Interim Report January – March 2011
STRABAG SE raises outlook for 2011 and 2012 after solid Q1- Outlook for output volume 2011 increased to € 14.0 billion from € 13.5 billion; EBIT 2011 expected at € 320 million instead of € 295 million
- Output volume 2012 forecast at € 14.3 billion; EBIT 2012 at € 330 million
- Solid Q1/2011: Output volume +26% to € 2.3 billion; Quarterly earnings per share unchanged at € -1.03
Vienna, 31 May 2011
After a solid first quarter 2011, STRABAG SE, Central and Eastern Europe´s largest construction company, raises its outlook for the financial years 2011 and 2012. According to the new forecast, STRABAG expects an output volume of € 14.0 billion in 2011 (previous target: € 13.5 billion). Earnings before interest and taxes (EBIT) are forecast to increase to € 320 million, after € 295 million had been predicted. For 2012, the company had expected an output volume of € 13.7 billion and an EBIT of € 300 million, while now it reckons with an output volume of € 14.3 billion and an EBIT of € 330 million.
Hans Peter Haselsteiner, CEO of STRABAG SE, explains the reason for raising the outlook:
"The first quarter of the previous year was characterised by a very long and hard winter. This year´s weather conditions allowed us to begin building significantly earlier, which is why we are pleased to report of double-digit growth of the output volume. We also have good news on the earnings side: Last year´s EBIT is significantly positively distorted by a one-off effect in the balance sheet. Nevertheless, with € -145.38 million, EBIT in the first three months of the current financial year was not as negative as in the first quarter of 2010. After seeing the quarterly results, my management board colleagues and I are now more positive about the future than we were at the presentation of the 2010 annual financial report. We are therefore altering our outlook for the 2011 and 2012 financial years."
Output volume and revenue
STRABAG generated an output volume of € 2,309.25 million in the first quarter of 2011, which corresponds to an increase of 26 %. In the comparison period of the previous year, construction activity had been greatly restricted by unfavourable weather conditions. Growth of the construction volume was witnessed across all segments, though it was particularly strong in the Transportation Infrastructures segment. A country-level view reveals significant increases in Germany, Poland and the northern European markets. The consolidated group revenue reached € 2,210.04 million in the first three months of the 2011 financial year, compared to € 1,788.45 million the year before (+24 %).
Order backlog
The order backlog was not enough to reach the record high of the previous year´s first quarter; with € 15,176.99 million, this figure was 3 % lower on the 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. Also striking is the increase of the order backlog in Benelux as well as the reduction in Poland and in Hungary. While large infrastructure projects are continuously completed and transformed into output in the boom market of Poland, the impact of public-sector savings efforts can be seen in Hungary.
Financial performance
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.
The EBITDA (earnings before interest, taxes, depreciation and amortisation) was more strongly negative than in the first quarter of the previous year, amounting to € -59.80 million. This can be explained by the extraordinary write-up through profit or loss for Czech railway construction company Viamont DSP a.s. of € 24.60 million in the previous year reported in the result from associates. The EBITDA margin, however, changed only slightly from minus 2.6 % to minus 2.7 %.
The depreciation and amortisation fell by 18 % to € -85.58 million – in part related to a one-time goodwill impairment in the amount of € -14.00 million performed in the first quarter of the previous year related to the Viamont transaction. The EBIT therefore remained relatively stable at € -145.38 million, although for comparison purposes the previous year´s EBIT of € -149.89 million would have to be adjusted by the positive one-off effect of € 10.6 million from the Viamont transaction. The EBIT margin improved from minus 8.4 % to minus 6.6 % in the face of the rising revenue.
Financial position and cash-flows
The balance sheet total on 31 March 2011 fell short of the € 10 billion mark as expected, landing at € 9,920.34 million after € 10,382.16 million at the end of 2010. The reduction of the current assets is due to the seasonally lower current trade receivables. Current liabilities were down as well as a result of the lower trade payables, which were also affected by the winter break.
The equity ratio showed little change, settling at 31.8 % after 31.1 % on 31 December 2010. The net cash position fell significantly from € 669.04 million to € 268.90 million in response to the build-up of the working capital.
Employees
The number of employees grew by 6 % to 72,363. Nearly half of the more than 4,000 new employees had been working for Rimex, which had been active in Germany and which then was acquired by STRABAG. The significant increase in Switzerland can be explained by the first-time inclusion of the employees of two acquired companies, Brunner Erben Holding AG and Astrada AG. Workforce reductions were registered in Hungary and in the Czech Republic.