“In every wayAnnual the Report location 2008 counts!” businessreport business “Make yourself master of every situation and wherever you stand is the true place” KeyA snapshot figures KEY PROFIT AND LOSS FIGURES IN E MILLION 2008 in % 2007 2006 Annual construction output 307.3 16.9 263.0 185.7 of which: international in % 85.6 +22.1PP 63.5 72.2 Earnings before interest and taxes (EBIT) 35.8 11.4 32.2 18.6 Earnings before taxes (EBT) 16.8 1.2 16.6 11.2 Profit after tax 16.2 34.5 12.0 8.6 Retained profit 3.3 0 3.3 3.0 Return on capital employed in % 6.9 +0.1PP 6.8 5.4 Return on equity in % 14.0 +2.6PP 11.4 8.9 BALANCE SHEET FIGURES IN E MILLION Total assets 559.4 17.0 477.9 438.3 Equity ratio as % of total assets as at 31.12. 22.0 –0.7PP 22.7 23.3 Investments 44.2 –52.6 93.0 74.9 Amortisation and depreciation 2.8 17.5 2.4 2.0 STOCK MARKET FIGURES Earnings per share in EUR 5.36 34.0 4.00 2.78 Dividend per share in EUR 1) 1.10 – 1.10 1.00 Pay-out ratio in % 20.4 –25.8 27.5 36.0 1) Proposal to general meeting of shareholders Florido Tower, Vienna, Austria UBM Vienna, Headquarters RECONCILIATION OF TOTAL OUTPUT (ANNUAL CONSTRUCTION OUTPUT) OF THE GROUP TO REVENUES IN CONSOLIDATED INCOME STATEMENT FOR 2008 FISCAL YEAR At UBM we define annual construction output as being the most significant factor in describing revenues. Unlike the total output included in the consolidated income statement, this figure also includes the proportional reve- nues from joint ventures as well as from subsidiaries consolidated at equity and other subsidiaries. In addition, it includes changes in inventories relating to own projects as well as own work capitalised in the reporting year. The following table shows the calculation of the annual construction output for the fiscal years 2006 to 2008. REVENUES in T E 2008 2007 2006 Total output of Group 307,342 262,960 185,714 Revenue in consolidated income statement 216,399 133,655 117,039 Difference 90,943 129,305 68,675 Revenues from real estate acquisitions 34,770 3,690 10,742 Changes in inventory of own projects in prior year 16,089 16,372 2,568 Revenues from participations consolidated at 39,868 108,845 54,168 equity or which are of minor importance Own work capitalised 216 398 1,197 90,943 129,305 68,675 01 UBM-Group RangeUBM Group of Services ACQUISITION OF LAND Search, analysis, lease, buy STUDIES Market studies, feasibility studies, project studies, FINANCING & LEGAL Financing models, special financing, tax models, company law concepts APPROVAL PROCEDURES Zoning, demolition approvals, construction permits, utilisa- tion permits PLANNING Submission planning, execution planning, structural enginee- ring, general planning CONSTRUCTION SERVICES Construction management, general contractor, master con- tractor, developer COMMERCIALISATION Leasing, sale PROPERTY MANAGEMENT Commercial property administration, optimisation of opera- ting costs FaCILITY MANAGEMENT CENTRE MANAGEMENT Marketing, PR, floor-space management, tenant service e 01 / OUR COMPANY 02 / BUSINESS REPORT 05 Foreword from the Managing Board 40 Business developments, results 06 Statutory bodies of the company and position of company 07 Company profile 50 Planned development and risks 08 Strategy and success factors of the company 09 Our strengths – Our business 53 Research and development 10 Our projects – growing 11 UBM shares 22 Our projects – international 36 Our projects – national 03 Table of Contents 08 po businessre rt/ Table of Contents 03/ ANNUAL FINANCIAL 04/ CONSOLIDATED FINANCIAL 03/ STATEMENTS OF UBM AG 04/ STATEMENTS OF UBM GROUP 58 Balance sheet 74 Consolidated income statement 60 Income statement 75 Consolidated balance sheet 62 Non-current assets 76 Changes in consolidated equity 64 2008 notes 78 Consolidated cash flow 79 Notes to consolidated financial statements 2008 100 Notes to segment reporting 108 Equity investments 112 Supervisory Board report 113 Appropriation of profits sines report u Peter Maitz confereKarl Bier n Heribert Smolé Martin Löcker ce positio 0705 UForewordBM-Group status“To be content with ourreport own is the greatest and most certain wealth of all.” (Marcus Tullius Cicero) DEAR SHAREHOLDERS, 2008 was a year marked by negative headlines, but the general economic conditions have yet to unleash their force on UBM. In spite of the difficult business environment and contrary to the overall trend of receding earnings, UBM managed to generate a new record output. With annual construction output reaching approximately €307.3 million we again succeeded in beating last year‘s performance and chalked up another record in the company‘s history. Earnings before tax (EBT) were also raised by €0.2 million in comparison to the previous year, and totalled €16.8 million. The main contributors to this outstanding result in 2008 were the countries of Poland and Germany. The key factors in Poland included the sale of Hotel „andel’s“ in Krakow as well as general contractor services for the „Poleczki Park“ multi-functional building complex and for various hotels („andel’s“ in Lodz, „angelo“ in Katowice and „Park Inn“ in Krakow). In Germany, the main projects were Hotel „andel’s“ in Berlin and „angelo“ in Munich as well as residential sales in the Bergmannstraße and Riem projects in Munich. But many other projects boosted the company‘s performance in 2008, in addition to these construction projects. First and foremost we should mention the hotels in the „angelo“ chain, in Pilsen, Munich and Bucharest among others, which were successfully implemented. Yet it was not just this segment of our business that proved lucrative: the logistics business (Regensdorf in Switzerland and Chitila in Romania) also made a solid contribution to the positive figures. Furthermore, the Neue Mitte Lehen project in Salzburg coupled with sales within the „andel’s Residences“ project and the sale of the last third of phases 1-4 in the An- del City project helped the company put in a strong performance. You can find more detailed information regarding these projects on pages 23-37. In view of the economic conditions we are cautiously optimistic about the future but do have our reservations. Although the 2008 crisis has yet to be reflected in our books, it is unlikely that we will be able to elude the general developments in the economy in 2009. Consequently, we expect that the looming recession will result in a slight downturn in sales revenue and earnings. Nonetheless, we remain true to our growth strategy and for 2009 plan to conclude projects such as the hotel on Hessenplatz in Linz, Hotel „andel’s“ in Berlin, „Park Inn“ hotel in Krakow, „andel’s“ in Lodz as well as the „Chitila“ logistics centre in Romania. In addition to this we are continuing to drive our other projects, with the focus in 2009 prima- rily being Poland (Hotel „angelo“ in Katowice and „Poleczki Park“) and Germany (residential projects in Munich). We would like to take this opportunity to thank you, our shareholders, business partners and staff, for your trust, your loyalty and your cooperation. We hope that next year we will once again be able to conquer the great challenges facing UBM together, and continue down our successful path. Karl Bier Peter Maitz Heribert Smolé Martin Löcker (Chairman) Company bodies MANAGING BOARD KARL BIER, Chairman of the Managing Board Degree in law, tax specialist; general manager of several project com- panies, member of UBM AG Managing Board since 1992. Responsible for the development and expansion of project development in Austria as well as in the Czech Republic (since 1993), Hungary (since 1994), Poland (since 1995), Germany and Slovakia (since 2003) as well as Croatia (since 2005) and Romania (since 2006). Karl Bier PETER MAITZ Studied construction engineering in Graz; joined Porr in 1972, management of many projects in Austria, Hungary, Iran and Algeria from 1972 to 1986. Technical manager of various project companies in Austria and abroad since 1985. Member of Managing Board at UBM AG since 1992. Peter Maitz HERIBERT SMOLÉ Joined the Porr Group in 1973. head of department for commercial administration of investments from 1985; joint signatory (Gesamtpro- kurist) of UBM AG from 1990, general manager of various companies of UBM Group. Member of Managing Board at UBM AG since 1997. Heribert Smolé MARTIN LÖCKER Studied industrial engineering and construction at the Technical Uni- versity in Graz; postgraduate studies in real estate economics at the European Business School in Munich; joined the Porr Group in 2001. Responsible for the technical management of commercial real estate in Germany, managing director of project companies abroad. Martin Löcker 07 UCompanyBM-Group profile status report SUPERVISORY BOARD Wolfgang Hesoun (ab 18.04.08) Horst Pöchhacker, Chairman (from 18.04.08) Dr. Walter Lederer Dr. Peter Weber, Deputy chairman (from 18.04.08) Iris Ortner-Winischhofer Dr. Bruno Ettenauer Dr. Johannes Pepelnik Wolfhard Fromwald Dr. Siegfried Sellitsch, Vorsitzender (bis 18.04.08) Confident in a future of partnerships People need land. People need a roof over their heads. And people need a reliable partner who can make all this happen. For more than 136 years the UBM Group has been mak- ing every effort to support people in fulfilling their dreams. Initially, just by manufacturing the best construction materials for them. Today, the focus of our company lies in the de- velopment, leasing and sale of real estate throughout Europe. Especially in the countries of Central, Eastern and South-eastern Europe we deploy our many years of experience in the field of real estate development and consulting.