Annual Report 2019 ON THE SAFE SIDE. Annual Report 2019 Annual Report 2019 ON THE SAFE SIDE. 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 Annual Report 2019 highest quality and at the best price. KEY FIGURES KEY FINANCIAL FIGURES 2015 2016 2017 2018 ∆ % 2019 Output volume (€ mln.) 14,289.76 13,491.03 14,620.89 16,322.88 2 16,617.97 Revenue (€ mln.) 13,123.48 12,400.46 13,508.72 15,221.83 3 15,668.57 Order backlog (€ mln.) 13,134.58 14,815.79 16,591.87 16,899.71 3 17,411.48 Employees (FTE) 73,315 71,839 72,904 75,460 2 76,919 KEY EARNINGS FIGURES 2015 2016 2017 2018 ∆ % 2019 EBITDA (€ mln.) 816.10 855.18 834.58 952.60 17 1,113.30 EBITDA margin (% of revenue) 6.2 6.9 6.2 6.3 7.1 EBIT (€ mln.) 341.04 424.91 448.36 558.21 8 602.58 EBIT adjusted (€ mln.)1 397.10 502.90 EBIT margin (% of revenue) 2.6 3.4 3.3 3.7 3.8 EBIT margin adjusted (% of revenue)1 3.2 3.3 EBT (€ mln.) 316.62 421.13 421.21 530.78 9 577.24 Net income (€ mln.) 182.49 282.00 292.36 362.78 4 378.56 Net income after minorities (€ mln.) 156.29 277.65 278.91 353.53 5 371.70 Net income after minorities margin (% of revenue) 1.2 2.2 2.1 2.3 2.4 Earnings per share (€) 1.52 2.71 2.72 3.45 5 3.62 Cash flow from operating activities (€ mln.)2 1,240.35 264.17 1,345.19 788.98 36 1,075.94 ROCE (%) 4.1 6.4 6.7 7.6 7.5 Investments in property, plant and equipment, and in intangible assets (€ mln.) 395.75 412.46 457.62 644.99 7 689.25 KEY BALANCE SHEET FIGURES 2015 2016 2017 2018 ∆ % 2019 Equity (€ mln.) 3,320.63 3,264.59 3,397.72 3,653.77 6 3,855.90 Equity ratio (%)2 31.0 31.5 30.7 31.6 31.5 Net debt (€ mln.) -1,094.48 -449.06 -1,335.04 -1,218.28 -6 -1,143.53 Gearing ratio (%) -33.0 -13.8 -39.3 -33.3 -29.7 Capital employed (€ mln.) 5,448.01 5,258.17 5,242.91 5,552.09 5 5,838.71 Balance sheet total (€ mln.)2 10,728.87 10,378.41 11,054.12 11,567.61 6 12,250.81 EBITDA = earnings before interest, taxes, depreciation and amortisation EBIT = earnings before interest and taxes EBT = earnings before taxes 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 a 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 Adjustment of the 2018 values OUTPUT VOLUME BY REGION 2019 ORDER BACKLOG BY REGION 2019 Rest of Rest of world Rest of world 7 % Europe Rest of 10 % 7 % KEY FINANCIAL FIGURES Europe 12 % Germany Germany 2015 2016 2017 2018 ∆ % 2019 CEE 47 % 44 % Output volume (€ mln.) 14,289.76 13,491.03 14,620.89 16,322.88 2 16,617.97 23 % CEE Revenue (€ mln.) 13,123.48 12,400.46 13,508.72 15,221.83 3 15,668.57 23 % Order backlog (€ mln.) 13,134.58 14,815.79 16,591.87 16,899.71 3 17,411.48 Austria Employees (FTE) 73,315 71,839 72,904 75,460 2 76,919 16 % Austria 11 % OUTPUT VOLUME BY SEGMENT 2019 ORDER BACKLOG BY SEGMENT 2019 Other 1 % International + International + Special Divisions Special Divisions 21 % 24 % North + West North + West 49 % 50 % South + East South + East 29 % 26 % OUTPUT VOLUME ORDER BACKLOG € € 20 bn. 20 bn. CAGR +7 % CAGR +4 % 17,411.48 16,899.71 16,591.87 16,617.97 KEY BALANCE SHEET FIGURES 16,322.88 14,815.79 14,620.89 14,289.76 13,491.03 13,134.58 2015 2016 2017 2018 ∆ % 2019 Equity (€ mln.) 3,320.63 3,264.59 3,397.72 3,653.77 6 3,855.90 Equity ratio (%)2 31.0 31.5 30.7 31.6 31.5 Net debt (€ mln.) -1,094.48 -449.06 -1,335.04 -1,218.28 -6 -1,143.53 Gearing ratio (%) -33.0 -13.8 -39.3 -33.3 -29.7 € 0 € 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Capital employed (€ mln.) 5,448.01 5,258.17 5,242.91 5,552.09 5 5,838.71 Balance sheet total (€ mln.)2 10,728.87 10,378.41 11,054.12 11,567.61 6 12,250.81 EBIT EBIT BY SEGMENT 2019 € € mln. 800 mln. 310.20 North + West CAGR +15 % 121.97 South + East 602.58 558.21 183.97 International + Special Divisions 448.36 EBITDA = earnings before interest, taxes, depreciation and amortisation 424.91 EBIT = earnings before interest and taxes EBT = earnings before taxes 341.04 -13.56 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 2015 2016 2017 2018 2019 1 2016 adjusted for a 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 Adjustment of the 2018 values CEE = Central and Eastern Europe; comprises the following countries: Bulgaria, Croatia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Czech Republic, Hungary BETTER SAFE THAN SORRY Ensuring the health and safety of our employees is a fundamental priority for us. The global ntatve “1>2>3 hoose Safety” that was launched n 2019 s a way to sustanably anchor our clear commtment to occupatonal safety and health n the group CONTENT Consolidated • 4 ON THE SAFE SIDE Non-Financial • 19 ABOUT THIS REPORT Report • 20 GRI CONTENT INDEX • 24 CEO’S REVIEW • 30 THE STRABAG GROUP AT A GLANCE • 32 STRATEGY • 43 SHARES, BONDS & INVESTOR RELATIONS Corporate Governance 51 • 52 CONSOLIDATED CORPORATE GOVERNANCE REPORT • 72 SUPERVISORY BOARD REPORT • Economic Responsibility • Corporate Governance • People & Workplace • Business Compliance • Environmental Responsibility • Corporate Citizenship 771 Consolidated • 78 ABOUT THIS CONSOLIDATED NON-FINANCIAL REPORT Non-Financial • 79 OUR STRATEGIC APPROACH Report • 80 STAKEHOLDER DIALOGUE • 81 MATERIALITY ANALYSIS • 84 CLIENT SATISFACTION • 88 DIGITALISATION AND INNOVATION • 94 RISK AND OPPORTUNITY MANAGEMENT – PROJECT RISK MANAGEMENT 1372 • 102 GENERAL EMPLOYMENT FIGURES • 138 GROUP MANAGEMENT REPORT • 106 OCCUPATIONAL SAFETY • 189 CONTENT NOTES • 108 HEALTH PROTECTION • 190 CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2019 • 110 HUMAN RIGHTS • 196 NOTES TO THE CONSOLIDATED • 112 STRATEGIC HUMAN FINANCIAL STATEMENTS RESOURCE DEVELOPMENT • 266 STATEMENT OF ALL LEGAL • 118 EMPLOYMENT AND SOCIAL FUND REPRESENTATIVES • 119 SOCIETAL ENGAGEMENT • 267 AUDITOR’S REPORT • 123 FAIR COMPETITION • 127 MATERIALS Group • 129 ENERGY Management • 134 INDEPENDENT ASSURANCE REPORT ON THE NON FINANCIAL Report, REPORTING Consolidated Financial Statements and Notes • 272 GLOSSARY • 274 FINANCIAL CALENDAR • 275 IMPRINT • Economic Responsibility • Corporate Governance • People & Workplace 1 This section was audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz, under a limited • Business Compliance • Environmental Responsibility • Corporate Citizenship assurance audit regime. 2 This part has been audited by the financial auditor KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz. WHO MAKES SURE THAT NOTHIN HAPPENS TO MY DADDY AT WORK In Austria alone, more than 120,000 people suffer an accident at work every year – that’s 480 nured people per workng day Often only a fracton of a second makes the dfference between comng home safe from work n the evenng or not A bref moment of not payng attenton can have far-reachng consequences We do everythng wthn our power to ensure that our employees stay healthy and safe Our focus s on occupatonal organsaton, workplace desgn, and accdent and emergency organsaton For us there s nothng more valuable than a healthy lfe WHO MAKES SURE THAT NOTHIN HAPPENS TO MY DADDY AT WORK In Austria alone, more than 120,000 people suffer an accident at work every year – that’s 480 nured people per workng day Often only a fracton of a second makes the dfference between comng home safe from work n the Sopha s evenng or not A bref moment of not payng attenton can have far-reachng consequences We do everythng wthn our power to ensure that our employees stay healthy and safe Our focus s on occupatonal organsaton, workplace desgn, and accdent and emergency organsaton For us there s nothng more valuable than a healthy lfe 3years old Her parents are current and former employees of the STRABA roup OUR MODEL FOR MORE SAFETY Safety can only be achieved as a team. Everyone – ncludng the Management Board, leadershp staff, whte-collar and blue-collar, as well as the employees of our customers and partner companes – must act responsbly and proactvely Our Vson Safety model shows our understandng of how safety should be lved Nearly 77,000 people are at work on the con- structon stes, n the producton plants and at the offces of the STRABA roup every day Please note: OUR MODEL FOR MORE How we make STRABAG safer SAFETY every day The numbers 1>2>3 stand for three important steps: Safety can only be achieved as a team.