Network and growth: Added value within the

Group

To O u r S h C o rp o ra te G o ve rn a n c e H O C H T IE F S to c k M a n a g e m e n t R e p o rt c ia l S ta te m e n ts a n d N o te s

we intend to systematically expand our portfolio with addi- tional valuable services.

Facility management

As part of systematically pursuing our strategy to cover the entire project life cycle, we have expanded our service spec- trum in the area of integrated facility management. In facility management, HOCHTIEF has chosen a highly profitable field within a growth market that promises a higher, more stable income stream for the long term.

Thanks to Group-wide networking, all HOCHTIEF compa- nies are in a position to include facility management serv- ices in their offerings, thus achieving higher order volume for HOCHTIEF overall.

Insurance services

Insuring projects and project risks is part of our service portfolio. We have generated added value for HOCHTIEF, and hence our shareholders, by making this strategic ad- dition to our traditional construction business.

HOCHTIEF Insurance offers custom coverage to all of the Group’s operational units and outside project partners, in- suring everything from construction projects to facility man- agement services. Clients, owners and end users can also turn to HOCHTIEF for protection against postconstruction risks such as fire and service interruption.

In conjunction with its growing service portfolio, HOCHTIEF offers tailor-made reinsurance services through subsidiaries in Luxembourg. The policies reinsured include coverage for construction services, loss of suppliers and liability pre- dominantly relating to the operating activities of the Ameri- cas division.

Focus on concessions and operation

The concessions business* is one of HOCHTIEF’s strategic focuses and a value driver for our stock. The returns are attractive and, with a guaranteed stream of income over the long term, the concessions business is less vulnerable to cyclical fluctuations than traditional construction opera- tions.

Airport

HOCHTIEF took a strategic step toward realizing future growth in the promising airport market in 2005 by founding the world’s first airport investment partnership, HOCHTIEF AirPort Capital (HTAC). Capital freed up from existing air- port holdings can be used to invest in additional projects going forward, whether they involve the acquisition of stakes in privatized airports or execution of demanding infrastruc- ture projects.

In HTAC, HOCHTIEF AirPort has also made a lasting con- tribution toward strengthening its competitive position in the field of international airport management. What is more, the finance expertise of the financial partners to the ven- ture is an ideal complement to the specialized knowledge of HOCHTIEF AirPort, which is one of the leading indepen- dent airport managers worldwide.

Public-private partnership

With PPP know-how concentrated in the companies HOCHTIEF PPP Solutions, Leighton and Aecon, HOCHTIEF has strategically set the stage to grow in this attractive segment across all key regions. We intend to increase our market share in the PPP growth market in Germany, as well as the continually expanding PPP markets in the UK and Ireland in particular.

Contract mining

In the field of contract mining, HOCHTIEF is an established partner for underground and open pit mining via its Aus- tralian subsidiary Leighton. Leighton leads the market in contract mining down under. By acquiring 15 mining proj- ects in Australia and New Zealand from Henry Walker Eltin Group Ltd., Leighton is adding activities in the promising iron ore mining industry to its already robust coal mining business. Our subsidiary has secured an excellent posi- tion for itself through this purchase. It will enable us to serv- ice the consistently brisk demand for raw materials, par- ticularly in China, in the most advantageous way possible.

*For additional information on our airport and PPP portfolios beyond that provi- ded in the Management Re- port, turn to pages 20-23.

R&D at HOCHTIEF: New technologies and procedures often originate from our projects

Construction is a project business centered on creating something that is unique each time. Fundamentally, this is what separates construction companies from businesses involved in the mass production of goods. This is why time and again R&D activities are carried out at HOCHTIEF job sites. The construction of complex projects such as high- rises, tunnels and bridges frequently represents new tech- nological territory for the HOCHTIEF companies, requiring the development of innovative technical procedures and processes—on site and as the project progresses. Many times, it is also necessary to find innovative solutions for specific project management and logistical demands. A property’s particular location, for example, may necessitate an elaborate logistics strategy. Such project-related R&D activities are initiated and implemented by the respective corporate unit. A case in point is the construction of the new Container Terminal IV in Bremerhaven, which involves an-

choring, to the centimeter, more than 700 steel panels that are up to 42 meters long in order to build a level sheet pile wall. To accomplish this, HOCHTIEF created the jack-up platform known as “Odin” in 2005, which allows for driving the panels into the ground with extreme pressure. “Odin” has also given us a competitive advantage in the promising market for offshore wind parks.

The holding company’s structured and systematic innovation management

Corporate Development is responsible for working with the individual HOCHTIEF companies to identify and coordinate innovation projects with Group-wide impact. It reviews how useful projects will be to the Group and, as applicable, sup- ports their execution. Such projects include new technolo- gies and optimized processes as well as product innova- tions and forward-looking strategies for previously untapped market segments. New ideas are generated and fine-tuned in a number of different ways. One way is through HOCHTIEF’s close contact with leading scientists, universities and re- search institutions worldwide. Cooperating with competitors and sharing experiences with companies from other indus- tries also make it easier to pinpoint and implement inno- vative ideas.

Our company’s efforts in the year under review included working with the renowned Stanford University in the area of innovation management, participating in several EU re- search projects and taking part in ENCORD, the European Network of Construction Companies for Research and Development.

Internally, R&D specialists from Corporate Development, ideas competitions as well as workshops with the divisions and outside experts assist in identifying potential innova- tions that could have a positive impact on the Group’s strategic future. Initially, no limits are placed on partici-