HOCHTIEF achieved further significant growth in value added in the year under review. Net value added rose in 2008 compared with 2007 by EUR 571.7 million to EUR 3,977.2 million. This represents an increase of some 17 percent.
The growth was mainly driven by the rising value contribution from corporate performance net of input costs: Although year-on-year sales growth was 16.1 percent, the corresponding material expense went up by a lesser increment of only 15.6 percent. This boosted value added by EUR 727.4 million. Value added was also pushed up by higher operating earnings, but this positive effect was completely cancelled out by an equal increase in operating expenses.
An increase in depreciation, amortization and impairments, especially in the HOCHTIEF Asia Pacific and HOCHTIEF Americas divisions, also reduced value added, as did a drop in net income from participating interests compared with the prior year. This was primarily attributable to positive extraordinary items in fiscal 2007, consisting of the special dividend at Sydney Airport and the remeasurement, required under the corporate tax reform in Germany, of deferred tax items recognized on accounting for Hamburg Airport using the equity method. In addition, impairments were recognized in the HOCHTIEF Asia Pacific division in 2008 on listed companies in the business portfolio.
As in previous years, the largest share of value added, some 82 percent, was distributed to employees. The share distributed to lenders increased in 2008 due to new borrowing to finance our substantially increased business volume and the high level of capital expenditure. In addition, we took the precaution of supplementing liquidity reserves by further drawing on our available credit facilities. The decrease in the share distributed to minority shareholders was primarily attributable to lower earnings contributions from
| 2008 | 2007 | |||
|---|---|---|---|---|
| EUR million | % | EUR million | % | |
| Sales | 19,103.0 | 98.1 | 16,451.8 | 98.6 |
| Changes in inventories | 0.0 | 0.0 | (0,2) | - |
| Other operating income | 375.9 | 1.9 | 230.8 | 1.4 |
| Corporate performance | 19,478.9 | 100.0 | 16,682.4 | 100.0 |
| Materials | (14,250.6) | 73.2 | (12,326.8) | 73.9 |
| Other operating expenses | (1,259.7) | 6.5 | (1,113.4) | 6.7 |
| Other investment expenses | (22,7) | 0.1 | (9,2) | 0.0 |
| Input costs | (15,533.0) | 79.8 | (13,449.4) | 80.6 |
| Investment and interest income | 117.6 | 0.6 | 130.7 | 0.8 |
| Net income from participating interests | 306.0 | 1.6 | 354.3 | 2.1 |
| Gross value added | 4,369.5 | 22.4 | 3,718.0 | 22.3 |
| Depreciation and amortization | (392,3) | 2.0 | (312,5) | 1.9 |
| Net value added | 3,977.2 | 20.4 | 3,405.5 | 20.4 |
| 2008 | 2007 | |||
|---|---|---|---|---|
| EUR million | in % | EUR million | in % | |
| Employees | 3,261.8 | 82.0 | 2,798.7 | 82.2 |
| Lenders | 195.3 | 4.9 | 105.5 | 3.1 |
| Minority shareholders | 167.1 | 4.2 | 200.3 | 5.9 |
| HOCHTIEF shareholders* | 88.2 | 2.2 | 90.9 | 2.7 |
| Public authorities | 177.9 | 4.5 | 160.3 | 4.7 |
| HOCHTIEF | 86.9 | 2.2 | 49.8 | 1.4 |
| Net value added | 3,977.2 | 100.0 | 3,405.5 | 100.0 |
The total dividend amount stated for 2008 is based on the dividend of EUR 1.40 per no-par-value share proposed by the Executive Board and the number of shares in circulation on December 31, 2008.
the Leighton Group and airport holdings compared with 2007. The Executive Board proposal for the use of net profit provides for a further rise in the dividend for fiscal 2008 of EUR 1.40 per no-par-value share.
Despite this dividend increase of almost eight percent, the total dividend to shareholders remains at around the same level as in 2007, thanks to HOCHTIEF's repurchase of almost ten percent of its own shares concluded in 2008. The tax expense, constituting the proportion of value added distributed to public authorities, increased due to higher deferred tax items arising from temporary differences. Net value added distributed to HOCHTIEF represents the difference between consolidated net profit and dividends paid to shareholders.