STRABAG SE Annual Report 2008
STRABAG SE: Figures for the 2008 Financial year- Revenue grew by 24 % to € 12,228 million, EBITDA up by 9 %, EBIT down 14 %
- Earnings per share at € 1.38 – Management Board proposes a dividend of € 0.55 per share
- Security comes first in 2009: cash and cash equivalents of about € 1.5 billion and equity ratio of 30.5 %
Vienna, 30 April 2009 STRABAG SE exceeded its growth targets in the 2008 financial year, with organic growth and acquisitions contributing to a 28 % increase in the construction output volume to € 13,742.5 million. Activities in Central and Eastern Europe accounted for 31 % of the overall output volume, the same level as the year before. Revenue grew by 24 % to € 12,227.8 million year on year.
Despite the higher provisions, the write-downs on accounts receivables and the lower earnings from investments in associates, the earnings before interest, taxes, depreciation and amortisation (EBITDA) was up 9 % to € 647.7 million. The earnings before interest and taxes (EBIT) fell by 14 % to € 269.9 million because of higher depreciation and amortisation charges related to acquisitions and expenditures and due to extraordinary charges (thereof approx. € 25 million for impairment on goodwill). This resulted in an EBIT margin of 2.2 %, compared to 3.2 % the year before.
In the 2008 financial year, STRABAG SE made a voluntary public takeover offer to the remaining shareholders of the German subsidiary STRABAG AG, Cologne. For this reason, the minority interest fell by 75 % to € 9.3 million, leading to a net income after minorities of € 157.0 million (-8 %). The number of weighted outstanding shares was up from 82,904,110 to 114,000,000, leading to earnings per share of € 1.38, an above average decline of 33 % compared to the net income after minorities.
The CEO of STRABAG SE, Hans Peter Haselsteiner, announced an unchanged dividend proposal compared to last year: “Despite the lower profit, my management board colleagues and I have decided to propose to the Annual General Meeting a dividend of € 0.55 per share. In absolute terms, this is the same amount as the year before, although the dividend yield would naturally be much higher. With this proposed dividend, we want to show our appreciation for our shareholders and lend support to our conviction that STRABAG – in terms of both its liquidity as well as the expected future profits – is a stable company.”
In the past year, STRABAG SE’s balance sheet total grew significantly once again, up 26 % to € 9,765.2 million. The equity ratio fell from 40.0 % to 30.5 % which is still above industry-average. The management board considers an equity ratio between 20 % and 25 % to be a realistic target in the medium term.
STRABAG SE has a total credit line for cash and surety loans in the amount of € 5.5 billion. The credit lines include cash and cash equivalents in the amount of € 1.5 billion and undrawn cash credit lines of € 0.4 billion which assure the group's liquidity needs. Nevertheless, further bond issues are planned, depending on the market situation, in order to maintain a high level of liquidity reserves in the future as well.
The cash-flow from operating activities grew significantly last year by 40 % to € 689.9 million. This growth is due in part to the increased cash-flow from profits by 19 % to € 536.1 million and a reduction of the working capital compared to 31 December 2007. In the next financial year, STRABAG wants to further pay attention to a strict working capital management.
In line with the STRABAG Group’s expansion strategy, the cash-flow from investing activities grew significantly by 63 % to € -1,046.4 million. The cash-flow from financing activities entered negative territory (€ -96.9 million), after a strongly positive figure in the 2007 financial year (the result of the two capital increases).
The Building Construction & Civil Engineering segment generated an output volume of € 5,821.8 million in the 2008 financial year, which represents organic growth of 8 % over the previous year. Growth in absolute terms was particularly high in Russia (+83 % to € 464.7 million), Slovakia (+55 % to € 352.5 million) and Germany (+5 % to € 1,975.1 million). The proportional contribution of the segment to the overall group output volume fell from 50 % to 42 % as the Transportation Infrastructures segment in particular has shown above-average growth through enterprise acquisitions. Segment revenues amounted to € 5,244.1 million, a 9 % increase over the 2007 financial year. The EBIT margin was practically unchanged at 1.5 % (2007: 1.6 %).
A number of acquisitions led to a 36 % increase in output volume in the Transportation Infrastructures segment in the 2008 financial year to € 6,274.2 million. Thanks to a number of acquisitions, revenues in the Transportation Infrastructures segment grew by 23 % to € 5,464.3 million in the year under report. Fluctuating raw materials prices and integration costs proved to be a burden on the EBIT and the EBIT margin (from 4.2 % in 2007 to 2.5 %).
While the output volume in the Special Divisions & Concessions segment was on the decline in the 2007 financial year, it showed a plus of 143 % to € 1,417.4 million in 2008, corresponding to an increase in its share of the overall group output volume from 5 % to 10 %. The segment generated revenues in the amount of € 1,483.3 million in the 2008 financial year, compared to € 585.0 million the previous year. The EBIT grew by 7 % to € 51.9 million.
In the 2008 financial year, the group order backlog passed the historic mark of € 13 billion for the first time, growing by 23 % over the previous year to reach € 13.3 billion on 31 December 2008. This figure covers 96 % of the output volume in 2008. The development of the order backlog on the growth market of Poland is particularly worth mentioning: with € 1,188.5 million, the order backlog in the country more than doubled over the previous year. In Germany, the order backlog was up by about 45 %, largely due to acquisitions. In Russia, by comparison, the group was unable to maintain the same high levels of the previous year: in this market, the order backlog fell by 17 % to € 1,399.0 million. In Hungary, the decline of about 25 % points to a future reduction of capacities.
For STRABAG, security comes first in the financial year 2009. With an equity ratio of 31 % and cash and cash equivalents of about € 1.5 billion, the company sees itself in a solid financial and liquidity position which must be further secured through a restrictive acquisitions and investment policy as well as through an active working capital management. The previous objective of raising the margins will still not be reached in 2009, despite the planned and agreed upon cost reduction and restructuring measures.