STRABAG sees profits grow

Construction company 945 STRABAG has seen its financial performance improve during the 2015 financial year. The firm’s earnings before interest and taxes (EBIT) reached €341.04 million, an increase of 21% over the previous year. Double-digit growth was also achieved in net income (after minorities), with a gain of 22% to €156.29 million, while earnings/share grew from €1.25 to €1.52. These developments have compelled the management board to propose to the AGM planned for June 2016 a dividend of €0.65, which will be the highest since the IPO in 2007.

“Our aim is to put profitability before revenue. We gauge our progress through our operating margin, by measuring the EBIT-to-revenue ratio. The trend in the last couple of years shows that we are on the right course and that our measures are having an effect. The construction business involves a high degree of risk, which is why risk management plays such an important role for improving the profitability. The risk management unit analyses the causes behind positive and negative outcomes of construction projects in order to derive valuable lessons learned and share these with the group. We are also working intensely on the digitalisation of the construction process under the concept of building information modelling,” said Thomas Birtel, STRABAG CEO.

The STRABAG Group generated an output volume of €14.3 billion in the 2015 financial year, a gain of 5% over the previous year. The consolidated group revenue amounted to €13.1 billion, which also represents an increase of 5%.

The order backlog decreased in 2015, a situation which already became apparent over the course of the year. At year’s end, this figure stood at €13.1 billion, 9% below the level of 31st December 2014. This development is mostly due to the completion of large projects in Hungary, Italy and Slovakia, but also because of the adverse economic conditions in the RANC region (Russia and Neighbouring Countries).

In total, there was a 13% increase of the earnings before interest, taxes, depreciation and amortisation (EBITDA) to € 816.10 million, while the EBITDA margin grew from 5.8% to 6.2%. The depreciation and amortisation stood at €475.06 million, which corresponds to a gain of 8.5% over the previous year. The EBIT increased significantly by 21% to €341.04 million, which corresponds to an EBIT margin of 2.6% after 2.3% in 2014. Compared to the previous year, this figure improved in Poland, the Czech Republic, Slovakia and Hungary, among other places. A tunnelling project in Chile, on the other hand, represented a significant burden on the earnings.

STRABAG expects a more or less unchanged output volume of about €14 billion for the 2016 financial year. The management board confirms the target of achieving a lasting EBIT margin of 3% starting in 2016.