Bauer AG — Interim / Quarterly Report 2014

May 14, 2014

Interim Report as at March 31, 2014

GROUP KEY FIGURES JANUARY – MARCH 2014

IFRS in EUR million	03/2013 *	03/2014	Change	12/2013
Total Group revenues	330.7	378.1	14.3 %	1,506.2
of which Germany	96.0	112.5	17.2 %	412.1
International	234.7	265.6	13.2 %	1,094.1
International in %	71.0	70.2	n/a	72.6
of which Construction	153.5	176.5	15.0 %	742.7
Equipment	152.4	165.8	8.8 %	628.6
Resources	39.1	48.4	24.0 %	189.9
Other/Elimination/Consolidation	-14.3	-12.6	n/a	-55.0
Consolidated revenues	309.6	371.1	19.9 %	1,449.5
Sales revenues	262.6	313.4	19.3 %	1,404.2
Orders received	349.1	333.9	-4.3 %	1,486.5
Orders in hand	803.4	721.1	-10.2 %	765.2
EBITDA	23.1	27.5	19.0 %	126.0
EBITDA margin in % (of sales revenues)	8.8	8.8	n/a	9.0
EBIT	2.3	4.9	n/a	32.1
EBIT margin in % (of sales revenues)	0.9	1.6	n/a	2.3
Net profit or loss	-9.6	-7.4	n/a	-19.4
Capital investment in property, plant and equipment	18.5	9.2	-50.3 %	91.9
Shareholders' equity	457.1	405.9	-11.2 %	419.4
Equity ratio in %	28.4	24.8	n/a	26.5
Net assets	1,610.0	1,637.1	1.7 %	1,585.2
Earnings per share	-0.54	-0.45	n/a	-0.99
Return on equity after tax in %	n/a	n/a	n/a	-4.6
Employees (on average over the year)	10,176	10,358	1.8 %	10,264
of which Germany	4,100	4,144	1.1 %	4,144
International	6,076	6,214	2.3 %	6,120

* Previous years figures adjusted; see 2013 Annual Report p. 106 f.

At variance with the consolidated revenues presented in the Group income statement, the total Group revenues presented here include portions of revenues from associated companies as well as revenues of non-consolidated subsidiaries and joint ventures.

Percentages are calculated on the basis of unrounded starting values (EUR thousand).

Summary

Total revenues of the BAUER Group at the end of fi rst quarter 2014 were EUR 378.1 million, 14.3 percent above the previous year comparative (EUR 330.7 million). The Group's net loss for the period of EUR 7.4 million was EUR 2.2 million better than in the previous year. We are generally satisfi ed with the start to 2014. In our business, the year normally begins with a loss-making quarter which is balanced out in the subsequent quarters. Our Construction segment was kept busy in all regions of the world in the fi rst three months of the year. A good start was made in Germany, especially, thanks to the mild weather. Our Equipment segment recorded levels of orders received in line with our planning, and we see the prospects for the future as positive. Sales in our Resources segment increased once again. There are nevertheless still a number of diffi cult areas on which we are continuing to work hard.

Orders in hand totalling EUR 721.1 million were 10.2 percent below the previous year's level. The decrease refl ects the fact that last year we had a number of very large orders on our books which were mostly completed in the course of the year. However, we still have very reasonable levels of orders in hand for medium and large-scale projects in all regions which will keep us quite busy over the period ahead. Our Equipment segment continues to operate on the basis of short delivery lead times. It is seeing lively demand, so we further expect a positive trend.

As forecast in the 2013 Annual Report, we expect total Group revenues for fi nancial 2014 of around EUR 1.55 billion, profi t after tax of around EUR 20 to 25 million, and EBIT of around EUR 75 million.

In mid-April, a three-year syndicated loan providing a EUR 450 million credit facility was concluded which placed the Group's fi nancing on a new long-term basis. We will be working hard over the years ahead to improve our fi nancial ratios again.

Course of Business and Background Conditions

GENERAL ECONOMIC CLIMATE

The global economy is basically back on a positive trend. It is currently subject to some turbulence as a result of political issues however. The trouble regarding Ukraine has brought with it echoes of what was thought to be a long-past East-West confl ict. Some 20 years ago, with the Soviet Union breaking up, and Russia weakened, the West was keen to draw Ukraine into its own sphere of infl uence. Russia and Ukraine signed a contract allowing Russia long-term use of a key strategic naval base on the Crimean Peninsula. It was to be expected that Russia would not fi nd acceptable any attempt to make Ukraine a NATO member or to strengthen its ties with the European Union. Consequently, Russia exploited the political unrest in Ukraine to annex Crimea based on a local referendum.

The current tensions between Russia and the West pose a major risk to the world and the global economy. In view of our widespread international operations, this could also reduce our opportunities in the affected markets. We do not expect the confl ict to escalate further, however, as all the parties involved are well aware that any such prospect would set the whole world back years.

Notwithstanding those developments, trends on global construction markets are positive. There has been far too little investment in construction in western economies over recent decades, while in the emerging economies there is still a signifi cant backlog in terms of renewal of infrastructure to meet the needs of the modern world. The rapid urbanization in progress all over the world, especially, is triggering major demand for construction works. In view of the fact that many of the world's mega-cities are already suffering because of traffi c congestion, major infrastructure works need to be instigated in order to improve conditions for their populations and boost their economies. Those works, including underground railway systems, bridges and underground parking garages, will entail a substantial increase in demand for specialist foundation engineering services. The world will face further challenges in the years ahead with regard to water, the environment and energy production – all areas in which we offer solutions, and which will become increasingly important as time goes on. We therefore believe we are very well set to meet a wide range of demands through our products and services.

A pleasing factor is that trends in the major economic regions are positive. The USA has returned to stable growth, enabling it to resume its role as an economic powerhouse for many other countries. In some countries in the Far East, such as China, growth is slowing. But a number of countries, such as Indonesia, are in fact developing much better than could have been imagined years ago. Europe is slowly returning to growth, and in the Arab region confl ict appears to be gradually reducing, so increasing demand for construction is evident there too. Eastern Europe is still struggling to recover its growth trend however. By contrast, a number of countries in Africa are exploiting their natural resources effectively to drive their economies.

In the machinery business, the shifts among market players following on from the major changes seen in previous years continue apace. Overcapacity among Chinese manufacturers has led many of them to move into international markets. Western companies are in a strong position to defend their customer base, however, so the situation is slowly beginning to stabilize. It is good to see that no new players are emerging on markets at present, so the supply side is quite stable.

In the past year we were able to increase our machinery sales in the face of complex market conditions. We are sure that customers value the major efforts we have made in recent years in terms of product development, quality and service, and as a result trust in our products is not only holding up well, but is increasing. Therefore, we also expect to see slight growth in this segment in future. Sales of our deep drilling rigs will enable us to build further on that success.

Our Resources segment continues to see interesting prospects worldwide, particularly in the fi eld of environmental technology and for our products and services relating to water. As a result, that segment will likewise be able once again to achieve reasonable growth.

OVERVIEW OF INTERNATIONAL MARKETS

Germany

Trends on the German construction market are positive, and will remain healthy over the years ahead. The mild weather meant that construction companies had a good start to the year. Housing construction remains the main driver of growth, thanks to low interest rates acting as a major incentive for developers to invest. The commercial property construction sector is profi ting from the general upturn in the global economy. Only the public sector is lagging somewhat, because federal budgets have been delayed due to last year's election. Moreover, the additional budget funding for transport infrastructure at federal level is in no way adequate to meet the country's needs. It is to be expected that more will be done in this respect in future, however, as all politicians have recognized the problem of underfi nancing in the transport section. That will bring additional opportunities for us.

The widely anticipated positive effects of the turnaround of energy policy in Germany have unfortunately not yet been realized. Only the onshore wind power sector is generating healthy orders. The necessary north-to-south power transfer lines are not currently being implemented, and the development of offshore wind power has slowed down. Even the urgently required growth in conventional power station capacity is not happening due to a lack of clear policy framing.

Europe

Eastern Europe continues to suffer the after-effects of the fi nancial crisis. Investment in construction remains at very low levels in almost all the countries in the region. An improved trend is to be expected as a result of this stagnation over the years ahead however. The situation in Russia is somewhat better. The country's oil and gas wealth makes it easier to provide funding for infrastructure projects.

We predict that growth on construction markets in Western Europe will continue to be modest over the coming years. Many countries have had to impose strict budget constraints which will hamper the further development of their infrastructure. There are nevertheless a number of opportunities for us around the region, including in Switzerland. In France, major funding will be allocated in the coming years to improve the traffi c situation in Paris.

Middle East & Central Asia

The countries of the Middle East have plenty of funds at their disposal thanks to their sales of oil and gas. Construction markets across the region – especially in Saudi Arabia, Qatar and the United Arab Emirates – should actually be growing. Unfortunately, progress is being hindered, among other factors, by protracted decision-making processes. Some major projects are in urgent need of execution, such as the underground railway lines in Riyadh and Qatar and the facilities for the football World Cup, but they are all subject to repeated delays. It can be assumed that the construction sector will see renewed progress over the months ahead however.

The situation in Egypt is remarkably positive for our business. Although the country is still struggling with major political and economic problems overall, some large-scale construction projects have been instigated, fi nanced in particular by other Arab nations. Our local presence has enabled us to acquire a number of very interesting contracts. Trends on the construction market in Libya remain very restrained. Trends in Lebanon are pleasing, as a number of interesting projects are being carried out there.

Asia-Pacifi c, Far East & Australia

Construction markets in the Far East remain pleasingly stable. Almost every country in the region is undertaking major infrastructure projects. In Hong Kong, construction sector capacities are being well utilized by extensive rail and road construction works. The same is true in Singapore and Malaysia. Economies such as Indonesia and the Philippines are also seeing healthy growth. By contrast, the Australian economy is not doing as well. Construction activity in the country has slowed.

America

The situation in North America is improving steadily after a number of weak years. It is in the USA that there is the highest level of backlogged demand in many areas of infrastructure, arising from a lack of adequate investment over recent decades. Major efforts will be made over the coming years to make good this defi cit, and a positive side effect of this commitment will be a further boost to the economy. Overall, we regard the market situation as stable, and offering good opportunities for further growth in both our Construction and Equipment segments. Trends on the construction market in Canada are likewise sound. Interesting projects are regularly arising in Central America.

Africa

In Africa, it will be worthwhile actively pursuing new business, even though the economic weakness of the countries concerned means the business generated will not make a major contribution to our total Group revenues overall.

In general terms, our Equipment segment has similar opportunities to those of the Construction segment, as demand for construction machinery is dependent on construction markets.

For the Resources segment, a number of interesting environmental projects on the Arabian Peninsula will soon be entering the tendering phase. Enquiries from the mining sector have fallen back signifi cantly due to the current weakness of commodity markets. By contrast, demand for water-related products and services is increasing worldwide.

PERFORMANCE OF THE BAUER GROUP

In the fi rst quarter of 2014 the total Group revenues of the BAUER Group increased by 14.3 percent over the same period last year, to EUR 378.1 million. The Group's net loss for the period of EUR 7.4 million represented a EUR 2.2 million improvement against the previous year comparative net loss of EUR 9.6 million.

The improvement in earnings is attributable in roughly equal portions to the Construction and Equipment segments. While the respective subsidiaries remained somewhat weak, the two parent companies achieved a substantial increase in earnings. The earnings of the Resources segment were on the same level as last year.

Group orders in hand decreased against the previous year comparative period by 10.2 percent to EUR 721.1 million. This is fully in line with our expectations, as a number of large-scale projects were completed in the course of the year. Orders received by the Equipment segment were slightly above the previous year's level, and we see many interesting opportunities arising. The order situation in the Resources segment is likewise in line with our planning.

All in all, the levels of orders in hand and the opportunities offered by the market provide a sound foundation for further growth in our business.

	in EUR million	03/2013 * revenues	03/2014 revenues	Share 2014	Change against previous year	Orders in hand
	BAUER Spezialtiefbau GmbH (BST)
	BST, Germany	23.2	29.4	7.7 %	26.7 %	+
	Subsidiaries, Germany	11.6	1.8	0.5 %	-84.5 %	•
	BST, international	15.0	19.7	5.2 %	31.3 %	+
Construction	Subsidiaries, international	110.0	131.5	34.8 %	19.5 %	+
	BST Group total	159.8	182.4	48.2 %	14.1 %	+
	SCHACHTBAU NORDHAUSEN GmbH incl. subsidiaries (SBN)	9.7	12.3	3.3 %	26.8 %	•
	less intra-Group revenues and IFRS adjustments	-16.0	-18.2	-4.8 %
	Construction total	153.5	176.5	46.7 %	15.0 %	+
	BAUER Maschinen GmbH (BMA)	87.7	104.7	27.7 %	19.4 %	•
	Equipment subsidiaries	86.8	95.0	25.1 %	9.4 %	•
	BMA Group total	174.5	199.7	52.8 %	14.4 %	•
Equipment	SBN	13.5	16.6	4.4 %	23.0 %	•
	less intra-Group revenues and IFRS adjustments	-35.6	-50.5	-13.4 %
	Equipment total	152.4	165.8	43.8 %	8.8 %	•
	BAUER Resources GmbH (BRE)	1.3	5.2	1.4 %	n/a
	Resources subsidiaries	38.0	44.2	11.7 %	16.3 %	-
	BRE Group total	39.3	49.4	13.1 %	25.7 %	-
Resources	SBN	6.0	7.1	1.9 %	18.3 %	++
	less intra-Group revenues and IFRS adjustments	-6.2	-8.1	-2.1 %
	Resources total	39.1	48.4	12.8 %	24.0 %	•
	BAUER Aktiengesellschaft (BAG)	7.4	7.7	2.0 %	4.1 %
Other	Other subsidiaries	0.6	0.5	0.1 %	-16.7 %
	Total Other/services	8.0	8.2	2.1 %	2.5 %
	less intra-Group revenues and IFRS adjustments	-22.3	-20.8	-5.5 %
	Group total (including minority interests)	330.7	378.1	100.0 %	14.3 %	•
	of which: Germany International	96.0 234.7	112.5 265.6	29.8 % 70.2 %	17.3 % 13.2 %

BREAKDOWN OF TOTAL GROUP REVENUES BY SEGMENT

* See footnote on page 2

Notes on the table:

List also includes non-consolidated holdings

Valuation of orders in hand relative to budgeted sales:

-- weak; - slightly weak; • adequate; + well adequate; ++ very well adequate; Percentages and totals are calculated on the basis of unrounded starting values Breakdown Germany/international according to country in which accounting figures were allocated. For reasons of complexity the figures are not absolutely precise.

Trends in our Business Segments

CONSTRUCTION SEGMENT

CONSTRUCTION SEGMENT KEY FIGURES

in EUR '000	03/2013 *	03/2014	Change	12/2013
Total Group revenues	153,486	176,504	15.0 %	742,662
Sales revenues	124,351	165,899	33.4 %	659,063
Orders received	152,998	107,329	-29.8 %	728,276
Orders in hand	512,599	429,526	-16.2 %	498,701
EBIT	325	1,418	n/a	22,816
Net profit or loss	-4,448	-3,387	n/a	5,472
Employees (on average over the year)	5,334	5,667	6.2 %	5,531

* See footnote on page 2

The total Group revenues of the Construction segment amounting to EUR 176.5 million were 15.0 percent up on the previous year. We have made a good start to the year in all regions of the world. Segment EBIT increased by EUR 1.1 million against the previous year comparative period to EUR 1.4 million. The net result for the period improved from EUR -4.4 million to EUR -3.4 million.

Orders in hand in our Construction segment fell to EUR 429.5 million (previous year: EUR 512.6 million) owing to the completion of large-scale projects. The orders are spread very evenly across the various regions of the world. This provides a sound foundation for us to achieve our revenue targets in the current year.

Trends were particularly positive in our construction business in Germany, in Russia (where we acquired an additional contract for work on the Lakhta Tower in St. Petersburg), in Malaysia, and on our bridge building site in Hong Kong. We regard the segment as being on a healthy track overall.

The other German construction companies in the Group have likewise achieved healthy order levels. SCHACHTBAU NORDHAUSEN GmbH is continuing to see healthy levels of capacity utilization in the mining sector.

An appraisal of ongoing market trends in the construction sector was presented in the "Overview of international markets" section above.

Full-year outlook

All in all, we expect our Construction segment to achieve a slight growth in revenues in 2014. We predict a healthy rise in earnings against the previous year comparative.

EQUIPMENT SEGMENT

EQUIPMENT SEGMENT KEY FIGURES

in EUR '000	03/2013 *	03/2014	Change	12/2013
Total Group revenues	152,360	165,806	8.8 %	628,612
Sales revenues	104,139	104,843	0.7 %	561,615
Orders received	165,468	167,422	1.2 %	632,053
Orders in hand	126,192	118,141	-6.4 %	116,525
EBIT	3,773	5,647	49.7 %	32,223
Net profit or loss	-2,473	-865	n/a	5,055
Employees (on average over the year)	2,971	3,027	1.9 %	2,998

* See footnote on page 2

In the fi rst quarter, the total Group revenues of the Equipment segment rose by 8.8 percent against the previous year comparative to EUR 165.8 million. Sales revenues increased by 0.7 percent to EUR 104.8 million. Segment EBIT increased from EUR 3.8 million in the previous year to EUR 5.6 million. We posted a number of sales transactions in the fi rst quarter which delivered stronger margins than in the comparative period last year, and we were also able to sell somewhat more of our large machinery.

The net result for the period improved from EUR -2.5 million last year to EUR -0.9 million this year. Orders in hand in the Equipment segment totalling EUR 118.1 million (previous year: EUR 126.2 million) were slightly down. Levels of orders received were slightly higher than the previous year. No major growth has been achieved since the recovery in markets following on from the fi nancial crisis in 2010. Business continues to be very short-term in nature. Specialist foundation engineering machinery customers expect immediate delivery after ordering. Demand is lively, leading us to forecast sustained healthy levels of sales.

The three-yearly Conexpo construction machinery show was held in Las Vegas, USA, this March. We used the occasion to launch our newly developed BG 11 entry-level rotary drilling rig. Interest from visitors was very positive, so we expect to achieve strong sales with the product. The rig will be built at our US plant in Houston, Texas.

Full-year outlook

We forecast that the sales in our Equipment segment will increase in the current fi nancial year, enabling us also to improve earnings.

RESOURCES SEGMENT

RESOURCES SEGMENT KEY FIGURES

in EUR '000	03/2013 *	03/2014	Change	12/2013
Total Group revenues	39,051	48,409	24.0 %	189,868
Sales revenues	33,963	42,492	25.1 %	182,968
Orders received	44,810	71,835	60.3 %	181,061
Orders in hand	164,586	173,446	5.4 %	150,020
EBIT	-2,383	-2,118	n/a	-23,576
Net profit or loss	-3,558	-3,567	n/a	-31,444
Employees (on average over the year)	1,591	1,373	-13.7 %	1,449

* See footnote on page 2

In the fi rst quarter of 2014, our Resources segment increased its total Group revenues by 24.0 percent to EUR 48.4 million. This was attributable primarily to the Materials and Environment areas. EBIT of EUR -2.1 million was slightly up on the previous year (EUR -2.4 million). The net loss for the period of EUR 3.6 million was the same as the previous year comparative.

The Resources segment has for some time been working intensively on a reorganization. Operations in the fi eld of environmental technology and relating to water are especially pleasing. Our healthy levels of orders in hand in those areas will help us to achieve growth. The management of the Materials area has been changed, and intensive optimization efforts are underway. The segment had a better than expected start to this year thanks to the mild weather among other factors.

We have begun making changes to our deep drilling activities for water wells and for exploration, which we will be implementing on a long-term basis. Weak mining markets are having a negative impact on us in this context. We are nevertheless optimistic that we will be able to make good progress in this area.

Our Resources segment will stop operating a number of minor areas of business in order to focus fully on core opportunities.

The segment has healthy levels of orders in hand totalling EUR 173.4 million, though that fi gure in the core business is somewhat down against the peaks seen in the past. The Mining division of SCHACHTBAU NORDHAUSEN GmbH is making an outstanding contribution, accounting for approximately EUR 45 million of the total. There are also a number of interesting large-scale environmental projects in the pipeline, on the Arabian Peninsula in particular, which we are working hard to realize.

Full-year outlook

We see further encouraging development opportunities over the coming years in the Resources segment. We will increase our revenues again in 2014. We will make a slight net loss for the period however.

Earnings, Financial and Net Asset Position

Our consolidated balance sheet and income statement continue to bear the marks of the years following the fi nancial crisis, which entailed the need for signifi cantly higher funding of our business. Up-front fi nancing of our works additionally rose substantially in relation to a number of major construction projects. Our Equipment segment, too, is still clearly showing the impact of its much increased up-front fi nancing requirements, resulting from the need to hold more stocks due to shortened delivery lead times. The loss made last year and the adjustments to provisions for defi ned benefi t plans necessitated by IFRS have had a negative impact on our balance sheet, and especially on the equity ratio. Those changes will be continue to affect us, though we will be working in the years ahead to improve the equity ratio again.

It is normal in the specialist foundation engineering and related equipment business that the fi nancing needs of the companies concerned increase substantially in the early months and only decrease again towards the end of the year. This effect is attributable fi rstly to the payment practices of our customers, but also stems from the seasonal nature of the business and the necessity to boost production at the start of the year in order to make deliveries in the summer when sales rise. This results in a signifi cant in-year rise in working capital. The same factors will have an opposite effect at the year-end.

Net assets increased by 3.3 percent in the fi rst three months of 2014 relative to the 2013 year-end. Against the balance sheet to March of last year, the increase was only 1.7 percent. The increase in net assets is thus well below the increase in revenues. Our medium-term target is a substantial reduction in net assets relative to total Group revenues.

EARNINGS

The consolidated revenues shown in the Group's earnings statement increased by 19.9 percent against the previous year comparative period to EUR 371.1 million. The "Changes in inventories" item increased to EUR 48.6 million. The "Capitalized goods and services for own account" item, which mainly relates to the equipment required for our own in-house construction operations and development costs, amounted to EUR 3.4 million in the fi rst three months of the year. Other income decreased by EUR 3.3 million to EUR 5.7 million. Sales revenues in themselves totalled EUR 313.4 million, 19.3 percent up on the previous year.

The "Cost of materials", "Staff costs", "Depreciation and amortization" and "Other operating expenses" items in the income statement rose somewhat less than the revenues overall, so also contributing to the slight improvement in earnings.

Cost of materials increased by 26.3 percent – 6.4 percentage points more than the rate of rise in consolidated revenues. In the Construction segment's service business, the distribution of costs between years often varies very considerably owing to the order structure. Staff costs increased by 7.8 percent – signifi cantly less than the rate of rise in revenues. The good start to the year meant that higher personnel expenses were incurred to generate the output.

Depreciation of fi xed assets increased by 3.5 percent. Write-downs of inventories due to use increased by EUR 1.2 million, as more equipment was hired out than in the previous year.

Financial expenses increased by 9.4 percent over the previous year. Financial income totalled EUR 1.0 million.

Income tax expense of EUR 0.6 million was slightly below the previous year's fi gure. We expect that the full-year income tax rate will be around 30 percent of profi t before tax.

The net loss for the period improved against the previous year from EUR -9.6 million to EUR -7.4 million.

FINANCIAL POSITION

Our fi nancial position is developing in line with our plans. On April 17, 2014, we agreed a three-year syndicated loan providing a EUR 450 million credit facility with a consortium of the company's main bankers. This provided the business with a new fi nancing structure which will form the basis of planning for the years ahead. The syndicated loan also replaces the loans affected by the breaking of covenants. The new fi nancing structure will increase the Group's fi nance costs.

NET ASSET POSITION

The net assets shown on the balance sheet increased by 3.3 percent against the 2013 year-end and by 1.7 percent relative to March of the previous year. An in-year increase is normal in our business, for the reasons already outlined. According to our planning, the increase in net assets at the year-end will be substantially less than the rate of rise in revenues.

Fixed assets have decreased slightly relative to the 2013 year-end. Non-current assets have decreased by 1.4 percent overall. The inventories (particularly fi nished goods and work in progress and stock for trade) and the receivables refl ect the annual recurring seasonal effect. The level of up-front fi nancing for our projects and inventories has therefore risen accordingly. Cash and cash equivalents decreased by EUR 12.5 million against the year-end fi gure. Current assets thus increased by 6.0 percent against the comparative previous year period.

On the Equity and Liabilities side, shareholders' equity decreased by EUR 13.5 million. The key changes, alongside the loss made, are exchange rate changes in an amount of EUR -0.7 million; effects of interest rate changes on the valuation of defi ned benefi t plans in an amount of EUR -4.2 million (after deduction of deferred taxes); and a dividend payment to minority shareholders totalling EUR 1.4 million.

The usual seasonal additional fi nancing requirement was mainly covered by borrowings. The shifts from non-current fi nancial liabilities to current fi nancial liabilities are similar to those at the 2013 year-end, and have already been explained here. Borrowings under these items increased relative to the year-end by EUR 88.6 million in line with seasonal norms.

DEVELOPMENT OF THE BAUER AG SHARE

The Bauer share began 2014 positively, in line with the market trend. From its opening price of EUR 18.75, the share had risen by mid-January to just over EUR 20. By the end of January, the share price subsequently fell back to start-of-year levels in line with trends on the comparative DAX and SDAX indexes. In line with the fl uctuating market trend, the share price slowly recovered to EUR 19.72 by the end of February, before closing the fi rst quarter slightly better than the DAX, but down against the trend on the SDAX, at EUR 19.18. On the day the Annual Report was published, April 11th, the share price fell by almost 4 percent. At the end of April, the Bauer share price was EUR 18.74.

HUMAN RESOURCES

As at the end of March, the average number of employees had increased slightly year-on-year, to 10,358 (previous year: 10,176). The increase was mainly due to the personnel requirements of a number of large-scale construction projects.

FOLLOW-UP REPORT

On April 17, 2014, a syndicated loan was agreed, as already detailed under "Financial position". No further matters of special note which we would expect to have a material infl uence on the net asset, fi nancial and earnings position of the BAUER Group occurred after March 31, 2014.

OPPORTUNITIES AND RISKS

Major opportunities and risks are set out in the individual sections of this Interim Report. There has been no material change in risks since the Annual Report to December 31, 2013. Consequently, we refer back to the Combined Management Report for fi nancial 2013.

FULL-YEAR OUTLOOK

After the unsatisfactory performance of last year, we have had a good start to 2014. Thanks to the mild weather conditions in Germany, the good start made to projects in the international construction sector, and improved order receipts in the machinery sector, we are satisfi ed with the course of business in the fi rst quarter. We are confi dent that this trend will continue.

The new fi nancing structure will slightly increase our interest costs, which we will offset by cost savings. The cost-saving programme which we have already launched to that end is progressing in line with our planning.

Our forecast as published in the 2013 Annual Report remains unchanged. We predict:

• Total Group revenues of around EUR 1.55 billion.
• Profi t after tax around EUR 20 to 25 million, equating to EBIT of around EUR 75 million.

As in previous years, we must again point out that – contrary to earlier boom years – the forecast revenues and earnings of the BAUER Group are subject to a much greater degree of uncertainty. The main reason for this is the persisting uncertainty regarding developments in many parts of the world.

Last year was disappointing for the company's management and employees. Fortunately, everyone is aware that events such as we have encountered in our business do not mean that the structure of the business has fundamentally and lastingly changed. Moreover, we have undertaken a wide range of measures to improve our products and services even further. So we approach the future with renewed vigour and confi dence.

Interim Financial Statements of the BAUER Group

INCOME STATEMENT

in EUR '000	01.01. - 31.03.2013 *	01.01. - 31.03.2014
1. Sales revenues	262,596	313,352
2. Changes in inventories	35,960	48,602
3. Other capitalized goods and services for own account	2,018	3,446
4. Other income	8,976	5,748
CONSOLIDATED REVENUES	309,550	371,148
5. Cost of materials	-157,776	-199,309
6. Staff costs	-79,542	-85,758
7. Depreciation and amortization
a) Depreciation of fixed assets	-18,417	-19,057
b) Write-downs of inventories due to use	-2,359	-3,536
8. Other operating expenses	-49,117	-58,569
OPERATING RESULT	2,339	4,919
9. Financial income	888	971
10. Financial expenses	-11,547	-12,631
11. Share of the profi t or loss of associated companies accounted for using the equity method	-219	1
PROFIT BEFORE TAX	-8,539	-6,740
12. Income tax expense	-1,027	-610
NET PROFIT OR LOSS	-9,566	-7,350
of which attributable to shareholders of BAUER AG	-9,319	-7,775
of which attributable to minority interests	-247	425

in EUR / share	01.01. - 31.03.2013	01.01. - 31.03.2014
Basic earnings per share	-0.54	-0.45
Diluted earnings per share	-0.54	-0.45
Average number of shares in circulation (basic)	17,131,000	17,131,000
Average number of shares in circulation (diluted)	17,131,000	17,131,000

STATEMENT OF COMPREHENSIVE INCOME OF THE BAUER GROUP

in EUR '000	01.01. - 31.03.2013 *	01.01. - 31.03.2014
Net profit or loss	-9,566	-7,350
Income and expenses which will not be subsequently reclassified to profit and loss
Revaluation of commitments arising from employee benefi ts after termination of employment	0	-5,801
Deferred taxes on that revaluation with no effect on profi t and loss	0	1,630
Income and expenses which will be subsequently reclassified to profit and loss
Market valuation of derivative fi nancial instruments	613	152
Included in profi t and loss Deferred taxes on fi nancial instruments with no effect on profi t and loss	0 -303	7 -43
Differences from currency translation	3,850	-725
Other result after tax	4,160	-4,780
Total Comprehensive income for the year	-5,406	-12,130
of which attributable to shareholders of BAUER AG	-5,135	-12,413
of which attributable to minority interests	-271	283

* See footnote on page 2

BALANCE SHEET OF THE BAUER GROUP

ASSETS in EUR '000	31.03.2013 *	31.12.2013	31.03.2014
A. NON-CURRENT ASSETS
I. Intangible assets	34,606	35,388	35,248
II. Property, plant and equipment and investment property	468,069	459,537	449,499
III. Investments accounted for using the equity method	12,932	9,972	9,973
IV. Participations	3,613	3,613	3,613
V. Deferred tax assets	27,923	26,299	27,996
VI. Receivables from concession arrangements	41,859	36,762	36,727
VII. Other non-current assets	8,225	7,564	7,627
VIII. Other non-current fi nancial assets	6,963	5,420	5,446
	604,190	584,555	576,129
B. CURRENT ASSETS
I. Inventories	458,920	419,352	458,028
II. Receivables and other assets	487,320	520,657	555,203
III. Effective income tax refund claims	5,850	3,437	3,038
IV. Cash and cash equivalents	53,742	57,217	44,688
	1,005,832	1,000,663	1,060,957
	1,610,022	1,585,218	1,637,086

EQUITY AND LIABILITIES in EUR '000	31.03.2013 *	31.12.2013	31.03.2014
A. SHAREHOLDERS' EQUITY
Equity of BAUER AG shareholders	424,200	396,602	384,273
Minority interests	32,934	22,809	21,595
	457,134	419,411	405,868
B. NON-CURRENT LIABILITIES
Defi ned benefi t plans	80,667	81,637	87,899
Financial liabilities	456,688	279,437	275,562
III. Other liabilities	7,655	6,483	5,724
IV. Deferred tax liabilities	19,493	14,788	12,711
	564,503	382,345	381,896
C. CURRENT LIABILITIES
Financial liabilities	320,909	449,876	542,347
Other liabilities	245,749	307,203	282,133
III. Effective income tax obligations	4,821	9,606	5,589
IV. Provisions	16,906	16,777	19,253
	588,385	783,462	849,322
	1,610,022	1,585,218	1,637,086

* See footnote on page 2

CASH FLOW STATEMENT OF THE BAUER GROUP

in EUR '000	31.03.2013	31.03.2014
Cash flows from operating activities	-83,972	-80,244
Cash flows from investing activities	-13,978	-9,502
Cash flows from financing activities	104,289	77,231
Changes in liquid funds affecting payments	6,339	-12,515
Influence of exchange rate movements on cash	2,171	-14
Total change in liquid funds	8,510	-12,529
Cash and cash equivalents at beginning of reporting period	45,232	57,217
Cash and cash equivalents at end of reporting period	53,742	44,688
Change in cash and cash equivalents	8,510	-12,529

STATEMENT OF CHANGES IN EQUITY OF THE BAUER GROUP

in EUR '000	Other revenues and net earnings available for distribution
	Subscribed capital	Capital reserve	Revenue reserves	Currency translation reserve	Reconciling item, IFRS	Hedging transactions reserve	Minority interests	Total
As at 01.01.2013	73,001	38,404	303,892	7,373	10,387	-3,722	33,205	462,540
Net profit or loss	0	0	-9,319	0	0	0	-247	-9,566
Differences from currency translation	0	0	0	3,874	0	0	-24	3,850
Revaluation of com mitments arising from employee benefits after termination of employment	0	0	0	0	0	0	0	0
Market valuation of derivative financial instruments	0	0	0	0	0	613	0	613
Deferred taxes with no effect on profit and loss	0	0	0	0	0	-303	0	-303
Total comprehensive income for the year	0	0	-9,319	3,874	0	310	-271	-5,406
Changes in scope of consolidation	0	0	0	0	0	0	0	0
Dividend payments	0	0	0	0	0	0	0	0
Other changes	0	0	0	0	0	0	0	0
As at 31.03.2013 *	73,001	38,404	294,573	11,247	10,387	-3,412	32,934	457,134
As at 01.01.2014	73,001	38,404	283,895	-6,492	10,387	-2,593	22,809	419,411
Net profit or loss	0	0	-7,775	0	0	0	425	-7,350
Differences from currency translation	0	0	0	-607	0	0	-118	-725
Revaluation of com mitments arising from employee benefits after termination of employment	0	0	-5,751	0	0	0	-50	-5,801
Market valuation of derivative financial instruments	0	0	0	0	0	145	14	159
Deferred taxes with no effect on profit and loss	0	0	1,615	0	0	-40	12	1,587
Total comprehensive income for the year	0	0	-11,911	-607	0	105	283	-12,130
Changes in scope of consolidation	0	0	0	0	0	0	0	0
Dividend payments	0	0	0	0	0	0	-1,413	-1,413
Other changes	0	0	84	0	0	0	-84	0
As at 31.03.2014	73,001	38,404	272,068	-7,099	10,387	-2,488	21,595	405,868

* See footnote on page 2

SEGMENT REPORTING OF THE BAUER GROUP

in EUR '000	Construction		Equipment			Resources		Other
01.01. - 31.03.	2013 *	2014	2013 *	2014	2013 *	2014	2013 *	2014
Total revenues (Group)	153,486	176,504	152,360	165,806	39,051	48,409	8,067	8,212
Sales revenues with third parties	124,351	165,899	104,139	104,843	33,963	42,492	143	118
Sales revenues between business segments	4,064	3,573	10,218	8,993	289	520	7,570	7,435
Changes in inventories	312	-67	33,419	46,790	2,229	1,879	0	0
Other capitalized goods and services for own account	65	13	975	1,688	120	10	0	0
Other income	5,126	1,957	2,670	2,400	1,149	1,026	70	420
CONSOLIDATED REVENUES	133,918	171,375	151,421	164,714	37,750	45,927	7,783	7,973
OPERATING RESULT	325	1,418	3,773	5,647	-2,383	-2,118	255	-264
Financial income	274	117	142	476	625	486	1,532	1,671
Financial expenses	-5,264	-5,593	-4,802	-5,519	-2,231	-2,263	-935	-1,035
Share of the profit or loss of associated companies accounted for using the equity method	-216	43	4	-4	-7	-38	0	0
Income tax expense	433	628	-1,590	-1,465	438	366	-209	-80
NET PROFIT OR LOSS	-4,448	-3,387	-2,473	-865	-3,558	-3,567	643	292

ADDITIONAL INFORMATION ON THE INCOME STATEMENT

Depreciation and amortization

Depreciation of fixed assets	-11,210	-11,466	-3,814	-4,604	-2,571	-2,337	-822	-771
Write-downs of inventories due to use	0	0	-2,359	-3,536	0	0	0	0
	31.12.2013	31.03.2014	31.12.2013	31.03.2014	31.12.2013	31.03.2014	31.12.2013	31.03.2014
SEGMENT ASSETS	566,266	590,161	803,467	802,765	265,613	264,858	303,121	273,084

SEGMENT REPORTING OF THE BAUER GROUP

in EUR '000	Consolidation		Group
01.01. - 31.03.	2013	2014	2013 *	2014
Total revenues (Group)	-22,281	-20,855	330,683	378,076
Sales revenues with third parties			262,596	313,352
Sales revenues between business segments	-22,141	-20,521	0	0
Changes in inventories	0	0	35,960	48,602
Other capitalized goods and services for own account	858	1,735	2,018	3,446
Other income	-39	-55	8,976	5,748
CONSOLIDATED REVENUES	-21,322	-18,841	309,550	371,148
OPERATING RESULT	369	236	2,339	4,919
Financial income	-1,685	-1,779	888	971
Financial expenses	1,685	1,779	-11,547	-12,631
Share of the profit or loss of associated companies accounted for using the equity method	0	0	-219	1
Income tax expense	-99	-59	-1,027	-610
NET PROFIT OR LOSS	270	177	-9,566	-7,350

ADDITIONAL INFORMATION ON THE INCOME STATEMENT

Depreciation and amortization
Depreciation of fixed assets	0	121	-18,417	-19,057
Write-downs of inventories due to use	0	0	-2,359	-3,536
	31.12.2013	31.03.2014	31.12.2013	31.03.2014
SEGMENT ASSETS	-353,249	-293,782	1,585,218	1,637,086	* See footnote on page 2

Notes to the Financial Statements

1. GENERAL DISCLOSURES RELATING TO THE GROUP

BAUER Aktiengesellschaft, Schrobenhausen (referred to in the following as BAUER AG) is a stock corporation under German law. Its registered offi ce is at BAUER-Strasse in Schrobenhausen, and the company is entered in the Register of Companies of Ingolstadt under fi le reference HRB 101375.

The BAUER Group is a provider of services, machinery and ancillary products for ground and groundwater. The Group markets its products and services all over the world. The operations of the Group are divided into three segments: Construction, Equipment and Resources. BAUER AG has been listed on the SDAX stock market index since September 2006. Between September 2008 and September 2010, BAUER AG was also listed on the MDAX index.

These condensed interim consolidated statements were released for publication on May 9, 2014.

Auditing

These condensed interim consolidated fi nancial statements and the interim Group Management Report have not been audited in accordance with section 317 of the German Commercial Code (HGB), nor have they been subjected to any review by an auditor.

2. BASES FOR COMPILING THE CONSOLIDATED FINANCIAL STATEMENTS

BAUER AG compiles its condensed interim consolidated fi nancial statements in accordance with International Financial Reporting Standards (IFRS), the requirements of the International Accounting Standards Board (IASB), London, and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as applicable on the accounting reference date and recognized by the European Union. Only IASB Standards and Interpretations adopted by the Commission and duly published in the Offi cial Journal of the EU by the accounting reference date are applied.

The Interim Report to March 31, 2013 was prepared in condensed form on the basis of IAS 34, "Interim Financial Reporting", and as such does not include all the disclosures mandatory for full-year consolidated fi nancial statements.

These condensed interim consolidated fi nancial statements are based on the Group's consolidated fi nancial statements to December 31, 2013, and as such should be read in conjunction with the consolidated fi nancial statements of BAUER AG to December 31, 2013.

3. SCOPE OF CONSOLIDATION

The scope of consolidation includes BAUER AG and all major subsidiaries. Subsidiaries are all companies over which the parent has control in terms of fi nancial and corporate policy. This is routinely accompanied by a voting share of over 50 percent. When assessing whether control is exerted, the existence and effect of potential voting rights currently exercisable or convertible are considered.

In a small number of cases, companies are fully consolidated into the fi nancial statements of BAUER AG even though that company holds less than 50 percent of their voting rights. This is the result of state restrictions which stipulate that foreign investors may not hold more than 50 percent of the voting rights in domestic companies. In such cases BAUER AG makes use of so-called agency constructions, whereby more than 50 percent of the voting rights are commercially held in the company concerned, thus allowing for full consolidation.

Subsidiaries are included in the consolidated fi nancial statements (fully consolidated) from the point at which control is transferred to the Group. They are de-consolidated at the point when control ends.

Companies of which BAUER AG is able, directly or indirectly, to exercise a signifi cant infl uence on the said companies' fi nancial and operating policy decisions (associated companies) are consolidated according to the equity method.

Changes in scope of consolidation

No changes have occurred to the scope of consolidation since December 31, 2013.

4. KEY ASSUMPTIONS AND ESTIMATES

In this context we refer to our 2013 Annual Report, page 103.

5. ACCOUNTING AND VALUATION METHODS

The accounting and valuation methods applied as from January 1, 2014 correspond to those applied to the consolidated fi nancial statements to December 31, 2013, with the following exceptions:

• IAS 28 Investments in Associates and Joint Ventures This amendment replaces IAS 28 – Investments in Associates – and stipulates the preconditions for application of the equity method by associates and joint ventures.
• IFRS 32 Financial Instruments: Presentation

The amendment essentially involves clarifi cation of a number of rules for the offsetting of fi nancial assets and liabilities. A fi nancial asset may only be set off against a fi nancial liability if the claim is current. That is to say, it must not be dependent on a future event. Additionally, the amendments clarify that gross offsetting mechanisms (such as through clearing), which both eliminate credit and liquidity risks and process receivables and liabilities in a single accounting process, must be treated as equivalent to net offsetting.

The amendment to IAS 32 has no effect on the interim consolidated fi nancial statements of BAUER AG.

• IAS 36 – Impairment of Assets

Pursuant to the amendment to IFRS 13 Fair Value Measurement, a number of disclosure rules in IAS 36 Impairment of Assets regarding measurement of the achievable amount of asset impairment have been changed. The amendment to IAS 36 has no effect on the interim consolidated fi nancial statements of BAUER AG.

• IFRS 39 Financial Instruments: Recognition and Measurement With the amendment to IAS 39, it is possible to retain hedge accounting for derivatives if the contract party changes. This possibility is only allowable under certain preconditions. The amendment to IAS 39 has no effect on the interim consolidated fi nancial statements of BAUER AG.
• IFRS 10 Consolidated Financial Statements

IFRS 10 modifi es the term "control" such that the same criteria are applied to all entities in assessing a control relationship. This defi nition is backed by wide-ranging application examples illustrating various kinds of control. The effects of IAS 10 have no effect on the interim consolidated fi nancial statements of BAUER AG.

• IFRS 11 – Joint Arrangements

As a result of the changes to defi nitions in IFRS 11, there are now two kinds of joint arrangement: joint operation and joint venture.

Moreover, the option of proportionate consolidation of jointly controlled entities has been abolished. Parties to a joint venture are obligated to recognize their share on the balance sheet applying the equity method in accordance with IAS 28 – Investments in Associates and Joint Ventures. Parties to a joint operation recognize their shares proportionate to their share of the assets and liabilities of the joint operation. Consequently, a party to a joint operation includes the following items in its consolidated fi nancial statements:

• Its assets, including its share in jointly held assets
• Its liabilities, including its share in jointly incurred liabilities
• Its income from the sale of its share in the products of the joint operation
• Its share in income from the sale of products by the joint operation
• Its expenses, including its share in any jointly incurred expenses

The effects of IAS 11 have no effect on the interim consolidated fi nancial statements of BAUER AG.

• IFRS 12 – Disclosure of Interests in Other Entities IFRS 12 requires disclosures which enable readers of fi nancial statements to assess the nature, risks and fi nancial effects linked to interests in subsidiaries, associated companies, joint arrangements and non-consolidated structured entities (special-purpose entities).

The effects of IAS 12 have no effect on the interim consolidated fi nancial statements of BAUER AG.

• Amendments to IFRS 10, IFRS 12 and IAS 27 The IASB project resulting in the amendments to IFRS 10, IFRS 12 and IAS 27 emerged from the consultation process relating to the publication of IFRS 10 Consolidated Financial Statements. These changes have no effect on the interim consolidated fi nancial statements of BAUER AG.
• IFRIC 21 Levies

IFRIC 21 regulates accounting for government levies not covered by IAS 12. It stipulates when such an obligation is to be recognized as a liability.

The effects of IFRIC 21 have no effect on the interim consolidated fi nancial statements of BAUER AG.

6. DISCLOSURES REGARDING FINANCIAL INSTRUMENTS

6.1 Financial risk factors

In its business operations and fi nancing activities, the BAUER Group is subject to a wide range of fi nancial risks (foreign exchange rate, interest rate, raw material and liquidity risks, risk of default).

These condensed interim consolidated fi nancial statements do not include all disclosures and information relating to fi nancial risk management, so they should be read in conjunction with the consolidated fi nancial statements to December 31, 2013.

No changes to the management of fi nancial risks have been made since the end of the fi nancial year.

6.2 Carrying amounts and fair values

The fair values of fi nancial instruments are determined on the basis of one of the methods set out on the three following levels:

• Level 1: Quoted prices (adopted unchanged) on active markets for identical assets and liabilities
• Level 2: Directly or indirectly observable input data for the asset or liability other than quoted prices as per level 1
• Level 3: Applied input data which does not originate from observable market data for measurement of the asset and liability (non-observable input data)

The fi nancial instruments measured at fair value are assignable to the following levels:

ASSETS in EUR '000	IAS 39 category	31.03.2014	Level 1	Level 2
Securities	AfS	0	0	0
Derivatives not in hedge accounting	FAHfT	1,932	0	1,932
Derivatives in hedge accounting	n/a	2,241	0	2,241
Total		4,173	0	4,173

EQUITY AND LIABILITIES in EUR '000	IAS 39 category	31.03.2014	Level 1	Level 2
Derivatives not in hedge accounting	FLHfT	4,497	0	4,497
Derivatives in hedge accounting	n/a	2,550	0	2,550
Total		7,047	0	7,047

ASSETS in EUR '000	IAS 39 category	31.12.2013	Level 1	Level 2
Securities	AfS	0	0	0
Derivatives not in hedge accounting	FAHfT	1,326	0	1,326
Derivatives in hedge accounting	n/a	1,980	0	1,980
Total		3,306	0	3,306

EQUITY AND LIABILITIES in EUR '000	IAS 39 category	31.12.2013	Level 1	Level 2
Derivatives not in hedge accounting	FLHfT	4,591	0	4,591
Derivatives in hedge accounting	n/a	2,940	0	2,940
Total		7,531	0	7,531

In the fi rst three months of the fi nancial year, no reclassifi cation was undertaken between level 1 and 2 fi nancial instruments measured at fair value.

6.3 Methods for determining level 2 fair values

Level 2 derivatives comprise foreign exchange forward contracts, foreign exchange forward options, interest rate swaps and cross-currency swaps. The fair values of foreign exchange forward contracts and cross-currency swaps are measured separately at their respective forward prices and discounted to the reference date based on the corresponding interest rate curve. The market prices of foreign exchange forward options are determined by recognized option price models. The fair values of the interest rate swaps correspond to the respective market value as determined by appropriate fi nancial valuation methods, such as by discounting expected future cash fl ows.

For cash and cash equivalents, current trade receivables and other current assets, current trade payables and other current liabilities, owing to their short remaining terms the carrying amount should be adopted as a realistic estimate of the fair value.

The fair values of non-current assets and non-current fi nancial assets and of non-current liabilities and non-current fi nancial liabilities correspond to the cash values of the payment fl ows linked to the assets, taking into account the applicable interest rate parameters, which refl ect changes in the terms and expectations of the market and of the respective parties. Investments are valued at cost, as no fair value can be reliably determined owing to the lack of an active market.

6.4 Fair value disclosures

The principles and methods of calculating fair value have essentially remained unchanged from the previous year. Detailed explanatory notes on the measurement principles and methods are set out in the 2013 Annual Report.

The fi nancial assets and liabilities of which the fair values differ from their carrying amounts are as follows:

in EUR '000	31.12.2013		31.03.2014
	Carrying amount	Fair value	Carrying amount	Fair value
Receivables from concession arrangements	36,762	40,449	36,727	41,160
Other non-current financial assets	5,420	5,309	5,446	5,352
Trade receivables	323,008	322,161	322,583	321,781
Liabilities to banks	247,775	256,361	245,321	256,168
Other non-current financial liabilities	14,397	15,396	14,043	14,575
Total	627,362	639,676	624,120	639,036

The carrying amounts of all other fi nancial assets and liabilities correspond to their fair value.

In other respects we refer to pages 154 ff. of the 2013 Annual Report.

7. SEASONALITY

Our Construction segment undertakes many projects in regions where winter and other hostile weather conditions impact severely on site results in the fi rst quarter of the year and at the start of the second quarter. The fi rst quarter is also weak in terms of the performance of our Equipment segment, because customers only buy machines when they actually need them to carry out their construction works. For our Resources segment, wintry conditions at the start of the year mean that sales of well engineering materials are very weak.

Since most costs are fi xed, signifi cant losses are made in the fi rst quarter of each year. Beginning with the second quarter, those losses are balanced out as contribution margins improve. Break-even has normally not yet been achieved by the end of the second quarter. Most profi t is generated in the third and fourth quarters. This annually recurring business cycle allows performance, sales and earnings in the various quarters to be compared against the corresponding reference periods.

8. NOTES ON SEGMENT REPORTING

The internal organizational and management structure and the internal system of reporting to the Management Board and Supervisory Board dictate the segmentation employed by the BAUER Group.

The BAUER Group comprises the Construction, Equipment and Resources segments. Transactions between the segments are conducted at market prices.

SCHACHTBAU NORDHAUSEN GmbH is the only Group company to operate in all three segments. The assets and liabilities and income statement items of SCHACHTBAU NORDHAUSEN GmbH are assigned to the relevant segments.

Construction

The core business of the Construction segment is specialist foundation engineering. Complete excavation pits and foundation works, often in diffi cult subgrade conditions, are carried out for major infrastructure projects and buildings. In order to offer customers a full range of services, the companies of the BAUER Group additionally offer other construction services, often involving a major specialist foundation engineering element. Examples of this include bridges, environmental engineering, remediation and building renovation projects. The Construction segment is founded on the close interlinking of all construction activities.

Equipment

In the Equipment segment, machinery for all specialist foundation engineering processes and for deep drilling is developed and manufactured for worldwide distribution. The specialist foundation engineering equipment can be employed to produce large-diameter and small-diameter bores for piles, diaphragm walls, anchors, injections and wells. The deep drilling equipment can be employed to drill for geothermal energy, oil and gas. Equipment for ramming and ground improvement is also manufactured. The range is supplemented by a wide selection of add-on units and ancillary equipment, covering all the processes involved in specialist foundation engineering.

Resources

The Resources segment brings together all the Group companies providing products and services relating to the remediation and exploitation of natural resources essential to human life. They include environmental technology companies involved in the treatment of ground and groundwater as well as companies involved in exploratory drilling and mining of raw materials and drilling of wells and geothermal energy sources. This segment also includes companies which manufacture and sell materials for the engineering of bore holes, specifi cally for wells and geothermal energy sources.

The Other segment comprises the central services (accounting, human resources, IT etc.) provided by BAUER AG to the Group companies as well as other units not assignable to the separately listed segments, providing services such as in-house and external education and training and centralized research and development.

The intersegmental consolidation effects are grouped here under Consolidation. This includes offsetting of intra-Group sales between the segments as well as income and expenses and interim results. The intersegmental consolidation effects are adjusted within the respective segments.

Total Group revenues, consolidated revenues and sales revenues with third parties

The consolidated revenues refl ect the performance of all the companies included in the scope of consolidation. The total Group revenues represent the revenues of all the companies forming part of our Group. The difference between the consolidated revenues and the total Group revenues is derived from the revenues of the associated companies, from our subcontractor shares in consortia, and from the revenues of non-consolidated companies.

The sales revenues with third parties are allocated to the business segments according to the customer's location. No one customer accounts for more than 10 percent of total sales.

No breakdown of sales revenues by product and service, or by groups of comparable products and services, was available as per the balance sheet date.

9. EVENTS AFTER MARCH 31, 2014

On April 17, 2014, BAUER Aktiengesellschaft together with other borrowers from within the BAUER Group agreed a threeyear syndicated loan providing a EUR 450 million credit facility with the company's main bankers. This successfully implemented a new long-term fi nancing concept. The new agreement will incur fees and other expenses. It is also expected that interest charges will increase.

10. MATERIAL TRANSACTIONS WITH RELATED PARTIES

The relationships between fully consolidated Group companies and related companies and persons relate mainly to associated and joint-venture companies. Transactions with the said companies are transacted at standard market terms. In the period under review, no material transactions were undertaken with related parties.

11. CONTINGENT LIABILITIES

Contingent liabilities arising from guarantees to third parties exist in an amount of EUR 4,386 thousand (December 31, 2013: EUR 4,386 thousand). In addition, we are subject to joint and several liability in respect of all joint ventures in which we participate.

Schrobenhausen, May 9, 2014

The Management Board

Chairman of the Management Board

Prof. Thomas Bauer Dipl.-Betriebswirt (FH) Hartmut Beutler Dipl.-Ing. Heinz Kaltenecker

FUTURE-RELATED STATEMENTS

This Interim Report contains future-related statements. Future-related statements are any statements which do not relate to historical facts and events, such as forecasts of future fi nancial earning power and indications of plans and expectations with regard to the development of the business of the BAUER Group and relating to the general economic climate or other factors to which the BAUER Group is subject. The use of words such as "believe", "expect", "predict", "forecast", "intend", "plan", "estimate", "aim", "likely", "assume" and similar formulations indicates that the statements in question are futurerelated. Future-related statements are subject to risks and many uncertainties which may mean that actual developments, earnings or levels of performance differ widely from those explicitly or implicitly assumed in the future-related statements.

Readers are advised that, in view of the said risks and uncertainties, no inappropriately high degree of confi dence should be placed in the likelihood of such statements proving to be accurate in the future. BAUER Aktiengesellschaft does not intend to and assumes no obligation to publish updates of such future-related statements in order to incorporate events or circumstances beyond the date of publication of this Interim Report.

DATES 2014

April 11, 2014	Publication of 2013 Annual Report
	Annual Press Conference
	Analysts' Conference
May 14, 2014	Interim Report to March 31, 2014
June 26, 2014	Annual General Meeting
August 14, 2014	Half-Year Interim Report to June 30, 2014
November 14, 2014	Interim Report to September 30, 2014

You will fi nd more information on the BAUER Group on the Internet at www.bauer.de.

PUBLISHED BY

BAUER Aktiengesellschaft BAUER-Strasse 1 86529 Schrobenhausen, Germany

Offi ce of the Management Board: Phone: 08252 97-1215 Fax: 08252 97-2900 E-mail: BAG@bauer.de

Registered place of business: 86529 Schrobenhausen, Germany Registered at the District Court of Ingolstadt under HRB 101375