Semi-annual statement 2008
STRABAG SE: DOUBLE-DIGIT GROWTH IN THE FIRST SIX MONTHS 2008 – UPGRADED OUTLOOK- Record order backlog of € 13.7 billion – increase of 28 % over first half of 2007 – Russia’s share 15 %
- Output volume +19 % to € 5,296.8 million in first half of 2008 – EBIT seasonally negative – annual profit after minority interests enters plus to € 1.0 million
- Outlook 2008 upgraded: expected growth of construction output to +25 % – increase of EBIT by nearly +30 % – increased margins for consolidated result as well
Vienna, 29 August 2008
Construction output and Revenue
STRABAG SE was able to grow its output volume in the first half of 2008 by 19 % over the first half of the previous year to € 5,296.8 million. About 42 % or € 348 million of this increase was contributed by Central and Eastern Europe, while a plus of € 206 million came from the largest national market, Germany. The consolidation of Italy’s Adanti S. p. A. and of Swedish construction firm ODEN Anläggningsentreprenad AB in part contributed to increases in other Western European countries.
Consolidated Group revenue in the first six months of the 2008 financial year amounted to € 4,777.4 million, compared to € 4,046.7 million in the same period last year (+18 %). Revenue in the second quarter 2008 was up 17 % to € 3,014.7 million. All companies consolidated for the first time in the first half of the year contributed a total of € 101.6 million to the consolidated revenue and € 1.2 million to the consolidated profit.
Order Backlog
The order backlog at 30 June 2008 showed a plus of 28 % compared to the first half of 2007 and an increase of 27 % over the balance sheet date from the 2007 financial year. The record volume of € 13,656.8 million was due to significant increases in all segments. As was the case in the first quarter 2008, the Building Construction & Civil Engineering Segment accounts for 56 %, Transportation Infrastructures for 25 % and Special Divisions & Concessions for 18 % of the Group’s order backlog. Worth noting is the fact that Russia, with € 2,039.5 million, already has the second highest order backlog in the STRABAG Group. In this dynamic growth market with comparably high margins, the order backlog, with a plus of 135 %, more than doubled when compared with the first half of 2007.
Financial Position, Financial Performance and Cash-flows
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 negative results, which is then overcompensated by results in the second half of the year. As a result of these seasonal effects, a quarterly comparison (to Q1 2008) makes little sense. Higher business volume also results in a more pronounced effect of seasonality on the earnings development, a situation which is revealed in the results of the first half of 2008 as well.
While the EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization), with € 130.1 million, grew by 27 % over the first half of 2007, the EBIT (Earnings before Interest and Taxes), with € -28.4 million, fell 31 % more deeply into negative territory. Due to the positive net interest income, which had still been negative in the previous period last year, the pre-tax profit (EBT) was improved to € -23.4 million. The profit for the period stood at € -17.8 million, while the profit for the period after minorities left the red to reach € 1.0 million. The earnings per share stood at € 0.01.
The EBITDA, EBIT and profit for the period all posted two-digit growth rates in the second quarter 2008. With the exception of the EBIT margin, all margins remained relatively stable.
The balance sheet total increased from € 7,740.8 million on 31 December 2007 to € 9,121.7 million on 30 June 2008, above all due to the strong increase in intangible assets because of the first time consolidation of AKA Alföld Koncessizios Autopalya Zrt., Budapest. The thereby resulting increase of total assets lead to a decrease of the equity ratio from 40.0 % to 32.9 %. In the medium term, STRABAG is aiming at an equity ratio between 20 % and 25 %. The previous net cash position developed into one of net debt of € 921.6 million.
At € -346.4 million, the cash-flow from operating activities stood below the previous year’s levels of € -248.3 million. The cash-flow from investing activities was up from € -298.9 million to € -591.7 million as a result of the STRABAG Group’s acquisition and expansion activities. Due to the significantly lower level of bank borrowings in the first six months, the cash-flow from financing activities fell from € 290.9 million to € 24.9 million.
Employees
As a result of the higher construction activity and the acquisitions effected over the same period of the previous year, the workforce grew by 16 % to 66,042 persons.
Outlook
Due to the Group’s lively investment activities of the past six months, STRABAG SE is revising its outlook for the 2008 financial year. STRABAG now believes that construction output and revenues in 2008 will grow more significantly than previously expected, gaining 25 % over the 2007 financial year. With the expansion into higher-margin countries and segments, significantly higher Earnings before Interest and Taxes (EBIT) – a plus of nearly 30 % – and a slight improvement of the EBIT margin should be possible.
The order backlog of € 13.7 billion at 30 June 2008 covers more than 100 % of the planned construction output for 2008. STRABAG thus sees itself in a good position to grow its market shares in the Eastern European markets – in Croatia, the STRABAG Group is already number two on the market – and to further consolidate its position as a market leader in Germany, Austria and Hungary. STRABAG SE remains confident of being able to improve – slightly but still clearly noticeable in the results – the margins in Germany, still the Group’s largest single market, compared to last year. The expansion in Russia is on track, lending an additional boost to the Group’s earnings development.
Statement Hans Peter Haselsteiner, CEO STRABAG SE
“Despite critical voices regarding the current economic environment and the weak international stock markets, I remain convinced: STRABAG SE will keep its promises and deliver attractive results in the 2008 financial year. We are at work every day to ensure that STRABAG grows more than its peer group while increasing profitability at the same time.”
Replay of Analyst Conference Call
Today`s analyst conference call will be recorded and the replay will be available as of 29 August 2008, 4.30 p.m., until 3 September 2008, 4.30 p.m. The replay dial-in numbers are:
+49 (0) 69 7104 8870 (Germany)
+44 (0) 1212 60 48 61 (UK)
+1 (1) 866 268 1947 (US)
+43 (0) 268 2205 9238 (Austria)
+43 (0) 800 10251970 (Toll free Austria)
You will be asked for the code: 4 4 6 0, followed by the # key.