Quarterly Report • Nov 29, 2013
Quarterly Report
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29 november 2013
| KEy figures 3 | |
|---|---|
| Ceo's Re view 4 |
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| Important events 5 | |
| share 7 | |
| Management Re port January–september 2013 8 |
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| SEGM ENT Re port 11 |
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| Consolidated interim financial statements 15 | |
| notes 20 | |
| statement of all legal representatives 27 | |
| CHANG E |
CHANG E |
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|---|---|---|---|---|---|---|---|
| € MLN | Q3/2013 | Q3/2012 | in % | 9M/2013 | 9M/2012 | in % | 2012 |
| Output volume | 3,966.21 | 4,074.92 | -3 % | 9,609.21 | 10,111.10 | -5 % | 14,042.60 |
| Revenue | 3,732.04 | 3,588.73 | 4 % | 8,891.19 | 9,289.84 | -4 % | 12,983.23 |
| Order backlog | 13,999.05 | 14,572.83 | -4 % | 13,202.66 | |||
| Employees | 72,904 | 73,847 | -1 % | 74,010 |
| CHANG E |
CHANG E |
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|---|---|---|---|---|---|---|---|
| € MLN | Q3/2013 | Q3/2012 | in % | 9M/2013 | 9M/2012 | in % | 2012 |
| EBITDA | 260.38 | 261.18 | 0 % | 328.85 | 277.32 | 19 % | 608.35 |
| EBITDA margin % of revenue | 7.0 % | 7.3 % | 3.7 % | 3.0 % | 4.7 % | ||
| EBIT | 162.44 | 168.42 | -4 % | 39.63 | 1.71 | 2,220 % | 207.19 |
| EBIT margin % of revenue | 4.4 % | 4.7 % | 0.4 % | 0.0 % | 1.6 % | ||
| Profit before taxes | 152.72 | 153.76 | -1 % | 21.02 | -43.62 | n. m. | 156.46 |
| Net income | 114.04 | 114.45 | 0 % | 8.56 | -42.22 | n. m. | 110.04 |
| Earnings per share | 0.97 | 0.86 | 13 % | -0.02 | -0.66 | 97 % | 0.58 |
| Cash-flow from operating | |||||||
| activities | 103.83 | 17.28 | 501 % | -117.32 | -310.12 | 62 % | 268.80 |
| ROCE in % | 2.5 % | 2.6 % | 1.3 % | 0.5 % | 4.0 % | ||
| Investments in fixed assets | 119.86 | 119.70 | 0 % | 292.35 | 335.44 | -13 % | 458.28 |
| Net income after minorities | 99.64 | 89.35 | 12 % | -2.18 | -68.92 | 97 % | 60.63 |
| Net income after minorities margin | |||||||
| % of revenue | 2.7 % | 2.5 % | 0.0 % | -0.7 % | 0.5 % |
| € MLN | 30.9.2013 | 31.12.2012 | CHANG E in % |
|---|---|---|---|
| Equity | 3,111.01 | 3,162.54 | -2 % |
| Equity Ratio in % | 30.2 % | 31.2 % | |
| Net Debt | 605.37 | 154.55 | 292 % |
| Gearing Ratio in % | 19.5 % | 4.9 % | |
| Capital Employed | 5,388.44 | 5,322.35 | 1 % |
| Balance sheet total | 10,299.28 | 10,137.69 | 2 % |
EBITDA = profit for the period before net interest income, income tax expense and depreciation and amortization
EBIT = profit for the period before net interest income and income tax expense
ROCE = (net income + interest on debt – interest tax shield (25 %)) / (average group equity + interest-bearing debt) Net Debt = financial liabilities less non-recourse debts + provisions for severance and pension obligations – cash and cash equivalents
Gearing Ratio = Net Debt / Group Equity Capital Employed = group equity + interest-bearing debt
Dear shareholders, associates and friends of STRABAG SE,
We were able to nearly make up for the weather-related decline in output volume from the first two quarters of 2013. As a result, we are confident of being able to report a full-year output figure that corresponds approximately to that of the previous year: In our home markets of Germany and Austria, there is plenty of building construction work to be done at this time. Our books are also well padded for the future, with an order backlog of € 14.0 billion – especially satisfying were the awards of several new large building construction orders in Germany. And in Poland, which recorded the greatest decline in output volume, we can see the first signs of a slight improvement of the climate in the Polish construction sector: more than 700 km of expressways are planned for realisation here between 2014 and 2020.
My management board colleagues and I are therefore staying overall with the forecast of nearly € 14.0 billion for the group's output volume in the 2013 financial year. While we are currently registering another slight worsening of the business environment in the European construction sector, and an intensified competition on the price as a result, we also continue to believe that larger negative non-recurring items will not burden the result to the same degree as in 2012. We therefore continue to expect the earnings before interest and taxes (EBIT) to grow to at least € 260 million in the 2013 financial year.
Your
Thomas Birtel
■ EBIT up manifold to € 40 million after the first nine months of 2013 (9M/2012: € 2 million) – non-recurring items had been a burden in the previous year
The STRABAG Group has undergone enormous growth in Switzerland over the past few years with the acquisitions of Brunner Erben AG, Astrada AG, Egolf AG, Meyerhans AG and Baunova AG. In order to achieve a uniform presence on the Swiss market, these group companies were merged into STRABAG AG, Switzerland, effective retroactively to 1 January 2013. Eggstein AG, which had already been merged into STRABAG AG, Switzerland, in 2010 and which had been renamed Eggstein Swissboring, is now doing business under the STRABAG brand. Under the merger, STRABAG AG, Switzerland, assumed the assets and liabilities of the acquired companies. STRABAG SE continues to hold 100 % of the shares of its subsidiary STRABAG AG, Switzerland.
Four new contracts have increased the order backlog of the STRABAG Group until July 2013 by more than € 230 million. Those projects include the construction of a flood protection dam for € 92 million in Oman, two road construction projects in Oman with a total contract value of € 28 million, production of concrete sleepers for railway construction worth € 88 million in Thailand and construction of an LNG tank in Brunei, worth € 23 million.
Ed. Züblin AG, Stuttgart, a subsidiary of STRABAG SE, constructs the building "New Office Airport Stuttgart" on behalf of client Flughafen Stuttgart GmbH. The contract value of the office ensemble, which is being built under a partnership arrangement with a guaranteed maximum price and upon completion will be leased almost entirely to management consulting firm Ernst & Young as its Germany headquarters, stands at about € 95 million.
Through Ed. Züblin AG, Stuttgart, STRABAG has been awarded a large contract by the Deutsche Bahn AG, with an order volume of € 250 million, 60 % of which is Ed. Züblin AG's share. The construction of the 5.9 km tunnel from the Swabian Jura to the tracks of Ulm Central Station will last four-and-a-half-years.
Ed. Züblin AG will act as main contractor and build the centrally located cultural quarter for around € 70 million at a vacant plot of land of a former power station until the summer of 2016. The contract involves the renovation of the former machine hall, a new seven-storey building, the renovation of an existing four-storey building and the demolition and construction of a new two-storey workshop.
Swedish STRABAG Projektutveckling will develop the multi-functional building "Orgelpipan 6" at Stockholm's Citybanan Commuter Station, Sweden's largest and busiest railway terminal. The investment volume is in the triple-digit million euro range. Completion of the project – which will include apartments, a hotel, shopping and servicing facilities – is planned for December 2015.
A consortium led by STRABAG AG won the contract to build the Svilaj-Odžak section of the international motorway corridor 5c in Bosnia. Works on the 10.4 km long section – which have already started in October – include the construction of the roadway, the border crossing at Svilaj, the Svilaj toll station, two service areas and two motorway exits. Completion is july
august
scheduled for December 2014. The contract value amounts to a total of € 84 million, 50 % of which is STRABAG's share.
Acting as general contractor, Ed. Züblin AG was awarded the contract to build Allianz Campus Unterföhring near Munich. In a consortium together with Munich-based Dobler Metallbau GmbH, it will construct the new building with a gross floor area of 58,000 m². The contract has a value of approx. € 100 million; Züblin's share amounts to 90 %. A DGNB gold certification for the new building is aimed at. A Precertification has already been awarded. Completion is planned for autumn of 2015.
Züblin A/S, a Danish subsidiary of the STRABAG Group, was awarded the contract to build the "Bryghus", a six-storey multi-use building on the site of a former brewery at the Copenhagen waterfront. The value of the contract amounts to about € 140 million. Construction time is scheduled from autumn 2013 to autumn 2017.
Züblin Spezialtiefbau Österreich engaged in the "BioSealing" joint industry project, a European joint project to further investigate the principle of operation of bacteria for the sealing of underground leaks. In total nine companies will invest € 400,000 in the coming years.
Since 1 October 2013, bonds of STRABAG SE are listed in the Corporates Prime segment of the Vienna Stock Exchange's bond trading platform. This new segment comprises bonds from issuers in non-financial sectors with the aim of increasing the transparency of and providing more effective publicity for Austrian bonds and their issuers. The participating companies agree to provide potential bond buyers with standardised information about their bonds.
STRABAG will build the third section of the Hungarian motorway M4 between Abony and Geyvernek for about € 106 million. The section has a length of 13.2 km and is part of the 233 km long motorway which links Budapest to the Ukrainian border.
A consortium led by STRABAG signed the contract to build the 10.4 km long section of the R2 expressway between Pstruša and Kriván in Slovakia. The contract value amounts to € 178 million, of which STRABAG a.s. holds a 40 % share.
october
The downward trend of the STRABAG SE share price since the beginning of the year reached its lowest point at € 15.59 in June. The price began to recover in September, however, a development that was surely influenced by the company's relisting in the Austrian benchmark index ATX effective 23 September 2013. STRABAG SE shares closed at € 18.44 on 30 September 2013; while this translates to growth of 16 % versus the previous quarter, it still represents a minus of 10 % over the first nine months of 2013.
Despite a subdued second quarter, the ATX as well as the international stock exchanges reported strong performance over the ninemonth period: Japan's Nikkei Index led the winners' list with a plus of 39 %, followed by New York's Dow Jones Industrials with growth of 16 %. The industry index STOXX Europe 600 Construction & Materials and Europe's Euro Stoxx 50 reported an increase of 15 % and 10 %, respectively. The ATX came in last, closing with a plus of 5 %. STRABAG SE ended its share buyback programme on 23 May 2013. From July 2011, the company continuously bought back a total of 11,400,000 shares on the stock market as well as over the counter, corresponding to 10 % of all issued shares. This brings the volume of the free float to 13 %. Some € 237 million were spent on the buyback.
Although STRABAG SE did not form part of the ATX between March and September, the cumulative trade volume of STRABAG SE shares on the Vienna Stock Exchange in the first nine months of 2013 amounted to about € 194 million1), with an average trade volume per day of 58,217 shares1). The share's weight in the ATX stood at 1.03 %.
STRABAG's shares are currently under observation by eleven international banks. The analysts calculated an average share price target of € 18.00. Detailed analyses and recommendations are available on the STRABAG SE website at www.strabag.com > Investor Relations > Share > Research & Analysts
| STRABAG SE share |
9M/2013 | |
|---|---|---|
| Market capitalisation on 30 September 2013 | € million | 1,892 |
| Closing price on 30 September 2013 | € | 18.44 |
| Year's maximum on 2 January 2013 | € | 20.61 |
| Year's minimum on 25 June 2013 | € | 15.59 |
| Performance nine months 2013 | % | 16 |
| Outstanding bearer shares on 30 September 2013 (absolute) | shares | 102,599,997 |
| Outstanding bearer shares nine months 2013 (weighted) | shares | 102,756,227 |
| Weight in ATX on 30 September 2013 | % | 1.03 |
| Volume traded nine months 2013 | € million1) | 194 |
| Average trade volume per day | shares1) | 58,217 |
| % of total volume traded on Vienna Stock Exchange | % | 0.66 |
The STRABAG Group's output volume in the first nine months of 2013 fell by 5 % versus the same period of the previous year to € 9,609.21 million. More than half of the decrease was accounted for by the expected, market-related decline in Poland following the end of the construction boom. On the other hand, it was possible to almost fully make up for the weather-related declines that had occurred in several countries during the first two quarters.
The consolidated group revenue amounted to € 8,891.19 million, 4 % below the level of the comparison period in the previous year. The ratio of revenue to output was 93 %. In the third quarter of 2013, the output volume fell by 3 % versus the same quarter of the previous year to € 3,966.21 million, while the revenue grew by 4 % to € 3,732.04 million.
The company completed several large projects, such as the Olympic Village in the RANC region (Russia and Neighbouring Countries), and worked off orders in the markets of Canada and Benelux in these past months. Nevertheless, the order backlog fell by just 4 % compared to the end of September of the previous year to € 13,999.05 million, as a number of new building construction orders in Germany bolstered the order backlog by more than € 750 million.
The limited capacity for construction in winter results in significant seasonal effects on the development of earnings and other financial figures of STRABAG SE. The first two quarters of the year typically have a negative effect on results, which is then overcompensated by results in the second half of the year. As a result of the seasonal effects, a quarterly comparison makes little sense.
Despite the somewhat lower revenue, the earnings before interest, taxes, depreciation and amortisation (EBITDA) increased in the first nine months of 2013 by 19 % to € 328.85 million. In the previous year, damage compensation payments related to an arbitration ruling on a failed acquisition had distorted results in the second quarter and transportation infrastructures projects caused losses in Poland. At the same time, the cost development among large projects in hydraulic engineering, a transportation infrastructures project in the Netherlands and the competitive pressure in railway construction were a burden both in the period under report as well as in the previous year.
For the international business, the company had invested in specialty equipment that is now being depreciated over just a few years of construction. Depreciation and amortisation therefore increased by 5 % in the ninemonth period. The earnings before interest and taxes (EBIT) improved from € 1.71 million to € 39.63 million.
At € 260.38 million, the EBITDA remained nearly unchanged in the third quarter; the EBIT was down by 4 %.
The negative interest income decreased significantly after the first nine months of 2013: While the € -45.32 million of the comparison period had included approx. € -28 million in negative currency exchange rate differences, 2013 has so far seen exchange rate gains in the amount of a little more than € 5 million so that the interest income reached € -18.61 million. Below the line, this resulted in a positive profit before tax of € 21.02 million after € -43.62 million the year before. Correspondingly, the income tax was calculated at € 12.46 million – during the same period of the previous year, by comparison, the result had been negative and the taxes had provided some relief. This left net income of € 8.56 million. Non-controlling interests accounted for a Due to the – now concluded – share buyback programme, the number of weighted outstanding shares was down from 104,365,968 to 102,756,227. The result per share in the first nine months of the 2013 financial year thus amounted to € -0.02 after € -0.66.
The third quarter yielded a result per share of € 0.97, compared to € 0.86 in the same period of the previous year.
€ -117.32 million, was 62 % less deeply in
The cash flow from investing activities could be contained by 20 % and therefore amounted to € -256.92 million. The purchase of property, plant and equipment and intangible assets was handled even more restrictively than previously and enterprise acquisitions took place to only a minor extent. The cash flow from financing activities transitioned into positive territory, from € -128.12 million to € 76.16 million. The comparison period from the previous year had been characterised by a significant repay-
negative territory.
The balance sheet total reached € 10,299.28 million, showing little change versus 31 December 2012. The same can be said for the equity ratio, which settled at 30.2 % after 31.2 % at year's end. In view of the financing need for operating activities during the period, among other things, the net debt position was up from € 154.55 million at year's end to € 605.37 million after the first nine months of 2013.
The cash flow from profits grew by 60 % to € 248.06 million. Project financing in associated companies was replaced with bank financing. As a result, the cash flow from operating activities, which reached
In addition to the necessary maintenance expenditures, STRABAG invested especially in equipment for large tunnelling projects in Austria and the international business as well as in the home market of Germany in the first nine months of 2013. The expenditures
The number of employees fell by only 1 % to 72,904. Large changes in several entities nearly balanced each other out here: on the one hand, the workforce in Poland was scaled back for market reasons; on the other hand, new large projects in non-European markets and in Germany resulted in the addition of more than 1,600 jobs.
include € 292.35 million for the purchase of property, plant and equipment and intangible assets as well as € 14.11 million for the purchase of financial assets and € 6.46 million for enterprise acquisitions (changes to the
scope of consolidation).
ment of bank borrowings.
During the first nine months of the financial year, there were no transactions with related parties which significantly influenced the financial situation or the business result nor were there any changes to transactions with related parties which were presented in the annual financial statements and which significantly influenced the financial situation or business result of the first nine months of the current financial year.
In the course of its entrepreneurial activities, the STRABAG Group is exposed to a number of risks, which can be identified and assessed using an active risk management system and dealt with by applying an appropriate risk policy. Among the most important risks are external risks such as cyclical fluctuations in the construction industry, operating risks in the selection and execution of projects, as well as financial, organisational, personnel, and investment risks.
The risks are explained in more detail in the 2012 management report. A review of the current risk situation revealed that in the reporting period there existed no risks which threatened the existence of the company and that for the future no risks are recognizable which constitute a threat to its continued existence.
Based on the balanced business in terms of regions and segments, STRABAG SE expects to nearly reach the previous year's output volume of about € 14.0 billion in the 2013 financial year. The reduction in Poland is expected to be countered by increases in building construction in Austria and Hungary, for example.
While STRABAG sees another slight worsening of the business environment in the European construction sector in 2013, and an intensified competition on the price as a result, it continues to believe that larger negative non-recurring items will not burden the result to the same degree as in 2012. The company therefore continues to expect the group's EBIT to grow to at least € 260 million in the 2013 financial year.
| € MLN | Q3/2013 | Q3/2012 | CHANG E in % |
9M/2013 | 9M/2012 | CHANG E in % |
2012 |
|---|---|---|---|---|---|---|---|
| Output volume | 1,753.66 | 1,842.14 | -5 % | 4,273.16 | 4,549.53 | -6 % | 6,237.17 |
| Revenue | 1,636.39 | 1,604.23 | 2 % | 3,979.68 | 4,003.86 | -1 % | 5,509.53 |
| Order backlog | 5,801.44 | 5,429.36 | 7 % | 4,826.52 | |||
| EBIT | 55.30 | 30.86 | 79 % | -20.82 | -107.81 | 81 % | -51.32 |
| EBIT margin as a % of revenue | 3.4 % | 1.9 % | -0.5 % | -2.7 % | -0.9 % | ||
| Employees | 22,617 | 25,079 | -10 % | 25,108 |
The segment North + West generated an output volume of € 4,273.16 million in the first nine months of 2013, 6 % lower than in the same period of the previous year. This is mostly due to the significant market- and weather-related declines in Poland, after Germany the second-largest geographic market in this segment. As this development was expected, it should still be possible to reach the full-year target output of € 5.8 billion for the segment. The revenue remained largely stable in the first nine months with -1 % to € 3,979.68 million. The negative earnings before interest and taxes (EBIT) improved by 81 % to € -20.82 million after € -107.81 million in the comparison period of the previous year. In the third quarter, the revenue increased slightly by 2 % to € 1,636.39 million. The EBIT grew by 79 % to € 55.30 million. An especially positive contribution came from the building construction business in Germany. The result also improved in Poland and in the German transportation infrastructures and construction materials business. The cost development among large projects in hydraulic engineering and a transportation infrastructures project in the Netherlands continue to be a burden, however.
In comparison, several new large orders helped raise the order backlog to € 5,801.44 million, an increase of 7 % versus the end of September of the previous year. Particularly positive developments were registered in building construction in Germany: In Jena, STRABAG subsidiary Ed. Züblin AG was awarded the construction contract for a section of Thuringia's new university clinic; the project has a total value of more than € 170 million. The company was also awarded the contracts to establish an office building at the Stuttgart airport for about € 95 million, to build a cultural quarter in Dresden for € 70 million, and to expand the Allianz Campus in Unterföhring near Munich with a volume of € 100 million (share 90 %). In Denmark, Ed. Züblin AG was chosen to build the multi-use Bryghus building at the Copenhagen harbour for € 140 million. And in Poland, STRABAG companies recently began construction of sections of the A4 and S8 highways.
The number of employees was down by 10 % to 22,617 in response to the shifting of activities in the Americas region into the segment International + Special Division. At the same time, an expansion of the workforce in Germany was countered by an expected market-related reduction of the blue-collar and white-collar workforce in Poland.
A note on the outlook of the segment: according to the autumn reports of the economic research institutes, the German economy is seen at the beginning of an upswing in the economic cycle. Further economic stimulus is being provided by the favourable financing conditions and the positive labour market situation. As a result, building construction and civil engineering showed very positive development; for the beginning of 2014, STRABAG SE expects to see an order backlog here that will again cover at least 70 % of the output volume being forecast for the coming year. The future is likely to bring rising subcontractor prices but stable raw materials prices, however. In the German transportation infrastructures business, the company nearly succeeded in balancing out the weatherand flood-related output backlog of the previous quarters. Furthermore, policymakers have recognised the investment backlog in public-sector infrastructure, with the result that a number of tenders are expected which could have a positive impact on the market from the second half of 2014.
The end of the construction boom in Poland was clearly reflected in the output volume of the segment in 2013. Momentum is expected starting in 2014, however: more than 700 km of expressways are planned for realisation in Poland between 2014 and 2020, co-financed in part by the EU.
Scandinavia, which accounts for 9 % of the segment output, is the third-largest region in North + West, with Sweden and Denmark making the most significant contributions to the output volume of several hundred million euros. Both the overall economic environment and the market for tunnelling and infrastructure projects continue to remain stable. Especially in the Stockholm region, the coming years will see the realisation of a number of large infrastructure projects and housing developments. Increasing competitive pressure is expected, however, as internationally operating construction groups enter this market.
While STRABAG has indefinitely postponed its investments in the field of offshore wind due to the adverse political and organisational environment in the German renewable energy sector, the company invested in other areas with growth potential in the first nine months of the 2013 financial year: Ed. Züblin AG expanded its range of services in the field of structural timber engineering with the acquisition of Merk Timber GmbH (formerly Metsä Wood Merk GmbH), a German manufacturer of crosslaminated timber; STRABAG B.V. took over the employees, equipment and production facilities of the transportation infrastructures activities of Janssen de Jong Groep in the Netherlands.
| € MLN | Q3/2013 | Q3/2012 | CHANG E in % |
9M/2013 | 9M/2012 | CHANG E in % |
2012 |
|---|---|---|---|---|---|---|---|
| Output volume | 1,400.39 | 1,493.90 | -6 % | 3,226.46 | 3,413.83 | -5 % | 4,755.74 |
| Revenue | 1,395.17 | 1,453.48 | -4 % | 3,095.16 | 3,355.25 | -8 % | 4,792.43 |
| Order backlog | 4,352.73 | 4,897.19 | -11 % | 4,326.12 | |||
| EBIT | 109.82 | 109.77 | 0 % | 48.04 | 31.08 | 55 % | 148.89 |
| EBIT margin as a % of revenue | 7.9 % | 7.6 % | 1.6 % | 0.9 % | 3.1 % | ||
| Employees | 20,992 | 22,571 | -7 % | 22,699 |
The output volume in the segment South + East decreased to € 3,226.46 million in the first nine months of 2013, down 5 % versus the same period of the previous year. A decisive factor was, among other things, the shifting of the building construction business in Poland into the segment North + West. Meanwhile, on a more positive note, growth of the output volume was reported in Hungary and the Czech Republic. Like the output volume, the revenue was also down – specifically by 8 %, while the earnings before interest and taxes (EBIT) grew by 55 % to € 48.04 million. In the third quarter, the revenue fell by 4 % while the EBIT remained more or less unchanged at € 109.82 million. Decisive factors behind this development included, on the one hand, the successful result-improvement programme of the environmental technology business as well as the continued considerable competitive pressure in railway construction, on the other hand.
The order backlog fell by 11 % to € 4,352.73 million. This was influenced by the completion of large projects such as the Olympic Village in the region Russia and Neighbouring Countries (RANC) or of the Deva–Orăştie motorway section in Romania, which will soon be handed over to the client, as well as by the aforementioned internal shifting in Poland. A recovery of the order situation can be seen in Hungary, on the other hand, where work began on two new motorway projects in the past few months. And in Bosnia, a consortium including STRABAG secured the tender to build the Svilaj–Odžak section of the international motorway corridor 5c.
Corresponding to the lower order backlog, the number of employees in the segment decreased by 7 % to 20,992; a declining workforce was registered in nearly all markets, however.
The management board expects the output volume to just fall below the previously expected output volume of approximately € 5.0 billion for the segment South + East in the 2013 financial year. In general, the price pressure in transportation infrastructures in Central and Eastern Europe will continue to last. A lack of financing, e specially in the Czech Republic, in Romania and in the Adriatic region, means that very few large public-sector projects are being awarded at this time – with a resulting tougher competition on the price. A more positive outlook, on the other hand, is offered by transportation infrastructures in Slovakia, where several large motorway and expressway projects are currently being tendered, as well as in the area of building construction for private clients in Slovakia and the Czech Republic.
Austria, with a contribution of 36 % to the segment output the largest market in South + East, paints a mixed picture: From the vantage point of the present, the shifting competitive landscape resulting from a competitor's market departure is unlikely to result in a reduction of margin pressure in the transportation infrastructures business or in the Austrian states – where Upper Austria and Carinthia are particularly affected. In the greater Vienna area, meanwhile, STRABAG continues to see itself faced with a stable environment in which it was possible to selectively acquire certain construction projects from the departed competitor.
In Hungary, which contributes the fourthgreatest share to the segment output, stabilisation is becoming apparent at a low level: investments from international industrial groups are growing slightly and the longawaited large projects in road construction are now finally coming up for tender. Older projects continue to have a negative impact, however.
In the RANC region, acquisition efforts are shifting from building construction in metropolitan areas in Russia to industrial projects as well as projects with special demands on know-how in countries such as Turkmenistan and Kazakhstan, where a STRABAG subsidiary was recently awarded the contract for concrete works for the Astana– Karaganda motorway section.
In Switzerland, STRABAG merged most of its companies, so that a homogeneous brand presence is now possible. The reorganisation, which is now largely complete, had become necessary due to the strong growth experienced by the group in Switzerland in the past few years.
The railway construction business will remain characterised by overcapacities and a distorted competitive landscape in Germany; additionally, the long winter means that large equipment has been hardly used this year.
| € MLN | Q3/2013 | Q3/2012 | CHANG E in % |
9M/2013 | 9M/2012 | CHANG E in % |
2012 |
|---|---|---|---|---|---|---|---|
| Output volume | 773.51 | 711.67 | 9 % | 2,006.35 | 2,055.48 | -2 % | 2,924.86 |
| Revenue | 692.05 | 519.89 | 33 % | 1,794.26 | 1,907.08 | -6 % | 2,661.29 |
| Order backlog | 3,835.86 | 4,236.64 | -9 % | 4,038.33 | |||
| EBIT | 12.48 | 35.58 | -65 % | 14.13 | 72.45 | -80 % | 126.93 |
| EBIT margin as a % of revenue | 1.8 % | 6.8 % | 0.8 % | 3.8 % | 4.8 % | ||
| Employees | 23,556 | 20,432 | 15 % | 20,426 |
In the volatile segment International + Special Division, the output volume showed little change in the first nine months of the 2013 financial year, slipping by 2 % to € 2,006.35 million. The greatest share of the output volume was again generated in the markets of Germany, the Middle East and Austria. The revenue fell by 6 %, as last year's figure had included a large infrastructure project in Poland. The earnings before interest and taxes (EBIT) reached only € 14.13 million after € 72.45 million in the comparison period of the previous year. This development is due to the typically volatile business in the segment, particularly in the international business and in tunnelling. This volatility was also evident in the third quarter: the revenue grew by 33 %, while the EBIT fell by 65 %.
The order backlog fell by 9 % to € 3,835.86 million: new projects were recorded in Chile, in Thailand and in Oman, and the order books were further padded in the home market of Germany by the contract to build a new government building in Potsdam under a public-private partnership (PPP) arrangement; at the same time, however, a number of large projects were completed in Africa, in Austria and in Benelux.
The number of employees grew by a considerable 15 % to 23,556. This can be explained, though, with the restructuring of staff in the Americas region – precisely Chile – from the segment North + West into the segment International + Special Divisions due to an organisational adjustment and with several orders in Africa.
The company no longer expects to fully achieve the targeted 2013 output volume of € 3.0 billion in the segment International + Special Divisions. The earnings are likely to remain satisfactory, however, even if the price level is ruinously low in some areas. STRABAG has observed that competition in tunnelling in Austria, in Germany and in Switzerland is increasingly being carried out on the price.
The market for concession projects in Europe also remains a challenging one. In this business field, STRABAG is currently working on offers in Belgium, Ireland, Romania or Croatia. Competitive pressure is on the rise and, especially in Eastern Europe, the sector is facing political and financial hurdles. PPP Building Construction, on the other hand, is likely to benefit from the great investment needs in Germany in particular. The market for PPP measures in building construction should therefore continue to grow, especially as this constellation makes it possible for the client to realise efficiency advantages from an integrated solutions approach, i.e. from the observation of lifecycle costs. STRABAG is moreover in a position to completely cover all specifications in this area, thanks to the inclusion of specialist providers from within the group such as STRABAG Property and Facility Services. Property management in particular is contributing to stable development of this service subsidiary in 2013; STRABAG had acquired a residential property management company last year and has been able to develop this business within the group.
The price pressure in the European core markets requires STRABAG to diversify more broadly geographically. In addition to selected countries in East Africa, the foreign markets currently being worked by the company include Oman, the United Arab Emirates and Qatar. In Canada – the Niagara Tunnel Project was successfully concluded here in March –, Colombia and the United Kingdom, STRABAG has been working on new order opportunities in the area of concession and infrastructure projects. Looking at specific construction segments, the conclusion of a partnership agreement with mining company Rio Tinto marked the group's entry into the mining business. STRABAG is also offering specialty construction services around the world in pipe jacking (a tunnelling technique), in test track construction and in the field of liquefied natural gas (LNG).
The construction materials business will continue to put pressure on the margins of the segment, as the market for concrete is stagnating at a very low level. In Bulgaria, therefore, STRABAG has already ended its engagement in this business field. In many countries, the situation with stone and gravel continues to be modest at best, and the situation in the cement business is also not expected to improve in the short term.
Consolidated
Statements
Interim Financial
STRABAG SE,
Villach, as of
30 september 2013
| 1.7.–30.9.2013 T€ |
1.7.–30.9.2012 T€ |
1.1.–30.9.2013 T€ |
1.1.–30.9.2012 T€ |
|
|---|---|---|---|---|
| Revenue | 3,732,037 | 3,588,729 | 8,891,189 | 9,289,844 |
| Changes in inventories | -3,457 | -26,249 | 48,500 | -19,804 |
| Own work capitalised | 340 | 5,484 | 1,997 | 17,501 |
| Other operating income | 60,423 | 36,989 | 164,583 | 141,739 |
| Raw materials, consumables and services used | -2,511,527 | -2,361,263 | -5,914,830 | -6,210,813 |
| Employee benefits expenses | -799,674 | -823,229 | -2,252,468 | -2,281,229 |
| Other operating expenses | -230,435 | -168,216 | -629,701 | -671,282 |
| Share of profit or loss of associates | 5,180 | 3,707 | -1,075 | -2,910 |
| Net income from investments | 7,489 | 5,223 | 20,654 | 14,270 |
| EBITDA | 260,376 | 261,175 | 328,849 | 277,316 |
| Depreciation and amortisation expense | -97,938 | -92,752 | -289,222 | -275,608 |
| EBIT | 162,438 | 168,423 | 39,627 | 1,708 |
| Interest and similar income | 11,162 | 15,230 | 45,850 | 47,544 |
| Interest expense and similar charges | -20,884 | -29,893 | -64,456 | -92,867 |
| Net interest income | -9,722 | -14,663 | -18,606 | -45,323 |
| Profit before tax | 152,716 | 153,760 | 21,021 | -43,615 |
| Income tax expense | -38,677 | -39,309 | -12,459 | 1,395 |
| Net income | 114,039 | 114,451 | 8,562 | -42,220 |
| Attributable to: non-controlling interests | 14,397 | 25,106 | 10,738 | 26,698 |
| Attributable to: equity holders of the parent company | 99,642 | 89,345 | -2,176 | -68,918 |
| Earnings per share (€) | 0.97 | 0.86 | -0.02 | -0.66 |
| 1.7.–30.9.2013 T€ |
1.7.–30.9.2012 T€ |
1.1.–30.9.2013 T€ |
1.1.–30.9.2012 T€ |
|
|---|---|---|---|---|
| Net income | 114,039 | 114,451 | 8,562 | -42,220 |
| Differences arising from currency translation | 5,252 | 20,775 | -31,197 | 47,820 |
| Change in hedging reserves including interest rate swaps | 1,380 | -12,629 | 25,443 | -24,108 |
| Deferred taxes on neutral change in equity | -339 | 2,481 | -4,938 | 4,746 |
| Other income from associates | -876 | 1,384 | -2,834 | 4,979 |
| Total of items which are later recognised ("recycled") in the | ||||
| income statement | 5,417 | 12,011 | -13,526 | 33,437 |
| Other income from associates | 19 | 0 | 59 | 0 |
| Total of items which are not later recognised ("recycled") in the | ||||
| income statement | 19 | 0 | 59 | 0 |
| Other income | 5,436 | 12,011 | -13,467 | 33,437 |
| Total comprehensive income | 119,475 | 126,462 | -4,905 | -8,783 |
| Attributable to: non-controlling interests | 13,775 | 26,397 | 8,985 | 28,598 |
| Attributable to: equity holders of the parent company | 105,700 | 100,065 | -13,890 | -37,381 |
| Assets | 30.9.2013 T€ |
31.12.2012 T€ |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 528,841 | 530,361 |
| Property, plant and equipment | 2,191,377 | 2,225,572 |
| Investment property | 37,847 | 41,667 |
| Investments in associates | 367,360 | 379,122 |
| Other financial assets | 253,979 | 250,292 |
| Receivables from concession arrangements | 781,584 | 782,567 |
| Trade receivables | 88,839 | 91,426 |
| Non-financial assets | 6,984 | 12,009 |
| Other financial assets | 35,257 | 35,824 |
| Deferred taxes | 209,894 | 197,619 |
| 4,501,962 | 4,546,459 | |
| Current assets | ||
| Inventories | 1,098,754 | 1,031,557 |
| Receivables from concession arrangements | 24,165 | 22,785 |
| Trade receivables | 3,009,328 | 2,535,469 |
| Non-financial assets | 114,971 | 106,372 |
| Other financial assets | 485,355 | 520,094 |
| Cash and cash equivalents | 1,064,745 | 1,374,955 |
| 5,797,318 | 5,591,232 | |
| 10,299,280 | 10,137,691 |
| Equity and Liabilities | 30.9.2013 T€ |
31.12.2012 T€ |
|---|---|---|
| Group equity | ||
| Share capital | 114,000 | 114,000 |
| Capital reserves | 2,311,384 | 2,311,384 |
| Retained earnings | 393,189 | 436,130 |
| Non-controlling interests | 292,441 | 301,028 |
| 3,111,014 | 3,162,542 | |
| Non-current liabilities | ||
| Provisions | 1,009,102 | 1,025,833 |
| Financial liabilities1) | 1,377,912 | 1,265,982 |
| Trade payables | 47,125 | 61,006 |
| Non-financial liabilities | 1,334 | 1,328 |
| Other financial liabilities | 24,902 | 33,330 |
| Deferred taxes | 47,354 | 44,437 |
| 2,507,729 | 2,431,916 | |
| Current liabilities | ||
| Provisions | 685,534 | 735,457 |
| Financial liabilities2) | 396,380 | 384,002 |
| Trade payables | 2,909,745 | 2,724,119 |
| Non-financial liabilities | 332,139 | 327,586 |
| Other financial liabilities | 356,739 | 372,069 |
| 4,680,537 | 4,543,233 | |
| 10,299,280 | 10,137,691 |
| 1.1.–30.9.2013 T€ |
1.1.–30.9.2012 T€ |
|
|---|---|---|
| Net income | 8,562 | -42,220 |
| Deferred taxes | -16,939 | -67,462 |
| Non-cash effective results from consolidation | 0 | 2,491 |
| Non-cash effective results from associates | 6,064 | 9,078 |
| Depreciations/write ups | 292,989 | 275,489 |
| Changes in long-term provisions | -11,838 | 8,105 |
| Gains/losses on disposal of non-current assets | -30,776 | -30,054 |
| Cash flow from profits | 248,062 | 155,427 |
| Change in items: | ||
| Inventories | -70,230 | -89,239 |
| Trade receivables, construction contracts and consortia | -463,422 | -399,827 |
| Receivables from subsidiaries and receivables from participation companies | 39,912 | -28,023 |
| Other assets | -7,383 | -24,038 |
| Trade payables, construction contracts and consortia | 189,965 | 194,633 |
| Liabilities from subsidiaries and liabilities from participation companies | 23,741 | -2,815 |
| Other liabilities | -32,703 | -60,178 |
| Current provisions | -45,260 | -56,059 |
| Cash flow from operating activities | -117,318 | -310,119 |
| Purchase of financial assets | -14,112 | -30,015 |
| Purchase of property, plant, equipment and intangible assets | -292,352 | -335,436 |
| Gains/losses on disposal of non-current assets | 30,776 | 30,054 |
| Disposals of non-current assets (carrying value) | 35,516 | 24,569 |
| Change in other cash clearing receivables | -10,288 | 12,705 |
| Change in scope of consolidation | -6,459 | -23,258 |
| Cash flow from investing activities | -256,919 | -321,381 |
| Change in bank borrowings | 28,755 | -176,849 |
| Change in bonded loan | 0 | 140,000 |
| Change in bonds | 105,000 | 25,000 |
| Change in liabilities from finance leases | -9,244 | -3,339 |
| Change in other cash clearing liabilities | -1,732 | -6,404 |
| Change due to acquisitions of non-controlling interests | -89 | -2,283 |
| Acquisition of own shares | -8,863 | -34,650 |
| Distribution and withdrawals from partnerships | -37,670 | -69,597 |
| Cash flow from financing activities | 76,157 | -128,122 |
| Cash flow from operating activities | -117,318 | -310,119 |
| Cash flow from investing activities | -256,919 | -321,381 |
| Cash flow from financing activities | 76,157 | -128,122 |
| Net change in cash and cash equivalents | -298,080 | -759,622 |
| Cash and cash equivalents at the beginning of the period | 1,374,955 | 1,700,237 |
| Change in cash and cash equivalents due to currency translation | -12,130 | 31,224 |
| Cash and cash equivalents at the end of the period | 1,064,745 | 971,839 |
| Interest paid | 52,855 | 50,915 |
| Interest received | 32,834 | 41,695 |
| Taxes paid | 38,209 | 114,025 |
| Share capital T€ |
Capital reserves T€ |
Retained earnings T€ |
Hedging reserve T€ |
Foreign currency reserve T€ |
Group equity T€ |
Non controlling interests T€ |
Total equity T€ |
|
|---|---|---|---|---|---|---|---|---|
| Balance as of 1.1.2013 | 114,000 | 2,311,384 | 554,709 | -121,825 | 3,246 | 2,861,514 | 301,028 | 3,162,542 |
| Net income | 0 | 0 | -2,176 | 0 | 0 | -2,176 | 10,738 | 8,562 |
| Differences arising from currency translation |
0 | 0 | 0 | 0 | -29,084 | -29,084 | -2,113 | -31,197 |
| Change in hedging reserves | 0 | 0 | 0 | -788 | 0 | -788 | -20 | -808 |
| Changes in associates | 0 | 0 | 58 | -919 | -1,851 | -2,712 | -63 | -2,775 |
| Change of interest rate swaps |
0 | 0 | 0 | 25,710 | 0 | 25,710 | 541 | 26,251 |
| Deferred taxes on neutral change in equity |
0 | 0 | 0 | -4,840 | 0 | -4,840 | -98 | -4,938 |
| Total comprehensive income |
0 | 0 | -2,118 | 19,163 | -30,935 | -13,890 | 8,985 | -4,905 |
| Transactions concerning non-controlling interests |
0 | 0 | 332 | 0 | 0 | 332 | -422 | -90 |
| Own shares | 0 | 0 | -8,863 | 0 | 0 | -8,863 | 0 | -8,863 |
| Distribution of dividends1) | 0 | 0 | -20,520 | 0 | 0 | -20,520 | -17,150 | -37,670 |
| Balance as of 30.9.2013 | 114,000 | 2,311,384 | 523,540 | -102,662 | -27,689 | 2,818,573 | 292,441 | 3,111,014 |
| Share | Capital | Retained | Hedging | Foreign currency |
Group | Non controlling |
||
|---|---|---|---|---|---|---|---|---|
| capital T€ |
reserves T€ |
earnings T€ |
reserve T€ |
reserve T€ |
equity T€ |
interests T€ |
Total equity T€ |
|
| Balance as of 1.1.2012 | 114,000 | 2,311,384 | 656,913 | -97,816 | -45,737 | 2,938,744 | 211,098 | 3,149,842 |
| Net income | 0 | 0 | -68,918 | 0 | 0 | -68,918 | 26,698 | -42,220 |
| Differences arising from currency translation |
0 | 0 | 0 | 0 | 45,497 | 45,497 | 2,323 | 47,820 |
| Change in hedging reserves | 0 | 0 | 0 | 3,016 | 0 | 3,016 | 61 | 3,077 |
| Changes in associates | 0 | 0 | 0 | -1,895 | 6,919 | 5,024 | -45 | 4,979 |
| Change of interest rate swaps |
0 | 0 | 0 | -26,662 | 0 | -26,662 | -523 | -27,185 |
| Deferred taxes on neutral change in equity |
0 | 0 | 0 | 4,662 | 0 | 4,662 | 84 | 4,746 |
| Total comprehensive income |
0 | 0 | -68,918 | -20,879 | 52,416 | -37,381 | 28,598 | -8,783 |
| Transactions concerning non-controlling interests |
0 | 0 | -1,200 | 0 | 0 | -1,200 | 23,882 | 22,682 |
| Own shares | 0 | 0 | -34,650 | 0 | 0 | -34,650 | 0 | -34,650 |
| Distribution of dividends2) | 0 | 0 | -62,492 | 0 | 0 | -62,492 | -7,105 | -69,597 |
| Balance as of 30.9.2012 | 114,000 | 2,311,384 | 489,653 | -118,695 | 6,679 | 2,803,021 | 256,473 | 3,059,494 |
The consolidated interim financial statements of STRABAG SE, based in Villach, Austria, with reporting date 30 September 2013 were drawn up under application of IAS 34 in accordance with the International Financial Reporting Standards (IFRS) – issued by the International Accounting Standards Board (IASB) in London and recognised by the European Union – including the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) valid on the reporting date. Applied were exclusively those IASB standards and interpretations adopted by the European Commission before the reporting deadline and published in the Official Journal of the European Union.
In accordance with IAS 34, the consolidated interim financial statements do not contain all the information and details required of annual financial statements. The interim statements should therefore be read in conjunction with the annual financial statements of STRABAG SE, Villach, with reporting date 31 December 2012.
The consolidated financial statements of the Group as at and for the year ended 31 December 2012 are available at www.strabag.com.
The following amended or new accounting standards are effective for annual periods beginning on or after 1 January 2013:
| Application for financial years which begin on or after (according to IASB ) |
Application for financial years which begin on or after (according to EU en dorsement) |
|
|---|---|---|
| IFRS 13 Fair Value Measurement | 1.1.2013 | 1.1.2013 |
| IAS 1 Presentation of Financial Statements | 1.7.2012 | 1.7.2012 |
| IAS 12 Deferred Tax – Recovery of Underlying Assets | 1.1.2012 | 1.1.2013 |
| IAS 19 Employee Benefits | 1.1.2013 | 1.1.2013 |
| IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine | 1.1.2013 | 1.1.2013 |
| Annual Improvements to IFRS 2009–2011 | 1.1.2013 | 1.1.2013 |
The first-time application of the IFRS and IFRIC mentioned had secondary consequences on the interim consolidated financial statements for the period ending 30 September 2013.
With exception of the above mentioned changes in the accounting and valuation methods the accounting and valuation are fundamentally based on the same accounting principles and valuation methods underlying the consolidated annual financial statements with reporting date 31 December 2012.
Information regarding the accounting and valuation methods can be found in the annual financial statements with reporting date 31 December 2012.
The establishment of the interim report requires estimations and assumptions to be made which may influence the application of the accounting and valuation methods as well as the figures for the assets, liabilities, expenses and income. The actual results could deviate from these estimates.
The consolidated interim financial statements as of 30 September 2013 include STRABAG SE as well as all major domestic and foreign subsidiaries where STRABAG SE either directly or indirectly holds a majority of the voting rights. Major associated companies are reported in the balance sheet using the equity method (investments in associates).
The number of consolidated companies changed in the first nine month as follows:
| consolidation | equity method | |
|---|---|---|
| Situation as of 31.12.2012 | 321 | 21 |
| First-time inclusion in year under report | 1 | 0 |
| Merger/accretion in year under report | -17 | 0 |
| Exclusion in year under report | -1 | 0 |
| Situation as of 30.9.2013 | 304 | 21 |
The following company formed part of the scope of consolidation for the first time on the reporting date:
| consolidation | direct stake % |
Date of acquisition |
|---|---|---|
| Merk Timber GmbH (former Metsä Wood Merk GmbH), Aichach | 100.00 | 22.4.2013 |
Per contract from 11 March 2013, STRABAG acquired 100 % of Merk Timber GmbH (former Metsä Wood Merk GmbH), Aichach, effective retroactively to 1 January 2013. The acquisition serves to expand the group's existing activities in the field of structural timber engineering. The closing took place on 22 April 2013.
The purchase price is preliminarily allocated to assets and liabilities as follows:
| ACquisition | |
|---|---|
| T€ | |
| Acquired assets and liabilities | |
| Goodwill | 1,835 |
| Other non-current assets | 2,352 |
| Current assets | 5,617 |
| Current liabilities | -2,952 |
| Purchase price | 6,852 |
| Acquired cash and cash equivalents | -393 |
| Net cash outflow from the acquisition | 6,459 |
Assuming a fictitious initial consolidation on 1 January 2013 for the acquisition in the reporting period, the consolidated revenue would amount to T€ 8,897,187 and consolidated profit would have changed by a total of T€ -913.
The company which was consolidated for the first time in the reporting period contributed T€ 14,549 to revenue and T€ -2,229 to profit.
As of 30 September 2013, the following companies were no longer included in the scope of consolidation:
| Disposal from scope of consolidation | |
|---|---|
| Züblin International Malaysia Sdn. Bhd., Kuala Lumpur | Fell below significant level |
| Merger1) | |
| A2 Strada sp.z o.o., Pruszkow | Merger |
| Astrada AG, Subingen | Merger |
| Baunova AG, Dällikon | Merger |
| Brunner Erben AG, Zurich | Merger |
| Egolf AG Strassen- und Tiefbau, Weinfelden | Merger |
| "GfB" Gesellschaft für Bauwerksabdichtungen mbH, Kobern-Gondorf | Merger |
| Merk Timber GmbH (former Metsä Wood Merk GmbH), Aichach | Merger |
| Meyerhans AG Amriswil, Amriswil | Merger |
| Meyerhans AG, Strassen- und Tiefbau Uzwil, Uzwil | Merger |
| Northern Energy GlobalTech III. GmbH, Aurich | Merger |
| Polski Asfalt Sp.z o.o., Pruszkow | Merger |
| POßÖGEL & PARTNER STRAßEN- UND TIEFBAU GMBH HERMSDORF/THÜR., St. Gangloff | Merger |
| R I M E X GmbH Servicebetriebe, Aalen | Merger |
| riw Industriewartung GmbH, Ulm | Merger |
| SBR Verwaltungs-GmbH, Kehl | Merger |
| SLOVAKIA ASFALT s.r.o., Bratislava | Merger |
| STRABAG Beteiligungsverwaltung GmbH, Cologne | Merger |
Deconsolidation led to an insignificant disposal of assets and liabilities.
The same methods of consolidation and principles of currency translation were applied in drawing up the consolidated interim financial statements with reporting date 30 September 2013 as were used for the consolidated annual financial statements with reporting date 31 December 2012. Details regarding the methods of consolidation and principles of currency translation are available in the 2012 annual report.
Due to snow, ice and other adverse weather conditions, revenue is usually lower in the winter months than in the summer. As the largest part of the costs involves fixed costs, noteworthy losses are posted in the first quarter every year. Starting with the second quarter, these losses are compensated for by rising contribution margins. The break-even point is usually not yet reached before the end of the second quarter. The largest portion of the earnings is expected in the third and fourth quarters. Seasonal fluctuations in the Transportation Infrastructures business are greater than they are in Building Construction & Civil Engineering.
The above-described, annually repeating business trend allows a year-on-year comparison of output volume, revenue and results of the respective quarters.
Interest income from concession contracts which is included in other operating income is represented as follows (also see notes on receivables from concession arrangements):
| 1.1.–30.9.2013 T€ |
1.1.–30.9.2012 T€ |
|
|---|---|---|
| Interest income | 51,557 | 53,146 |
| Interest expense | -25,707 | -27,544 |
| Total | 25,850 | 25,602 |
1) The companies listed under "Merger" were merged with already fully consolidated companies.
Goodwill assets are subjected to an annual impairment test in accordance with IAS 36. The impairment test is carried out in the last two months of the financial year.
In 1-9/2013, a total goodwill from capital consolidation on the basis of the preliminary purchase price allocations in the amount of T€ 1,835 was capitalised and no impairments were made.
In 1-9/2013, tangible and intangible assets in the amount of T€ 292,352 (1-9/2012 T€ 335,436) were acquired.
In the same period, tangible and intangible assets with a book value of T€ 26,123 (1-9/2012 T€ 35,043) were sold.
On the reporting date, there were € 53 million (30 September 2012 € 114 million) in contractual commitments for the acquisition of property, plant and equipment which were not considered in the financial statements.
STRABAG has a 100 % interest in the Hungarian M5 Motorway Concession Company AKA Alföld Koncessizios Autopalya Zrt., Budapest (AKA).
In the concession agreement with the Hungarian state, AKA committed to develop, plan, finance and 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 contract 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 "Other operating income".
A part of the availability fee consists of interest adjustment payments of the Hungarian state. As a result, the state bears the interest risk from the financing of AKA. These interest adjustment payments represent an embedded hedging transaction which is measured separately in accordance with IAS 39.11. Presentation is made as a cash-flow hedge; as a result, changes in the fair value of the interest rate swap are recognised directly in equity.
The market value of the interest rate swap in the amount of T€ -43,881 (31 December 2012 T€ -61,198) is also recognised as long-term receivables from concession arrangements.
Recognisable receivables from concession arrangements are offset by non-recourse financing in the amount of T€ 607,305 (31 December 2012 T€ 630,311), classified either as a current or non-current liability depending on the term. The resulting interest expense is recognised in "Other operating income".
The fully paid-in share capital amounts to € 114,000,000 and is divided into 113,999,997 no-par bearer shares and three registered shares.
The changes in equity are shown in the statement of changes in equity.
The company has accepted the following guarantees:
| 30.9.2013 | 31.12.2012 | |
|---|---|---|
| T€ | T€ | |
| Guarantees without financial guarantees | 903 | 903 |
Furthermore, there is a derived credit risk arising from the financial guarantee contracts (guarantees issued) of T€ 71,760 (31 December 2012 T€ 56,019).
The rules of IFRS 8 Operating Segments apply to the segment reporting. IFRS 8 prescribes defining the segments and reporting the earnings on the basis of the internal reporting (Management Approach).
Internal reporting at STRABAG is based on the dedicated management board functions North + West, South + East and International + Special Divisions, which represent the group's operating segments. In addition, there are the central business units and central staff units, which handle services in the areas of accounting, group financing, technical development, machine management, quality management, logistics, legal affairs, contract management etc. These services are included in the segment Other.
The settlement between the single segments is made at arm's-length prices.
| Rec onciliation |
||||||
|---|---|---|---|---|---|---|
| North + West 1.7.–30.9.2013 |
South + East 1.7.–30.9.2013 |
International + Special Divisions 1.7.–30.9.2013 |
Other 1.7.–30.9.2013 |
to IFRS Financial Statements 1.7.–30.9.2013 |
total 1.7.–30.9.2013 |
|
| T€ | T€ | T€ | T€ | T€ | T€ | |
| Output volume | 1,753,665 | 1,400,385 | 773,505 | 38,654 | 3,966,209 | |
| Revenue | 1,636,395 | 1,395,171 | 692,055 | 8,416 | 0 | 3,732,037 |
| Inter-segment revenue | 31,900 | 4,236 | 114,348 | 227,979 | ||
| EBIT | 55,295 | 109,829 | 12,483 | 965 | -16,134 | 162,438 |
| Interest and similar income | 0 | 0 | 0 | 11,162 | 0 | 11,162 |
| Interest expense and similar | ||||||
| charges | 0 | 0 | 0 | -20,884 | 0 | -20,884 |
| Profit before tax | 55,295 | 109,829 | 12,483 | -8,757 | -16,134 | 152,716 |
| International + | Rec onciliation to IFRS Financial |
|||||
|---|---|---|---|---|---|---|
| North + West 1.7.–30.9.2012 |
South + East 1.7.–30.9.2012 |
Special Divisions 1.7.–30.9.2012 |
Other 1.7.–30.9.2012 |
Statements 1.7.–30.9.2012 |
total 1.7.–30.9.2012 |
|
| Output volume | T€ 1,842,138 |
T€ 1,493,905 |
T€ 711,675 |
T€ 27,196 |
T€ | T€ 4,074,914 |
| Revenue | 1,604,229 | 1,453,487 | 519,888 | 11,125 | 0 | 3,588,729 |
| Inter-segment revenue | 25,393 | 4,507 | 125,333 | 249,658 | ||
| EBIT | 30,861 | 109,772 | 35,580 | -837 | -6,953 | 168,423 |
| Interest and similar income | 0 | 0 | 0 | 15,230 | 0 | 15,230 |
| Interest expense and similar charges |
0 | 0 | 0 | -29,893 | 0 | -29,893 |
| Profit before tax | 30,861 | 109,772 | 35,580 | -15,500 | -6,953 | 153,760 |
| Rec onciliation |
|||||||
|---|---|---|---|---|---|---|---|
| North + West 1.1.–30.9.2013 T€ |
South + East 1.1.–30.9.2013 T€ |
International + Special Divisions 1.1.–30.9.2013 T€ |
Other 1.1.–30.9.2013 T€ |
to IFRS Financial Statements 1.1.–30.9.2013 T€ |
total 1.1.–30.9.2013 T€ |
||
| Output volume | 4,273,165 | 3,226,455 | 2,006,346 | 103,242 | 9,609,208 | ||
| Revenue | 3,979,683 | 3,095,163 | 1,794,264 | 22,079 | 0 | 8,891,189 | |
| Inter-segment revenue | 99,468 | 9,570 | 225,575 | 596,994 | |||
| EBIT | -20,823 | 48,044 | 14,130 | 420 | -2,144 | 39,627 | |
| Interest and similar income | 0 | 0 | 0 | 45,850 | 0 | 45,850 | |
| Interest expense and similar | |||||||
| charges | 0 | 0 | 0 | -64,456 | 0 | -64,456 | |
| Profit before tax | -20,823 | 48,044 | 14,130 | -18,186 | -2,144 | 21,021 |
| Rec onciliation |
|||||||
|---|---|---|---|---|---|---|---|
| North + West 1.1.–30.9.2012 T€ |
South + East 1.1.–30.9.2012 T€ |
International + Special Divisions 1.1.–30.9.2012 T€ |
Other 1.1.–30.9.2012 T€ |
to IFRS Financial Statements 1.1.–30.9.2012 T€ |
total 1.1.–30.9.2012 T€ |
||
| Output volume | 4,549,533 | 3,413,834 | 2,055,482 | 92,250 | 10,111,099 | ||
| Revenue | 4,003,857 | 3,355,252 | 1,907,079 | 23,656 | 0 | 9,289,844 | |
| Inter-segment revenue | 107,471 | 18,382 | 264,231 | 644,590 | |||
| EBIT | -107,811 | 31,084 | 72,455 | -547 | 6,527 | 1,708 | |
| Interest and similar income | 0 | 0 | 0 | 47,544 | 0 | 47,544 | |
| Interest expense and similar charges |
0 | 0 | 0 | -92,867 | 0 | -92,867 | |
| Profit before tax | -107,811 | 31,084 | 72,455 | -45,870 | 6,527 | -43,615 |
Income and expense in the internal reporting are shown essentially 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 financial statements, earnings from companies which were not fully consolidated respectively reported using the equity method are recognised in conformity with dividends, transfer of earnings and/or depreciation and amortisation. For this reason, the internal reporting does not conform 100 % with EBIT respectively profit before tax in the consolidated financial statements in terms of the investment result.
Other minor differences result from the other consolidation entries.
Reconciliation of the internal reporting to IFRS Financial Statements is allocated as follows:
| 1.1.–30.9.2013 T€ |
1.1.–30.9.2012 T€ |
|
|---|---|---|
| Investment income | 3,986 | 11,724 |
| Other consolidations | -6,130 | -5,197 |
| Total | -2,144 | 6,527 |
With exception of the financial liabilities the book value of the financial instruments corresponds to the fair value. The fair value of the financial liabilities amounts to T€ 1,805,740 on 30 September 2013 (31 December 2012 T€ 1,671,524) composed to the recognised book value of T€ 1,774,292 (31 December 2012 T€ 1,649,984).
The fair value measurement at 30 September 2013 for financial instruments measured at fair value was done as follows:
| ASS ETS |
Valuation at market value T€ |
Valuation using input taken from obser vable market data T€ |
Other valuation methods T€ |
TOTAL T€ |
|---|---|---|---|---|
| Investments in subsidiaries | 0 | 0 | 109,145 | 109,145 |
| Other investments | 0 | 0 | 92,084 | 92,084 |
| Securities | 34,869 | 0 | 0 | 34,869 |
| Cash and cash equivalents | 9,417 | 0 | 0 | 9,417 |
| Derivatives | 0 | -41,904 | 0 | -41,904 |
| Total | 44,286 | -41,904 | 201,2291) | 203,611 |
| LIABILITI ES |
||||
| Derivatives | 0 | -4,818 | 0 | -4,818 |
| Total | 0 | -4,818 | 0 | -4,818 |
The fair value measurement at 31 December 2012 for financial instruments measured at fair value was done as follows:
| ASS ETS |
Valuation at market value T€ |
Valuation using input taken from obser vable market data T€ |
Other valuation methods T€ |
TOTAL T€ |
|---|---|---|---|---|
| Investments in subsidiaries | 0 | 0 | 101,493 | 101,493 |
| Other investments | 0 | 0 | 100,612 | 100,612 |
| Securities | 35,317 | 0 | 0 | 35,317 |
| Cash and cash equivalents | 12,472 | 0 | 0 | 12,472 |
| Derivatives | 0 | -59,632 | 0 | -59,632 |
| Total | 47,789 | -59,632 | 202,1052) | 190,262 |
| LIABILITI ES |
||||
| Derivatives | 0 | -7,641 | 0 | -7,641 |
| Total | 0 | -7,641 | 0 | -7,641 |
Notes on related parties may be found in the 2012 consolidated financial statements. Since 31 December 2012, there have been no significant changes in this area. Arm's-length business relations exist in transactions with related parties.
No material events occurred after the reporting for this interim financial statements.
The present interim financial statements for STRABAG SE were neither audited nor subjected to an audit review.
We confirm to the best of our knowledge that the condensed interim financial statements as of 30 September 2013 give a true and fair view of the assets, liabilities, financial position and profit 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 of important events that have occurred during the first nine months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining three months of the financial year and of the major related party transactions to be disclosed.
Villach, 29 November 2013
Management Board
Dr. Thomas Birtel CEO Responsibility Central Divisions and Central Staff Divisions (except BRVZ) as well as Divisions 3L RANC and 3M RANC1)
Mag. Christian Harder CFO
DI Dr. Peter Krammer Responsibility Segment North + West
DI Siegfried Wanker Responsibility Segment South + East (except Divisions 3L RANC and 3M RANC)1)
Mag. Hannes Truntschnig Responsibility Segment International + Special Divisions
| Interim Report January–September 2013 | 29 November 2013 |
|---|---|
| Publication | 7:30 am |
| Investor and analyst telephone conference | 2:00 pm |
| Annual report 2013 | 30 April 2014 |
| Publication | 7:30 am |
| Press conference | 10:00 am |
| Investor and analyst telephone conference | 2:00 pm |
| Interim report January–March 2014 | 28 May 2014 |
| Publication | 7:30 am |
| Investor and analyst telephone conference | 2:00 pm |
| Notice of Annual General Meeting | 30 May 2014 |
| Shareholding confirmation record date | 17 June 2014 |
| Annual General Meeting 2014 | 27 June 2014 |
| Beginning | 10:00 am |
| Location – to be announced | |
| Ex-dividend date | 4 July 2014 |
| Payment date for dividend | 7 July 2014 |
| Semi-annual report 2014 | 29 August 2014 |
| Publication | 7:30 am |
| Investor and analyst telephone conference | 2:00 pm |
| Interim report January–September 2014 | 28 November 2014 |
| Publication | 7:30 am |
| Investor and analyst telephone conference | 2:00 pm |
All times are CET/CEST. Please find the current road show schedule on the website www.strabag.com > Investor Relations > Company Calendar
| Maturity | Coupon | Volume | ISIN | Stock Exchange |
|---|---|---|---|---|
| 2010–2015 | 4.25 % | € 100 million | AT0000A0DRJ9 | Vienna |
| 2011–2018 | 4.75 % | € 175 million | AT0000A0PHV9 | Vienna |
| 2012–2019 | 4.25 % | € 100 million | AT0000A0V7D8 | Vienna |
| 2013–2020 | 3.00 % | € 200 million | AT0000A109Z8 | Vienna |
Standard & Poors BBB- Outlook stable
| Bloomberg: | STR AV |
|---|---|
| Reuters: | STR .VI |
| Vienna Stock Exchange: | STR |
| ISIN: | AT000000STR 1 |
FOR FURTHER QUESTIONS, PLEASE CONTACT OUR INVESTOR RELATIONS DEPARTMENT:
STRABAG SE, Donau-City-Str. 9, 1220 Vienna/Austria
+43 800 880890
This interim report is also available in German. In case of discrepancy the German version prevails.
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