Quarterly Report • Nov 30, 2012
Quarterly Report
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SUCCESS Means BALANCE. interim REPORT JANUARY–SEPTEMBER 2012
| KEy figure s |
3 |
|---|---|
| Ceo ´s Rev iew |
4 |
| Impor tant even ts |
5 |
| share | 6 |
| Managemen t Repor t January–SEPT EMBER 2012 |
7 |
| SEGMENT Repor t |
9 |
| Con solidated INTERIM financ ial statemen ts |
12 |
| no tes |
16 |
| statemen t of all legal re pre sen tative s |
24 |
| € MLN. | Q3/2012 | Q3/2011 | CHANGE in % |
9M/2012 | 9M/2011 | CHANGE in % |
12M/2011 |
|---|---|---|---|---|---|---|---|
| Output volume | 4,074.92 | 4,169.32 | -2 % | 10,111.10 | 10,305.65 | -2 % | 14,325.85 |
| Revenue | 3,588.73 | 3,792.13 | -5 % | 9,289.84 | 9,709.46 | -4 % | 13,713.80 |
| Order backlog | 14,572.83 | 14,060.65 | 4 % | 13,354.00 | |||
| Employees | 73,847 | 76,662 | -4 % | 76,866 |
| CHANGE | CHANGE | ||||||
|---|---|---|---|---|---|---|---|
| € MLN. | Q3/2012 | Q3/2011 | in % | 9M/2012 | 9M/2011 | in % | 12M/2011 |
| EBITDA | 261.18 | 280.93 | -7 % | 277.32 | 478.11 | -42 % | 746.33 |
| EBITDA margin % of revenue | 7.3 % | 7.4 % | 3.0 % | 4.9 % | 5.4 % | ||
| EBIT | 168.42 | 190.96 | -12 % | 1.71 | 207.62 | -99 % | 334.78 |
| EBIT margin % of revenue | 4.7 % | 5.0 % | 0.0 % | 2.1 % | 2.4 % | ||
| Profit before taxes | 153.76 | 189.84 | -19 % | -43.62 | 202.38 | n.m. | 343.33 |
| Net income | 114.45 | 136.30 | -16 % | -42.22 | 145.11 | n.m. | 239.29 |
| Earnings per share | 0.86 | 1.11 | -22 % | -0.66 | 0.99 | n.m. | 1.75 |
| Cash-flow from operating activities | 17.28 | 131.53 | -87 % | -310.12 | -160.65 | -93 % | 501.15 |
| ROCE in % | 2.6 % | 3.2 % | 0.5 % | 4.0 % | 6.3 % | ||
| Investments in fixed assets | 119.70 | 100.82 | 19 % | 335.44 | 347.60 | -3 % | 477.15 |
| Net income after minorities | 89.35 | 123.16 | -27 % | -68.92 | 112.22 | n.m. | 195.00 |
| Net income after minorities margin % of revenue | 2.5 % | 3.2 % | -0.7 % | 1.2 % | 1.4 % |
| € MLN. | 30.9.2012 | 31.12.2011 | CHANGE in % |
|---|---|---|---|
| Equity | 3,059.49 | 3,149.84 | -3 % |
| Equity Ratio in % | 29.3 % | 30.3 % | |
| Net Debt | 538.37 | -267.81 | n.m. |
| Gearing Ratio in % | 17.6 % | -8.5 % | |
| Capital Employed | 5,221.37 | 5,336.45 | -2 % |
| Balance sheet total | 10,455.45 | 10,386.05 | 1 % |
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
Conditions in the construction sector are becoming more difficult than we have been accustomed to in recent years – a fact we already made clear after our half-year results. Three months later, my management board colleagues and I are determined to remain committed to the target of a more or less unchanged output volume compared to that of the 2011 financial year. We believe the forecasted goal of earnings before interest and taxes of about € 200 million to be extraordinarily ambitious, though. The fourth quarter will be decisive – particularly as far as the transportation infrastructures sector, the construction materials business and the markets of Eastern Europe are concerned.
We are currently working on updating the forecast for the future development, which, given the dynamic situation in the construction business, is proving to be quite a challenging task. At the same time, our Task Force 2013ff is driving forward its analyses. We plan to provide you with our updated corporate forecasts in February 2013, as well as with details on how we want to maintain our competitive advantage in the European construction sector.
Your
Hans Peter Haselsteiner
Hans Peter Haselsteiner CEO
STRABAG SE won a new tunnelling project at the world's largest copper mine in Chuquicamata in the Chilean desert. The tunnellers from STRABAG, together with STRABAG's subsidiary Züblin Chile and a local partner, will build several tunnels to improve the infrastructure of the mine. The contract is worth about € 100 million and will be executed over a period of three years.
Based on new information, the Management Board of STRABAG SE expects that the earnings before interest and taxes (EBIT) target for 2012 of € 300 million, which had been indicated as being "more than ambitious", could be reached only by about two thirds. Reasons are, among others: the delays of public authorities in Central and Eastern Europe in dealing with claims, especially in Poland, the cautious valuation of some construction projects and the ruinous price war in the raw materials business.
The City of Hamburg, Germany, has commissioned HEOS Berufsschulen Hamburg GmbH – a project company partly owned by STRABAG Real Estate GmbH specifically established for this purpose – with the planning, new construction, renovation and operation of 15 selected vocational colleges. The € 700 million project will be implemented in public-private partnership (PPP) over a period of 30 years including the five-year construction and renovation phase.
The Urban Municipality of Ljubljana, Slovenia, awarded STRABAG with a € 112 million contract for the RCERO Ljubljana – a solid waste treatment plant comprising biogas generation out of organic waste, production of refuse derived fuel and recovery of recyclables. The biogas plant with the patented STRABAG LARAN® Plug Flow Digester will be one of the most modern of its kind in Europe.
The Chilean tunnelling division of STRABAG SE signed a design and build contract for the majoritiy of the tunnelling and civil works of the Alto Maipo Hydroelectrical Power Plant. The contract is one of the biggest private construction contracts in South America. The client is a subsidiary of the Chilean-based AES Gener and the US-based AES Corporation. The complete contract consists of tunnels and shafts with a total length of 46.5 km. The design and construction period will last for about four and a half years.
While the share price of STRABAG SE had shown favourable development at the beginning of the year, reaching its year-to-date high of € 23.50 on 17 February 2012, it has registered a steady decline since April. In the third quarter, the share price exhibited a volatile sideways movement. Shares traded at their year-to-date low of € 17.20 on 31 August 2012, although they did exhibit a slight upward trend in the weeks that followed. STRABAG SE shares closed the first nine months of 2012 at € 18.85 – this corresponds to a decline of 15 %. By way of comparison: The Austrian benchmark index ATX registered clear growth of 10 %; the STOXX Europe 600 Construction & Materials managed to gain 7 %.
Despite a restrained second quarter, the international stock markets made a strong showing over the nine-month period: The German DAX index led the winner's list with a plus of 22 %, followed by New York's Dow Jones Industrials with an increase of 10 %. Europe's Euro Stoxx 50 grew by 6 %, Japan's Nikkei Index by 5 %.
The cumulative trade volume of STRABAG SE shares on the Vienna Stock Exchange in the first nine months of 2012 amounted to € 206 million1), with an average trade volume per day of 54,8851) shares. The weight of the shares in the ATX was 1.35 %. The share buyback programme, which was extended until July 2013 by resolution from the 8th Annual General Meeting on 15 June 2012, affected the free float of STRABAG SE as follows: By 30 September 2012, the company had bought back 10,498,740 shares, or 9.21 % of the share capital, which helped to boost the share price on the one hand, but also reduced the free float to 13.79 %. By end of September, the company has spent € 219.88 million on the buyback programme.
Shares of STRABAG are currently under observation by ten international banks. The analysts calculated an average share price target of € 17. Detailed analyses and recommendations are available on the STRABAG SE website at www.strabag.com / Investor Relations / Share / Research & Analysts
| STRA BAG SE share |
9m /12 |
|
|---|---|---|
| Market capitalisation on 28.9.2012 | € million | 1,951 |
| Closing price on 28.9.2012 | € | 18.85 |
| Year's maximum on 17.2.2012 | € | 23.50 |
| Year's minimum on 31.8.2012 | € | 17.20 |
| Performance nine months 2012 | % | -15 |
| Outstanding bearer shares on 28.9.2012 (absolute) | shares | 103,503,260 |
| Outstanding bearer shares nine months 2012 (weighted) | shares | 104,365,968 |
| Weight in ATX on 28.9.2012 | % | 1.35 |
| Volume traded nine months 2012 | € million1) | 206 |
| Average trade volume per day | shares1) | 54,885 |
| % of total equity volume traded on Vienna Stock Exchange | % | 0.74 |
The STRABAG Group's output volume in the first nine months of 2012 – as in the first half of the year – fell slightly by 2 % to € 10,111.10 million. The largest reduction was registered in Poland due to the end of the construction boom in that country. Declines in the Czech Republic and in Switzerland were accompanied by increases in Germany and in Romania.
The consolidated group revenue in the first nine months of the ongoing financial year amounted to € 9,289.84 million, down 4 % relative to the previous year. This brings the ratio of revenue to output volume to 92 %. In the third quarter, a decline of the revenue was registered by 5 % to € 3,588.73 million.
The order backlog reached € 14,572.83 million at the end of the third quarter 2012, a 4 % plus over the end of September the year before. While the high order backlog of the previous year from the large infrastructure projects in Poland was continuously worked off and transformed into output, STRABAG was awarded several new large projects at the beginning of 2012: The Pedemontana Lombarda project to build a bypass around the city of Milan, Italy, added about € 1 billion to the STRABAG order books; in Germany, STRABAG subsidiaries were awarded several important building construction projects as well as a public-private partnership contract.
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.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) was down significantly from € 478.11 million to € 277.32 million in the first nine months of 2012. This is due to several factors. First of all, there were some non-recurring factors: The other operating expenses include, among other things, damage compensation payments in the amount of € 43 million related to the ruling by an arbitral tribunal regarding the failed acquisition of the Cemex activities in Hungary and Austria – a ruling which STRABAG has appealed – as well as noteworthy transfers of losses by consortia. Also missing was that revenue which should have covered the costs of work already performed in Central and Eastern European countries – above all in Poland –, but whose processing by the local public-sector clients has been proceeding at only a slow pace.
The depreciation and amortisation rose slightly by just 2 % to € 275.61 million. The earnings before interest and taxes (EBIT) reached € 1.71 million, thus passing the break-even point after nine months. The EBIT at the end of nine months last year had stood at € 207.62 million.
At € -45.32 million, the interest income was significantly more negative than in the same period the previous year (€ -5.25 million) as this figure contained currency exchange rate losses in the amount of € -28.04 million compared to exchange rate gains of € 23.71 million in the first nine months of 2011. This led to a pre-tax result of € -43.62 million, after € 202.38 million the year before. Accordingly, the income tax was in positive territory with € 1.40 million and thus provided some relief so that the earnings after taxes stood at € -42.22 million versus € 145.11 million the previous year. The third-party shareholders enjoyed earnings of € 26.70 million, following a share of € 32.89 million during the previous year, resulting in a net income after minorities of € -68.92 million.
Due to the ongoing share buyback programme, the number of weighted outstanding shares was down in the first nine months of 2012 from 113,105,289 to 104,365,968. The result per share thus amounted to € -0.66 compared to € 0.99 after the first three quarters of the previous year.
At € 10,455.45 million, the balance sheet total was only slightly higher in comparison to the end of 2011. Worth mentioning are the seasonally higher current trade receivables, with simultaneous reduction of cash and cash equivalents, as well as the growth of inventories in connection with project developments in Germany and in the field of offshore wind. The current receivables from concession arrangements fell significantly following completion of a motorway project in Denmark.
The equity ratio fell from 30.3 % at the end of 2011 to 29.3 %, which can be explained in part by the loss after nine months and in part by the progress of the buyback of own shares. Instead of a net cash position, as was the case at year's end and after the first quarter, the seasonal working capital increase and the capital expenditures led to net debt in the amount of € 538.37 million.
The cash-flow from earnings was down by more than one half to € 155.43 million. This earnings reduction was reflected in a negative cash-flow from operating activities of € -310.12 million, even though lower growth of current trade receivables was registered, particularly thanks to the aforementioned completion of the large Danish project.
In the previous year, the investment in a cement company had still marked the cash-flow from investing activities. The absence of such an investment in this year's period and the caution with enterprise acquisitions resulted in a decline in the cash-flow from investing activities by around one third from € -474.76 million to € -321.38 million. The cash-flow from financing activities was shaped by a significant repayment of bank borrowings, which, however, was nearly compensated by an increase of the funds from the bonded loan and from the bond. As a result of the dividend and the buyback of own shares, the cash-flow from financing activities still moved into negative territory from € 28.47 million to € -128.12 million.
In addition to the necessary maintenance expenditures, which have so far accounted for about 30 % of the total investments in property, plant and equipment, STRABAG invested significantly in equipment for waterway construction, including a ship, in the first nine months of 2012. Another focus was on increasing the level of self-sufficiency with construction materials and on the German market in general as well as on expansion expenditures in equipment for large construction sites in the tunnelling sector in Austria and for the international business. The expenditures also include € 335.44 million for the purchase of property, plant and equipment and intangible assets, € 23.26 million for enterprise acquisitions and € 30.02 million for the purchase of financial assets.
The somewhat lower output volume resulted in a reduction of the workforce by 4 % to 73,847 employees. Most of this reduction can be explained by the completion of large-scale projects, for example in Poland or in the Middle East. In many other markets, workforce reductions were necessary due to cyclical factors in the construction economy.
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 2011 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.
The management of STRABAG SE remains committed to its target of attaining a more or less unchanged output volume compared to that of the 2011 financial year. STRABAG believes the forecasted goal of earnings before interest and taxes of about € 200 million to be extraordinarily ambitious, though. The fourth quarter will be crucial – particularly as far as the transportation infrastructures sector, the construction materials business and the markets of Eastern Europe are concerned.
| CHANGE | CHANGE | |||||
|---|---|---|---|---|---|---|
| € MLN. | q3/2012 | q3/2011 | in % | 9M/2012 | 9M/2011 | in % |
| Output volume | 1,842.14 | 1,898.30 | -3% | 4,549.53 | 4,613.14 | -1% |
| Revenue | 1,604.23 | 1,632.08 | -2% | 4,003.86 | 4,154.25 | -4% |
| Order backlog | 5,429.36 | 5,568.71 | -3% | |||
| EBIT | 30.86 | 76.88 | -60% | -107.81 | 76.16 | n.m. |
| EBIT margin as a % of revenue | 1.9% | 4.7% | -2.7% | 1.8% | ||
| Employees | 25.079 | 25.794 | -3% |
With the third quarter of 2012, STRABAG began reporting its segments in a new composition. The segment North + West comprises mainly the markets of Germany, Poland, Benelux, Scandinavia, Ground and Hydraulic Engineering and Offshore Wind.
With € 4,549.53 million, the segment North + West exhibited a nearly stable output volume in the first nine months of the 2012 financial year (-1 % in a year-on-year comparison). The good demand in the German building construction and civil engineering business, as well as the expansion in northern Europe, compensated for the significant decline in Poland that followed the end of the construction boom in that country.
The revenue for the segment was down 4 % after nine months and 2 % in the third quarter. The earnings before interest and taxes (EBIT), however, moved from positive territory deep into the negative. While satisfactory earnings contributions could still be reported from Poland and Germany during the same period the previous year, losses in large projects in hydraulic engineering, the tense price situation affecting the asphalt mixing plants in Germany, and provisions for expected losses in Poland have been a burden on the segment in the past few months. Additionally, public-sector clients in Poland are slow to deal with contract supplements – if they deal with them at all – and can therefore not be considered in the result.
The order backlog decreased only slightly by 3 % to € 5,429.36 million. Here, too, the declines – in Poland, for example – were balanced out by Germany, with several new large contracts in building construction and civil engineering there. In the segment North + West, with € 3.50 billion, the group divisions in Germany hold an 64 % share of the order backlog. In the group as a whole, Germany contributes the greatest proportion – 32 % – to the total order backlog. In the first half of the year, STRABAG subsidiary Ed. Züblin was able to win the tender for the station building and further infrastructure measures related to the Stuttgart 21 rail project. It was also selected to build new buildings for the Hamm-Lippstadt University of Applied Sciences. Finally, the company won the nearly € 84 million contract to build the new Germany headquarters for the Thales Group in Ditzingen near Stuttgart.
As with the output volume and the order backlog, the economic situation is also reflected in the employee figures. An increase in Germany is thus countered by a significant reduction in Poland. A decline was also registered in the Americas region: Although all non-European activities are concentrated in the segment International + Special Divisions, the activities of Züblin Chile and Züblin Ground Engineering globally are represented in the segment North + West.
The outlook by country: STRABAG continues to see the employment situation in the German building construction and civil engineering business at a high level with simultaneously stable subcontractor prices. STRABAG should be able to start 2013 here with an order backlog above 70 % of the expected output volume. The situation in the transportation infrastructures business is more difficult: Only few large projects are being tendered, as a result of which the price level remains extremely tense due to the great number of SMEs taking part in the competition. For the 2012 full year, STRABAG expects a slightly reduced output volume in the German transportation infrastructures business compared to the 2011 figures.
A burden in Germany is the business with asphalt mixing plants. It remains difficult to sell asphalt at a sufficiently high price everywhere in order to balance out the bitumen price hikes of the past.
In Poland, business is being hindered by price battles, delays involving the acceptance of unforeseen additional costs by public-sector clients, and the risk of insolvent subcontractors. STRABAG does not expect larger contract awards from the public sector until the turn of the year 2013/2014. Alternative financing models such as public-private partnerships or finance-and-build contracts could be an opportunity for the construction industry. Important aspects of such tenders, besides the technical demands, include the capital and financial position as well as the creditworthiness of the contractor – a competitive advantage for STRABAG.
In Sweden, the market is expected to shrink slightly in 2012. Still, the housing market for project developments is booming in Stockholm, which, according to forecasts by STRABAG, will last for several more years. In the Stockholm, Gothenburg and Helsingborg/Malmö regions, there is high demand for new commercial real estate, hotels and shopping centres. The situation is expected to remain unchanged in the field of infrastructure and tunnelling, with stable public-sector financing contributing significantly to the positive outlook. STRABAG sees a growing market for infrastructure projects in Stockholm and eastern Sweden. A high number of large projects will enter the realisation phase in the years 2013–2017, driving expectations of an overall long-term positive market environment. High demand exists in Finland, where STRABAG is already present with a tunnelling project. Meanwhile, 2012 has also seen unexpectedly high demand for medium-sized infrastructure projects in Latvia. STRABAG
profited from this development and for 2013 expects a continued good market development for the stabilisation of its road construction-focused revenues in this country.
| € MLN. | q3/2012 | q3/2011 | CHANGE in % |
9M/2012 | 9M/2011 | CHANGE in % |
|---|---|---|---|---|---|---|
| Output volume | 1,493.90 | 1,458.04 | 2% | 3,413.83 | 3,472.41 | -2% |
| Revenue | 1,453.48 | 1,327.16 | 10% | 3,355.25 | 3,344.55 | 0% |
| Order backlog | 4,897.19 | 5,116.77 | -4% | |||
| EBIT | 109.77 | 77.35 | 42% | 31.08 | 33.52 | -7% |
| EBIT margin as a % of revenue | 7.6% | 5.8% | 0.9% | 1.0% | ||
| Employees | 22,571 | 23,059 | -2% |
With the third quarter of 2012, STRABAG began reporting its segments in a new composition. The segment South + East comprises mainly the markets of Austria, Switzerland, Hungary, Czech Republic, Slovakia, Adriatic, Rest of Europe, Russia and Neighbouring Countries, and Railway Structures.
The segment South + East generated an output volume of € 3,413.83 million in the first nine months of the 2012 financial year. This is just slightly, specifically 2 %, lower than in the same period of the previous year. The result of working off several large contracts in the transportation infrastructures business in Romania more or less balanced out the declines in the Czech Republic and in Switzerland.
Due to a 10 % increase in revenue in the third quarter, driven by a building construction project in Austria, the revenue after nine months remained more or less unchanged at € 3,355.25 million. The nine-month earnings before interest and taxes (EBIT) fell only slightly from € 33.52 million to € 31.08 million, though an increase of 42 % was registered in the third quarter.
The employee figures exhibited a similar situation as the output volume: growth in Romania, with a reduction of the employee levels in nearly all other markets. In total, the workforce fell by 2 % to 22,571 employees.
The order backlog was down by 4 % to € 4,897.19 million. A country-by-country comparison reveals quite a differentiated situation: Despite the large order for the extension of the U1 underground line in Vienna, the order backlog in Austria fell slightly due to a significant reluctance on the part of public-sector clients, in particular in the federal states of the country's south. The order backlog was also burdened in part by contract cancellations in the RANC region (Russia and neighbouring countries). Here, strategic changes are on the agenda, with activities gradually shifting from building construction in the major cities to industrial projects in the regions. STRABAG is also preparing for market entry in Turkmenistan and Kazakhstan.
In Hungary and Slovenia, on the other hand, new projects helped to enlarge the order backlog. In Ljubljana, Slovenia, STRABAG was commissioned to build a waste treatment facility for € 112 million, among other things to produce biogas from organic waste.
Nearly all markets are characterised by a decline in the number of public-sector orders and a correspondingly higher level of competition and price pressure, resulting in a dampened outlook for the segment. Austria is one of only a few markets with a stable positive trend, even if only in the building construction business. The existing order backlog in Austria indicates that a similarly high output can be expected in 2013 as in 2011 and 2012. The stagnating to declining market for transportation infrastructures, on the other hand, is a hotly contested one.
Several large motorway projects are currently in the tendering phase on the Czech transportation infrastructures market. However, the price competition from the previous lack of public-sector orders has resulted in an aggressive price policy in the sector and to correspondingly lower margins. STRABAG does not expect any significant improvement here in the coming year. A slight recovery can be observed in the field of building construction in the Czech Republic and in Slovakia, although some competitors are calculating bids that are only just on the border of profitability.
The markets in Eastern and especially in South-East Europe are also dominated by not very attractive conditions: The construction industry in several countries has shown itself to be more than sluggish, public-sector clients have been keeping investments low for some time, and corporate bankruptcies have led to an increased risk in the hiring of subcontractors. In Romania, for example, no noteworthy tenders and awards can be expected this year due to the upcoming elections in December. In Croatia, the construction sector remains stagnant at a very low level – although the situation is expected to improve by the summer of 2013.
Besides restructuring measures in the Adriatic region, STRABAG is therefore bidding increasingly in Central and Eastern Europe particularly in specialty fields such as environmental technology in Romania or railway construction – e.g. in Poland or in Hungary. Contrary to expectations, however, this latter niche failed to bring any positive impulses: Despite smaller and medium-sized successes in contract acquisition, for example with the Gyoma-Békéscsaba project in Hungary, it remains difficult to achieve a profitable use of equipment capacities.
| € MLN. | q3/2012 | q3/2011 | CHANGE in % |
9M/2012 | 9M/2011 | CHANGE in % |
|---|---|---|---|---|---|---|
| Output volume | 711.67 | 765.10 | -7% | 2,055.48 | 2,105.51 | -2% |
| Revenue | 519.89 | 824.97 | -37% | 1,907.08 | 2,187.09 | -13% |
| Order backlog | 4,236.64 | 3,363.17 | 26% | |||
| EBIT | 35.58 | 37.36 | -5% | 72.45 | 92.49 | -22% |
| EBIT margin as a % of revenue | 6.8% | 4.5% | 3.8% | 4.2% | ||
| Employees | 20,432 | 22,214 | -8% |
With the third quarter of 2012, STRABAG began reporting its segments in a new composition. The segment International + Special Division comprises mainly those areas of business which were previously included in the segment Special Divisions & Concessions but also the group's construction materials business.
As in the other two segments, the output volume in the segment International + Special Divisions fell only slightly, slipping 2 % to € 2,055.48 million. A country-by-country view continues to fail to show any decisive trends. Germany – specifically the field of Property & Facility Services – continues to generate the most significant portion of the output volume, followed by the Middle East.
The revenue, on the other hand, fell by 13 % to € 1,907.08 million. This can be explained through the completion of a public-private partnership project which had driven the revenue in the previous year. The earnings before interest and taxes (EBIT) in the nine months fell by 22 % to € 72.45 million due to the damage compensation expenses related to the Cemex arbitration.
Two quite distinct trends were observed regarding the workforce and the order backlog, however. The number of employees fell – among other things because of the finalisation of projects in the Middle East – by 8 % to 20,432, whereas the order backlog grew by 26 % to € 4,236.64 million. Although the on-schedule handover of larger motorway sections in Poland and in Denmark helped to reduce the order backlog, STRABAG added several new large orders to the books. One of these was in Italy: The project volume of € 1.7 billion – STRABAG's share amounts to about € 1.0 billion, that of the segment to about € 720 million – for the Milan bypass includes the construction of a 50 km section of dual-carriage motorway with two to three lanes in each direction plus 50 km of spurs and connecting routes to the existing road network. The works also include 50 cut-and-cover tunnels as well as two bored tunnels including technical facilities, bridges and an approx. 80 km bicycle trail.
In Germany, the city of Hamburg commissioned a project company with participation by STRABAG Real Estate GmbH to plan, build, modernise and operate 15 vocational schools. The project has a total value of € 700 million (STRABAG's share is 50 %) and is being carried out under a public-private partnership model. STRABAG also secured several orders internationally, including one to build a bus rapid transit system in Tanzania as well as a tunnelling project in the world's largest copper mine in Chuquicamata in the desert of Chile. Specific markets which – regardless of the type of service – are currently being worked more intensely outside of Europe are the United Arab Emirates, Qatar – STRABAG expects the construction boom in preparation for the 2022 FIFA World Cup to begin here soon –, Oman and Saudi Arabia. Because of the low price level in these regions as a result of the high degree of competition, STRABAG is successfully offering specialty construction services such as pipe jacking (a special form of tunnelling), test track construction, mining-related services or services in the field of liquefied natural gas (LNG). The local STRABAG entities have a long presence and are well-established in their respective markets, which allows them to compensate for the impact of the difficult market environment through their competitive strength.
Competition is also on the rise in the PPP Infrastructure business. For this reason, STRABAG is exploring other markets besides the core markets in Europe, such as Canada, Turkey, India, selected countries in South America, and the Middle East. Some of these countries also are of interest for tunnelling projects despite the high costs involved in bid processing. Several projects will be tendered in Austria and Germany in the short to medium term, but the prices in the home markets are in part at a ruinously low level.
By contrast, the activities of the PPP Building Construction business are concentrated on the home market of Germany. Here, the growth forces have increasingly shifted towards housing construction, which, given the clear lack of rental flats in urban agglomerations, should provide some positive impulses for public-private partnership models. 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. The efficiency advantages of having an integrated solutions approach, i.e. through the observation of the life-cycle costs, are offsetting the disadvantages in the current market environment. As a result, a positive mood can be observed in the field of real estate development among companies – together with private clients, STRABAG is currently developing several building construction projects in Germany. To cite one example, STRABAG recently began with the realisation of the Milaneo shopping centre in Stuttgart.
The construction materials business is putting pressure on the margins of the segment. Regarding concrete, the situation is burdened by delays in the tendering of large-scale projects as well as by overcapacities on the market. Growth of production in Central Europe is not expected until the spring of 2013 at the earliest. In the field of stone and gravel, ruinous price competition has become apparent in several regions, with no improvement in sight for the next one to two years. The operating result in the cement business will likely worsen once more this year versus 2011. This is due to the weather-dependent decline in volumes at the beginning of the year, a clear increase of the input prices, high rationalisation costs, and a stagnation of the sales volume given the generally weak construction economy.
| 1.7.-30.9.2012 T€ |
1.7.-30.9.2011 T€ |
1.1.-30.9.2012 T€ |
1.1.-30.9.2011 T€ |
|---|---|---|---|
| 3,588,729 | 3,792,133 | 9,289,844 | 9,709,456 |
| -26,249 | 32,293 | -19,804 | 54,444 |
| 5,484 | 4,991 | 17,501 | 44,280 |
| 36,989 | 52,406 | 141,739 | 177,564 |
| -2,361,263 | -2,583,958 | -6,210,813 | -6,660,708 |
| -823,229 | -784,489 | -2,281,229 | -2,234,138 |
| -168,216 | -240,849 | -671,282 | -625,772 |
| 3,707 | 3,264 | -2,910 | 3,746 |
| 5,223 | 5,135 | 14,270 | 9,237 |
| 261,175 | 280,926 | 277,316 | 478,109 |
| -92,752 | -89,969 | -275,608 | -270,486 |
| 168,423 | 190,957 | 1,708 | 207,623 |
| 15,230 | 32,775 | 47,544 | 67,261 |
| -29,893 | -33,895 | -92,867 | -72,507 |
| -14,663 | -1,120 | -45,323 | -5,246 |
| 153,760 | 189,837 | -43,615 | 202,377 |
| -39,309 | -53,538 | 1,395 | -57,263 |
| 114,451 | 136,299 | -42,220 | 145,114 |
| 25,106 | 13,141 | 26,698 | 32,893 |
| 89,345 | 123,158 | -68,918 | 112,221 |
| 0.86 | 1.11 | -0.66 | 0.99 |
| 1.7.-30.9.2012 T€ |
1.7.-30.9.2011 T€ |
1.1.-30.9.2012 T€ |
1.1.-30.9.2011 T€ |
|
|---|---|---|---|---|
| Net income | 114,451 | 136,299 | -42,220 | 145,114 |
| Differences arising from currency translation | 20,775 | -61,475 | 47,820 | -34,186 |
| Change in hedging reserves including interest rate swaps | -12,629 | -35,131 | -24,108 | -23,958 |
| Other income from associates | 1,384 | -409 | 4,979 | -1,340 |
| Deferred taxes on neutral change in equity | 2,481 | 6,792 | 4,746 | 4,503 |
| Other income | 12,011 | -90,223 | 33,437 | -54,981 |
| Total comprehensive income | 126,462 | 46,076 | -8,783 | 90,133 |
| Attributable to: non-controlling interests | 26,397 | 10,320 | 28,598 | 29,445 |
| Attributable to: equity holders of the parent company | 100,065 | 35,756 | -37,381 | 60,688 |
| Assets | 30.9.2012 T€ |
31.12.2011 T€ |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 538,362 | 536,510 |
| Property, plant and equipment | 2,220,259 | 2,154,238 |
| Investment property | 50,587 | 53,278 |
| Investments in associates | 405,630 | 402,279 |
| Other financial assets | 268,926 | 249,062 |
| Receivables from concession arrangements | 792,682 | 839,332 |
| Trade receivables | 94,590 | 74,082 |
| Non-financial assets | 6,958 | 3,833 |
| Other financial assets | 37,807 | 48,017 |
| Deferred taxes | 179,338 | 173,724 |
| 4,595,139 | 4,534,355 | |
| Current assets | ||
| Inventories | 1,015,763 | 818,390 |
| Receivables from concession arrangements | 22,342 | 160,743 |
| Trade receivables | 3,234,629 | 2,629,738 |
| Non-financial assets | 130,537 | 117,844 |
| Other financial assets | 485,201 | 424,747 |
| Cash and cash equivalents | 971,839 | 1,700,237 |
| 5,860,311 | 5,851,699 | |
| 10,455,450 | 10,386,054 |
| Equity and Liabilities |
30.9.2012 T€ |
31.12.2011 T€ |
|---|---|---|
| Group equity | ||
| Share capital | 114,000 | 114,000 |
| Capital reserves | 2,311,384 | 2,311,384 |
| Retained earnings | 377,637 | 513,360 |
| Non-controlling interests | 256,473 | 211,098 |
| 3,059,494 | 3,149,842 | |
| Non-current liabilities | ||
| Provisions | 941,370 | 923,976 |
| Financial liabilities1) | 1,308,019 | 1,298,653 |
| Trade payables | 58,926 | 60,424 |
| Non-financial liabilities | 1,385 | 1,481 |
| Other financial liabilities | 36,893 | 25,919 |
| Deferred taxes | 27,826 | 48,401 |
| 2,374,419 | 2,358,854 | |
| Current liabilities | ||
| Provisions | 751,528 | 790,976 |
| Financial liabilities2) | 410,486 | 433,304 |
| Trade payables | 3,165,245 | 2,910,153 |
| Non-financial liabilities | 314,641 | 360,656 |
| Other financial liabilities | 379,637 | 382,269 |
| 5,021,537 | 4,877,358 | |
| 10,455,450 | 10,386,054 |
1) Thereof T€ 607,305 concerning non-recourse liabilities from concession arrangements (31 December 2011: T€ 630,311) 2) Thereof T€ 44,368 concerning non-recourse liabilities from concession arrangements (31 December 2011: T€ 123,867)
| 1.1.-30.9.2012 | 1.1.-30.9.2011 | |
|---|---|---|
| Net income | T€ -42,220 |
T€ 145,114 |
| Deferred taxes | -67,462 | -28,094 |
| Non-cash effective results from first time consolidations | 2,491 | 0 |
| Non-cash effective results from associates | 9,078 | -2,179 |
| Depreciations/write ups | 275,489 | 273,446 |
| Changes in long term provisions | 8,105 | 12,393 |
| Gains/losses on disposal of non-current assets | -30,054 | -25,836 |
| Cash-flow from profits | 155,427 | 374,844 |
| Change in items: | ||
| Inventories | -89,239 | -78,187 |
| Trade receivables, construction contracts and consortia | -399,827 | -676,522 |
| Receivables from subsidiaries and receivables from participation companies | -28,023 | -74,155 |
| Other assets | -24,038 | -9,564 |
| Trade payables, construction contracts and consortia | 194,633 | 289,541 |
| Liabilities from subsidiaries and liabilities from participation companies | -2,815 | 43,329 |
| Other liabilities | -60,178 | -22,821 |
| Current provisions | -56,059 | -7,110 |
| Cash-flow from operating activities | -310,119 | -160,645 |
| Purchase of financial assets | -30,015 | -126,048 |
| Purchase of property, plant, equipment and intangible assets | -335,436 | -347,599 |
| Gains/losses on disposal of non-current assets | 30,054 | 25,836 |
| Disposals of non-current assets (carrying value) | 24,569 | 55,445 |
| Change in other cash clearing receivables | 12,705 | 8,728 |
| Change in scope of consolidation | -23,258 | -91,118 |
| Cash-flow from investing activities | -321,381 | -474,756 |
| Change in bank borrowings | -176,849 | 151,438 |
| Change in bonded loan | 140,000 | 0 |
| Change in bonds | 25,000 | 100,000 |
| Change in non-current provisions | 0 | 0 |
| Change in liabilities from finance leases | -3,339 | -10,931 |
| Change in other cash clearing liabilities | -6,404 | -1,641 |
| Other neutral change in equity | -2,283 | -5,898 |
| Acquisition of own shares | -34,650 | -137,265 |
| Distribution and withdrawals from partnership | -69,597 | -67,232 |
| Cash-flow from financing activities | -128,122 | 28,471 |
| Cash-flow from operating activities | -310,119 | -160,645 |
| Cash-flow from investing activities | -321,381 | -474,756 |
| Cash-flow from financing activities | -128,122 | 28,471 |
| Net change in cash and cash equivalents | -759,622 | -606,930 |
| Cash and cash equivalents at the beginning of the period | 1,700,237 | 1,952,452 |
| Change in cash and cash equivalents due to currency translation | 31,224 | -47,552 |
| Cash and cash equivalents at the end of the period | 971,839 | 1,297,970 |
| Interest paid | 50,915 | 46,419 |
| Interest received | 41,695 | 35,579 |
| Taxes paid | 114,025 | 75,901 |
| Share cap ital T€ |
Capital reser ves T€ |
Reta ined earn ings T€ |
Hedg ing reser ve T€ |
Fore ign currenc y reser ve T€ |
Group equity T€ |
Non-con troll ing interests T€ |
Total equity T€ |
|
|---|---|---|---|---|---|---|---|---|
| Balance as of 1.1.2012 | 114,000 | 2,311,384 | 656,913 | -97,816 | -45,737 | 2,938,744 | 211,098 | 3,149,842 |
| Net income | 0 | 0 | -68,918 | 0 | 0 | -68,918 | 26,698 | -42,220 |
| Differences arising from currency translation |
0 | 0 | 0 | 0 | 52,416 | 52,416 | 2,323 | 54,739 |
| Change in hedging reserves | 0 | 0 | 0 | 3,016 | 0 | 3,016 | 61 | 3,077 |
| Change of interest rate swaps | 0 | 0 | 0 | -28,557 | 0 | -28,557 | -568 | -29,125 |
| Deferred taxes on neutral change in equity |
0 | 0 | 0 | 4,662 | 0 | 4,662 | 84 | 4,746 |
| Total comprehensive income |
0 | 0 | -68,918 | -20,879 | 52,416 | -37,381 | 28,598 | -8,783 |
| Transactions concerning non-controlling interests |
0 | 0 | -1,200 | 0 | 0 | -1,200 | 23,882 | 22,682 |
| Own shares | 0 | 0 | -34,650 | 0 | 0 | -34,650 | 0 | -34,650 |
| Distribution of dividends1) | 0 | 0 | -62,492 | 0 | 0 | -62,492 | -7,105 | -69,597 |
| Balance as of 30.9.2012 | 114,000 | 2,311,384 | 489,653 | -118,695 | 6,679 | 2,803,021 | 256,473 | 3,059,494 |
| Share cap ital T€ |
Capital reser ves T€ |
Reta ined earn ings T€ |
Hedg ing reser ve T€ |
Fore ign currenc y reser ve T€ |
Group equity T€ |
Non-con troll ing 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 |
| Differences arising from currency translation |
0 | 0 | 0 | 0 | -31,287 | -31,287 | -2,987 | -34,274 |
| Change in hedging reserves | 0 | 0 | 0 | 779 | 0 | 779 | 33 | 812 |
| Change of interest rate swaps | 0 | 0 | 0 | -25,429 | 0 | -25,429 | -593 | -26,022 |
| Deferred taxes on neutral change in equity |
0 | 0 | 0 | 4,404 | 0 | 4,404 | 99 | 4,503 |
| Total comprehensive income |
0 | 0 | 112,221 | -20,246 | -31,287 | 60,688 | 29,445 | 90,133 |
| Transactions concerning non-controlling 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 dividends2) | 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 |
1) The total dividend payment of T€ 62,492 corresponds to a dividend per share of € 0.60 based on 104,153,000 shares. 2) The total dividend payment of T€ 62,700 corresponds to a dividend per share of € 0.55 based on 114,000,000 shares.
The consolidated interim financial statements of STRABAG SE, based in Villach, Austria, with reporting date 30 September 2012 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 2011.
The consolidated financial statements of the group as at and for the year ended 31 December 2011 are available at www.strabag.com.
The following amended or new accounting standards are effective for annual periods beginning on or after 1 January 2012:
| Appl icat ion for financ ial years which beg in on or after (accord ing to IASB) |
Appl icat ion for financ ial years which beg in on or after (accord ing to EU endorsement ) |
|
|---|---|---|
| IFRS 7 Disclosures in the notes to the financial statements regarding the transfer of financial instruments |
1.7.2011 | 1.7.2011 |
The first-time application of the IFRS mentioned had secondary consequences on the interim consolidated financial statements for the period ending 30 September 2012.
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 2011.
Information regarding the accounting and valuation methods can be found in the annual financial statements with reporting date 31 December 2011.
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 2012 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 1-9/2012 period as follows:
| consol idat ion |
equity method | |
|---|---|---|
| Situation on 31.12.2011 | 308 | 21 |
| First-time inclusions in the reporting period | 14 | 0 |
| First-time inclusions in the reporting period due to merger/accretion | 5 | 0 |
| Merger/accretion in the reporting period | -5 | 0 |
| Situation on 30.9.2012 | 322 | 21 |
The following companies formed part of the scope of consolidation for the first time on the reporting date:
| Compan y |
direct sta ke % |
Date of acq uisition or foundat ion |
|---|---|---|
| Consolidation | ||
| Atlas Tower GmbH & Co. KG, Cologne | 100.00 | 1.1.20121) |
| Baunova AG, Dällikon | 100.00 | 21.3.2012 |
| MiTTAG s.r.o., Brünn | 100.00 | 1.1.20121) |
| Northern Energy GAIA I. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy GAIA II. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy GAIA III. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy GAIA IV. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy GAIA V. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy Seastorm I. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy Seastorm II. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy SeaWind III. GmbH, Aurich | 100.00 | 10.1.2012 |
| Northern Energy SeaWind IV. GmbH, Aurich | 100.00 | 10.1.2012 |
| STRABAG Holding GmbH, Vienna | 100.00 | 27.7.2012 |
| Zweite Nordsee-Offshore-Holding GmbH, Pressbaum | 51.00 | 10.1.2012 |
| Merger/Accretion2) | ||
| Belagswerk Sternenfeld GmbH, Basel | 100.00 | 1.1.2012 |
| Frey & Götschi AG, Affoltern am Albis | 100.00 | 1.1.2012 |
| Ing. Siegl Installationsgesellschaft m.b.H., Vienna | 100.00 | 1.1.2012 |
| Ucka Asfalt d.o.o., Zagreb | 100.00 | 1.1.2012 |
| ZIPP GECA, s.r.o., Geca | 100.00 | 1.1.2012 |
Effective 21 March 2012, STRABAG acquired 51 % of the Swiss construction company Baunova AG, Dällikon. The company has about 100 employees and generates annual revenues of approximately CHF 60 million. The acquisition serves to further expand the market presence in the building construction segment in Switzerland. Due to a put option by the minority shareholders, the company has already been 100 % fully consolidated and a liability was recognised in the amount of the estimated assignment price.
STRABAG acquired 51 % of Zweite Nordsee-Offshore-Holding GmbH, Pressbaum, effective 10 January 2012. The holding company holds several project companies which develop, build and operate offshore wind turbines in the North Sea. With the acquisition, STRABAG expands its existing competence as a wind turbine builder.
The purchase price is preliminary allocated to assets and liabilities as follows:
| Acquisitions T€ |
|
|---|---|
| Acquired assets and liabilities | |
| Goodwill | 2,234 |
| Other non-current assets | 7,493 |
| Current assets | 120,033 |
| Increase in non controlling interest | -24,964 |
| Non-current liabilities | -26,602 |
| Current liabilities | -47,745 |
| Purchase price | 30,449 |
| Less non-cash-effective purchase price component | -3,802 |
| Acquired cash and cash equivalents | -3,389 |
| Net cash outflow from the acquisition | 23,258 |
Assuming a fictitious initial consolidation on 1 January 2012 for all acquisitions in the reporting period, the consolidated revenue would amount to T€ 9,292,290.
All companies which were consolidated for the first time in the reporting period contributed T€ 13,895 to revenue and T€ -5,863 to profit.
acquisition of the company occurred before 1 January 2012. 2) The companies listed under "Merger/Accretion" were merged with/accrued on already fully consolidated companies and as such are at once represented as additions to and removals from the scope of consolidation.
1) Due to its increased business volume, the company was included in the scope of consolidation of the group for the first time effective 1 January 2012. The foundation/
As of 30 September 2012, the following companies were no longer included in the scope of consolidation:
| Merger/Accretion1) | |
|---|---|
| Belagswerk Sternenfeld GmbH, Basel | Merger |
| Frey & Götschi AG, Affoltern am Albis | Merger |
| Ing. Siegl Installationsgesellschaft m.b.H., Vienna | Merger |
| Ucka Asfalt d.o.o., Zagreb | Merger |
| ZIPP GECA s.r.o., Geca | Merger |
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 2012 as were used for the consolidated annual financial statements with reporting date 31 December 2011. Details regarding the methods of consolidation and principles of currency translation are available in the 2011 annual report.
1) The companies listed under "Merger/Accretion" were merged with already fully consolidated companies or, as a result of accretion, already formed part of fully consolidated companies.
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.-30.9.2012 T€ |
1.1.-30.9.2011 T€ |
|
|---|---|---|
| Interest income | 53,146 | 55,069 |
| Interest expense | -27,544 | -28,095 |
| Total | 25,602 | 26,974 |
The other operating expenses include damage compensation expenses in the amount of € 43 million related to the arbitration with Cemex. The arbitral tribunal ruled that the withdrawal from the contract to buy the Cemex activities in Hungary and Austria was unlawful. STRABAG has already filed an appeal against this decision.
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 1-9/2012, a total goodwill from capital consolidation on the basis of the preliminary purchase price allocations in the amount of T€ 719 was capitalised and no impairments were made.
In 1-9/2012, tangible and intangible assets in the amount of T€ 335,436 (1-9/2011: T€ 347,599) were acquired.
In the same period, tangible and intangible assets with a book value of T€ 35,043 were sold (1-9/2011: T€ 26,777).
On the reporting date, there were € 114 million (30 September 2011: € 118 million) in contractual commitments for the acquisition of property, plant and equipment which were not considered in the interim financial statements.
STRABAG has a 100 % interest in the Hungarian M5 Motorway Concession Company AKA Alföld Koncessizios Autopalya Zrt., Budapest (AKA).
In the concession agreement with the Hungarian state, AKA committed to develop, plan, finance and build and operate the M5 motorway. The motorway itself is the property of the state; all vehicles and equipment necessary for motorway operation are to be transferred to the state free of charge following the end of the concession period.
In exchange, AKA will regularly receive an availability fee, independent of transit volume, from the Hungarian state for making the motorway available to the public. AKA bears the operator's risk of motorway closure and non-compliance of contractually agreed roadway criteria.
The route totals 156.5 km and was built in three phases. The concession period runs until 2031. A one-time extension for up to 17.5 years is possible.
All services provided under this concession contract are accounted for under the separate balance sheet item "Receivables from concession arrangements". The receivables are carried at the present value of the payment to be made by the state. The annual accumulation amount is recognised in "Other operating income".
A part of the availability fee consists of interest adjustment payments of the Hungarian state. As a result, the state bears the interest risk from the financing of AKA. These interest adjustment payments represent an embedded hedging transaction which is measured separately in accordance with IAS 39.11. Presentation is made as a cash flow hedge; as a result, changes in the fair value of the interest rate swap are recognised directly in equity.
The market value of the interest rate swap in the amount of T€ -56,948 (31 December 2011: T€ -27,217) is also recognised as longterm receivables from concession arrangements.
Recognisable receivables from concession arrangements are offset by non-recourse financing in the amount of T€ 651,673 (31 December 2011: T€ 673,927), 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 M51 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 motorway was completed in March 2012 and was transferred to the state. The operation will then be paid for by regular payments from the state. The interim financing of the construction works included non-recourse financing in the amount of T€ 80,251 as of 31 December 2011.
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 15 June 2012:
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 12 months from 10 July 2012 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 of the 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 share-holders' 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 further authorisation of the management board to acquire own shares thus seamlessly follows the authorisation as per resolution by the Annual General Meeting of 10 June 2011.
The authorisation is to be exercised by the management board in such a way that, under consideration of the already acquired number of shares, a maximum of 11,400,000 shares is not exceeded and at no time the acquisition of own shares exceeds the 10 % limit.
The management board was authorised, with approval from the supervisory board, to issue financial instruments within the meaning of Section 174 of the Austrian Stock Corporation Act (AktG), in particular convertible bonds, income bonds, profit participation rights with a total nominal value of up to € 1,000,000,000 which may also confer subscription and/or exchange rights for the acquisition of up to 50,000,000 shares of the company and/or may be designed in such a way that they can be issued as equity, also in several tranches and in different combinations, up to five years inclusive from the day of this resolution, also indirectly by way of a guarantee for the issue of financial instruments through an associate or related entity of the company with conversion rights on shares of the company. For the servicing, the management board may use the conditional capital or own shares. The issue amount and issue conditions, as well as the possible exclusion of the shareholders' subscription rights for the issued financial instruments, are to be determined by the management board with the approval of the supervisory board.
Also approved was a conditional increase of the share capital of the company pursuant to Section 159 Paragraph 2 No. 1 of the Austrian Stock Corporation Act (AktG) by up to € 50,000,000 through the issue of up to 50,000,000 new bearer shares with no face value (no-par shares) for issue to creditors of financial instruments within the meaning of the Annual General Meeting resolution of 15 June 2012, provided the creditors of financial instruments exercise their subscription and/or exchange rights for shares of the company. The issue amount and the exchange ratio are to be determined based on recognised actuarial methods and the price of the shares of the Company in a recognised pricing procedure. The newly issued shares of the conditional capital increase carry a dividend entitlement corresponding to that of the shares traded on the stock market at the time of the issue. The management board is authorised, with the approval of the supervisory board, to establish the further details of the implementation of the conditional capital increase. The supervisory board is authorised to pass resolution on any amendments to the Articles of Association resulting from the issue of shares within the scope of the conditional capital.
The changes in equity are shown in the statement of changes in equity.
The company has accepted the following guarantees:
| 30.9.2012 T€ |
31.12.2011 T€ |
|
|---|---|---|
| Guarantees without financial guarantees | 1,988 | 1,988 |
Furthermore, there is a derived credit risk arising from the financial guarantee contracts (guarantees issued) of T€ 27,620 (31 December 2011: T€ 45,541).
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 (Management Approach).
STRABAG restructured its segments effective 1 July 2012. The operating segments Building Construction & Civil Engineering, Transportation Infrastructures and Special Division & Concessions have been replaced by the operating segments "North + West", "South + East" and "International + Special Divisions". The segment defined as "Other" remains unchanged.
The segment "North + West" bundles the construction activities in Germany, Poland, Benelux and Scandinavia as well the ground engineering, hydraulic engineering and offshore wind activities. The segment "South + East" comprises the railway structures activities as well as the construction activities in Austria, Switzerland, Hungary, Czech Republic, Slovakia, Adriatic, Rest of Europe and Russia and neighbouring countries. The segment "International + Special Divisions" includes the international construction activities, tunnelling, services, real estate development and infrastructure development as well as the construction materials business.
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.
| Reconc ilia |
||||||
|---|---|---|---|---|---|---|
| Internat ional |
tion to IFRS |
|||||
| north + west |
south + east | + Spec ial Divisions |
Other | Financ ial Statements |
Total | |
| 1.7.-30.9.2012 | 1.7.-30.9.2012 | 1.7.-30.9.2012 | 1.7.-30.9.2012 | 1.7.-30.9.2012 | 1.7.-30.9.2012 | |
| T€ | T€ | T€ | T€ | T€ | T€ | |
| Output Volume | 1,842,138 | 1,493,905 | 711,675 | 27,196 | 4,074,914 | |
| Revenue | 1,604,229 | 1,453,487 | 519,888 | 11,125 | 0 | 3,588,729 |
| Inter-segment revenue | 25,393 | 4,507 | 16,676 | 271,854 | ||
| EBIT | 30,861 | 109,772 | 35,580 | -837 | -6,953 | 168,423 |
| Interest and similar income | 0 | 0 | 0 | 15,230 | 0 | 15,230 |
| Interest expense and similar charges | 0 | 0 | 0 | -29,893 | 0 | -29,893 |
| Profit before tax | 30,861 | 109,772 | 35,580 | -15,500 | -6,953 | 153,760 |
| Internat ional |
Reconc ilia tion to IFRS |
|||||
|---|---|---|---|---|---|---|
| north + west 1.7.-30.9.2011 T€ |
south + east 1.7.-30.9.2011 T€ |
+ Spec ial Divisions 1.7.-30.9.2011 T€ |
Other 1.7.-30.9.2011 T€ |
Financ ial Statements 1.7.-30.9.2011 T€ |
Total 1.7.-30.9.2011 T€ |
|
| Output Volume | 1,898,296 | 1,458,040 | 765,095 | 47,886 | 4,169,317 | |
| Revenue | 1,632,084 | 1,327,157 | 824,971 | 7,921 | 0 | 3,792,133 |
| Inter-segment revenue | 70,552 | 9,782 | 42,540 | 261,837 | ||
| EBIT | 76,876 | 77,349 | 37,358 | 468 | -1,094 | 190,957 |
| Interest and similar income | 0 | 0 | 0 | 32,775 | 0 | 32,775 |
| Interest expense and similar charges | 0 | 0 | 0 | -33,895 | 0 | -33,895 |
| Profit before tax | 76,876 | 77,349 | 37,358 | -652 | -1,094 | 189,837 |
| north + west 1.1.-30.9.2012 |
south + east 1.1.-30.9.2012 |
Internat ional + Spec ial Divisions 1.1.-30.9.2012 |
Other 1.1.-30.9.2012 |
Reconc ilia tion to IFRS Financ ial Statements 1.1.-30.9.2012 |
Total 1.1.-30.9.2012 |
|
|---|---|---|---|---|---|---|
| T€ | T€ | T€ | T€ | T€ | T€ | |
| Output Volume | 4,549,533 | 3,413,834 | 2,055,482 | 92,250 | 10,111,099 | |
| Revenue | 4,003,857 | 3,355,252 | 1,907,079 | 23,656 | 0 | 9,289,844 |
| Inter-segment revenue | 107,471 | 18,382 | 82,637 | 704,679 | ||
| EBIT | -107,811 | 31,084 | 72,455 | -547 | 6,527 | 1,708 |
| Interest and similar income | 0 | 0 | 0 | 47,544 | 0 | 47,544 |
| Interest expense and similar charges | 0 | 0 | 0 | -92,867 | 0 | -92,867 |
| Profit before tax | -107,811 | 31,084 | 72,455 | -45,870 | 6,527 | -43,615 |
| north + west 1.1.-30.9.2011 T€ |
south + east 1.1.-30.9.2011 T€ |
Internat ional + Spec ial Divisions 1.1.-30.9.2011 T€ |
Other 1.1.-30.9.2011 T€ |
Reconc ilia tion to IFRS Financ ial Statements 1.1.-30.9.2011 T€ |
Total 1.1.-30.9.2011 T€ |
|
|---|---|---|---|---|---|---|
| Output Volume | 4,613,140 | 3,472,406 | 2,105,506 | 114,594 | 10,305,646 | |
| Revenue | 4,154,251 | 3,344,552 | 2,187,094 | 23,559 | 0 | 9,709,456 |
| Inter-segment revenue | 171,690 | 22,472 | 111,151 | 699,917 | ||
| EBIT | 76,156 | 33,517 | 92,488 | 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 | 76,156 | 33,517 | 92,488 | -4,998 | 5,214 | 202,377 |
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.-30.9.2012 T€ |
1.1.-30.9.2011 T€ |
|
|---|---|---|
| Investment income | 11,724 | 8,323 |
| Other consolidations | -5,197 | -3,109 |
| Total | 6,527 | 5,214 |
Notes on related parties may be found in the 2011 consolidated financial statements. Since 31 December 2011, 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 2012 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 2012
Dr. Hans Peter Haselsteiner Chairman of the Management Board Responsibility for Internal Service Units
Dr. Thomas Birtel Responsibility for Internal Service Units and region Russia and Neighbouring Countries (RANC)
Dr. Peter Krammer Responsibility for Segment North + West
Mag. Hannes Truntschnig Responsibility for Segment International + Special Divisions
DI Siegfried Wanker Responsibility for Segment South + East
| Interim Report January–September 2012 | 30 November 2012 |
|---|---|
| Publication | 7.30 a.m. |
| Investor and analyst telephone conference | 2.00 p.m. |
| Annual report 2012 | 30 April 2013 |
| Disclosure | 7.30 a.m. |
| Press conference | 10.00 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Interim report January-March 2013 | 29 May 2013 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Notice of Annual General Meeting | 17 May 2013 |
| Shareholding confirmation record date | 4 June 2013 |
| Annual General Meeting 2013 | 14 June 2013 |
| Start | 10.00 a.m. |
| Location – to be announced | |
| Ex-dividend date | 21 June 2013 |
| Payment date for dividend | 24 June 2013 |
| Semi-annual report 2013 | 30 August 2013 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
| Interim report January–September 2013 | 29 November 2013 |
| Disclosure | 7.30 a.m. |
| Investor and analyst conference call | 2.00 p.m. |
All times are CET/CEST. Please find the current road show schedule on the website www.strabag.com -> Investor Relations -> Company Calendar
| Maturity | Coupon | Vol ume |
ISIN | Stoc k Exchange |
|---|---|---|---|---|
| 2008–2013 | 5.75 % | € 75 million | AT0000A09H96 | Vienna |
| 2010–2015 | 4.25 % | € 100 million | AT0000A0DRJ9 | Vienna |
| 2011–2018 | 4.75 % | € 175 million | AT0000A0PHV9 | Vienna |
| 2012–2019 | 4.25 % | € 100 million | AT0000A0V7D8 | Vienna |
| Standard & Poors | BBB- | Outlook stable |
|---|---|---|
| Bloomberg: | STR AV |
|---|---|
| Reuters: | STR.VI |
| Vienna Stock Exchange: | STR |
| ISIN: | AT000000STR1 |
STRABAG SE, Donau-City-Str. 9, 1220 Vienna, Austria
☎ +43 800 880890
www.strabag.com
This interim report is also available in German. In case of discrepancy the German version prevails.
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