Investor Relations Group Presentation 6M/Q2 2021
BAUER AG
August 12, 2021 1 Overview ▪ BAUER Group ▪ Highlights 6M/Q2 2021
2 BAUER Group Three closely interlinked segments – a business model with a future
Mission
The BAUER Group is a leading provider of services, equipment & products dealing with ground and groundwater
Construction Equipment Resources Global provider for One of the technical leading manufacturer Products and services for the water, specialist foundation engineering services of specialist foundation equipment mining and environmental industries ▪ For private and public clients ▪ Equipment for all specialist foundation ▪ Drilling services and well construction, ▪ Broad portfolio of specialist foundation engineering methods environmental technology, constructed techniques and many years of know-how ▪ Innovative and digital assistance systems wetlands, mining and remediation ▪ Focus on complex projects in the world ▪ Specialized machines for mining, deep ▪ Waste disposal and brownfield services drilling and offshore drilling often in combination with specialist ▪ Own equipment in use foundation engineering 3 Highlights 6M 2021 – Increase of revenues and earnings in still difficult environment
Total Group revenues EBIT* Earnings after tax Order backlog Equity
EUR 767.4 million EUR 15.3 million EUR -5.6 million EUR 1,279 million EUR 450.4 million (+5.8%) (EUR 11.0 million) (EUR -16.0 million) (+0.3%) (+22.8%)
Significant financial developments Significant operational developments
▪ Increase of total Group revenues in a still difficult market ▪ Construction markets are still significantly influenced by COVID-19 environment pandemic, especially in the Far East
▪ EBIT increased in all business segments ▪ Improved demand situation in the Equipment segment, but no significant improvement in key figures. Continued reluctance to ▪ Earnings after taxes significantly better – invest due to uncertainty and disruptions caused by the COVID-19 improvement of financial result pandemic – especially in China and South-East Asia
▪ Order backlog stable on a very high level ▪ Resources with successful first half-year. The restructuring measures of the recent years are now showing their effect. ▪ Equity and equity ratio increased substantially – capital increase was very successful and showed great interest from investors and private shareholders
▪ Bank liabilities were reduced very significantly
* Previous year adjusted; see p. 70 in the Annual Report 2020 4 2 Financials ▪ Overview: Market environment and course of business ▪ Working capital & Net debt ▪ Capital increase 2021
5 Financials Key figures 6M 2021
in EUR million 6M 2020* 6M 2021 ∆ 6M in % Total Group revenues 725.0 767.4 +5.8% Construction 312.2 358.6 +14.8% Equipment 296.9 314.4 +5.9% Resources 151.8 138.2 -9.0% Other/Consolidation -35.9 -43.8 n/a Sales revenues 648.5 685.5 +5.7% Order intake 973.1 884.3 -9.1% Order backlog 1,275.7 1,279.4 +0.3% EBITDA 62.4 66.4 +6.3% EBIT 11.0 15.3 +39.3% EBIT margin (in % of sales revenues) 1.7 2.2 n/a Earnings after tax -16.0 -5.6 n/a Earnings per share (in EUR) -0.96 -0.35 n/a Total assets 1,655.5 1,650.5 -0.3% Equity 366.8 450.4 +22.8% Equity ratio (in %) 22.2 27.3 n/a Employees 12,038 11,728 -2.6%
* Previous year adjusted; see p. 14 in the Half-Year Interim Report and p. 70 in the Annual Report 2020 6 Financials Revenues & Earnings – Group
Revenues Development 6M 2021 in EUR million Total Group revenues Sales revenues ▪ Increase of total Group revenues in a still difficult market ∆ 6M environment 2,000 +5.8% 1,595 1,471 1,454 +5.7% 1,600 1,343 ▪ Correspondingly, sales revenues were also above prior-year level 1,200 767 800 725 649 685 400 0 2019 2020 6M 2020 6M 2021
Earnings in EUR million EBIT* Earnings after tax ▪ EBIT increased significantly; earnings growth in all business ∆ 6M segments 75 55.5 +39.3% n/a 50 ▪ Earnings after taxes were significantly better, also the financial 33.7 result improved significantly 25 11.0 15.3 -8.2 -16.0 -5.6 0 2019 2020 6M 2020 6M 2021 -25
-50 -36.6
* Previous year adjusted; see p. 70 in the Annual Report 2020 7 Financials Order situation – Group
Order intake Development 6M 2021 in EUR million ▪ Order intake decreased on Group level 1,609 1,589 ▪ Equipment segment increased order intake Q4 321 318
Q3 450 297 -9.1% ▪ Decrease in Construction and Resources segments, because of the very high 2020 basis 518 Q2 418 368
Q1 420 455 516
2019 2020 2021
Order backlog in EUR million ▪ Order backlog stable on a very high level
1,500 1,276 1,279 1,163 +0.3% ▪ Construction segment with new major orders in Europe, Jordan, 1,200 1,028 India and Egypt in the first half-year 2021 900 ▪ Equipment segment increased order backlog 600 300 0 2019 2020 6M 2020 6M 2021
8 Financials Construction segment
Market environment 6M 2021 and course of business ▪ Construction continued to be influenced by the effects of the COVID-19 pandemic ▪ Markets in Europe and the USA positive, good workload in the Middle East due to a major order in Jordan. ▪ Postponements of project starts on some major projects ▪ Renewed exit and travel restrictions in some countries in Far East, due to an again increasing spread of the COVID-19 pandemic. Adjustment of capacities in Far East ongoing. ▪ Order backlog still very high; larger projects have been commissioned in Europe, Jordan, India and Egypt in the first half-year of 2021
Key figures
in EUR million 6M 2020* 6M 2021 ∆ 6M in % Total Group revenues 312.2 358.6 +14.8% EBIT -0.01 2.5 n/a Earnings after tax -11.5 -5.5 n/a Order backlog 783.3 791.9 +1.1% Order intake 484.5 429.2 -11.4%
* Previous year adjusted; see p. 14 in the Half-Year Interim Report and p. 70 in the Annual Report 2020 9 Financials Equipment segment
Market environment 6M 2021 and course of business ▪ The first quarter of 2020 showed only minimal effects of the COVID-19 pandemic. In this respect, the increase in revenue and earnings in the first half of the year 2021 represents an improvement in comparison. ▪ The customers’ reluctance to invest, resulting from the uncertainty and disruptions caused by the COVID-19 pandemic is still ongoing. ▪ In the Far East, the sales figures so far have remained significantly below expectations. ▪ Order intake and order backlog increased
Key figures
in EUR million 6M 2020* 6M 2021 ∆ 6M in % Sales revenues 223.1 227.3 +1.9% EBIT 4.2 8.4 +98.9% Earnings after tax -3.8 1.3 n/a Order intake 314.8 363.2 +15.4% Order backlog 126.1 167.6 +32.9%
* Previous year adjusted; see p. 70 in the Annual Report 2020 10 Financials Resources segment
Market environment 6M 2021 and course of business ▪ Resources segment still relatively unaffected by the pandemic ▪ Revenue decrease compared to H1 2020 is related to the major Kesslergrube project, which was handed over to the client in July 2020 ▪ Good start into 2021 with lower footprint after restructuring – water well drilling, environmental services and mining performed well ▪ Restructuring success of recent years is now being increasingly reflected in the key figures
Key figures
in EUR million 6M 2020* 6M 2021 ∆ 6M in % Total Group revenues 151.8 138.2 -9.0% EBIT 4.1 4.8 +15.7% Earnings after tax 1.1 2.9 n/a Order backlog 366.2 319.9 -12.7% Order intake 209.8 135.7 -35.3%
* Previous year adjusted; see p. 14 in the Half-Year Interim Report and p. 70 in the Annual Report 2020 11 Financials Working Capital, liabilities to banks & net debt – Group
Working Capital Development 6M 2021 in EUR million ▪ Positive development ongoing in first half-year 2021 800 726 700 ▪ Measures to optimize working capital take effect: inventories reduced; receivables and other assets increased in line with higher 600 553 547 revenues 500
400 ▪ Income from capital increase was used to reduce liabilities to Q1/15 Q4/15 Q3/16 Q2/17 Q1/18 Q4/18 Q3/19 Q2/20 Q1/21 banks. Total reduction of about EUR 86 million (EUR 64 million effect from capital increase plus EUR 22 million additional reduction) Net debt in EUR million ▪ Net debt reduced by EUR 78.2 million to EUR 560.2 million; 800 779
700 638 600 560
500
400 Q1/15 Q4/15 Q3/16 Q2/17 Q1/18 Q4/18 Q3/19 Q2/20 Q1/21
12 Financials Capital increase 2021 successfully implemented
Results ▪ Very successful – maximum net proceeds of EUR 63.3 million achieved ▪ Strong demand for oversubscriptions ▪ Used for repayment of financial liabilities ▪ Increase in equity ratio – 27.3% compared to 22.2% (6M/2020)
Shareholder structure – before Capital increase 2021 Shareholder structure – after Capital increase 2021
Doblinger Free float Beteiligung GmbH 36.35% 30.00%
43.81% Bauer family 36.02% Bauer family 19.84% Doblinger Beteiligung GmbH 33.98% Free float
13 3 Markets & Regions ▪ Markets ▪ Regional distribution
14 BAUER Group Construction market environment vs. order backlog
Europe USA / Canada Germany o Market: Western European countries affected by Market: good construction Market: still a good market, o o coronavirus; slow development market despite coronavirus; first signs of weakening; in Eastern Europe; Russia very increasing demand for Bauer: good order situation weak infrastructure in the USA and + Canada, but delays in awards + Bauer: Reasonable order + and tender situation, primarily due to Asia Pacific major projects Bauer: good order backlog with o Market: regional market public projects in the USA, Middle East environment strongly affected by increased presence in Canada coronavirus; strong demand for - Market: significant negative infrastructure in Philippines, influences due to ongoing conflicts, Thailand, Indonesia, but strong coronavirus and slow economy o disruptions due to pandemic o Bauer: reasonable order backlog in Bauer: Weak order situation in Latin America UAE and Saudi Arabia; major Africa Malaysia; awaiting additional project in Jordan expanded; projects awards in Thailand and Market: isolated larger projects - projects in Bangladesh, Bhutan and o Market: few projects in some Philippines; chances in Australia, - Bauer: new orders in Panama, new projects starting in India countries, Egypt still growing Singapore low performance caused by + Bauer: healthy business situation in pandemic Egypt, e.g. new orders for Cairo Metro; small presence in other areas
++ strong growth + growing o stable - slightly weak -- weak
15 Regional breakdown Total Group revenues 6M 2021 – Group
Total 767 in EUR million Germany 266 (35%) Europe 138 (18%)
Middle East 86 (11%) Full year 2020
Total 1.098 Africa 52 (5%) in EUR million America 187 (17%) Germany 332 (30%)
Asia-Pacific, Far East & Australia 162 (15%) Middle East & Asia-Pacific EU excl. Germany Europe (other) Central Asia 112 (15%) 136 (12%) 77 (7%) 152 (14%)
Americas 122 (16%) Africa 43 (6%)
The regional breakdown 2021 was slightly adjusted compared with the previous year 16 Regional breakdown Total Group revenues 6M 2021 – Segments
Construction segment Equipment segment Resources segment
Total 351 Total 279 Total 138 in EUR million
Germany 86 (24%) Germany 83 (30%) Germany 98 (71%)
Europe 46 (13%) Europe 77 (28%) Europe 15 (11%) Middle East Middle East Middle East 67 (19%) 7 (3%) 12 (9%)
Asia-Pacific 4 (3%)
Africa Africa Americas Africa 30 (9%) 7 (2%) 3 (2%) 6 (4%) Americas Asia-Pacific Americas Asia-Pacific 60 (17%) 62 (18%) 59 (21%) 46 (16%)
Figures after deducting Other/Consolidation 17 4 Outlook ▪ Forecast 2021 ▪ Megatrends & focus topics ▪ Financial ambition for 2023
18 BAUER Group Forecast 2021 unchanged – Increase in revenues and earnings expected
Construction Equipment Resources ▪ High demand for infrastructure ▪ Investments expected to pick up from ▪ Measures 2020 are the basis for the ▪ Growth in revenues and EBIT mid-2021 onwards realignment ▪ Growth in revenues and EBIT ▪ Stable revenues and growth in EBIT
Group
in EUR million 2020 final Forecast 2021
Total Group revenues 1,454 1,550 - 1,650
EBIT 55.5 75 - 85
▪ Indication: Sales revenues are expected to be EUR 90 to 100 million lower than total Group revenues (no forecast)
19 BAUER Group A look into the future
Megatrends Our focus topics
▪ Exploiting opportunities in global fields of the future ▪ Megatrends open up attractive potential worldwide ▪ Leveraging synergies between the segments ▪ The three segments Construction, Equipment and Resources enable an interlinking of know-how that is unique in the industry ▪ Expand environmental technology into new markets Infrastructure Urbanization ▪ Expand core business of Resources segment and open up new markets such as USA and China ▪ Global footprint for growth opportunities ▪ Worldwide network organization offers opportunity to benefit from regional differences ▪ Clear focus on sustainable profitability ▪ Consistent implementation of a comprehensive package of measures for profitable development Environmental Water extraction/ awareness treatment
20 BAUER Group Financial ambition – mid-term perspective for year-end 2023
Key topics Mid-term financial targets
▪ Sustainable profit improvement is our main focus for the next ▪ Growth: 3 - 5% (CAGR) years ▪ Top line growth is not our primary focus ▪ EBIT margin: ▪ Target is a healthy & strong balance sheet ▪ Group: 7 - 9% ▪ Construction: 4 - 6% ▪ Equipment: 10 - 12% ▪ Resources: 6 - 8%
▪ Net debt / EBITDA ratio < 2.5 ▪ Liabilities to banks < EUR 300 million
▪ Equity ratio > 30%
▪ Dividend ratio of about 25 to 30% of Group earnings after taxes
21 5 Appendix ▪ BAUER Group ▪ Executive Board ▪ The three segments ▪ Financials ▪ BAUER share ▪ Financial calendar & IR contact
22 BAUER Group Longstanding healthy business development
Total Group revenues in EUR million (segment after deducting Other/Consolidation) Total 1,454
1,800
1,600 Resources 1,400 265
1,200 Equipment 546 1,000
800 Construction Overseas 600 501
400
200 Construction Domestic 142 0 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
Note: from 2003 based on IFRS figures; segment figures after deducting Other/Consolidation 23 BAUER Group The three segments
▪ Target: ~ 40 % of ▪ Target: ~ 20 % of total Group revenues total Group revenues ▪ Market leader in specialist ▪ Innovative products and foundation equipment services in the fields of drilling services and water ▪ Specialized products for mining, well drilling and wells, environmental offshore drilling services, constructed wetlands, mining and ▪ 80 % of revenues from remediation sales abroad ▪ Multi-branding strategy
▪ Target: ~ 40 % of total Group revenues ▪ Global provider for specialist foundation engineering services ▪ Specialist construction services ▪ Focus on complex, international projects
24 BAUER Group Worldwide network
Permanent Offices: Construction Equipment sales Resources Equipment production
Conroe Schrobenhausen Tianjin Kuala Lumpur
25 BAUER Group The history – Over two centuries of experience
Dipl.-Ing. Dr.-Ing. Prof. Dr. Dipl.-Kfm. Karl Bauer Karlheinz Bauer Thomas Bauer
1790 - 1956 1958 - 1990 1992 - 2008 2009 - 2020
▪ 1790 Sebastian Bauer acquires a ▪ 1958 Invention of the injection anchor on the ▪ 1992 Takeover of SCHACHTBAU ▪ 2009 Largest investment program in the coppersmith's shop in Schrobenhausen construction site of the Bayrischer Rundfunk NORDHAUSEN GmbH company's history completed: administration building in Munich building in Schrobenhausen, Edelshausen ▪ 1900 Start of well drilling by ▪ 1994 Founding of BAUER Aktiengesellschaft plant, machinery manufacturing plant in Andreas Bauer ▪ 1969 First anchor drilling rig UBW 01 Conroe, Texas, USA ▪ 2001 BAUER Maschinen GmbH becomes ▪ 1928 Dipl.-Ing. Karl Bauer constructs the ▪ 1975 First contracts in Libya, Saudi Arabia independent company ▪ 2012 The Group's global workforce topped Schrobenhausen water supply system; and the United Arab Emirates the 10,000 mark for the first time construction of wells and water pipes ▪ 2006 BAUER AG is listed on the stock market throughout Bavaria ▪ 1976 First heavy-duty rotary drilling rig BG 7 ▪ 2018 Michael Stomberg succeeds ▪ 2007 Founding of BAUER Resources GmbH; Prof. Thomas Bauer as Chairman ▪ 1956 Dr.-Ing. Karlheinz Bauer becomes ▪ 1986 Prof. Thomas Bauer becomes sole market launch of the three new segments: of the Management Board sole managing director; construction of a managing director of BAUER Spezialtiefbau Construction, Equipment and Resources first office building in GmbH and drives forward the international ▪ 2019 Bauer cutter technology reaches record Wittelsbacherstrasse growth of the Group ▪ 2008 Expansion of machinery manufacturing depth of 251.4 m at project in Canada capacities in Aresing and Nordhausen as well as in Tianjin and Shanghai, China ▪ 2020 Three successful decades of environmental and mixing plant technology
26 BAUER AG Executive Board
Michael Stomberg (CEO) Florian Bauer Hartmut Beutler (CFO) Peter Hingott
▪ Digitalization ▪ Financing & Treasury ▪ Group Controlling & Accounting ▪ Technology ▪ Human Resources
27 Construction segment Overview
Key facts ▪ About 50 small-/mid-size local companies around the world ▪ Focus on complex, international projects ▪ About 400 to 500 projects per year with a 50/50 infrastructure/industrial split ▪ Figures are somewhat cyclical between the quarters – focus on the entire year
Market environment ▪ Growing construction markets worldwide Mission ▪ Special foundation engineering is growing stronger than construction markets Global provider for specialist ▪ Huge pent-up demand in developed countries and in emerging markets foundation engineering services Competition Key figures and targets ▪ Keller, Trevi, Soletanche Bachy (worldwide) ▪ Total Group revenues (incl. JV) ▪ Local competitors in each country ▪ EBIT ▪ Order backlog ▪ ~ 40% of BAUER Group's total revenues ▪ EBIT margin: 4 - 6% (2020: 4.0%, 2019: n/a)
28 What is specialist foundation? Building an excavation pit
Mixed-In-Place Method Diaphragm and Cut-off Wall
Piling Retaining Ground Anchor Wall
Permeation Grouting Pile Foundation
29 What is specialist foundation used for? Applications
Excavation Pits Cut-off-Walls Foundations Soil Improvement ... for every problem and requirement … as solution for dams and dikes …for the highest buildings in the world … allows projects on weak ground
30 Construction segment Arab Potash, Dead Sea, Jordan
31 Construction segment Operaparken, Copenhagen, Denmark
32 Equipment segment Overview
Key facts ▪ Provider for the full range of equipment for specialist foundation engineering as well as for the exploration, mining and extraction of natural resources ▪ Multi-branding strategy ▪ About 80% of sales abroad
Market environment ▪ Growing construction markets worldwide lead to positive equipment demand Mission ▪ Strong position due to efforts regarding quality, efficiency and noise reduction One of the technical leading manufacturer ▪ Growth potential with specialized machines for mining, water and offshore drilling of specialist foundation equipment Competition Key figures and targets ▪ Trevi, Liebherr, Chinese manufactures (e.g. Sany, XCMG) ▪ Sales revenues (excl. JV) ▪ Further competition regarding special product types ▪ EBIT ▪ Order intake ▪ ~ 40% of BAUER Group's total revenues ▪ EBIT margin: 10 - 12% (2020: 6.1%, 2019: 9.6%)
33 Equipment segment Whole range of products for special foundation engineering
34 Resources segment Overview
Key facts ▪ Three focus topics: water, environment, natural resources ▪ Competence areas: water treatment, environmental remediation, waste management, drilling technologies and constructed wetlands ▪ Focus on key markets: Germany, Europe & Middle East
Market environment
▪ Huge demand for environmental and water solutions Mission ▪ Outstanding market position with ground-breaking projects in the field of cleaning Products and services for the water, drinking and process water, e.g. the biological water treatment plant in Oman mining and environmental industries Competition Key figures and targets ▪ Fragmented competition for each single product and service area ▪ Total Group revenues (incl. JV) ▪ EBIT ▪ Order backlog ▪ ~ 20% of BAUER Group's total revenues ▪ EBIT margin: 6 - 8% (2020: 0.8%, 2019: n/a)
35 Resources segment Groundwater treatment on industrial area, Leuna, Germany
36 Resources segment World's largest reed bed treatment plant, Nimr, Oman
37 Financials Income statement 6M 2021 in EUR '000 Q2 2020* Q2 2021 6M 2020* 6M 2021 ∆ 6M in % Sales revenues (P&L) 314,531 382,472 648,527 685,464 5.7% Consolidated revenues (P&L) 329,367 396,114 705,575 736,790 4.4% Cost of materials -166,105 -206,197 -350,291 -371,852 6.2% Personel expenses -90,256 -108,355 -197,175 -213,236 8.1% Other operation expenses -46,105 -43,591 -100,133 -90,672 -9.4% Share of profit/loss of associated companies (equity method) 2,215 2,502 4,462 5,359 20.1% EBITDA 29,116 40,473 62,438 66,389 6.3% Depreciation of fixed assets -22,979 -24,497 -45,107 -45,979 1.9% Write-downs of inventories due to use -3,654 -2,449 -6,331 -5,086 -19.7% EBIT 2,483 13,527 11,000 15,324 39.3% Financial income -332 6,447 14,630 23,983 63.9% Financial expenses -8,792 -12,624 -34,538 -33,320 -3.5% Earnings before tax (EBT) -6,641 7,350 -8,908 5,987 n/a Income tax expense -4,386 -7,840 -7,082 -11,598 63.8% Earnings after tax -11,027 -490 -15,990 -5,611 n/a of which attributable to shareholders of BAUER AG -11,313 -1,069 -16,478 -7,101 n/a of which attributable to non-controlling interests 286 579 488 1,490 n/a
* Previous year adjusted; see p. 70 in the Annual Report 2020 38 Financials Balance sheet as of June 30, 2021
in EUR '000 Dec 31, 2020 June 30, 2020* June 30, 2021 ∆ June in % Assets 1,543,985 1,655,545 1,650,521 -0.3% Non-current assets 641,541 679,228 654,069 -3.7% Intangible assets 14,598 15,106 14,342 -5.1% Property, plant and equipment and investment property 452,487 453,091 465,962 2.8% Investments accounted for using the equity method 76,189 115,643 79,162 -31.5% Participations 10,761 8,806 10,761 22.2% Other non-current assets & deferred tax assets 87,506 86,582 83,842 -3.2% Current assets 902,444 976,317 996,452 2.1% Inventories 434,966 500,037 477,899 -4.4% Less advances received on inventories -10,340 -11,978 -18,322 53.0% 424,626 488,059 459,577 -5.8% Receivables and other assets 394,661 437,016 455,995 4.3% Effective income tax refund claims 2,356 3,904 2,927 -25.0% Cash and cash equivalents 46,015 47,338 42,246 -10.8% Assets classified as held for sale 34,786 0 35,707 n/a Equity and liabilities 1,543,985 1,655,545 1,650,521 -0.3% Equity 365,523 366,801 450,362 22.8% Non-current debt 512,022 584,613 399,425 -31.7% Provisions for pensions 167,457 151,812 155,254 2.3% Non-current liabilities & deferred tax liabilities 344,565 432,801 244,171 -43.6% Current debt 666,440 704,131 800,734 13.7% Financial liabilities 256,881 286,345 388,504 35.7% Other current liabilities 347,472 376,388 363,874 -3.3% Effective income tax obligations 25,997 11,276 13,462 19.4% Provisions 36,090 30,122 34,894 15.8%
* Previous year adjusted; see p. 73 in the Annual Report 2020 39 Financials Cash flow statement 6M 2021
in EUR '000 6M 2020 6M 2021 ∆ in % Cash flow from operational activity -24,383 -50,949 n/a
Cash flow from investment activity -30,969 -50,307 n/a
Cash flow from financing activity 65,541 96,626 47.4%
Free Cash Flow -55,352 -101,256 n/a
Changes in liquid funds affecting payments 10,189 -4,630 n/a
Influence of exchange rate movements on cash -426 861 n/a
Total change in liquid funds 9,763 -3,769 n/a
Cash and cash equivalents at beginning of reporting period 37,575 46,015 22.5%
Cash and cash equivalents at end of reporting period 47,338 42,246 -10.8%
40 Financials Working capital & net debt – Financing of future revenues
Key facts ▪ Bauer’s business model requires considerably more working capital than building construction companies ▪ Net debt is needed to pre-finance the operating business (working capital)
▪ Working capital mainly consists of Inventory 15-20% 75-80% ~5% Receivables 55-60% 20-25% 15-20% Construction Equipment Resources Why does the business model needs so much working capital? ▪ Construction segment ▪ Construction contracts with short duration need approx. 2 - 3 months of pre-financing (no advance payments, no front-loading of prices possible, comparably long time needed for final account settlement). ▪ Receivables also includes litigations. On some jobs collection of money need a long time due to disputes with the customer. However, valuation adjustments on receivables were only about 4% in average over the last years ▪ Payment terms in some regions are 6 to 9 months
▪ Equipment segment ▪ Machinery parts need to be pre-ordered well in advance, because of delivery times of up to 12 months. Customer often need their equipment in a few weeks. Therefore, approx. 3 months of the equipment during production is pre-financed. ▪ Worldwide spare parts stores are needed for large customer base and a 24/7 after-sales service. A relatively large rental fleet is needed for different contract types (e.g. rental purchase).
▪ Resources segment is a mixture of outstanding customer payments (water business) and receivables on projects (environmental & drilling business)
41 Financials Working capital needs – Comparison with building construction
Specialist foundation engineering Building construction ▪ Pre-financing need ▪ Positive cash contribution ▪ Construction contracts with short duration need ▪ Construction contracts with long durations ▪ No advance payments, no front-loading of prices possible ▪ Advance payments, front-loading of prices → approx. 2 - 3 months of pre-financing ▪ Positive cash contribution during construction phase ▪ Negative cash contribution during construction phase
EUR EUR
Negative cash contribution Negative cash contribution
Positive cash contribution
Contract value Contract Contract value Contract
12 24 months 12 24 months
42 Financials Time line – FY 2008 to Q2 2021
Total Group revenues in EUR million 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 18 Q2 18 Q3 18 Q4 18 2018 Q1 19 Q2 19 Q3 19 Q4 19 2019 Q1 20 Q2 20 Q3 20 Q4 20 2020 Q1 21 Q2 21 BAUER Group 1,527.2 1,275.8 1,304.0 1,371.8 1,435.8 1,504.2 1,560.2 1,656.4 1,554.7 1,772.0 370.8 421.5 443.5 450.3 1,686.1 410.9 420.7 407.8 355.3 1,594.7 390.1 334.8 373.2 355.5 1,453.6 356.6 410.9 Construction 700.9 570.0 615.4 606.6 655.2 741.7 725.6 742.9 713.1 835.0 150.8 176.2 210.0 230.6 767.6 163.7 159.3 161.5 144.3 628.8 167.1 154.5 162.8 184.7 669.0 169.7 188.9 Equipment 780.1 608.5 581.7 636.5 589.1 628.6 639.2 753.1 634.4 754.5 180.8 193.6 180.2 168.5 723.1 185.9 195.0 178.1 154.7 713.7 163.7 133.2 159.1 154.7 610.7 152.0 162.5 Resources 135.1 174.3 177.7 211.5 262.8 188.9 252.8 221.6 262.4 248.2 51.7 67.6 69.9 72.3 261.5 75.7 82.4 77.3 79.5 314.8 80.8 61.8 65.8 60.4 268.8 63.2 75.0 Sales revenues in EUR million 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 18 Q2 18 Q3 18 Q4 18 2018 Q1 19 Q2 19 Q3 19 Q4 19 2019 Q1 20 Q2 20 Q3 20 Q4 20 2020 Q1 21 Q2 21 BAUER Group 1,290.8 1,096.5 1,131.7 1,219.6 1,344.4 1,402.2 1,375.7 1,379.0 1,396.9 1,667.9 318.4 398.7 405.1 466.9 1,589.1 341.9 403.5 362.2 363.3 1,470.9 334.0 314.5 342.3 352.4 1,343.2 303.0 382.5
Construction 584.3 487.9 505.8 506.2 579.1 657.5 646.6 650.8 614.5 783.8 143.2 164.2 202.1 216.8 726.3 155.8 152.2 150.8 130.4 589.2 152.8 145.9 152.8 158.9 610.4 157.8 178.5 Equipment 601.2 456.5 469.3 511.4 520.6 561.6 532.7 548.0 542.7 660.9 128.7 173.6 144.0 193.8 640.1 125.3 179.7 141.7 163.5 610.2 110.0 113.1 128.8 139.6 491.5 91.9 135.5 Resources 105.1 152.0 156.4 201.5 244.3 182.6 195.9 179.3 238.2 221.5 46.2 60.5 58.7 55.9 221.3 60.6 71.4 69.4 68.7 270.0 70.7 55.2 60.7 53.5 240.1 52.9 68.2 EBIT in EUR million 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 18 Q2 18 Q3 18 Q4 18 2018 Q1 19 Q2 19 Q3 19 Q4 19 2019 Q1 20 Q2 20 Q3 20 Q4 20 2020 Q1 21 Q2 21 BAUER Group 167.5 84.4 88.4 82.3 72.0 30.1 76.4 90.7 70.3 89.6 11.0 23.1 22.7 43.3 100.1 11.0 28.4 16.5 -22.3 33.7 8.4 2.5 18.8 25.8 55.5 1.8 13.5
Construction 46.3 25.7 28.8 17.9 22.0 21.2 26.0 13.9 29.7 19.6 2.7 2.1 8.0 26.3 39.1 0.5 4.7 -0.6 -21.9 -17.4 0.2 0.9 7.7 15.6 24.3 -0.2 2.7 Equipment 118.3 51.3 48.3 53.0 34.0 32.2 36.0 99.4 38.4 80.6 14.2 22.2 15.8 22.7 74.9 7.7 22.2 19.2 9.8 58.7 3.8 0.4 10.1 15.8 30.1 0.5 7.9 Resources 4.0 6.0 8.1 10.9 15.2 -24.0 15.9 -19.8 -3.7 -10.0 -5.7 -1.0 -1.2 -3.2 -11.0 3.4 1.7 -1.4 -8.8 -5.1 4.0 -1.0 -1.2 0.0 1.9 2.1 2.6 EBIT margin in % 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 18 Q2 18 Q3 18 Q4 18 2018 Q1 19 Q2 19 Q3 19 Q4 19 2019 Q1 20 Q2 20 Q3 20 Q4 20 2020 Q1 21 Q2 21 BAUER Group 13.0% 7.7% 7.8% 6.7% 5.4% 2.1% 5.6% 6.6% 5.0% 5.4% 3.5% 5.8% 5.6% 9.3% 6.3% 3.2% 7.0% 4.6% -6.1% 2.3% 2.5% 0.8% 5.5% 7.3% 4.1% 0.6% 3.5%
Construction 7.9% 5.3% 5.7% 3.5% 3.8% 3.2% 4.0% 2.1% 4.8% 2.5% 1.9% 1.3% 3.9% 12.1% 5.4% 0.3% 3.1% -0.4% -16.8% -2.9% 0.1% 0.6% 5.0% 9.8% 4.0% -0.1% 1.5% Equipment 19.7% 11.2% 10.3% 10.4% 6.5% 5.7% 6.8% 18.1% 7.1% 12.2% 11.0% 12.8% 11.0% 11.7% 11.7% 6.0% 12.4% 13.6% 6.0% 9.6% 3.5% 0.4% 7.8% 11.3% 6.1% 0.6% 5.8% Resources 3.8% 3.9% 5.2% 5.4% 6.2% -13.1% 8.1% -11.0% -1.6% -4.5% -12.3% -1.6% -2.0% -5.7% -5.0% 5.7% 2.4% -2.0% -12.8% -1.9% 5.7% -1.7% -1.9% -0.1% 0.8% 4.1% 3.8%
2019 figures adjusted; see p. 70 and 102 in the Annual Report 2020 43 BAUER share Facts & Figures
Shareholder structure Share performance since IPO (in EUR)
Doblinger Beteiligung GmbH
30.00%
Bauer family 36.02%
33.98% Free float
▪ Listed on Frankfurt stock exchange (Prime Standard), since July 4, 2006 ▪ Share capital: EUR 111,186,566.80 in EUR 2017 2018 2019 2020 2021 ▪ Shares issued 26,091,781 ▪ Issue price IPO: EUR 16.75 Earnings per share 0.16 1.32 -2.17 -0.48 Share price year end 30.00 12.16 15.10 10.52 ISIN DE0005168108 CDAX Share price highest 30.96 31.25 24.30 16.30 13.68 Reuters B5AG.DE Classic All Share Bloomberg B5A GR Prime All Share Share price lowest 11.72 12.08 12.62 8.53 10.52 Market Cap (in EUR million) 513.9 208.3 258.7 198.2 ~320
44 BAUER share Dividend policy
Dividend policy Dividend payment ▪ The dividend policy founded on a reasonable balance between in EUR shareholders and company 1.20 ▪ fair participation of shareholders 1.00 1.00 ▪ maintaining continuity 0.90 ▪ safeguarding of the equity ratio 0.60 0.60 0.60 ▪ All shareholders shall participate in the success of the business. 0.50 0.50 0.30 ▪ After some difficult years, we must continue to strike a careful 0.30 0.15 0.15 balance between continuity and shareholder participation on the one 0.10 0.10 0.10 hand, and safeguarding our equity ratio on the other. 0.000.01 0.000.01 0.000.01 0.00 ▪ To secure an adequate equity ratio is an important aim of the 2006 2008 2010 2012 2014 2016 2018 2020 company’s management. With this we intend to safeguard the long- term success of the Group. Our mid-term target is an equity ratio of more than 30%. ▪ In the medium term, the payout ratio should be about 25 to 30% of the reported Group earnings after tax.
45 Investor Relations Financial calendar & contact
Financial Calendar 2021 IR contact
March 2, 2021 Preliminary figures for 2020 Christopher Wolf Head of Investor Relations March 31, 2021 Extraordinary General Meeting BAUER Aktiengesellschaft April 13, 2021 Annual Report 2020 BAUER-Straße 1 Analyst & Press Conference 86529 Schrobenhausen Germany Tel.: +49 8252 97-1797 May 12, 2021 Quarterly Statement Q1 2021 [email protected] www.bauer.de June 24, 2021 Annual General Meeting
August 12, 2021 Half-Year Interim Report to June 30, 2021
November 11, 2021 Quarterly Statement 9M/Q3 2021
46 Disclaimer
This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs, intentions, expectations, predictions and the assumptions underlying them.
These statements are based on factors as they are currently available to the management of BAUER AG and therefore speak only as of the date they are made. We assume no liability to update publicly or conform any of them to future events or future developments.
Forward-looking information is subject to various known and unknown risks and un-certainties, which could lead to material differences between the actual future results, financial situation, development or performance of the BAUER Group and those factors contained in any forward-looking statement. In view of these uncertainties, no assurance can be given that these forward-looking statements will prove accurate and correct, or that anticipated and projected future results will be achieved and we caution you not to place undue reliance on these forward-looking statements.
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