- Total Group revenues are EUR 1,586.1 million (previous year: EUR 1,656.4 million); sales revenues are up by 1.3 % to EUR 1,396.9 million (previous year: EUR 1,379.0 million)
- Earnings after tax at EUR 14.4 million (previous year: EUR 29.0 million) are towards the top of the latest forecast range of about EUR 10 to 15 million
- Order backlog is at a high level: growth of 1.3 % to EUR 1,008.1 million
- Proposed dividend for 2016: EUR 0.10 per share
- Forecast for 2017: Group expects total Group revenues of around EUR 1.7 billion, earnings after tax of around EUR 23 to 28 million and EBIT of around EUR 75 million.
The Bauer Group's results for the 2016 year are in line with the most recent forecast issued in November. However, it hasn't been able to achieve its original objectives. "From an operational perspective our figures were much better than in the previous year and we have reached a turnaround", says Prof. Thomas Bauer, the Chairman of the Management Board of BAUER AG when presenting the balance sheet. The previous year's figures included special effects and are therefore not fully comparable.
The Bauer Group achieved total Group revenues amounting to EUR 1,586.1 million in 2016, 4.2 % below the previous year's figure of EUR 1,656.4 million. The previous year's figure included revenues from the divestment and revaluation of businesses amounting to EUR 77.8 million, primarily relating to the deep-drilling joint venture with Schlumberger. Total Group revenues were roughly on a par with the previous year if this influence is excluded. Sales revenues grew by 1.3 % from EUR 1,379.0 million to EUR 1,396.9 million. EBIT came in at EUR 68.3 million (previous year: EUR 90.7 million). The above-mentioned additional revenues also had an effect on the previous year's EBIT figure. Earnings after tax were EUR 14.4 million (previous year: EUR 29.0 million). The excellent order situation provides a good basis for further development. In the fourth quarter in particular the company saw a pick-up in its order intake, and the order backlog at year end was consequently EUR 1,008.1 million, 1.3 % above the previous year's level.
The syndicated loan, which was agreed upon in 2014, was renewed for another three years in 2016. It has a volume of EUR 430 million and extends until July 2019 with the option of renewal. A value agreed with lenders as a covenant was not able to be fully adhered to in the 2016 year due to the results being below the original forecast. An amicable solution has already been found with all relevant financial partners for all of the affected loans. For 2017 the company assumes that it will once again fulfill the agreed values as a result of the planned development of earnings.
The Management Board and Supervisory Board will propose to the Annual General Meeting that a slightly reduced dividend of EUR 0.10 per share (previous year: EUR 0.15) should be paid for 2016. The dividend quota consequently increases from 8.7 % to 15.2 %. The reduction in the dividend also serves to protect the Group's equity, which we intend to significantly improve in the coming years.
With its three segments - Construction, Equipment and Resources - and more than 110 subsidiaries as well as its broadly diversified business model, the Group operates in some 70 countries around the world.
The Construction segment benefits from the overall positive development of the construction markets around the world. Despite the many uncertainties and crisis hot spots, there is a great need for infrastructure such as roads, bridges, dams or power supply infrastructure. Increasing urbanization brings an increased need for specialist foundation engineering services which enable buildings to be erected in increasingly complex and difficult conditions.
In total, the segment generated total Group revenues of EUR 722.1 million in 2016. This was 2.8 % below the previous year's figure (EUR 742.9 million). EBIT was up from EUR 13.9 million to EUR 30.4 million. Earnings after tax were EUR 9.5 million - compared to a negative figure of EUR -7.3 million in the previous year, which was mainly caused by the subsidiary in the USA. The completion of the Center Hill Dam project created a considerable financial burden and necessitated a realignment of the subsidiary.
In 2016, the segment suffered losses at the construction companies in Hong Kong and Malaysia. In Malaysia, the award of three large projects was delayed several times, which meant that capacities were unable to be utilized for almost six months. In Hong Kong, Bauer carried out preliminary works for an expansion of the airport but ultimately was not awarded the contract. Both caused an overall loss amounting to well over EUR 10 million, which by itself explains the difference between the Group's original forecast and the final result. In contrast to this, the segment achieved additional earnings of just over EUR 10 million which are attributable to the participation in Wöhr + Bauer GmbH. The company achieved a very good operating profit in the financial year; Bauer has also reduced its holding to 16.67 %.
At EUR 585.3 million, the order backlog represented a slight 1.0 % decrease compared to the previous year (EUR 591.1 million). The order backlog in core business of specialist foundation engineering increased considerably since the previously included order backlog of the real estate company Wöhr + Bauer GmbH is no longer included in the figures for the 2016 financial year.
The Equipment segment has achieved a good performance in a difficult market environment. Growth in large-scale and special equipment had a positive impact on earnings. Sales of anchor drilling rigs and rotary drives were very satisfactory. The service and spare parts business has established itself as an important area of activity.
Total Group revenues fell by 13.5 % from EUR 753.1 million to EUR 651.7 million. Thereby, it must be considered that 2015 included the aforementioned revenues amounting to EUR 77.8 million from the divestment and revaluation of businesses. Sales revenues fell slightly by 1.0 %, from EUR 548.0 million to EUR 542.7 million. The deep-drilling business - which is now a joint venture with Schlumberger - is no longer included in 2016, so that the figure is entirely attributable to the core specialist foundation equipment business and consequently shows growth. This all the more commendable given that the global construction machinery market recorded a decline of roughly 28 % between 2012 and 2015. Over the same period Bauer managed to keep its revenues more or less stable. EBIT fell from EUR 99.4 million to EUR 37.0 million. EBIT grew considerably if the aforementioned effects of EUR 77.8 million are stripped out of the 2015 figures. Earnings after tax reduced from EUR 65.4 million to EUR 10.9 million.
The order backlog was EUR 144.0 million, 12.4 % up on the previous year's figure of EUR 128.1 million. In the fourth quarter a good order intake was recorded. This meant that the order backlog at year end was at roughly the same level as during the rest of the year, despite the usually high level of orders delivered at this time of year.
In the Resources segment the Group started the current financial year with a new organizational structure. The extensive restructuring was completed by the end of the year, so the segment can now focus on the operative business again under the Bauer Resources GmbH umbrella.
Total Group revenues recorded an increase of 19.5 % to EUR 264.7 million. EBIT improved from EUR -19.8 million to EUR -3.2 million and earnings after tax were up from EUR -29.4 million to EUR -8.5 million. The order backlog was EUR 278.8 million, 0.8 % higher than the previous year's figure of EUR 276.5 million. Bauer's involvement in the remediation works at the Kesslergrube landfill site in Grenzach-Wyhlen, the largest order in the company's history, will continue until 2020. With its realignment and improved order backlog, the company expects to return the segment to profit in the next two years.
A very positive order situation forms the basis of the BAUER Group's current financial year. The order backlog increased to EUR 1,008.1 million by the end of 2016 and was consequently 1.3 % above the previous year's figure of EUR 995.6 million.
"In operative terms we have improved significantly and have taken a big step forward. We have realigned some business operations and withdrawn from some markets, but we are not stopping there. We have identified further areas, such as human resources, purchasing and production, and we are working on making them more efficient", says Prof. Thomas Bauer. "These efforts and the very good order situation offer us the opportunity to achieve a sustainable improvement in our profitability."
For the current financial year the Group expects total Group revenues of around EUR 1.7 billion, earnings after tax of around EUR 23 to 28 million, and EBIT of around EUR 75 million. We are continuing to plan for growth of between 3 % and 8 % in total Group revenues for the coming years.
Source: Bauer Group