe	48	59	-19	-11
Austria	28	25	12	3
Switzerland	23	28	-18	-5
Americas	21	9	133	12
Romania	16	13	23	3
Middle East	4	7	-43	-3
Africa	4	7	-43	-3
Czech Republic	1	1	0	0
Hungary	0	1	-100	-1
Total	8,107	7,827	4	280

Strong development of the German infrastructure business

The North + West segment posted a 4 % higher output volume of € 8,106.93 million in 2019. This is due to the two largest countries in the segment – Germany and Poland – while the other markets, such as Benelux, Sweden and Denmark, showed small, inconsistent deviations.

ORDER BACKLOG

Order backlog remains at a high level

Employee numbers grow with output

GROUP MANAGEMENT REPORT

NORTH + WEST: BUILDING BOOM IN CORE MARKETS

€ mln. 2019 2018

EBIT margin (% of revenue) 4.1 2.2

€ mln. 2019 2018

Strong development of the German infrastructure business

EBIT € 400 mln.

€ 0

€ 10 bn.

2017 2018 2019

8.8

310

2017 2018 2019

161

199

ORDER BACKLOG

8.18.8 Order backlog remains at a high level

Output volume 8,106.93 7,827.48 4 279.45 Revenue 7,555.75 7,242.42 4 313.33 Order backlog 8,807.66 8,804.15 0 3.51 EBIT 310.20 161.40 92 148.80

Employees (FTE) 25,386 24,222 5 1,164

Germany 6,402 6,221 3 181 Poland 999 895 12 104 Benelux 285 305 -7 -20 Sweden 180 169 7 11 Denmark 96 87 10 9 Rest of Europe 48 59 -19 -11 Austria 28 25 12 3 Switzerland 23 28 -18 -5 Americas 21 9 133 12 Romania 16 13 23 3 Middle East 4 7 -43 -3 Africa 4 7 -43 -3 Czech Republic 1 1 0 0 Hungary 0 1 -100 -1 Total 8,107 7,827 4 280

countries and Scandinavia. Ground engineering

∆ 2018 – 2019 %

GROUP MANAGEMENT REPORT

∆ 2018 – 2019 %

modernisation of the main building at Bielefeld University, the realisation of the offi ce building "Airsite West" at the airport in Munich and the construction of the airport connection to the

margin increased from 2.2 % to 4.1 %.

new Stuttgart–Ulm rail line.

∆ 2018 – 2019 absolute

can also be found in this segment.

The North + West segment executes construction services of nearly any kind and size with a focus on Germany, Poland, the Benelux

OUTPUT VOLUME NORTH + WEST

The number of employees in Germany and Poland grew along with the output volume.

Outlook1 : Demand remains strong

There is also continuing demand in the regional business in the German transportation infrastructures sector. Given the still limited capacity for executing projects, this is causing a continued

SELECTED PROJECTS NORTH + WEST

Overall, the staff levels in the segment increased by 5 % to 25,386 employees.

Project	Order backlog in € mln.	as % of total group order backlog
A1 Kamieńsk–Radomsko	94	0.5
S7 Strzegowo–Pieńki	88	0.5
S13 Troisdorf	86	0.5
Carlsberg City District BA9	79	0.5
Combinatie Herepoort	79	0.5

SOUTH + EAST: GROWTH IN OUTPUT VOLUME, DECREASE IN EARNINGS

			∆ 2018 – 2019	∆ 2018 – 2019
€ mln.	2019	2018	%	absolute
Output volume	4,915.79	4,639.26	6	276.53
Revenue	4,879.50	4,521.81	8	357.69
Order backlog	4,489.37	4,311.00	4	178.37
EBIT	121.97	142.03	-14	-20.06
EBIT margin (% of revenue)	2.5	3.1
Employees (FTE)	19,850	18,729	6	1,121

		2018 – 2019	∆ 2018 – 2019
			absolute
			197
			132
636	557	14	79
318	460	-31	-142
205	235	-13	-30
179	156	15	23
151	145	4	6
146	109	34	37
131	148	-11	-17
126	110	15	16
67	70	-4	-3
42	61	-31	-19
36	37	-3	-1
17	15	13	2
3	0	n. a.	3
3	8	-63	-5
2	0	n. a.	2
1	4	-75	-3
4,916	4,639	6	277
	2019 2,176 677	2018 1,979 545	∆ % 10 24

OUTPUT VOLUME SOUTH + EAST

2017 2018 2019

4.5

4.34.5

€ 0

EBIT down in contrast to output due to provisions

The revenue increased by 8 % to € 4,879.50 million. Due to provisions, on the other hand, the EBIT fell by 14 % to € 121.97 million and the EBIT margin slipped from 3.1 % to 2.5 %.

Order backlog: Growth in the Czech Republic offsets declines in Hungary and Slovakia

Output-related increases in the number of employees

The same dynamic by country as with the output volume was evident in the number of employees, which also increased in total by 6 % to 19,850.

Outlook1 : Inconsistent trends

1 This outlook does not take into account any impact from the coronavirus pandemic.

development is also positive. The output volume and order backlog could be moderately increased here.

GROUP MANAGEMENT REPORT

OUTPUT VOLUME SOUTH + EAST

€ mln. 2019 2018

EBIT down in contrast to output due to provisions

Output-related increases in the number of employees

1 This outlook does not take into account any impact from the coronavirus pandemic.

The same dynamic by country as with the output volume was evident in the number of

: Inconsistent trends

Outlook1

ORDER BACKLOG

205

€ 10 bn.

€ 0

EBIT € 400 mln.

€ 0

2017 2018 2019

142

122

4.5

4.34.5

Austria 2,176 1,979 10 197 Hungary 677 545 24 132 Czech Republic 636 557 14 79 Slovakia 318 460 -31 -142 Switzerland 205 235 -13 -30 Romania 179 156 15 23 Germany 151 145 4 6 Serbia 146 109 34 37 Croatia 131 148 -11 -17 Rest of Europe 126 110 15 16 Russia 67 70 -4 -3 Slovenia 42 61 -31 -19 Bulgaria 36 37 -3 -1 Asia 17 15 13 2 Poland 3 0 n. a. 3 Benelux 3 8 -63 -5 Middle East 2 0 n. a. 2 Americas 1 4 -75 -3 Total 4,916 4,639 6 277

Order backlog: Growth in the Czech Republic offsets declines in Hungary and Slovakia

∆ 2018 – 2019 %

GROUP MANAGEMENT REPORT

The revenue increased by 8 % to € 4,879.50 million. Due to provisions, on the other hand, the EBIT fell by 14 % to € 121.97 million and the EBIT margin slipped from 3.1 % to 2.5 %.

the southern section of the M3 metro line in Budapest – was added to the books in 2019. And in Slovakia, bid evaluations on the client side are regularly delayed, sometimes for several years. On the other hand, these developments were compensated, among other things, by several modernisation orders from the railways

employees, which also increased in total by 6 %

metropolitan areas of Graz and Linz. This applies to both residential construction as well as commercial and industrial construction. In the fi rst quarter of 2019, STRABAG was commissioned with the construction of the Austrian headquarters of an international technology group. In transportation infrastructures, the

in the Czech Republic.

to 19,850.

∆ 2018 – 2019 absolute

In Hungary, incoming orders for the industry as a whole fell in 2019, following the large number of large-scale public-sector projects that had been awarded until than, due to the EU funding period expiring in 2020. As a result, construction growth in this country far outpaced overall economic growth, a situation that is also expected for 2020.

The extremely strong competition with simultaneous cost increases and staff shortages in the Czech Republic and Slovakia continues. These risks are monitored on an ongoing basis, especially as STRABAG is handling a number of large railway construction contracts in the Czech Republic. In the building construction segments of both countries, STRABAG is working primarily on commercial projects for private clients, such as the automotive industry.

In Switzerland, construction activity picked up in 2019. Public-sector clients are preparing additional large-scale projects, but the price situation remains tense.

The situation in South-East Europe is characterised by strongly mixed trends. While the tendering activity can be described as active in transportation infrastructures in Croatia, few activities that would be attractive for STRABAG are currently taking place in Slovenia. Romania is experiencing political instability, lack of legal certainty and a low price level despite a large

number of tenders and material price increases. What all markets have in common is a lack of qualifi ed personnel, extremely high bitumen prices and increasing competition from Chinese companies. In building construction, some countries are exhibiting high demand, while activity is low in others.

SELECTED PROJECTS SOUTH + EAST

Country	Project	Order backlog in € mln.	as % of total group order backlog
Hungary	M30 Miskolc–Tornyosnémeti	108	0.6
	Czech Republic Modernisation of Veselí–Soběslav railway line	80	0.5
Croatia	Pelješac access road	64	0.4
Austria	Triiiple Residential Towers, Vienna	60	0.4
Hungary	Metro M3 – modernisation of fi ve stations	55	0.3

INTERNATIONAL + SPECIAL DIVISIONS: EXPECTED LOSS OF A LARGE ORDER IN THE PROPERTY & FACILITY SERVICES BUSINESS

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018– 2019 absolute
Output volume	3,450.57	3,740.30	-8	-289.73
Revenue	3,216.67	3,437.82	-6	-221.15
Order backlog	4,110.77	3,782.41	9	328.36
EBIT	183.97	198.69	-7	-14.72
EBIT margin (% of revenue)	5.7	5.8
Employees (FTE)	25,219	26,279	-4	-1,060

OUTPUT VOLUME INTERNATIONAL + SPECIAL DIVISIONS

€ mln.	2019	2018	∆ 2018 – 2019 %	∆ 2018– 2019 absolute
Germany	1,207	1,464	-18	-257
Americas	678	652	4	26
Austria	448	506	-11	-58
Rest of Europe	168	180	-7	-12
Asia	162	147	10	15
Hungary	158	163	-3	-5
Middle East	142	198	-28	-56
Czech Republic	140	144	-3	-4
Poland	119	74	61	45
Africa	62	50	24	12
Slovakia	47	52	-10	-5
Romania	29	27	7	2
Benelux	29	36	-19	-7
Sweden	23	8	188	15
Croatia	19	14	36	5
Slovenia	6	7	-14	-1
Bulgaria	5	4	25	1
Russia	3	6	-50	-3
Denmark	3	4	-25	-1

Switzerland	2	3	-33	-1
Serbia Total	1 3,451	1 3,740	0 -8	0 -289

2017 2018 2019

184

Continued very high EBIT margin

GROUP MANAGEMENT REPORT

€ mln. 2019 2018

EBIT margin (% of revenue) 5.7 5.8

€ mln. 2019 2018

OUTPUT VOLUME INTERNATIONAL + SPECIAL DIVISIONS

Continued very high EBIT margin

in the middle of the year.

EBIT € 400 mln.

€ 0

2017 2018 2019

199

184

The revenue fell at a somewhat lower rate than the output, slipping by 6 % to settle at € 3,216.67 million. Starting from a high level, the

Output volume 3,450.57 3,740.30 -8 -289.73 Revenue 3,216.67 3,437.82 -6 -221.15 Order backlog 4,110.77 3,782.41 9 328.36 EBIT 183.97 198.69 -7 -14.72

Employees (FTE) 25,219 26,279 -4 -1,060

Germany 1,207 1,464 -18 -257 Americas 678 652 4 26 Austria 448 506 -11 -58 Rest of Europe 168 180 -7 -12 Asia 162 147 10 15 Hungary 158 163 -3 -5 Middle East 142 198 -28 -56 Czech Republic 140 144 -3 -4 Poland 119 74 61 45 Africa 62 50 24 12 Slovakia 47 52 -10 -5 Romania 29 27 7 2 Benelux 29 36 -19 -7 Sweden 23 8 188 15 Croatia 19 14 36 5 Slovenia 6 7 -14 -1 Bulgaria 5 4 25 1 Russia 3 6 -50 -3 Denmark 3 4 -25 -1 Switzerland 2 3 -33 -1 Serbia 1 1 0 0 Total 3,451 3,740 -8 -289

∆ 2018 – 2019 %

GROUP MANAGEMENT REPORT

∆ 2018 – 2019 %

EBIT dropped slightly to € 183.97 million (2018: € 198.69 million) while the EBIT margin weakened a bit to 5.7 % (2018: 5.8 %). The continued positive environment in real estate development and a capital gain from the sale of a facility management investment in Hungary had a positive impact on the fi gures. This was contrasted by the loss of the large order in the property &

facility services business.

∆ 2018– 2019 absolute

Order backlog driven by major order in the UK

In general, we can see a shift of capacities from European core markets to international markets and the United Kingdom. In total, staff levels fell

by 4 % to 25,219 people.

Capacity shift from core markets to international markets and the UK

Outlook1 : Slightly lower output volume expected in 2020

1 This outlook does not take into account any impact from the coronavirus pandemic.

this market, pursuing projects in the UK and in the international mining sector.

The development of the construction materials business is essentially linked to that of the construction sector. Here we should point out that the bitumen price has risen sharply in 2019.

SELECTED PROJECTS INTERNATIONAL + SPECIAL DIVISIONS

Country	Project	Order backlog in € mln.	as % of total group order backlog
	United Arab Emirates Hatta Pumped Storage Power Plant, Dubai	117	0.7
Chile	Candelaria Norte	113	0.7
Israel	5th Line Water Supply, Jerusalem	85	0.5
Canada	Pumping station, Toronto	74	0.4
Austria	Koralmtunnel 2	69	0.4

OTHER (SERVICE COMPANIES AND CENTRAL STAFF DIVISIONS)

This segment encompasses the group's internal central divisions and central staff divisions.

			∆ 2018 – 2019	∆ 2018– 2019
€ mln.	2019	2018	%	absolute
Output volume	144.68	115.84	25	28.84
Revenue	16.65	19.78	-16	-3.13
Order backlog	3.68	2.15	71	1.53
EBIT	0.87	0.86	1	0.01
EBIT margin (% of revenue)	5.2	4.3
Employees (FTE)	6,464	6,230	4	234

Risk management

RISK MANAGEMENT AS A CORE TASK OF MANAGEMENT

All STRABAG management employees, within the scope of their duties and responsibilities, and according to the Rules of Procedure and relevant company regulations, are obliged to

work with the employees to set risk identifi cation measures,
monitor the risks,

• introduce countermeasures, and

• pass on relevant information about risks to other units or levels within the company. This requirement especially applies to all employees of the STRABAG Group.

The STRABAG SE Management Board prohibits engaging in business transactions whose realisation could endanger the company's existence.

RISK MANAGEMENT USING DEFINED RISK GROUPS

The group's internal risk report defi nes the following central risk groups:

External risk
Operating and technical risks
Financial risks
Ethical risks
Human resource risks
IT risks
Investment risks
Legal risks
Political risks

EXTERNAL RISKS COUNTERED THROUGH DIVERSIFICATION

OPERATING AND TECHNICAL RISKS REDUCED THROUGH BINDING MINIMUM STANDARDS

FINANCIAL RISKS: ACTIVE LIQUIDITY AND RECEIVABLES MANAGEMENT

All STRABAG management employees, within the scope of their duties and responsibilities, and according to the Rules of Procedure and relevant company regulations, are obliged to

• introduce countermeasures, and

ees of the STRABAG Group.

pliance system.

as follows:

• pass on relevant information about risks to other units or levels within the company. This requirement especially applies to all employ-

The STRABAG SE Management Board prohibits engaging in business transactions whose realisation could endanger the company's existence.

margin on the costs of the project.

• work with the employees to set risk identifi ca-

RISK MANAGEMENT USING DEFINED RISK GROUPS

EXTERNAL RISKS COUNTERED THROUGH DIVERSIFICATION

The group's internal risk report defi nes the

tion measures,

• monitor the risks,

• External risk

• Financial risks

• Ethical risks

• IT risks

• Legal risks

• Political risks

• Human resource risks

• Investment risks

following central risk groups:

• Operating and technical risks

ETHICAL RISKS COUNTERED WITH AN ETHICS AND BUSINESS COMPLIANCE SYSTEM

As corruption and anti-competitive behaviour pose risks in the construction industry, STRABAG has implemented a set of tools that have proved effective in combating these problems. The rules for proper business behaviour are conveyed by the ethics and business compliance system. These have group-wide validity. The STRABAG business compliance model is based on the Code of Conduct, the Business Compliance Guidelines, the Business Compliance Guidelines for Business Partners, and the personnel structure of the STRABAG business compliance model, consisting of the group business compliance coordinator, the regional business compliance representatives, the internal ombudspersons and the external ombudsperson. Details on the ethical risks are available in the Consolidated Non-Financial Report pursuant to Sec 267a of the Austrian Commercial Code (UGB).

People & Workplace

HUMAN RESOURCE RISKS: COUNTERMEASURES WITH CENTRAL HUMAN RESOURCE MANAGEMENT AND NEEDS-ORIENTED HUMAN RESOURCE DEVELOPMENT

IT RISKS: IT USAGE GUIDELINES AND CONTINUOUS REVIEW OF SECURITY CONCEPTS TO COUNTER CYBERCRIME

INVESTMENT RISKS: SECTOR-TYPICAL MINORITY HOLDINGS OF MIXING PLANTS

The shares in mixing companies typically involve minority interests, as is usual in this sector. With these companies, economies of scope are at the fore.

LEGAL RISKS AVOIDED THROUGH EXTENSIVE RISK ANALYSIS

POLITICAL RISK: INTERRUPTIONS AND DISPOSSESSION POSSIBLE

consequences of political changes which could have an impact on the group's fi nancial structure. These risks are analysed during the tendering phase and assessed by internal committees.

People & Workplace

Environmental Responsibility

MANAGEMENT SYSTEM FOR WORK SAFETY AND HEALTH IN PLACE

CERTIFIED ENVIRONMENTAL AND ENERGY MANAGEMENT SYSTEM DESIRED

QUALITY MANAGEMENT AS COMPONENT OF THE INTEGRATED MANAGEMENT SYSTEM

BUSINESS CONTINUITY: RIGOROUS INCLUSION OF GROUP CENTRAL DIVISIONS

EVALUATION OF PARTNER COMPANIES TO REDUCE RISKS IN THE SUPPLY CHAIN

A review of the current risk situation reveals that there were no risks which jeopardised the company's existence, nor were there any visible future risks

REPORT ON KEY FEATURES OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM IN RELATION TO THE FINANCIAL REPORTING PROCESS

Introduction

GROUP MANAGEMENT REPORT

MANAGEMENT SYSTEM FOR WORK SAFETY AND HEALTH IN PLACE

CERTIFIED ENVIRONMENTAL AND ENERGY MANAGEMENT SYSTEM DESIRED

QUALITY MANAGEMENT AS COMPONENT OF THE INTEGRATED MANAGEMENT SYSTEM

BUSINESS CONTINUITY: RIGOROUS INCLUSION OF GROUP CENTRAL DIVISIONS

EVALUATION OF PARTNER COMPANIES TO REDUCE RISKS IN THE SUPPLY CHAIN

A review of the current risk situation reveals that there were no risks which jeopardised the

group-wide work safety standards are followed. The aspects of work safety and health also form part of the evaluation of subcontractors and suppliers. Details on the risks related to employee safety and health are available in the Consolidated Non-Financial Report pursuant to

and – wherever possible – minimises the use of natural resources, avoids waste and promotes recycling. Details on the environmental risks are available in the Consolidated Non-Financial

products at any time. In this process, quality management forms a component of an integrated management system. This system is documented in the Management Manual, in group directives and in subordinated provisions.

includes the rigorous inclusion of the group's own specialised central divisions. These are capable of procuring, for example, equipment, accommodation, IT systems or staff on short notice, they build up long-term strategic partnerships with selected subcontractors and suppliers, and they have emergency scenarios

description of the services and products to be procured, and an agreement on acceptance criteria for the products and services. STRABAG also systematically evaluates subcontractors, service providers and suppliers as part of its decision-making foundation for future orders.

audited in the IT division.

Report pursuant to Sec 267a UGB.

Sec 267a UGB.

People & Workplace

Environmental Responsibility

company's existence, nor were there any visible future risks

Control environment

The corporate culture determines the control environment in which management and employees operate. STRABAG is constantly working to improve its communication and to convey its corporate values as defi ned in its Code of Conduct and its Business Compliance Guidelines in order to guarantee moral standards, ethics and integrity within the company and in its dealings with others. The implementation of the internal control system in relation to the fi nancial reporting process is done on the basis of internal rules and guidelines. Responsibilities for internal control were adapted to fi t the corporate organisation. The internal audit department carries out periodic, announced as well as unannounced inspections of all relevant business units as part of its responsibility for monitoring compliance with the law and corporate guidelines in the technical and commercial areas. The internal audit department also monitors the effectiveness of business compliance. During these inspections, the internal audit department analyses the legality and correctness of individual actions. The department also conducts regular, independent reviews of compliance with internal guidelines in the area of accounting. The head of the internal audit department reports directly to the CEO. The effectiveness of the work of the internal audit department is reviewed periodically by the fi nancial auditor. After the most recent review in 2015, a renewed audit was commissioned in 2019.

Risk assessment

The management identifi es and monitors risks relating to the fi nancial reporting process, with a focus on those risks that are typically considered to be material.

Control activities

Information and communication

Monitoring

BRZV central division support the Management Board in this task.

Research and development

GROUP MANAGEMENT REPORT

Control activities

Information and communication

Monitoring

involved in the monitoring process.

BRZV central division support the Management

ed IT controls included in the system.

Board in this task.

at an early stage.

Audit Committee.

The STRABAG Group spent about € 17 million on research, development and innovation activities during the 2019 fi nancial year (2018: about € 14 million).

Website Corporate Governance Report

The STRABAG SE Consolidated Corporate Governance Report is available online at www.strabag.com > Investor Relations > Corporate Governance > Corporate Governance Report.

Disclosures under Sec 243a Para 1 UGB

1. The share capital of STRABAG SE amounts to € 110,000,000 and consists of 110,000,000 fully paid-in, no-par value shares with a pro rata value of € 1 per share of the share capital. 109,999,997 shares are bearer shares and are traded in the Prime Market segment of the Vienna Stock Exchange. Three shares are registered shares. Each bearer share and each registered share accounts for one vote (one share – one vote). The nomination rights associated with registered shares No. 1 and No. 2 are described in more detail under item 4.
1. The Haselsteiner Group (Haselsteiner Familien-Privatstiftung, Dr. Hans Peter Haselsteiner), the Raiffeisen Group (Raiffeisen-Holding Niederösterreich-Wien reg. Gen.m.b.H, BLR Baubeteiligungs GmbH, "GULBIS" Beteiligungs GmbH), the UNIQA Group (UNIQA Insurance Group AG, UNIQA Beteiligungs-Holding GmbH, UNIQA Österreich Versicherungen AG, UNIQA Erwerb von Beteiligungen Gesellschaft m.b.H.) and MKAO "Rasperia Trading Limited"2 (controlled by Oleg Deripaska), as shareholder groups of STRABAG SE, have signed a syndicate agreement governing (1) nomination

one share - one vote

¹ Head count

² The shareholder Rasperia Trading Limited, Cyprus, moved its headquarters to the Russian Federation and is now called MKAO "Rasperia Trading Limited".

To the knowledge of STRABAG SE, the following shareholders held a direct or indirect interest of at least 10.0 % of the share capital of STRABAG SE on 31 December 2019:

GROUP MANAGEMENT REPORT

the quality of the buildings. TPA has about 9501 employees at 130 locations in 18 countries, making it one of Europe's largest private laboratraffi c fl ows can also be optimised in historic city districts to ensure the implementation of en-

The STRABAG Group spent about € 17 million on research, development and innovation activities during the 2019 fi nancial year (2018: about

Corporate Governance > Corporate Govern-

vironmental zones.

€ 14 million).

ance Report.

The STRABAG SE Consolidated Corporate Governance Report is available online at www.strabag.com > Investor Relations >

The share capital of STRABAG SE amounts to € 110,000,000 and consists of 110,000,000 fully paid-in, no-par value shares with a pro rata value of € 1 per share of the share capital. 109,999,997 shares are bearer shares and are traded in the Prime Market segment of the Vienna Stock Exchange. Three shares are registered shares. Each bearer share and each registered share accounts for one vote (one share – one vote). The nomination rights associated with registered shares No. 1 and No. 2 are described in more detail under item 4.
The Haselsteiner Group (Haselsteiner Familien-Privatstiftung, Dr. Hans Peter Haselsteiner), the Raiffeisen Group (Raiffeisen-Holding Niederösterreich-Wien reg. Gen.m.b.H, BLR Baubeteiligungs GmbH, "GULBIS" Beteiligungs GmbH), the UNIQA Group (UNIQA Insurance Group AG, UNIQA Beteiligungs-Holding GmbH, UNIQA Österreich Versicherungen AG, UNIQA Erwerb von Beteiligungen Gesellschaft m.b.H.) and MKAO "Rasperia Trading Limited"2

one share - one vote

trolled by Oleg Deripaska), as shareholder groups of STRABAG SE, have signed a syndicate agreement governing (1) nomination

1 Head count

"Rasperia Trading Limited".

Website Corporate Governance Report

Disclosures under Sec 243a Para 1 UGB

(con-

2 The shareholder Rasperia Trading Limited, Cyprus, moved its headquarters to the Russian Federation and is now called MKAO

(AktG).

tory companies.

Haselsteiner Group ........................... 26.4 %
Raiffeisen Group ............................... 13.2 %
UNIQA Group .................................... 14.3 %
MKAO "Rasperia Trading Limited" .....25.9 %

Three shares are – as mentioned under item 1 – registered shares entered in the shareholder register. Registered shares No.1 and No. 2 require the consent of the Supervisory Board for their full or partial sale and pledging. Registered shares No. 1 and No. 3 are held by

Related parties

Business transactions with related parties are described in item 34 of the Notes.

Outlook

1. No employee stock option programmes exist.
1. No further regulations exist beyond items 2 and 4 regarding the nomination and recall of members of the Management and Supervisory Boards or regarding changes to the Articles of Association which do not result directly from relevant law and legislation.
1. With the exception of the agreements over a syndicated surety loan and a syndicated cash credit line, there exist no signifi cant agreements to which STRABAG SE is party and which would become effective, change or end due to a change of ownership in STRABAG SE following a takeover offer.
1. No compensation agreements exist between STRABAG SE and its Management and Supervisory Board members or employees in the event of a public takeover offer.

The net investments (cash fl ow from investing activities) in 2020 are not expected to exceed the value of € 500 million.

Events after the reporting period

The material events after the reporting period are described in item 37 of the Notes The period are described in the item V. of the Notes.

Villach, 8 April 2020 The Management Board

Dr. Thomas Birtel CEO Responsibility Central Staff Divisions and Central Divisions BMTI, TPA as well as CML Construction Services

Klemens Haselsteiner Responsibility Central Divisions Digitalisation, Innovation and Business Development as well as Zentrale Technik, Responsibility Subdivision NN Russia

Dipl.-Ing. Siegfried Wanker Responsibility Segment International + Special Divisions

Mag. Christian Harder CFO Responsibility Central Division BRVZ

Dipl.-Ing. Dr. Peter Krammer Responsibility Segment South + East (except Subdivision NN Russia)

Dipl.-Ing. (FH) Alfred Watzl Responsibility Segment North + West

AUDITOR'S REPORT

REPORT ON THE FINANCIAL STATEMENTS

Audit Opinion

We have audited the fi nancial statements of

STRABAG SE, Villach, Austria,

which comprise the Balance Sheet as at 31 December 2019, the Income Statement for the year then ended, and the Notes.

In our opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of the Company as at 31 December 2019 and its fi nancial performance for the year then ended, in accordance with Austrian Generally Accepted Accounting Principles.

Basis for our Opinion

We conducted our audit in accordance with Regulation (EU) No. 537/2014 ("AP Regulation") and Austrian Standards on Auditing. These standards require the audit to be conducted in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the "Auditor's Responsibilities" section of our report. We are independent of the Company, in accordance with Austrian company law and professional regulations, and we have fulfi lled our other responsibilities under those relevant ethical requirements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signifi cance in our audit of the fi nancial statements. These matters were addressed in the context of our audit of the fi nancial statements as a whole, however, we do not provide a separate opinion thereon.

Valuation of investments in affi liated companies and receivables from affi liated companies

Refer to note Annex I/5.

Risk for the Financial Statements

Investments in and receivables from affi liated companies represent a major portion of the assets reported in the annual fi nancial statements of STRABAG SE as of 31 December 2019.

Investments in and receivables from affi liated companies are tested for impairment annually and whenever there is an indication that the assets may be impaired. In a fi rst step, the carrying amount of the investments in affi liated companies is compared with the proportionate share in equity at the reporting date. In case the carrying amount exceeds the proportionate share in equity, a valuation of the investment based on discounted cashfl ows, which signifi cantly depend on future revenue and margin projections, and on discount rates, is performed in a further step. This valuation is subject to signifi cant uncertainty.

Our Response

AUDITOR'S REPORT

accordance with Austrian Generally Accepted Accounting Principles.

STRABAG SE, Villach, Austria,

which comprise the Balance Sheet as at 31 December 2019, the Income Statement for the year then

Valuation of investments in affi liated companies and receivables from affi liated companies

Investments in and receivables from affi liated companies represent a major portion of the assets

reported in the annual fi nancial statements of STRABAG SE as of 31 December 2019.

we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

fi nancial statements as a whole, however, we do not provide a separate opinion thereon.

REPORT ON THE FINANCIAL STATEMENTS

We have audited the fi nancial statements of

Audit Opinion

ended, and the Notes.

Basis for our Opinion

Key Audit Matters

Refer to note Annex I/5.

signifi cant uncertainty.

Risk for the Financial Statements

We have evaluated the valuation of investments in affi liated companies as well as the receivables from affi liated companies as follows:

We reconciled the revenues and margins on which the valuation of shares in and receivables from affi liated companies are based, with the current budgets of the Group, approved by the Supervisory Board.
In order to assess the appropriateness of the planning fi gures, we gained an understanding of the planning process und compared the assumptions with current industry specifi c market expectations and discussed these with the Management Board and representatives of the respective company divisions.
In addition, we evaluated the appropriateness of the discount rates used as well as the underlying calculation and by means of sensitivity analyses, assessed whether the tested book values were still covered by their respective valuation in the event of possible realistic changes in these assumptions.
We further assessed the appropriateness and completeness of the Company's disclosures and explanations in the notes regarding investments in and receivables from affi liated companies.

Responsibilities of Management and the Audit Committee for the Financial Statements

Management is responsible for the preparation and fair presentation of the fi nancial statements in accordance with Austrian Generally Accepted Accounting Principles and for such internal controls as management determines are necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Management is also responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The audit committee is responsible for overseeing the Company's fi nancial reporting process.

Auditor's Responsibilities

Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material misstatement – whether due to fraud or error – and to issue an auditor's report that includes our audit opinion. Reasonable assurance represents a high level of assurance, but provides no guarantee that an audit conducted in accordance with AP Regulation and Austrian Standards on Auditing (and therefore ISAs), will always detect a material misstatement, if any. Misstatements may result from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these fi nancial statements.

As part of an audit in accordance with AP Regulation and Austrian Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit.

Moreover:

We identify and assess the risks of material misstatements in the fi nancial statements, whether due to fraud or error, we design and perform audit procedures responsive to those risks and obtain suffi cient and appropriate audit evidence to serve as a basis for our audit opinion. The risk of not detecting material misstatements resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
We conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the respective note in the fi nancial statements. If such disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the fi nancial statements, including the notes, and whether the fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our audit as well as signifi cant fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.
We communicate to the audit committee that we have complied with the relevant professional requirements in respect of our independence, that we will report any relationships and other events that could reasonably affect our independence and, where appropriate, the related safeguards.
From the matters communicated with the audit committee, we determine those matters that were of most signifi cance in the audit i.e. key audit matters. We describe these key audit matters in our auditor's report unless laws or other legal regulations preclude public disclosure about the matter or when in very rare cases, we determine that a matter should not be included in our audit report because the negative consequences of doing so would reasonably be expected to outweigh the public benefi ts of such communication.

REPORT ON OTHER LEGAL REQUIREMENTS

Management Report

In accordance with Austrian company law, the management report is to be audited as to whether it is consistent with the fi nancial statements and prepared in accordance with legal requirements.

Management is responsible for the preparation of the management report in accordance with Austrian company law.

We have conducted our audit in accordance with generally accepted standards on the audit of management reports as applied in Austria.

Opinion

As part of an audit in accordance with AP Regulation and Austrian Standards on Auditing, we exercise

• We identify and assess the risks of material misstatements in the fi nancial statements, whether due to fraud or error, we design and perform audit procedures responsive to those risks and obtain suffi cient and appropriate audit evidence to serve as a basis for our audit opinion. The risk of not detecting material misstatements resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override

• We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

• We evaluate the appropriateness of accounting policies used and the reasonableness of accounting

• We conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the respective note in the fi nancial statements. If such disclosures are not appropriate, we will modify our audit opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may

• We evaluate the overall presentation, structure and content of the fi nancial statements, including the notes, and whether the fi nancial statements represent the underlying transactions and events

• We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of our audit as well as signifi cant fi ndings, including any signifi cant defi ciencies in

professional judgment and maintain professional skepticism throughout the audit.

Moreover:

guards.

of internal control.

on the effectiveness of the entity's internal control.

estimates and related disclosures made by management.

cause the Company to cease to continue as a going concern.

in a manner that achieves fair presentation.

public benefi ts of such communication.

internal control that we identify during our audit.

In our opinion, the management report is consistent with the fi nancial statements and has been prepared in accordance with legal requirements. The disclosures pursuant to Section 243a UGB are appropriate.

Statement

Based on our knowledge gained in the course of the audit of the fi nancial statements and our understanding of the Company and its environment, we did not note any material misstatements in the management report.

Other Information

Management is responsible for other information. Other information is all information provided in the annual report, other than the fi nancial statements, the management report and the auditor's report. We expect the annual report to be provided to us after the date of the auditor's report.

Our opinion on the fi nancial statements does not cover other information and we do not provide any kind of assurance thereon.

In conjunction with our audit, it is our responsibility to read this other information as soon as it becomes available, to assess whether, based on knowledge gained during our audit, it contains any material inconsistencies with the fi nancial statements or any apparent material misstatement of fact.

Additional Information in accordance with Article 10 AP Regulation

We have been auditors of the Company, without interruption, since the fi nancial statements at 31 March 1999.

We declare that our opinion expressed in the "Report on the Financial Statements" section of our report is consistent with our additional report to the audit committee, in accordance with Article 11 AP Regulation.

Engagement Partner

The engagement partner is Mr Mag. Ernst Pichler.

Linz, 8 April 2020

KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

signed by: Mag. Ernst Pichler Wirtschaftsprüfer (Austrian Chartered Accountant)

STATEMENT OF ALL LEGAL REPRESENTATIVES

We confi rm to the best of our knowledge that the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties the group faces.

We confi rm to the best of our knowledge that the individual fi nancial statements of the parent company give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the parent company as required by the applicable accounting standards and that the management report gives a true and fair view of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties the company faces.

Villach, 8 April 2020 The Management Board

Dr. Thomas Birtel CEO Responsibility Central Staff Divisions and Central Divisions BMTI, TPA as well as CML Construction Services

Klemens Haselsteiner Responsibility Central Divisions Digitalisation, Innovation and Business Development as well as Zentrale Technik, Responsibility Subdivision NN Russia

Dipl.-Ing. Siegfried Wanker Responsibility Segment International + Special Divisions

Mag. Christian Harder CFO Responsibility Central Division BRVZ

Dipl.-Ing. Dr. Peter Krammer Responsibility Segment South + East (except Subdivision NN Russia)

Dipl.-Ing. (FH) Alfred Watzl Responsibility Segment North + West

AI Terminal

STRABAG SE

761_10-k_2020-04-29_09737744-6544-4dfe-83be-93225af6e170.pdf

CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019

Consolidated income statement

Statement of total comprehensive income

Consolidated balance sheet

Consolidated cash fl ow statement

Statement of changes in equity

Consolidated statement of fi xed assets as at 31 December 2019

Acquisition and production costs Accumulated depreciation

Consolidated statement of fi xed assets as at 31 December 2018

Acquisition and production costs Accumulated depreciation

Acquisition and production costs Accumulated depreciation

Acquisition and production costs Accumulated depreciation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Basic principles

Changes in accounting policies

NEW AND REVISED STANDARDS AND INTERPRETATIONS THAT ARE EFFECTIVE FOR THE 2019 FINANCIAL YEAR

FIRST-TIME ADOPTION OF IFRS 16 LEASES

FUTURE CHANGES OF FINANCIAL REPORTING STANDARDS

Consolidation

SUBSIDIARIES

TRANSACTIONS WITH NON-CONTROLLING INTERESTS THAT DO NOT RESULT IN LOSS OF CONTROL

DISPOSAL OF SUBSIDIARIES

STRUCTURED ENTITIES

ASSOCIATES

JOINT ARRANGEMENTS

INVESTMENTS

CONSOLIDATION PROCEDURES

Scope of consolidation

ADDITIONS TO SCOPE OF CONSOLIDATION

ACQUISITIONS

at-equity

Changes to initial consolidation under IFRS 3.45

DISPOSALS FROM THE SCOPE OF CONSOLIDATION

Disposals from scope of consolidation

at-equity

NON-CONTROLLING INTERESTS

Currency translation

Consolidated companies and equity-accounted associates and joint ventures

Accounting policies

INTANGIBLE ASSETS

Intangible assets Useful life in years

GOODWILL

RIGHTS FROM CONCESSION ARRANGEMENTS

PROPERTY, PLANT AND EQUIPMENT

INVESTMENT PROPERTY

LEASES

GOVERNMENT GRANTS

BORROWING COSTS

IMPAIRMENT OF NON-FINANCIAL ASSETS

FINANCIAL ASSETS

Financial assets measured at amortised cost

Financial assets measured at fair value through profi t or loss

IMPAIRMENT OF FINANCIAL ASSETS AND CONTRACT ASSETS

DERECOGNITION OF A FINANCIAL ASSET

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

CURRENT AND DEFERRED INCOME TAXES

INVENTORIES

CONTRACT ASSETS AND CONTRACT LIABILITIES

CASH AND CASH EQUIVALENTS

PROVISIONS

PROVISIONS FOR SEVERANCE PAYMENTS

PENSION PROVISIONS

MEASUREMENT OF SEVERANCE AND PENSION PROVISIONS

OTHER PROVISIONS

NON-FINANCIAL LIABILITIES

FINANCIAL LIABILITIES

CONTINGENT LIABILITIES

REVENUE RECOGNITION

NET INTEREST INCOME

ESTIMATES

(a) Recoverability of goodwill

(b) Recognition of revenue from construction contracts with customers and project developments

(c) Equity-accounted investments

(d) Income taxes

(e) Fair value of derivatives and other fi nancial instruments

(f) Rights from leases and lease liabilities

(g) Severance and pension provisions