Austrian-based contracting group Strabag has reported the highest level of output volume, order backlog, EBIT (earnings before interest and taxes), dividend and balance sheet total in the company’s history.
CEO Thomas Birtel said that 2017 had been “another very successful year for us”.
He said, “The EBIT margin is our most important financial indicator. And with 3.3%, we solidly achieved our self-imposed target of at least 3.0%.
“The EBIT grew by 6% versus the previous year, despite the fact that a non-operational one-off effect in 2016, which also had been disclosed, had resulted in an upwards distortion of the earnings figures. At the same time, earnings reached an all-time high.”
The Strabag Group generated a record output volume of €14.6 billion in the 2017 financial year – an increase of 8% over the previous year.
The consolidated group revenue amounted to €13.5 billion, a rise of 9%. Strabag reported numerous large orders acquired in the fourth quarter in transportation infrastructure in Hungary and Poland, together with building construction and civil engineering projects in Germany and in Asia. It said these helped push the order backlog to a new record high of €16.6 billion, an increase of 12% over the record value of the year before.
It added that the completion of large products as well as order reductions led to a decline in Italy, Romania and Denmark.
There was a 2% decrease in EBITDA (earnings before interest, taxes, depreciation and amortization) to €834.58 million – the EBITDA margin fell from 6.9% to 6.2%. Strabag said that adjusting the EBITDA of the previous year taking into account the non-operating item from the sale of a minority investment, the EBITDA grew slightly at 1%.
It said that it had again been possible to reduce the depreciation and amortization, by 10%, as it had not been necessary to make extraordinary depreciation allowances to the same degree as in the previous year.
The EBIT increased by 6% to €448.36 million, which corresponds to an EBIT margin of 3.3%, compared to 3.4% in 2016. Adjusted for the positive one-off effect, the margin would have stood at 3.2%.
Strabag said all three of its operating segments – North & West, South & East, and International & Special Divisions – contributed to the earnings improvement. This development was said to be a result of, among other things, improved earnings in several group countries, including Germany, and the recognition of a receivable from a concession project.
Strabag said it continued to expect an increase in the output volume to at least €15.0 billion – up 3% – in 2018, and confirmed the goal of again achieving an EBIT margin of at least 3%.