Bauer AG — Interim / Quarterly Report 2015

May 13, 2015

Interim Report as at March 31, 2015

GROUP KEY FIGURES JANUARY – MARCH 2015

IFRS in EUR million	03/2014 *	03/2015	Change	12/2014 *
Total Group revenues	378.1	409.1	8.2 %	1,560.2
of which Germany	112.5	124.1	10.3 %	440.2
International	265.6	285.0	7.3 %	1,120.0
International in %	70.2	69.7	n/a	71.8
of which Construction	178.5	193.5	8.4 %	725.6
Equipment	163.8	173.8	6.1 %	639.2
Resources	48.4	54.3	12.1 %	252.8
Other/Consolidation	-12.6	-12.5	n/a	-57.4
Consolidated revenues	371.1	391.5	5.5 %	1,506.0
Sales revenues	313.4	299.6	-4.4 %	1,375.7
Orders received	333.9	494.6	48.1 %	1,557.7
Orders in hand	721.1	848.2	17.6 %	762.7
EBITDA	27.5	24.2	-12.0 %	171.0
EBITDA margin in % (of sales revenues)	8.8	8.1	n/a	12.4
EBIT	4.9	1.2	-74.9 %	76.4
EBIT margin in % (of sales revenues)	1.6	0.4	n/a	5.6
Net profit or loss	-7.4	-8.6	n/a	15.7
Capital investment in property, plant and equipment	9.2	16.3	77.2 %	64.1
Shareholders' equity	406.3	417.5	2.8 %	418.9
Equity ratio in %	24.8	24.0	n/a	26.6
Net assets	1,637.7	1,738.0	6.1 %	1,575.1
Earnings per share	-0.45	-0.52	n/a	0.85
Return on equity after tax in %	n/a	n/a	n/a	3.7
Employees (on average over the year)	10,358	10,593	2.3 %	10,405
of which Germany	4,144	4,165	0.5 %	4,158
International	6,214	6,428	3.4 %	6,247

* Previous year's figures adjusted; see p. 9 f. and 2014 Annual Report p. 100 and p. 106

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 the fi rst quarter of 2015 were EUR 409.1 million, 8.2 percent above the previous year comparative (EUR 378.1 million). The Group's net loss for the period was EUR -8.6 million (previous year: EUR -7.4 million). In our business, the year normally begins with a loss-making quarter. The quarterly result meets our expectations. Exchange rate effects had a positive effect on total Group revenues. The realized and unrealized foreign currency gains and gains from foreign exchange forward contracts increased by EUR 31.9 million and were the main reason for the steep rise in other income. Negative exchange rate effects offset this fi gure and also signifi cantly increased the other operating expenses. These fi gures are the result of currency management, which is of utmost importance in periods of large exchange rate fl uctuations. Total Group revenues would be roughly on par with the previous year if it were not for these effects.

We were satisfi ed with the start of 2015 in the Construction segment. In the Equipment segment we received a positive number of orders in the fi rst quarter. However, many orders will only be delivered in the coming weeks, meaning that sales fi gures fell short of expectations. Our Resources segment falls slightly short of target. The outlook for our business is improving again as a whole.

Group orders in hand with EUR 848.2 million are 17.6 percent higher versus the previous year. Although we are currently unable to record large orders, because of the completion of these in the past two years, orders in hand in the Construction segment have increased signifi cantly on account of numerous small and medium-sized projects across all of our regions. Orders for deep drilling rigs received by the Equipment segment in December increased orders in hand year-on-year. The order situation for specialist foundation engineering equipment has remained almost unchanged with orders still having very short terms. Orders in hand in the Resources segment are on par with the previous year.

As set forth in the 2014 Annual Report, we forecast total Group revenues for the full year 2015 of around EUR 1.6 billion and EBIT of around EUR 75 million. We continue to forecast profi t after tax of around EUR 18 to 23 million.

Course of Business and Background Conditions

GENERAL ECONOMIC CLIMATE

The global economy is continuing its positive trend. The International Monetary Fund currently expects 3.5 percent growth in 2015. Growth in numerous regions such as the European Union is weak and might even recede signifi cantly in some others such as Russia. However, growth in the Far East, Middle East, and especially the USA will be able to greatly overcompensate for this development.

A growing global economy will also strengthen the construction market as a whole as economic growth requires construction investments. Growth in the specialist foundation engineering sector continues to remain slightly stronger as an increasing lack of space means that construction projects have to be realized underground or on very small parcels of land. Urbanization, the increasing mobility of both humans and products, the problem sectors water and environmental protection, and the change in the energy sector are further driving construction.

The German construction market is booming at present. People regard apartments and private homes as an attractive investment at present as interest rates are low. The commercial construction sector developed positively on account of the strong economy and public-sector construction benefi ted from the fact that the political sector recognized the urgent need to reduce the backlog of remediation and expansion projects. As from 2016, the German government will increase its spending on infrastructure by around EUR 2 billion per year. Deutsche Bahn has also increased its investment budget. Unfortunately, the budgets for the necessary investment allocations are still lagging behind so that the existing funds cannot be fully utilized, but this will change in due course.

The generally positive outlook, however, is clouded by some political event on a global scale with a serious and far-reaching impact.

• The political sector has so far been unable to solve the Russia/Ukraine confl ict. For the capital goods industry, which also includes the construction and construction equipment sectors, this has caused a serious slump in orders in and from Russia.
• The problems in the Arab region are causing great uncertainty. Today, nobody is able to predict if the radical Islamists such as the Islamic State can be forced back. Numerous countries continue to fi ght for an organization of a stable government structure and others do their best not to become instable due to revolutionary movements. Although the current order situation in the Arab construction sector is extremely positive, this may change should the attempts at creating more stability be unsuccessful.
• Up to now, the low oil price has had little impact on the efforts made by the affected countries to develop their infrastructure, as they have created large fi nancial reserves over the past years. However, a permanently low oil price could have a negative impact on the investment climate in the oil-producing countries.
• The European fi nancial crisis remains a serious inhibitor of growth in the construction sector. Numerous countries continue to focus on imposing austerity measures.
• China is now experiencing the fi rst consequences of the conduct among local competitors in recent years. Almost all equipment manufacturers in the construction machinery sector woke up to the fact that their growth expectations had been entirely unrealistic and that they are now left with a huge unsellable production surplus. Reckless customer fi nancing models furthermore resulted in a vast number of equipment being returned to the stock. To us, the positive part of this development is that now even the Chinese competitors have to accept that markets follow certain basic rules that cannot be ignored. The international construction machinery markets will therefore normalize again in the future.

Overall, we forecast signifi cant growth in the construction market that will be impacted by numerous disruptions. It therefore is a large challenge for us to continuously adapt the company's structure in this respect to enable our segments to fully utilize their diverse opportunities in the future.

At present, large projects are increasingly returning to the market. We will apply for their contracts in order to strengthen the stability of our business in the coming years.

The in-house exhibition of the Equipment segment took place once again at our Schrobenhausen headquarters at the end of April, which was frequented, as usual, by many visitors and customers from around the world. We saw an increased interest, in particular, in our deep drilling rigs for oil and gas.

OVERVIEW OF INTERNATIONAL MARKETS

Germany

The German construction market will continue to see positive growth over the coming years. Residential construction is being buoyed up, above all because of the low interest rates. Public-sector construction is benefi ting from an enormous backlog of infrastructure work, something which governments now have much more money at their disposal to pay for. The commercial construction sector profi ts from the continuing upward trend in the industrial sector.

The widely anticipated positive effects of the reversal of energy policy in Germany to favor renewable energies have not been realized, however. Only the onshore wind power sector is still generating strong order fl ow. The necessary north-to-south power transfer lines are not currently being implemented, and the development of offshore wind power has largely come to a standstill. Even the urgently required growth in conventional power station capacity is not yet happening due to a lack of clear policy framing.

Europe

We predict that growth on construction markets in Western Europe will 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 nonetheless a number of opportunities for us in Europe, especially in Switzerland. In France, a new circular metro line is being built around Paris, and is requiring extensive construction activities. Other cities are also planning to upgrade their infrastructure.

Smaller markets in Eastern Europe largely collapsed as a result of the fi nancial crisis. There have recently been signs of a slight upturn, though at a very low level.

The crisis embroiling Russia and Ukraine is currently imposing a serious burden on these countries' development. Ukraine is practically no longer capable of maintaining a construction sector – due to lack of funds. Although Russia is attempting to keep fi nance fl owing into its building sector, the fi nancial defi cits brought about by sanctions and the low oil price are forcing the country to pursue a policy of frugality. Commercial construction has almost shut down entirely. Interestingly, Russian construction companies report that the tension has eased somewhat in recent months. It can nevertheless be assumed that Russia will suffer from the consequences of the crisis for years to come. As a result, the equipment sales business will also decline signifi cantly.

Middle East & Central Asia

The oil-rich and gas-rich countries of the Middle East, such as Abu Dhabi, Saudi Arabia and Qatar, have lots of large-scale construction projects in the pipeline and being carried out. Metro systems are being constructed in Doha and in Riyadh, while intensive extensions to railway lines are in progress throughout the entire region. The football World Cup in Qatar will trigger additional building volumes. Construction has also bounced back in Dubai in a big way.

Conditions are highly problematic in Iraq and in Syria, however. Armed confl ict with the Islamic State has almost brought economic development and specifi cally the construction sector to a halt. The neighboring states such as Jordan and Lebanon are also hamstrung by the situation, as a result of which economic development has signifi cantly abated there.

Further developments in the Arab countries, which were characterized by revolutionary political upheavals in the past years, remain uncertain. Many clashes are still taking place in Libya and Egypt, with repeated incidents of rioting. Nevertheless, the construction sector in Egypt is currently experiencing an astonishing upturn. The expansion to the Suez Canal that got underway within an extremely short time will require considerable building activities. In Cairo, work will get underway within the next few years to expand the metro network. Our local subsidiary has already landed considerable orders, and will be able to increase its sales signifi cantly given this market situation.

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. For example, new underground railway lines and urban motorways are being constructed in Singapore. The port – one of the most important and biggest in the world – is being relocated. Economies such as Indonesia and the Philippines are also seeing healthy growth. By contrast, the Australian economy is no longer developing quite so positively. Trends in this construction market are somewhat slower.

Americas

The USA's economy is returning to its role as the driver of global growth. A very high level of backlog demand has arisen in many infrastructure areas, due to 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 situation as stable, and offering good opportunities for further growth in both our Construction and Equipment segments. Trends in the Canadian construction market are likewise favorable. Interesting projects are regularly seen 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. Some countries have very good chances of improving their prosperity based on their enormous raw material resources.

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

The Resources segment has a number of interesting environmental projects in the pipeline, which will soon be entering the contract award phase. Demand from the mining sector remains weak as the commodity markets are barely recovering. Demand for water-related products and services is increasing worldwide.

PERFORMANCE OF THE BAUER GROUP

In the fi rst quarter of 2015, the total Group revenues of the BAUER Group increased by 8.2 percent relative to the same period last year, from EUR 378.1 million to EUR 409.1 million. This is mainly due to exchange rate effects (EUR +31.9 million), which increased other income year-on-year. The Group's net loss for the period was EUR -8.6 million (previous year: EUR -7.4 million).

Whereas the Construction segment's result increased considerably, the Equipment segment's result was still lagging signifi cantly behind due to the low number of deliveries in the fi rst quarter. The result of the Resources segment was slightly down year-onyear.

Group orders in hand for the period increased by 17.6 percent year-on-year to EUR 848.2 million. The Construction segment has processed and fi nalized almost all of the large projects from previous years. It is pleasing that the number of orders in hand has risen regardless due to numerous small and medium-sized projects being acquired in all regions. Orders in hand in the Equipment segment are considerably up year-on-year. The deep drilling rigs ordered in December 2014 and numerous small equipment orders were behind this steep rise recorded by the subsidiaries of BAUER Maschinen GmbH. The orders in hand for large specialist foundation engineering equipment were roughly on par with the previous year, refl ecting how diffi cult it still is to fi ll production capacity in advance. Orders in the environmental technology, underground mining and materials business in the Resources segment are in line with our projections, though in the exploration and mining companies the order backlog is insuffi cient. On the positive side, there are many interesting large-scale projects on the market, especially in the environmental sector, which we are energetically pursuing.

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

	in EUR million	03/2014 * Revenues	03/2015 Revenues	Share 2015	Change against previous year	Orders in hand
	BAUER Spezialtiefbau GmbH (BST)
	BST, Germany	29.4	29.2	7.1 %	-0.7 %	+
	Subsidiaries, Germany	1.8	3.6	0.9 %	100.0 %	+
	BST, international	19.7	26.1	6.4 %	32.5 %	•
	Subsidiaries, international	131.5	141.3	34.5 %	7.5 %	+
Construction	BST Group total	182.4	200.2	48.9 %	9.8 %	+
	SCHACHTBAU NORDHAUSEN GmbH including Subsidiaries (SBN)	14.3	11.7	2.9 %	-18.2 %	•
	less intra-Group revenues and IFRS adjustments	-18.2	-18.4	-4.5 %
	Construction total	178.5	193.5	47.3 %	8.4 %	+
	BAUER Maschinen GmbH (BMA)	104.7	91.9	22.5 %	-12.2 %	•
	Equipment subsidiaries	95.0	102.2	25.0 %	7.6 %	•
	BMA Group total	199.7	194.1	47.5 %	-2.8 %	•
Equipment	SBN	14.6	12.8	3.1 %	-12.3 %	•
	less intra-Group revenues and IFRS adjustments	-50.5	-33.1	-8.1 %
	Equipment total	163.8	173.8	42.5 %	6.1 %	•
	BAUER Resources GmbH (BRE)	5.2	6.7	1.6 %	28.8 %
	Resources subsidiaries	44.2	42.8	10.5 %	-3.2 %	•
	BRE Group total	49.4	49.5	12.1 %	0.2 %	•
Resources	SBN	7.1	9.6	2.3 %	35.2 %	+
	less intra-Group revenues and IFRS adjustments	-8.1	-4.8	-1.1 %
	Resources total	48.4	54.3	13.3 %	12.1 %	•
	BAUER Aktiengesellschaft (BAG)	7.7	8.5	2.1 %	10.4 %
Other	Other subsidiaries	0.5	0.6	0.1 %	20.0 %
	Total Other/services	8.2	9.1	2.2 %	11.0 %
	less intra-Group revenues and IFRS adjustments	-20.8	-21.6	-5.3 %
	Group total (including non-controlling interests) of which: Germany	378.1 112.5	409.1 124.1	100.0 % 30.3 %	8.2 % 10.3 %	+
	International	265.6	285.0	69.7 %	7.3 %

BREAKDOWN OF TOTAL GROUP REVENUES BY SUBSEGMENT

* 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 KEY FIGURES

in EUR '000	03/2014 *	03/2015	Change	12/2014 *
Total Group revenues	178,478	193,470	8.4 %	725,626
Sales revenues	167,818	156,039	-7.0 %	646,628
Orders received	109,303	255,871	n/a	677,865
Orders in hand	435,871	513,341	17.8 %	450,940
EBIT	1,460	4,861	n/a	26,033
Net profit or loss	-3,404	1,132	n/a	2,524
Employees (on average over the year)	5,767	6,085	5.5 %	5,675

* Previous year figures adjusted; Structural Steel Engineering division of SCHACHTBAU NORDHAUSEN GmbH was reclassified from the Equipment segment to the Construction segment

The total Group revenues of the Construction segment amounting to EUR 193.5 million were 8.4 percent up on the previous year. We therefore had a good start into the new year. EBIT increased by EUR 3.4 million year-on-year to EUR 4.9 million for the period. The net result for the period improved from EUR -3.4 million last year to EUR 1.1 million this year. In our business, it would be rather unusual to post profi ts in the fi rst quarter. Almost all regions of the world experienced an upturn. We now expect that the problematic projects in the past will no longer negatively impact our result.

Despite several large-scale projects being completed, orders in hand in our Construction segment increased by 17.8 percent to EUR 513.3 million (previous year: EUR 435.9 million). Real estate business concluded by one of the German participations also had a major impact on this development. Order backlog is evenly distributed geographically across the world, providing a fi rm foundation for us to achieve this year's performance targets. In addition to this positive development, we once again see numerous opportunities for large-scale projects, which we are pursuing at present.

We had a good start to the new year in Germany, compared with the previous year, despite the bad weather conditions. Performance in Russia declined, on the other hand. We started into the new year with positive performances in the USA, Central America, Egypt, the United Arab Emirates, Saudi Arabia, Qatar, Malaysia, Thailand, and the Philippines.

The other German construction companies in the Group have solid order backlog.

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

Full-year outlook

We are expecting our revenues to be slightly higher than those of the previous year in 2015. As far as EBIT is concerned, we are expecting a slight improvement, while the improvement in profi t after tax should be considerable.

EQUIPMENT SEGMENT

EQUIPMENT KEY FIGURES

in EUR '000	03/2014 *	03/2015	Change	12/2014 *
Total Group revenues	163,832	173,821	6.1 %	639,151
Sales revenues	102,924	100,495	-2.4 %	532,691
Orders received	165,448	176,675	6.8 %	681,346
Orders in hand	111,796	161,574	44.5 %	158,720
EBIT	5,605	-887	n/a	35,952
Net profit or loss	-848	-5,904	n/a	8,847
Employees (on average over the year)	2,927	2,909	-0.6 %	3,038

* See footnote on page 8

In the fi rst quarter, the total Group revenues of the Equipment segment rose by 6.1 percent against the previous year comparative to EUR 173.8 million. Sales revenues decreased by 2.4 percent to EUR 100.5 million. EBIT decreased signifi cantly year-on-year from EUR 5.6 million to EUR -0.9 million. The net loss for the period worsened from EUR -0.8 million last year to EUR -5.9 million this year. In the fi rst three months of the year, the number of large and complex equipment with higher contribution margins delivered decreased year-on-year. At the same time, the number of orders received increased slightly. Numerous orders will only be delivered to customers in the coming weeks. As a result, sales were slightly and the result signifi cantly down year-on-year. We expect these fi gures to be balanced out again in the course of the year.

Orders in hand in the Equipment segment increased signifi cantly from EUR 111.8 million to EUR 161.6 million. The main growth was generated by our deep drilling rigs and small equipment. The orders in hand for large specialist foundation engineering equipment are roughly on par with the previous year. Orders received remain highly variable. Some markets are continually seeing new factors appear contributing to political uncertainty, which reduces customer willingness to invest. Business continues to be very short-term in nature. Specialist foundation engineering machinery customers expect immediate delivery after ordering. Demand is nevertheless lively, thus we are forecasting sales growth to remain steady.

For many years, we have had to put a particularly great effort into the equipment business in order to react to the uncertainties in the markets. The extreme developments in the Chinese construction machinery market and the events in Russia are the main issues in this respect. Our strategy is to maintain an increasingly perfect, state-of-the-art product portfolio that meets the highest quality standards. A dynamic development team that is closely aligned with the markets ensures that we are very successful in our efforts. We have added new products such as deep drilling technology to our portfolio, thus expanding it by new growth markets. We see further good opportunities in this particular fi eld. The Chinese markets looks like it is going to normalize soon. Our business profi ts from the growing global markets overall.

Our in-house exhibition in mid-April was a complete success. Around 1,700 customers showed great interest in our new developments and we received a lot of positive feedback regarding our equipment developments. Our experts intensively discussed many project opportunities in the near future.

Full-year outlook

For 2015, we are expecting that revenues, EBIT and profi t after tax will be slightly up on the previous year.

RESOURCES SEGMENT

RESOURCES KEY FIGURES

in EUR '000	03/2014	03/2015	Change	12/2014
Total Group revenues	48,409	54,251	12.1 %	252,830
Sales revenues	42,492	42,860	0.9 %	195,860
Orders received	71,835	74,497	3.7 %	255,837
Orders in hand	173,446	173,273	-0.1 %	153,027
EBIT	-2,118	-2,918	n/a	15,932
Net profit or loss	-3,567	-4,709	n/a	4,347
Employees (on average over the year)	1,373	1,301	-5.2 %	1,400

Total Group revenues in the Resources segment rose 12.1 percent to EUR 54.3 million in the fi rst quarter of 2015, thanks primarily to the materials and environment areas. EBIT came to EUR -2.9 million (previous year: EUR -2.1 million). The net loss for the period was EUR -4.7 million (previous year: EUR -3.6 million).

We still have to expend the most effort on our Resources segment. The developments in the environmental and water business are pleasing. The sales of materials for the engineering of drilling have also increased in the past year. In contrast, we are still struggling to secure suffi cient orders for the execution of deep drillings to utilize our capacities in this area.

The segment has healthy levels of orders in hand totaling EUR 173.3 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 holds much of this total, with orders valued at EUR 38.7 million. Operations in this fi eld include in particular shaft driving for a mine in Kazakhstan.

The Resources segment has the largest number of good opportunities in the markets. Our product range is aimed directly at the large future markets water, environment, and natural resources. These markets contain many extraordinarily large pro jects that will be tendered globally in the near future.

Full-year outlook

For 2015, we are assuming that revenues will be well above the level of the previous year. The absence of the one-off income for 2014 deriving from the sale of shares as well as charges incurred during the reorganization mean that the EBIT should be slightly in the positive area, whereas it is currently expected that the profi t after tax will be slightly negative.

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. The Equipment segment too is still clearly showing the impact of increased up-front fi nancing requirements, resulting from the need to hold greater inventories due to shortened delivery lead times. The loss recorded in 2013 and adjustments to provisions for defi ned benefi t plans necessitated by IFRS have had a negative impact on our balance sheet – especially on the equity ratio. These changes will continue to affect us, though we will be working to improve the equity ratio in the years ahead.

It is normal in the specialist foundation engineering and related equipment business that the fi nancing needs of the companies concerned increase substantially early in the year, then decline towards the end of the year. This effect is attributable in part to customer payment practices, but also refl ects the seasonal nature of the business which necessitates boosting 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 have a converse effect at year-end.

The extraordinarily high exchange rate effect in the fi rst quarter of 2015 should be taken into consideration when reading all of the disclosures below. The depreciation of the EUR/USD exchange rate had the most profound effect. It was 1.2166 at the end of 2014 and 1.074 at the end of the fi rst quarter. Exchange rate effects have increased shareholders' equity by 4.5 percent. This and other comparisons show that almost all balance sheet and income statement items increased by around 5 percent due to exchange rate fl uctuations, which makes it more diffi cult to compare these fi gures with the previous year's values.

EARNINGS

The consolidated revenues shown in the Group's income statement increased by 5.5 percent against the previous year comparative period to EUR 391.5 million. The change in inventories increased by 4.0 percent to EUR 50.5 million. The item other capitalized goods and services for own account, which mainly relates to equipment required for our own construction operations as well as development costs, amounted to EUR 2.5 million in the fi rst three months of the year (previous year: EUR 3.4 million). Other income rose signifi cantly by EUR 33.1 million to EUR 38.8 million. In this item, the realized and unrealized currency gains and gains from foreign exchange forward contracts increased from EUR 2.8 million in the previous year to EUR 34.7 million. This is exclusively due to exchange rate fl uctuations in the fi rst quarter. Sales revenues fell 4.4 percent year-on-year to EUR 299.6 million.

The cost of materials, staff costs, depreciation and amortization, and other operating expenses items in the income statement rose somewhat more than the revenues overall, so also contributing to the decline in earnings.

At 2.1 percent, the cost of materials decreased slightly less than the consolidated revenues after exchange rate effects. In the service business in the Construction segment, year-to-year cost distribution often varies considerably due to order structure. Staff costs increased by 6.5 percent, once again partially due to exchange rate effects.

Depreciation of fi xed assets increased by 7.4 percent, while write-downs of inventories due to use decreased by EUR 1.0 million, as fewer machines were rented out than in the previous-year period. The other operating expenses increased mainly by the previously described exchange rate losses, which amounted to EUR 26.9 million in the fi rst quarter and were related to exchange rate hedging measures.

The fi nancial expenses decreased by EUR 2.3 million year-on-year to EUR 10.3 million. The fi nancial income increased to EUR 1.8 million (previous year: EUR 1.0 million).

Income tax expense came in EUR 1.1 million higher versus the previous-year period at EUR 1.7 million. Despite the loss posted in the fi rst quarter, income taxes were created by group companies that posted profi t. We expect that full-year income tax expense will ultimately be slightly above 30 percent.

The net loss for the period was EUR -8.6 million (previous year: EUR -7.4 million).

FINANCIAL POSITION

Our fi nancial position is developing in line with plans.

NET ASSET POSITIONS

The net assets shown on the consolidated balance sheet increased by 10.4 percent against the 2014 year-end and by 6.1 percent relative to March of the previous year. An in-year increase is normal in our business, for the reasons outlined above. When disregarding the exchange rate effects, net assets increased only slightly year-on-year and developed slightly better than consolidated revenues. Our medium-term target is a substantial reduction in net assets relative to total Group revenues. According to our planning, the increase in net assets at the year-end will be less than the rate of rise in revenues.

In total, intangible assets and property, plant and equipment and investment property increased by 3.9 percent yearon-year, primarily due to the exchange rate fl uctuations. Without this effect, our fi xed assets would have decreased as we are continuing to invest very carefully. Property, plant and equipment increased by 4.3 percent. The deferred tax assets rose from EUR 31.0 million since year-end to EUR 41.0 million. The exchange rate differences and revaluations of provisions for defi ned benefi t plans had a particular impact in this case (EUR +3.9 million). Total non-current assets increased by 8.3 percent versus the previous-year period. Inventories (particularly fi nished goods, work in progress and stock for trade) and receivables refl ect the currency effect described above and the annually recurring seasonal effect. The level of up-front fi nancing for our projects and inventories has thus risen accordingly. Cash and cash equivalents remained unchanged compared with the previous year. Current assets increased by 5.0 percent versus the previous-year period.

On the Equity and Liabilities side, shareholders' equity decreased by EUR 1.4 million against the end of last year. The key changes, alongside the loss made (EUR -8.6 million), are exchange rate changes (EUR +19.6 million), effects of interest rate changes on the valuation of defi ned benefi t plans after deduction of deferred taxes (EUR -10.0 million), and changes in the scope of consolidation (EUR -1.2 million). The provisions for defi ned benefi t plans increased by EUR 13.8 million due to the low current actuarial interest rate of 1.43 percent (previous year-end: 2.0 percent) only and due to regular additions. The usual seasonal additional fi nancing requirement was mainly covered by borrowings. The allocation to non-current and current fi nancial liabilities was considerably impacted by the syndicated loan agreement concluded in the previous year. Non-current liabilities to banks increased by EUR 122.8 million compared with the fi rst three months of the previous year. In contrast, current liabilities to banks decreased by EUR 147.2 million. Current liabilities increased signifi cantly compared to the previous year-end due to seasonal effects. Deferred tax liabilities increased by EUR 5.2 million, primarily due to exchange rate effects.

DEVELOPMENT OF THE BAUER AG SHARE

The BAUER share started 2015 out strong, climbing from its opening price of EUR 13.35 to its interim high of EUR 16.44 on January 26. In the generally very positive stock market environment, the price continued to climb in the fi rst quarter, closing at EUR 17.91 at the end of the period. The Bauer share rose by 29.4 percent in the fi rst quarter, thus outperforming the DAX (22.5 percent) and SDAX (16.1 percent). The indices went through a general slump in April, which also impacted the Bauer share. The share closed the month at EUR 15.54.

HUMAN RESOURCES

The number of company employees increased slightly since March 31, 2014 (10,358) to an average 10,593 for the year. Changes occurred solely in lower-wage countries in relation to specifi c projects. The total number of employees in Construction increased by 318, and decreased slightly in the other segments.

FOLLOW-UP REPORT

No matters of special note which we would expect to have a material infl uence on the BAUER Group's balance sheet or earnings occurred after December 31, 2014.

OPPORTUNITIES AND RISKS

Material opportunities and risks are outlined in the individual sections of this Interim Report. There has been no material change in risks since the Annual Report dated December 31, 2014. Consequently, we refer back to the Combined Management Report for fi nancial 2014.

FULL-YEAR OUTLOOK

Developments in the year so far are increasing our confi dence about the near future. We are noticing a growing demand for our services in almost all global region, except Russia. Orders in hand have already increased and we are fi nding additional opportunities. We received a positive order volume in the Equipment segment in the fi rst quarter, our in-house exhibition was a complete success, and our subsidiaries that mostly manufacture and sell small equipment have increased their orders in hand. We know from past experiences that small equipment is the fi rst to benefi t from an improvement in the markets. Despite the low oil price, there is great interest in our deep drilling rigs, which gives us confi dence in this area as well. We are working hard to implement the remaining necessary changes in the Resources segment. Opportunities for major projects give us cause to believe that the performance in this segment will improve.

We forecast a positive trend for our business overall. We know that the markets will continue to be disrupted for a long time to come, but thanks to our international focus we appear to be in a better position again to utilize positive developments.

Thus in general we believe the Group companies are well-positioned for the future. We are aware that we will have to prove our company's strength once more in the coming years.

For full-year 2015 we predict:

• Total Group revenues of around EUR 1.6 billion.
• We forecast profi t after tax of around EUR 18 to 23 million. In accounting terms, this will mean EBIT of around EUR 75 million.

As in previous years, we must again point out that BAUER Group revenue and earnings estimates are subject to considerably uncertainty in these turbulent times.

Our managers are confi dent that together with the entire workforce, they will be able to convert the opportunities that are given to us into great success stories. This is key to improving our company's performance again.

Interim consolidated financial statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

in EUR '000	01.01. - 31.03.2014	01.01. - 31.03.2015
1. Sales revenues	313,352	299,560
2. Changes in inventories	48,602	50,526
3. Other capitalized goods and services for own account	3,446	2,549
4. Other income	5,748	38,820
CONSOLIDATED REVENUES	371,148	391,455
5. Cost of materials	-199,309	-195,086
6. Staff costs	-85,758	-91,326
7. Depreciation and amortization
a) Depreciation of fixed assets	-19,057	-20,466
b) Write-downs of inventories due to use	-3,536	-2,503
8. Other operating expenses	-58,569	-80,841
OPERATING RESULT	4,919	1,233
9. Financial income	971	1,819
10. Financial expenses	-12,631	-10,266
11. Share of the profit or loss of associated companies accounted for using the equity method	1	308
PROFIT BEFORE TAX	-6,740	-6,906
12. Income tax expense	-610	-1,707
NET PROFIT OR LOSS	-7,350	-8,613
of which attributable to shareholders of BAUER AG	-7,775	-8,836
of which attributable to non-controlling interests	425	223
in EUR/share	01.01. – 31.03.2014	01.01. – 31.03.2015
Basic earnings per share	-0.45	-0.52
Diluted earnings per share	-0.45	-0.52
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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in EUR '000	01.01. – 31.03.2014	01.01. – 31.03.2015
Net profit or loss	-7,350	-8,613
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	-5,801	-13,890
Deferred taxes on that revaluation with no effect on profit and loss	1,630	3,901
Income and expenses which will be subsequently reclassified to profit and loss
Market valuation of derivative fi nancial instruments	152	-2,009
Included in profi t and loss	7	529
Deferred taxes on fi nancial instruments with no effect on profi t and loss	-43	416
Differences from currency translation	-725	19,562
Other comprehensive income after tax	-4,780	8,509
Total comprehensive income	-12,130	-104
of which attributable to shareholders of BAUER AG	-12,413	-1,103
of which attributable to non-controlling interests	283	999

CONSOLIDATED BALANCE SHEET

ASSETS in EUR '000	31.03.2014 *	31.12.2014	31.03.2015
A. NON-CURRENT ASSETS
I. Intangible assets	35,248	34,440	33,986
II. Property, plant and equipment and investment property	449,499	446,909	466,282
III. Investments accounted for using the equity method	10,543	42,906	42,736
IV. Participations	3,613	3,613	3,613
V. Deferred tax assets	27,996	30,973	41,011
VI. Receivables from concession arrangements	36,727	0	0
VII. Other non-current assets	7,627	7,492	7,929
VIII. Other non-current financial assets	5,446	28,420	28,794
	576,699	594,753	624,351
B. CURRENT ASSETS
I. Inventories	458,028	439,184	486,820
II. Receivables and other assets	555,203	496,650	582,154
III. Effective income tax refund claims	3,038	2,661	3,569
IV. Cash and cash equivalents	44,688	41,835	41,137
	1,060,957	980,330	1,113,680
	1,637,656	1,575,083	1,738,031

	EQUITY AND LIABILITIES in EUR '000	31.03.2014 *	31.12.2014	31.03.2015
	A. SHAREHOLDERS' EQUITY
I.	Equity of BAUER AG shareholders	384,677	399,308	397,006
II.	Non-controlling interests	21,595	19,617	20,529
		406,272	418,925	417,535
	B. NON-CURRENT LIABILITIES
I.	Defi ned benefi t plans	87,899	116,358	131,106
II.	Financial liabilities	275,562	387,816	393,342
	III. Other liabilities	5,724	5,959	6,333
	IV. Deferred tax liabilities	12,877	13,123	18,340
		382,062	523,256	549,121
	C. CURRENT LIABILITIES
I.	Financial liabilities	542,347	299,698	427,276
II.	Other liabilities	282,133	305,861	314,143
	III. Effective income tax obligations	5,589	9,317	10,213
	IV. Provisions	19,253	18,026	19,743
		849,322	632,902	771,375
		1,637,656	1,575,083	1,738,031

* See footnote on page 2

CONSOLIDATED CASH FLOW STATEMENT

in EUR '000	01.01. - 31.03.2014	01.01. - 31.03.2015
Cash flows from operational activity:
Profit before tax	-6,740	-6,906
Depreciation of fixed assets	19,057	20,466
Write-downs of inventories due to use	3,536	2,503
Financial income received	-751	-783
Financial expenses paid	11,882	8,838
Other non-cash transactions	13,013	-30,939
Dividends received	0	0
Result from the disposal of fixed assets	-122	104
Change in provisions	-62	217
Change in trade receivables	-905	-3,567
Change in receivables from construction contracts	-18,875	-23,307
Change in other assets and in prepayments and deferred charges	-16,229	-18,230
Change in inventories	-45,352	-35,005
Change in trade payables	-16,076	-7,298
Change in liabilities from construction contracts	1,092	1,903
Change in other current and non-current liabilities	-18,834	15,075
Cash and cash equivalents generated from day-to-day business operations	-75,366	-76,929
Income tax paid	-4,878	-2,467
Net cash from operating activities	-80,244	-79,396
Cash flows from investment activity:
Acquisition of property, plant and equipment and intangible assets	-10,477	-14,074
Proceeds from sale of fixed assets	975	3,733
Consolidation scope-related change in financial resources	0	96
Net cash used in investing activities	-9,502	-10,245
Cash flows from financing activity:
Raising of loans and liabilities to banks	99,187	106,472
Repayment of loans and liabilities to banks	-7,234	-10,734
Repayment of liabilities from finance lease agreements	-2,755	-2,259
Dividends paid	-1,413	-87
Interest paid	-11,453	-8,012
Interest received	899	789
Net cash used in financing activities	77,231	86,169
Changes in liquid funds affecting payments	-12,515	-3,472
Influence of exchange rate movements on cash	-14	2,774
Total change in liquid funds	-12,529	-698
Cash and cash equivalents at beginning of reporting period	57,217	41,835
Cash and cash equivalents at end of reporting period	44,688	41,137
Change in cash and cash equivalents	-12,529	-698

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in EUR '000	Other revenue reserves and net earnings available for distribution
	Subscribed capital	Capital reserve	Revenue reserves	Foreign currency translation	Reconciling item, IFRS	Hedging transactions reserve	Non controlling interests	Total
As at 01.01.2014 *	73,001	38,404	284,299	-6,492	10,387	-2,593	22,809	419,815
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 deriva tive 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	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	272,472	-7,099	10,387	-2,488	21,595	406,272
As at 01.01.2015	73,001	38,404	275,725	3,149	10,387	-1,358	19,617	418,925
Net profit or loss	0	0	-8,836	0	0	0	223	-8,613
Differences from currency translation	0	0	0	18,701	0	0	861	19,562
Revaluation of com mitments arising from employee benefits after termination of employment	0	0	-13,768	0	0	0	-122	-13,890
Market valuation of deriva tive financial instruments	0	0	0	0	0	-1,484	4	-1,480
Deferred taxes with no effect on profit and loss	0	0	3,867	0	0	417	33	4,317
Total comprehensive income	0	0	-18,737	18,701	0	-1,067	999	-104
Changes in scope of consolidation	0	0	-1,199	0	0	0	0	-1,199
Dividend payments	0	0	0	0	0	0	-87	-87
Other changes	0	0	0	0	0	0	0	0
As at 31.03.2015	73,001	38,404	255,789	21,850	10,387	-2,425	20,529	417,535

* See footnote on page 2

CONSOLIDATED SEGMENT REPORTING

in EUR '000	Construction		Equipment		Resources		Other
01.01. – 31.03.	2014 *	2015	2014 *	2015	2014	2015	2014	2015
Total revenues (Group)	178,478	193,470	163,832	173,821	48,409	54,251	8,212	9,100
Sales revenues with third parties	167,818	156,039	102,924	100,495	42,492	42,860	118	166
Sales revenues between business segments	3,573	3,217	8,993	9,830	520	1,469	7,435	7,668
Changes in inventories	-67	6	46,790	50,095	1,879	425	0	0
Other capitalized goods and services for own account	13	23	1,688	1,095	10	175	0	0
Other income	2,012	21,638	2,345	10,849	1,026	5,368	420	1,021
CONSOLIDATED REVENUES	173,349	180,923	162,740	172,364	45,927	50,297	7,973	8,855
OPERATING RESULT	1,460	4,861	5,605	-887	-2,118	-2,918	-264	43
Financial income	117	503	476	979	486	277	1,671	2,528
Financial expenses	-5,652	-3,307	-5,460	-5,301	-2,263	-2,670	-1,035	-1,456
Share of the profit or loss of associ ated companies accounted for using the equity method	43	-254	-4	3	-38	559	0	0
Income tax expense	628	-671	-1,465	-698	366	43	-80	-354
NET PROFIT OR LOSS	-3,404	1,132	-848	-5,904	-3,567	-4,709	292	761

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Depreciation and amortization

SEGMENT ASSETS	586,378	652,617	759,510	810,672	264,276	298,830	338,993	344,490
	31.12.2014 *	31.03.2015	31.12.2014 *	31.03.2015	31.12.2014	31.03.2015	31.12.2014	31.03.2015
Write-downs of inventories due to use	0	0	-3,536	-2,503	0	0	0	0
Depreciation of fixed assets	-11,466	-12,132	-4,604	-4,856	-2,337	-2,950	-771	-679

in EUR '000	Consolidation		Group
01.01. – 31.03.	2014	2015	2014	2015
Total revenues (Group)	-20,855	-21,541	378,076	409,101
Sales revenues with third parties			313,352	299,560
Sales revenues between business segments	-20,521	-22,184	0	0
Changes in inventories	0	0	48,602	50,526
Other capitalized goods and services for own account	1,735	1,256	3,446	2,549
Other income	-55	-56	5,748	38,820
CONSOLIDATED REVENUES	-18,841	-20,984	371,148	391,455
OPERATING RESULT	236	134	4,919	1,233
Financial income	-1,779	-2,468	971	1,819
Financial expenses	1,779	2,468	-12,631	-10,266
Share of the profit or loss of associ ated companies accounted for using the equity method	0	0	1	308
Income tax expense	-59	-27	-610	-1,707
NET PROFIT OR LOSS	177	107	-7,350	-8,613

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Depreciation and amortization
Depreciation of fixed assets	121	151	-19,057	-20,466
Write-downs of inventories due to use	0	0	-3,536	-2,503
	31.12.2014	31.03.2015	31.12.2014	31.03.2015
SEGMENT ASSETS	-374,074	-368,578	1,575,083	1,738,031

* See footnote on page 2

Notes to the interim consolidated financial statement

1. GENERAL INFORMATION 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 (HRB 101375).

The BAUER Group is a provider of services, equipment and products dealing with 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 is listed on the SDAX index.

These condensed consolidated fi nancial statements were released for publication on May 8, 2015.

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. BASIS OF PREPARATION

BAUER AG prepares 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 May 13, 2015 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, 2014, and as such should be read in conjunction with the consolidated fi nancial statements of BAUER AG to December 31, 2014.

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 at subsidiaries:

Resources segment:

On March 20, 2015, BAUER Resources Australia Pty. Ltd., Sydney, Australia, was dissolved and thus deconsolidated.

In the fi rst quarter of fi nancial year 2015, BAUER Resources Maroc S.A.R.L, Kenitra, Morocco, was included in the Group fi nancial statements for the fi rst time. The company was previously not consolidated owing to its minor importance.

No changes have otherwise occurred to the scope of consolidation since December 31, 2014.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In this context we refer to our 2014 Annual Report, page 105.

5. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied as from January 1, 2015 correspond to those applied to the consolidated fi nancial statements to December 31, 2014, with the following exceptions:

On March 31, 2015, the BAUER Group lowered the discount interest rate for measuring its defi ned benefi t plan commitments in Germany to 1.43 percent (previous year: 2.0 percent).

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 market 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, 2014.

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	31.03.2015	Level 1	Level 2
Securities	AfS	0	0	0
Derivatives not in hedge accounting	FAHfT	4,296	0	4,296
Derivatives in hedge accounting	n/a	698	0	698
Total		4,994	0	4,994
EQUITY AND LIABILITIES in EUR '000	IAS 39 category	31.03.2015	Level 1	Level 2
Derivatives not in hedge accounting	FLHfT	13,187	0	13,187
Derivatives in hedge accounting	n/a	24,978	0	24,978
Total		38,165	0	38,165
ASSETS in EUR '000	IAS 39 category	31.12.2014	Level 1	Level 2
Securities	AfS	0	0	0
Derivatives not in hedge accounting	FAHfT	485	0	485
Derivatives in hedge accounting	n/a	1,058	0	1,058
Total		1,543	0	1,543
EQUITY AND LIABILITIES in EUR '000	IAS 39 category	31.12.2014	Level 1	Level 2
Derivatives not in hedge accounting	FLHfT	9,108	0	9,108
Derivatives in hedge accounting	n/a	8,994	0	8,994
Total		18,102	0	18,102

In the fi rst three months of the 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 2014 Annual Report.

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

in EUR '000	31.12.2014		31.03.2015
	Carrying amount	Fair value	Carrying amount	Fair value
Other non-current financial assets	28,420	27,973	28,794	28,261
Trade receivables	311,417	310,972	337,063	336,635
Liabilities to banks	364,771	378,016	368,105	378,991
Other non-current financial liabilities	10,013	9,904	9,999	9,901
Total	714,621	726,865	743,961	753,788

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

In other respects we refer to pages 158 et seq. of the 2014 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 usually 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, ignoring special factors.

8. 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 extraction 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 joint ventures, 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 THE BALANCE SHEET DATE

No events of special note which we would expect to have a material infl uence on the BAUER Group's balance sheet or earnings occurred after the balance sheet date.

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 5,186 thousand (December 31, 2014: EUR 5,112 thousand). In addition, we are subject to joint and several liability in respect of all joint ventures in which we participate.

Schrobenhausen, May 13, 2015

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 2015

April 10, 2015	Publication of Annual Report 2014
	Annual Press Conference
	Analysts' Conference
May 13, 2015	Interim Report March 31, 2015
June 25, 2015	Annual General Meeting
August 14, 2015	Half-Yearly Interim Report June 30, 2015
November 13, 2015	Interim Report September 30, 2015

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

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