Annual Report 2010 The BAUER Group is an international construction and machinery manufacturing concern based in Schrobenhausen, Bavaria. The stock market-listed holding company BAUER Aktiengesellschaft is the parent of more than 110 subsidiary businesses across its Construction, Equipment and Resources segments. Bauer is a leader in the execution of complex excavation pits, foundations and vertical seals, as well as in the development and manufacture of related machinery for this dynamic market. The Group also deploys its expertise in the exploration, mining and safeguarding of valuable natural resources. In 2010 the companies of the BAUER Group employed some 9,100 people in around 70 countries and achieved total Group revenues of EUR 1.3 billion. Passion for progress The origins of Bauer date back as far as 1790, and still today the company's success is founded on highly flexible application of the specialist know-how it has built up over those many years. As an innovator and technology leader, Bauer has played a major role in the advancement of the international specialist foundation engineering industry and related business fields. Indeed, today Bauer is also the world market leader in manufacture of the relevant machinery. It is with just such innovative strength and a keen focus on the challenges of the future, that the Group is also developing its recently established Resources segment. The Group at a glance GROUP KEY FIGURES 2007-2010 Change: IFRS in EUR million 2007 2008 2009 2010 2009/2010 Total Group revenues * 1,208.1 1,527.2 1,275.8 1,304.0 2.2 % of which Germany * 331.6 379.5 361.4 339.1 -6.2 % International 876.5 1,147.7 914.4 964.9 5.5 % International in % 72.6 75.2 71.7 74.0 n/a of which Construction * 531.8 700.9 570.0 615.4 8.0 % Equipment * 643.1 780.1 608.5 581.7 -4.4 % Resources * 112.0 135.1 174.3 177.7 2.0 % Other/Consolidation -78.8 -88.9 -77.0 -70.8 n/a Consolidated revenues * 1,159.4 1,455.3 1,226.0 1,255.6 2.4 % Sales revenues 1,033.0 1,290.8 1,096.5 1,131.7 3.2 % Orders received * 1,403.8 1,580.7 1,113.1 1,410.0 26.7 % Orders in hand (as per December of current year) 618.0 671.6 508.9 614.9 20.8 % EBITDA * 185.4 228.4 157.4 165.5 5.2 % EBITDA margin in % (of sales revenues) * 17.9 17.7 14.4 14.6 n/a EBIT 131.8 167.5 84.4 88.4 4.7 % EBIT margin in % (of sales revenues) 12.8 13.0 7.7 7.8 n/a Net profit or loss 74.4 107.5 42.0 39.8 -5.3 % Capital investment in property, plant and equipment 96.4 140.6 136.8 90.7 -33.7 % Shareholders' equity 279.1 372.6 401.9 443.9 10.4 % Equity ratio in % 34.1 35.8 33.9 33.2 n/a Net assets 818.0 1,041.5 1,185.2 1,337.7 12.9 % Earnings per share 4.23 6.09 2.28 2.04 -10.5 % Dividend payment (2010 proposal) 17.13 17.13 10.28 10.28 0.0 % Dividend per share in EUR (2010 proposal) 1.00 1.00 0.60 0.60 0.0 % Return on equity after tax in % 33.4 38.5 11.3 9.9 n/a Employees (on average over the year) 6,983 8,674 8,872 9,094 2.5 % of which Germany 3,324 3,781 4,062 4,036 -0.6 % International 3,659 4,893 4,810 5,058 5.2 % At variance with the consolidated revenues presented in the Group income statement, the total Group revenues presented here include portions of revenues from associated companies as well as revenues of non-consoli- dated subsidiaries and joint ventures. * Previous year figures adjusted (for explanation see footnote on page 130) > > DEVELOPMENT OF TOTAL GROUP REVENUES BY SEGMENT > in EUR million Construction Equipment Resources 2007 1,208 2008 1,527 2009 1,276 2010 1,304 CONSTRUCTION SEGMENT KEY FIGURES in EUR '000 2009 2010 Change Total Group revenues * 570,017 615,403 8.0 % of which external sales revenues 487,894 505,758 3.7 % GROUP KEY FIGURES AT A GLANCE GROUP KEY FIGURES AT Orders received * 512,972 671,684 30.9 % Orders in hand * 297,959 354,240 18.9 % EBIT 25,746 28,798 11.9 % Net profit or loss 13,109 9,995 -23.8 % Employees (on average over the year) * 4,935 5,055 2.4 % EQUIPMENT SEGMENT KEY FIGURES in EUR '000 2009 2010 Change Total Group revenues * 608,477 581,682 -4.4 % of which external sales revenues 456,468 469,252 2.8 % Orders received * 485,878 607,577 25.0 % Orders in hand * 114,068 139,963 22.7 % EBIT 51,306 48,283 -5.9 % Net profit or loss 24,966 20,900 -16.3 % Employees (on average over the year) 2,739 2,775 1.3 % RESOURCES SEGMENT KEY FIGURES in EUR '000 2009 2010 Change Total Group revenues * 174,302 177,744 2.0 % of which external sales revenues 152,003 156,398 2.9 % Orders received * 191,297 201,557 5.4 % Orders in hand * 96,920 120,733 24.6 % EBIT 5,997 8,075 34.7 % Net profit or loss 3,105 5,298 70.6 % Employees (on average over the year) * 953 1,019 6.9 % * Previous year figures adjusted (for explanation see footnote on page 130) BAUER Aktiengesellschaft 2010 Annual Report 2 Management Board of the Company 72 The Bauer Share 4 Foreword 74 Declaration on Corporate Governance / Corporate Governance 6 Milestones in the Company's History Report 8 The World is our Market 78 Report of the Supervisory Board 11 Group Management Report 81 Balance Sheet and Income Statement 11 I. Group of BAUER Aktiengesellschaft in 14 II. Macro-Economic Trend accordance with HGB 21 III. Trends in the Business Segments 85 Consolidated Financial Statements in accordance with IFRS 37 IV. Trend in Orders Received 154 Declaration of the Management Board 39 V. Earnings, Financial and Net Asset Position 155 Auditors' Report 47 VI. Remuneration Report 156 Imprint 51 VII. Sustainability 57 VIII. Follow-up Report 59 IX. Risk and Opportunity Report 69 X. Outlook 2 Management Board of the Company PROF. DIPL.-KFM. THOMAS BAUER Supervisory Board mandates: (CHAIRMAN) • BAUER Spezialtiefbau GmbH, Schrobenhausen (Chairman) ¹ Professor Thomas Bauer (born 1955) heads the Participa- • BAUER Maschinen GmbH, Schrobenhausen tions in Subsidiaries, Financial Reporting, Planning and (Chairman) ¹ Controlling functions on the Management Board of BAUER • BAUER Resources GmbH, Schrobenhausen Aktiengesellschaft. (Chairman until December 7, 2010) ¹ • SCHACHTBAU NORDHAUSEN GmbH, Nordhausen After studying business economics at the Ludwig Maximil- (Chairman) ¹ ian University in Munich, he worked in the USA. He joined • BAUER EGYPT S.A.E., Cairo (Chairman) ¹ the family company in 1982. In 1986 he became sole man- • Mannheimer Holding AG, Mannheim ² aging director of BAUER Spezialtiefbau GmbH and since 1994 he has been Chairman of the Management Board of BAUER Aktiengesellschaft. Professor Thomas Bauer is President of the Bavarian Con- struction Industry Association, Vice-President for Econom- ics of the Confederation of the German Construction Indus- try and Vice-President of the Confederation of Bavarian Industry (vbw). He is an honorary professor of the Technical University of Munich. ¹ Internal Supervisory Board membership ² Memberships of Supervisory Boards or comparable supervisory bodies of business entities in Germany and abroad, in accordance with Section 285 No. 10 of the German Commercial Code (HGB) MANAGEMENT BOARD OF THE COMPANY 3 DIPL.-BETRIEBSWIRT (FH) HARTMUT BEUTLER Hartmut Beutler (born 1957) is responsible for the Finance, Legal Affairs and Insurance, and Facility Management func- tions on the Management Board of BAUER Aktiengesellschaft. He studied business economics (specializing in the construction industry) at Biberach University of Applied Sci- ences and joined BAUER Spezialtiefbau GmbH as a trainee in 1983. He later became deputy head of that company's Accounting department and assistant to the Management Board. After working as head of IT, Facility Management, Legal Affairs and Insurance at BAUER Spezialtiefbau GmbH, as well as being a company "Prokurist" (holder of power of attorney), Hartmut Beutler was appointed to the Management Board of BAUER Aktiengesellschaft in 2001. Supervisory Board mandates: • BAUER Resources GmbH, Schrobenhausen ¹ • Raiffeisenbank Schrobenhausen e. G. (Chairman) ² DIPL.-ING. HEINZ KALTENECKER Heinz Kaltenecker (born 1951) is responsible for the Partici- pations in Subsidiaries, Human Resources and Information Technology functions on the Management Board of BAUER Aktiengesellschaft. He is also the Labour Relations Director. After studying civil engineering at the Technical University of Karlsruhe, he joined BAUER Spezialtiefbau GmbH in 1978. He performed a number of senior management functions, including being managing director of BAUER Spezialtiefbau GmbH from 2001 to 2007. Heinz Kaltenecker was manag- ing director of BAUER Resources GmbH from 2007 to 2010. He has been a member of the Management Board of BAUER Aktiengesellschaft since 1997. Heinz Kaltenecker is a board member of the German Geotechnical Society and a member of the Large Construction Companies subcommit- tee of the Confederation of the German Construction Industry. Supervisory Board mandates: • BAUER Spezialtiefbau GmbH, Schrobenhausen ¹ • BAUER Maschinen GmbH, Schrobenhausen ¹ • BAUER Resources GmbH, Schrobenhausen (Chairman since December 7, 2010) ¹ • SCHACHTBAU NORDHAUSEN GmbH, Nordhausen ¹ • German Water & Energy Pakistan (Private) Ltd., Islamabad (Chairman) ¹ 4 Foreword Dear Shareholders, Partners and Friends, Ladies and Gentlemen, The year 2010 will go down in history as the year when the economic crisis unexpectedly diminished, virtually into non- existence.