Quarterly Report January to March 2013

Transcription

1 Quarterly Report January to March 2013 My Health our care Turning Vision into Value.

2 The HOCHTIEF Group *Restated for IAS 19R. For notes on the adjustment, please see pages 18 and 19. **Note: The percentage changes are calculated at the level of precision used in the interim financial statements (thousands of euros). (EUR million) Q Q1 (restated)* Percentage change Full year (restated)* New orders 5, , ,487.8 Work done 6, , ,693.4 Order backlog 50, , ,793.6 Divisional sales 5, , ,551.2 External sales** 5, , ,527.7 Operating earnings (EBITA)** (46.1) Profit before taxes** (92.1) Consolidated net profit/(loss)** 43.5 (34.8) Earnings per share (EUR) 0.59 (0.47) 2.11 Capital expenditure** ,781.4 Net assets 9, , ,844.7 Employees 82,196 77, ,987 (Q1 2013) (Q1 ) ( average) HOCHTIEF stock Kursentwicklung 130 % im ersten Halbjahr % 110 % HOCHTIEF MDAX DAX % 090 % 080 % 070 % Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar Cover image: Winning team: HOCHTIEF s Australian subsidiary Leighton is highly sought after when it comes to challenging, sophisticated projects in the healthcare sector. A shining example is the Royal North Shore Hospital (RNSH), Sydney, completed in early As part of the public-private partnership project consortium, Leighton company Thiess was contracted to design and build the new hospital. Thiess will also operate the entire complex as well as servicing and maintaining buildings, grounds, and systems for the next 28 years. The RNSH is one of the largest and now one of the most state-of-the-art healthcare facilities in Sydney, offering patients top-notch care with both an acute and a general unit. The project was honored with the Contractor Excellence Award by Infrastructure Partnerships Australia in early

3 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 Foreword Marcelino Fernández Verdes, Chairman of the Executive Board HOCHTIEF made a good start to fiscal 2013 with a successful first quarter. All of the Group s divisions contributed to improved operating earnings (EBITA) well into positive figures. The Group once again secured numerous attractive projects in the first three months of the new fiscal year. The order backlog at the end of the first quarter of 2013 is at the same, very high level as a year earlier and represents 20 months of forward orders for HOCHTIEF. This sound start to the current fiscal year lets us look ahead with confidence and optimism. We are convinced that HOCHTIEF has great potential, and we aim to leverage notably those strengths that have so far remained hidden. And we are working hard to boost HOCHTIEF s profitability on a sustainable basis. To that end, we presented our strategy at the beginning of 2013 and initiated action in a number of areas. These measures will enable us to raise efficiency, make risk management more effective, and streamline our organizational structure. At the same time, our focus is on attractive markets with strong future prospects: We are concentrating on countries, segments, and projects where we are competitive and can bring in good returns. A case in point is the Netherlands, where the market for public-private partnerships (PPP) is growing rapidly and we are already there with an initial roads project. Our goal is to develop HOCHTIEF into the leading global infrastructure contractor. In HOCHTIEF s core markets where we are already very well positioned Australia, North America, and Europe there is huge demand when it comes to transportation and energy infrastructure expansion and upgrading. The market for social and urban infrastructure, such as schools, public buildings, hospitals, offices as well as residential developments, likewise holds vast potential. We undertake infrastructure projects as construction contracts and on a PPP basis. Over the last few months, we have also taken steps regarding units that are no longer part of our Group s core business: Leighton thus signed an agreement in March for the sale of telecommunications assets. The transaction is expected to be completed by mid It will have a positive impact on earnings and cash. In the HOCHTIEF Europe division, we plan to sell our facility and energy management service units and we have met with strong interest out in the market. We aim to achieve an outcome soon. This is also in the interests of our employees and clients. With regard to our units in the real estate business, we aim to establish strategic partnerships. The search for long-term investors has already begun successfully. Naturally we have our employees interests at heart as we move forward: We are specifically looking for partners and investors to expand the business in cooperation with our employees. On May 6, 2013 HOCHTIEF has also entered into a sale and purchase agreement with a subsidiary of Public Sector Pension Investment Board (PSP Investments) for the sale of all shares in HOCHTIEF AirPort GmbH. The transaction will have retroactive economic effect as of January 1, The transaction proceeds are approximately EUR 1.1 billion, subject to closing adjustments. HOCHTIEF expects no significant earnings impact from the transaction. Closing is expected in the second half of The transaction is the result of a very competitive tendering process. We will use the released funds as planned to reduce debt and to invest in the operating infrastructure business. The transaction will further strengthen HOCHTIEF s financial situation. HOCHTIEF AirPort is passing into the hands of a long-term and trustworthy investor which will continue to support the airports business in a responsible manner. We have, thus, also achieved our goal of offering a perspective to the employees. In the first quarter of 2013, we won a number of attractive new orders: For instance, we are to undertake various building construction projects in the USA, including a range of 3

4 healthcare and education properties. In Australia, there are further infrastructure projects in the contract portfolio, including a rail project in Hong Kong. In Latvia, HOCHTIEF is part of a consortium contracted with the modernization and expansion of Riga airport s infrastructure. Continuation of building work on the Elbe Philharmonic Hall project is now official: The parties signed the contracts in April. HOCHTIEF will complete the building. The new structure is showing results. Progress on the construction work will be visible in the near future. In March, we successfully issued our second corporate bond, this year with a nominal principal amount of EUR 750 million. This once again showed how HOCHTIEF enjoys the full confidence of the capital market. The non-rated bond maturing in March 2020 was more than five times oversubscribed. We used the issue proceeds to pay off existing debt and are keeping part available for general business purposes. A clear focus here is on investment in our core infrastructure business. deducting HOCHTIEF AirPort s operating earnings, this new guidance implies a profit before taxes range of EUR million and consolidated net profit of EUR million for The earnings guidance range is purely operational, i.e. not including non-operative items such as restructuring charges and effects from disposals. The airport transaction is expected to generate no significant extraordinary earnings impact. The airport transaction is expected to improve the Group s cash position significantly by approximately EUR 1.1 billion. Through operating improvements and disposals, the Group expects to attain a net financial assets/net cash position already by the end of 2013 or 2014 at the latest. HOCHTIEF has been in the market for 140 years. We are committed to continuing that success story is a year of change, and we have successfully initiated our realignment. We are forging ahead with the onward development of HOCHTIEF into the leading global infrastructure contractor with profitable growth. Our shareholders will profit from that transformation. Our shareholders demands and expectations are very important to us. It is our policy for shareholders to participate adequately in the success of our business. I am a firm believer in that success. Numerous infrastructure projects the world over are waiting for HOCHTIEF and we look forward to taking them on. Yours, Group outlook For fiscal year 2013 we continue to anticipate that new orders, work done, and the order backlog of the Group will normalize. Marcelino Fernández Verdes Chairman of the Executive Board Furthermore, we increased our operating profit expectation: When publishing the full year figures, HOCHTIEF had guided 10 20% year-on-year increase of profit before taxes and consolidated net profit respectively for 2013 (equivalent to approximately EUR million profit before taxes and EUR million consolidated net profit). We now expect a stronger earnings increase in 2013 with profit before taxes reaching EUR million and consolidated net profit EUR million. This guidance is before adjustment for the sale of HOCHTIEF AirPort, which is expected to be closed with retroactive economic effect as of January 1, Adjusting for this airport transaction, i.e. 4

5 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 Interim Management Report Orders and work done New orders came to EUR 5.55 billion in the quarter ending March 31, 2013, down EUR 2.14 billion or 27.8%* on the very strong figure of a year earlier. This mainly relates to the HOCHTIEF Asia Pacific division (down EUR 1.69 billion). The comparative prior-year period featured large-scale projects in the coal and gas sector. HOCHTIEF Americas (down EUR 0.59 billion) likewise came in below the prioryear figure, which was dominated by large-scale contracts in building construction and the roads segment. The HOCHTIEF Europe division succeeded in increasing new orders compared with the prior-year figure (up EUR 0.14 billion). Work done, at EUR 6.50 billion as of the reporting date, was slightly higher than in the prior-year period (up 2.1%). The increase mainly reflected the high level of capacity utilization at the HOCHTIEF Asia Pacific division (up EUR 0.11 billion) as it worked through large projects on its order book. The HOCHTIEF Americas and HOCHTIEF Europe divisions were on a par with the corresponding prior-year figure. The order backlog, at EUR billion as of March 31, 2013, is at the same high level as in the prior-year period. The order backlog includes positive exchange rate effects relating to the Australian and the US dollar (EUR 1.32 billion). Even with work done at a sustained high level, the order backlog represents a forward order book of more than 20 months. Financial Review Earnings At EUR 5.5 billion, sales in the first quarter of fiscal 2013 almost matched their prior-year level (EUR 5.57 billion). The basis for what was once again a good start to the new fiscal year was the strong orders situation in the prio year and the large order backlog from the year-end. The sales figure includes exchange rate effects in a net negative amount of EUR 47 million, mainly relating to the Australian dollar. Sales in the HOCHTIEF Asia Pacific division, at EUR 3.35 billion, attained another high level in the first quarter of 2013, though slightly short of the prior-year period (EUR 3.41 billion). The HOCHTIEF Americas division, too, generated a high level of sales, at EUR 1.53 billion, only slightly below the comparative prior-year figure (EUR 1.56 billion). The HOCHTIEF Europe division recorded a slight increase in first-quarter sales to EUR 598 million, representing growth of 3.7% relative to the prior-year period (EUR million). The first quarter of 2013 was no exception in that HOCHTIEF generated the majority of its sales outside of Germany, with the proportion of sales generated internationally again very high at 92.4% (Q1 : 93.5%). HOCHTIEF achieved good progress on the earnings side in the first three months of the current fiscal year, with operating earnings (EBITA) at EUR million. All operating divisions contributed to this improvement. In the corresponding prior-year period, by contrast, substantial losses of some EUR 204 million on the Airport Link and Victorian Desalination Plant projects resulted in negative operating earnings of EUR 46.1 million. In the HOCHTIEF Asia Pacific division, operating earnings reached EUR million in the period under review, compared with minus EUR 84.7 million in the first quarter of. Operating earnings at the HOCHTIEF Americas division climbed to EUR 21.6 million in the first quarter of 2013, a substantial 44% higher than the comparative figure from the prior year (EUR 15 million). While the building construction business showed stable performance with Turner notching up a slight increase in earnings compared with the prior-year period, earnings performance in the civil engineering sector, in particular, improved due to the changes already put in place in. Another positive effect alongside the operating business came from the reversal of risk provisioning that was no longer needed. The HOCHTIEF Europe division generated slightly positive operating earnings of EUR 2.5 million in the reporting period. This compares with a loss of EUR 2 million in the same period a year earlier. The main factor in the improvement was a larger earnings contribution from the public-private partnership business. Significantly higher in the first quarter of 2013, HOCHTIEF Group net income from participating interests was into positive figures at EUR 39.8 million. This represented an improvement of EUR 70.7 million on the prior year, the first quarter of having been impacted by the Victorian Desalination Plant project. With that project completed and handed over to the customer last year, the HOCHTIEF Asia Pacific division s net income from participating interests improved considerably and was back within reach of breakeven in the first quarter of The HOCHTIEF Americas division likewise improved net income from participating interests, attaining a figure of EUR 10.2 million (Q1 : EUR 7.7 million). The increase resulted from higher income from participating interests at Flatiron. The HOCHTIEF Europe division also recorded a marked rise in net income *Calculated on basis of figures in EUR million. Figures in table form are provided in the interim financial statements starting on page 14. 5

6 from participating interests. At EUR 9 million, this was substantially better than the comparative figure from the prior year (EUR 3.4 million). The main factor here was income generated in connection with the sale of a school project abroad in the public-private partnership business. Income from participating interests in the real estate business, on the other hand, was more or less on a par with the prioryear period. The HOCHTIEF Group s airport holdings continue to be accounted for in the first quarter of 2013 as assets held for sale (comprising a disposal group) in accordance with the criteria stipulated in IFRS 5. Under IFRS 5, the holdings concerned are no longer accounted for as equity-method investments. The airport portfolio was adjusted in line with market requirements as of September 30, and Athens Airport taken out of the disposal group, although the fundamental intention to sell remains unchanged. The airport companies contributed a total of EUR 20.9 million to net income from participating interests for the HOCHTIEF Group in the first quarter of The significantly higher prior-year figure is not comparable due to differing accounting treatment. The figure of EUR 45.7 million primarily related to a large dividend distribution from Athens Airport. Americas and HOCHTIEF Europe, the Group notably benefited here from the distinct improvement in earnings at Leighton. The first-quarter tax expense came to EUR 22.3 million. The income tax item in the comparative prior-year period was positive, with tax income of EUR 37.8 million, mainly relating to the recognition of deferred tax assets in connection with the project losses incurred at Leighton. Thanks to the positive performance trend in all divisions during the first quarter of 2013, profit after taxes improved to EUR 101 million, up EUR million on the comparative prior-year figure (a loss of EUR 54.3 million). Consolidated net profit attributable to HOCHTIEF shareholders reached EUR 43.5 million, compared with a consolidated net loss of EUR 34.8 million in the prior-year period. The amount allocated to minority interest in the first quarter of 2013 was likewise positive, at EUR 57.5 million. In the prior-year period, minority interest was allocated a loss of EUR 19.5 million. In fiscal 2013, we will continue to pursue the long-term, balanced refinancing strategy adopted in the prior year. Following the successful corporate bond issue in the prior year, HOCHTIEF has issued a further non-rated bond. The bond issue is for a nominal principal amount of EUR 750 million and has a nominal coupon of 3.875% p.a. and a seven-year term to maturity. With this bond, we have further improved the maturity profile of HOCHTIEF s loans portfolio. Net investment and interest income is dominated by interest expense on the HOCHTIEF Group s borrowings and came to minus EUR 63.5 million in the first quarter of 2013, compared with minus EUR 45 million in the corresponding period of the prior year. The latter period was mainly affected by the bond issued by Corporate Headquarters in the prior year and by borrowings at Leighton. With profit before taxes of EUR million, HOCHTIEF made a major step forward in terms of earnings performance relative to the prior year (loss before taxes of EUR 92.1 million). Alongside a smaller improvement at HOCHTIEF 6

7 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 Cash flow Substantial cash resources were deployed in the HOCHTIEF Group to bring down liabilities at the beginning of the new fiscal year. Most of this related to a total of EUR million comprising a normal seasonal increase in net working capital notably a reduction in trade payables and a cash injection into the Bris-Conncection project in the HOCHTIEF Asia Pacific division. At the same time, the ongoing expansion of our business brought an increase in trade receivables and inventories, thus tying up further cash resources in working capital. This was countered by the positive effect on cash flow from our EUR 101 million profit after taxes. In total, net cash used in operating activities came to EUR 706 million, compared with EUR million in the prior-year period. Capital expenditure in the HOCHTIEF Group was EUR 512 million in the first quarter of 2013, EUR million higher than the EUR million recorded in the prior-year period. Capital spending on intangible assets and property, plant and equipment accounted for EUR million of the total, compared with EUR million in the prior-year period. In the HOCHTIEF Asia Pacific division, the same item came to EUR million, up EUR 96.5 million on the figure of EUR million a year earlier. The increase related chiefly to the greater need for investment spending in the capitalintensive contract mining business at Leighton. Spending on financial assets was substantially higher than in the prioryear period, reaching EUR million in the first quarter of The majority of this was for additions to the business portfolio at Leighton. Most of the prior-year figure of EUR 90.4 million was accounted for by the acquisition of the majority stake in Clark Builders, Canada. The net cash outflow from changes in securities holdings and financial receivables mainly related to purchases of fixed-interest securities by HOCHTIEF Aktiengesellschaft. At EUR 68.1 million, however, this figure was below the corresponding prior-year figure of EUR 99.3 million, most of which comprised purchases of securities at Turner as well as loans to companies in the Leighton business portfolio. Net cash used in investing activities consequently totaled EUR million in the first three months of The comparative prior-year figure of EUR million included a EUR 57 million addition to cash flow on the initial consolidation of Clark Builders. In the first three months of the 2013 fiscal year, net cash provided by financing activities stood at EUR 482 million, a large figure significantly above that of the prior-year period (EUR 115 million). Proceeds from new borrowing came to EUR million in the first quarter of 2013, compared with EUR million a year earlier. Besides for general business purposes, the proceeds from the bond with a nominal principal amount of EUR 750 million were used to repay previous finance commitments and scale back short-term bank loans. Service of debt in the HOCHTIEF Group ran to a total of EUR 375 million, compared with EUR million in the prior-year period. The first quarter of 2013 also brought a EUR 84.7 million cash outflow from dividends to minority shareholders. As in the prior-year period (EUR 75.6 million), the majority of this related to minority shareholders at Leighton. The Consolidated Balance Sheet showed EUR 1.8 billion in cash and cash equivalents at the March 31, 2013 reporting date. This is EUR million down on the figure as of December 31, (EUR 2.51 billion). The effect of exchange rate changes included in this total was positive and amounted to EUR 40.1 million. At minus EUR 1.24 billion, free cash flow was well into negative figures in the reporting period, as in the first three months of the prior year (minus EUR million). This comprised EUR 706 million net cash used in operating activities and EUR million net cash used in investing activities. 7

8 Balance sheet The HOCHTIEF Group had total assets of EUR billion at March 31, 2013, on a par with the prior year-end level of EUR billion. Non-current assets stood at EUR 5.05 billion at the end of the first quarter of 2013, compared with EUR 4.84 billion as of December 31,. The intangible assets of EUR million notably include concessions and similar rights alongside goodwill recognized on the initial consolidation of fully consolidated companies. In property, plant and equipment, an increase due to capital expenditure and exchange rate effects was primarily countered by depreciation and disposals. Property, plant and equipment consequently increased relative to the figure as of December 31, by a net EUR 53.2 million to EUR 1.95 billion. In the first quarter of 2013, HOCHTIEF recorded an increase in financial assets by EUR 64.1 million to EUR 1.25 billion. This mainly related to investment in jointly controlled entities at Leighton. Other financial assets, by contrast, remained virtually unchanged. Financial receivables likewise showed only slight change, with an increase of EUR 10.6 million. The total of EUR million as of March 31, 2013 largely consists of loans to companies in the Leighton business portfolio as well as in the HOCHTIEF Europe division s real estate activities. Other receivables and other assets increased, mostly due to a rise in derivatives receivables, by EUR 11 million to EUR million. Deferred tax assets stood at EUR million at the end of the first quarter of 2013, an increase of EUR 16.8 million on the comparative figure as of December 31, (EUR million), and related for the most part to remeasurements. Current assets decreased in the first three months of the current fiscal year relative to the figure as of December 31, (EUR billion) by EUR million to EUR billion. Reflecting the increase in work in progress in the HOCHTIEF Europe division s real estate project business, inventories rose by EUR million to EUR 1.53 billion. Current financial receivables went up by EUR 13.6 million to EUR million at the end of the reporting period. Trade receivables came to EUR 5.6 billion at the March 31, 2013 reporting date. The additional amount of EUR million relative to the figure as of December 31, (EUR 5.31 billion) was mostly accounted for by Leighton. Alongside the increase from the operating business, exchange rate changes also had a significant impact. During the first quarter of 2013, holdings of marketable securities increased by EUR 51.2 million to EUR 680 million. This primarily reflected purchases of fixed-income securities by Corporate Headquarters. By contrast, cash and cash equivalents decreased compared to the end of the prior year (EUR 2.51 billion) by EUR million to EUR 1.8 billion, reflecting net cash used in operating activities and in investing activities. The assets presented in the Consolidated Balance Sheet as held for sale relate, as at the year end, to the airport holdings that are for sale and the assets in Leighton s telecommunications business. The figure increased slightly in the course of the reporting period by EUR 50.6 million to EUR 1.9 billion. HOCHTIEF s shareholders equity increased in the first quarter of 2013 by EUR million to EUR 4.37 billion. Factors in the increase relative to December 31, (EUR 4.24 billion) included EUR million from currency translation differences and changes in fair value of financial instruments as well as EUR 101 million from profit after taxes. To these are added a total of EUR 2.4 million in changes from remeasurement of defined benefit plans and other changes not recognized in the Statement of Earnings. In the opposite direction, dividends paid to minority shareholders had a negative impact on shareholders equity in the amount of EUR 84.7 million. At the end of the first quarter of 2013, our equity ratio (shareholders equity to total assets) improved to 25.7% (December 31, : 25%). Non-current liabilities increased substantially during the first quarter of The total figure came to EUR 4.51 billion as of March 31, 2013, compared with EUR 3.74 billion as of December 31,. The majority of the increase related to the issue of a non-rated bond by HOCHTIEF Aktiengesellschaft with a nominal principal amount of EUR 750 million. The HOCHTIEF Group s non-current financial liabilities rose as a result to EUR 3.51 billion. Non-current provisions, by contrast, remained more or less constant relative to the year end, at EUR million as of March 31, Within this figure, provisions for pensions and similar obligations came to EUR million, compared with EUR million as of December 31,. Other non-current provisions, mostly relating to personnel and insurance-related obligations, stood at EUR million. Other liabilities (EUR 61.8 million) and deferred tax liabilities (EUR 97.6 million) showed only slight change relative to December 31,. 8

9 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 Current liabilities were reduced by EUR million during the first quarter of 2013 and came to EUR 8.1 billion as of March 31, Most of the decrease in liabilities related to the reduction of operating liabilities at our subsidiary Leighton. Trade payables consequently decreased in the Consolidated Balance Sheet by EUR million to EUR 5.07 billion. Current financial liabilities were also reduced by EUR million to EUR 1.47 billion as a result of the corporate bond issue by HOCHTIEF Aktiengesellschaft. Current provisions likewise went down slightly by EUR 6.5 million to EUR million. In contrast, other liabilities rose by EUR 22 million to EUR million, while liabilities associated with assets held for sale increased by EUR 16.1 million to EUR million. Risk and opportunities report The presentation of the opportunities and risks* of likely future developments given in the combined company and Group management report as of December 31, continues to apply. There has been no material change in the situation of the Group from that presented in our Annual Report with regard to the general economic environment and to the company-specific risks presented in this report. The overall economic situation poses risks notably due to the continuing debt crisis in the euro zone and primarily the situation in Greece, the developments in Hungary, the ongoing political uncertainties in the Arabian region, and exchange rate movements. We monitor and assess these risks on a continuous basis. From today s perspective, they raise no doubts about the HOCHTIEF Group s ability to continue as a going concern. The economic situation is subject to continuous assessment as part of our risk management system. Despite extensive control mechanisms and ongoing project reviews, we cannot rule out the future necessity in individual instances of recognizing impairment losses on investments within the portfolio. Report on forecasts and other statements relating to the company s likely future development The forecasts and other statements regarding the likely development of HOCHTIEF published in the combined management report as of December 31, have taken on more concrete shape during the first quarter of In line with this report, we are raising our Group operating earnings guidance for When publishing the full year figures, HOCHTIEF had guided 10 20% year-on-year increase of profit before taxes and consolidated net profit respectively for 2013 (equivalent to approximately EUR million profit before taxes and EUR million consolidated net profit). We now expect a stronger earnings increase in 2013 with profit before taxes reaching EUR million and consolidated net profit EUR million. This guidance is before adjustment for the sale of HOCHTIEF AirPort, which is expected to be closed with retroactive economic effect as of January 1, Adjusting for this airport transaction, i.e. deducting HOCHTIEF AirPort s operating earnings, this new guidance implies a profit before taxes range of EUR million and consolidated net profit of EUR million for The earnings guidance range is purely operational, i.e. not including non-operative items such as restructuring charges and effects from disposals. The airport transaction is expected to generate no significant extraordinary earnings impact. The airport transaction is expected to improve the Group s cash position significantly by approximately EUR 1.1 billion. Through operating improvements and disposals, the Group expects to attain a net financial assets/net cash position already by the end of 2013 or 2014 at the latest. The statements regarding the development of orders published in the Annual Report continue to apply. News from the Boards The Supervisory Board elected Thomas Eichelmann as Chairman of the Supervisory Board with effect from January 1, Christine Wolff stepped down from her office as member of the Supervisory Board as of January 31, Nikolaus Graf von Matuschka was appointed as a member of the Executive Board of HOCHTIEF Solutions AG on February 19, 2013 and consequently stepped down from his office as member of the Supervisory Board on the same day. Dr. Michael Frenzel, Elmar Rommerskirchen, and Dr. Jan Martin Wicke were appointed as members of the Supervisory Board by decision of Essen Local Court on March 12, *Our risk report is provid ed starting on page 119 of our Annual Report and on our website, 9

10 Divisions HOCHTIEF Americas Division (EUR million) Q Q1 (restated)* Percentage change Full year (restated)* New orders 1, , ,577.7 Work done 1, , ,037.6 Order backlog 11, , ,900.1 Divisional sales 1, , ,374.9 External sales 1, , ,374.6 Operating earnings (EBITA) Profit before taxes Capital expenditure Net assets Employees 8,894 (Q1 2013) 7,798 (Q1 ) ,397 ( average) Capital expenditure decreased substantially year on year. This relates to the fact that the prior-year figure included the acquisition of a majority stake in Clark Builders for a purchase price of EUR 49.9 million. The total number of employees increased to 8,894, primarily due to the large number of projects in progress. Turner reinforced its leading position in US general building with attractive new projects. The company is undertaking construction of a Veterinary Medicine Learning Center for the University of Georgia. The 26,000-squaremeter project includes construction of a teaching hospital, a clinic, lecturing facilities, classroom space, and offices. *Restated for IAS 19R. For notes on the adjustment, please see pages 18 and 19. The HOCHTIEF Americas division began the new fiscal year with a healthy level of new building construction orders. However, compared with the exceptionally high prior-year figure, new orders, at EUR 1.53 billion, were down in the first quarter of 2013 while still maintaining the comparable level from two years ago. The prior-year period included various large-scale projects in building construction and the roads segment. Work done and external sales were slightly down on the prior-year level. Work done and sales showed healthy growth in the civil engineering segment, the slight decrease in the first quarter of the fiscal year being attributable entirely to the building construction segment. The HOCHTIEF Americas division s order backlog marked a new record at EUR billion; this includes a EUR million positive exchange rate effect relative to the prior-year period. Both operating earnings and profit before taxes increased significantly compared with the prior-year period. The improvement in earnings on the prior-year period was especially notable in the civil engineering segment. As planned, we continued systematically applying the meas ures launched in the civil engineering business during, including the appointment of a new Chief Executive Officer and a new Chief Operating Officer at our subsidiary Flatiron. Earnings include a positive nonrecurring item from the reversal of risk provisioning that is no longer required. In Chicago, Illinois, Turner is providing the Advocate Illinois Masonic Medical Center with a new 13,000-square-meter outpatient facility and an addition and renovation to a cancer center. Only this March, Modern Healthcare magazine ranked our subsidiary the number one construction manager for healthcare buildings in the United States for the sixth consecutive year. As a specialist in education buildings, Turner is also constructing new student accommodations at the University of Morgantown in West Virginia. The project includes 250 student rooms in one six-story and one seven-story building plus 200 parking spaces. The HOCHTIEF subsidiary s expertise in building sports facilities once again came to the fore in the modernization of Lincoln Financial Field Stadium, the home of the Philadelphia Eagles, in Philadelphia, Pennsylvania. Alongside this, Turner is undertaking preconstruction work on a recreation park for the town of Castle Rock, Colorado. In addition to a conventional park, the 91-hectare site includes an amphitheater, an indoor sports facility, and swimming pools. Turner has also secured a contract to construct a four-story baggage building between Terminal 4 and the International Terminal at Los Angeles World Airports. The company will also make interior improvements to Terminal 4. Turner helps customers create sustainable buildings. In the first quarter of 2013, the company has itself been honored for its sustainability achievements with the Climate Leadership Award. Turner succeeded in cutting its own greenhouse gas emissions by over 5% in the past five years. 10

11 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 US subsidiary Flatiron likewise received awards in the period under review. The John James Audubon Bridge project in Louisiana was named Transportation Project of the Year and picked as the overall Best Project by Engineering News- Record. Furthermore, the California Department of Transportation honored two Flatiron projects the Big Bear Bridge project and the Interstate 15 Managed Lanes project with Excellence in Partnering Awards. HOCHTIEF Americas outlook The HOCHTIEF Americas division began the new fiscal year with a large order backlog. After a decline in, the outlook in the markets of importance for HOCHTIEF Americas has now improved. The division therefore expects profit before taxes in 2013 to increase to between EUR 80 and 100 million. HOCHTIEF Asia Pacific Division The HOCHTIEF Asia Pacific division saw new orders decrease (by EUR 1.69 billion) in the first quarter relative to the prior-year period. The prior-year quarter was exceptionally strong, however, due to a number of large-volume project awards in the coal and gas sector. Work done and sales were on a par with the prior-year period. The order backlog, at EUR billion, held the yearend level from, but is down on the corresponding prior-year figure (by EUR 1.50 billion). Operating earnings and profit before taxes once again showed marked growth in the first quarter of the current fiscal year. The prior-year quarter was heavily impacted by the two loss-making projects, Airport Link and Victorian Desalination Plant, both of which are now complete. HOCHTIEF also profited from the positive trend in work done and business performance at Leighton in the form of a EUR million dividend payment made by Leighton in March 2013 for the second half of the fiscal year. (EUR million) Q Q1 Percentage change Full year New orders 3, , ,414.5 Work done 4, , ,223.5 Order backlog 32, , ,486.4 Divisional sales 3, , ,179.8 External sales 3, , ,179.8 Operating earnings (EBITA) (84.7) Profit before taxes (121.5) Capital expenditure ,532.6 Net assets 4, , ,756.3 Employees 57,686 (Q1 2013) 54,151 (Q1 ) During the period under review, Leighton agreed with Macmahon Holdings Ltd. to take over a total of took ten construction projects for around EUR 25 million, with the bulk of the projects transitioning to Leighton subsidiary John Holland. Leighton also settled its approximately EUR 157 million (AUD 200 million) cash commitment to BrisConnections, the Airport Link project operating company. The carrying amount of the balance of its stake in the operating company was fully impaired in fiscal ,959 ( average) The significantly higher level of capital expenditure relative to the prior-year comparative period consists of some EUR 222 million in spending on property, plant and equipment (mainly for the procurement of new and the maintenance of existing mining equipment) and approximately EUR 221 million in expenditure on financial assets (mostly payments into capital at jointly controlled entities), which will not continue at the same high level through the remainder of The comparative figure for the prior year related almost entirely to expenditure on property, plant and equipment. The number of employees increased by 6.5% on the prior-year period (3.0% compared with the end of ), in line with the higher work done volume. Leighton has reached agreement with Ontario Teachers Pension Plan for the sale of approximately 70% of Leighton s telecommunications assets, which include the Nextgen Networks, Metronode, and Infoplex businesses. The EUR approximately 496 million transaction is scheduled for completion by mid Visionstream, which provides construction services to the telecom sector, will be retained in the Leighton Group as planned. In energy infrastructure-related work, Thiess was awarded a third contract worth EUR 165 million at the Gorgon LNG project in Western Australia to deliver civil works. On the same project, an existing contract with Leighton Contractors was expanded by EUR 750 million to reflect an increased scope. In Papua New Guinea, Leighton Con- 11

12 tractors was awarded a circa EUR 154 million contract to construct Esso Highlands Ltd. s permanent head office in Port Moresby, their third contract in that country. Transportation infrastructure continues to provide good opportunities. In Hong Kong, Leighton Asia was awarded a EUR 501 million contract to construct a challenging component of the Shatin to Central Link rail development in Hong Kong. This is the seventh contract from the MTR Corporation in the past three years. The contract includes significant modification works to an existing station, platforms, tunnel box, and approach tunnels. In social and urban infrastructure, Leighton Contractors subsidiary Visionstream was awarded EUR 259 million worth of work to roll out Australia s National Broadband Network in Victoria, Queensland and southern New South Wales. Leighton Asia is to design and build a 12-story hospital in Hong Kong. The contract is worth a total of EUR 203 million. In Sydney, Thiess successfully completed the EUR 905 million Royal North Shore Hospital project, for which it was awarded Infrastructure Partnerships Australia s Contractor Excellence Award. Thiess was awarded a five-year contract valued at EUR 141 million to provide operations and facilities maintenance services for Sydney Water. In Melbourne, Leighton Properties sold 567 Collins Street, a 26-story office property, for some EUR 364 million. New contracts in the resources sector include a EUR 143 million iron ore wharf extension project in Western Australia for John Holland. Xstrata entered into an agreement with Thiess to take the Collinsville coal mine in Queensland back to an owner-operator model from later this year. This will have negligible impact on fiscal John Holland s contract mining business was transferred to Leighton Contractors as Leighton implements its strategy of developing distinctive core competencies within its operational units and to add value for clients. Leighton is also to develop centers of excellence to establish bestin-class processes. HOCHTIEF Asia Pacific outlook Leighton is excellently placed as a long-term provider of construction and mining services in Australia and key Asian locations. The available market potential combined with the Leighton Group s focus on core competencies and efficient structures will result in increased earnings. In fiscal 2013, subject to market conditions and unforeseen circumstances, Leighton expects to deliver operating profit after taxes of AUD million (EUR million). HOCHTIEF Europe Division (EUR million) Q Q1 Percentage change Full year New orders ,393.9 Work done ,332.0 Order backlog 6, , ,419.7 Divisional sales ,856.2 External sales ,845.3 Operating earnings (EBITA) 2.5 (2.0) 92.2 Profit before taxes (12.1) (13.7) Capital expenditure Net assets 1, , ,792.5 Employees 15,335 (End Q1 2013) 15,192 (End Q1 ) ,320 ( average) In the first quarter of 2013, the HOCHTIEF Europe division exceeded its performance in the prior-year period with in some cases marked improvements in orders and work done as well as in its earnings figures. New orders, at EUR million in the quarter under review, were a substantial EUR million (18.5%) higher than the prior-year figure. This increase reflected the positive performance of the business in, among others, Germany. Work done likewise increased, by EUR 68.9 million (9.9%) to EUR million, although the infrastructure segment was hit by the long, hard winter in Europe. In line with the rise in work done, external sales were 3.7% up on the first quarter of the prior year. The order backlog was slightly up on the prior year, at EUR 6.46 billion (a 0.4% increase), and represents over 25 months in forward orders. In operating earnings, the division made it back into positive figures, largely due to successes in our publicprivate partnership activities. EBITA improved by EUR 4.5 million compared with the prior-year period. Taking into account net investment and interest income together with negative non-operating earnings in connection with ongoing organizational development, profit before taxes was still negative, but showed a slight improvement of EUR 1.6 million (11.7%) on the prior-year quarter. The change in capital expenditure relative to the prioryear period (a reduction of EUR 9.8 million) reflects a 12

13 To Our Shareholders 3 Interim Management Report 5 Interim Financial Statements 14 Responsibility Statement 21 Financial Calendar 23 decrease in capital expenditure on financial assets (by EUR 15.4 million), where investment was required in the prioryear quarter for our offshore business and PPP activities. Capital expenditure on property, plant and equipment showed an increase of EUR 5.6 million year on year for project work and for additions to our equipment pool in the construction logistics segment. HOCHTIEF Solutions is set to further sharpen its strategic focus in the future on the core business of delivering infrastructure projects. The new orders generated in the first quarter of 2013 underscore this strategic orientation: The division secured attractive projects, most of all in the transportation infrastructure as well as the social and urban infrastructure segments. Public-private partnerships featured strongly in these projects. February 2013 on a further residential project in Frankfurt with 237 rental and 113 owner-occupied apartments, underground parking, and a daycare center. The rental apartments and daycare center parts of the project were sold before construction began and were brought under a special-purpose real estate investment fund. Among the PPP projects in the social infrastructure segment, HOCHTIEF has won a 25-year contract to design, build, and operate six daycare centers for the City of Leverkusen. The centers will cater to 480 children. In Nuremberg, the company is to erect new facilities for the Paul Moor School. Alongside a special-needs school building constructed to passive solar standards, the complex also includes a sports building and open-air sports facilities. Here, too, the operation contract runs for 25 years. In the Netherlands, HOCHTIEF is part of a consortium that is to upgrade a 20-kilometer-plus section of the freeway linking the city of Almere with Amsterdam s Schiphol Airport. The project has a total value of over EUR 1 billion. The work involves widening the highway to up to five lanes and building two complex bridge structures, an aqueduct, and a rail bridge. The design-build-finance-maintain (DBFM) project is the first of four projects to improve transportation links to the airport. The highway segment will subsequently be operated for 30 years. In southern Germany, HOCHTIEF Solutions is to work in a joint venture to build a 970-meter tunnel for the new Wend - lingen-ulm rail link. The tunnel runs parallel to the A8 freeway and is scheduled for completion in In North Wales, also, the company has won the contract for a rail project and is to replace the Pont Briwet rail bridge. Alongside the rail track, the bridge will also carry a cycleway and a two-lane road. New contracts in the social and urban infrastructure segment include the Mercaden Böblingen, Baden-Württemberg, shopping center project in which HOCHTIEF has a share of approximately EUR 49 million. HOCHTIEF Solutions is to complete the turnkey construction project by the end of Boasting a gross floor area of 78,000 square meters, the center will house a mix of some 100 retail, catering, and services businesses. In February 2013, HOCHTIEF received the contract for core and shell, concrete, reinforced concrete, and steel work on Berlin s City Palace. Since the beginning of the year, HOCHTIEF has provided infrastructure services and facility management for 472 properties belonging to Vodafone across Germany, including the corporate headquarters, a call center, offices, stores, transmission stations, and data centers. In the first quarter, Mercedes Benz renewed and increased the scope of technical facility management services provided in cooperation with HOCHTIEF. The north as well as the south plant at Mercedes are now both served by HOCHTIEF. The company is responsible for several locations in and around Stuttgart and for technical facility management for two climatic wind tunnels in Sindelfingen. HOCHTIEF Europe outlook Strategically, HOCHTIEF Europe will focus on constructing and delivering infrastructure projects, with the priority on improving cost-efficiency. The process of selling the services business, as announced, has been successfully initiated. Tied-up capital is to be reduced by implementing partnerships with other investors in the real estate segment. Another focus in 2013 will be on improvement of the cost structure. All these measures will improve the profitability of the HOCHTIEF Europe division sustainably. Compared to we expect an improvement of the recurring operative result already in HOCHTIEF Solutions has secured a contract worth approximately EUR 46 million to build some 400 rental apartments in Berlin by the fall of Construction began in 13