Interim Report January–September 2014
STRABAG SE posts increase in earnings and order backlog after nine months 2014- Output volume stable at € 9.7 billion (+1 %) – particularly strong growth in Germany
- Order backlog up 10 % to € 15.4 billion thanks to new orders in Russia and Denmark
- EBIT increased from € 39.63 million to € 64.28 million
- 2014 outlook confirmed: output volume of € 13.6 billion, EBIT of at least € 260 million
Vienna, 28 November 2014
The publicly listed construction group STRABAG SE today, Friday, disclosed its figures for the first nine months of 2014. The company posts an increase in earnings and in order backlog.
“As expected, we are ending the first nine months of the ongoing financial year with an output volume that has stayed stable year on year (+1 %). Our books are well-filled with € 15.4 billion worth of orders and the weather has remained favourable for construction activity through the end of November, making me optimistic that we can reach the forecasted group output volume of nearly € 14 billion for the full year. At the same time, we are setting the course for increasing our profitability in the medium term. We hope that these efforts will have a noticeable positive impact on earnings in the 2015 financial year”, comments Thomas Birtel, CEO of STRABAG SE.
Output volume and revenue
The STRABAG SE Group registered an output volume of € 9,711.60 million in the first nine months of 2014. This translates into stable development of +1 %. While the favourable weather conditions at the beginning of the year had resulted in a clear plus in the home market of Germany, several markets were each down slightly at the same time. The consolidated group revenue developed in line with the output volume, moving up slightly by 1 % to € 8,892.29 million. The third quarter revenue declined by 4 %, mainly due to the development in the countries of the South + East segment.
Order backlog
The order backlog grew by 10 % from € 13,999.05 million at the end of September 2013 to € 15,399.91 million on 30 September 2014. This development was driven particularly by the industrial construction projects acquired in Russia, but also by large projects in Chile, Slovakia, Romania and Denmark.
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. As a result of the seasonal effects, a quarterly comparison makes little sense.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) after nine months of 2014 increased from € 328.85 million to € 349.82 million. The depreciation and amortisation was at about last year’s level. The earnings before interest and taxes (EBIT) rose by € 24.65 million to settle at € 64.28 million. This growth was driven by the segments South + East and International + Special Divisions, while the earnings in the North + West segment were deeper in negative territory than they had been the previous year. As a result of less positive currency exchange rate differences compared to the year before, the net interest income slipped from € -18.61 million to € -24.85 million. Below the line, the result was an 88 % improvement of the earnings before taxes (EBT) in the amount of € 39.43 million. The income tax increased from € -12.46 million to € -19.15 million, and the remaining net income grew by 137 % to € 20.28 million. As a profit of € 5.88 million was attributable to third-party shareholders, the net income after minorities moved from negative into positive territory to reach € 14.40 million. The earnings per share amounted to € 0.14 after € -0.02 in the first nine months of the previous year.
STRABAG SE generated an EBITDA of € 269.40 million in the third quarter, a plus of 3 %. The EBIT grew by 6 % to € 172.26 million.
Financial position and cash flows
The balance sheet total of € 10,494.47 million on 30 September 2014 changed only little versus the € 10,560.79 million from 31 December 2013. The equity ratio, with 30.2 % after 30.7 % at the end of 2013, remained at the usual high level. Typical for the season, the net cash position in the amount of € 73.73 million at year’s end turned into net debt of € 472.22 million. A comparison with the net debt after nine months in 2013 shows a decrease by 22 %.
The cash flow from earnings grew by 4 % over the comparison period of the previous year. The cash flow from operating activities improved by 7 % to € -108.82 million. In contrast, the other cash flows worsened: The purchase of financial assets and the payment for the acquisition of DIW Group drove the cash flow from investing activities to € -380.62 million. The cash flow from financing activities moved from positive into negative terrain due to a € 200 million bond issue last year, something which STRABAG opted against this year.
Employees
The number of employees fell by just 1 % to 71,987 in comparison to the same period of the previous year. Large changes in several entities nearly balanced each other out: The workforce was scaled back for market reasons in Poland and for project-related reasons in Russia and Romania, while new large projects in Denmark and internationally led to increases in staff levels in other countries.
Outlook
The management board of STRABAG SE continues to expect the output volume for the 2014 financial year to remain more or less unchanged versus 2013 at € 13.6 billion. It forecasts an EBIT of at least € 260 million for the current financial year, which more or less corresponds to the value of 2013.