STRABAG SE Annual Report 2007
STRABAG SE reports record order backlog and boosts margins in 2007- With order backlog of € 10.7 billion at 31 December 2007, € 10 billion mark crossed for first time
- High growth of plus 13% of EBITDA margin (6.0%) and plus 9% of EBIT margin (3.2%)
Vienna, 30 April 2008 Following the enormous growth in the period from 2004 to 2006, STRABAG SE reported growth of 3.5 per cent of its output volume in the 2007 financial year. Revenues grew by 5% to € 9,878.6 million compared to the previous year. At the same time, EBITDA was up 19% to € 595.9 million and EBIT increased by 15% to € 312.4 million. The margin growth was correspondingly positive, with the EBITDA margin up 13% from 5.3% to +6.0% and the EBIT margin up 9% from +2.9% to +3.2%. STRABAG aims at growing profitability even further.
The profit per share stood at € 2.05 and the management board of STRABAG will propose a dividend of € 0.55 per share at the Annual General Meeting, which would correspond to 37% of the profit.
The remaining profit is to be used to finance further growth, specifically the continued expansion of the proprietary raw materials basis, the enlargement of the product portfolio to include construction-related services and an increased involvement in public private partnerships in important infrastructure projects. The future focus of the business activities will be on the Eastern European markets, where the GDP growth and the growth of the construction sector lie significantly above Western European levels. STRABAG already generates 31% of its output volume in the countries of Central and Eastern Europe.
STRABAG SE CEO Hans Peter Haselsteiner expects the development of the Group’s business to remain positive: “In 2008 we want to raise our output volume by 15% in order to come closer to our goal of growing to € 20 billion by the year 2012. With the latest financial results, we are confident we have created a solid foundation for further growth.”
The balance sheet total of the STRABAG Group in the 2007 financial year grew significantly from € 5,575.8 million to € 7,740.8 million, largely due to higher levels of intangible assets as well as property, plant and equipment from acquisitions and the higher cash and cash equivalents from the capital increases related to the entry of the new core shareholder Rasperia Trading Ltd. and the IPO in October 2007.
The first capital increase resulted in a cash in-flow of € 1,050 million; the second increase gave the Group a further € 893 million. The equity grew by € 2,060.5 million to € 3,096.4 million, resulting in an equity ratio of 40.0%, compared to 18.6% the previous year. The management board considers an equity ratio between 20% and 25% to be reasonable. The cash-flow from operating activities grew by 11% to € 494.0 million, due in part to the increased cash-flow from profits of 25% to € 448.8 million.
The Building Construction & Civil Engineering segment generated an output volume of € 5,417.84 million in the 2007 financial year, accounting for about 50% of STRABAG’s overall output volume. Compared to the previous year, this represents a plus of approximately 11%. The development of the output volume in the segment was particularly positive in the Middle East (+62%, € +97.7 million), Russia (+49%, € +83.8 million) and Slovakia (+45%, € +71.0 million). Overall, the Building Construction & Civil Engineering Segment posted a significant plus of its output volume in Central and Eastern Europe (+24%, € +244.1 million). Revenues stood at € 4,815.6 million, a plus of 13% over 2006. The margin was up too: the EBIT grew by 45% to € 76.6 million, and the margin was up from +1.3% to +1.6%.
The Transportation Infrastructures segment contributed € 4,616.84 million or 43% to the consolidated output volume in 2007. Compared to the previous year, the segment output volume thus remained relatively stable. The positive development in Poland (+49%, € +168.6 million) was countered by a decline in Hungary (-34%, € -178.6 million) due to the completion of several large infrastructure projects. Revenues grew by 6% to € 4,455.1 million. The EBIT reached € 185.6 million, up 24% over 2006. The EBIT margin in the Transportation Infrastructures segment grew from +3.6% to +4.2%.
The output volume in the Tunnelling & Services segment fell by -16% to € 582.08 million, which must be seen against the background of the traditionally volatile business in this area. The segment contributed 5% to the Group output volume. A large portion of the decline was seen in Germany (-23%, € -45.0 million), Switzerland (-28%, € -37.9 million) and Canada (-40%, € -32.5 million). Revenues declined more significantly than the output volume, falling 37% to € 585.0 million. The previous year’s revenues had included above-average gains from the sale of completed real estate projects; mere sales, however, produce only a relatively small output volume. The decline of the EBIT by 29% to € 48.5 million is explained by the unusually high level the previous year. The EBIT margin grew from +7.3% to auf +8.2%.
In the 2007 financial year, the Group’s order backlog topped the historical mark of € 10 billion, settling at the record high of € 10.7 billion as of 31 December 2007, a plus of 26% over 2006. The order backlog thus covered the entire output for 2007 and about 86% of the planned output for 2008. The development of the orders situation in the Russian growth market is particularly worth noting. At € 1,677.3 million, the order backlog in Russia nearly quadrupled over the previous year, placing Russia in second place after Germany in terms of order backlog.
Against the background of the high order backlog, STRABAG expects to raise its output volume and revenues in 2008 by 15% over 2007. The expansion into high-margin countries and segments should also lead to higher margins in the EBIT and profit. STRABAG SE’s long-term objective is to hold a top 3 market position in the growth markets. By 2012, the Group’s output volume is to be raised to € 20 billion through organic growth and acquisitions. In order to continue the success and reach these ambitious targets, STRABAG is boosting its human resource capacity, especially in Russia, and will expand its raw materials network.
STRABAG SE is one of Europe’s leading construction groups. With more than 60,000 employees, STRABAG posted an output volume of € 10.7 billion for the 2007 financial year. From its core markets of Austria and Germany, STRABAG is present via its numerous subsidiaries in all countries of Eastern and South-East Europe, in selected markets in Western Europe and the Arabian Peninsula, as well as in Canada, Chile and India. STRABAG’s activities span the entire construction industry (Building Construction and Civil Engineering, Transportation Infrastructures, Tunnelling) and cover the entire value-added chain in the field of construction.