Our Company Sustainability Report 2014 Our Company

Sustainability Report 2014

Our Company in the Community The Group at a glance

Group key figures 2011 – 2014

IFRS in EUR million 2011 2012 2013 2014 Change (adjusted) (adjusted) 2013/2014

Total group revenues 1,371.8 1,435.8 1,504.2 1,560.2 3.7 % of which Germany 370.3 378.6 410.4 440.2 7.3 %

International 1,001.5 1,057.2 1,093.8 1,120.0 2.4 % of which Construction 606.6 655.2 741.7 725.6 -2.2 %

Equipment 636.5 589.1 628.6 639.2 1.7 %

Resources 211.5 262.8 188.9 252.8 33.9 %

Sales revenues 1,219.6 1,344.4 1,402.2 1,375.7 -1.9 %

Cost of materials 672.8 686.8 755.9 749.2 -0.9 %

Staff costs 298.8 325.0 342.8 355.3 3.6 %

EBIT 82.3 72.0 30.1 76.4 n/a

Net profit or loss 34.1 25.8 -19.4 15.7 n/a

Employees (on average over the year) 9,646 10,253 10,264 10,405 1.4 % of which Germany 4,065 4,090 4,144 4,158 0.3 %

International 5,581 6,163 6,120 6,247 2.1 %

Consolidated balance sheet

ASSETS in EUR '000 Dec. 31, 2013 Dec. 31,2014 EQUITY AND LIABILITIES in EUR '000 Dec. 31, 2013 Dec. 31, 2014

NON-CURRENT ASSETS SHAREHOLDERS' EQUITY

Intangible assets 35,388 34,440 Equity of BAUER AG shareholders 397,006 399,308

Property, plant and equipment and Non-controlling interests 22,809 19,617 investment property 459,537 446,909 419,815 418,925 Investments accounted for using the equity method 13,249 42,906 NON-CURRENT LIABILITIES Participations 3,613 3,613 Defined benefit plans 81,637 116,358 Deferred tax assets 26,299 30,973 Financial liabilities 279,437 387,816 Receivables from concession arrangements 36,762 0 Other liabilities 6,483 5,959 Other non-current assets 7,564 7,492 Deferred tax liabilities 14,954 13,123 Other non-current financial assets 5,420 28,420 382,511 523,256 587,832 594,753 CURRENT ASSETS CURRENT LIABILITIES

Inventories 419,352 439,184 Financial liabilities 449,876 299,698

Receivables and other assets 517,950 496,650 Other liabilities 307,203 305,861

Effective income tax refund claims 3,437 2,661 Effective income tax obligations 9,606 9,317

Cash and cash equivalents 57,217 41,835 Provisions 16,777 18,026

997,956 980,330 783,462 632,902

1,585,788 1,575,083 1,585,788 1,575,083 Sustainability Report 2014

2 Machinery Plants 36 Employees

37 Our Employees are our Strength 4 Milestones of Sustainability 40 Diversity in the BAUER Group 6 Foreword 42 Trainees and Students 43 Training and Development 8 Company 44 Work-Life Balance 9 The BAUER Group 46 Goals 11 Management and Responsibility 15 Quality 48 Environment 18 Goals 49 Environmental Management 50 Production Figures 20 Projects 53 Goals 2 1 Our Segments 26 Goals 56 About this Report

28 Stakeholders 58 GRI Index

29 Hand in Hand with our Stakeholders 35 Goals 2

Machinery Plants

USA BAUER Manufacturing

81 75

Conroe Conroe

Employees Plant Countries with registered subsidiaries and facilities

Shown locations of the Equipment segment for which environmental data is collected MACHINERY PLANTS 3

SCHROBENHAUSEN LOCATION

1.398 295 334

Schrobenhausen Aresing Edelshausen

FAR EAST BAUER Tianjin Technologies

215

Tianjin

Shanghai BAUER Technologies

Shanghai

BAUER Equipment Malaysia

129

Kuala Lumpur

GERMANY

236 90 68

Drolshagen Peine Immenstadt

44 120 824

Drolshagen Olbersdorf Nordhausen 4

Milestones of Sustainability

1980 – 1995 1996 – 2006

1980 1996 - Establishment of the Safety and Environmental - First registration as an EMAS-certified company operating Protection department an environmental management system - Sign-up to the Bavarian Eco-Pact - Founding member of the Association of Ethical Management 1987 in the Construction Industry - Establishment of the Leisure, Sports and Cultural Committee 1997 - First certification in ethics management 1988 - Creation of an integrated management system covering quality, environmental protection, health and safety 2004 - Establishment of the BAUER Foundation

1990 - BAUER and MOURIK Umwelttechnik GmbH is the first 2005 company specializing in environmental technology - Establishment of BAUER Umwelt GmbH as a holding for the environmental companies in the group

1991 - Production of the first Social Report 2006 - Contribution to developing occupational profiles - First employee satisfaction survey

1995 - Production of the first corporate eco-statement - First audit by an eco-auditor

2014

- Execution of the Schwarzkopf tunnel bypass railway project in Lower Franconia; the largest project signed in Germany to date - MeBo 200 sea bed drilling rig presented to the public - 25 years of Thai BAUER Co. Ltd. MILESTONES OF SUSTAINABILITY 5

2007 – 2010 2011 – 2013

2007 2011 - Establishment of the Resources segment with a focus on - Development and production of the Bauer Seabed Drill water, environment and mineral resources (BSD 3000) - Creation of a corporate-wide master guideline for - First mono-pile foundation for a tidal turbine management approaches aimed at a sustainable - First-time offering of a dual study course in mechanical business culture engineering and information technology - First external management system certification in the area of occupational safety 2012 - Celebration of the 40th anniversary of the employee 2009 suggestion system - Production of the first Sustainability Report - Leisure, Sports and Culture committee celebrates its - Opening of new head office administration building in 25th anniversary Schrobenhausen and of Edelshausen plant; - Opening of the first soil treatment center in Austria inauguration of machinery manufacturing plant in Conroe, - During the year, the group's global workforce topped the Texas, USA 10.000 mark for the first time - When establishing new facilities, or extending existing facilities, we thoroughly investigate all possibilities for using renewable energy and saving energy 2013 - Foundation works on what will be the tallest buildings in the world and in Europe 2010 - Winning of the Bauma Innovation Award for an undersea - 20 years of environmental technology in the BAUER Group drilling process - Completion of the BAUER Group's first large-scale reed-bed - KLEMM Bohrtechnik GmbH celebrates its 50th anniversary treatment plant in the Sultanate of Oman - Opening of the BAUER Ausbildung Center - Opening of a training circuit and licensing of the BAUER Training Center GmbH to conduct drilling rig and pile-driver operator's permit testing 6

Foreword

Ladies and gentlemen, Dear partners and friends of our company,

What has “our company in society” achieved over the past year? Each year, we attempt to answer this question in our Sustainability Report. With the information and reports created, we take a look back and draw conclusions about what we were able to achieve for our group and its environment over the past year. Furthermore, of course, we want to give you, our readers, an insight into the wide range of activities that we have initiated, been following and putting into practice alongside our operational business.

“Diversity” is the perfect keyword for this. When I am asked what I am most proud of in our company, with scarcely any ex- ception, this is precisely what I answer. This unbelievable diversity of people who input their own cultures, perspectives, experience and characteristics into the BAUER Group and make it what it is today. Last year, we employed about 10,400 people from 76 different countries – for a company of our size, that is both an astonishing and impressive figure.

Speaking personally, I am always thrilled to see how magnificently our employees work together, in spite of – or perhaps because of – their diversity. Whether it is on construction sites all over the world, at the various production facilities or in administration at our headquarters in Schrobenhausen: when walking along the corridors or eating in the canteen, it is part and parcel of our everyday work to encounter colleagues with different languages and skin colors. What unifies them is that they work together for our company – and that is one of the best and most important achievements of our company history spanning 225 years.

I think that our company is an outstanding example of what diversity actually means: harnessing the strengths of different people, irrespective of their origin, religion, age, gender or sexual orientation and working together for our shared success. When you think about it, it immediately becomes clear how narrow-minded and reductive the public debate about diversity actually is, in that it focuses exclusively on the promotion of women through quota arrangements. It is a shame that such an important topic has thus been channeled into a completely incorrect direction.

This Sustainability Report has been published each year for the past seven years, and once again this year's summarizes an extremely wide range of topics from the various areas. As well as some nice construction projects from last year, we also report for you on research activities, the various campaigns pursued by our employees and cooperation with our customers and partners.

Over the past few years, we have made particularly intensive efforts to offer our equipment customers even better products and services. In addition to establishing a worldwide service network, we have worked hard on the quality, efficiency and consumption of our machines. An excellent example of this is the Energy Efficiency Package (EEP), which we are going to present to you in more detail in this report. Based on a research project, we have been able to improve the efficiency of our equipment through a host of small improvements. Using the EEP enables fuel consumption to be reduced by up to 30 percent now. That is a great success for our engineers.

Often, people overlook the fact that the numerous projects and activities that are initiated by a company and its workforce on behalf of society and the many interest groups are based on one significant precondition: financial success. FOREWORD 7

Following a difficult year in 2013 in which we reported a loss, we succeeded in returning to profit in 2014 by improving total group revenues to EUR 1.56 billion, allowing us to report a post-tax profit of EUR 15.7 million. In fact, we should not be satisfied with this even though it does represent a significant achievement considering the manifold problems and disruptions in the markets which have influenced us during the past financial year.

Primarily, we should refer to the conflict between Russia and Ukraine which caused a significant decline in machine sales during the second half of the year. Furthermore, the various markets in the Middle East and North Africa were hamstrung by unrest in certain countries, while the impact of the so-called Islamic State terrorist group spread uncertainty throughout the entire region. Another factor is the decline in the oil price from mid-2014 onward, which had the effect of preventing certain orders from being placed. Europe is still suffering from the effects of the debt crisis, with only a few exceptions. Also, the competitive situation in our equipment business, characterized above all by the unreasonable actions of Chinese manufacturers, has not changed significantly.

It is above all thanks to the outstanding efforts of our workforce, which is highly committed to our company all over the world, that we nevertheless succeeded in completing 2014 positively in spite of the general circumstances, and are able to look ahead to the future with greater optimism again. Our international character is our trump card – and diversity one of our greatest successes.

I hope that you enjoy reading our new Sustainability Report.

Sincerely,

Thomas Bauer Aresing plant, Germany COMPANY 9

Company

THE BAUER GROUP

FT_Bold225 YEARS OF BAUER BAUER AG, the subsidiaries operate in the three segments FoundationFT piles from Bauer support the glass dome over the of Construction, Equipment and Resources. Reichstag in Berlin, the 828 meter tall Burj Khalifa in Dubai stands on Bauer piles – since the mid-20th century, Bauer has CONSTRUCTION significantly shaped special foundation engineering. Equip- BAUER Spezialtiefbau GmbH has significantly shaped the ment also grew, and new solutions were quickly found for development of special foundation engineering, and under- many construction problems all over the world. What started takes foundations, excavation pits, cut-off walls and ground out in a small town in Upper Bavaria developed into an inter- improvement all over the world. The core company of the national group over half a century. In spite of this enormous BAUER Group is organized on a regional basis in Germany, development, Bauer has remained a family company with its and operates on all the world's continents with over roots reaching back over 225 years. 50 subsidiaries and branch offices.

Alongside the dominant special foundation engineering, the companies SCHACHTBAU NORDHAUSEN GmbH and its subsidiaries carry out activities in the areas of construction, mining, mechanical engineering and structural steel work, as well as in environmental technology. SPESA Spezialbau und Sebastian Bauer started the development of the family compa- Sanierung GmbH is a specialized construction firm for historic ny in Schrobenhausen when he purchased a coppersmith's preservation, technical building renovation and concrete shop in 1790. Ten years later, he was able to purchase a restoration. second company, and soon there was only one coppersmith's shop left in the town. With Andreas Bauer, the fourth genera- Breakdown of 2014 total group revenues by region tion finally embarked on a new path: He discovered that it was in EUR million possible to drill Artesian wells in Schrobenhausen, and over the years the coppersmith's shop developed into a well building Germany Africa 440 (28 %) 62 (4 %) company. Dr.-Ing. Karlheinz Bauer led the company onto the international stage in the 1950s, taking it into the field of specialist America foundation engineering and launching equipment manufacturing 172 (11 %) operations at the end of the 1960s. A key step was taken in 1958 with the invention of the injection anchor on the construction site of the Bayerischer Rundfunk building in Munich.

With Prof. Dr. Dipl.-Kfm. Thomas Bauer, born in 1955, the seventh generation of the family joined the company in 1982. After taking over management of the company in 1986, he shaped the current global group, with a network of operations Asia-Pacific, EU excl. Far East & Australia on every continent. In 2014 the companies of the BAUER Germany 377 (24 %) Group employed some 10,400 people in around 70 coun- 152 (10 %) Europe (other) Middle East & Central Asia tries and achieved total group revenues of EUR 1.56 billion. 125 (8 %) 232 (15 %)

BAUER AG is the holding company of the group, and pro- EQUIPMENT vides central management and service functions for its affil- The BAUER Maschinen Group is the world market leader in iates. These specifically include human resources, account- the development and manufacture of specialist foundation ing, finance, legal and tax affairs, IT, facility management, and engineering equipment. BAUER Maschinen GmbH – the health, safety and environment (HSE). Under the umbrella of holding company for a number of subsidiaries – designs Edelshausen. The Equipment segment has a worldwide sales and customer service network, three plants at headquarters as well as other production sites in Germany and other countries such as China, Russia and the US.

RESOURCES The Resources segment is focused on products and services

The business district of Doha, Al Dafna, is the site of the Mozoon Towers, four in the areas of water, environment and natural resources. new hotel and residential towers, representing yet another architectural high- BAUER Resources GmbH is the holding company, under the light. Bauer Spezialtiefbau is excavating a complex foundation pit over an area of 600,000 m³. Several BAUER BG 28 and BG 25 machines are being used. umbrella of which the subsidiaries operate as full-service pro- viders. The competence centers of Water Treatment, Process and Biotechnology, Environmental Rehabilitation and Waste and manufactures heavy-duty drilling rigs, trench cutters, Management, Drilling Technologies as well as Well Drilling and grab systems, vibrators and deep drilling rigs, as well as the Geothermal pool their expertise and support the subsidiaries related tooling, at its plants in Schrobenhausen, Aresing and in carrying out projects.

Construction Equipment Resources COMPANY 11

MANAGEMENT AND RESPONSIBILITY

MANAGEMENT STRUCTURE AND CONTROL SYSTEM BAUER Spezialtiefbau GmbH pioneered and co-founded the The principal task of the Management Board of BAUER AG Association of Ethical Management in the Construction is the strategic management of a global group of companies. Industry, thus making a major contribution to the develop- The Supervisory Board acts as a controlling entity. As part ment of ethical and values-based management in the con- of central strategies, goals and regulations, the main com- struction industry today. BAUER Umwelt GmbH, BAUER panies in the three operating segments – Construction, Water GmbH, SCHACHTBAU NORDHAUSEN GmbH and Equipment and Resources – develop their own detailed SCHACHTBAU NORDHAUSEN Bau GmbH are audited strategies which are converged at holding company level members of the Association. Today, ethics management is and integrated into the strategic corporate planning process. an integral part of the group's Management Guidelines and SCHACHTBAU NORDHAUSEN GmbH, which offers services applies to all companies within the group. in all three segments, is hierarchically at the same level. Right from the word go, we inculcate in new employees in The development and implementation of a self-managing Germany the values and principles that govern our actions. organizational structure with decentralized business units When someone starts a new job, we provide them with a unburdened by complex decision-making hierarchies is the program of values, thereby forming the basis for cooperation primary characteristic of corporate governance within the in an atmosphere of trust. Regular training courses provide BAUER Group. The managers of those group companies our employees with orientation on how to implement the operate under their own responsibility, and are provided with communicated values in their everyday work. We expect a large degree of independence within the framework of the our employees and companies outside Germany to comply corporate strategy in determining how their business units with the laws, ethical values and standards that apply there. progress. Honesty and fairness form the basis for working together in the BAUER Group. Actively corrupt behavior and passive GUIDELINES AND MANAGEMENT PRINCIPLES corruption are not tolerated. The Code of Conduct of the Our Corporate Management Guidelines are designed to BAUER Group can be viewed online. familiarize the staff with the principles and goals behind our actions. At the core of these guidelines lies our philosophy Our company success is based on people – our employees of meeting the needs of our customers and partners to just as much as our customers and partners. As a result, the highest degree possible through our competence and respect for and upholding human rights forms part of our services. basic understanding of social responsibility. Child labor and forced labor are not tolerated in the BAUER Group. Often, The BAUER management principles are intended to help we work as a subcontractor, meaning that almost exclusively our staff work together on a daily basis. In our view, good our own employees work on projects. It is an important task management is not just about leadership skills but also about of our managers to raise awareness for these topics among setting suitable goals for our staff and promoting teamwork. our employees on-site during their regular visits. In line with It is also important to foster a positive attitude in our employ- our understanding of values, discrimination, particularly on ees and encourage them to take pride and joy in their work. grounds of religion, age, gender, race or sexual orientation, This will ultimately ensure the success of our company. has no place in our company.

CORPORATE GOVERNANCE BAUER'S TRIPLE A The BAUER Group adheres to both national and international Taking the maxim “BAUER's Triple A”, the BAUER Group standards and principles for proper, responsible corporate has defined its most important action areas: health, safety management. We take into account the recommendations and environment, quality and ethics as well as performance. of the German Corporate Governance Codex and align our The slogan is based on the highest grade given by rating businesses with the principles of decency and fairness. agencies when evaluating the strength of a company. In the 12 COMPANY

area of health, safety and environment, we have implemented we indicate which companies or how many employees the many measures for the benefit of our employees and cus- data covers and how it should be interpreted. tomers. At the same time, we intend to meet the expectations of our customers with an ever more perfected product The “Company” section provides financial indicators com- range and the highest quality of services. At the same time, piled at the time the balance sheet and income statement we treat one another with respect and communicate with the were created. These indicators apply to the BAUER Group various stakeholder groups openly and in a spirit of partner- as a whole. The occupational accident analysis and the list ship. Performance, i.e. the economic performance of the of external certifications of our management systems also company, is a prerequisite for the company's future develop- comprise the BAUER Group. ment. The goal is to achieve three top marks – i.e. A grades. For more information on the reporting basis and limits, see the “About this Report” section.

RISK AND OPPORTUNITY MANAGEMENT As part of our business activities, we are exposed to risks inherent to our operations. Running a business requires taking risks. True risks result from unforeseeable events that can bring both hazards and opportunities along with them. SUSTAINABILITY Therefore, at Bauer, risk management means not just reduc- The actions areas defined under BAUER’s Triple A also ing the hazards but also knowing how to take advantage of represent the core aspects of sustainability management. the opportunities. The Group Management Board and the Managing Directors of the holding companies have the main responsibility for the The purpose of risk management is to protect our business long-term development of the company as well as its direc- objectives, increase the value of our company and reduce tion with regard to quality, safety, health and environmental the costs of risk. Risk management involves identifying, protection. These topics are also discussed during monthly analyzing, evaluation and monitoring existing and anticipated group meetings. risks along the entire value chain and devising actions to deal with them. Our system of risk management is based on a At the meeting of the Corporate Social Responsibility (CSR) fundamentally risk-averse approach, meaning that we aim Committee, the Executive Board and representatives of primarily to safeguard against impending risks rather than Human Resources, HSE, Training and Corporate Commu- to exploit opportunities for short-term gain. As a general nications departments of BAUER AG come together once a rule, we do not take risks that threaten the existence of the year to discuss current developments and define actions and company. goals. The annually published Sustainability Report, which since 2011 meets the requirements of the Global Reporting The BAUER Group is also particularly concerned about Initiative (GRI), provides in-depth information about these the consequences of climate change. Potential risks that actions and goals. could affect the company include, for instance, government regulations, such as the tightening of emission values for REPORTING BASIS AND LIMITS construction equipment. The physical risks to our employees The annual Sustainability Report is based on data from a and machines, production facilities and possible downtimes wide variety of departments. This means that the limits of the through changes in weather conditions are also assessed. report and scope of the data may vary widely depending on Risks are regularly evaluated as part of the risk process and the subject. For this reason, in each section of the Report, currently categorized as low. COMPANY 13

We see particularly good potential for our products through ing and greater acceptance of safety guidelines among our faster emission reduction of our equipment or through the staff. In addition, we regularly cover a wide range of HSE- Resources segment, which provides services related to wa- related topics in a separate section of our staff magazine ter and other natural resources. In the Construction segment, BAUERnews. the demand for services aimed at safeguarding against the effects of climate change, such as dam remediation, could SYSTEMATICALLY SAFE increase. As we see things at present, the opportunities outweigh the risks. Health and safety management at Schachtbau Nord- hausen was awarded the “Systematically safe” seal of For detailed information, see the “Risk and Opportunities” quality by the Employers' Liability Insurance Association section of our 2014 Annual Report. for the Raw Materials and Chemicals Industries (BG RCI) in 2014. Over several months, not only the industrial area HSE MANAGEMENT but also the administrative area were scrutinized in great For the BAUER Group, health, safety & environment (HSE) detail, examining whether the topic of health and safety is an integral element of everything we do in creating and is indeed being put into practice actively at Schachtbau developing all our products, specialist services, and business Nordhausen. In all parts of the company, it was established processes. In 2011, we introduced global standards in the that the basic requirements for a systematic integration area of health, safety & environment (HSE), thus creating a of health and safety in the workplace had been met in uniform HSE management system for all companies of the the company culture. The seal of quality applies for three BAUER Group. By constantly reviewing our performance and years, and supplements the management system certi- comparing it against our set goals and parameters, we seek ficates in the areas of quality, environmental protection to continuously improve our HSE system and thus consis- and ethics to include that of health and safety in the tently minimize our accident and damage rates. Implementa- workplace. By awarding the seal, the BG RCI supports tion of our health, safety and environmental policy is a central small and medium enterprises in reducing the number of task of the particular managers, and is examined regularly in accidents as well as work-related illness on a sustainable the course of the audits conducted within the group. basis.

The effectiveness of health and safety measures in our company is determined by the behavior of our employees We have worked intensively on protecting the health of to a large extent. Consequently, we are committed in many our employees who work in political crisis areas. We have ways to raising awareness for the topic of health and safety developed an IT-based early warning system to provide an throughout the group. Thus, we offer regular HSE training optimum guarantee of this. This informs our employees on courses. In 2014, we held the first special fitter's train- the ground about the latest political and economic devel- ing course for our mechanics, focusing on the aspect of opments. This allows safety measures to be taken quickly if equipment safety. The participants were trained in important necessary. For medical emergencies abroad, we have set up fundamentals concerning the stability of our equipment and a company-wide emergency telephone number. It is available its general safety in special foundation engineering. to all company employees around the clock. Special safety equipment also ensures optimum safety within the plants Weekly safety meetings are held at our construction sites and for visitor groups. all our production facilities. This ensures a better understand- 14 COMPANY

The number of reportable workplace accidents per million 50 % FEWER HAND AND ARM INJURIES working hours at headquarters has fallen compared to previous years. Since 2012, we have been publishing corporate- With the goal of reducing the number of hand and arm wide accident statistics that cover nearly every company in injuries in the company, the HSE department of BAUER the group. We use the Lost Time Incident Frequency Rate AG has continued to intensify its preventative efforts (LTIFR), a highly useful international benchmark that indicates over the past few years. These have borne consid- the number of workplace or field accidents that result in more erable fruit, because BAUER Maschinen GmbH has than one missed day per million working hours, as the basis for achieved a 40 % reduction in hours lost through hand our statistics. We have seen a downward trend in this bench- and arm injuries since 2012. The number of accidents mark as well. In the three segments of Construction, Equip- involving absence from work as well as the number of ment and Resources, there has also been a significant decline accidents subject to mandatory reporting in Germany in accident numbers compared to previous years. has been reduced by 60 %. This is above all thanks to a targeted prevention program comprising an extensive TOP MARKS IN SAFETY STANDARDS range of training opportunities for employees at risk in the workshops and on construction sites. Also, the Con- BAUER Nimr LLC has already received several awards tinuous Improvement Process (CIP) has made an impor- for its reed-bed treatment plant in Oman. The project tant contribution to this result: marked improvements sets new standards, in particular with regard to the in working processes as well as the selection of correct HSE sector. In January 2014, Thomas Kleefeld, HSE working equipment significantly increased safety with manager at BAUER Nimr LLC, was able to report yet regard to hand and arm injuries for our employees. another impressive figure: three million working hours without loss of working time due to accidents. In recognition of this top mark, Heinz Kaltenecker, Member of the Management Board of BAUER AG, awarded the team in Nimr responsible for the reed-bed treatment plant a “Certificate of Excellence”. The topic of safety was taken very seriously right from the start of this groundbreaking project, and has been resolutely pursued and supported by the managing directors. The workforce in Oman now includes several trained HSE employees who monitor compliance with HSE standards and raise the awareness of their colleagues with regard to recognising dangers.

BAUER Emirates Environment Technologies & Services LLC was presented with the ADNOC HSE Award in recognition of a major reclamation project in Abu Dhabi. As a result of the high HSE standards at Bauer Emirates Environment, the challenging task of demolishing an old oil storage facility was accomplished without a single accident at work. The Abu Dhabi National Oil Company (ADNOC), one of the largest oil companies in the world, presents the award annually to companies for their outstanding commitment to health and safety. COMPANY 15

Work-related accidents Regular reviews and audits confirm the consistent implementation of our safety standards. Through certifications such as 50 OHRIS, OHSAS 18001, AMS-Bau and SCC, we ensure that

40.05 our safety policies meet the requirements of the Internation- 40 37.16 36.98 35.81 al Labour Organization (ILO). We are working on obtaining 29.84 30 certification for other companies in the group. 24.36 21.95 20 14.96 13.17 10.18 10 7.72 QUALITY

0 2011 2012 2013 2014 GUIDELINES AND ORGANIZATION BAUER Group * Core companies ** German Construction Industry **/*** The ability to offer high-quality products, services and equip- * LTIFR: Lost Time Incident Frequency Rate = workplace accidents or accidents in transit  1 lost day per million hours worked ment is the prerequisite for our customers to be satisfied, ** Notifiable workplace accidents (excl. accidents in transit) per million hours worked and a key factor in our success. In order to meet the diverse *** Source: DGUV according to BG Bau requirements and expectations of our customers as effectively as possible, we place great emphasis on maintaining Work-related accidents by segment LTIFR the high standards of quality in our company, and improving it wherever possible. As well as cost-effective solutions, we 50 43.22 also focus on rapid availability as well as reliable processing. 39.52 40 Our attention is particularly directed toward issues such as 36.55 32.05 ethics, health and safety, the environment, as well as profit- 29.35 30 27.40 24.70 ability and sustainability. 20 18.75 13.17 Our quality management system is based on ISO 9001 as 10.18 10 6.30 7.72 well other applicable government and industry standards. We conduct regular audits and benchmark reviews to make sure 0 2012 2013 2014 we are meeting our planned quality goals. The findings from Construction Equipment Resources BAUER Group these audits and reviews are incorporated into our regular

External certifications of our management systems as at Dec. 31, 2014

Employees * Coverage according to employees *

Quality management Environmental management Health and safety management

Germany 3,918 100 % 76 % 76 %

Europe (other) 231 77 % 77 % 77 %

Middle East & Central Asia 1,487 73 % 52 % 52 %

Far East and Australia 2,256 52 % 4 % 25 %

Americas 498 54 % 55 % 54 %

Africa 917 91 % 0 % 91 % Total 9,307 80 % 46 % 60 %

* The calculations took into account all companies in the group with more than 50 employees. Management systems for smaller companies do not always make sense due to the kinds of work they do. The number of employees taken into consideration is equal to 89 % of the total workforce. 16 COMPANY

training programs. We motivate our staff by demonstrating EQUIPMENT SEGMENT our own commitment to quality, setting challenging goals for API certification them, giving them adequate responsibility and recognizing At the start of 2015, BAUER Maschinen GmbH underwent good performance. Active cooperation is essential to meeting an audit by the American Petroleum Institute (API), the largest our goals in a timely manner. association of the oil and gas industry, including the petro- chemical industry, in the USA. The objective was to achieve CONSTRUCTION SEGMENT API Q1 certification, in anticipation of opening up new sales Certifications opportunities in the area of deep drilling. For this purpose, A new version of the ISO 9001 “quality management system” BAUER Maschinen GmbH has updated the full set of man- will be introduced at the end of 2015. BAUER Spezialtiefbau agement documentation and supplemented the ISO 9001 GmbH is currently intensively gearing itself up to implement standard to include the requirements of API Q1. Following the new content in the company within the next few years. recognition of some important corrective measures by the This work also focuses on explaining the sustainability of our API, we are expecting that the certificate will be issued soon. activities. Process landscape Innovation For many years, BAUER Maschinen GmbH has maintained Over recent years, BAUER Spezialtiefbau GmbH has devoted an electronic corporate management manual that contains particular attention to the topic of innovation, with the goal of documentation on its certified management systems. These promoting products and services with a sustainable effect in management systems (for example, ISO 9001) have become the international market. For example, reducing the amount increasingly process-oriented. Over the past few years, our of construction byproducts requiring disposal, such as used company has experienced enormous growth, making these bentonite suspensions, is a significant topic in the research processes even more complex. In 2014, BAUER Maschin- and development area. What is important in this case are the en GmbH consequently further expanded its modeling of ideas of our employees, because these generate patents that the most important processes with a process management secure our market lead. tool. Work is ongoing to link the process representation in the process management tool with the electronic corporate Quality awareness management manual. The tool will also be introduced at the The maxim of BAUER's Triple A, which is concerned with subsidiaries of BAUER Maschinen GmbH in future. Through quality as well as a health, safety & environment and perfor- visualization, employees are better able to understand these mance, has been firmly anchored in the company culture processes and their interactions. By linking these processes since its launch in 2012. In particular, the slogan has led to with instructions, lists and other important documents in the improved cooperation with good synergy effects in audits corporate management manual, we can make our staff's job and process design. Moreover, there is now an increased un- much easier. The Bauer Process Portal is available to all staff derstanding that no management system can be effective in via the company's intranet. isolation. BAUER Spezialtiefbau GmbH is working constantly to achieve further improvements in process modeling and Processes must be clearly defined in order to be properly optimization with regard to BAUER's Triple A. evaluated. This allows projects to be managed in accordance with the principles of the Plan-Do-Check-Act process. COMPANY 17

Idea management QUALITY MANAGERS' MEETING Work on a new workflow system for controlling the flow of ideas from idea generators to idea evaluators was com- Verifying goals from the previous year and defining new pleted in 2014. Two kinds of improvement have now been ones, providing information and promoting personal ex- combined, and are dealt within a joint system: ideas from change: at the international quality managers' meeting the Continuous Improvement Process (CIP) as well as ideas in January 2015 organized by the Quality Management from the in-house suggestion scheme. The long-term goal department of BAUER Maschinen GmbH on an annual is to establish an extensive idea management structure for basis, participants were once again treated to a diverse continuously improving our company processes. program. 14 quality managers from the Bauer plants in Tianjin, Shanghai, Malaysia and the USA spent about RESOURCES SEGMENT two weeks in Schrobenhausen to exchange experience Management systems relating to quality management at Bauer. Among other The Resources segment, founded in 2007, is continuously things, the first week's agenda included a presentation expanding its management systems for quality and environ- of current IT projects as well as supplier management mental and workplace safety at its subsidiaries. In 2014, for at BAUER Maschinen GmbH and the Bauer production the first time, the Site Group was certified according to ISO system. Tours of the plants in Aresing and Edelshausen 9001, and FORLITH Drilling Support AG as well as BAUER also gave the participants an opportunity to gain their Foralith GmbH were certified according to the SCC health own impression of the Bauer production system. In and safety standard. Certification of GWE Tubomin S.A. in the second week, the quality managers took part in a Chile is already being implemented for 2015. In the com- three-day training course focusing on supplier man- panies with existing management systems, monitoring or agement and problem-solving methods. Following that, recertification audits were successfully conducted. they took the examination to qualify as “supplier audi- tors”. Despite the extensive accompanying program, Occupational safety the international group still had enough time to get All the subsidiaries of BAUER Resources GmbH participate to know one another better and make contacts with in a program to carry out internal company health and safety colleagues in other companies. audits which has been developed by the HSE department of BAUER AG. Standardized software with special questions achieves a comprehensive overview, and also makes comparisons with other subsidiaries possible. In 2014, all the audited subsidiaries of BAUER Resources GmbH passed these audits with flying colors.

Communication The integration of subsidiaries into the existing IT landscape continues. As a result, more and more employees are able to access our central information systems. In 2014, the corporate management manual of GWE pumpenboese GmbH, the second largest subsidiary of BAUER Resources GmbH, was prepared for integration in the electronic corporate management manual of the BAUER Group. 18 COMPANY

In order to reach all employees, major aspects of the In addition, findings obtained from assessing accidents and management systems are summarized in a newsletter hazardous situations are also distributed to the staff in the which is sent to all employees in the segment worldwide. form of “Lessons Learned”.

Status of Sustainability Goals in the Company:

Goals Situation Status Implementation

Ensure widespread use of Implement and obtain certification for management systems such as ongoing management systems HSE in other group companies.

The goal is to improve data quality and expand reports to other Improve CSR reporting ongoing companies in the group.

Status of Sustainability Goals in Health and Safety:

Goals Situation Status Implementation

In 2011, the management adopted a group-wide health, safety and Improve and enhance the environment policy. Goals were set and bases were established. This ongoing group-wide HSE policy policy must now be continuously improved and enhanced.

Continuously improve and enhance health and safety training options. Improve and enhance HSE training Since 2014, the subsidiaries have also had the opportunity to access ongoing for customers and staff training documents via a central communication platform.

After implementing a group-wide, software-based accident reporting Achieve a group-wide accident system, 2014 a 100 % reporting rate from all group companies was 2014 reporting rate of 100 % reached.

As part of the expansion of HSE activities, IT-based training for all Introduce group-wide IT-based group employees shall be offered. Its implementation had to be 2016 HSE training. postponed because of other priorities.

All group companies audited by the central HSE department shall be Internal HSE audits 2016 in full compliance with Bauer standards.

An app shall allow employees in foreign countries and those assigned Emergency app for employees to construction sites to report emergencies to the company quickly. 2016 This will allow supportive measures to be implemented rapidly. Abu Dhabi, United Arab Emirates Schwarzkopf tunnel, Germany PROJECTS 21

Projects

OUR SEGMENTS

In this chapter, we present you exciting special foundation of Bauer Spezialtiefbau's work will be completed by the end engineering projects in Germany and all over the world. of 2015. We report on the research activities undertaken by BAUER Maschinen GmbH and about the diverse projects in our Longest sea bridge in the world Resources segment that are going to be actively shaping The special foundation work subsidiary BAUER Hong Kong Ltd. the topics of the future. has been involved in construction of the Hong Kong-Zhuhai-

CONSTRUCTION SEGMENT Schwarzkopf tunnel bypass In the middle of the Spessart region, BAUER Spezialtiefbau GmbH is working on its largest German construction site so far. In a joint venture, it carried out the special foundation work for a new section of the railway line between Würzburg and Frankfurt. As part of this, the existing passage through the Schwarzkopf tunnel is to be replaced. This Schwarzkopf tunnel is 160 years old, and is showing its age.

Macau bridge over the past two years. It is the world's longest bridge over open water, and is currently being built in the Pearl Delta. The 50 kilometer long connection between the cities of Hong Kong, Macau and Zhuhai completes the southern ring section of a gigantic infrastructure measure. Bauer Hong Kong was contracted by the joint venture, Dragages-China Harbour-VSL, to manufacture offshore bored piles for the Hong Kong Link Road, a ten kilometer long section from the border between China and Hong Kong as far as Hong Kong International Airport. ICE trains can only pass through it at a maximum speed of 70 km/h, while freight traffic requires a second locomotive due The piles with 2,300 and 2,500 millimeters diameter are up to the steep gradient. As a result, the line is now being leveled, to 115 meters long, and have been embedded into the rock and this requires construction of four new tunnels. The work to a depth of two to five meters. Bauer Hong Kong had to by Bauer Spezialtiefbau on the order worth about EUR 43 undertake all the work for the EUR 72 million project from million includes the portion of the tunneling that is not done the water – a particular challenge. The work involved using by mining methods, but using the open construction method five BG 40 rotary drilling rigs – four of which were special in several sections over a length of 2,800 meters. In order to fabrications with an extended mast and larger main winch- prepare for the mining tunnel work, Bauer excavated portal es. They were transported by ship to steel platforms, each pits and shotcrete walls with a height of up to 30 meters for a of which is just large enough for one rig. In addition, there total of ten tunnel entrances and exits. In addition, there is work were pontoons for four bentonite plants, 300 ton cranes and such as soil nailing along the existing tracks or pile foundations accessories. The work was concluded in January 2015. for railway embankments. Several BG 28 and BG 40 rigs, as well as anchor drilling rigs are being employed. The main part 22 PROJECTS

to their concerns and needs. In doing so, we rely on close REPAIR OF THE HIGHEST RAILWAY BRIDGE cooperation with more than 60 academic and research institutions. By support for dissertations, we also offer The Müngsten Bridge, a steel bridge that carries the rail- young students the opportunity to take part in exciting way line between Solingen and Remscheid over the river research projects. Wupper is in need of complete refurbishment. SCHACHT- BAU NORDHAUSEN GmbH, as the leading member of PROMOTIONAL AWARD FOR AN ENERGY a joint venture, received the order from Deutsche Bahn EFFICIENCY PACKAGE AG to undertake the repair. It is an honor to undertake this task, because the Müngsten Bridge is not only 117 BAUER Maschinen GmbH, as part of the TEAM research years old, at 107 meters it is also still the highest railway project, developed a new energy efficiency package which bridge in Germany. The steel framework structure erected is now offered as an option for Bauer rotary drilling rigs. in 1897 comprises seven spans and is 470 meters long in In February 2015, BAUER Maschinen GmbH received total. Alongside the complete scaffolding for the structure the promotional award from the Association of the Con- and the complete renovation of the corrosion protection struction Industry, Environmental and Machine Engineer- which are the responsibility of the partners in the joint ing (VDBUM) in the category of construction machinery venture, SCHACHTBAU NORDHAUSEN GmbH is re- and components, in recognition of its energy efficiency sponsible for the technical management tasks as well as package. Test rig tests and applications on construction repairing and reinforcing the steel fabrication of the bridge. sites prove that this can reduce the fuel consumption of The work started in August 2014. a drilling rig by ten to 30 percent, depending on the application. Moreover, the measures implemented also lead to a significant reduction in noise during operation, because the diesel engine and fan are controlled according to need – which is an advantage not only for the environment but also for the operators and workers. Furthermore, the modified drive concept enables several functions to be operated independently. This allows sim- pler handling of the drilling rig and ensures that the work proceeds more efficiently. To demonstrate its practical effectiveness, a correspondingly modified BAUER BG 30 PremiumLine rotary drilling rig was used for the normal operations on a construction site of BAUER Spezialtief- bau GmbH. The machine was characterized by reliable EQUIPMENT SEGMENT operation with very high productivity and low fuel con- Research & Development sumption – the new technology has thus already proven Right from the start, innovations are one of the most itself in use on the construction site. important growthdrivers for the BAUER Group. As a result,

Research & Development plays a central role in our com- BG 30

pany. It is our intention to develop an ever more perfected [l] BG 30 EEP range of products and services with the highest quality. [l/100 cycles] Our customers are the most important motivation for what

we do. We regularly exchange experience with them, and Consumption we direct our research and development work according Drilling depth [m] Consumption BG 30 BG 30 EEP PROJECTS 23

Our current research projects As part of the TEAM project, which is sponsored by the MEBO 200 VDMA (German Engineering Federation), we are developing and testing suitable methods for evaluating the energy BAUER Maschinen GmbH worked with the Bremen efficiency of mobile machines and energy-saving drive Center for Maritime Environmental Sciences MARUM to technologies in order to maximize the performance of our develop the MeBo 200 sea bed drilling rig. The Institute of equipment and processes while conserving precious energy. the University of Bremen is going to use the special drilling The project ended in early 2015. TEAM made it possible to rig for research purposes. The MeBo 200 is controlled from substantially improve our understanding of the interactions a research ship; it has pressure compensation, can be between drive systems in mobile plant and equipment. In lowered to a depth of 4,000 meters and take 200 meter this way, standard tests were developed for calculating the long drill cores from the sea bed. Bauer developed and fuel consumption of special foundation equipment. The built the special drilling rig that is about 6 meters tall and development of new technologies as well as the corre- weighs 10 tonnes, and was in particular responsible for sponding theoretical and experimental investigations also the whole of the hydraulically operated control system. provide new emphases for development even beyond the There had already been a predecessor of the MeBo 200 project, and will thus represent the starting point for further in the BAUER Maschinen Group, which was manufac- activities. We are offering our customers the specific results tured in 2004 by PRAKLA Bohrtechnik GmbH in Peine from the work in this project in the form of our new energy – also on behalf of MARUM. The important factor for efficiency package. the client from Bremen was the expertise that Bauer has gathered over decades in drilling and control engineering. The electric impulse process (EIV) is one of the options we The rig was presented to the public in July 2014. Bauer have tested for hard-rock drilling using electric impulses. The has made a significant contribution to submarine research results achieved so far indicate that a system of this kind can with this development. contribute to reducing costs when sinking boreholes. Electric impulse drilling uses very little energy to crack and loosen the rock with high-voltage impulses. The ability to implement an EIV drilling system has already been proven in principle in the course of a feasibility study. Based on the results of this study, a new drill head has been developed and already successfully tested in the laboratory. A follow-on project was started in 2014, in the form of the ISEB research project. The objective is to develop the electrical power supply for this prototype, and to trial the drill head under real conditions.

Research and Development in the BAUER Group

2013 2014

Construction Equipment Resources BAUER Group Construction Equipment Resources BAUER Group

Total group revenues (in EUR million) 717.3 590.5 196.4 1,504.2 699.0 612.6 248.6 1,560.2 Expenses for R&D (in EUR million) 3.1 26.0 3.7 32.8 2.9 23,1 1.9 27.9 as % of total group revenues 0.4 4.4 1.9 2.2 0.4 3.8 0.8 1.8 Group employees 5,531 2,998 1,449 10,264 5,675 3,038 1,400 10,405 R&D employees 45 190 33 268 41 183 22 246 Patent series - - - 259 - - - 260 Applications, patents etc. - - - 1,473 - - - 1,480 24 PROJECTS

BAUER PERFORATION CUTTER

With the prototype of the BAUER Perforation Cutter, the originally intended application – perforating harder layers BAUER Maschinen GmbH was able to offer our customer of soil at various depths so as to create “points of attack” a tailor-made solution to its problem in 2014: The ground in for the excavator shovel of the floating excavator. It also the customer's gravel pit is interspersed with hard layers, became apparent that the Perforation Cutter can make a which exacerbate the task of wet extraction of the gravel significant contribution to increasing safety in wet extraction. using a floating excavator. These layers run in a highly het- The cutter of the Perforation Cutter largely consists of the erogeneous way through the entire area in which extraction basic cutter body containing, among other items, two cutter has been approved. As a result of the varying thickness gears, hydraulic motors, various measuring sensors, weight- and depth of the layers, it was not possible to adapt the ed plates and hydraulic cylinders. The cutter gears receive process to take account of them and ensure the required the rotational movement that is generated by the hydraulic extraction performance using the floating excavator alone. motors in the basic cutter body and transfer this movement As a specific response to these requirements, BAUER to the cutter wheels. Each gear unit can transmit a torque Maschinen GmbH developed and designed the prototype of 57 kilonewton meters onto the cutter wheels. Exchange- of the new Perforation Cutter. This is an auxiliary unit for able cutter wheels make it possible to change the cutting wet extraction based on tried-and-tested, globally estab- width. The cutting wheels break up the hard soil layers, lished diaphragm wall cutting technology. By deriving the and in addition two pipes that emerge between both the applied technology from special foundation engineering, gear units spray flush water and flush air into the trench new possibilities are opened up for increasing the productiv- during cutting. This makes it easier for the cutter to pene- ity of floating excavators when hard soil layers are encoun- trate the soil. The two hydraulic cylinders arranged on the tered. In practical use with our customer, it was revealed that sides of the basic cutter body allow the Perforation Cutter the BAUER Perforation Cutter can be used for more than to be stabilized on the sea bed. PROJECTS 25

As part of the SUGAR III project that was started in 2014, we are working with several partners to develop a drilling rig for extracting methane gas hydrates from undersea deposits. Methane gas is a natural energy source with much larger reserves than petroleum and natural gas and, despite being a fossil fuel, offers the advantage that extraction is CO2-neutral at best. Use of the Bauer MeBo sea bed drilling rig has already been trialed. The goal is to specialize the measuring technol- A BAUER BG 15 H weighing about 44 tonnes floated above the roofs of the ogy further on the MeBo and to push ahead with its develop- Schwabing district of Munich in September. An apartment block with an underground garage is being built there in the section set back from the street. ment. By 2017, the target is for an industrially usable control The rotary drilling rig would not fit through the accessway from the street, so it had to be carefully lifted onto the construction site using a mobile crane. system to be developed for the MeBo, and for a suitable level of automation to be determined and put into practice.

To increase the safety and efficiency of deep geothermal This fact, combined with the short construction period, drilling operations, the AUTIG research project is develop- offered the advantage that production by the company on ing a concept for building a fully automated deep drilling rig. site as well as at neighboring companies was only inconve- This should reduce the number of workers in the danger nienced to a minor extent. zone, thus increasing the safety as well as the efficiency of the drilling operations. Numerous findings from this research project were incorporated in the development of the new TBA 440 M2, which was completed in 2013. Many concepts and innovations from the project also provided the conditions for BAUER Deep Drilling GmbH to sign a contract to produce and sell two deep drilling rigs. This was won largely due to the ultra-modern control technology, the high degree of automation and the latest safety standards, all of which went into the development of the equipment.

RESOURCES SEGMENT Replacement boring BAUER Umwelt GmbH carried out replacement bores for Groundwater remediation a customer in Coswig near to Dresden, from November On an industrial site in the north-eastern part of the Weinviertel 2013 to May 2014. Severe contamination of the ground region of Lower Austria, uncontrolled seepage of benzene in and groundwater had been identified on the site of a the past resulted in a light gasoline phase several tens of centi- former tarpaper factory. The contaminated soil excavated meters thick forming over a wide area above the groundwater. using the large bore hole method was placed in gas-tight The technology used for removing this light phase, together containers for transport to the Hirschfeld soil treatment with the expertise, was provided by several subsidiaries of center and to disposal sites. A total of about 45,000 tonnes BAUER Resources GmbH: BAUER Umwelt GmbH was the of soil material were disposed of. In addition, the water main contractor, and together with BAUER Water GmbH pumped out was treated in a specially installed water and Esau & Hueber GmbH, supplied the appropriate process treatment plant. A BG 40 rig with a large bore diameter and plant engineering; well engineering products were also of two meters was used. More than 400 bores were drilled supplied by GWE pumpenboese GmbH. The work started in down to a drilling depth of 17 meters. The large bore hole January 2014. The facility was able to be taken into operation method is practically vibration-free, which means it can be in December 2014. employed in the immediate vicinity of sensitive buildings. 26 PROJECTS

Using four refurbishment wells about 35 meters deep, with also construction of a 100 meter long and 6 meter tall hall a diameter of 500 millimeters and lined with high-grade including soil excavation, disposal, foundation work and hall steel – the wire wrapped screens being produced by GWE outfitting. In total, up to 340 vehicles a day are washed in pumpenboese GmbH – water is removed in order to create the machine. Final acceptance took place in early 2015. a depression cone and to remove the light phase that flows Furthermore, it was possible to extend the order to include into the well through the cone. The water is purified using an the service activities of maintenance and provision of operat- activated charcoal system and allowed to drain away. The ing equipment. light phase pumped through high-grade steel pipes using pneumatically operated pumps is collected in a tank, where it is available for further processing. There is the permanent danger of the highly volatile light phase forming a potentially explosive atmosphere, meaning that the explosion and light- ning protection systems have to meet particularly exacting requirements.

Automotive industry In July 2014, BAUER Water GmbH was given the contract to build a carwash and test facility for the BMW plant in Garching. The order included not only delivering the complete system technology for biological water processing, but

Status of Sustainability Goals in Research and Development:

Goals Situation Status Implementation

Benchmarking of mobile machines to define energy efficiency classes and increase the efficiency of drilling rigs. An energy effi- Participation in the “TEAM” ciency package for drilling rigs was developed containing multiple 2015 research project improvements. Our understanding of the interactions between drive systems in mobile machines was significantly improved. The project has been completed.

The focus of this project is on increasing the safety and efficiency of Participation in the “AUTIG” deep geothermal drilling operations by developing an automated deep 2015 research project drilling rig. Further optimization of the components and the control system is in process.

As part of this project, we are working with several partners to develop a drilling rig for extracting methane gas hydrates from submarine Participation in the “SUGAR III” deposits. Use of the Bauer MeBo sea bed drilling rig has already NEW 2017 research project been trialed. By 2017, it is planned for an industrially applicable control system to have been developed for the MeBo.

The electric impulse process (EIV) is one of the options we have tested for hard-rock drilling using electric impulses. A new drill head Participation in the “ISEB” has been developed and already successfully tested in the labora- NEW 2017 research project tory. The objective of the ISEB follow-on project is to develop the electrical power supply for this prototype, and to trial the drill head under real conditions. Mangdechhu hydro-electric power station, Bhutan In-house exhibition 2014 - Schrobenhausen, Germany STAKEHOLDERS 29

TtlTStakeholderstl

TTL-EBENE00TTTHANDTLL--EEBB INEEN NHANDEE000 WITH OUR STAKEHOLDERS

FT_BoldEvery company is anchored in an economic, social and eco- REPORTING BASIS AND LIMITS FTlogical environment in which strategic decisions must be taken In this section, we will present a variety of indicators that are into account. The diversity of this company environment is of special interest to individual stakeholder groups. These matched only by the requirements and expectations that indicators apply to the BAUER Group as a whole. For more stakeholders have of a company. We are convinced that we information on the reporting basis and limits, see the “About can only be successful in the long term if we take account this Report” section. of all interest groups inside and outside our company as effectively as possible in our decision-making. As a result, CUSTOMERS AND PARTNERS we regularly exchange views with customers and partners, We work hand-in-hand with our customers and partners. employees, shareholders, suppliers, representatives of the In this, we are interested in long-term cooperation, and region and society as well as of research and science. establishing a relationship of trust with our customers and partners. This is why, we treat one another with respect and communicate openly and in a spirit of partnership. Is only through continuously improving our machines and services Customers Part and ners that we can create a long-lasting and trustful link with our

S customers and partners in the long term. When searching s h e a e re y h together for new and improved solutions, this is why quality, lo o l p d efficiency and high value are at the center of our attention. In e m r E s doing so, we specifically address the wishes and requirements of our customers and partners.

e s r S s e ie Mutual trust is the basis of our success and makes it possible c a a l i n r p e d c n h p c u for us to rely on one another. This is precisely what we are e S aiming for with our “BAUER Partnering” program, which we Region and developed especially for the German construction market. Community Here we focus on common objectives to promote a close working relationship.

Our goal is to consider the different requirements and inter- An absolute highlight for our machinery customers was once ests of all our stakeholders equally in all our entrepreneurial again the in-house exhibition, which took place in Schroben- activities. The most important factors that we use to gauge hausen in May 2014. Over four days, more than 1,700 guests and align our company strategy are our own employees, from over 70 countries visited the event to find out about the customers and partners as well as our shareholders who innovations and equipment from BAUER Maschinen GmbH are significantly involved in the ongoing development of the and its subsidiaries. The large machines were presented in firm. As a result, we feel an extremely high level of respon- the courtyard of the head office: the PremiumLine of the sibility towards them. However, we are also aware that we heavy-duty rotary drilling rigs was represented by three BG's. can only win over our customers if we maintain a relation- For the ValueLine, there was not only the best selling BG 26 ship of trust with our suppliers. Furthermore, we intend to to be seen but also a new BG 11 H. With the MC 96 – in show commitment to the region around us in which we are combination with a massive Leffer VRM 3000 casing oscilla- active, and provide assistance where our society is faced tor – BAUER Maschinen GmbH was presenting its 100th MC by major challenges. Equally, we want to cooperate closely duty-cycle crane. The subsidiaries were also represented by with research and science community to lay the foundation many interesting innovations. Once again on this occasion, for new technological developments. the Bavarian evening proved to be a highlight and has been 30 STAKEHOLDERS

appreciated by customers from far-off countries for several The “Schrobenhausener Tage” (Schrobenhausen Days) years now. have been a popular meeting point for our customers and partners for many years, as well as for specialists from the In the course of the in-house exhibition, another survey was construction business and experts from academic institu- carried out among the customers and partners who were tions. In 2014, BAUER Spezialtiefbau GmbH and BAUER present. This helps us to respond optimally to wishes and Resources GmbH once again issued invitations for the requirements, and to identify potential for improvement more popular special foundation engineering forum which was effectively. With this poll, visitors could evaluate general all about the topic of “Innovation at Bauer”. More than satisfaction with the exhibition and the presentation of our 250 prominent external participants were in attendance to products as well as how well organized they find the event. exchange experience on outstanding construction projects Furthermore, the customers of BAUER Maschinen GmbH and new construction processes. can also use a feedback questionnaire on the website to express their level of satisfaction with the machines and the A large network of service partners in many regions of the various services they have received. The concerns and sug- world provides comprehensive customer support all-round gestions for improvement that are reported are very valuable, the globe. In early 2014, the Parts & Service and Customer because we regard the satisfaction of our customers as an Service departments of BAUER Maschinen GmbH invited all important prerequisite for our company's success. associated service partners to attend a three-day workshop in Schrobenhausen. Alongside the newly defined guidelines BAUER Maschinen GmbH was one of something like 3,000 for service partners, the CRM (customer relationship man- exhibitors who presented their latest equipment and deve- agement) system was also presented, by means of which lopments at the Bauma China in Shanghai at the end of the customer and service information can be exchanged November 2014. The range included the ValueLine BG 26 even more easily. The high point of the service meeting was and BG 38 drilling rigs as well as the GB 46 and GB 60 the award for the “Service Partner of the Year”. This is the grab carriers. In the modern exhibition building, customers fifth year that this award has been made. This year, it went from all over the world could come and see for themselves to BAUER Equipment UK. the standard of quality delivered by the Bauer plants in Tianjin and Shanghai. Above all, the open building concept In 2010, we began offering operator's licenses for rotary of the Bauer stand provided an opportunity for exchanging drilling rigs and pile drivers for our employees and custom- ideas and conducting meetings. ers. More than 150 candidates have successfully completed the training since then. Since 2014, in cooperation with The in-house exhibition 2014 attracted visitors are both large and small. PRAKLA Bohrtechnik GmbH, we have been offering a new Many kindergarten children enjoyed an exclusive guided tour of the exhibition site. license: “Certified driver for exploration and well drilling rig”.

EMPLOYEES Our employees are the driving force behind our success. Thanks to their expertise, commitment and performance, we can look back on a successful history at Bauer that spans over 225 years. That's why we've dedicated an entire section of this report to them, which you'll find on pages 36 to 46.

SHAREHOLDERS Satisfaction for our shareholders is of great importance to us. In difficult economic times, however, it is essential for us to concentrate on maintaining a solid and adequate level of equity. Consequently, it was not possible to pay a dividend in 2014. However, we remain fundamentally committed in future to a dividend policy whereby our shareholders enjoy an appropriate share in the company’s success. Our share- holder structure remains unchanged, with the Bauer family holding a 48.19 % stake since IPO in 2006.

Once a year at the Annual General Meeting, the Management

Board answers questions from the shareholders. Around 450 In July 2014, Deutsche Bahn invited guests to attend a visitor's day at the large shareholders and guests also came to our company head- construction site for the Schwarzkopf tunnel bypass in the Spessart region. About 3,500 people took advantage of the opportunity to gain an impression quarters in Schrobenhausen in June 2014 to gain an over- of the construction site and the companies tasked with carrying out the work. view of the completed business year.

SUPPLIERS AND SUBCONTRACTORS RESEARCH AND SCIENCE Cooperation with high-performing suppliers and subcon- It is particular concern for us to promote the exchange of tractors is an important building block in our success. knowledge between research and business. This is why Consequently, we greatly appreciate the relationship of we work closely together with more than 60 academic and trust and we place great emphasis on dealing with one research institutions and we use the synergy effects that this another fairly and openly. Together, we work regularly on produces. In the three segments of Construction, Equipment optimizing the delivery chain so as to ensure that we can and Resources, we offer students a wide variety of opportuni- maintain the high quality standards in preliminary and end ties to gather practical experience while they are still studying. products. When doing this, we rely on cooperation with Some of our employees are active lecturers, which means they suppliers and subcontractors from the region as far as are in intensive contact with students and researchers. We are possible. In this way, not only do we avoid lengthy trans- always concerned to promote this scientific exchange, and to port distances, we also strengthen the regional economy expand our cooperation with research institutions. sustainably. We also work on an extremely wide range of research projects It is our objective to manufacture high-quality products and within our company. The Projects section contains information thereby meet the expectations of our customers. Conse- about these and more besides. quently, we evaluate our suppliers carefully based on the criteria of price, quality, service and performance. We also REGION AND COMMUNITY conduct on-site audits. Moreover, we verify the compliance We are the largest employer at our headquarters in of our suppliers with EU and US sanction rules. New sup- Schrobenhausen, and we feel ourselves closely linked to the pliers have got to meet standardized admission criteria, and people in the region. Consequently, it is of particular concern agreed to a declaration obliging them to accept our ethical for us to make a contribution toward supporting the quality of standards. Our entire purchasing staff is subject to our life in the region. We know that we bear a special social re- purchasing guidelines and ethical principles. sponsibility for the town and the region. Our varied social commitment means we play an important role in the development BAUER Maschinen GmbH purchasing by region of our society. Our strong links to the region are combined with in EUR million a wide variety of social commitments and support for clubs Rest of world and associations. 32.9

Promoting art and culture is also an important component Rest of Region of our social commitment. With our series of exhibitions Germany 50 km from 144.9 Schrobenhausen entitled “Art in the Canteen”, we are offering regional art- 17.5 ists the opportunity to exhibit their works in our company. The exhibitions change every three months, and comprise external private customers as well as companies and their employees a wide variety of seminars on personality coaching, social and methodological competence as well as intensive workshops with a modular structure to teach IT skills from the Microsoft Office package. With topics such as “office management” or “competent and professional conduct in secretarial services”, special seminars are

With the series of exhibitions entitled “Art in the Canteen”, we are offering available to employees in secretarial and assistance jobs. regional artists the opportunity to exhibit their works in our company. With its location advantage, BAUER Training Center GmbH is able to offer the service from a single source: consulting and activities with a regional background. a highly diverse range of styles and genres. For example, the works range from paintings on canvas through to watercolors For more than ten years now, the BAUER Foundation has and works in wood. With this project, not only are we raising been making an important contribution to social develop- the profile of local artists and their craft, but also allowing our ment through its actions. The work focuses on promoting employees to play an active part in the cultural life. the arts, culture, heritage and religion, as well as sponsoring science and research, education and training. Charitable projects are also regularly supported. In 2014, funding was KINDERGARTEN INITIATIVE “MASTER BUILDERS WANTED!” channeled to the Mühlried Kindergarten and the Schroben- hausen Music School, amongst others. Bauer is a sponsor of the building trade, and shares a joint mission with Harry Hammer and Nicky Nail: tracking DONATION FOR TOWN FOUNTAIN down tomorrow's master builders. These two characters are the main protagonists in the mobile educational The BAUER Foundation donated a total of EUR 5,000 initiative, “Master Builders Wanted!”, which kicked off in for a new fountain in the town center of Schrobenhausen. Schrobenhausen and is currently touring Bavaria. Through The citizens' project was initiated by friends of the this project, the associations representing industry and Schrobenhausen Museum, who collected donations commerce in Bavaria intend to raise the profile of the for the town fountain. The foundation stone for the building trade among children. Harry and Nicky, builders fountain was laid in early 2015 thanks to active support trained in educational theory, visit kindergartens in Bavaria by Bauer. and show the teachers how children can be taught about the building trade in a way that is appropriate for their age. However, it is above all the children who should take part in the campaign. As a sponsor of the building trade, it goes without saying that we have provided Harry and Nicky with the appropriate tools.

For five years now, BAUER Training Center GmbH has been offering training courses for employees and customers of the BAUER Group, as an organization in its own right. The training courses have also been available to external applicants since early 2014. In its “Seminar program for vocational training”, BAUER Training Center GmbH offers STAKEHOLDERS 33

In 2014, BAUER AG and its Schrobenhausen companies KLEMM IS SUPPORTING A SCHOOLCHILDREN'S once again decided not to offer Christmas presents to PROJECT its business partners, but to donate the money to charity The donations collected by KLEMM Bohrtechnik GmbH instead. In total, EUR 7,000 went to the St. Josef center on the occasion of its 50th jubilee in 2014 were used for children and young people, the Schrobenhausener Tafel by the company for supporting Drolshagen Secondary food charity, a charity for helping children in Lithuania and School to participate in the international robot com- the Neuburg-Schrobenhausen Hospice Association, among petition, First Lego League. This involved schoolchil- others. dren building, programming and testing autonomous robots in order to carry out predefined tasks. What is Social responsibility is also very important for our employ- more, the teams of schoolchildren worked on research ees. By taking up honorary positions, they also display their projects and presented their results. The competition commitment to helping society outside the working environ- is held in 53 countries with the objective of interesting ment. Many fulfill voluntary functions in clubs and associa- more schoolchildren in science and technology, as well tions, such as working with young people, in sports clubs, as encouraging children and young people to tackle church, social and cultural institutions as well as in politics. complex tasks with creative solutions. Thanks to the What is more, some of our employees work voluntarily as donation, the school was able to purchase a total of examiners for the Chamber of Industry and Commerce. In four new robots, including spare parts. this way, they make an important contribution to the ongoing development of young people, and strengthening the regional economy.

In addition to making donations to associations, organizations or projects, it is our understanding of democracy to support political parties with donations. We do this in a moderate way. Today, especially, supporting political involvement is important. It is also one of our responsibilities as a company.

In 2014, BAUER AG and its Schrobenhausen companies once again decided not to offer Christmas presents to its business partners, but to donate the money to charity instead. The donation ceremony was attended by Dr. Johannes Bauer (third from left), Chairman of the BAUER Foundation, and Chief Financial Officer Hartmut Beutler (second from left).

BAUER Group and BAUER Foundation donations in EUR '000 350 303.1 306.5 300 275.5 58.1 250 98.2 234.4 75.0 48.4 200

150 245.1 100 208.4 186.0 200.5

0 2011 2012 2013 2014

BAUER Group BAUER Foundation 34 STAKEHOLDERS

It is not just our company and staff who are involved in the exhibition, as well as videos made by our apprentices them- region and local community but our management board as selves. We also have our own profiles on the LinkedIn and well. In addition to his role as President of the Central Fed- XING recruitment platforms. eration of the German Construction Industry, Prof. Thomas Bauer is also the state treasurer for the CSU (Christian Our BAUER app for Apple and Android displays current Social Union) and an honorary professor at the Technical messages from the area of investor relations and career University of Munich (TU München). directly on a tablet and smartphone. Even when the recip- ient is out and about, the app delivers all the important in- Another BAUER AG management board member, Heinz formation about the current share price or upcoming dates Kaltenecker, is a member of the board of the German in the financial calendar. In addition, we give information Geotechnical Society. CFO Hartmut Beutler is the chairman about Bauer as an employer and provide current reports, of the Neuburg-Schrobenhausen Chamber of Commerce magazine articles and videos. Our worldwide locations and and Industry and a member of the board of the Regional construction sites can be found really easily at the touch of Management Initiative for the Ingolstadt Region. a fingertip.

CORPORATE COMMUNICATION The Bauer Review is the annual company magazine. For We inform our stakeholders about current developments four decades now, it has been reporting on all the things and important issues in our company regularly via a number that happened in the BAUER Group during the previous of publications. Social media is becoming an increasingly year. Current and former employees as well as customers important method of direct contact with our stakeholders. and friends of the company gain an interesting insight into In 2014, we expanded our social media activities further. what is happening in our company. We present the people who work behind the scenes in our company, and report on our special foundation engineering projects in Germany and FACEBOOK around the world. This Sustainability Report has been part Facebook has now become an important communication of our publications since its first edition 2009. tool for us. Many of our employees in Germany and abroad, as well as customers, partners and friends of the The Bauer picture book is an absolute highlight for our big company, are active on Facebook. Since June 2014, we and small fans alike; it consists of individual hand-drawn have been reporting twice a week on the BAUER Group posters. With great attention to detail, the colorful scenes page about current developments and projects in our tell stories about all aspects of our company and its employees company. We present impressive pictures to show our on the construction sites. international construction sites, while exciting experience reports from colleagues all over the world provide first- In our BAUERcompact newsletter, which appears three times hand impressions. We also provide information about a year, we provide our shareholders, friends and interested upcoming events and everything worth knowing about parties with reports from our construction sites and on inno- careers at Bauer. You can visit the Facebook page of vations and events. The newsletter is available online or as the BAUER Group at https://www.facebook.com/ PDF, or by e-mail subscription upon registration. BauerAGgroup. In our career newsletter, appearing four times a year, we provide information about interesting topics and new projects In addition, the BAUER Group has its own YouTube channel. relating to careers at Bauer. We report on what motivates There, we regularly publish new videos about equipment, people at Bauer, and keep the subscribers up to date processes and projects. In addition, there are always current regarding our vacancies. reports from construction sites or films about the in-house STAKEHOLDERS 35

VALUE ADDED The BAUER Group created a substantial EUR 439 million of around the world. The largest share was paid out to our value added in 2014, benefiting many national economies employees.

in EUR million Value added Other expenses Depreciation and amortization Cost of materials 439 231 95 749

Minority interests Public purse 1 22

Profit Sharehol- Interest expenses Employees (in the ders 45 355 company) 2 14

Status of Sustainability Goals with regard to Stakeholders:

Goals Situation Status Implementation

We offer pupils and students the opportunity to become familiar with Offering of “taster” internships ongoing Bauer in “taster” internships.

We want to increase collaboration with middle schools in the region Partnerships with middle schools ongoing to offer career perspectives to adolescents.

Partnerships with secondary schools: “Improved Career In the cooperation, we seek to educate and inform secondary ongoing Orientation for Secondary school students on the various job training opportunities at Bauer. School Students”

We support staff volunteer-based projects. We assist associations Support volunteering ongoing and organizations through donations as well as expertise.

To strengthen the region, we aim to work even more closely with its Expand regional cooperation with academic and research institutions. A survey was carried out at the ongoing universities and research institutions German locations regarding existing cooperations with colleges and universities. Schrobenhausen plant, Germany EMPLOYEES 37

Employees

OUR EMPLOYEES ARE OUR STRENGTH

Employees make the company what it is. Every single one of of women working there. In 2014, approximately 11 percent them jointly contributes to the success of the BAUER Group of the group’s workforce were women – a figure which essen- with their performance and their commitment. We owe a tially reflects the technical nature of our business and the small debt of gratitude to our employees that we can look back numbers of women who apply for such careers. on 225 years of experience at Bauer. People with disabilities are also welcome in our company. In 2014, the BAUER Group employed 10,405 employees A total of 112 people with disabilities were employed at the worldwide (previous year: 10,264) from 76 nations – people extended core companies and at Schachtbau Nordhausen from different cultures who work for our group all over the in 2014. However, due to the nature of our construction world. We are proud of our diverse corporate culture, and business, despite yearly increases, we typically fall short of we intend to pay particular attention to it in this chapter. the legally prescribed standard of 5 percent per company. For this reason, we make compensation payments and REPORTING BASIS AND LIMITS award contracts to local facilities that employ people with The Employees section provides key human resources indi- disabilities. cators compiled at the time the annual report was created.

These indicators apply to the BAUER Group as a whole. The EMPLOYEE SATISFACTION STUDY Social Report, which is put together by the Human Resources department of BAUER AG, evaluates additional key figures In order to maintain and improve our employees' sat- for the parent company and other subsidiaries in Germany isfaction in the long term, it is important for us to deal (extended core companies). Data was also collected from with one another fairly and in a spirit of trust, and for us SCHACHTBAU NORDHAUSEN GmbH and SCHACHTBAU to communicate with one another openly. With regard NORDHAUSEN Bau GmbH (combined in the report as to this, an employee satisfaction study was carried out Schachtbau Nordhausen). In some cases, the data include at Schachtbau Nordhausen in 2014. A project team all group companies in Germany. Each graph or description from Nordhausen University of Applied Sciences was indicates what the data relates to. tasked with carrying out the study; the team's members included 13 students on the social management course. TOGETHER FOR ONE GOAL The aim of the project was to identify approaches for We regard ourselves as under a particular obligation to the improving the current level of employee satisfaction. In welfare of our employees and their personal development in the first section of the project, a total of 23 individual our company. As a result, we reject any form of discrimination, interviews were held from May to mid-July 2014, as well and we offer all employees the same opportunities. In both as a group interview with various employees from the hiring and development, we place great emphasis on person- various business units of the company. The results of the ality and skills-based assessment. interview formed the basis for elaborating an employee questionnaire by means of which a company-wide We want to encourage young women and girls to enter tech- survey was carried out in November 2014. The results of nical careers to an increasing extent. With our participation in the survey were used for developing and implementing a the annual Girls' Day, not only are we offering an exciting insight suitable concept of measures. into the world of technology at Bauer, but also establishing contact at an early stage for internships and building links with the people responsible for human resources in our company. We are convinced that we can only be successful if we strike Moreover, we take part in the mentorING program for engi- a balance in our company between the interests of employees neers and young scientists at the Technical University of Mu- and those of the company. As a result, the topic of co-deter- nich with the objective of increasing the proportion of women mination is firmly rooted in our corporate culture. Since the in the corresponding branches, and boosting the numbers mid-1950s, there has been a representation of interests for 38 EMPLOYEES

the employees at our core companies in Schrobenhausen, Employees by segment and the works council is involved in decision-making processes. In addition to the works councils at our subsidiaries, 12.000 10,405 there is also a central works council that protects the interests 10,253 10,264 10.000 9,646 269 269 292 of our staff throughout the group while keeping the operational 251 1,578 1,449 1,400 1,367 goals and needs of the business in mind. Working together 8.000 2,952 2,998 3,038 without conflicts as well as an open exchange between the 2,915 works council and the company management are principal 6.000 issues. At our international locations, the interests of local 4.000 employees are represented by unions. 5,113 5,454 5,531 5,675 2.000 We have introduced a company suggestion scheme to make 0 optimum use of our employees' enormous store of experience 2011 2012 2013 2014

and their ideas. In 2014, 501 suggestions for improving our Construction Equipment Resources Others operational processes were submitted in our extended core companies. Employees by employment terms

As a family firm, the long-term loyalty of our employees is 12.000 10,405 a very important factor for us, and we are concerned to 10,253 10,264 10.000 9,646 239 240 248 ensure that new colleagues feel at home with us right from 248

the start. 3,664 3,835 3,948 8.000 3,371

We have taken many measures to make it easier for new 6.000

colleagues to take their first steps in unfamiliar surround- 4.000 ings. For example, we even offer accommodation and other 6,027 6,350 6,189 6,209 benefits during the first few months of employment. Our in- 2.000 troductory seminars are also an important component of the 0 familiarization process for new employees. Our “routing slip” 2011 2012 2013 2014

also offers the opportunity for new employees to introduce Industrial Salaried staff Apprentices

Employees by region In March 2014, BAUER Bulgaria EOOD celebrated its tenth anniversary with staff, partners, customers and suppliers. 12,000 10,253 10,264 10,405 10,000 9,646 965 950 1,018 924 542 612 586 478 8,000 2,061 2,290 1,891 2,212 6,000 1,658 1,869 1,584 1,601

4,000 630 726 762 752

2,000 4,065 4,090 4,144 4,158

0 2011 2012 2013 2014

Germany Europe (other) Middle East & Central Asia Far East & Australia America Africa EMPLOYEES 39

themselves to important colleagues and departments within a short period of time, while an orientation folder in several languages helps them to find their feet on the ground. Spe- cifically for our non-German employees, we have prepared an information booklet that not only contains useful tips for leisure activities but also offers information about peculiarities of German culture and everyday life.

Thai Bauer Co. Ltd. looks back on a quarter century of its existence: In In 2012, the Human Resources department in Schrobenhau- December 2014, the special foundation engineering subsidiary in Bangkok celebrated its 25th jubilee. Managing director Mike Sinkinson welcomed sen began holding a monthly regulars' table for new staff, many employees and a few long-term companions to the gala evening. but also for those who have been at Bauer a bit longer. In a relaxed atmosphere, participants can establish new contacts and get to know their coworkers. Since 2013, there has also In 2014, the fluctuation rate at the extended core companies been an international employees' regulars' table which offers was 9.9 % (previous year: 7.4) and at our Germany companies them not only the opportunity to share experiences about life it was 7.6 % (previous year: 6.0). This means the number of em- in Germany but also to practice their German and expand ployees leaving our company rose for the first time since 2011. their vocabulary. One possible reason is the fiercer competition for specialists – particularly in technical professions. Compared to other compa- We also show our appreciation for our employees in the form nies in the construction business, however, the fluctuation rate of gifts and presents to mark special occasions such as wed- is still running at a low level. The average length of employment dings, births or jubilees. Our monthly employee magazine, in the extended core companies was 12.6 years (previous year: BAUERnews, has been reporting since 2008 on current 12.3). At SCHACHTBAU NORDHAUSEN GmbH this figure was projects and events along with developments and news from 13.7 years (previous year: 13.6) and at SCHACHTBAU NORD- throughout the group. To keep our former staff members HAUSEN Bau GmbH 17.2 years (previous year: 16.7). up-to-date on what is happening in the company as well, we organize retiree meetings at many of our German locations in the group.

Number of employees with disabilities Submitted improvement suggestions

Extended core companies 120 750 111 110 112 104 100 600 41 40 42 536 501 80 38 431 450 400 60 300 40 66 70 70 70 150 20

0 0 2011 2012 2013 2014 2011 2012 2013 2014

Extended core companies Schachtbau Nordhausen 40 EMPLOYEES

DIVERSITY IN THE BAUER GROUP

The employees of the BAUER Group literally come from all the respective country; we also actively live diversity in our over the world. In 2014, 10,405 employees were employed company. in our company, with 76 different nationalities represented – people from all kinds of cultures and ethnicities who work The situation in which people from various nationalities work with commitment on all continents to achieve our shared together in the workplace has long been part and parcel goals successfully. With their different world views and per- of everyday work in our company. We are convinced that spectives, experience and characteristics, they also make we need people with different ideas, strengths, interests and a decisive mark on our company culture. This is precisely cultural backgrounds in order to be successful. And we also what we mean by diversity. A small world community under believe that differences do not have to lead to conflict, but one roof knows that more can be achieved by working rather that diversity represents a truly special incentive for together. people to interact with one another. As a result, promoting diversity has been a firm objective for our company for many In the course of the globalization of the group, national years now. We offer everyone in the BAUER Group the same boundaries have become less and less important. More and opportunity to contribute to the company's success irrespec- more employees from the head quarter in Schrobenhau- tive of their origin, religion, age, gender or sexual orientation. sen have made their way out into the big wide world, for example to hand over machines to customers or to carry out It is also important for us to respond to the individual lifestyles and construction projects and, at the same time, more and more cultural practices of our colleagues and customers all over the employees have been hired directly in the country where they world. We are pleased to go with them to eat in their restaurants, are going to be working. In this process, friendships were we take part in their festivals and we accept their way of wearing formed and people learned how to work together successfully. ceremonial clothing. We are proud of our diverse company Today, people from all kinds of ancestries, religions and ori- culture, and we regard this as a major opportunity for the group. gins work alongside one another amicably on our construction sites. When walking along the corridors or eating in the Elvis Kamgang canteen, it has become quite normal to encounter colleagues Elvis Kamgang was born in Cameroon, with different languages and skin colors – whether in the ad- and works as a project engineer at ministration at our headquarters in Schrobenhausen or at the BAUER Spezialtiefbau GmbH in various production plants. At the beginning of this develop- Schrobenhausen. In an interview, he ex- ment, the management had a very German character across plains what drew him to Germany, and the board; now, however, many countries have managers what he likes about his work at Bauer: who come from that particular country. This way, we not only “For me, German always sounded like promote and support the job market and the economy in a language that would be impossible to speak. That was the

At the bauma China 2014 in Shanghai, the Bauer team welcomed numer- At the opening of the new works for BAUER Tianjin Technologies ous visitors to a completely redesigned exhibition booth, which proved a Co. Ltd., the workforce formed up in the shape of the Bauer real attraction with its friendly and open atmosphere. arrow. EMPLOYEES 41

challenge, and it was an irresistible one to me. So, I visited leader in the field while I was studying construction engineer- a language course which entitled me to attend a university ing, with the focus on geotechnology. In 2003, I joined the course in Germany. 18 years ago, I turned my back on my International Projects and Services department at BAUER home country to study construction engineering at Braun- Spezialtiefbau GmbH. There, I was initially employed as a schweig and at the Technical University in Munich. There, design engineer concentrating on structural engineering, I also attended the lectures given by Prof. Thomas Bauer. marketing and estimations; later, at project manager level, I Even during my of course, I tried to gather as much practical covered all of the areas ranging from structural engineering, experience as possible, and this meant I came into contact marketing and estimations through to construction works. with the Bauer company quite often. After I graduated from During this period, I worked on numerous deployments Leipzig University, I was delighted to be accepted for a graduate abroad for the company, as well as managing some foreign position in the Design department. After that, things went very projects. For example, I was a member of the project team quickly. I was offered a job, and was able to participate in some for the Peribonka Dam project in Canada and a site manager major projects. For example, I was a member of the team which in the UK; I was responsible for submitting major tenders in carried out the underwater drilling operation in sea off Scotland Qatar and I managed various cut-off wall projects in France. in 2011. It was a super experience! Today, I'm working as a It was an exciting time! In 2014, I became a project manager project engineer at Bauer Renewables, a subsidiary of BAUER in the area of growth fields, focusing on international soil Spezialtiefbau GmbH, where my responsibilities principally in- improvement at BAUER Spezialtiefbau GmbH. What I enjoy clude site management and calculation in the field of underwa- most about my work is elaborating solutions for complex ter foundations. I work in a great team and this business area is questions and projects. This is a very dynamic area in which quite young, extremely diverse and exciting. And as the father of you need to take account of local conditions all the time, a five-year-old daughter, I can say that the company offers the and there is no end in sight to the development. This is a best conditions for achieving a work-life balance!” characteristic of my work, and also makes it very interesting and diverse. As a result, I experience diversity in the BAUER Jee-Sun Stephan Group in my everyday work. One of the aces up my sleeve Jee-Sun Stephan has South Korean is that I speak four languages. Over the past few years, roots, grew up in Germany and has the company has made major steps towards globalization, been working for BAUER Spezialtiefbau meaning that we work together on a daily basis with people GmbH in Schrobenhausen since 2003. from different cultures and regions. It goes without saying She talks not only about her work in the that this is a great experience, and I think that flexibility is company but also how she experienc- essential in order to respond to changes in markets.” es diversity in her everyday work: “I had already got to know about Bauer as a world market

In Jeddah, Saudi Arabia the future tallest building in the world is In 2014, the BAUER Group employed 10,405 people from 76 different under construction – the Kingdom Tower. Bauer drilled 70 piles – nations. Our two IT experts come from India and Mexico. at 109 meters they are extremely long – with diameters of 1,500 and 1,800 millimeters and also 200 piles with lengths up to 90 meters. 42 EMPLOYEES

TRAINEES AND STUDENTS

PATHS TO BAUER to identify weak points, thereby allowing them to choose the We regard it as an important social task to actively help professional training that would be appropriate for them. young people make a start in their working life. We provide More than 240 students from 30 different courses worked them with guidance at an early stage and we are committed at Bauer during 2014. In the three segments of Construction, to drawing them closer to our entrepreneurial activity in Equipment and Resources, we offer a wide variety of oppor- many ways. tunities to gather practical experience while still studying. We provide support for bachelor's or master's students who are writing their dissertations, and our internships ALUMNI DAY AT BAUER provide exciting insights into our entrepreneurial activity. Our annual alumni day enables us to keep in touch Furthermore, in cooperation with Ingolstadt University, we with former interns and graduate placement candidates offer the dual study course in mechanical engineering. Our regarding their work in our company. Numerous alumni monthly employees' regulars' table makes it possible to came back to Schrobenhausen in May 2014 to find out establish contacts with other interns and works students. about current developments in the BAUER Group. The program included a tour of the equipment on show in TRAINING AT BAUER the in-house exhibition as well as a visit to the Aresing In 2014, Bauer employed 248 apprentices in Germany. Most plant. Here, the participants were able to experience the of them were learning to become industrial or construction machines up close. mechanics, electrical engineers, industrial clerks or construction equipment operators. Overall, we train young people in some 20 different professions.

BECOME A SPECIALIST FOR METAL TECHNOLOGY

Since 2014, we have been offering a two-year professional training course specifically for children from middle schools, allowing them to qualify as a specialist for metal technology, focusing in particular on assembly technology. Our apprentices expect a modern training profession with plenty of future potential. The apprenticeship focuses on planning, preparation, monitoring and optimization of installation and removal processes, as well as assembling components Bauer offers schoolchildren many opportunities to gather and modules. Following basic training in the metals area, important practical experience while they are still at school. For our apprentices are cycled through various installation and example, every year many schoolchildren take part in company repair departments. This makes their everyday work very placements in our firm. The (M)Einblick (“my insight”) project varied. Anyone who decides for an apprenticeship as a on increasing the career orientation of schoolchildren entered specialist for metals technology in our company certainly a new phase in 2014 in cooperation with secondary schools, needs to be interested in technical matters. The applicant companies in the district of Neuburg-Schrobenhausen, the should also possess craftsmanship skills and the ability local employment agency and BAUER Training Center GmbH. to think logically. Specialists for metals technology who Several year eight secondary schoolchildren once again had the successfully complete their apprenticeship will find them- opportunity to get to know Bauer as an employer. These intro- selves excellently placed to make a flying start in all sorts of ductory placements were intended to allow the schoolchildren technical areas. to find out where their preferences and strengths lie, or possibly It is important for us that our new apprentices should feel at home in our company right from the word go. A three-day introductory seminar offers the opportunity to get to know one another better and exchange experience as soon as they enter the company. Through videos and presentations, we provide an insight into the history and structures of our company. Plant visits to Aresing and Edelshausen are always on the agenda as well. As part of the three-day introductory seminar, our new apprentices traveled to Munich where BAUER Spezialtiefbau GmbH is carrying out the special foundation engineering for a residential construction project at the Hirschgarten site. TEAM DAY ON THE LOW ROPE COURSE

One highlight in September was the team-spirit training TRAINING AND DEVELOPMENT for commercial apprentices held at a low rope course. This was all about promoting a communal spirit and TARGETED SUPPORT FOR EMPLOYEES WITH POTENTIAL strengthening team cohesion through play. In addition BAUER Training Center GmbH represents a source of expert to apprentices from the second and third training years, advice for our employees, customers and partners as well the group also included apprentices from the first year as external interested parties in all questions relating to so the team day provided an excellent opportunity for further and continuing education. The main objective is to getting to know one another better. continuously improve and professionalize the training measures, as well as to increase the courses on offer according to demand. In 2014, BAUER Training Center GmbH had a budget of about EUR 2.1 million. A total of 475 internal and external seminars as well as external conferences were attended.

ESTIMATION OF POTENTIAL

It is an important task of our managers to identify talented people in our company and to develop their potential. With regard to this, BAUER Training Center GmbH held a management training course at BAUER Resources GmbH in 2014. Furthermore, the first group Number of apprentices in Germany of employees with potential have already been identified. In future, the goal is to work out suitable measures and 300 concepts for encouraging such employees and pointing

248 248 them towards possible career paths in the company. One 250 239 240 of the goals is to insure a clear approach to succession

200 planning through taking a targeted approach and working with candidates who have potential. In the long term, 150 a group-wide young manager development program is

100 to be established.

0 2011 2012 2013 2014 44 EMPLOYEES

We are working intensively to push ahead with the topic Average training per employee of continuing education within the group, and on adapting in hrs. the training program to the rapidly changing challenges we 18 16 face. The BAUER Training Center GmbH receives requests 14.3 14 for seminars or training courses on an ongoing basis directly 12.6 12.4 12 from locally held German subsidiaries. 10.4 10 8 Alongside the diverse range of further and continuing 6 education measures, a wide range of measures and tools, 4 such as participation in the company's own international 2 assignment program, individual coaching or mentoring, 0 2011 2012 2013 2014 help us to support our staff and management in carrying The data includes headquarters, SPESA Spezialbau und Sanierung out their tasks and further developing their skills in our GmbH and is based on the seminars provided by BAUER Training Center GmbH. company.

Number of seminars

WORK-LIFE BALANCE 600 546 516 500 458 FAMILY-FRIENDLY WORKING CULTURE 440

As before, striking a good work-life balance presents many 400 parents with a significant challenge, and in future a family- friendly company policy will increasingly come to the fore. 300

To allow personal life planning to be optimally combined with 200 professional functions, we assist our employees with all kinds of part-time working, job sharing and other working models. 100 In 2014, 277 employees in total (previous year: 267) at the 0 extended core companies made use of such flexible working 2011 2012 2013 2014

time models. Of these, 35 took part in semi-retirement, with The data is based on the seminars provided by the BAUER Training Center GmbH. the remaining 242 opting for regular part-time employment.

To allow working parents in our company to juggle the time demands of family and work, we also intend to Training and development costs create appropriate general conditions in the area of in EUR million childcare as well. That's why, at group headquarters in 2.5 2.10 Schrobenhausen, as the largest employer in the region, 1.90 1.98 2.0 1.82 we have been committed to local preschools and child

care centers for many years. In 2011, the 1.5 “Men and Women at Work” working group was established to promote equality of 1,0 opportunity and to improve the work-life 0,5 balance in our company.

Be family 0 2011 2012 2013 2014

The data includes the extended core companies (without the HGC Hydro-Geo-Consult GmbH) and the seminars provided by the BAUER Training Center GmbH. EMPLOYEES 45

FLEXIBLE WORKING HOURS By providing flexibility in working hours, we would like to take account of the different requirements of our employees during phases of particularly challenging family circumstances. For example, not only do we provide the opportunity for an individual allocation of time, we also strengthen their self-responsibility. For many years now, we have had an

annual working time balances for our waged employees, In glorious weather, the Bauer moles took their place on the start line of and we offer a flextime model for our salaried staff. Munich's traditional relay marathon in October 2014. The three teams of four runners each shared out the stages between 6.8 and 14 kilometers in length. As well as this, there were two marathon runners. To ensure a successful transition from the life of work to retirement, we offer our employees the choice of two options with our 57 plus model: in the first variant, the employee HEALTH, SPORT AND LEISURE can take additional holiday on completion of their 57th year We place great emphasis on encouraging our employees for each calendar year with a corresponding adjustment in to think more about their health. We want to maintain and salary, or they can reduce their weekly working hours. The promote the performance and satisfaction of our workforce second option allows employees to extend their employment in the long term through a wide range of health and care until age 67. It is also possible to combine both variants. programs. For example, BAUER Training Center GmbH offers the twice-weekly “Be Fit” fitness program for general COMPENSATION AND PROVISION flexibility and stabilization of muscle groups, as well as to Our compensation package is usually higher than the improve bodily feeling. Furthermore, there are also regular standard payscale. In Germany, besides the collectively yoga courses with the objective of preventing stress-related negotiated wage and wage premiums, the package in- physical and mental illness. cludes performance-based bonuses, shopping discounts and a wide range of insurance options. Employees assigned For more than 25 years now, the leisure, sports and culture to foreign locations also receive special allowances. In committee (FSK in German) has been promoting and orga- addition, we offer our staff a supplementary retirement nizing a variety of activities with the goal of strengthening the pension through SOKA-Bau. Employees can choose from team spirit among our staff and their friends and family in their three different types of benefits. Most of them opt for the private lifes as well. In 2014, for example, there was not only deferred compensation option, under which their pension the traditional angling competition in the waters of the local contributions are tax-free.

Length of Employment Turnover Rate

in percent in percent 50 12 9.9 40 37.3 10 9.2 8.2 7.8 7.6 31.4 8 7.2 7.4 30 24.9 6.0 6 18.3 20 17.2 16.3 13.9 13.7 4 9.6 10 9.1 2 1.9 2.0 0 0 0-5 6-10 11 - 20 21 - 30 31 - 40 >40 2011 2012 2013 2014

Length of Employment 2013 Length of Employment 2014 Germany Extended core companies

Length of employment of employees of the extended core companies and Schachtbau Nordhausen. 46 EMPLOYEES

Schrobenhausen angling association, but also a motorbike the ice-stock competition and the Bauer ski trip as well as tour and participation in the Schrobenhausen city run. What other activities. is more, there is also the annual communal sports badge,

Status of Sustainability Goals in Human Resources

Goals Situation Status Implementation

For some time now, employees at the Schrobenhausen location Extend “Be-Mobil” program have also been able to gain experience of working abroad through ongoing group-wide the “Be Mobil” program. The program shall be made available to all other companies of the BAUER Group.

Communication within the group between individual companies and headquarters in Schrobenhausen shall be intensified. This objective is supported by the personnel development group. In 2014, BAUER Improve cooperation within the Training Center GmbH further intensified its discussions with Ger- group on the topic of training ongoing man subsidiaries regarding their requirements, and conducted such development discussions with foreign company locations for the first time as well. In addition, video conferences are held regularly with trainers at the foreign company locations.

Training options for customers and employees in Latin America, Asia and the US will be offered and expanded with support from BAUER Training Center GmbH in certain main areas. Corresponding discus- Training in Latin America, sions of requirements have been held. At the start of 2015, a sales ongoing Asia and the US training course was held in Asia, and received highly positive feedback from the participants. There is demand for further international training courses in this area. The long-term objective is to achieve a uniform global sales standard.

In early 2014, we introduced the new license: “Certified operator for exploration and well drilling rigs”. BAUER Training Center GmbH, as Operator's license for exploration recognized testing facility, will soon begin offering training to employ- ongoing and water drilling rigs ees and customers in this area. It is planned for the first operator training to be held at the end of 2015.

The targeting of potential recruits and trainees will be improved via a Improve recruiting efforts for range of measures including image films, social media activities and 2015 potential staff the like. In 2014, we further expanded our presence on the LinkedIn social network by creating our own career page.

Master tradesmen and their deputies have had the opportunity since late 2012 to gain international experience as a trainer and acquire Trainer job rotation for master new skills. This opportunity will be publicized to an increasing extent 2016 tradesmen and their deputies in future in the course of development of personnel and young managers.

With the support of BAUER Training Center GmbH, the objective is to establish a group-wide development concept for young managers. Development of young managers NEW ongoing As a first step, a management training course was held at BAUER Resources GmbH in 2014 on the topic of estimating potential. CBC 40 Silent Cutter, Singapore Reed-bed treatment plant – Nimr, Oman ENVIRONMENT 49

Environment

ENVIRONMENTAL MANAGEMENT

As a globally active company, we bear particular responsibility The managing directors of the individual companies in for our environment. As a result, in all areas of our company the group bear a particular responsibility. They are directly we place great value on protecting the environment and responsible for achieving the targets and set an example as husbanding natural resources. Environmental management a contribution to improving environmental awareness in our at Bauer is a significant component of the overarching HSE company. The central HSE department supports, coordinates policy alongside the topics of health and safety. As a binding and monitors the implementation of the policy. In addition, yardstick for our actions, we have established standards and regular HSE training courses make an important contribu- guidelines in this area that apply to all employees and compa- tion to developing the corresponding understanding further nies in the group. In the course of in-house HSE audits, we among employees and establishing environmental protection monitor the implementation of our environmental policy on an as a firm feature of the company culture. ongoing basis. In July 2014, the annual EMAS audit was carried out successfully at the Schrobenhausen location. EMAS SCHACHTBAU APPRENTICES UNDERWAY AS “ENERGY SCOUTS” (Eco-Management and Audit Scheme) is an environmental management and environmental auditing instrument for Apprentices at SCHACHTBAU NORDHAUSEN GmbH organizations seeking to improve their environmental perfor- made an important contribution to saving energy in mance. Its requirements exceed those of the ISO 14001. the company in 2014. As “energy scouts”, they took a close look at the offices, workshops and the entire When purchasing new company cars, we are concerned to company premises at the company's base in Nordhau- select more environmentally friendly models. Important selec-

sen so as to identify potential for saving energy. The tion criteria are low fuel consumption and CO2 emissions. results and ideas for improvements were carefully doc- umented, before being presented to the environmental Up to the present day, we have installed a total of about officers and the company management. The goal of the 50 videoconferencing systems at several locations world-

project was to increase young people's awareness of wide. By avoiding long journeys and the associated CO2 the energy-saving topic even during their apprentice- emissions, we are thus making a valuable contribution to ship. At the same time, the apprentices learned what it protecting the environment. means to work out suitable solutions in a team, and to pass on the knowledge learned to others as well. Fur- NEW ENERGY SERVICES ACT thermore, the apprentices were familiarized with using measuring instruments as well as evaluating measure- The modified Energy Services Act (EDL-G) came into ment data. The project results will form the basis for force in April 2015. The new version of the EDL-G obliges a long-term energy saving program at SCHACHTBAU German companies to carry out a regular energy audit for NORDHAUSEN GmbH. Some small but extremely themselves and possibly also for their subsidiaries in efficient measures have already been carried out. For Europe, if they have attained a certain size. The com- example, measurements are now taken once a week panies affected have to meet these legal requirements in the plant halls to identify leaks in the compressed for the first time by December 2015. Following that, the air system and repair them immediately. Furthermore, energy audit must be repeated every four years at least. the entire lighting at the location has been checked Various companies of the BAUER Group are also affected and replaced by LED technology if appropriate, or else by the EDL-G and will have to carry out the corresponding equipped with electronic ballasts. energy audits. 50 ENVIRONMENT

PRODUCTION FIGURES

REPORTING BASIS AND LIMITS at KLEMM Bohrtechnik GmbH in 2014 as well as reprogram- This section provides key figures related to the environment. ming the heating systems for nighttime output reduction and The Schrobenhausen location, comprising the buildings of pre-heat temperature led to a significant decrease in energy the head office, as well as the Schrobenhausen, Aresing and consumption. Edelshausen plants, form the headquarters of the company and is the largest location for machinery production. Primarily TREND IN ENERGY CONSUMPTION the parent companies of the group, BAUER AG, BAUER Energy consumption at the Schrobenhausen location Spezialtiefbau GmbH and BAUER Maschinen GmbH are decreased again somewhat in 2014 because of the milder located there. At the same time, data is gathered on a world- winter, following a slight rise in the previous years. At the wide basis from the most important machinery production Aresing plant and the head office building, geothermal plants. It includes company participation Olbersdorfer Guß systems are providing energy savings. At the paint shop in GmbH, a foundry producing primarily small castings, which Aresing, a portion of the process heat is being recovered naturally consumes a large amount of energy. Its environmen- by efficient heat wheels. Furthermore, the specific retrofit tal data has been fully incorporated. The plant of BAUER of fast-running gates at the plant contributed to reducing Equipment Malaysia (BEM) was completed in 2012 and has heat energy consumption. In Edelshausen, a photovoltaic been included in the data since then. system was installed, which in 2014 generated around 373 megawatt hours of energy, of which 51 were fed into A (simplified) environmental declaration is issued each year for the supply grid. Schrobenhausen. The declaration is reviewed by an environmental auditor and subsequently published. This forms the At the other locations, there was a rise in 2014 compared basis for the figures reported below. The environmental man- to the year before, which is explained above all by BAUER agement system in place at the major production facilities of Tianjin Technology Co. Ltd. (BTTCL) moving to the new the BAUER Group is ISO 14001 or EMAS certified. plant. The area of the new works with offices amounts to 30,717 square meters, which is thus about twice as large The collection of environmental data for the production plants as before. The slight rise in machinery production at BAUER of the Resources segment is also planned, but has not been Manufacturing Inc. (BMC), at Shanghai BAUER Technolo- implemented yet. For more information on the reporting basis gies Co., Ltd. (SBT) and at BEM resulted in higher energy and limits, see the “About this Report” section. consumption than in the previous year.

CAPITAL INVESTMENTS TREND IN EMISSIONS

The two Texan machinery companies, BAUER-Pileco Inc. NOx, SO2 and CO2 emissions were calculated on the basis and BAUER Manufacturing Inc. (BMC) have increased their of electricity, heating oil, natural gas and fuel consumption. cooperation since October 2014. The Bauer Pileco location The installation of geothermal energy systems in the head in Houston has been closed and the company moved to the office building in Schrobenhausen and the Aresing plant, large premises of Bauer Manufacturing in Conroe. A new office combined with the reduction of heating oil systems, is help- and warehouse building was erected for the new employees ing us reduce sulfur oxides. The decrease at the location at the premises in Conroe. in Schrobenhausen is due to the lower heat demand as a consequence of the mild winter. The other machinery plants Following the energy-saving roof refurbishment in 2013, recorded a slight rise in 2014, the principle factor at work SCHACHTBAU NORDHAUSEN GmbH conducted an ener- here being BTTCL's move to the new plant. Emission data gy-saving facade refurbishment of an administration building from BEM was also included for the first time in 2012. At on its premises in 2014. At KLEMM Bohrtechnik GmbH our non-German machinery plants, higher capacity utiliza- in Drolshagen, a geothermal heating and cooling system tion at BMC, SBT and BEM 2014 led to a slight increase replaces a primary energy demand of around 136 megawatt overall. hours per year. In addition, installation of the hot water pipes ENVIRONMENT 51

Energy consumption Energy consumption Schrobenhausen location Other machinery plants in MWh in MWh

30,000 36,000 31,690 30,691 29,325 25,000 30,000 19,923 21,067 26,401 19,792 295 289 20,000 349 479 569 18,028 24,000 14,844 13,079 446 322 12,504 579 11,563 15,000 10,476 9,600 9,779 18,000 907 289 180 8,360 529 10,000 12,000 558 738 864 464 15,914 16,557 17,432 14,309 5,000 9,188 8,927 9,157 8,625 6,000

0 0 20112012 2013 2014 2011 2012 2013 2014

Electricity Heating oil Natural gas Electricity Heating oil Natural gas Geothermal heating pump Photovoltaic

Emissions Emissions Schrobenhausen location Other machinery plants in t or kg in t or kg 10,000 20,000 9,000 18,000 8,000 16,000 7,000 247 14,000 240 104 6,000 1,956 178 12,000 305 97 355 1,739 1,810 1,509 2,547 2,616 2,445 5,000 10,000 178 4,000 8,000 2,104 3,000 6,000 4,858 4,861 5,104 4,415 9,212 9,192 9,310 2,000 4,000 7,578 1,000 2,000 0 0 2011201220132014 2011 2012 2013 2014

CO2 (t) NOx (kg) SO2 (t) CO2 (t) NOx (kg) SO2 (t)

Avoidance of CO emissions Water consumption 2 Machinery plants (incl. Schrobenhausen) in m3 in t/year 1,000 80,000 879 71,097 900 807 70,000 73 772 783 62,239 800 50 56 63 60,000 55,441 700 50,289 600 50,000 53,107 500 40,000 40,996 690 632 568 570 27,278 35,893 400 30.000 300 20,000 200 10,000 23,011 21,243 19,548 17,990 100 116 125 148 150 0 0 2011 2012 2013 2014 2011 2012 2013 2014

Geothermal Schrobenhausen Photovoltaic Schrobenhausen location Other machinery plants Energy recovery supply grid 52 ENVIRONMENT

Some of our fossil fuel consumption has been replaced by Beginning in 2011, water consumption at other plants was environmentally friendly and low-emission energy sources. taken into account. Data from BEM was included for the

The “Avoidance of CO2 emissions” graph includes data first time in 2012. The construction of the new building, from SCHACHTBAU NORDHAUSEN GmbH and KLEMM completed in 2012, resulted in very high water consumption Bohrtechnik GmbH plants. Geothermal plants were installed at which returned to normal in the subsequent years. In addi- the Aresing plant and in the head office complex which saved tion to the increased capacity utilization, leakage problems

a total of 150 tonnes (previous year: 148 tonnes) of CO2 in in the water piping system at BTTCL resulted in higher than 2014. In 2014, the photovoltaic facility in Edelshausen saved usual water consumption in 2014.

89 tonnes of CO2 (previous year: 80 tonnes), the Schachtbau facility saved 481 tonnes (previous year: 488 tonnes). Grid SOLVENT EMISSIONS feed-in of recovered power at Edelshausen saved 51 tonnes The introduction and increased use of low-solvent water-

(previous year: 45 tonnes) of CO2; the similar system at Klemm based paints in 2009, which have a solvent content of only saved 12 tonnes (previous year: 11 tonnes). three to six percent, about a tenth of that of conventional paints, helped us greatly to reduce our VOC emissions WATER CONSUMPTION compared to the previous year. Apart from the Schroben- Water consumption in Schrobenhausen decreased in 2014 hausen location, VOC emissions from painting are generat- compared to 2013. In the last Sustainability Report, the ed primarily at KLEMM Bohrtechnik GmbH, SCHACHTBAU figure given for 2013 was too high due to a data collection NORDHAUSEN GmbH, EURODRILL GmbH and BMC. The error; it has been corrected in this report. Consumption emissions values have normalized in 2014 in comparison in 2013 was thus below the value of the previous year. In with the previous year. As a result, the savings in VOC emis- 2014, consumption fell because less water was needed sions at the Schrobenhausen location also decreased. for tests at the Aresing plant. In the graph, freshwater consumption is equal to the volume of wastewater.

VOC emissions Avoidance of VOC emissions

in kg/year in kg/year

35,000 25,000 23,086 22,315 30,000 27,720 27,406 4,785 20,000 4,851 24,701 25,867 25,000 16,661 16,366 10,873 13,962 15,000 20,000 9,831 4,251 4,134 14,221 15,000 10,000 17,464 18,301 10,000 16,847 12,410 12,232 14,870 13,444 5,000 5,000 11,646

0 0 2011 2012 2013 2014 2011 2012 2013 2014

Schrobenhausen location Other machinery plants Schrobenhausen location Klemm ENVIRONMENT 53

Environmental key figures 2014

Energy consumption (in MWh) Emissions

Employees Electricity Natural gas Heating oil CO NO Revenues 2 x Water (EUR million) (t) (kg) (m3)

Schrobenhausen location 650.2 2,027 8,625 8,360 464 4,415 1,509 17,990 SCHACHTBAU NORDHAUSEN GmbH 107.3 824 4,740 5,110 0 2,490 880 12,670 KLEMM Bohrtechnik GmbH 42.9 236 1,229 1,773 0 737 305 1,468 EURODRILL GmbH 12.4 44 197 200 0 101 34 336 MAT Mischanlagentechnik GmbH 11.8 68 200 430 0 189 74 587 PRAKLA Bohrtechnik GmbH 13.0 90 237 239 180 186 80 319 Olbersdorfer Guß GmbH 7.9 120 5,044 2,744 0 3,100 472 2,239 Total Germany 845.5 3,409 20,273 18,856 644 11,217 3,320 35,609

BAUER-Pileco Inc. 76.3 75 643 6 0 197 1 3,870 BAUER Manufacturing Inc. 22.2 81 2,939 6 0 894 1 3,218 Shanghai BAUER Technologies 5.0 35 228 0 0 69 0 2,910 BAUER Tianjin Technology Co., Ltd. 44.7 215 1,375 2,570 0 1,164 632 22,512 BAUER Equipment Malaysia 37.5 129 600 0 0 182 0 2,979 Total international 185.7 535 5,784 2,583 0 2,506 634 35,489 Total of determined key figures 1,031.2 3,944 26,057 21,439 644 13,723 3,954 71,097 as % of the group 66.1 37.9 n/a n/a n/a n/a n/a n/a BAUER Group 1,560.2 10,405 n/a n/a n/a n/a n/a n/a

Status of Sustainability Goals in the Environmental Area

Goals Situation Status Implementation

Bauer has been listed as an EMAS-certified company since 1996. Revalidation of EMAS certification at The site was recertified in 2014. Our goal is to renew this certifica- ongoing the Schrobenhausen location tion in the coming years.

Since 2011, a total of 50 video conferencing systems have been installed at several BAUER Group locations, reducing travel costs Expand the use of video and protecting the environment. Accordingly, monthly meetings are 2015 conferencing systems held between BAUER Maschinen GmbH and several worldwide sites via video conference. Other locations will also be equipped.

In Schrobenhausen, existing heating and lighting systems will be inspected and continually replaced. Among the improvements, mod- Optimization of older heating and ern LED lighting systems will be used. Insulation in older office and 2016 lighting systems plant buildings will also be inspected. The newly built production hall for BAUER Water GmbH and Esau & Hueber GmbH in Schroben- hausen has been equipped with LED lighting.

The GWE Group sought to introduce an energy management system at its German locations to evaluate energy consumption. This is Introduce and obtain certification for DIN EN ISO 50001 certification should be obtained by 2015. The not being an energy management system in goal of external certification is not being pursued further. However, pursued the GWE Group intensive work is being carried out to reduce energy consumption in further the GWE Group. Replacement bore – Coswig, Germany

About this Report

The BAUER Group Sustainability Report is intended for our and specific polling. All data is acquired by means of internal present and former employees, analysts and investors, cus- polling of individual group companies. Due to the complex tomers and suppliers, public policymakers, the public at large structure of the group, it is not always possible to collect data in the regions where we operate, friends of the company and consistently. We always state to which group companies the anyone else who may be interested. data relates.

REPORTING PERIOD The table below lists the companies whose personnel data This report covers the fiscal year from January 1, 2014, is included in the “Employees” section of this report. This is to December 31, 2014. In certain cases, information from intended to give readers an idea as to the range of the infor- other periods may be provided. The editorial deadline was mation provided. June 2015. The report is published annually. Our goal is to improve the quantity and quality of the data, REPORTING BASIS AND LIMITS thereby enhancing the information value of the data present- Reporting basis and limits are explained in detail in each ed in this report. section. Because data is collated from different departments, its scope and range varies. The 2014 Sustainability Report is Despite exercising all due diligence, we cannot guarantee that based on the 2015 Environmental Statement and the 2014 the information contained herein is complete and correct in Social Report as well as international group accounting data every detail.

Company Total group revenues (in EUR million) Employees

2013 2014 2013 2014

BAUER AG 37.0 31,7 247 253 BAUER Spezialtiefbau GmbH 186.7 232.1 651 663 BAUER Maschinen GmbH 391.7 383.3 1,046 1,023 BAUER Resources GmbH 9.6 29.6 29 38 Core companies Core BAUER Training Center GmbH 1.7 1.5 9 10 SPESA Spezialbau und Sanierung GmbH 17.0 14.2 111 104

Extended core companies Extended core RTG Rammtechnik GmbH 28.4 26.4 9 8 SPANTEC Spann- und Ankertechnik GmbH 18.5 21.5 26 29 BAUER Deep Drilling GmbH * 1.3 14 BAUER Umwelt GmbH 42.7 54.8 94 93 BAUER Water GmbH 13.5 13.5 38 32 Esau & Hueber GmbH 11.5 15.4 57 57 HGC Hydro-Geo-Consult GmbH 1.0 1.7 15 13 Total (extended core companies) 759.3 827.0 2,332 2,337

extended core companies as a % of the group 50.5 53.0 22.7 22.5 SCHACHTBAU NORDHAUSEN GmbH 102.1 107.3 808 824 SCHACHTBAU NORDHAUSEN Bau GmbH 21.4 21.7 77 77 Total (including Schachtbau) 882.8 956.0 3,217 3,238

as % of the group 58.7 61.3 31.3 31.1 BAUER Group 1,504.2 1,560.2 10,264 10,405

* added in 2014 Doha, Qatar 58

GRI Index

Our 2014 Sustainability Report is based on the template pro- sustainability. These guidelines are continuously updated and vided by the Global Reporting Initiative (GRI), version G3. The improved. Global Reporting Initiative is a multi-stakeholder foundation based in Amsterdam, Netherlands, which supports organiza- The application levels indicate how well the company in questions in drafting sustainability reports. To that end, the GRI has tion has applied the reporting framework and how many stan- established a comprehensive reporting framework as well as dard disclosures and performance indicators are contained guidelines setting out principles and indicators that companies in the Sustainability Report. Based on our own appraisal, our can use to measure their economic, environmental and social 2014 Sustainability Report is classifiable as application level C.

Indicator and Description Link/Note Status

Strategy and analysis

1.1 Statement from the CEO p. 6/7

1.2 Impacts, risks and opportunities p. 6/7, 12/13; AR p. 67-75 Organizational proﬁ le

2.1 Name of the organization p. 9

2.2 Primary brands, products and/or services p. 9/10

2.3 Operational structure of the organization p. 2/3, 9-11; AR p. 8/9, 12/13, 176-179

2.4 Location of headquarters p. 9

2.5 Countries and main production sites p. 2/3, 9/10; AR p. 8/9, 176-179

2.6 Nature of ownership and legal form p. 9/10, 31

2.7 Markets p. 2/3, 9/10; AR p. 41-43, 120/121

2.8 Scale of the reporting organization Front cover

2.9 Structural changes None

2.10 Prizes and awards p. 13/14, 22 Report parameters

3.1 Reporting period p. 56

3.2 Publication of last report p. 56

3.3 Reporting cycle p. 56

3.4 Contact point Rear cover

3.5 Process for deﬁ ning report content p. 6/7, 12, 29

3.6 Boundary of the report p. 2/3, 12, 29, 37, 50, 56

3.7 Speciﬁ c limitations p. 2/3, 12, 29, 37, 50, 56

Joint Ventures, subsidiaries, leased facilities and outsourced 3.8 p. 2/3, 12, 29, 37, 50, 56 activities

3.9 Data measurement techniques and the bases of calculations p. 2/3, 12, 29, 37, 50, 56

3.10 Revised statements p. 52

3.11 Changes from previous reporting periods p. 35, 56

3.12 GRI index p. 58-60

3.13 External assurance None

Complete response Partial response AR 2014 Annual Report GRI INDEX 59

FT_BoldCorporate governance, commitments and engagements FT 4.1 Governance structure p. 11/12; AR p. 17/18, 84-89, 170/171

4.2 Independence of Supervisory Board Chairman p. 11; AR p. 17/18, 84-89, 170/171

4.3 Independence of the Supervisory Board Not relevant Shareholders' and employees' right to provide recommendations 4.4 p. 30/31, 38; AR p. 63-65 or direction 4.5 Compensation of Executive Board and Supervisory Board members AR p. 61-63

4.6 Avoidance of conﬂ icts of interest p. 11

4.7 Qualiﬁ cations and experience of Supervisory Board members AR p. 84-87

4.8 Internal guidelines, code of conduct and principles p. 11-16

4.9 Overseeing of sustainability by Supervisory Board AR p. 88/89

4.10 Evaluation of Supervisory Board's performance AR p. 88/89

4.11 Precautionary approach in the company p. 12/13; AR p. 67-75, 77-81

4.12 External agreements, principles, initiatives or memberships p. 11, 15-18, 34, 42, 45, 49/50

4.13 Membership in associations and advocacy organizations p. 33/34

4.14 Stakeholder list p. 29-35

4.15 Identiﬁ cations of relevant stakeholders p. 29-35

4.16 Inclusion of stakeholders p. 29-35

4.17 Topics and concerns of stakeholders p. 29-35 Economics

Management approach p. 6/7, 9-12 Economic performance

EC 1 Economic value Front cover, p. 32/33

EC 2 Impacts of climate change p. 12/13

EC 3 Organization's deﬁ ned beneﬁ t plan obligations p. 37, 44-46; AR p. 61-63 Market presence

EC 6 Local suppliers p. 31

EC 7 Local personnel p. 11, 40 Indirect economic impact

EC 8 Infrastructure investments for public beneﬁ t p. 31-34 Environment

Management approach p. 6/7, 11/12, 49 Energy

EN 3 Direct energy consumption p. 50-53

EN 4 Indirect energy consumption p. 50-53

EN 5 Energy saved and efﬁ ciency improvements p. 50-53

EN 6 Energy-efﬁ cient products p. 21-26

EN 7 Reduction of indirect energy consumption p. 22/23, 49, 53 Water

EN 8 Total water withdrawal p. 50-53

EN 10 Recycled and reused water p. 50-53 60 GRI INDEX

Emissions, wastewater, solid waste

EN 16 Direct and indirect greenhouse gas emissions p. 50-53

EN 18 Reduction of greenhouse gas emissions p. 50-53

EN 20 NOx, SOx and other signiﬁ cant air emissions p. 50-53 EN 21 Wastewater discharges p. 50-53 Products and services

EN 26 Minimization of environmental impacts of products p. 21-26

EN 27 Reclaimed packaging materials Not relevant for end-products Compliance with legislation

EN 28 Compliance with legislation None Labor

Management approach p. 6/7, 11/12, 37, 40 Employment

LA 1 Total workforce p. 37-43

LA 2 Fluctuation p. 39, 45

LA 3 Company beneﬁ ts p. 43-46 Occupational safety

LA 6 Representation in occupational safety committees p. 13/14

LA 7 Occupational accidents p. 14/15 Training and education

LA 10 Training and education p. 43/44

LA 11 Skills management and lifelong learning p. 43-45 Diversity and equal opportunity

LA 13 Composition of governance bodies and employees p. 37-41; AR p. 2/3, 170/171 Human rights

Management approach p. 6/7, 11/12 Child labor

HR 6 Child labor p. 11 Forced or compulsory labor

HR 7 Forced labor p. 11 Company

Management approach p. 6/7, 11/12, 29 Public policy

SO 5 Public policy positions and lobbying p. 33 Product responsibility

Management approach p. 6/7, 11/12, 15-18, 22-25 Labeling of products and services

PR 5 Customer satisfaction p. 29/30 Marketing communications

PR 6 Guidelines for advertising, promotion and sponsoring p. 31-34

PR 7 Compliance with voluntary code of conduct None IMPRINT PUBLISHED BY CONTACT DESIGN BAUER Aktiengesellschaft Corporate Communications Kerstin Kaltenstadler BAUER-Strasse 1 BAUER Aktiengesellschaft 86529 Schrobenhausen, Germany BAUER-Strasse 1 PHOTOS www.bauer.de 86529 Schrobenhausen, Germany BAUER Group Tel.: +49 8252 97-1218 Gregor Eisele - Kaloo Images (p. 26) REGISTERED PLACE OF Fax: +49 8252 97-2900 BUSINESS [email protected] PRINT 86529 Schrobenhausen, Germany Kastner AG – das medienhaus, Wolnzach Registered at the District Court of TEXT/CONCEPT Ingolstadt under HRB 101375 Verena Kaspar Christopher Wolf

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This Sustainability Report is published in German and English. http://www.bauer.de/en/ It is available as a PDF document and online. bauer_group/csr BAUER Aktiengesellschaft BAUER-Strasse 1 86529 Schrobenhausen, Germany www.bauer.de