Quarterly Report • May 29, 2009
Quarterly Report
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29.5.2009
| Q1/09 T€ |
Q1/08 T€ |
change in % |
2008 T€ |
|
|---|---|---|---|---|
| Output volume | 2,190,329 | 1,922,568 | 14 % | 13,742,501 |
| Revenue | 2,082,334 | 1,762,715 | 18 % | 12,227,795 |
| Order backlog | 12,848,651 | 12,581,535 | 2 % | 13,253,795 |
| Employees | 73,720 | 63,377 | 16 % | 73,008 |
| Q1/09 T€ |
Q1/08 T€ |
change in % |
2008 T€ |
|
|---|---|---|---|---|
| EBITDA | -66,307 | -62,296 | -6 % | 647,732 |
| EBITDA-margin as % of revenue | -3.2 | -3.5 | 9 % | 5.3 |
| EBIT | -152,673 | -138,217 | -11 % | 269,866 |
| EBIT-margin as % of revenue | -7.3 | -7.8 | 6 % | 2.2 |
| Profit before taxes | -179,032 | -136,207 | -31 % | 229,258 |
| Profit for the period | -141,935 | -109,846 | -29 % | 166,360 |
| EPS | -1.13 | -0.71 | -59 % | 1.38 |
| Cash-flow from operating activities | -189,906 | -241,639 | 21 % | 689,885 |
| ROCE in % | -2.3 | -2.3 | 0 % | 5.3 |
| Investment in fixed assets | 58,640 | 155,710 | -62 % | 876,800 |
| 31.3.2009 T€ |
31.12.2008 T€ |
change in % |
|
|---|---|---|---|
| Equity | 2,723,686 | 2,978,981 | -9 % |
| Equity Ratio in % | 29.8 | 30.5 | -2 % |
| Net Debt | 175,529 | -109,663 | 260 % |
| Gearing Ratio in % | 6.4 | -3.7 | 273 % |
| Capital Employed | 4,937,883 | 5,158,849 | -4 % |
| Total | 9,143,213 | 9,765,206 | -6 % |
EBITDA = profit for the period before net interest income, income tax expense and depreciation and amortization
EBIT = profit for the period before net interest income and income tax expense
ROCE = net income + interest on debt-interest tax shield (25 %) / (average group equity + interest-bearing debt) Net Debt = financial liabilities less non-recourse debts + provisions for severance and pension obligations – cash and cash equivalents
Gearing Ratio = Net Debt/Group Equity
Capital Employed = group equity + interest-bearing debt
haselsteiner Chairman of the Management Board Dear shareholders, associates and friends of STRABAG SE
The first quarter developed positively for STRABAG SE, as had been expected, despite the fact that the economic environment became more difficult. We also do not share the budding optimism; rather, we believe that the external factors will continue to develop negatively. Nevertheless, STRABAG SE expects to end the current year at the same levels as the year before, in part thanks to the economic stimulus programmes adopted by the various national governments.
Dr. Hans Peter Haselsteiner
A consortium around a Hungarian subsidiary of STRABAG SE was awarded a large-scale order worth € 183 million. Of this amount, 37.5 % is attributable to the STRABAG Group. The consortium is charged with the modernisation and upgrade of the track and overhead lines between Tárnok und Székesfehérvár, Hungary.
A consortium, whose members include the STRABAG subsidiary F. Kirchhoff AG , has signed a concession agreement with the German government over a 60 km section of the A5 motorway between Baden-Baden and Offenburg. As part of this public private partnership (PPP) undertaking, Via Solution Südwest GmbH & Co. KG will plan, finance and oversee construction for the upgrade to six lanes and will operate and maintain the motorway over a period of 30 years. In exchange, the company will receive the truck toll levied on the section. The total investment volume amounts to about € 660 million, the construction volume to € 343 million. Kirchhoff's share of the concession company is 12.5 %; its share of the construction is 41 %.
STRABAG has received an order to build the first phase of the new Gaženica port facility in Croatia. The € 43 million order involves underwater and earthworks. Work is set to begin in May 2009 and is scheduled for completion in approximately one year.
At the end of July 2008, STRABAG SE signed the purchase agreement covering the acquisition of the Austrian and Hungarian activities of CEMEX. On 13 February 2009, STRABAG was informed by the Hungarian cartel authorities of their approval of the transaction. In May, the Austrian cartel authorities approved the deal, but imposed conditions. The decision is not yet final.
While isolated signs of a levelling-off could be seen in April and May, the international stock markets still registered significant losses in the first three months of 2009. New York's Dow Jones Industrial lost 13 %, Europe's Euro Stoxx 50 fell by 16 %, the Japanese Nikkei stock index was down 8 % and the Austrian Traded Index (ATX) sank 3 %.
Similarly, the construction sector also had to face further serious losses. The Dow Jones STOXX Construction & Materials, which measures the performance of construction sector shares, lost 11 %. With a minus of 9 % over the first quarter, the STRABAG SE stock stood in the middle of its two benchmark indexes ATX and Dow Jones STOXX Construction & Materials.
Shares of STRABAG SE are currently under observation by analysts from ten international banks. They calculate an average share price target of € 14. Detailed analyses and recommendations are available at the STRABAG SE website at www.strabag.com -> Investor Relations -> Share -> Research & Analysts.
| € mln. | 1,686 |
|---|---|
| € | 14.79 |
| € | 19.70 |
| € | 9.86 |
| % | -9 |
| shares | 113,999,997 |
| shares | 113,999,997 |
| % | 1.8 |
| € mln.* | 243 |
| shares* | 294,829 |
| % | 1.7 |
* double count
STRABAG SE grew its output volume to € 2,190.3 million in the first three months of 2009, a plus of 14 % compared to the same period the year before. Significant growth was registered in Germany – thanks mainly to enterprise acquisitions in the Transportation Infrastructures and the Special Divisions & Concessions segments –, in Russia and in the Middle East. By comparison, business receded in Austria and the Czech Republic in the Building Construction & Civil Engineering segment.
The consolidated group revenue reached € 2,082.3 million in the first three months of the 2009 financial year, compared to € 1,762.7 million the period before (+18 %). The growth is largely due to the acquisitions made the previous year.
The order backlog on 31 March 2009 stood at € 12,848.7 million, slightly higher than at the same time last year and down slightly when compared to the end of 2008. In a year-on-year comparison, the order backlog in Germany was up by more than € 1 billion, compensating for decreases in Russia at a similar value. In the first quarter of 2009, the order backlog in Russia dropped even more, while a plus was registered in Germany, Austria and the Czech Republic. The order backlog in Poland was remarkably high – with € 1,029.6 million, Poland now ranks third in terms of the group's order backlog by country, behind Germany and just slightly behind Austria.
The limited capacity for construction in winter results in significant seasonal effects on the development of earnings and other financial figures of STRABAG SE. The first two quarters of the year typically have a negative effect on results, which is then overcompensated by results in the second half of the year. As a result of the seasonal effects, a quarterly comparison makes little sense. Due to the higher business volume, there was a more pronounced effect of seasonality on the earnings in the first quarter of 2009 as well. The EBITDA (earnings before interest, taxes, depreciation and amortisation) fell by 6 % with the higher output volume to reach € -66.3 million and the EBIT (earnings before interest and taxes) fell by 11 % to € -152.7 million.
The EBITDA and EBIT margins, by comparison, improved from -3.5 % to -3.2 % and from -7.8 % to -7.3 %, respectively. STRABAG explains this development in part with the better earnings in the Building Construction & Civil Engineering segment on the German home market. On the other hand, the first-time inclusion of STRABAG Property und Facility Services GmbH (SPFS) in the Special Divisions & Concessions segment also had a positive effect on the margins.
While the contribution from the net interest had still been positive in the same period last year, with € -26.4 million it has now slipped into negative territory – in part due to the lower net liquidity but also because of the higher currency exchange losses. The tax rate remained relatively stable, at 20.7 % compared to 19.4 % the previous year. The minority interest reached € -12.7 million. Last year – STRABAG has meanwhile increased its share in the German subsidiary STRABAG AG, Cologne, to 90.0 % – this figure still stood at € -28.6 million. The profit for the period after minorities fell by 59 % to € -129.3 million, while the earnings per share was down from € -0.71 to € -1.13.
The balance sheet total fell by 6 % from € 9,765.2 million on 31 December 2008 to € 9,143.2 million, mostly due to the decline of current trade receivables and cash and cash equivalents. The equity ratio fell slightly compared to the balance sheet date for the 2008 financial year, slipping from 30.5 % to 29.8 %. The net cash position of € 109.7 million turned into a net financial liability of € 175.5 million as the cash and cash equivalents fell from € 1,491.4 million to € 1,240.5 million.
The negative cash-flow from operating activities improved from € -241.6 million to € -189.9 million, as, despite the higher business volume, the replenishment of the working capital could be reduced compared to the same period the year before. In line with the strategy of lowering capital expenditures, the cash-flow from investing activities was down from € -155.0 million to € -58.6 million. The cash-flow from financing activities was in positive territory (€ 32.0 million) after the negative financing cash-flow of € -4.3 million during the same period the year before.
In addition to the necessary maintenance expenditures, the first three months of the 2009 financial year saw increased expenditures in the business fields of waterway construction and railway construction. Some € 90 million have been budgeted for the first proprietary cement plant in Hungary for the entire year, of which STRABAG already invested € 9 million in the first quarter.
The number of employees grew with the higher output volume, gaining 16 % to 73,720, of which 31,339 were white-collar and 42,381 were blue-collar workers. The acquisitions in Germany led to additional 7,000-plus employees in this market. Significant increases were also registered in the Middle East and in Poland.
During the first three months of the financial year, there were no transactions with related parties which significantly influenced the financial situation or the business result nor were there any changes to transactions with related parties which were presented in the annual financial statements and which significantly influenced the financial situation or business result of the first three months of the current financial year.
In the course of its entrepreneurial activities, the STRABAG Group is exposed to a number of risks, which can be identified and assessed using an active risk management system and dealt with by applying an appropriate risk policy. Among the most important risks are external risks such as cyclical fluctuations in the construction industry, operating risks in the selection and execution of projects, as well as financial, organisational, personnel, and investment risks. The risks are explained in more detail in the 2008 management report. A review of the current risk situation revealed that in the reporting period there existed no risks which threatened the existence of the company and that for the future no risks are recognizable which constitute a threat to its continued existence.
For the 2009 financial year, security will remain a top priority. With an equity ratio of 30 % and cash and cash equivalents of some € 1.2 billion, the company sees itself in a solid financial and liquidity position which must be further secured through a restrictive acquisitions and investment policy as well as through an active working capital management.
The financial crisis and, subsequently, the economic crisis have rewritten the rules of doing business. A declining business volume was registered in the business with certain clients such as real estate developers and other private companies which commission the construction of shopping centres or offices. PPP models dependent on bank financing have proven to be unrealisable in the current market environment.
This is where the advantages of STRABAG's strategy become clear: the geographical diversification of the activities and the broad product portfolio help compensate for the slowdown on certain markets through stronger engagement in other, more successful markets. The areas of transportation infrastructures and civil engineering, for example, are expected to profit from the various national economic stimulus programmes. Of great importance, therefore, is that these programmes are implemented soon.
| Q1/09 M€ |
Q1/08 M€ |
change in % |
2008 M€ |
|
|---|---|---|---|---|
| Output volume | 1,122 | 1,123 | 0 % | 5,822 |
| Revenue | 1,062 | 1,030 | 3 % | 5,244 |
| Order backlog | 6,062 | 7,085 | -14 % | 6,774 |
| Operational result | -13 | -27 | 52 % | 78 * |
| Operational margin as a % of revenue | -1.2 | -2.6 | 1.5 | |
| Employees | 28,103 | 27,769 | 1 % | 28,802 |
* Representation according to IAS 14
The Building Construction & Civil Engineering segment offered a mixed picture of the first quarter 2009. At € 1,121.6 million, the construction output volume remained stable over the previous year, with growth in Russia and in several CEE countries making up for a decline in Austria. The revenue, by comparison, grew slightly, gaining 3 % to € 1,062.4 million. The operational result stood at € -12.7 million, significantly less negative than in the first quarter the year before, due to better results in Germany. This led to an improvement of the negative operational margin from -2.6 % to -1.2 %.
The order backlog was down 14 % in a year-on-year comparison and 11 % from the end of 2008, due almost entirely to Russia. So far, however, STRABAG has not registered any noteworthy cancellations outside of Russia. Furthermore, the entire segment remained unaffected by customer insolvencies in the quarter under report.
Several new large-scale orders helped to positively influence the order backlog. STRABAG won an order to build the first phase of the new Gaženica port facility near Zadar in Croatia. The € 43 million project involves underwater and earthworks (see also Transportation Infrastructures segment).
STRABAG also received an order for the Nagatinskaya residential facility in Moscow, Russia. The "costplus-fee" project is worth € 150 million. Finally, the company is working on the "Neue Mitte" multifunction complex in Karlsfeld, Germany, worth about € 44 million.
STRABAG is bidding for a number of projects in the Building Construction & Civil Engineering segment, for example in the fields of Environmental Technology and Transportation Infrastructures. Generally STRABAG sees a shift toward public-sector projects, whereby these often involve a high pressure on margins. Although many private projects have been delayed or postponed, the high order backlog means we can realistically expect only a low decline in output with a somewhat improved result for the full year 2009.
| Q1/09 M€ |
Q1/08 M€ |
change in % |
2008 M€ |
|
|---|---|---|---|---|
| Output volume | 598 | 591 | 1 % | 6,274 |
| Revenue | 571 | 579 | -1 % | 5,464 |
| Order backlog | 4,416 | 3,236 | 36 % | 3,957 |
| Operational result | -143 | -90 | -59 % | 138 * |
| Operational margin as a % of revenue | -25.0 | -15.5 | 2.5 | |
| Employees | 30,518 | 27,690 | 10 % | 33,906 |
* Representation according to IAS 14
Due to the unusually harsh winter the output volume in the Transportation Infrastructures segment grew by only 1 % to € 598.3 million. The employee levels, by comparison, were up 10 %. The revenue fell slightly, losing 1 % to settle at € 571.5 million. The operational result, and with it the operational margin, were also affected by the tough winter. The operational result was down 59 %, reaching € -143.4 million, while the operational margin fell more deeply into negative territory, dropping to -25.0 % from -15.5 % the previous year.
Positive growth was registered in the order backlog both in comparison to the same period last year (+36 %) as well as in comparison to the end of 2008 (+12 %) thanks to a number of large-scale projects. One of these involves the modernisation and upgrade of the track and overhead lines between Tárnok und Székesfehérvár, Hungary, by a consortium led by a Hungarian STRABAG subsidiary. The contract has a volume of € 183 million, of which 37.5 % is attributable to STRABAG.
In addition, STRABAG was awarded the contract for rail bed construction as part of the renovation of the Chemnitz railway station in Germany. STRABAG holds an 85 % of the € 48 million project volume. Furthermore, the Building Construction & Civil Engineering and Transportation Infrastructures segments will handle the underwater and earthworks for the Gaženica port facility in Zadar, Croatia. The contract has a volume of € 43 million (see also Building Construction & Civil Engineering segment).
About half of the growth of the year-on-year order backlog can be ascribed to Germany, where the group acquired the construction SMEs Kirchhoff and Kirchner in 2008. The integration of the two companies is largely completed so that any resulting additional cost should only be minor.
Poland is responsible for one quarter of the order backlog growth. An increasing number of new companies are entering the transportation infrastructures market, leading to an increased pressure on prices. Thanks to its already high order backlog in the country, however, STRABAG does not have to subject itself to any procurement pressure in the acquisition of new projects. On the contrary, the falling material and transportation costs and lower prices for diesel and bitumen are having a positive effect on the margins.
In other European countries, however, the first signs of strain can be seen on the market. The tender situation from a number of national governments remained unchanged in the first quarter, leading to increased competition as more and more private clients fell away. The stimulus effect from the economic stimulus packages is not expected to be felt until at least autumn 2009. STRABAG expects demand to decline in the years 2011/2012, as the public-sector funds will have run out by then.
| Q1/09 M€ |
Q1/08 M€ |
change in % |
2008 M€ |
|
|---|---|---|---|---|
| Output volume | 431 | 163 | 164 % | 1,417 |
| Revenue | 439 | 147 | 199 % | 1,483 |
| Order backlog | 2,347 | 2,212 | 6 % | 2,480 |
| Operational result | -4 | -17 | 76 % | 52 * |
| Operational margin as a % of revenue | -0.9 | -11.6 | 3.5 | |
| Employees | 9,644 | 2,932 | 229 % | 5,174 |
* Representation according to IAS 14
The output volume of the Special Divisions & Concessions segment in the first quarter 2009 more than doubled (+164 %) to over € 431.1 million. This brought the segment's contribution to the overall output volume to 20 % from 8 % the year before. The revenue grew by 199 % year on year to € 438.5 million, thanks above all to the first-time inclusion of STRABAG Property und Facility Services GmbH (SPFS). The operational result settled at € -4.3 million, nearly reaching positive territory after the previous year's € -17.7 million. The inclusion of SPFS also contributed considerably to the improved operational margins, which grew from -11.6 % to -0.9 %. As a result, SPFS not only significantly increased the size of the segment but has also had a stabilising effect. Furthermore, the margin improved as the result of restructuring measures in the business field of specialty foundation engineering and thanks to approved change orders in tunnelling.
The consolidation of STRABAG Property & Facility Services GmbH (formerly: Deutsche Telekom Immobilien and Service GmbH (DeTeImmobilien)) resulted in a threefold increase of the employee numbers in the Special Divisions & Concessions segment to 9,644 people.
The order backlog grew by 6 % to € 2,346.3 million. While project related declines were registered in the vast majority of the national markets – above all Hungary and Austria –, the order backlog in Germany grew by 181 %. This increase is due to two factors, one of them being the € 449.9 million attributable to STRABAG Property & Facility Services GmbH.
The second factor was the signing of a concession agreement between a consortium, whose members include the STRABAG subsidiary F. Kirchhoff AG, and the German government over a 60 km section of the A5 motorway between Baden-Baden and Offenburg. As part of this public private partnership (PPP) undertaking, Via Solution Südwest GmbH & Co. KG will plan, finance and oversee construction for the upgrade to six lanes and will operate and maintain the motorway over a period of 30 years. In exchange, the company will receive the truck toll levied on the section. The total investment volume amounts to about € 660 million, the construction volume to € 343 million. Kirchhoff's share of the concession company is 12.5 %; its share of the construction is 41 %.
In real estate development, the group has seen its expectations confirmed that PPP projects could be delayed or even cancelled due to a lack of financing options or economically nonviable conditions. This is true to a higher degree in some countries in Central and Eastern Europe. It is also to be expected that the revenue components for commercial developments – such as tenant demand, rental conditions and sales prices – will decline more strongly than the relief on the cost side (property and construction costs as well as interest expense), which ultimately represents a burden on margins.
On the other hand, STRABAG expects to see attractive opportunities from the further consolidation among bidders for real estate developments. The group is in a position to realise new projects despite the higher equity requirements of the banks, as capital bound in other projects will increasingly become free for use. Furthermore, the buyer's market for commercial real estate has shown first signs of stabilising after having collapsed nearly completely in the fourth quarter 2008.
In infrastructure development, STRABAG is participating in several large tenders and is prequalified for projects in Abu Dhabi, Montenegro, the Netherlands, Denmark and Ireland, among other places.
The delay of planned infrastructure projects and the low number of public-sector tenders has led to very low prices in the field of tunnelling. For this reason, STRABAG is additionally focusing on selected projects outside its core markets so far – like in Scandinavia, where the price level is still intact. In Germany more tenders are to be expected, as a number of infrastructure projects have been announced there.
STRABAG's service business registered a stable order backlog level (90 % of the services are covered by the long-term contract with Deutsche Telekom AG) as well as stable margins.
11segment Report
Consolidated interim financial statements
12
| 1.1.-31.3.2009 T€ |
1.1.-31.3.2008 T€ |
|
|---|---|---|
| Profit for the period | -141,935 | -109,846 |
| Differences arising from currency translation | -62,210 | 13,346 |
| Change in hedging reserves | -62,469 | -1,909 |
| Deferred taxes on neutral change in equity | 14,739 | 477 |
| Total comprehensive income | -251,875 | -97,932 |
| Attributable to: Non-controlling interests | -16,356 | -27,233 |
| Attributable to: Equity holders of the parent | -235,519 | -70,699 |
| Ass ets |
31.3.2009 T€ |
31.12.2008 T€ |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 457,659 | 462,889 |
| Property, plant and equipment | 1,976,218 | 2,044,698 |
| Investment property | 141,253 | 143,410 |
| Investments in associates | 151,962 | 155,631 |
| Other financial assets | 270,939 | 265,316 |
| Receivables from concession arrangements | 948,331 | 972,824 |
| Trade receivables | 58,706 | 64,783 |
| Non financial assets | 7,509 | 7,552 |
| Other financial assets | 33,153 | 38,859 |
| Deferred taxes | 167,153 | 138,220 |
| Current assets | 4,212,883 | 4,294,182 |
| Inventories | 672,183 | 674,164 |
| Receivables from concession arrangements | 16,979 | 16,650 |
| Trade receivables | 2,500,313 | 2,836,432 |
| Non financial assets | 110,943 | 100,392 |
| Other financial assets | 389,412 | 352,013 |
| Cash and cash equivalents | 1,240,500 | 1,491,373 |
| 4,930,330 | 5,471,024 | |
| 9,143,213 | 9,765,206 | |
| Equity and Liabilities | 31.3.2009 T€ |
31.12.2008 T€ |
| Group equity | ||
| Share capital | 114,000 | 114,000 |
| Capital reserves | 2,311,384 | 2,311,384 |
| Retained earnings | 176,654 | 412,173 |
| Non-controlling interests | 121,648 | 141,424 |
| Non-current liabilities | 2,723,686 | 2,978,981 |
| Provisions | 837,527 | 846,946 |
| Financial liabilities 1) | 1,437,678 | 1,434,340 |
| Trade payables | 34,664 | 25,824 |
| Non financial liabilities | 868 | 913 |
| Other financial liabilities | 13,758 | 14,002 |
| Deferred taxes | 46,732 | 73,977 |
| 2,371,227 | 2,396,002 | |
| Current liabilities | ||
| Provisions | 525,412 | 537,843 |
| Financial liabilities 2) | 304,679 | 274,041 |
| Trade payables | 2,518,999 | 2,765,177 |
| Non financial liabilities | 227,189 | 368,956 |
| 472,021 | 444,206 | |
| Other financial liabilities | ||
| 4,048,300 9,143,213 |
4,390,223 9,765,206 |
| 1.1.-31.3.2009 T€ |
1.1.-31.3.2008 T€ |
|
|---|---|---|
| Profit for the period | -141,935 | -109,846 |
| Deferred taxes | -46,134 | -32,745 |
| Non-cash effective results from associates | 3,005 | 2,036 |
| Depreciations / write ups | 86,651 | 75,980 |
| Changes in long term provisions | -6,718 | -5,296 |
| Gains/losses on disposal of non-current assets | -5,690 | -6,919 |
| Cash-flow from profits | -110,821 | -76,790 |
| Change in items: | ||
| Inventories | 2,572 | -12,085 |
| Trade receivables, construction contracts and consortia | 358,538 | 349,312 |
| Receivables from subsidiaries and receivables from participation | ||
| companies | -23,213 | -10,272 |
| Other assets | -12,241 | -22,696 |
| Trade payables, construction contracts and consortia | -228,595 | -311,258 |
| Liabilities from subsidiaries and liabilities from participation companies | -1,056 | -6,476 |
| Other liabilities | -167,857 | -121,669 |
| Current provisions | -7,233 | -29,705 |
| Cash-flow from operating activities | -189,906 | -241,639 |
| Purchase of financial assets | -7,966 | -11,032 |
| Purchase of property, plant, equipment and intangible assets | -58,640 | -155,710 |
| Gains/losses on disposal of non-current assets | 5,690 | 6,919 |
| Disposals of non-current assets (carrying value) | 8,393 | 17,868 |
| Change in other cash pooling receivables | -1,209 | 2,749 |
| Change in scope of consolidation | -4,890 | -15,793 |
| Cash-flow from investing activities | -58,622 | -154,999 |
| Change in bank borrowings | 36,661 | 904 |
| Change in liabilities from finance leases | -2,465 | -1,419 |
| Change in other cash pooling liabilities | 1,259 | 249 |
| Change in non-controlling interests due to capital consolidation | -64 | 0 |
| Distribution and withdrawals from partnership | -3,356 | -4,073 |
| Cash-flow from financing activities | 32,035 | -4,339 |
| Cash-flow from operating activities | -189,906 | -241,639 |
| Cash-flow from investing activities | -58,622 | -154,999 |
| Cash-flow from financing activities | 32,035 | -4,339 |
| Net change in cash and cash equivalents | -216,493 | -400,977 |
| Cash and cash equivalents at the beginning of the year | 1,491,373 | 1.965,775 |
| Change in cash and cash equivalents due to currency translation | -34,380 | 6,586 |
| Cash and cash equivalents at the end of the period | 1,240,500 | 1,571,384 |
| Interest paid | 11,384 | 11,509 |
| Interest received | 14,151 | 21,146 |
| Taxes paid | 12,618 | 7,196 |
financial statements
| Balance at 31.3.2008 | 114,000 | 2.311,384 | 342,069 | 5,635 | 26,717 | 194,644 | 2,994,449 |
|---|---|---|---|---|---|---|---|
| dividends | 0 | 0 | 0 | 0 | 0 | -4,073 | -4,073 |
| Distribution of | |||||||
| income | 0 | 0 | -81,240 | -1,262 | 11,803 | -27,233 | -97,932 |
| Total comprehensive | |||||||
| Balance at 1.1.2008 | 114,000 | 2,311,384 | 423,309 | 6,897 | 14,914 | 225,950 | 3,096,454 |
| T€ | T€ | T€ | T€ | T€ | T€ | T€ | |
| Share capital |
Capital reserves |
Retained earnings |
Hedging reserve |
curr ency reserve |
troll ing interests |
Total | |
| Foreign | Non-con |
| Share capital T€ |
Capital reserves T€ |
Retained earnings T€ |
Hedging reserve T€ |
Foreign curr ency reserve T€ |
Non-con troll ing interests T€ |
Total T€ |
|
|---|---|---|---|---|---|---|---|
| Balance at 1.1.2009 | 114,000 | 2,311,384 | 530,342 | -97,755 | -20,414 | 141,424 | 2,978,981 |
| Total comprehensive income |
0 | 0 | -129,276 | -46,059 | -60,184 | -16,356 | -251,875 |
| Change in non-cont rolling interest due to capital consolidation |
0 | 0 | 0 | 0 | 0 | -64 | -64 |
| Distribution of dividends |
0 | 0 | 0 | 0 | 0 | -3,356 | -3,356 |
| Balance at 31.3.2009 | 114,000 | 2,311,384 | 401,066 | -143,814 | -80,598 | 121,648 | 2,723,686 |
17notes to the Consolidated interim financial statements
The consolidated interim financial statements of STRABAG SE, based in Villach, Austria, with reporting date 31 March 2009 were drawn up under application of IAS 34 in accordance with the International Financial Reporting Standards (IFRS) – issued by the International Accounting Standards Board (IASB) in London and recognised by the European Union – including the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) valid on the reporting date. Applied were exclusively those IASB standards and interpretations adopted by the European Commission before the reporting deadline and published in the Official Journal of the European Union.
In accordance with IAS 34, the consolidated interim financial statements do not contain all the information and details required of annual financial statements. The interim statements should therefore be read in conjunction with the annual financial statements of Strabag SE, Villach, with reporting date 31 December 2008.
The consolidated financial statements of the Group as at and for the year ended 31 December 2008 are available at www.strabag.com.
The following amended or new accounting standards are effective for annual periods beginning on or after 1 January 2009:
| IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate |
1.1.2009 |
|---|---|
| IFRS 2 Share-based Payment: Vesting Conditions and Cancellations | 1.1.2009 |
| IFRS 8 Operating Segments | 1.1.2009 |
| IAS 1 Presentation of Financial Statements | 1.1.2009 |
| IAS 23 Borrowing Costs | 1.1.2009 |
| IAS 32 and IAS 1 Amendments on puttable financial instruments and obligations arising on liquidation |
1.1.2009 |
| Amendments to various IFRS under the annual improvement process | 1.1.2009 |
The following changes result in the present interim report in comparison to 31 December 2008:
IAS 1 Presentation of Financial Statements: From 1 January 2009, IAS 1 requires the presentation of a statement of comprehensive income. According to IAS 1.81 b, presentation can be made in two separate statements: a statement displaying components of profit or loss (separate income statement) and a second statement beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income). Only owner-related changes in equity are shown in the statement of changes in equity. The comparative figures were adapted to conform with the new rules.
IFRS 8 Operating Segments: The new segment reporting rules were applied from the 1st quarter 2009. Comparatives were adapted accordingly (see item Segment Reporting).
IAS 23 Borrowing Costs: From 1 January 2009, borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset. The capitalisation of the borrowing costs affects intangible assets, property, plant and equipment, inventories and receivables from construction contracts.
With exception of the above mentioned changes in the accounting and valuation methods the accounting and valuation are fundamentally based on the same accounting principles and valuation methods underlying the consolidated annual financial statements with reporting date 31 December 2008.
Information regarding the accounting and valuation methods can be found in the annual financial statements with reporting date 31 December 2008.
The establishment of the interim report requires estimations and assumptions to be made which may influence the application of the accounting and valuation methods as well as the figures for the assets, liabilities, expenses and income. The actual results could deviate from these estimates.
The consolidated interim financial statements as of 31 March 2009 include STRABAG SE as well as all major domestic and foreign subsidiaries where STRABAG SE either directly or indirectly holds a majority of the voting rights. Major associated companies are reported in the balance sheet using the equity method.
The number of consolidated companies changed in the Q1/2009 period as follows:
| consol idation |
equity method | |
|---|---|---|
| Situation on 31.12.2008 | 311 | 12 |
| First-time inclusions in reporting period | 1 | 0 |
| Situation on 31.3.2009 | 312 | 12 |
The following companies formed part of the scope of consolidation for the first time on the reporting date:
| Comp any |
direct stake % |
date of Acquisition/ Foundation |
|---|---|---|
| Consolidation: | ||
| Johannes Sienknecht GmbH & Co. KG, | 100.00 | 1.1.2009 |
| Neumünster |
The consolidation of companies included for the first time took place at the date of acquisition or the nearest reporting date provided that this had no significant implications to an inclusion at the date of acquisition.
All companies which were consolidated for the first time in Q1/2009 contributed T€ 62 to revenue and T€ -564 to profit.
The same methods of consolidation and principles of currency translation were applied in drawing up the consolidated interim financial statements with reporting date 31 March 2009 as were used for the consolidated annual financial statements with reporting date 31 December 2008. Details regarding the methods of consolidation and principles of currency translation are available in the 2008 annual report.
Goodwill assets are subjected to an annual impairment test in accordance with IAS 36. The impairment test is carried out in the last two months of the financial year. Effective 31 March 2009, there was no indication that impairment was necessary.
In Q1/2009, a total goodwill from capital consolidation in the amount of T€ 6,527 was capitalised.
Due to snow, ice and other adverse weather conditions, revenue is usually lower in the winter months than in the summer. As the largest part of the costs involves fixed costs, noteworthy losses are posted in the first quarter every year. Starting with the second quarter, these losses are compensated for by rising contribution margins. The break-even point is usually not yet reached before the end of the second quarter. The largest portion of the earnings is expected in the third and fourth quarters. Seasonal fluctuations in the Transportation Infrastructures business are greater than they are in Building Construction & Civil Engineering.
The above-described, annually repeating business trend allows a year-on-year comparison of output volume, revenue and results of the respective quarters.
Interest income from concession contracts which is included in other operating income is represented as follows (also see notes on receivables from concession arrangements):
| 31.3.2009 | 31.3.2008 | |
|---|---|---|
| T€ | T€ | |
| Interest income | 17,664 | 0 |
| Interest expense | -10,557 | 0 |
| Total | 7,107 | 0 |
In Q1/2009, tangible and intangible assets in the amount of T€ 58,640 (Q1/2008 T€ 155,710) were acquired.
In the same period, tangible and intangible assets in the amount of a book value of T€ 5,908 were sold (Q1/2008 T€ 15,596).
In Q1/2009 as well as in Q1/2008 no extraordinary impairments on property, plant and equipment and goodwill were made.
On the reporting date, there were € 109.5 million (Q1/2008 € 136.0 million) in contractual commitments for the acquisition of property, plant and equipment which were not considered in the financial statement.
STRABAG has a 100 % interest in the Hungarian Concession Company M5 AKA Alföld Koncessizios Autopalya Zrt., Budapest.
In the concession agreement with the Hungarian state, AKA committed to develop, plan, finance, build and operate the M5 motorway. The motorway itself is the property of the state; all vehicles and equipment necessary for motorway operation are to be transferred to the state free of charge following the end of the concession period.
In exchange, AKA will regularly receive an availability fee, independent of transit volume, from the Hungarian state for making the motorway available to the public. AKA bears the operator's risk of motorway closure and non-compliance of contractually agreed roadway criteria.
The route totals 156.5 km and was built in 3 phases. The concession period runs until 2031. A one-time extension for up to 17.5 years is possible.
All services provided under this concession contract are accounted for under the separate balance sheet item "Receivables from concession arrangements". The receivables are carried at the present value of the payment to be made by the state. The annual accumulation amount is recognised in "Other operating income".
A part of the availability fee consists of interest adjustment payments of the Hungarian state. As a result, the state bears the interest risk from financing of the project. These interest adjustment payments represent an embedded hedging transaction which is measured separately in accordance of IAS 39.11. Presentation is made as a cash flow hedge; as a result, changes in the fair value of the interest rate swap are recognised directly in equity.
The interest rate swap in the amount of T€ 27,591 (31 December T€ 47,724) is also recognised as longterm receivables from concession contracts.
Receivables from concession arrangements are offset by non-recourse debts in the amount of T€ 798,158 (31 December T€ 798,158) classified either as a current or non-current liability depending on the term. The resulting interest rate expense is recognised in "Other operating income".
The fully paid share capital amounts to € 114,000,000 and is divided into 114,000,000 no-par bearer shares.
The changes in equity are shown in the statement of changes in equity.
The company has accepted the following guarantees:
| 31.3.2009 | 31.12.2008 |
|---|---|
| T€ | T€ |
| 19,849 | 14,550 |
Furthermore, there is a derived credit risk arising from the financial guarantee contracts (guarantees issued) of T€ 49,944 (31 December 2008: T€ 52,862).
From 1 January 2009, the rules of IFRS 8 Operating Segments, apply to the segment reporting. IFRS 8 prescribes defining the segments and reporting the earnings and net assets on the basis of the internal reporting.
Internal reporting at STRABAG is based on the dedicated management board functions Building Construction & Civil Engineering, Transportation Infrastructure and Special Divisions & Concessions, which – as has been the case so far – represent the group's operating segments. In addition, there are the central business units and central staff units, which handle services in the areas of accounting, group financing, technical development, machine management, quality management, logistics, legal affairs, contract management etc. These services are included in the segment Miscellaneous.
The settlement between the single segments is made at arm's-length prices.
There was no significant change in assets and liabilities compared to 31 December 2008.
| Operational result | -12,677 | -143,372 | -4,338 | -25,222 | -185,609 |
|---|---|---|---|---|---|
| Inter-segment revenue | 11,282 | 3,316 | 903 | 157,489 | |
| Revenue | 1,062,415 | 571,459 | 438,516 | 9,944 | 2,082,334 |
| Output volume | 1,121,558 | 598,262 | 431,091 | 39,418 | 2,190,329 |
| Building Constr uction & Civil Engineering 1.1.-31.3.2009 t€ |
Transport ation Infr a str uctures 1.1.-31.3.2009 t€ |
Special Divisions & Concessions 1.1.-31.3.2009 t€ |
Miscell aneous 1.1.-31.3.2009 t€ |
Total 1.1.-31.3.2009 t€ |
| Operational result | -26,810 | -89,989 | -17,689 | -683 | -135,171 |
|---|---|---|---|---|---|
| Inter-segment revenue | 25,336 | 2,914 | 951 | 115,578 | |
| Revenue | 1,029,993 | 579,122 | 147,275 | 6,325 | 1,762,715 |
| Output volume | 1,122,777 | 590,901 | 163,282 | 45,608 | 1,922,568 |
| Building Constr uction & Civil Engineering 1.1.-31.3.2008 t€ |
Transport ation Infr a str uctures 1.1.-31.3.2008 t€ |
Special Divisions & Concessions 1.1.-31.3.2008 t€ |
Miscell aneous 1.1.-31.3.2008 t€ |
Total 1.1.-31.3.2008 t€ |
Income and expense in the internal reporting are shown essentially in accordance with IFRS. An exception is income taxes, including those applicable to deferred tax, which are not considered in the internal reporting.
The basis for the internal reporting is formed by all subsidiaries, associated companies and investments. In the IFRS financial statements, earnings from companies which were not consolidated and not reported using the equity method are recognised in conformity with dividends, transfer of earnings and/or depreciation and amortisation. For this reason, the internal reporting does not conform 100 % with the profit before taxes in the consolidated financial statements in terms of the investment result.
Other minor differences result from the other consolidation entries.
Reconciliation is as follows:
| 1.1. - 31.3.2009 T€ |
1.1. - 31.3.2008 T€ |
|
|---|---|---|
| Operational result | -185,609 | -135,171 |
| Investment income | 9,407 | -314 |
| Other consolidations | -2,830 | -722 |
| Profit before taxes | -179,032 | -136,207 |
Notes on related parties may be found in the 2008 consolidated financial statements. Since 31 December 2008, there have been no significant changes in this area. Arm`s-length business relations exist in transactions with related parties.
With the transfer agreement from 5 May 2009, STRABAG acquired 100 % of the shares of Center Communications System GmbH, Vienna. The company was purchased from Efkon AG, of which STRABAG already holds a 49.8 % stake. Center Communications System GmbH, Vienna, is a market leader in Austria in the field of communications systems for emergency and rescue services, public transport, public safety and industry. The transaction was approved by the cartel authorities on 26 May 2009.
The present interim financial statements for STRABAG SE were neither audited nor subjected to an audit review.
We confirm to the best of our knowledge that the condensed interim financial statements as of 31 March 2009 give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the of important events that have occurred during the first three months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining nine months of the financial year and of the major related party transactions to be disclosed.
Villach, 29 May 2009
Board of Management
Dr. Hans Peter Haselsteiner
Ing. Fritz Oberlerchner Dr. Thomas Birtel
Dipl.-Ing. Nematollah Farrokhnia Dipl.-Ing. Roland Jurecka
Mag. Wolfgang Merkinger Mag. Hannes Truntschnig
| Interim Report January–March 2009 | Fri., 29 May 2009 |
|---|---|
| Publication | 7:30 am |
| Analyst Telephone Conference | 1:30 pm |
| Notice of Annual General Meeting | Thur., 28 May 2009 |
| Deposit deadline for shares | Mon., 15 June 2009 |
| Annual General Meeting 2009 | Fri, 19 June 2009 |
| Wiener Stadthalle / Hall F | 10:00 am |
| Ex-dividend date | Fri., 26 June 2009 |
| Payment date for dividend | Mon., 29 June 2009 |
| Semi-annual report 2009 | Mon., 31 August 2009 |
| Publication | 7:30 am |
| Analyst Telephone Conference | 2:00 pm |
| Interim Report January–September 2009 | Mon., 30 November 2009 |
| Publication | 7:30 am |
| Analyst Telephone Conference | 2:00 pm |
| All times are CET/CEST Please find the roadshow schedule on the website www.strabag.com -> Investor Relations -> Financial Calendar |
| maturity | coupon | Vol ume |
isin number | sto ck exchange |
|---|---|---|---|---|
| 2004 - 2009 | 5.50 % | € 50 Mio. | AT0000342332 | Wien |
| 2005 - 2010 | 4.25 % | € 75 Mio. | AT0000492723 | Wien |
| 2006 - 2011 | 5.25 % | € 75 Mio. | AT0000A013U3 | Wien |
| 2007 - 2012 | 5.75 % | € 75 Mio. | AT0000A05HY9 | Wien |
| 2008 - 2013 | 5.75 % | € 75 Mio. | AT0000A09H96 | Wien |
| Standard & Poors | BBB- | Outlook stable |
|---|---|---|
| Bloomberg: | STR AV |
|---|---|
| Reuters: | STRV.VI |
| Vienna Stock Exchange: | STR |
| ISIN: | AT000000STR1 |
STRABAG SE, Donau-City-Straße 9, A-1220 Vienna
This interim report is also available in German. In case of discrepancy, the German version prevails.
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