HOCHTIEF Quarterly Report January - March 2009 - Interim Management Report

HOCHTIEF Services Division

(EUR million) Q1
2009 Q1
2008 Percentage
change Full year
2008

New orders 144.0 137.2 5.0 753.5

Work done 158.8 162.0 -2.0 709.4

Order backlog 1,444.4 1,528.6 -5.5 1,560.0

Divisional sales 158.8 161.7 -1.8 709.5

External sales 154.4 160.6 -3.9 683.1

Operating earnings (EBITA) 5.9 4.2 40.5 26.8

Profit before taxes 5.1 3.4 50.0 22.9

Capital expenditure 1.3 1.0 30.0 11.1

Net assets 166.8 207.0 -19.4 176.7

Employees 5,626
(End Q1 2009) 5,542
(End Q1 2008) 1.5 5,651
(2008 average)

HOCHTIEF Services was highly successful in the first quarter of 2009. At EUR 144 million, new orders were up five percent on the prior-year quarter. This increase resulted primarily from the activities of HOCHTIEF Energy Management. In Germany, significant new orders for the quarter also included contract extensions, for example, by the Essen Philharmonic. The effects of the economic downturn on the division were limited and were largely offset. Both work done and external sales were slightly down year on year in the period under review. The order backlog fell year on year by 5.5 percent – partially as a result of exchange rate effects in international subsidiaries, chiefly in connection with the PPP projects in the UK.

Operating earnings increased by 40.5 percent compared with the below-average first quarter of 2008 to EUR 5.9 million, profit before taxes grew by 50 percent to EUR 5.1 million.

The 19.4 percent fall in net assets year on year to EUR 166.8 million resulted in part from a reduction in trade receivables.

In the past quarter, HOCHTIEF Facility Management was able to capitalize on a willingness of businesses to outsource. In 2008, after the collaboration with Siemens Real Estate was extended early to 2014, the company undertook another outsourcing project with the German technology group. In addition to the technical operation currently carried out at more than 60 Siemens sites in Germany, we will in the future maintain and modernize additional facilities at four sites. Under the contract, HOCHTIEF Facility Management is taking on 45 employees from Siemens Industry Solutions.

The collaboration with key account Lufthansa was also stepped up: HOCHTIEF is in charge of facility management operations at the newly built Lufthansa Training & Conference Center in Seeheim, Hesse, for two years. With its 483 rooms and over 80 function rooms, the property is one of the largest conference hotels in Germany and serves as a training center for Lufthansa employees.

Through a collaboration with the SRH Zentralklinikum hospital in Suhl, Germany, HOCHTIEF Facility Management is strengthening its position in the healthcare sector.

In the future, we will be responsible for the technical building management of the hospital. The company will also manage cleanroom technology in the intensive care units and surgical suites and operate the equipment that produces and distributes medical gases.

HOCHTIEF Energy Management also expanded its business success. While the effects of falling production made themselves felt in the industrial customer segment, activities in the real estate segment increased. For the next 15 years, we will be responsible for the heat supply at the 100,000-square-meter "neue balan – Campus der Ideen" business park in Munich. Using an innovative HOCHTIEF concept, some 450 metric tons of CO₂ will be saved there each year. This is equal to the CO₂ emissions from the heating supply of some 200 households.

HOCHTIEF Services outlook

Experts believe the market for facility and energy management services still holds immense potential, especially in outsourcing.

It is nevertheless difficult to predict the impact the financial crisis will have on the HOCHTIEF Services division. For the current fiscal year, we are aiming for profit before taxes slightly above the prior-year level.