Interim Management Report
Orders and work done
Group orders and work done as of September 30, 2009 are very soundly structured. The order backlog set a new record in the history of HOCHTIEF.
New orders
New orders in the first three quarters of 2009 totaled EUR 17.33 billion, down 11.2 percent on the comparable prioryear figure. In monetary terms, the year-on-year decrease was EUR 0.54 billion in Germany and EUR 1.64 billion internationally. The financial crisis had not yet made itself felt in the equivalent period of 2008. The HOCHTIEF Americas division in particular was unable to repeat the exceptionally strong intake of new orders achieved in the prior-year period, which featured a large number of major contracts.
Group work done
Work done came to EUR 15.28 billion in the nine months to September 30, 2009, just 2.9 percent down on the comparable prior-year figure. The lower figure at HOCHTIEF Americas was largely offset by an increase in work done on long-term contract mining projects at HOCHTIEF Asia Pacific.
Order backlog
The order backlog set a new all-time record with an absolute figure of EUR 35.3 billion. This marked an increase of EUR 2.52 billion on the prior-year figure. The increment mostly reflected a significant surplus of new orders (EUR 1.94 billion) over work done for the last twelve months. The order backlog corresponds to a forward order book of nearly 21 months—an exceptionally high figure within the industry.
Financial review
Earnings
The HOCHTIEF Group generated sales of EUR 13.77 billion in the first nine months of fiscal 2009. The high level of EUR 13.75 billion was thus upheld.
The HOCHTIEF Asia Pacific division continued its highly successful trend, benefiting from Leighton’s strong position in the Asia-Pacific market and the Gulf region. HOCHTIEF Asia Pacific sales were EUR 5.76 billion, up 7.6 percent on the prior-year period (EUR 5.36 billion). Despite a sharp appreciation in the third quarter, the Australian dollar exchange
rate was close to eight percent down on average during the period under review compared with the prior period. This resulted in an adverse exchange rate effect of EUR 472.1 million on currency translation. As expected, sales in HOCHTIEF’s important North American market, at EUR 5.14 billion, fell short of the high figure for the prior-year period (EUR 5.8 billion). This put North American sales— predominantly generated by subsidiaries Turner and Flatiron— 11.4 percent down on the prior-year figure. The exchange rate effect on translating from US dollars to euros (the Group currency) added EUR 520.2 million to Turner and Flatiron sales. The HOCHTIEF Europe division successfully mastered the difficult situation on the European market for construction services and generated sales of EUR 1.64 billion. The division was unable to break completely free from the general market trend, however, and sales overall remained 2.3 percent down on the prior-year period (EUR 1.68 billion). HOCHTIEF Real Estate division sales reached EUR 527.2 million, more than double the equivalent prior-year figure (EUR 201.8 million). Most of this was accounted for by sales of real estate development projects. In the HOCHTIEF Services division, sales dropped to EUR 470.4 million, a decrease of 6.8 percent on the EUR 504.6 million recorded in the same period of the prior year.
HOCHTIEF once again presented outstanding earnings figures* for the first nine months of 2009. Despite the financial crisis and the still overcast economic climate, operating earnings (EBITA), at EUR 564.1 million, reached a very high level. This represents a 7.2 percent increase on the comparable prior-year figure (EUR 526.1 million). The individual divisions contributed to this overall strong Group performance as follows:
HOCHTIEF Americas division operating earnings improved by 8.8 percent to EUR 86.3 million (prior-year period: EUR 79.3 million). We benefited here from the strong positions of Turner and Flatiron in their respective market segments along with a rigorous focus on profitability when pursuing new business. In contrast, the HOCHTIEF Asia Pacific division saw its earnings performance down on a year earlier, largely due to the exchange rate effect of the weaker Australian dollar. At EUR 389.1 million, operating earnings decreased by 12.3 percent from the prior-year period (EUR 443.5 million). The heightened quality of contracts in our German building construction business made an impact in the HOCHTIEF Europe division. Operating earnings came