Semi-annual statement 2010
STRABAG SE’S SEMI-ANNUAL FIGURES CONFIRM UNCHANGED OUTLOOK ON FULL YEAR 2010- Again record order backlog: € 15.75 billion
- Lower output volume resulting from winter weather not fully compensated: output volume down 7 % to € 5.23 billion after first six months of 2010
- EBITDA up 14 % to € 186.22 million, EBIT less negative at € -10.36 million
- Result per share improved from € -0.21 to € -0.10 – at last year’s levels without special itemsrelating to acquisitions
- Outlook confirmed: output volume and results stable in 2010
Vienna, 31 August 2010
STRABAG SE, Central and Eastern Europe’s largest construction company, confirms its outlook on stable output volume and earnings for the full year 2010. “Once again, we can report a record order backlog. The 10 % increase over the end of June last year to € 15.8 billion this year is due not only to the boom market in Poland. We are also seeing the results of our plans to grow in Northern Europe and in non-European markets. The lower first-quarter output volume resulting from the winter weather could not be compensated for in the second quarter – at € 5.2 billion, we are 7 % below the levels after the first six months last year –, but we are well on our way to concluding the current financial year with output volume and results at the previous year’s levels. Therefore, our outlook for the full year remains unchanged”, Hans Peter Haselsteiner, CEO of STRABAG SE, commented on the figures.
Output Volume and Revenue
The unfavourable weather conditions at the beginning of the year and the completion of several large projects in the Middle East led to a 7 % reduction in the output volume to € 5,234.20 million in the first six months of 2010. Sharp drops were registered in the Building Construction & Civil Engineering and the Special Divisions & Concessions segments, while the output volume remained stable in the Transportation Infrastructures segment. The group output volume remained nearly unchanged in the second quarter of 2010, losing just 1 % to € 3,396.82 million. The picture was similar with the consolidated group revenue, which fell by 6 % to € 5,034.97 million in the first six months of 2010. In the second quarter of 2010, the revenue – and the output volume – was 1 % below the levels of the same period the year before.
Order Backlog
The order backlog reached another record high of € 15,752.01 million. This time, the growth is due not only to newly acquired large-scale projects in the Polish transportations infrastructures segment. In Slovakia, the full consolidation of railway construction subsidiary Viamont in the first quarter of 2010 had a positive effect on the order backlog. STRABAG continues to successfully pursue the strategy of expanding its market presence in the Benelux countries, Scandinavia and the non-European markets to avoid being fully exposed to the margin pressure on the core markets in Europe.
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 quarter typically has a negative effect on results, which is not yet fully compensated by the positive results in the second quarter.
Expenses for raw materials, consumables and other services remained stable in the first six months measured in terms of the revenue. The earnings before interest, taxes, depreciation and amortization (EBITDA) nevertheless gained 14 % over the last year due to the write-up through profit or loss for Czech railway construction company Viamont DSP a.s. of € 24.60 million. STRABAG increased its share in the company from 50 % to 100 %. A premium for control was considered in the purchase price for the additional 50 % interest. As synergy effects in the group may only be used after organizational measures, these synergies are not yet included in the goodwill. This resulted in a charge for goodwill impairment in the amount of € 14.00 million, which increased the depreciation and amortisation by 13 %. This results in earnings before interest and taxes (EBIT) of € -10.36 million compared to € -11.13 million in the same period last year.
A stable trend could be seen in the second quarter of 2010: while the EBITDA gained 1 % to € 232.24 million, the EBIT fell slightly by 1 % to € 139.53 million.
With € -6.75 million, the interest income in the first six months was less negative than in the same period the previous year (€ -16.57 million). While interests remained more or less unchanged, exchange rate decreases no longer had the same effect. The pre-tax result was € -17.11 million, compared to € -27.69 million in the first half of the year before. The negative earnings after taxes was reduced by 41 % to € -12.80 million. After minorities, the result is a 51 % decrease in consolidated losses to € -11.47 million and a result per share of € -0.10, compared to € -0.21 in the first half last year. Without the special items from the step acquisition of Viamont, the result per share would have been at around the previous year’s level.
Financial Position and Cash-Flows
The balance sheet total changed only slightly from € 9,613.59 million on 31 December 2009 to € 9,549.03 million. Worth mentioning in this respect is a significantly lower level of cash and cash equivalents with simultaneous growth of property, plant and equipment and trade receivables. As a result, the net cash position at the end of 2009 turned into net debt of € 134.00 million at the end of June 2010. The equity ratio remained relatively stable at 31.3 % after 32.2 %.
The cash-flow from profits stood at € 98.00 million, just 5 % below the level after the first half of 2009, but the build-up of the working capital led to a significantly higher negative cash-flow from operating activities of € -407.85 million. Last year, the amount was € -208.64 million. Several large capital expenditures in property, plant and equipment pushed the cash-flow from investing activities from € -169.40 million to € -241.80 million. The cash-flow from financing activities, by comparison, was only slightly negative at € -13.96 million after € -187.59 million; unlike the same period last year, a corporate bond was issued this year.
Employees
STRABAG responded to the economic situation by introducing workforce reductions in several countries – for example in the Czech Republic, Hungary and the Balkan states. This, coupled with the lower output volume in winter during the first quarter and the completion of large-scale projects in the Middle East, resulted in a drop in the average employee numbers in the first half of 2010 by 6 % to 70,734.
Investor and analyst conference call
The investor and analyst conference call will be recorded and the replay will be available as of today, 3.00 p.m., CEST, until 4 September 2010. In order to listen to the replay, please dial one of these numbers followed by the code 5 1 8 5 7 #:
+49 (0) 69 7104 8870 (Germany)
+44 (0) 1212 60 48 61 (UK)
+1 (1) 866 268 1947 (US)
+43 (0) 125 302 1400 (Austria)
+43 (0) 800 102 519 70 (Toll free Austria)
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A transcript of the investor and analyst conference is available for download on our website www.strabag.com -> Investor Relations -> Webcasts & Presentations-> Webcasts.