Annual Report 2018 Annual Report 2018 STRABAG is a European-based technology group for construction services, a leader in innovation and financial strength. Our services span all areas of the construction industry and cover the entire construction value chain. We bring together people, materials and machinery at the right place and at the right time in order to realise even complex construction projects – on schedule, of the highest quality and at the best price. KEY FIGURES KEY FINANCIAL FIGURES 2014 2015 2016 2017 ∆ % 2018 Output volume (€ mln.) 13,566.00 14,289.76 13,491.03 14,620.89 12 16,322.88 Revenue (€ mln.) 12,475.67 13,123.48 12,400.46 13,508.72 13 15,221.83 Order backlog (€ mln.) 14,403.44 13,134.58 14,815.79 16,591.87 2 16,899.71 Employees (FTE) 72,906 73,315 71,839 72,904 4 75,460 KEY EARNINGS FIGURES 2014 2015 2016 2017 ∆ % 2018 EBITDA (€ mln.) 719.94 816.10 855.18 834.58 14 952.60 EBITDA margin (% of revenue) 5.8 6.2 6.9 6.2 6.3 EBIT (€ mln.) 281.96 341.04 424.91 448.36 25 558.21 EBIT adjusted (€ mln.)1 397.10 448.36 12 502.90 EBIT margin (% of revenue) 2.3 2.6 3.4 3.3 3.7 EBIT margin adjusted (% of revenue)1 3.2 3.3 3.3 EBT (€ mln.) 255.76 316.62 421.13 421.21 26 530.78 Net income (€ mln.) 147.50 182.49 282.00 292.36 24 362.78 Net income after minorities (€ mln.) 127.97 156.29 277.65 278.91 27 353.53 Net income after minorities margin (% of revenue) 1.0 1.2 2.2 2.1 2.3 Earnings per share (€) 1.25 1.52 2.71 2.72 27 3.45 Dividend per share (€) 0.50 0.65 0.95 1.30 0 1.302 Cash flow from operating activities (€ mln.) 805.33 1,240.35 264.17 1,345.19 -45 736.18 ROCE (%) 4.3 4.1 6.4 6.7 7.6 Investment in fixed assets (€ mln.) 346.49 395.75 412.46 457.62 41 644.99 KEY BALANCE SHEET FIGURES 2014 2015 2016 2017 ∆ % 2018 Equity (€ mln.) 3,144.30 3,320.63 3,264.59 3,397.72 8 3,653.77 Equity ratio (%) 30.6 31.0 31.5 30.7 31.4 Net debt (€ mln.) -249.11 -1,094.48 -449.06 -1,335.04 9 -1,218.28 Gearing ratio (%) -7.9 -33.0 -13.8 -39.3 -33.3 Capital employed (€ mln.) 5,357.82 5,448.01 5,258.17 5,242.91 6 5,552.09 Balance sheet total (€ mln.) 10,275.54 10,728.87 10,378.41 11,054.12 5 11,621.45 EBITDA = earnings before net interest income, income tax expense and depreciation and amortisation EBIT = earnings before net interest income and income tax expense EBT = earnings before income tax expense ROCE = (net income + interest on debt - interest tax shield (25 %)) / (average group equity + interest-bearing debt) Net debt = financial liabilities - non-recourse debt + provisions for severance and pension obligations - cash and cash equivalents Gearing ratio = net debt /group equity Capital employed = group equity + interest-bearing debt 1 2016 adjusted for non-operating income in the amount of € 27.81 million 2018 adjusted for a non-operating step-up profit in the amount of € 55.31 million 2 Proposed dividend OUTPUT VOLUME BY REGION 2018 ORDER BACKLOG BY REGION 2018 Rest of Rest of world Rest of world 7 % Europe Rest of 11 % 7 % KEY FINANCIAL FIGURES Europe 11 % Germany Germany 2014 2015 2016 2017 ∆ % 2018 43 % CEE 48 % Output volume (€ mln.) 13,566.00 14,289.76 13,491.03 14,620.89 12 16,322.88 22 % CEE Revenue (€ mln.) 12,475.67 13,123.48 12,400.46 13,508.72 13 15,221.83 23 % Order backlog (€ mln.) 14,403.44 13,134.58 14,815.79 16,591.87 2 16,899.71 Austria Austria 16 % Employees (FTE) 72,906 73,315 71,839 72,904 4 75,460 12 % OUTPUT VOLUME BY SEGMENT 2018 ORDER BACKLOG BY SEGMENT 2018 Other 1 % International + International + Special Divisions Special Divisions 23 % 22 % North + West North + West 48 % 52 % South + East South + East 26 % 28 % OUTPUT VOLUME ORDER BACKLOG CAGR +4 % € CAGR +5 % € 17 bn. 17 bn. 16,899.71 16,591.87 16,322.88 14,815.79 14,620.89 KEY BALANCE SHEET FIGURES 14,403.44 14,289.76 13,566.00 13,491.03 13,134.58 2014 2015 2016 2017 ∆ % 2018 Equity (€ mln.) 3,144.30 3,320.63 3,264.59 3,397.72 8 3,653.77 Equity ratio (%) 30.6 31.0 31.5 30.7 31.4 Net debt (€ mln.) -249.11 -1,094.48 -449.06 -1,335.04 9 -1,218.28 Gearing ratio (%) -7.9 -33.0 -13.8 -39.3 -33.3 € 0 € 0 Capital employed (€ mln.) 5,357.82 5,448.01 5,258.17 5,242.91 6 5,552.09 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Balance sheet total (€ mln.) 10,275.54 10,728.87 10,378.41 11,054.12 5 11,621.45 EBIT EBIT BY SEGMENT 2018 € € mln. 600 mln. CAGR +19 % 161.40 North + West 558.21 142.03 South + East 448.36 424.91 198.69 International + Special Divisions 341.04 EBITDA = earnings before net interest income, income tax expense and depreciation and amortisation EBIT = earnings before net interest income and income tax expense 281.96 EBT = earnings before income tax expense 56.09 Other and reconciliation ROCE = (net income + interest on debt - interest tax shield (25 %)) / (average group equity + interest-bearing debt) Net debt = financial liabilities - non-recourse debt + provisions for severance and pension obligations - cash and cash equivalents Gearing ratio = net debt /group equity Capital employed = group equity + interest-bearing debt € 0 2014 2015 2016 2017 2018 1 2016 adjusted for non-operating income in the amount of € 27.81 million 2018 adjusted for a non-operating step-up profit in the amount of € 55.31 million CAGR = Compound annual growth rate 2 Proposed dividend CEE = Central and Eastern Europe comprises the following countries: Bulgaria, Croatia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Czech Republic, Hungary The business of construction requires an open-minded spirit. That is why we have been building a successful bridge to art for more than 30 years. In addition to economic, ecological and social responsibility, cultural commitment is also strategically anchored at STRABAG SE. According to Leonardo da Vinci, art speaks “to all generations of the world”. It also is our conviction that contact with art opens up new perspectives and expands one’s horizons. Art can help to get people excited about new ideas. So we took some winning works from the STRABAG Value Awards and put them on our construction sites. Because for us, the world of construction is conceivable only with a foundation built on values. CONTENT • 16 THE ART OF BUILDING • 23 ABOUT THIS REPORT Report • 24 GRI CONTENT INDEX • 28 CEO’S REVIEW • 32 THE STRABAG GROUP AT A GLANCE • 34 STRATEGY • 48 SHARES, BONDS & INVESTOR RELATIONS 55 orporate • 56 CONSOLIDATED CORPORATE overnance GOVERNANCE REPORT • 76 SUPERVISORY BOARD REPORT • Economic Responsibility • Corporate Governance • People & Workplace • Business Compliance • Ecological Responsibility • Corporate Citizenship 81 • 82 ABOUT THIS CONSOLIDATED NON-FINANCIAL REPORT Report • 83 EMPLOYMENT CONDITIONS • 2 9 STRATEGIC HUMAN RESOURCE DEVELOPMENT • 98 BUSINESS COMPLIANCE 1291 • 101 RESOURCE MANAGEMENT • 130 GROUP MANAGEMENT REPORT • 107 SOCIETAL ENGAGEMENT • 181 CONTENT NOTES • 110 RISK AND OPPORTUNITY MANAGEMENT – PROJECT-RELATED • 182 CONSOLIDATED FINANCIAL STATEMENTS RISK MANAGEMENT AS AT 31 DECEMBER 2018 • 118 INNOVATION • 188 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 121 DIGITALISATION • 258 STATEMENT OF ALL • 124 CLIENT SATISFACTION LEGAL REPRESENTATIVES • 259 AUDITOR’S REPORT roup Manage- ment Report, onsol dated F nanc al State- ments and Notes • 264 GLOSSARY • 266 FINANCIAL CALENDAR • 267 IMPRINT • Economic Responsibility • Corporate Governance • People & Workplace • Business Compliance • Ecological Responsibility • Corporate Citizenship 1 This part has been audited by the financial auditor KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz. 15 16 THE ART OF BUILDING STRABAG has set itself the objective to execute Following STRABAG’s project of anchoring the all of its projects on time and to the best quality, values in our day-to-day work, artists in the meaning: to the highest satisfaction. In performing STRABAG Artcollection were invited to submit these tasks, our corporate culture builds espe- works based thematically on one or more of cially on our nine guiding values of partnership, the nine values. From among the submissions, commitment, reliability, trust, respect, sus- the members of the top class jury awarded a tainability, solidarity, modesty and innova- prize to ten artists, whose works were presented tive spirit. They form the basis of our success. at a special exhibition in the Gironcoli-Kristall at the STRABAG headquarters in Vienna in the spring of 2018. Seven of these works are shown here in this Annual Report; one of the three re- maining works is included as a special edition. COVER Masha Sha’s large-format graphite and coloured with the appearance of an advertising slogan. Masha Sha, pencil drawings require incredible effort and The word combination “NEW NOW” is short and NEW NOW, 2017, exertion in their production. The artist uses dozens concise, a single letter being the only difference coloured pencil of pencils to meticulously fi ll the substrate with between them.