Quarterly Report • Nov 30, 2011
Quarterly Report
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| key figures | 3 |
|---|---|
| ceo´s review | 4 |
| important events | 5 |
| share | 6 |
| management report January–September 2011 | 7 |
| Segment report | 11 |
| Consolidated interim financial statements | 17 |
| notes | 22 |
| statement of all legal representatives | 32 |
| Q3/2011 | Q3/2010 | change in % |
9M/2011 | 9M/2010 | change in % |
2010 |
|---|---|---|---|---|---|---|
| 4,169.32 | 3,862.74 | 8 % | 10,305.65 | 9,096.94 | 13 % | 12,777.00 |
| 3,792.13 | 3,854.27 | -2 % | 9,709.46 | 8,889.24 | 9 % | 12,381.54 |
| 14,060.65 | 14,850.84 | -5 % | 14,738.74 | |||
| 76,662 | 71,913 | 7 % | 73,600 | |||
| € Mln. | Q3/2011 | Q3/2010 | change in % |
9M/2011 | 9M/2010 | change in % |
2010 |
|---|---|---|---|---|---|---|---|
| EBIT DA |
280.93 | 289.47 | -3 % | 478.11 | 475.69 | 1 % | 734.69 |
| EBIT DA margin % |
|||||||
| of revenue | 7.4 % | 7.5 % | 4.9 % | 5.4 % | 5.9 % | ||
| EBIT | 190.96 | 203.10 | -6 % | 207.62 | 192.74 | 8 % | 298.95 |
| EBIT margin % |
|||||||
| of revenue | 5.0 % | 5.3 % | 2.1 % | 2.2 % | 2.4 % | ||
| Profit before taxes | 189.84 | 182.33 | 4 % | 202.38 | 165.22 | 22 % | 279.27 |
| Net income | 136.30 | 129.16 | 6 % | 145.11 | 116.37 | 25 % | 188.38 |
| Earnings per share | 1.11 | 1.05 | 5 % | 0.99 | 0.95 | 4 % | 1.53 |
| Cash-flow from | |||||||
| operating activities | 131.53 | 200.93 | -35 % | -160.65 | -206.93 | -22 % | 690.42 |
| RO CE in % |
3.8 % | 3.0 % | 4.0 % | 3.6 % | 5.4 % | ||
| Investments in | |||||||
| fixed assets | 100.82 | 129.98 | -22 % | 347.60 | 394.46 | -12 % | 553.84 |
| Net income after | |||||||
| minorities | 123.16 | 119.74 | 3 % | 112.22 | 108.27 | 4 % | 174.86 |
| Net income after minori | |||||||
| ties margin % of revenue | 3.2 % | 3.1 % | 1.2 % | 1.2 % | 1.4 % |
| € Mln. | 30.9.2011 | 31.12.2010 | change in % |
|---|---|---|---|
| Equity | 3,129.23 | 3,232.44 | -3 % |
| Equity Ratio % | 29.3 % | 31.1 % | |
| Net Debt | 187.78 | -669.04 | -128 % |
| Gearing Ratio % | 6.0 % | -20.7 % | |
| Capital Employed | 5,370.57 | 5,235.74 | 3 % |
| Balance sheet total | 10,685.54 | 10,382.16 | 3 % |
EBITDA = earnings before interest, taxes, depreciation and amortization
EBIT = earnings before interest and taxes
Net Debt = financial liabilities less non-recourse debt + provisions for severance and pension obligations – cash and cash equivalents
ROCE = (net income + interest on debt - interest tax shield (25 %)) / (average group equity + interest-bearing debt)
Dr. Hans Peter Haselsteiner CEO
STRABAG SE is the only company in the leading index ATX of the Vienna Stock Exchange whose stock has gained in value since the beginning of the year. Two factors have been decisive for this fact:
On the one hand, there is our ongoing share buyback programme. Since mid-July of this year, we have bought back 6.83 % of outstanding STRABAG SE shares on the stock market as well as over the counter. This has resulted in a significant reduction of the free float from the previous 23 %, but at the same time has also helped to stabilise the share price.
On the other hand, we confirmed our outlook for the 2011 full-year in November. We continue to expect to generate net income after minorities of approximately € 185 million, which corresponds to an improvement by around € 10 million year on year.
If the economic framework does not change – i.e. if the financing environment for our private and industrial clients does not worsen and there is no recovery of state spending in the STRABAG core markets – then the construction sector should remain stable in 2012. This also means, however, that growth will be possible at a level no higher than with inflation.
Our strategy of regional and segmental diversification in the construction industry has proven its worth to date and has – in contrast to much of the competition – protected us from losses at the consolidated level. We will therefore continue to pursue this strategy in order to be prepared for difficult markets.
Dr. Hans Peter Haselsteiner
STRABAG SE increased its stake in Josef Möbius Bau AG, Hamburg, from 70 % to 100 %, and further expands its engagement in hydraulic engineering and strengthens its position as German market leader in this promising business field.
STRABAG subsidiary Ed. Züblin AG bought parts of Wolfer & Goebel Bau GmbH, Stuttgart. Therewith, approximately 100 jobs will be secured, after this traditional company had to file for bankruptcy in May. With the acquisition, Ed. Züblin plans to strengthen its construction activities in the region of Southern Germany and to achieve an additional annual output volume of approximately € 15 million.
In Finland and Sweden, STRABAG Group was awarded three new contracts: A 100 % subsidiary in Sweden, STRABAG Sverige AB (formerly ODEN Anläggningsentreprenad AB), will establish a 1.8 km track tunnel with intermediate stations for the metro phase 1, LU 1 Matinkyla in Helsinki, Finland. The contract value is approx. € 28 million. Furthermore, STRABAG Sverige will build a part of Sweden's largest new city district, Norra Djurgardsstaden in Stockholm until October 2012. The contract value is worth approx. € 22 million. Finally, STRABAG Sverige has been commissioned by Trafikverket (The Swedish Transport Administration) to build the section Edet Rasta and Torpa of the motorway E45, a part of the way between Goteborg and Trollhattan, which connects the North to the South of Sweden. The contract value amounts to € 26 million.
Hermann Kirchner Projektgesellschaft mbH, a subsidiary of STRABAG, won the Public-private-partnership-contract to modernise and perform an energy retrofit of the hospital's nurses' home at the Klinikum Ansbach, Germany. Once completed, Kirchner will maintain all objects during the 30-year operating phase and will guarantee the financing of the entire project over the contract period. The overall project volume amounts to € 52 million, the gross total investment costs amount to about € 30 million. The construction period is scheduled to last three years.
Through its subsidiary Tollink South Africa EFKON Group received an additional major order for the supply and maintenance of the toll plazas on the N1 North Toll Road in South Africa. The € 60 million South African National Roads Agency Limited SANRAL contract was won by Tolcon-Lehumo as the operator. EFKON subsidiary Tollink is the preferred service provider for the maintenance component of the contract, which is valued at around € 11 million (ZAR 110 million). The contract spans eight years and includes the full upgrade of the N1 North route (57 lanes) toll plazas as well as the maintenance and support of the system. The project started in June 2011 and the operation service period is scheduled to end on 30 June 2019.
STRABAG Inc., a subsidiary of STRABAG SE, received a new contract in Canada: It will build a 15-kilometre wastewater tunnel in The Regional Municipality of York, in the Greater Toronto Area, for CAD 290 million (about € 200 million).
The Italian STRABAG subsidiary Adanti S.p.A. was awarded the contract to upgrade some 11 km of State Road 223 between Grosseto and Siena in Tuscany. The contract includes the planning and building of three junctions, six tunnels and five viaducts. Adanti's share of the € 161 million contract amounts to around 65 % or € 105 million.
STRABAG Real Estate GmbH is planning a new architectural highlight in the German capital, the Atlas Tower, to be realised on a prime piece of real estate between Kurfürstendamm and Kantstraße. With its 120 metres and 33 floors, plus an adjoining eight-storey block building, the Atlas Tower will be among the three tallest structures in Berlin. The investment sum for the building complex, which will have a total floor area of 51,000 m², amounts to around € 250 million. Construction is scheduled to begin in 2012, with completion expected in 2015.
A consortium led by the two Polish STRABAG subsidiaries Heilit+Woerner Budowlana Sp. z o. o. and STRABAG Sp. z o. o. was commissioned by Poland's General Directorate for National Roads and Highways to continue construction of the 21 km section of A4 motorway between Brzesko and Wierzchoslawice. The construction time amounts to 15 months. The contract volume is of some € 120 million and the group share amounts to 55 %.
STRABAG Oman L.L.C., a subsidiary of STRABAG SE, won the contract to build roads and infrastructure at Duqm port in Oman. The order is worth € 150 million.
STRABAG has made it into the Carbon Disclosure Leadership Index (CDLI) this year for the first time with 76 (out of 100) points. The index comprises those 30 companies with the most points calculated according to the criteria of completeness of their disclosures about their CO2 emissions.
Shares of STRABAG SE closed at € 22.99 on 30 September 2011, which corresponds to a plus of 12 % since the start of the year. Strongly influenced by the stock buyback programme launched by the group on 14 July 2011, the share price fluctuated greatly during the third quarter: on 8 August 2011, it reached its lowest point this year at € 17.90; on 1 September 2011, the price stood at its highest value thus far of € 23.97.
On 25 November 2011, STRABAG SE held 7,786,209 shares of its own stock, accounting for 6.83 % of the share capital. According to the authorisation of the Annual General Meeting of 10 June 2011, the management board may acquire own shares in accordance with Section 65 Paragraph 1 No. 8 of the Austrian Stock Corporation Act (AktG), on the stock market or over the counter, to the extent of up to 10 % of the share capital of the company until no later than 10 July 2012. The purchase price per STRABAG SE share was set at no more than € 27.115 – the book value per share at the end of 2010.
The cumulative trade volume of STRABAG shares on the Vienna Stock Exchange in the first nine months amounted to € 660 million; the average trade volume per day was 167,025 shares. The weight in the Austrian blue chip index ATX stood at 2.6 %.
The economic and political events in Europe as well as the stagnating economy were reflected in the development of the international stock markets. Without exception, the various blue chip indexes registered losses. Particularly affected was the ATX, which lost 33 % within the last nine months. The STOXX Europe 600 Construction & Materials, which measures the performance of construction sector shares, slipped by 26 %, followed by Europe's Euro Stoxx 50, which fell by 22 %. Japan's Nikkei Index and New York's Dow Jones Industrials posted a minus of 15 % and 6 %, respectively.
Shares of STRABAG are currently under observation by analysts from nine international banks. The analysts calculated an average share price target of € 23.00. Detailed analyses and recommendations are available on the STRABAG SE website at www.strabag.com / Investor Relations / Share / Research & Analysts.
| STRABAG SE share | ||
|---|---|---|
| Market capitalisation on 30.9.2011 | € million | 2,621 |
| Closing price on 30.9.2011 | € | 22.99 |
| Year's maximum on 1.9.2011 | € | 23.97 |
| Year's minimum on 8.8.2011 | € | 17.90 |
| Performance nine months 2011 | % | 12 |
| Outstanding bearer shares on 30.9.2011 (absolute) | shares | 107,390,103 |
| Outstanding bearer shares nine months 2011 (weighted) | shares | 113,105,289 |
| Weight in ATX on 30.9.2011 | % | 2.6 |
| Volume traded nine months 2011 | € million1) | 660 |
| Average trade volume per day | shares1) | 167,025 |
| % of total volume traded on Vienna Stock Exchange | % | 2.6 |
6
STRABAG generated an output volume of € 10,305.65 million in the first nine months of the 2011 financial year, which corresponds to an increase of 13 %. Unfavourable weather conditions had resulted in an extraordinarily reduced output volume in the spring of the previous year. Increases could be seen in all segments this year, especially in the Building Construction & Civil Engineering segment. Worth mentioning here is the growth in the home market of Germany, in Poland and in Scandinavia. The higher output volume in Switzerland can be attributed to the acquisitions of two construction SMEs, Brunner Erben Holding AG and Astrada AG, in the first quarter of 2011.
The consolidated group revenue of the first nine months of the 2011 financial year grew in line with the output volume, reaching € 9,709.46 million after € 8,889.24 million in the same period the year before (+9 %). This brings the ratio of revenue to output volume to just 94 % after the previous 98 %.
The order backlog, at € 14,060.65 million, was 5 % lower than at the end of September of the previous year. This can be attributed for the most part to the cancellation of the projects in Libya due to the political unrest in that country. Poland is another factor of influence: the previous year's high order backlog in that country, in the form of large infrastructure projects, is being continuously worked off and transformed into output. In Austria and Romania, by comparison, the order backlog is on the rise with projects including the Koralm Tunnel in Styria and several new road construction orders in Romania.
The limited capacity for construction in winter results in significant seasonal effects on the development of earnings 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.
The EBITDA (earnings before interest, taxes, depreciation and amortisation) for the first nine months of the 2011 financial year remained nearly stable with only minor growth of 1 % to € 478.11 million. This growth is remarkable, however, as an extraordinary measurement through profit or loss for Czech railway construction company Viamont DSP a.s. in the amount of € 24.60 million, reported in the result from associates, led to a positive distortion of the EBITDA last year. This fact, however, limited the growth opportunities of the EBITDA and led to a reduced EBITDA margin from 5.4 % to 4.9 %.
The depreciation and amortisation fell by 4 % to € -270.49 million – in part related to a one-time amortisation of goodwill in the amount of € 14.0 million performed in the first quarter of the previous year related to the Viamont transaction. The measurement and amortisation of goodwill last year had an extraordinary positive effect of € 10.60 million in the earnings before interest and taxes (EBIT). Nevertheless, the EBIT in the first nine months of the 2011 financial year stood at € 207.62 million – 8 % higher than the positively distorted result from the previous year's period. The margin slipped to 2.1 % after 2.2 %.
At € -5.25 million, the interest income was far less deeply in negative territory (previous year: € -27.51 million). This can be attributed to the exchange rate results in the amount of € 23.71 million and the weak Polish złoty in particular. In the end, this results in a 22 % increase in the pre-tax result to € 202.38 million. The tax rate fell slightly from 29.6 % to 28.3 %, resulting in earnings after taxes of € 145.11 million. This corresponds to a plus of 25 %. However, as the earnings attributable to minority shareholders more than quadrupled to € 32.89 million, the net income after minorities was left with a mere 4 % boost to € 112.22 million and an unchanged net margin on the revenue of 1.2 %. Here, too, it is important to mention the positively distorted comparison value from the Viamont measurement.
The earnings per share were influenced by the stock buyback programme that has been running since July 2011: in the past nine months, the number of outstanding STRABAG SE shares was down from 114,000,000 to a weighted 113,105,289. This results in earnings per share of € 0.99 in comparison to € 0.95 in the same period last year.
The balance sheet total grew by a few percent from € 10,382.16 million at the end of 2010 to € 10,685.54 million. Worth mentioning are the reclassification of the investment in a cement plant in Hungary from "assets held for sale" to "investments in associates" and the related higher proportion of non-current assets in the balance sheet. A public private partnership project in Denmark influenced the item "current receivables from concession agreements" and "current financial liabilities".
The equity ratio fell from 31.1 % to 29.3 %. This is attributed to the buyback of own shares. The necessary expenditures directly reduced the equity at a simultaneous decline of cash and cash equivalents. The net cash position at the end of 2010 turned into a net financial liability in the amount of € 187.78 million in response to the build-up of the working capital and the share buyback. STRABAG expects a net debt of around zero for the end of 2011.
The cash-flow from earnings increased by 12 % to € 374.84 million thanks to the higher earnings after taxes. The cash-flow from operating activities stood at € -160.64 million, 22 % less negative than in the comparison period of the previous year, in part because of an improved cash-flow from earnings and the as-planned lower growth of the working capital.
A series of medium-sized enterprise acquisitions as well as the investment in the cement plant and in the cement holding, with simultaneous reduction of the investments in property, plant and equipment and intangible assets, resulted in a cash-flow from investing activities of € -474,76 million. This corresponds to a plus of 36 % relative to the previous year. The cash-flow from financing activities moved into positive territory from € -21.26 million to € 28.47 million. This can be explained on the one hand by the bond issue in the second quarter. The volume of the issue amounted to € 175 million, compared to an issue of just € 100 million the year before. On the other hand, this is offset by the payment of € 137.27 million for the buyback of own shares in the third quarter 2011.
In addition to the necessary maintenance expenditures, which account for about 30 % of the total investments in property, plant and equipment, STRABAG invested increasingly in machines for use in the markets of Germany and Poland in the first nine months of 2011. A special focus has so far been on the niche business fields, the optimisation of the own raw materials base and the Koralm Tunnel project in Styria, Austria. The expenditures include € -347.60 million for the purchase of property, plant and equipment and intangible assets, € -91.12 million for enterprise acquisitions (changes in scope of consolidation; e.g. acquisitions of Brunner Erben Holding AG and Astrada AG, Switzerland, and of K.H. Gaul GmbH & Co. KG, Germany) and € -126.05 million for the purchase of financial assets. Given the capital expenditures at the end of September 2011, STRABAG adjusted from € 525 million to € 580 million the full-year CAPEX forecast taking into consideration the book value disposals.
The number of employees grew by 7 % to 76,662. Nearly half of the more than 4,000 new employees were previously employed by Rimex, a German company acquired by STRABAG. The significant increase in Switzerland can be explained by the first-time inclusion of the employees of the two acquired companies Brunner Erben Holding AG and Astrada AG. The decline in the number of employees in Africa can be attributed to STRABAG's withdrawal from the Libyan market, those in Hungary and the Czech Republic have market-dependent reasons.
During the first nine months of the financial year, there were no transactions with related parties which significantly influenced the financial situation or the business result nor were there any changes to transactions with related parties which were presented in the annual financial statements and which significantly influenced the financial situation or business result of the first nine months of the current financial year.
In the course of its entrepreneurial activities, the STRABAG Group is exposed to a number of risks, which can be identified and assessed using an active risk management system and dealt with by applying an appropriate risk policy. Among the most important risks are external risks such as cyclical fluctuations in the construction industry, operating risks in the selection and execution of projects, as well as financial, organisational, personnel, and investment risks.
The risks are explained in more detail in the 2010 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 recognisable which constitute a threat to its continued existence.
The turbulence caused by the euro debt crisis has so far not affected the output or the expected results of the STRABAG Group over the course of the current 2011 financial year. While state investment programmes in markets such as Germany had supported the construction industry through the middle of the year, the sector already has several difficult years behind it in countries with lower public-sector spending – such as Hungary – or in the Adriatic region.
The course of business so far this year has shown notably higher results in Poland as well as internationally, where significant write-downs had dampened results the year before. On the other hand, the company has had to accept market-dependent losses in the construction materials business as well as losses due to the low capacity use of large equipment and machinery in the fields of waterway and railway construction. A loss-making project in Scandinavia as well as one-off costs related to the integration of transacted enterprise acquisitions in Germany led STRABAG AG, Cologne, a subsidiary of STRABAG SE, to downwardly adjust its results estimate. An ad-hoc notice in this regard was released on 21 November 2011.
Thanks to the successful strategy of regional diversification and the related diversification of risk, however, STRABAG SE can confirm its existing forecast for the further general course of business. Nevertheless, individual parameters are being adjusted in the face of the more detailed information that is now available for the 2011 financial year:
STRABAG had previously expected earnings before interest and taxes (EBIT) of € 320 million, corresponding to a margin on the output of 2.3 %. Less the expected interest result, a tax rate of 30 % and minority interest of approximately € 25 million, this would have resulted in net income after minorities of € 185 million. This target remains unchanged; however, STRABAG is raising its forecast for the EBIT to € 340 million and for minority interest to € 40 million.
| P&L - for ecast (€ Mln.) |
May 2011 | November 2011 | |
|---|---|---|---|
| Output | 14,000 | 14,000 | |
| Revenue | 96 % | 13,440 | 13,440 |
| EBIT | 320 | 340 | |
| Margin on output | 2.3 % | 2.4 % | |
| Interest result | -20 | -20 | |
| Tax | 30 % | -90 | -96 |
| Minorities | -25 | -40 | |
| Net income a.m. | 185 | 185 |
Rounding differences may occur.
The outlook for the output remains at € 14.0 billion for the full year 2011. This corresponds to an expected rise of around 10 % over the previous year. The segments Building Construction & Civil Engineering, Transportation Infrastructures and Special Divisions & Concessions as well as Other are expected to contribute € 5.1 billion, € 6.3 billion, € 2.5 billion and € 0.1 billion to the output, respectively.
For 2012, STRABAG remains convinced of growing at most with inflation across all markets and of raising its output to approximately € 14.3 billion. STRABAG bases these forecasts on the assumptions that the economic framework in Europe will remain unchanged in the coming year. This means that the financing environment for our private and industrial clients may not worsen, at the same time that a rapid recovery of the conditions or significantly higher government spending is not to be expected in the STRABAG core markets.
The forecasts made in May 2011 on the individual results-related items and planned expenditures are currently being reworked and will not be published until after clear and meaningful information becomes available on the general economic situation and on the political decisions regarding the euro debt crisis, most likely, however, in the spring of 2012. STRABAG expects that earnings in the Transportations Infrastructures segment will stay weak in the next year, while a compensating development of the other segments could be possible.
10
| € Mln. | Q3/2011 | Q3/2010 | change IN % |
9M/2011 | 9M/2010 | change in % |
20101) |
|---|---|---|---|---|---|---|---|
| Output volume | 1,401.77 | 1,220.56 | 15 % | 3,708.88 | 3,060.26 | 21 % | 4,279.07 |
| Revenue | 1,241.95 | 1,149.99 | 8 % | 3,383.51 | 2,897.72 | 17 % | 3,975.84 |
| Order backlog | 6,142.21 | 5,715.36 | 7 % | 5,659.60 | |||
| EBIT | 67.38 | 80.69 | -16 % | 107.96 | 123.63 | -13 % | 153.77 |
| EBIT margin |
|||||||
| as a % of revenue | 5.4 % | 7.0 % | 3.2 % | 4.3 % | 3.9 % | ||
| Employees | 20,323 | 18,145 | 12 % | 18,253 |
The output volume generated in the Building Construction & Civil Engineering segment in the first nine months of 2011 increased by 21 % to € 3,708.88 million. Disadvantageous weather conditions had led to an unusually reduced output volume in the spring of the previous year. Especially worth noting is the growth in the home market of Germany, in Poland and in the RANC region (Russia and neighbouring countries). Switzerland generated a higher output volume, which can be attributed to the acquisitions of two construction SMEs, Brunner Erben Holding AG and Astrada AG, in the first quarter of 2011. A declining trend was seen only in Hungary.
The revenue grew in the first nine months of 2011 in tandem with the output volume by a double-digit percentage amount to € 3,383.51 million. The earnings before interest and taxes (EBIT), in contrast, fell by 13 % to € 107.96 million especially as a result of delayed restructuring effects from earlier enterprise acquisitions in the field of environmental technology. In the third quarter, the revenue increased by 8 % to € 1,241.95 million while the EBIT was down 16 % to € 67.38 million.
The order backlog grew by 7 % to € 6,142.21 million. Here, too, the markets of Germany and Switzerland were responsible for the majority of the growth. Following a series of large orders in the first two quarters in Germany and Austria, STRABAG again registered strong demand in the third quarter for buildings in its home markets. The company was commissioned to modernise the Weser-Ems-Halle in Oldenburg, Germany and to build the Park Living residential complex in Moosach, Germany, as well as the Star 22 student's residence and nursing home in Vienna, Austria.
Romania – thanks above all to a major project there – also made a strong contribution to the growth of the order backlog. Otherwise, restraint dominates the scene among private investors, at the same time that strong demand can be registered from the public sector – albeit with high price pressure.
The workforce grew by more than 2,100 persons, or 12 %, to 20,323 employees. The number includes the growth resulting from the Swiss acquisitions, which contributed over 1,100 employees to the overall personnel figures and helped make STRABAG the No. 3 on the Swiss construction market. Employee numbers were cut, in comparison, in the currently very weak markets of Hungary, the Czech Republic and Slovakia. While a slight improvement to the climate was felt in the Czech Republic, the impact of the government crisis on public-sector tenders in Slovakia remains impossible to assess at this time. The construction sector in Hungary remains weak, even though the economy is expecting stimulus measures – in particular with environmental protection projects.
Enormous price pressure can be seen in Bulgaria. In Poland, STRABAG expects a significantly lower output volume due to the completion of large projects from 2012.
The high demand, however, coupled with simultaneously stable prices for materials and subcontractors in the largest retail market of Germany, is helping to stabilise the output volume of the Building Construction & Civil Engineering segment. For this reason, STRABAG reaffirms its output volume forecast of € 5.1 billion for the 2011 financial year. For the following year, the company expects an overall stable course of business.
| € Mln. | Q3/2011 | Q3/2010 | change IN % |
9M/2011 | 9M/2010 | change in % |
20101) |
|---|---|---|---|---|---|---|---|
| Output volume | 2,165.36 | 2,040.49 | 6 % | 4,793.29 | 4,279.54 | 12 % | 5,809.94 |
| Revenue | 1,874.18 | 1,927.66 | -3 % | 4,403.89 | 4,061.97 | 8 % | 5,691.96 |
| Order backlog | 4,687.43 | 5,349.01 | -12 % | 4,735.39 | |||
| EBIT | 97.77 | 133.56 | -27 % | -1.73 | 59.29 | n.a. | 183.58 |
| EBIT margin |
|||||||
| as a % of revenue | 5.2 % | 6.9 % | 0.0 % | 1.5 % | 3.2 % | ||
| Employees | 31,266 | 30,467 | 3 % | 30,059 |
The Transportation Infrastructures segment achieved output growth of 12 % to € 4,793.29 million in the first nine months of 2011. This can be attributed on the one hand to a milder and shorter winter at the beginning of the year compared to the year before, resulting in significant increases in the home market of Germany. On the other hand, the construction boom in Poland and the expansion in Scandinavia also had a beneficial effect. In comparison, business in Hungary and the Czech Republic, as well as the completion of large projects in Switzerland, has had a negative impact on output.
The revenue developed similarly to the output volume, gaining 8 % to settle at € 4,403.89 million. In contrast to the same period the year before, the earnings before interest and taxes (EBIT) remained in negative territory even after the end of the third quarter with € -1.73 million. This development can be blamed among other things on the price competition in Central and Eastern Europe as a result of lacking infrastructure investments, forcing STRABAG to respond with structural adaptations. Another damper is the continuously low demand in the area of construction materials. This led to a decline of the EBIT in the third quarter of 2011 by 27 % to € 97.77 million. The quarterly revenue sank by 3 % to € 1,874.18 million.
Due to the high volume of construction activity in Poland, as well as the increased activities in Scandinavia, the number of employees in the Transportation Infrastructures segment rose by 3 % to 31,266. This growth was once more countered by declines in Hungary, the Czech Republic and Switzerland.
The order backlog stood at € 4,687.43 million, 12 % below the level at the end of September of the year before. The reason for this is the above-average volume of new orders in Poland in the previous year – which could not be repeated despite new projects such as the construction of the A4 motorway between Brzesko and Wierzchosławice – and which has now fallen back to a usual level. Additionally, the order backlog in the Czech Republic is at a low level due to cyclical factors in the construction economy.
In contrast, growth of the order backlog was registered in Scandinavia: the STRABAG Group was awarded three new infrastructure contracts in Sweden and in Finland at the middle of the year. Furthermore, the order cushion of Swedish construction group NIMAB, which was acquired in May, became visible in STRABAG's books in the third quarter.
STRABAG is staying with its estimate that the Transportation Infrastructures segment will generate an output volume of around € 6.3 billion in the 2011 financial year. After such growth of around 10 % year on year, however, the Transportation Infrastructures segment faces an inhospitable environment in Europe, which is why STRABAG expects to see a slight decline in output and further weak results in this segment in 2012.
The special challenge in the largely stable German home market in the coming year will be to hold our own in the recruiting of qualified specialists. Their task will be to win and efficiently process contracts from private and institutional clients against the background of growing competitive pressure, falling returns and empty local government coffers.
An aggressive price battle is to be expected in Poland: STRABAG believes that by the year 2014 the market volume in Poland will shrink back down to the original level before the construction boom. Public private partnership models, which have been well received as an alternative financing model in other countries, have so far – with the exception of the STRABAG project A2 Motorway Section 2 – not been widely used in Poland due to the lack of consensus as to which of the parties involved will accept the risk.
While Germany's economic stimulus programmes and the construction boom in Poland had helped stabilise Transportation Infrastructures through the end of 2010, the output has been falling for some time in this segment in Austria. An improvement of the situation of the Hungarian construction industry, the low-price market of Bulgaria or the standstill of public-sector orders in the Czech Republic, all of which have been mired in crisis since 2007, is not expected for now.
In Romania, by comparison, STRABAG emerged as the successful bidder in several large projects in the first nine months of the year, including the contract to renovate and upgrade national roads DN 14 and 15a and to build the A1 motorway segment between Deva and Orăştie. The Romanian transport ministry is pushing the upgrade and expansion of the country's motorway and railway networks, which should grow the output in 2012; however, prices remain low.
STRABAG is attempting to counteract the public-sector budget bottlenecks in its core markets by investing in niche markets such as the construction of sports facilities as well as railway construction or hydraulic engineering. In the field of hydraulic engineering, STRABAG acquired Cuxhaven-based civil hydraulic engineering firm Ludwig Voss GmbH & Co. KG and increased its stake in Josef Möbius Bau AG, Hamburg, from 70 % to 100 %. Due to the continuing belowcapacity use of large equipment and machinery, there is significant room for improvement of results in the niche business fields.
BAB A5, Germany
| € Mln. | Q3/2011 | Q3/2010 | change IN % |
9M/2011 | 9M/2010 | change in % |
20101) |
|---|---|---|---|---|---|---|---|
| Output volume | 554.31 | 565.26 | -2 % | 1,688.89 | 1,636.76 | 3 % | 2,517.84 |
| Revenue | 668.07 | 764.82 | -13 % | 1,898.49 | 1,900.26 | 0 % | 2,671.85 |
| Order backlog | 3,219.01 | 3,760.56 | -14 % | 4,318.36 | |||
| EBIT | 26.43 | 7.33 | 261 % | 95.93 | 25.61 | 275 % | -15.54 |
| EBIT margin |
|||||||
| as a % of revenue | 4.0 % | 1.0 % | 5.1 % | 1.3 % | -0.6 % | ||
| Employees | 19,478 | 17,873 | 9 % | 19,867 |
The output volume in the Special Divisions & Concessions segment increased slightly in the first nine months of 2011 by 3 % to € 1,688.89 million. The structurally weak Hungarian construction sector and the decline of output in Africa in the wake of the withdrawal from the Libyan market were countered by new large-scale projects in Germany and Italy.
The revenue remained nearly unchanged at € 1,898.49 million. At the same time, the earnings before interest and taxes (EBIT) nearly quadrupled from € 25.61 million to € 95.93 million. This development can be explained by the extremely volatile business in the non-European markets, which – above all in Africa and in the Middle East – developed much better in the first nine months of 2011 than in the comparison period. In the third quarter, the revenue sank by 13 % to € 668.07 million while the EBIT multiplicated both in the quarter as well as over the nine-month period.
Employee numbers grew by 9 % to 19,478. Worth mentioning is the significant, acquisition-driven increase in the German property and facility management business, contrasted by the reduction in Africa and in Hungary.
The order backlog at the end of September 2011 was down 14 % to € 3,219.01 million in comparison to the same date the year before. Three factors were responsible for this development. Firstly, the section under construction of the A2 motorway in Poland, a public private partnership (PPP) project, is being continuously worked off. Secondly, STRABAG is no longer reporting its projects in Libya in the order books due to the political situation in the country at the beginning of the year. Finally, the order to build the Koralm Tunnel in Austria can only partially compensate these negative developments.
Further projects added to the books in the third quarter are widely distributed geographically and by and large help to secure a relatively stable order structure across the remaining countries. These include the PPP contract to build the nurses' home at Klinikum Ansbach as well as the Branich Tunnel project in Germany, the construction of a wastewater tunnel in the Greater Toronto Area in Canada, and the upgrade of State Road 223 in Italy.
Basically, a strong regional diversification can be seen in the Special Divisions & Concessions segment due to the heterogeneous nature of the services offered as well as the international demand for technological competence. Projects are currently in the prequalification or bidding phase in Belgium, Bosnia-Herzegovina, the UK, India, Qatar, the Netherlands and Saudi Arabia.
STRABAG pursues projects on several continents as a way of diversifying its own risk. This is currently proving to be of benefit in the field of tunnelling: here the demand in the STRABAG home markets of Germany and Austria, as well as in Switzerland, can be described as very low, and the market prices have reached an inacceptable level. Furthermore, the market for infrastructure has completely collapsed in South-East Europe.
While the PPP infrastructure business has in the past few months been mainly successful in northern Europe, STRABAG is working with PPP projects in building construction primarily in its home markets of Germany and Austria. On the one hand, this form of financing widens the public sector's scope of action; on the other hand, the consequences of the financial crisis – significantly higher interest premiums and liquidity costs with a trend to shorter financing terms – are having an inhibitory effect.
In the market for the group's own project developments in building construction – still mostly in Germany – STRABAG expects a rising turnover of office space in 2011 as well as an improved net absorption of the available space. Because of the sovereign debt crisis and the necessary recapitalisation, the credit supply of the real economy could prove to be a limiting factor for the real estate sector. In this business field, the company remains focused on commercial
strabag SE interim report January– September 2011
properties in the mid-double-digit million euro range, including offices, business real estate and hotels. At the same time, STRABAG has since the previous year been driving ahead the development of residential buildings for global investors. Regionally, the view is on opportunities in the Central and Eastern European region.
In Property and Facility Management, STRABAG sees a positive order backlog, which will likely result in a higher output volume in the full year 2011 compared to the previous year and a positive development of the relevant result.
Taken together, this yields the following picture for the entire segment – with quite different trends depending on the market and business field:
While a loss was generated in the 2010 financial year due to the strong price competition in tunnelling and the negative business in non-European markets, STRABAG expects a significantly positive result overall for the Special Divisions & Concessions segment for 2011. STRABAG confirms its forecast of € 2.5 billion for the segment output for the 2011 financial year, while admitting that this is an ambitious target.
Effective 1 January 2011, the business fields of Offshore Wind – Construction Operations and of Special Foundation Engineering were moved from the Special Divisions & Concessions segment to the Transportation Infrastructures segment. The comparison values for the third quarter of the previous year for order backlog, employees, output volume and earnings were adjusted accordingly. In the first nine months of the 2011 financial year, these two business fields contributed € 180.10 million to the output volume and € 250.63 million to the order backlog and employed 835 people.
Blackwaterbridge, ireland
norra länken 35, Stockholm
| 1.7.-30.9.2011 T€ |
1.7.-30.9.2010 T€ |
1.1.-30.9.2011 T€ |
1.1.-30.9.2010 T€ |
|
|---|---|---|---|---|
| Revenue | 3,792,133 | 3,854,268 | 9,709,456 | 8,889,238 |
| Changes in inventories | 32,293 | -1,216 | 54,444 | 17,472 |
| Own work capitalized | 4,991 | 19,579 | 44,280 | 55,268 |
| Other operating income | 52,406 | 49,557 | 177,564 | 167,723 |
| Raw materials, consumables and services used | -2,583,958 | -2,649,594 | -6,660,708 | -5,982,226 |
| Employee benefits expenses | -784,489 | -763,027 | -2,234,138 | -2,067,495 |
| Other operating expenses | -240,849 | -226,818 | -625,772 | -644,345 |
| Share of profit or loss of associates | 3,264 | 2,957 | 3,746 | 28,028 |
| Net investment income | 5,135 | 3,760 | 9,237 | 12,023 |
| EBITDA | 280,926 | 289,466 | 478,109 | 475,686 |
| Depreciation and amortisation expense | -89,969 | -86,369 | -270,486 | -282,948 |
| EBIT | 190,957 | 203,097 | 207,623 | 192,738 |
| Interest and similar income | 32,775 | 12,341 | 67,261 | 49,629 |
| Interest expense and similar charges | -33,895 | -33,107 | -72,507 | -77,143 |
| Net interest income | -1,120 | -20,766 | -5,246 | -27,514 |
| Profit before tax | 189,837 | 182,331 | 202,377 | 165,224 |
| Income tax expense | -53,538 | -53,168 | -57,263 | -48,858 |
| Net income | 136,299 | 129,163 | 145,114 | 116,366 |
| Attributable to: non-controlling interests | 13,141 | 9,428 | 32,893 | 8,097 |
| Attributable to: equity holders of the parent company | 123,158 | 119,735 | 112,221 | 108,269 |
| Earnings per share (in €) | 1.11 | 1.05 | 0.99 | 0.95 |
| 1.7.-30.9.2011 T€ |
1.7.-30.9.2010 T€ |
1.1.-30.9.2011 T€ |
1.1.-30.9.2010 T€ |
|
|---|---|---|---|---|
| Net income | 136,299 | 129,163 | 145,114 | 116,366 |
| Differences arising from currency translation | -61,563 | 38,649 | -34,274 | 46,361 |
| Change in hedging reserves including interest rate swaps | -35,452 | -4,718 | -25,210 | -44,911 |
| Deferred taxes on neutral change in equity | 6,792 | 218 | 4,503 | 3,499 |
| Total comprehensive income | 46,076 | 163,312 | 90,133 | 121,315 |
| Attributable to: non-controlling interests | 10,320 | 12,169 | 29,445 | 9,857 |
| Attributable to: equity holders of the parent company | 35,756 | 151,143 | 60,688 | 111,458 |
| assets | 30.9.2011 T€ |
31.12.2010 T€ |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 557,254 | 535,687 |
| Property, plant and equipment | 2,124,050 | 2,102,364 |
| Investment property | 70,072 | 73,524 |
| Investments in associates | 442,104 | 87,933 |
| Other financial assets | 275,580 | 257,256 |
| Receivables from concession arrangements | 853,538 | 968,875 |
| Trade receivables | 74,007 | 64,229 |
| Non-financial assets | 5,546 | 4,044 |
| Other financial assets | 39,075 | 36,778 |
| Deferred taxes | 217,522 | 214,349 |
| 4,658,748 | 4,345,039 | |
| Current assets | ||
| Inventories | 772,976 | 705,721 |
| Receivables from concession arrangements | 144,397 | 19,477 |
| Trade receivables | 3,194,885 | 2,548,790 |
| Non-financial assets | 120,682 | 138,260 |
| Other financial assets | 495,882 | 440,527 |
| Cash and cash equivalents | 1,297,970 | 1,952,452 |
| Assets held for sale | 0 | 231,891 |
| 6,026,792 | 6,037,118 | |
| 10,685,540 | 10,382,157 | |
| Equity and Liabilities | 30.9.2011 T€ |
31.12.2010 T€ |
| Group equity | ||
| Share capital | 114,000 | 114,000 |
| Capital reserves | 2,311,384 | 2,311,384 |
| Retained earnings | 515,212 | 665,726 |
| Non-controlling interests | 188,635 | 141,328 |
| 3,129,231 | 3,232,438 | |
| Non-current liabilities | ||
| Provisions | 928,944 | 927,948 |
| Financial liabilities1) | 1,331,260 | 1,318,305 |
| Trade payables | 49,478 | 43,231 |
| Non-financial liabilities | 1,515 | 1,003 |
| Other financial liabilities | 19,424 | 23,847 |
| Deferred taxes | 34,990 | 49,142 |
| 2,365,611 | 2,363,476 | |
| Current liabilities | ||
| Provisions | 717,738 | 710,810 |
| Financial liabilities2) | 467,939 | 240,847 |
| Trade payables | 3,226,110 | 3,067,759 |
| Non-financial liabilities | 363,833 | 355,381 |
| Other financial liabilities | 415,078 | 411,446 |
| 5,190,698 | 4,786,243 | |
| 10,685,540 | 10,382,157 |
2) Thereof T€ 103,910 concerning non-recourse liabilities from concession arrangements (31 December 2010 T€ 41,172)
| 1.1.-30.9.2011 T€ |
1.1.-30.9.2010 T€ |
|
|---|---|---|
| Net income | 145,114 | 116,366 |
| Deferred taxes | -28,094 | -38,151 |
| Non-cash effective results from associates | -2,179 | -25,719 |
| Depreciations/write ups | 273,446 | 283,669 |
| Changes in long term provisions | 12,393 | 25,451 |
| Gains/losses on disposal of non-current assets | -25,836 | -26,188 |
| Cash-flow from profits | 374,844 | 335,428 |
| Change in items: | ||
| Inventories | -78,187 | -59,178 |
| Trade receivables, construction contracts | ||
| and consortia | -676,522 | -673,667 |
| Receivables from subsidiaries and receivables | ||
| from participation companies | -74,155 | -29,872 |
| Other assets | -9,564 | -20,707 |
| Trade payables, construction contracts | ||
| and consortia | 289,541 | 270,204 |
| Liabilities from subsidiaries and liabilities from | ||
| participation companies | 43,329 | -8,239 |
| Other liabilities | -22,821 | -43,527 |
| Current provisions | -7,110 | 22,632 |
| Cash-flow from operating activities | -160,645 | -206,926 |
| Purchase of financial assets | -126,048 | -47,887 |
| Purchase of property, plant, equipment and intangible assets | -347,599 | -394,456 |
| Gains/losses on disposal of non-current assets | 25,836 | 26,188 |
| Disposals of non-current assets (carrying value) | 55,445 | 63,432 |
| Change in other cash clearing receivables | 8,728 | 2,941 |
| Change in scope of consolidation | -91,118 | 279 |
| Cash-flow from investing activities | -474,756 | -349,503 |
| Change in bank borrowings | 151,438 | 32,199 |
| Change in bonds | 100,000 | 25,000 |
| Change in liabilities from finance leases | -10,931 | -9,445 |
| Change in other cash clearing liabilities | -1,641 | 4,535 |
| Change due to acquisitions of non-controlling interests | -5,898 | -11,583 |
| Acquisition of own shares | -137,265 | 0 |
| Distribution and withdrawals from partnership | -67,232 | -61,969 |
| Cash-flow from financing activities | 28,471 | -21,263 |
| Cash-flow from operating activities | -160,645 | -206,926 |
| Cash-flow from investing activities | -474,756 | -349,503 |
| Cash-flow from financing activities | 28,471 | -21,263 |
| Net change in cash and cash equivalents | -606,930 | -577,692 |
| Cash and cash equivalents at the beginning of the period | 1,952,452 | 1,782,951 |
| Change in cash and cash equivalents due to currency translation | -47,552 | 21,570 |
| Cash and cash equivalents at the end of the period | 1,297,970 | 1,226,829 |
| Interest paid | 46,419 | 43,352 |
| Interest received | 35,579 | 39,568 |
| Taxes paid | 75,901 | 83,693 |
| Share capital T€ |
Capital reserves T€ |
Retained earnings T€ |
Hedging reserve T€ |
For eign curr ency reserve T€ |
Gro up equity T€ |
Non-con tro lling interests T€ |
Total equity T€ |
|
|---|---|---|---|---|---|---|---|---|
| Balance as | ||||||||
| of 1.1.2011 | 114,000 | 2,311,384 | 724,317 | -73,296 | 14,705 | 3,091,110 | 141,328 | 3,232,438 |
| Net income | 0 | 0 | 112,221 | 0 | 0 | 112,221 | 32,893 | 145,114 |
| Net income recognised directly in |
||||||||
| equity | 0 | 0 | 0 | -20,246 | -31,287 | -51,533 | -3,448 | -54,981 |
| Total com prehensive |
||||||||
| income | 0 | 0 | 112,221 | -20,246 | -31,287 | 60,688 | 29,445 | 90,133 |
| Subtotal | 114,000 | 2,311,384 | 836,538 | -93,542 | -16,582 | 3,151,798 | 170,773 | 3,322,571 |
| Transactions concerning non-control |
||||||||
| ling interests | 0 | 0 | -11,237 | 0 | 0 | -11,237 | 22,394 | 11,157 |
| Own shares | 0 | 0 | -137,265 | 0 | 0 | -137,265 | 0 | -137,265 |
| Distribution | ||||||||
| of dividends | 0 | 0 | -62,700 | 0 | 0 | -62,700 | -4,532 | -67,232 |
| Balance as of 30.9.2011 |
114,000 | 2,311,384 | 625,336 | -93,542 | -16,582 | 2,940,596 | 188,635 | 3,129,231 |
| Share capital T€ |
Capital reserves T€ |
Retained earnings T€ |
Hedging reserve T€ |
For eign curr ency reserve T€ |
Gro up equity T€ |
Non-con tro lling interests T€ |
Total equity T€ |
|
|---|---|---|---|---|---|---|---|---|
| Balance as | ||||||||
| of 1.1.2010 | 114,000 | 2,311,384 | 617,207 | -65,284 | -27,120 | 2,950,187 | 148,877 | 3,099,064 |
| Net income | 0 | 0 | 108,269 | 0 | 0 | 108,269 | 8,097 | 116,366 |
| Net income recognised directly in |
||||||||
| equity | 0 | 0 | 0 | -40,405 | 43,594 | 3,189 | 1,760 | 4,949 |
| Total com | ||||||||
| prehensive | ||||||||
| income | 0 | 0 | 108,269 | -40,405 | 43,594 | 111,458 | 9,857 | 121,315 |
| Subtotal | 114,000 | 2,311,384 | 725,476 | -105,689 | 16,474 | 3,061,645 | 158,734 | 3,220,379 |
| Transactions concerning non-control |
||||||||
| ling interests | 0 | 0 | -4,092 | 0 | 0 | -4,092 | -7,321 | -11,413 |
| Distribution | ||||||||
| of dividends | 0 | 0 | -57,000 | 0 | 0 | -57,000 | -4,969 | -61,969 |
| Balance as of 30.9.2010 |
114,000 | 2,311,384 | 664,384 | -105,689 | 16,474 | 3,000,553 | 146,444 | 3,146,997 |
22
The consolidated interim financial statements of STRABAG SE, based in Villach, Austria, with reporting date 30 September 2011 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 (IF-RIC) 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 2010.
The consolidated financial statements of the Group as at and for the year ended 31 December 2010 are available at www.strabag.com.
The following amended or new accounting standards are effective for annual periods beginning on or after 1 January 2011:
| App lication for financial years which begin on or after (accord ing to IASB) |
App lication for financial years which begin on or after (accord ing to EU endors e ment) |
|
|---|---|---|
| IAS 24 Related Party Disclosures (amended) |
1.1.2011 | 1.1.2011 |
| Amendment to IAS 32 about Classification of Rights Issues |
1.2.2010 | 1.2.2010 |
| IFRIC 14 Prepayment of a Minimum Funding Requirement | 1.1.2011 | 1.1.2011 |
| IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments | 1.7.2010 | 1.7.2010 |
| generally | 1.7.2010/ | |
| Amendments to various IFRS under the 2010 annual improvement process | 1.7.2010 | 1.1.2011 |
The first-time application of the IFRS and IFRIC mentioned had secondary consequences on the interim consolidated financial statements for the period ending 30 September 2011.
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 2010.
Information regarding the accounting and valuation methods can be found in the annual financial statements with reporting date 31 December 2010.
The establishment of the interim report requires estimations and assumptions to be made which may influence the application of the accounting and valuation methods as well as the figures for the assets, liabilities, expenses and income. The actual results could deviate from these estimates.
The consolidated interim financial statements as of 30 September 2011 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 1-9/2011 period as follows:
| conso li dation |
equity method |
|
|---|---|---|
| Situation on 31.12.2010 | 295 | 14 |
| First-time inclusions in the reporting period | 10 | 1 |
| First-time inclusions in the reporting period due to merger/accretion | 5 | 0 |
| Merger/accretion in the reporting period | -8 | 0 |
| Exclusions in the reporting period | -4 | 0 |
| Situation on 30.9.2011 | 298 | 15 |
The following companies formed part of the scope of consolidation for the first time on the reporting date:
| direct | Date of acquisition |
|
|---|---|---|
| Comp any |
stake % | or foundation |
| Consolidation: | ||
| Appartementhaus Scharmützel Projekt-Beteiligungs GmbH, Bad Saarow-Pieskow | 100.00 | 1.1.20111) |
| Astrada AG, Subingen | 100.00 | 23.3.2011 |
| BFB Behmann Feuerfestbau GmbH, Bremen | 100.00 | 1.1.2011 |
| Brunner Erben AG, Zurich | 100.00 | 16.3.2011 |
| Brunner Erben Holding AG, Zurich | 100.00 | 16.3.2011 |
| K.H. Gaul GmbH & Co. KG, Sprendlingen | 100.00 | 1.1.2011 |
| Ludwig Voss GmbH & Co. KG, Cuxhaven | 100.00 | 28.8.2011 |
| NIMAB Entreprenad AB, Sjöbo |
100.00 | 7.7.2011 |
| SFB Behmann Feuerfestbau GmbH, Schwedt/Oder | 100.00 | 1.1.2011 |
| Steffes-Mies GmbH & Co. KG, Sprendlingen | 100.00 | 1.1.2011 |
| Merger/Accretion:2) | ||
| BITUNO VA Verwaltungs-GmbH, Hamburg |
100.00 | 1.1.2011 |
| BOT BÖRN ER Oberflächen Verwaltungs- und Beteiligungs GmbH, Ritschenhausen |
100.00 | 1.1.2011 |
| BOT BÖRN ER Oberflächentechnik GmbH & Co. KG, Ritschenhausen |
100.00 | 1.1.2011 |
| ERA -Stav s.r.o., Prague |
100.00 | 1.1.2011 |
| Obit spol. s.r.o., Prague | 100.00 | 1.1.2011 |
| at-equity: | ||
| Lafarge Cement CE Holding GmbH, Vienna | 30.00 | 28.7.2011 |
In March 2011 STRABAG acquired the construction company Brunner Erben Holding AG, Zurich. The company is active on the Swiss market in the fields of civil and underground engineering (special foundation engineering and road construction), building construction (incl. wood building) and transport. The approval of the cartel authorities was effective on 16 March 2011.
In addition STRABAG acquired in March 2011 the Swiss construction company Astrada AG, Subingen. The company is active with about 350 employees in the fields of road and ground-level construction, railway and civil engineering, and industrial and residential construction. The closing was effective on 23 March 2011.
Effective 1 January 2011, the companies BFB Behmann Feuerfestbau GmbH, Bremen, and SFB Behmann Feuerfestbau GmbH, Schwedt/Oder, were acquired.
Also effective 1 January 2011, STRABAG acquired all shares of K. H. Gaul GmbH & Co. KG, Sprendlingen. The company is to be included in the Transportation Infrastructures segment. The acquisition serves to strengthen the construction materials activities in the German states of Rhineland-Pfalz and Hessen.
STRABAG acquired Swedish company NIMAB Entreprenad AB, Sjöbo. The Swedish company, which is mainly active in the field of building construction in southern Sweden, has 124 employees and generated an annual output of about SEK 300 million. The acquisition allows STRABAG to bolster its presence in the southern Swedish market. The closing took place on 7 July 2011.
Effective 28 August 2011, STRABAG acquired 100 % of civil hydraulic engineering SME Ludwig Voss GmbH & Co. KG, Cuxhaven. A specialised service provider in the field of civil hydraulic engineering, the company operates mainly in Germany's seaports and along the coasts of the North and Baltic Seas. The group generates average revenue of around € 20 million a year.
The purchase price is preliminary allocated to assets and liabilities as follows:
| T€ | |
|---|---|
| Acquired assets and liabilities: | |
| Goodwill | 27,620 |
| Other non-current assets | 81,245 |
| Current assets | 102,136 |
| Non-current liabilities | -47,687 |
| Current liabilities | -61,105 |
| Purchase price | 102,209 |
| Less non-cash-effective purchase price component | -9,028 |
| Acquired cash and cash equivalents | -16,398 |
| Net cash outflow from the acquisition | 76,783 |
Assuming a fictitious initial consolidation on 1 January 2011 for all acquisitions in the reporting period, the consolidated revenue would amount to T€ 9,768,879 and consolidated profit would have changed by a total of T€ -762.
All companies which were consolidated for the first time in the reporting period contributed T€ 243,733 to revenue and T€ -8,142 to profit.
With entry in the commercial register on 28 July 2011, STRABAG merged its cement plant in Hungary in Lafarge Cement CE Holding GmbH, Vienna, and acquired 30 % of the company. The remaining 70 % are held by Lafarge, a market leader in construction materials manufacturing. Lafarge Cement CE Holding GmbH bundles the cement activities of Lafarge and STRABAG in the countries of Central and Eastern Europe.
Due to the political unrest in Libya, the activities in the country were temporarily suspended in March 2011. The employees were evacuated, the equipment was secured as much as possible and the construction sites were closed. As control cannot be exercised over the Libyan subsidiary Al-Hani General Construction Co. at present the company was deconsolidated effective 31 March 2011.
As of 30 September 2011, the following companies were no longer included in the scope of consolidation: Disposals from scope of consolidation
| Al-Hani General Construction Co., Tripolis | Temporary suspension of activities |
|---|---|
| ILBAU GmbH, Vienna |
Merger in Lafarge Cement CE Holding GmbH |
| ILBAU Management GmbH, Vienna |
Merger in Lafarge Cement CE Holding GmbH |
| NOSTRA Cement Kft., Budapest |
Merger in Lafarge Cement CE Holding GmbH |
| Merger/Accretion1) | |
|---|---|
| BITUNO VA GmbH & Co. KG, Hamburg |
merger |
| BITUNO VA Verwaltungs-GmbH, Hamburg |
merger |
| BOT BÖRN ER Oberflächen Verwaltungs- und Beteili |
|
| gungs GmbH, Ritschenhausen | merger |
| BOT BÖRN ER Oberflächentechnik GmbH & Co. KG, |
|
| Ritschenhausen | merger |
| ERA -Stav s.r.o., Prague |
merger |
| Georg Börner Dach und Straße GmbH, Bad Hersfeld | merger |
| JUKA Justizzentrum Kurfürstenanlage GmbH, Cologne | merger |
| Obit spol. s.r.o., Prague | merger |
The merger of the cement activities in Lafarge Cement CE Holding GmbH, Vienna, resulted in disposals of assets in the amount of T€ 276,241 and liabilities in the amount of T€ 3,741. These are offset by the acquisition of 30 % of Lafarge Cement CE Holding GmbH, which is reported under investments in associates.
The same methods of consolidation and principles of currency translation were applied in drawing up the consolidated interim financial statements with reporting date 30 September 2011 as were used for the consolidated annual financial statements with reporting date 31 December 2010. Details regarding the methods of consolidation and principles of currency translation are available in the 2010 annual report.
Due to snow, ice and other adverse weather conditions, revenue is usually lower in the winter months than in the summer. As the largest part of the costs involves fixed costs, noteworthy losses are posted in the first quarter every year. Starting with the second quarter, these losses are compensated for by rising contribution margins. The break-even point is usually not yet reached before the end of the second quarter. The largest portion of the earnings is expected in the third and fourth quarters. Seasonal fluctuations in the Transportation Infrastructures business are greater than they are in Building Construction & Civil Engineering.
The above-described, annually repeating business trend allows a year-on-year comparison of output volume, revenue and results of the respective quarters.
Interest income from concession contracts which is included in other operating income is represented as follows (also see notes on receivables from concession arrangements): 1.1.-30.9.2011 1.1.-30.9.2010
| T€ | T€ | |
|---|---|---|
| Interest income | 55,069 | 54,668 |
| Interest expense | -28,095 | -28,246 |
| Total | 26,974 | 26,422 |
1) The companies listed under "Merger" were merged with already fully consolidated companies or, as a result of accretion, already formed part of fully consolidated companies.
Goodwill assets are subjected to an annual impairment test in accordance with IAS 36. The impairment test is carried out in the last two months of the financial year.
In 1-9/2011, a total goodwill from capital consolidation on the basis of the preliminary purchase price allocations in the amount of T€ 28,779 was capitalized and no impairments were made.
In 1-9/2011, tangible and intangible assets in the amount of T€ 347,599 (1-9/2010 T€ 394,456) were acquired.
In the same period, tangible and intangible assets with a book value of T€ 26,777 were sold (1-9/2010 T€ 58,661).
On the reporting date, there were € 118 million (30 September 2010 € 248 million) in contractual commitments for the acquisition of property, plant and equipment which were not considered in the interim financial statement.
STRABAG has a 100 % interest in the Hungarian M5 Motorway Concession Company AKA Alföld Koncessizios Autopalya Zrt., Budapest (AKA).
In the concession agreement with the Hungarian state, AKA committed to develop, plan, finance and build and operate the M5 motorway. The motorway itself is the property of the state; all vehicles and equipment necessary for motorway operation are to be transferred to the state free of charge following the end of the concession period.
In exchange, AKA will regularly receive an availability fee, independent of transit volume, from the Hungarian state for making the motorway available to the public. AKA bears the operator's risk of motorway closure and non-compliance of contractually agreed roadway criteria.
The route totals 156.5 km and was built in three phases. The concession period runs until 2031. A one-time extension for up to 17.5 years is possible.
All services provided under this concession contract are accounted for under the separate balance sheet item "Receivables from concession arrangements". The receivables are carried at the present value of the payment to be made by the state. The annual accumulation amount is recognised in "Other operating income".
A part of the availability fee consists of interest adjustment payments of the Hungarian state. As a result, the state bears the interest risk from the financing of AKA. These interest adjustment payments represent an embedded hedging transaction which is measured separately in accordance with IAS 39.11. Presentation is made as a cash flow hedge; as a result, changes in the fair value of the interest rate swap are recognised directly in equity.
The market value of the interest rate swap in the amount of T€ -18,434 (31 December 2010 T€ 12,818) is also recognised as long-term receivables from concession arrangements.
Recognisable receivables from concession arrangements are offset by non-recourse financing in the amount of T€ 693,838 (31 December 2010 T€ 715,099), classified either as a current or non-current liability depending on the term. The resulting interest expense is recognised in "Other operating income".
The STRABAG consortium KMG - Kliplev Motorway Group was awarded the tender for Denmark's first PPP project. The consortium will plan and build 26 km of the E51 motorway from Kliplev to Sønderborg as well as 18 km of side roads and seven interchanges and will operate the road over a period of 26 years from completion. The total investment volume amounts to € 148.0 million. Following the planned completion in the spring of 2012, the road will be sold to the state. The operation will then be paid for by regular payments from the state. As at 30 September 2011, the project involves non-recourse financing in the amount of T€ 61,745 (31 December 2010 T€ 4,786).
The fully paid share capital amounts to € 114,000,000 and is divided into 113,999,997 no-par bearer shares and 3 registered shares.
The following resolutions were passed at the Annual General Meeting of 10 June 2011:
The management board was authorised to acquire no-par bearer or registered shares of the company on the stock market or over the counter to the extent of up to 10 % of the share capital during a period of 13 months from the day of the resolution at a minimum price per share of € 1.00 and a maximum price per share of € 34.00. The purpose of the acquisition may not be to trade with own shares. The authorisation can be exercised in full or in part or in several partial amounts for one, several purposes by the company, a subsidiary (Section 228 Paragraph 3 of the Austrian Commercial Code) or third parties acting on behalf of the company.
The management board of STRABAG SE can decide to acquire shares on the stock exchange but must inform the supervisory board following decision to do so. Over-the-counter purchases require prior approval by the supervisory board.
The management board shall be authorised, for a period of five years from this resolution (Section 65 Paragraph 1b Austrian Stock Corporation Act), to sell or assign its own shares, with approval by the supervisory board, in a manner other than on the stock market or through a public tender, to the exclusion of the shareholders' buyback rights (subscription rights), and to determine the conditions of sale. The authorisation can be exercised in full or in part or in several partial amounts for one, several purposes by the company, a subsidiary (Section 228 Paragraph 3 of the Austrian Commercial Code) or third parties acting on behalf of the company.
The Annual General Meeting cancelled the existing authorization to buy back own shares as per resolution by the Annual General Meeting of 18 June 2010.
From 14 July 2011, the management board made use of the authorisation to acquire own shares. By 30 September 2011 6,609,897 no-par shares were acquired on the stock market and over the counter. This corresponds to 5.80 % of the share capital. The costs for the acquisition of own shares are deducted directly from equity without affecting profit or loss and are presented separately in the retained earnings in the statement of changes in equity.
The changes in equity are shown in the statement of changes in equity.
The company has accepted the following guarantees:
| 30.9.2011 T€ |
31.12.2010 T€ |
|
|---|---|---|
| Guarantees without financial guarantees | 2,190 | 12,633 |
Furthermore, there is a derived credit risk arising from the financial guarantee contracts (guarantees issued) of T€ 18,528 (31 December 2010 T€ 42,754).
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 Infrastructures and Special Divisions & Concessions, which represent the group's operating segments. In addition, there are the central business units and central staff units, which handle services in the areas of accounting, group financing, technical development, machine management, quality management, logistics, legal affairs, contract management etc. These services are included in the segment Other.
The settlement between the single segments is made at arm's-length prices.
Since 1 January 2011, the special foundation engineering and offshore wind activities, which had previously been grouped in the Special Divisions & Concessions segment, have been bundled in the Transportation Infrastructures segment. For the sake of comparison, the previous year's figures were adjusted to match the new structure.
| charges | ||||||
|---|---|---|---|---|---|---|
| 0 | 0 | 0 | -33,895 | 0 | -33,895 | |
| Interest expense and similar | ||||||
| Interest and similar income | 0 | 0 | 0 | 32,775 | 0 | 32,775 |
| EBIT | 67,382 | 97,772 | 26,429 | 468 | -1,094 | 190,957 |
| Inter-segment revenue | 74,720 | 27,004 | 0 | 273,198 | ||
| Revenue | 1,241,958 | 1,874,182 | 668,072 | 7,921 | 0 | 3,792,133 |
| Output Volume | 1,401,771 | 2,165,352 | 554,308 | 47,886 | 4,169,317 | |
| Building Constr uc tion & Civil Engineering 1.7.–30.9.2011 T€ |
Transpor tation Infra str uctures 1.7.–30.9.2011 T€ |
Special Divisions & Con cessions 1.7.–30.9.2011 T€ |
Other 1.7.–30.9.2011 T€ |
Reconcilia tion to IFRS Financial Statements 1.7.–30.9.2011 T€ |
Total 1.7.–30.9.2011 T€ |
| Profit before tax | 80,695 | 133,560 | 7,328 | -20,191 | -19,061 | 182,331 |
|---|---|---|---|---|---|---|
| charges | 0 | 0 | 0 | -33,107 | 0 | -33,107 |
| Interest expense and similar | ||||||
| Interest and similar income | 0 | 0 | 0 | 12,341 | 0 | 12,341 |
| EBIT | 80,695 | 133,560 | 7,328 | 575 | -19,061 | 203,097 |
| Inter-segment revenue | 47,196 | 12,620 | 0 | 249,840 | ||
| Revenue | 1,149,996 | 1,927,658 | 764,813 | 11,801 | 0 | 3,854,268 |
| Output Volume | 1,220,564 | 2,040,496 | 565,255 | 36,429 | 3,862,744 | |
| T€ | T€ | T€ | T€ | T€ | T€ | |
| Engineering 1.7.–30.9.2010 |
str uctures 1.7.–30.9.2010 |
cessions 1.7.–30.9.2010 |
Other 1.7.–30.9.2010 |
Statements 1.7.–30.9.2010 |
Total 1.7.–30.9.2010 |
|
| tion & Civil | tation Infra | Con | Financial | |||
| Constr uc |
Transpor |
Divisions & | tion to IFRS |
|||
| Building | Special | Reconcilia |
| Building Constr uc tion & Civil |
Transpor tation Infra |
Special Divisions & Con |
Reconcilia tion to IFRS Financial |
|||
|---|---|---|---|---|---|---|
| Engineering 1.1.–30.9.2011 T€ |
str uctures 1.1.–30.9.2011 T€ |
cessions 1.1.–30.9.2011 T€ |
Other 1.1.–30.9.2011 T€ |
Statements 1.1.–30.9.2011 T€ |
tot al 1.1.–30.9.2011 T€ |
|
| Output Volume | 3,708,879 | 4,793,286 | 1,688,887 | 114,594 | 10,305,646 | |
| Revenue | 3,383,514 | 4,403,893 | 1,898,490 | 23,559 | 0 | 9,709,456 |
| Inter-segment revenue | 166,796 | 76,558 | 0 | 721,862 | ||
| EBIT | 107,961 | -1,732 | 95,932 | 248 | 5,214 | 207,623 |
| Interest and similar income | 0 | 0 | 0 | 67,261 | 0 | 67,261 |
| Interest expense and similar | ||||||
| charges | 0 | 0 | 0 | -72,507 | 0 | -72,507 |
| Profit before tax | 107,961 | -1,732 | 95,932 | -4,998 | 5,214 | 202,377 |
| Building | Special | Reconcilia | ||||
|---|---|---|---|---|---|---|
| Constr uc |
Transpor |
Divisions & | tion to IFRS |
|||
| tion & Civil | tation Infra | Con | Financial | |||
| Engineering | str uctures |
cessions | Other | Statements | tot al |
|
| 1.1.–30.9.2010 | 1.1.–30.9.2010 | 1.1.–30.9.2010 | 1.1.–30.9.2010 | 1.1.–30.9.2010 | 1.1.–30.9.2010 | |
| T€ | T€ | T€ | T€ | T€ | T€ | |
| Output Volume | 3,060,264 | 4,279,543 | 1,636,757 | 120,377 | 9,096,941 | |
| Revenue | 2,897,722 | 4,061,966 | 1,900,258 | 29,292 | 0 | 8,889,238 |
| Inter-segment revenue | 97,498 | 45,927 | 0 | 671,387 | ||
| EBIT | 123,634 | 59,286 | 25,611 | 661 | -16,454 | 192,738 |
| Interest and similar income | 0 | 0 | 0 | 49,629 | 0 | 49,629 |
| Interest expense and similar | ||||||
| charges | 0 | 0 | 0 | -77,143 | 0 | -77,143 |
| Profit before tax | 123,634 | 59,286 | 25,611 | -26,853 | -16,454 | 165,224 |
Income and expense in the internal reporting are shown essentially in accordance with IFRS. An exception is income taxes, including those applicable to deferred tax, which are not considered in the internal reporting.
The basis for the internal reporting is formed by all subsidiaries. In the IFRS financial statements, earnings from companies which were not fully consolidated respectively reported using the equity method are recognised in conformity with dividends, transfer of earnings and/or depreciation and amortisation. For this reason, the internal reporting does not conform 100 % with EBIT respectively profit before tax in the consolidated financial statements in terms of the investment result.
Other minor differences result from the other consolidation entries.
Reconciliation of the internal reporting to IFRS Financial Statements is allocated as follows:
| 1.1.-30.9.2011 T€ |
1.1.-30.9.2010 T€ |
|
|---|---|---|
| Investment income | 8,323 | -12,548 |
| Other consolidations | -3,109 | -3,906 |
| Total | 5,214 | -16,454 |
Notes on related parties may be found in the 2010 consolidated financial statements. Since 31 December 2010, there have been no significant changes in this area. Arm`s-length business relations exist in transactions with related parties.
No material events occurred after the reporting period for this interim financial statements.
The present interim financial statements for STRABAG SE were neither audited nor subjected to an audit review.
We confirm to the best of our knowledge that the condensed interim financial statements as of 30 September 2011 give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the of important events that have occurred during the first nine months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining three months of the financial year and of the major related party transactions to be disclosed.
Villach, 30 November 2011
Management Board
Dr. Hans Peter Haselsteiner Chairman of the Management Board Responsibilities for Central Staff Units and Central Divisions as well as technical Responsibilities for Building Construction & Civil Engineering of Russia and Neighboring Countries
Ing. Fritz Oberlerchner Vice Chairman Technical Responsibilities for Transportation Infrastructures
Dr. Peter Krammer Technical Responsibilities for Building Construction & Civil Engineering (without Russia and Neighboring Countries)
DI Siegfried Wanker Technical Responsibilities for Special Divisions & Concessions
Dr. Thomas Birtel Commercial Responsibilities for Building Construction & Civil Engineering
Mag. Hannes Truntschnig Commercial Responsibilities for Transportation Infrastructures, Special Divisions & Concessions
| Full year results 2011 | Fri, 27 April 2012 |
|---|---|
| Disclosure | 7.30 a.m. |
| Press conference | 10.00 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Interim report January-March 2012 | Thu, 31 May 2012 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Notice of Annual General Meeting | Fri, 18.5.2012 |
| Shareholding confirmation record date | Tue, 5.6.2012 |
| Annual General Meeting 2012 | Fri, 15.6.2012 |
| Start | 10.00 a.m. |
| Location - to be announced | |
| Ex-dividend date | Fri, 22.6.2012 |
| Payment date for dividend | Mon, 25.6.2012 |
| Semi-annual report 2012 | Fri, 31.8.2012 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Interim report January-September 2012 | Fri, 30.11.2012 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| All times are CET/CEST Please find the roadshow schedule on the website www.strabag.com -> Investor Relations -> Financial Calendar. |
| Maturity | Coupon | Volume | isin | Stock Exchange |
|---|---|---|---|---|
| 2007 - 2012 | 5.75 % | € 75 million | AT0000A05HY9 | Vienna |
| 2008 - 2013 | 5.75 % | € 75 million | AT0000A09H96 | Vienna |
| 2010 - 2015 | 4.25 % | € 100 million | AT0000A0DRJ9 | Vienna |
| 2011 - 2018 | 4.75 % | € 175 million | AT0000A0PHV9 | Vienna |
Standard & Poors BBB- Outlook stable
| STR AV |
|---|
| STR V.VI |
| STR |
| AT000000STR 1 |
This interim report is also available in German. In case of discrepancy the German version prevails.
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