STRABAG SE INVESTOR PRESENTATION

Transcription

1 STRABAG SE INVESTOR PRESENTATION MARCH 2015

2 DISCLAIMER This presentation is made by STRABAG SE (the "Company") solely for use at investor meetings and is furnished to you solely for your information. This presentation speaks as of March The facts and information contained herein might be subject to revision in the future. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. None of the Company or any of its parents or subsidiaries or any of such person's directors, officers, employees or advisors nor any other person (i) accepts any obligation to update any information contained herein or to adjust it to future events or developments or (ii) makes any representation or warranty, express or implied, as to, and no reliance should be placed on, the accuracy or completeness of the information contained in this presentation. None of the Company or any of its parents or subsidiaries or any of their directors, officers, employees and advisors nor any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, directly or indirectly, from any use of this presentation. The same applies to information contained in other material made available at the meeting. identified by words such as "believes, "expects, "predicts, "intends, "projects, "plans, "estimates, "aims, "foresees, "anticipates, "targets, and similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the Company or information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward-looking statements. By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the market and of the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business. This document is selective in nature and is intended to provide an introduction to, and overview of, the business of the Company. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements generally are Page 2

3 1 STRABAG AT A GLANCE 2 THE CONSTRUCTION 3 SECTOR WITHIN EVOLVING GLOBAL THEMES THE STRABAG STRATEGY & INVESTMENT PROPOSITION 4 FINANCIAL 5 PERFORMANCE APPENDIX Page 3

4 1 STRABAG AT A GLANCE

5 STRABAG AT A GLANCE FACTS & FIGURES MARKETS Output volume 2014: 13.6 bn Net income after minorities 2013: 114 m 72,900 employees > 500 locations in more than 80 countries Highly innovative: Central Technical Division with over 750 engineers Equity ratio: > 30% Strong brands: STRABAG & Züblin OUTPUT VOLUME BY REGION (2014) #1 #2 #2 #3 #1 #2 #3 #1 #2 #1 Rest of Europe 11% CEE 23% Austria 15% Rest of World 6% Source: company information Germany 45% Oman Abu Dhabi Qatar Saudi Arabia 1 Page 5

6 LARGEST PROJECTS IN PROGRESS NO SPECIFIC EXPOSURE TO ANY LARGE PROJECT (DEC. 2013) Country Project Order backlog in m As % of total order backlog ltaly Pedemontana motorway 1, Chile Hydro power plant Alto Maipo Austria Koralm Tunnel, lot Germany Stuttgart 21,under-ground railway station United Arab Emirates STEP wastewater systems Germany Jena University Hospital Germany Upper West Berlin Germany Albabstieg Tunnel Italy Grosseto Siena motorway Poland S8 Opacz Paszków Total 2, STEP wastewater systems S8 Poland 1 Page 6

7 FLAGSHIP PROJECTS EXAMPLES PPP-MOTORWAY A8 GERMANY Upgrading and operation of A8 from Ulm to Augsburg Size: 205 m (=50% share) Project schedule: Project scope: upgrading to a six-lane motorway and operate and maintain it for 30 years EXPRESSWAY S8 POLAND Construction of S8 between Walichnowy and Sieradz Południe Size: 254 m Project schedule: Project scope: construction of two expressway segments, bridges and service area CENTRAL STATION VIENNA AUSTRIA Construction of the new Central Station in Vienna Size: 59 m (=27% share) Project schedule: Project scope: the construction includes all adjoining buildings, shopping facilities and underground parking EUROPEAN CENTRAL BANK GERMANY Construction of the new headquarter in Frankfurt/Main Size: 185 m Project schedule: Project scope: Construction consisting of two polygonal towers, which are connected by an atrium 1 Page 7

8 FLAGSHIP PROJECTS INTERNATIONAL HYDROELECTRIC POWER PLANT CHILE Size: 366 m Project schedule: Project scope: all earth and concrete works for the intake structures, an open-channel waterway, a turbine hall and a stilling basin CONTAINER PORT MAURITIUS Size: 45 m (=50% share) Project schedule: Project scope: new berthing quay, quay facilities, relocation of container cranes, extension of the container storage area and the construction of annex buildings, modernisation of existing harbour facilities WATER TREATMENT PLANT GHANA Size: 9 m Project schedule: Project scope: construction of a drinking water treatment plant and supply network (photovoltaic installation) OUTFALL TUNNEL CANADA Size: 54 m Project schedule: Project scope: excavation of two 60 m deep shafts and a 6.3 km rock-bored tunnel (4.1 km onshore and 2.2 km offshore) 1 Page 8

9 BUSINESS SEGMENT CONTRIBUTION 2013 North + West 44% of output volume 34% of output volume South + East International + Special Divisions 21% of output volume Regions / Areas Germany, Poland, Benelux, Scandinavia, Ground and Hydraulic Engineering, Offshore Wind Austria, Switzerland, Hungary, Czech Republic, Slovakia, Adriatic region, Russia and neighbouring countries, Rest of Europe, Environmental Technology International, Tunnelling, Construction Materials (except asphalt), Property & Facility Services, Real Estate and Infrastructure Development (concessions) Output volume ( m) 6,021 4,593 2,822 Order backlog ( m) 5,451 3,805 4,202 EBIT ( m) EBIT margin (%) Employees 22,695 21,089 23,575 4 th, non-operating segment Others, output volume 1%, not shown 1 Page 9

10 KEY FINANCIALS ( m) 9M/2014 9M/2013 % % Output volume 9,712 9, ,573 14,043-3 Revenue 8,892 8, ,476 12,983-4 EBITDA EBIT Net income after minorities 14-2 n.m Cash flow from operating activities Cash flow from investing activities Balance sheet total 10,494 10, ,561 10,138 4 Group equity 3,169 3, ,239 3,163 2 Equity ratio 30.2% 30.2% 30.7% 31.2% Net debt (+)/cash (-) n.m. % was calculated with original, not rounded figures therefore, rounding differences may occur. 1 Page 10

11 COMPREHENSIVE COUNTRY NETWORK INTEGRATED MODEL TAKES ADVANTAGE OF local management skills market knowledge cost and efficiency synergies risk diversification COMPREHENSIVE COUNTRY NETWORK ENABLES STRABAG TO make more use of technology and machinery follow clients around the world Region-wide presence Direct Export business 1) Mixed according to region 1) Only countries with a minimum annual output volume of 1 m are considered. 1 Page 11

12 2 THE CONSTRUCTION SECTOR WITHIN EVOLVING GLOBAL THEMES

13 THREE EUROPEAN TRENDS: (1) URBANISATION / DEMOGRAPHICS GERMANY: DAILY TRAFFIC LOAD 2025F By % of the global population will live in cities (today: 54%) an increase of the urban population by 2.5 billion. Higher need for infrastructure Vehicles (thousands) Over Under 60 Example: Significant need for rehabilitation and extension of the German transportation network within the next ten years 2.6 bn of additional investments p.a. necessary over 15 years according to Daehre Commission 2012 Example: Germany invested 22 bn into the maintenance of roads and 34 bn into road extension and new construction between Sources: Tatjana Tegtbauer, BMVBS, Weimar, 22 March 2013; html; Report of the Daehre Commission in December 2012; 2 Page 13

14 EXAMPLE: MOTORWAY DENSITY IN DIFFERENT MARKETS 45 km motorway / 1,000 km 2 0 Slovenia Croatia Austria Hungary Czech Republic Slovakia Bulgaria Poland Romania Source: Eurostat, Wikipedia Page 14

15 THREE EUROPEAN TRENDS: (2) ENERGY / SUSTAINABILITY Kyoto Protocol: Current commitment period ; 37 countries with binding emissions reduction targets (mostly in Europe) EU: Greenhouse gas emissions to be cut by 20% until 2020 (vs. 1990), planned reduction of 80 95% by 2050 Construction sector responsible for 30% of all greenhouse gas emissions measures to reduce emissions could bring this share down to 25% by 2050 (1) Clients increasingly ask for energyefficient solutions, environmentally friendly products and a sustainable business conduct of suppliers. Own building materials network provides a high barrier to entry for other market participants, as the permits for building new mixing plants are not granted easily due to environmental concerns. (1) DIW Berlin A2 Poland 2 Page 15

16 THREE EUROPEAN TRENDS: (3) FINANCIAL ENVIRONMENT Historically low interest rates and highly volatile financial environment make real estate an attractive investment alternative for some investor groups Low financing costs facilitate investment into real estate STRABAG Real Estate Development Tanzende Türme, Hamburg 2 Page 16

17 CONSTRUCTION SEGMENTS WITH OWN BUSINESS MODELS AND CYCLES CONSTRUCTION SUBSEGMENTS GERMANY 10% STRABAG CLIENT STRUCTURE Private 34% 0% e 2015e Public 66% -10% Residential Other building construction Civil CONSTRUCTION OUTPUT BY COUNTRIES 10% 0% e 2015e Public clients: The price is mostly the dominant criterion. Private client: Often opts for the best offer, not necessarily the lowest. -10% Germany Austria Eastern Europe Source: Euroconstruct 2 Page 17

18 SELECTION CRITERIA IN CONSTRUCTION Clients selection criteria Price Financial strength Technology & Innovation References Experience and Know-how of employees Construction materials supply 2 Page 18

19 3 THE STRABAG STRATEGY & INVESTMENT PROPOSITION

20 A EUROPEAN-BASED TECHNOLOGY GROUP FOR CONSTRUCTION SERVICES STRABAG is a European-based technology group for construction services, a leader in innovation and financial strength. We create added value for our clients by integrating the most diverse services and assuming responsibility for them: We bring together people, materials and machinery at the right place and at the right time in order to realise even the most complex construction projects on schedule, of quality and at the best price. STRABAG takes an agreed scope of responsibility and part of the risk, thereby relieving the client e.g. of the risk of delays and cost overruns. Professional and market experience as well as financial strength needed to create added value Helps clients meet their goals (time, quality, lower costs) Technology/Innovation: Differentiation through superior technology and innovative solutions 3 Page 20

21 THE STRABAG INVESTMENT PROPOSITION (1) Growth and Margin Upside Strategic priority: Strengthening risk and opportunity management Strategic priority: Implementing efficiency-rising measures proposed by task force (2) Flexible Business Model, Selective Diversity Strategic priority: Showing flexibility Strategic priority: Staying diversified Strategic priority: Offering top technology and sustainability (3) Financial Strength Strategic priority: Maintaining financial strength (4) Attractive Dividends on a reliable level 3 Page 21

22 (1) GROWTH AND MARGIN UPSIDE: TARGETS MID-TERM TARGET OF 3% EBIT MARGIN TOP-LINE GROWTH AS OF 2016 EXPECTED 12% 4% 12% 2.3% 2.4% 2.4% 1.6% 2.1% 3.0% -2% -2% -3% 0% 0% % Task Force Streamline overhead costs Organisational development Measures currently and continuously being implemented Comprehensive risk management Output volume 2014e: 13.6 bn (stable vs. 2013) Grow share of non-european operations to 10% by 2016 Americas, Middle East, Asia, Africa 2014: 6% 3 Page 22

23 (1) GROWTH AND MARGIN UPSIDE: RISK MANAGEMENT RISK MANAGEMENT INSTRUMENTS Four-eyes-principle Contract Management (most risks occur prior to the signature of the contract) Internal price committees (including a STRABAG SE board member when project volume 70 m) Internal Audits Organisational structure with central divisions Management information system: We have developed a management information system that helps us to ensure that the same standards apply in all regions where STRABAG is active. This means: clear criteria for the assessment of new projects, a standardised process for the submission of bids and control systems serve as filters to avoid loss-bringing projects. Thomas Birtel, CEO TYPES OF CONTRACTS Joint Venture with the client Cost + fee Guaranteed maximum price Lump-sum Unit pricing COMPOSITION OF THE ORDER BACKLOG 20 % Total of the ten largest projects in the order backlog 14,603 Construction sites per year 3 Page 23

24 (2) FLEXIBLE BUSINESS MODEL, SELECTIVE DIVERSITY: RESILIENCE OVER A VOLATILE PERIOD OUTPUT VOLUME ( M) ORDER BACKLOG ( M) ,777 14,326 14,043 13,573 13,566 14,739 13,354 13,203 13,470 14, EBITDA ( M) AND EBITDA MARGIN (%) EBIT ( M) AND EBIT MARGIN (%) % 5.5% 5.4% 5.6% % 2.4% 2.4% 2.3% 2.1% 1.6% EBITDA and EBIT figures include a positive one-off of 24.6 m and 10.6 m, respectively. 3 Page 24

25 (2) FLEXIBLE BUSINESS MODEL, SELECTIVE DIVERSITY: SUBCONTRACTING AND PORTFOLIO MIX SUBCONTR. BUILDING & CIVIL ENGINEERING SUBC. TRANSPORTATION INFRASTRUCTURE Own 30% Subcontractors 30% Subcontractors 70% Own 70% DIVERSIFIED PORTFOLIO BALANCES CYCLICAL/PROJECT-DRIVEN NATURE OF CONSTRUCTION Diversifying selectively Top market positions in stable home markets Growing share of non-european countries Construction Materials 6% Services 9% Building Construction & Civil Engineering 37% International 3% Tunnelling 4% Project Development & Concessions 2% Transportation Infrastructure 39% 3 Page 25

26 (2) FLEXIBLE BUSINESS MODEL, SELECTIVE DIVERSITY: OWN DENSE CONSTRUCTION MATERIALS NETWORK STRABAG FACILITIES (1) Asphalt mixing plants 288 (2) Concrete mixing plants 149 (2) Total quarries and gravel pits 171 (2) Cement mixing plants 5 (3) Production of 3.3 m m³ of concrete, 15.6 m tons of asphalt and 1.0 m tons of cement in 2014 More than 2.2 bn tons reserves of stone and gravel Sales revenue of 584 m in 2014 HIGHLIGHTS Hedge against price fluctuations, securing supply Existing quarries as effective entry barriers lack of permits for new sites OWN COVERAGE OF MATERIAL NEEDS (%) 82% 84% 28% 29% 27% 26% 30% in joint venture (at equity-consolidated since Q3/2011) with Lafarge secures access to cement in Central and Easter Europe Further optimisation of raw materials network and increased self-sufficiency except in asphalt 100% 0% 16% 18% Asphalt Concrete Cement Stone/Gravel (1) December 2014, (2) Includes active facilities from joint ventures and associates, (3) JV with Lafarge, STRABAG share 30% 3 Page 26

27 (2) FLEXIBLE BUSINESS MODEL, SELECTIVE DIVERSITY: STEADY INCOME THROUGH CONCESSION BUSINESS NUMBER OF STRABAG S PPP (1) PROJECTS SELECTED PPP PROJECTS Vocational schools, Germany Motorway A8, Germany PPP STRATEGY Focus on infrastructure and large public buildings PPP/BOT (1) in home markets, Eastern Europe and increasingly in selected international markets (insufficient legal framework in some countries) Importance as public procurement method due to cost advantages High barriers to entry due to necessary PPP expertise and financial strength (1) Public-Private Partnership/Build-Operate-Transfer COUNTRY PROJECT TOTAL COST ( M) % SHARE CONCESSION UNTIL STATUS PL A2 Section II 1, Operation HU M5 Motorway 1, Operation HU M6 Motorway Operation PL A2 Motorway I Operation GER GER Schools, Mülheim Ministries, Potsdam Operation In progress 3 Page 27

28 (2) FLEXIBLE BUSINESS MODEL, SELECTIVE DIVERSITY: PROPERTY & FACILITY SERVICES TARGET MARKETS PROJECTS UNDER MANAGEMENT KEY FACTS 2013 Output 2013: 955 m ~ 10,700 employees ~ 30 m m² managed area ~ 56,800 objects in portfolio (1) Active in 12 countries Top Arbeitgeber in Deutschland 2014 (Top Employer in Germany 2014) September 2014: Acquisition of DIW strengthens #2 market position in German facility management Consolidated in the International + Special Divisions segment Tower 185, Frankfurt, Germany City Tower, Praha, Czech Republic Deutsche Telekom AG, Germany (1) without residential units 3 Page 28

29 (2) OFFERING TECHNOLOGY AND SUSTAINABILITY: CASE STUDY CENTRAL TECHNICAL DIVISION / TPA STRABAG AND PEERS: R&D/TECHNICAL DIVISION STAFF HEADCOUNT % 0% STRABAG 1.1% STRABAG 3.2% Number of employees % % of total headcount 1.5% % Peers Central Technical Division TPA 0.2% 0.2% 0.1% 0.1% Peers Central Technical Division organisation in charge of planning and execution of R&D projects Focus on building construction and civil engineering >750 employees in 21 locations; personnel cost ~ 50 m p.a. R&D spending: ~ m p.a. TPA organisation focused on optimising technical processes, workplace safety and quality Focus on transportation infrastructure STRABAG s competence centre for quality management and construction R&D 800 employees in 130 locations 3 Page 29

30 (2) OFFERING TECHNOLOGY AND SUSTAINABILITY: OUR SUSTAINABILITY AGENDA 3 Page 30

31 (2) OFFERING TECHNOLOGY AND SUSTAINABILITY: EXAMPLE ON NON FINANCIAL TARGETS WOMEN GROW SHARE OF WOMEN IN TOTAL EMPLOYMENT AND MANAGEMENT POSITIONS EACH YEAR 16% 13.6% 13.4% 8.6% 8.7% 0% Women as % of staff Women as % of management 3 Page 31

32 (3) FINANCIAL STRENGTH AS COMPETITIVE ADVANTAGE RATING EQUITY RATIO STRABAG SE is one of the few European construction companies with an official corporate credit rating. S&P confirmed investment grade rating BBB-, stable outlook, in August 2014 vertical integration and strategic access to construction materials strong liquidity position & track record of relatively stable margins indicators necessary for investment grade rating offer further flexibility in terms of investments and acquisitions Rating as a competitive advantage: bond issued with a coupon of 1.625%, Target: maintain investment grade credit rating at least High equity ratio of 31% despite share buyback (sector average 19%) Target: maintain equity ratio of 25% NET CASH Net cash of 74 m end of Page 32

33 (3) FINANCIAL STRENGTH: DIVERSIFIED FINANCING DEBT REPAYMENT PROFILE ( M) DIVERSIFIED MEANS OF FINANCING Bonds Bonded loans Cash and surety credit lines (31 Dec. 2013): 6.7 bn (thereof cash credit lines of 0.6 bn) Bond issue: 200 m, 3.00%, bn syndicated surety loan (at least by 2019) 400 m syndicated cash credit line (at least by 2019) 3 Page 33

34 (4) ATTRACTIVE DIVIDENDS: CONSISTENT PAYOUT RATIO NET INCOME A.M. ( M) AND MARGIN (%) DIVIDEND ( ) AND PAYOUT RATIO (%) % % % 1.4% % % 0.5% % 35% 36% 34% 34% % EARNINGS PER SHARE ( ) % Page 34

35 (4) ATTRACTIVE DIVIDENDS: TOTAL SHAREHOLDER RETURN % Dividend policy: % of net income after minorities distributed as a dividend 4.8% 27.8% 2.9% 2.7% 7.9% 3.0% 2.1% 4.1% -1.0% -7.6% -10% Return from share price Return from dividends 3 Page 35

36 4 FINANCIAL PERFORMANCE

37 OUTPUT VOLUME DECLINES DUE TO WEATHER, FULL ORDER BOOKS OUTPUT VOLUME ( M) % 13,573 14,043 Weather-related declines not fully compensated STRABAG broadly diversified: declines in Poland, Canada, Benelux and Romania nearly balanced out by increases in Hungary, Austria and Africa ORDER BACKLOG ( M) % 13,470 13,203 Completion of large projects in Russia and Benelux Several new building construction orders in Germany Page 37

38 EBITDA AND EBIT SHOW DOUBLE-DIGIT GROWTH EBITDA ( M) % 608 Previous year s EBITDA had been distorted by damage compensation payments ( 43 m) Still a burden: cost development in projects in hydraulic engineering, the Netherlands and Sweden as well as competitive pressure in railway construction EBIT ( M) % Depreciation and amortisation increased by 8% > specialty equipment for international business depreciated over just a few years of construction Relatively high depreciation in the fields of railway construction and hydraulic engineering Page 38

39 N+W MAKES THE TURNAROUND, S+E ALMOST ON 2012 RECORD HIGH, I+S BACK TO NORMAL EBIT NORTH + WEST ( M) EBIT SOUTH + EAST ( M) 100 n.m % EBIT INTERNAT. + SPECIAL DIVISIONS ( M) EBIT TOTAL GROUP ( M) % % N+W = North + West; S+E = South + East; I+S = International & Special Divisions Page 39

40 EARNINGS PER SHARE +90% NET INCOME AFTER MINORITIES ( M) % 114 EARNINGS PER SHARE ( ) 2 90% Positive FX effects of 13 m (2012: -12 m) Minority shareholders account for a result of 43 m (2012: 49 m) Number of weighted outstanding shares down to 102,716,850 4 Page 40

41 GROUP INCOME STATEMENT 2013 ( m) % Output volume 13, , Revenue 12, , Changes in inventories/own work capitalised Other operating income Construction materials, consumables and services used -8, , Personnel cost -2, , Other operating expenses ,16 9 Share of profit or loss of associates n.m. Net income from investments n.m. EBITDA % was calculated with original, not rounded figures therefore, rounding differences may occur. 4 Page 41

42 GROUP INCOME STATEMENT 2013 (CONT.) ( m) % EBITDA Margin (%) Depreciation and amortisation EBIT Margin (%) Net interest income Income tax expense Net income Attributable to minority interest Attributable to equity holders of the parent Earnings per share ( ) % was calculated with original, not rounded figures therefore, rounding differences may occur. 4 Page 42

43 HIGHLY SEASONAL BUSINESS QUARTERLY DEVELOPMENT OF OUTPUT VOLUME AND EBIT ( M) % EBIT margin (1) 5.3% % 5.0% 3.2% % 5.6% % % % % % -0.1% % 1.6% % % Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Output volume EBIT (1) EBIT/revenue 4 Page 43

44 EQUITY RATIO REMAINS HIGH AT 31% ASSETS (1) LIABILITIES AND EQUITY (1) ( m) Intangible assets PP&E & investment property 2,183 2,268 Associated companies Other financial assets Concession receivables Trade and other receivables Deferred taxes Non-current assets 4,416 4,547 Inventories ,032 Trade and other receivables 3,303 3,161 Concession receivables Cash and cash equivalents 1,712 1,375 Current assets 6,145 5,591 Total assets 10,561 10,138 ( m) Share capital Capital reserves 2,311 2,311 Retained earnings Non-controlling interests Equity 3,239 3,163 Provisions 995 1,026 Financial liabilities 1,354 1,266 Trade payables & other liab Deferred taxes Non-current liabilities 2,466 2,432 Provisions Financial liabilities Trade payables 2,936 2,724 Other current liabilities Current liabilities 4,856 4,543 Liabilities & equity 10,561 10,138 (1) Rounding differences might occur. 4 Page 44

45 NET CASH AND HIGH EQUITY RATIO NET DEBT/NET CASH (-) ( M) EQUITY RATIO (%) Net cash position in 2013 again uncharacteristically high project-related prepayments at year-end Cash and cash equivalents end of 2013 at 1.7 bn (2012: 1.4 bn) Equity ratio stable over the medium term at approx. 30% vs. current sector average of 19% (1) (1) Weighted average includes ACS, Balfour Beatty, BAM, Bilfinger, Bouygues, Budimex, Eiffage, Ferroval, Hochtief, Porr, Skanska, Vinci, YIT; last reported balance sheet date 4 Page 45

46 ALL CASH FLOWS IMPROVED ( m) 2013 % 2012 Cash beginning of period 1, ,689 Cash flow from profits Working Capital 181 n.m Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net change in cash 355 n.m FX changes -18 n.m. 29 Change restricted cash Cash end of period 1, ,351 Rounding differences might occur. 4 Page 46

47 CASH AT 1.7 BILLION CASH DEVELOPMENT ( M) COMMENTS , ,685 Unusually high decrease of working capital due to uncharacteristically high project-related prepayments; likely to reverse in 2014 Purchase of specialty equipment needed for certain projects shifted in part to Cash 1/1/2013 CFO CFI CFF Currency translation Restricted cash Cash 31/12/2013 Enterprise acquisitions took place to only a minor extent Buyback of own shares cost approx. 9 m in 2013 (0.4% of shares) CFO: Cash flow from operating activities CFF: Cash flow from financing activities CFI: Cash flow from investing activities (net CAPEX) 4 Page 47

48 SUCCESSFUL WORKING CAPITAL MANAGEMENT 9M CASH OUTFLOWS FROM WORKING CAPITAL ( M) ,0% 5,2% ,6% % 365 Working capital outflows generally occur over the first nine months of the year due to business seasonality Size of 9M outflows has consistently fallen over past three years both in absolute terms and as % of output volume WORKING CAPITAL PATTERN: CASH OUTFLOWS IN Q1 3; INFLOWS IN Q4 ( M) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Page 48

49 2013: RETURN TO POSITIVE FCF GROSS CAPEX 2013 ( M) CFO VS. CFI ( M) CFI VS. DEPRECIATION ( M) PP&E Acquisitions Financial assets CFO CFI CFI Depreciation FCF positive, after having been negative for two years ~ 250 m maintenance CAPEX in PP&E Expansion CAPEX due to tunnelling and international business special equipment needed Lower PP&E: Purchase of specialty equipment needed for certain projects shifted in part to depreciation includes goodwill impairment of 4 m (2012: 10 m) Depreciation higher than CFI for the first time 4 Page 49

50 NORTH + WEST: EBIT TURNS INTO CLEARLY POSITIVE TERRITORY KEY INDICATORS ( m) 2013 % 2012 Output volume 6, ,237 Revenue 5, ,510 Order backlog 5, ,827 EBIT 73 n.m. -51 EBIT margin % Employees 22, ,108 SHARE OF GROUP OUTPUT VOLUME 44% of group output volume COMMENTS Market- and weather-related declines in Poland Positive contribution to EBIT from building construction in Germany; results improved in Poland and in the German transportation infrastructures market Hydraulic engineering projects and large-scale projects in the Netherlands and Sweden still a burden Growth in order backlog in Germany, among others: Thuringia s new university clinic Office building at Stuttgart airport Cultural quarter in Dresden Outlook: Expected 2014 output volume 6.0 bn Stable construction materials prices vs. rising subcontractor prices Slight optimism for Poland as of Page 50

51 SOUTH + EAST: EBIT MARGIN STABLE ON A HIGH LEVEL KEY INDICATORS ( m) 2013 % 2012 Output volume 4, ,756 Revenue 4, ,792 Order backlog 3, ,326 EBIT EBIT margin % Employees 21, ,699 SHARE OF GROUP OUTPUT VOLUME 34% of group output volume COMMENTS Output volume decreased due to an internal shift of the Polish building construction unit; growth in Hungary and Czech Republic EBIT -7%: Result improvement programme in environmental technology, but continued competitive pressure in railway construction Completion of large projects in RANC (1), recovery of order situation in Slovakia and Hungary Outlook: Output volume at 4.7 bn expected in 2014 Austria: no reduction of margin pressure in transportation infrastructures expected Continued price pressure in transportation infrastructures in CEE (1) Russia and neighbouring countries 4 Page 51

52 INTERNATIONAL + SPECIAL DIVISIONS: VOLATILE AS USUAL KEY INDICATORS ( m) 2013 % 2012 Output volume 2, ,925 Revenue 2, ,661 Order backlog 4, ,038 EBIT EBIT margin % Employees 23, ,426 SHARE OF GROUP OUTPUT VOLUME 21% of group output volume COMMENTS Volatile international and tunnelling business influences EBIT Order backlog grew by 4%: New orders in Germany, Chile and Canada Outlook: Output volume unchanged at 2.8 bn expected Extremely low price levels in tunnelling core markets Market for concession projects remains challenging in Europe Construction materials business will continue to put pressure on margins Significant positive earnings contributions from real estate development STRABAG to diversify more broadly internationally 4 Page 52

53 ORDER BACKLOG + 10 %, STABLE OUTPUT VOLUME OUTPUT VOLUME ( M) % 9,712 9,609 13,573 Favourable weather conditions in Germany Several other markets down slightly 0 9M/14 9M/ ORDER BACKLOG ( M) ,400 10% New industrial construction projects in Russia 13,999 13,470 Large orders also in Chile, Slovakia, Romania and Denmark 0 9M/14 9M/ Page 53

54 DOUBLE-DIGIT GROWTH IN EBIT EBITDA ( M) 750 6% 695 Efficiency gains, among others, resulted in an increase in EBITDA by 6 % M/14 9M/ EBIT ( M) % 262 Depreciation and amortisation at about last year s level M/14 9M/ Page 54

55 EARNINGS PER SHARE MOVED INTO POSITIVE TERRITORY NET INCOME AFTER MINORITIES ( M) 200 EARNINGS PER SHARE ( ) 2 n.m. 114 n.m M/14 9M/ M/14 9M/ Net interest income slipped from -19 million to -25 million Profit of 6 million attributable to third-party shareholders Net income after minorities moved from negative into positive territory 4 Page 55

56 EQUITY RATIO REMAINS HIGH AT MORE THAN 30% ASSETS (1) LIABILITIES AND EQUITY (1) ( m) 9M/ Intangible assets PP&E & investment property 2,098 2,183 Associated companies Other financial assets Concession receivables Trade and other receivables Deferred taxes Non-current assets 4,404 4,416 Inventories 1, Trade and other receivables 3,907 3,303 Concession receivables Cash and cash equivalents 1,135 1,712 Current assets 6,090 6,145 Total assets 10,494 10,561 ( m) 9M/ Share capital Capital reserves 2,311 2,311 Retained earnings Non-controlling interests Equity 3,169 3,239 Provisions Financial liabilities 1,220 1,354 Trade payables & other liab Deferred taxes Non-current liabilities 2,326 2,466 Provisions Financial liabilities Trade payables 3,088 2,936 Other current liabilities Current liabilities 4,999 4,856 Liabilities & equity 10,494 10,561 (1) Rounding differences might occur. 4 Page 56

57 HIGHER CFI DUE TO ACQUISITION OF DIW AND PURCHASE OF FINANCIAL ASSETS ( m) 9M/14 % 9M/13 Cash beginning of period 1, ,351 Cash flow from earnings Working Capital Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities -80 n.m. 76 Net change in cash FX changes Change restricted cash Cash end of period 1, ,046 Rounding differences might occur. 4 Page 57

58 NORTH + WEST: INDIVIDUAL PROJECTS WEIGH ON EBIT KEY INDICATORS ( m) 9M/14 % 9M/13 Output volume 4, ,273 Revenue 4, ,946 Order backlog 6, ,801 EBIT EBIT margin % Employees 23, ,617 SHARE OF GROUP OUTPUT VOLUME BC & CE: building construction & civil engineering 47% of group output volume COMMENTS Output volume increased, mainly due mild winter and despite lack of public sector tenders in Germany EBIT more deeply in negative territory: individual construction projects burdened, e.g. in Germany, the Netherlands and Sweden Order backlog unchanged, new orders: Axeltorv multi-use building, Denmark Copenhagen Metro, Denmark Marieholmstunnel, Sweden Cherbourger Straße harbour tunnel in Bremerhaven, Germany Poland: S5 Poznań Wrocław, S7 Trasa Nowohucka, bypass Kościerzyna, A4 Rzeszów Jarosław Outlook: German BC & CE business to contribute positively to output volume and earnings German transportation infrastructures market: no substantial investment expected next year Optimistic expectations for Poland confirmed 4 Page 58

59 SOUTH + EAST: EFFICIENCY GAINS DRIVE EBIT KEY INDICATORS ( m) 9M/14 % 9M/13 Output volume 2, ,226 Revenue 2, ,074 Order backlog 4, ,353 EBIT EBIT margin % Employees 18, ,992 SHARE OF GROUP OUTPUT VOLUME COMMENTS Output volume down due to reclassification of a part of railway construction to North + West EBIT: more than doubled due not least to efficiency increases in several countries in the segment Order backlog +10%: Orders in Slovakia and Romania Outlook: CEE construction sector remains a challenge Austrian TI business did not relax, but positive BC business in the greater area of Vienna Russia: new large orders in heavy industrial construction; no significant influence of political situation on STRABAG expected Sale of flue gas treatment business 31% of group output volume TI: transportation infrastructure; BC: building construction 4 Page 59

60 INTERNATIONAL + SPECIAL DIVISIONS: BUSINESS AS USUAL KEY INDICATORS ( m) 9M/14 % 9M/13 Output volume 2, ,006 Revenue 1, ,764 Order backlog 4, ,836 EBIT EBIT margin % Employees 24, ,556 SHARE OF GROUP OUTPUT VOLUME 21% of group output volume COMMENTS Output volume +3%: growth in Germany, other markets balanced each other out EBIT increased from 14 million to 32 million Order backlog up by 18%, new orders: Tunnelling project Alto Maipo, Chile Ulriken rail tunnel, Norway Tulfes Pfons section of the Brenner Base Tunnel, Austria Mid-Halton Outfall tunnel, Canada PPP: N17/18 in Ireland, tolling system in Belgium Outlook: Economic situation difficult in traditional tunnelling markets and for concession projects Solid earnings contribution from property & facility services and real estate development expected Acquisition of DIW Group, Stuttgart 4 Page 60

61 5 APPENDIX

62 OUTPUT VOLUME BY COUNTRY ( m) CAGR (1) (%) Germany 5,380 5,051 5,609 5,779 5,789 2 Austria 1,981 1,907 1,985 1,888 1,982 0 Poland 993 1,352 1,719 1, Czech Republic RANC (2) Scandinavia Hungary Benelux Switzerland Slovakia Middle East Romania Americas ltaly Africa Croatia Asia Other European Countries Slovenia Serbia Bulgaria Total 13,021 12,777 14,326 14,043 13,573 1 (1) CAGR over period ; (2) Russia and neighbouring countries 5 Page 62

63 STRABAG MARKET SHARE DATA 2013 ( M) CONSTRUCTION OUTPUT STRABAG OUTPUT MARKET SHARE (%) Germany 278,761 5, Austria 31,654 1, Poland 42, Czech Republic 15, RANC 177, Hungary 7, Benelux 98, Switzerland 52, Slovakia 4, Romania 16, Sweden 32, Italy 166, Denmark 26, Croatia 2, Slovenia 2, Serbia 1, Bulgaria 6, Sources: Euroconstruct November 2014, EECFA Country Reports December 2014, company data 5 Page 63

64 MARKET LEADING POSITIONS IN CENTRAL AND EASTERN EUROPEAN COUNTRIES WESTERN EUROPE GERMANY AUSTRIA Output volume/revenue 2013 ( m) 1. STRABAG 5, Vinci 2, Hochtief 2, Max Bögl 1,600 1) 5. Goldbeck 1,570 1) Output volume/revenue 2013 ( m) 1. Porr 2, STRABAG 1, Swietelsky 1, Habau Wolf 514 POLAND EASTERN EUROPE CZECH REPUBLIC HUNGARY Output volume/revenue 2013 ( m) 1. Budimex 1, Skanska STRABAG Polimex Mostostal Trakcja 253 Output volume/revenue 2013 ( m) 1. Metrostav STRABAG Skanska Eurovia OHL 301 Output volume/revenue 2013 ( m) 1. Közgép STRABAG Colas Swietelsky Duna Aszfalt 309 Sources: Companies Annual Reports; Deutsche Bauindustrie; Deloitte; Figyelö; img.ihned.cz 1) Bilfinger no longer listed as the company withdrew its focus from the construction business. Max Bögl and Goldbeck listed with total revenue. 5 Page 64

65 MARKET LEADING POSITION IN CENTRAL AND EASTERN EUROPEAN COUNTRIES (CONT.) CROATIA Output volume/revenue 2013 ( m) 1. STRABAG Viadukt Tehnika GP Krk Swietelsky 74 SLOVAKIA Output volume/revenue 2013 ( m) 1. STRABAG Doprastav Vahostav Inzinierske stavby Eurovia 71 SLOVENIA Output volume/revenue 2013 ( m) 1. SGP Pomgrad CGP STRABAG Gorenjska gradbena druzba GH Holding 58 Sources: ; trend.sk; ajpes.si; RCB ROMANIA Output volume/revenue 2013 ( m) 1. STRABAG Delta Romstrade Straco Hidroconstructia Page 65

66 OWN BUILDING MATERIALS NETWORK 5 Page 66

67 FINANCING PPP-PROJECTS TYPICAL FINANCING The SPV (1) is financed with equity (10% 30%) and bank debt (70% 90%) STRABAG as a shareholder in the SPV puts in equity Other SPV shareholders are e.g. governments, infrastructure funds and developers or other construction companies. The grantor pays a fee to the SPV which is used for construction, maintenance, repaying debt and paying dividends to equity partners. Availability and hard toll projects, forfeiting models Maintenance part of availability fee linked to inflation WACCs differ according to risk: 6% 13% ROE targets: minimum 12% Current debt in PPP SPVs consolidated in STRABAG balance sheet: 585 m (as at end of 2013, only SPV with material impact) (1) Special Purpose Vehicle EQUITY INVESTED IN PPP ( M) Page 67

68 ILLUSTRATIVE PPP PROJECT STRUCTURE DEBT Grantor Lenders Funding Agreements Insurance Contracts Project/Concession Contract SPC / Project Consortium / Company Independent Engineer Agreement Shareholders Agreement Independent Engineer STRABAG [Public Entity] Partner(s) EQUITY Insurance Providers Turnkey Design and Construction Contract Operations & Maintenance Contract Construction Joint Venture (EPC Contract) STRABAG CJV Partner(s) Operations & Maintenance Company A-Way OJV Partner(s) 5 Page 68

69 PROPERTY & FACILITY SERVICES: STRATEGIC RATIONALE & TARGETS EXTENDING THE VALUE CHAIN Offsets seasonal and cyclicality factors (contracts of 3-5 years duration) One integrated provider for planning, construction and operation of properties Long-term relationship with customers, that does not end after the construction project has finished Growth opportunities through international market access and rising importance of lean real estate operations TARGETS FOR 2014 Extend business with new and existing customers Stable output volume of over 930 m, considering expected turnover declines in German market (Deutsche Telekom accounts for 80% of turnover in Germany) Enter new market segments (e.g. industrial services, automotive, energy management etc.) Increase competitiveness by further optimisation of productivity and costs BUSINESS SEGMENTS Real Estate Management Property Management Leasing and letting/area management Technical Facility Management Infrastructural Facility Management Support of tenancy and marketing activities MILESTONES 2008 Acquisition of Deutsche Telekom Immobilien und Services GmbH Germany 2010 Acquisition of RIMEX Group Germany Acquisition of ECM Facility a.s. Czech Republic Acquisition of BWG (GSW Betreuungsgesellschaft f. Wohnungs- und Gewerbebau mbh) Germany Acquisition of DIW Instandhaltung Germany 5 Page 69

70 STABLE SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE 7/2014 COMMENTS Free float 13.0% Treasury shares 10.0% Rasperia Trading 25.0% + 1 share Haselsteiner Family 25.5% UNIQA/ Raiffeisen 26.5% Core shareholders account for the majority 77% stake Shareholders syndicate until end of 2017 Flexibility: Strategic decisions can be taken and implemented very fast. Share buyback programme July 2011 May 2013; acquisition of 10% of shares 5 Page 70

71 ORGANISATION CENTRAL UNITS ORGANISATIONAL STRUCTURE CEO CFO Central Divisions & Central Staff Divisions BRVZ (1) Accounting, Financing, Taxes, IT, Human Resources, Real Estate, Insurance, Risk Management/Organisational Development, International Coordination, Management Support BMTI (2) TPA (3) Zentrale Technik (4) Internal Auditing Contract Management Corporate Communications Legal Business Compliance Operative Segments North + West South + East International + Special Divisions 1 Board Member 1 Board Member CEO 1 Board Member 5 Divisions Division Managers 39 Subdivisions Subdivision Managers 6 Divisions Division Managers 39 Subdivisions Subdivision Managers 1 Division Division Managers 3 Subdivisions Subdivision Managers 7 Divisions Division Managers 22 Subdivisions Subdivision Managers (1) BRVZ: Bau- Rechen- und Verwaltungszentrum (3) TPA: TPA Gesellschaft für Qualitätssicherung und Innovation (2) BMTI: Baumaschinentechnik International (4) Zentrale Technik: Central Technical Division 5 Page 71

72 THE MANAGEMENT BOARD LONG RECORD OF EXPERIENCE WITHIN STRABAG AND IN THE CONSTRUCTION SECTOR Thomas Birtel, CEO (second left) Joined STRABAG in 1996 Management Board member since 2006 Born 1954 Education: Economics Christian Harder, CFO (second right) Joined STRABAG in 1994 Management Board member since 2013 Born 1968 Education: Business Administration Peter Krammer, Head of North + West segment (left) Joined STRABAG in 1998 Management Board member since 2010 Born 1966 Education: Civil Engineering Over 100 years combined experience at STRABAG Siegfried Wanker, Head of South + East segment (right) Joined STRABAG in 1994 Management Board member since 2011 Born 1968 Education: Civil Engineering Hannes Truntschnig, Head of International + Special Divisions segment (centre) Joined STRABAG in 1981 Management Board member since 1995 Born 1956 Education: Engineering and Business Administration 5 Page 72

73 STRABAG SHARE IS COVERED BY NINE INSTITUTIONS COMPANY DATE TITLE TARGET PRICE RATING MainFirst Bank E earnings adjustment after subsidiary s warning 27.0 Outperform HSBC Still chasing high expectations 18.5 Underweight RCB Target price raised to 24.5 on yield curve support 24.5 Hold Erste Group Empfehlungsliste 22.0 Hold Commerzbank Profit recovery remains bumpy 23.0 Buy LBBW Ziele 2014 erreicht und positiver Ausblick auf ,0 Hold Deutsche Bank Company & numbers update 19.0 Hold Kepler Cheuvreux Solid FY results 19.5 Hold Starker Kursrückgang bietet Einstiegschance Neues Anlageurteil: DZ Bank Kaufen 20.0 Buy 5 Page 73

74 FINANCIAL CALENDAR AND IR CONTACT Full-year results April 2015 Interim Report January March May 2015 Semi-Annual Report August 2015 Interim Report January September November 2015 Diana Neumüller-Klein, CFA Head of Investor Relations & Corporate Communications diana.klein@strabag.com 5 Page 74