Annual Report 2014

Transcription

Annual Report 2014

Annual Report
2014
The BAUER Group is an international construction and machinery manufacturing
concern based in Schrobenhausen, Bavaria. The stock market-listed holding
company BAUER Aktiengesellschaft is the parent of more than 110 subsidiary
businesses across its Construction, Equipment and Resources segments. Bauer
is a leader in the execution of complex excavation pits, foundation and vertical
seals, as well as in the development and manufacture of related machinery for
this dynamic market. The Group also deploys its expertise in the exploration,
mining and safeguarding of valuable natural resources. In 2014 the companies
of the BAUER Group employed some 10,400 people in around 70 countries and
achieved total Group revenues of EUR 1.56 billion.
Passion for progress –
The origins of Bauer date back as far as 1790, and still today the company's
success is founded on highly flexible application of the specialist know-how it
has built up over those many years. As an innovator and technology leader,
Bauer has played a major role in the advancement of the international specialist
foundation engineering industry and related busniess fields. Indeed, today Bauer
is also the world market leader in the manufacture of the relevant machinery. It is
with just such innovative strength and a keen focus on the challenges of the future
that the Group is also developing its recently established Resources segment.
The Group at a glance
GROUP KEY FIGURES 2011 – 2014
IFRS in EUR million
2011
2012
2013 **
2014
1,371.8
1,435.8
1,504.2
1,560.2
3.7 %
370.3
378.6
410.4
440.2
7.3 %
1,001.5
1,057.2
1,093.8
1,120.0
2.4 %
73.0
73.6
72.7
71.8
n/a
Construction
606.6
655.2
741.7
713.0
-3.9 %
Equipment
636.5
589.1
628.6
651.8
3.7 %
Resources
211.5
262.8
188.9
252.8
33.9 %
Other/Consolidation
-82.8
-71.3
-55.0
-57.4
n/a
Consolidated revenues
1,327.1
1,376.1
1,447.5
1,506.0
4.0 %
Sales revenues
1,219.6
1,344.4
1,402.2
1,375.7
-1.9 %
Orders received
1,506.9
1,470.8
1,484.5
1,557.7
4.9 %
Orders in hand
750.0
785.0
765.2
762.7
-0.3 %
EBITDA
164.5
163.8
124.0
171.0
37.9 %
EBITDA margin in % (of sales revenues)
13.5
12.2
8.8
12.4
n/a
EBIT
82.3
72.0
30.1
76.4
n/a
6.7
5.4
2.1
5.6
n/a
Net profit or loss
34.1
25.8
-19.4
15.7
n/a
Capital investment in property, plant and equipment
96.6
96.4
91,9
64.1
-30.3 %
461.0
462.5
419.8
418.9
-0.2 %
30.9
30.2
26.5
26.6
n/a
1,491.1
1,529.4
1,585.8
1,575.1
-0.7 %
Earnings per share
1.86
1.44
-0.99
0.85
n/a
Distribution
8.57
5.14
0.00
2.57*
n/a
Dividend per share in EUR
0.50
0.30
0.00
0.15*
n/a
7.7
5.6
-4.2
3.7
n/a
Employees (on average over the year)
9,646
10,253
10,264
10,405
1.4 %
of which
Germany
4,065
4,090
4,144
4,158
0.3 %
International
5,581
6,163
6,120
6,247
2.1 %
Total Group revenues
of which
Germany
International
International in %
of which
EBIT margin in % (of sales revenues)
Shareholders’ equity
Equity ratio in %
Net assets
Return on equity after tax in %
Change
2013/2014
* Proposed; subject to the consent of the Annual General Meeting to be held on June 25, 2015
** Previous year adjusted; see notes on page 106
At variance with the consolidated revenues presented in the Group income statement, the total Group revenues
presented here include portions of revenues from associated companies as well as revenues of non-consolidated
subsidiaries and joint ventures.
in EUR million
Construction
Equipment
Resources
2011
1,372
2012
1,436
2013
1,504
2014
1,560
CONSTRUCTION SEGMENT KEY FIGURES
in EUR '000
2013 *
2014
Change
741,673
713,005
-3.9 %
Sales revenues
657,456
634,096
-3.6 %
Orders received
727,287
665,244
-8.5 %
Orders in hand
498,701
450,940
-9.6 %
21,209
25,068
18.2 %
Net profit or loss
5,472
1,858
-66.0 %
5,531
5,675
2.6 %
EBIT
EQUIPMENT SEGMENT KEY FIGURES
in EUR '000
2013 *
2014
628,612
651,772
3.7 %
Sales revenues
561,615
545,223
-2.9 %
Orders received
632,053
693,967
9.8 %
Orders in hand
116,525
158,720
36.2 %
32,223
36,917
14.6 %
Net profit or loss
5,055
9,513
88.2 %
2,998
3,038
1.3 %
EBIT
Change
RESOURCES SEGMENT KEY FIGURES
in EUR '000
2013 *
2014
Change
188,861
252,830
33.9 %
Sales revenues
182,579
195,860
7.3 %
Orders received
180,054
255,837
42.1 %
Orders in hand
150,020
153,027
2.0 %
EBIT
-23,965
15,932
n/a
Net profit or loss
-31,444
4,347
n/a
1,449
1,400
-3.4 %
* Previous year adjusted; see notes on page 106
GROUP KEY FIGURES AT A GLANCE
>>>
DEVELOPMENT OF TOTAL GROUP REVENUES BY SEGMENT
BAUER Aktiengesellschaft
Annual Report 2014
2
Management Board of the Company
88
Report of the Supervisory Board
4
Foreword
91
Balance Sheet and Income Statement
6
Milestones in the Company's History
8
The World is our Market
of BAUER Aktiengesellschaft
in accordance with HGB
95
Consolidated Financial Statements
in accordance with IFRS
10
Highlights 2014
12
Mission and Strategy
180
Assurance by the legal representatives
15
Combined Management Report
181
Auditors' Report
82
The Bauer Share
182
Glossary
84
Corporate Governance Report
184
Imprint
2
Management Board of the Company
PROF. DR.-ING. E.H. DIPL.-KFM. THOMAS BAUER
(CHAIRMAN)
Prof. Thomas Bauer (born 1955) heads the Participations in
Supervisory Board mandates:
Subsidiaries, Financial Reporting, Planning and Controlling
• BAUER Spezialtiefbau GmbH, Schrobenhausen
functions on the Management Board of BAUER Aktiengesellschaft.
(chairman) ¹
• BAUER Maschinen GmbH, Schrobenhausen
(chairman) ¹
After studying business economics at the Ludwig Maximilian
• BAUER Resources GmbH, Schrobenhausen ¹
University in Munich, he worked in the USA. He joined the
• SCHACHTBAU NORDHAUSEN GmbH, Nordhausen
family company in 1982. In 1986 he became sole managing
director of BAUER Spezialtiefbau GmbH and since 1994 he
(chairman) ¹
• BAUER EGYPT S.A.E., Cairo (chairman) ¹
has been Chairman of the Management Board of BAUER
Aktiengesellschaft.
Prof. Thomas Bauer is President of the German Construction
Industry Confederation, Vice-President of the Confederation
of German Industry (BDI) and Vice-President of the Confederation of Bavarian Industry (vbw) − the Bavarian business
association. He is an honorary professor of the Technical
University in Munich.
¹ Supervisory Board mandate within the Group
² Membership of Supervisory Boards or comparable controlling committees of businesses in Germany and abroad according to Section 285 No. 10
of the German Commercial Code (HGB)
MANAGEMENT BOARD OF THE COMPANY
DIPL.-BETRIEBSWIRT (FH) HARTMUT BEUTLER
DIPL.-ING. HEINZ KALTENECKER
Hartmut Beutler (born 1957) is responsible for the Finance,
Heinz Kaltenecker (born 1951) is responsible for Partici-
Legal Affairs and Insurance, and Facility Management functions
pations in Subsidiaries as well as the Human Resources
on the Management Board of BAUER Aktiengesellschaft.
and Information Technology functions on the Management
Board of BAUER Aktiengesellschaft. He is also the Labor
He studied business economics (specializing in the construction
Relations Director.
industry) at Biberach University of Applied Sciences and joined
BAUER Spezialtiefbau GmbH as a trainee in 1983. He later
After studying civil engineering at the Technical University
became deputy head of the company's Accounting depart-
of Karlsruhe, he joined BAUER Spezialtiefbau GmbH in 1978.
ment and assistant to the Management Board. After working
He has held a number of senior management posts, including
as head of IT, Facility Management, Legal Affairs and Insurance
being managing director of BAUER Spezialtiefbau GmbH
at BAUER Spezialtiefbau GmbH, as well as being a company
from 2001 to 2007. Heinz Kaltenecker was managing director
"Prokurist" (holder of power of attorney), Hartmut Beutler was
of BAUER Resources GmbH from 2007 to 2010. He has
appointed to the Management Board of BAUER Aktiengesell-
been a member of the Management Board of BAUER Aktien-
schaft in 2001.
gesellschaft since 1997. Heinz Kaltenecker is a board member of the German Geotechnical Society and a member of
the Large Construction Companies subcommittee of the
• BAUER Resources GmbH, Schrobenhausen ¹
German Construction Industry Confederation.
• Schrobenhausener Bank e.G. (chairman) ²
• BAUER Spezialtiefbau GmbH, Schrobenhausen ¹
• BAUER Maschinen GmbH, Schrobenhausen ¹
• BAUER Resources GmbH, Schrobenhausen (chairman) ¹
• SCHACHTBAU NORDHAUSEN GmbH, Nordhausen ¹
3
4
Foreword
Dear Shareholders, Partners and Friends of our company,
Ladies and Gentlemen,
In 2014 despite a great deal of turbulence in our markets, we succeeded in achieving our revenue targets. With total Group
revenues of EUR 1.56 billion, we exceeded the previous year's value by 3.7 %. This was not an easy matter, given the numerous
disturbances to our business. We are all the more grateful to our employees for their magnificent work which enabled us to meet
this target.
Over the past decades, our Group has pursued a strategy of increasing internationalization, thereby creating a significant
advantage for itself: we are at home throughout the world. In this way, we can compensate for fluctuations in construction
markets, which are frequently volatile, and develop the Group in a steady manner. Unfortunately, it is sometimes the case that
problems concentrate in different regions to such an extent that we are excessively impacted for a period of time. In that case,
our broad base may also have a detrimental effect temporarily. Nevertheless, we remain totally convinced that our international
presence represents a major advantage in the medium and long terms.
What were the turbulent influences last year? First and foremost, we should identify the conflict in Ukraine that has triggered a
new misunderstanding between Russia and the Western world. The events in eastern Ukraine, sanctions and counter-sanctions
have imposed significant restrictions on business relationships. For our company, that means a severe decline in demand for
our machines especially in Russia.
In Syria and Iraq the Islamic State terrorist group has expanded. For a time, it seemed that the Western world would not be
able to overcome this threat. This situation triggered uncertainty in the neighboring countries, placing further obstacles in the
path of their development. There is no prospect for improvement anytime soon, as a result of which individual markets have
been lost as far as our construction activities are concerned.
From mid-2014 onwards, the oil price came under significant pressure. This will pose problems to Germany as an industrial
location. Although people will be able to fill their fuel tanks for less money, the growth in consumption thus triggered is unlikely
to be able to compensate for expected sales problems to the oil-producing states which are affected by the price drop. The
business prospects for German industrial companies such as ours would worsen if fewer investments were made in these
countries.
In China, the market for construction machinery has slipped totally out of kilter in recent years. As a result of exaggerated
growth expectations for the construction market there, local manufacturers of construction machinery built up enormous
surplus capacity. The equipment produced was then dumped on the markets by means of questionable financing solutions.
Many construction companies could no longer afford the payments, as a result of which large stocks of returned machines
have built up. On the other hand, we were satisfied with our production and sales in China, as we concentrated on large and
special machinery.
It is pleasing to see that many markets are still positive, such as the Far East, or have come back again, such as in the Middle
East. As a result, we succeeded in increasing our revenues in spite of the difficulties.
However, we were unable to achieve the targets for profit after tax that we set in April 2014. In the USA, we did not succeed
in achieving the expected improvement in the major Center Hill Dam project. We had to report significant losses again as a
result of further delays. In the Resources segment, we reorganized the structures and some subsidiaries, as well as closing
FOREWORD
sites and terminating business. This had an additional detrimental effect on our results. In addition to these factors, one of our
large subsidiaries was fined by the Federal Cartel Office. All in all, this produced a significantly negative result. By means of a
non-operative one-time income, the last predicted profit after tax was able to be achieved nevertheless, with EUR 15.7 million.
The one-time income derives from the sale of shares in our subsidiary in Oman that was built up over recent years and is active
with long-term projects in the environmental area.
In addition to making significant efforts to deal with all these topics, we also devoted a great deal of work during the past year
to preparing the company to face the future even more effectively. A cost-cutting program was implemented in all parts of the
company, which will continue to have positive effects in the future as well. All major investments in our plants were able to be
completed, as a result of which the full attention of our management team is concentrated on markets, products and commercial
processes. This will give us stability for the future in a continuing volatile environment.
The successes of the past year mean that we are looking to the future with confidence. In the area of deep drilling rigs, the
engineering contract agreed in May 2014 with Saxon Energy Services Inc. resulted in the order of two 375 ton rigs in December.
This will present great opportunities in the future as well. Additionally, a sales contract was signed for two already completed
rigs. In the Construction segment, we successfully completed some unique reference projects in the form of the foundation
work for what will be the tallest buildings in the world and Europe, as well as a section of the bridge between Hong Kong and
Macau. In Equipment, many new and continuing developments are improving our chances of selling machines.
Without doubt, years such as 2013 and 2014 are by no means simple for a company and its workforce. Nevertheless, we are
aware of our strengths that will allow us to make significant progress in future. The successes we were able to achieve last
year in spite of great turbulence have confirmed our confidence in our plans for the future. Our company is firmly embedded
in the market of more than 70 countries in the world. The construction processes, equipment and many other activities are
excellently developed, and our company infrastructure has been expanded to a very high level. All stores and service centers
worldwide are networked with one another, and with their functions and flexibility they can meet the complex demands of our
construction operations and our machine customers with outstanding effectiveness.
The current significant fluctuations in markets are not very pleasant for us. However, we can compensate for them well with
our worldwide presence, giving us the opportunity to carry out interesting projects time and time again in diverse regions.
Overall, we see many opportunities in the market, as a result we are planning further growth for 2015.
It is important for us to express our thanks to all our employees, shareholders, customers and partners for the loyalty and
support they provided during the past year. 2014 was characterized not only by successes but also many disappointments,
specifically the development in our share price. We are making intensive efforts to grow the value of the company again. Our
employees in about 80 countries of the world and the entire management team are working with total commitment on bringing
the full strength of the company to bear again.
Sincerely,
Prof. Thomas Bauer
5
6
Milestones in the Company's History
1790
- Sebastian Bauer acquires a coppersmith's shop in the
1956
- Dr.-Ing. Karlheinz Bauer, a shareholder in the company
center of Schrobenhausen; in the 19th century, subse-
since 1952, becomes sole managing director; construction
quent Bauer generations were engaged in copper work-
of a first office building in Wittelsbacherstrasse
ing, primarily for breweries and domestic households
Dipl.-Ing. Karl Bauer (left) turned the company into
an industrial well builder known throughout Bavaria.
Dr.-Ing. Karlheinz Bauer (center) led the company onto
1840
- Copper cladding for the steeple roof of St. Jakob's church
in Schrobenhausen
the international stage, taking it into the field of specialist
foundation engineering and launching equipment manufacturing operations. Prof. Dr. Dipl.-Kfm. Thomas Bauer
shaped the current global Group, with a network of
1900
operations on every continent.
- Start of well drilling by Andreas Bauer
1790 – 1948
1956 – 1984
1902
1958
- Drilling of an artesian well for Schrobenhausen railway
station
- Invention of the injection anchor on the construction site of
the Bayrischer Rundfunk building in Munich
1969
- First anchor drilling rig UBW 01
1972
- Construction of the new head office administration block
1975
- First contracts in Libya, Saudi Arabia and the United Arab
Emirates
1928
- Dipl.-Ing. Karl Bauer constructs the Schrobenhausen water
supply system; construction of wells and water pipes
1976
- First heavy-duty rotary drilling rig BG 7
throughout Bavaria
1984
1948
- First works on Wittelsbacherstrasse
- Work complex West begins operations; manufacture and
deployment of the first trench cutter
MILESTONES IN THE COMPANY'S HISTORY
1986
- Prof. Thomas Bauer becomes sole managing director
2007
- Founding of BAUER Resources GmbH, entailing a
of BAUER Spezialtiefbau GmbH and drives forward the
restructuring of the mining and environmental business;
international growth of the Group
market launch of the three new segments: Construction,
Equipment and Resources
1990
- Founding of BAUER und MOURIK Umwelttechnik GmbH
and of SPESA Spezialbau und Sanierung GmbH
2008
- Expansion of machinery manufacturing capacities in
Aresing and Nordhausen as well as in Tianjin and
1992
Shanghai, China
- Takeover of SCHACHTBAU NORDHAUSEN GmbH
2009
- The BAUER Group completed the largest investment
program in the company's history: new administration
building in Schrobenhausen, Edelshausen plant,
machinery manufacturing plant in Conroe, Texas, USA
2011
- The first deep drilling rig is sold to South America;
construction of an underwater drilling rig and successful
deployment of it for a tidal turbine off the coast of Scotland
1986 – 2006
2007 – 2014
1994
2012
- Founding of BAUER Aktiengesellschaft
- During the year, the Group's global workforce topped the
10,000 mark for the first time
1998
- Takeover of KLEMM Bohrtechnik GmbH
2013
- Bauma Innovation Prize for an underwater drilling technique
2001
- BAUER Maschinen GmbH becomes independent company
2014
- Execution of the Schwarzkopf Tunnel bypass railway
2002
- Purchase of large machinery manufacturing facility in Aresing
2003 – 2005
- Specialist companies in a variety of fields are acquired
and integrated into the BAUER Group: FWS Filter- und
Wassertechnik GmbH; PRAKLA Bohrtechnik GmbH;
TracMec Srl, Imola, Italy; Pileco, Inc., Houston, Texas, USA
2006
- BAUER AG is listed on the stock market
project in Lower Franconia, the largest project signed in
Germany to date
7
8
The World is our Market
OVER
110
IN MORE THAN
70
COUNTRIES
GROUP COMPANIES
EUR
1.56 BILLION TOTAL
GROUP REVENUES
10,405 EMPLOYEES
FROM
76 NATIONS
THE WORLD IS OUR MARKET
28 PRODUCTION FACILITIES
and many other service centers and construction yards
Construction
Equipment sales
Resources
Equipment production locations
9
10
Highlights 2014
Schwarzkopf Tunnel bypass
for the mining tunnel work, Bauer
Harbour-VSL, to manufacture offshore
Heigenbrücken/Hain i. Spessart,
excavated portal pits and shotcrete
bored piles for the Hong Kong Link
Germany – In the middle of the
walls with a height of up to 30 meters
Road, a ten km long section from the
Spessart hills, BAUER Spezialtiefbau
for a total of ten tunnel entrances and
border between China and Hong Kong
GmbH worked on its biggest ever con-
exits. In addition, there is work such
as far as Hong Kong International
struction site in Germany from January
as soil nailing along the existing tracks
Airport. The piles with 2,300 and
to December 2014. In a joint venture,
or pile foundations for railway embank-
2,500 mm diameter are up to 115 m
it carried out the special foundation
ments. Several BG 28 and BG 40 rigs,
long, and have been embedded into the
work for a new section of the railway
as well as anchor drilling rigs are being
rock to a depth of two to five meters.
line between Würzburg and Frankfurt.
employed. The main part of Bauer
Spezialtiefbau's work will be completed
Bauer Hong Kong had to undertake all
in fall 2015.
the work for the EUR 72 million project
from the water – a particular challenge.
Longest sea bridge in the world
Five BG 40 rotary drilling rigs were used
Hong Kong, China – The special
– four of them were custom-built with an
foundation work subsidiary BAUER
extended mast and larger main winches.
Hong Kong Ltd. was involved in con-
They were transported by ship to steel
struction of the Hong Kong-Zhuhai-
platforms, each of which is just large
Macau bridge from April 2013 to
enough for one rig. In addition, there
December 2014. It is the world's
were pontoons for four bentonite plants,
longest bridge over open water, and is
300 ton cranes and accessories.
currently being built in the Pearl Delta.
As part of this, the existing passage
The 50 km long connection between
Replacement bore in Coswig
through the Schwarzkopf Tunnel is to
the cities of Hong Kong, Macau and
Coswig, Germany – BAUER Umwelt
be replaced.
Zhuhai completes the southern ring
GmbH carried out a replacement
section of a gigantic infrastructure
bore for a customer in Coswig near
measure.
to Dresden, from November 2013
This Schwarzkopf Tunnel is 160 years
old, and is showing its age. ICE trains
to May 2014. Severe contamination
can only pass through it at a maximum
Bauer Hong Kong was contracted
of the ground and groundwater had
speed of 70 km/h. Freight traffic even
by the joint venture, Dragages-China
been identified on the site of a former
requires a second locomotive due to
tarpaper factory.
the steep gradient. As a result, the line
is now being leveled, and this requires
The contaminated soil excavated using
construction of four new tunnels.
the large bore hole method was placed
in gas-tight containers for transport
The work by Bauer Spezialtiefbau on
to the Hirschfeld soil treatment center
the order worth about EUR 43 million
and to disposal sites. A total of about
includes the portion of the tunneling
45,000 tons of soil material were
that is not done by mining methods,
disposed of. In addition, the water
but using the open construction
pumped out was treated in a specially
method in several sections over a
installed water treatment plant.
length of 2,800 m. In order to prepare
HIGHLIGHTS 2014
BG's and the ValueLine by the bestsell-
deep drilling, signed an agreement with
er BG 26 as well as by a new BG 11 H.
Saxon Energy Services Inc. in Decem-
With its compact dimensions and low
ber 2014 for the manufacture and sale
weight, it permits easy transport which
of two ATD 750 deep drilling rigs.
makes it particularly appealing for the
oil and gas industry. Bauer Maschinen
Saxon Energy Services Inc. is an
presented its 100th MC duty-cycle
international drilling company and is a
crane in the form of the MC 96 – in
fully owned subsidiary of Schlumberger,
combination with a massive Leffer
the world's largest oilfield service com-
VRM 3000 casing oscillator. The subsidiaries were also represented by
many interesting innovations.
A BG 40 rig with a large bore diameter
of 2,000 mm was used. More than 400
In the "Old Welding Shop", visitors
bores were drilled down to a drilling
were able to find out about further
depth of 17 m.
offers and services. The live presentations on the plant premises in Aresing
The large bore hole method is practically
proved to be a particular draw. It was
vibration-free, which means it can be
possible to observe tried-and-tested
employed in the immediate vicinity of
machine technology and new develop-
sensitive buildings. This fact, combined
ments in application. Once again on
with the short construction period,
pany. The rigs are the result of a joint
offered the advantage that production
development process for a new series
by the company on site as well as
of deep drilling rigs, which began in May
at neighboring companies was only
2014 on the basis of an engineering
inconvenienced to a minor extent.
contract signed at the time.
In-house exhibition 2014
Additionally, a sales contract was signed
Schrobenhausen, Germany – The
for the two already completed TBA
in-house exhibition held from 10 to
300/440 M1 and TBA 440 M2 deep
13 May in Schrobenhausen proved to
drilling rigs. Already in 2009, BAUER
be a veritable highlight. Over four days,
Maschinen GmbH decided to open
more than 1,700 guests from over
up a new business area with the deep
70 countries visited the event to find
this occasion, the Bavarian evening
drilling division. In 2011, the first TBA
out about the innovations and equip-
proved to be a highlight and has been
300 deep drilling rig was delivered to a
ment from BAUER Maschinen GmbH
appreciated by customers from far-off
customer in Venezuela. This product
and its subsidiaries.
countries for several years now.
range has already been expanded with
The large machines were presented
Deep drilling rigs sold
in the courtyard of the head office: the
Edelshausen, Germany – BAUER Deep
More information:
PremiumLine of the heavy-duty rotary
Drilling GmbH, the subsidiary of the
http://www.bauer.de/
drilling rigs was represented by three
BAUER Group that is specialized in
en/bauer_group/world
several developments.
11
12
Mission and Strategy
OUR MISSION
>>> SERVICES, EQUIPMENT AND PRODUCTS DEALING
WITH GROUND AND GROUNDWATER
>>> Target: ~ 40 percent of total Group revenues
>>> Market leader in specialist foundation engineering
machinery and equipment
>>> New products for mining, deep drilling and offshore
drilling
>>> 80 percent of sales generated outside of Germany
>>> Multi-branding strategy
MISSION AND STRATEGY
OUR STRATEGY
>>>
The world is our market
>>>
World market leadership in specialist foundation
technologies
>>>
>>>
Optimization of worldwide organizational structures
and of the Group's self-managed business units
>>>
Annual growth from 3 to 8 percent
>>>
Target: ~ 20 percent of total Group revenues
Powerful development of drilling techniques
and applications for related markets such as
environment, water and natural resources
>>>
Activities in environmental technology, mining,
deep drilling, well construction, materials
>>>
Target: ~ 40 percent of total Group revenues
>>>
Global provider of specialist foundation engineering services
>>>
Specialist construction services
>>>
Focus on complex international projects
13
15
17
I.
The Group
17
Group structure
17
Corporate Governance and control system
19
II.
Business Report
19
Macro-economic trend
23
Course of business
29
III.
Trend by Segment
29
Construction segment
33
Equipment segment
37
Resources segment
40
Other/Consolidation segments
45
IV.
Earnings, financial and net asset position
45
Trend in orders
46
Group earnings position
49
Group financial and net asset position
54
V.
55
VI.
Financial Statements of BAUER Aktiengesellschaft
Sustainability
55
Sustainability within the BAUER Group
55
Employees
57
Capital Investments
58
Research and Development
60
Health Safety Environment (HSE)
60
Quality
61
VII.
Legal disclosures
61
Remuneration Report
63
Statutory disclosures regarding takeovers
65
VIII.
67
IX.
Follow-up Report
Risk and Opportunity Report
67
Risk Report
74
Opportunity Report
77
X.
Forecast Report
In Abu Dhabi, BAUER Spezialtiefbau GmbH carried out the foundation work for an office and commercial building. A 1 m thick
diaphragm wall was built and piles with diameters of 750 mm and 900 mm were drilled.
17
I. THE GROUP
GROUP STRUCTURE
CORPORATE GOVERNANCE AND CONTROL SYSTEM
The products and services of the BAUER Group, based
The principal task of the Management Board of BAUER AG
in the Bavarian town of Schrobenhausen, are focused on
is the strategic management of a global group of companies.
the ground and groundwater fields. The Group’s three seg-
As part of central strategies, goals and regulations, the main
ments – Construction, Equipment and Resources – operate
companies in the three operating segments – Construction,
more than 110 subsidiary companies in some 70 countries
Equipment and Resources – develop their own detailed
worldwide.
strategies which are converged at holding company level and
integrated into the strategic corporate planning process.
The Construction segment carries out all the established
methods and techniques of specialist foundation engineering
The development and implementation of a self-managing
all over the world. These include creating complex excavation
organizational structure with decentralized business units
pits, foundations for large infrastructure projects and buildings,
unburdened by complex decision-making hierarchies is the
cut-off walls and ground improvements. It also carries out
primary characteristic of corporate governance within the
other specialist construction activities, including civil engi-
BAUER Group. The managers of those Group companies
neering and remediation works.
operate under their own responsibility, and are provided with
a large degree of independence within the framework of the
The Equipment segment develops and produces equipment,
corporate strategy in determining how their business units
tools and machines for specialist foundation engineering and
progress.
other underground drilling operations, such as mines, wells,
geothermal energy, oil and gas. In addition to its headquarters
The autonomous management of the individual operating
in Schrobenhausen, the Equipment segment operates a global
business units is constrained by framework guidelines and
distribution network, as well as additional production facilities
standards laid down in the Group and subsidiary Corporate
in Germany, China (Shanghai and Tianjin), Malaysia, Russia
Management Manuals. The principles of proper conduct,
(at two locations), Italy, Turkey and the USA, among other
including adherence to our ethical and moral standards,
locations. With exports accounting for around 80 percent of
are defined by an ethics management and values program
its total sales, BAUER Maschinen GmbH is the world market
covering all the companies of the BAUER Group, backed by
leader in specialist foundation engineering equipment.
corporate management guidelines and a code of conduct
imposed on our employees, among other measures.
The Resources segment is focused on products and services
in the areas of water, environment and natural resources.
Systems and departments handling central functions assist
BAUER Resources GmbH is the holding company of the
in implementing standard processes and support the work
business segment, under the umbrella of which the subsidiaries
of the operating units by providing the necessary backup
operate as full-service providers with their focus on environ-
services. The self-managing structure is linked to a central-
mental technology, water and natural resources for industrial
ized system of risk management and control, and to a central
customers.
Group accounting function. Internal auditing systems monitor
compliance with laws and standards across the Group.
BAUER Aktiengesellschaft is the holding company of the
Group, and is listed on the Frankfurt Stock Exchange.
Statements regarding the role of the Management Board and
BAUER AG provides central management and service
Supervisory Board and in relation to other issues of corporate
functions for its affiliates. These specifically include human
governance are set out in the Declaration on Corporate Gover-
resources, accounting, finance, legal and tax affairs, IT, facility
nance on pages 84 to 87 of this Annual Report, which is
management, and health, safety and environment (HSE).
published on the Internet at http://www.bauer.de/en/inves-
In the middle of the Spessart region, BAUER Spezialtiefbau GmbH will be working on its largest German construction site
so far – the Schwarzkopf Tunnel bypass – until autumn 2015. Several BG 28 and BG 40 rigs, as well as anchor drilling rigs are
being employed.
18
COMBINED MANAGEMENT REPORT
The Group
tor_relations/reports in the Investor Relations section under
integrated within the scope of internal Group management
Reports & Accounts.
activities. They primarily comprise balance sheet and income
statement figures and indicators of capital structure, profitability
Financial performance indicators
and liquidity derived from them.
The trend in total Group revenues is used as the fundamental
and significant key financial performance indicator for the
Non-financial performance indicators
management of the Group. The total Group revenues
As part of a comprehensive reporting system, many non-
represent the revenues of all the companies forming part of
financial indicators are measured in assessing the performance
our Group. The difference between the consolidated revenues
of the Group which individually, in terms of internal controls and
and the total Group revenues is derived from the revenues
beyond that scope, have no material significance. The reporting
of the associated companies, from our subcontractor shares
on trends in those performance indicators in the “Sustainability”
in joint ventures, and from the revenues of non-consolidated
section is primarily intended to convey an overall picture of the
companies. The trend in total Group revenues and the
operations of the BAUER Group.
contributions to them by the various segments are depicted in
the Business Report and in the “Trend by Segment” section.
The indicators included originate, among other sources,
from the Human Resources function, such as workforce
Alongside total Group revenues, earnings before interest and
numbers – categorized by segment, employment type and
taxes (EBIT) and the net profit or loss for the period are used as
region. Furthermore, continuing and further education indica-
key financial performance indicators for internal management.
tors are included in the reporting, such as the budget applied,
The Business Report and the “Trend by Segment” section
the number of employees attending the seminars offered,
detail the trends in EBIT and net profit or loss for the period
and the number of seminars and conferences held. Reporting
and trends in the various segments.
also covers performance indicators from the Research and
Development function. They include the number of registered
A wide range of other financial performance indicators,
patents, expenditure on research and development, and the
which are of comparatively minor significance to the medium-
number of staff employed in those areas.
and long-term development of the Group, are collated and
Business Report
II. BUSINESS REPORT
MACRO-ECONOMIC TREND
of the countries in the region are sticking to their construction
Germany is doing well – to judge from the raw data. Tax
projects, something which represents a positive sign.
revenues are booming, the economy is growing and the
government is not planning to assume any new borrowing.
• At first sight, it appears logical to draw the conclusion that
However, a less cursory glance at the situation reveals that
the drop in the oil price will have a positive effect on the
there are many problems in the world, the dark clouds of
German economy. Thanks to the lower price of fuel, the
which are casting their shadow over Germany as well.
general public will have more money to spend on other
consumer goods. However, this upside will by no means
The repercussions of the financial crisis and the credit crunch
compensate for the drop in orders placed with German
suffered by many European countries mean that the overall
companies. Although the order books of construction
system still cannot settle on an even keel. Germany is part of
firms in the Arab world are currently full, it remains unclear
this system, and due to its presumed strength has to bear a
which projects might be delayed as a result of the low oil
considerable share of the burden.
price. And it is not only Arab countries that are affected.
Malaysia, Mexico, Brazil, Russia, Angola, Venezuela
In addition to the familiar problem areas, new crisis hot-spots
and Azerbaijan are dependent on oil. This also affects
have also arisen; these will also have significant effects on the
conglomerates that earn their money with oil. As a result,
economic development of countries and regions in the world.
the situation cannot be said to be positive.
• Russia and Ukraine are not regarded as the most impor-
• Over recent years, China has acted as a powerhouse for
tant countries for Germany’s export business. This fact
the global economy, but is now displaying some weak-
perhaps made it easier for the politicians to impose sanc-
nesses. Many companies nowadays are heavily dependent
tions on Russia in the wake of the events in the Crimea –
on the market there. These include the major German car
in the hope of inducing a change of policy. Unfortunately,
companies as well as their components suppliers and
past experience shows that punitive measures such as
many capital goods manufacturers. In the engineering
these take a long time to bear fruit, and can even lead to
business, we can already see what problems can arise in
a hardening of attitudes and tit-for-tat countermeasures.
this country. The construction equipment business in China
The conflict is lodged in a spiral of this kind, while hopes
grew many times over, on the back of the building boom.
for a rapid resolution are evanescent. This will have a
It was clear that the bubble in the sector would burst
greater impact on the German economy than many people
once the construction market had normalized. Chinese
appreciate. Russia is highly important for Germany – more
machinery manufacturers did not see this coming, as a
so than is indicated by the raw data.
result of which the factories’ production is going straight to
stock, and the majority of the equipment is being dumped
• Scarcely anyone would have imagined that a group of
on the market through reckless financing models. Now,
extremists could have taken over and terrorized large
however, these machines are being returned because
areas of Iraq and Syria within a matter of weeks. For some
many construction companies overextended themselves
months, it seemed that the western world was incapable
with these investments. Our strategy of concentrating on
of reversing the advance of the Islamic State, at least to
large and special machines in China does add up, on the
a certain extent. At present, it appears that the threat
other hand. We are satisfied with our success.
posed to the Arab world will continue for some time yet.
Economically, it is spreading great uncertainty. Neighbor-
• The countries in the eurozone are making strenuous efforts
ing countries such as Jordan, Lebanon and Turkey will
to get a grip on their economic problems, but there is
thus have more limited opportunities to develop their
not yet any prospect of achieving stability any time soon.
economies on a stable basis. This fragile situation could
Many companies are no longer able to compensate for
deteriorate at any time, and this is noticeably curtailing the
volatility in the foreign exchange markets. What is needed
opportunities offered to western companies. At least many
is a reliable policy in order to return to a steady course of
19
20
Business Report
development. However, there is no sign of this happening
to major problems. A business such as the BAUER Group,
at the moment.
however, which operates on a very large number of markets,
must expect to face a multitude of problems in volatile times.
The considerable number of crises and problematic areas
Nevertheless, a global presence does mean that there will
will represent threats for years to come. Rarely has there
always be rising markets available. We regard our strategy
been such an accumulation of issues facing the world as
as the biggest advantage in terms of our ongoing develop-
is the case today. Fortunately, there have also been some
ment in that respect. As well as confronting country-specific
very positive developments. The most important of these is,
problems, this also means that strategic options regularly
without doubt, the upswing in the US economy. The United
open up, providing us with the opportunity to grow.
States has once again assumed its role as the driving force
in the global economy. Many countries of the Far East are
Against the background of this economic situation in the
also enjoying highly dynamic growth, such as Indonesia,
construction sector, we are convinced that the BAUER
Malaysia and the Philippines. What is more, many markets
Group will again be able to achieve increasing orders so as
are highly stable and are well placed to face the future.
to sustain healthy growth in the years ahead, in spite of the
disruptions.
The construction sector in Germany is one such market that
is developing very well. Sustained low interest rates and the
Sales of construction machinery are linked directly to the
positive economic situation are inducing people to invest in
situation on construction markets, so healthy selling oppor-
real estate. Also, the government is finally setting about making
tunities are also to be expected in that sector over the years
good the huge deficiencies in Germany’s infrastructure. For
ahead. Deep drilling markets will also grow again, as future
this reason, the favorable situation is set to continue for a
oil and gas exploration drilling will need to be carried out at
few years more.
ever shorter intervals, so entailing a rise in drilling capacity.
Construction statistics Germany – Change 2014/2013
In parallel with the general trends, future trends on construc-
in %
tion markets in the various regions around the world will vary
Germany
overall
West
Germany
East
Germany
Sales
4.4
5.0
2.1
Hours worked
4.6
5.2
2.8
Employees
1.1
1.5
-0.1
The German construction market will continue to see positive
-0.5
-0.6
-0.1
growth over the coming years. Residential construction is
Orders received
Source: Central Federation of the German Construction Industry
in some cases:
Germany
being buoyed up, above all because of the low interest rates.
Public-sector construction is benefiting from an enormous
There is also a very pressing necessity and demand for
backlog of infrastructure work, something which governments
construction activities internationally. Everywhere, there
now have much more money at their disposal to pay for.
are huge deficiencies when it comes to refurbishing infra-
The development of commercial construction will depend
structure and constructing new transport arteries and supply
on industry’s future prospects.
systems. Also, commercial companies and residential building
operations have a great demand for construction services.
The widely anticipated positive effects of the reversal of
Once again, the crises and problems existing in the world
energy policy in Germany to favor renewable energies have
represent the greatest stumbling block, however.
not been realized, however. Only the onshore wind power
sector is still generating strong order flow. The necessary
Under such circumstances, it may be better for construction
north-to-south power transfer lines are not currently being
companies to operate on only a small number of markets
implemented, and the development of offshore wind power
as and when they are on an upswing. As soon as those
has largely come to a standstill. Even the urgently required
markets decline again, such a strategy can very quickly lead
growth in conventional power station capacity is not yet
Business Report
happening due to a lack of clear policy framing. Those
sector to a halt. The neighboring states such as Jordan and
statements do contain a positive aspect: once the works
Lebanon are also hamstrung by the situation, as a result of
start, they will have to be completed rapidly.
which economic development has significantly abated there.
Europe
Further developments in the Arab countries, which were
We predict that growth on construction markets in Western
characterized by revolutionary political upheavals in the
Europe will be modest over the coming years. Many countries
past years, remain uncertain. Many clashes are still taking
have had to impose strict budget constraints which will
place in Libya and Egypt, with repeated incidents of rioting.
hamper the further development of their infrastructure. There
Nevertheless, the construction sector in Egypt is currently
are nonetheless a number of opportunities for us in Europe,
experiencing an astonishing upturn. The expansion to the
especially in Switzerland. In France, a new circular metro
Suez Canal that got underway within an extremely short time
line is being built around Paris, and is requiring extensive
will require considerable building activities. In Cairo, work will
construction activities. Other cities are also planning to
get underway within the next few years to expand the metro
upgrade their infrastructure.
network. Our local subsidiary has already landed considerable
orders, and will be able to increase its sales significantly
Smaller markets in Eastern Europe largely collapsed as a
given this market situation.
result of the financial crisis. There have recently been signs
of a slight upturn, though at a very low level.
Asia-Pacific, Far East & Australia
Construction markets in the Far East remain pleasingly
The crisis embroiling Russia and Ukraine is currently imposing
stable. Almost every country in the region is undertaking
an enormous burden on these countries’ development.
major infrastructure projects. In Hong Kong, construction
Ukraine is practically no longer capable of maintaining a
sector capacities are being well utilized by extensive rail and
construction sector – due to lack of funds. Although Russia
road construction works. The same is true in Singapore and
is attempting to keep finance flowing into its building sector,
Malaysia. For example, new underground railway lines and
the financial deficits brought about by sanctions and the low
urban motorways are being constructed in Singapore. The
oil price are forcing the country to pursue a policy of extreme
port – one of the most important and biggest in the world –
frugality. Commercial construction has almost shut down
is being relocated. Economies such as Indonesia and the
entirely. It can be assumed that Russia will suffer from the
Philippines are also seeing healthy growth. By contrast,
consequences of the crisis for years to come – even if the
the Australian economy is no longer developing quite so
conflict were to be resolved rapidly. As a result, the equip-
positively. Trends in this construction market are somewhat
ment sales business will also decline significantly.
slower.
Middle East & Central Asia
Americas
The oil-rich and gas-rich countries of the Middle East,
The USA’s economy is returning to its role as the driver
such as Abu Dhabi, Saudi Arabia and Qatar, have lots of
of global growth. A very high level of backlog demand
large-scale construction projects in the pipeline and being
has arisen in many infrastructure areas, due to a lack of
carried out. Metro systems are being constructed in Doha
adequate investment over recent decades. Major efforts will
and in Riyadh, while intensive extensions to railway lines
be made over the coming years to make good this deficit,
are in progress throughout the entire region. The football
and a positive side effect of this commitment will be a further
World Cup in Qatar will trigger additional building volumes.
boost to the economy. Overall, we regard the situation as
Construction has also bounced back in Dubai in a big way.
stable, and offering good opportunities for further growth
in both our Construction and Equipment segments. Trends
Conditions are highly problematic in Iraq and in Syria, however.
in the Canadian construction market are likewise favorable.
Armed conflict with the Islamic State has almost brought
Interesting projects are regularly seen in Central America.
economic development and specifically the construction
21
Business Report
>>>
22
Africa
same commitment as they were just a few years ago, when
In Africa, it will be worthwhile actively pursuing new business,
environmental issues were seen as the major risk to global
even though the economic weakness of the countries con-
economic development. Dialog with major polluters, such as
cerned means the business generated will not make a major
China, must be intensified. The financial burdens we face in
contribution to our total Group revenues. Some countries
dealing with this over the years ahead will be substantial. On
have very good chances of improving their prosperity based
the other hand, it does of course offer major opportunities for
on their enormous raw material resources.
companies operating in the relevant fields.
As a result of the described political risks and economic
These issues are opening up wide-ranging new opportunities
issues, a number of vitally important challenges which also
for us too. In operation for several years now, our Resources
need to be met have been pushed into the background. In
segment is focused on matters relating to the environment,
Germany and many other countries, demographic trends are
water and natural resources. We have already achieved
posing major economic challenges. Environmental problems,
success in many countries around the world, and we believe
particularly air pollution, are rising. In this context, too, neces-
that demand for these products and services will continue
sary policies are currently no longer being pursued with the
to grow strongly.
The north of Munich will be getting a significantly new look with the “Schwabinger Tor” project. BAUER Spezialtiefbau GmbH
excavated the up to 12 m deep pit, which has an area of 35,000 m².
Business Report
Global economic trends will stabilize again in the medium
excellent lines; consequently, in early 2014, we assumed it
term. The current causes of destabilization will fall away
would be possible to conduct the remainder of the project
again over coming years. The currently still enormous cost
on a much better basis. Unfortunately, this expectation
differences and imbalances in many countries will likewise
turned out to be over-optimistic. During the second cutting
reduce significantly. After all, people in China are also aware
of the wall in the dam area, drilling progress returned to a
of the value of professional work in other countries, and
lower level. The concrete mixture used proved to be exces-
will demand the same standards for themselves. There are
sively hard for the planned progress to be achieved. Also,
already several signs of this happening: good equipment
many other procedures on the site, such as permanent
operators in most countries now have similar pay levels
monitoring of quality, took longer than planned, as a
to those in the old-established industrial nations for example.
result of which the construction time and thus the costs
This will impact on all businesses, including our competitors.
significantly exceeded the expected amounts. This meant
the project delivered a loss in 2014, which reached the low
The outcome of the global changes will be much larger
double digit million range. The project will be completed in
markets, on which orders will again need to be fought for
the second quarter of 2015 with an outstanding technical
against a background of similar conditions. German companies
achievement.
will be able to focus on their specialties and enjoy healthy
revenues on the larger market. The BAUER Group, too, will
Business in Russia, Egypt, Indonesia, Hong Kong and
maintain that focus.
Thailand was very pleasing. In Hong Kong, the major project
involving foundation works for a section of the new bridge
COURSE OF BUSINESS
between Hong Kong and Macau was completed in early
In 2014, the BAUER Group was hit by some problems with
2015.
a major financial impact and also faced some difficult market
conditions. On the other hand, we have also achieved some
The Equipment segment had to cope with significant market
pleasing successes. Overall, however, we were only able to
upheavals once again during the reporting period. The
post a positive profit after tax by means of a one-time income
greatest problems were the behavior of Chinese manufacturers
item.
which continued to produce with significant overcapacity,
and the methods they employed of dumping their equipment
In the Construction segment, we are well established in all
onto the market via risky financing schemes. Our European
international markets. Specifically in Germany, our specialist
competitors were also affected by the situation. Our strategy
foundation engineering business was able to contribute with
of concentrating on special equipment of the highest quality
a positive development. The numerous disturbances in the
and providing perfect customer support meant that we were
world meant it was necessary to respond to changes quickly.
able to expand our sales further in spite of the significant
Nevertheless, our business was effectively distributed over the
competition. In 2014, we succeeded in selling more large
regions of the world. Revenues declined slightly compared
machines once again.
to the previous year because a relatively large number of
very large projects were carried out the year before. During
Developments in Russia and Ukraine proved problematical
the year under review, it was rather the small and medium
for us. In Russia, orders tailed off almost entirely as a result
projects which characterized our revenues.
of the sanctions and the economic problems these triggered
towards the end of the year. This represents the loss of
The factor which affected us most was the development in
an important market for our companies. In 2014, we had
our dam remediation project at Center Hill dam in the USA.
planned sales of about EUR 80 million for the Group in
We had already been obliged to post a loss in the previous
Russia and Ukraine, but we were only able to achieve about
year. Significant problems arose during the site mobilization
half of this figure. We are expecting even lower sales in future.
and the technical preparation work for the project, leading
As a result, we need to look to compensate for this, a task
to a considerable delay. However, from the end of 2013
which will not be easy.
onwards, the diaphragm walling works proceeded along
23
24
Business Report
Geographical breakdown of total Group revenues
generated by selling 21 percent of the shares in this
in EUR million
company.
Total 1.560
The companies in the segment which manufacture well
engineering materials were reorganized following a difficult
Germany 440 (28 %)
previous year. Once again, a loss was reported in 2014.
Africa 62 (4 %)
We are confident that business will now develop better.
Americas 172 (11 %)
Asia-Pacific,
Far East &
Australia
377 (24 %)
The year was highly unsatisfactory for our exploration
companies. Following the end of the major project in Jordan,
we had hoped it would be possible to relocate the capacity
becoming available to other regions without interruption.
However, weakness in the mining market during the previous
year meant that exploration drilling ceased almost entirely.
As a result of political upheavals in the region, it also proved
impossible to attract an adequate number of orders for other
work. Consequently, we had to accept significant losses
resulting from the overcapacities.
Europe (other)
125 (8 %)
232 (15 %)
Many re-organizational measures were undertaken in the
Resources segment. Activities were merged or, in some cases,
terminated. We have withdrawn from many regions. All of
EU (excl. Germany)
152 (10 %)
these issues led to a financial cost. Consequently, a loss in
the segment could only be avoided by one-time income from
Our deep drilling business achieved very satisfactory
the sale of shares mentioned previously.
development in 2014. In May, the agreement was signed to
develop a new deep drilling rig for Saxon Energy Services
2014 was an extremely challenging year. We had to deal
Inc. Following joint development work, we received the order
with markets changing at breakneck pace, at the same
to manufacture two rigs at the end of the year. Additionally,
time as correcting our own mistakes and aligning internal
a sales contract was signed in December for two already
structures better to face the future again. The cost reduction
completed deep drilling rigs.
program amounting to about EUR 20 million was implemented
successfully in order to safeguard overall profits, and will be
In the Resources segment, the environmental business
continued in the coming year as well. The positive effects will
continued to develop very well. There were many attrac-
bear fruit for years to come.
tive projects, especially in Germany. Our subsidiary in
Oman enjoyed a successful year, with many appealing
Another important goal for the year was to comply with
new opportunities for the future. One-time income was
the financial covenants of our financing agreements with
Forecast/actual comparison 2014
Forecasts
in EUR million
Actual 2014
EBIT
Net profit or loss
11.04.2014
14.08.2014
14.11.2014
~ 1,550
~ 1,550
~ 1,550
1,560
~ 75
~ 75
~ 75
76.4
~ 20 - 25
~ 15 - 20
~ 15 - 20
15.7
Business Report
slightly increased revenue. Furthermore, we aim to achieve a
regard to total Group revenues and EBIT. At the 2014
long-term improvement in key financial figures. Although we
year-end, this is expected to be towards the bottom end of
still have some work to do to achieve this, we were able to
the range from about EUR 15 to 20 million.
meet the target. The net debt to EBITDA ratio has returned
below 4.0. The EBITDA to net interest coverage ratio was
The final results for 2014 are now as follows: total Group
also improved.
revenues rose by 3.7 percent to EUR 1.56 billion. Sales
revenues fell slightly by 1.9 percent to EUR 1.38 billion.
As a result of the aforementioned problems, we were regret-
EBIT came to EUR 76.4 million (previous year: EUR
tably forced to adjust our forecast downwards once in the
30.1 million). The net profit for the period was EUR
course of 2014. In our 2013 Annual Report we predicted total
15.7 million (previous year: EUR -19.4 million).
Group revenues of about EUR 1.55 billion, EBIT around EUR
75 million, and profit after tax of about EUR 20 to 25 million.
Summary
All in all, we cannot be satisfied with our results for 2014.
As a result of special effects, including above all our dam
We were only able to achieve a positive result due to the
project in USA which burdened us with a significant loss, we
one-time income from the sale of shares in Oman. We regard
were obliged to adjust our forecast for profit after tax in the
the business trend as continuing positive, because even in
half-year report to about EUR 15 to 20 million.
tricky circumstances we once again succeeded in increasing
total Group revenues slightly. The financial year 2015 will
In the nine-month interim report, the forecast for the profit
build on that foundation.
after tax was concretized, with an unchanged outlook with
Total 1,560
in EUR million (segments after deducting Other/Consolidation)
1,600
Resources
249
1,400
1,200
1,000
Equipment
612
800
600
Construction
international
510
400
200
Construction
Germany
189
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
25
Business Report
Breakdown of total Group revenues by subsegment
in EUR million
2013
Revenues *
Change against
previous year
Orders
in hand
2014
Revenues
Share
Year 2014
133.2
8.6 %
11.6 %
+
BAUER Spezialtiefbau GmbH (BST)
Construction
BST, Germany
Subsidiaries, Germany
24.0
16.7
1.1 %
-30.4 %
+
BST, international
67.3
98.9
6.3 %
47.0 %
•
Subsidiaries, international
BST Group total
Equipment
SCHACHTBAU NORDHAUSEN GmbH Subsidiaries (SBN)
502.5
32.2 %
-8.2 %
•
751.3
48.2 %
-0.9 %
•
-10.6 %
•
73.9
66.1
4.2 %
-90.2
-104.4
-6.7 %
Construction total
741.7
713.0
45.7 %
-3.9 %
•
BAUER Maschinen GmbH (BMA)
391.7
383.3
24.6 %
-2.1 %
•
Equipment subsidiaries
453.3
468.7
30.0 %
3.4 %
•
BMA Group total
845.0
852.0
54.6 %
0.8 %
•
62.3
62.0
4.0 %
-0.5 %
•
-278.7
-262.2
-16.8 %
628.6
651.8
41.8 %
3.7 %
•
SBN
less intra-Group revenues and IFRS adjustments
BAUER Resources GmbH (BRE)
Resources
547.3
758.0
Equipment total
Other
119.4
9.6
29.5
1.9 %
n/a
Resources subsidiaries
193.2
231.1
14.8 %
19.6 %
BRE Group total
202.8
260.6
16.7 %
28.5 %
-
19.8
33.9
2.2 %
71.2 %
++
•
SBN
-33.7
-41.7
-2.7 %
Resources total
188.9
252.8
16.2 %
33.9 %
37.0
37.1
2.4 %
0.3 %
BAUER Aktiengesellschaft (BAG)
Other subsidiaries
Total Other/services
Group total (including non-controlling interests)
of which: Germany
International
2.3
2.3
0.1 %
39.3
39.4
2.5 %
0.3 %
-94.3
-96.8
-6.2 %
1,504.2
1,560.2
100.0 %
3.7 %
410,4
440,2
28.2 %
7.3 %
1,093.8
1,120.0
71.8 %
2.4 %
Notes on the table:
List also includes non-consolidated holdings
Evaluation of orders in hand in relation to planned revenues:
-- weak; - slightly weak; • adequate; + well adequate; ++ very well adequate;
Percentages and totals are calculated on the basis of unrounded starting values
-
•
Breakdown Germany/international according to country in
which accounting figures were allocated. For reasons of
complexity the figures are not absolutely precise.
Our customer Ammico Contracting Co. W.L.L. was involved in the construction of a large commercial complex on the artificial
island “The Pearl”, which is just off the east coast of Qatar. A cut-off wall up to 700 m long and 8 m deep was built using the cuttersoil-mixing-method. They used a BG 28 with a BCM 5 mixing head.
27
Trend by Segment
III. TREND BY SEGMENT
CONSTRUCTION SEGMENT
Construction key figures
in EUR '000
2013 *
2014
Change
741,673
713,005
-3.9 %
Sales revenues
657,456
634,096
-3.6 %
Orders received
727,287
665,244
-8.5 %
Orders in hand
498,701
450,940
-9.6 %
21,209
25,068
18.2 %
Net profit or loss
EBIT
5,472
1.858
-66.0 %
5,531
5,675
2.6 %
In the 2014 business year, the Construction segment earned
West Region, however, failed to achieve its targets, attracting
total Group revenues of EUR 713.0 million, down slightly on
only a few orders. However, the planned earnings and the
the previous year’s value of EUR 741.7 million by -3.9 percent.
planned revenues were well surpassed.
The reason for this is that more major projects were handled
in the year before than in 2014 itself. Segment EBIT of EUR
The major project at the Schwarzkopf Tunnel should be
25.1 million was slightly up on the previous year’s level of
highlighted in particular. This involves extensive special
EUR 21.2 million. The net profit for the period decreased
foundation engineering for the bypass rail link between Hanau
markedly from EUR 5.5 million to EUR 1.9 million. The decline
and Nantenbach, with a total volume of above EUR 40 million.
in the net profit for the period is chiefly due to economic
We still have significant work to accomplish on the project
problems with our dam project at Center Hill in Tennessee,
until autumn 2015. In addition to this, the major project at the
USA. It was not possible to offset the loss incurred in the
Zerben lock was completed successfully in November.
project against any deferred tax assets, as a result of which
the income tax expense increased significantly compared to
Next year, we are expecting a decline in revenues for the
the previous year.
German specialist foundation engineering business, because
there are fewer major projects on the market overall.
2014 was characterized by good conditions overall in the
world construction market, which proved to have a positive
SCHACHTBAU NORDHAUSEN GmbH, which operates
effect on our companies in Germany and the Far East above
primarily in Germany, works on behalf of all three of the
all. Furthermore, the markets in the Middle East once again
Group’s segments. The company and its subsidiaries
showed significant signs of life. The business situation was
increased total revenues against the previous year’s
good on the whole, but was negatively affected by the
figure, but earnings were down against planned levels.
problems with the Center Hill dam project to such an extent
An improvement is expected in 2015. As the company
that we failed to achieve our earnings targets markedly.
operates in all three segments, the effects of the individual
divisions are detailed in the respective segment reports. The
Germany
Construction division achieved revenues on the same level
As in the previous years, our German construction business
as the previous year. The Environmental Technology division,
performed better than expected once again. Revenues and
operating primarily in the biogas field and in the construction
results were significantly above expectations. The contracts
of treatment plants, is likewise assigned to the Construction
procured were spread very unevenly around the various
segment. Although it was able to increase revenues, the
regions however. Capacities in the South region were very
negative result remained at the previous year’s level. SPESA
well utilized, and well utilized in the North East region. The
Spezialbau und Sanierung GmbH, which is allocated to
In Jeddah, Saudi Arabia, what will soon be the tallest building in the world is under construction – the Kingdom Tower. Bauer
drilled 70 piles – with up to 109 m they are extremely long – with diameters of 1,500 and 1,800 mm. Another 200 piles with
lengths up to 90 m were also installed.
29
30
Trend by Segment
We are expecting the business situation to be significantly
Construction segment
less favorable in 2015 because of sanctions.
in EUR million (after deduction of Consolidation)
The situation in the markets of Western Europe was also highly
Total 699
differentiated. Our subsidiary in the Netherlands failed to meet
expectations in terms of revenues and earnings. Last year
Germany 189 (27 %)
was very poor in the UK. Following major underground railway
Africa 49 (7 %)
Americas 68 (10 %)
Asia-Pacific,
Far East &
Australia
199 (29 %)
orders in previous years, there were scarcely any projects on
the market in the business year just finished. Consequently, the
planned revenue target was missed by a wide mark, and the
result is negative. There are signs of an improvement in 2015.
In Switzerland, revenues increased thanks to a good market
position. Our subsidiary in Austria failed to meet its targets
because of a dearth of projects in the summer months. On the
whole, markets in Southern Europe remain weak.
Following political unrest in the markets of the Middle East
Europe (other)
64 (9 %)
over recent years, the construction sector once again
94 (13 %)
EU (excl. Germany)
36 (5 %)
enjoyed a significant upswing in the course of 2014. Our
companies in the United Arab Emirates, above all Abu Dhabi
and Dubai, are once again operating at full capacity and
were able to increase revenues and earnings significantly;
the situation is similar in Qatar where work started on several
Schachtbau in the organizational structure, succeeded in
orders particularly in the second half of 2014. Our subsidiary
improving its result during the reporting year although with a
in Lebanon was also largely on target in terms of revenues
slight decline in revenues.
and earnings.
The holding Wöhr + Bauer GmbH, which develops and
Revenues declined in Saudi Arabia, above all because of
builds urban real estate such as office buildings and parking
the completion of the major project at the Kingdom Tower,
garages, was able to complete a large number of relatively
involving the foundation work for what will be in future the
large projects during the reporting year, as well as starting
tallest building in the world. Order books remain buoyant
new ones.
here, and upcoming major projects – especially for the metro
system in the capital city Riyadh – mean that prospects are
Europe
bright. Overall, we believe the region is once again on an
Trends on European construction markets remain regionally
upward trend.
very variable. In Eastern Europe, revenues in Hungary,
Georgia and Bulgaria increased, while Romania underper-
formed slightly. Overall, perspectives have improved again
The construction sector in the markets of the Far East
somewhat following a few weak years. Azerbaijan is also
continues to deliver pleasing performance. Our subsidiaries in
offering us good opportunities for new projects. In Russia,
Indonesia and Thailand benefited from very full order books
work was completed on the Lakhta Tower in St. Petersburg,
with pleasing results. Prospects remain highly positive. Hong
which is set to be Europe’s tallest building; subsequent
Kong was characterized by the foundation works for a section
to this, we carried out some add-on and follow-up order.
of the Hong Kong-Zhuhai-Macau bridge that were completed
Revenues and earnings were on a good level overall.
in early 2015. The project was able to be concluded successfully.
Trend by Segment
In Malaysia, there were somewhat fewer orders than
the Dominican Republic. We are expecting the situation to
expected, as a result of which revenues were somewhat
improve in the region during the current year.
lower than planned even though they attained a very high
level in total. In the Philippines, project delays represented
Africa
somewhat of a hindrance to revenues, although the situation
Once again in 2014, the performance of our holding in Egypt
with orders in hand is good on the whole. The market in
was more than pleasing. In the difficult prevailing conditions,
Vietnam is displaying the first signs of a recovery following
it succeeded in closing the financial year with revenues up on
weakness during previous years.
the previous year and healthy earnings. Order levels continue
to be very high, because numerous construction projects
In 2014, extensive diaphragm walling works were constructed
are being carried out. For example, extensive work is being
for several dams in Bhutan as well as on Mauritius. The work
conducted on the metro system in Cairo. We assume that
will continue into the current business year as well. The
we will be able to increase our revenues further in the current
projects are proceeding very pleasingly. The market in
year. There are individual project opportunities available from
Australia in 2014 was very slow. We expect this to continue
time to time in other countries as well.
in 2015 as well.
Outlook
Overall, we are expecting continued good development for
Revenues in the Construction segment declined slightly during
the region in the current business year.
the completed business year. Above all, this was because
some major projects were processed and concluded during
Americas
the previous year. In some regions, we merged capacities to
Our subsidiary in the USA was kept busy through 2014
a greater extent and ceased our activities in some countries
primarily by the large-scale Center Hill dam project. The
– such as Algeria. The trend in the segment was positive,
difficulties getting the project off the ground led to a backlog
apart from the losses incurred by the major project at Center
of work. At the start of the year, we had expected to make
Hill dam, representing a significant negative influence.
good this deficit, at least in part, by increasing performance.
Unfortunately, this proved to be impossible because of
Overall, the regions of the world continue to perform positively,
further delays and problems that arose during the course
in spite of all the existing political and economic disruptions.
of the year, as a result of which a significant loss was once
Our global presence provides us with an excellent opportunity
again incurred. From a technical perspective, the project has
to exploit opportunities in regions with a favorable trend in
been carried out to an excellent standard. The work will be
their construction sectors, thereby making up for weaker
concluded in the second quarter of 2015. As well as this, a
markets. Overall, orders in hand have declined in relation
larger number of different specialist foundation engineering
to the previous year, this being due to the situation that there
orders were handled in the USA. There were only a few
are currently more small and medium projects available on the
orders available on the Canadian market during the year, as
market. The major projects have been completed during the
a result of which revenues declined here. The prospects are
past two years.
looking brighter again for the current year.
We are expecting our revenues to be slightly higher than those
In Latin America, we are focusing our activities on Panama
of the previous year in 2015. As far as EBIT is concerned,
above all else. Our subsidiary’s performance was somewhat
we are expecting a slight improvement, while the improvement
below expectations during the past business year. Individual
in profit after tax should be considerable.
orders are being carried out in the other markets – such as
31
Trend by Segment
EQUIPMENT SEGMENT
Equipment key figures
in EUR '000
2013
2014
Change
628,612
651.772
3.7 %
Sales revenues
561,615
545,223
-2.9 %
Orders received
632,053
693,967
9.8 %
Orders in hand
116,525
158,720
36.2 %
32,223
36.917
14.6 %
Net profit or loss
EBIT
5,055
9,513
88.2 %
2,998
3,038
1.3 %
In the past business year, total Group revenues in the
Paris. We were also able to achieve good sales in the Baltic
Equipment segment increased slightly by 3.7 percent, from
states, although the markets in Eastern Europe continue to
EUR 628.6 million to EUR 651.8 million. Sales revenues, on
be at a low level. There is a lack of funding for major invest-
the other hand, fell back by 2.9 percent from EUR 561.6 mil-
ments. Spain and Portugal continued to perform weakly.
lion to EUR 545.2 million. Segment EBIT increased sharply
by 14.6 percent from EUR 32.2 million to EUR 36.9 million.
In Russia, sales up to the middle of 2014 were completely ac-
The net profit for the period increased markedly from
cording to plan. During the second half of the year, however,
EUR 5.1 million to EUR 9.5 million.
first sanctions and then the significant decline in the value
of the ruble exerted an influence on the market. At the start
In 2014, in spite of fierce competition, we succeeded in
of the embargo, it was questionable whether we would be
maintaining sales volume at approximately the same level as
able to deliver several items of machinery to Russia, although
the previous year. The markets of the Middle and Far East
the situation was resolved within a few weeks. However,
enjoyed particularly positive development, as did sales of
demand collapsed markedly in the second half of the year. In
large machinery and cutters. This led to an increased result,
the current business year, we are expecting to see a further
and further benefited from the trend in the US dollar. The
noticeable decline in sales volume compared to 2014.
still too low capacity utilization of the plants and losses at
individual subsidiaries hampered a greater increase.
The markets of the Middle East developed significantly better
Germany & Europe
than in the year before. In spite of continuing uncertainties
Sales in Germany were slightly below the previous year, in
in the region, demand increased noticeably because of a
line with our expectations. In 2014, like in the previous year,
greater number of infrastructure projects being implemented.
the plants at our headquarters in Schrobenhausen had
Our sales were significantly above the planned targets,
adequate capacity utilization. We are expecting an improve-
delivering a pleasing contribution to earnings. In the United
ment during the current year because of production of two
Arab Emirates, including Dubai, there was a reinvigoration
deep drilling rigs for Saxon Energy Services Inc.
of the construction market. Numerous infrastructure
projects got under way in Qatar. In Saudi Arabia, additional
Sales volumes in Western and Southern Europe were above
machinery was required in particular for the expansion of the
planned values. Alongside good market conditions in Italy,
Holy Mosque in Mecca. Sales in Iraq, however, were weak.
we were above all able to sell some machinery to France,
Overall, the perspectives for the markets in the region are
including several cutters for the expansion of the metro in
once again good.
A highlight was the in-house exhibition, which took place in Schrobenhausen in May 2014. Over four days, more than
1,700 guests from over 70 countries visited the event to find out about the innovations and equipment from
BAUER Maschinen GmbH and its subsidiaries.
33
34
Trend by Segment
relocation to the new plant in Tianjin contributed to this, and
Equipment segment
was completed by October 2013. The new plant’s capacity
was already utilized to a significant extent in 2014, with
Total 612
scope for further growth.
The market in Japan was satisfactory overall. There are once
Germany 118 (19 %)
again major infrastructure projects in the pipeline, which
Africa 9 (1 %)
Americas 96 (16 %)
Asia-Pacific,
Far East &
Australia
177 (29 %)
represent interesting opportunities. Australia proved to be
rather weak, this being a corollary of the weak demand from
the mining industry.
Americas
Although the market situation in the USA improved in 2014,
we were unable to meet our targets entirely despite achieving slight improvements in sales and earnings compared to
the previous year. In the USA, the business is predominantly
characterized by renting equipment to customers. We
took an important step in setting the course for the future
Europe (other)
56 (9 %)
by merging locations of BAUER-Pileco Inc. and BAUER
60 (10 %)
EU (excl. Germany)
96 (16 %)
Manufacturing Inc. at our site in Conroe, near to Houston.
We are expecting this to deliver synergy effects which will
lead to significant cost savings. We were also able to reduce
our rental fleet by selling equipment. Production capacity in
Conroe was not yet adequately utilized in 2014, as a result of
As a result of delays in major projects, we suffered a decline in
which we still recorded a relatively small loss.
sales compared to the previous year in Turkey and Azerbaijan.
The other countries of Central Asia such as Kazakhstan were
In South America, our sales volumes were at a similar level to
influenced by the uncertainty generated by the Russia/Ukraine
those of the previous year. The market in Brazil continued to
crisis. Here, our sales were below the expected levels. As in
perform weakly. Many projects have been postponed here.
the previous years, the Indian market was weak.
Africa
In Africa, we were not quite able to match our sales in the
Markets in the Far East continued to be very positive. We
previous year. Egypt enjoyed positive development because
were able to increase our sales volumes somewhat once
of the growth in the construction market. The remaining
again, achieving a good contribution to earnings. Hong Kong
countries of Africa, however, were weak. There was signifi-
has become an excellent market for our duty-cycle crane
cant reluctance to invest in West Africa, as a result of Ebola,
series. We were also able to achieve good sales volumes in
and the mining industry displayed hardly any demand for
Malaysia, as in Singapore. Here, we were able to sell some
equipment. Production in Botswana, where our joint venture
machines in particular which will be used in the extensive
manufactures blast-hole drilling rigs and well drilling rigs for
expansion of Changi Airport. The Philippines and Indonesia
Southern Africa, failed to meet our expectations in 2014
continue to develop along positive lines.
because of weak markets.
As before, the Chinese market is characterized by significant
Parts & Service
overcapacity, meaning that the competitive situation remains
The Parts & Service business has continued to develop
tight. In spite of these difficult conditions, we succeeded in
steadily over recent years, delivering a good contribution to
achieving a satisfactory contribution to earnings. The smooth
revenues and earnings in the past business year. The spare
Trend by Segment
parts business continues to be positive, whereas demand
applications. During 2014, an increasing volume of large
for drilling tools and add-on units was somewhat weaker.
machine sales was achieved, as well as better sales of
Consequently, revenues and earnings were somewhat down
cutters, leading to increased earnings for the segment.
on the previous year.
Some subsidiaries delivered unsatisfactory performance
Deep drilling
in the past financial year. PRAKLA Bohrtechnik GmbH, a
In May 2014, BAUER Deep Drilling GmbH and Saxon
specialist for well drilling rigs, was confronted by very weak
Energy Services Inc. concluded an engineering contract for
demand, leading to a significant decline in revenues and a
development and manufacturing of onshore deep drilling
negative result. MAT Mischanlagentechnik GmbH, a manu-
rigs with a hook load of 375 metric tons. Saxon Energy
facturer of products for mixing and separating technology,
Services Inc. is a subsidiary of Schlumberger, the worlds's
also recorded a negative result due to poor demand.
largest oilfield service company. Following joint development work, the order for production and sale of two rigs,
In contrast, a good business year with very positive results
designation ATD 750, was signed in December. These will
was experienced by RTG Rammtechnik GmbH, with its pile-
be manufactured in the BAUER Maschinen GmbH plants
drivers and piling leaders, SPANTEC Spann- & Ankertechnik
in Germany and also partially assembled in the US plant
GmbH, which makes anchor products for foundation engi-
in Conroe, near Houston. As a result, we are expecting
neering applications and EURODRILL GmbH, which makes
that capacity utilization, in particular of the plants at our
rotary drives and hydraulic hammers. KLEMM Bohrtechnik
Schrobenhausen headquarters, will be increased during
GmbH, a manufacturer of anchor drilling technology, once
the current year.
again slightly increased its revenues in 2014.
Additionally, a sales contract was signed at the end of
Outlook
2014 for the two already completed TBA 300/440 M1 and
Overall, the Equipment segment was able to perform
TBA 440 M2 rigs. A 100 metric ton rig will also be delivered
positively in 2014 amongst conditions characterized by
to China in 2015.
fierce competition and some difficult markets. The nearly
stable sales volume with an increase in earnings as well as
As a result, the Deep Drilling business has taken a major
the trends in Deep Drilling were very pleasing. On the other
step forward. Work is in progress towards certification by
hand, the results recorded by some subsidiaries as well
the American Petroleum Institute (API), and is expected
as capacity utilization at the plants, which is still too low,
to be completed in 2015. This would open up new sales
imposed a burden.
opportunities.
The business remains significantly affected by short-term
Products & subsidiaries
customer orders, representing a major challenge for produc-
BAUER Maschinen GmbH manufactures rotary drilling
tion planning which has to look many months ahead as a
rigs (the BG series), duty-cycle cranes (the MC series) and
result of delivery lead times for purchasing. The markets in
cutters (the BC series) at a number of plants. The BG series
the Middle East should post a continued rising trend and
is the most important and extensive machine range, and is
increased demand, whereas the Russian market will tail off
divided in two product lines: the ValueLine rigs are optimized
markedly. For 2015, we are expecting that revenues, EBIT
for kelly drilling, while the PremiumLine rigs are multifunction
and profit after tax will be slightly up on the previous year.
units for a wide variety of specialist foundation engineering
35
Trend by Segment
RESOURCES SEGMENT
Resources key figures
in EUR '000
2013 *
2014
Change
188,861
252,830
33.9 %
Sales revenues
182,579
195,860
7.3 %
Orders received
180,054
255,837
42.1 %
Orders in hand
150,020
153,027
2.0 %
EBIT
-23,965
15,932
n/a
Net profit or loss
-31,444
4,347
n/a
1,449
1,400
-3.4 %
Total Group revenues in the Resources segment grew
levels in the areas of environment and water treatment.
significantly by 33.9 percent from EUR 188.9 million to
Reorganization of the Resources segment proceeded
EUR 252.8 million. Sales revenues grew by 7.3 percent
intensively in 2014. The previous split into the business areas
from EUR 182.6 million to EUR 195.9 million. Segment
Materials, Exploration & Mining Services and Environment
EBIT was once again significantly positive following the
has been replaced by a regional sales organization which is
loss made during the previous year (EUR -24.0 million),
functionally supported by competence centers. In the regions
at EUR 15.9 million. The net profit for the period was
of America, Europe and Africa as well as the Middle East &
EUR 4.3 million (previous year: EUR -31.4 million).
Asia, the subsidiaries now operate as full-line providers of all
products and services offered by the Resources segment.
The key results of the segment were significantly influenced
The competence centers of Water Treatment, Process and
by a one-time income. The increase in total Group revenues
Biotechnology, Environmental Rehabilitation and Waste
contains an income item from sale and consolidation
Management, Drilling Technologies as well as Well Drilling and
amounting to EUR 36.5 million resulting from the sale of
Geothermal pool their expertise and support the subsidiaries
21 percent of the shares in our subsidiary BAUER Nimr LLC
in carrying out projects.
in Oman. The shareholding up to that point was 70 percent.
The company’s principal activity involves operating the large-
Germany & Europe
scale reed-bed treatment plant under an operating contract
The GWE Group offers solutions for well-drilling and geother-
set to last a further 15 years. Without sale of these shares,
mal, for which purpose it manufactures products for devel-
the EBIT and the net profit for the period would have been
opment, delivery and distribution of water and geothermal
in the red as a result of negative earnings contributions –
energy. Following weak performance in the previous year,
specifically from the subsidiaries in the area of exploration
some restructuring measures were initiated and are still in
and mining services – and as a result of expenditure for the
progress. These measures, as well as stagnating markets in
reorganization of the segment.
Europe, had an impact on results which remained negative.
Above all because of growth in Germany, Austria, Swit-
The Resources segment is undergoing reorganization and
zerland and new customers in the energy sector, it proved
adjustment to the changed market situation following the
possible to increase revenues slightly. Business improved on
loss it suffered in 2013. The loss was above all due to a
the whole, but work is continuing on optimizing costs.
major project in Jordan, as well as weak demand for well
construction materials and from the mining area. The signifi-
The Polish subsidiary, which produces and sells well
cant increase in revenues during 2014, even without taking
construction materials, was able to increase revenues slightly
account of the sale of shares, is above all due to good order
year-on-year despite operating in a stagnating market
BAUER Umwelt GmbH conducted replacement drilling for a customer in Coswig, near Dresden. A total of about 45,000 t of
soil material were disposed of. A BG 40 rig with a large bore diameter of 2,000 mm was used. More than 400 bores were drilled
down to a drilling depth of 17 m.
37
38
Trend by Segment
recent years, it has been possible to expand projects with
Resources segment
customers from the automotive industry in particular, which
were handled successfully. There are still good prospects for
Total 249
the future here.
In 2014, Esau & Hueber GmbH, a specialist for brewery,
Germany 133 (54 %)
beverage and biotechnology, achieved revenues which were
Africa 4 (2 %)
Americas 8 (3 %)
Asia-Pacific,
Far East &
Australia
1 (0 %)
both above target and higher than the previous year thanks
to good demand for brewery technology and systems for the
pharmaceuticals industry. The result was also significantly
improved. An expansion to capacity has already been com-
Middle East &
Central Asia
78 (31 %)
pleted, and will result in further improvements in production.
The order books of our foreign subsidiaries reveal a highly
diverse situation. In Italy, revenues were at the level of the
previous year in spite of project delays. The result improved.
Two Resources companies in Spain were merged. There has
been a slight uptick in the market for environment and water
there. Some activities, including those in Hungary, will not be
continued as a result of unsatisfactory developments.
Europe (other)
5 (2 %)
EU (excl. Germany)
20 (8 %)
FORALITH Drilling Support AG, a specialist for deep and
extended-reach exploration drilling based in Switzerland,
was able to carry out some projects successfully in Europe
during the past business year; as a result, it improved its
environment, and consequently also improved its result. In
revenues and earnings. BAUER Foralith GmbH had to
Hungary, revenues and earnings were on target, at the level
absorb significant burdens due to drilling rigs with underused
of the previous year. The sales company in France increased
capacity. In future, the activities of both companies will be
its revenues and earnings despite a difficult market situation,
more closely meshed, so that synergy and cost effects can
but nevertheless failed to meet its targets.
be leveraged more effectively.
BAUER Umwelt GmbH is a central provider of products and
The Resources segment also incorporates the Mining division
services for environmental technology in Germany. In 2014,
of SCHACHTBAU NORDHAUSEN GmbH. It proved possible
it was able to increase its revenues significantly, thereby
to increase revenues once again as a result of the very vigorous
exceeding the planned goals. The result was also improved,
market. Alongside many projects in Germany, a considerable
with a healthy positive performance. It was possible to carry
order is being handled in Kazakhstan. In spite of a fine that
out numerous projects, above all in the areas of remediation
imposed a significant burden on the area, it was possible to
of polluted sites and waste mangement. Orders in hand
report a positive result.
continued to be at a high level, as a result of which further
positive development is expected.
Middle East & Asia
The Site Group for Services and Well Drilling Ltd. Co. in
BAUER Water GmbH plans, builds and installs water treat-
Jordan is still undergoing reorganization following the loss
ment plants for customers all over the world. Following a
incurred during the major Disi-Amman project in 2013.
weak first half of 2014, revenues were significantly increased
Following completion of this project, it did not prove possible
in the second half. The result improved markedly following a
to find another use for the drilling rigs used there because
loss in the previous year, and is now showing a surplus. Over
the decisions on some very interesting projects were post-
Trend by Segment
poned due to the political situation in the region. As a result,
subsidiary in Ghana was able to increase its revenues
revenues and earnings were significantly below the planned
year-on-year; it also improved its result.
targets. We are expecting new projects and better capacity
utilization for the current year.
Americas
Our subsidiary, which produces and sells well construction
The subsidiary in the United Arab Emirates is active above
materials in Chile, suffered from weak demand from the
all in the environmental sector. It developed pleasingly and
mining sector. Revenues were down on the previous year,
is handling an increased number of projects for the oil and
and the result was slightly negative.
gas industries. Revenues were up on the previous year. In
Saudi-Arabia, activities are still at the beginning, but this
Activities in Peru were terminated and the subsidiaries in
market does offer good opportunities. Drilling activities in
Canada closed.
Australia have been brought to a close.
Reorganization
The operative business of BAUER Nimr LLC in Oman
The reorganization of the segment that was started in 2014
focused primarily on operation of the large-scale reed-bed
entailed some fundamental changes. In future, we will
treatment plant which processes water contaminated with
pursue the strategy of concentrating even more on core
oil for the local oil company. Following an expansion last
competences at the same time as focusing on the greatest
year, 115,000 m3 of water is being purified there every day.
potential markets. This goes hand-in-hand with a consolida-
At the end of 2014, 21 percent of the shares in the BAUER
tion and cessation of some businesses and subsidiaries.
Nimr LLC subsidiary in Oman were sold. This led to a high
The restructured regional sales organization – supported by
one-off income for the Resources segment in the Group's
competence centers described above – is intended to push
consolidated financial statements.
ahead with this strategy rapidly.
Africa
By the time the reorganization is finished, Resources
The mining markets have been weak for quite a long time,
should have become a full-service provider focusing on
and there has been little demand for exploration work;
environmental technology, water and natural resources for
as a result of this, 2014 was unsatisfactory for our drilling
industrial customers, predominantly from the oil, gas and
companies. A slight upturn only became apparent at the
mining industries.
end of the year. In Africa, as a result, our activities were
restructured and a new strategy was initiated for operating
Outlook
in the markets.
The extensive reorganization of the segment will continue
until the end of 2015. We are expecting the situation to
In Morocco, our subsidiary has specialized in undertaking
improve for our drilling companies during the current year.
irrigation projects which allowed it to improve its revenues
We continue to see significant opportunities in the environ-
year-on-year. Further opportunities are apparent in this area.
mental field, as well as in water treatment. For 2015, we are
Earnings failed to meet expectations.
assuming that revenues will be well above the level of the
previous year. The absence of the one-off income for 2014
In South Africa, revenues were significantly down on the
deriving from the sale of shares as well as charges incurred
previous year, and earnings were negative as a result. In
during the reorganization mean that the EBIT should be
future, activities in Senegal will be looked after from Ghana.
slightly in the positive area, whereas it is currently expected
As a result of favorable orders at the end of the year, our
that the profit after tax will be slightly negative.
39
Trend by Segment
OTHER/CONSOLIDATION SEGMENTS
The Other and Consolidation segments bundle the revenues
profit for the period of EUR 4.9 million (previous year:
and earnings of the Group which cannot be allocated to the
EUR 6.0 million) includes EUR 1.6 million comprising the
operating segments. The Other segment essentially comprises
net profit of BAUER AG disregarding the aforementioned
the revenues of the parent company BAUER AG itself,
payments. The segment’s revenues are especially generated
generated from a wide variety of administrative services
by intra-Group charges.
provided to Group subsidiaries.
The Consolidation segment reflects the consolidation
>>>
40
The Other segment reports EBIT of EUR 3.3 million (pre-
within the Group. The negative EBIT of EUR -4.8 million
vious year: EUR 5.1 million). This includes EUR 5.0 million
(previous year: EUR -4.5 million) largely matches the
of dividend payments by Group subsidiaries to the parent
EUR 5.0 million of dividend payments by Group sub-
company. Part of the fine resulting from proceedings against
sidiaries to BAUER AG. The net loss for the period was
one of our companies has also been posted here. The net
EUR -4.9 million (previous year: EUR -4.5 million).
SPESA Spezialbau und Sanierung GmbH did remediation work on a ski jump in Oberhof in Thuringia for the first time. To secure
the slope of the main jump against sliding, a shotcrete plate was installed at an inclination of approximately 37 degrees and
deep-anchored with 36 soil nails.
Trend by Segment
Breakdown of total Group revenues across the companies of the BAUER Group
Shareholdings < 50 % are listed with their revenue share
in EUR million
2013 *
2014
186.7
232.1
17.5
14.5
BAUER Spezialtiefbau GmbH - Group
BAUER Spezialtiefbau GmbH, Schrobenhausen, Germany (BST)
Wöhr + Bauer GmbH, Munich, Germany (33 % share) – (sub-group consolidated financial statements)
BAUER Funderingstechniek B.V., Mijdrecht, Netherlands
4.8
4.7
BAUER Technologies Limited, Bishops Stortford, UK
43.2
2.6
BAUER Spezialtiefbau Schweiz AG, Baden-Dättwil, Switzerland
15.2
28.6
TERRABAUER, S.L., Madrid, Spain (30 % share)
1.0
0.4
BAUER Magyarország Speciális Mélyépítö Kft., Budapest, Hungary
6.0
7.7
BAUER ROMANIA S.R.L., Bucarest, Rumania
1.9
2.1
BAUER BULGARIA EOOD, Sofia, Bulgaria
1.8
4.5
BAUER SPEZIALTIEFBAU Gesellschaft m.b.H., Vienna, Austria
15.0
14.4
OOO BAUER Technologie, Moscow, Russian Federation
36.7
31.3
BAUER EGYPT S.A.E. Specialised Foundation Contractors, Cairo, Egypt
20.8
22.9
BAUER LEBANON FOUNDATION SPECIALIST S.a.r.l., Beirut, Lebanon
11.3
16.5
BAUER Georgia Foundation Specialists LCC, Batumi, Georgia
BAUER International FZE, Dubai, United Arab Emirates
BAUER Geotechnical Specialized Foundation LLC, Abu Dhabi, United Arab Emirates
BAUER International Qatar LLC, Doha, Qatar
3.0
3.3
35.5
37.0
8.3
20.7
8.0
13.8
Saudi BAUER Foundation Contractors Ltd., Jeddah, Saudi Arabia
25.3
10.8
BAUER (MALAYSIA) SDN. BHD., Petaling Jaya, Malaysia - (sub-group consolidated financial statements)
95.4
84.7
BAUER Hong Kong Limited, Hong Kong, People’s Republic of China
41.6
45.3
BAUER Vietnam Ltd., Ho Chi Minh City, Vietnam
3.1
2.9
BAUER Foundations Philippines, Inc., Quezon City, Philippines
15.9
10.2
P.T. BAUER Pratama Indonesia, Jakarta, Indonesia
26.0
30.2
Thai BAUER Co. Ltd., Bangkok, Thailand
17.6
21.2
BAUER Foundation Australia Pty Ltd., Brisbane, Australia
13.8
6.7
BAUER FOUNDATION CORP., Odessa, Florida, USA
48.9
42.2
BAUER Foundations Canada Inc., Calgary, Canada
19.1
9.1
BAUER FUNDACIONES PANAMÁ S.A., Panama City, Panama
11.9
11.7
Other BST shareholdings
16.3
17.2
Joint ventures, Germany - (BST share only)
6.4
2.0
Intra-Group sales
-84.3
-93.9
BST Group total
673.7
657.4
102.1
107.3
30.1
33.8
SCHACHTBAU NORDHAUSEN GmbH - Group
SCHACHTBAU NORDHAUSEN GmbH, Nordhausen, Germany (SBN)
SBN participations
Joint ventures SCHACHTBAU NORDHAUSEN GmbH - (SBN share only)
SPESA Spezialbau und Sanierung GmbH, Schrobenhausen, Germany
Joint ventures SPESA - (SPESA share only)
1.7
0.0
17.0
14.2
5.1
6.7
Intra-Group sales
-61.3
-59.0
SBN Group total
94.7
103.0
BAUER Maschinen GmbH - Group
BAUER Maschinen GmbH, Schrobenhausen, Germany (BMA)
391.7
383.3
KLEMM Bohrtechnik GmbH, Drolshagen, Germany
39.9
42.9
EURODRILL GmbH, Drolshagen, Germany
13.1
12.4
RTG Rammtechnik GmbH, Schrobenhausen, Germany
28.4
26.4
Compared to the breakdown of total Group revenues by segment, in the breakdown of total Group revenues by company the total of the individual groups is shown
after consolidation.
41
Trend by Segment
Continued: Breakdown of total Group revenues across the companies of the BAUER Group
Shareholdings < 50 % are listed with their revenue share
in EUR million
2013 *
2014
BAUER Maschinen GmbH - Group
MAT Mischanlagentechnik GmbH, Immenstadt, Germany
12.3
11.8
PRAKLA Bohrtechnik GmbH, Peine, Germany
27.9
13.0
Olbersdorfer Guß GmbH, Olbersdorf, Germany
7.4
7.9
18.5
21.5
SPANTEC Spann- & Ankertechnik GmbH, Schrobenhausen, Germany
BAUER Deep Drilling GmbH, Schrobenhausen, Germany
TracMec Srl, Mordano, Italy
0.0
1.3
12.1
11.4
BAUER EQUIPMENT UK LIMITED Rotherham, UK
7.9
7.4
BAUER Macchine Italia Srl, Mordano, Italy
8.3
13.1
15.5
7.8
OOO BAUER Maschinen - Kurgan, Kurgan, Russian Federation
OOO BAUER Maschinen Russland, Moscow, Russian Federation
7.8
5.6
OOO BG-TOOLS-MSI, Lyubertsy, Russian Federation
2.9
1.6
BAUER Equipment Gulf FZE, Dubai, United Arab Emirates
5.5
8.4
BAUER Casings Makina Sanayi ve Ticaret Limited Sirketi, Ankara, Turkey
5.5
3.9
BAUER-DE WET EQUIPMENT (PROPRIETARY) LIMITED, Rasesa, Botswana
2.6
2.1
120.9
152.9
BAUER Technologies Far East Pte. Ltd., Singapore, Singapore - (sub-group consolidated financial statements)
NIPPON BAUER Y.K., Tokyo, Japan
7.9
7.3
BAUER-Pileco Inc., Conroe, Texas, United States of America
68.9
76.3
BAUER Manufacturing Inc., Conroe, United States of America
22.9
22.2
Other BMA participations
17.1
11.5
Intra-Group sales
-229.2
-220.5
BMA Group total
615.8
631.5
9.6
29.6
51.0
56.0
BAUER Resources GmbH - Group
BAUER Resources GmbH, Schrobenhausen, Germany (BRE)
GWE pumpenboese GmbH, Peine, Germany
GWE Prakla Services GmbH - merged with GWE pumpenboese GmbH
2.2
0,0
BAUER Umwelt GmbH, Schrobenhausen, Germany (BMU)
42.7
54.8
BAUER Water GmbH, Dunningen, Germany
13.5
13.5
Esau & Hueber GmbH, Schrobenhausen, Germany
11.5
15.4
BAUER Foralith GmbH, Schrobenhausen, Germany
5.9
5.1
GWE POL-Bud Sp.z.o.o, Lodz, Poland
2.9
3.1
FORALITH Drilling Support AG, St. Gallen, Switzerland
2.9
5.1
BAUER Ambiente S.r.l., Milan, Italy
1.4
1.4
GWE Budafilter Kft., Mezöfalva, Hungary
3.1
3.2
BAUER Resources GmbH / Jordan Ltd. Co., Amman, Jordan - (sub-group consolidated financial statements)
20.7
29.9
BAUER Nimr LLC, Maskat-Al Mina, Sultanate of Oman
11.8
17.4
BAUER Emirates Environment Technologies & Services LLC, Abu Dhabi, United Arab Emirates
3.3
4.8
BAUER Technologies South Africa (PTY) Ltd., Johannesburg, South Africa (sub-group consolidated financial statements)
4.2
2.4
BAUER RESOURCES GHANA LIMITED, Accra, Ghana
1.4
2.5
GWE Tubomin S.A., City of Santiago, Chile
3.5
3.3
BAUER Resources Canada Ltd., Edmonton, Canada - (sub-group financial statements)
3.1
1.2
Other participations of BRE
8.1
7.3
Joint ventures BAUER Umwelt GmbH - (BMU share only)
0.0
4.6
Intra-Group sales
-27.9
-34.9
BRE Group total
174.9
225.7
37.0
37.1
BAUER Aktiengesellschaft, Schrobenhausen, Germany (BAG)
Other participations of BAG
2.3
2.3
Intra-Group sales
-94.2
-96.8
GROUP TOTAL
1,504.2
1,560.2
The Magdeburg Waterway Construction Authority is conducting remediation work on the Zerben lock on the Mittelland Canal.
Since March 2013, Bauer has carried out 10,000 m² of diaphragm wall, 20,000 m² of sheet pile walls, 930 buoyancy piles and
505 ground anchors as part of a joint venture. The work was concluded in November 2014.
43
Earnings, financial and net asset position
IV. EARNINGS, FINANCIAL AND NET ASSET POSITION
Orders in hand/orders received by segment
in EUR '000
2013
2014
In hand
Received
In hand
Received
Backlog of orders in hand in
months in relation to total
Group revenues 2014
Construction
498,701
727,287
450,940
665,244
7.6
Equipment
116,525
632,053
158,720
693,967
2.9
Resources
150,020
180,054
153,027
255,837
7.3
0
-54,915
0
-57,387
---
765,246
1,484,479
762,687
1,557,661
5.9
Intra-Group revenues and
IFRS adjustments
Total
TREND IN ORDERS
Orders in hand in the international specialist foundation
At the end of 2014, the BAUER Group held orders in hand
engineering business fell by 24.8 percent to EUR 271.0
totaling EUR 762.7 million, which is approximately at the
million owing to the completion of large-scale projects. The
previous year’s level of EUR 765.2 million. On the whole,
foundations of the bridge between Hong Kong and Macau,
orders in hand remain at a good level overall but some
and further work on the building complexes adjoining what
events in 2014 have also had a negative effect on this. There
will soon be Europe’s tallest building, the Lakhta Tower in
would have been more orders in hand by the end of the year
St. Petersburg, Russia, have been completed successfully.
had it not been for the crisis involving Russia and Ukraine,
The diaphragm walling works on the Center Hill dam in
uncertainties in Iraq resulting from the Islamic State terror
the USA will be completed in the second quarter of 2015.
organization and the drop in the oil price.
A major diaphragm walling project on Mauritius has reached
a very advanced stage, and it will be possible to complete
The Construction segment had orders of big projects on
it towards the middle of 2015. A particularly positive aspect
its books last year. These have now been finished. Conse-
is the situation of our subsidiary in Egypt which, despite
quently, orders in hand declined significantly by 9.6 percent
the difficult situation in the country, has been able to attract
from EUR 498.7 million to EUR 450.9 million. In 2014, there
some very interesting, large-scale projects, enabling us to
were hardly any major orders on the market, whereas many
predict an increase in its revenues.
small and medium projects were picked up in all regions of
the world. The homogeneous regional distribution over the
The Construction and Environmental Technology divisions of
world is positive, and so this represents a good basis for
SCHACHTBAU NORDHAUSEN GmbH have orders in hand
reaching the objectives for 2015.
totaling EUR 47.5 million, 10.5 percent up on the previous
year’s level. Business operations are currently benefiting from
In Germany, specialist foundation engineering business
the generally favorable development in the construction market
has experienced a significant decline in its orders in hand
in Germany.
following processing of the major project for the bypass rail
link between Hanau and Nantenbach. At present, there are
Orders in hand in the Equipment segment of EUR 158.7 mil-
hardly any major projects on the market even in Germany.
lion are 36.2 percent up on the previous year’s level of EUR
Nevertheless, the overall environment continues to be
116.5 million. BAUER Maschinen GmbH itself produces and
positive, as a result of which it has been possible to occupy
sells large machines, and delivered a large proportion of its
capacity with a large number of small and medium projects.
orders by the end of the year; orders in hand fell from EUR
Total orders in hand in this area have fallen by 34.5 percent
50.1 million to EUR 37.2 million in consequence of this. The
to EUR 62.2 million.
business remains very short-term in nature. The majority of
Our customer Bachy Soletanche sunk piles with a diameter of 1,050 mm to a depth of over 20 m using a BG 46 in double-head
mode for the Puddington Mill London train station.
45
46
machines are delivered within one month of being ordered.
With regard to the Group as a whole, orders in hand are in
As a result, it is necessary to keep a stock of machines
line with our forecast for slight growth in the current year.
available, so as to meet customers’ expectations for rapid
delivery.
GROUP EARNINGS POSITION
The Group earnings position in 2014 was influenced by
However, the subsidiaries in the segment recorded significant
contradictory developments compared to the previous year.
growth. BAUER Deep Drilling GmbH sells deep drilling rigs
Our construction subsidiary, BAUER Foundation Corp. in the
and succeeded in growing its orders in hand by EUR 53.7 mil-
USA, recorded significant losses amounting to EUR 19.0 mil-
lion thanks to orders received in December. It is very pleasing
lion. These arose from the major Center Hill dam project
that we have managed to make a significant breakthrough
and due to the lack of capacity utilization, because that
here. In spite of turbulence in the oil markets, we are assuming
project meant it was not possible to process sufficient other
that we will be able to build on this success in coming years.
orders. Furthermore, weak order levels in the UK as well as
Overall, the many efforts by our company to improve and
inadequate utilization of our drilling capacity in the Resources
specialize products and services are being welcomed by our
segment – especially in Jordan – negatively influenced the
customers, so we are confident of achieving the necessary
earnings position. Furthermore, our worldwide activities were
order intake for the current year.
burdened by restructuring measures in many areas. However, there were also many positive developments, especially
In the Resources segment, orders in hand increased
the construction business in Germany, Russia, the United
slightly, by 2.0 percent, from EUR 150.0 million to EUR
Arab Emirates, Saudi Arabia, Indonesia and Thailand. In the
153.0 million. Of that total, a significant proportion – worth
Equipment segment, we were able to achieve better margins
EUR 40.9 million – was held by the Mining division of
once again due to increased sales of large and special rigs.
SCHACHTBAU NORDHAUSEN GmbH. We have interesting
The Environment area was also highly positive.
projects, in both Kazakhstan and Germany, which can
provide us with work for years to come.
Overall, the positive overall result could only be posted
because we compensated for special losses during the
The orders in hand of the BAUER Resources Group itself
year by means of a one-off income item amounting to EUR
have increased by 7.3 percent to EUR 112.1 million. In
36.5 million. The one-off income item was derived from the
Environmental Technology, in particular, our levels of orders
sale of 21 percent of the shares in our subsidiary in Oman.
in hand are very healthy. We are still involved in our large-
As a result of the sale, our holding fell to 49 percent; this
scale project of operating the reed-bed treatment plant in
triggered de-consolidation and the investment therefore had
Oman, and it will provide us with plenty of work for years to
to be posted at the year end at-equity in relation to the fair
come. Our capacities are also being well utilized in Germany.
value. The company had undergone excellent development
Conversely, the well-engineering materials business is very
in recent years, and its future prospects are very bright.
short-term in nature, so there are never high levels of orders
The reduction to a 49 percent shareholding is a sensible
in hand. We expect these levels to remain consistent. The
measure, because majority locally owned companies in
exploration and mining business for our customers remains
Oman have better chances of winning orders.
problematic in many different countries around the world.
Mine operators are faced with economic problems, as a
As a result of the one-off income item, it was possible to im-
result of which very few contracts are being awarded. That
prove the results figures compared to 2013. In consequence,
business accounts for only a very small proportion of our
the net profit for the period increased compared to the
total revenues however. Major projects are continually arising
previous year from EUR -19.4 million to EUR 15.7 million.
around the world for the Resources segment to target. We
therefore remain convinced that this business especially will
EBIT increased from EUR 30.1 million to EUR 76.4 million.
continue to provide us with interesting opportunities in future.
EBITDA increased by 37.9 percent from EUR 124.0 million
to EUR 171.0 million, representing 11.4 percent (previous
Other income rose very significantly against the previous
year: 8.6 percent) of consolidated revenues.
year, from EUR 30.6 million to EUR 89.0 million. The main
change in other income is due to the overall effect of selling
The pre-tax return on equity as the ratio of pre-tax profit
21 percent of the shares in BAUER Nimr LLC amounting to
to shareholders’ equity (equity at the start of the period)
EUR 36.5 million and the associated fair-value reporting of
improved against the previous year from -1.3 percent to
the remaining shares. Other key changes to this item related
9.0 percent. The return on equity after tax was 3.7 percent
to realized and unrealized foreign currency gains as well as
(previous year: -4.2 percent). The return on sales after tax
gains from foreign exchange forward contracts, which overall
(relative to the consolidated income statement revenues)
increased by EUR 23.1 million to EUR 34.6 million compared
improved from -1.3 percent to 1.0 percent year-on-year.
to the previous year. Realized and unrealized foreign
We expect to be able to improve our returns further in the
currency gains and losses as well as gains and losses from
coming years.
foreign exchange forward contracts result from our currency
hedge management activities. Fluctuations in hedged and
There have been substantial changes to some income
unhedged currencies can cause the corresponding income
statement items in the year under review. This is largely a
statement items to vary widely over the years depending on
consequence of the negative result in the previous year and
trends. The unbalanced statement of exchange rate shifts
the special influences in the financial year.
results from the situation that exchange rate hedging cannot
always be set exactly against the underlying transactions,
The individual income statement items are summarized in
even though in operational reality they are aligned as closely
the following.
as possible to each other. The Group’s objective is to undertake exchange rate hedging which rules out the possibility
Consolidated revenues rose by 4.0 percent against the
of foreign currency gains or losses as far as possible. The
previous year (EUR 1,447.5 million) to EUR 1,506.0 million.
countering item in an amount of EUR 29.8 million (realized
This includes a sale and consolidation income from the at-
and unrealized foreign currency losses and losses from
equity balancing of BAUER Nimr LLC in Oman with EUR 36.5
foreign exchange forward contracts) is entered under “Other
million. Without this special effect, consolidated revenues
operating expenses”. The difference between the gains and
would have grown by 1.5 percent.
losses shows that we experienced overall foreign currency
gains of EUR 4.8 million in the year under review. The
Sales revenues were down slightly by 1.9 percent
considerable fluctuations in exchange rates towards the end
compared to the previous year (EUR 1,402.2 million) at
of the year were the main cause of this positive result. The
EUR 1,375.7 million.
other major items under “Other income” are income from
insurance refunds (EUR 1.8 million), book profits on asset
The other capitalized goods and services for own
disposals (EUR 5.4 million) and other operating income
account item decreased by 23.4 percent from EUR
distributed amongst the companies.
19.2 million to EUR 14.7 million. The reduction is due to
our restrained investment policy in 2014.
Trend in total Group revenues by quarter
in EUR million
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Full year 2014
BAUER Group
378.076
371.139
413.948
397.057
1,560.220
Construction
176.504
174.944
181.805
179.752
713.005
Equipment
165.806
155.534
186.148
144.284
651.772
Resources
48.409
52.547
59.615
92.259
252.830
-12.643
-11.886
-13.620
-19.238
-57.387
Other/Consolidation
47
48
Costs of materials hardly changed during the year under
described under “Other income”, which contributed to an
review at EUR 749.2 million. Costs of materials on projects
increase in the item at EUR 8.6 million.
in the Construction segment vary widely, so comparisons
between individual years are only possible to a very limited
Financial income fell by 8.2 percent from EUR 7.7 million
extent.
to EUR 7.1 million. Financial expenses fell by 0.9 percent
from EUR 45.5 million to EUR 45.1 million. The slightly higher
Personnel expenses increased by 3.6 percent to EUR
conditions from the syndicated loan concluded in April 2014
355.3 million – a slightly lower rate than the consolidated
were able to be compensated by slightly lower utilization of
revenues. The rise is largely explained by higher personnel
the other lines during the course of the year, as well as by
expenses for our major projects in Hong Kong, the USA and
some interest rate reductions.
Switzerland.
The share of the profit or loss of associated companies
The decline in depreciation of fixed assets by 1.2 percent
accounted for using the equity method is EUR 2.3 mil-
to EUR 78.8 million is due to the absence of write-downs of
lion below the previous year at EUR -0.6 million, largely due
goodwill and a slight increase in write-downs of development
to a write-down of the investment in Spain (EUR -2.3 million).
costs and properties and buildings.
Income tax expense of EUR 22.1 million was EUR 8.6 milWrite-downs of inventories due to use reflect the use of
lion above the previous year’s level. The main reason for
rental equipment made available to our customers. This equip-
the significant rise is a consequence of the loss incurred on
ment does not form part of the fixed assets, but is recognized
the Center Hill dam project in the USA. In this case, it was
under inventories. The reason for this approach is that most of
not possible to report corresponding deferred tax assets,
this equipment remains within the company only for a relatively
because from the current perspective there is no reason to
short time. The aim of the rental operation is to subsequently
expect that the loss can be compensated within a reason-
sell the equipment under a rental-purchase agreement. As
able period of time by profits earned locally. Negative result
the equipment has to be financed correspondingly on the
contributions from subsidiaries in individual countries only
Equity and Liabilities side of the balance sheet, its depreciation
have the effect of reducing the tax burden on the Group if
forms part of the company’s EBITDA. As a consequence of
it has been possible to establish deferred tax assets on the
the changes in the market following the financial crisis, our
basis of positive tax-related earnings planning. In future, we
customers are increasingly entering into these rental transac-
once again expect an income tax burden of between 30 and
tions. The write-downs due to use increased by 11.2 percent
40 percent.
to EUR 15.8 million during the year under review.
The non-controlling interests in profit/loss item was EUR
Other operating expenses rose by 2.5 percent to EUR
1.2 million (previous year: EUR -2.5 million). The companies in
230.5 million. The many individual components of this item
Oman and Egypt contributed significantly.
develop in very different ways depending on the course
of business and the mix of the order portfolio. This item
The profit attributable to BAUER AG shareholders was
includes the realized and unrealized foreign currency losses
EUR 14.5 million.
EBIT trend by quarter
in EUR million
Q1 2014
Q2 2014
Q3 2014
BAUER Group
4.919
8.684
24.689
Construction
1.418
6.000
Equipment
5.647
7.527
Resources
-2.118
Other/Consolidation
-0.028
Q4 2014
Full year 2014
38.134
76.426
12.900
4.750
25.068
12.720
11.023
36.917
-1.163
-2.378
21.591
15.932
-3.680
1.447
0.770
-1.491
GROUP FINANCIAL AND NET ASSET POSITION
require financing across the Group’s many construction
With consolidated revenues up 4.0 percent on the previous
sites corresponding to roughly three months’ sales of
year, the Group’s net assets fell 0.7 percent from EUR
the Construction segment. So we are always billing after
1,585.8 million to EUR 1,575.1 million. The equity ratio of
carrying out the works. Moreover, we also have to finance
26.6 percent was slightly up on the previous year (25.5 per-
retentions of payment as safety.
cent). The loss in 2013 meant that the equity ratio fell below
30 percent in the previous year. The significant effects from
The situation in the Equipment segment is similar. Produc-
the interest-related increase in defined benefit plans impacted
tion lead times for our specialist machinery are around
equity and meant we were unable to increase our equity
12 months. Since customers usually only order equipment
ratio further in 2014. We are aiming to achieve a value in
once they have an actual contract to fulfil, and so expect
excess of 30 percent in coming years. All investment and
short delivery lead times from us, we are forced to hold
growth plans of the business are aligned to this target.
stocks of finished machinery. And since we also offer a
very wide product range – as is likewise demanded by the
The net debt of our business decreased by 3.9 percent in
market – our financing needs are increased correspondingly.
the year under review. In the coming years, we will continue
The working capital also covers the machines we rent out
to work intensively on reducing net debt in relation to net
to customers, or which are only bought by customers after
assets. We must stress, however, that in view of the nature
a certain rental period based on a rental-purchase agree-
of our business and the current economic climate, that
ment. With worldwide inventories now extending to several
is only possible to a certain extent. The reasons for the
thousand Bauer machines, many of our locations have to
considerable rise over recent years following the financial
hold considerable stocks of spare parts in order to provide
crisis are detailed below:
customers with the necessary service backup.
The level of net debt within the Group depends essentially
Nevertheless, we judge that the working capital of the
on the working capital, as the intangible assets as well
BAUER Group is currently too high in relation to our busi-
as the property, plant and equipment and the investment
ness volumes. Our levels of inventories, finished goods and
property are very largely covered by the shareholders’
receivables have increased beyond the normal bounds.
equity and defined benefit plans. The working capital
This is not good, but on the other hand is explainable,
of our businesses is inevitably relatively high due to the
because we are aware of the reasons why it is so: they
nature of our business model and the special market in
reflect market trends as well as a number of special effects.
which we operate. Our construction projects run for only
Furthermore, substantial amounts are imposing a burden,
comparatively short periods of time. As opposed to build-
as claims in respect of supplementary work on completed
ing construction contractors, who work on longer-running
international construction projects are having to be asserted
projects, we only sometimes receive advance payments for
by legal action. Even though the amounts are recognized
the construction project in question to generate a positive
with due commercial caution in the accounts, they are
cash flow over the term of the project. Short-running
nevertheless imposing a burden in terms of the indebted-
construction contracts – such as we mostly carry out –
ness of the business.
Exchange rate trend 2014
1 EUR corresponds to
Average rate
2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Average rate
2014
USD
1.3301
1.3782
1.3692
1.2632
1.2166
1.3219
GBP
0.8497
0.8266
0.8008
0.7792
0.7818
0.8028
RUB
42.5912
48.4270
46.5654
50.0110
67.5895
51.5000
CNY
8.1686
8.5735
8.4918
7.7596
7.5550
8.1575
49
50
We are aware that the Group’s higher financing requirements
On the Assets side:
place greater weight on the question of our in-house financing
• Intangible assets declined by EUR 0.9 million. At the
capabilities. Following the loss made in 2013, the equity ratio
same time, concessions and industrial property rights fell
has fallen too low, so it will have to be increased again in the
by EUR 0.9 million.
years ahead. It would be much higher if the hidden reserves
were included. Since changing over to IFRS we have used
• Land, land rights and buildings declined by EUR
the historical cost model to value land and buildings. With a
5.0 million to EUR 206.6 million. Only small building
carrying amount for the land and buildings of EUR 206.6 million,
projects were undertaken during the financial year. In
there is a considerable reserve here.
the USA, the premises of BAUER-Pileco Inc. were sold
and the company relocated to the works of BAUER
The net debt to EBITDA and EBITDA to net interest coverage
Manufacturing Inc. in Conroe near Houston. A hall and an
ratios agreed with lenders as covenants have worsened
office were set up there for this purpose.
since the financial crisis, and especially as a result of the loss
made in the 2013 financial year. In 2014, it was possible to
• Payments on account and assets in course of
move the net debt to EBITDA ratio to an acceptable level
construction increased by EUR 2.9 million. The increase
at 3.78, representing a significant improvement compared
should be seen in connection with the land, land rights
to the previous year (5.42). The two other agreed covenant
and buildings item, because some of the structures had
ratios – EBITDA to net interest coverage and equity ratio –
not been finished at the year-end.
are adequately within the agreed thresholds. The Group has
entered into covenants in respect of a number of long-term
• Technical equipment and machinery decreased
loans, which were valued as per the 2014 year-end at EUR
by EUR 8.3 million to EUR 206.2 million. This is a
156.0 million. The covenants on them stipulate net debt to
consequence of the cautious investment strategy we are
EBITDA ratio thresholds between 4.0 and 5.0.
currently pursuing. Basically, however, the shift in demand
on international construction markets means that our
construction works require increasingly large machinery
Covenants trend
2013
2014
and equipment. Consequently, small equipment is
Net debt/EBITDA
5.42
3.78
increasingly being replaced by much larger machinery,
EBITDA/net interest coverage
3.28
4.49
leading to a general increase in fixed assets. They were
Equity ratio in %
26.5
26.6
nevertheless reduced in the past financial year.
In April 2014, we agreed a three-year syndicated loan with a
consortium of the company's main banks providing a EUR
• Other equipment, factory and office equipment
decreased by EUR 2.2 million to EUR 25.1 million.
450 million credit facility. This also includes threshold values
for the net debt to EBITDA and the EBITDA to net interest
Property, plant and equipment and investment
coverage ratios and for the equity ratio. This provided the
property were reduced overall by EUR 12.6 million to
firm a new financing structure which will form the basis for
EUR 446.9 million.
planning going forward. The syndicated loan also replaced
loans affected by the breaking of covenants in the previous
• Investments accounted for using the equity method
year. The new financing structure imposes slightly higher
increased by EUR 29.7 million to EUR 42.9 million. The
financing costs on the Group.
main changes involved the increase in investments in
joint ventures by EUR 0.9 million, the write-down on a
With regard to the individual items on the balance sheet, the
Spanish investment amounting to EUR 2.3 million and the
following material changes should be noted:
new at-equity balancing of BAUER Nimr LLC in Oman at
EUR 31.1 million.
Assets
Equity and liabilities
Non-current assets
EUR 418.9 million (26.6 %)
EUR 594.8 million (37.8 %)
(2013: EUR 419.8 million (26.5 %))
(2013: EUR 587.8 million (37.1 %))
Non-current liabilities
Current assets
EUR 523.3 million (33.2 %)
EUR 938.5 million (59.6 %)
(2013: EUR 382.5 million (24.1 %))
(2013: EUR 940.8 million (59.3 %))
Current liabilities
Liquid funds
EUR 632.9 million (40.2 %)
EUR 41.8 million (2.6 %)
(2013: EUR 783.5 million (49.4 %))
(2013: EUR 57.2 million (3.6 %))
EUR 1,575.1 million
• Deferred tax assets increased by EUR 4.7 million to
EUR 1,575.1 million
segment, due among other factors to a somewhat weaker
EUR 31.0 million. The greatest change in this context
year-end business in the Equipment segment. However,
arose from the interest-related revaluation of defined
we will continue to work diligently on reducing this item.
benefit plans, leading to additional deferred tax assets
amounting to EUR 9.0 million.
• Receivables from construction contracts (PoC) decreased by EUR 11.0 million to EUR 132.2 million. Changes
• Receivables from concession arrangements have
been omitted due to the explained sale of shares in
in this item result from the percentage of completion of our
projects at the year-end closing date.
BAUER Nimr LLC as at 31 December 2014.
• Trade receivables increased by EUR 8.9 million to
• Other non-current financial assets increased by EUR
EUR 311.4 million.
23.0 million to EUR 28.4 million. The main change here
concerns a loan by BAUER Resources GmbH to BAUER
Nimr LLC amounting to EUR 9.4 million for financing the
• Other current assets decreased by EUR 2.1 million to
EUR 28.6 million.
water treatment plant in Oman as well as the outstanding
purchase price receivable from the sale of the shares in
BAUER Nimr LLC amounting to EUR 13.3 million.
• Raw materials and supplies increased 5.9 percent
• Other current financial assets increased by EUR
0.5 million to EUR 20.1 million.
• Cash and cash equivalents decreased by EUR 15.4 mil-
compared to the previous year, by EUR 8.7 million to
lion to EUR 41.8 million. Attempts are made to minimize
EUR 155.3 million. Around 40 percent of this item relates
this figure at the year-end by appropriate liquidity manage-
to the Construction and Resources segments.
ment.
• Work in progress and finished goods and merchan-
In assessing the Assets side of the consolidated balance
dise increased 4.1 percent from EUR 272.7 million to
sheet, it is important to note that this is composed of a
EUR 283.9 million. During the financial year, it was not
Construction element (relating to the Construction and
possible to reduce inventories further in the Equipment
Resources segments) and an Equipment element (relating to
51
52
machinery manufacturing operations). Some specific items
netted against the associated deferred tax assets (EUR
relate primarily to the Construction element, while others, in
-23.2 million).
contrast, relate to the Equipment element. The main items of
such kinds are listed in the following:
• Non-controlling interests decreased by EUR 3.2 million
to EUR 19.6 million, chiefly due to the de-consolidation of
• Within property, plant and equipment, well over two
BAUER Nimr LLC.
thirds of the land, land rights and buildings item relates to
the Equipment segment. On the other hand, about three
• The non-current portion of liabilities to banks in-
quarters of the technical equipment and machinery item is
creased from EUR 247.8 million to EUR 364.8 million.
attributable to the Construction segment.
The increase is largely due to drawings on the agreed
syndicated loan.
• Some 60 percent of the raw materials and supplies
item is linked to the machinery manufacturing operations
of the Equipment segment.
• Non-current defined benefit plans increased by EUR
34.7 million to EUR 116.4 million. The increase is largely
due to the lower discount rate, which is now 2.0 percent.
• Some 90 percent of the work in progress and finished
The annual injection from ongoing pension commitments
goods and merchandise item relates to the Equipment
only contributed to the increase to a small extent. Overall,
segment, with a small percentage attributable to the
this has a negative effect on the equity ratio.
Construction and Resources segments. In the Equipment
segment, it is essential to successful selling operations
• Deferred tax liabilities decreased by EUR 1.8 million.
to maintain stocks of rental equipment as part of current
assets, so that customers can try out the machinery
• The current portion of liabilities to banks declined
before making their final purchasing decision. Equipment
from EUR 427.6 million to EUR 266.5 million as a result
can also be drawn from the pool to cover short-term
of the increase in non-current financing and the lower
capacity bottlenecks on construction sites. The machinery
utilization of financing overall. Financing decreased
in production at the balance sheet date also represents a
by EUR 44.1 million overall in terms of current and
very substantial capital tie-up.
non-current liabilities to banks. Taking into account the
decrease in the “Cash and cash equivalents” item (EUR
• Receivables from construction contracts (PoC) are
15.4 million), the decrease was EUR 28.7 million. It was
attributable to the Construction and Resources segments.
possible to reduce indebtedness in spite of the difficult
The trade receivables item is broken down according to
market environment.
the respective segments’ shares of total Group revenues.
• Liabilities from construction contracts relate primarily
These different weightings are barely relevant to inter-period
to construction projects on which the payments received
balance sheet comparisons when the rate of growth – either
surpass the work carried out. They increased by EUR
positive or negative – of the business areas is roughly the
15.6 million to EUR 48.5 million.
same.
• Trade payables decreased by EUR 25.5 million to EUR
On the Equity and Liabilities side:
169.0 million. By this practice we are able to make use of
• Shareholders’ equity decreased slightly by EUR
all discounting opportunities.
0.9 million to EUR 418.9 million. Factors contributing
to this change were the net profit for the period (EUR
15.7 million), currency fluctuations (EUR 10.5 million) and
the interest-related adaptation in defined benefit plans
• Other current liabilities decreased by EUR 1.2 million to
EUR 68.6 million.
• Other current financial liabilities increased by EUR
• The decrease in trade receivables and in receivables
13.6 million to EUR 25.7 million. This is chiefly due to
from construction contracts resulted in a release of funds
liabilities from forward exchange transactions, an increas-
totaling EUR 44.9 million in contrast to a capital tie-up of
ing number of which were concluded at the year-end as a
EUR 87.3 million in total in the previous year.
result of currency fluctuations.
• The increase in inventories impacted on operating cash
The ratio of net assets to consolidated revenues decreased
flow in the amount of EUR 37.3 million.
from 109.6 percent to 104.6 percent.
Cash flow from investment activities totaled EUR -47.5 milNet cash from operating activities shown in the cash flow
lion, decreasing by EUR 19.7 million below last year’s figure,
statement increased substantially from EUR 38.4 million to
especially due to the reduced investment activity.
EUR 115.4 million. The following factors contributed to this
change:
The outflow of funds from financing activities was EUR
-86.9 million. The main factors influencing this were loan
• Owing to the effects set out under “Earnings”, a pre-tax
repayments amounting to EUR 237.8 million and interest
profit of EUR 37.8 million was made compared to a loss of
payments of EUR 43.0 as well as new indebtedness to
EUR 6.0 million in the previous year.
banks in the amount of EUR 202.3 million.
• Depreciation on fixed assets decreased slightly by EUR
0.9 million, and contributed EUR 78.8 million to the inflow
of funds from ongoing business activity.
53
54
Financial Statements of BAUER Aktiengesellschaft
V. FINANCIAL STATEMENTS OF BAUER AKTIENGESELLSCHAFT
The annual report combines the Group management report
and the management report of BAUER AG as the parent
• The operating result improved by EUR 0.5 million to
EUR -0.2 million.
company. Consequently, notes on the balance sheet and
income statement of BAUER AG (acc. to German Commer-
• The net profit for the year is EUR 5.9 million, EUR
cial Code, HGB) are presented at this point. They changed
0.8 million up on the previous year. No dividend was paid
materially in the following items in the past financial year
in the 2014 financial year, as a result of which the net
relative to the previous year.
earnings available for distribution increased significantly
from EUR 27.4 million to EUR 33.3 million.
Main changes to the balance sheet:
• Receivables and other assets increased by EUR
The payment of dividends to shareholders is based on the
31.9 million. This is primarily down to the EUR 32.0 million
net earnings of BAUER AG as the parent company, taking
increase in receivables from affiliated companies, which
into account the Group’s consolidated earnings. The divi-
results from the issue of more loans to subsidiaries.
dend policy of BAUER AG is one of continuity, meaning that
in principle a dividend should be paid even in difficult years,
• Shareholders’ equity increased from EUR 155.3 million
where financially justifiable. As the Group’s holding company,
to EUR 161.2 million. The reason for this was the net
BAUER AG is dependent on the earnings of its subsidiaries,
earnings available for distribution, being EUR 5.9 million
and additionally provides financing to them.
higher than in the previous year.
Following a difficult financial year, the planned after-tax result
• Liabilities increased from EUR 137.1 million to EUR
in the Group could only be achieved by means of a one-off
161.9 million. The main factor responsible for this was the
income. We believe it is appropriate to allow our sharehold-
growth in liabilities to banks by EUR 43.5 million, which
ers to participate in this, so we intend to pay a small dividend
chiefly resulted from the new syndicated loan. On the
again. At the same time, we are still intensively pursuing the
other hand, liabilities to affiliated companies declined by
objective of improving the equity ratio. The Management
EUR 18.9 million.
Board will therefore recommend to the Supervisory Board
that it propose to the Annual General Meeting that a dividend
Main changes to the income statement:
of EUR 0.15 be paid to shareholders on the net earnings
• Sales revenues, primarily related to charging of adminis-
available for distribution totaling EUR 33,349,700.22.
trative services to subsidiaries, decreased slightly by EUR
An amount of EUR 30,780,050.22 should therefore be
0.5 million. On the other hand, other income increased
carried forward.
markedly by EUR 3.6 million, chiefly due to income from
forward exchange transactions.
As the Group’s holding company, BAUER AG receives
earnings in particular from its subsidiaries. In 2015, dividend
• Other operating expenses rose by EUR 2.9 million.
payments from the subsidiaries will be somewhat lower
Significantly higher expenses were incurred during the
than in the year under review. The intention is to reduce the
financial year in currency management. In addition, there
burden on the subsidiaries’ capital base. For this reason,
were special expenses as a result of the syndicated loan.
the result in the financial statements for BAUER AG will be
somewhat decreased.
Sustainability
VI. SUSTAINABILITY
SUSTAINABILITY WITHIN THE BAUER GROUP
of the holding companies have the main responsibility for the
The BAUER Group has combined its most important action
long-term development of the company as well as its direc-
areas under the maxim “BAUER’s Triple A”. The slogan is
tion with regard to quality, safety, health and environmental
based on the highest grade given by rating agencies when
protection. These topics are also discussed during monthly
evaluating the strength of a company. It is used to reflect
group meetings.
the areas of utmost concern with the Group. The first of
these is Health, Safety and Environment, which has grown
At the meeting of the Corporate Social Responsibility (CSR)
significantly in recent years through various measures and
Committee, the Executive Board and representatives of
should continue to be expanded. The second area is Quality
Human Resources, HSE, Training and Corporate Commu-
and Ethics. We want to offer our customers the highest
nications departments of BAUER AG come together once a
quality possible and treat our stakeholders with fairness. The
year to discuss current developments and define actions and
third A stands for performance thus the company’s financial
goals. The annually published Sustainability Report, which
success. The goal is to earn the highest grades – all A’s –
since 2011 meets the requirements of the Global Reporting
in each area.
Initiative (GRI), provides in-depth information about these
actions and goals.
EMPLOYEES
Every single employee is extremely important in reaching
the common goals of the BAUER Group. Thanks to their
commitment and experience, in 2015 we can look back on
Performance
Health
Safety
Environment
a successful history that spans 225 years. That’s precisely
why developing and supporting our staff is our top priority.
Employee-related data
The actions areas defined under BAUER’s Triple A also
The companies of the BAUER Group worldwide employed
represent the core aspects of sustainability management.
10,405 people (previous year: 10,264) on average over the
The Group Management Board and the Managing Directors
year. They are broken down as follows:
Value added 2014
in EUR million
Value added
439
Minority interests
1
Profit
Share(in the
holders
company) 2
14
Other expenses
231
Depreciation and amortization
95
Public purse
22
Interest
expenses
45
Employees
355
Cost of materials
749
55
56
Sustainability
Construction segment: 5,675 (previous year: 5,531)
workforce of the companies in Germany decreased slightly.
Equipment segment: 3,038 (previous year: 2,998)
One of our key goals is to retain the loyalty of our core
Resources segment: 1,400 (previous year: 1,449)
permanent workforce, which we again succeeded in doing in
BAUER AG and subsidiaries: 292 (previous year: 286)
the past year.
The trend in workforce numbers within the Group was in line
The workforce of the Resources segment was reduced
with our expectations. Changes to subsidiaries’ workforce
due to some restructuring measures, the reorganization and
numbers were primarily recorded outside of Germany, linked
as a result of weakness in the mining sector. The subsidiaries
to international construction projects. Individual contracts
in Jordan (35 employees) and South Africa (30 employees)
often facilitate major changes.
played a significant part in the reduction during the year
under review.
By the nature of its operations, the workforce of the Construction segment is subject to the greatest fluctuation
Education
dependent on the number of major projects being handled
At Bauer, we care about inspiring young people to work
in specific countries. Consequently, the biggest growth was
for our company and maximize their potential. That’s why
achieved by the subsidiaries in Egypt (124 employees),
we offer a variety of opportunities for getting to know the
Indonesia (104 employees) and the United Arab Emirates
company better as a potential employer and gaining insight
(44 employees). In some countries, such as Malaysia or
into our business activities. In 2014, Bauer employed 248
Algeria, fewer people were employed in the year under
apprentices in Germany. Most of them were learning to
review than in the previous year owing to the weaker state
become industrial mechanics, construction machinery
of the market. The good overall level of orders in hand
operators, or clerical staff.
led to a slight increase in workforce in Construction, while
the growth above all related to staff recruited for specific
For higher education students, we offer dual-study courses
projects.
in engineering and information technology in cooperation
with the Hochschule Ingolstadt technical college. Students
Workforce numbers in the Equipment segment increased
can also establish initial links with our business through
only slightly. Most of the small rise was attributable to recruit-
internships or by undertaking their Bachelor’s or Master’s
ment of new staff at the production facilities in the Far East
thesis with us.
(17 employees) and Botswana (12 employees). In total, the
Employees by segment
Employees by employment type
12,000
12,000
10,000
9,646
251
1,367
10,253
269
1,578
10,264
286
1,449
10,405
292
1,400
8,000
10,000
8,000
6,000
6,000
4,000
4,000
2,000
5,454
5,113
10,253
239
10,264
240
10,405
248
248
3,371
3,664
3,835
3,948
6,350
6,189
6,209
3,038
2,998
2,952
2,915
9,646
6,027
5,675
5,531
2,000
0
0
2011
Construction
2012
Equipment
2013
Resources
2014
Others
2011
Industrial
2012
Salaried staff
2013
Apprentices
2014
Sustainability
Training and development
personality and skills-based assessment. With this in mind,
The BAUER Training Center GmbH is the Group’s in-house
we work specifically to attract more young women and girls
training facility, providing specially tailored courses both for
to technical professions and promote their advancement in
our own staff and for external target groups. Its extensive
this area.
program of seminars and courses in a wide variety of fields
covers many different subjects. In 2014 the BAUER Training
In 2014, approximately 11 percent of the Group’s workforce
Center GmbH had a budget of around EUR 2.1 million
were women – a figure which essentially reflects the techni-
(previous year: EUR 2.3 million) for employee training and
cal nature of our business and the small numbers of women
development. Almost 2,717 in-house staff (previous year:
who apply for such careers.
2,948) attended the seminars. A total of 475 (previous year:
599) internal and external seminars and external conferences
CAPITAL INVESTMENTS
were attended.
In view of the general economic climate, we reduced our
capital investments compared to previous years in 2014.
We support our employees’ career development through a
For the first time in years, they were once again below
system of reviews, coaching sessions and various mentoring
the level of amortizations. This was possible thanks to
programs. We also conduct international training courses.
extensive investments made in our plants over previous
years. The pace of technological progress in our business
Diversity
has become faster, however, so it will only be possible to
In 2014, the BAUER Group employed people from 76 dif-
improve performance in the future by increasing invest-
ferent nations. Our presence on worldwide markets has
ments again.
brought together people from a wide variety of cultures as
part of our company. Our cooperation is characterized by
For Equipment, our US plant in Conroe near Houston was
mutual respect. Discrimination, particularly on grounds of
expanded in 2014 to allow our subsidiary BAUER-Pileco Inc.
religion, age, gender, race or sexual orientation, has no place
to move there with all its activities in the areas of service,
in our company. That’s why promoting diversity is an integral
sales and spare parts supply. The old site in Houston was
part of our corporate culture.
sold, thereby allowing the new construction to be financed
from the proceeds of the sale. Furthermore, the production
We offer all our employees the same opportunities. In
capacity for our anchor production in Edelshausen was
both hiring and development, we place great emphasis on
expanded in response to the urgent need for greater capacity as a result of very good development in the business. All
further investments were chiefly channeled into modernizing
Employees by region
the equipment available to the production sites.
12,000
Investments in the Resources segment in 2014 were also
10,253
10,000
8,000
9,646
924
478
1,891
6,000
10,264
10,405
965
542
950
612
1,018
586
2,061
2,212
2,290
at a low level. A small hall was built in Schrobenhausen for
stainless steel production to be used in water treatment
and brewery systems. Further investments went into the
modernization of existing production systems.
1,658
1,869
1,584
1,601
4,000
630
726
762
752
2,000
4,065
4,090
4,144
4,158
Further investments were made in equipment, specifically
in the Construction segment, in order to meet the market
demand for ever more powerful machinery to handle specialist projects. We have for years now been seeing a trend
0
2011
2012
2013
2014
Germany
Europe (other)
Far East & Australia
Americas
Africa
towards ever larger volumes in international infrastructure
projects, and we are increasingly needing ever larger
57
58
Sustainability
machinery to carry out the associated specialist foundation
effects are derived with regard to their further development.
engineering works. This demands higher levels of individual
These central components include the hydraulics and drive
investment, but also opens up new market opportunities for
technology, electronics and machine software as well as
us.
gearboxes. Basic research work is also situated in the
central development department.
In financial 2014 the BAUER Group invested a total of EUR
72.7 million (previous year: EUR 103.4 million) in intangible
Development work at the subsidiaries of BAUER Maschinen
assets and property, plant and equipment. Depreciation of
GmbH comes under the described system, in which case
fixed assets across the Group totaled EUR 78.8 million
each subsidiary is individually responsible for its specific
(previous year: EUR 79.7 million). Write-downs of inventories
product group. Our international production sites also have
due to use Group-wide totaled EUR 15.8 million (previous
development areas which concentrate on the needs of our
year: EUR 14.2 million).
customers locally, as well as on special machines that are
manufactured in that location. A development office in India
Additions to the property, plant and equipment assets of
provides support for all development groups if required.
BAUER AG in the 2014 financial year totaled EUR 2.3 million
(previous year: EUR 3.5 million), against depreciation of EUR
Our construction areas also have their own development
2.9 million (previous year: EUR 3.3 million).
capacities. Specifically, BAUER Spezialtiefbau GmbH
operates a department for construction technology which
Ongoing capital investments were funded primarily by cash
develops new methods and conducts fundamental research.
and cash equivalents from business operations and from
financing. In 2015 too, we will keep investments in balance
With regard to research activities that might be of Group-
with amortizations.
wide importance, internal and external orders are placed
for research work via the BAUER Forschungsgemeinschaft
RESEARCH AND DEVELOPMENT
(research community). This gives a chance for blue-skies
The BAUER Group invested substantial sums in developing
thinking to be investigated with regard to its practical
new construction methods and machinery in financial 2014.
applicability. Sometimes, this gives rise to outstanding new
Key areas of focus were heavy-duty rotary drilling rigs, cranes
techniques that help our companies to achieve technological
for specialist foundation engineering applications, drilling tool
advances.
technology, small boring equipment in the field of anchoring
and high-pressure injection, diaphragm wall technology,
This type of overall organization for research and develop-
deep drilling, underwater drilling, and measuring technology
ment work has proven highly effective. Rapid decisions and
for quality control purposes. Many electronic applications
great flexibility allow all products to be kept at the cutting
and techniques have been created or enhanced in order
edge, while new ideas and market requirements can be
to optimize on-site processes.
implemented quickly.
Research and development work in the BAUER Group is
There were some outstanding development projects in 2014
organized on a decentralized basis. In the companies that
as well. For example, Deep Drilling developed a completely
belong to BAUER Maschinen GmbH, there is a separate
new deep drilling rig in the 375 metric ton class together with
development area in each major product group which
our client, Saxon Energy Services Inc. Two rigs were ordered
concentrates entirely on the corresponding equipment such
at the end of the year. Our underwater drilling machines for
as rotary drilling rigs or cranes. The central development
the foundations of wind turbines and underwater turbines
department develops the technologies and components of
also underwent intensive further development. Unfortunately,
a machine that are used in several product groups. Thus, on
we are still waiting for orders to be placed for equipment of
the one hand, the greatest level of standardization amongst
this kind because of sluggish development in the projects
components is achieved, while on the other hand synergy
in question. However, we are convinced that the significant
Sustainability
advantages offered by our machines, particularly with regard
variety of methods, and to produce modern materials for use
to noise emissions and their ability to work under the influence
in geotechnical applications. A state-of-the-art system of
of powerful currents, mean they have excellent chances.
innovation management is practiced with great intensity by
all Group units.
In the area of Premium and ValueLine drilling rigs, parts of the
equipment range have been relaunched and a new uppercar-
In the Equipment segment we invest a good 3.8 percent
riage platform developed. Consistent modularization of the
(including internal and project-related expenditure) of the
products meant that significant advantages were achieved
corresponding portion of total Group revenues in research
with regard to production, scheduling and streamlined global
and development. A staff of 183 people are involved in this
spare parts stocking.
field, as well as outside consulting engineers and interns.
Research and development activities are routinely reviewed
Insights gained from a research project bore fruit during the
and maintained at a high level to keep pace with the ever
previous year in an optional energy efficiency package for
increasing rate of change in market demands. We are also
our rotary drilling rigs which reached market readiness. This
continuing to expand our development departments outside
is highly appreciated by customers all over the world.
of Germany, such as in India and China. This will enable us
to benefit from the large numbers of highly trained engineers
Further developments during the year concerned new well
available on local labor markets.
drilling rigs, components for deep drilling rigs, improvements
to diaphragm wall machines, machines and processes
Research and development expenditure in the Construction
for soil remediation work with restricted overhead height,
segment is 0.4 percent of total Group revenues, and in the
improvements to the duty-cycle cranes to reduce noise levels
Resources segment 0.8 percent. We invest further significant
and a hydraulic hammer for ramming in piles with increased
resources in the preparation and design of construction sites.
frequency.
Profitable construction contracts are very often obtained
on the basis of special proposals on the market. Drawing
For many years now, our products and services have
up such special proposals is development work, and also
extended well beyond the bounds of specialist foundation
provides a competitive edge for future projects on which
engineering. The BAUER Group today is a machinery manu-
the costs cannot be recorded separately from the general
facturer and service provider in all fields dealing with ground
construction works.
and groundwater. Pursuing that strategy, many units within the
Group have been undertaking additional development work,
Of the total research and development costs for 2014 of EUR
such as to design new pipes for underground engineering
27.9 million, an amount of EUR 6.2 million was capitalized
installations, to advance water purification based on a wide
(capitalization rate: 22.2 percent). Depreciation of capitalized
development costs and patents totaled EUR 6.5 million.
Research and development in the BAUER Group
2013
Construction Equipment
Total Group Revenues (in EUR million)
Expenses for R&D (in EUR million)
as % of total Group revenues
Group employees
R&D employees
2014
Resources
BAUER
Group
Construction Equipment
Resources
BAUER
Group
717.3
590.5
196.4
1,504.2
699.0
612.6
248.6
1,560.2
3.1
26.0
3.7
32.8
2.9
23.1
1.9
27.9
0.4
4.4
1.9
2.2
0.4
3.8
0.8
1.8
5,531
2,998
1,449
10,264
5,675
3,038
1,400
10,405
45
190
33
268
41
183
22
246
Patent series
-
-
-
259
-
-
-
260
Patent applications, registered patents, etc.
-
-
-
1,473
-
-
-
1,480
59
60
Sustainability
Our expenditure on research and development is reflected
BAUER Spezialtiefbau GmbH was the first member of the
in 244 (previous year: 259) current patent series, including
BAUER Group to participate in the “Umweltpakt Bayern”
1,392 (previous year: 1,473) patent applications, registered
eco-pact, an environmental initiative between the Bavarian
patents and utility models worldwide.
state government and businesses in the state.
HEALTH SAFETY ENVIRONMENT (HSE)
QUALITY
For the BAUER Group, HSE is an integral element of
Quality is one of the fundamental concerns of top management
everything we do in creating and developing all our products,
in our companies. We must do everything in our power to
specialist services, and business processes. In 2011, we
maintain and, where possible, further develop our customers’
introduced global standards in the area of Health, Safety &
trust in our companies and the quality of our products, services
Environment (HSE), thus creating a uniform HSE management
and equipment, earned over many years. We work hard to
system for all companies of the BAUER Group. By constantly
understand the needs and expectations of our customers so
reviewing our performance and comparing it against our set
we can then meet them quickly, reliably and cost-effectively.
goals and parameters, we seek to continuously improve our
Ethics, health and safety, environmental friendliness, efficiency
HSE system and thus consistently minimize our accident and
and sustainability are all very important factors in meeting these
damage rates. The managerial staff is primarily responsible for
needs.
compliance and execution of the guidelines.
Bauer has had a traditional staff suggestion system in place
We take great care to educate our staff on the topic of
for decades. Recently, an intensively expanded system in the
workplace safety. That’s why we conduct regular training on
Continuous Improvement Process (CIP) has also been a
HSE. Weekly safety meetings are held at our construction
source of new ideas.
sites and all our production facilities. This ensures a better
understanding and greater acceptance of safety guidelines
Our quality management system is based on ISO 9001 as
among our staff.
well other applicable government and industry standards.
We conduct regular audits and benchmark reviews to
Regular reviews and audits confirm the consistent implemen-
make sure we are meeting our planned quality goals. The
tation of our safety standards. Through certifications such
findings from these audits and reviews are incorporated
as OHRIS, OHSAS, AMS-Bau and SCC, we ensure that our
into our regular training programs. We motivate our staff by
safety policies meet the requirements of the International
demonstrating our own commitment to quality, setting chal-
Labour Organization (ILO). We are working on obtaining
lenging goals for them, giving them adequate responsibility
certification for other companies in the Group.
and recognizing good performance. Active cooperation is
essential to meeting our goals in a timely manner.
Environmental management is integrated within the overarching
HSE policy. Here, standards and guidelines have been defined
Our policy is to implement other management systems in the
which apply to all companies in the Group; we continuously
various Group companies alongside quality management to
check that they are being implemented and complied with.
ISO 9001. We aim to assure customer satisfaction, in new
business fields especially, by implementing industry-specific
Some Group locations and companies – including the home
management systems, such as in conformance to API stan-
base Schrobenhausen – already operate environmental
dards for companies with customers operating in the gas and
management systems certified to standards such as EMAS.
oil sector.
Legal disclosures
VII. LEGAL DISCLOSURES
REMUNERATION REPORT
performance is exceptionally good, the said levels may be
The Remuneration Report sets forth the system of remuner-
surpassed by up to 1.8 times.
ation paid to the members of the Management Board and
the total amounts paid to them, and explains the underlying
The short-term criteria applied in setting the variable
principles and amount with regard to the remuneration paid
remuneration elements are the performance of the respective
to the Supervisory Board.
Management Board members in the past financial year and
the economic position of the Group in respect of attainment
Remuneration of the Management Board
of budget targets in the year under review, particularly the
The Management Board of BAUER AG, as previously,
attainment of profit and revenue targets, taking into account
comprised three members in the year under review. The
general economic trends.
Supervisory Board sets the overall levels of remuneration paid
to the individual members of the Management Board based
The long-term criteria applied in setting the variable
on proposals submitted by the Presidial and Personnel Com-
remuneration elements are the success and future prospects
mittee. The plenary Supervisory Board reviews and approves
of the Group and the performance of the Management
the remuneration system for the members of the Management
Board in respect of these criteria. This assessment judges
Board following prior consultations in the Presidial and Person-
the decision-making of the Management Board in terms
nel Committee.
of sustainable business development over the past three
financial years and the effects of this decision-making in
The system of remuneration paid to the members of the
achieving long-term stability for the business. Criteria applied
Management Board did not change from the previous year.
here are long-term profit and revenue prospects, sustainable
The overall levels of remuneration paid to the individual
personnel development in accordance with the future
members are set on the basis of a performance assessment.
prospects of the Group, the development of the corporate
This process assures that the overall remuneration is appropri-
culture, the development of intra-Group collaboration, the
ate to the duties and performance of the Management Board
safeguarding of corporate harmony, strategic market and
member concerned and to the situation of the company. The
product development, risk and security management,
remuneration paid to each Management Board member is
long-term financial stability, and the quality of key financial
composed of non-performance-related components, chiefly
indicators relative to the prevailing economic conditions.
a fixed basic salary, paid in equal monthly installments, and
a performance-related component in the form of a variable
In assessing the appropriateness of the remuneration paid to
annual bonus. This is set by the Supervisory Board on the
the Management Board, the variable remuneration is set and
basis of short and long-term evaluation criteria, in which case
compared in proportion to the fixed basic salary. Further-
the short-term evaluation criteria are equally weighted with the
more, the fixed and variable portions respectively, and the
long-term ones when setting the variable remuneration.
overall remuneration paid, are compared against the normal
levels of remuneration received by management board
The criteria for setting the fixed remuneration to members
members of other stock market quoted companies, and
of the Management Board are the assignment of duties, the
other companies operating in the same sector, or companies
performance of the respective Management Board member,
similar in other ways, in Germany (horizontal comparison).
the economic position of the Group and its profitability and
A vertical comparison is carried out on two levels: firstly, the
ongoing future prospects.
salaries of the Management Board members are compared
against those of the directors of the major BAUER Group
Maximum limits are imposed on the total remuneration
subsidiaries; secondly, they are assessed relative to salary
paid. The variable remuneration paid to each member of
grade A VIII stipulated in the collective pay agreement ap-
the Management Board is limited by an individually defined
plicable within the Group within the industry-wide framework
maximum bonus level. This maximum is the upper limit of
of salary and training remuneration to salaried staff and
potential bonus payment in the normal course of business,
foremen in the construction sector.
and is paid in full if all set goals are attained. If business
61
62
Legal disclosures
The remuneration is further set so as to remain competitive
Remuneration of the Supervisory Board
with that generally paid to highly qualified management staff
The Supervisory Board of BAUER AG comprises 12 mem-
on the market as a whole.
bers. Calculation of the remuneration paid to the members of
the Supervisory Board is specified in detail in the Articles of
The Annual General Meeting held on June 30, 2011 resolved
Association of BAUER AG. Each member of the Supervisory
that the BAUER AG financial statements and the Group
Board receives a basic annual fee of EUR 18 thousand, pay-
consolidated financial statements for the financial years 2011
able in December of each financial year, plus reimbursement
to 2015 would contain no disclosures of the remuneration
of out-of-pocket expenses and any sales tax (VAT) liability
paid to individual Management Board members, thereby
incurred in performing the duties of a Supervisory Board
applying the legal authority assigned to it by section 286,
member. The Chairman of the Supervisory Board receives
subsection 5 and section 314, subsection 2 of the German
twice that amount of remuneration, and the Deputy Chair-
Commercial Code (HGB).
man 1.5 times the amount. The basic remuneration amounts
are increased by 10 percent for each membership of a
The total remuneration paid to members of the Management
Supervisory Board committee, provided that the committee
Board in the year under review, excluding allocations to
in question was convened at least twice in the financial year.
provisions for defined benefit plans, was EUR 1,150 thousand
Membership of the Mediation Committee is excluded from
(previous year: EUR 1,361 thousand). Of that total, EUR
these remuneration provisions. Changes to the Supervisory
1,090 thousand (previous year: 1,056 thousand) was not
Board and/or its committees are taken into account in the
performance-related and EUR 60 thousand (previous year:
remuneration proportionate to the respective member’s time
305 thousand) was performance-related. The total remunera-
in office, and rounded up or down to full months based on
tion includes benefits in kind arising from the private use of
the standard commercial rule. The members of the Supervi-
a company car and reimbursement of expenses for each
sory Board receive no performance-related pay.
member of the Management Board, as well as group accident
insurance premiums and employer’s liability insurance associa-
The net remuneration paid to all the members of the
tion contributions.
Supervisory Board in the 2014 financial year totaled EUR
254 thousand (previous year: EUR 254 thousand).
The company pension scheme for Management Board
members incurred pension service costs totaling EUR
Other
159 thousand (previous year: EUR 118 thousand). The
No loans or advances were paid to members of executive
baseline salary defined for calculating retirement benefits
bodies of the company in the year under review, nor were
is significantly lower in all contracts than the basic salary.
any liabilities entered into in their favor. As a matter of
Calculated in accordance with IAS 19, the defined benefit
principle, no securities-oriented incentive systems exist for
obligation entailed by all pension commitments to members
members of the Management Board or Supervisory Board
of the Management Board at the year-end was EUR 5,531
of BAUER AG, or for Group employees in Germany. BAUER
thousand (previous year: EUR 3,868 thousand).
AG provides D&O (Directors and Officers) group insurance
cover in respect of liability for economic loss to the members
The contracts of Management Board members include
of executive bodies of BAUER AG and of all affiliates in
individual severance clauses regulating the specific terms
Germany and internationally in which a majority share is
of premature termination, with settlements oriented to
held. The D&O policy includes an appropriate excess for
the length of service of the Management Board member
the insured parties. For the members of the Management
concerned and gauged so as not to exceed an amount of
Board, the minimum excess stipulated by law of 10 percent
two years’ remuneration for any one Management Board
of the loss up to at least an amount representing one and a
member. No provisions for compensation in the event of
half times the fixed annual remuneration of the Management
a takeover offer being made have been agreed with the
Board member concerned was agreed in the D&O insurance
members of the Management Board.
policy in the year under review.
Legal disclosures
Remuneration Supervisory Board (not including sales tax proportion and reimbursement of expenses)
in EUR '000
2013
2014
38
38
27
27
20
20
Chairman
Dr. Klaus Reinhardt
Deputy chairman
Robert Feiger
Employer representatives
Dr.-Ing. Johannes Bauer
Dipl.-Ing. (FH) Rainer Schuster
18
18
Dipl.-Ing. (FH) Elisabeth Teschemacher
18
18
Gerardus N. G. Wirken
20
20
Prof. Dr. Manfred Nussbaumer
20
20
Employee representatives
Dipl.-Volkswirt Norbert Ewald
20
20
Dipl.-Kfm. (FH) Stefan Reindl
9
18
Regina Andel
18
18
Dipl.-Ing. Gerold Schwab
20
20
Dipl.-Ing. (FH) Walter Sigl
Reinhard Irrenhauser
Total *
9
0
18
18
254
254
* As a result of rounding to EUR thousands, there was a rounding difference of EUR thousand in 2013 and 2014.
The members of the Management Board are required to
Composition of subscribed capital
limit the extent to which they take on Supervisory Board
The subscribed capital (share capital) of BAUER AG remains
mandates and other administrative or voluntary functions
unchanged at EUR 73,001,420.45 and is divided into
outside of the company. The members of the Management
17,131,000 no-nominal-value bearer shares, representing
Board may not, without the consent of the Supervisory
a pro rata amount of approximately EUR 4.26 per share
Board, carry out any trade or business or conduct, on their
of the total share capital. Each share entails equal rights,
own or a third-party’s account, any dealings in the sector
and entitles the holder to one vote at the Annual General
in which the company operates. Further, they may not,
Meeting, with the exception of share categories precluded
without the consent of the Supervisory Board, become a
from voting by law pursuant to section 136 of the German
management board member, director or personally liable
Stock Corporation Act (AktG) and section 28 of the German
shareholder of any other trading company. This ensures that
Securities Trading Act (WpHG).
no conflict arises with the assigned duties of the Management Board member either in relation to time commitment or
As in the previous year, 51.81 percent of the shares were
to remuneration received. No separate remuneration is paid
in free float. The members of the Bauer family and the
for the assumption of executive or supervisory mandates on
BAUER Stiftung, Schrobenhausen, own a total of 8,256,246
the boards of Group companies.
no-nominal-value shares in BAUER AG on the basis of a
pool agreement, representing a 48.19 percent share in the
STATUTORY DISCLOSURES REGARDING TAKEOVERS
company. The pool agreement provisions include binding
The following disclosures are made pursuant to section 315,
voting commitments as well as restrictions on the transfer-
subsection 4 and section 289, subsection 4 of the German
ability of pool members’ shares. No other direct or indirect
Commercial Code (HGB) as per December 31, 2014.
holdings of BAUER AG share capital exceeding 10 percent
63
64
Legal disclosures
of the voting rights are known to the company. None of the
stock market, the acquisition price (excluding ancillary costs)
shareholders have special rights entailing controlling powers.
may be no more than 10 percent above or 20 percent below
Nor does any voting rights control exist on the part of the
the price determined by the opening auction on the trading
employees holding shares in the capital.
day for shares in the company in Xetra trading (or a comparable successor system) on the Frankfurt Stock Exchange.
Authority of the Management Board to issue or buy
If the acquisition is effected by means of a public tender
back shares
offer, the purchase price or the limits of the purchase price
Article 4, paragraph 4 of the company’s Articles of Association
span per share (excluding ancillary costs) may be no more
Board states that the Man-agement Board is authorized, with
than 10 percent above or 20 percent below the average of
the consent of the Supervisory Board, to increase the share
the closing prices per share in the company in Xetra trading
capital once or more than once up to June 27, 2017 by up
(or a comparable successor system) on the three trading
to a total of EUR 7.3 million by the issue of new no-nominal-
days prior to the day of issue of the public tender offer. If not
value bearer shares against cash and/or non-cash contribu-
insignificant variations of the decisive share price occur after
tions. To that end, the Management Board is authorized,
the day of issue of the public tender offer, the purchase price
with the consent of the Supervisory Board, to exclude the
may be adjusted.
legal subscription rights of shareholders in the following
cases:
The Management Board shall be authorized to appropriate
shares in the company acquired pursuant to the above au-
• in the event of capital increases against non-cash contributions,
thorizations for all legally admissible purposes. Consequently,
the acquired shares may also in particular be sold by means
other than by way of the stock market or by means of an
• in the event of capital increases against cash contributions
offer to the shareholders, if the shares are sold for cash at a
where the issue amount of the new shares issued is not
price (excluding ancillary costs) not materially below the stock
materially below the market price of the already quoted
market price of shares of the company carrying the same
shares at the time of definitive setting of the issue price
rights at the time of the sale in Xetra trading (or a comparable
and the shares issued excluding shareholders’ subscrip-
successor system). The shares may also be sold in return for
tion rights pursuant to section 186, subsection 3, clause
non-cash payment, provided this is done for the purpose of
4 AktG do not in total exceed 10 percent of the existing
effecting company mergers or acquiring companies, parts
share capital either at the time this authority takes effect or
of companies, shareholdings in companies or other assets.
at the time of exercising this authority. Shares which have
The aforementioned shares may be redeemed without need
been or are to be sold or issued in direct or corresponding
of a further Annual General Meeting in order to approve the
application of section 186, subsection 3, clause 4 AktG
redemption or its execution. With regard to use of the bought-
while this authority is in place until such time as it is exer-
back shares, the authorization provides, in specific cases, for
cised, pursuant to other authorities, excluding subscription
legal rights of subscription of shareholders to be excluded. The
rights, are to be set off against the said 10 percent limit,
facility to acquire treasury stock has not been utilized to date.
• to balance out fractional amounts.
Appointment and termination of appointment of
Management Board members, amendments of the
By resolution of the Ordinary Annual General Meeting held
Articles of Association
on June 26, 2014, the company was authorized to acquire
The appointment and termination of appointment of
treasury stock, over a limited period up to June 25, 2019,
members of the Management Board of BAUER AG is
representing up to a total of 10 percent of the company’s
regulated by sections 84 and 85 of the German Stock
share capital at the time the resolution was passed. The
Corporation Act (AktG) and sections 30 ff. of the German
shares shall be acquired at the discretion of the Manage-
Co-determination Act (MitbestG) in conjunction with Articles
ment Board by means of a public tender offer or by way of
5 and 6 of the company’s Articles of Association. Pursuant
the stock market. If the acquisition is effected by way of the
to the company’s Articles of Association, the Management
Follow-up Report
Board comprises at least two persons, who are appointed
lender to terminate its loan commitments in the event of a
by the Supervisory Board for a maximum term of office of
change of control or if control is gained by a third party. As
five years. At present the Management Board comprises
defined by this syndicated loan agreement, a change of
three members appointed by the Supervisory Board and
control is defined as a situation in which the total sharehold-
a Chairman of the Management Board, as well as a Labor
ing held by the pooled members of the Bauer family directly
Director. It is permissible to re-appoint or extend the appoint-
amounts to less than 40 percent of the capital shares or
ment of a member of the Management Board for a further
voting rights in BAUER AG. A third party gains control if,
maximum term of office of five years. Any appointment
overall, more than 50 percent of the capital shares or voting
or re-appointment requires a decision by the Supervisory
rights in BAUER AG is held directly or indirectly by one or
Board, which may be taken no earlier than one year prior to
more persons acting jointly (with the exception of the pooled
the end of the relevant term of office. The Supervisory Board
members of the Bauer family).
may rescind an appointment to the Management Board or
an appointment as Chairman for good cause. The Presidial
Furthermore, several long-term loans with balances totaling
and Personnel Committee of the Supervisory Board prepares
EUR 146.0 million as per the balance sheet date, agreed
the Supervisory Board’s decisions on the appointment and
by BAUER AG together with other Group companies as the
termination of appointment of Management Board members
borrower and guarantor, provide for a right of termination
and concerns itself with the long-term planning of successor
for cause by the lender in the event of a change of control
members for appointment to the Management Board.
in BAUER AG. A change of control is considered to have
taken place where a third party, not forming part of the circle
In accordance with section 119, subsection 1 clause 5 and
of existing main shareholders, directly or indirectly acquires
with section 179 AktG, the amendment of the Articles of
control of at least 30 percent or the majority of voting shares
Association is passed by the Annual General Meeting with
in BAUER AG. Any loaned amounts would have to be repaid
a majority of at least three quarters of the share capital
in the event of termination. The terminated credit line would
represented at the vote. Pursuant to Article 12 of the Articles
no longer be available for new borrowing.
of Association, the Supervisory Board is authorized to pass
amendments to the Articles of Association which relate only
Additional short- and long-term loan agreements also exist
to its wording. The Supervisory Board is further authorized to
within the Group which provide for a right of termination for
adapt the wording of Article 4 of the Articles of Association
cause, at market terms, in the event of a change of control.
(amount and division of the share capital) following full or
partial execution of the increase in share capital or on expiration of the authorization period according to the respective
utilization of the authorized capital.
Change of control
VIII. FOLLOW-UP REPORT
BAUER AG, together with other Group companies, has
concluded a syndicated loan agreement providing a credit
No matters of special note occurred after the end of the
line of up to EUR 450 million; this contains provision for the
financial year.
65
IX. RISK AND OPPORTUNITY REPORT
RISK REPORT
BASIC PRINCIPLE OF RISK MANAGEMENT
improve its efficacy. Moreover, our auditors review on an
As part of our business activities, we are exposed to risks
annual basis the extent to which our existential risk early-
inherent to our operations. Running a business requires
warning system is fit for purpose. Their suggestions are
taking risks. True risks result from unforeseeable events
incorporated in order to improve the system. The process
that can bring both hazards and opportunities along
steps involved in risk management are: identification, as-
with them. Therefore, at Bauer, risk management means
sessment, control of measures and monitoring.
not just reducing the hazards but also knowing how to
take advantage of the opportunities. The purpose of risk
For the identification of risk, risk categories are defined
management is to protect our business objectives, increase
and assigned to specific areas of risk. This defines areas of
the value of our company and reduce the costs of risk. Risk
focus. Risk categories defined by the BAUER Group are:
management involves identifying, analyzing, evaluation and
strategic risks; market risks; financial market risks; political
monitoring existing and anticipated risks along the entire
and legal risks; organizational and governance risks; risks
value chain and devising actions to deal with them. This
arising from the value creation chain; and risks of the sup-
involves assessing external risks potentially impacting on our
porting processes. These risks are grouped as latent risks
businesses, as well as risks arising internally. Our system of
and managed in a unified process within the framework of
risk management is based on a fundamentally risk-averse
our risk management system. Conversely, project risks are
approach, meaning that we aim primarily to safeguard
managed according to their nature and significance by an
against impending risks rather than to exploit opportunities
additional, independent process.
for short-term gain. As a general rule, we do not take risks
that threaten the existence of the company.
The process of identifying and assessing latent risks is
reviewed once yearly at management meetings within the
Risk management system
relevant Group companies, and is implemented jointly by
Our risk management system is based on the risk policy
departmental and central function heads as well as through
defined by the Management Board, and regulates the
individual specialists. This process ensures that potential
handling of risks within the BAUER Group. It defines a unified
new risks and opportunities are submitted for review at
methodology applicable to all segments and their member
management level, and are included in follow-up reporting if
companies. It is continually reviewed and adjusted as
considered relevant. Structured risk identification is followed
required.
by risk assessment based on a scale of relevance.
Our risk management system is an integral element of our
Relevant risks above a certain threshold value are quantified
overall management system and, like all our management
based on scenarios. Planning risks are estimated on the
systems, serves as an instrument of value- and success-
basis of empirical values, applying standard deviations. Risks
oriented corporate governance. Audits routinely verify its
from within the subgroups are consolidated at Group level.
implementation, and management reviews continuously
Relevance scale of the BAUER Group
Relevance
Extent of losses
(in EUR '000)
Definition
Identified risks
Risks with this relevance are identified
in our business
1
up to
8,000
Insignificant to low risk
2
up to
20,000
Medium risk
3
up to
50,000
Significant risk
4
up to 100,000
Serious risk
5
above 100,000
Critical risk
We do not see risks with this relevance
in our business
Our customer Jafec – Japan Foundation Engineering Co., Ltd. – produced 120 piles for the construction of a 14-story hospital with
two basement levels. A BG 28 and a BG 30 were used for the work.
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68
Following assessment, risk-specific management measures
class. Secondly, it is based on potential harm identified in
are defined. Where possible and useful, we have taken out
relation to the project, with the worst-case outcome serving as
appropriate insurance cover in respect of potential damage
the decisive factor. The risk classes defined by this process
and liability risk, in order to reduce our risk exposure and
are taken into account at fixed cost surcharges to cover the
avoid, or at least minimize, potential losses. Responsibility
identified risks.
for monitoring risk lies with the risk managers.
The system has been developed over a number of years
The effects of individual risks are aggregated in the context
across the corporate units faced by the relevant project risks
of corporate planning by means of risk simulation. This
and expanded to apply to the relevant operations.
means that the income statement for a given financial
year is played through several thousand times in indepen-
Risks
dent simulations based on random figures (Monte Carlo
In the following we set forth risks which may have a significant
simulation).
impact on our financial and earnings position and on our
reputation, and assess the relevance to our business. The
Risk analysis is conducted on at least a yearly basis. Yearly
breakdown follows the same risk categories as we apply
reports are submitted to the Management Board and
in our risk management system. The areas of risk are
Supervisory Board. The system is continually being updated
aggregated. Unless otherwise specified, all risks set out
and continuously improved both qualitatively and structurally
in the following relate to all our segments.
in terms of the integration of more Group companies. To
communicate acute risks, the routine risk analysis is supple-
STRATEGIC RISKS
mented by immediate reporting. Our risk management
Segmental structure
system covers both risks and opportunities.
We counter the strategic risks arising from the segmental
structure of the Group by dividing it into separate Construc-
Handling of project risks
tion, Equipment and Resources segments, thereby pursuing
Project risks are the principal performance risks, and thus
the aim of greater independence from the economic cycles
are an integral element in the work of the Construction and
of the construction industry.
Resources segments, wherever construction work or plant
assembly is carried out on the customer’s premises. Associ-
Frequent acquisitions and new company start-ups in
ated risks, such as in relation to the ground and resulting
the Resources segment entail the risk of misjudgment of
from the individual character of each individual project –
partners as well as difficulties in integrating the companies
including contract, timetable and damage risks – can thus
concerned into the BAUER Group. We counter this risk by
accumulate detrimentally in specific cases in such a way
employing thorough due diligence and intensive monitoring
that they may threaten the existence, if not of the Group as
during the integration phase.
a whole, at least potentially of smaller subsidiary companies.
In respect of all relevant projects above low threshold
The Equipment segment’s move into deep drilling and the
values, prior to submission of quotes all conceivable risks
manufacture of machinery for mining applications will also
and opportunities are systematically identified, analyzed
further reduce its dependence on the Construction segment.
and assessed, and appropriate measures are defined to
We class the risks associated with the structure of our
minimize risks and track opportunities.
business as medium.
Each project is assigned to a risk class and organizationally
Strategy development and implementation
escalated according to its risk class, and is thus subject to
The goals for the various strategic areas of action and the
a strict approval process. Risk classification is based, firstly,
implementation of the resultant measures are reviewed at
on defined checklists applying the K.O. principle, in order to
regular intervals. Consequently, we regard the risks relating
prevent inadvertent assignment to an inappropriately low risk
to strategy development and implementation as low.
MARKET RISKS
Despite the overcapacity and associated pressure on
Selling market risks
margins in China, we have been able to maintain our
It has always been one of our key strategic principles
market position based on the recognized high quality and
to counter risks on our selling markets by means of a
still clear technical edge of our machinery. The lack of
multi-segment organization. Whereas our machinery
market experience of Chinese manufacturers, combined
manufacturing business is still heavily influenced – if at a
with the facts that the quality of their products remains
delay – by economic trends in the construction sector, the
significantly lower and their after-sales service is generally
establishment of the Resources segment has enabled us to
of a less developed nature, has to date impeded exports
isolate part of our business from the effects of construction
of Chinese construction machinery on a grand scale to the
cycles much more effectively. Our strategy of spreading
markets of relevance to us. A number of smaller Chinese
business in each segment across a large number of mar-
competitors have already been forced out of market as
kets worldwide further reduces the overall risk, so that no
a result. This risk is rated as low in the short term, but
serious risk is posed to the Group as a whole in the event
medium in the medium term.
of any weakening or collapse of individual regional markets.
Moreover, in the event of a regional market downturn our
Macro-economic risks
network strategy in the Construction segment enables us
High levels of public sector debt in the USA, as well as in
to relocate our capacities rapidly to another country and
some EU member-states, significant interventions by some
continue operations at the new location. This strategy has
central banks as well as uncertainty as to the stability of
proven effective during various regional crisis situations in
markets in specific countries and the phases of significant
the past, in which it compensated for or cushioned nega-
downturn on the market in China and the other BRIC nations
tive impacts on the overall result. Our Resources segment
influence our appraisals of the macro-economic situation.
has also already expanded on a broad international scale.
Ongoing political unrest in the Middle East is impeding
We rate risks associated with our selling markets as
willingness to invest in the countries immediately affected,
medium.
and often beyond.
Competitive environment
The significant drop in the oil price may well be easing
In the Equipment segment especially, we operate in highly
pressure on importing countries’ balances of trade, but
competitive, price-sensitive markets. The Chinese construc-
in the long term it will restrict the purchasing power and
tion market – and to an even greater extent in its wake, the
investment appetite of the oil producing countries in the
Chinese construction machinery market – have seen highly
Middle East and Russia. If the oil price remains low for a long
dynamic growth in the past as a result of government policy.
period, this could have a negative effect on demand for deep
As a consequence, major production capacities for construc-
drilling rigs and services for the oil industry. As a result of the
tion machinery were created. The repeated stagnation of the
significantly reduced oil price and the tense situation in the
Chinese construction market since 2012 has seen demand for
east of Ukraine, leading to sanctions against Russia, there
new machinery decline, in some cases disproportionately dra-
was a significant drop in value of the Russian ruble against
matically. The resultant overcapacity in the country has placed
the euro towards the end of 2014. This creates obstacles
prices and margins under heavy pressure at times. We have
for our equipment sales business to Russia, and is currently
implemented intensive cost-cutting measures in order to
regarded as a medium risk.
lastingly improve our competitiveness in China. For example,
production above all as well as sourcing has been localized to
These issues entail both exchange rate risks and demand-
a significant extent, and the level of professionalism increased
related risks in the markets concerned. By contrast, the
while retaining the familiar high quality standards. Furthermore,
overall positive macro-economic situation in the Far East is
the after-sales service has been expanded further in all
creating a structurally greater dependence of the Group on
markets as a stabilizing factor for new business.
that region.
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70
The Group Management Board and the directors of the three
Interest rate risks
operating segments routinely consider projections based
We reduce the risks arising from fluctuations in interest rates
on specific scenarios of the impact of any given risks on
to a low level by fixing rates and rate derivatives for as long
the company in question and on the Group as a whole. Any
as possible.
necessary and relevant measures are derived from these
analyses and implemented in full. However, we rate the
Foreign exchange risks
overall macro-economic risks as low.
Where possible and available, we counter foreign exchange
risks by financing our international holdings in their respective
Procurement market risks
local currency. Transaction risks (foreign currency risks arising
We counter fluctuations on the procurement market by enter-
from the current cash flow) are minimized in all business
ing into long-term contracts. This risk is rated as insignificant.
divisions by means of suitable rate hedging instruments. The
remaining currency risks are evaluated as low.
FINANCIAL MARKET RISKS
Covenant risks
POLITICAL AND LEGAL RISKS
Several long-term loans are covered by covenants linked to
Compliance
pre-determined financial variables. These are primarily the
For the BAUER Group, acting responsibly and in keeping
ratio of net debt to EBITDA, the ratio of EBITDA to net inter-
with the law is a fundamental principle underpinning our
est coverage, and the equity ratio. The key figures agreed for
commercial success, the quality of our products and services
the promissory notes and the syndicated loan concluded in
and our sustainable ongoing development. We place the
2014 were met by the year end.
utmost value in upholding social conventions and in complying with applicable laws and business standards, so as to
In addition to the earnings situation of the Group as a whole,
minimize the risk of non-compliance. For us, compliance
higher financing requirements in particular may pose an
means observing all applicable laws, rules and regulations.
increased covenant risk. This applies, for example, to changes
Legally compliant, ethical and socially sustainable action is
in inventories in the Equipment segment. In order to reduce
the cornerstone of our values management system. This
that risk, active selling of surplus stocks is initiated and
will be applied to ensure staff are aware of our fundamental
production volumes are reduced as necessary. A high level of
values as soon as they are hired. Special training courses
outstanding receivables can likewise result in the inability to
enable them to extend their knowledge. A special software
meet agreed covenants.
program ensures that we do not do business with any
companies cited on an EU or US sanctions list.
Based on forward-thinking planning and sound financial
controlling, we are making every effort to keep within the
In summary, we are of the opinion that our existing values
agreed limits. This risk is classed as medium.
management system provides us with an efficient means of
keeping our compliance risk to a low level.
Financial stability and liquidity
The risk of financial instability and supply shortages on
Political and legal environment
international financial markets was countered last year by
However, owing to the broad spread of the Group’s opera-
concluding a syndicated loan agreement. This agreement,
tions, and its restraint in investing in potentially unstable
with a three-year term, ensures the medium-term liquidity
countries, the political risks in individual countries pose little
supply for the Group of companies, and is an important tool
risk to the Group as a whole. We therefore rate the risk as
for alleviating major risks on the financial markets.
low.
Contract risks
Production and order fulfillment
Our Construction and Resources segments primarily provide
Technical failures arising from design errors or miscalcula-
construction, drilling and environmental services. The under-
tions of statics in the project business can result in significant
lying projects are almost always prototypes executed in each
delays, both on the company’s own construction projects
case on the basis of customized contracts. The resultant
and on our customers’ projects. In the BAUER Group, the
risks are subject to stringent management routines, and
risks resulting from this represent an inherent component
so can be rated as low.
of our project business. Consequently, designs and statics
are predominantly produced in our own design bureaus by
Current legal cases
experienced employees. Consequently, we can assess the
Legal disputes arise almost exclusively from our provision
risks resulting from this as low.
of services, in particular in the project business. Judicial
disputes exist with regard to clients, suppliers and business
A further risk in order fulfillment is entailed by the selection
partners, and in the majority of cases relate to remuneration,
and application of drilling techniques. Misjudging ground
claimed deficiencies in performance or delays in completing
conditions can likewise result in increased risk costs.
a project. By their very nature, it is impossible to say for
Disturbances to the project timetable must be identified
certain how the court or arbitration proceedings we are
by the project manager and communicated at an early
involved in will turn out. Nevertheless, following careful
stage. The management is aware of these risks, and relies
examination, we assume that adequate provision has been
on experienced project and production managers in all
made in the balance sheet for all legal disputes.
segments. All the listed risks are subjected to a threat and
opportunity analysis at project level in the Construction and
VALUE CREATION RISKS
Resources segments.
Research and development risks
As a technology leader, particularly in our Equipment segment,
A further risk in relation to production and order fulfillment is
we counter any possible weakening of our market position by
the rising cost of production in China, resulting among other
means of continuous research and development. Although
factors from increasing rates of pay. The new plant in Tianjin
the booming markets in the Far East and the resultant new
is intended to generate synergies in production and optimize
competitors are sharpening the innovative pressures, we have
machine capacity utilization in future. The risks in production
to date succeeded in maintaining the necessary edge as a
and order fulfillment are rated as medium.
technology leader.
Project risks
Nevertheless, we are well aware that these pressures will
Project risks are essentially the principal performance risks
continue to grow. That is one reason why we are also
in the Construction and Resources segments, especially as
increasingly utilizing low-cost local development resources
each project has its own individual characteristics. Although
in India and China to provide a rapid, cost-effective boost
we work on the assumption that our projects are costed
to our rate of innovation.
with due diligence, the possibility cannot be definitively ruled
out that, on finally billing the customer, lower earnings will
Moreover, there is a risk of incurring additional costs in this
ultimately be generated. As a result of the trend for projects
context due to development and design mistakes necessitating
to increase in size and complexity, the resulting risks must be
modifications. This risk is minimized by a structured, multi-
evaluated as of a medium level.
stage product creation process.
Supplements and claims management
Thanks to our great innovative strength and transparent
Especially in respect of complex construction works, we
product creation process, we rate the risks in relation to
are increasingly seeing parties resort to legal action when
research and development as being currently medium.
disputes arise in relation to contract interpretation as well as
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72
additional works and supplements. Clients’ representatives
Personnel development and structure; key personnel
are increasingly rarely authorized to resolve conflicts by
Our procedures for providing assistance and support
mutual consent. As a result, final project settlement is
to our employees, from the selection and recruitment
increasingly being delayed by legal action, and additional
stage, through induction, qualification and training, and
costs are being incurred. We manage this risk by profes-
incorporating ongoing support in personal development,
sional management of supplemental requirements in the
have been continuously improved. Fluctuation rates have
course of the construction project, and based on full
been very low for many years, and represent an affirmation
documentation of the work carried out. Despite all efforts,
of our personnel policy. We rate risks relating to personnel
the outcomes of some negotiations on supplemental require-
as insignificant.
ments pose a residual risk to the company. The risks arising
from supplemental requirements are rated as medium.
IT
Security to prevent data loss or unauthorized access, as
Acquisition, sales and contract negotiations
well as to safeguard system and data availability, is ensured
The risks of miscalculating quotations and of warranting
by means of state-of-the-art hardware and software and
technical characteristics which cannot be fulfilled are mini-
building services technology, so IT risks are classed as
mized by the strict application of the dual-control principle,
insignificant.
and can basically be regarded as low.
Accounting-related system of internal controls and
Materials management and procurement
risk management
Thanks to our long-standing and successful policy in our
Consolidated accounting risks comprise risks in respect of
machinery manufacturing operations of planning well ahead
accounting, valuation and recognition. To counteract them,
to safeguard supplies of components which may be subject
the accounting functions for the major subsidiaries in Ger-
to bottlenecks, and based on additional measures we have
many are mainly managed centrally at Group headquarters
taken and on our ability to have time-critical components
in Schrobenhausen. This permits specialization in certain
made within the Group in the event of a bottleneck, the risks
kinds of business operations, such as joint ventures, and
in terms of procurement currently remain classed as low.
means that transactions are all treated uniformly.
RISKS OF SUPPORTING PROCESSES
The accounting functions for the other subsidiaries –
Debtor management
practically all international subsidiary companies outside of
To limit our exposure to risk of payment default, in Germany
Germany and the main German subsidiaries – are usually
we have at our disposal a tried and tested system compris-
managed by decentralized in-house commercial depart-
ing credit insurance, payment default guarantees, advance
ments. In this, our international subsidiaries are assisted
payments and – in special cases – also guarantees as security
by external accountants and auditors as well as by our
in respect of contracted works, so we rate this risk as low.
investment controllers, so as to ensure properly qualified
financial reporting in accordance with local laws or conform-
Quality risks
ing to International Financial Reporting Standards (IFRS).
Great attention is paid to the quality of work done in all
The financial statements of the major Group companies are
areas of the business. This is safeguarded by employing
additionally audited in accordance with IFRS. Audits are
well-trained staff and by means of a long-established
conducted in accordance with the International Standards
quality management system, which has been in place for
on Auditing (ISA).
many years. All major Group companies are certified, and
are audited on a regular basis. We therefore rate quality
The procedures for monthly Group reporting, preparation of
risks as low.
quarterly and annual financial statements and consolidation
of the individual financial statements in accordance with
non-conformance to plan is implemented promptly by the
IFRS are implemented using a Group-wide accounting
managers of the units concerned.
guideline on the basis of a unified schedule of accounts by
the subsidiaries, and by the Group Accounting function for the
The major Group company annual financial statements and
consolidated financial statements. Appropriate adjustments
the year-end consolidated financial statements are audited
are made to adapt local accounts to IFRS.
by auditors in accordance with the applicable legal requirements and standards, and are reviewed by the Supervisory
At the major Group companies, the success of each individual
Boards established in the various business units as part
department is mapped as a central management instrument
of their duty of supervision. The key figures and related
by means of an expense distribution sheet. This reveals
information reports are submitted to the Management Board
any non-conformance to annual budgets. At project level,
and the Supervisory Board of BAUER AG from the central
a monthly reconciliation is carried out to cross-check the
accounting function on a monthly basis.
actual figures against the cost accounting and site management budgets. Our judgment and experience tells us that
The IT systems employed in these procedures are protected
self-monitoring allied to mutual monitoring are the effective
by appropriate security systems against unauthorized
elements of our system of internal controls.
access and data loss. Based on the systematic multisegment structuring of the Group’s accounting process, with
The individual Group companies and departments are
its redundant control instances, we are able to classify the
monitored and controlled on a monthly basis by the central
resultant risks as low.
commercial departments in the respective segments and
are then reviewed by Group Accounting further reducing the
OVERALL RISK
accounting, valuation and reporting risks.
At present, no individual or aggregated risks can be detected
that could threaten the existence of the BAUER Group in the
The consolidated figures are in turn checked on a monthly
2015 financial year. The management sees no change in the
basis against the figures from the annual Group-wide
overall risk situation, in view of future business prospects
planning process and analyzed on the basis of Group key
among other factors.
performance indicators (KPIs). Any necessary correction of
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74
OPPORTUNITY REPORT
The opportunities arising are classified in parallel with the
expanded its portfolio with deep drilling rigs capable of
detailing of risks. In this context, too, the areas of opportunity
operating down to depths of 6,000 meters for geothermal
have been aggregated. Unless otherwise specified, all op-
energy, oil and gas exploration and for production drilling.
portunities set out in the following relate to all our segments.
Opportunities in Deep Drilling have improved further with the
STRATEGIC OPPORTUNITIES
signature of the contract between our subsidiary BAUER
Over the years, our Group has repeatedly worked on single
Deep Drilling GmbH and Saxon Energy Services Inc. for
projects in marginal markets. This has led to the establishment
delivery of two 375 metric ton rigs. There is an opportunity
of independently operating business units. One example of
for Deep Drilling to make an important overall positive contri-
this is in our activities relating to environmental technology
bution to our results in future. We are capable of successfully
which, having begun over 20 years ago, have grown to
carrying out exploration and production drilling for water,
become an international business area forming part of our
oil and gas, as well as for coal-gas and geothermal energy.
Resources segment.
Extensive areas across Australia, Africa and Indonesia are
being staked out as claims for the extraction of coal-gas.
A similar development grew out of the first deployment of
Their seriousness in terms of mass extraction is being
specialist foundation engineering equipment for diamond
reinforced by the planning and construction of large gas
exploration, which has since become the competence center
liquefaction plants.
Drilling Technologies within the Resources segment.
The nuclear accident in Fukushima sparked a new debate
Together with the 2007 acquisition of the GWE Group,
on energy production which is bringing about far-reaching
specializing in the development, manufacture and sale
changes to energy policy. The most suitable future-proof
of high-grade well engineering products and in close-to-
alternatives to nuclear power are currently being sought.
the-surface geothermal energy extraction, we were able
The BAUER Group has been contributing to this search by
to merge the three businesses to create the Resources
developing underwater drilling rigs that can be operated from
segment. This core business unit, established in 2007, is
on-board a ship, to sink foundations for tidal or wind tur-
focused on areas relating to water, environment and natural
bines. This opens up an entirely new product area, with great
resources – some of the major issues of the 21st century.
prospects for long-term success, for both our Construction
Moreover, the Resources segment is less dependent on
and Equipment segments.
the economic cycles of our traditional Construction and
Equipment segments.
By establishing new subsidiaries in the Resources segment,
our environmental business has succeeded in moving out
In order to bring about a rapid internationalization of the
of its traditional, and limited, sphere of pollution remediation
Resources segment, we are utilizing the experience of our
into industrial process water treatment, and thus into the oil
long-standing organizational units in the other two segments.
and gas industry. The large quantities of industrial process
waters occurring in oil production, against a background of
MARKET OPPORTUNITIES
ever more stringent environmental standards, offer additional
Thanks to the rapid growth being seen in some emerging
outstanding market opportunities for our environmental
economies, and the expected increase in oil and gas extraction
business.
based on new techniques such as fracking, a trend can be
observed for even difficult-to-access deposits, demanding
Dam remediations are much in demand worldwide, due to
intensive drilling operations, to be exploited. This is a trend
the fact that dam structures have been neglected for years.
that will continue, even if it is exposed to the influences of oil
Our depth of experience in this area, which we have been
price fluctuations over and over again. Demand for modern
able to acquire in various dam remediation projects, means
deep drilling rigs will thus continue to rise in the medium
that we regard this as an outstanding market opportunity for
and long-term. Consequently, the Equipment segment has
our Construction segment.
VALUE CREATION OPPORTUNITIES
Supplements and claims management
Development and innovation
The assertion of requirements and supplements does not
Development and innovation are systematically integrated
only entails risks, but also the opportunity to achieve better
into many standard processes within the Group. Their
earnings than originally specified in the contract based on
efficiency is monitored as part of the quality management
changes to the ordered construction services or supple-
system and by way of the corporate controlling function. It is
mental work ordered by the client. On projects involving high
also ensured that customers’ wishes are understood as be-
potential for changes, this can result in a substantial improve-
ing opportunities, and are translated into innovations for our
ment in earnings. We attempt to exploit such opportunities
products and services in a timely manner. The capacities of
by professional management of supplemental requirements
our engineering offices are systematically being strengthened
in the course of the construction project.
by resources from countries with high levels of education
allied to low labor costs, such as India.
OPPORTUNITIES BASED ON SUPPORTING PROCESSES
The Group has initiated a worldwide cost-cutting program
Innovation is possible at practically every point within our
in response to the displeasing loss recorded at the end
business processes. Our employees are best placed to
of 2013. As well as abandoning some smaller, financially
know where improvements are achievable in their particular
problematical businesses in 2014, this included in particular
sphere of work. In order to collate and make use of the
the sustained implementation of numerous individual projects
many good suggestions which our employees submit, we
such as reducing personnel costs by process optimization,
have devised a system for the unbureaucratic recording,
reducing material costs by specific negotiations with A-sup-
evaluation, implementation and rewarding of suggested
pliers, reducing wear costs by technical improvements and
improvements, which has been in turn rewarded by a
cost reductions through changes of rules and behavior. The
number of good ideas.
projects are defined in the course of planning and subjected
to monthly checks. The object of the cost-cutting program is
Project opportunities
to lastingly improve the cost structures of the BAUER Group
Regardless of national and global market cycles, projects
and so improve the contribution margin.
often arise in otherwise weak markets which we as a
corporation are extremely well equipped to handle thanks to
OVERALL OPPORTUNITIES
the mix of our products and services portfolio. Examples of
We are seeing a steady improvement in our opportunities
this are processes for retrofitting of core seals in earthwork
on global markets as our Resources segment becomes
dams, or for the long-term, environmentally compatible
increasingly well established. This is also being boosted
treatment and disposal of industrial process water from the
by new, innovative products. Our strategy of systematically
oil industry.
interlinking our mainly small and medium-sized globally operating units to create efficient networks is enabling us more and
The resultant projects in some cases entail very large lot units.
more effectively to generate speed and cost benefits from
When contracted, we are able to manage them successfully
the associated economies of scale. All in all, we see the
by converging our global resources and based on our many
opportunities for our Group’s worldwide business increasing
years of experience in handling large-scale projects.
further in 2015.
75
Forecast Report
X. FORECAST REPORT
A number of factors are of key importance to our companies
The competitive situation in the machinery business has
and their future development, as detailed in the following.
changed significantly over the past ten years. The enormous
growth in construction in China made that country’s market
Markets
more important than all the others in the world put together
As set out at the beginning in the Business Report, the
for a number of years. Many Chinese companies started
markets for specialist foundation engineering services and
manufacturing specialist foundation engineering equipment,
the associated machinery can generally be rated as positive.
creating capacities to fully serve the needs of the Chinese
There is substantial backlog demand for construction works
market. Once the growth of the Chinese construction market
all over the world. The infrastructure, especially, must be
had come to an end, machinery markets fell back dramati-
updated to meet the new needs of people and the demands
cally too. As a consequence, competition has intensified
of a globalized industrial society. Increasing urbanization in
markedly. Other European manufacturers of construction
many countries is necessitating major efforts to upgrade city
machinery are now also coming under pressure in their
transport infrastructures. Underground construction, especially,
standard equipment sales, and so are trying to make up for
provides a solution to the challenges we face. Many inquiries
them in the specialist foundation engineering business. This is
from all markets, and our healthy levels of orders in hand in the
not feasible, because the market is not big enough. However,
Construction segment in the regions of the world, affirm that
the trend will additionally impact on the competitive situation
judgment.
to which our business is subject for some time to come.
The work of our Resources segment meets the essential
In this new competitive situation, our business will only be
needs of our world, for which issues surrounding the environ-
able to maintain its leading position by providing high-quality
ment and water will become key over the decades ahead.
products and outstanding services. Concerted efforts have
The availability of resources essential to industry will likewise
enabled us to build further on our competitive edge in that
remain a permanent and pressing challenge.
respect over recent years, as the increased revenues for
2014 demonstrate. We are convinced that we will continue
Competition
in future to achieve success and growth. We will also be in
Competition in the construction industry has changed little
a position to improve our margins again, which will also be
overall in recent years. The construction market is, and will
based on improved capacity utilization.
remain, a market with very large numbers of players. Our
worldwide companies have established themselves firmly
Bauer has to date played only a minor role on markets for
within that competitive environment, and on some markets –
deep drilling rigs. We have nevertheless succeeded in arous-
such as in Egypt – we have attained an outstanding position.
ing customers’ interest with our fully hydraulic rigs featuring
On some markets, conversely, other construction companies
state-of-the-art electronic control. The successes achieved
play a predominant role. We regard this mix as positive,
in 2014 deliver precisely the confirmation we are looking for
because it provides us with the opportunity to respond stra-
with regard to the efforts we have made.
tegically to changes. Very many companies – including in the
specialist foundation engineering sector – have withdrawn from
In the Resources segment, we have numerous competitors
the German market over the last two decades. As a result,
on the various markets. We regard it as a major advantage
there are today relatively few specialist foundation engineering
that we are the only company offering a full portfolio relating
contractors capable of handling large-scale projects. This
to water and other resources bundled within one business
opens up additional opportunities for our business in Germany.
segment, meaning that we are able to offer our customers a
very wide range of products and services. This will pay off in
future.
Bauer drilled 252 diaphragm panels over a stretch of 1.6 km to a depth of 19.5 m for the port's 26.5 km² cargo handling facilities
in Doha, Qatar. A MC 64 was used for this purpose.
77
Forecast Report
Products
the dynamic process of product development. We have
By concentrating on products and services relating to ground
intensively utilized the possibilities of state-of-the-art elec-
and groundwater, we have the capability to be a technology
tronic control to make our equipment even more versatile
leader in both our Construction and Equipment segments.
and reliable. Specifically, we have made great efforts to
The interaction between construction and machinery manu-
provide comprehensive performance verification based on
facture – the application of high-tech construction engineering
the acquisition and evaluation of large volumes of data.
techniques on the one hand, and the design and manufacture
of high-grade machinery with state-of-the-art technology on
The product of machinery business is not just the machine
the other – allows us to exploit wide-ranging synergies in our
itself. For our customers, supplies of replacement and
development work. This enables us to assume a pioneering
wearing parts, and service backup for their equipment, are of
role with our methods and techniques.
increasing importance. We have greatly expanded our offer in
those areas through wide-ranging measures. All our worldwide
>>>
78
We have had to commit major efforts to our Equipment seg-
warehouse facilities are electronically linked, allowing us to
ment in recent years in response to changes on the market.
achieve a high level of parts availability. We have established
The decentralized organization of our development activities
service centers in all regions of the world. The rapid-response
close to the plant floor has enabled us to considerably boost
backup they ensure is much appreciated by our customers.
Demler Spezialtiefbau located in Netphen in North Rhine-Westphalia sunk 158 foundation piles and a piled wall in Halle with three
different drilling rigs in an extremely restricted space.
Forecast Report
The excellent sales successes we have recorded despite
detailed preliminary ground surveys, some factors which
difficult market conditions are strongly linked to these efforts.
were not detectable will occur on a regular basis. They can
We are convinced that we have an outstanding product offer,
impede construction works in a wide variety of ways, and
and that it provides us with a sound basis for future success
in some cases also cause significant financial losses. We
on the market.
are working hard to optimize even further our behavior with
regard to risk, in order to avoid issues such as we have
In our Resources segment, we have repeatedly demonstrat-
encountered in the last two years in future.
ed over recent years that we offer a portfolio which attracts
great interest on the market. Our environmental technology
Of course, an opportunity can also arise if the ground has
solutions especially, such as the reed-bed treatment plant
been assessed too negatively prior to starting construction
for the treatment of oil-contaminated water in Oman, have
works. Our construction sites can then also generate ad-
attracted widespread public acclaim.
ditional profit.
Once again, 2015 will be a year with many challenges. The
Achieving success within a major corporation is also heavily
world’s construction markets are fundamentally on course
linked to its basic organizational structure. We have been
for growth. We are also expecting the Chinese competitors
working hard on that aspect in recent years, and we are
of our Equipment segment to behave more reasonably than
convinced that we are now very well positioned. We have
in the past, since they will also be obliged to fall in line with
focused closely on international networking, so that today
the rules of the market.
almost all subsidiaries worldwide are interconnected via a
centralized IT network and share software platforms. This
In spite of the overall positive expectations, the risks posed
provides us with close control, delivering massive benefits
in the markets should not be overlooked. They can influence
in terms of logistics and parts supply especially. All major
our companies to differing extents, depending on how the
locations are equipped with state-of-the-art videoconferencing
issues pan out. This includes the current problems in Russia
systems, saving on travel expenses. We have also made
and Ukraine as well as the Islamic State terror organization
great progress with regard to our management systems.
in Syria and in Iraq. It is also very difficult to predict whether
Lots of positive changes have been made in relation to HSE
the efforts made to achieve political stability in the countries
(Health, Safety & Environment), and thanks to the global IT
of North Africa will bear fruit, or if new unrest will confront
network, our efforts to internationalize the company have
the markets with further challenges. The economic problems
been successful.
facing some countries, such as Greece, are by no means
resolved either.
All in all, we therefore believe that we are well set to meet the
challenges of the future. We are continuing to work hard on
In view of the general conditions, it is our opinion that our
our cost-cutting program, and cost ratios will also improve
business model will prove robust in 2015 as well. In our
as our capacity utilization grows. Although we still have some
planning, we have attempted to evaluate all known threats
overcapacity, we need it in order to drive the new business
and opportunities, thinking through both positive and nega-
fields in deep drilling and underwater drilling forward. In those
tive scenarios as effectively as possible. Ultimately, we are
areas especially, we will soon be in a position to provide a
convinced that our planning for 2015 is realistic. This applies
good contribution to future growth.
to all segments and to the Group overall.
We see no need to change our strategic objectives at
Nevertheless, we are obliged to point out that specialist
present. The strategy comprising the Construction, Equip-
foundation engineering and our other businesses are exposed
ment and Resources segments will continue to dictate
to greater risk than the business activities undertaken by most
the direction of the Group over the coming years. We are
other companies. Our activity always contains a factor that
not planning any major acquisitions at present, as we are
cannot be perfectly analyzed in advance – the subsoil or the
intending to strengthen our capital base especially over the
ground itself. Even after conducting the most extensive and
years ahead.
79
Forecast Report
Based on the information available to us at the time of
following quarters. The trend over the full year will thus be in
completing this report, we forecast that total Group
line with patterns in our business seen in earlier times. The
revenues for the 2015 financial year will be around EUR
reason for this is that fewer machines can be invoiced at
1.6 billion. We forecast profit after tax of around EUR
the start of the year, because customers do not start buying
18 to 23 million. In accounting terms, this will mean EBIT
equipment until the construction season gets underway.
of around EUR 75 million.
In the Construction segment, despite the good weather
conditions in some countries, the winter period has a heavy
impact on a number of our markets.
Comparison: 2014 actual/2015 forecast
in EUR million
Actual 2014
Forecast 2015
1,560
~ 1,600
EBIT
76.4
~ 75
Net profit or loss
15.7
~ 18 - 23
Our balance sheet ratios have changed markedly over recent
years. This is illustrated most clearly by the increase in working
capital, which also resulted in a substantial increase in net
debt. This trend was largely attributable to the normalization
of our machinery business, in which inventories increased
>>>
80
We still expect to make a loss in the first quarter, in line with
significantly due to the return of shorter lead times. No
seasonal norms, though it will be balanced out over the
significant change to the balance sheet structure is to be
In the Kingdom of Bhutan, approximately 80 km east of the capital city Thimphu, a 1.200 MW diversion hydroelectric power plant,
the “Punatsangchhu-I” is being built. To lower the water level, Bauer is sealing the upstream cofferdam with a cut diaphragm wall
that is up to 90 m deep.
Forecast Report
expected in the coming year, as our business model is tied
could only be achieved by means of a one-time income, we
to high levels of up-front financing. With stronger demand for
nevertheless intend for our shareholders to participate in this.
machinery, however, the ratios will improve again. Over the
As a result, we would like to pay a dividend again – although
coming years, we will be making great efforts to increase our
admittedly at a low level. In the medium term, the dividend
equity ratio back to more than 30 percent.
quota should be about 25 to 30 percent of the reported
profit after tax.
We expect the Group to enjoy positive development through
2015 and 2016. We are planning for growth of between
We do not see any existential risk or relevant risk to future
3 and 8 percent, in line with our long-term plans. We also
progress in our trading environment. The global economy
predict that we can achieve an increase in earnings. The
remains marked by great change, however, which may also
Group has largely adjusted to the changed market condi-
have a negative impact on our situation again. We should
tions, meaning it is able to return to a positive trend overall.
point out that future forecasts are based on assumptions
and estimates of the company management. Such assump-
The Management Board will recommend to the Supervisory
tions and estimates always entail a degree of uncertainty and
Board that it propose to the Annual General Meeting that
risk, which may mean that actual performance differs from
a dividend of EUR 0.15 per share should be paid for the
that forecast.
2014 financial year. Despite the fact that the result in 2014
Schrobenhausen, 31 March 2015
Prof. Thomas Bauer
Chairman of the Management Board
Dipl.-Betriebswirt (FH) Hartmut Beutler
Dipl.-Ing. Heinz Kaltenecker
81
82
The Bauer Share
Falling interests rates and new crisis areas
probable that the definitive outcomes of these developments
Although many problems remain in 2014 – the situation
will only come to light in 2015.
in Spain, Portugal or Greece has hardly changed – the
Eurozone economy did return to slight growth with 0.8 %.
The Bauer Share lost significantly in value
The Bauer share underwent a marked drop in value in 2014.
The European Central Bank cut its key interest rate, first in
Whereas the benchmark indexes, the DAX (+5.1 %) and
June 2014 from 0.25 % to 0.15 % and then again in Septem-
SDAX (+4.3 %), grew, the Bauer share lost 28.8 % of its
ber to a mere 0.05 %, in an effort to stave off deflation. The
value by the end of the year.
ECB introduced penalty interest rates on bank deposits in
order to motivate the banks to increase lending. This policy
The first days of trading in 2014 were positive, and saw the
boosted in particular the stock markets in 2014. In January
share increase from its opening price of EUR 18.81 to its
2015, the ECB decided to purchase government bonds
high-point for the year in mid-January, at EUR 20.04. As the
(quantitative easing) as a further measure against the low
first quarter continued, the share price continued relatively
inflation rate.
unchanged in line with the German indexes, with slight
upward and downward movements.
Overall, the global economy improved in 2014. The gross
domestic product of the USA grew by 2.2 %. China, on the
Following publication of the annual report on April 11 as well
other hand, missed its own growth target with 7.4 %.
as the interim report on the first quarter on May 14, the share
price dropped to EUR 18.12, while the markets recorded
The German economy managed growth of 1.4 %. The good
modest growth.
level of employment, growth in incomes and low inflation
meant that economic growth was promoted by domestic
The Bauer share was able to recover slightly by the end
demand in particular.
of June before dropping markedly in relation to the slightly
downward trend of the stock markets. An initial interim low
However, problematic areas also developed in 2014 again.
point was reached on August 8, at EUR 14.44.
In spring, the Russia/Ukraine conflict intensified. Europe
introduced sanctions which had an effect on the European
The Bauer share came under significant pressure following
and the Russian economies. The ruble lost one third of its
publication of the first half-year’s figures on August 14 with
value against the euro over the course of the year. In addition,
the associated slight downgrade to the earnings forecast
the oil price collapsed by about 50 % during the year. It is
for the complete year, combined with further stock market
Performance of the Bauer Share 2014
in %
Bauer
DAX
MDAX
SDAX
40
30
20
10
0
(10)
(20)
(30)
(40)
01.01.2014
01.04.2014
01.07.2014
01.10.2014
31.12.2014
31.03.2015
THE BAUER SHARE
weakness; by October 16, it had reached the low for the year
Share information
at EUR 11.75.
ISIN / WKN
DE0005168108 / 516810
Trading symbol
B5A
As the markets recovered, the price rose slightly and topped
Trading segment
Frankfurt, Prime Standard
the EUR 14 mark for a period in November. On the last
Share indexes
SDAX, CDAX, GEX, DAXPlus Family
Classic All Share, Prime All Share
Class of share
No-nominal-value individual bearer shares
During the first quarter of 2015, the share price increased
Share capital
EUR 73,001,420.45
significantly, reaching EUR 17.91 by the end of March.
Number of shares
17,131,000
Shareholder structure
Bauer family 48.19 %, free float 51.81 %
trading day of the year, the share price was EUR 13.35.
Continuous dialog with shareholders
It is the objective of the Management Board and Investor Rela-
Dividend policy
tions to keep shareholders comprehensively and continuously
Our dividend strategy is fundamentally oriented to the
informed about the course of business. In addition to the
goals of providing shareholders with an appropriate and fair
financial reports, the BAUERcompact newsletter offers news
participation in the success of the business, maintaining
and topics relating to the BAUER Group. With the BAUER
continuity, and safeguarding the equity ratio.
app, it is possible to call up all messages, the share price and
much else besides on a mobile device.
Following a difficult financial year, the planned after-tax
result could only be achieved by means of a one-off gain.
The Management Board uses roadshows in Scandinavia,
We believe it is appropriate to allow our shareholders to
the USA or Germany as well as participating in capital
participate in this, so we intend to pay a small dividend
market conferences to inform German and international
again. At the same time, we are still intensively pursuing
investors alike about the position of the business.
the objective of improving the equity ratio.
Furthermore, there is an intensive exchange with analysts.
Consequently, the Management Board and Supervisory
Overall, seven analysts reported on BAUER AG in 2014 with
Board will propose to the Annual General Meeting on
their research. At the end of the year, there were six neutral
June 25, 2015 that a dividend of EUR 0.15 should be
and one negative share recommendations. The average
paid per share.
target share price quoted was EUR 14.36.
The Annual General Meeting in June was attended by about
More information:
450 shareholders and guests who came to the headquarters
http://ir.bauer.de
in Schrobenhausen to be informed by Prof. Bauer about the
course of business.
KEY FIGURES
Earnings per share (in EUR)
2011
1.86
2012
2013
2014
1.44
-0.99
0.85
Dividend per share (in EUR)
0.50
0.30
0
0.15 *
Dividend total (in EUR ’000)
8,566
5,139
0
2,570 *
Year-end price (in EUR)
21.10
19.32
18.81
13.35
Annual high (in EUR)
38.49
26.50
23.05
20.04
Annual low (in EUR)
16.04
16.13
17.33
11.75
361,464
330,971
322,234
228,699
65,885
48,584
39,017
26,984
Market capitalization at year-end (in EUR ’000)
Average daily trading volume (units)
* Proposed; subject to the consent of the Annual General Meeting to be held on June 25, 2015
83
84
Corporate Governance Report
AND DECLARATION ON CORPORATE GOVERNANCE
The Management Board, also on behalf of the Supervisory
3. The individualized disclosures of the benefits, the remuner-
Board, submits the following report on the company’s
ation and the pension benefits awarded to each member
Corporate Governance in accordance with Article 3.10 of
of the Management Board are not individualized for each
the German Corporate Governance Code. The Corporate
member of the Management Board in the remuneration
Governance Report also includes the Declaration on
report as the General Meeting dated June 30, 2011
Corporate Governance pursuant to Article 289a of the
resolved on the omission of the disclosures according to
German Commercial Code (HGB), which forms part of
section 285, no. 9, letter a, sentences 5 to 8, section 315a
the Management Report for the 2014 financial year.
subsection 1 and section 314, subsection 1, no. 6, letter a,
sentences 5 to 8 of the German Commercial Code (HGB)
Declaration of Conformity 2014
and therefore the disclosures required under Article 4.2.5
In the year under review, based on preliminary work by the
would contradict such Shareholder resolution.
Presidial and Personnel Committee, the Management Board
and Supervisory Board reviewed the company’s compliance
4. Contrary to Articles 5.1.2 and 5.4.1, no age limit is specified
with the German Corporate Governance Code. On Decem-
for members of the Management Board or Supervisory
ber 5, 2014 the Management Board and Supervisory Board
Board. Expertise and performance cannot be determined
passed the following declaration of conformity:
on the basis of rigid age limits. Upon the appointment of
new Management Board and Supervisory Board members,
“Since the last declaration in December 2013 the company
the persons who bear responsibility for selecting suitable
has complied with, and currently complies with, each of
members will take account of the age of the chosen person
the recommendations of the “Government Commission of
when reaching their decision, alongside assessing their
the German Corporate Governance Code” as published by
skills. If a Management Board or Supervisory Board member
the German Federal Ministry of Justice in the official section
should become no longer sufficiently capable of holding
of the electronic version of the German Federal Gazette
office on the grounds of age during their term of office, the
(“Bundesanzeiger”), with the following exceptions:
common sense of the persons involved is to be trusted.
1. Contrary to Article 3.8 an excess of at least 10 percent of
5. Contrary to Article 7.1.2, the consolidated financial
the loss up to at least an amount representing one and a half
statements at December 31, 2013 were made public within
times the fixed annual remuneration of Supervisory Board
101 days rather than 90 days of the end of the financial
members is not agreed for D&O insurance for the Supervisory
year. As a result of the international structure of the Group,
Board. As a result of the moderate remuneration provisions
the completion and consolidation of the separate financial
for the Supervisory Board in the Articles of Association,
statements takes a considerable amount of time. In the
a corresponding excess for the Supervisory Board is not
interests of conscientious accounting processes, efforts to
approved. Even without a corresponding excess, the Super-
improve the accounting procedures continue.
visory Board members will perform their duties responsibly.
BAUER AG already conforms largely to the suggestions of the
2. Contrary to Article 4.1.5, Article 5.1.2 and Article 5.4.1
German Corporate Governance Code Commission.”
there is no appropriate inclusion or participation of women
arranged for in the filling of management positions or
Roles of the Management Board and Supervisory Board
in the composition of the Management Board and the
German company law prescribes a dual system of manage-
Supervisory Board. In particular, the introduction of a
ment for BAUER AG, characterized by a strict separation of
quota for women is not supported in order to ensure
personnel between the Management Board as the executive
equal opportunities. These positions should be filled
management body and the Supervisory Board as the super-
regardless of gender so that neither the female gender
vising body. Moreover, the company’s Articles of Association
nor the male gender is favored or discriminated against. In
and the rules of procedure governing the work of the Super-
addition, a candidate should not suffer any disadvantage
visory Board and of the Management Board also lay down
on the grounds of racial or ethnic origin, religion or belief.
the basic structures of their collaboration.
CORPORATE GOVERNANCE REPORT
The Management Board of BAUER AG currently comprises
appropriation of net earnings available for distribution. The
three members. They are assigned independent responsibility
Chairman of the Supervisory Board coordinates the work of
for managing the company. The members of the Management
the Supervisory Board, chairs its meetings and represents the
Board work together on a collegiate basis. Notwithstanding
Supervisory Board externally. The Supervisory Board regularly
the joint overall responsibility of the Management Board, each
reviews the efficacy of its activities.
member of the Board Management acts on his or her own
responsibility within his or her assigned portfolio of functions.
Composition of the Supervisory Board
Measures and transactions of a division of the Management
The Supervisory Board of BAUER AG comprises a total
Board that are of extraordinary importance for the company or
of 12 members. Six of its members are elected by the
a business unit, or which are associated with an extraordinary
employees at the Group’s locations in Germany, with the
financial risk, require the prior approval of the entire Manage-
other six members being elected by the Annual General
ment Board. The Chairman of the Management Board
Meeting to represent the shareholders. The Supervisory
coordinates the work of the Management Board. The Man-
Board includes a sufficient number of independent members
agement Board members report on a regular basis to the
who have no business or personal links to the company, to
Chairman of the Management Board in respect of all material
its executive bodies, to any controlling shareholder or to any
matters and on the course of business within their assigned
company associated with any such shareholder which may
functions. A member of the Management Board has been
give grounds for a material and not merely temporary conflict
appointed Labor Director, and is responsible to an increased
of interests. Moreover, all members of the Supervisory Board
extent for human resources and social policy topics in the
are obligated to immediately disclose to the Supervisory
company. The Management Board defines the corporate
Board any conflicts of interest as and when they arise. No
strategy, agrees it in consultation with the Supervisory Board,
conflicts of interest were disclosed to the Supervisory Board
and ensures that it is implemented. The Management Board
by any of its members during the year under review.
provides the Supervisory Board and its subcommittees with
regular, detailed information, in written form by way of monthly
Objectives of the Supervisory Board with regard to its
reports, by conference calls and at routine meetings, as well
composition
as at extraordinary meetings held as and when required, in
The following objectives must be taken into account by the
respect of all matters of planning, business development,
Nominations Committee and by the Supervisory Board when
finance and earnings, risk, risk management, internal auditing
proposing candidates for election to the Supervisory Board
and compliance of relevance to the company.
at the Annual General Meeting:
The Supervisory Board appoints the Management Board.
• The Supervisory Board shall be composed such that
In doing so, it considers not only the relevant professional
its members collectively possess the necessary skills,
qualification of its members but also – given the international
knowledge and professional experience to carry out its
nature of the business – the diversity of its composition. The
assigned role in a correct and proper manner.
Supervisory Board also sets the overall level of remuneration
paid to the Management Board, regularly reviews remuner-
• The appointment of shareholders’ representatives to the
ation levels, and specifies the remuneration paid to individual
Supervisory Board shall take due account of the Group’s
members of the Management Board. It appoints, supervises
fundamental character as a family business, giving due
and advises the Management Board, and participates in
consideration to the implications of that character in terms
decisions of fundamental significance to the company. The
of the corporate culture, whereby two members shall be
company’s Articles of Association stipulate relevant trans-
appointed from the Bauer family, provided the candidates
actions and undertakings which require the consent of the
are suitable.
Supervisory Board. Duties of the Supervisory Board include
reviewing the annual financial statements of the company, the
consolidated financial statements and the parent company
and Group Management Report, as well as proposals for the
• At least two of the shareholders’ representatives on the
Supervisory Board shall have substantial experience in
85
86
the management of construction and/or construction
system for the Management Board in general, as well as
machinery manufacturing companies.
responsibility for establishing, amending and terminating
service contracts with the members of the Management
• At least one of the shareholders’ representatives on the
Board. Furthermore, it deals with questions of corporate
Supervisory Board shall possess specialist skills and ex-
governance and is authorized to pass amendments to the
perience in the application of financial reporting standards
Articles of Association which relate only to its wording.
and the implementation of internal control procedures.
The Audit Committee comprises three members elected by
• The employees’ representatives on the Supervisory Board
the Supervisory Board by a majority of the votes cast, with two
will be elected in accordance with the provisions of the
members proposed by the Supervisory Board members of the
German Employees’ Co-determination Act.
shareholders and one member proposed by the Supervisory
Board member of the employees. The Chairman of the Audit
• The Supervisory Board shall include not more than four
Committee is elected by the Supervisory Board at the sug-
members in total who have business or personal links
gestion of the shareholders’ representatives. The Chairman of
to BAUER AG, to its executive bodies, to any controlling
this committee possesses specific knowledge and experience
shareholder or to any company associated with any such
in the application of accounting policies and internal control
shareholder which may give grounds for a material and not
procedures, and is neither a former member of the company’s
merely temporary conflict of interests.
Management Board nor the Chairman of the Supervisory Board.
The role of the Audit Committee is in particular to monitor
• Supervisory Board posts shall be filled on merit, regardless
accounting procedures and to review the efficiency of the
of gender so that neither men nor women are preferred or
system of internal controls, the risk management system and
disadvantaged. Moreover, when appointments are made to
the internal auditing system including compliance. The Audit
the Supervisory Board, a candidate shall not be disadvan-
Committee prepares the proposal of the Supervisory Board to
taged for reason of race, ethnic origin, religion or world view.
the Annual General Meeting concerning the appointment of
auditors, obtaining an Independence Confirmation from the au-
The objectives are fully embodied in the current composition
ditors in advance of each Annual General Meeting. It undertakes
of the Supervisory Board.
a preliminary review of the annual financial statements of the
parent company and the consolidated financial statements of
Composition and roles of the subcommittees
the Group together with the Combined Management Report, as
The Supervisory Board has established four standing
well as preparing the proposal on appropriation of net earnings
committees constituted from among its members in order to
available for distribution and consulting on the audit reports with
support its plenary work. The Supervisory Board subcom-
the auditors. It also reviews the quarterly financial reports.
mittees and their roles and procedures are laid down in the
rules of procedure governing the Supervisory Board. The
The Nominations Committee comprises three shareholder
committee chairmen report to the plenary Supervisory Board
representative members of the Supervisory Board. The Chair-
on a regular basis with regard to the work of their respective
man and the Deputy Chairman of the Nominations Committee
committees, and prepare the way for plenary Supervisory
are proposed and elected by the Supervisory Board members
Board decisions within their specific remits.
of the shareholders. The task of the Nominations Committee
is to submit to the Supervisory Board proposals of suitable
The Presidial and Personnel Committee comprises the
candidates to be put forward to the Annual General Meeting
Chairman of the Supervisory Board as well as one Supervisory
for election to the Supervisory Board.
Board member elected by the shareholder representatives
and one by the employee representatives respectively. Its role
The Mediation Committee, constituted pursuant to the
includes preparing the way for Supervisory Board decisions
German Co-determination Act, comprises two shareholder
relating to the setting of overall remuneration to individual
representative and two employee representative members
Management Board members and to the remuneration
respectively. The Mediation Committee is only convened
SHAREHOLDERS AND TRANSPARENCY
if a proposed candidate for appointment as a member of
All documents and information resources relating to the
the Management Board has not obtained the majority vote
Annual General Meeting are made available to shareholders
required by the German Co-determination Act.
on the company’s website well in advance. The shareholders
were assisted in exercising their voting rights by the facility to
In his report to the Annual General Meeting, the Chairman
assign power of attorney to nominees and by the appointment
of the Supervisory Board summarizes the work of the
of a company proxy to vote in accordance with the sharehold-
Supervisory Board and its subcommittees over the past
ers’ instructions. An electronic transfer facility is also provided
financial year. The Report of the Supervisory Board for the
for the submission of powers of attorney. No company share
2014 financial year is published in the company’s Annual
option schemes or similar stock incentive programs existed
Report on pages 88 to 89. This report is thereby quoted by
during the past financial year.
way of reference.
The company provides regular and timely information relating
Corporate Governance and Compliance
to the position of the company and in respect of material
The company’s system of corporate governance is based
changes to the business. Extensive documentation and infor-
on German law, specifically on legislation governing public
mation resources are provided on the company’s website.
limited companies, corporate co-determination and capital
In addition, electronic distribution systems and the electronic
markets, as well as on the company’s Articles of Associa-
version of the German Federal Gazette (“Bundesanzeiger”) are
tion. The company’s Articles of Association are published
used to ensure timely communication with our shareholders
on the company website at www.bauer.de, in the “Investor
and with the public at large.
Relations” section under “Corporate Governance”. The Management Board employs the Corporate Management Manual
Four times a year, BAUER AG publishes updates on the
implemented throughout the Group as its central instrument of
course of its business in the form of quarterly interim financial
management. The Corporate Management Manual also sets
reports, the half-year interim financial report and the annual
out framework policy guidelines covering the entire Group,
financial statements. Notifications relating to voting rights
and lays down the principles of corporate governance and
as well as items of insider information relating directly to
the program of basic values which dictate the ethical and
the company are disclosed by the Management Board
moral conduct of the company’s employees in carrying out
immediately. The Annual General Meeting passed a resolution,
the business of the company. A Code of Conduct defining
with the necessary three-quarters majority, stipulating that
correct behavior of employees in the BAUER Group, dealing
the remuneration paid to members of the Management
in particular with the topics of anti-corruption, competition
Board shall not be disclosed individually. Consequently, as
and cartel law, health, safety & environment (HSE) as well
has been the policy to date, only the remuneration paid
as dealing with business partners, has additionally been
to the Management Board in total and the structure of the
published on the company’s website.
remuneration system are disclosed in the Remuneration
Report on pages 61 to 63 of the company’s Annual Report.
An appropriate system of risk management and of internal
controls is established within the company. The essential
SHAREHOLDINGS OF THE MANAGEMENT BOARD
features of the risk management and control system are set
AND SUPERVISORY BOARD
out in the Risk Report forming part of the Combined Man-
Members of the Management Board at the year-end held
agement Report. The established risk management system
a total of 1,742,022 (previous year: 1,741,022) shares in the
supports Group-wide control and monitoring procedures.
company as per December 31, 2014. This corresponded
Internal auditing systems monitor compliance with laws
to 10.17 % (previous year: 10.16 %) of the share capital of
and standards across the Group. The Management Board
BAUER AG. At the same date members of the Supervisory
regularly updates the Supervisory Board on existing risks
Board held a total of 1,310,531 (previous year: 1,310,431)
and risk trends, as well as on internal auditing procedures.
Bauer shares, corresponding to 7.65 % (previous year:
7.65 %) of the company’s share capital.
87
88
Report of the Supervisory Board 2014
The Supervisory Board regularly monitored the work of the
Supervisory Board reviewed the actions of the Management
Management Board during the 2014 financial year on the
Board in dealing with the aforementioned issues as well
basis of the detailed reports provided by the Management
as the strategy being pursued by the Group, providing the
Board in written and verbal form, and provided support
Management Board with advice and support to ensure that an
in the form of advice. The Management Board discharged
appropriate approach was employed. The current business
its duties to provide the Supervisory Board with regular,
development in the Construction, Equipment and Resources
prompt and comprehensive information about all questions of
segments was discussed in all Supervisory Board meetings.
strategy, planning, company development, risk development
and compliance that are relevant to the company and the
At the annual accounts review meeting in April relating to
Group. Between the meetings, the Management Board
the annual parent company and Group consolidated finan-
submitted monthly written reports on all important business
cial statements for the 2013 financial year, also attended
transactions and financial indicators of the Group and the
by the auditors, a detailed review was undertaken of the
company. The Chairman of the Supervisory Board was
respective financial statements and associated management
also in regular contact with the Management Board, and
and audit reports, taking into due consideration the report
gathered information as appropriate relating to the course
from the Audit Committee, and the proposal of the Manage-
of business and key transactions.
ment Board with regard to the appropriation of earnings.
Furthermore, the Supervisory Board dealt with compliance
In their subcommittees and plenary sessions, the Supervisory
with the financing covenants in this meeting, as well as the
Board members always had the opportunity to scrutinize
preparations for a syndicated loan. Current legal cases,
the reports and proposals submitted by the Management
the remuneration of the Management Board and extension
Board and to set forth their own suggestions. In particular,
of the term in office for the member of Management Board
the Supervisory Board intensively discussed all business
Heinz Kaltenecker were discussed
transactions important for the company on the basis of
written and verbal reports from the Management Board,
In the second meeting of the financial year, the Supervisory
and examined them with regard to plausibility.
Board dealt with, amongst other matters, the interim report
for the first quarter of 2014, the Group’s financing situation
There were no indications of conflicts of interest among
including the cost-cutting program and the segments’ order
members of the Management Board or Supervisory Board
situation.
requiring immediate notification of the Supervisory Board and
disclosure to the Annual General Meeting. There were no
In conjunction with the September meeting, the Super-
changes of personnel on the Supervisory Board in the past
visory Board obtained information about the handling of a
financial year.
construction site at a major project. The meeting focused on
the expected development of earnings, the liquidity required
Main focus of consultations in Supervisory Board
in major projects, the debt situation in the Group as well as
meetings
compliance topics. It also approved the medium-term plan
Four regular plenary meetings were held during the reporting
with regard to the consolidated balance sheet.
year. Apart from two meetings at which one member was
absent in each instance, the meetings of the Supervisory
In the last meeting of the Supervisory Board in December
Board were attended by all members.
of the year under review, the expected development of
earnings and planning for the 2015 financial year were
The Supervisory Board reviewed performance trends on
discussed in particular. An updated declaration of conformity
large-scale projects on several occasions in the course of
to the German Corporate Governance Code was passed,
the past year, and also gave consideration to the status of a
and approval was given to the employee bonus framework.
cost-cutting program and assessed the liquidity planning. The
REPORT OF THE SUPERVISORY BOARD
Work carried out by the subcommittees
the Supervisory Board, PricewaterhouseCoopers AG und
In the 2014 financial year there were four committees of
Wirtschaftsprüfungsgesellschaft, Stuttgart. The accounts
the Supervisory Board. The Mediation Committee and the
were certified by the auditors without reservation. The Audit
Nominations Committee were not required to convene. The
Committee subjected the audit documentation and reports
chairpersons submitted regular reports on the main content
to thorough scrutiny. The Committee reported on its review
of the subcommittee meetings to the plenary Supervisory
to the Supervisory Board. The auditors attended the relevant
Board meetings. The meetings of the various subcommittees
meetings of the Audit Committee as well as the annual
of the Supervisory Board in the financial year were attended
financial review meeting of the plenary Supervisory Board.
by all the respective members.
The audit documentation and reports from the auditors
Two meetings of the Presidial and Personnel Committee
were provided to all members of the Supervisory Board in
were convened. At those meetings, preparations were
good time for scrutiny. The Supervisory Board duly noted
made for the decision of the Supervisory Board relating to
and concurred with the findings of the auditors’ review
the setting of the salaries and performance bonuses of the
of the parent company and Group consolidated financial
members of the Management Board and to the structuring of
statements and the Combined Management Report. On
its remuneration system, as well as to the performance bonus
conclusion of the Supervisory Board’s review, no objections
framework. Consideration was also given to the declaration
were raised. The financial statements of BAUER AG and the
of conformity to the German Corporate Governance Code,
consolidated financial statements of the Group were approved
as well as to the extension of the contract of service of
by the Supervisory Board at its annual review meeting on
Management Board member Heinz Kaltenecker.
April 8, 2015. The annual financial statements of BAUER AG
were thereby confirmed. Following prior consultations by the
The Audit Committee held one conference call and four
Audit Committee, the Supervisory Board concurred with the
meetings in the financial year. The committee reviewed
proposal of the Management Board regarding the appropria-
the audit of the interim reports and, in the presence of the
tion of net profit available for distribution.
auditors, the audit of the annual financial statements of the
parent company and the consolidated financial statements
On behalf of the Supervisory Board, I would like to thank
of the Group. It also prepared the appointment of the auditor,
the members of the Management Board, all the Group’s
taking account of the examination into the latter’s impartiality.
employees and the employee representatives within all
Furthermore, the forecast reporting, liquidity commitment
Group companies for their great commitment throughout
and enforcement of supplements in major projects were
the past financial year.
examined, as were the financing of the Group of companies
and the sale of a participation. A dedicated meeting
reviewed the risk management system’s compliance with
Schrobenhausen, April 2015
applicable laws and standards, as well as the audit activities
The Supervisory Board
of the Internal Auditing function.
Auditing of 2014 annual and consolidated financial
statements
Dr. Klaus Reinhardt
The annual financial statements of BAUER AG to December 31,
Chairman of the Supervisory Board
2014 and the consolidated financial statements of the Group,
as well as the Combined Management Report, including
the Group accounts, were audited by the auditors elected
by the Annual General Meeting and duly appointed by
89
91
Balance Sheet and Income Statement of
BAUER Aktiengesellschaft in accordance
with HGB
Income Statement of BAUER Aktiengesellschaft
93
Balance sheet of BAUER Aktiengesellschaft as at December 31, 2014
2014
CONSOLIDATED FINANCIAL STATEMENTS
92
Our customer Stefanutti Stocks Geotechnical employed a BG 28 in the construction work on the Simon Vermooten Bridge in
Pretoria, South Africa. Drilling cased piles with a diameter of 1,250 mm were produced in depths of up to 30 m, including 3 m
rock socketing.
92
Income Statement of
in EUR '000
1.
Sales revenues
2.
Other capitalized goods and services for own account
3.
Other operating income
4.
Cost of materials
5.
Staff costs
6.
Amortization of intangible assets and depreciation of property, plant and equipment
7.
Other operating expenses
Operating result
01.01. - 31.12.2013
01.01. - 31.12.2014
30,495
30,046
0
8
2,124
5,749
32,619
35,803
-1,733
-1,052
-14,613
-15,450
-3,191
-2,874
-13,776
-16,667
-33,313
-36,043
-694
-240
8.
Income from participations
4,356
4,950
9.
Other interest and similar income
7,029
7,950
10. Interest and similar expenses
-4,804
-5,914
Financial result
6,581
6,986
Result from operating activities
5,887
6,746
11. Extraordinary expenses
-141
-141
12. Income tax expense
-609
-666
-17
-18
5,120
5,921
15. Profit carryforward
22,309
27,429
16. Net earnings available for distribution
27,429
33,350
13. Other taxes
14. Net profit for the year
93
Balance sheet of BAUER Aktiengesellschaft
as at December 31, 2014
in EUR '000
A.
Fixed assets
I.
Intangible assets
II.
Property, plant and equipment
III.
Financial assets
B.
Current assets
I.
Inventories
Raw materials and supplies
II.
Receivables and other assets
(of which receivables from affiliated companies)
III.
Cash at banks
31.12.2013
31.12.2014
2,982
2,616
3,822
3,557
115,696
116,646
122,500
122,819
74
71
174,049
(172,622)
205,920
(204,598)
1,517
960
175,640
206,951
Prepayments and deferred charges
586
641
Deferred tax assets
352
603
299,078
331,014
31.12.2013
31.12.2014
73,001
73,001
2014
C.
D.
Assets
in EUR '000
A.
I.
Subscribed capital
II.
Capital reserve
39,781
39,781
III.
Revenue reserves
15,100
15,100
IV.
Net earnings available for distribution
(off which profit carryforward EUR 27,429 thousand; previous year EUR 22,309 thousand)
27,429
33,350
155,311
161,232
6,716
(5,575)
7,841
(6,600)
137,051
(53,830)
161,941
(34,942)
299,078
331,014
B.
Provisions
(of which provisions for defined benefit plans)
C.
Liabilities
(of which liabilities payable to affiliated companies)
95
96
Consolidated statement of profit or loss
96
Consolidated statement of comprehensive income
97
Consolidated cash flow statement
98
Consolidated balance sheet as at December 31, 2014
Consolidated statement of chances in equity
101
Notes of the consolidated financial statement
180
Assurance by the Legal Representatives
181
Auditor’s Report
2014
100
Consolidated Financial Statements
in accordance with IFRS
After over 375 years, the Paulaner Brauerei in Munich left its brewery facility at Nockherberg and dug new wells on the outskirts
of the city near Langwied. GWE Pumpenboese GmbH supplied materials for this.
96
Consolidated statement of profit or loss
and Consolidated statement of comprehensive
income
Income Statement
in EUR '000
1.
Sales revenues
2.
Changes in inventories
3.
4.
Other income
Appendix 01.01. - 31.12.2013 * 01.01. - 31.12.2014
(6)
1,402,173
1,375,679
-4,423
26,622
(7)
19,196
14,696
(8)
30,579
89,022
1,447,525
1,506,019
CONSOLIDATED REVENUES
5.
Cost of materials
(9)
-755,906
-749,247
6.
Staff costs
(10)
-342,815
-355,250
7.
a) Depreciation of fixed assets
(11)
-79,696
-78,781
b) Write-downs of inventories due to use
(12)
-14,196
-15,789
(13)
-224,827
-230,526
30,085
76,426
8.
OPERATING RESULT
9.
Financial income
10. Financial expenses
(14)
7,729
7,096
(15)
-45,541
-45,149
11. Share of the profit or loss of associated companies accounted for using the equity method
PROFIT BEFORE TAX
12. Income tax expense
(16)
NET PROFIT OR LOSS
of which attributable to shareholders of BAUER AG
of which attributable to non-controlling interests
in EUR
1,770
-572
-5,957
37,801
-13,474
-22,075
-19,431
15,726
-16,927
14,481
-2,504
1,245
01.01. - 31.12.2013
Basic earnings per share
(17)
Diluted earnings per share
(17)
-0.99
01.01. - 31.12.2014
0.85
-0.99
0.85
Average number of shares in circulation (basic)
17,131,000
17,131,000
Average number of shares in circulation (diluted)
17,131,000
17,131,000
01.01. - 31.12.2013
01.01. - 31.12.2014
-19,431
15,726
970
-32,264
-226
9,046
2,094
-5,323
Included in profit and loss
-310
6,497
Deferred taxes on financial instruments with no effect on profit and loss
-642
54
-15,678
10,545
Other result after tax
-13,792
-11,445
Total Comprehensive income for the year
-33,223
4,281
-28,924
2,360
-4,299
1,921
Statement of Comprehensive Income
in EUR '000
Net profit or loss
Income and expenses which will not be subsequently reclassified to profit and loss
Revaluation of commitments arising from employee benefits after termination of employment
Deferred taxes on that revaluation with no effect on profit and loss
Income and expenses which will not be subsequently reclassified to profit and loss
Market valuation of derivative financial instruments
Differences from currency translation
of which attributable to shareholders of BAUER AG
of which attributable to non-controlling interests
97
Consolidated cash flow statement
in EUR '000
01.01. - 31.12.2013 * 01.01. - 31.12.2014
-5,957
37,801
Depreciation of fixed assets
79,696
78,781
Write-downs of inventories due to use
14,196
15,789
Financial income received
-4,610
-4,463
Financial expenses paid
39,358
40,567
6,088
-49,476
Other non-cash transactions
Dividends received
Result from the disposal of fixed assets
Change in provisions
2,951
450
-3,175
-4,773
-3,029
314
Change in trade receivables
-55,342
20,634
Change in receivables from construction contracts
-31,950
24,309
2,279
2,309
Change in receivables from concession arrangements
Change in other assets and in prepayments and deferred charges
Change in inventories
Change in trade payables
Change in liabilities from construction contracts
7,717
-10,506
-22,687
-37,316
20,451
-21,114
4,424
18,551
Change in other current and non-current liabilities
-4,968
22,776
Cash and cash equivalents generated from day-to-day business operations
45,442
134,633
Income tax paid
-7,026
-19,235
Net cash from operating activities
38,416
115,398
-89,240
-69,119
22,053
26,854
34
-5,187
-67,153
-47,452
Raising of loans and liabilities to banks
111,650
202,306
Repayment of loans and liabilities to banks
-17,317
-237,761
Repayment of liabilities from finance lease agreements
-11,012
-11,074
Cash flows from investment activities:
Acquisition of property, plant and equipment and intangible assets
Proceeds from sale of fixed assets
Consolidation scope-related change in financial resources
Net cash used in investing activities
Cash flows from financing activities:
Dividends paid
Interest paid
Interest received
-6,589
-2,872
-39,342
-42,952
6,186
5,462
Net cash used in financing activities
43,576
-86,891
Changes in liquid funds affecting payments
14,839
-18,945
Influence of exchange rate movements on cash
-2,854
3,563
Total change in liquid funds
11,985
-15,382
Cash and cash equivalents at beginning of reporting period
45,232
57,217
Cash and cash equivalents at end of reporting period
57,217
41,835
Change in cash and cash equivalents
11,985
-15,382
2014
Profit before tax
Cash flows from operational activities:
98
Consolidated balance sheet as at
December 31, 2014
Assets
in EUR '000
A.
NON-CURRENT ASSETS
I.
Intangible assets
Appendix
2. Capitalized software costs
3. Capitalized development costs
Property, plant and equipment and investment property
2. Investment property
3. Technical equipment and machinery
4. Other equipment, factory and office equipment
5. Payments on account and assets in course of construction
III.
Investments accounted for using the equity method
Participations
11,038
10,156
90
39
24,260
24,245
35,388
34,440
211,577
206,576
863
804
214,496
206,209
27,319
25,107
(18)
1. Land, land rights and buildings
IV.
31.12.2014
(18)
1. Concessions, industrial property rights and similar rights and values as well
as licenses to such rights and values
II.
31.12.2013 *
5,282
8,213
459,537
446,909
13,249
42,906
3,613
3,613
V.
Deferred tax assets
(19)
26,299
30,973
VI.
Receivables from concession arrangements
(20)
36,762
0
VII. Other non-current assets
(21)
7,564
7,492
VIII. Other non-current financial assets
(22)
5,420
28,420
587,832
594,753
1. Raw materials and supplies
146,666
155,334
2. Finished goods and work in progress and stock for trade
272,686
283,850
419,352
439,184
1. Receivables from construction contracts (PoC)
143,234
132,159
2. Trade receivables
320,301
311,417
B.
CURRENT ASSETS
I.
Inventories
II.
(23)
(24)
3. Receivables from enterprises in which the company has participating interests
444
67
3,725
4,304
5. Other current assets
30,695
28,603
6. Other current financial assets
19,551
20,100
517,950
496,650
4. Payments on account
III.
Effective income tax refund claims
IV.
Cash and cash equivalents
(25)
3,437
2,661
57,217
41,835
997,956
980,330
1,585,788
1,575,083
99
Appendix
31.12.2013 *
31.12.2014
73,001
73,001
SHAREHOLDERS’ EQUITY
I.
Subscribed capital
II.
Capital reserve
38,404
38,404
III.
Other revenue reserves and net earnings available for distribution
285,601
287,903
Equity of BAUER AG shareholders
397,006
399,308
IV.
Non-controlling interests
22,809
19,617
419,815
418,925
247,775
364,771
B.
NON-CURRENT LIABILITIES
I.
Liabilities to banks
II.
Liabilities from finance lease agreements
III.
Defined benefit plans
IV.
Other non-current liabilities
V.
Other non-current financial liabilities
VI.
Deferred tax liabilities
C.
CURRENT LIABILITIES
I.
Liabilities
(27)
(28)
(19)
13,032
116,358
6,483
5,959
14,397
10,013
14,954
13,123
382,511
523,256
427,589
266,533
(29)
1. Liabilities to banks
2. Liabilities from finance lease agreements
3. Advances received for orders
4. Liabilities from construction contracts (PoC)
5. Trade payables
6. Receivables from enterprises in which the company has participating interests
7. Other current liabilities
8. Other current financial liabilities
II.
17,265
81,637
10,185
7,453
9,801
19,579
32,839
48,471
194,471
168,974
219
205
69,873
68,632
12,102
25,712
757,079
605,559
9,606
9,317
14,809
15,880
Provisions
1. Effective income tax obligations
2. Provisions
(30)
3. Current portion of defined benefit plans
(28)
(26)
A.
1,968
2,146
26,383
27,343
783,462
632,902
1,585,788
1,575,083
2014
in EUR '000
100
Consolidated statement of chances in equity
Other revenue reserves and net earnings
available for distribution
in EUR '000
Subscribed
capital
As at 01.01.2013
Capital
reserve
Revenue
reserves
Currency
translation
reserve
Reconciling
Hedging
item,
transactions
IFRS
reserve
Noncontrolling
interests
Total
73,001
38,404
303,892
7,373
10,387
-3,722
33,205
462,540
Net profit or loss
0
0
-16,927
0
0
0
-2,504
-19,431
Differences from currency
translation
0
0
0
-13,865
0
0
-1,813
-15,678
Revaluation of commitments
arising from employee benefits
after termination of employment
0
0
964
0
0
0
6
970
Market valuation of derivative
financial instruments
0
0
0
0
0
1,767
17
1,784
Deferred taxes with no effect
on profit and loss
0
0
-225
0
0
-638
-5
-868
Total Comprehensive income
for the year
0
0
-16,188
-13,865
0
1,129
-4,299
-33,223
Changes in scope of consolidation
0
0
-2,887
0
0
0
0
-2,887
Dividend payments
0
0
-5,139
0
0
0
-1,450
-6,589
Other changes *
0
0
4,621
0
0
0
-4,647
-26
As at 31.12.2013
73,001
38,404
284,299
-6,492
10,387
-2,593
22,809
419,815
As at 01.01.2014
73,001
38,404
284,299
-6,492
10,387
-2,593
22,809
419,815
Net profit or loss
0
0
14,481
0
0
0
1,245
15,726
Differences from currency
translation
0
0
0
9,641
0
0
904
10,545
Revaluation of commitments
arising from employee benefits
after termination of employment
0
0
-31,956
0
0
0
-308
-32,264
Market valuation of derivative
financial instruments
0
0
0
0
0
1,184
-10
1,174
Deferred taxes with no effect
on profit and loss
0
0
8,959
0
0
51
90
9,100
0
0
-8,516
9,641
0
1,235
1,921
4,281
Total Comprehensive income
for the year
Changes in scope of consolidation
0
0
0
0
0
0
-3,199
-3,199
Dividend payments
0
0
0
0
0
0
-2,872
-2,872
Other changes
As at 31.12.2014
0
0
-58
0
0
0
958
900
73,001
38,404
275,725
3,149
10,387
-1,358
19,617
418,925
* Previous year adjusted; there was a non-significant change in value in the course of calculating the share of joint ventures according to IFRS 11 and the retrospectively
changed balance sheet disclosure (see page 106)
101
Notes of the consolidated financial statement
GENERAL NOTES
GENERAL INFORMATION ABOUT THE GROUP
BAUER Aktiengesellschaft, Schrobenhausen (referred to in the following as BAUER AG) is a stock corporation under German law.
Its registered office is at BAUER-Strasse in Schrobenhausen, and the company is entered in the Register of Companies of
markets its products and services all over the world. The operations of the Group are divided into three segments:
Construction, Equipment and Resources.
BAUER AG has been listed on the SDAX stock market index since September 2006. Between September 2008 and
September 2010, BAUER AG was also listed on the MDAX index.
1. BASES FOR COMPILING THE CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of BAUER AG were prepared applying section 315a of the German Commercial Code
(HGB) in accordance with International Financial Reporting Standards (IFRS), as applicable in the EU. The consolidated
financial statements were prepared on the basis of historical cost, limited by the market-value valuation of available-for-sale
financial assets and by the fair-value valuation of financial assets and liabilities (including derivative financial instruments)
affecting net income. The previous year’s figures have been determined according to the same principles.
The BAUER Group’s financial year is the calendar year.
The consolidated financial statements were prepared in euros. Unless otherwise specified, all amounts are quoted in thousands
of euros (EUR '000).
The income statement was prepared according to the nature of expenses method.
2. SCOPE OF CONSOLIDATION AND CONSOLIDATION PRINCIPLES
Scope of consolidation
The scope of consolidation includes BAUER AG and all major subsidiaries. Subsidiaries are all companies over which the parent
has control in terms of financial and corporate policy. This is routinely accompanied by a voting share of over 50 %. When
assessing whether control is exerted, the existence and effect of potential voting rights currently exercisable or convertible
are considered.
The consolidated financial statements 2014 include 120 companies (previous year: 122). Of these, 0 (previous year: 3)
were included in the scope of consolidation for the first time. Since the start of 2014, 4 (previous year: 2) companies have
been removed from the scope of consolidation due to merger and sale. Consortia have not been included in the number of
companies included in the scope of consolidation, because of the short-term nature of the projects involved. Also, non-significant
joint ventures have not been considered in the stated number of included companies.
2014
The BAUER Group is a provider of services, equipment and products dealing with ground and groundwater. The Group
Ingolstadt under file reference (HRB 101375).
102
NOTES OF THE CONSOLIDATED FINANCIAL STATEMENT 2014
The following overview shows the number of subsidiaries broken down by segment:
Main business
Construction
segment
Headquarters
Number of
wholly-owned
subsidiaries
Number of
non-wholly-owned
subsidiaries
Total
Number of
associated
companies
31.12.
2013
31.12.
2014
31.12.
2013
31.12.
2014
31.12.
2013
31.12.
2014
31.12.
2013
31.12.
2014
Special foundation engineering,
mining, project development
Worldwide
30
30
5
5
11
12
46
47
Equipment
segment
Machine manufacturing
and sale
Worldwide
26
25
8
9
1
1
35
35
Resources
segment
Environment and
environmental technology
Worldwide
28
26
9
7
1
2
38
35
Central services
Worldwide
3
3
0
0
0
0
3
3
87
84
22
21
13
15
122
120
‘Other’
segment
Total
Subsidiary companies are not included in the consolidated financial statements if they are not material from the viewpoint of
an operating segment or of the Group based on the following assessment:
If the sum of all subsidiaries not included in the consolidated financial statements accounts for more than 1 % of the Group’s
total net assets, consolidated revenues or net profit for the period, an assessment is undertaken as to which company should
be included in the consolidated financial statements taking into account sustainability and consolidation effects. The assessment criteria for materiality in respect of associated companies are restricted to annual earnings. Alongside quantitative
criteria, qualitative criteria are also applied in assessing the materiality of a company with regard to its inclusion in the scope of
consolidation. Consequently, the non-inclusion of any one company must not result in material changes to segment or Group
annual earnings, nor must it mask any other materially relevant trends.
In a small number of cases, companies are fully consolidated into the financial statements of BAUER AG even though that
company holds less than 50 % of their voting rights. This is the result of state restrictions which stipulate that foreign investors
may not hold more than 50 % of the voting rights in domestic companies. In such cases BAUER AG makes use of so-called
agency constructions, whereby more than 50 % of the voting rights are commercially held in the company concerned, thus
allowing for full consolidation.
Subsidiaries are included in the consolidated financial statements (fully consolidated) from the point at which control is
transferred to the Group. They are de-consolidated at the point when control ends. Companies of which BAUER AG is
able, directly or indirectly, to exercise a significant influence on the said companies’ financial and operating policy decisions
(associated companies) are consolidated according to the equity method. 16 (previous year: 15) companies were affected by
this as at 31 December. The consolidated subgroup of Wöhr + Bauer GmbH was disclosed as one company in the previous
year. All companies of the subgroup were listed in the financial year. The previous year’s figure was changed accordingly.
Joint ventures were also consolidated according to the equity method.
The main subgroups and companies included in the consolidated financial statements are listed in the Major Participations
section. The disclosures in accordance with Section 313, Subsection 2 HGB are grouped in a separate list of holdings. This
will be published as part of the Notes to the financial statements of BAUER Aktiengesellschaft in the electronic version of
the official Gazette (“Bundesanzeiger”) of the Federal Republic of Germany. Subsidiaries with differing balance sheet dates
compile interim financial statements as per the consolidated balance sheet date. NuBa Equipment Ltd., Canada, prepares its
annual financial statements as at 30 September, because Nuna Logistics Limited, Edmonton, Canada, as another shareholder, also prepares its annual financial statements as at 30 September. BAUER Corporate Services Private Limited, India,
prepares its financial statements as at 31 March due to local statutory requirements.
103
Changes at subsidiaries
Equipment segment
Purchases
With effect from April 30, 2014, Celler Brunnenbau Holding GmbH, Celle, contributed assets with a fair value of
determined by the DCF method was allotted. The asset deal also entailed a premium of EUR 786 thousand.
The assets contributed are linked to the business unit involved in the production of drilling rigs, casing oscillators and grip
heads, as well as spare parts in particular for water extraction, subgrade and constructional engineering works, and geological drilling and exploration.
Amounts recorded at time of acquisition:
in EUR '000
0
Equity portions
900
Total acquisition cost
900
Non-current assets
900
Current assets
Assets
0
900
0
Current liabilities
0
0
Net worth
900
900
As this is a change in equity at a subsidiary as a result of which the Group’s share in equity is reduced or increased without
loss of control, the change is recognized as a transaction between equity investors not affecting profit and loss.
No goodwill was created by the asset deal.
Resources segment
Mergers
On August 25, 2014, GWE Prakla Services GmbH, Peine, Germany and on August 29, 2014, GWE GF-Tec GmbH, Rödermark,
Germany were merged into GWE pumpenboese GmbH, Peine, Germany retrospectively with effect from January 1, 2014.
On October 30, 2014, PESA ENGINEERING S.A., Madrid, Spain and BAUER Ingeneria Medioambiental S.A., Madrid, Spain
were merged and the company name changed to BAUER RESOURCES SPAIN S.A., Madrid, Spain.
2014
In return, linked to a capital increase by PRAKLA Bohrtechnik GmbH, Peine, a capital share (10 %, or EUR 114 thousand)
EUR 900 thousand to PRAKLA Bohrtechnik GmbH as part of an asset deal. The fair value was certified by an external auditor.
104
Divestments
BAUER Resources GmbH sold 21 % of its shares in BAUER Nimr LLC on November 19, 2014.
The effects of the divestment are presented below:
a) Consideration received
in EUR '000
Consideration received
19.11.2014
13,324
b) Assets and liabilities disposed of due to the loss of control
in EUR '000
19.11.2014
Non-current assets
Intangible assets
Other non-current assets
11
2,042
38,290
11
Current assets
7.997
5,187
−24,103
−435
−12,290
−200
Current liabilities
0
Liabilities from construction contracts (PoC)
−2,046
Trade payables
−2,937
Other current liabilities
−265
Effective income tax obligations
−181
Divested net assets
11,081
c) Overall effect of the proportional sale of BAUER Nimr LLC
in EUR '000
19.11.2014
Considerations received
13,324
Relinquished net assets
−11,081
3,199
Fair value of retained at-equity interest of 49 %
31,089
Overall effect of the proportional sale
36,531
The overall effect is included in Other income and is stated separately in item 8.
105
d) Net cash outflow from the proportional sale of BAUER Nimr LLC
19.11.2014
0
Net of cash or cash equivalents divested as part of the transaction
-5,187
The net cash outflow from the sale
-5,187
The retained at-equity interest was valued at its fair value as a result of the proportional sale of BAUER Nimr LLC. The fair
value was calculated from the discounted transaction price for the sold shares at the time of the divestment. This procedure
falls within Level 3 of the IFRS 13 measurement hierarchy. The complete effect of this measurement is explained on page 104.
Consolidation principles
The assets and liabilities of the German and foreign companies included in the consolidated financial statements are stated
according to the uniform accounting and valuation methods applicable throughout the BAUER Group. Mutual receivables
and liabilities as well as expenses and income between consolidated companies are eliminated. Consolidated inventories and
fixed assets are adjusted by existing intra-Group balances. Consolidation affecting net income is subject to deferral of taxes,
with deferred tax assets and liabilities being offset against each other provided the payment period and tax creditor are the
same. In respect of subsidiaries consolidated for the first time, the identifiable assets, liabilities and contingent liabilities of
the acquired companies were recorded at their applicable fair values at the time of acquisition. Goodwill occurring on initial
consolidation is capitalized and subjected to a yearly impairment test; an excess of the net fair value of the acquired net
assets over cost is recognized in the income statement immediately at the time of initial consolidation in accordance with
IFRS 3. Consolidation according to the equity method is subject to the same principles. If the pro rata loss in an associated
company is equal to or greater than the carrying amount of the participating interest, no further losses are recognized, unless
a consolidated Group company has entered into obligations or made payments on behalf of the associated company.
Non-controlling interests represent the proportion of the result and the net worth which is not to be attributed to the Group.
The result attributable to these interests is stated in the income statement as follows, separately from the proportion of the
result to be allocated to the shareholders of the parent company. It is stated in the balance sheet within shareholders’ equity,
separately from the shareholders’ equity attributable to shareholders of the parent company. The purchase of non-controlling
investments and changes in the investment quota of the parent company in a subsidiary which do not lead to a loss of control
are stated in the balance sheet as equity transactions.
3. KEY ASSUMPTIONS AND ESTIMATES
In the consolidated financial statements, assumptions and estimates must be made which influence the amounts and
recognition of assets and liabilities, income and expenses recorded, as well as contingent liabilities. The main areas of
application of assumptions and estimates are in specifying the useful lives of fixed assets, determining discounted cash flows
within the framework of impairment tests, assessing the realizability of deferred tax assets and the collectability of receivables,
estimating the percentage of completion of construction contracts, establishing the fair value of some financial instruments
and in creating provisions for legal actions, pensions and other benefit commitments, taxes, warranties and guarantees.
The actual values may differ from the estimates made.
Selling price settled with cash and cash equivalents
2014
in EUR '000
106
4. GENERAL ACCOUNTING AND VALUATION METHODS
4.1. General changes to accounting and valuation methods
Application of the following standards and interpretations was mandatory for the first time in the financial year:
• IFRS 10 – Consolidated Financial Statements
IFRS 10 modifies the term “control” such that the same criteria are applied to all entities in assessing a control relationship.
This definition is backed by wide-ranging application examples illustrating various kinds of control.
The effects of IFRS 10 do not have any significant influence on the consolidated financial statements of BAUER AG.
• IFRS 11 – Joint Arrangements
As a result of the changes to definitions in IFRS 11, there are now two kinds of joint arrangement: joint operation and joint
venture. Moreover, the option of proportionate consolidation of jointly controlled entities has been abolished. Parties to a
joint venture are obligated to recognize their share on the balance sheet applying the equity method in accordance with
IAS 28, “Investments in Associates and Joint Ventures”. Parties to a joint operation recognize their shares proportionate to
their share of the assets and liabilities of the joint operation. Consequently, a party to a joint operation includes the following
items in its consolidated financial statements:
- Its assets, including its share in jointly held assets
- Its liabilities, including its share in jointly incurred liabilities
- Its income from the sale of its share in the products of the joint operation
- Its share in income from the sale of products by the joint operation
- Its expenses, including its share in any jointly incurred expenses
The Accounting and Auditing Board of the Institute of German Certified Public Accountants (IDW) takes the view that the
typical German construction consortium meets the preconditions for classification as a joint venture.
As previously mentioned, IFRS 11 stipulates that shares in joint ventures are to be valued according to the equity method.
In the BAUER Group, the changes relate to the statement in the balance sheet and the income statement.
Proportionate results are no longer stated under receivables from joint ventures and sales revenues with consortia as used
to be the case, but under investments accounted for using the equity method as well as in the result from investments
accounted for using the equity method. The previous year’s figures have been adjusted for greater comparability.
The effects of IFRS 11 do not have any significant influence on the consolidated financial statements of BAUER AG, with the
exception of changes in recognition of items.
• IFRS 12 – Disclosure of Interests in Other Entities
IFRS 12 requires disclosures which enable readers of financial statements to assess the nature, risks and financial effects
linked to interests in subsidiaries, associated companies, joint arrangements and non-consolidated structured entities
(special-purpose entities).
The effects of IFRS 12 are presented in the notes to the consolidated financial statements of BAUER AG.
• IAS 27 – financial statements (revised 2011)
The new regulations included in IFRS 10, consolidated financial statements, have replaced the consolidation guidelines
contained in the former IAS 27, consolidated and financial statements, as well as SIC-12, consolidation – special purpose
107
vehicles. Now, IAS 27 only contains the regulations that are to be applied to separate financial statements, as a result of
which the standard has been renamed as IAS 27, financial statements (revised 2011).
The effects of IAS 27 (revised 2011) do not have any significant influence on the consolidated financial statements of
This amendment replaces IAS 28 - Investments in Associates - and stipulates the preconditions for application of the equity
method by associates and joint ventures.
• IAS 32 – Financial Instruments: Representation
The amendment essentially involves clarification of a number of rules for the offsetting of financial assets and liabilities.
A financial asset may only be set off against a financial liability if the claim is current - that is to say, it must not be dependent on a future event. Additionally, the amendments clarify that gross offsetting mechanisms (such as through clearing),
which both eliminate credit and liquidity risks and process receivables and liabilities in a single accounting process, must
be treated as equivalent to net offsetting.
The effects of IAS 32 do not have any significant influence on the consolidated financial statements of BAUER AG.
• IAS 36 – Impairment of Assets
Pursuant to the amendment to IFRS 13 Fair Value Measurement, a number of disclosure rules in IAS 36 Impairment of
Assets regarding measurement of the achievable amount of asset impairment have been changed.
• IFRS 39 – Financial Instruments: Recognition and Measurement
With the amendment to IAS 39, it is possible to retain hedge accounting for derivatives if the contract party changes.
This possibility is only allowable under certain preconditions.
• Amendments to IFRS 10, IFRS 12 and IAS 27
The IASB project resulting in the amendments to IFRS 10, IFRS 12 and IAS 27 emerged from the consultation process
relating to the publication of IFRS 10 Consolidated Financial Statements.
The effects of this do not have any significant influence on the consolidated financial statements of BAUER AG.
• Amendments to IFRS 10, IFRS 11 and IFRS 12
The collective amendment to IFRS 10, IFRS 11 and IFRS 12 clarifies their transitional provisions. Early adoption is allowable
only in respect of all standards together.
• IFRIC 21 – Levies
IFRIC 21 regulates accounting for government levies not covered by IAS 12. It stipulates when such an obligation is to be
recognized as a liability.
The effects of IFRIC 21 do not have any significant influence on the consolidated financial statements of BAUER AG.
Moreover, the IASB and the IFRIC have adopted further standards, interpretations and amendments, as listed below, which
were not yet bindingly applicable, or had not yet been recognized by the EU, in financial 2014. The BAUER Group had not
implemented early application of these standards by December 31, 2014.
2014
• IAS 28 – Investments in Associates and Joint Ventures
BAUER AG.
108
Initial application of the standards is planned as from the point they are recognized and adopted by the EU.
Applicable
from the
financial year
Adoption
by EU
Amendment to IAS 19, defined benefit plans: employee contributions
2015
Yes
Annual improvements in IFRS (cycle 2010 - 2012)
2015
Yes
Annual improvements in IFRS (cycle 2011 - 2013)
2015
Yes
Amendment to IFRS 11, purchase of interests in a joint activity
2016
No
Amendment to IAS 16 and IAS 38, clarification of acceptable depreciation methods
2016
No
Amendment to IAS 16 and IAS 41, agriculture: producing plants
2016
No
IFRS 15, sales revenues from customer contracts
2017
No
Amendment to IAS 27, financial statements (equity method)
2016
No
Amendment to IFRS 10 and IAS 28, disposal of an investor’s assets in or application
to the investor’s associated company or joint venture
2016
No
-
No
Amendment to IFRS 10, IFRS 12 and IAS 28, investment companies −
application of the consolidation exception
2016
No
Amendment to IAS 1, disclosure initiative
2016
No
IFRS 14, regulatory deferrals and accruals
2016
No
IFRS 9, financial instruments
2018
No
Standard/interpretation/amendments
Annual improvements in IFRS (cycle 2012-2014)
Possible effects of the first use of IFRS 15, sales revenues from customer contracts, cannot be ultimately assessed at the
present time. BAUER AG does not expect any significant effect on the consolidated financial statements to result from any of
the other standards.
4.2. Accounting and valuation methods within the Group
Currency translation reserve
Currency translation reserve are translated in the financial statements of BAUER AG and the consolidated subsidiaries at the
rates applying on the dates of the transactions. The financial statements of the foreign companies belonging to the BAUER
Group are translated into euros according to the functional currency concept. Accordingly, assets and liabilities are translated
at the rate applying on the balance sheet date and the income statement items at the average rate. The differences arising
from currency translation are recognized in the currency translation reserve as part of the shareholders’ equity, without
affecting net income.
109
The rates used for translation are based on the following table:
SGD
1.6661
2014
1.6778
2013
1.7392
2014
1.6074
Thailand
THB
41.0558
42.9860
45.2177
40.0245
Mexico
MXP
17.1181
17.6560
18.0282
17.9234
Chile
CLP
664.3491
757.8911
724.4884
736.1344
Argentina
ARS
7.3833
10.8648
8.9744
10.4039
Peru
PEN
3.6211
3.7598
3.8506
3.6351
Japan
JPY
130.3063
140.5059
144.5122
145,2439
United States of America
USD
1.3301
1.3219
1.3767
1.2166
South Africa
ZAR
12.9709
14.3577
14.5035
14.0575
UK
GBP
0.8497
0.8028
0.8331
0.7818
Malaysia
MYR
4.2178
4.3329
4.5204
4.2622
Saudi Arabia
SAR
4.9982
4.9585
5.1632
4.5653
Lebanon
LBP
2,005.2622
1,995.3273
2,068.4917
1,838.8153
Egypt
EGP
9.1766
9.3713
9.5661
8.6984
Indonesia
IDR
14,047.7904
15,669.6389
16,754.4389
15,139.9647
Hungary
HUF
298.0405
309.9893
297.0230
314.9587
Romania
RON
4.4164
4.4386
4.4739
4.4845
United Arab Emirates
AED
4.8855
4.8553
5.0565
4.4685
Philippines
PHP
56.7348
58.7377
61.1186
54.4041
New Zealand
NZD
1.6295
1.6001
1.6747
1.5506
Taiwan
TWD
39.6265
40.1344
41.0539
38.5999
Hong Kong
HKD
10.3173
10.2525
10.6753
9.4373
China
CNY
8.1686
8.1575
8.3314
7.5550
Switzerland
CHF
1.2288
1.2124
1.2267
1.2024
Australia
AUD
1.3937
1.4708
1.5396
1.4841
Canada
CAD
1.3759
1.4634
1.4636
1.4117
Russia
RUB
42.5912
51.5000
45.2582
67.5895
India
INR
78.5205
80.7777
85.2246
77.4729
Bulgaria
BGL
1.9558
1.9559
1.9560
1.9559
Sweden
SEK
8.6664
9.1184
8.8263
9.4275
Poland
PLN
4.2159
4.1955
4.1508
4.2902
Panama
PAB
1.3301
1.3219
1.3767
1.2166
Qatar
QAR
4.8418
4.8133
5.0133
4.4307
Turkey
TRY
2.5646
2.8937
2.9450
2.8327
Vietnam
VND
27,999.3993
28,039.4804
29,062.1368
26,031.7369
Jordan
JOD
0.9421
0.9357
0.9753
0.8611
Oman
OMR
0.5121
0.5090
0.5301
0.4684
Ghana
GHS
2.7791
4.0594
3.2559
3.9112
Georgia
GEL
2.2134
2.3352
2.3887
2.2604
2013
Singapore
Balance sheet date
2014
Yearly average value
1 EUR corresponds to
110
Intangible assets
Intangible assets are capitalized at cost and amortized according to the straight-line method over the projected useful life of
3 to 10 years.
Assets which have an indefinite useful life, such as goodwill, are not subjected to scheduled amortization but are impairmenttested each year, or when relevant indications arise. The goodwill is the amount by which the acquisition cost of the acquisition exceeds the fair value of the Group’s shares in the net assets of the acquired entity at the date of acquisition. Goodwill
created by acquisition is recognized under “Intangible assets”. Goodwill resulting from the acquisition of an associated
company is included in the carrying amount of investments in associated companies and consequently is not impairmenttested separately, but within the overall carrying amount. The recognized goodwill is subjected to an annual value retention
test and valued at its original acquisition cost less cumulative impairment. Value recovery adjustments are not permitted.
Gains and losses from the disposal of an entity include the carrying amount of the goodwill assigned to the entity being sold.
Assets which are subject to scheduled amortization are impairment-tested if relevant events or changes in circumstances
indicate that the carrying amount may no longer be attainable.
Impairment in the amount of the carrying amount exceeding the attainable amount is recognized. The attainable amount is the
higher amount of the applicable fair value of the asset less selling costs and the value in use. For the impairment test, assets
are grouped at the lowest level for which cash flows can be separately identified (cash-generating units). With the exception
of goodwill, a test is performed on each balance sheet date in respect of non-cash assets for which in the past an impairment
was recognized as to whether a value recovery adjustment is required.
Research and development costs are generally charged as expenditure in the financial year in which they occurred, in accordance with IAS 38. Exceptions to this are certain development costs which are capitalized where it is probable that a future
economic benefit will be drawn from the development project and the costs incurred can be measured reliably. In addition,
the following criteria in accordance with IAS 38.57 must be met:
• Technical feasibility of completion of the intangible asset so that it will be available for use or sale
• Intention to complete the intangible asset and to use or sell it
• Ability to use or sell the intangible asset
• Evidence of how the intangible asset will generate probable future economic benefits
• The availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset
• The ability to measure reliably the expenditure attributable to the intangible asset during its development
The cost of manufacture includes all costs directly attributable to the development process as well as appropriate portions of
development-related overheads. The assets in development are subjected to an annual impairment test and valued at their
original cost less cumulative depreciation. Amortization is undertaken according to the straight-line method as from start of
production over the intended term of the developed models. The projected useful life is between 3 and 6 years. Impairment
losses on intangible assets are recognized to the higher of the value in use or net realizable value. If the preconditions for an
impairment no longer exist, reversals of impairment – except for goodwill – are undertaken.
111
According to IAS 16, property, plant and equipment is valued at cost, less scheduled straight-line depreciation based on the
pro rata temporis method, unless in exceptional cases some other method of depreciation more effectively reflects the usage.
Economic life
Buildings and other structures
3 to 60 years
Technical equipment and machinery
3 to 21 years
Other equipment, factory and office equipment
2 to 21 years
Impairment losses on property, plant and equipment are recognized in accordance with IAS 36 where the value in use or
fair value less cost to sell of the asset concerned has fallen below the carrying amount. If the reasons for an impairment
recognized in previous years no longer exist, a corresponding reversal of impairment is applied.
Both impairment losses and scheduled depreciation are recognized under the “Depreciation of fixed assets” item. The level of
impairment losses is explained in accordance with IAS 36 under “Non-current assets”.
Leasing
The BAUER Group acts as both a lessee and a lessor. Leasing relationships are classified according to IAS 17 based on the
distribution of opportunity and risk between the lessor and lessee.
Leasing relationships in which most of the opportunity and risk linked to ownership of the leased item remains with the lessor
are classified as operating leases. Where the lessee has most of the opportunity and risk, the agreement is classified as a
finance lease.
a) Accounting for lessee transactions
Payments made in connection with an operating lease (net after taking into account incentive payments by the lessor) are
recognized in the income statement by straight-line depreciation over the term of the lease.
Assets from finance leases are capitalized at the start of the lease term at the lower of the fair value of the leased item and the
present value of the minimum lease payments. A leasing liability is recognized under “Current and non-current liabilities”. Each
lease installment is split into an interest and a repayment portion, so that the leasing liability is subject to a consistent interest
rate. The interest portion of the lease installment is recognized as affecting expenditure in the income statement. The property,
plant and equipment asset held under a finance lease is written down over the shorter of the economic life of the asset or the
lease term.
b) Accounting for lessor transactions
A lease is an agreement whereby the lessor assigns to the lessee the right to use an asset for a specific period of time against
a payment or series of payments.
Assets leased by the customer in the form of operating leases are assigned on the balance sheet according to their nature.
Income from leases is recognized by the straight-line method over the term of the agreement.
In the BAUER Group, mainly operating leases are entered into as the lessor.
2014
Asset object
The following table provides an overview of the useful lives:
112
Government grants
Government grants for assets including non-monetary benefits at fair value are recognized on the balance sheet as accruals
on the Equity and Liabilities side (Investment allowance) or, on determining the carrying amount of the asset, are deducted
from the Assets side (Invest subsidy).
Business combinations
Acquisitions of subsidiaries are accounted for in accordance with IFRS 3 based on the acquisition method. The cost of the
acquisition corresponds to the fair value of the assets contributed, the equity instruments issued and the liabilities created
and/or transferred at the transaction date. Assets, liabilities and contingent liabilities identifiable in the course of a business
combination are measured on initial consolidation at their fair values at the acquisition date. The amount by which the acquisition cost exceeds the Group’s share of the net assets measured at their fair value is stated as goodwill. The non-controlling
interests are valued either at cost (Partial Goodwill method) or at fair value (Full Goodwill method). The available option can be
exercised on a case-by-case basis. BAUER Group policy is to apply the Partial Goodwill method. If the acquisition cost is less
than the net assets of the acquired subsidiary measured at their fair value, the difference is recognized directly in the income
statement. Transaction costs directly linked to a business combination are recognized in the income statement. In the event
of successive acquisitions, the differences between the carrying amount and the applicable fair value of the shares previously
held are recognized as affecting net income at the time of acquisition. Existing contracts with the acquired entity at the time of
acquisition, except those under the terms of IAS 17 and IFRIC 4, are analyzed and reclassified where appropriate.
Borrowing costs
Borrowing costs linked directly to the acquisition, construction or production of qualifying assets in accordance with IAS
23 are included in the cost of the asset in question for the period until start of use of the asset. No borrowing costs were
capitalized in the financial year. The finance cost rate in the previous year was between 6.76 and 8.0 percent. Testing as to
whether an asset is a qualifying asset is carried out according to internally stipulated materiality limits for projects and installations.
If the said materiality limits are exceeded, borrowing costs for qualified assets are capitalized. Other financing costs are recognized
as ongoing expenditure under “Financial expenses”.
Investment property
Land and buildings maintained in order to generate rental income are accounted for at amortized cost in accordance with
IAS 40, with the useful lives applied for depreciation (straight-line according to the pro rata temporis method) corresponding to
those of the property, plant and equipment used by the company itself. The valuation takes place by deriving current market
prices of comparable real estate. This procedure falls within Level 2 of the IFRS 13 measurement hierarchy.
Associated companies
According to IAS 28, an associated company is any entity over which the investor has significant influence, though not
control. This routinely means voting shares of between 20 and 50 percent.
Shares in associated companies are valued at-equity and recognized initially at cost. The Group’s shares in associated
companies include the goodwill created by the acquisition (less cumulative impairment).
The Group’s share in the profits and losses of associated companies is reported in the income statement as from the time of
acquisition. The share in changes in reserves is recorded in the Group reserves. The cumulative changes after acquisition are
set off against the carrying amount of the investment. If the Group’s share in the losses of an associated company is equal
to or more than the Group’s shareholding in the said associate, including other unsecured claims, the Group recognizes no
additional losses, unless it has entered into obligations or made payments on behalf of the associated company.
113
Non-realized gains from transactions between Group companies and associated companies are eliminated according to
the Group’s share in the associated company. Non-realized losses are likewise eliminated, unless the transaction implies an
impairment of the transferred asset.
agreement. Joint control is the contractually agreed, jointly exercised management of the agreement. This is only provided if
decisions relating to significant activities require the unanimous approval of the parties involved in the joint control.
Joint ventures stated in the balance sheet using the at-equity method also include the consortia which are typical features of
the German economy, in which case provision consortia should be distinguished from umbrella consortia.
In provision consortia, assets are provided to the consortium in the form of personnel, material or equipment, and are
invoiced. Results earned by the consortium are stated according to the equity method in accordance with IAS 28.
Accordingly, this is disclosed in the balance sheet under investments accounted for using the equity method and in the
income statement under the share of the profit or loss of associated companies accounted for using the equity method.
The BAUER Group accounts for consortia in compliance with IFRS 11 as follows: BAUER as a partner in a consortium
accounts for the assets at its disposal and the liabilities it itself incurs, as well as its own expenditures, and recognizes the
income from such activities on a pro rata basis in its sales revenues. The umbrella consortium, on the other hand, always
operates without effect on net income. The remuneration claims between the umbrella consortium and the client are identical
to the remuneration claims of the individual lots towards the umbrella consortium. All payments received from the client are
passed onto the individual lots in full by the umbrella consortium.
Current settlements of and towards consortia are stated under the receivable from or liabilities to consortia.
Joint operations
Joint operations are joint arrangements in which the parties exercising joint control possess rights to the assets and liabilities
for the debts of the arrangement. Joint control is the contractually agreed, jointly exercised control of the arrangement. This
is only provided if decisions relating to significant activities require the unanimous approval of the parties involved in the joint
control.
If the BAUER Group carries out activities in the course of a joint operation, the Group discloses the following items as a joint
operator in conjunction with its share of the joint operation:
- Its assets, including its share in jointly held assets
- Its liabilities, including its share in jointly incurred liabilities
- Its income from the sale of its share in the products or services of the joint operation
- Its share of the income from the sale of the products or services of the joint operation and
- Its expenses, including its share in any expenses jointly entered into
In transactions such as the purchase of assets by a Group company, profits and losses are stated to the extent of the Group’s
share in the joint operation only when assets are sold on to third parties.
2014
Joint ventures are joint arrangements in which the parties with shared controlling interests hold rights to the net assets of the
Joint ventures
114
Financial instruments
a) Primary financial instruments
In the BAUER Group, primary financial instruments are assigned as financial assets to the following categories:
• Loans and Receivables (LaR)
• Available-for-Sale (AfS)
The “Loans and Receivables” category includes current and non-current financial assets.
The “Available-for-Sale” category includes marketable securities as well as equity portions which are not consolidated or
not recognized by the equity method. For those equity portions there is no active market, and no fair value can be reliably
determined for them, so the shares are valued at cost. We have no intention of selling them.
Available-for-sale financial assets are non-derivative financial assets which are classified as available for sale and are not allocated to one of the other categories of financial asset specified. They are recognized at fair value both when initially entered
and in the subsequent periods.
Assets classified as held for sale are impairment-tested at each balance sheet date in relation to objective criteria (such as
significant financial difficulties of the debtor, high probability of insolvency proceedings being initiated against the debtor, loss
of an active market in the financial assets). Any impairment expenditure incurred because a fair value is less than the carrying
amount is recognized affecting net income. Where impairment of the fair values of assets held for sale was previously stated
not affecting net profit in the shareholders’ equity, it must be eliminated from the shareholders’ equity up to the amount of
the measured impairment and recognized in the income statement. If subsequent valuation reveals that the fair value has
objectively increased due to events occurring after entry, the impairment is reversed in the corresponding amount. Recovery in
the value of debt instruments is recognized in the income statement. Impairment affecting equity instruments held for sale and
recognized at cost must not be reversed.
Primary financial instruments as financial liabilities are assigned to the following category:
• Financial Liabilities Measured at Amortized Cost (FLAC) or Other Financial Liabilities
The “Financial Liabilities Measured at Amortized Cost” category includes liabilities to banks, trade payables as well as other
current and non-current liabilities and current and non-current financial liabilities.
Receivables and liabilities in the “Financial Liabilities Measured at Amortized Cost” and “Loans and Receivables” categories
are initially recognized at the applicable fair value, including transaction costs directly attributable to acquisition of the financial
asset or incurring of the financial liability, and subsequently measured at amortized cost, applying the effective interest rate
method. The amortized cost of a financial asset or liability is calculated, applying the effective interest rate method, from the
historical cost less the repayments made, plus or less the cumulative amortization of any difference between the original
amount and the amount repayable at the final due date, and also less depreciation and impairment or plus appreciation and
value recovery adjustment.
115
In the case of current receivables and liabilities, the amortized cost always corresponds to the nominal amount, or the amount
repayable. Cash and cash equivalents comprise credit balances with banks as well as petty cash stocks, and are valued at
amortized cost.
In the case of financial assets or liabilities recognized in the income statement at fair value, the initial fair value valuation ex-
by value adjustments in separate value adjustment accounts. Financial assets are derecognized if the rights to payments from
the financial assets have expired or been transferred, and the Group has essentially transferred all risks and opportunities
associated with ownership, or the essential opportunities and risks have neither been transferred nor retained, but right of
disposal has been transferred. If there are doubts as to the collectability of receivables, they are valued at amortized cost less
appropriate single valuation allowances or a flat-rate allowance. Impairment of trade receivables is recognized when there
are objective signs (such as disputed contract variations, missed payments or insolvencies) indicating that the amounts due
will not be collectable in full. The impairment is recognized in the income statement by way of a value adjustment account.
All other impairments are written off directly and likewise recognized in the income statement. Group directives stipulate that
impairment of receivables must always be recorded in separate value adjustment accounts. They are derecognized at the
same time as the corresponding impaired receivable. The fair value option provided by IAS 39 was not exercised.
b) Derivative financial instruments
A derivative is a financial instrument or a contract in the area of application of IAS 39 which cumulatively fulfills the following
three criteria:
• which varies in value based on changes in a specific interest rate, price of a financial instrument, commodity price,
exchange rate, price or interest rate index, credit rating or credit index, or some similar variable, provided in the case of a
non-financial variable the variable is not specific to one party to the contract;
• which requires no payment in return for acquisition, or one which, compared to other forms of contract expected to react
similarly to changes in market conditions, is lower;
• or which is settled at a later date.
In the BAUER Group, free-standing derivative financial instruments are assigned as financial assets to the following category:
• Financial Assets Held for Trading (FAHfT)
Free-standing derivative financial instruments as financial liabilities are assigned to the following category:
• Financial Liabilities Held for Trading (FLHfT)
Changes in value of derivatives not forming part of a cash flow hedge are stated under other operating income or expenses in
the case of foreign exchange forward contracts or options or, in the case of interest rate swaps, are recognized in the income
statement under financial expenses or income. The applicable fair values of the level 2 financial instruments are calculated on
the basis of the conditions prevailing at the balance sheet date, such as interest or exchange rates, and applying recognized
models, such as discount cash flow or option price models.
2014
are initially recorded on the performance date. In the case of financial assets, derecognition of potential default risks is effected
cludes the transaction costs. Financial liabilities are derecognized when they are repaid or if the obligation has expired. Items
116
The free-standing derivative financial instruments of the “Financial Assets Held for Trading” and “Financial Liabilities Held for
Trading” categories include fair values of interest rate swaps, foreign exchange options, cross-currency swaps and foreign
exchange forward contracts not included in hedge accounting or not meeting the hedge accounting conditions.
In the BAUER Group, derivative financial instruments (interest rate swaps, foreign exchange options, cross-currency swaps
and foreign exchange forward contracts) are entered into solely to hedge against interest rate and currency risks. No deals are
made without an underlying transaction.
In the case of derivatives included in hedge accounting, when hedging expected future transactions (cash flow hedges) the
effective portion of the gain or loss from a hedging instrument is initially recognized in the shareholders’ equity, taking into
account deferred taxes, and is only recognized in the income statement when the underlying hedged transaction is realized.
The ineffective portion of the hedge transaction is recognized in the income statement immediately. The derivative financial
instruments are stated at their fair values as assets or liabilities. The fair values of the foreign exchange forward contracts
are defined on the basis of current reference prices, taking into account forward premiums and discounts. The fair values of
the interest rate swaps are determined on the basis of discounted future payment flows, applying the market interest rates applicable to the respective residual terms of the derivatives. Items are initially recorded on the trading date. Hedge accounting
was applied in financial 2014.
Inventories
Inventories of finished goods and work in progress as well as merchandise and raw materials and supplies, are measured
at acquisition cost or cost of manufacture or at the lower net realizable value on the balance sheet date, in accordance
with IAS 2.
The net realizable value is the estimated achievable selling price in the ordinary course of business less the estimated costs
through to completion and the estimated necessary selling costs.
Raw materials and supplies are valued mainly at floating average cost.
Where the machinery and accessories classified as finished goods and stock for trade and primarily held for sale, are hired
out for a short period as a secondary sales promotion measure, the following factors are considered in determining their net
realizable values:
• Hire period
• Useful life of the machines
• Damage and inoperability
Where the net realizable value of previously written-down inventories has increased, corresponding value recovery adjustments are made. The cost of manufacture includes all direct costs of the manufacturing process. The level of impairment
losses on inventories is explained in accordance with IAS 2 under “Inventories”.
Construction contracts
Construction contracts are accounted for by the percentage of completion method in accordance with IAS 11. The sales are
recognized according to the progress of work based on the percentage of completion method. The applicable percentage
of completion is determined according to the costs incurred (cost-to-cost method). Where the cumulative return (contract
costs and pro rata result) exceeds the payments on account in individual cases, the construction contracts are recognized as
assets under “Receivables from construction contracts (PoC)”. If a negative balance remains after deduction of the payments
on account, it is recognized as a liability under “Liabilities from construction contracts (PoC)”. Expected losses on a contract
are accounted for in full at the time they are identified, by adjustments to the valuation of any existing receivables or by
the creation of a provision. Construction contracts undertaken in joint ventures are valued according to the percentage of
completion method.
117
Receivables from joint ventures also include the pro rata result from the contract. Expected losses are covered by writedowns or liabilities as appropriate, and are taken into account in the contract result.
Service concession arrangements
receivables from concession arrangements are stated under “Other current financial assets”. The receivables are allocated to
the “Loans and Receivables” category and recognized at the present value of the remuneration payable. The annual interest
due according to the effective interest rate method is recorded in the financial income.
Cash and cash equivalents comprise cash and sight deposits with an original term of no more than three months.
Deferred taxes
In accordance with IAS 12, deferred taxes are taken into account in respect of variations between the valuations of assets
and liabilities according to IFRS and their corresponding tax bases in the amount of the projected future tax charge or relief.
In addition, deferred tax assets are recognized for future advantages arising from tax losses carryforward, provided it is
probable that they will be realized.
Deferred taxes arising from temporary differences in connection with investments in subsidiaries and associated companies
are recognized, unless the date of reversal of the temporary differences can be determined by the Group and it is likely that
the temporary differences will not be reversed again in the foreseeable future because of this effect.
According to IAS 12.74, deferred tax assets and liabilities are to be offset if a legally enforceable right to set off current tax
assets against current tax liabilities exists. Offsetting should also be carried out if the deferred tax assets and liabilities relate to
income taxes levied by the same tax authority in respect of:
• either the same taxable entity or
• different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets
and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets
are expected to be settled or recovered.
The tax expenditure for the period comprises current and deferred taxes. Taxes are reported in the income statement, unless
they relate to items recognized directly in the shareholders’ equity or in the other result. In this case; the taxes are likewise
recognized in the shareholders’ equity or in the other result.
In Germany, deferred taxes are stated on the basis of corporation tax, the “solidarity surcharge” and trade tax, in a range of
27.82 to 30.92 % (previous year: 27.82 % and 30.92 %). Outside Germany, tax rates of between 0.00 % and 38.15 % are
applied (previous year: 0.00 % and 39.00 %).
Provisions
a) Defined benefit plans
The BAUER Group operates a number of defined benefit plans in Germany and internationally.
Typically, such plans define an amount of pension benefit which employees will receive on retirement and which is normally
dependent on one or more factors (such as age, years of service and salary).
2014
IFRIC 12 are recognized separately under “Receivables from concession arrangements”. The short-term portions of the
Service concession arrangements entailing an unconditional contractual right to receive a payment in accordance with
118
The provision for defined benefit plans on the balance sheet corresponds to the cash value of the defined benefit obligation
(DBO) at the balance sheet date, less the fair value of the plan assets. The DBO is calculated annually by an independent
actuary applying the projected unit credit method. The cash value of the DBO is calculated by discounting the expected future
inflow of funds at the interest rate of industrial bonds of the highest credit rating. The industrial bonds are denominated in the
currency of the disbursements and allocate corresponding terms to the pension commitments. In countries where the market
in such bonds is insufficiently developed, government bonds are applied.
Actuarial gains and losses based on experience-related adjustments to actuarial assumptions are recognized in the “Other
result” in the shareholders’ equity in the period in which they occur. Post-employment expenditure is recognized in the staff
costs, and the interest expenses of the allocation to provisions in the financial expenses.
Under the contribution-based defined benefit plans, the entity concerned makes payments to pension institutions which are
stated in the staff costs.
b) Provisions for tax purposes
Tax provisions include liabilities from current income taxes. Income tax provisions are balanced against corresponding tax
refund claims, provided they arise in the same tax territory and are identical in nature and in terms of due date.
c) Other provisions
The other provisions are created in accordance with IAS 37 where a present obligation arises from a past event, a relevant
claim is more likely than unlikely, and the amount of the claim can be reliably estimated. The provisions are stated at their
performance amount, and are not netted against profit contributions. Long-term provisions are recognized at present value.
Provisions are created only for legal or constructive obligations to third parties.
Income and expenses
Sales revenues and other incomes are realized in accordance with IAS 18 on performance of the supply or service or on
transfer of risk to the customer, as appropriate.
Dividend income is recognized at the date on which the right to receipt of payment is created. Dividends received are
recognized as income from operating investments under “Financial income”. Operating expenses are recognized as affecting
net income when the supply or service is claimed or at the time they are caused, as appropriate. Financial income and
expenses are recognized when incurred.
Income from service contracts is recognized according to the degree of completion.
5. CONSOLIDATED SEGMENT REPORTING
Reporting on the segments of the BAUER Group was implemented in accordance with IFRS 8, as in the previous year.
The internal organizational and management structure and the internal system of reporting to the Management Board and
Supervisory Board dictate the segmentation employed by the BAUER Group.
The BAUER Group comprises the Construction, Equipment and Resources segments. Transactions between the segments
are conducted at market prices.
SCHACHTBAU NORDHAUSEN GmbH is the only Group company to operate in all three segments. The assets and liabilities
and income statement items of SCHACHTBAU NORDHAUSEN GmbH are assigned to the relevant segments.
119
Construction
The core business of the Construction segment is specialist foundation engineering. Complete excavation pits and foundation
works, often in difficult subgrade conditions, are carried out for major infrastructure projects and buildings. In order to offer
customers a full range of services, the companies of the BAUER Group additionally offer other construction services, often involving
Equipment
In the Equipment segment, machinery for all specialist foundation engineering processes and for deep drilling is developed
and manufactured for worldwide distribution. The specialist foundation engineering equipment can be employed to produce
large-diameter and small-diameter bores for piles, diaphragm walls, anchors, injections and wells. The deep drilling equipment
can be employed to drill for geothermal energy, oil and gas. Equipment for ramming and ground improvement is also
manufactured. The range is supplemented by a wide selection of add-on units and ancillary equipment, covering all the
processes involved in specialist foundation engineering.
Resources
The Resources segment brings together all the Group companies providing products and services relating to the remediation
and extraction of natural resources essential to human life. They include environmental technology companies involved in the
treatment of ground and groundwater as well as companies involved in exploratory drilling and mining of raw materials and
drilling of wells and geothermal energy sources. This segment also includes companies which manufacture and sell materials
for the engineering of bore holes, specifically for wells and geothermal energy sources.
Other
The Other segment comprises the central services (accounting, human resources, IT etc.) provided by BAUER AG to the
Group companies as well as other units not assignable to the separately listed segments, providing services such as in-house
and external education and training and centralized research and development.
Consolidation
The intersegmental consolidation effects are grouped here under Consolidation. This includes offsetting of intra-Group sales
between the segments as well as income and expenses and interim results. The intersegmental consolidation effects are
adjusted within the respective segments.
The segment result for the period reflects the financial income and expenses as well as the net earnings of shares valued atequity and the income tax expenditure. The segments’ assets and liabilities incorporate all the assets and liabilities of the Group.
The non-current assets stated in the segment report by region comprise intangible assets, property, plant and equipment and
investment property.
Total Group revenues, consolidated revenues and sales revenues with third parties
The consolidated revenues reflect the performance of all the companies included in the scope of consolidation. The total
Group revenues represent the revenues of all the companies forming part of our Group. The difference between the
consolidated revenues and the total Group revenues is derived from the revenues of the associated companies, from our
subcontractor shares in joint ventures, and from the revenues of non-consolidated companies.
The sales revenues with third parties are allocated to the business segments according to the customer’s location.
No one customer accounts for more than 10 % of total sales.
No breakdown of sales revenues by product and service, or by groups of comparable products and services, was available as
per the balance sheet date.
2014
building renovation projects. The Construction segment is founded on the close interlinking of all construction activities.
a major specialist foundation engineering element. Examples of this include bridges, environmental engineering, remediation and
120
Consolidated segment reporting
SEGMENT REPORT BY BUSINESS SEGMENTS
Construction
Equipment
2013 *
in EUR '000
Total revenues (Group)
Sales revenues with third parties
Sales revenues between business segments
OPERATING RESULT
2014
741,673
713,005
628,612
651,772
634,096
561,615
545,223
15,660
16,327
47,928
42,831
-172
-105
-4,184
27,898
2013
657,456
Other income
2014
486
407
6,955
6,234
16,809
24,861
10,117
21.724
690,239
675,586
622,431
643,910
21,209
25,068
32,223
36,917
Financial income
2,989
2,993
2,562
1,882
-13,389
-15,875
-22,196
-21,153
1,132
-1,330
1
-57
Income tax expense
-6,469
-8,998
-7,535
-8,076
NET PROFIT OR LOSS
5,472
1,858
5,055
9,513
-47,504
-46,098
-17,266
-19,259
-526
0
-996
-1,768
0
0
-14,196
-15,789
Financial expenses
Share of the profit or loss of associated companies accounted
for using the equity method
ADDITIONAL INFORMATION ON THE INCOME STATEMENT
of which impairment losses on fixed assets
Major non-cash segment items
Impairment losses on financial assets
-40
-631
0
-9
-112
-282
-3,808
-8,052
Allocation of impairment of receivables
-26,876
-10,597
-4,671
-4,611
Reversal of impairment of receivables
31,227
14,726
3,396
3,881
566,816
577,401
803,467
768,487
of which shares in associated companies
accounted for using the equity method
10,898
10,687
99
42
of which investments in fixed assets
48,168
40,837
40,166
20,904
444,775
450,582
579,077
551,054
Impairment losses on inventories
ADDITIONAL INFORMATION ON THE BALANCE SHEET
SEGMENT ASSETS 31.12.
SEGMENT LIABILITIES 31.12.
SEGMENT REPORT BY REGIONS
Germany
in EUR '000
2013 *
Total revenues (Group)
Europe (other)
2014
2013 *
2014
Europe excluding EU
2013
2014
410,390
440,205
167,830
151,958
155,028
124,886
Sales revenues with third parties
355,289
367,779
163,143
140,534
145,381
127,782
Non-current assets 31.12.
255,613
244,151
21,414
18,132
19,578
16,383
2013 *
Other
2014
Consolidation
2013
2014
2013
Group
2014
2013 *
2014
188,861
252,830
39,319
39,407
-94,234
-96,794
1,504,231
1,560,220
182,579
195,860
523
500
0
0
1,402,173
1,375,679
2,413
3,141
31,146
30,729
-97,147
-93,028
0
0
-67
-1,171
0
0
0
0
-4,423
26,622
1,548
1,606
0
9
10,207
6,440
19,196
14,696
2,910
41,968
6,624
7,028
-5,881
-6,559
30,579
89,022
189,383
241,404
38,293
38,266
-92,821
-93,147
1,447,525
1,506,019
-23,965
15,932
5,117
3,326
-4,499
-4,817
30,085
76,426
2,159
7,044
13,702
-7,134
-13,640
7,729
7,096
-10,518
-5,205
-11,243
7,134
13,640
-45,541
-45,149
637
815
0
0
0
0
1,770
-572
1,501
-4,041
-961
-886
-10
-74
-13,474
-22,075
-31,444
4,347
5,995
4,899
-4,509
-4,891
-19,431
15,726
-11,940
-10,885
-3,371
-3,023
385
484
-79,696
-78,781
-2,191
-7
0
0
0
0
-3,713
-1,775
0
0
0
0
0
0
-14,196
-15,789
-2,546
-65
0
0
0
0
-2,586
-705
-4,329
-263
0
0
0
0
-8,249
-8,597
-6,651
-5,360
0
0
0
0
-38,198
-20,568
495
950
0
0
0
0
35,118
19,557
265,633
264,276
303,121
338,993
-353,249
-374,074
1,585,788
1,575,083
2,252
32,177
0
0
0
0
13,249
42,906
11,539
8,885
13,552
2,555
-10,000
-485
103,425
72,696
226,675
226,217
149,980
182,939
-234,700
-254,634
1,165,807
1,156,158
2014
2,268
-11,885
Resources
121
Middle East
and Central Asia
2013
2014
America
Asia-Pacific
Far East and Australia
2013
2014
2013
Africa
2014
2013
Group
2014
2013 *
2014
163,036
232,037
363,305
376,645
186,392
172,288
58,250
62,201
1,504,231
1,560,220
158,749
180,313
356,877
337,587
170,648
158,411
52,086
63,273
1,402,173
1,375,679
52,630
56,025
82,364
86,106
56,751
53,259
6,575
7,293
494,925
481,349
122
NOTES ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
6. SALES REVENUES
The sales revenue totaling EUR 1,375,679 thousand (previous year: 1,402,173 thousand) include revenues based on application of the percentage of completion method, trade revenues from consortia, as well as pro rata earnings from consortia and
revenues from the sale and hire of equipment and accessories
Sales revenues based on application of the percentage of completion method in the financial year totaled EUR 649,625 thousand
(previous year: 680,963 thousand).
Sales revenues from the hire of equipment and accessories in the financial year totaled EUR 29,428 thousand (previous year:
26,031 thousand).
With regard to the presentation and breakdown of sales revenues by operating segment and region, please refer to the notes
on segment reporting (see item 5).
The sales revenues include a net value adjustment of EUR 5,381 thousand (previous year: 7,393 thousand). The net value
adjustment is attributable to the Construction segment, where final invoices, for example, may include supplementary items
which have not yet been finally negotiated with the customer and ordered. These may prove uncertain. Value adjustments
(reductions for impairment) are made in respect of uncertain receivables and recorded under “Sales revenues”. If the uncertain
receivable is realized, the reduction for impairment is reversed. The reversal is likewise recorded under “Sales revenues”.
The net balance of the application and reversal of reductions for impairment in respect of uncertain receivables produces the
aforementioned net value adjustment.
The application and reversal of reductions for impairment by the other segments is stated under “Other operating expenses”.
7. OTHER CAPITALIZED GOODS AND SERVICES FOR OWN ACCOUNT
in EUR '000
2013
2014
19,196
14,696
in EUR '000
2013
2014
Income from disposal of property, plant and equipment
4,435
5,447
Realized and unrealized foreign currency gains
8,682
32,097
Income from insurance refunds
2,958
1,849
373
272
Income from other capitalized goods and services for own account
8. OTHER INCOME
Other income from rentals
Income from changes in fair values of foreign exchange forward contracts
2,818
2,548
0
36,531
Other operating income
11,313
10,278
Total
30,579
89,022
Overall effect of the proportional sale
The realized and unrealized foreign currency gains as well as gains from foreign exchange forward contracts stated under
“Other income” totaling EUR 34,645 thousand (previous year: 11,500 thousand) arose in connection with the global currency
hedging strategy and the underlying currency postings. In this context, the income is countered by realized and unrealized
foreign currency losses as well as losses from foreign exchange forward contracts totaling EUR 29,767 thousand (previous
year: 21,194 thousand), stated under “Other operating expenses”.
Additionally, the other operating income mainly comprises income from benefits in money’s worth, other reimbursements of
expenditure as well as other income spread across the consolidated companies which is of minor importance in the individual
instances.
123
9. COST OF MATERIALS
2014
Expenses for raw materials and supplies and purchased goods
511,419
504,877
Expenses for purchased services
244,487
244,370
Total
755,906
749,247
10. STAFF COSTS
The expenses for retirement benefits include the expenditure on benefits as well as the allocations to provisions for defined
benefit plans excluding the interest portion, which is stated under “Interest and similar expenses”.
in EUR '000
Wages and salaries
Social security contributions
Expenses for retirement benefits
Total
2013
2014
289,944
299,785
47,654
49,632
5,217
5,833
342,815
355,250
The employer’s pension contributions in the financial year totaled EUR 20,653 thousand (previous year: 18,926 thousand).
These are contribution-based schemes, as explained under 4.2 Accounting and valuation methods in the consolidated
financial statements. Of that total, EUR 17,411 thousand (previous year: 16,801 thousand) relate to Germany and
EUR 3,242 thousand (previous year: 2,125 thousand) to Group companies outside of Germany. The wages and salaries
include severance payments in the amount of EUR 735 thousand (previous year: 1,019 thousand).
11. DEPRECIATION OF FIXED ASSETS
The depreciation is broken down as follows:
in EUR '000
2013
Depreciation of intangible assets
11,290
9,956
Depreciation of property, plant and equipment
68,406
68,825
Total
79,696
78,781
2014
The impairment losses on fixed assets are explained under item 18.2, Property, plant and equipment and investment property.
12. WRITE-DOWNS OF INVENTORIES DUE TO USE
Write-downs of inventories due to use Group-wide totaled EUR 15,789 thousand in the financial year (previous year:
14,196 thousand). This related to write-downs of used machinery temporarily hired out to customers as sales promotion
measures. Write-downs of used machinery disposed of in the 2014 financial year are included in these figures.
2013
2014
in EUR '000
124
13. OTHER OPERATING EXPENSES
in EUR '000
Losses from disposal of property, plant and equipment
2013
2014
1,260
675
18,187
21,360
Energy, heating, water
8,295
6,291
Vehicle costs
6,360
6,755
Property, motor and transport insurance
9,658
10,096
34,675
35,766
Administrative expenses
40,991
41,513
Distribution costs
37,221
33,304
Other employee-related expenses
17,396
17,208
Realized and unrealized foreign currency losses
18,941
19,948
-794
6,392
Bank charges
2,827
3,284
Duties
3,930
3,411
Rents and leases
Impairment of receivables
Additional other operating expenses
Total
25,880
24,523
224,827
230,526
The “Additional other operating expenses” mainly comprise allocations to and reversal of provisions affecting net income,
losses from foreign exchange forward contracts as well as additional other operating expenses spread across the consolidated companies which are of minor importance in the individual instances. The other employee-related expenses include
education and training costs, grants and gifts, travel and relocation expenses, and other project-specific personnel costs.
FINANCIAL RESULT
14. FINANCIAL INCOME
The financial income is broken down as follows:
in EUR '000
Income from operating investments
Other interest and similar income
2013
2014
26
14
5,418
5,287
Income from changes in fair values of interest rate swaps
2,285
1,795
Total
7,729
7,096
125
15. FINANCIAL EXPENSES
in EUR '000
Interest and similar expenses
Losses from changes in fair values of interest rate swaps
Interest portions of allocations to provisions for defined benefit plans and similar obligations
Total
2013
2014
41,944
41,273
656
796
2,941
3,080
45,541
45,149
The interest from finance leases included under “Interest and similar expenses” in the financial year totaled EUR 988 thousand
(previous year: 1,122 thousand). The financial result includes interest income from financial assets in an amount of
EUR 5,278 thousand (previous year: 5,410 thousand) and interest expenses from financial liabilities in an amount of
EUR 40,285 thousand (previous year: 40,822 thousand) which were not measured at fair value affecting profit and loss.
The interest and similar expenses include impairment losses on financial assets held for sale in an amount of EUR 705 thousand
(previous year: 2,586 thousand). Of that total, EUR 631 thousand (previous year: 40 thousand) is attributable to the
Construction segment, EUR 9 thousand (previous year: 0) to the Equipment segment and EUR 65 thousand (previous year:
2,546 thousand) to the Resources segment.
2014
16. INCOME TAX EXPENSE
The income tax expense is broken down as follows:
in EUR '000
2013
2014
Actual taxes
15,705
19,721
Deferred taxes
-2,231
2,354
Total
13,474
22,075
The theoretical tax rate is 28.08 % (previous year: 28.08 %).
Reconciliation from expected to actual income tax expenditure
The expected tax expenditure is below (previous year: below) the recorded tax expenditure. The reasons for the difference
between the expected and recorded tax expenditure are as follows:
in EUR '000
2013
2014
Profit before income tax
-5,957
37,801
Theoretical tax expenditure 28.08 % (previous year: 28.08 %)
-1,673
10,615
Differences in tax rate
Taxation effects of non-deductible expenses and tax-free income
Effects of variations in the tax calculation base
At-equity valuation of associated companies
Out-of-period tax payments/refunds for previous years
Effects of deferred tax assets in respect of losses carryforward and temporary differences
Other
Income tax expense
The financial expenses are broken down as follows:
714
-1,534
10,022
-4,869
2,054
2,000
-63
160
-273
-68
2,675
15,701
18
70
13,474
22,075
126
Internal disbursements result in taxation effects after December 31, 2014 totaling EUR 39 thousand (previous year: 34 thousand).
17. EARNINGS PER SHARE
The earnings per share are calculated by dividing the profit attributable to the shareholders of BAUER AG by the weighted
average number of ordinary shares outstanding. The earnings per share amount to the following values:
2013
Profit attributable to the shareholders of BAUER AG, in EUR '000
2014
-16,927
14,481
Number of shares from 01.01. to 31.12.
17,131,000
17,131,000
Weighted average number of shares in circulation in financial year (basic)
17,131,000
17,131,000
Weighted average number of shares in circulation in financial year (diluted)
17,131,000
17,131,000
Basic earnings per share in EUR
-0.99
0.85
Diluted earnings per share in EUR
-0.99
0.85
127
NOTES ON THE CONSOLIDATED BALANCE SHEET
The breakdown of the fixed asset items summarized on the balance sheet and their development is presented in the fixed
asset movement schedule on the following pages.
18.1 Intangible assets
Internally generated
intangible assets
in EUR '000
Cost of purchase/cost of manufacturing
01.01.2013 *
Change in scope of consolidation
Licenses, software
and similar rights
and values
Goodwill
Capitalized
software costs
30,725
2,203
589
Capitalized
development costs
Total
30,148
63,665
220
0
0
377
597
Additions
3,124
0
0
8,395
11,519
Disposals
453
0
232
72
757
Transfers
Currency adjustment
31.12.2013
-9
0
0
516
507
-529
-17
0
-10
-556
33,078
2,186
357
39,354
74,975
intangible assets
in EUR '000
Accumulated depreciation
01.01.2013 *
Licenses, software
and similar rights
and values
18,474
Goodwill
0
Capitalized
software costs
415
Capitalized
development costs
Total
10,209
29,098
100
0
0
14
114
Additions
4,046
2,186
84
4,974
11,290
Disposals
442
0
232
72
746
Transfers
21
0
0
-21
0
-159
0
0
-10
-169
31.12.2013
22,040
2,186
267
15,094
39,587
Carrying amount 31.12.2013
11,038
0
90
24,260
35,388
Currency adjustment
intangible assets
in EUR '000
01.01.2014
Licenses, software
and similar rights
and values
Goodwill
Capitalized
software costs
Capitalized
development costs
Total
33,078
2,186
357
39,354
74,975
-17
0
0
0
-17
Additions
2,422
0
0
6,186
8,608
Disposals
2,392
0
68
0
2,460
Transfers
-6
0
0
22
16
Currency adjustment
31.12.2014
452
0
0
6
458
33,537
2,186
289
45,568
81,580
* Previous year’s figures changed; this involves a correction to the balances carryforward due to the system
2014
18. FIXED ASSETS
NON-CURRENT ASSETS
128
intangible assets
in EUR '000
Licenses, software
and similar rights
and values
01.01.2014
Goodwill
Capitalized
software costs
Capitalized
development costs
Total
22,040
2,186
267
15,094
39,587
-6
0
0
0
-6
Additions
3,681
0
51
6,224
9,956
Disposals
2,619
0
68
0
2,687
Transfers
4
0
0
0
4
281
0
0
5
286
31.12.2014
Currency adjustment
23,381
2,186
250
21,323
47,140
10,156
0
39
24,245
34,440
Of the total research and development costs and patent costs incurred in 2014, EUR 6,247 thousand (previous year:
8,594 thousand) met the IFRS capitalization criteria. The following amounts were recognized in net income:
in EUR '000
Research costs and uncapitalized development costs
Amortization of development costs and patents
Research and development costs recognized in net income
2013
2014
20,900
18,567
5,212
6,473
26,202
25,040
129
18.2 Property, plant and equipment and investment property
Land and
buildings
01.01.2013 *
287,311
Investment
property
1,882
Other
Payments on
equipment,
account and
factory and
assets in course
office equipment of construction
468,428
68,995
Total
23,014
849,630
0
0
9,689
376
42
10,107
3,179
13
65,050
10,565
13,099
91,906
Disposals
2,853
118
41,512
5,248
557
50,288
Transfers
17,692
0
11,319
142
-29,661
-508
Additions
Currency adjustment
31.12.2013
-3,045
-14
-24,119
-1,798
-655
-29,631
302,284
1,763
488,855
73,032
5,282
871,216
in EUR '000
01.01.2013 *
Land and
buildings
Investment
property
Technical
equipment and
machinery
Other
Payments on
equipment,
account and
factory and
assets in course
Total
84,396
921
257,736
41,261
0
384,314
0
0
4,235
225
0
4,460
Additions
9,080
40
49,440
9,846
0
68,406
Disposals
2,399
54
22,491
4,372
0
29,316
Transfers
Currency adjustment
31.12.2013
of which financing leasing
0
0
-11
11
0
0
-370
-7
-14,550
-1,258
0
-16,185
90,707
900
274,359
45,713
0
411,679
211,577
863
214,496
27,319
5,282
459,537
3,194
0
22,574
5,246
0
31,014
in EUR '000
Cost of purchase/
cost of manufacturing
Land and
buildings
01.01.2014
302,284
1,763
Investment
property
Technical
equipment and
machinery
Other
Payments on
equipment,
account and
factory and
assets in course
488,855
73,032
5,282
Total
871,216
-563
0
-2,063
-678
0
-3,304
Additions
3,926
6
43,524
7,310
9,322
64,088
Disposals
6,022
0
49,712
6,374
193
62,301
Transfers
765
-35
5,255
-112
-5,889
-16
Currency adjustment
31.12.2014
5,802
0
27,331
2,119
-309
34,943
306,192
1,734
513,190
75,297
8,213
904,626
* Previous year’s figures changed; this involves a correction to the balances carryforward due to the system
Cost of purchase/
cost of manufacturing
Technical
equipment and
machinery
2014
in EUR '000
130
in EUR '000
01.01.2014
Land and
buildings
Investment
property
90,707
Technical
equipment and
machinery
900
274,359
Other
Payments on
equipment,
account and
factory and
assets in course
45,713
0
Total
411,679
-5
0
-773
-485
0
-1,263
Additions
10,042
36
49,829
8,918
0
68,825
Disposals
2,000
0
32,386
5,366
0
39,752
Transfers
6
-6
168
-172
0
-4
Currency adjustment
31.12.2014
of which financing leasing
866
0
15,784
1,582
0
18,232
99,616
930
306,981
50,190
0
457,717
206,576
804
206,209
25,107
8,213
446,909
2,935
0
19,150
5,122
0
27,207
The changes to the scope of consolidation comprise assets arising from the deconsolidation of BAUER Nimr LLC, Muscat –
Al Mina. Of these, EUR −2,041 thousand relate exclusively to property, plant and equipment.
In respect of buildings and equipment leased by way of finance lease agreements purchase options exist for the most part,
which will be exercised. The interest rates applied to the leases vary, according to the market and date of signing, between
2.38 % and 7.89 % (previous year: 2.31 % and 8.13 %). The future lease payments due at their present values are shown in
the following table:
Remaining term 2013
in EUR '000
under 1 year 1 to 5 years over 5 years
Minimum lease payments
Interest portions
Present value
11,182
18,779
0
997
1,514
10,185
17,265
Remaining term 2014
Total
under 1 year 1 to 5 years over 5 years
29,961
8,470
0
2,511
0
27,450
Total
13,707
0
22,177
1,017
675
0
1,692
7,453
13,032
0
20,485
The investment property has a fair value of EUR 804 thousand (previous year: 1,143 thousand) and in 2014 were all rented
out. This relates to a hotel owned by SCHACHTBAU NORDHAUSEN GmbH which is rented out to third parties and is being
written down over a period of 48 years. SCHACHTBAU NORDHAUSEN GmbH is also committed to a maintenance contract
in respect of the property. The valuation was derived from current market prices. This procedure falls within Level 2 of the
IFRS 13 measurement hierarchy.
In the period under review rental income in the amount of EUR 60 thousand (previous year: 62 thousand) was generated, to
which direct operating expenses totaling EUR 23 thousand (previous year: 19 thousand) are attributable.
Property, plant and equipment with a carrying amount of EUR 105,811 thousand (previous year: 133,191 thousand) is subject
to charges in the form of land charges and assignment. In addition, the usual commercial restrictions on right of disposal
existing respect of leased assets, attributable to the Group in accordance with IAS 17 (finance lease agreements), totaling
EUR 27,207 thousand (previous year: 31,014 thousand).
In the financial year, investment grants for the extension of manufacturing facilities were awarded to Olbersdorfer Guß GmbH
in an amount of EUR 13 thousand (previous year: 42 thousand). All conditions necessary for allocation of the investment
subsidies were met on the balance sheet date.
No borrowing costs were capitalized in the financial year (previous year: 520). The finance cost rate in the previous year was
between 6.76 and 8.0 %.
131
Total impairment losses on fixed assets in the financial year were EUR 1,775 thousand (previous year: 3,713 thousand).
Of that figure, EUR 0 thousand (previous year: 526 thousand) was attributable to the Construction segment, EUR 1,768 thousand (previous year: 996 thousand) to the Equipment segment and EUR 7 thousand (previous year: 2,191 thousand) to
the Resources segment. Of the total, intangible assets accounted for EUR 942 thousand (previous year: 3,184 thousand)
ment losses on intangible assets relate to capitalized development costs amounting to EUR 520 thousand at Klemm
Bohrtechnik GmbH in the Equipment segment. Future expected market development for various machines developed
in-house was decisive in this respect. Also in the Equipment segment, the carrying amounts of BAUER Pileco Inc., Houston,
Texas in land and buildings amounting to EUR 794 thousand were written down to their fair value. Impairment losses were
realized on the basis of the achievable amount. In the regular way, these corresponded to the fair value less costs of sale. This
procedure falls within Level 1 of the IFRS 13 measurement hierarchy.
18.3 Investments accounted for using the equity method and participations
The balance sheet valuations of the joint ventures and associated companies have developed as follows:
in EUR '000
31.12.2013
31.12.2014
Shares in joint ventures measured at equity *
3,302
4,175
Shares in associated companies measured at equity
9,947
38,731
13,249
42,906
2014
Total
and property, plant and equipment accounted for EUR 833 thousand (previous year: 529 thousand). Most of the impair-
The following table provides an overview of the change in the shares measured at equity:
in EUR '000
2014
2013 *
2014
13,133
9,947
3,277
3,302
Additions
0
31,089
17
662
Disposals
1
0
0
479
01.01.
Profit share
2013
Joint ventures
−234
330
8
690
−2,951
−450
0
0
Transfers
0
0
0
0
Currency adjustment
0
0
0
0
31.12.
9,947
40,916
3,302
4,175
in EUR '000
Dividend payments
01.01.
2013
Joint ventures
2014
2013
0
0
0
2014
0
Additions
0
2,185
0
0
Disposals
0
0
0
0
Transfers
0
0
0
0
Currency adjustment
0
0
0
0
31.12.
0
2,185
0
0
9,947
38,731
3,302
4,175
Carrying amount 31.12.
* Previous year adjusted, see notes on page 106
132
a) Joint ventures
The financial information presented for the joint ventures are amounts that are derived from financial statements prepared
according to local legislation, corrected to take account of any adaptations to IFRS.
Combined financial information about the immaterial joint ventures (before consolidations):
BALANCE SHEET
in EUR '000
Non-current assets
Current assets
of which cash and cash equivalents
Total assets
of which non-current financial liabilities
Current liabilities
of which current financial liabilities
Total liabilities
Joint ventures
31.12.2013
31.12.2014
180
317
65,022
63,796
3.089
2,445
65,202
64,113
0
0
0
0
58,758
55,646
33,782
43,607
58,758
55,646
The non-current and current financial liabilities do not contain any trade liabilities and provisions.
INCOME STATEMENT
in EUR '000
Sales revenues
Scheduled depreciation
Operating result
Joint ventures
31.12.2013
31.12.2014
48,996
41,008
-234
-373
2,700
3,529
Interest income
40
1
Interest expenditure
-3
-4
Income tax expense
Net profit or loss
Dividends paid to the BAUER Group
0
0
2,737
3,526
10
0
Reconciliation of the combined financial information for joint ventures
The pro rata carrying value of the joint ventures can be reconciled as follows:
in EUR '000
31.12.2013
31.12.2014
Net assets of joint ventures
6,444
8,467
Interest in joint venture according to investment quota
3,302
4,175
0
0
3,302
4,175
Goodwill and other adaptations
Carrying value disclosed within the balance sheet
The fair value has not been stated, because there is no quoted market price available for our joint ventures (generally construction
consortia).
133
The risk arising from joint and several liability on failure of a partner is hedged within the joint venture by mutual guarantees.
There are no further obligations and significant restrictions beyond that.
b) Associated companies
The main associated companies are as follows:
2013 financial year:
Name
Headquarters
Activity
of the company
Wöhr + Bauer GmbH
Project development
Munich, Germany
33.33 %
Disposal
Bleicherode, Germany
25.00 %
Specialist foundation engineering
Madrid, Spain
30.00 %
Activity
of the company
Headquarters
Capital share in %
NDH Entsorgungsbetreibergesellschaft mbH
TERRABAUER S. L.
Capital share in %
Name
Wöhr + Bauer GmbH
Project development
Munich, Germany
33.33 %
Disposal
Bleicherode, Germany
25.00 %
Specialist foundation engineering
Madrid, Spain
30.00 %
Water treatment and
soil remediation
Muscat – Al Mina,
Sultanate of Oman
49.00 %
TERRABAUER S. L.
BAUER Nimr LLC
Combined financial information for each significant associated company (amounts before consolidations):
BALANCE SHEET
in EUR '000
Wöhr + Bauer GmbH
TERRABAUER S. L.
BAUER Nimr LLC
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
Non-current assets
60,472
60,132
19,090
18,288
5,338
-
0
41,102
Current assets
43,209
48,073
25,869
26,857
7,357
-
0
13,187
8,309
526
21,936
23,060
125
-
0
5,019
103,681
108,205
44,959
45,145
12,695
-
0
54,289
10,816
22,279
0
0
1,800
-
0
35,421
10,685
21,897
0
0
665
-
0
34,968
74,556
66,775
40,065
40,225
3,327
-
0
7,299
8,803
0
3,375
3,225
1,390
-
0
2,327
85,372
89,054
40,065
40,225
5,127
-
0
42,720
of which cash and
cash equivalents
Total assets
of which non-current
financial liabilities
Current liabilities
of which current
Total liabilities
* These are extrapolated values; financial information was not available at the balance sheet date
31.12.2014
31.12.2013
31.12.2014
2014
prepared according to local legislation, corrected to take account of any adaptations to IFRS.
The financial information presented for the associated companies are amounts that are derived from financial statements
134
INCOME STATEMENT
in EUR '000
Wöhr + Bauer GmbH
TERRABAUER S. L.
2013
2014
2013
2014
2013
Sales revenues
50,865
21,531
22,952
22,736
3,452
-1,170
-1,774
-2,744
-2,956
-676
1,330
2,550
1,624
1,522
-1,832
Operating result
Interest income
BAUER Nimr LLC
2014 *
2013
-
2014
0
1,528
-
0
-367
-
0
281
261
15
98
238
0
-
0
6
-503
-414
-287
-262
-310
-
0
-244
Income tax expense
-587
-667
-474
-509
0
-
0
0
Net profit or loss
501
1,484
961
989
-2,142
-1,090
0
43
Net profit or loss
according to interest
167
494
240
247
-643
-327
0
21
Dividends paid
to the BAUER Group
2,640
210
135
240
166
0
0
4,598
* These are extrapolated values; financial information was not available at the balance sheet date
Combined financial information for associated companies that are, taken individually, non-significant (amounts before consolidations):
BALANCE SHEET
in EUR '000
Non-current assets
Current assets
of which cash and cash equivalents
Total assets
of which non-current financial liabilities
Current liabilities
of which current financial liabilities
Total liabilities
INCOME STATEMENT
in EUR '000
31.12.2013
31.12.2014
90
67
245
239
47
33
335
306
26
22
26
22
135
132
0
0
161
154
31.12.2013
31.12.2014
Sales revenues
853
825
-33
-29
Operating result
6
-22
Interest income
0
0
-1
-1
Income tax expense
-2
0
3
-23
1
-7
10
0
Net profit or loss
Net profit or loss according to interest
Dividends paid to the BAUER Group
135
Reconciliation of the combined financial information for associated companies
Net assets of associated companies
Interest in associated companies according to investment quota
Goodwill and other adaptations
Cash value of the concession agreement
Currency adjustment
Carrying value disclosed within the balance sheet
31.12.2013
31.12.2014
30,945
35,792
9,651
13,331
296
16,908
0
8,709
0
-217
9,947
38,731
The other adaptations relate to temporary posting differences.
The market value of BAUER Nimr LLC as at December 31, 2014 is EUR 63,447 thousand. The market values of the other
significant associated companies were not available as at the balance sheet date.
There were no obligations, significant restrictions or risks relating to the shares in associated companies as at the balance
sheet date.
2014
in EUR '000
The pro rata carrying value of the associated companies can be reconciled as follows:
136
c) Participations
Participations
in EUR '000
01.01.
2013
2014
4,454
4,429
Additions
0
0
Disposals
25
0
Profit share
0
0
Dividend payments
0
0
Transfers
0
0
Currency adjustment
31.12.
0
0
4,429
4,429
Participations
in EUR '000
2013
01.01.
2014
816
816
Additions
0
0
Disposals
0
0
Transfers
0
0
Currency adjustment
31.12.
Carrying amount 31.12.
0
0
816
816
3,613
3,613
31.12.2013 *
31.12.2014
19. DEFERRED TAXES
The deferred tax assets and liabilities are distributed across the following balance sheet items:
in EUR '000
31.12.2013
31.12.2014
Deferred tax assets
Intangible assets
33
401
6,437
7,202
324
119
9,468
13,926
Inventories
2,509
3,763
2,424
2,498
1,228
1,474
2,093
1,410
Liabilities
Tax losses carryforward
Consolidation
Offsetting
Net amount
10,275
19,652
4
208
9,811
10,201
5,937
4,800
14,560
12,559
0
0
4,841
3,999
5,873
4,274
-17,282
-21,195
-17,282
-21,195
26,299
30,973
14,954
13,123
In the above table, the liabilities include deferred tax assets totaling EUR 2,025 thousand (previous year: 835 thousand) and
deferred tax liabilities totaling EUR 1,708 thousand (previous year: 8 thousand) which are part of the hedge accounting.
Also, the provisions for defined benefit plans include deferred tax assets totaling EUR 16,772 thousand (previous year:
7,889 thousand) and deferred tax liabilities totaling EUR 4 thousand (previous year: 4) in respect of the actuarial gains and
losses recognized in the shareholders’ equity.
137
Current deferred tax assets excluding losses carryforward totaled EUR 10,039 thousand (previous year: 9,080 thousand);
deferred tax liabilities totaled EUR 7,280 thousand (previous year: 9,585 thousand).
31.12.2013
31.12.2014
Domestic losses (corporation tax)
76,262
75,553
Foreign losses
31,758
46,953
108,020
122,506
21,069
25,461
Total
Of which losses carryforward deductible for limited periods
Based on our medium-term earnings planning, losses carryforward totaling EUR 78,059 thousand (previous year:
47,672 thousand) were not usable for tax purposes.
Current deferred tax assets against losses carryforward in the financial year totaled EUR 1,028 thousand (previous year: 1,708
thousand).
In connection with interests in subsidiaries, temporary differences totaling EUR 1,170 thousand (previous year:
1,172 thousand) exist for which no deferred tax liabilities were recognized.
20. RECEIVABLES FROM CONCESSION ARRANGEMENTS
BAUER Nimr LLC (“Bauer”) signed a contract with Petroleum Development Oman LLC (“the customer”) on November 28,
2008 relating to water treatment (“the service”). In performance of the service, Bauer is constructing a plant which it will
subsequently operate. Bauer will receive a fixed agreed unit price per cbm for operation of the plant. This price includes a
variable component to compensate for price rises during the contract term. According to the agreement, Bauer is obligated
to comply with the general standards applicable in the oil and gas industry in constructing and operating the plant, unless
otherwise stipulated in the contract.
Bauer is further obligated to allow the customer to conduct any necessary inspection and testing. The costs of this are to be
borne by the customer.
At the end of the service performance period, Bauer is required by the customer to dismantle the plant and recultivate the site
(for a fee). The agreement also provides the customer with a purchase option at a price yet to be agreed.
The contract runs for a term of 20 years, with an option to extend by a further 5 years. Bauer is entitled to cancel the contract
at any time by means of written notice to the customer. If the contract is canceled by the customer before the agreed term expires – provided the cancellation is not as a result of bad or failed performance, or insolvency of the operator – the customer
is obligated to pay compensation.
The customer undertakes to supply Bauer with a daily minimum of 45,000 m³ of water for treatment. If the customer supplies
less water, Bauer receives a compensation payment, which may be offset by over-supply quantities in the subsequent
months.
On May 10, 2011, Bauer signed a contract extension with the customer providing for an increase in the customer’s supplies
of water for treatment by 45,000 m³.
2014
in EUR '000
The tax losses carryforward at the year-end are broken down as follows:
138
The receivables from concession arrangements developed as follows:
in EUR '000
31.12.2013
31.12.2014
40,770
36,762
1,931
1,721
As at 01.01.
Interest income from financial assets
Currency adjustment
-1,581
3,886
Payment of contract costs
-4,358
-4,079
Disposal
0
-38,290
36,762
0
of which with a remaining term of 1 to 5 years
9,122
0
of which with a remaining term of over 5 years
27,640
0
As at 31.12.
21 % of the shares in BAUER Nimr LLC were sold on November 19, 2014. Refer to page 104 in this regard.
The short-term portion of the receivables from concession arrangements is EUR 0 (previous year: 2,280 thousand) following
the divestment. The short-term portion was previously stated under “Other current financial assets”.
The financial income from concession arrangements in the financial year totaled EUR 1,721 thousand (previous year:
1,931 thousand). The discount rate in the past financial year was 4.26 % (previous year: 4.67 %).
The financial income is included in the interest income from financial assets.
21. OTHER NON-CURRENT ASSETS
The other non-current assets comprise the following items:
in EUR '000
31.12.2013
31.12.2014
Claims from backup insurance
4,743
4,787
Sundry other non-current assets
2,821
2,705
Total
7,564
7,492
The sundry other non-current assets were not subject to interest in the past financial year, as in the previous year. The previous
year’s figure has been adapted.
They also include assets arising from continuing involvements totaling EUR 1,068 thousand (previous year: 1,170 thousand).
As in the previous year, the other non-current assets were neither impaired nor overdue in the year under review.
The BAUER Group sold trade receivables as well as services totaling EUR 18,425 thousand (previous year: 17,378 thousand)
to third parties as part of receivables sale agreements. It comprises the maximum amount of the remaining risks which the
BAUER Group would have to pay to the buyer.
The corresponding liability amounts to EUR 1,175 thousand (previous year: 1,287), and is stated under “Other non-current
liabilities”. The difference reflects the fair value of the guarantees resulting from the remaining risk and the servicing, and is
recognized in net income.
139
22. OTHER NON-CURRENT FINANCIAL ASSETS
The other non-current financial assets comprise the following:
over 5 years
Remaining term 31.12.2014
1 to 5 years
over 5 years
Sundry other non-current financial assets
5,420
0
28,420
0
Total
5,420
0
28,420
0
The sundry other non-current assets contain receivables from derivatives as well as other non-current financial assets.
The derivatives are presented in item 36 under “Other disclosures”. Financial 2014 also includes a receivable item from the
purchase price payment and loan to BAUER Nimr LLC amounting to EUR 20,059 thousand (previous year: 0). As in the
previous year, the other non-current financial assets were neither impaired nor overdue in the year under review.
CURRENT ASSETS
23. INVENTORIES
The inventories comprise the following items:
in EUR '000
31.12.2013
31.12.2014
Raw materials and supplies
146,666
155,334
Finished goods and work in progress and stock for trade
272,866
283,850
Total
419,352
439,184
Of the inventories, EUR 121,319 thousand (previous year: 116,787 thousand) are stated at net realizable value.
The impairment losses on inventories against the net realizable value affecting net expenditure in the financial year totaled
EUR 24,386 thousand (previous year: 22,445 thousand).
They are broken down as follows:
in EUR '000
Impairment losses on inventories
Total
31.12.2013
31.12.2014
14,196
15,789
8,249
8,597
22,445
24.386
The rate of hire was higher than last year, above all at BAUER Maschinen GmbH. Write-downs of used machinery due to use
therefore increased from EUR 14,196 thousand to EUR 15,789 thousand.
The impairment losses on inventories include both impairment losses on new and used machinery (stated under “Changes
in inventories”) and on warehouse inventories (stated under “Cost of materials”). Most of the impairment losses relate to the
machinery which was not hired out, and are attributable to the Equipment segment. Impairment losses were realized on the
basis of the achievable amount. In the regular way, these corresponded to the fair value less costs of sale.
The finished goods and merchandise include machinery and accessories produced internally by the Equipment segment and
intended primarily for sale.
1 to 5 years
2014
in EUR '000
140
We differentiate essentially between two forms of machinery and accessories (referred to in the following as “machinery”):
New machines
These are machines manufactured in the financial year or in earlier years which are available for sale but have not yet been
hired out. These machines are valued at manufacturing cost or at the lower net realizable value on the balance sheet date.
Used machines
Used machines are machines which are primarily up for sale and which have been temporarily hired out as a secondary sales
promotion measure during the financial year or in earlier years. New machines automatically become used machines the first
time they are hired out.
When hiring out machinery, the net realizable value is determined from the manufacturing cost less the write-downs due to
use and impairment losses on inventories.
In the case of a new machine, or a used machine which has not been hired out, the reduction in value against the net
realizable value is recognized by means of an impairment loss.
The sale and hire of machinery relates solely to the Equipment segment.
The following chart sets out the carrying amount before impairment of the used machinery and accessories along with the
rate of hire status on the balance sheet date:
in EUR '000
31.12.2013
31.12.2014
Carrying value of the used machine
94,392
86,744
of which hired out
33,588
32,236
of which not hired out
60,804
54,508
In the financial year, apart from the usual retentions of title, inventories totaling EUR 119 thousand (previous year: 2,507 thousand) were provided as security for loans with a term until 2016. The securities provided can only be claimed by the lending
banks in the event of definitive failure to fulfill contractual obligations, such as defaulting on interest and loan payments or
failure to meet agreed financial targets. No claims on securities provided are foreseeable.
24. RECEIVABLES AND OTHER ASSETS
Construction contracts
The construction contracts measured according to the percentage of completion method developed as follows:
in EUR '000
31.12.2013
31.12.2014
Contract costs incurred (plus profits, less losses) for projects not yet completed
493,944
674,169
less down-payments
383,549
590,481
Balance
110,395
83,688
of which: Receivables from construction contracts (PoC)
143,234
132,159
32,839
48,471
of which: Liabilities from construction contracts (PoC)
141
Development of receivables and other assets
31.12.2013
31.12.2014
Receivables from construction contracts (PoC)
143,234
132,159
Trade receivables *
320,301
311,417
444
67
Receivables from enterprises in which the company has participating interests
Payments on account
3,725
4,304
Other current assets
30,695
28,603
Other current financial assets
19,551
20,100
517,950
496,650
Total *
The “Trade receivables” balance sheet item includes long-term receivables totaling EUR 10,504 thousand (previous year:
15,077 thousand).
The following table presents the changes in value adjustments to current receivables:
in EUR '000
31.12.2013
31.12.2014
63,504
59,938
14
0
Value adjustments at start of financial year
Currency adjustment
−353
842
Allocation
32,207
20,568
Reversal
34,003
19,557
1,431
7,815
59,938
53,976
Consumption
Value adjustments at end of financial year
The value adjustment for foreseeably uncollectable trade receivables of EUR 53,976 thousand (previous year: 59,938 thousand) was calculated taking into account individual risks and on the basis of past experience in relation to payment default.
Value adjustments were applied in respect of individual claims as well as on a portfolio flat-rate basis. The individual value
adjustments were translated into flat-rate percentages spread across the age structure of the receivables. Within the individual
value adjustments, 100 % of the claim receivable was usually adjusted. The calculation of value adjustments in respect of
uncertain receivables is based to a large extent on estimates and assessments of individual claims, incorporating considerations of the creditworthiness and late-payment record of the customer concerned as well as current economic trends and
historical experience in relation to default.
In the financial year, receivables from construction contracts totaling EUR 3,993 thousand (previous year: 2,998 thousand)
and other current assets totaling EUR 0 thousand (previous year: 2,993) were subject to impairment.
2014
in EUR '000
The receivables and other assets comprise the following:
142
The following table presents an analysis of the due dates of gross carrying amounts of trade receivables:
in EUR '000
Trade receivables (gross carrying amount)
Value adjustments in respect of trade receivables
Carrying
amount
31.12.2013 *
382,946
Carrying
amount
31.12.2014
365,393
59,938
53,976
320,301
114,938
205,363
311,417
110,640
200,777
- less than 30 days
68,462
75,046
- between 30 and 60 days
27,881
13,599
- between 60 and 90 days
10,627
10,886
- more than 90 days
98,393
101,246
Trade receivables (net carrying amount)
of which neither impaired nor overdue at closing date
of which not impaired at closing date and overdue in the following time bands:
* Previous year adapted; part of the overdue receivables of SCHACHTBAU NORDHAUSEN GmbH has not been included
The above table includes trade receivables as well as receivables from joint ventures. With regard to the trade receivables
which were neither impaired nor delayed in payment, there were no indications at the balance sheet date that the debtors
concerned will not fulfill their payment obligations. Credit ratings are derived from an active system of claims management
with reference to the relevant credit history and from continuous monitoring of the creditworthiness of our customers based
on information obtained from both internal and external sources.
As in the previous year, the other current assets were neither impaired nor overdue in the year under review (previous
year: EUR 2,993 thousand). The other current assets mainly comprise miscellaneous tax refund claims and claims against
employees and against welfare benefit funds as well as accrued interest and insurance premiums and other prepayments and
deferred charges.
A total of EUR 6,846 thousand (previous year: 15,400 thousand) in monetary assets were pledged as securities for potential
future guarantees during the financial year. The current portion of the receivables from foreign exchange forward contracts
included in the current financial assets in the financial year totaled EUR 141 thousand (previous year: 3,169 thousand).
The payments on account for intangible assets shown under “Other current assets” totaled EUR 0 (previous year: 4 thousand)
in the year under review. In the 2014 financial year, impairment totaled EUR 20,568 thousand (previous year: 38,198 thousand).
143
25. CASH AND CASH EQUIVALENTS
The cash and cash equivalents totaling EUR 41,835 thousand (previous year: 57,217 thousand) include credit balances at
banks and petty cash stocks.
31.12.2013
in EUR '000
%
Bauer family
Free float
Total
31.12.2014
EUR '000
%
EUR '000
48.19
35,182
48.19
35,182
51.81
37,819
51.81
37,819
100.00
73,001
100.00
73,001
With regard to the disclosures relating to shares held in BAUER AG, refer to the Notes to the annual financial statements of
BAUER AG as per December 31, 2014 published in the German Federal Gazette (“Bundesanzeiger”).
Composition of subscribed capital
The subscribed and fully paid-up capital (share capital) of BAUER AG remains unchanged at EUR 73,001,420.45 and is
divided into 17,131,000 no-nominal-value bearer shares, representing a pro rata amount of approximately EUR 4.26 per share
of the total share capital. The shares have no nominal value. Each share entails equal rights, and entitles the holder to one
vote at the Annual General Meeting, with the exception of share categories precluded from voting by law pursuant to section
136 of the German Stock Corporation Act (AktG) and section 28 of the German Securities Trading Act (WpHG).
As in the previous year, 51.81 % of the shares were in free float. The members of the Bauer family and a charitable foundation
own a total of 8,256,246 no-nominal-value shares in BAUER AG on the basis of a pool agreement, representing a 48.19 %
share in the company. The pool agreement provisions include binding voting commitments as well as a right of pre-emption
of pool participants if any member of the pool sells shares to third parties. No other direct or indirect holdings of BAUER AG
share capital exceeding 10 % of the voting rights are known to the company.
None of the shareholders have special rights entailing controlling powers. Nor does any voting rights control exist on the part
of the employees holding shares in the capital.
Authority of the Management Board to issue or buy back shares
Article 4, paragraph 4 of the company’s Articles of Association Board states that the Management Board is authorized, with
the consent of the Supervisory Board, to increase the share capital once or more than once up to June 27, 2017 by up to
a total of EUR 7.3 million by the issue of new no-nominal-value bearer shares against cash and/or non-cash contributions
(2012 authorized capital). To that end, the Management Board is authorized, with the consent of the Supervisory Board, to
exclude the legal subscription rights of shareholders in the following cases:
• in the event of capital increases against non-cash contributions;
• in the event of capital increases against cash contributions where the issue amount of the new shares issued is not
materially below the market price of the already quoted shares at the time of definitive setting of the issue price and the
shares issued excluding shareholders’ subscription rights pursuant to section 186, subsection 3, clause 4 AktG do not
in total exceed 10 % of the existing share capital either at the time this authority takes effect or at the time of exercising
2014
The shareholder structure of BAUER AG is as follows:
26. SHAREHOLDERS’ EQUITY
144
this authority. Shares which have been or are to be sold or issued in direct or corresponding application of section 186,
subsection 3, clause 4 AktG while this authority is in place until such time as it is exercised, pursuant to other authorities,
excluding subscription rights, are to be set off against the said 10 % limit;
• to balance out fractional amounts.
By resolution of the Ordinary Annual General Meeting held on June 26, 2014, the company was authorized to acquire treasury
stock, over a limited period up to June 25, 2019, representing up to a total of 10 % of the company’s share capital at the time
the resolution was passed. The shares shall be acquired at the discretion of the Management Board by means of a public
tender offer or by way of the stock market. If the acquisition is effected by way of the stock market, the acquisition price
(excluding ancillary costs) may be no more than 10 % above or 20 % below the price determined by the opening auction
on the trading day for shares in the company in Xetra trading (or a comparable successor system) on the Frankfurt Stock
Exchange. that if the acquisition is effected by means of a public tender offer, the purchase price or the limits of the purchase
price span per share (excluding ancillary costs) may be no more than 10 % above or 20 % below the average of the closing
prices per share in the company in Xetra trading (or a comparable successor system) on the Frankfurt Stock Exchange on the
three trading days prior to the day of issue of the public tender offer. If not insignificant variations of the decisive share price
occur after the day of issue of the public tender offer, the purchase price may be adjusted.
The Management Board shall be authorized to appropriate shares in the company acquired pursuant to the above authorizations for all legally admissible purposes. Consequently, the acquired shares may also in particular be sold by means other than
by way of the stock market or by means of an offer to the shareholders, if the shares are sold for cash at a price (excluding
ancillary costs) not materially below the stock market price of shares of the company carrying the same rights at the time
of the sale in Xetra trading (or a comparable successor system) on the Frankfurt Stock Exchange. The shares may also be
sold to third parties, provided this is done for the purpose of effecting company mergers or acquiring companies, parts of
companies, shareholdings in companies or other assets. The aforementioned shares may be redeemed without need of a
further Annual General Meeting. With regard to use of the bought-back shares, the authorization provides, in specific cases,
for legal rights of subscription of shareholders to be excluded. The facility to acquire treasury stock has not been utilized to
date.
145
The Supervisory Board is authorized to amend Article 4 of the Articles of Association accordingly following complete or partial
execution of the increase in share capital or on expiration of the period of authority.
I. Capital reserve
II. Other revenue reserves and net earnings available for distribution
III. Non-controlling interests
Total
31.12.2013
31.12.2014
38,404
38,404
285,601
287,903
324,005
326,307
22,809
19,617
346,814
345,924
In the financial year, a dividend amounting to EUR 0.00 (previous year: EUR 0.30) per share was paid to the shareholders.
2014
in EUR '000
The remaining shareholders’ equity of the BAUER Group developed as follows:
146
26.1 Non-controlling interests
a) Details of the non-wholly-owned subsidiaries in which significant non-controlling interests exist
The non-controlling interests which are significant in the BAUER Group are as follows:
31.12.2013
in EUR '000
Group company
Non-controlling
interests
Capital
share
in
%
Capital
share
in
EUR '000
31.12.2014
Profit
share
in
EUR '000
Capital
share
in
%
Capital
share
in
EUR '000
Profit
share
in
EUR '000
BAUER Maschinen GmbH, Schrobenhausen,
Germany
BAUER Anteilspool GbR
1.00
1,855
74
1.00
2,014
122
BAUER EGYPT S.A.E, Cairo, Egypt
Various natural persons
44.25
9,827
671
44.25
11,268
939
OOO BAUER Maschinen – Kurgan,
Russian Federation
Paryscheva Valentina,
Kokota Ivan
35.00
1,556
37
35.00
841
-372
Emiroglu Makina
40.00
1,102
359
40.00
1,185
184
Synergy Petroleum
International LLC, Merit
International LLC
30.00
4,201
852
-
-
939
Oweis family
16.70
-558
-4,048
16.70
-183
104
4,826
-449
4,492
-671
22,809
-2,504
19,617
1,245
BAUER Casings Makina Sanayi ve Ticaret
Limited Sirketi, Ankara, Turkey
BAUER Nimr LLC, Muscat – Al Mina,
Sultanate of Oman *
Site Group for Services and Well Drilling Ltd.
Co., Amman, Jordan
Individual non-significant subsidiaries with
non-controlling interests
Total
Combined financial information is presented below for each Group company with significant non-controlling interests, and
corresponds to the amounts before intra-Group eliminations:
BALANCE SHEET
BAUER Maschinen GmbH
BAUER EGYPT S.A.E
OOO BAUER Maschinen –
Kurgan
in EUR '000
31.12.2013
31.12.2014
Non-current assets
144,774
156,332
2,776
4,339
1,961
3,089
Current assets
290,197
317,141
23,673
26,326
7,636
5,732
31.12.2013
31.12.2014
31.12.2013
31.12.2014
118,848
198,527
144
0
3,314
4,967
Current liabilities
172,740
133,321
6,192
6,827
2,549
2,164
BALANCE SHEET
in EUR '000
Non-current assets
Current assets
Current liabilities
* up to November 19, 2014; see notes on page 104
BAUER Casings
31.12.2013
BAUER Nimr LLC
31.12.2014
31.12.2013
Site Group
31.12.2014
31.12.2013
31.12.2014
598
579
38,396
0
35,238
38,003
3,306
3,052
15,783
0
48,737
50,833
19
4
33,460
0
0
0
1,115
649
6,585
0
86,022
90,767
BAUER EGYPT S.A.E
Kurgan
in EUR '000
31.12.2013
31.12.2014
Sales revenues
393,011
357,925
Operating result
19,129
23,788
2,468
3,064
564
-818
Profit before tax
9,759
15,819
2,773
3,559
161
-1,316
Net profit or loss
7,426
12,165
1,696
2,122
105
-1,063
74
122
671
939
37
372
7,352
12,043
1,025
1,183
68
-691
-40
-50
-69
-227
0
0
Profit share of non-controlling interests
Profit share of shareholders of BAUER AG
Dividends paid to minority shareholders
INCOME STATEMENT
in EUR '000
BAUER Casings
31.12.2013
31.12.2013
31.12.2014
31.12.2013
20,084
22,758
6,663
BAUER Nimr LLC
31.12.2014
31.12.2013
31.12.2014
31.12.2014
7,567
Site Group
31.12.2013
31.12.2014
Sales revenues
5,250
3,687
11,745
16,616
20,750
11,224
Operating result
1,122
575
3,514
3,819
-20,314
5,027
Profit before tax
1,123
575
2,840
3,131
-23,908
503
Net profit or loss
898
460
2,840
3,131
-24,007
355
Profit share of non-controlling interests
359
184
852
939
-4,048
104
Profit share of shareholders of BAUER AG
539
276
1,988
2,192
-19,959
251
0
-146
-1,182
-2,364
0
0
Dividends paid to minority shareholders
CASH FLOW STATEMENT
BAUER EGYPT S.A.E
Kurgan
in EUR '000
2013
2014
2013
2014
2013
2014
Cash flows from operational activities
5,614
15,001
3,007
4,636
3,354
1,968
Cash flows from investment activities
-9,398
-16,205
-406
-2,929
-1,097
-1,607
6,995
-1,631
144
-19
-2,396
-478
Cash flows from financing activities
Net change in liquid funds
CASH FLOW STATEMENT
in EUR '000
0
0
-993
1,117
-61
155
3,211
-2,835
1,752
2,805
-200
38
BAUER Casings
2013
BAUER Nimr LLC
2014
Site Group
2013
2014 *
2013
2014
Cash flows from operational activities
438
537
11,114
10,352
-8,890
11,519
Cash flows from investment activities
-242
-74
-376
-607
8,878
-4,191
Cash flows from financing activities
Net change in liquid funds
* up to November 19, 2014; see notes on page 104
33
-375
-6,373
-9,735
-2,349
-7,791
-145
12
49
26
443
516
84
100
4,414
36
-1,918
53
2014
INCOME STATEMENT
147
148
b) Changes to the investment quota of subsidiaries of the Group
In financial 2013, BAUER Resources GmbH/Jordan Ltd. Co. purchased 23.3 % of the shares in Site Group for Services and
Well Drilling Ltd. Co., Amman, Jordan for a purchase price of USD 1. As a result, the proportion increased to 83.30 %. In this,
proportions totaling EUR 4,647 thousand in value (proportion of the carrying value of the net assets of the Site Group) have
been transferred to BAUER Resources GmbH/Jordan Ltd. Co. The transferred proportions have been reported under revenue
reserves.
With effect from April 30, 2014, Celler Brunnenbau Holding GmbH, Celle, contributed assets with a fair value of
EUR 900 thousand to PRAKLA Bohrtechnik GmbH as part of an asset deal. The fair value was certified by an external auditor.
In return, linked to a capital increase by PRAKLA Bohrtechnik GmbH, Peine, a capital share (10 %, or EUR 114 thousand)
determined by the DCF method was allotted. The asset deal also entailed a premium of EUR 786 thousand.
The asset deal reduced the investment in PRAKLA Bohrtechnik GmbH to 90 %, while the proportion of the minority shareholders increased by EUR 900 thousand due to the asset deal.
149
ADDITIONAL INFORMATION ABOUT CAPITAL MANAGEMENT
The object of Bauer’s capital management is to safeguard a strong financial profile. In particular, capital servicing is to be assured for suitable dividend payments for the shareholders as well as for the external capital providers. We also aim to provide
ourselves with adequate financial resources to sustain our growth strategy. The risk profile is actively managed and monitored.
The key indicators are presented below:
in EUR '000
Shareholders’ equity *
Equity ratio
31.12.2013
31.12.2014
419,815
418,925
26.5 %
26.6 %
Net profit or loss
-19,431
15,726
Net debt
672,096
645,679
729,313
687,514
57,217
41,835
Net debt / EBITDA *
5.42
3.78
EBITDA / net interest coverage *
3.28
4.49
Financial indebtedness
Liquid funds
* Previous year adjusted; there was a non-significant change in value in the course of calculating the share of joint ventures according to IFRS 11 and the retrospectively
changed balance sheet disclosure (see page 106)
2014
As part of the capital management strategy covering the subsidiaries of the BAUER Group, it is ensured that member
companies are provided with an equity base in line with local requirements. Our aim in doing this is to provide the necessary
flexibility in terms of finance and liquidity. All externally imposed capital requirements (covenants) were complied with during
the year under review.
27. NON-CURRENT LIABILITIES
The non-current portions of the liabilities comprise the following:
in EUR '000
1 to 5 years
Total
in EUR '000
over 5 years
1 to 5 years
over 5 years
247,775
0
364,771
0
17,265
0
13,032
0
6,483
0
5,959
0
14,397
0
10,013
0
285,920
0
393,775
0
Fair value
Interest rate margin
31.12.2013
31.12.2014
31.12.2013
31.12.2014
256,361
378,016
0.50 - 9.12 %
0.50 - 11.2 %
17,265
13,032
2.38 - 7.75 %
2.38 - 7.89 %
15,396
9,904
1.59 - 9.21 %
0.85 - 12.5 %
289,022
400,952
-
-
Total
This is focused primarily on key indicators such as the equity ratio, net debt and net profit or loss for the period.
150
The other non-current liabilities include non-current portions of liabilities from obligations in respect of part-time retirement and
service anniversary payments, trade payables, and liabilities from continuing involvements.
The other non-current financial liabilities mainly comprise the fair values of the derivatives as well as other liabilities to finance
companies and convertible bonds (see the Notes to the financial instruments in section 36).
28. PROVISIONS FOR DEFINED BENEFIT PLANS
The BAUER Group operates a number of defined benefit plans in Germany and internationally. The provisions for defined
benefit plans of the companies in Schrobenhausen recognized on the consolidated balance sheet cover most (96 %) of the
balance sheet value. Those companies are governed by the occupational pension scheme of BAUER Spezialtiefbau GmbH
constituted on July 1, 1992 as amended by the in-company agreement dated November 18, 1998. In it, the company grants
all employees who joined by March 31, 1998 and their surviving dependents a retirement pension and invalidity benefit as well
as a widow’s/widower’s pension. Employees qualify for the retirement pension on reaching the standard retirement age, or on
prior qualification for a pension from the statutory pension fund. The pension payable amounts to 0.225 % of the employee’s
pensionable earnings for each pensionable year of service, plus 0.075 % of pensionable earnings for each pensionable year
of service completed before January 1, 1999; plus, for the portion of pensionable earnings above the contribution assessment limit in the statutory pension fund, 0.375 % plus 0.125 % for each pensionable year of service completed before
January 1, 1999. In the case of scheme members who are not members of the Zusatzversorgungskasse des Baugewerbes
(construction industry ancillary benefits fund): The pension payable amounts to 0.3 % of the employee’s pensionable earnings
for each pensionable year of service, plus 0.1 % of pensionable earnings for each pensionable year of service completed
before January 1, 1999; plus, for the portion of pensionable earnings above the contribution assessment limit in the statutory
pension fund, 0.3 % plus 0.1 % for each pensionable year of service completed before January 1, 1999.
The widow’s/widower’s pension amounts to 50 % of the attained entitlement. Benefits are also promised to surviving dependent children in various forms.
Vesting and transitional arrangements are also in place.
The risks entailed by the pension schemes are mainly those commonly associated with defined benefit plans in terms of
potential variations in the discount interest rate and, to a lesser extent, inflation trends as well as longevity.
The calculations are based on the following actuarial assumptions:
31.12.2013
in %
Germany
Indonesia
Philippines
Taiwan
3.7
8.8
4.7
2.0
Future salary increases
3.0
10.0
3.0
3.0
Future pension increases
2.0
-
-
-
Interest rate
31.12.2014
in %
Germany
Indonesia
Philippines
Taiwan
Interest rate
2.0
8.0
7.8
2.0
3.0
10.0
3.0
3.0
Future pension increases
2.0
-
-
-
151
Defined benefit plans in Germany are calculated biometrically applying the 2005 G Graduated Life Tables compiled by Klaus
Heubeck. The discount interest rate applied to future pension payment commitments by most Group companies is derived
from the Mercer Yield Curve.
in EUR '000
Present value of commitments financed by a fund
Fair value of plan assets
Plan deficit
31.12.2013
31.12.2014
2,688
3,801
-504
-657
2,184
3,144
Present value of commitments not financed by a fund
81.421
115,360
Total deficit of define benefit pension plans
83,605
118,504
-
-
83,605
118,504
Effect of asset ceiling
Recognized provision
2014
The amount of the provisions recognized on the balance sheet for pensions and similar obligations was determined as follows:
Outside of Germany, the underlying biometric probability of death is based on published national statistics and empirical data.
152
The defined benefit obligation and the plan assets developed as follows during the previous year:
in EUR '000
As at: January 1, 2013
Present value
of commitment
Fair value
of plan assets
Effect
of asset ceiling
Total
Total
82,825
-502
82,323
-
82,323
Current service costs
1,850
-
1,850
-
1,850
Interest expense/income
2,933
-21
2,912
-
2,912
-
-
-
-
-
87,608
-523
87,085
-
87,085
Return on plan assets excluding amounts included
in the above interest
-
35
35
-
35
Actuarial gains and losses arising from adjustments
to demographic assumptions
-
-
-
-
-
to financial assumptions
-1,410
-
-1,410
-
-1,410
405
-
405
-
405
-
-
-
-
-
-1,005
35
-970
-
-970
-272
61
-211
-
-211
Employer
-
-88
-88
-
-88
Beneficiary employee
-
-
-
-
-
-
11
11
-
11
-2,222
-
-2,222
-
-2,222
Post-employment expenditure, gains
and losses from payment in lieu
Total
Revaluation:
Empirical value-based adjustments
Changes in asset ceiling, excluding amounts
included in the interest
Total
Exchange rate movements
Contributions:
Payments from the plan:
Ongoing payments
Benefits (not fund-financed)
Other effects
As at: December 31, 2013
-
-
-
-
-
84,109
-504
83,605
-
83,605
153
The defined benefit obligation and the plan assets developed as follows during the financial year:
Fair value
of plan assets
Effect
of asset ceiling
Total
Total
84,109
-504
83,605
-
83,605
Current service costs
1,817
-
1,817
-
1,817
Interest expense/income
3,080
-32
3,048
-
3,048
-
-
-
-
-
89,006
-536
88,470
-
88,470
Return on plan assets excluding amounts included
in the above interest
-
18
18
-
18
to demographic assumptions
-
-
-
-
-
to financial assumptions
32,274
-
32,274
-
32,274
-6
-
-6
-
-6
-
-
-
-
-
32,268
18
32,286
-
32,286
140
-52
88
-
88
Employer
-
-89
-89
-
-89
Beneficiary employee
-
-
-
-
-
-
2
2
-
2
-2,253
-
-2,253
-
-2,253
Post-employment expenditure, gains
and losses from payment in lieu
Total
Revaluation:
Empirical value-based adjustments
Changes in asset ceiling, excluding amounts
included in the interest
Total
Exchange rate movements
Contributions:
Payments from the plan:
Ongoing payments
Benefits (not fund-financed)
Other effects
-
-
-
-
-
119,161
-657
118,504
-
118,504
As at: January 1, 2014
Present value
of commitment
2014
in EUR '000
154
The fair value of the plan assets can be allocated to the following categories:
in EUR '000
31.12.2013
31.12.2014
Qualifying insurance contracts
223
235
Money market fund and pension fund
252
390
29
32
504
657
Total
No market price quotations exist for the qualifying insurance contracts.
The key actuarial assumptions applied in determining the defined benefit plan commitment are the discount interest rate,
expected salary increases and expected pension increases.
The sensitivity of the overall pension commitment to variations in the weighted primary assumptions is:
Effect on obligation
in EUR '000
Variation
in assumption
Increase
in assumption
Decrease
in assumption
Discount interest rate
+/- 0.5 %
107,354
131,121
+/- 0.5 %
122,313
114,726
Future pension increase
+/- 0.5 %
125,835
110,971
Probability of death
Increase
in assumption
by 1 year
Decrease
in assumption
by 1 year
124,321
114,007
The above sensitivity analysis is based on a variation in one assumption while all other assumptions remain constant. It is
unlikely that this will occur in reality, and variations in some assumptions may correlate. In calculating the sensitivity of the
defined benefit plan obligation to variations in actuarial assumptions, the same method was applied as that used to measure
the provisions for defined benefit plans on the balance sheet. The present value of the defined benefit plan obligations was
calculated by the projected unit credit method as at the end of the reporting period.
The methods and categories of assumption applied in preparing the sensitivity analysis have not changed relative to the prior
period except for the probability of death.
155
The defined benefit plan commitments and plan assets by country are as follows:
31.12.2013
Germany
Present value of commitments
Total
Total
Indonesia
Total
164
Total
-223
-252
0
-29
-504
82,839
456
175
135
83,605
84,109
-
-
-
-
-
82,839
456
175
135
83,605
31.12.2014
Germany
Total
175
Taiwan
708
in EUR '000
Present value of commitments
Philippines
83,062
Indonesia
Philippines
223
Taiwan
138
Total
117,773
1,027
119,161
-235
-390
0
-32
-657
117,538
637
223
106
118,504
-
-
-
-
-
117,538
637
223
106
118,504
in EUR '000
Active scheme members
Deferred beneficiaries
2014
The present value of the defined benefit plan commitment is distributed as follows among the plan members:
31.12.2013
31.12.2014
49,949
75,169
4,630
6,522
Pensioners
29,530
37,470
Total
84,109
119,161
The weighted average term of the defined benefit plans is 20.2 years.
For the 2015 financial year, pension payments totaling EUR 2,314 thousand (previous year: 2,242 thousand) are expected.
Of that total, EUR 2,314 thousand (previous year: 2,242 thousand) is projected to be contributed by the employer. Contributions to the external plan assets totaling EUR 89 thousand (previous year: 84 thousand) are expected for 2015.
The following table provides an overview of the due dates of the undiscounted pension payments:
in EUR '000
Pension payments
Under
1 year
2,314
in EUR '000
1 to 5 years
6 to 10 years
31.12.2014
Total
11,736
26,181
40,231
156
CURRENT LIABILITIES
29. CURRENT LIABILITIES
in EUR '000
31.12.2013
31.12.2014
427,589
266,533
10,185
7,453
Advances received for orders
Trade payables
Liabilities to enterprises in which the company has participating interests
Other current liabilities
Other current financial liabilities
Total
9,801
19,579
32,839
48,471
194,471
168,974
219
205
69,873
68,632
12,102
25,712
757,079
605,559
The “Trade liabilities” balance sheet item includes long-term liabilities totaling EUR 979 thousand (previous year: 949 thousand).
The other current liabilities mainly comprise obligations in respect of outstanding invoices, flexitime and holiday credits,
employer’s liability insurance associations, the compensation levy for the shortfall in handicapped employees, performance
bonuses as well as other tax liabilities and liabilities in respect of social security.
The other current financial liabilities mainly comprise obligations to leasing and finance companies. The fair values virtually
match the carrying amounts. The interest rate margin on current liabilities to banks is 0.75 to 11.20 % (previous year:
1.10 to 9.60 %).
30. OTHER PROVISIONS
The other provisions have developed as follows in the financial year:
in EUR '000
31.12.2013
31.12.2014
14,893
14,809
0
0
-33
153
Allocation
6,461
6,633
Reversal
3,454
3,432
As at 01.01.
Currency adjustment
Consumption
3,058
2,283
As at 31.12.
14,809
15,880
31.12.2013
31.12.2014
14,605
14,670
204
1,210
14,809
15,880
The other provisions comprise the following:
in EUR '000
Risk from contract processing and warranties
Litigation
Total
157
The provisions for risk from contract processing and warranties include all risks arising from carrying out specialist foundation engineering work and from the sale of machinery, equipment and tools for specialist foundation engineering, with the
associated services. These primarily relate to warranty obligations and to other uncertain commitments. The risk from contract
predicted to be used up during 2015. Provisions for litigation amounting to EUR 427 thousand (previous year: 0) is predicted
to be used up during 2017.
31. CONTINGENT LIABILITIES
Contingent liabilities are liabilities not yet recognized in the financial statements, which are recognized in the amount of the
maximum possible exposure on the balance sheet date.
in EUR '000
31.12.2013
Liabilities from guarantees
4,386
31.12.2014
5,112
In the construction industry, it is common and essential practice to issue various guarantees to secure obligations arising
from construction contracts. These guarantees are usually issued by banks or credit insurance companies (guarantors), and
essentially guarantee quotations, contract performance, prepayments and warranty commitments. In the event of a guarantee
being given, the guarantors have a right of recourse against the Group. A risk of a guarantee being implemented exists only
when the underlying contractual obligations are not duly met.
The contingent liabilities were mainly in relation to the securing of contract performance, to warranty obligations and to
advance payments. Liabilities from guarantees exist to third parties. In addition, we are subject to joint and several liability in
respect of all joint ventures in which we participate.
For reasons of practicality, no information has been provided about the due dates of outflows from contingent liabilities.
32. OTHER FINANCIAL OBLIGATIONS
Remaining term
in EUR '000
under 1 year
31.12.2013
Minimum lease payments from operating leases
Other financial obligations
31.12.2014
1 to 5 years
31.12.2013
31.12.2014
over 5 years
31.12.2013
31.12.2014
15,139
9,663
15,688
22,048
89
77
8,616
6,715
4,893
3,677
5,724
6,749
The operating leases relate mainly to mutual agreements about factory and office equipment, as well as to technical equipment and machinery which were added in the financial year and are classified as operating leases. The BAUER Group is
committed to rental agreements of unlimited term totaling monthly EUR 685 thousand (previous year: 1,686 thousand).
The other financial obligations mainly include limited-term property rentals and leases.
33. DISCONTINUED OPERATIONS
There no plans to discontinue business operations under the terms of IFRS 5.
34. EVENTS AFTER THE BALANCE SHEET DATE
No events subject to mandatory reporting in accordance with IAS 10 occurred after December 31, 2014.
2014
The majority of the provisions for risks arising from contract processing and warranties and provisions for litigation are
processing and warranties is determined specific to project/construction site.
158
OTHER DISCLOSURES
35. CASH FLOW STATEMENT
The funds shown in the cash flow statement comprise only the cash and cash equivalents stated on the balance sheet.
The cash flow statement details payment flows, broken down by inflow and outflow of funds from operating activities and
from investing and financing activities.
The cash flow from operating activities is derived indirectly from the pre-tax profit. The pre-tax profit is adjusted by non-cash
transactions. The cash flow from operating activities is produced taking account of the changes in working capital.
Investing activities include additions to property, plant and equipment and to financial assets and intangible assets, as well
as income from the sale of assets. Financing activities include outflows of cash and cash equivalents arising from dividend
payments as well as the change in other financial indebtedness.
The changes in balance sheet items applied for the preparation of the cash flow statement are not directly derivable from the
balance sheet, as the effects of currency translation and changes in the scope of consolidation, as well as the allocation and
elimination of value adjustments on trade receivables, do not affect payments and are stripped out.
36. FINANCIAL INSTRUMENTS
In its business operations and financing activities the BAUER Group is subject in particular to fluctuations in exchange rates
and interest rates. It is the company’s policy to exclude, or at least limit, these risks by entering into hedge transactions.
All hedging measures are managed centrally by BAUER AG.
Application of the segregation-of-duties approach ensures that there is an adequate split between the trading and execution
functions. The segregation-of-duties approach is implemented by spreading functions across the Management Board
(financial reporting) and the corporate departments (operational handling). All derivatives transactions are entered into only
with banks of the highest credit rating.
MARKET RISKS
Foreign exchange rate risks
Foreign exchange rate risks under the terms of IFRS 7 are created by financial instruments which are denominated in a
currency different to the functional currency and are of a monetary nature. Exchange rate-related differences when converting
financial statements into the Group currency are ignored. All non-functional currencies in which the BAUER Group enters into
financial instruments are classed, as a matter of principle, as relevant risk variables.
The existing foreign exchange forward contracts, foreign exchange options and cross-currency swaps safeguard our currency
hedging strategy. Within the BAUER Group, the primary monetary financial instruments are either denominated directly in
functional currency or are largely transferred into the functional currency by means of derivatives. In view of the usually shortterm maturity of the instruments too, possible changes in exchange rates have only very minor effects on earnings or equity.
For the purposes of sensitivity analysis, foreign exchange rate risks arising from monetary financial instruments which were not
concluded in the functional currencies of the individual member companies of the BAUER Group are included in the analysis.
159
Quantification of foreign exchange risk in case of exchange rate shifts of +/- 10 %:
USD
RUB
CAD
Overall effect of +10 % on OCI
5,572
255
0
Overall effect of −10 % on OCI
-6,838
-309
0
Overall effect of +10 % on income statement
2,713
49
-367
Overall effect of −10 % on income statement
-2,654
-58
449
In EUR '000
As at 31.12.2014
USD
RUB
Overall effect of +10 % on OCI
10,653
137
Overall effect of −10 % on OCI
CAD
0
-13,021
-167
0
Overall effect of +10 % on income statement
8,055
64
-99
Overall effect of −10 % on income statement
-6,181
-78
122
In 2014, the sensitivity effects mainly related to the US Dollar, Russian Ruble and Canadian Dollar. No concentrations of risk
exist.
Interest rate risks
The existing interest rate swaps serve to safeguard our financing and interest rate hedging strategy. Agreements exist in
respect of swaps from variable to fixed interest rates in order to exclude the risk of fluctuation in market interest rates.
Changes in market interest rates affect the interest results of variable-rate primary financial instruments of which the interest
payments are not hedged by derivatives, and consequently are included in the calculation of earnings-related sensitivity.
Changes in market interest rates of interest rate derivatives (interest rate swaps, interest rate/currency swaps) which are not
embedded in a hedging relationship pursuant to IAS 39 have effects on financial income and expenses (net valuation based
on adjustment of financial assets to applicable fair value) and so are included in the calculation of earnings-related sensitivity.
The effects of changes in market interest rates of interest rate derivatives to which hedge accounting is applied are recognized
in the OCI.
Quantification of risk of change in interest rate in case of interest rate shifts of +/- 100 base points:
in EUR '000
31.12.2013
Overall effect of +100 base points on OCI
2,076
Overall effect of −100 base points on OCI
31.12.2014
732
-1,806
-393
Overall effect of +100 base points on income statement
2,494
4,080
Overall effect of −100 base points on income statement
-2,298
-3,474
A drop in the variable interest rate below 0 % was ruled out when calculating the interest sensitivity.
Raw material risks
Raw material risks to which the BAUER Group is exposed in respect of availability and potential fluctuations in price on the
market are excluded, or limited, by means of supply promises and fixed pricing agreements entered into with suppliers prior to
execution of contracts. The raw material risk relates mainly to steel.
As at 31.12.2013
2014
In EUR '000
160
Liquidity risks
The liquidity risk is managed by means of business planning, which ensures that the necessary funds to finance operating
activities and current and future capital investments are made available at the appropriate time, in the required currency, and at
optimum cost, in all Group companies. In liquidity risk management, the liquidity requirement arising from operating activities,
from investment activities and from other
financial measures is determined in the form of a banking report and a liquidity plan.
Liquidity is guaranteed at all times by means of a liquidity forecast focused on a fixed planning horizon and by unused lines of
credit and guarantee facilities.
The following tables present the contractually agreed and discounted interest payments and capital repayments in respect of
primary financial liabilities and derivative financial instruments of the BAUER Group:
Carrying amount
31.12.2013
Cash flows
2014
Cash flows
2015 to 2018
Cash flows
2019 ff.
675,364
443,095
239,939
30,423
27,450
11,070
18,324
0
Other liabilities
76,356
69,873
6,483
0
Other financial liabilities (without derivatives)
18,968
11,088
6,416
3,537
32,839
32,839
0
0
194,471
193,522
949
0
219
219
0
0
in EUR '000
Trade payables
in EUR '000
Carrying amount
31.12.2014
Cash flows
2015
Cash flows
2016 to 2019
Cash flows
2020 ff.
631,304
276,146
393,705
10,816
20,485
8,201
13,712
20
Other liabilities
74,591
68,632
2,898
3,062
Other financial liabilities (without derivatives)
17,623
11,981
5,997
0
48,471
48,471
0
0
168,974
167,995
979
0
205
205
0
0
Trade payables
There were no instances of defaulting on interest payments or capital repayments in the period under review. Furthermore,
all externally imposed capital requirements (covenants) for the loan agreements were met, see also page 148 “Additional
information about capital management”. No concentrations of risk exist. It is not to be expected that liabilities arising from
sureties (contingent liabilities) will result in significant actual liabilities, and thus in significant cash flows, for which no provisions
have yet been made.
161
The due dates of derivative financial instruments based on outflow and inflow of cash and cash equivalents are as follows:
Liabilities from foreign exchange forward contracts
Outflow of cash and cash equivalents *
Inflow of cash and cash equivalents *
Carrying amount
2014
2015 to 2018
from 2019
491
-382
-150
0
-
-41,399
-9.159
0
-
41,017
9,009
0
6,846
-3,132
-4,513
-190
Outflow of cash and cash equivalents
-
-3,132
-4,513
-190
Inflow of cash and cash equivalents
-
0
0
0
194
-122
-95
0
-
-239
-186
0
-
117
91
0
Liabilities from interest rate swaps
Liabilities from cross currency swaps
* Previous year’s figure adapted
In EUR '000
Carrying amount
2015
12,926
-12,804
-279
0
-
-228,410
-8,220
0
-
215,606
7,941
0
As at 31.12.2014
Liabilities from foreign exchange forward contracts
Liabilities from interest rate swaps
2016 to 2019
from 2020
5,176
-2,598
-2,341
-29
-
-2,598
-2,341
-29
-
0
0
0
Liabilities from cross currency swaps
0
0
0
0
-
0
0
0
-
0
0
0
To calculate the cash inflows from interest rate swaps the conditions as per December 31, 2014 were applied.
Risk of default
The risk of default is managed at Group level. Default risks arise from cash and cash equivalents, derivative financial instruments and deposits at banks and financial service companies. Only banks and financial services companies with high credit
ratings are selected as partners. No credit limit was exceeded in the reporting period. The management expects no defaults
on the part of these business partners.
The risk of default on financial assets exists in terms of the risk of failure of a contract party and thus to a maximum in the
amount of the carrying amount of the exposure to the said party. A presentation of the carrying amounts and the resultant
maximum risk of default per category is given in the table starting on page 166. The risk arising from primary financial instruments is countered by means of value adjustments for bad debt, and in Germany also by means of credit insurance cover.
As derivative financial instruments are entered into only with banks with high credit ratings, and the risk management system
sets limits for each party, the actual risk of default is negligible. No concentrations of risk exist.
As at 31.12.2013
2014
In EUR '000
162
Other disclosures relating to financial instruments
On October 2, 2001, BAUER EGYPT S.A.E. issued an 11 % convertible bond with a face value of EGP 10,000,000. The term
of the convertible bond was originally 6 years, and was again extended for a further 3 years in 2010. On expiry of the
convertible bond, the holder did not exercise the option to exchange it for 200,000 shares at EGP 50 each. Repayment of
the convertible bond was agreed in three installments. The first two installments were paid in 2013, in the amount of EGP
3,000,000, and in 2014, in the amount of EGP 4,000,000; the remaining installment of EGP 3,000,000 will be paid in 2015.
The applicable fair value of the liability component and of the equity conversion component was set as per the issue date of
the convertible bond. The applicable fair value of the debt component recognized in the non-current financial liabilities as at
December 31, 2014 amounts to EUR 0 (previous year: 144 thousand).
The applicable fair value of the equity component recognized in the non-controlling interests as at December 31, 2014
EUR 116 thousand (previous year: 324 thousand).
The Group has taken up loans with variable interest rates and hedged against its interest rate-related cash flow risk by means
of swaps. Such interest rate swaps have the commercial effect of converting variable-interest loans into fixed-interest loans.
In these interest rate swaps, the Group agrees with other parties to swap the difference between the fixed and variable
interest rates derived from the agreed nominal amounts at regular intervals.
The nominal volumes and market values of the derivative financial instruments are as follows:
Nominal volume
in EUR '000
31.12.2013
Fair value
31.12.2014
31.12.2013
Positive
31.12.2014
Negative
Positive
Negative
Interest rate swaps
of which in hedge accounting
125,464
64,571
0
−2,765
0
−1,354
45,550
67,350
0
−4,081
0
−3,822
74,931
119,546
1,980
−133
988
−7,640
of which not in hedge accounting
84,712
145,022
1,211
−358
426
−5,286
Foreign exchange forward contracts
Foreign exchange forward options
0
0
0
0
0
0
6,556
0
115
0
0
0
1,605
1,419
0
−42
69
0
3,314
2,578
0
−152
60
0
Cross-currency swaps
Net result by valuation category
The following table sets out the net profits and losses (before tax) on financial instruments stated in the income statement,
broken down by valuation category as per IAS 39:
in EUR '000
Loans and receivables
Financial liabilities measured at amortized cost
Available-for-sale financial assets
Held for Trading
Total
31.12.2013
31.12.2014
8,471
982
-38,691
-39,075
-2,586
-705
2,465
-7,875
-30,341
-46,673
163
The net result of the “Loans and Receivables” category includes results from the creation and reversal of value adjustments in
respect of trade receivables as well as interest income. Furthermore, the valuation category of “Loans and Receivables” was
extended in 2014 to include the results from bank fees amounting to EUR −3,284 thousand (previous year: −2,827 thousand)
to third parties, for current and non-current loans as well as guaranty commissions.
The net result of the “Available-for-Sale Financial Assets” category includes impairment of financial assets. Equity shares in
companies are valued at cost and are not included.
The net result of the “Financial Assets and Liabilities Held for Trading” category includes results from foreign exchange forward
contracts and options, as well as results from changes to the fair values of interest rate swaps.
Carrying amounts and fair values
The fair value of a financial instrument is the consideration for which an asset might be exchanged, or a debt paid, between
informed, willing and mutually independent parties. Where financial instruments are quoted on an active market – such as
in particular shares held and bonds issued – the price quoted on the market in question is the fair value. If no active market
exists, the fair value is determined by financial valuation methods. For securities (AfS) the BAUER Group has at its disposal the
prices quoted on an active market.
The fair values of foreign exchange forward contracts and cross-currency swaps are measured separately at their respective
forward prices and discounted to the reference date based on the corresponding interest rate curve. The market prices of
foreign exchange forward options are determined by recognized option models.
The fair values of the interest rate swaps correspond to the respective market value as determined by appropriate financial
valuation methods, such as by discounting expected future cash flows.
For cash and cash equivalents, current trade receivables and other current assets, current trade payables and other current
liabilities, owing to their short remaining terms the carrying amount should be adopted as a realistic estimate of the fair value.
The fair values of non-current financial assets and of other non-current financial liabilities correspond to the cash values of the
payment flows linked to the assets, taking into account the applicable interest rate parameters, which reflect changes in the
terms and expectations of the market and of the respective parties.
The fair values of financial instruments are determined on the basis of one of the methods set out on the three following levels:
• Level 1: Quoted prices (adopted unchanged) on active markets for identical assets and liabilities
• Level 2: Directly or indirectly observable input data for the asset or liability other than quoted prices as per level 1
• Level 3: Applied input data which does not originate from observable market data for measurement of the asset and liability
(non-observable input data)
There were no transfers between the levels during the year. If circumstances arise necessitating a reclassification, it is
undertaken at the end of the reporting period.
2014
The net result of the “Financial Liabilities Measured at Amortized Cost” category includes the result from interest expenditure
and value reductions on irrecoverable receivables in the amount of EUR −411 thousand (previous year: −72 thousand).
164
Other disclosures relating to hedging transactions
In the 2014 financial year, changes in shareholders’ equity from cash flow hedges in an amount of EUR 1,184 thousand (previous
year: 1,767 thousand) before tax and EUR 1,235 thousand (previous year: 1,129 thousand) after tax were recognized in the
shareholders’ equity as a hedge reserve with no effect on profit and loss. An amount of EUR 6,497 thousand (previous
year: 310) was recognized as affecting expenditure from the hedge reserve created with no effect on net income in the
shareholders’ equity. Fair value changes in the shareholders’ equity (reducing equity) amounting to EUR -5,313 thousand were
reported from the derivative financial instruments held as at December 31, 2014. Moreover, the changes in deferred taxes in
the amount of EUR 51 thousand were reported in the shareholders’ equity with no effect on net income. Future transactions
in foreign currencies secured by hedging and hedged changes in market interest rates are expected to be realized by 2020
at the latest. Gains and losses on future contracts in foreign currency and interest rates at December 31, 2014 included in
the hedge reserve in the OCI are recognized in the income statement in the period in which the hedged planned transaction
impacts on the income statement.
The prospective effectiveness is measured according to the Critical Term Match method and the retrospective effectiveness
according to the Dollar Offset method based on the Hypothetical Derivatives method.
Offsetting Financial Assets and Financial Liabilities
a) Financial assets
The following financial assets are subject to offsetting, enforceable master-netting arrangements or similar arrangements.
Related amounts not offset
on the balance sheet
in EUR '000
Gross amount
of recognized
Gross amount
of recognized
financial assets
offset on the
balance sheet
Net amount of
recognized on the
financial
balance sheet
Financial
instruments
Cash
securities paid
Net amount
Status: December 31, 2013
Derivative financial assets
3,306
0
3,306
-859
-
2,447
57,217
0
57,217
-3,400
-
53,817
Total
60,523
0
60,523
-4,259
-
56,264
Status: December 31, 2014
1,543
0
1,543
-1,484
-
59
Derivative financial assets
41,835
0
41,835
-4,402
-
37,433
Total
43,378
0
43,378
-5,886
-
37,492
165
b) Financial liabilities
The following financial liabilities are subject to offsetting, enforceable master-netting arrangements or similar arrangements.
Net amount of
recognized on the
financial
balance sheet
Financial
instruments
Cash
securities paid
Net amount
Derivative financial liabilities
7,531
0
7,531
-859
-
6,672
Current-account overdrafts
255,605
0
255,605
-3,400
-
252,205
Total
263,136
0
263,136
-4,259
-
258,877
Derivative financial liabilities
18,102
0
18,102
-1,484
-
16,618
Current-account overdrafts
188,709
0
188,709
-4,402
-
184,307
Total
206,811
0
206,811
-5,886
-
200,925
The “Financial instruments” column lists the amounts which are subject to master-netting arrangements but are not netted
on the balance sheet because the preconditions for offsetting are not met. The “Cash securities received” column lists the
amounts of cash and financial instrument securities received relative to the sum total of assets and liabilities which do not
meet the criteria for netting on the balance sheet.
2014
Gross amount
of recognized
Gross amount
of recognized
financial assets
offset on the
balance sheet
Related amounts not offset
on the balance sheet
in EUR '000
166
Within the Group, financial instruments are classified in the same way as the respective balance sheet items. No fair value is
stated for current financial instruments or financial instruments reported at acquisition cost in the balance sheet, according to
IFRS 7.29. The following table presents a progression of the classes to the categories of IAS 39 and the respective market
values:
in EUR '000
Valuation standard
Loans and receivables/
other financial liabilities
Carrying amount
31.12.2013
31.12.2014
31.12.2013
31.12.2014
at cost
3,613
3,613
0
0
at amortized cost
36,762
0
36,762
0
5,420
28,420
137
1,402
0
0
at amortized cost
1,325
22,671
1,325
22,671
at cost
3,958
4,347
0
0
NON-CURRENT ASSETS
Participations
Other non-current financial assets
at fair value
CURRENT ASSETS
Receivables from construction contracts
at amortized cost
143,234
132,159
143,234
132,159
Trade receivables
at amortized cost
320,301
311,417
320,301
311,417
at amortized cost
444
67
444
67
19,551
20,100
at fair value
3,169
141
0
0
at amortized cost
16,382
19,959
16,382
19,959
57,217
41,835
57,217
41,835
586,542
537,611
575,665
528,108
Receivables from enterprises
in which the company has participating interests
Other current financial assets
Total financial assets
Balance sheet valuation as per IAS 39
Not assigned to any IAS 39 category
Financial assets and
liabilities held for trading
Available for sale
Derivatives in
hedge accounting
Balance sheet valuation
as per IAS 17
Fair Value as per IFRS 7
and IFRS 13
Valuation
level
according to
IFRS 13
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
3,613
3,613
0
0
0
0
0
0
n/a
n/a
0
0
0
0
0
0
0
0
40,449
0
2
0
0
127
349
10
1,053
0
0
137
1,402
2
0
0
0
0
0
0
0
0
1,214
22,224
2
3,958
4,347
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
0
0
319,454
310,972
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
1,199
136
1,970
5
0
0
3,169
141
2
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
0
0
n/a
n/a
n/a
7,571
7,960
1,326
485
1,980
1,058
0
0
364,423
334,739
2014
31.12.2013
167
2
168
in EUR '000
Valuation standard
Loans and receivables/
other financial liabilities
Carrying amount
31.12.2013
31.12.2014
31.12.2013
31.12.2014
at amortized cost
247,775
364,771
247,775
364,771
at fair value
17,265
13,032
0
0
14,397
10,013
at fair value
6,516
4,371
0
0
at amortized cost
7,881
5,642
7,881
5,642
at amortized cost
427,589
266,533
427,589
266,533
at fair value
10,185
7,453
0
0
Liabilities from construction contracts
at amortized cost
32,839
48,471
32,839
48,471
Trade payables
at amortized cost
194,471
168,974
194,471
168,974
at amortized cost
219
205
219
205
12,102
25,712
at fair value
1,015
13,731
0
0
at amortized cost
11,087
11,981
11,087
11,981
956,842
905,164
921,861
866,577
CURRENT LIABILITIES
Liabilities to enterprises
in which the company has participating interests
Other current financial liabilities
Total financial liabilities
Financial assets and
liabilities held for trading
Available for Sale
Derivatives in
hedge accounting
Balance sheet valuation
as per IAS 17
Fair Value as per IFRS 7
and IFRS 13
Valuation
level
according to
IFRS 13
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
0
0
0
0
0
0
0
0
256,361
378,016
2
0
0
0
0
0
0
17,265
13,032
17,265
13,032
n/a
0
0
4,270
3,648
2,246
723
0
0
6,516
4,371
2
0
0
0
0
0
0
0
0
8,880
5,533
2
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
10,185
7,453
10,185
7,453
n/a
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
0
0
0
0
0
0
n/a
n/a
n/a
0
0
321
5,460
694
8,271
0
0
1,015
13,731
0
0
0
0
0
0
0
0
n/a
n/a
0
0
4,591
9,108
2,940
8,994
27,450
20,485
300,222
422,136
2
n/a
Not allocated to any IAS 39 category
2014
Balance sheet valuation as per IAS 39
169
170
37. EXECUTIVE BODIES
In the year under review the Supervisory Board comprised the following members:
Chairman
• Dr. Klaus Reinhardt, General (retd.), Starnberg
Deputy Chairman
• Robert Feiger, Neusäss
Chairman of the Federal Executive Committee of the IG Bauen-Agrar-Umwelt trade union, Frankfurt am Main
Supervisory Board, HeidelbergCement AG, Heidelberg, Member (up to May 7, 2014)
Supervisory Board, Zusatzversorgungskasse des Baugewerbes AG, Wiesbaden, Member
Supervisory Board, Zusatzversorgungskasse Gerüstbaugewerbe VVaG, Wiesbaden, Chairman
• Dr.-Ing. Johannes Bauer, Schrobenhausen
Construction engineer with BAUER Designware GmbH, Schrobenhausen
• Dipl.-Ing. (FH) Rainer Schuster
Retired construction engineer
• Dipl.-Ing. (FH) Elisabeth Teschemacher, née Bauer, Schrobenhausen
1st Chair of Caritasverband Neuburg-Schrobenhausen e.V.
• Gerardus N. G. Wirken, Breda, Netherlands
Freelance consultant on strategy, controlling and accounting
Supervisory Board, Vendor Beheer B.V., Tilburg/Netherlands, Chairman
Supervisory Board, Winters Bouw- en Ontwikkeling B.V., Breda/Netherlands, Chairman
Supervisory Board, Rabobank Breda, Breda/Netherlands, Chairman (to July 1, 2014)
Supervisory Board, Egeria Investments B.V., Amsterdam/Netherlands, Chairman (to July 1, 2014)
Member of the Board of Rabobank Pensioenfonds, Utrecht/Netherlands (to 1 July 1, 2014)
• Prof. Dr.-Ing. E.h. Manfred Nußbaumer M.Sc, Munich
Retired construction engineer
Supervisory Board, Leonhardt, Andrä und Partner Beratende Ingenieure VBI AG, Stuttgart, Member
• Regina Andel, Ellrich
Chair of the Works Council, SCHACHTBAU NORDHAUSEN GmbH, Nordhausen
• Dipl.-Volkswirt Norbert Ewald, Bad Vilbel
Member of the Management Board, Zusatzversorgungskasse des Steinmetz- und Steinbildhauerhandwerks VVaG,
Wiesbaden
• Reinhard Irrenhauser, Schrobenhausen
Chairman of the Works Council, BAUER Maschinen GmbH, Schrobenhausen
• Dipl.-Kfm. (FH) Stefan Reindl, Schrobenhausen
Human Resources Director of BAUER Aktiengesellschaft, Schrobenhausen
Advisory Board, BAUER Training Center GmbH, Schrobenhausen, Chairman
• Dipl.-Ing. Gerold Schwab, Kernen
Construction Engineer in the Technical Division of BAUER Spezialtiefbau GmbH, Schrobenhausen
171
Management Board
• Prof. Dr.-Ing. E.h. Dipl.-Kfm. Thomas Bauer, Schrobenhausen, Chairman, Functions: Participations in Subsidiaries,
Accounting, Planning, Advertising, Controlling
Supervisory Board, BAUER Spezialtiefbau GmbH, Schrobenhausen, Chairman
Supervisory Board, SCHACHTBAU NORDHAUSEN GmbH, Nordhausen, Chairman
Supervisory Board BAUER EGYPT S.A.E., Cairo, Chairman
• Dipl.-Betriebswirt (FH) Hartmut Beutler, Schrobenhausen, Functions: Finance, Legal Affairs and Insurance, Investor Relations,
Facility management
Supervisory Board, BAUER Resources GmbH, Schrobenhausen, Member
Supervisory Board, Schrobenhausener Bank e.G., Schrobenhausen, Chairman
• Dipl.-Ing. Heinz Kaltenecker, Schrobenhausen, Functions: Participations in Subsidiaries, Information Technology,
Human Resources, Quality
Management, Risk Management, Health Safety Environment
Supervisory Board, BAUER Spezialtiefbau GmbH, Schrobenhausen, Deputy Chairman
Supervisory Board, BAUER Maschinen GmbH, Schrobenhausen, Deputy Chairman
Supervisory Board, BAUER Resources GmbH, Schrobenhausen, Chairman
Supervisory Board, SCHACHTBAU NORDHAUSEN GmbH, Nordhausen, Deputy Chairman
The total remuneration paid to members of the Management Board in the year under review, excluding allocations to provisions for defined benefit plans, was EUR 1,150 thousand (previous year: EUR 1,361 thousand). Of that total, EUR 1,090 thousand (previous year: 1,056 thousand) was not performance-related and EUR 60 thousand (previous year: 305 thousand)
was performance-related. The total remuneration includes benefits in kind arising from the private use of a company car and
reimbursement of travel expenses for each member of the Management Board, as well as pro rata group accident insurance
premiums and employer’s liability insurance association contributions. The company pension scheme for Management Board
members incurred pension service costs totaling EUR 159 thousand (previous year: 118 thousand). The pensionable earnings
serving as the basis for calculating pension levels are significantly lower than the basic salary in all contracts. Calculated in
accordance with IAS 19, the defined benefit obligation entailed by all pension commitments to members of the Management
Board at the year-end was EUR 5,531 thousand (previous year: EUR 3,868 thousand). Former members of the management
bodies of the parent company received total remuneration of EUR 0 thousand (previous year: 0) in return for duties performed
on behalf of the parent company.
2014
Supervisory Board, BAUER Resources GmbH, Schrobenhausen, Deputy Chairman
Supervisory Board, BAUER Maschinen GmbH, Schrobenhausen, Chairman
172
The remuneration paid to the Supervisory Board for the 2014 financial year totaled EUR 254 thousand (previous year:
254 thousand) and was distributed as follows:
in EUR '000
2013
2014
38
38
27
27
20
20
Chairman
Dr. Klaus Reinhardt
Deputy CEO
Robert Feiger
Dr.-Ing. Johannes Bauer
Dipl.-Ing. (FH) Rainer Schuster
18
18
Dipl.-Ing. (FH) Elisabeth Teschemacher
18
18
Gerardus N. G. Wirken
20
20
Prof. Dr. Manfred Nußbaumer
20
20
20
20
Dipl.-Volkswirt Norbert Ewald
Dipl.-Kfm. (FH) Stefan Reindl
9
18
Regina Andel
18
18
Dipl.-Ing. Gerold Schwab
20
20
Dipl.-Ing. (FH) Walter Sigl
9
0
Reinhard Irrenhauser
Total *
18
18
254
254
* As a result of rounding to the nearest thousand euros, there was a rounding difference of EUR 1,000 in 2013 and 2014
38. RELATED PARTY DISCLOSURES
Related parties under the terms of IAS 24 are parties that the reporting enterprise has the ability to control or exercise significant influence over, or parties that have the ability to control or exercise significant influence over the reporting enterprise.
Transactions with related parties are defined as the transfer of resources, services or obligations between the reporting entity
and a related party, regardless of whether an invoice is issued in respect of the transaction or not.
Members of the Management Board of BAUER AG are members of Supervisory Boards and Management Boards of other
companies with which BAUER AG maintains relations in the course of its ordinary business operations. Supervisory Board
received pensions totaling EUR 55 thousand (previous year: 54 thousand) in respect of former employment within the BAUER
Group. The members of the Supervisory Board, by virtue of their role as employees, received remuneration totaling EUR 468
thousand (previous year: 503 thousand). Lease and service contracts and contracts of employment (except for the remuneration to members of the Management Board disclosed) exist with members of the Management Board, including close family,
in respect of which remuneration to an amount of EUR 879 thousand (previous year: 945 thousand) was paid.
173
Loan commitments to the BAUER Foundation existed totaling EUR 1,000 thousand (previous year: 1,000 thousand), for
which interest amounting to EUR 55 thousand (previous year: 55 thousand) was paid.
At the end of the financial year no loan commitments existed to shareholders of BAUER AG.
in EUR '000
Non-consolidated companies
Joint ventures
2013
2014
2013
2014
2,063
1,990
16,457
14,651
Purchased services
312
172
6,915
2,875
0
0
Receivables and other assets (31.12.)
444
0
25,893
18,863
31,661
24,738
Liabilities (31.12.)
133
125
1,775
2,538
0
0
0
0
4,035
891
21,802
16,790
Income
Impairment of receivables
2013
2014
9,965
11,812
The purchased services essentially comprise all expenses incurred with related parties during the financial year.
Transactions with related parties are conducted at standard market terms.
2014
The receivables and other assets include uncollectable receivables as well as financial assets in respect of related parties.
The key relationships between fully consolidated Group companies and related parties are set out in the following table:
39. JOINT OPERATIONS
The main joint operations are listed below:
Activity
of the company
Headquarters
Shareholding
Bangaroo Project
Specialist foundation
engineering
Sydney, Australia
60 %
Sebuku Island
engineering
South Kalimantan, Indonesia
35 %
Deep-Bauer Foundation Inc.
engineering
Calgary, Canada
50 %
Activity
of the company
Headquarters
Shareholding
Bangaroo Project
engineering
Sydney, Australia
60 %
Sebuku Island
engineering
South Kalimantan, Indonesia
35 %
Deep-Bauer Foundation Inc.
engineering
Calgary, Canada
50 %
Project
Project
174
40. FEES AND SERVICES OF THE AUDITORS
The fee paid to the auditors and recorded as expenditure in the financial year is broken down as follows:
PricewaterhouseCoopers AG:
in EUR '000
Fees for auditing services
2013
593
Fees for other certification
2014
668
2
5
Fees for tax advice
74
21
Fees for other services
76
45
745
739
Total
In addition, Roland Jehle GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft was engaged to audit the
major German capital corporations included in the Group’s consolidated financial statements.
The fees for this recognized in the financial year are broken down in accordance with Section 285, Paragraph 17 and Section 314,
Subsection 1, Paragraph 9 HGB as follows:
in EUR '000
Auditing fees
2013
2014
34
37
Fees for other certification
0
0
Fees for tax advice
7
7
Fees for other services
Total
0
0
41
44
41. DECLARATION OF CONFORMITY TO THE GERMAN CORPORATE GOVERNANCE CODE
The Management Board and Supervisory Board of BAUER AG issued their declaration in accordance with Section 161 of the
German Stock Corporation Act (AktG) on December 5, 2014 and published it in a form permanently accessible to shareholders on the company’s website at www.bauer.de.
42. AVERAGE NUMBER OF EMPLOYEES
2013
2014
Salaried staff
3,835
3,948
Germany
1,957
1,984
International
1,878
1,964
Industrial & trades
6,189
6,209
Germany
1,947
1,926
International
4,242
4,283
Apprentices
Total number of employees
240
248
10,264
10,405
43. AUTHORIZATION FOR ISSUE OF THE CONSOLIDATED FINANCIAL STATEMENTS
The Management Board has submitted the consolidated financial statements to the Supervisory Board for authorization for
issue (the Supervisory Board meeting is scheduled for April 8, 2015).
175
44. PROPOSAL ON APPROPRIATION OF NET EARNINGS AVAILABLE FOR DISTRIBUTION
The Management Board and Supervisory Board submit the proposal for decision that a dividend should be paid from the net
earnings available for distribution of BAUER Aktiengesellschaft for the 2014 financial year, amounting to EUR 33,349,700.22 EUR;
it is proposed that the dividend should be EUR 0.15 per bearer share entitled to participate in the dividend, which given
entitled to participate in the dividend will also be carryforward to the next accounting period.
Schrobenhausen, March 31, 2015
The Management Board
Prof. Thomas Bauer
2014
available for distribution, namely EUR 30,780,050.22, to be carryforward as profit. Any apportionment to bearer shares not
17,131,000 bearer shares entitled to the dividend, represents an amount of EUR 2,569,650, leaving the remaining net earnings
176
Principal investments of the BAUER Group
as at December 31, 2014
NAME OF COMPANY AND REGISTERED PLACE OF BUSINESS
1.
Fully consolidated companies
A.
Germany
Currency
Capital share
in %
EUR
BAUER Spezialtiefbau GmbH, Schrobenhausen, Germany
EUR
99.00
BAUER Maschinen GmbH, Schrobenhausen, Germany
EUR
99.00
SCHACHTBAU NORDHAUSEN GmbH, Nordhausen, Germany
EUR
99.00
SPESA Spezialbau und Sanierung GmbH, Schrobenhausen, Germany
EUR
99.00
BAUER Resources GmbH, Schrobenhausen, Germany
EUR
99.00
BAUER Training Center GmbH, Schrobenhausen, Germany
EUR
100.00
BAUER Designware GmbH, Schrobenhausen, Germany
EUR
100.00
BAUER Umwelt GmbH, Schrobenhausen, Germany
EUR
100.00
KLEMM Bohrtechnik GmbH, Drolshagen, Germany
EUR
100.00
EURODRILL GmbH, Drolshagen, Germany
EUR
100.00
BAUER Mietpool GmbH, Schrobenhausen, Germany
EUR
100.00
RTG Rammtechnik GmbH, Schrobenhausen, Germany
EUR
100.00
MAT Mischanlagentechnik GmbH, Immenstadt, Germany
EUR
90.00
PRAKLA Bohrtechnik GmbH, Peine, Germany
EUR
90.00
Olbersdorfer Guß GmbH, Olbersdorf, Germany
EUR
75.00
SPANTEC Spann- & Ankertechnik GmbH, Schrobenhausen, Germany
EUR
90.00
SCHACHTBAU NORDHAUSEN Bau GmbH, Nordhausen, Germany
EUR
100.00
MMG Mitteldeutsche MONTAN GmbH, Nordhausen, Germany
EUR
100.00
HGC Hydro-Geo-Consult GmbH, Freiberg, Germany
EUR
100.00
BAUER Water GmbH, Dunningen, Germany
EUR
100.00
PURE Umwelttechnik GmbH, Schrobenhausen, Germany
EUR
100.00
BAUER Foralith GmbH, Schrobenhausen, Germany
EUR
100.00
GWE pumpenboese GmbH, Peine, Germany
EUR
100.00
Esau & Hueber GmbH, Schrobenhausen, Germany
EUR
75.50
hydesco24 GmbH, Hamburg, Germany
EUR
60.00
BAUER Deep Drilling GmbH, Schrobenhausen, Germany
EUR
100.00
C.
D.
Capital share
in %
BAUER Resources Hungary Kft., Budapest, Hungary
HUF
100.00
GWE Budafilter Kft., Mezöfalva, Hungary
HUF
100.00
BAUER Ambiente S.r.l., Milan, Italy
EUR
100.00
BAUER SPEZIALTIEFBAU Gesellschaft m.b.H., Vienna, Austria
EUR
100.00
BAUER Technologies Limited, Bishops Stortford, UK
GBP
100.00
BAUER RENEWABLES LIMITED, Bishops Stortford, UK
GBP
100.00
BAUER EQUIPMENT UK LIMITED, Rotherham, Great Britain
GBP
100.00
BAUER Magyarország Speciális Mélyépítö Kft., Budapest, Hungary
HUF
100.00
BAUER ROMANIA S.R.L., Bucarest, Rumania
RON
100.00
BAUER BULGARIA EOOD, Sofia, Bulgaria
BGN
100.00
BAUER Funderingstechniek B.V., Mijdrecht, Netherlands
EUR
100.00
BAUER Foundations (IRL) Ltd., Dublin, Ireland
EUR
100.00
GWE France S.A.S., Aspiran, France
EUR
100.00
BAUER Cimentaciones Y Equipos S.A., Madrid, Spain
EUR
100.00
TracMec Srl, Mordano, Italy
EUR
100.00
BAUER Macchine Italia Srl, Mordano, Italy
EUR
100.00
FAMBO Sweden AB, Eslöv, Sweden
SEK
100.00
GWE Pol-Bud Sp.z.o.o, Łódz, Poland
PLN
100.00
BAUER RESOURCES SPAIN S.A., Leganes, Spain
EUR
100.00
BAUER Resources UK Ltd., Wigan, Great Britain
GBP
100.00
Europe (other)
BAUER Spezialtiefbau Schweiz AG, Baden-Dättwil, Switzerland
CHF
100.00
FORALITH Drilling Support AG, St. Gallen, Switzerland
CHF
100.00
OOO BAUER Maschinen - Kurgan, Kurgan, Russian Federation
RUB
65.00
OOO BAUER Maschinen SPb, St. Petersburg, Russian Federation
RUB
100.00
OOO BG-TOOLS-MSI, Ljuberzy, Russian Federation
RUB
55.00
OOO BAUER Maschinen Russia, Moscow, Russian Federation
RUB
100.00
OOO BAUER Technologie, Moscow, Russian Federation
RUB
100.00
BAUER Georgia Foundation Specialists LCC, Batumi, Georgia
GEL
100.00
Saudi BAUER Foundation Contractors Ltd., Jeddah, Saudi Arabia
SAR
100.00
BAUER LEBANON FOUNDATION SPECIALISTS S.a.r.L., Beirut, Lebanon
USD
100.00
BAUER International FZE, Dubai, United Arab Emirates
AED
100.00
BAUER International Qatar LLC, Doha, Qatar
QAR
49.00 *
BAUER Equipment Gulf FZE, Dubai, United Arab Emirates
AED
100.00
BAUER Emirates Environment Technologies & Services LLC,
Abu Dhabi, United Arab Emirates
AED
49.00 *
EU excluding Germany
2014
B.
Currency
177
178
CONSOLIDATED NOTES 2014
Currency
Capital share
in %
USD
100.00
Middle East & Central Asia (continued)
BAUER Resources GmbH / Jordan Ltd. Co. – (sub-group consolidated financial statements),
Amman, Jordan
Site Group for Services and Well Drilling Ltd. Co., Amman, Jordan
USD
83.30
Site Group for Services and Well Drilling Ltd. Co., Ramallah, Palestine
USD
100.00
Site Drilling Ltd. Co., Limassol, Cyprus
USD
100.00
BAUER Casings Makina Sanayi ve Ticaret Limited Sirketi, Ankara, Turkey
TRY
60.00
BAUER Corporate Services Private Limited, Mumbai, India
INR
100.00
AED
100.00
MYR
100.00
AUD
100.00
BAUER (NEW ZEALAND) LIMITED, Auckland, New Zealand
NZD
100.00
BAUER Resources Australia Pty Ltd., Sydney, Australia
AUD
100.00
BAUER Geotechnical Specialized Foundation LLC, Abu Dhabi, United Arab Emirates
E.
Asia-Pacific, Far East and Australia
BAUER (MALAYSIA) SDN. BHD. – (sub-group consolidated financial statements),
Petaling Jaya, Malaysia
BAUER Foundations Australia Pty Ltd, Brisbane, Australia
P.T. BAUER Pratama Indonesia, Jakarta, Indonesia
IDR
100.00
BAUER Services Singapore Pte Ltd, Singapore, Singapore
EUR
100.00
BAUER Hong Kong Limited, Hong Kong, People’s Republic of China
HKD
100.00
VND
100.00
BAUER Foundations Philippines, Inc., Quezon City, Philippines
PHP
100.00
BAUER Technologies Far East Pte. Ltd. – (sub-group financial statements), Singapore,
Singapore
EUR
100.00
BAUER EQUIPMENT SOUTH ASIA PTE. LTD., Singapore
EUR
100.00
BAUER Technologies Taiwan Ltd., Taipei, Taiwan
TWD
99.88
BAUER Tianjin Technologies Co. Ltd., Tianjin, People’s Republic of China
CNY
100.00
BAUER Equipment Hong Kong Ltd., Hong Kong, People’s Republic of China
HKD
100.00
BAUER Equipment (Malaysia) Sdn. Bhd., Shah Alam, Malaysia
MYR
100.00
Shanghai BAUER Technologies Co. Ltd., Shanghai, People’s Republic of China
CNY
100.00
BAUER Equipment (Shanghai) Co. Ltd., Shanghai, People’s Republic of China
CNY
100.00
BAUER Vietnam Ltd., Ho Chi Minh City, Vietnam
F.
NIPPON BAUER Y.K., Tokyo, Japan
JPY
100.00
Inner City (Thailand) Company Limited, Bangkok, Thailand
THB
49.00 %
Thai BAUER Co. Ltd., Bangkok, Thailand
THB
73.99
Americas
BAUER FUNDACIONES PANAMÁ S.A., Panama City, Panama
USD
100.00
BAUER MEXICO, S.A. DE C.V., Mexico City, Mexico
MXP
100.00
BAUER Resources Canada Ltd., Edmonton, Canada
CAD
100.00
BAUER Foundations Canada Inc., Calgary, Canada
CAD
100.00
BAUER-Pileco Inc., Conroe, Texas, USA
USD
100.00
BAUER Manufacturing Inc., Conroe, United States of America
USD
100.00
BAUER FOUNDATION CORP., Odessa, Florida, USA
USD
100.00
BAUER Resources Chile Limitada – (sub-group financial statements), Santiago de Chile, Chile
CLP
100.00
CLP
60.00
GWE Tubomin S.A., Santiago de Chile, Chile
EGP
55.75
BAUER Technologies South Africa (PTY) Ltd – (sub-group financial statements),
Johannesburg, South Africa
ZAR
100.00
MINERAL BULK SAMPLING NAMIBIA (PTY) LTD, Windhoek, Namibia
NAD
100.00
MINERAL BULK SAMPLING SOUTH AFRICA (PTY) LTD, Cape Town, South Africa
ZAR
100.00
BAUER RESOURCES GHANA LIMITED, Accra, Ghana
GHS
100.00
BAUER-DE WET EQUIPMENT (PROPRIETARY) LIMITED, Rasesa, Botswana
BWP
51.00
2.
Associates and joint ventures
A.
Germany
Wöhr + Bauer GmbH – (sub-group financial statements), Munich, Germany
EUR
33.33
Wöhr + Bauer Angerhof GmbH & Co. KG, Munich, Germany
EUR
100.00
Wöhr + Bauer Angerhof Verwaltungs GmbH, Munich, Germany
EUR
100.00
WÖHR + BAUER PARKING GmbH, Munich, Germany
EUR
100.00
Wöhr + Bauer H2O Verwaltungs GmbH, Munich, Germany
EUR
100.00
Wöhr + Bauer H2O GmbH & Co. KG, Munich, Germany
EUR
100.00
Wöhr + Bauer Projekt HTW Verwaltungs GmbH, Munich, Germany
EUR
100.00
Wöhr + Bauer Projekt HTW GmbH & Co. KG, Munich, Germany
EUR
100.00
WÖHR + BAUER Tower Riem Verwaltungs GmbH,
Munich, Germany
EUR
100.00
WÖHR + BAUER Tower Riem GmbH & Co. KG, Munich, Germany
EUR
100.00
Riem Vermietungs GmbH, Munich, Germany
EUR
100.00
NDH Entsorgungsbetreibergesellschaft mbH, Bleicherode, Germany
EUR
25.00
Grunau und Schröder Maschinentechnik GmbH, Drolshagen, Germany
EUR
30.00
TERRABAUER S. L., Madrid, Spain
EUR
30.00
NuBa Equipment Ltd., Edmonton, Canada
CAD
50.00
Bauer + Moosleitner Entsorgungstechnik GmbH, Salzburg, Austria
EUR
50.00
BAUER Nimr LLC, Muscat – Al Mina, Sultanate of Oman
OMR
49.00
TMG Tiefbaumaterial GmbH, Emmering, Germany
EUR
33.33
Nordhäuser Bauprüfinstitut GmbH, Nordhausen, Germany
EUR
20.00
Harz Hotel Grimmelallee Nordhausen Beteiligungsgesellschaft mbH,
Nordhausen, Germany
EUR
20.00
EUR
20.00
EUR
4.18
RUB
15.00
International
3.
Enterprises in which the company has participating interests
A.
Germany
Harz Hotel Grimmelallee Nordhausen GmbH & Co. KG,
Nordhausen, Germany
Stadtmarketing Schrobenhausen e.G., Schrobenhausen, Germany
B.
International
OAO Mostostrojindustria, Moscow, Russian Federation
* Beneficial ownership is 100 %
Africa
BAUER EGYPT S.A.E. Specialised Foundation Contractors, Cairo, Egypt
B.
Capital share
in %
2014
G.
Currency
179
180
Assurance by the Legal Representatives
We hereby assure that, to the best of our knowledge, the consolidated financial statements give a true and fair view of the net
assets, financial position and earnings of the company in accordance with the accounting principles applicable to financial
reporting, and that the Combined Management Report depicts the course of business, including the earnings and overall
situation of the Group, in such a way that a true and fair view is conveyed and the material opportunities and risks of the
foreseeable development of the Group are set out.
Schrobenhausen, March 31, 2015
The Management Board
Prof. Thomas Bauer
181
Auditor’s Report
“We have audited the consolidated financial statements prepared by BAUER Aktiengesellschaft, Schrobenhausen, comprising
the balance sheet, the income statement and statement of comprehensive income, statement of changes in equity, cash
flow statement and the notes to the consolidated financial statements, together with the Group management report, which is
combined with the company management report, for the business year from January 1 to December 31, 2014. The prepara-
(“Handelsgesetzbuch” – German Commercial Code) are the responsibility of the parent company’s Management Board.
Our responsibility is to express an opinion on the consolidated financial statements and the combined management report,
based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and the generally accepted
German standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public
Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstatements materially
affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements
in accordance with the applicable financial reporting framework and in the combined management report are detected with
reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and
expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness
of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial
statements and the combined management report are examined primarily on a test basis within the framework of the audit.
The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of
the entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made
by the company’s Management Board, as well as evaluating the overall presentation of the consolidated financial statements
and the combined management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with the IFRS as adopted by
the EU and the additional requirements of German commercial law pursuant to § 315a, Section 1 HGB, and give a true and
fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements.
The combined management report is consistent with the consolidated financial statements, and as a whole provides a
suitable view of the Group’s position, and suitably presents the opportunities and risks of future development.”
Stuttgart, March 31, 2015
Klaus Neubarth
ppa. Dagmar Liphardt
Auditor
Auditor
2014
by the EU, and the additional requirements of German commercial law pursuant to § (Article) 315a, Abs. (paragraph) 1 HGB
tion of the consolidated financial statements and the combined management report in accordance with the IFRS, as adopted
182
Glossary
A
ASSOCIATED COMPANIES | Associated companies are
F
FINANCIAL COVENANTS | Some loan agreements
those over which a major but not controlling influence can be
include clauses stipulating adherence to threshold values for
exerted. The shareholding is usually between 20 and 50 %.
predefined key financial performance indicators.
Such holdings are valued at equity.
FINANCIAL INSTRUMENT | Any transaction which results
AT EQUITY | “At equity” is the method by which shares in
in a financial asset for one entity and a financial liability (or an
associated companies are valued in the Group’s financial
equity instrument) for the other.
statements. The carrying amount of the investment is
adjusted according to the trend of the percentage equity
G
held in the entity concerned.
GROSS DOMESTIC PRODUCT (GDP) | Gross domestic
C
product corresponds to the total value of all goods and
services for consumption produced by an economy in one
CASH FLOW | This figure indicates the amount of money
year. GDP is a measure of the performance (output) of an
which a business entity generates by its own efforts and is
economy.
able to use for its own purposes. It essentially comprises
profit, depreciation and amortization and increases in
H
provisions.
HGB FINANCIAL STATEMENTS | The German ComCONSOLIDATED REVENUES | Consolidated revenues
mercial Code (Handelsgesetzbuch; HGB) imposes financial
are disclosed in the income statement. They comprise the
reporting rules on incorporated entities in Germany.
output of the companies fully consolidated into the Group’s
consolidated annual financial statements.
D
I
IFRS FINANCIAL STATEMENTS | International Financial
Reporting Standards (IFRS) are applicable to stock market
DEEP DRILLING RIG (TBA) | This equipment series was
listed companies. The standards are issued by the Interna-
developed specially to drill for particularly deep-lying raw
tional Accounting Standards Board (IASB). Their aim is to
material resources. The rigs can drill down to depths of more
ensure the international comparability of corporate financial
than 5,000 meters, and are used to extract oil, gas, water
reporting. The BAUER Group has been preparing financial
and geothermal energy.
statements in accordance with IFRS since 2004.
E
N
EBITDA | Earnings before interest, taxes, depreciation
NET PROFIT OR LOSS FOR THE PERIOD | The net profit
and amortization (on property, plant and equipment and
or loss for the period – also referred to as the profit after
intangible assets).
tax – is the profit earned or loss made in a given period.
EBIT MARGIN | The EBIT margin is a profitability indicator,
describing the ratio of EBIT to the entity’s sales revenues.
EBIT | Earnings before interest and taxes.
GLOSSARY
O
183
SEGMENTS | The BAUER Group’s segments are its operating divisions: Construction, Equipment and Resources. Each
ORDERS IN HAND | Indicates the volume of orders held by
a business entity at the reporting date.
segment comprises a holding company with subsidiaries
beneath it, all of which have the same portfolio of products
NORDHAUSEN GmbH operates in all three segments.
received in a specific reporting period. Orders received are
an indicator of future order volumes.
SINKING | The term describes the execution of shafts or
bore holes to mine mineral deposits or to extract resources.
P
PERCENTAGE OF COMPLETION METHOD (POC) |
This method is applied to measure and report the profit
realized on contracts extending over a protracted period of
time according to their degree of completion based on the
associated costs and revenues (actual and forecast).
PREMIUMLINE | The PremiumLine comprises the
multifunction rotary drilling rigs of the BG series designed to
handle a wide variety of foundation engineering applications.
Deep vibrators or trench cutters can also be mounted on
them.
R
ROTARY DRILLING RIG (BG) | BAUER Maschinen GmbH
specializes in the development and manufacture of rotary
drilling rigs. The machines are produced and marketed in
two product lines: Premium and Value. They are able to carry
STAKEHOLDERS | The term refers to individuals or groups
who have a justified interest in the fortunes of a business
entity. The interests of the various stakeholders may vary
widely.
T
TOTAL GROUP REVENUES | In addition to the output of
the consolidated companies, total Group revenues include
the proportionate outputs of associated companies as well
as the outputs of non-consolidated subsidiaries and joint
ventures.
V
VALUE ADDED | Value added is the contribution made by
a business entity to the wider society at large. Value added
reflects how the output of a business is distributed across
the wide variety of stakeholder groups.
out a wide variety of foundation engineering tasks.
VALUELINE | The ValueLine includes the rotary drilling rigs
S
SALES REVENUES | As opposed to the output, which
comprises the value of all goods produced, the sales
of the BG series which are optimized for the kelly drilling
process.
W
revenues disclosed in the income statement relate to all
products and services definitively sold and billed within a
period. The difference between the two values essentially
stems from changes in work in progress, inventories and
other income.
WORKING CAPITAL | The working capital is the portion
of the current assets which is tied up by the operational
production process and by the process of selling products
and services (such as receivables).
2014
ORDERS RECEIVED | Corresponds to the sum of all orders
and services. Within the Group, only SCHACHTBAU
184
IMPRINT
Published by
Registered place of business
86529 Schrobenhausen, Germany
BAUER-Strasse 1
Registered at the District Court of
Ingolstadt under HRB 101375
www.bauer.de
Print
Photos
Kastner AG – das medienhaus,
BAUER Group
Wolnzach
HOW TO CONTACT US
Contact
Investor Relations
BAUER-Strasse 1
http://ir.bauer.de
Tel.: +49 8252 97-1215
Fax: +49 8252 97-2900
http://www.youtube.com/
[email protected]
BAUERGroup
This Annual Report is published in German and English.
The 2014 Annual Report is printed on environmentally friendly paper
conforming to the standards of the Forest Stewardship Council (FSC).
GROUP KEY FIGURES: INCOME STATEMENT AND BALANCE SHEET
>>>
Construction
BAUER Spezialtiefbau GmbH, the original
parent company of the BAUER Group, has
been a major driving force in the development
of specialist foundation engineering, and
carries out projects all over the world. Bauer
Spezialtiefbau is organized on a regional basis
in Germany, and operates on all the world's
continents with over 50 subsidiaries and
branch offices. Market trends have meant that
most of the company’s revenues are now generated outside of Germany. Bauer has major
subsidiaries and branch offices in the United
Arab Emirates, Malaysia, Egypt and the USA
among other locations. Bauer Spezialtiefbau
has built up networks in numerous regions
across the world, enabling it to acquire and
execute contracts both in the countries in
which it is represented and in neighbouring
countries, using its own machinery and inhouse engineering consultancy. In addition to
the predominant field of specialist foundation
engineering, Group companies SCHACHTBAU
NORDHAUSEN GmbH, SPESA Spezialbau
und Sanierung GmbH and Wöhr + Bauer
GmbH also carry out general construction activities such as civil engineering, environmental
engineering and project development.
Equipment
The BAUER Maschinen Group is the world
market leader in the development and manufacture of specialist foundation engineering
equipment. BAUER Maschinen GmbH – the
holding company for a number of subsidiaries
– designs and builds heavy-duty drilling rigs,
trench cutters, grab systems, vibrators and
deep drilling rigs, as well as the related tooling, at its plants in Schrobenhausen, Aresing
and Edelshausen. The company also operates
manufacturing facilities in the USA, Russia,
China, Malaysia, Italy, Singapore and Turkey.
It is supplied with components from within the
BAUER Group by Schachtbau Nordhausen
and Olbersdorfer Guß. The BAUER Maschinen
Group operates a global sales and service
network.
Resources
The Resources segment is focused on
products and services in the areas of
water, environment and natural resources.
BAUER Resources GmbH is the holding
company, under the umbrella of which the
subsidiaries operate as full-service providers.
The competence centers of Water Treatment,
Process and Biotechnology, Environmental
Rehabilitation and Waste Management, Drilling
Technologies as well as Well Drilling and Geothermal pool their expertise and support the
subsidiaries in carrying out projects.
Income statement of the BAUER Group
in EUR '000
2013 *
2014
Change
1,402,173
1,375,679
-4,423
26,622
n/a
19,196
14,696
-23.44 %
SALES REVENUES
Other income
-1.89 %
30,579
89,022
n/a
1,447,525
1,506,019
4.04 %
Cost of materials
-755,906
-749,247
-0.88 %
Staff costs
-342,815
-355,250
3.63 %
-79,696
-78,781
-1.15 %
OPERATING RESULT
Financial income
Financial expenses
Share of the profit or loss of associated companies accounted for
using the equity method
-14,196
-15,789
11.22 %
-224,827
-230,526
2.53 %
30,085
76,426
n/a
7,729
7,096
-8.19 %
-45,541
-45,149
-0.86 %
1,770
-572
n/a
-5,957
37.801
n/a
Income tax expense
-13,474
-22,075
63.84 %
NET PROFIT OR LOSS
-19,431
15,726
n/a
PROFIT BEFORE TAX
Balance Sheet of the BAUER Group
ASSETS in EUR '000
31.12.2013 *
31.12.2014
Change
NON-CURRENT ASSETS
Intangible assets
35,388
34,440
-2.68 %
459,537
446,909
-2.75 %
13,249
42,906
n/a
3,613
3,613
0.00 %
Deferred tax assets
26,299
30,973
17.77 %
36,762
0
-100.00 %
-0.95 %
Participations
Other non-current assets
7,564
7,492
Other non-current financial assets
5,420
28,420
n/a
587,832
594,753
1.18 %
Inventories
419,352
439,184
4.73 %
517,950
496,650
-4.11 %
CURRENT ASSETS
Effective income tax refund claims
EQUITY AND LIABILITIES in EUR '000
3,437
2,661
-22.58 %
57,217
41,835
-26.88 %
997,956
980,330
-1.77 %
1,585,788
1,575,083
-0.68 %
31.12.2013 *
31.12.2014
Change
SHAREHOLDERS’ EQUITY
Group shares
Minority interests
397,006
399,308
0.58 %
22,809
19,617
-13.99 %
419,815
418,925
-0.21 %
81,637
116,358
42.53 %
279,437
387,816
38.78 %
6,483
5,959
-8.08 %
14,954
13,123
-12.24 %
382,511
523,256
36.80 %
Financial liabilities
449,876
299,698
-33.38 %
Other liabilities
307,203
305,861
-0.44 %
9,606
9,317
-3.01 %
16,777
18,026
7.44 %
783,462
632,902
-19.22 %
1,585,788
1,575,083
-0.68 %
Financial liabilities
Other liabilities
CURRENT LIABILITIES
Effective income tax obligations
Provisions
In the “Change” column, there may be differences from the Group key figures as a result of roundings and a different representation between
thousands of EUR and millions of EUR.
Financial calendar 2015
April 10, 2015
Publication of Annual Report 2014
Annual Press Conference
Analysts' Conference
May 13, 2015
Interim Report March 31, 2015
June 25, 2015
Annual General Meeting
August 14, 2015
Half-Year Interim Report June 30, 2015
November 13, 2015
Interim Report September 30, 2015
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Annual Report 2014

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